80 FR 47517 - United States and State of New York v. Twin America, LLC, et al.; Public Comment and Response on Proposed Final Judgment
DEPARTMENT OF JUSTICE
Antitrust Division Federal Register Volume 80, Issue 152 (August 7, 2015)
Antitrust Division
Federal Register Volume 80, Issue 152 (August 7, 2015)
| Page Range | 47517-47525 | |
| FR Document | 2015-19495 |
[Federal Register Volume 80, Number 152 (Friday, August 7, 2015)] [Notices] [Pages 47517-47525] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-19495] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF JUSTICE Antitrust Division United States and State of New York v. Twin America, LLC, et al.; Public Comment and Response on Proposed Final Judgment Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h), the United States hereby publishes below the comment received on the proposed Final Judgment in United States and State of New York v. Twin America, LLC, et al., Civil Action No. 12-cv-8989 (ALC) (GWG) (S.D.N.Y.), together with the Response of the United States to Public Comment. Copies of the comment and the United States' Response are available for inspection at the Department of Justice Antitrust Division, 450 Fifth Street NW., Suite 1010, Washington, DC 20530 (telephone: 202-514- 2481), on the Department of Justice's Web site at [[Page 47518]] http://www.justice.gov/atr/case/us-and-state-new-york-v-twin-america-llc-et-al, and at the Office of the Clerk of the United States District Court for the Southern District of New York, Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, NY 10007. Copies of any of these materials may also be obtained upon request and payment of a copying fee. Patricia A. Brink, Director of Civil Enforcement. UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA, AND STATE OF NEW YORK, Plaintiffs, v. TWIN AMERICA, LLC, et al. Defendants. Civil Action No. 12-cv-8989 (ALC) (GWG) ECF Case RESPONSE OF PLAINTIFF UNITED STATES TO PUBLIC COMMENT ON THE PROPOSED FINAL JUDGMENT Pursuant to the requirements of the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h) (``Tunney Act''), the United States hereby files the single public comment received concerning the proposed Final Judgment in this case and the United States' response to the comment. After careful consideration of the submitted comment, the United States continues to believe that the proposed Final Judgment provides an effective and appropriate remedy for the violations alleged in the Complaint. The United States will move the Court for entry of the proposed Final Judgment after the public comment and this Response have been published in the Federal Register pursuant to 15 U.S.C. 16(d). I. PROCEDURAL HISTORY On March 17, 2009, Defendants Coach USA, Inc. (through subsidiary International Bus Services, Inc.) and CitySights LLC (through subsidiary City Sights Twin, LLC) formed Twin America, LLC (``Twin America''), a joint venture that combined their hop-on, hop-off bus tour operations in New York City. Defendants subsequently applied to the federal Surface Transportation Board (``STB'') for approval of the Twin America transaction, which would have conferred antitrust immunity. After more than two years of proceedings, the STB rejected the joint venture as anticompetitive. However, while Defendants ceased operating the nominal interstate service that had formed the basis for the STB's jurisdiction, they continued operating their hop-on, hop-off bus tour operations in New York City. In December 2012, the United States and the State of New York (collectively, ``Plaintiffs'') filed this civil antitrust action, alleging that the formation of Twin America substantially lessened competition in the market for hop-on, hop-off bus tours in New York City in violation of Section 7 of the Clayton Act, 15 U.S.C. 18, and also violated Section 1 of the Sherman Act, 15 U.S.C. 1, Section 340 of the Donnelly Act, N.Y. Gen. Bus. Law Sec. 340, and Section 63(12) of the New York Executive Law, N.Y. Exec. Law Sec. 63(12). The Complaint sought to remedy the harm to competition and disgorge the ill-gotten gains Defendants had obtained from operating Twin America in violation of the antitrust laws. In December 2014, the parties adjourned a February 2015 trial date to facilitate settlement discussions. These discussions culminated in the proposed Final Judgment, which was filed on March 16, 2015 (Dkt. No. 127-1).\1\ As required by the Tunney Act, the United States published the proposed Final Judgment and Competitive Impact Statement in the Federal Register on March 27, 2015, 80 FR 16427 (Mar. 27, 2015), and caused to be published summaries of the terms of the proposed Final Judgment and Competitive Impact Statement, together with directions for the submission of written comments relating to the proposed Final Judgment, in The Washington Post and the New York Daily News for seven days (March 24 through March 30, 2015). The 60-day period for public comments ended on May 29, 2015. The United States received one comment, which is described below and attached hereto as Exhibit 1. --------------------------------------------------------------------------- \1\ In October 2014, this Court approved Defendants' settlement of related class action lawsuits. See Order and Final Judgment Approving In Re NYC Bus Tour Antitrust Litigation Class Action Settlement, In re NYC Bus Tour Antitrust Litigation, No. 13-CV-0711 (ALC) (GWG) (S.D.N.Y. Oct. 21, 2014) (Dkt. No. 122). --------------------------------------------------------------------------- II. THE PROPOSED SETTLEMENT The Complaint alleged that the formation of Twin America had the purpose and effect of creating a monopoly in the hop-on, hop-off bus tour market in New York City. The joint venture eliminated substantial head-to-head competition between Coach and City Sights that had benefitted consumers in the form of discounts, increased product offerings, and service improvements. The joint venture also enabled Defendants to increase hop-on, hop-off bus tour prices by approximately 10%, resulting in immediate and continuing harm to consumers. The Complaint alleged that entry of new firms into the market or expansion of existing firms was unlikely to counteract the competitive harm caused by the formation and operation of Twin America. According to the Complaint, the primary barrier to entry was the difficulty of obtaining hop-on, hop-off bus stop authorizations from the New York City Department of Transportation (``NYCDOT''). Bus stop authorizations are required by NYCDOT for each location a tour operator wishes to load and unload passengers. Defendants obtained a robust portfolio of bus stop authorizations from NYCDOT several years ago, including authorizations at or very close to virtually all of Manhattan's major tourist attractions. Recent entrants, by contrast, were consistently unable to obtain competitive bus stop authorizations from NYCDOT at top tourist attractions because NYCDOT allocated such authorizations on a ``first come, first served'' basis and most competitive bus stop locations were already at capacity or otherwise unavailable. As a result, more than five years after Twin America's formation, the joint venture still dominated the market and Defendants had sustained their anticompetitive price increases. The proposed Final Judgment addresses the harm alleged in the Complaint by requiring Twin America to divest all of City Sights's bus stop authorizations in Manhattan to NYCDOT, the city agency charged with managing bus stop authorizations. The divestiture significantly eases the primary entry barrier alleged in the Complaint by increasing NYCDOT's inventory of bus stops, including for the locations most sought by recent entrants. City Sights's set of approximately 50 bus stops includes highly-coveted stops surrounding key tourist attractions such as Times Square, the Empire State Building, and Battery Park that are critical to operating a competitive hop-on, hop-off bus tour. The proposed Final Judgment also prohibits Defendants from applying for or obtaining any bus stop authorizations for hop-on, hop-off bus tours at the locations of the divested City Sights bus stop authorizations for five years, subject to limited exceptions. In compliance with the proposed Final Judgment, Defendants relinquished the City Sights bus stop authorizations to NYCDOT on April 30, 2015. The proposed Final Judgment also requires Defendants to pay $7.5 million in disgorgement to the United States and State of New York, which is on top [[Page 47519]] of the payments made by Defendants to settle the class action. III. STANDARD OF JUDICIAL REVIEW UNDER THE TUNNEY ACT The Tunney Act requires that proposed consent judgments in antitrust cases brought by the United States be subject to a 60-day public comment period, after which the court shall determine whether entry of the proposed Final Judgment ``is in the public interest.'' 15 U.S.C. 16(e)(1); see also United States v. Apple, Inc., 889 F. Supp. 2d 623, 630 (S.D.N.Y. 2012); United States v. Morgan Stanley, 881 F. Supp. 2d 563, 566 (S.D.N.Y. 2012). In making that determination, the court, in accordance with the statute as amended in 2004, is required to consider: (A) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration of relief sought, anticipated effects of alternative remedies actually considered, whether its terms are ambiguous, and any other competitive considerations bearing upon the adequacy of such judgment that the court deems necessary to a determination of whether the consent judgment is in the public interest; and (B) the impact of entry of such judgment upon competition in the relevant market or markets, upon the public generally and individuals alleging specific injury from the violations set forth in the complaint including consideration of the public benefit, if any, to be derived from a determination of the issues at trial. 15 U.S.C. 16(e)(1); see also Apple, 889 F. Supp. 2d at 630-31; Morgan Stanley, 881 F. Supp. 2d at 566-67. In considering these statutory factors, the court's inquiry is necessarily a limited one. Apple, 889 F. Supp. 2d at 631; Morgan Stanley, 881 F. Supp. 2d at 567; United States v. Keyspan Corp., 763 F. Supp. 2d 633, 637 (S.D.N.Y. 2011). A court should consider, among other things, the relationship between the remedy secured and the specific allegations set forth in the Complaint, whether the decree is sufficiently clear, whether the enforcement mechanisms are sufficient, and whether the decree may positively harm third parties. Apple, 889 F. Supp. 2d at 631; United States v. Microsoft Corp., 56 F.3d 1448, 1458- 62 (D.C. Cir. 1995). However, ``[a] court must limit its review to the issues in the complaint and give `due respect to the [Government's] perception of . . . its case[.]' '' Morgan Stanley, 881 F. Supp. 2d at 567 (quoting Microsoft, 56 F.3d at 1461); see also Keyspan, 763 F. Supp. 2d at 638 (same); Apple, 889 F. Supp. 2d at 631 (``In most cases, the court is not permitted to reach beyond the complaint to evaluate claims that the government did not make.'') (internal quotation omitted). ``The role of the court is not to determine whether the decree results in the array of rights and liabilities `that will best serve society, but only to ensure that the resulting settlement is within the reaches of the public interest.''' Apple, 889 F. Supp. 2d at 631 (quoting Keyspan, 763 F. Supp. 2d at 637) (emphasis in original); see also Morgan Stanley, 881 F. Supp. 2d at 567; Microsoft, 56 F.3d at 1460; United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (explaining court may not ``engage in an unrestricted evaluation of what relief would best serve the public''); United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981) (noting that ``court is required to determine not whether a particular decree is the one that will best serve society, but whether the settlement is within the reaches of the public interest'') (citations omitted). In determining whether a proposed settlement is in the public interest, ``the court should be `deferential to the government's predictions as to the effect of the proposed remedies.' '' Apple, 889 F. Supp. 2d at 631 (quoting Microsoft, 56 F.3d at 1461); see also United States v. US Airways Grp., Inc., 38 F. Supp. 3d 69, 76 (D.D.C. 2014) (``must accord deference to the government's predictions about the efficacy of its remedies'') (quoting United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1, 17 (D.D.C. 2007)); United States v. Archer- Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that the court should grant due respect to the United States' ``prediction as to the effect of proposed remedies, its perception of the market structure, and its view of the nature of the case''). A court ``is not permitted to reject the proposed remedies merely because the court believes other remedies are preferable.'' Keyspan, 763 F. Supp. 2d at 637; see also Apple, 889 F. Supp. 2d at 631 (same); United States v. Am. Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982) (stating that ``proposed decree must be approved even if it falls short of the remedy the court would impose on its own, as long as it falls within the range of acceptability or is within the reaches of the public interest'') (citations and internal quotations omitted); United States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) (approving consent decree even though the court would have imposed greater remedy). The relevant inquiry ``is whether the Government has established an ample `factual foundation for [its] decisions such that its conclusions regarding the proposed settlement are reasonable.' '' Apple, 889 F. Supp. 2d at 631 (quoting Keyspan, 763 F. Supp. 2d at 637-38); see also Microsoft, 56 F.3d at 1461 (assessing whether ``the remedies [obtained in the decree are] so inconsonant with the allegations charged as to fall outside of the `reaches of the public interest.' ''); SBC Commc'ns, 489 F. Supp. 2d at 17 (explaining that courts ``may not require that the remedies perfectly match the alleged violations''). Accordingly, the United States ``need only provide a factual basis for concluding that the settlements are reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 489 F. Supp. 2d at 17; see also Apple, 889 F. Supp. 2d at 631. In its 2004 amendments to the Tunney Act,\2\ Congress made clear its intent to preserve the practical benefits of using consent decrees in antitrust enforcement, adding the unambiguous instruction that ``[n]othing in this section shall be construed to require the court to conduct an evidentiary hearing or to require the court to permit anyone to intervene.'' 15 U.S.C. 16(e)(2); see also Apple, 889 F. Supp. 2d at 631 (``The Tunney Act allows, but does not require, the court to conduct an evidentiary hearing and to permit third parties to intervene.''). The procedure for the public-interest determination is left to the discretion of the court, with the recognition that the court's ``scope of review remains sharply proscribed by precedent and the nature of Tunney Act proceedings.'' SBC Commc'ns, 489 F. Supp. 2d at 11. ``A court can make its public interest determination based on the competitive impact statement and response to public comments alone.'' US Airways, 38 F. Supp. 3d at 76. --------------------------------------------------------------------------- \2\ The 2004 amendments substituted ``shall'' for ``may'' in directing relevant factors for courts to consider and amended the list of factors to focus on competitive considerations and to address potentially ambiguous judgment terms. Compare 15 U.S.C. 16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004 amendments ``effected minimal changes'' to Tunney Act review). --------------------------------------------------------------------------- IV. UNITED STATES' RESPONSE TO PUBLIC COMMENT The United States received one public comment, from Taxi Tours, Inc., doing business as BigBus (``Big Bus''). Big Bus entered the New York City hop-on, hop-off bus tour market in 2014 by acquiring an existing player, Big Taxi. The comment makes four principal points: (1) There should be additional remedies to facilitate competitors' ticket sales; (2) there should be a more specific process governing the allocation of bus stop authorizations; (3) the judgment should apply to Defendants' future affiliated [[Page 47520]] entities; and (4) there should be a process for third parties to report violations of the Final Judgment. The United States respectfully responds to each point below. 1. Divestiture of the City Sights bus stops is sufficient to remedy the harm alleged in the Complaint Big Bus's comment asserts that Defendants prevent competitors from selling tickets for hop-on, hop-off bus tours at or near certain key tourist attractions and proposes that the settlement be amended to ensure equal access to vendors to market and sell tickets from Defendants' competitors. Big Bus also expresses concerns regarding the conduct of City Experts, an affiliate of Defendants that offers tourists a variety of tours and attractions from concierge desks it operates at certain New York City hotels. Big Bus contends that because City Experts sells Defendants' hop-on, hop-off bus tours as part of its bundled tourism packages but not the hop-on, hop-off bus tours of Defendants' competitors, it ``prevents the Defendants' competitors from effectively competing at the hotel and retail level.'' Big Bus also complains that Twin America's employees prevent Big Bus staff from selling tickets by verbally and physically attacking them. Pursuant to the Tunney Act, review of a proposed Final Judgment is limited to the relationship of the remedy to the violations alleged in the Complaint. See Microsoft, 56 F.3d at 1459-61; Morgan Stanley, 881 F. Supp. 2d at 567; Keyspan, 763 F. Supp. 2d at 637-38; Apple, 889 F. Supp. 2d at 631. As described above, the Complaint alleged that the formation and operation of Twin America substantially lessened competition in the hop-on, hop-off bus tour market in New York City and identified potential entrants' inability to obtain bus stop authorizations at or sufficiently near top tourist attractions as the primary entry barrier. The proposed settlement addresses this entry barrier by requiring Twin America to divest all of the approximately 50 City Sights bus stop authorizations in Manhattan, including highly desirable stops at or near key tourist attractions that rivals have been consistently unable to obtain. By relinquishing all of the City Sights bus stops to NYCDOT, the proposed Final Judgment increases the available inventory of bus stops for which rivals can obtain the authorizations needed to effectively compete with Twin America. The Complaint did not allege that the conduct of Defendants' street sellers, its City Experts affiliate, or Defendants' sales practices otherwise served as a meaningful barrier to competition in the hop-on, hop-off bus tour market. Nor did the Complaint allege that the formation of the joint venture had an impact on these practices. Thus, the suggested additional provisions are unnecessary to address the competitive harm set forth in the Complaint. 2. NYCDOT administers bus stop authorizations Big Bus argues that the proposed settlement should establish certain rules and processes related to the allocation and use of hop- on, hop-off bus stops. First, Big Bus asserts that the Final Judgment ``should define a fair and monitored process of reassignment/ reallocation of the divested [City Sights bus stop] authorizations to ensure that all competitors in the relevant market have an equal opportunity to apply for the divested stop authorizations.'' Big Bus also claims that the Final Judgment should address how hop-on, hop-off bus stop authorizations would be handled in the event that Defendants acquired an existing hop-on, hop-off bus tour business. Procedures relating to the assignment and allocation of bus stop authorizations are within the jurisdiction of NYCDOT, the New York City agency charged with regulating and managing bus stops. See, e.g., NYC Charter Sec. 2903 (giving NYCDOT control of and responsibility for ``all those functions and operations of the city relating to transportation''); NYC Charter Sec. 2903(a)(14) (empowering NYCDOT to enforce rules and regulations regarding vehicular traffic and the parking, standing, or stopping of vehicles on the city's streets); 34 RCNY Sec. 4-10 (governing the operations of buses in the city and providing that bus operators, subject to certain exceptions, cannot ``pick up or discharge passengers on a street except at a bus stop designated by the Commissioner [of NYCDOT] in writing.''). Pursuant to this authority, NYCDOT is best positioned to determine how to distribute the City Sights bus stops that have been relinquished pursuant to the proposed Final Judgment, taking into account the relevant factors just as it does with respect to bus stop allocations and authorizations generally. Given the established NYCDOT role in bus stop authorizations and allocations, the United States concluded that the facts of this case did not call for the proposed Final Judgment to establish any additional regulations or processes relating to the assignment or allocation of bus stop authorizations. 3. The proposed settlement already covers affiliated entities Big Bus's comment raises a concern that two provisions of the proposed Final Judgment--having to do with notification to the government of certain transactions (Section X) and ``reacquisition'' of stops (Section XII)--would not apply to affiliated entities that Defendants might form after entry of the Final Judgment. Big Bus is incorrect. The proposed Final Judgment applies to Defendant entities as well as their ``successors and assigns, and any subsidiaries, divisions, groups, affiliates, partnerships and joint ventures under their control, and their directors, officers, managers, agents, and employees'' (emphasis added). Therefore, any entities that Defendants form or acquire after entry of the Final Judgment will also be subject to it. 4. Third parties may report violations of the Final Judgment to the United States or State of New York Finally, Big Bus argues that Section XIII of the proposed Final Judgment, which provides that the Court retains jurisdiction for ten years to monitor and enforce the terms of the Final Judgment, should also set forth ``a process whereby third parties may directly report violations of the Final Judgment by the Defendants.'' The United States does not believe this is necessary. Third parties can already report such violations to the Antitrust Division of the Department of Justice or the Antitrust Bureau of the New York Attorney General's Office. Plaintiffs will take the appropriate steps to respond to any reported violations, including by applying to the Court to enforce compliance or punish violations pursuant to Section XIII of the proposed Final Judgment. V. CONCLUSION After carefully reviewing the public comment submitted by Big Bus, the United States has determined that the proposed Final Judgment, as drafted, provides an effective and appropriate remedy for the antitrust violation alleged in the Complaint and is therefore in the public interest. The United States will move this Court to enter the proposed Final Judgment after the public comment and this Response have been published in the Federal Register. Dated: July 28, 2015 Respectfully submitted, /s/-------------------------------------------------------------------- Sarah Oldfield David E. Altschuler U.S. Department of Justice, Antitrust Division, Transportation, Energy & [[Page 47521]] Agriculture Section, 450 Fifth Street NW., Suite 8000, Washington, DC 20530, Telephone: (202) 305-8915, [email protected], [email protected]. Benjamin Sirota U.S. Department of Justice, Antitrust Division, New York Office, 26 Federal Plaza, Room 3630, New York, NY 10278, Telephone: (212) 335- 8056, [email protected]. Attorneys for Plaintiff United States [[Page 47522]] [GRAPHIC] [TIFF OMITTED] TN07AU15.044 [[Page 47523]] [GRAPHIC] [TIFF OMITTED] TN07AU15.045 [[Page 47524]] [GRAPHIC] [TIFF OMITTED] TN07AU15.046 [[Page 47525]] [GRAPHIC] [TIFF OMITTED] TN07AU15.047 [FR Doc. 2015-19495 Filed 8-6-15; 8:45 am] BILLING CODE P
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terminal at 202–205–1810. General International Trade Commission identified by means of brackets. All
information concerning the Commission Building, 500 E Street SW., Washington, written submissions, except for
may also be obtained by accessing its DC, beginning at 9:30 a.m. on November confidential business information, will
Internet server (http://www.usitc.gov). 17, 2015. Requests to appear at the be made available for inspection by
Persons with mobility impairments who public hearing should be filed with the interested parties. Any confidential
will need special assistance in gaining Secretary, no later than 5:15 p.m., business information received by the
access to the Commission should November 2, 2015, in accordance with Commission in this investigation and
contact the Office of the Secretary at the requirements in the ‘‘Submissions’’ used in preparing this report will not be
202–205–2000. section below. All pre-hearing briefs published in a manner that would
Background: On June 29, 2015, the and statements should be filed no later reveal the operations of the firm
President signed the Bipartisan than 5:15 p.m., November 4, 2015; and supplying the information.
Congressional Trade Priorities and all post-hearing briefs and statements Summaries of Written Submissions:
Accountability Act of 2015 (TPA). should be filed not later than 5:15 p.m., The Commission intends to publish
Section 105(f)(2) of the Act requires the November 30, 2015. In the event that, as summaries of the positions of interested
Commission to submit two reports to of the close of business on November 2, persons in an appendix to its report.
the House Committee on Ways and 2015, no witnesses are scheduled to Persons wishing to have a summary of
Means and the Senate Committee on appear at the hearing, the hearing will their position included in the appendix
Finance, one in 2016 and a second not be canceled. Any person interested in should include a summary with their
later than mid-2020, on the economic attending the hearing as an observer or written submission. The summary may
impact of trade agreements nonparticipant should contact the Office not exceed 500 words, should be in
implemented under trade authorities of the Secretary at 202–205–2000 after MSWord format or a format that can be
procedures since 1984. Section 105(f)(2) November 2, 2015, for information easily converted to MSWord, and
provides as follows: concerning whether the hearing will be should not include any confidential
(2) REPORT ON IMPACT OF TRADE held. business information. The summary will
PROMOTION AUTHORITY.— Not later Written Submissions: In lieu of or in be published as provided if it meets
than one year after the date of the addition to participating in the hearing, these requirements and is germane to
enactment of this Act, and not later than interested parties are invited to file the subject matter of the investigation.
5 years thereafter, the United States written submissions concerning this In the appendix the Commission will
International Trade Commission shall investigation. All written submissions identify the name of the organization
submit to the Committee on Ways and should be addressed to the Secretary. furnishing the summary, and will
Means of the House of Representatives Except in the case of requests to appear include a link to the Commission’s
and the Committee on Finance of the at the hearing and pre- and post-hearing Electronic Document Information
Senate a report on the economic impact briefs, all written submissions should be System (EDIS) where the full written
on the United States of all trade received no later than 5:15 p.m., submission can be found.
agreements with respect to which February 5, 2016. All written
Congress has enacted an implementing submissions must conform to the By order of the Commission.
bill under trade authorities procedures provisions of section 201.8 of the Issued: August 4, 2015.
since January 1, 1984. Commission’s Rules of Practice and Lisa R. Barton,
The Commission will submit its first Procedure (19 CFR 201.8). Section 201.8 Secretary to the Commission.
report by June 29, 2016, and the second and the Commission’s Handbook on [FR Doc. 2015–19436 Filed 8–6–15; 8:45 am]
report by June 29, 2020. This notice Filing Procedures require that interested BILLING CODE 7020–02–P
pertains only to the procedures relating parties file documents electronically on
to preparation of the first report. or before the filing deadline and submit
For purposes of this report the eight (8) true paper copies by 12:00 p.m.
Commission considers the trade eastern time on the next business day. DEPARTMENT OF JUSTICE
agreements covered to include the In the event that confidential treatment Antitrust Division
Uruguay Round Agreements, the North of a document is requested, interested
American Free Trade Agreement parties must file, at the same time as the United States and State of New York v.
(NAFTA—Canada and Mexico), and eight paper copies, at least four (4) Twin America, LLC, et al.; Public
U.S. free trade agreements (FTAs) with additional true paper copies in which Comment and Response on Proposed
Australia, Bahrain, Canada, Chile, the confidential information must be Final Judgment
Colombia, the Dominican Republic and deleted (see the following paragraph for
five Central American countries (Costa further information regarding Pursuant to the Antitrust Procedures
Rica, El Salvador, Guatemala, Honduras, confidential business information). and Penalties Act, 15 U.S.C. 16(b)–(h),
and Nicaragua), Israel, Jordan, Korea, Persons with questions regarding the United States hereby publishes
Morocco, Oman, Panama, Peru, and electronic filing should contact the below the comment received on the
Singapore. Secretary (202–205–2000). proposed Final Judgment in United
The Commission has instituted an Any submissions that contain States and State of New York v. Twin
investigation under section 332(g) of the confidential business information (CBI) America, LLC, et al., Civil Action No.
Tariff Act of 1930 (19 U.S.C. 1332(g)) for must also conform to the requirements 12-cv-8989 (ALC) (GWG) (S.D.N.Y.),
the purpose of preparing this report and of section 201.6 of the Commission’s together with the Response of the
also for the purpose of assisting the Rules of Practice and Procedure (19 CFR United States to Public Comment.
tkelley on DSK3SPTVN1PROD with NOTICES
public in the filing and inspection of 201.6). Section 201.6 of the rules Copies of the comment and the
documents and also to make the report requires that the cover of the document United States’ Response are available for
more readily accessible to the public and the individual pages be clearly inspection at the Department of Justice
through the Commission’s Web site. marked as to whether they are the Antitrust Division, 450 Fifth Street NW.,
Public Hearing: The Commission will ‘‘confidential’’ or ‘‘non-confidential’’ Suite 1010, Washington, DC 20530
hold a public hearing in connection version, and that the confidential (telephone: 202–514–2481), on the
with this investigation at the U.S. business information is clearly Department of Justice’s Web site at
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of the payments made by Defendants to the government did not make.’’) Apple, 889 F. Supp. 2d at 631 (quoting
settle the class action. (internal quotation omitted). Keyspan, 763 F. Supp. 2d at 637–38);
‘‘The role of the court is not to see also Microsoft, 56 F.3d at 1461
III. STANDARD OF JUDICIAL REVIEW determine whether the decree results in (assessing whether ‘‘the remedies
UNDER THE TUNNEY ACT the array of rights and liabilities ‘that [obtained in the decree are] so
The Tunney Act requires that will best serve society, but only to inconsonant with the allegations
proposed consent judgments in antitrust ensure that the resulting settlement is charged as to fall outside of the ‘reaches
cases brought by the United States be within the reaches of the public of the public interest.’ ’’); SBC
subject to a 60-day public comment interest.’’’ Apple, 889 F. Supp. 2d at 631 Commc’ns, 489 F. Supp. 2d at 17
period, after which the court shall (quoting Keyspan, 763 F. Supp. 2d at (explaining that courts ‘‘may not require
determine whether entry of the 637) (emphasis in original); see also that the remedies perfectly match the
proposed Final Judgment ‘‘is in the Morgan Stanley, 881 F. Supp. 2d at 567; alleged violations’’). Accordingly, the
public interest.’’ 15 U.S.C. 16(e)(1); see Microsoft, 56 F.3d at 1460; United States United States ‘‘need only provide a
also United States v. Apple, Inc., 889 F. v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. factual basis for concluding that the
Supp. 2d 623, 630 (S.D.N.Y. 2012); 1988) (explaining court may not ‘‘engage settlements are reasonably adequate
United States v. Morgan Stanley, 881 F. in an unrestricted evaluation of what remedies for the alleged harms.’’ SBC
Supp. 2d 563, 566 (S.D.N.Y. 2012). In relief would best serve the public’’); Commc’ns, 489 F. Supp. 2d at 17; see
making that determination, the court, in United States v. Bechtel Corp., 648 F.2d also Apple, 889 F. Supp. 2d at 631.
accordance with the statute as amended 660, 666 (9th Cir. 1981) (noting that In its 2004 amendments to the
in 2004, is required to consider: ‘‘court is required to determine not Tunney Act,2 Congress made clear its
(A) the competitive impact of such whether a particular decree is the one intent to preserve the practical benefits
judgment, including termination of alleged that will best serve society, but whether of using consent decrees in antitrust
violations, provisions for enforcement and the settlement is within the reaches of enforcement, adding the unambiguous
modification, duration of relief sought, the public interest’’) (citations omitted). instruction that ‘‘[n]othing in this
anticipated effects of alternative remedies In determining whether a proposed section shall be construed to require the
actually considered, whether its terms are settlement is in the public interest, ‘‘the
ambiguous, and any other competitive court to conduct an evidentiary hearing
court should be ‘deferential to the or to require the court to permit anyone
considerations bearing upon the adequacy of government’s predictions as to the effect
such judgment that the court deems to intervene.’’ 15 U.S.C. 16(e)(2); see
of the proposed remedies.’ ’’ Apple, 889 also Apple, 889 F. Supp. 2d at 631
necessary to a determination of whether the
consent judgment is in the public interest; F. Supp. 2d at 631 (quoting Microsoft, (‘‘The Tunney Act allows, but does not
and 56 F.3d at 1461); see also United States require, the court to conduct an
(B) the impact of entry of such judgment v. US Airways Grp., Inc., 38 F. Supp. 3d
evidentiary hearing and to permit third
upon competition in the relevant market or 69, 76 (D.D.C. 2014) (‘‘must accord
parties to intervene.’’). The procedure
markets, upon the public generally and deference to the government’s
individuals alleging specific injury from the for the public-interest determination is
predictions about the efficacy of its
violations set forth in the complaint left to the discretion of the court, with
remedies’’) (quoting United States v.
including consideration of the public benefit, the recognition that the court’s ‘‘scope
SBC Commc’ns, Inc., 489 F. Supp. 2d 1,
if any, to be derived from a determination of of review remains sharply proscribed by
17 (D.D.C. 2007)); United States v.
the issues at trial. precedent and the nature of Tunney Act
Archer-Daniels-Midland Co., 272 F.
15 U.S.C. 16(e)(1); see also Apple, 889 proceedings.’’ SBC Commc’ns, 489 F.
Supp. 2d 1, 6 (D.D.C. 2003) (noting that
F. Supp. 2d at 630–31; Morgan Stanley, Supp. 2d at 11. ‘‘A court can make its
the court should grant due respect to the
881 F. Supp. 2d at 566–67. United States’ ‘‘prediction as to the public interest determination based on
In considering these statutory factors, effect of proposed remedies, its the competitive impact statement and
the court’s inquiry is necessarily a perception of the market structure, and response to public comments alone.’’
limited one. Apple, 889 F. Supp. 2d at its view of the nature of the case’’). US Airways, 38 F. Supp. 3d at 76.
631; Morgan Stanley, 881 F. Supp. 2d at A court ‘‘is not permitted to reject the IV. UNITED STATES’ RESPONSE TO
567; United States v. Keyspan Corp., proposed remedies merely because the PUBLIC COMMENT
763 F. Supp. 2d 633, 637 (S.D.N.Y. court believes other remedies are
2011). A court should consider, among preferable.’’ Keyspan, 763 F. Supp. 2d at The United States received one public
other things, the relationship between 637; see also Apple, 889 F. Supp. 2d at comment, from Taxi Tours, Inc., doing
the remedy secured and the specific 631 (same); United States v. Am. Tel. & business as BigBus (‘‘Big Bus’’). Big Bus
allegations set forth in the Complaint, Tel. Co., 552 F. Supp. 131, 151 (D.D.C. entered the New York City hop-on, hop-
whether the decree is sufficiently clear, 1982) (stating that ‘‘proposed decree off bus tour market in 2014 by acquiring
whether the enforcement mechanisms must be approved even if it falls short an existing player, Big Taxi. The
are sufficient, and whether the decree of the remedy the court would impose comment makes four principal points:
may positively harm third parties. on its own, as long as it falls within the (1) There should be additional remedies
Apple, 889 F. Supp. 2d at 631; United range of acceptability or is within the to facilitate competitors’ ticket sales; (2)
States v. Microsoft Corp., 56 F.3d 1448, reaches of the public interest’’) there should be a more specific process
1458–62 (D.C. Cir. 1995). However, ‘‘[a] (citations and internal quotations governing the allocation of bus stop
court must limit its review to the issues omitted); United States v. Alcan authorizations; (3) the judgment should
in the complaint and give ‘due respect Aluminum Ltd., 605 F. Supp. 619, 622 apply to Defendants’ future affiliated
to the [Government’s] perception of . . . (W.D. Ky. 1985) (approving consent 2 The 2004 amendments substituted ‘‘shall’’ for
tkelley on DSK3SPTVN1PROD with NOTICES
its case[.]’ ’’ Morgan Stanley, 881 F. decree even though the court would ‘‘may’’ in directing relevant factors for courts to
Supp. 2d at 567 (quoting Microsoft, 56 have imposed greater remedy). consider and amended the list of factors to focus on
F.3d at 1461); see also Keyspan, 763 F. The relevant inquiry ‘‘is whether the competitive considerations and to address
Supp. 2d at 638 (same); Apple, 889 F. Government has established an ample potentially ambiguous judgment terms. Compare 15
U.S.C. 16(e) (2004), with 15 U.S.C. 16(e)(1) (2006);
Supp. 2d at 631 (‘‘In most cases, the ‘factual foundation for [its] decisions see also SBC Commc’ns, 489 F. Supp. 2d at 11
court is not permitted to reach beyond such that its conclusions regarding the (concluding that the 2004 amendments ‘‘effected
the complaint to evaluate claims that proposed settlement are reasonable.’ ’’ minimal changes’’ to Tunney Act review).
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![47520 Federal Register / Vol. 80, No. 152 / Friday, August 7, 2015 / Notices
entities; and (4) there should be a meaningful barrier to competition in the 3. The proposed settlement already
process for third parties to report hop-on, hop-off bus tour market. Nor covers affiliated entities
violations of the Final Judgment. The did the Complaint allege that the Big Bus’s comment raises a concern
United States respectfully responds to formation of the joint venture had an that two provisions of the proposed
each point below. impact on these practices. Thus, the Final Judgment—having to do with
1. Divestiture of the City Sights bus suggested additional provisions are notification to the government of certain
stops is sufficient to remedy the harm unnecessary to address the competitive transactions (Section X) and
alleged in the Complaint harm set forth in the Complaint. ‘‘reacquisition’’ of stops (Section XII)—
2. NYCDOT administers bus stop would not apply to affiliated entities
Big Bus’s comment asserts that
authorizations that Defendants might form after entry
Defendants prevent competitors from
of the Final Judgment. Big Bus is
selling tickets for hop-on, hop-off bus
Big Bus argues that the proposed incorrect. The proposed Final Judgment
tours at or near certain key tourist
settlement should establish certain rules applies to Defendant entities as well as
attractions and proposes that the
and processes related to the allocation their ‘‘successors and assigns, and any
settlement be amended to ensure equal
and use of hop-on, hop-off bus stops. subsidiaries, divisions, groups,
access to vendors to market and sell
tickets from Defendants’ competitors. First, Big Bus asserts that the Final affiliates, partnerships and joint
Big Bus also expresses concerns Judgment ‘‘should define a fair and ventures under their control, and their
regarding the conduct of City Experts, monitored process of reassignment/ directors, officers, managers, agents, and
an affiliate of Defendants that offers reallocation of the divested [City Sights employees’’ (emphasis added).
tourists a variety of tours and attractions bus stop] authorizations to ensure that Therefore, any entities that Defendants
from concierge desks it operates at all competitors in the relevant market form or acquire after entry of the Final
certain New York City hotels. Big Bus have an equal opportunity to apply for Judgment will also be subject to it.
contends that because City Experts sells the divested stop authorizations.’’ Big 4. Third parties may report violations
Defendants’ hop-on, hop-off bus tours as Bus also claims that the Final Judgment of the Final Judgment to the United
part of its bundled tourism packages but should address how hop-on, hop-off bus States or State of New York
not the hop-on, hop-off bus tours of stop authorizations would be handled in
Finally, Big Bus argues that Section
Defendants’ competitors, it ‘‘prevents the event that Defendants acquired an
XIII of the proposed Final Judgment,
the Defendants’ competitors from existing hop-on, hop-off bus tour
which provides that the Court retains
effectively competing at the hotel and business.
jurisdiction for ten years to monitor and
retail level.’’ Big Bus also complains Procedures relating to the assignment enforce the terms of the Final Judgment,
that Twin America’s employees prevent and allocation of bus stop should also set forth ‘‘a process whereby
Big Bus staff from selling tickets by authorizations are within the third parties may directly report
verbally and physically attacking them. jurisdiction of NYCDOT, the New York
Pursuant to the Tunney Act, review of violations of the Final Judgment by the
City agency charged with regulating and Defendants.’’ The United States does not
a proposed Final Judgment is limited to
managing bus stops. See, e.g., NYC believe this is necessary. Third parties
the relationship of the remedy to the
Charter § 2903 (giving NYCDOT control can already report such violations to the
violations alleged in the Complaint. See
of and responsibility for ‘‘all those Antitrust Division of the Department of
Microsoft, 56 F.3d at 1459–61; Morgan
functions and operations of the city Justice or the Antitrust Bureau of the
Stanley, 881 F. Supp. 2d at 567;
relating to transportation’’); NYC New York Attorney General’s Office.
Keyspan, 763 F. Supp. 2d at 637–38;
Charter § 2903(a)(14) (empowering Plaintiffs will take the appropriate steps
Apple, 889 F. Supp. 2d at 631. As
NYCDOT to enforce rules and to respond to any reported violations,
described above, the Complaint alleged
regulations regarding vehicular traffic including by applying to the Court to
that the formation and operation of
Twin America substantially lessened and the parking, standing, or stopping of enforce compliance or punish violations
competition in the hop-on, hop-off bus vehicles on the city’s streets); 34 RCNY pursuant to Section XIII of the proposed
tour market in New York City and § 4–10 (governing the operations of Final Judgment.
identified potential entrants’ inability to buses in the city and providing that bus
operators, subject to certain exceptions, V. CONCLUSION
obtain bus stop authorizations at or
cannot ‘‘pick up or discharge passengers After carefully reviewing the public
sufficiently near top tourist attractions
on a street except at a bus stop comment submitted by Big Bus, the
as the primary entry barrier. The
designated by the Commissioner [of United States has determined that the
proposed settlement addresses this
NYCDOT] in writing.’’). Pursuant to this proposed Final Judgment, as drafted,
entry barrier by requiring Twin America
authority, NYCDOT is best positioned to provides an effective and appropriate
to divest all of the approximately 50
determine how to distribute the City remedy for the antitrust violation
City Sights bus stop authorizations in
Sights bus stops that have been alleged in the Complaint and is
Manhattan, including highly desirable
relinquished pursuant to the proposed therefore in the public interest. The
stops at or near key tourist attractions
Final Judgment, taking into account the United States will move this Court to
that rivals have been consistently
relevant factors just as it does with enter the proposed Final Judgment after
unable to obtain. By relinquishing all of
respect to bus stop allocations and the public comment and this Response
the City Sights bus stops to NYCDOT,
authorizations generally. have been published in the Federal
the proposed Final Judgment increases
Given the established NYCDOT role Register.
the available inventory of bus stops for
tkelley on DSK3SPTVN1PROD with NOTICES
which rivals can obtain the in bus stop authorizations and Dated: July 28, 2015
authorizations needed to effectively allocations, the United States concluded Respectfully submitted,
compete with Twin America. that the facts of this case did not call for /s/ lllllllllllllllllll
The Complaint did not allege that the the proposed Final Judgment to Sarah Oldfield
conduct of Defendants’ street sellers, its establish any additional regulations or David E. Altschuler
City Experts affiliate, or Defendants’ processes relating to the assignment or U.S. Department of Justice, Antitrust
sales practices otherwise served as a allocation of bus stop authorizations. Division, Transportation, Energy &
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Document Created: 2015-12-15 10:57:01
Document Modified: 2015-12-15 10:57:01
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 47517 |
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