83 FR 11529 - Oregon Lithoprint, Inc.; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

Federal Register Volume 83, Issue 51 (March 15, 2018)

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 complaint and the terms of the consent order-- embodied in the consent agreement--that would settle these allegations.

[Federal Register Volume 83, Number 51 (Thursday, March 15, 2018)]
[Notices]
[Pages 11529-11532]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-05252]


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FEDERAL TRADE COMMISSION

[File No. 161 0230]


Oregon Lithoprint, Inc.; 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 complaint and the terms of the consent order--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before April 8, 2018.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write: ``In the Matter of 
Oregon Lithoprint, Inc., File No. 161 0230'' on your comment, and file 
your comment online at https://ftcpublic.commentworks.com/ftc/oregonlithoprintconsent by following the instructions on the web-based 
form. If

[[Page 11530]]

you prefer to file your comment on paper, write ``In the Matter of 
Oregon Lithoprint, Inc., File No. 161 0230'' 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: Michael Turner (202-326-3619), 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 a consent order 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 March 9, 2018), on the World Wide Web, at 
https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before April 8, 2018. 
Write ``In the Matter of Oregon Lithoprint, Inc., File No. 161 0230'' 
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 website, at https://www.ftc.gov/policy/public-comments.
    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/oregonlithoprintconsent 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 website.
    If you prefer to file your comment on paper, write ``In the Matter 
of Oregon Lithoprint, Inc., File No. 161 0230'' 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.
    Because your comment will be placed on the publicly accessible FTC 
website at https://www.ftc.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else'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, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
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)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). 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). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC website--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website 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 April 8, 2018. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an agreement containing consent order (``Consent 
Agreement'') from Oregon Lithoprint Inc. (``OLI''). The Commission's 
Complaint alleges that OLI violated Section 5 of the Federal Trade 
Commission Act, as amended, 15 U.S.C. 45, by inviting a competitor in 
the publication of foreclosure notices to divide clients by geographic 
market.
    Under the terms of the proposed Consent Agreement, OLI is required 
to cease and desist from communicating with its competitors about the 
placement of foreclosure notices. It is also barred from entering into, 
participating in, inviting, or soliciting an agreement with any 
competitor to divide markets or to allocate customers.
    The Consent Agreement has been placed on the public record for 30 
days for receipt of comments from interested members of the public. 
Comments received during this period will become part of the public 
record. After 30 days, the Commission will review the Consent Agreement 
again and the comments received, and will decide whether it should 
withdraw from the Consent Agreement or make final the accompanying 
Decision and Order (``Proposed Order'').
    The purpose of this Analysis to Aid Public Comment is to invite and 
facilitate public comment. It is not intended to constitute an official 
interpretation of the proposed Consent Agreement and the accompanying 
Proposed Order or in any way to modify their terms.

I. The Complaint

    The allegations of the Complaint are summarized below:

[[Page 11531]]

    OLI owns the News-Register, a twice-weekly community newspaper 
based in Yamhill, Oregon. Among other things, the News-Register charges 
clients to publish a type of legal notice known as a foreclosure 
notice. Under Oregon law, parties foreclosing on real property must 
place a notice of foreclosure in a qualifying newspaper in the county 
within which the property is located.
    The News-Register's only competitor in Yamhill County is The 
Newberg Graphic, a weekly community newspaper. The Newberg Graphic also 
publishes foreclosure notices, and it charges considerably less than 
the News-Register for the service. The News-Register has more 
subscribers and a wider circulation within Yamhill County than The 
Newberg Graphic.
    In August 2016, the publisher of the News-Register learned that a 
client intended to place foreclosure notices only in The Newberg 
Graphic from that point on because The Newberg Graphic was less 
expensive than the News-Register. In response, on August 29, 2016, the 
publisher emailed a manager at the parent company of The Newberg 
Graphic and explained the publisher's view that, under state law, 
foreclosure notices should be placed in the newspaper with the largest 
circulation in the area that the property is located. The publisher 
concluded his email by inviting the competitor to join the News-
Register in instructing mutual clients that they should place 
foreclosure notices in the newspaper dominant in the area of the 
foreclosed property. The parent company of the The Newberg Graphic 
rejected the invitation and reported it to the Federal Trade 
Commission.
    Several months later, in October 2016, the publisher of the News-
Register emailed the competitor again to state that the News-Register 
had told a client to use The Newberg Graphic because the property in 
question was located in its area, and that the client was in fact going 
to use The Newberg Graphic to publish the notice. He ended the email 
stating ``[i]t is probably too much to expect that others would do 
likewise.''
    The parent company of the The Newberg Graphic interpreted this 
second email as another invitation to collude, rejected the invitation, 
and reported it to the Federal Trade Commission.

II. Analysis

    OLI's August 29, 2016, email to its competitor is an explicit 
attempt to arrange an agreement between the two companies to divide 
foreclosure notices by geography. It is an invitation to collude. The 
October 2016 email is also an invitation to collude: OLI proposed a 
market allocation scheme and expressed a hope that its competitor would 
join that conduct. The Commission has long held that invitations to 
collude violate Section 5 of the FTC Act.
    In a 2015 statement, the Commission explained that unfair methods 
of competition under Section 5 ``must cause, or be likely to cause, 
harm to competition or the competitive process, taking into account any 
associated cognizable efficiencies and business justifications.'' \1\ 
Potential violations are evaluated under a ``framework similar to the 
rule of reason.'' \2\ Competitive effects analysis under the rule of 
reason depends upon the nature of the conduct that is under review.\3\
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    \1\ Fed. Trade Comm'n, Statement of Enforcement Principles 
Regarding ``Unfair Methods of Competition'' Under Section 5 of the 
FTC Act (Aug. 13, 2015) (Section 5 Unfair Methods of Competition 
Policy Statement), available at https://www.ftc.gov/system/files/documents/public_statements/735201/150813section5enforcement.pdf. 
Acting Chairman Ohlhausen dissented from the issuance of the Section 
5 Unfair Methods of Competition Policy Statement. See https://www.ftc.gov/public-statements/2015/08/dissenting-statement-commissioner-ohlhausen-ftc-act-section-5-policy.
    \2\ Section 5 Unfair Methods of Competition Policy Statement.
    \3\ See, e.g., California Dental Ass'n v. FTC, 526 U.S. 756, 781 
(1999) (``What is required . . . is an inquiry meet for the case, 
looking to the circumstances, details, and logic of a restraint.'').
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    An invitation to collude is ``potentially harmful and . . . serves 
no legitimate business purpose.'' \4\ For this reason, the Commission 
treats such conduct as ``inherently suspect'' (that is, presumptively 
anticompetitive).\5\ Accordingly, an invitation to collude can be 
condemned under Section 5 without a showing that the respondent 
possesses market power.\6\
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    \4\ In re Valassis Commc'ns., Inc., 141 F.T.C. 247, 283 (2006) 
(Analysis of Agreement Containing Consent Order to Aid Public 
Comment); see also Address by FTC Chairwoman Edith Ramirez, Section 
5 Enforcement Principles, George Washington University Law School at 
5 (Aug. 13, 2015), available at https://www.ftc.gov/system/files/documents/public_statements/735411/150813section5speech.pdf.
    \5\ See, e.g., In re North Carolina Bd. of Dental Examiners, 152 
F.T.C. 640, 668 (2011) (noting that conduct is inherently suspect if 
it can be ``reasonably characterized as `giv[ing] rise to an 
intuitively obviously inference of anticompetitive effect.' '' 
(citation omitted)).
    \6\ See, e.g., In re Realcomp II, Ltd., 148 F.T.C. ___, No. 
9320, 2009 FTC LEXIS 250 at *51 (Oct. 30, 2009) (Comm'n Op.) 
(explaining that if conduct is ``inherently suspect'' in nature, and 
there are no cognizable procompetitive justifications, the 
Commission can condemn it ``without proof of market power or actual 
effects'').
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    The Commission has long held that an invitation to collude violates 
Section 5 of the FTC Act even where there is no proof that the 
competitor accepted the invitation \7\ This is for several reasons. 
First, unaccepted solicitations may facilitate coordination between 
competitors because they reveal information about the solicitor's 
intentions or preferences. Second, it can be difficult to discern 
whether a competitor has accepted a solicitation. Third, finding a 
violation may deter conduct that has no legitimate business purpose.\8\
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    \7\ See, e.g., In re Valassis Commc'ns, Inc., 141 F.T.C. 247 
(2006); In re Stone Container, 125 F.T.C. 853 (1998); In re 
Precision Moulding, 122 F.T.C. 104 (1996). See also In re McWane, 
Inc., Docket No. 9351, Opinion of the Commission on Motions for 
Summary Decision at 20-21 (F.T.C. Aug. 9, 2012) (``an invitation to 
collude is `the quintessential example of the kind of conduct that 
should be . . . challenged as a violation of Section 5' '') (citing 
the Statement of Chairman Liebowitz and Commissioners Kovacic and 
Rosch, In re U-Haul Int'l, Inc., 150 F.T.C. 1, 53 (2010)). This 
conclusion has been endorsed by leading antitrust scholars. See P. 
Areeda & H. Hovenkamp, VI ANTITRUST LAW ] 1419 (2003); Stephen 
Calkins, Counterpoint: The Legal Foundation of the Commission's Use 
of Section 5 to Challenge Invitations to Collude is Secure, 
ANTITRUST Spring 2000, at 69. In a case brought under a state's 
version of Section 5, the First Circuit expressed support for the 
Commission's application of Section 5 to invitations to collude. Liu 
v. Amerco, 677 F.3d 489 (1st Cir. 2012).
    \8\ In re Valassis Comm'c, Inc., 141 F.T.C. 247, 283 (2006) 
(Analysis of Agreement Containing Consent Order to Aid Public 
Comment).
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III. The Proposed Consent Order

    The Proposed Order contains the following substantive provisions:
    Section II, Paragraph A of the Proposed Order enjoins OLI from 
entering or attempting to enter any agreement to refuse to publish 
legal notices or allocate customers for the publication of legal 
notices.
    Section II, Paragraph B prohibits OLI from publically or privately 
communicating with a competitor that the competitor should advice 
customers to place foreclosure notices in the newspaper with the widest 
circulation in the area in which the property is located, or refuse to 
publish notices for properties located in a competitor's primary 
distribution area.
    Section II, Paragraph C, contains three provisos. The first allows 
OLI to communicate with any governmental body regarding the proper 
interpretation of state law related to legal notices. The second allows 
OLI to participate with any effort of the Oregon newspaper association 
to lobby any governmental body regarding legal notices. The third 
allows OLI to disseminate information regarding legal notices to the 
public.
    Sections III-VI of the Proposed Order impose certain standard 
reporting and compliance requirements on OLI.
    The Proposed Order will expire in 10 years.

[[Page 11532]]

    The purpose of this analysis is to facilitate public comment on the 
proposed Consent agreement, and the Commission does not intend this 
analysis to constitute an official interpretation of the proposed 
Consent Agreement or to modify its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2018-05252 Filed 3-14-18; 8:45 am]
 BILLING CODE 6750-01-P