48660 Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Notices

1For purposes of this notice, ‘‘competitor

collaborations’’ should be understood as including

all collaborations, short of a merger, between or

among entities that would have been actual or

likely potential competitors in a relevant market

absent that collaboration.

additional 1.51 percent, for a total of

10.57 percent, of the voting shares of

MidSouth Bancorp, Inc., Lafayette,

Louisiana, and thereby indirectly

acquire MidSouth National Bank,

Lafayette, Louisiana.

B. Federal Reserve Bank of Dallas

(Genie D. Short, Vice President) 2200

North Pearl Street, Dallas, Texas 75201-

2272:

1. Rodney G. Kroll, Waco, Texas, to

acquire 23.0 percent; Tommy G. Salome,

Crawford, Texas, to acquire 21.8

percent; Newman E. Copeland, Waco,

Texas, to acquire 11.5 percent; Scott J.

Salmans, Waco, Texas, to acquire 11.5

percent; Rondy T. Gray, Waco, Texas, to

acquire 11.5 percent; Charles B. Turner,

Waco, Texas, to acquire 11.5 percent;

James H. DuBois, Waco, Texas, to

acquire 4.6 percent; and Time

Manufacturing Company, Waco, Texas,

to acquire 4.6 percent, of the voting

shares of First Riesel Corporation,

Riesel, Texas, and thereby indirectly

acquire First State Bank, Riesel, Texas.

Board of Governors of the Federal Reserve

System, September 10, 1997.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 97–24446 Filed 9–15–97; 8:45 am]

BILLING CODE 6210–01–F

FEDERAL TRADE COMMISSION

Comment and Hearings on Joint

Venture Project

AGENCY: Federal Trade Commission.

ACTION: Notice of second opportunity for

comment and public hearing on Joint

Venture Project.

SUMMARY: The Federal Trade

Commission (‘‘FTC’’ or ‘‘Commission’’)

is requesting public comment about

issues to be addressed in the Joint

Venture Project that the Commission

has authorized. The Project is being

undertaken by the Commission in

collaboration with the Department of

Justice. Comments may be provided to

the Commission in writing as specified

below. In addition, the Commission will

hold public hearing concerning these

issues in November, 1997.

The Joint Venture Project grows out of

public hearings held by the FTC in the

fall of 1995, at which businesses

reported that global and innovationbased competition is driving firms

toward ever more complex collaborative

agreements that sometimes raise new

competition issues. Some commenters

at those hearings also requested

clarification and updating of current

antitrust policy toward business

collaborations among competitors.

The Joint Venture Project will address

whether antitrust guidance to the

business community can be improved

through clarifying and updating

antitrust policies regarding joint

ventures and other forms of competitor

collaborations. As has been generally

noted, businesses may find it desirable

to collaborate with rivals in order to

achieve a large variety of goals: Attain

economies of scale; increase capacity

and market access; minimize risk; avoid

duplication; transfer, commercialize, or

distrubte technology efficiently;

combine complementary or cospecialized capabilities; or better

appropriate the returns of innovation.

Some competitor collaborations,

however, raise antitrust concerns about

the degree to which competition among

rivals has been curtailed. In such cases,

antitrust enforcers must assess whether

and to what extent competition is

harmed.

Issues relevant to why and how

competitors wish to collaborate with

their rivals, and the impact those

arrangements have on competition, are

of interest to the Commission in

connection with the Joint Venture

Project. In order to better inform itself

as to these issues, the Commission

engaged in a first round of public

comment and hearings regarding issues

identified in a notice published on April

28, 1997, at 62 FR 22945. Now the

Commission is seeking comment and

testimony regarding additional issues,

including some issues that the first

round of comments and testimony have

indicated warrant follow-up attention.

The Commission’s April 28 notice

sought information relating to many of

the issues associated with the potential

anticompetitive effects of competitor

collaborations. Consequently, the

factual questions in this notice deal

primarily with possible efficiencies.

Specifically, the FTC is seeking

comment at this time on the following

issues:

Factual Questions Relating to

Competitor Collaborations

The Commission is interested in

better understanding the efficiencies

that may be generated by competitor

collaborations.1 As an aid to

understanding, the Commission has

included the following questions as

examples of the kinds of factual

information in which the Commission is

interested. Those who respond should

neither feel constrained by those

questions nor compelled to answer each

one, however.

Because real-world examples are

usually the most informative, the

Commission would prefer information

concerning competitor collaborations

that actually have been undertaken.

However, recognizing that businesses

may wish to protect confidential

information about some collaborations,

the Commission also encourages the use

of hypothetical fact patterns to describe

and discuss the efficiencies that may

result from collaborations among

competitors.

Questions

What kinds of efficiency benefits are

most frequently attributed to competitor

collaborations, e.g., economies of scale,

risk reduction, or learning advantages?

To what extent are differences in

assets or technology among prospective

participants important to the possible

efficiency benefits from a competitor

collaboration?

What contractual problems do

prospective competitor collaboration

participants encounter in designing an

arrangement to achieve efficiency gains,

and how have those problems been

solved? What types of agreements or

mechanisms are most frequently or most

successfully used to align incentives? to

safeguard the value of assets or efforts

that individual participants might

contribute to the collaboration? to deal

with possible disputes among the

participants? Are particular contractual

problems more pressing in certain kinds

of ventures, or in certain industries,

than in others?

How and under what circumstances

do variations in a competitor

collaboration’s governance structure—

such as variations in individual

participants’ abilities to affect the

collaboration’s level of output or to

control portions of its productive

capacity—affect the collaboration’s

ability to achieve efficiencies?

Under what circumstances might

restrictions on the ability of participants

to compete promote legitimate

efficiency goals? Specifically, when and

how can restrictions on price, quality,

advertising, geographic scope, or other

dimensions of competition contribute to

legitimate efficiency ends? Are some

restrictions more closely related to the

formation of a competitor collaboration,

while others are needed to help the

collaboration run smoothly after it is

formed?

Under what circumstances might

various exclusivity provisions be related

to the efficiency goals of the competitor

collaboration? Examples could include
Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Notices 48661

agreements that participants satisfy all

of their input needs from the

collaboration or that participants refrain

from competing with the collaboration,

either unilaterally or as part of another

group.

When can information exchanges

(including exchanges of competitively

sensitive data) among participants in a

competitor collaboration be necessary to

achieving efficiencies?

How and under what circumstances

do restrictions on membership in or

access to assets controlled by a

competitor collaboration promote

efficiency? What criteria do firms

employ in initially selecting coparticipants when establishing

competitor collaborations?

Can reciprocal buying agreements

among participants or restrictions on

participants’ activities outside the

collaboration’s market have efficiency

rationales?

Under what circumstances do

restraints in competitor collaborations

give rise to efficiencies that are

experienced over the long run or that

affect competition in a dynamic sense

(such as through incentives for

innovation) rather than in the short run?

What factors affect determinations to

pursue business goals through

traditional joint ventures as opposed to

alternative mechanisms such as shortterm contracts, long-term contracts,

licensing and franchise agreements,

minority equity investments, strategic

alliances, and asset acquisitions? When

are the various alternatives relatively

good or relatively poor substitutes in

achieving efficiency goals?

Has the mix between traditional joint

ventures, short- and long-term contracts,

licensing or franchising, minority equity

investments, strategic alliances, and

asset acquisitions changed over time? If

so, what factors are responsible?

In what ways does the initial

agreement as to the duration of a

competitor collaboration affect its

ability to achieve efficiencies?

Antitrust law often considers whether

efficiency goals might be achieved with

less competitively restrictive

alternatives. What factors must

participants in competitor

collaborations take into account (other

than potential antitrust liability) in

determining the breadth of a

competitive restraint? Are there realworld examples in which relatively

narrow restraints were ineffective in

achieving efficiency goals?

To what extent has non-exclusivity—

the ability of the participants in a

competitor collaboration to compete

with the collaboration—reduced the

anticompetitive effects of competitor

collaborations? What factors tend to

demonstrate that a competitor

collaboration is non-exclusive in fact as

well as on paper?

Policy and Legal Questions Relating to

Competitor Collaborations

The Commission also is interested in

better understanding the extent to

which antitrust law and the antitrust

agencies’ current policy guidelines have

successfully dealt with issues raised by

competitor collaborations and how the

usefulness of antitrust guidance might

be improved. The following questions

are suggestive of issues that would be of

interest in responses, but, again, the

questions are not intended to constrain

or to require responses.

Questions

The State of Antitrust Law

What aspects of antitrust law

regarding the efficiencies of competitor

collaborations require clarification? For

example, is clarification required

regarding the evaluation of efficiency

justifications for competitive

restrictions, information exchanges, or

membership rules?

Have there been any circumstances in

which the chosen form of competitor

collaboration (such as traditional joint

ventures, short- and long-term contracts,

licensing and franchise agreements,

minority equity investments, strategic

alliances, and asset acquisitions) has

been affected by uncertainty about

antitrust rules or possible costs of

antitrust investigation or litigation?

Have there been any circumstances in

which antitrust standards regarding less

restrictive alternatives, including

burdens of proof, have failed to take into

account the difficulty in practical terms

of fashioning and implementing a

theoretically less restrictive alternative?

Antitrust standards for distinguishing

legitimate competitor collaborations

from ‘‘sham’’ arrangements often have

been articulated in terms of

‘‘integration’’ rather than in terms of

‘‘efficiencies.’’ Have there been

circumstances when the use of

integration-based standards has deterred

the formation or impaired the operation

of competitor collaborations that could

have enhanced competition? If so,

please give specific real-world examples

(or explain in the context of

hypothetical facts). Under what

circumstances might greater integration

signal greater potential for

anticompetitive effects as opposed to a

greater likelihood of achieving

procompetitive efficiencies? Should

more specific standards for

distinguishing legitimate from sham

arrangements be considered in

conjunction with particular types of

collaborative activity or particular

industries?

To what extent, if any, should the

expected evolution of a competitor

collaboration be taken into account in

determining its state of integration? For

example, when, if ever, should rule of

reason treatment be accorded a

collaboration that fails integration

criteria today on grounds that it may

pass muster in the near future? How

could enforcement agencies evaluate

such a likelihood? Would such dynamic

considerations be particularly relevant

in certain industries or in particular

circumstances? If so, where and why?

Antitrust standards for distinguishing

competitor collaborations warranting

rule of reason review rather than per se

condemnation have sometimes looked

to whether the collaboration has created

a new product. What are the factors that

should be included in a determination

that the fruits of a competitor

collaboration constitute a new product?

What role should a determination that a

competitor collaboration produces a

new product play in the assessment of

the collaboration’s competitive effects?

What role should a determination that

a competitor collaboration adds capacity

in a relevant market play in the

assessment of the collaboration’s

competitive effects?

What role should a determination that

a competitor collaboration is nonexclusive—that is, that it allows its

participants to compete independently

in the joint venture market—play in the

assessment of the collaboration’s

competitive effects?

What mechanisms should be

employed in assessing the net effects of

a competitor collaboration (or of a

restraint associated with a competitor

collaboration) that would likely achieve

efficiencies but also would likely harm

competition absent the efficiencies?

Are there instances when unusual

cost or demand conditions might make

it appropriate to modify or qualify

general antitrust policy with regard to

competitor collaborations? For example,

should enforcement policy concerning

competitor collaborations be modified

when there are substantial scale

economies from increasing group size or

consumer switching costs, such as may

arise in network industries or in

standard-setting contexts?

Under what circumstances, if any,

should participants be able to assert that

membership restrictions are necessary

to ensure that members of a competitor

collaboration can use cost advantages or

innovation to compete more effectively

in the output market?
48662 Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Notices

Are there any circumstances under

which the competitive effects of

restraints associated with a competitor

collaboration should be analyzed like

the competitive effects of single firm

conduct?

Under what circumstances is a

competitor collaboration less likely than

a merger of the same participants to

restrict competition within any relevant

market? What adjustments to merger

analysis could take these considerations

into account? Under what

circumstances is a competitor

collaboration more likely than a merger

to restrict competition within any

relevant market? What adjustments to

merger analysis could take these

considerations into account?

Under what circumstances is a

competitor collaboration more likely

than a merger of the same participants

to achieve efficiencies within any

relevant market? What adjustments to

merger analysis could take these

considerations into account? Under

what circumstances is a competitor

collaboration less likely than a merger of

the same participants to achieve

efficiencies within any relevant market?

What adjustments to merger analysis

could take these considerations into

account?

FTC/DOJ Guidelines

If the Joint Venture Project were to

result in the development of guidelines

applicable to competitor collaborations,

what factors should be considered in

demarcating the division between

transactions covered by the new

guidelines and transactions covered by

the existing Department of Justice and

Federal Trade Commission Horizontal

Merger Guidelines?

DATES: Any interested person may

submit written comments by December

12, 1997. Requests to participate in

public hearings should be submitted by

October 17, 1997, or earlier if at all

possible. Such requests should identify

the requesting party and briefly state the

matter than the party wishes to address

at the hearings. Public hearings will be

held in November, 1997, at the Federal

Trade Commission, Sixth Street and

Pennsylvania Avenue, N.W.,

Washington, D.C. 20580.

ADDRESSES: To facilitate efficient review

of public comments, all comments

should be submitted in written and

electronic form. Electronic submissions

may be made in one of two ways. They

may be filed on either a 5 and 1⁄4 or 3

and 1⁄2 inch computer disk, with a label

on the disk stating the name of the

commenter and the name and version of

the word processing program used to

create the document. (Programs based

on DOS or Windows 3.1 are acceptable.

Files from other operating systems

should be submitted in ASCII text

format.) Alternatively, electronic

submissions may be sent by electronic

mail to jventures@ftc.gov. Submissions

should be captioned ‘‘Comments on

Issues relating to Joint Venture Project—

Second Federal Register Notice’’ and

addressed to Donald S. Clark, Office of

the Secretary, Federal Trade

Commission, Sixth Street and

Pennsylvania Avenue, N.W.,

Washington, D.C. 20580.

Notice of interest in participating in

the hearings also should be addressed in

writing to the Office of the Secretary at

the above address.

FOR FURTHER INFORMATION CONTACT:

Policy Planning staff at (202) 326–3712.

SUPPLMENTARY INFORMATION: The

Commission is examining its role in

enforcing antitrust laws in light of the

above issues. Public comments and

hearings are expected to provide

information relevant to determining

what, if any, actions may be desirable.

The Commission has general authority

under the FTC Act to interpret its

substantive laws through guidelines,

advisory opinions, and policy

statements.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 97–24515 Filed 9–15–97; 8:45 am]

BILLING CODE 6750–01–M

FEDERAL RESERVE SYSTEM

Change in Bank Control Notices;

Acquisitions of Shares of Banks or

Bank Holding Companies

The notificants listed below have

applied under the Change in Bank

Control Act (12 U.S.C. 1817(j)) and §

225.41 of the Board’s Regulation Y (12

CFR 225.41) to acquire a bank or bank

holding company. The factors that are

considered in acting on the notices are

set forth in paragraph 7 of the Act (12

U.S.C. 1817(j)(7)).

The notices are available for

immediate inspection at the Federal

Reserve Bank indicated. The notices

also will be available for inspection at

the offices of the Board of Governors.

Interested persons may express their

views in writing to the Reserve Bank

indicated for that notice or to the offices

of the Board of Governors. Comments

must be received not later than October

1, 1997.

A. Federal Reserve Bank of Atlanta

(Lois Berthaume, Vice President) 104

Marietta Street, N.W., Atlanta, Georgia

30303-2713:

1. Jaime Gilinski, Santafe de Bogota,

Columbia; to acquire 100 percent of the

voting shares of Eagle National Holding

Company, Inc., Miami, Florida.

B. Federal Reserve Bank of Chicago

(Philip Jackson, Applications Officer)

230 South LaSalle Street, Chicago,

Illinois 60690-1413:

1. James Randel Smith, Auburn,

Nebraska, to retain 33.3 percent; Jerry A.

Jobe, Tabor, Iowa, to acquire 33.3

percent; and Grant T. Schaaf, Randolph,

Iowa, to acquire 33.3 percent, of the

voting shares of Tabor Enterprises, Inc.,

Tabor, Iowa, and thereby indirectly

acquire First State Bank, Tabor, Iowa.

C. Federal Reserve Bank of St. Louis

(Randall C. Sumner, Vice President) 411

Locust Street, St. Louis, Missouri 63102-

2034:

1. Craig Dwight Heath, Phoenix,

Arizona; to acquire 100 percent of the

voting shares of Texico Bancshares

Corporation, Texico, Illinois, and

thereby indirectly acquire Texico State

Bank, Texico, Illinois.

Board of Governors of the Federal Reserve

System, September 11, 1997.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 97–24579 Filed 9–15–97; 8:45 am]

BILLING CODE 6210–01–F

FEDERAL RESERVE SYSTEM

Formations of, Acquisitions by, and

Mergers of Bank Holding Companies

The companies listed in this notice

have applied to the Board for approval,

pursuant to the Bank Holding Company

Act of 1956 (12 U.S.C. 1841 et seq.)

(BHC Act), Regulation Y (12 CFR Part

225), and all other applicable statutes

and regulations to become a bank

holding company and/or to acquire the

assets or the ownership of, control of, or

the power to vote shares of a bank or

bank holding company and all of the

banks and nonbanking companies

owned by the bank holding company,

including the companies listed below.

The applications listed below, as well

as other related filings required by the

Board, are available for immediate

inspection at the Federal Reserve Bank

indicated. The application also will be

available for inspection at the offices of

the Board of Governors. Interested

persons may express their views in

writing on the standards enumerated in

the BHC Act (12 U.S.C. 1842(c)). If the

proposal also involves the acquisition of

a nonbanking company, the review also

includes whether the acquisition of the

nonbanking company complies with the