83 FR 4051 - Seven & iHoldings Co., Ltd., a Corporation; 7-Eleven, Inc., a Corporation; and Sunoco LP, a Limited Partnership; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

Federal Register Volume 83, Issue 19 (January 29, 2018)

Page Range		4051-4053
FR Document		2018-01547

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 orders-- embodied in the consent agreement--that would settle these allegations.

Federal Register, Volume 83 Issue 19 (Monday, January 29, 2018)

[Federal Register Volume 83, Number 19 (Monday, January 29, 2018)]
[Notices]
[Pages 4051-4053]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2018-01547]

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FEDERAL TRADE COMMISSION

[File No. 171 0126]

Seven & iHoldings Co., Ltd., a Corporation; 7-Eleven, Inc., a
Corporation; and Sunoco LP, a Limited Partnership; 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 orders--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before February 20, 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
Seven & iHoldings Co., Ltd. File No. 1710126'' on your comment, and
file your comment online at https://ftcpublic.commentworks.com/ftc/sevensunococonsent by following the instructions on the web-based form.
If you prefer to file your comment on paper, write ``In the Matter of
Seven & iHoldings Co., Ltd. File No. 1710126'' 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: Eric Olson (202-326-2349), 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 January 19, 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 February 20,
2018. Write ``In the Matter of Seven & iHoldings Co., Ltd. File No.
1710126'' 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/sevensunococonsent 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 Seven & iHoldings Co., Ltd. File No. 1710126'' 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.

[[Page 4052]]

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 February 20, 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

I. Introduction

The Federal Trade Commission (``Commission'') has accepted for
public comment, subject to final approval, an Agreement Containing
Consent Orders (``Consent Agreement'') from Seven & i Holdings Co.,
Ltd. and 7-Eleven, Inc. (collectively, ``7-Eleven''), and Sunoco LP
(``Sunoco'') (collectively, the ``Respondents''). The Consent Agreement
is designed to remedy the anticompetitive effects that likely would
result from 7-Eleven's proposed acquisition of certain Sunoco retail
fuel assets (the ``Transaction'').
Absent a remedy, the Transaction would raise competitive concerns
in 76 local markets in 20 metropolitan statistical areas (``MSAs'').
Under the terms of the proposed Consent Agreement, 7-Eleven must sell
retail fuel outlets in some local markets to Sunoco and reject Sunoco
retail fuel outlets in other local markets pursuant to the Respondents'
asset purchase agreement (thereby allowing Sunoco to retain these
assets). The divestitures must be completed no later than 90 days after
the closing of 7-Eleven's acquisition of Sunoco. The Commission and
Respondents have agreed to an Order to Maintain Assets that requires
Respondents to operate and maintain each 7-Eleven divestiture outlet in
the normal course of business through the date Sunoco acquires the
outlet.
The Commission has placed the proposed Consent Agreement 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 proposed
Consent Agreement and any comments received, and will decide whether it
should withdraw from the Consent Agreement, modify it, or make it
final.

II. The Respondents

Respondent Seven & iHoldings Co., Ltd, a publicly traded company
headquartered in Tokyo, Japan, operates convenience stores and retail
fuel outlets throughout the United States and the world. 7-Eleven's
U.S. network consists of approximately 8,500 stores located in 35
states. More than 1,000 locations are company-operated, making 7-Eleven
one of the largest convenience store operators in terms of company-
owned stores and the second-largest chain overall in the country. 7-
Eleven convenience store locations operate under the 7-Eleven banner,
while its retail fuel outlets operate under a variety of company and
third-party brands.
Respondent Sunoco operates convenience stores and retail fuel
outlets in the United States and Canada. With more than 1,300
convenience stores and retail fuel outlets in the United States, Sunoco
is one of the largest chains in the country. Sunoco's U.S. convenience
stores operate primarily under the APlus and Stripes banners, while its
retail fuel outlets operate under a variety of company and third-party
brands. Sunoco also has an extensive wholesale fuel business that
supplies more than 6,800 third-party outlets.

III. The Proposed Acquisition

On April 6, 2017, 7-Eleven, through its wholly owned subsidiaries
7-Eleven, Inc. and SEI Fuel Services, Inc. (``SEI Fuel Services''),
entered into an agreement with Sunoco to acquire approximately 1,100
retail fuel outlets for approximately $3.3 billion. Sunoco would
continue to operate its wholesale business and approximately 200 retail
fuel outlets following the Transaction. SEI Fuel Services would enter
into a 15-year fuel supply agreement with Sunoco, LLC as a part of the
Transaction.
The Commission's Complaint alleges that the Transaction, if
consummated, would violate Section 7 of the Clayton Act, as amended, 15
U.S.C. 18, and that the asset purchase agreement constitutes a
violation of Section 5 of the Federal Trade Commission Act, as amended,
15 U.S.C. 45, by substantially lessening competition for the retail
sale of gasoline and the retail sale of diesel in 76 local markets
across 20 MSAs.

IV. The Retail Sale of Gasoline and Diesel

The Commission's Complaint alleges that relevant product markets in
which to analyze the Transaction are the retail sale of gasoline and
the retail sale of diesel. The retail sale of gasoline and the retail
sale of diesel constitute separate relevant markets because the two are
not interchangeable. Consumers require gasoline for their gasoline-
powered vehicles and can purchase gasoline only at retail fuel outlets.
Likewise, consumers require diesel for their diesel-powered vehicles
and can purchase diesel only at retail fuel outlets.
The Commission's Complaint alleges the relevant geographic markets
in which to assess the competitive effects of the Transaction are 76
local markets within the following MSAs: Boston-Cambridge-Quincy, MA-
NH; Brownsville-Harlingen, TX; Buffalo-Niagara Falls, NY; Cape Coral-
Fort Myers, FL; Corpus Christi, TX; Deltona-Daytona Beach-Ormond Beach,
FL; Killeen-Temple-Fort Hood, TX; Laredo, TX; McAllen-Edinburg-Mission,
TX; Miami-Fort Lauderdale-Pompano Beach, FL; Gettysburg, PA; Palm Bay-
Melbourne-Titusville, FL; Pittsburgh, PA; Richmond, VA; San Antonio,
TX; Sarasota-Bradenton-Venice, FL; Tampa-St. Petersburg-Clearwater, FL;
Rio Grande City-Roma, TX; Victoria, TX; and Washington-Arlington-
Alexandria, DC-VA-MD-WV. Each particular geographic market is unique,
with factors such as commuting patterns, traffic flows, and outlet
characteristics playing important roles in determining the scope of the
geographic market. Retail fuel markets are highly localized and can
range up to a few miles in size.
The Transaction would substantially increase the market
concentration in each of the 76 local markets, resulting in highly
concentrated markets. In 18 local markets, the Transaction would result
in a monopoly. In 39 local markets, the Transaction would reduce the
number of independent market participants from three to two. In 19
local markets, the Transaction would reduce the number of independent
market participants from four to three.
According to the Commission's Complaint, the Transaction would
reduce the number of independent market participants in each market to
three or fewer. The Transaction would thereby substantially lessen
competition in these local markets by increasing the likelihood that 7-
Eleven would unilaterally exercise market power and by increasing the
likelihood of successful coordination among the remaining firms. Absent
relief, the Transaction would likely result in higher prices in each of
the 76 local markets.
Entry into each relevant market would not be timely, likely, or
sufficient to deter or counteract the anticompetitive

[[Page 4053]]

effects arising from the Transaction. Significant entry barriers
include the availability of attractive real estate, the time and cost
associated with constructing a new retail fuel outlet, and the time
associated with obtaining necessary permits and approvals.

V. The Proposed Consent Agreement

The proposed Consent Agreement remedies the Transaction's
anticompetitive effects by requiring 7-Eleven to sell retail fuel
outlets in some local markets to Sunoco and reject Sunoco retail fuel
outlets in other local markets pursuant to the Respondents' asset
purchase agreement (thereby allowing Sunoco to retain these assets).
Sunoco intends to convert the acquired or retained stations from
company-operated sites to commission agent sites. This remedy would
preserve competition as it is today, ensure that the divestiture assets
go to a viable, large-scale competitor, and reduce the risks and costs
associated with asset integration.
The Commission is satisfied that allowing Sunoco to acquire or
retain retail fuel stations and transition them to commission agent
sites is an appropriate remedy. Most importantly, the proposed remedy
preserves competition in each local market. Indeed, as Sunoco controls
retail fuel pricing at both its company-operated stations and its
commission agent stations, Sunoco and 7-Eleven would continue as
independent retail fuel competitors in each local market. Moreover,
Sunoco is a large, viable competitor capable of maintaining the
competitive landscape in each local market. Finally, the proposed
Consent Agreement reduces the uncertainty and costs relating to
integration since Sunoco already is familiar with the majority of the
stations at issue.
The proposed Consent Agreement also requires that for up to six
months following the divestiture, with up to an additional twelve
months at the buyer's option, 7-Eleven make available transitional
services, as needed, to assist the buyer of each divestiture asset. The
buyer may extend the period for an additional twelve months, but only
with Commission approval.
In addition to requiring outlet divestitures, the proposed Consent
Agreement also requires 7-Eleven to provide the Commission (and
Florida, Texas, or Virginia, where applicable) notice before acquiring
designated outlets in the 76 local areas for ten years. The prior
notice provision is necessary because acquisitions of the designated
outlets likely would raise competitive concerns and may fall below the
HSR Act premerger notification thresholds.
The proposed Consent Agreement contains additional provisions
designed to ensure the effectiveness of the proposed relief. For
example, Respondents have agreed to an Order to Maintain Assets that
will issue at the time the proposed Consent Agreement is accepted for
public comment. The Order to Maintain Assets requires Respondents to
operate and maintain each divestiture outlet in the normal course of
business through the date the Respondents' complete divestiture of the
outlet, thereby maintaining the economic viability, marketability, and
competitiveness of each divestiture asset. During this period, and
until such time as the buyer (or buyers) no longer requires
transitional assistance, the Order to Maintain Assets authorizes the
Commission to appoint an independent third party as a monitor to
oversee the Respondents' compliance with the requirements of the
proposed Consent Agreement.
The proposed Consent Agreement also requires Sunoco to take steps
to ensure that its employees in charge of setting retail fuel prices at
the acquired or retained retail fuel outlets do not have access to
confidential information about Sunoco's post-Transaction wholesale
supply of 7-Eleven's retail fuel stations. To ensure appropriate
firewalls remain in place for the duration of the Respondents' fuel
supply agreement, the proposed Consent Agreement has a term of fifteen
years.
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. 2018-01547 Filed 1-26-18; 8:45 am]
BILLING CODE 6750-01-P

Federal Register / Vol. 83, No. 19 / Monday, January 29, 2018 / Notices 4053

effects arising from the Transaction. below the HSR Act premerger ACTION: Notice.
Significant entry barriers include the notification thresholds.
availability of attractive real estate, the The proposed Consent Agreement SUMMARY: This notice announces the
time and cost associated with contains additional provisions designed intention of the Agency for Healthcare
constructing a new retail fuel outlet, and to ensure the effectiveness of the Research and Quality (AHRQ) to request
the time associated with obtaining proposed relief. For example, that the Office of Management and
necessary permits and approvals. Respondents have agreed to an Order to Budget (OMB) approve the proposed
Maintain Assets that will issue at the information collection project
V. The Proposed Consent Agreement ‘‘Outcome Measure Repository (OMR).’’
time the proposed Consent Agreement is
The proposed Consent Agreement accepted for public comment. The Order DATES: Comments on this notice must be
remedies the Transaction’s to Maintain Assets requires received by March 30, 2018.
anticompetitive effects by requiring 7- Respondents to operate and maintain ADDRESSES: Written comments should
Eleven to sell retail fuel outlets in some each divestiture outlet in the normal be submitted to: Doris Lefkowitz,
local markets to Sunoco and reject course of business through the date the Reports Clearance Officer, AHRQ, by
Sunoco retail fuel outlets in other local Respondents’ complete divestiture of email at doris.lefkowitz@AHRQ.hhs.gov.
markets pursuant to the Respondents’ the outlet, thereby maintaining the Copies of the proposed collection
asset purchase agreement (thereby economic viability, marketability, and plans, data collection instruments, and
allowing Sunoco to retain these assets). competitiveness of each divestiture specific details on the estimated burden
Sunoco intends to convert the acquired asset. During this period, and until such can be obtained from the AHRQ Reports
or retained stations from company- time as the buyer (or buyers) no longer Clearance Officer.
operated sites to commission agent sites. requires transitional assistance, the FOR FURTHER INFORMATION CONTACT:
This remedy would preserve Order to Maintain Assets authorizes the Doris Lefkowitz, AHRQ Reports
competition as it is today, ensure that Commission to appoint an independent Clearance Officer, (301) 427–1477, or by
the divestiture assets go to a viable, third party as a monitor to oversee the emails at doris.lefkowitz@
large-scale competitor, and reduce the Respondents’ compliance with the AHRQ.hhs.gov.
risks and costs associated with asset requirements of the proposed Consent
integration. SUPPLEMENTARY INFORMATION:
Agreement.
The Commission is satisfied that Proposed Project
The proposed Consent Agreement
allowing Sunoco to acquire or retain
also requires Sunoco to take steps to Outcome Measure Repository
retail fuel stations and transition them
ensure that its employees in charge of
to commission agent sites is an In accordance with the Paperwork
setting retail fuel prices at the acquired
appropriate remedy. Most importantly, Reduction Act, 44 U.S.C. 3501–3521,
the proposed remedy preserves or retained retail fuel outlets do not
AHRQ invites public comment on this
competition in each local market. have access to confidential information
proposed information collection. In
Indeed, as Sunoco controls retail fuel about Sunoco’s post-Transaction
accordance with the agency’s mission,
pricing at both its company-operated wholesale supply of 7-Eleven’s retail
AHRQ developed the Outcome Measure
stations and its commission agent fuel stations. To ensure appropriate
Repository (OMR), a web-based database
stations, Sunoco and 7-Eleven would firewalls remain in place for the
with the purpose of providing a readily
continue as independent retail fuel duration of the Respondents’ fuel
available public resource that includes
competitors in each local market. supply agreement, the proposed
definitions of outcome measures
Moreover, Sunoco is a large, viable Consent Agreement has a term of fifteen
associated with patient registries. The
competitor capable of maintaining the years.
information being collected in each
competitive landscape in each local The purpose of this analysis is to
OMR record will be visible to the public
market. Finally, the proposed Consent facilitate public comment on the
and readily available for public use.
Agreement reduces the uncertainty and proposed Consent agreement, and the This effort is in alignment the AHRQ
costs relating to integration since Commission does not intend this Registry of Patient Registries (RoPR),
Sunoco already is familiar with the analysis to constitute an official which provides a centralized point of
majority of the stations at issue. interpretation of the proposed Consent collection for information about all
The proposed Consent Agreement Agreement or to modify its terms in any patient registries in the United States.
also requires that for up to six months way. The RoPR furthers AHRQ’s goals to
following the divestiture, with up to an By direction of the Commission. enhance the description of the quality,
additional twelve months at the buyer’s Donald S. Clark, appropriateness, and effectiveness of
option, 7-Eleven make available Secretary. health services, and patient registries in
transitional services, as needed, to assist [FR Doc. 2018–01547 Filed 1–26–18; 8:45 am] particular, in a more readily available,
the buyer of each divestiture asset. The BILLING CODE 6750–01–P central location by enhancing patient
buyer may extend the period for an registry information, extracted from
additional twelve months, but only with ClinicalTrials.gov or modeled based on
Commission approval. the ClinicalTrials.gov data elements.
In addition to requiring outlet DEPARTMENT OF HEALTH AND The development of the OMR
divestitures, the proposed Consent HUMAN SERVICES continues these efforts, and aims to
Agreement also requires 7-Eleven to achieve the following objectives:
provide the Commission (and Florida, Agency for Healthcare Research and
sradovich on DSK3GMQ082PROD with NOTICES

(1) Provide a searchable database of
Texas, or Virginia, where applicable) Quality
outcome measures used in patient
notice before acquiring designated Agency Information Collection registries in the United States to
outlets in the 76 local areas for ten Activities: Proposed Collection; promote collaboration, reduce
years. The prior notice provision is Comment Request redundancy, and improve transparency;
necessary because acquisitions of the (2) Facilitate the use of standardized
designated outlets likely would raise AGENCY:Agency for Healthcare Research data elements and outcome measures;
competitive concerns and may fall and Quality, HHS. and

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Document Created: 2018-01-27 00:57:42
Document Modified: 2018-01-27 00:57:42

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 February 20, 2018.
Contact		Eric Olson (202-326-2349), Bureau of Competition, 600 Pennsylvania Avenue NW, Washington, DC 20580.
FR Citation		83 FR 4051