[Federal Register Volume 64, Number 10 (Friday, January 15, 1999)]
[Notices]
[Pages 2668-2677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-826]
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DEPARTMENT OF JUSTICE
Antitrust Division
Proposed Final Judgment and Competitive Impact Statement; United
States of America v. Chancellor Media Corporation and Whiteco
Industries, Inc.
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Stipulation, and Competitive Impact Statement have been filed with the
United States District Court for the District of Columbia in United
States of America v. Chancellor Media Corporation and Whiteco
Industries Inc., Case No. 1:98CV02875. The proposed Final Judgment is
subject to approval by the Court after the expiration of the statutory
60-day public comment period and compliance with the Antitrust
Procedures and Penalties Act. 15 U.S.C. 16(b)-(h).
The United States filed a civil antitrust Complaint on November 25,
1998, alleging that the proposed acquisition of Whiteco Industries Inc.
(``Whiteco'') by Chancellor Media Corporation (``Chancellor'') would
violate section 7 of the Clayton Act, 15 U.S.C. 18. The Complaint
alleges that Chancellor and Whiteco compete head-to-head to sell
outdoor bulletin advertising in seven counties: (1) Hartford County,
Connecticut; (2) Shawnee County, Kansas; (3) Leavenworth County,
Kansas; (4) Potter County, Texas; (5) Nolan County, Texas; (6)
Westmoreland County, Pennsylvania and (7) Washington County,
Pennsylvania (collectively ``the Seven Counties''). Outdoor advertising
companies sell advertising space, such as on bulletins, to local and
national customers. The outdoor bulletin advertising business in the
Seven Counties is highly concentrated. Chancellor through its
subsidiary, Martin Media, and Whiteco have a combined share of revenue
ranging from about 48 percent to 88 percent in the Seven Counties.
Unless the acquisition is blocked, competition would be substantially
lessened in the Seven Counties, and advertisers would pay higher
prices.
The prayer for relief seeks: (a) An adjudication that the proposed
transaction described in the Complaint would violate section 7 of the
Clayton Act; (b) preliminary and permanent injunctive relief preventing
the consummation of the transaction; (c) an award to the United States
of the costs of this action; and (d) such other relief as is proper.
Shortly before this suit was filed, a proposed settlement was
reached that permits Chancellor to complete its acquisition of Whiteco,
yet preserves competition in the Seven Counties where the transaction
raises significant competitive concerns. A Stipulation and proposed
Final Judgment embodying the settlement were filed at the same time the
Complaint was filed.
The proposed settlement requires Chancellor to divest bulletin
faces equal to the number of faces operated by Whiteco in:
(1) Hartford County, Connecticut;
(2) Shawnee County, Kansas;
(3) Leavenworth County, Kansas;
(4) Potter County, Texas;
(5) Nolan County, Texas; and
(6) Westmoreland and Washington Counties, Pennsylvania
Unless the plaintiff grants a time extension, Chancellor must divest
these outdoor bulletin advertising assets within six (6) months after
the filing of the Complaint in this action. Finally, in the event that
the Court does not, for any reason, enter the Final Judgment within
that six-month period, the divestitures are to occur within five (5)
business days after notice of entry of the Final Judgment.
If Chancellor does not divest the bulletin advertising assets in
the specified counties within the divestiture period, the Court, upon
plaintiff's application, is to appoint a trustee to sell the assets.
The proposed Final Judgment also requires that, until the divestitures
mandated by the Final Judgment have been accomplished, Chancellor shall
take all steps necessary to maintain and operate the bulletin
advertising assets as active competitors; maintain the management,
staffing, sales and marketing of the bulletin advertising assets; and
maintain the bulletin advertising assets in operable condition at
current capacity configurations. Further, the proposed Final Judgment
requires Chancellor to give the United States prior notice regarding
certain future outdoor bulletin advertising acquisitions or agreements
pertaining to the sale of outdoor advertising in the Seven Counties.
The plaintiff and the defendants have stipulated that the proposed
Final Judgment may be entered after compliance with the APPA. Entry of
the proposed Final Judgment would terminate this action, except that
the Court would retain jurisdiction to construe, modify, or enforce the
provisions of the proposed Final Judgment and to punish violations
thereof.
A Competitive Impact Statement filed by the United States describes
the Complaint, the proposed Final Judgment, and remedies available to
private litigants.
Public comment is invited within the statutory 60-day comment
period. Such comments, and the responses thereto, will be published in
the Federal Register and filed with the Court. Written comments should
be directed to Craig W. Conrath, Chief, Merger Task Force, Antitrust
Division, 1401 H Street, NW., Suite 4000, Washington, DC 20530
(telephone: 202-307-0001). Copies of the Complaint, Stipulation,
proposed Final Judgment and Competitive Impact Statement are available
for inspection in Room 215 of the Antitrust Division, Department of
Justice, 325 7th Street, NW., Washington, DC 20530 (telephone: 202-514-
2481) and at the office of the Clerk of the United States District
Court for the District of Columbia, Third Street and Constitution
Avenue, NW., Washington, DC 20001.
[[Page 2669]]
Copies of any of these materials may be obtained upon request and
payment of a copying fee.
Constance K. Robinson,
Director of Operations & Merger Enforcement, Antitrust Division.
Stipulation and Order
It is stipulated by and between the undersigned parties, by their
respective attorneys, as follows:
(1) The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto, and venue of this action is
proper in the United States District Court for the District of
Columbia.
(2) The parties stipulate that a Final Judgment in the form hereto
attached may be filed and entered by the Court, upon the motion of any
party or upon the Court's own motion, at any time after compliance with
the requirements of the Antitrust Procedures and Penalties Act (15
U.S.C. 16), and without further notice to any party or other
proceedings, provided that plaintiff has not withdrawn its consent,
which it may do at any time before the entry of the proposed Final
Judgment by serving notice thereof on defendants and by filing that
notice with the Court.
(3) Defendants shall abide by and comply with the provisions of the
proposed Final Judgment pending entry of the Final Judgment by the
Court, or until expiration of time for all appeals of any Court ruling
declining entry of the proposed Final Judgment, and shall, from the
date of the signing of this Stipulation by the parties, comply with all
the terms and provisions of the proposed Final Judgment as though the
same were in full force and effect as an Order of the Court.
(4) Defendants shall not consummate the transaction sought to be
enjoined by the Complaint herein before the Court has signed this
stipulation and order.
(5) This Stipulation shall apply with equal force and effect to any
amended proposed Final Judgment agreed upon in writing by the parties
and submitted to the Court.
(6) In the event (a) the plaintiffs withdraws its consent, as
provided in paragraph 2 above, or (b) the proposed Final Judgment is
not entered pursuant to this Stipulation, the time has expired for all
appeals of any Court ruling declining entry of the proposed Final
Judgment, and the Court has not otherwise ordered continued compliance
with the terms and provisions of the proposed Final Judgment, then the
parties are released from all further obligations under this
Stipulation, and the making of this Stipulation shall be without
prejudice to any party in this or any other proceeding.
(7) Defendants represent that the divestitures ordered in the
proposed Final Judgment can and will be made, and that defendants will
later raise no claim of hardship or difficulty as grounds for asking
the Court to modify any of the divestiture provisions contained
therein.
Dated: November 23, 1998.
For Plaintiff United States of America:
Renee Eubanks,
U.S. Department of Justice, Antitrust Division, Merger Task Force, 1401
H Street, NW, Suite 4000, Washington, DC 20005, (202) 307-0001.
For Defendant Chancellor Media Corporation:
Bruce Prager
Steven Sculman,
Latham and Watkins, 1001 Pennsylvania Avenue, Suite 1300, Washington,
DC 20004, (202) 637-2200.
For Defendants Whiteco Industries, Inc. and Metro Management
Associates:
Charles Biggio,
Akin, Gump, Strauss, Hauer & Feld, L.L.P. 590 Madison Avenue, 20th
Floor, New York, NY 10022, (212) 672-1000.
So ordered:
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United States District Judge
Certificate of Service
I, Renee Eubanks, hereby certify that, on November 25, 1998, I
caused the foregoing document to be served on defendants Chancellor
Media Corporation, Whiteco Industries, and Metro Management Associates
having a copy mailed, first-class, postage prepaid, to:
Bruce J. Prager
Steven H. Schulman,
Latham & Watkins, 1001 Pennsylvania Ave., NW, Suite 1300, Washington,
DC 20004, Counsel for Chancellor Media Corporation.
Charles Biggio,
Akin, Gump, Strauss, Hauer & Feld, L.L.P., 590 Madison Avenue, 20th
Floor, New York, NY 10022, Counsel for Whiteco Industries, Inc. and
Metro Management Associates.
Final Judgment
Whereas, plaintiff, the United States of America, filed its
Complaint in this action of November 25, 1998, and plaintiff and
defendants by their respective attorneys, having consented to the entry
of this Final Judgment without trial or adjudication of any issue of
fact or law herein, and without this Final Judgment constituting any
evidence against or an admission by any party with respect to any issue
of law or fact herein;
And whereas, defendants have agreed to be bound by the provisions
of this Final Judgment pending its approval by the Court;
And whereas, the essence of this Final Judgment is prompt and
certain divestiture of the outdoor advertising assets in the Seven
Counties identified below to ensure that competition is substantially
preserved;
And whereas, plaintiff requires defendants to make the divestitures
for the purpose of maintaining the current level of competition in the
sale of outdoor advertising;
And whereas, defendants have represented to the plaintiff that the
divestitures ordered herein can and will be made and that defendants
will not later raise claims of hardship or difficulty as grounds for
asking the Court to modify any of the divestitures contained below;
Now, therefore, before the taking of any testimony, and without
trial or adjudication of any issue of fact or law herein, and upon
consent of the parties hereto, it is hereby ordered, adjudged, and
decreed as follows:
I. Judisdiction
This Court has jurisdiction over each of the defendants hereto and
over the subject matter of this action. The Complaint states a claim
upon which relief may be granted against the defendants, as hereinafter
defined, under section 7 of the Clayton Act, as amended (15 U.S.C. 18).
II. Definitions
As used in this Final Judgment:
A. ``DOJ means the Antitrust Division of the United States
Department of Justice.
B. ``Chancellor'' means defendant Chancellor Media Corporation, a
Delaware corporation with its headquarters in Dallas, Texas, and its
successors, assigns, subsidiaries, divisions, groups, affiliates,
partnerships and joint ventures, and directors, officers, managers,
agents, and employees, including but not limited to Martin Media, L.P.
(``Martin''), a limited partnership with its headquarters in Dallas,
Texas.
C. ``Martin'' means Martin Media L.P., a limited partnership with
its headquarters in Dallas, Texas, and its successors, assigns,
subsidiaries, divisions, groups, affiliates, partnerships and joint
ventures, and directors, officers, managers, agents, and employees.
D. ``Whiteco'' means defendant Whiteco Industries, Inc., a Nebraska
corporation with its headquarters in Merrillville, Indiana, and its
successors, assigns, subsidiaries, divisions, groups, affiliates,
partnerships and joint
[[Page 2670]]
ventures, and directors, officers, managers, agents, and employees.
E. ``Metro'' means defendant Metro Management Associates, an
Indiana General Partership with its headquarters in Merrillville,
Indiana, and its successors, assigns, subsidiaries, divisions, groups,
affiliates, partnerships and joint ventures, and directors, officers,
managers, agents, and employees.
F. ``Defendants'' means Chancellor, Whiteco, and Metro.
G. ``Advertising Assets'' means the outdoor advertising bulletin
faces equal in number to, and having approximately the same market and
rental value as, the faces owned and operated by Whiteco or Metro, as
of the date the complaint in this action is filed, in each of these
Seven Counties: (1) Hartford County, Connecticut; (2) Shawnee County,
Kansas; (3) Leavenworth County, Kansas; (4) Potter County, Texas; (5)
Nolan County, Texas; (6) Westmoreland County, Pennsylvania; and (7)
Washington County, Pennsylvania, with the exception of the 23 bulletin
faces located on I-70, west of Exit 4 in the county, (collectively
``the Seven Counties''). This includes all tangible and intangible
assets used in the sale of outdoor advertising on those bulletin faces
in each of the Seven Counties including: All real property (owned or
leased); all licenses, permits and authorizations issued by any
governmental organization relating to the operation of the bulletin
faces; and all contracts, agreements, leases, licenses, commitments and
understandings pertaining to the sale of outdoor advertising on those
bulletin faces.
H. ``Acquirer'' or ``Acquirers'' means the entity or entities to
whom Chancellor and Whiteco divest the Advertising Assets pursuant to
this Final Judgment.
III. Applicability
A. The provisions of this Final Judgment apply to the defendants,
their successors and assigns, their subsidiaries, directors, officers,
managers, agents, and employees, and all other persons in active
concert or participation with any of them who shall have received
actual notice of this Final Judgment by personal service or otherwise.
B. Each defendant shall require, as a condition of the sale or
other disposition of all or substantially all of their outdoor
advertising business in any of the Seven Counties, that the Acquirer or
Acquirers agree to be bound by the provisions of this Final Judgment.
IV. Divestiture
A. Chancellor is hereby ordered and directed in accordance with the
terms of this Final Judgment, within six (6) months after the filing of
the Complaint in this matter or five (5) days after notice of the entry
of this Final Judgment by the Court, whichever is later, to divest the
Advertising Assets to an Acquirer (or Acquirers) acceptable to DOJ in
its sole discretion.
B. Defendants shall use their best efforts to accomplish the
divestitures as expeditiously and timely as possible. DOJ, in its sole
discretion, may extend the time period for any divestiture for two (2)
additional thirty (30) day periods of time, not to exceed sixty (60)
calendar days in total.
C. In accomplishing the divestitures ordered by this Final
Judgment, defendants promptly shall make known, by usual and customary
means, the availability of the Advertising Assets described in this
Final Judgment. Defendants shall inform any person making an inquiry
regarding a possible purchase that the sale is being made pursuant to
this Final Judgment and provide such person with a copy of this Final
Judgment. Defendants shall also offer to furnish to all prospective
Acquirers, subject to customary confidentiality assurances, all
information regarding the Advertising Assets, customarily provided in a
due diligence process except such information subject to attorney-
client privilege or attorney work-product privilege. Defendants shall
make available such information to DOJ at the same time that such
information is made available to any other person.
D. Defendants shall permit prospective Acquirers of the Advertising
Assets to have reasonable access to personnel and to make such
inspection of the physical facilities of the Advertising Assets and any
and all financial, operational, or other documents and information
customarily provided as part of a due diligence process.
E. The defendants shall not take any action that will impede in any
way the divestiture of the Advertising Assets.
F. Divestiture of the Advertising Assets may be made to one or more
Acquirers, so long as there is only one acquirer for any particular
county's assets, and provided that in each instance it is demonstrated
to the sole satisfaction of DOJ that the Advertising Assets will remain
viable and the divestiture of such advertising assets will remedy the
competitive harm alleged in the complaint. The divestitures, whether
pursuant to Section IV or Section V of this Final Judgment:
(1) Shall be made to an Acquirer (or Acquirers) who it is
demonstrated to DOJ's sole satisfaction has or have the intent and
capability (including the necessary managerial, operational, and
financial capability) of competing effectively in the sale of
outdoor advertising; and
(2) Shall be accomplished so as to satisfy DOJ, in its sole
discretion, that none of the terms of any agreement between an
Acquirer (or Acquirers) and Chancellor or Whiteco give Chancellor or
Whiteco the ability unreasonably to raise the Acquirer's (or
Acquirers') costs, to lower the Acquirer's (or Acquirers')
efficiency, or otherwise to interfere with the ability of the
Acquirer (or Acquirers) to compete effectively.
V. Appointment of Trustee
A. In the event that defendants have not divested the Advertising
Assets within the time specified in Section IV(A) of this Final
Judgment, the Court shall appoint, on application of the United States,
a trustee selected by DOJ in its sole discretion to effect the
divestiture of the Advertising Assets.
B. After the appointment of a trustee becomes effective, only the
trustee shall have the right to sell the Advertising Assets. The
trustee shall have the power and authority to accomplish the
divestitures at the best price then obtainable upon a reasonable effort
by the trustee, subject to the provisions of Sections IV and X of this
Final Judgment, and shall have such other powers as the Court shall
deem appropriate. Subject to Section V(C) of this Final Judgment, the
trustee shall have the power and authority to hire at the cost and
expense of defendants any investment bankers, attorneys, or other
agents reasonably necessary in the judgment of the trustee to assist in
the divestitures, and such professionals and agents shall be
accountable solely to the trustee. The trustee shall have the power and
authority to accomplish the divestitures of Advertising Assets at the
earliest possible time to an Acquirer (or Acquirers) acceptable to DOJ
in its sole discretion, and shall have such other powers as this Court
shall deem appropriate. Defendants shall not object to a sale by the
trustee on any grounds other than the trustee's malfeasance. Any such
objections by defendants must be conveyed in writing to plaintiff and
the trustee within ten (10) calendar days after the trustee has
provided the notice required under Section VII of this Final Judgment.
C. The trustee shall serve at the cost and expense of defendants,
on such terms and conditions as the Court may prescribe, and shall
account for all monies derived from the sale of the
[[Page 2671]]
assets sold by the trustee and all costs and expenses so incurred.
After approval by the Court of the trustee's accounting, including fees
for its services and those of any professionals and agents retained by
the trustee, all remaining money shall be paid to defendants as
appropriate according to ownership of the assets and the trust shall
then be terminated. The compensation of such trustee and of any
professionals and agents retained by the trustee shall be reasonable in
light of the value of the divested business and based on a fee
arrangement providing the trustee with an incentive based on the price
and terms of the divestitures and the speed with which they are
accomplished.
D. Defendants shall use their best efforts to assist the trustee in
accomplishing the required divestitures, including best efforts to
effect all necessary consents and regulatory approvals. The trustee,
and any consultants, accountants, attorneys and other persons retained
by the trustee, shall have full and complete access to the personnel,
books, records, and facilities of the businesses to be divested, and
defendants shall develop financial or other information relevant to the
businesses to be divested customarily provided in a due diligence
process as the trustee may reasonably request, subject to customary
confidentiality assurances. Defendants shall permit prospective
Acquirers of the Advertising Assets to have reasonable access to
personnel and to make such inspection of physical facilities and any
and all financial, operational or other documents and other information
as may be relevant to the divestitures required by this Final Judgment.
E. After its appointment, the trustee shall file monthly reports
with the parties and the Court setting forth the trustee's efforts to
accomplish the divestitures ordered pursuant to this Final Judgment;
provided, however, that to the extent such reports contain information
that the trustee deems confidential, such reports shall not be filed in
the public docket of the Court. Such reports shall include the name,
address and telephone number of each person who, during the preceding
month, made an offer to acquire, expressed an interest in acquiring,
entered into negotiations to acquire, or was contacted or made an
inquiry about acquiring, any interest in the businesses to be divested,
and shall describe in detail each contact with any such person during
that period. The trustee shall maintain full records of all efforts
made to divest the businesses to be divested.
F. If the trustee has not accomplished such divestitures within six
(6) months after its appointment, the trustee thereupon shall file
promptly with the Court a report setting forth: (1) The trustee's
efforts to accomplish the required divestitures; (2) the reasons, in
the trustee's judgment, why the required divestitures have not been
accomplished; and (3) the trustee's recommendations; provided, however,
that to the extent such reports contain information that the trustee
deems confidential, such reports shall not be filed in the public
docket of the Court. The trustee shall at the same time furnish such
report to the parties, who shall each have the right to be heard and to
make additional recommendations consistent with the purpose of the
trust. The Court shall enter thereafter such orders as it shall deem
appropriate in order to carry out the purpose of the trust which may,
if necessary, include extending the trust and the term of the trustee's
appointment by a period requested by DOJ.
VI. Notice
Unless such transaction is otherwise subject to the reporting and
waiting period requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''),
defendants, without providing advance notification to DOJ, shall not
directly or indirectly acquire any assets of or any interest, including
any financial, security, loan, equity or management interest, in any
outdoor advertising business in any of the Seven Counties that
constitute the greater of (i) four bulletin faces, or (ii) $250,000 in
bulletin face assets in any one county during a five-year period. For
the purposes of this limitation, there shall be two consecutive five-
year periods. Acquisitions during each of these five-year periods shall
be aggregated, with the first period ending five years after the Final
Judgment is entered, and the second period beginning immediately upon
the expiration of the first five-year period.
Such notification shall be provided to the DOJ in the same format
as, and per the instructions relating to the Notification and Report
Form set forth in the Appendix to Part 803 of Title 16 of the Code of
Federal Regulations as amended, except that the information requested
in Items 5 through 9 of the instructions must be provided only about
outdoor advertising operations in Seven Counties. Notification shall be
provided at least thirty (30) days prior to acquiring any such
interest, and shall include, beyond what may be required by the
applicable instructions, the names of the principal representatives of
the parties to the agreement who negotiated the agreement, and any
management or strategic plans discussing the proposed transaction. If
within the 30-day period after notification, representatives of DOJ
make a written request for additional information, defendants shall not
consummate the proposed transaction or agreement until twenty (20) days
after submitting all such additional information. Early termination of
the waiting periods in this paragraph may be requested and, where
appropriate, granted in the same manner as is applicable under the
requirements and provisions of the HSR Act and rules promulgated
thereunder. This Section shall be broadly construed and any ambiguity
or uncertainty regarding the filing of notice under this Section shall
be resolved in favor of filing notice.
VII. Notification
Within two (2) business days following execution of a definitive
agreement, contingent upon compliance with the terms of this Final
Judgment, to effect, in whole or in part, any proposed divestitures
pursuant to Sections IV or V of this Final Judgment, defendants or the
trustee, whichever is then responsible for effecting the divestitures,
shall notify DOJ, of the proposed divestitures. If the trustee is
responsible, it shall similarly notify defendants. The notice shall set
forth the details of the proposed transaction and list the name,
address, and telephone number of each person not previously identified
who offered to, or expressed an interest in or a desire to, acquire any
ownership interest in the businesses to be divested that are the
subject of the binding contract, together with full details of same.
Within fifteen (15) calendar days of receipt by DOJ of notice, DOJ may
request from defendants, the proposed Acquirer (or Acquirers), or any
other third party Acquirer or Acquirers additional information
concerning the proposed divestitures and the proposed Acquirer or
Acquirers. Defendants and the trustee shall furnish any additional
information requested from them within fifteen (15) calendar days of
the receipt of the request, unless the parties shall otherwise agree.
Within thirty (30) calendar days after receipt of the notice or within
twenty (20) calendar days after DOJ has been provided the additional
information requested from defendants, the proposed Acquirer (or
Acquirers), and any third party, whichever is later, DOJ shall provide
[[Page 2672]]
written notice to defendants and the trustee, if there is one, stating
whether or not it objects to the proposed divestitures. If DOJ provides
written notice to defendants and the trustee that DOJ does not object,
then the divestitures may be consummated, subject only to defendants'
limited right to object to the sale under Section V(B) of the Final
Judgment. Absent written notice that DOJ does not object to the
proposed Acquirer (or Acquirers) or upon objection by DOJ, a
divestiture proposed under Section IV or Section V may not be
consummated. Upon objection by defendants under the provision in
Section V(B), a divestiture proposed under Section V shall not be
consummated unless approved by the Court.
VIII. Affidavits
A. Within twenty (20) calendar days of the filing of the Complaint
in this matter and every thirty (30) calendar days thereafter until the
divestitures have been completed whether pursuant to Section IV or
Section V of this Final Judgment, defendants shall deliver to DOJ an
affidavit as to the fact and manner of compliance with this Final
Judgment. Each such affidavit shall include, inter alia, the name,
address, and telephone number of each person who, at any time after the
period covered by the last such report, made an offer to acquire,
expressed an interest in acquiring, entered into negotiations to
acquire, or was contacted or made an inquiry about acquiring, any
interest in the businesses to be divested, and shall describe in detail
each contact with any such person during that period. Each such
affidavit shall also include a description of the efforts that
defendants have taken to solicit a buyer for the Advertising Assets and
to provide required information to prospective Acquirers.
B. Within twenty (20) calendar days of the filing of the Complaint
in this matter, defendants shall deliver to DOJ an affidavit that
describes in detail all actions they have taken and all steps they have
implemented on an on-going basis to preserve the Advertising Assets
pursuant to Section IX of this Final Judgment. The affidavit also shall
describe, but not be limited to, the efforts of defendants to maintain
and operate the Advertising Assets as active competitors; maintain the
management, staffing, sales, and marketing of the Advertising Assets;
and maintain the Advertising Assets in operable condition at current
capacity configurations. Defendants shall deliver to DOJ an affidavit
describing any changes to the efforts and actions outlined in their
earlier affidavit(s) filed pursuant to this Section within fifteen (15)
calendar days after the change is implemented.
C. Until one year after such divestiture has been completed,
defendants shall preserve all records of all efforts made to preserve
the business to be divested and effect the divestitures.
IX. Preservation of Assets
Until the divestitures required by the Final Judgment have been
accomplished, defendants shall take all steps necessary to maintain and
operate the Advertising Assets in Hartford County, Connecticut, and
Westmoreland and Washington Counties, Pennsylvania, as active
competitors; maintain sufficient management and staffing, maintain
sales and marketing of the Advertising Assets; and maintain the
Advertising Assets in operable condition at current capacity
configurations. In each of the remaining Counties, defendants shall
maintain and operate the Advertising Assets as active competitors, such
that the sales and marketing of the Advertising Assets shall be
conducted separate from, and in competition with, Chancellor's bulletin
faces in each of the respective counties; defendants also shall
maintain these Advertising Assets in operable condition at current
capacity configurations. Defendants shall take no action that would
jeopardize the divestitures described in this Final Judgment.
X. Financing
The defendants are ordered and directed not to finance all or any
part of any purchase by an Acquirer (or Acquirers) made pursuant to
Sections IV or V of this Final Judgment.
XI. Compliance Inspection
For purposes of determining or securing compliance with the Final
Judgment and subject to any legally recognized privilege, from time to
time:
A. Duly authorized representatives of the plaintiff, upon the
written request of the Assistant Attorney General in charge of the
Antitrust Division, and on reasonable notice to the defendants made to
their principal offices, shall be permitted:
(1) Access during office hours of the defendants to inspect and
copy all books, ledgers, accounts, correspondence, memoranda, and
other records and documents in the possession or under the control
of the defendants, who may have counsel present, relating to the
matters contained in this Final Judgment; and
(2) Subject to the reasonable convenience of the defendants and
without restraint or interference from any of them, to interview,
either informally or on the record, their officers, employees, and
agents, who may have counsel present, regarding any such matters.
B. Upon the written request of the Assistant Attorney General in
charge of the Antitrust Division, made to the defendants' principal
offices, the defendants shall submit such written reports, under oath
if requested, with respect to any matter contained in the Final
Judgment.
C. No information or documents obtained by the means provided in
Sections VIII or XI of this Final Judgment shall be divulged by a
representative of the plaintiff to any person other than a duly
authorized representative of the Executive Branch of the United States,
except in the course of legal proceedings to which the plaintiff is a
party (including grand jury proceedings), or for the purpose of
securing compliance with this Final Judgment, or as otherwise required
by law.
D. If at the time information or documents are furnished by the
defendants to the plaintiff, the defendants represent and identify in
writing the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(7) of the Federal
Rules of Civil Procedure, and the defendants mark each pertinent page
of such material, ``Subject to claim of protection under Rule 26(c)(7)
of the Federal Rules of Civil Procedure,'' then ten (10) calendar days
notice shall be given by the plaintiff to the defendants prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding) to which the defendants are not a party.
XII. Retention of Jurisdiction
Jurisdiction is retained by this Court for the purpose of enabling
any of the parties to this Final Judgment to apply to this Court at any
time for such further orders and directions as may be necessary or
appropriate for the construction or carrying out of this Final
Judgment, for the modification of any of the provisions hereof, for the
enforcement of compliance herewith, and for the punishment of any
violations hereof.
XIII. Termination
Unless this Court grants an extension, this Final Judgment will
expire upon the tenth anniversary of the date of its entry; however,
all Whiteco and Metro obligations under the terms of this Final
Judgment cease once Whiteco and Metro irrevocably convey the
Advertising
[[Page 2673]]
Assets (owned by Whiteco and/or Metro) to be divested by Chancellor
pursuant to Section IV.
XIV. Public Interest
Entry of this Final Judgment is in the public interest.
Dated:-----------------------------------------------------------------
----------------------------------------------------------------------
United States District Judge
Certificate of Service
I, Renee Eubanks, hereby certify that, on November 25, 1998, I
caused the foregoing document to be served on defendants Chancellor
Media Corporation, Whiteco Industries, and Metro Management Associates
having a copy mailed, first-class, postage prepaid, to:
Bruce J. Prager
Steven H. Schulman,
Latham & Watkins, 1001 Pennsylvania Ave., NW, Suite 1300, Washington,
DC 20004, Counsel for Chancellor Media Corporation.
Charles Biggio,
Akin, Gump, Strauss, Hauer & Field, L.L.P., 590 Madison Avenue, 20th
Floor, New York, NY 10022, Counsel for Whiteco Industries, Inc. and
Metro Management Associates.
Competitive Impact Statement
Plaintiff, the United States of America, pursuant to section 2(b)
of the Antitrust Procedures and Penalties Act (``APPA''), 15 U.S.C.
16(b)-(h), files this Competitive Impact Statement relating to the
proposed Final Judgment submitted for entry in this civil antitrust
proceeding.
I. Nature and Purpose of the Proceeding
Plaintiff filed a civil antitrust Complaint on November 25, 1998,
alleging that a proposed acquisition of Whiteco Industries, Inc. and
Metro Management Association (collectively ``Whiteco'') by Chancellor
Media Corporation (``Chancellor'') would violate section 7 of the
Clayton Act, 15 U.S.C. 18. The Complaint alleges that Chancellor and
Whiteco compete head-to-head to sell outdoor bulletin advertising in
seven counties: (1) Hartford County, Connecticut; (2) Shawnee County,
Kansas; (3) Leavenworth County, Kansas; (4) Potter Country, Texas; (5)
Nolan County, Texas; (6) Westmoreland County, Texas; and (7) Washington
County, Texas, (collectively ``the Seven Counties''). Outdoor
advertising companies sell advertising space, such as on billboards, to
local and national customers. The outdoor advertising business in the
Seven Counties is highly concentrated. Chancellor and Whiteco have a
combined share of revenue ranging from about 48 percent to a virtual
monopoly in the Seven Counties. Unless the acquisition is blocked,
competition would be substantially lessened in the Seven Counties, and
advertisers would pay higher prices.
The prayer for relief seeks: (a) An adjudication that the proposed
transaction described in the Complaint would violate section 7 of the
Clayton Act; (b) preliminary and permanent injunctive relief preventing
the consummation of the transaction; (c) an award to the United States
of the costs of this action; and (d) such other relief as is proper.
Shortly before this suit was filed, a proposed settlement was
reached that permits Chancellor to complete its acquisition of Whiteco,
yet preserves competition in the Seven Counties where the transaction
raises significant competitive concerns. A Stipulation and proposed
Final Judgment embodying the settlement were filed at the same time the
Complaint was filed.
The proposed Final Judgment orders Chancellor to divest outdoor
bulletin advertising assets equal in number to, and having
approximately the same market and rental value as, the outdoor bulletin
advertising assets operated by Whiteco in each of the Seven Counties.
In doing so, Chancellor may divest outdoor bulletin advertising assets
currently owned by either Whiteco or Chancellor. Unless the plaintiff
grants a time extension, Chancellor must divest these outdoor bulletin
advertising assets within six (6) months after the filing of the
Complaint in this action or within five (5) business days after notice
of entry of the Final Judgment, whichever is later.
If Chancellor does not divest the outdoor bulletin advertising
assets in the specified counties within the divestiture period, the
Court, upon plaintiff's application, is to appoint a trustee to sell
the assets. The proposed Final Judgment also requires that, until the
divestitures mandated by the Final Judgment have been accomplished in
Hartford, Washington and Westmoreland Counties, Chancellor, Whiteco
and/or Metro shall take all steps necessary to maintain and operate the
outdoor bulletin advertising assets as active competitors; maintain
sufficient management and staffing, and maintain sales and marketing of
the outdoor bulletin advertising assets; and maintain the outdoor
bulletin advertising assets in operable condition at current capacity
configurations. In the remaining counties, Chancellor, Whiteco and/or
Metro shall take all steps necessary to maintain and operate the
outdoor bulletin advertising assets as active competitors, such that
the sale and marketing of the assets shall be conducted separate from,
and in competition with Chancellor's bulletin faces in the respective
counties. Further, the proposed Final Judgment requires Chancellor to
give the United States prior notice regarding certain future outdoor
advertising acquisitions or agreements pertaining to the sale of
outdoor bulletin advertising in the Seven Counties.
The plaintiff and the defendants have stipulated that the proposed
Final Judgment may be entered after compliance with the APPA. Entry of
the proposed Final Judgment would terminate this action, except that
the Court would retain jurisdiction to construe, modify, or enforce the
provisions of the proposed Final Judgment and to punish violations
thereof.
II. The Alleged Violations
A. The Defendants
Chancellor, a large nationwide operator of media businesses,
including outdoor advertising, is a Delaware corporation headquartered
in Dallas, Texas. Chancellor conducts some outdoor advertising business
through its subsidiary, Martin Media, L.P. (``Martin''), a limited
partnership headquartered in Dallas, Texas. Martin sells outdoor
advertising in many states throughout the United States, including in
each of the Seven Counties. In 1997 Chancellor's total revenues from
outdoor advertising were approximately $78 million.
Whiteco is a Nebraska corporation headquartered in Merrillville,
Indiana. Whiteco sells outdoor advertising in 32 states, including in
each of the Seven Counties. In 1997, its revenues from outdoor
advertising were approximately $6.9 million.
B. Description of the Events Giving Rise to the Alleged Violations
On August 30, 1998, Chancellor entered into an Asset Purchase
Agreement with Whiteco. Chancellor agreed to purchase certain assets of
Whiteco used or useful in the outdoor advertising business of Whiteco
in the United States. The transaction is valued at approximately $930
million.
Chancellor and Whiteco compete for the business of advertisers
seeking to obtain outdoor advertising space in the Seven Counties. The
proposed acquisition of Whiteco by Chancellor would eliminate that
competition in violation of Section 7 of the Clayton Act.
[[Page 2674]]
C. Anticompetitive Consequences of the Proposed Transaction
The Complaint alleges that the sale of outdoor advertising in the
Seven Counties constitutes a relevant product market and a line of
commerce, and that each county constitutes a relevant geographic market
and section of the country for antitrust purposes.
Advertisers select outdoor advertising based upon a number of
factors including, inter alia, the size of the target audience
(individuals most likely to purchase the advertiser's products or
services), the traffic patterns of the audience, and other audience
characteristics. Many advertisers seek to reach a large percentage of
their target audience by selecting outdoor advertising on highways and
roads where vehicle traffic is high, so that the advertising will be
frequently viewed by the target audience, or where the vehicle traffic
is close to the advertiser's location. When different firms own outdoor
advertising spaces that can efficiently reach that target audience,
advertisers benefit from the competition among outdoor advertising
providers, who offer better prices or services. Many local and/or
national advertisers purchase outdoor advertising because outdoor
advertising space is less expensive and more cost-efficient than other
media at reaching the advertiser's target audience with the type of
advertising message that the advertiser prefers to deliver.
Outdoor advertising has prices and characteristics that are
distinct from other advertising media. An advertiser's evaluation of
the importance of these characteristics depends on the type of
advertising message the advertiser wishes to convey and the price the
advertiser is willing to pay to deliver that message. Many advertisers
who use outdoor advertising also advertise in other media, including
radio, television, newspapers and magazines, but use outdoor
advertising when they want a large number of exposures to consumers at
a low cost per exposure. Because each exposure is brief, outdoor
advertising is most suitable for highly visual, limited information
advertising.
For many advertising customers, outdoor advertising's particular
combination of characteristics makes it an advertising medium for which
there are no close substitutes. Such customers who want or need to use
outdoor advertising would not switch to another advertising medium if
outdoor advertising prices increased by a small but significant amount.
Although some local and national advertisers may switch some of their
advertising to other media, rather than absorb a price increase in
outdoor advertising space, the existence of such advertisers would not
prevent outdoor advertising companies in the Seven Counties from
profitably raising their prices a small but significant amount. At a
minimum, outdoor advertising companies could profitably raise prices to
those advertisers who view outdoor advertising as a necessary
advertising medium for them, or as a necessary advertising complement
to other media. Outdoor advertising companies negotiate prices
individually with advertisers. During individual price negotiations
between advertisers and outdoor advertising companies, advertisers
provide the outdoor advertising companies with information about their
advertising needs, including their target audience and the desired
exposure. Outdoor advertising companies thus have the ability to charge
advertisers differing rates based in part on the number and
attractiveness of competitive outdoor advertising companies that can
meet a particular advertiser's specific target needs. Because of this
ability to price discriminate among customers, outdoor advertising
companies may charge higher prices to advertisers that view outdoor
advertising as particularly effective for their needs, while
maintaining lower prices for other advertisers.
The Complaint alleges that Chancellor's proposed acquisition of
Whiteco would lessen competition substantially in the sale of outdoor
advertising in each of the Seven Counties. The proposed transaction
would create further market concentration in already highly
concentrated markets, and Chancellor would control a substantial share
of the outdoor advertising revenues in these markets. Using a measure
of market concentration called the Herfindahl-Hirschman Index
(``HHI''), explained in Appendix A annexed hereto, post acquisition:
a. In Hartford County, Connecticut, Chancellor's share of the
outdoor advertising market, based on advertising revenues, would
increase to 100 percent. The approximately post-merger HHI would be
10000, representing an increase of about 4992.
b. In Shawnee County, Kansas, Chancellor's share of the outdoor
advertising market, based on advertising revenues, would increase to
about 48 percent. The approximate post-market HHI would be 5008,
representing an increase of about 1144.
c. In Leavenworth County, Kansas, Chancellor's share of the
outdoor advertising market, based on advertising revenues, would
increase to about 60 percent. The approximate post-merger HHI would
be 4130, representing an increase of about 832.
d. In Potter County, Texas, Chancellor's share of the outdoor
advertising market, based on advertising revenues, would increase to
about 82 percent. The approximate post-merger HHI would be 6959,
representing an increase of about 1050.
e. In Nolan County, Texas, Chancellor's share of the outdoor
advertising market, based on advertising revenues, would increase to
about 76 percent. The approximate post-merger HHI would be 6049,
representing an increase of about 1920.
f. In Westmoreland County, Pennsylvania, Chancellor's share of
the outdoor advertising market, based on advertising revenues, would
increase to about 71 percent. The approximate post-merger HHI would
be 5454 representing an increase of about 2516.
g. In Washington County, Pennsylvania, Chancellor's share of the
outdoor advertising market, based on advertising revenues, would
increase to about 88 percent. The approximate post-merger HHI would
be 8888 representing an increase of about 1560.
In each of the Seven Counties, Chancellor and Whiteco compete head-
to-head and, for many local and/or national advertisers buying space,
they are close substitutes for each other. During individual price
negotiations, advertisers that desire to reach a certain audience can
help ensure competitive prices by ``playing off'' Whiteco against
Chancellor. Chancellor's acquisition of Whiteco will end this
competition. After the acquisition, such advertisers will be unable to
reach their desired audiences with equivalent efficiency without using
Chancellor's outdoor advertising. Because advertisers seeking to reach
these audiences would have inferior alternatives to the merged entity
as a result of the acquisition, the acquisition would give Chancellor
the ability to raise prices and reduce the quality of its service to
some of its advertisers in each of the Seven Counties.
New entry into the advertising market in response to a small but
significant price increase by the merged parties in any of these
markets is unlikely to be timely and sufficient to render the price
increase unprofitable.
For all of these reasons, plaintiff concludes that the proposed
transaction would lessen competition substantially in the sale of
outdoor advertising in the Seven Counties, eliminate actual and
potential competition between Chancellor and Whiteco, and result in
increased prices and/or reduced quality of services of outdoor
advertisers in each of the Seven Counties, all in violation of section
7 of the Clayton Act.
III. Explanation of the Proposed Final Judgment
The proposed Final Judgment would preserve existing competition in
the sale
[[Page 2675]]
of outdoor advertising space in Seven Counties. It requires the
divestiture of bulletin faces equal in number to, and having
approximately the same market and rental value as, the number of faces
operated by Whiteco in the Seven Counties. Exempt from the divestiture
are the 23 bulletin faces located on I-70 west of Exit 4 in Washington
County, Pennsylvania. This relief maintains the level of competition
that existed premerger and ensures that the affected markets will
suffer no reduction in competition as a result of the merger.
Advertisers will continue to have alternatives to the merged firm in
purchasing outdoor advertising. Finally, the ownership structure is
maintained in that the number of competitors who may compete for
advertisers' business will remain unchanged.
Unless plaintiff grants an extension of time, the divestitures must
be completed within six (6) months after the filing of the Complaint in
this matter or within five (5) business days after notice of entry of
this Final Judgment by the Court, whichever is later. Until the
divestitures take place in Hartford, Washington and Westmoreland
Counties, defendants must maintain and operate the advertising assets
as active competitors; maintain sufficient management and staffing,
maintain sales and marketing of the advertising assets; and maintain
the advertising assets in operable condition at current capacity
configurations. In the remaining counties, defendants must maintain and
operate the advertising assets as active competitors; such that the
sales marketing of the assets is conducted separate from, and in
competition with the Chancellor's bulletin faces in the respective
counties.
The divestitures must be to a purchaser or purchasers acceptable to
the plaintiff in its sole discretion. Unless plaintiff otherwise
consents in writing, the divestitures shall include all the assets of
the outdoor advertising business being divested, and shall be
accomplished in such a way as to satisfy plaintiff, in its sole
discretion, that such assets can and will be used as viable, ongoing
commercial outdoor advertising businesses. In addition, the purchaser
or purchasers must intend in good faith to continue the operations of
the outdoor advertising businesses as were in effect in the period
immediately prior to the filing of the Complaint, unless any
significant change in the operations planned by a purchaser is accepted
by the plaintiff in its sole discretion. This provision is intended to
ensure that the outdoor advertising businesses to be divested remain
competitive with Chancellor's other outdoor advertising businesses in
the Seven Counties.
If defendants fail to divest these outdoor advertising assets
within the time periods specified in the Final Judgment, the Court,
upon plaintiff's application, is to appoint a trustee nominated by
plaintiff to effect the divestitures. If a trustee is appointed, the
proposed Final Judgment provides that defendants will pay all costs and
expenses of the trustee and any professionals and agents retained by
the trustee. The compensation paid to the trustee and any persons
retained by the trustee shall be both reasonable in light of the value
of the advertising assets, and based on a fee arrangement providing the
trustee with an incentive based on the price and terms of the
divestitures and the speed with which they are accomplished. After
appointment, the trustee will file monthly reports with the plaintiff,
defendants and the Court, setting forth the trustee's efforts to
accomplish the divestitures ordered under the proposed Final Judgment.
If the trustee has not accomplished the divestitures within six (6)
months after its appointment, the trustee shall promptly file with the
Court a report setting forth (1) the trustee's efforts to accomplish
the required divestitures, (2) the reasons, in the trustee's judgment,
why the required divestitures have not been accomplished and (3) the
trustee's recommendations. At the same time the trustee will furnish
such report to the plaintiff and defendants, who will each have the
right to be heard and to make additional recommendations.
The proposed Final Judgment contains provisions to ensure that
these outdoor advertising assets will be preserved, so that the
advertising assets remain viable competitors after divestiture.
The proposed Final Judgment requires Chancellor to provide at least
thirty (30) days' notice to the Department of Justice before acquiring
more than a de minimis interest in any assets of, or any interest in,
another outdoor advertising company in the Seven Counties. Such
acquisitions could raise competitive concerns but might be too small to
be reported otherwise under the Hart-Scott-Rodino (``HSR'') premerger
notification statute. Moreover, Chancellor may not agree to sell
outdoor advertising space for any other outdoor advertising company in
the Seven Counties without providing plaintiff with notice. Thus, this
provision in the proposed Final Judgment ensures that the Department
will receive notice of and be able to act, if appropriate, to stop any
agreements that might have anticompetitive effects in the Seven
Counties.
The relief in the proposed Final Judgment is intended to remedy the
likely anticompetitive effects of Chancellor's proposed transaction
with Whiteco in the Seven Counties. Nothing in this Final Judgment is
intended to limit the plaintiff's ability to investigate or to bring
actions, where appropriate, challenging other past or future activities
of defendants in the Seven Counties.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of section 5(a) of the Clayton Act, 15 U.S.C.
16(a), the proposed Final Judgment has no prima facie effect in any
subsequent private lawsuit that may be brought against defendants.
V. Procedures Available for Modification of the Proposed Final Judgment
The plaintiff and the defendants have stipulated that the proposed
Final Judgment may be entered by the Court after compliance with the
provisions of the APPA, provided that the plaintiff has not withdrawn
its consent. The APPA conditions entry upon the Court's determination
that the proposed Final Judgment is in the public interest.
The APPA provides a period of at least sixty (60) days preceding
the effective date of the proposed Final Judgment within which any
person may submit to the plaintiff written comments regarding the
proposed Final Judgment. Any person who wishes to comment should do so
within sixty (60) days of the date of publication of this Competitive
Impact Statement in the Federal Register. The plaintiff will evaluate
and respond to the comments. All comments will be given due
consideration by the Department of Justice, which remains free to
withdraw its consent to the proposed Final Judgment at any time prior
to entry. The comments and the response of the plaintiff will be filed
with the Court and published in the Federal Register.
Written comments should be submitted to: Craig W. Conrath, Chief,
Merger Task Force, Antitrust Division, United States Department of
Justice,
[[Page 2676]]
1401 H Street, NW; Suite 4000, Washington, DC 20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and that the parties may apply to the
Court for any order necessary or appropriate for the modification,
interpretation or enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
Plaintiff considered, as an alternative to the proposed Final
Judgment, a full trial on the merits of its Complaint against
defendants. Plaintiff is satisfied, however, that the divestiture and
other relief contained in the proposed Final Judgment will preserve
viable competition in the sale of outdoor advertising space in the
Seven Counties. Thus, the proposed Final Judgment would achieve the
relief the government would have obtained through litigation, but
avoids the time, expense and uncertainty of a full trial on the merits
of the Complaint.
VII. Standard of Review Under the APPA for Proposed Final Judgment
The APPA requires that proposed consent judgments in antitrust
cases brought by the United States be subject to a sixty (60) day
comment period, after which the Court shall determine whether entry of
the proposed Final Judgment ``is in the public interest.'' In making
that determination, the Court may consider--
(1) The competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration or relief sought, anticipated effects of
alternative remedies actually considered and any other
considerations bearing upon the adequacy of such judgment;
(2) The impact of entry of such judgment 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).
As the United States Court of Appeals for the D.C. Circuit held,
this statute permits a court to consider, among other things, the
relationship between the remedy secured and the specific allegations
set forth in the government's complaint, whether the decree is
sufficiently clear, whether enforcement mechanisms are sufficient and
whether the decree may positively harm third parties. See United States
v. Microsoft, 56 F.3d 1448, 1461-62 (D.C. Cir. 1995).
In conducting this inquiry, ``(t)he Court is nowhere compelled to
go to trial or to engage in extended proceedings which might have the
effect of vitiating the benefits of prompt and less costly settlement
through the consent decree process.'' \1\ Rather,
\1\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest''
determination can be made properly on the basis of the Competitive
Impact Statement and Response to Comments filed pursuant to the
APPA. Although the APPA authorizes the use of additional procedures,
15 U.S.C. 16(f), those procedures are discretionary. A court need
not invoke any of them unless it believes that the comments have
raised significant issues and that further proceedings would aid the
court in resolving those issues. See H.R. Rep. 93-1463, 93rd Cong.
2d Sess. 8-9 (1974), reprinted in U.S.C.C.A.N. 6535, 6538.
[a]bsent a showing of corrupt failure of the government to discharge
its duty, the Court, in making its public interest finding, should *
* * carefully consider the explanations of the government in the
competitive impact statement and its responses to comments in order
to determine whether those explanations are reasonable under the
---------------------------------------------------------------------------
circumstances.
United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para.
61,508, at 71,980 (W.D. Mo. 1977).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988), citing United States v. Bechtel
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083
(1981); see also Microsoft, 56 F.3d at 1460-62. Precedent requires that
the balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the public in consenting to
the decree. The 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.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree. \2\
---------------------------------------------------------------------------
\2\ Bechtel, 648 F.2d at 666 (citations omitted) (emphasis
added); see BNS, 858 F.2d at 463; United States v. National
Broadcasting Co., 449 F. Supp. 1127, 1143 (C.D. Cal. 1978);
Gillette, 406 F. Supp. at 716. See also Microsoft, 56 F.3d at 1461
(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' '') (citations omitted).
The proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate every
anticompetitive effect of a particular practice or whether it mandates
certainty of free competition in the future. Court approval of a final
judgment requires a standard more flexible and less strict than the
standard required for a finding of liability. ``[A] 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 public interest.' '' \3\
---------------------------------------------------------------------------
\3\ United States v. American Tel. and Tel. Co., 552 F. Supp.
131, 151 (D.D.C. 1982), aff'd. sub nom. Maryland v. United States,
460 U.S. 1001 (1983), quoting Gillette, 406 F. Supp. at 716
(citations omitted); United States v. Alcan Aluminum, Ltd., 605 F.
Supp. 619, 622 (W.D. Ky. 1985).
---------------------------------------------------------------------------
The relief obtained in this case is strong and effective relief
that should fully address the competitive harm posed by the proposed
transaction.
VIII. Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that were considered by the plaintiff in
formulating the proposed Final Judgment.
Dated: December 16, 1998.
Respectfully submitted,
Renee Eubanks,
Merger Task Force, U.S. Department of Justice, Antitrust Division, 1401
H Street, NW; Suite 4000, Washington, DC 20530, (202) 307-0001.
Exhibit A--Definition of HHI and Calculations for Market
``HHI'' means the Herfindahl-Hirschman Index, a commonly
accepted measure of market concentration. It is calculated by
squaring the market share of each firm competing in the market and
then summing the resulting numbers. For example, for a market
consisting of four firms with shares of thirty, thirty, twenty and
twenty percent, the HHI is 2600 (30\2\ + 30\2\ + 20\2\ + 20\2\ =
2600). The HHI takes into account the relative size and distribution
of the firms in a market and approaches zero when a market consists
of a large number of firms of relatively equal size. The HHI
increases both as the number of firms in the market decreases and as
the disparity in size between those firms increases.
Markets in which the HHI is between 1000 and 1800 points are
considered to be moderately concentrated, and those in which the HHI
is in excess of 1800 points are considered to be concentrated.
Transactions that increase the HHI by more than 100 points in
concentrated markets presumptively raise antitrust concerns under
the Merger Guidelines. See Merger Guidelines Sec. 1.51.
Certificate of Service
I, Renee Eubanks hereby certify that, on December 16, 1998, I
caused the foregoing document to be served on defendants Whiteco
Industries, Inc, Metro Management Associates, and
[[Page 2677]]
Chancellor Media Corporation by having a copy mailed, first-class,
postage prepaid, to:
Steven H. Schulman,
Bruce J. Prager,
Latham & Watkins, 1001 Pennsylvania Ave., NW, Suite 1300, Washington,
DC 20004, Counsel for Chancellor Media Corporation.
Charles Biggio,
Akin, Gump, Strauss, Hauer & Feld, L.L.P., 590 Madison Avenue, 20th
Floor, New York, NY 10022, Counsel for Whiteco Industries, Inc. and
Metro Management Associates.
[FR Doc. 99-826 Filed 1-14-99; 8:45 am]
BILLING CODE 4410-11-M
