81 FR 778 - ArcLight Energy Partners Fund VI, L.P.; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

Federal Register Volume 81, Issue 4 (January 7, 2016)

Page Range		778-780
FR Document		2016-00028

The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent orders--embodied in the consent agreement--that would settle these allegations.

Federal Register, Volume 81 Issue 4 (Thursday, January 7, 2016)

[Federal Register Volume 81, Number 4 (Thursday, January 7, 2016)]
[Notices]
[Pages 778-780]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-00028]

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FEDERAL TRADE COMMISSION

[File No. 151 0149]

ArcLight Energy Partners Fund VI, L.P.; Analysis To Aid Public
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair methods of competition.
The attached Analysis to Aid Public Comment describes both the
allegations in the draft complaint and the terms of the consent
orders--embodied in the consent agreement--that would settle these
allegations.

DATES: Comments must be received on or before January 27, 2016.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/arclightgulfoilconsent online or on
paper, by following the instructions in the Request for Comment part of
the SUPPLEMENTARY INFORMATION section below. Write ``ArcLight Energy
Partners Fund VI, L.P., Consent Agreement, File No. 151-0149'' on your
comment and file your comment online at https://ftcpublic.commentworks.com/ftc/arclightgulfoilconsent by following the
instructions on the web-based form. If you prefer to file your comment
on paper, write ``ArcLight Energy Partners Fund VI, L.P., Consent
Agreement, File No. 151-0149'' on your comment and on the envelope, and
mail your comment to the following address: Federal Trade Commission,
Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610
(Annex D), Washington, DC 20580, or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Jennifer Milici (202-326-2912), Bureau
of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing consent orders to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis to Aid Public Comment describes the terms of the
consent agreement, and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
from the FTC Home Page (for December 28, 2015), on the World Wide Web,
at http://www.ftc.gov/os/actions.shtm.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before January 27,
2016. Write ``ArcLight Energy Partners Fund VI, L.P., Consent
Agreement, File No. 151-0149'' on your comment. Your comment--including
your name and your state--will be placed on the public record of this
proceeding, including, to the extent practicable, on the public
Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a
matter of discretion, the Commission tries to remove individuals' home
contact information from comments before placing them on the Commission
Web site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which . . . is privileged or confidential,'' as discussed in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept
confidential only if the FTC General Counsel, in his or her sole
discretion, grants your request in accordance with the law and the
public interest.
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\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/arclightgulfoilconsent by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
If you file your comment on paper, write ``ArcLight Energy Partners
Fund VI, L.P., Consent Agreement, File No. 151-0149'' on your comment
and on the envelope, and mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver
your comment to the following address: Federal Trade Commission, Office
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor,
Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your
paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before January 27, 2016. You can find more
information, including routine uses permitted by the Privacy Act, in
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

Introduction

The Federal Trade Commission (``Commission'') has accepted from
ArcLight Energy Partners Fund VI, L.P. (``ArcLight''), subject to final
approval, an Agreement Containing Consent Orders (``Consent
Agreement'') designed to remedy the anticompetitive effects resulting
from ArcLight's proposed acquisition of Gulf Oil Limited Partnership
(``Gulf'') and related assets from Cumberland Farms, Inc.

[[Page 779]]

(``Cumberland''). Under the terms of the proposed Decision and Order
(``Order'') contained in the Consent Agreement, ArcLight must divest
four of Gulf's terminals located in Pennsylvania--in Mechanicsburg,
Altoona, Pittston Township, and Williamsport--to Arc Logistics
Partners, LP (``Arc Logistics'').
The Consent Agreement has been placed on the public record for 30
days to solicit comments from interested persons. Comments received
during this period will become part of the public record. After 30
days, the Commission will again review the Consent Agreement and the
comments received, and will decide whether it should withdraw from the
Consent Agreement, modify it, or make the Order final.

The Parties

ArcLight invests in energy infrastructure. Through its wholly-owned
subsidiary, Pyramid LLC, ArcLight owns and operates twelve light
petroleum product (``LPP'') terminals in Pennsylvania. ArcLight uses
its terminals to meet its own marketing needs and offers terminaling
services to third parties for a fee.
Cumberland, one of the largest convenience store operators in the
country, operates a petroleum marketing, terminaling, and distribution
business through its Gulf subsidiary. Gulf owns and operates twelve LPP
terminals in the Northeast, including seven in Pennsylvania. Gulf also
uses its terminals to meet its own marketing needs and provides
terminaling services to third parties for a fee.

The Proposed Acquisition

Pursuant to two contingent Purchase and Sale Agreements dated May
15, 2015, ArcLight proposes to acquire Gulf, and certain other assets,
from Cumberland (the ``Acquisition''). The Commission's Complaint
alleges that the Acquisition, if consummated, would violate Section 7
of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the
Federal Trade Commission Act, as amended, 15 U.S.C. 45, by
substantially lessening competition for gasoline and distillate
terminaling services in relevant geographic markets within
Pennsylvania.

The Relevant Market

Terminals are critical to the efficient distribution of LPPs.
Transporting bulk quantities of LPPs via pipeline or marine vessel is
significantly less expensive on a per gallon basis than trucking LPPs
the same distance. Terminals serve as the delivery points on pipeline
and marine routes and are capable of receiving bulk quantities of LPPs,
holding LPPs in storage tanks, and loading smaller quantities of LPPs
onto tanker trucks for local delivery. Tanker trucks pick up product
from the terminals through specialized loading systems and transport
LPPs to retail locations and end-use customers. Terminaling services
include the off-loading, temporary storage, and dispensing of LPPs into
trucks.
The Commission's Complaint alleges that the relevant product
markets within which to analyze the Acquisition are gasoline
terminaling services and distillates terminaling services. Gasoline
terminaling service customers can only use terminals that meet
gasoline-specific environmental regulations. A terminal must have
specialized equipment, including vapor recovery units and tanks with
internal floating roofs, to offer gasoline terminaling services. While
distillate terminaling customers may be able to use gasoline terminals,
the reverse is not possible due to the more stringent regulatory
requirements for the storage and handling of gasoline.
The Commission's Complaint alleges three relevant geographic
markets in Pennsylvania in which to assess the competitive effects of
the Acquisition: (1) Altoona, which includes terminals in Altoona; (2)
Scranton, which includes terminals in Pittston Township and
Edwardsville; and (3) Harrisburg, which includes terminals in
Northumberland, Williamsport, Mechanicsburg, and Highspire.
The Acquisition would substantially increase concentration in
relevant markets that are already highly concentrated. In the Altoona
market, ArcLight and Gulf are the only firms that offer gasoline
terminaling services, and two of three firms that offer distillate
terminaling services. ArcLight and Gulf are two of only three firms
that offer gasoline or distillate terminaling services in the Scranton
market. In the Harrisburg market, ArcLight and Gulf are two of three
firms that offer gasoline terminaling services, and two of four firms
that offer distillate terminaling services.

Effects of the Acquisition

The Acquisition would substantially lessen competition for
terminaling services in the relevant markets by enabling ArcLight to
exercise market power unilaterally, and enhancing the likelihood of
collusion or coordinated interaction among the few remaining
terminaling services providers. Post-acquisition, ArcLight would be the
sole firm offering gasoline terminaling services in Altoona. It would
own most of the LPP storage capacity in each of the other relevant
markets and would be able to raise terminaling service fees or reduce
access to terminaling services unilaterally. The remaining firms have
limited ability to accommodate additional throughput customers and
would likely be unable to constrain ArcLight from exercising market
power. To the extent the remaining firms could offer some limited
constraint on ArcLight's ability to exercise market power unilaterally,
they are unlikely to do so because the transaction would increase their
incentives to coordinate tacitly with ArcLight.

Entry Conditions

Entry into the relevant markets would not be timely, likely, or
sufficient to deter or counteract the anticompetitive effects arising
from the Acquisition. Barriers to entry are significant and include
high sunk costs associated with the construction of a new terminal, and
the substantial amount of time required to design, build, and permit a
new facility. ArcLight has significant excess capacity in the relevant
markets, and this capacity would also discourage new entry.

The Decision and Order

The Order resolves the competitive concerns raised by the
Acquisition by requiring that ArcLight divest Gulf's terminals in
Altoona, Pittston Township, Mechanicsburg, and Williamsport. The Order
requires ArcLight to divest to Arc Logistics, or another acquirer
approved by the Commission, the four terminals and all associated
assets, as well as enter into certain transitional arrangements
necessary for the acquirer to become established and compete
successfully in the relevant markets. ArcLight is required to divest
the terminals within 20 days of closing the Acquisition.
Arc Logistics is a publicly-traded logistics service provider
principally engaged in the terminaling, storage, throughput, and
transloading of crude oil and LPPs. The company owns twelve LPP
terminals in several states, not including Pennsylvania. To ensure that
the acquirer has sufficient throughput at the divested terminals while
it negotiates contracts with new terminal customers, the Order requires
ArcLight to enter a transitional throughput agreement with Arc
Logistics, whereby ArcLight commits to throughput certain volumes at
Arc Logistics' terminals for two years. The Order also requires
ArcLight to supply Arc Logistics with renewable fuels, at Arc
Logistics' request, for a period of five years, an option that will
help Arc Logistics attract throughput customers. Finally, the Order
requires ArcLight to let any

[[Page 780]]

customer in the relevant markets out of its terminaling service
contract without penalty for a period of six months after the
divestiture, allowing Arc Logistics to compete for those customers.
The purpose of this analysis is to facilitate public comment on the
Consent Agreement, and it is not intended to constitute an official
interpretation of the Order or to modify its terms in any way.

By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2016-00028 Filed 1-6-16; 8:45 am]
BILLING CODE 6750-01-P

780 Federal Register / Vol. 81, No. 4 / Thursday, January 7, 2016 / Notices

customer in the relevant markets out of following address: Federal Trade the Dodd-Frank Act,3 the FTC is
its terminaling service contract without Commission, Office of the Secretary, authorized to prescribe rules under
penalty for a period of six months after Constitution Center, 400 7th Street SW., Section 553 of the Administrative
the divestiture, allowing Arc Logistics to 5th Floor, Suite 5610 (Annex J), Procedure Act (APA) 4 with respect to
compete for those customers. Washington, DC 20024. unfair or deceptive acts or practices by
The purpose of this analysis is to FOR FURTHER INFORMATION CONTACT: motor vehicle dealers.5
facilitate public comment on the Carole Reynolds, 202–326–3230, or In recent years, the FTC has been
Consent Agreement, and it is not Teresa Kosmidis, 202–326–3216, particularly active in enforcement and
intended to constitute an official Division of Financial Practices, Bureau other initiatives related to automobile
interpretation of the Order or to modify of Consumer Protection, Federal Trade transactions. Since 2011, the FTC has
its terms in any way. Commission, 600 Pennsylvania Avenue brought more than twenty-five cases
NW., Mail Stop–CC–10232, Washington, protecting consumers in this area,
By direction of the Commission.
DC 20580. including a sweep of ten actions against
Donald S. Clark,
SUPPLEMENTARY INFORMATION: automobile dealers for deceptive
Secretary. advertising, and a coordinated federal-
[FR Doc. 2016–00028 Filed 1–6–16; 8:45 am] I. Background state effort that yielded more than two
BILLING CODE 6750–01–P For many consumers, aside from hundred automobile actions for fraud,
housing costs, a car purchase is their deception, and other illegal practices.6
most expensive financial transaction. In 2011, the FTC conducted three
FEDERAL TRADE COMMISSION With prices averaging more than automobile ‘‘roundtables’’ around the
$33,500 for a new vehicle and $20,000 country, where panelists from
Agency Information Collection government, consumer advocacy
Activities; Proposed Collection: for a used vehicle from a dealer, most
consumers seek to finance the purchase groups, and industry discussed
Comment Request consumer protection issues related to
of a new or used car.1 Consumers may
AGENCY: Federal Trade Commission seek financing from their local bank or sales, financing, and leasing practices
(‘‘Commission’’ or ‘‘FTC’’). credit union, as well as from the dealer involving automobiles; the Commission
ACTION: Notice. selling the vehicle. Financing obtained also sought and received public
at the dealership, whether it is provided
SUMMARY: The FTC plans to conduct a by a third party or directly by the dealer, under various other statutes, including, for
example, the Truth in Lending Act, 15 U.S.C. 1601–
qualitative survey of consumers who may provide benefits for many 1666j, and its implementing Regulation Z, 12 CFR
recently purchased an automobile and consumers, such as convenience, 226, 12 CFR 1026; the Consumer Leasing Act, 15
financed that purchase through a dealer. special manufacturer-sponsored U.S.C. 1667–1667f, and its implementing
Through a survey research firm, the FTC programs, access to a variety of banks Regulation M, 12 CFR 213, 12 CFR 1013; the Equal
Credit Opportunity Act (ECOA), 15 U.S.C. 1691–
seeks to interview consumers about the and financial entities, or access to credit 1691f, and its implementing Regulation B, 12 CFR
consumer’s experience in selecting, otherwise unavailable to a buyer. 202, 12 CFR 1002; the Electronic Fund Transfer Act,
purchasing, and financing an Financing that is offered or arranged by 15 U.S.C. 1693–1693r, and its implementing
automobile from a dealer. The dealers, however, can be a complicated, Regulation E, 12 CFR 205, 12 CFR 1005; and the
opaque process and potentially involve privacy and safeguard provisions of the Gramm-
interviews also will involve reviewing Leach Bliley Act, 15 U.S.C. 6801–6809, and related
the consumer’s documentation from the unfair or deceptive practices. privacy rule, 16 CFR 313, and safeguards rule, 16
purchase and financing. This is the first As the nation’s consumer protection CFR 314.
of two notices required under the agency, the Commission is committed to 3 Dodd-Frank Wall Street Reform and Consumer

Paperwork Reduction Act (‘‘PRA’’) in protecting consumers in connection Protection Act § 1029, 12 U.S.C. 5519.
4 5 U.S.C. 553.
which the FTC seeks public comments with auto-related transactions. The
5 See Dodd-Frank Act § 1029(d), 12 U.S.C.
on its proposed consumer research in Commission has broad authority to
5519(d). Under the Dodd-Frank Act, the term
connection with Office of Management protect consumers in this area. The ‘‘motor vehicle dealer’’ refers to ‘‘any person or
and Budget (‘‘OMB’’) review of, and agency enforces the FTC Act, which resident in the United States, or any territory of the
clearance for, the collection of prohibits unfair and deceptive practices United States, who (A) is licensed by a State, a
by a wide variety of entities, including territory of the United States, or the District of
information discussed herein. Columbia to engage in the sale of motor vehicles;
DATES: Comments must be received on
automobile dealers.2 Also pursuant to and (B) takes title to, holds an ownership in, or
or before March 7, 2016. takes physical custody of motor vehicles.’’ Id. at
1 In 2015, the average price of a new car sold in 1029(f)(2), 12 U.S.C. 5519(f)(2). The term ‘‘motor
ADDRESSES: Interested parties may file a the U.S. is $33,560, according to Kelly Blue Book. vehicle’’ includes, among other things, motorcycles,
comment online or on paper, by See Kelly Blue Book, Average New Car Transaction motor homes, recreational vehicle trailers,
following the instructions in the Prices Rise Steadily, Up 2.6% in April 2015 (May recreational boats and marine equipment, and other
1, 2015), available at http://mediaroom.kbb.com/ vehicles titled and sold through dealers. See id. at
Request for Comment part of the 2015-05-01-New-Car-Transaction-Prices-Rise- 1029(f)(1), 12 U.S.C. 5519(f)(1).
SUPPLEMENTARY INFORMATION section Steadily-Up-2-6-Percent-in-April-2015-According- 6 See Press Releases, FTC Announces Sweep

below. Write ‘‘Auto Buyer Consumer to-Kelley-Blue-Book. The average price of a used car Against 10 Auto Dealers (Jan. 9, 2014), available at
Survey, Project No. P154800’’ on your is $20,057. See Used Car Prices Hold Up in Strong http://www.ftc.gov/news-events/press-releases/
New-Vehicle Market), J.D. Power (Sept. 8, 2015), 2014/01/ftc-announces-sweep-against-10-auto-
comment, and file your comment online available at http://www.jdpower.com/cars/articles/ dealers; FTC Approves Final Consent Orders in
at https://ftcpublic.commentworks.com/ used-cars/used-car-prices-hold-strong-new-vehicle- Deceptive Auto Dealers’ Ad Cases (May 6, 2014),
ftc/autobuyersurveypra, by following market. Used cars available from independent available at http://www.ftc.gov/news-events/press-
the instructions on the web-based form. dealers and from ‘‘buy here pay here’’ dealers have releases/2014/05/ftc-approves-final-consent-orders-
rmajette on DSK2TPTVN1PROD with NOTICES

been lower in price. For example, in 2014, over deceptive-auto-dealers-ads and FTC, Multiple Law
If you prefer to file your comment on 42% of cars were sold at an average sales price of Enforcement Partners Announce Crackdown on
paper, mail your comment to the $5,000—$10,000 at independent dealers; the Deception, Fraud in Auto Sales, Financing and
following address: Federal Trade average cost of cars was $7,150 at ‘‘buy here pay Leasing (Mar. 26, 2015), available at https://
Commission, Office of the Secretary, here’’ dealers. See 2015 NIADA Used Car Industry www.ftc.gov/news-events/press-releases/2015/03/
Report, at 6 and 16, respectively, available at http:// ftc-multiple-law-enforcement-partners-announce-
600 Pennsylvania Avenue NW., Suite www.niada.com/publications.php. crackdown. See also https://www.ftc.gov/news-
CC–5610 (Annex J), Washington, DC 2 15 U.S.C. 45(a). The Commission also has events/media-resources/consumer-finance/auto-
20580, or deliver your comment to the enforcement authority over automobile dealers marketplace.

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Document Created: 2016-01-07 00:13:02
Document Modified: 2016-01-07 00:13:02

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
Action		Proposed consent agreement.
Dates		Comments must be received on or before January 27, 2016.
Contact		Jennifer Milici (202-326-2912), Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.
FR Citation		81 FR 778