[Federal Register Volume 61, Number 232 (Monday, December 2, 1996)]
[Notices]
[Pages 63861-63870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30550]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States of America v. Westinghouse Electric Corporation and
Infinity Broadcasting Corporation; Proposed Final Judgment and
Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 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 v. Westinghouse Electric Corporation and Infinity
Broadcasting Corporation, Civil Action No. 96-02563. 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. Sec. 16(b)-(h).
The United States filed a civil antitrust Complaint on November 12,
1996, alleging that the proposed acquisition of the Infinity
Broadcasting Corporation (``Infinity'') by the Westinghouse Electric
Corporation (``Westinghouse'') would violate Section 7 of the Clayton
Act, 15 U.S.C. Sec. 18. The Complaint alleges that Westinghouse and
Infinity own and operate numerous radio stations throughout the United
States, and that they each own and operate stations in the
Philadelphia, Pennsylvania and Boston, Massachusetts metropolitan
areas. This acquisition would give Westinghouse control over more than
40 percent of the radio advertising revenues in those metropolitan
areas, as well as a substantial amount of control over access to
certain demographic groups of radio listeners targeted by advertisers
in those metropolitan areas. As a result, the combination of these
companies would substantially lessen competition in the sale of radio
advertising time in the Philadelphia and Boston metropolitan areas.
The prayer for relief seeks: (a) Adjudication that Westinghouse's
proposed acquisition of Infinity would violate Section 7 of the Clayton
Act; (b) preliminary and permanent injunctive relief preventing the
consummation of the proposed acquisition; (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 Westinghouse to complete its acquisition of
Infinity, yet preserves competition in the markets in which the
transaction would raise significant competitive concerns. A Stipulation
and proposed Final Judgment embodying the settlement were filed with
the Court at the same time the Complaint was filed.
The proposed Final Judgment orders Westinghouse to divest WMMR-FM,
currently owned by Westinghouse, and WBOS-FM, currently owned by
Infinity, in Philadelphia and Boston, respectively. Unless the United
States grants an extension of time, Westinghouse must divest these
radio stations within six months after the filing of the Final
Judgment, or within five (5) business days after notice of entry of the
Final Judgment, whichever is later. If Westinghouse does not divest
these stations within the divestiture period, the Court may appoint a
trustee to sell the assets. The proposed Final Judgment also requires
the defendants to ensure that, until the divestitures mandated by the
Final Judgment have been accomplished, WMMR-FM and WBOS-FM will be
operated independently as viable, ongoing businesses, and kept separate
and apart from Westinghouse's and Infinity's other Philadelphia and
Boston radio stations, respectively. Further, the proposed Final
Judgment requires the defendants to give plaintiff prior notice
regarding future radio station acquisitions and future Joint Sales
Agreements, Local Marketing Agreements or comparable arrangements in
Philadelphia and Boston.
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, D.C. 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 St., NW, Washington, D.C. 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, D.C. 20001.
Copies of any of these materials may be obtained upon request and
payment of a copying fee.
Constance K. Robinson,
Director of Operation, 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 defendants have agreed to waive the requirements of Fed. R.
Civ. P. 4 and to accept service of the Complaint herein by first class
mail, addressed to their undersigned counsel of record.
available to it as a result of such delay, provided that: (i)
Defendants have entered into one or more definitive agreements to
divest the WMMR-FM Assets and the WBOS-FM Assets, as defined in the
Final Judgment, and such agreements and the Acquirer or Acquires have
been approved by plaintiff; (ii) All papers necessary to secure any
governmental approvals and/or rulings to effectuate such divestitures
(including but not limited to FCC, SEC and IRS approvals or rulings)
have been filed with the appropriate agency; (iii) Receipt of such
approvals are the only
[[Page 63862]]
closing conditions that have not been satisfied or waived; and (iv)
Defendants have demonstrated that neither they nor the prospective
Acquirer or Acquirers are responsible for any such delay.
(6) In the event the United States withdraws its consent, as
provided in paragraph 3 above, or if the proposed Final Judgment is not
entered, this Stipulation shall be of no effect whatever, and the
making of this Stipulation shall be without prejudice to any party in
this or any other proceeding.
(7) The defendants represent that the divestitures ordered in the
proposed Final Judgment can and will be made, and that the defendants
will later raise no claims of hardship or difficulty as grounds for
asking the Court to modify any of the divestiture provisions contained
therein.
Dated: November 12, 1996.
For Plaintiff United States of America:
Dando B. Cellini,
U.S. Department of Justice, Antitrust Division, Merger Task Force, 1401
H Street, N.W., Suite 4000, Washington, D.C. 20005, (202) 307-0829.
For Defendant Westinghouse Electric Corporation:
Joe Sims,
Jones, Day, Reavis & Pogue, 1450 G Street, N.W., Washington, D.C.
20005, (202) 879-3939.
For Defendant Infinity Broadcasting Corporation:
Daniel M. Abuhoff,
Debevoise & Plimpton, 875 Third Avenue, New York, NY 10022, (212) 909-
6000.
So Ordered:
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United States District Judge
Certificate of Service
I, Dando B. Cellini, hereby certify that, on November 12, 1996,
I caused the foregoing document to be served on defendants
Westinghouse Electric Corporation and Infinity Broadcasting
Corporation by having a copy mailed, first-class, postage prepaid,
to:
Joe Sims, Jones, Day, Reavis & Pogue, 1450 G St., N.W., Washington,
D.C. 20005, Counsel for Westinghouse Electric Corporation
Daniel M. Abuhoff, Debevoise & Plimpton, 875 Third Avenue, New York, NY
10022, Counsel for Infinity Broadcasting Corporation
Dando B. Cellini.
Whereas, plaintiff, the United States of America, having filed its
Complaint herein on November 12, 1996, 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 purpose of this Final Judgment is prompt and
certain divestiture of certain assets to assure that competition is not
substantially lessened;
And whereas, plaintiff requires defendants to make certain
divestitures for the purpose of remedying the loss of competition
alleged in the Complaint:
And whereas, defendants have represented to plaintiff that the
divestitures ordered herein can and will be made and that defendants
will later raise no claims of hardship or difficulty as grounds for
asking the Court to modify any of the divestiture provisions 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. Jurisdiction
This Court has jurisdiction over each of the parties hereto and
over the subject matter of this action. The Complaint states a claim
upon which relief may be granted against defendants Westinghouse and
Infinity, as hereinafter defined, under Section 7 of the Clayton Act,
as amended (15 U.S.C. Sec. 18).
II. Definitions
As used in this Final Judgment:
A. ``Westinghouse'' means defendant Westinghouse Electric
Corporation, a Pennsylvania corporation with its headquarters in
Pittsburgh, Pennsylvania, and includes its successors and assigns, its
subsidiaries (including CBS Inc.), and directors, officers, managers,
agents and employees acting for or on behalf of Westinghouse.
B. ``Infinity'' means defendant Infinity Broadcasting Corporation,
a Delaware corporation with its headquarters in New York, New York, and
includes its successors and assigns, its subsidiaries, and directors,
officers, managers, agents and employees acting for or on behalf of
Infinity.
C. ``WMMR-FM Assets'' means all of the assets, tangible or
intangible, used in the operation of the WMMR 93.3 FM radio station in
Philadelphia, Pennsylvania, including but not limited to: all real
property (owned and leased) used in the operation of that station; all
broadcast equipment, personal property, inventory, office furniture,
fixed assets and fixtures, materials, supplies and other tangible
property used in the operation of that station; all licenses, permits
and authorizations and applications therefor issued by the Federal
Communications Commission (``FCC'') and other governmental agencies
relating to that station; all contracts, agreements, leases and
commitments of Westinghouse pertaining to that station and its
operations; all trademarks, service marks, trade names, copyrights,
patents, slogans, programming materials and promotional materials
relating to that station; and all logs and other records maintained by
Westinghouse or that station in connection with its business. The WMMR-
FM Assets do not include any trademarks, service marks, trade names,
copyrights, patents, slogans, programming materials and promotional
materials created by Westinghouse, or its subsidiary CBS Inc., and used
by other radio stations, not solely by WMMR-FM. For all assets used
jointly by WMMR and KYW-AM or KYW TV prior to the divestiture required
by this Final Judgment, defendants shall propose to the plaintiff,
within 90 days of the filing of this Final Judgment, a plan for
dividing such assets in a way that, in plaintiff's sole discretion,
does not impair WMMR's ability to attract potential acquirers. Upon
approval of the plan by plaintiff, the term ``WMMR-FM Assets'' shall
include only those assets allocated under the plan to WMMR.
D. ``WBOS-FM Assets'' means all of the assets, tangible or
intangible, used in the operation of the WBOS 92.9 FM radio station in
Boston, Massachusetts, including but not limited to: all real property
(owned and leased) used in the operation of that station; all broadcast
equipment, personal property, inventory, office furniture, fixed assets
and fixtures, materials, supplies and other tangible property used in
the operation of that station; all licenses, permits and authorizations
and applications therefor issued by the Federal Communications
Commission (``FCC'') and other governmental agencies relating to that
station; all contracts, agreements, leases and commitments of Infinity
pertaining to that station and its operations; all trademarks, service
marks, trade names, copyrights, patents, slogans, programming materials
and promotional materials relating to that station; and all logs and
other records maintained by Infinity or that station in connection with
its business. For all assets used
[[Page 63863]]
jointly by WBOS and WOAZ-FM prior to the divestiture required by this
Final Judgment, defendants shall propose to plaintiff, within 90 days
of the filing of this Final Judgment, a plan for dividing such assets
in a way that, in the sole discretion of plaintiff, does not impair
WBOS's ability to attract potential acquirers. Upon approval of the
plan by plaintiff, the term ``WBOS-FM Assets'' shall include only those
assets allocated under the plan to WBOS.
E. ``Philadelphia Area'' means the Philadelphia, Pennsylvania Metro
Survey Area as identified by The Arbitron Radio Market Report for
Philadelphia (Summer 1996), which is made up of the following eight
counties: Bucks, Montgomery, Chester, Philadelphia, Delaware,
Burlington, Camden and Gloucester.
F. ``Boston Area'' means the Boston, Massachusetts Metro Survey
Area as identified by The Arbitron Radio Market Report for Boston
(Summer 1996), which is made up of the following five counties: Essex,
Middlesex, Suffolk, Norfolk and Plymouth.
G. ``Westinghouse Radio Station'' means any radio station owned by
Westinghouse or Infinity and licensed to a community in either the
Philadelphia Area or the Boston Area, other than WMMR-FM in the
Philadelphia Area and WBOS-FM in the Boston Area.
H. ``Non-Westinghouse Radio Station'' means any radio station
licensed to a community in either the Philadelphia Area or the Boston
Area that is not a Westinghouse Radio Station.
I. ``Acquirer'' means the entity or entities to whom defendants
divest the WMMR-FM Assets and/or the WBOS-FM Assets under this Final
Judgment.
III. Applicability
A. The provisions of this Final Judgment apply to each of the
defendants, their successors and assigns, their subsidiaries,
affiliates, 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 the assets used in its
business of owning and operating its portfolio of radio stations in
either the Philadelphia Area or the Boston Area, that the acquiring
party or parties agree to be bound by the provisions of this Final
Judgment; provided, however, that defendants need not obtain such an
agreement from an Acquirer, as defined herein.
IV. Divestiture of WMMR-FM and WBOS-FM
A. Defendants are hereby ordered and directed, in accordance with
the terms of this Final Judgment, within six (6) months after the
filing of this Final Judgment, or within five (5) business days after
notice of entry of this Final Judgment, whichever is later, to divest
the WMMR-FM Assets and the WBOS-FM Assets to one or two Acquirers
acceptable to plaintiff, in its sole discretion. Unless plaintiff
otherwise consents in writing, the divestitures pursuant to Section IV
of this Final Judgment, or by the trustee appointed pursuant to Section
V, shall be accomplished in such a way as to satisfy plaintiff, in its
sole discretion, that the WMMR-FM Assets and the WBOS-FM Assets can and
will be used by an Acquirer or Acquirers as viable, ongoing commercial
radio businesses. The divestitures, whether pursuant to Section IV or V
of this Final Judgment, shall be made (i) to an Acquirer or Acquirers
that, in plaintiff's sole judgment, has or have the capability and
intent of competing effectively, and has or have the managerial,
operational and financial capability to compete effectively as radio
station operators in the Philadelphia Area and the Boston Area; and
(ii) pursuant to agreements the terms of which shall not, in the sole
judgment of plaintiff, interfere with the ability of the purchaser(s)
to compete effectively.
B. Defendants agree to use their best efforts to divest the WMAR-FM
Assets and the WBOS-FM Assets, and to obtain all regulatory approvals
necessary for such divestitures, as expeditiously as possible.
Plaintiff, in its sole discretion, may extend the time period for the
divestitures 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 for sale of the WMMR-FM Assets and the WBOS-FM
Assets. Defendants shall inform any person making a bona fide inquiry
regarding a possible purchase that the sale is being made pursuant to
this Final Judgment and provide such person with a copy of the Final
Judgment. Defendants shall make known to any person making an inquiry
regarding a possible purchase of the WMMR-FM Assets and/or the WBOS-FM
Assets that the assets described in Section II (C) and (D) are being
offered for sale and that the WMMR-FM Assets and the WBOS-FM Assets may
be purchased as a two-station package or sold separately to different
purchasers. Defendants shall also offer to furnish to all bona fide
prospective purchasers, subject to customary confidentiality
assurances, all information regarding the WMMR-FM Assets and the WBOS-
FM Assets customarily provided in a due diligence process, except such
information that is subject to attorney-client privilege or attorney
work-product privilege. Defendants shall make available such
information to plaintiff at the same time that such information is made
available to any other person.
D. Defendants shall permit bona fide prospective purchasers of the
WMMR-FM Assets and/or the WBOS-FM Assets to have access to personnel
and to make such inspection of the assets, and any and all financial,
operational or other documents and information customarily provided as
part of a due diligence process.
E. Defendants shall not interfere with any efforts by any Acquirer
or Acquirers to employ the general manager or any employee of WMMR-FM
or WBOS-FM.
V. Appointment of Trustee
A. In the event that defendants have not divested the WMMR-FM
Assets and the WBOS-FM Assets within the time periods specified in
Section IV above, the Court shall appoint, on application of plaintiff,
a trustee selected by plaintiff to effect the divestiture of the
assets.
B. After the trustee's appointment has become effective, only the
trustee shall have the right to sell the WMMR-FM Assets and the WBOS-FM
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 Section V and VII
of this Final Judgment and consistent with FCC regulations, and shall
have 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 or agents shall be solely accountable to the trustee. The
trustee shall have the power and authority to accomplish the
divestitures at the earliest possible time to a purchaser acceptable to
plaintiff, in its sole judgment, and shall have such other powers as
this Court shall deem appropriate. Defendants shall not object to the
sale of the WMMR-FM and/or the WBOS-FM Assets by the trustee on any
[[Page 63864]]
grounds other than the trustee's malfeasance. Any such objection by
defendants must be conveyed in writing to plaintiff and the trustee no
later than fifteen (15) calendar days after the trustee has provided
the notice required under Section VIII 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 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 monies shall be paid to defendants and the trustee's services
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 divestiture 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 take no action to interfere with or impede the
trustee's accomplishment of the divestiture of the WMMR-FM Assets and
the WBOS-FM Assets, and shall use their best efforts to assist the
trustee in accomplishing the required divestitures, including best
efforts to effect all necessary regulatory approvals. Subject to a
customary confidentiality agreement, the trustee shall have full and
complete access to the personnel, books, records and facilities related
to the WMMR-FM Asssets and the WBOS-FM Assets, and defendants shall
develop such financial or other information as may be necessary to the
divestiture of the WMMR-FM Assets and WBOS-FM Assets. Defendants shall
permit prospective purchasers of the WMMR-FM Assets and WBOS-FM Assets
to have access to personnel and to make such inspection of physical
facilities and any and all financial, operational or other documents
and information as may be relevant to the divestitures required by this
Final Judgment.
E. After its appointment becomes effective, the trustee shall file
monthly reports with defendants, plaintiff and the Court, setting forth
the trustee's efforts to accomplish divestiture of the WMMR-FM Assets
and WBOS-FM Assets as contemplated under 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 WMMR-FM Assets and WBOS-FM
Assets, 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 these operations.
F. Within six (6) months after its appointment has become
effective, if the trustee has not accomplished the divestiture required
by Section IV of this Final Judgment, the trustee shall promptly file
with the Court a report setting forth (1) the trustee's efforts to
accomplish the required divestiture, (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 reports to
defendants and plaintiff, who shall each have the right to be heard and
to make additional recommendations. The Court shall thereafter enter
such orders as it shall deem appropriate to accomplish the purpose of
this Final Judgment, which shall, if necessary, include extending the
term of the trustee's appointment.
VI. Preservation of Assets/Hold Separate
Until the divestiture of the WMMR-FM Assets and the WBOS-FM Assets
required by Section IV of the Final Judgment has been accomplished:
A. Defendants shall take all steps necessary to ensure that WMMR-FM
is maintained as a separate, independent, ongoing, economically viable
and active competitor to defendants' other stations in Philadelphia and
that, except as necessary to comply with Section IV and paragraphs C
through F of this Section of the Final Judgment, the management of said
station, including the performance of decision-making functions
regarding marketing and pricing, will be kept separate and apart from,
and not influenced by, defendants.
B. Defendants shall take all steps necessary to ensure that WBOS-FM
is maintained as a separate, independent, ongoing, economically viable
and active competitor to defendants' other stations in Boston and that,
except as necessary to comply with Section IV and paragraphs C through
F of this Section of the Final Judgment, the management of said
station, including the performance of decision-making functions
regarding marketing and pricing, will be kept separate and apart from,
and not influenced by, defendants.
C. Defendants shall use all reasonable efforts to maintain and
increase sales of advertising time by WMMR-FM, and shall maintain at
1995 or previously approved levels for 1996, whichever are higher,
promotional advertising, sales, marketing and merchandising support for
said station.
D. Defendants shall use all reasonable efforts to maintain and
increase sales of advertising time by WBOS-FM, and shall maintain at
1995 or previously approved levels for 1996, whichever are higher,
promotional advertising, sales, marketing and merchandising support for
said station.
E. Defendants shall take all steps necessary to ensure that the
assets used in the operation of WMMR-FM are fully maintained. WMMR-FM's
sales and marketing employees shall not be transferred or reassigned to
any other station except for transfer bids initiated by employees
pursuant to defendants' regular established job posting polices,
provided that defendants give plaintiff and Acquirer ten (10) days'
notice of any such transfer.
F. Defendants shall take all steps necessary to ensure that the
assets used in the operation of WBOS-FM are fully maintained. WBOS-FM's
sales and marketing employees shall not be transferred or reassigned to
any other station, except for transfer bids initiated by employees
pursuant to defendants' regular, established job posting polices,
provided that defendants give plaintiff and Acquirer ten (10) days'
notice of any such transfer.
G. Defendants shall not, except as part of a divestiture approved
by plaintiff, sell any WMMR-FM Assets or WBOS-FM Assets.
H. Defendants shall take no action that would jeopardize the sale
of the WMMR-FM Assets or the WBOS-FM Assets.
I. Defendants shall each appoint a person or persons to oversee the
assets to be held separate and who will be responsible for defendants'
compliance with Section VI of this Final Judgment.
Within two (2) business days following execution of a binding
agreement to divest, including all contemplated ancillary agreement
(e.g., financing), to effect in whole or in part, any proposed
divestiture pursuant to Section IV or V of this Final Judgment,
[[Page 63865]]
defendants or the trustee, whichever is then responsible for effecting
the divestiture, shall notify plaintiff of the proposed divestiture. 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 WMMR-FM Assets or the WBOS-FM
Assets, together with full details of same. Within fifteen (15)
calendar days of receipt by plaintiff of such notice, plaintiff may
request from defendants, the proposed purchaser or purchasers, any
other third party, or the trustee, if applicable, additional
information concerning the proposed divestiture, the proposed
purchaser, and any other potential purchaser. Defendants and the
trustee shall furnish any additional information requested within
fifteen (15) calendar days of the receipt of the request. Within thirty
(30) calendar days after receipt of the notice or within twenty (20)
calendar days after plaintiff has been provided the additional
information, whichever is later, plaintiff shall provide written notice
of defendants and the trustee, if there is one, stating whether or not
it objects to the proposed divestiture. If plaintiff fails to object
within the period specified, or if plaintiff provides written notice to
defendants and the trustee, if there is one, that it does not object,
then the divestiture may be consummated, subject only to defendants'
limited right to object to the sale under Section V(B) of this Final
Judgment. A divestiture proposed under Section IV shall not be
consummated if plaintiff objects to the identity of the proposed
purchaser or purchasers. Upon objection by plaintiff, or by defendants
under the proviso in Section V(B), a divestiture proposed under Section
V shall not be consummated unless approved by the Court.
VIII. Financing
Defendants are ordered and directed not to finance all or any part
of any purchase by an Acquirer made pursuant to Sections IV or V of
this Final Judgment without the prior written consent of plaintiff.
IX. Affidavits
A. Within twenty (20) calendar days of the filing of this Final
Judgment and every thirty (30) calendar days thereafter until the
divestiture has been completed, whether pursuant to Section IV or
Section V of this Final Judgment, Defendants shall deliver to plaintiff
an affidavit as to the fact and manner of their compliance with Section
IV or V of 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, was
contacted by defendants, or their representatives, made an offer to
acquire, expressed an interest in acquiring, entered into negotiations
to acquire, or made an inquiry about acquiring, any interest in the
WMMR-FM Assets and/or the WBOS-FM Assets, 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 or buyers for the WMMR-FM
Assets and the WBOS-FM Assets.
B. Within twenty (20) calendar days of the filing of this Final
Judgment, defendants shall deliver plaintiff an affidavit which
describes in reasonable detail all actions defendants have taken and
all steps defendants have implemented on an on-going basis to preserve
WMMR-FM and WBOS-FM pursuant to Section IV of this Final Judgment.
Defendants shall deliver to plaintiff 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 such change is implemented.
C. Defendants shall preserve all records of all efforts made to
preserve WMMR-FM and WBOS-FM and to divest the WMMR-FM Assets and the
WBOS-FM Assets.
X. Notice
A. Unless such transaction is otherwise subject to the reporting an
waiting period requirements of the Hart-Scott-Antitrust Improvements
Act of 1976, as amended, 15 U.S.C. Sec. 18a (the ``HSR Act''),
defendants, without providing advance notification to the United States
Department of Justice, shall not directly or indirectly:
(1) acquire any assets of or any interest, including any financial,
security, loan, equity or management interest, in any Non-Westinghouse
Radio Station or any person affiliated with any such Station; provided,
however, that defendants need not provide notice under this provision
for any direct or indirect acquisition of equity of a Non-Westinghouse
Radio Station that would result in defendants' holding no more than
five percent of the total equity of the station; or
(2) enter into any Joint Sales Agreements, Local Marketing
Agreements or comparable arrangement with any Non-Westinghouse Radio
Station.
Notification shall be provided to the United States Department of
Justice 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 5-9 of the instructions must be provided
only with respects to Westinghouse Radio Stations in the city
implicated by the transaction giving rise to the notification
obligation under this Section X. Notification shall be provided at
least thirty (30) days prior to acquiring any such interest covered in
(1) or (2) above, and shall include, beyond what may be required by the
applicable instructions, the names of the principal representatives of
the parties to the agreements who negotiated the agreement, and any
management or strategic plans discussing the propose transaction. If
within the 30-days period after notification, representatives of the
Department 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.
B. 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.
XI. Compliance Inspection
For the purpose of determining of securing compliance with the
Final Judgment and subject to any legally recognized privilege, from
time to time:
A. Duly authorized representatives of the plaintiff, including
consultants and other persons retained by the plaintiff, shall, upon
written request of the United States Attorney General, or of the
Assistant Attorney General in charge of the Antitrust Division, and on
reasonable notice to defendants made to the principal offices, be
permitted:
(1) Access during office hours of defendants to inspect and copy
all books, ledgers, accounts, correspondence, memoranda and other
records and documents in the possession or under the control of
defendants, who may have counsel present, relating to any matters
contained in this Final Judgment; and
[[Page 63866]]
(2) Subject to the reasonable convenience of defendants and without
restraint or interference from them, to interview directors, officers,
employees and agents of defendants, who may have counsel present,
regarding any such matters.
B. Upon the written request of the United States Attorney General,
or of the Assistant Attorney General in charge of the Antitrust
Division, made to defendants' principal offices, defendants shall
submit such written reports, under oath if requested, with respect to
any of the matters contained in this Final Judgment as may be
requested.
C. No information or documents obtained by the means provided in
this Section XI shall be divulged by any representative of 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 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 either
defendant to plaintiff, and such defendant represents and identifies 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 such defendant marks 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 plaintiff to such defendant prior to divulging
such material in any legal proceeding (other than a grand jury
proceeding) to which such defendant is not a party.
XII. Retention of Jurisdiction
Jurisdiction is retained by this Court at any time for such further
orders and directions as may be necessary or appropriate for the
construction, implementation or modification of any provisions of this
Final Judgment, for the enforcement of compliance herewith, and for the
punishment of any violation hereof.
XIII. Termination
Unless this Court grants an extension, this Final Judgment will
expire upon the tenth anniversary of the date of its entry.
XIV. Public Interest
Entry of this Final Judgment is in the public interest.
Dated:-----------------------------------------------------------------
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United States District Judge
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.
Sec. 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 12, 1996,
alleging that the proposed acquisition of the Infinity Broadcasting
Corporation (``Infinity'') by the Westinghouse Electric Corporation
(``Westinghouse'') would violate Section 7 of the Clayton Act, 15
U.S.C. Sec. 18. The Complaint alleges that Westinghouse and Infinity
own and operate numerous radio stations throughout the United States,
and that they each own and operate radio stations in the Philadelphia,
Pennsylvania and Boston, Massachusetts metropolitan areas. This
acquisition would give Westinghouse control over more than 40 percent
of the radio advertising revenues in those metropolitan areas, as well
as a substantial amount of control over access to certain demographic
groups of radio listeners targeted by advertisers in those metropolitan
areas. As a result, the combination of these companies would
substantially lessen competition in the sale of radio advertising time
in the Philadelphia and Boston metropolitan areas.
The prayer for relief seeks: (a) adjudication that Westinghouse's
proposed acquisition of Infinity would violate Section 7 of the Clayton
Act; (b) preliminary and permanent injunctive relief preventing the
consummation of the proposed acquisition; (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 Westinghouse to complete its acquisition of
Infinity, yet preserves competition in the markets in which the
transaction would raise significant competitive concerns. A Stipulation
and proposed Final Judgment embodying the settlement were filed with
the Court at the same time the Complaint was filed.
The proposed Final Judgment orders Westinghouse to divest WMMR-FM,
currently owned by Westinghouse, and WBOS-FM, currently owned by
Infinity, in Philadelphia and Boston, respectively. Unless the United
States grants an extension of time, Westinghouse must divest these
radio stations within six months after the filing of the Final
Judgment, or within five (5) business days after notice of entry of the
Final Judgment, whichever is later. If Westinghouse does not divest
these stations within the divestiture period, the Court may appoint a
trustee to sell the assets. The proposed Final Judgment also requires
the defendants to ensure that, until the divestitures mandated by the
Final Judgment have been accomplished, WMMR-FM and WBOS-FM will be
operated independently as viable, ongoing businesses, and kept separate
and apart from Westinghouse's and Infinity's other Philadelphia and
Boston radio stations, respectively. Further, the proposed Final
Judgment requires the defendants to give plaintiff prior notice
regarding future radio station acquisitions in Philadelphia and Boston.
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 Violation
A. The Defendants
Westinghouse is a Pennsylvania corporation headquartered in
Pittsburgh, Pennsylvania. It currently owns, through its subsidiary CBS
Inc., 41 radio stations in 13 metropolitan areas across the United
States, including four located in the Philadelphia metropolitan area
and two located in the Boston metropolitan area. Westinghouse's four
radio stations in the Philadelphia area are KYW-AM, WMMR-FM, WOGL-FM
and WPHT-AM; its two radio stations in the Boston area are WBZ-AM and
WODS-FM. In 1995, its revenues from its Philadelphia stations were
appropriately $55,300,000, and its revenues from its Boston stations
were approximately $26,600,000.
Infinity is a Delaware corporation headquartered in New York, New
York. Infinity owns 42 radio stations in 13 metropolitan areas across
the United States, including two located in the Philadelphia
metropolitan area and four
[[Page 63867]]
located in the Boston metropolitan area. Infinity's two radio stations
in the Philadelphia area are WYSP-FM and WIP-AM; its four stations in
the Boston area are WBCN-FM, WZLA-FM, WBOS-FM and WOAZ-FM. In 1995, its
revenues from its Philadelphia stations were approximately $31,500,000,
and its revenues from the Boston stations were approximately
$46,000,000.
B. Description of the Events Giving Rise to the Alleged Violation
On June 20, 1996, Westinghouse agreed to purchase Infinity for
approximately $4.9 billion. As is more fully discussed below,
Westinghouse would control more than 40 percent of the radio
advertising revenues in Philadelphia and in Boston, and could exercise
substantial control over access to certain target audiences sought by
advertisers in those metropolitan areas. The proposed acquisition by
Westinghouse of Infinity, and the threatened loss of competition that
would be caused thereby, precipitated the Government's suit.
C. Anticompetitive Consequences of the Proposed Merger
1. Sale of Radio Advertising Time in the Philadelphia and Boston MSAs
The Complaint alleges that the provision of advertising time on
radio stations serving the Philadelphia, Pennsylvania Metro Survey Area
(``MSA'') and the Boston, Massachusetts MSA each constitute a line of
commerce and section of the country, of relevant market, for antitrust
purposes. These MSAs are the standard geographical units for which
Arbitron furnishes radio stations, advertisers and advertising agencies
in Philadelphia and Boston with data to aid in evaluating radio
audience size and composition. Local and national advertising that is
placed on radio stations within the Philadelphia and Boston MSAs is
aimed at reaching listening audiences in those MSAs, and radio stations
outside of those MSAs do not provide effective access to those
audiences. Thus, advertisers would not buy enough advertising time from
radio stations located outside of the Philadelphia MSA to defeat a
small but significant non-transitory increase in radio advertising
prices within that MSA. Likewise, advertisers would not buy enough
advertising time from radio stations located outside of the Boston MSA
to defeat a small but significant non-transitory increase in radio
advertising prices within that MSA.
Radio advertising time is sold by radio stations directly or
through their national representatives. Radio stations generate almost
all of their revenues from the sale of advertising time to local and
national advertisers.
Many local and national advertisers purchase radio advertising time
in Philadelphia and Boston because they find such advertising
preferable to advertising in other media to meet certain of their
specific needs. For such advertisers, radio time: may be less expensive
and, on a per-dollar basis, more cost-efficient than other media at
reaching the advertiser's target audience (individuals most likely to
purchase the advertiser's products of services); may reach target
audiences that cannot be reached as effectively through other media; or
may offer promotional opportunities to advertisers that they cannot
exploit as effectively using other media. For these reasons, may local
and national advertisers in Philadelphia and Boston who purchase radio
advertising time view radio either as a necessary advertising medium
for them, or as a necessary advertising complement to other media.
Although some local and national advertisers may switch some of
their advertising to other media rather than absorb a price increase in
radio advertising time in Philadelphia and Boston, the existence of
such advertisers would not prevent radio stations from profitably
raising their prices a small but significant amount. At a minimum,
stations could profitably raise prices to those advertisers who view
radio either as a necessary advertising medium for them, or as a
necessary advertising complement to other media. Radio stations, which
negotiate prices individually with advertisers, can identify those
advertisers with strong radio preferences. Consequently, radio stations
can charge different advertisers different rates. Because of this
ability price discriminate between different customers, radio stations
may charge higher prices to advertisers that view radio as particularly
effective for their needs, while maintaining lower prices for other
advertisers.
2. Harm to Competition
The Complaint alleges that Westinghouse's proposed acquisition of
Infinity would lessen competition substantially in the provision of
radio advertising time in the Philadelphia and Boston MSAs.
Westinghouse presently controls approximately 28 percent of all radio
advertising revenues in Philadelphia and approximately 15 percent of
all radio advertising revenues in Boston. Infinity presently controls
approximately 16 percent of all radio advertising revenues in
Philadelphia and more than 25 percent of all radio advertising revenues
in Boston. Westinghouse's market shares would rise to approximately 45
percent in Philadelphia and to more than 40 percent in Boston after the
proposed merger. According to the Herfindahl-Hirschman Index (``HHI''),
a widely-used measure of market concentration defined and explained in
Exhibit A annexed hereto, the pre-merger HHI in Philadelphia is
approximately 1876, which would rise to 2800 after the merger, with a
change of about 924. In Boston, the pre-,merger HHI is approximately
1875, which would rise to 2638 after the merger, with a change of about
763. These substantial increases in concentration are likely to reduce
competition and lead to higher prices and lower quality of service in
each of these markets.
Advertisers select radio stations to reach a large percentage of
their target audience based upon a number of factors, including, inter
alia, the size of the station's audience and whether the
characteristics of its audience have a high correlation to the target
audience of the advertisers. If a number of stations efficiently reach
that target audience, advertisers benefit from the competition among
such stations, which leads to better prices and services. Today,
several Westinghouse and Infinity stations compete head-to-head to
reach the same audiences and, for many local and national advertisers
buying time in Philadelphia and Boston, they are close substitutes for
each other based on their specific audience characteristics. The
proposed merger would eliminate this competition, most critically
affecting advertisers seeking to reach male listeners between the ages
of 18 and 54 in Philadelphia and Boston.
During individual price negotiations between advertisers and radio
stations, advertisers provide the stations with information about their
advertising needs, including their target audience and the desired
frequency and timing of ads. Radio stations thus have the ability to
charge advertisers differing prices after assessing the number and
attractiveness of alternative radio stations that can meet a particular
advertiser's specific target audience needs.
In Philadelphia and Boston, advertisers that must reach male
listeners within certain age ranges can help ensure competitive rates
by ``playing off'' Infinity stations against Westinghouse stations.
Because the direct competition between the Westinghouse and the
Infinity stations would be eliminated by the proposed merger, and
because advertisers seeking
[[Page 63868]]
to reach male listeners between the ages of 18 and 54 would have
inferior alternatives to the merged entity, the acquisition would give
Westinghouse the ability to raise prices and reduce quality. This is
particularly true because of the merged entity's ability to charge
different prices to different advertisers.
If Westinghouse raised prices or lowered services to those
advertisers who buy time on Westinghouse and Infinity stations because
of their strength in delivering access to certain audiences, non-
Westinghouse radio stations in Philadelphia and Boston would not be
induced to change their formats to attract those audiences in
sufficiently large numbers to defeat a price increase. Successful radio
stations are unlikely to undertake a format change solely in response
to small but significant increases in price being charged to
advertisers by a multi-station firm such as Westinghouse, because they
would likely lose a substantial portion of their existing audiences.
Even if less successful stations did change format, they would still be
unlikely to attract enough listeners to provide suitable alternatives
to the merged entity.
New entry into the Philadelphia and Boston radio advertising
markets is highly unlikely in response to a price increase by the
merged entity. No unallocated radio broadcast frequencies exist in
Philadelphia and Boston. Also, stations located in adjacent communities
cannot boost their power so as to enter the Philadelphia and Boston
MSAs without interfering with other stations on the same or similar
frequencies, a violation of Federal Communications Commission (``FCC'')
regulations.
For these reasons, the plaintiff concludes that the merger as
proposed would substantially lessen competition in the sale of radio
advertising time in the Philadelphia and Boston MSAs, eliminate actual
competition between Westinghouse and Infinity, and result in increased
prices and reduced quality of service for buyers of radio advertising
time in those markets, all in violation of Section 7 of the Clayton
Act.
III. Explanation of the Proposed Final Judgment
The proposed Final Judgment would preserve competition in the sale
of radio advertising time in the Philadelphia and Boston MSAs. It
requires the divestiture of WMMR-FM in Philadelphia and WBOS-FM in
Boston. The divestitures will preserve choices for advertisers,
particularly for those seeking to reach male listeners between the ages
of 18 and 54. They will also help ensure that radio advertising rates
do not increase and that services do not decline in Philadelphia and
Boston as a result of the acquisition. This relief will reduce the
market share Westinghouse would have achieved through the merger from
about 45 percent to about 37 percent in the Philadelphia MSA, and from
over 40 percent to 36.5 percent in the Boston MSA.
Unless the United States grants an extension of time, defendants
must divest WMMR-FM and WBOS-FM within six months after the Final
Judgment has been filed, or within five (5) business days after notice
of entry of this Final Judgment, whichever is later. Until the
divestitures take place, these stations, now owned by Westinghouse and
Infinity, respectively, will be maintained as independent competitors
to the other stations in the Philadelphia and Boston MSAs,
respectively, including the other Westinghouse and Infinity stations in
those markets.
If Westinghouse fails to divest either or both of these stations
within the time period specified in the Final Judgment, or any
extension thereof, the Court, upon application of the plaintiff, shall
appoint a trustee nominated by the plaintiff to effect the required
divestiture or 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 WMMR-
FM and WBOS-FM, and shall be 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,
the 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 consistent
with the purpose of the trust.
The proposed Final Judgment requires that defendants maintain WMMR-
FM and WBOS-FM separate and apart from their other stations, pending
divestiture. The Judgment also contains provisions to ensure that these
stations will be preserved, so that they will remain viable, aggressive
competitors after divestiture.
The proposed Final Judgment also requires defendants to notify the
plaintiff before acquiring any significant interest in another
Philadelphia or Boston radio station. Such acquisitions could raise
competitive concerns but might be too small to be otherwise reported
under the Hart-Scott-Rodino (``HSR'') premerger notification
requirements.
Moreover, defendants are also required to notify the plaintiff
before they enter into any Joint Sales Agreements (``JSAs''), where one
station takes over another station's advertising time, or enter into
any Local Marketing Agreements (``LMAs''), where one station takes over
another station's broadcasting and advertising time, or any other
comparable arrangements, in the Philadelphia or Boston areas.
Agreements whereby defendants sell advertising for or manage other
Philadelphia or Boston area radio stations would effectively increase
their market share in such MSA. Despite their clear competitive
significance, JSAs probably would not be reportable to the plaintiff
under the HSR Act. Thus, this provision in the decree ensures that the
plaintiff will receive notice of, and be able to stop, any agreements
that could have anticompetitive effects in the Philadelphia or Boston
markets.
The relief in the proposed Final Judgment is intended to remedy the
likely anticompetitive effects of the proposed acquisition of Infinity
by Westinghouse. Nothing in this Final Judgment is intended to limit
the plaintiff's ability to investigate or bring actions, where
appropriate, challenging other past or future activities of defendants
in the Philadelphia and Boston MSAs, including their entry into any
JSAs, LMAs or any other agreements related to the sale of advertising
time.
IV. Remedies Available to Potential Private Litigants
Secion 4 of the Clayton Act, 15 U.S.C. Sec. 15, provides that any
person who has been injured as result of conduct prohibited by the
antitrust laws may bring suite 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
[[Page 63869]]
provisions of Section 5(a) of the Clayton Act, 15 U.S.C. Sec. 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 its entry. The comments and the response of the plaintiff will be
filed with the Court and published in the Federal Register.
Any such written comments should be submitted to: Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, United States Department
of Justice, 1401 H Street, N.W., Suite 4000, Washington, D.C. 20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and 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
The plaintiff considered, as an alternative to the proposed Final
Judgment, a full trial on the merits of its Complaint against
defendants. The plaintiff is satisfied, however, that the divestiture
of WMMR-FM and WBOS-FM and other relief contained in the proposed Final
Judgment will preserve viable competition in the sale of radio
advertising time in the Philadelphia and Boston MSAs. 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. Sec. 16(e). As the United States Court of Appeals for the
D.C. Circuit recently 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 Responses to Comment filed pursuant to the
APPA. Although the APPA authorizes the use of additional procedures,
15 U.S.C. Sec. 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 Case. 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 distance 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 Co., 406 F. Supp. at 716
(citations omitted); United States v. Alcan Aluminum, Ltd., 605 F.
Supp. 619, 622 (W.D. Ky. 1985).
---------------------------------------------------------------------------
This is strong and effective relief that should fully address the
competitive harm posed by the proposed merger.
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: November 14, 1996.
[[Page 63870]]
Respectfully submitted,
Dando B. Cellini,
Merger Task Force, U.S. Department of Justice, Antitrust Division, 1401
H Street NW., Suite 4000, Washington, DC 20530, (202) 307-0829.
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, Dando B. Cellini, hereby certify that, November 15, 1996, I
caused a copy of the foregoing Competitive Impact Statement filed this
day in United States v. Westinghouse Broadcasting Corporation and
Infinity Broadcasting Corporation, Civil Action No. 1:96CV02563 (NHJ),
to be served on defendants Westinghouse Broadcasting Corporation and
Infinity Broadcasting Corporation by having a copy mailed, first class,
postage prepaid, to:
Joe Sims, Jones, Day, Reavis & Pogue, 1450 G St., N.W., Washington,
D.C. 20005, Counsel for Westinghouse Electric Corporation
Daniel M. Abuhoff, Debevoise & Plimpton, 875 Third Avenue, New York, NY
10022, Counsel for Infinity Broadcasting Corporation.
Dated: November 15, 1996.
Dando B. Cellini,
[FR Doc. 96-30550 Filed 11-29-96; 8:45 am]
BILLING CODE 4410--M
