[Federal Register Volume 63, Number 42 (Wednesday, March 4, 1998)]
[Notices]
[Pages 10625-10626]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5533]
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FEDERAL TRADE COMMISSION
[File No. 971-0115]
Lawyers Title Corp.; Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint that accompanies the consent agreement and the terms of the
consent order--embodied in the consent agreement--that would settle
these allegations.
DATES: Comments must be received on or before May 4, 1998.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., NW, Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
Patrick Roach, FTC/S-2627, Washington, DC 20580. (202) 326-2793.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the
Commission's rules of practice (16 CFR 2.34), notice is hereby given
that the above-captioned consent agreement containing a consent order
to cease and desist, having been filed with the accepted, subject to
final approval, by the Commission, has been placed on the public record
for a period of sixty (60) days. The following Analysis to Aid Public
Comment describes the terms of the consent agreement, and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC Home Page
(for February 24, 1998), on the World Wide Web, at ``http://
www.ftc.gov/os/actions/htm.'' A paper copy can be obtained from the FTC
Public Reference Room, Room H-130, Sixth Street and Pennsylvania
Avenue, NW., Washington, DC 20580, either in person or by calling (202)
326-3627. Public comment is invited. Such comments or views will be
considered by the Commission and will be available for inspection and
copying at its principal office in accordance with Sec. 4.9(b)(6)(ii)
of the Commission's rules of practice (16 CFR 4.9(b)(6)(ii)).
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, an agreement containing a proposed
[[Page 10626]]
Consent Order from Lawyers Title Corporation (``LTC''), which is
designed to remedy the anticompetitive effects arising from LTC's
acquisition of the title insurance operations of Reliance Group
Holdings, Inc. (``Reliance Group''), including Reliance Group's
indirect subsidiaries Commonwealth Land Title Insurance Company and
Transnation Title Insurance Company (collectively ``Commonwealth'').
Under the terms of the agreement LTC will be required to divest certain
assets known as ``title plants'' in twelve counties or local
jurisdictions in various parts of the United States. Title plants are
privately owned collections of records and/or indices that are used by
abstractors, title insurers, title insurance agents, and others to
determine ownership of an interests in real property in connection with
the underwriting and issuance of title insurance policies and for other
purposes.
The proposed Consent Order has been placed on the public record for
60 days so that the Commission may receive comments from interested
persons. Comments received during this period will become part of the
public record. After 60 days, the Commission will again review the
agreement and the comments received, and will decide whether it should
withdraw from the agreement or make final the agreement's proposed
order.
On August 20, 1997, LTC entered into an agreement to acquire the
title insurance operations of Reliance Group in exchange for
consideration to Reliance Group valued at approximately $456 million,
consisting of cash, a minority voting interest in LTC, and additional
non-voting convertible preferred shares of LTC. The proposed Complaint
alleges that the acquisition, if consummated, would constitute a
violation of section 7 of the Clayton Act, as amended, 15 U.S.C. 18,
and section 5 of the Federal Trade Commission Act, as amended, 15
U.S.C. 45, in local markets for title plant services in the following
counties or local jurisdictions in the United States: Washington, DC.;
Brevard County, Florida; Broward County, Florida; Clay County, Florida;
Indian River County, Florida; Pasco County, Florida; St. Johns County,
Florida; St. Lucie County, Florida; Ingham County, Michigan; Oakland
County, Michigan; Wayne County, Michigan; and St. Louis City & County,
Missouri.
Title plants are privately-owned collections of title information
obtained from public records that can be used to conduct title searches
or otherwise ascertain information concerning ownership of or interests
in real property. Title plants typically contain summaries or copies of
public records or documents (often in a format that is comparatively
easily to store and readily retrievable) as well as indices to
facilitate locating relevant records that pertain to a particular
property. Title plants permit users to obtain real property ownership
information with significantly greater speed and efficiency than by
consulting the original public records, which may be located in a
number of separate public offices (e.g. offices of the county recorder,
tax authorities, and state and federal courts), may be stored in an
inconvenient form, and may be indexed in a fashion that makes it
difficult to readily research a particular property. Because of the
county-specific way in which title information is generated and
collected and the highly local character of the real estate markets in
which the title plant services are used, geographic markets for title
plant services are highly localized, consisting of the county or local
jurisdiction embraced by the real property information contained in the
title plant.
In each of the local jurisdictions named in the Complaint, the
market for title plant services is highly concentrated and LTC and
Reliance Group are direct competitors in the sale or provision of title
plant services. In each of the local jurisdictions named, there are no
commercially reasonable substitutes for title plant services. For a
number of reasons, including the relatively large fixed costs
associated with building and maintaining title plants, entry into the
market for title plant services in each of the local jurisdictions
named is difficult or unlikely to occur at a sufficient scale to deter
or counteract the effect of the acquisition. For these reasons, the
Complaint alleges that in each of the named local jurisdictions the
effect of the acquisition may be substantially to lessen competition
by, among other things, eliminating direct actual competition between
LTC and Reliance Group in title plant services, increasing the
likelihood that LTC will unilaterally exercise market power in title
plant services, and increasing the likelihood of collusion among
competing providers of title plant services.
The Consent Order requires LTC to divest the pre-acquisition title
plant interests of either LTC or Reliance Group in each of the
identified local jurisdictions to a buyer or buyers approved by the
Commission. The divestitures are required to be completed within six
months after the respondent signs the Consent Order agreement. In
addition to the title plant assets themselves, the respondent also is
required to divest all user or access agreements pertaining to the
divested title plants. The respondent is further required for up to
three years to continue to provide the buyers of the title plants with
computer and other services previously provided for each divested title
plant, and to assist the purchaser in transferring such services to
another provider. In the period prior to divestiture, the respondent is
required to maintain the viability and marketability of the properties,
including updating the title plants in the same fashion as before the
acquisition and maintaining in effect all user contracts and
relationships.
The Consent Order includes a provision permitting the Commission to
appoint a trustee to accomplish the divestiture of required plant
interests if the divestitures are not accomplished by the respondent
within the six-month period. The Consent Order also includes a
requirement that for ten years the respondent provide the Commission
with prior notice of future title plant acquisitions by the respondent
in the counties where divestitures are required, if at the time of the
acquisition the respondent continues to have an interest in a title
plant serving the county. A prior notice provision is appropriate in
this matter because the small transaction size of most individual title
plant acquisitions is below the threshold of reportability under the
Hart-Scott-Rodino Act (Clayton Act section 7A, 15 U.S.C. 18a, as
amended) and because there is a creditable risk that the respondent
will, but for an order to the contrary, engage in otherwise
unreportable anticompetitive mergers.\1\
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\1\ See Statement of FTC Policy Concerning Prior Approval and
Prior Notice Provisions (June 21, 1995).
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The purpose of this analysis is to facilitate public comment on the
proposed Consent Order, and it is not intended to constitute an
official interpretation of the agreement and proposed Consent Order or
to modify in any way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 98-5533 Filed 3-3-98; 8:45 am]
BILLING CODE 6750-01-M
