[Federal Register Volume 89, Number 192 (Thursday, October 3, 2024)]
[Notices]
[Pages 80559-80565]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22874]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 241 0008]


Chevron Corporation and Hess Corporation; Analysis of Agreement 
Containing Consent Order To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement; request for comment.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged 
violations of Federal law prohibiting unfair methods of competition. 
The attached Analysis of Proposed Consent Order to Aid Public Comment 
describes both the allegations in the complaint 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 November 4, 2024.

ADDRESSES: Interested parties may file comments online or on paper by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Please write: ``Chevron/Hess; 
File No. 241 0008'' on your comment and file your comment online at 
https://www.regulations.gov by following the instructions on the web-
based form. If you prefer to file your comment on paper, please mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex 
M), Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Albert Teng (202-326-3272), Bureau of 
Competition, Federal Trade Commission, 400 7th Street SW, Washington, 
DC 20024.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule Sec.  2.34, 16 CFR 
2.34, notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of 30 days. The following 
Analysis of Agreement Containing Consent Order 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 website at this web address: 
https://www.ftc.gov/news-events/commission-actions.
    The public is invited to submit comments on this document. For the 
Commission to consider your comment, we must receive it on or before 
November 4, 2024. Write ``Chevron/Hess; File No. 241 0008'' on your 
comment. Your comment--including your name and your State--will be 
placed on the public record of this proceeding, including, to the 
extent practicable, on the https://www.regulations.gov website.
    Because of the agency's heightened security screening, postal mail 
addressed to the Commission will be delayed. We strongly encourage you 
to submit your comments online through the https://www.regulations.gov 
website. If you prefer to file your comment on paper, write ``Chevron/
Hess; File No. 241 0008'' on your comment and on the envelope, and mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex 
M), Washington, DC 20580.
    Because your comment will be placed on the publicly accessible 
website at https://www.regulations.gov, you are solely responsible for 
making sure your comment does not include any sensitive or confidential 
information. In particular, your comment should not include sensitive 
personal information, such as your or anyone else's Social Security 
number; date of birth; driver's license number or other State 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure your comment does not include 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule Sec.  
4.10(a)(2), 16 CFR 4.10(a)(2)--including competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule Sec.  4.9(c). In 
particular, the written request for confidential treatment that 
accompanies the comment must include the factual and legal basis for 
the request and must identify the specific portions of the comment to 
be withheld from the public record. See FTC Rule Sec.  4.9(c). Your 
comment will be kept confidential only if the General Counsel grants 
your request in accordance with the law and the public interest. Once 
your comment has been posted on https://www.regulations.gov--as legally 
required by FTC Rule Sec.  4.9(b)--we cannot redact or remove your 
comment from that website, unless you submit a confidentiality request 
that meets the requirements for such treatment under FTC Rule Sec.  
4.9(c), and the General Counsel grants that request.
    Visit the FTC website at https://www.ftc.gov to read this document 
and the news release describing this matter. The FTC Act and other laws 
the Commission administers permit the collection of public comments to 
consider and use in this proceeding, as appropriate. The Commission 
will consider all timely and responsive public comments it receives on 
or before November 4, 2024. For information on the Commission's privacy 
policy, including routine uses permitted by the Privacy Act, see 
https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Order To Aid Public Comment

I. Introduction and Background

    The Federal Trade Commission (``Commission'') has accepted for 
public comment, subject to final approval, an Agreement Containing 
Consent Order (``Consent Agreement'') from Chevron Corporation 
(``Chevron'') and Hess Corporation (``Hess''). Pursuant to an Agreement 
and Plan of Merger dated October 22, 2023 (``Merger Agreement''), 
Chevron has agreed to acquire Hess (``the Proposed Acquisition''). The 
purpose of the Consent Agreement is to remedy the anticompetitive 
effects that otherwise would result from the Proposed Acquisition.
    Chevron and Hess compete with members of the Organization of 
Petroleum Exporting Countries (``OPEC'') and ten affiliated non-OPEC 
participating countries (collectively ``OPEC Oil Producers'') in the 
global

[[Page 80560]]

production and sale of crude oil. Hess Chief Executive Officer 
(``CEO'') John B. Hess (``Mr. Hess'') has communicated publicly and 
privately with OPEC representatives and oil ministers of OPEC member 
states about global output and other dimensions of crude oil market 
competition, including encouraging OPEC representatives in their stated 
mission to stabilize global oil markets. Mr. Hess has also made public 
statements praising OPEC for its role in stabilizing the oil market and 
oil prices.
    Under the terms of the Merger Agreement, Chevron is required to 
take all actions necessary to appoint Mr. Hess as a member of the board 
of directors of Chevron. The appointment of Mr. Hess to Chevron's board 
as a result of the Proposed Acquisition would amplify the importance 
and likely effect of any such public or private communications, and 
therefore heighten the risk of harm to competition. In particular, Mr. 
Hess's post-merger appointment to Chevron's board would give him a 
larger platform from which to communicate on these issues, as well as 
decision-making input to one of the leading public integrated energy 
companies.
    Under the terms of the proposed Decision and Order (``Order''), 
Chevron is prohibited from appointing Mr. Hess to its board or allowing 
him to serve in an advisory or consulting capacity to, or as a 
representative of, Chevron or the Chevron board, with a limited 
exception. Chevron may consult with Mr. Hess and allow him to serve in 
an advisory or consulting capacity to, or as a representative of, 
Chevron solely related to interactions and discussions with Guyanese 
government officials about Hess's oil-related and health ministry-
related activities in Guyana, and with the Salk Institute's Harnessing 
Plants Initiative. Chevron is required to attest on a regular basis 
that it is complying with the Order.
    The Consent Agreement is thus designed to remedy allegations in the 
Commission's Complaint that the Proposed Acquisition, if consummated, 
would violate section 7 of the Clayton Act, as amended, 15 U.S.C. 18, 
and section 5 of the FTC Act, as amended, 15 U.S.C. 45, by meaningfully 
increasing the risk of coordination in the relevant market. Absent a 
remedy, placing Mr. Hess on the Chevron board would harm the 
competitive process.
    The Consent Agreement has been placed on the public record for 30 
days for receipt of comments from interested persons. Comments received 
during this period will become part of the public record. After 30 
days, the Commission will review the comments received and decide 
whether it should withdraw, modify, or finalize the proposed Order.

II. The Merging Parties

    Chevron is a public integrated energy company, with reported 
revenues in 2023 of $196.9 billion. Chevron has crude oil production 
operations in the United States and operates all around the world. 
Chevron is headquartered in San Ramon, California. Hess is a public 
multinational corporation headquartered in New York, New York, engaged 
in the exploration and production of crude oil with operations in the 
United States and other countries. In 2023, Hess reported $10.6 billion 
in revenue.

III. The Agreement and Plan of Merger

    Pursuant to the Agreement and Plan of Merger between Chevron and 
Hess dated October 22, 2023, Chevron agreed to acquire Hess in an all-
stock transaction valued at approximately $53 billion. Section 1.3(a) 
of the Merger Agreement states that Chevron and its board of directors 
shall, subject to Mr. Hess's acceptance, take all actions necessary to 
appoint Mr. Hess to the Chevron board of directors. The Commission's 
Complaint alleges that this effect--Mr. Hess's appointment to the 
Chevron board--of the Proposed Acquisition, if consummated, would 
violate section 7 of the Clayton Act and section 5 of the FTC Act.

IV. Relevant Market

    A relevant product market in which to assess the Proposed 
Acquisition's anticompetitive effects is the development, production, 
and sale of crude oil. Crude oil purchasers generally cannot switch to 
alternative commodities without facing substantial costs. Chevron and 
Hess are engaged in the development, production, and sale of crude oil. 
A relevant geographic market in which to analyze the Proposed 
Acquisition is global.

V. Effects of the Proposed Acquisition

    The Commission's Complaint alleges that the Proposed Acquisition 
poses risks to competition including meaningfully increasing the risk 
of coordination among remaining firms in the relevant market. As stated 
in the Commission's Complaint, Mr. Hess's history of communications and 
supportive messaging to OPEC demonstrates encouragement of OPEC's 
output stabilizing agenda and may also signal how OPEC's decisions may 
be received by other market participants. Such encouragement reduces 
the unpredictability of the non-OPEC response to OPEC's output 
decisions. Because Chevron is substantially larger than Hess--Chevron 
is one of the world's ten largest oil enterprises by market 
capitalization and the fourth largest public, non-state-owned oil 
company--Mr. Hess's elevation to the Chevron board would amplify the 
importance and likely effect of any public or private communications on 
these issues, and meaningfully increase the risk of industry 
coordination.
    The proposed Order presents significant relief for these concerns 
and imposes effective and administrable relief. The Commission's 
Complaint and the proposed Order make clear that communications by oil 
executives that support and encourage OPEC members and foreign oil 
ministers to stabilize oil output and prices can facilitate 
opportunities for other oil executives to act in support of these 
objectives and may give rise to legal liability. This proposed Order 
remedies the harm to competition from the agreement to place Mr. Hess 
on the Chevron board, including meaningfully increasing the risk of 
industry coordination. The Commission continues to investigate mergers 
and acquisitions activity in the oil and gas industry and its risks to 
competition, as well as problematic unilateral signaling and 
coordination and attempted coordination among market participants.

VI. The Proposed Order

    The proposed Order imposes several terms to remedy these concerns. 
First, the proposed Order prohibits Chevron from appointing Mr. Hess to 
Chevron's board--as required by the Merger Agreement--or allowing him 
to serve in an advisory or consulting capacity to, or as a 
representative of, Chevron or the Chevron board. The proposed Order 
allows Chevron to consult with Mr. Hess and allows him to serve in an 
advisory or consulting capacity to, or as a representative of, Chevron 
solely related to interactions and discussions with Guyanese government 
officials about Hess's oil-related and health ministry-related 
activities in Guyana, and with the Salk Institute's Harnessing Plants 
Initiative.
    The proposed Order also contains provisions to ensure the 
effectiveness of the relief, including obtaining information from 
Chevron that it is complying with the Order; requiring Chevron to 
submit a yearly compliance report containing sufficient information and 
documentation to enable the Commission to determine independently 
whether Chevron is in compliance with the Order; and requiring that 
Chevron maintain specific

[[Page 80561]]

written communications. The proposed Order also requires Chevron to 
distribute the Order to each of its officers and directors.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement and proposed Order to aid the Commission in 
determining whether it should make the proposed Order final. This 
analysis is not an official interpretation of the proposed Order and 
does not modify its terms in any way.

    By direction of the Commission, Commissioners Holyoak and 
Ferguson dissenting.
Joel Christie,
Acting Secretary.

Statement of Chair Lina M. Khan Joined by Commissioner Rebecca Kelly 
Slaughter and Commissioner Alvaro Bedoya

    The Organization of the Petroleum Exporting Countries (OPEC) is 
a cartel that, for decades, has enjoyed outsized control over oil 
prices in the United States. When OPEC and its allies, collectively 
known as OPEC+, decide to limit or cut back oil production, American 
consumers pay more at the pump and American businesses face higher 
costs. In the early 2010s, technological advances led to a surge in 
U.S. production--an increase that has let the United States emerge 
as the world's largest oil producer.\1\ This development has 
positioned U.S. crude oil producers to serve as a competitive check 
on OPEC+, protecting Americans from the whims of a foreign cartel.
---------------------------------------------------------------------------

    \1\ United States produces more crude oil than any country, 
ever, U.S. Energy Information Administration (Mar. 11, 2024), 
https://www.eia.gov/todayinenergy/
detail.php?id=61545#:~:text=The%20United%20States%20produced%20more,s
ix%20years%20in%20a%20row.
---------------------------------------------------------------------------

    Greater production at home should mean Americans enjoy lower 
prices when filling their tanks or heating their homes. But when 
U.S. oil executives communicate privately and publicly with high-
level OPEC representatives to support them in their stated mission 
to ``stabilize'' or limit global production, it threatens to replace 
the churn and dynamism of a competitive market with the ossification 
of a cartel. While this may boost the companies' bottom lines, it 
means Americans pay inflated prices.
    Today's complaint identifies statements by Hess Corporation CEO 
John Hess that signaled support for efforts by OPEC+ to stabilize 
production.\2\ The proposed order would prohibit Chevron Corporation 
from appointing Mr. Hess to its Board of Directors. This action 
builds on the Commission's action in Exxon-Pioneer, which surfaced 
troubling statements by Pioneer CEO Scott Sheffield that suggested 
efforts to coordinate with members of OPEC+.\3\
---------------------------------------------------------------------------

    \2\ See, e.g., Compl. ]] 25-49.
    \3\ Press Release, Fed. Trade Comm'n, FTC Order Bans Former 
Pioneer CEO from Exxon Board Seat in Exxon-Pioneer Deal (May 2, 
2024), https://www.ftc.gov/news-events/news/press-releases/2024/05/ftc-order-bans-former-pioneer-ceo-exxon-board-seat-exxon-pioneer-deal; see also Statement of Chair Lina M. Khan in the Matter of 
Exxon Mobil Corporation, No. 241-0004 (May 2, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/2410004exxonpioneerlmkstmt1_0.pdf; Concurring Statement of Comm'r 
Rebecca Kelly Slaughter in the Matter of ExxonMobil Co., No. 241-
0004 (May 2, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/2410004exxonrksstmt_0.pdf; Concurring Statement of Comm'r Alvaro M. 
Bedoya in the Matter of ExxonMobil Co./Pioneer Natural Resource Co., 
No. 241-0004 (May 2, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/2410004exxonpioneerambstmt_0.pdf.
---------------------------------------------------------------------------

    Commissioners Ferguson and Holyoak dissent from this matter, as 
they do not believe that a CEO communicating with a foreign cartel 
about output should be central to the antitrust analysis here.\4\ 
Commissioner Ferguson writes, for example, that a sophisticated firm 
like Chevron would have a ``strong incentive to ensure that its 
officers and directors avoid risky conversations with OPEC 
representatives.'' \5\ We are unaware of any research showing that 
sophisticated firms are less likely to violate the antitrust laws, 
or studies finding that the extent to which a firm complies with the 
law correlates with the size of its legal department. We do not 
believe that the Commission should use a firm's sophistication, or 
the elite credentials of its executives, as an input into our 
assessment of their likely behavior.
---------------------------------------------------------------------------

    \4\ See Dissenting Statement of Commissioner Andrew N. Ferguson 
in the Matter of Chevron Corporation and Hess Corporation, No. 241-
0008 (Sep. 27, 2024); Dissenting Statement of Commissioner Melissa 
Holyoak in the Matter of Chevron Corporation and Hess Corporation, 
No. 241-0008 (Sep. 27, 2024).
    \5\ Dissenting Statement of Commissioner Andrew N. Ferguson in 
the Matter of Chevron Corporation and Hess Corporation, at 2.
---------------------------------------------------------------------------

    The Commission's actions in Chevron-Hess and Exxon-Pioneer mark 
an important step towards ensuring that U.S. oil producers are 
serving as a competitive check on OPEC+ rather than subordinating 
their independent decision-making to the goals set by a cartel. 
Indeed, news outlets last week reported that OPEC+ and its members 
are preparing to increase oil production rates amid increasing 
supply from U.S. producers.\6\ Rivals responding to one another by 
increasing production, rather than coordinating to hold it back, 
represents the type of competitive dynamic the antitrust laws were 
designed to protect.
---------------------------------------------------------------------------

    \6\ See Tom Wilson, Saudi Arabia ready to abandon $100 crude 
target to take back market share, Financial Times (Sep. 26, 2024), 
https://www.ft.com/content/1d186f62-5941-4f9e-aef1-7d93a8a696cd.
---------------------------------------------------------------------------

Dissenting Statement of Commissioner Melissa Holyoak

    For the second time in five months, the Majority has used its 
leverage in the HSR process to extract a consent from merging 
parties with no reason to believe the law has been violated.\1\ To 
make it worse, once again, the consent targets an individual and 
deprives him of his contractual rights. I dissent.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 53(b).
---------------------------------------------------------------------------

    The two largest mergers announced in 2023 were the $64.5 billion 
acquisition of Pioneer Natural Resources by Exxon Mobil Corporation 
and the $53 billion acquisition of Hess Corporation by Chevron 
Corporation.\2\ Not only were they the two largest mergers of 2023, 
the mergers involved oil companies and attracted the ire of certain 
elected officials. In November of 2023, right after the mergers were 
announced, 23 senators wrote to the FTC expressing their ``concerns 
about two blockbuster oil-and-gas deals.'' \3\ The letter urged the 
Commission to ``carefully consider all the possible anticompetitive 
harms'' from the proposed mergers because the ``Industry Is Already 
Too Concentrated'' \4\ and ``The FTC Must Protect Americans from Big 
Oil.'' \5\ The letter classified the Commission's efforts as ``[t]he 
fight against Big Oil'' and concluded that the Commission should be 
investigating ``to determine whether these energy giants should be 
broken up once again.'' \6\ After the Commission published its 
complaint and order in Exxon back in May,\7\ there was still 
significant opposition to the deal between Chevron and Hess 
Corporation.\8\
---------------------------------------------------------------------------

    \2\ See Devensoft, The Top Mergers and Acquisitions of 2023--
Meet the Power Players Behind the Year's Largest Deals (Feb. 1, 
2024), https://www.devensoft.com/blog/the-top-mergers-and-acquisitions-of-2023/; Press Release, Fed. Trade Comm'n, FTC Order 
Bans Former Pioneer CEO from Exxon Board Seat in Exxon-Pioneer Deal 
(May 2, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/05/ftc-order-bans-former-pioneer-ceo-exxon-board-seat-exxon-pioneer-deal (listing $64.5 billion as the value of Exxon's 
acquisition of Pioneer); Compl., In re Chevron Corp., No. 241-0008 
at ] 17 (F.T.C. Sept. 26, 2024) (listing $53 billion as the value of 
Chevron's acquisition of Hess Corporation) [hereinafter Compl.].
    \3\ Letter from Charles E. Schumer, U.S. Senator, et al., to 
Lina Khan, Chair, Fed. Trade Comm'n, at 1 (Nov. 1, 2023) https://www.democrats.senate.gov/imo/media/doc/Letter%20to%20FTC%20re%20Exxon-Pioneer.pdf.
    \4\ Id..
    \5\ Id. at 3.
    \6\ Id. at 4.
    \7\ See Press Release, Fed. Trade Comm'n, FTC Order Bans Former 
Pioneer CEO from Exxon Board Seat in Exxon-Pioneer Deal (May 2, 
2024), https://www.ftc.gov/news-events/news/press-releases/2024/05/ftc-order-bans-former-pioneer-ceo-exxon-board-seat-exxon-pioneer-deal; Joint Dissenting Statement of Commissioners Melissa Holyoak 
and Andrew N. Ferguson in the Matter of Exxon Mobil Corporation, 
Commission File No. 241-0004 (May 2, 2024), https://www.ftc.gov/legal-library/browse/cases-proceedings/public-statements/joint-dissenting-statement-commissioners-melissa-holyoak-andrew-n-ferguson-matter-exxon-mobil [hereinafter Exxon Dissent].
    \8\ See e.g., @SenSchumer, X (May 12, 2024, 4:07 p.m.), https://x.com/SenSchumer/status/1789749253956399528.
---------------------------------------------------------------------------

    But herein lies the problem: no legitimate and factually 
supported theory of harm existed for the Commission's Majority to 
execute the bidding of the political left. Still, the fact that the 
Commission opted not to challenge the biggest merger of 2023 seems 
to have been lost on the press. So the Majority got what it wanted. 
And they are trying to repeat the play here. Rather than accept 
reality and any political blowback, the Majority creates a sequel to 
the fairy tale in Exxon where section 7 of the Clayton Act means 
whatever the Majority needs it to mean to appease political demands.

[[Page 80562]]

Unfortunately for Mr. Hess, the CEO of Hess Corporation, the author 
of every fairy tale must also fabricate a villain, and today's 
action unjustifiably gave him that label.
    To violate section 7 of the Clayton Act, Chevron must ``acquire 
. . . assets . . . where . . . the effect of such acquisition may be 
substantially to lessen competition or tend to create a monopoly.'' 
\9\ But the Majority's complaint does not take issue with Chevron's 
acquisition of Hess Corporation's assets. Nor could it. There is no 
evidence to suggest Chevron, post-merger, could diminish competition 
in the global market for oil. Even if one were to accept the 
Majority's fetish with concentration levels, post-merger Chevron 
would have a low single-digit share of the world market for oil and 
natural gas. And the delta in concentration from the merger is 
miniscule. Thus, the tangible and intangible assets of Hess 
Corporation have nothing to do with the violation of law--it's all 
about the acquisition of Mr. Hess. Of course, I assume the Majority 
is not endorsing a view that Mr. Hess is an asset or transferrable 
human chattel. Certainly no court would endorse such a view--further 
highlighting the farcical nature of today's complaint.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 18.
---------------------------------------------------------------------------

    Even if one were to accept arguendo the outlandish antitrust 
theory of harm the Majority puts forward, the facts and arguments 
alleged in the complaint to justify the theory are no less 
ridiculous. Section 7 requires a ``probable anticompetitive effect'' 
that is based on ``reasonable probabilit[ies],'' not ``ephemeral 
possibilities.'' \10\ The Majority's complaint does not reach even 
ephemeral possibilities. And as the Majority surely knows, if it 
were litigated, the complaint would not survive a motion to 
dismiss.\11\ Nothing in the complaint alleges that Mr. Hess has ever 
attempted to, or coordinated with, a rival.\12\ At most, the 
complaint alleges that he was a cheerleader for OPEC's efforts. And 
yet somehow Chevron, despite its low share of the market, has 
violated the law by agreeing to make efforts to appoint Mr. Hess as 
one of Chevron's twelve board members.\13\ Such a theory of 
coordinated effects is so bizarre that no court--or even scholarly 
work--has endorsed it or even discussed it.\14\
---------------------------------------------------------------------------

    \10\ Brown Shoe Co. v. United States, 370 U.S. 294, 323, 325 
(1962).
    \11\ See Fed. R. Civ. P. 12(b)(6); see generally Ashcroft v. 
Iqbal, 556 U.S. 662 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 
544 (2007).
    \12\ My analysis is limited to whether his conduct is sufficient 
to create anticompetitive coordinated effects that may substantially 
lessen competition under section 7 of the Clayton Act.
    \13\ Chevron Leadership, https://www.chevron.com/who-we-are/leadership#boardofdirectors (last visited Sep. 16, 2024) (listing 
the company's twelve board members); Compl. ] 10.
    \14\ To my knowledge, the only other circumstance where such a 
novel theory has been advanced was in the Commission's complaint 
against Exxon and Pioneer. See Compl., In the Matter of Exxon Mobil 
Corp., No. 241-0004 (F.T.C. May 1, 2024).
---------------------------------------------------------------------------

    The implausibility of the alleged theory is heightened by a few 
additional observations. First, under section 7 the harm must result 
from the merger. But the merger transitions Mr. Hess from the role 
as Chief Executive Officer of a company to a role as one of 12 board 
members of another company. Pre-merger, Hess Corporation has an 
infinitesimally small share of the global market for oil, and post-
merger Chevron will still only have low single digits. It strains 
credulity to argue that Mr. Hess will have more power or ability to 
orchestrate coordination while serving as one of twelve board 
members than he had while serving as a CEO for the last several 
decades. If anything, it seems more plausible that a CEO is better 
equipped to orchestrate coordination than the same individual 
serving as one of twelve board members.
    Second, coordinated effects normally manifest when one firm 
buys, and thereby removes, a maverick who has undermined the ability 
to coordinate.\15\ But Mr. Hess is the alleged coordinator, not the 
maverick, and his firm is the one being acquired. Thus, Chevron's 
acquisition does not remove an impediment to successful 
coordination, making this situation very different from the normal 
manifestation of merger-specific coordinated effects.
---------------------------------------------------------------------------

    \15\ See, e.g., F.T.C. v. Arch Coal, Inc., 329 F. Supp. 2d 109, 
146 (D.D.C. 2004), case dismissed, No. 04-5291, 2004 WL 2066879 
(D.C. Cir. Sept. 15, 2004) (``An important consideration when 
analyzing possible anticompetitive effects is whether the 
acquisition would result in the elimination of a particularly 
aggressive competitor in a highly concentrated market. . . . The 
loss of a firm that does not behave as a maverick is unlikely to 
lead to increased coordination.'' (citations, ellipses, and internal 
quotation marks omitted); U.S. Dept. of Just. & Fed. Trade Comm'n, 
Horizontal Merger Guidelines at section 7.1 (Aug. 19, 2010) (``An 
acquisition eliminating a maverick firm . . . in a market vulnerable 
to coordinated conduct is likely to cause adverse coordinated 
effects.'').
---------------------------------------------------------------------------

    Third, the complaint does not allege that the firms in the 
alleged market will have the post-merger incentive to engage in 
coordinated behavior. Focusing merely on an individual's conduct--
without allegations about the incentives of Chevron and all the 
other firms in the industry--does not amount to a plausible pleading 
of coordinated effects.\16\
---------------------------------------------------------------------------

    \16\ See, e.g., F.T.C. v. H.J. Heinz Co., 246 F.3d 708, 724-25 
(D.C. Cir. 2001) (``Where rivals are few, firms will be able to 
coordinate their behavior, either by overt collusion or implicit 
understanding, in order to restrict output and achieve profits above 
competitive levels. The creation of a durable duopoly affords both 
the opportunity and incentive for both firms to coordinate to 
increase prices.'' (brackets, citations, and internal quotation 
marks omitted)); U.S. Dept. of Just. & Fed. Trade Comm'n, Horizontal 
Merger Guidelines at section 7.1 (Aug. 19, 2010) (``The Agencies 
seek to identify how a merger might significantly weaken competitive 
incentives through an increase in the strength, extent, or 
likelihood of coordinated conduct.'').
---------------------------------------------------------------------------

    An appeal to the Majority's own 2023 Merger Guidelines \17\ 
would not provide refuge from a motion to dismiss either. According 
to the Guidelines, three primary factors are used to ``assess the 
extent to which a merger may increase the likelihood, stability, or 
effectiveness of coordination:'' \18\ (1) highly concentrated 
market, (2) prior actual or attempted attempts to coordinate; and 
(3) elimination of a maverick.\19\ The complaint alleges none of 
these factors. It avoids making allegations of concentration because 
the combined share of the two firms in the alleged global market 
would not exceed low single digits, the HHI is very low, and the 
delta is miniscule. Taking the allegations and the implications 
against Mr. Hess as true, neither he nor Hess Corporation ever 
coordinated or attempted to coordinate with Hess Corporation's 
rivals.\20\ Nor does the complaint allege that Hess Corporation is a 
maverick eliminated by the merger. The Guidelines also include a 
list of six secondary factors used to assess coordinated 
effects,\21\ but again, the complaint does not rely upon any of 
them.
---------------------------------------------------------------------------

    \17\ U.S. Dept. of Just. & Fed. Trade Comm'n, Merger Guidelines 
(Dec. 18, 2023).
    \18\ Id. at section 2.3.
    \19\ Id. at section 2.3.A.
    \20\ See supra note 7.
    \21\ Id. at section 2.3.B.
---------------------------------------------------------------------------

    Setting aside the dubious section 7 claim, the hypocrisy of the 
process is apparent from the Majority's express willingness in 
today's order to allow Mr. Hess to consult with Chevron on projects 
that align with the climate agenda of the political left.\22\ For 
the Majority, Mr. Hess is too dangerous to be allowed to participate 
as a board member or generally ``in an advisory or consulting 
capacity.'' \23\ But Mr. Hess ceases to be dangerous if his services 
further climate change-related activity.
---------------------------------------------------------------------------

    \22\ The order allows Mr. Hess to consult with Chevron as long 
as his consulting services are ``solely related to interactions and 
discussions with (a) Guyanese government officials about Hess's oil-
related and health ministry-related activities in Guyana, and (b) 
the Salk Institute's Harnessing Plants Initiative.'' Decision & 
Order, In re Chevron Corp., No. 241-0008 at section II.B. (F.T.C. 
Sept. 26, 2024).
    \23\ Id.
---------------------------------------------------------------------------

    Today's case is the most recent example of the Majority's 
unfortunate proclivity to ignore statutory text to reach politically 
beneficial outcomes.\24\ And they appear even more comfortable when 
embracing indefensible positions in the context of settlements 
\25\--knowing very well that the substance of their pleadings will 
never be litigated. Today's approach, which is becoming increasingly 
common, allows the Majority to coerce concessions from parties 
without pleading facts that satisfy what the statute requires.\26\ 
Because so many of the Commission's cases settle without litigation, 
the Majority has the luxury of advancing

[[Page 80563]]

unsound legal theories below the radar.\27\ However the Majority 
wants to move the law, it cannot do so by manufacturing change 
through some fictitious body of extracted settlements.
---------------------------------------------------------------------------

    \24\ See, e.g., Dissenting Statement of Commissioner Melissa 
Holyoak, Joined by Commissioner Andrew N. Ferguson, In the Matter of 
the Non-Compete Clause Rule, Matter Number P201200 (June 28, 2024), 
https://www.ftc.gov/system/files/ftc_gov/pdf/2024-6-28-commissioner-holyoak-nc.pdf; cf. generally Dissenting Statement of Commissioner 
Melissa Holyoak, Joined by Commissioner Andrew Ferguson, Health 
Breach Notification Rule, File No. P205405 (Apr. 26, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/p205405_hbnr_mhstmt_0.pdf.
    \25\ See, e.g., Exxon Dissent, supra note 7, at 1, 3.
    \26\ See, e.g., id. at 1, 3 (explaining that ``the Commission is 
leveraging its merger enforcement authority to extract a consent 
from Exxon'' and that ``[t]he Commission should not leverage its 
merger enforcement authority--or any authority--the way it does 
today'').
    \27\ Cf. Dissenting Statement of Commissioner William E. 
Kovacic, In the Matter of Negotiated Data Solutions, LLC, File No. 
051-0094 (Jan. 23, 2008) (``The prospect of a settlement can lead 
one to relax the analytical standards that ordinarily would 
discipline the decision to prosecute if the litigation of asserted 
claims was certain or likely.''), https://www.ftc.gov/sites/default/files/documents/cases/2008/01/080122kovacic.pdf.
---------------------------------------------------------------------------

Dissenting Statement of Commissioner Andrew N. Ferguson

    The Commission today authorizes the filing of an administrative 
complaint and proposed decision and order against Chevron 
Corporation and Hess Corporation. The Complaint alleges that 
Chevron's proposed $53 billion acquisition of Hess Corporation would 
violate section 7 of the Clayton Act.\28\ The Complaint does not 
plead a traditional section 7 theory because the Commission has 
none. Chevron and Hess together have a two percent share of the 
relevant market.\29\ No court has ever blocked a merger between 
companies with such small shares. The aggressive new Merger 
Guidelines presume that a merger would harm competition when it 
combines companies with market shares of over thirty percent.\30\ A 
two percent market share does not raise any competitive concerns at 
all.
---------------------------------------------------------------------------

    \28\ Compl. ] 50, In re Chevron Corp. and Hess Corp., FTC File 
No. 241-0008 (Sept. 26, 2024) (``Complaint'') (citing 15 U.S.C. 18).
    \29\ See BP Statistical Review of World Energy (2023); Chevron 
2022 10-K; Hess 2022 10-K.
    \30\ Dep't. of Justice & Fed. Trade Comm'n, Merger Guidelines, 
section 2.1 (Dec. 18, 2023); see also United States v. Philadelphia 
Nat'l Bank, 374 U.S. 321, 364 (1963) (establishing a rebuttable 
presumption that a merger resulting in a single firm's control of at 
least thirty percent of the relevant market violates section 7).
---------------------------------------------------------------------------

    The Complaint instead alleges that adding John Hess--Hess 
Corporation's CEO--to Chevron's twelve-member board of directors 
turns an unobjectionable merger into a section 7 violation. The 
Commission's Complaint alleges that while serving as Hess 
Corporation's CEO, Mr. Hess ``communicated publicly and privately 
with OPEC representatives . . . about global output and other 
dimensions of crude oil market competition.'' \31\ This conduct, the 
Commission suggests, is dangerous to competition. The Commission 
then contends that Mr. Hess's position on Chevron's board would give 
him even more power to harm competition in global oil markets than 
he currently wields as Hess Corporation's CEO and as a member of its 
board.\32\ This increase in power, the Commission claims, would 
``substantially lessen competition, or tend to create a monopoly'' 
in the global market for crude oil.\33\ Because the increase in 
power is a function of Chevron's acquisition of Hess Corporation, 
the Commission reasons that the acquisition therefore violates 
section 7 of the Clayton Act.
---------------------------------------------------------------------------

    \31\ Compl. at ] 4.
    \32\ Id. at ] 50.
    \33\ Ibid. (citing 15 U.S.C. 18).
---------------------------------------------------------------------------

    The Commission's section 7 theory does not hold water. It rests 
on a series of implausible and unsupported assumptions that fall 
well short of pleading a violation of the Clayton Act. But it does 
satisfy a constituency important to the Commission majority--
Democratic politicians who have repeatedly and publicly urged the 
Commission to block this merger in order to advance their climate 
agenda.\34\ Bending section 7 to political pressure is incompatible 
with the rule of law. I therefore dissent from the filing of the 
Complaint.
---------------------------------------------------------------------------

    \34\ See, e.g., Letter from U.S. Senator Charles E. Schumer, 
Representative Ro Khanna, et al., to Lina Khan, Chair, Fed. Trade 
Comm'n (Mar. 6, 2024) (``We write concerning the wave of oil-and-gas 
consolidation, building on top of a longstanding trend, that 
threatens competition in the industry . . . In just the most recent 
months . . . Chevron moved to acquire Hess. Many of us warned in a 
November letter that [this] mega-deal[ ] could provoke a wave of 
mergers and acquisitions in the energy sector and trigger a new 
`consolidation trend' to the detriment of industry competition and 
American consumers. . . . We applaud the FTC for opening 
investigations of the . . . Chevron-Hess . . . acquisition[ ] . . . 
[W]e urge the FTC to extend its current investigations. . . .''); 
Letter from U.S. Senator Charles E. Schumer, U.S. Senator Amy 
Klobuchar, et al. to Lina Khan, Chair, Fed. Trade Comm'n (Nov. 1, 
2023) (``We write regarding our concerns about two blockbuster oil-
and-gas deals announced in October: ExxonMobil's (Exxon) proposed 
$60 billion acquisition of Pioneer Natural Resources (Pioneer) and 
Chevron's proposed $53 billion acquisition of Hess Corporation 
(Hess)--two of the largest oil-and-gas deals of the 21st century. By 
allowing Exxon and Chevron to further integrate their extensive 
operations into important oil-and-gas fields, these deals are likely 
to harm competition, risking increased consumer prices and reduced 
output throughout the United States.'').
---------------------------------------------------------------------------

    First, the majority necessarily assumes that Mr. Hess would 
continue his communications with OPEC representatives after joining 
Chevron's board. If that were not the case, then the transaction 
would be at worst competitively neutral or even pro-competitive 
insofar that Mr. Hess's previous communications were injurious to 
competition.\35\ This assumption is utterly implausible. Discussing 
output with representatives of Hess Corporation's competitors at 
OPEC is obviously risky.\36\ Mr. Hess's past communications with 
OPEC officials have landed him and Hess Corporation in hot water. 
The statements to which the majority objects attracted the attention 
of government regulators and formed the basis of several private 
class-action lawsuits pending against Hess Corporation.\37\ It is 
unreasonable to assume that Mr. Hess would continue his OPEC 
discussions unabated in light of the consequences those statements 
have generated.
---------------------------------------------------------------------------

    \35\ Section 7 is a forward-looking statute, intended to prevent 
future harm to competition, not punish past conduct. See United 
States v. Baker Hughes Inc., 908 F.2d 981, 991 (D.C. Cir. 1990) 
(Thomas, J.) (``By focusing on the future, section 7 gives a court 
the uncertain task of assessing probabilities''); Deborah Feinstein, 
then-FTC Director of the Bureau of Competition, The Forward-Looking 
Nature of Merger Analysis, Advanced Antitrust U.S., 3 (2014) (``In 
markets, the past is not always prologue. For example, the 
Commission recently closed its investigation of the Office Depot/
OfficeMax transaction without action, 17 years after obtaining an 
injunction to block the Staples/Office Depot combination.'').
    \36\ In re Domestic Airline Travel Antitrust Litig., 691 F. 
Supp. 3d 175, 219 (D.D.C. 2023) (finding that defendant airlines' 
statements regarding restrained output could support inference of a 
conspiracy violating the Sherman Act).
    \37\ Compl., Rosenbaum v. Permian Res. Corp., No. 2:24-cv-00103 
(D. Nev. 2024); Compl., Mellor v. Permian Res. Corp., No. 2:24-cv-
00253 (D. Nev. 2024). The United States Judicial Panel on 
Multidistrict Litigation consolidated these two lawsuits with three 
others and transferred them to the District of New Mexico. See 
Transfer Order, In re: Shale Oil Antitrust Litig., MDL No. 3310 
(Aug. 1, 2024). The parties also ``informed the Panel of eleven 
potentially-related actions pending in four districts.'' Id.
---------------------------------------------------------------------------

    Even if Mr. Hess could not appreciate the risk of discussing 
output with OPEC officials, Chevron has a strong incentive to ensure 
that its officers and directors avoid risky conversations with OPEC 
representatives. The Complaint does not allege that any current 
Chevron officer or director had any potentially unlawful discussions 
with OPEC officials. In fact, one private lawsuit against Hess 
Corporation specifically alleges that Chevron rejected OPEC's calls 
for constrained output in favor of increased production.\38\ But for 
the proposed order, Mr. Hess would become a director of Chevron. He 
would then be subject to Chevron's direction, and Chevron's 
incentive to prevent its officers and directors from cavorting with 
OPEC officials would apply to Mr. Hess. The Commission's assumption 
that Mr. Hess's behavior as a Chevron board member would be 
identical to his behavior as Hess Corporation's CEO is not only 
implausible; the only plausible inference is precisely the opposite.
---------------------------------------------------------------------------

    \38\ Compl., Rosenbaum v. Permian Res. Corp., No. 2:24-cv-00103, 
] 104 (D. Nev. 2024) (``the supermajors started investing in shale 
in 2021 and 2022 at rates previously unseen, in direct response to 
U.S. shale producers underinvesting as an industry . . . Mid way 
through 2022, Chevron anticipated a `15% year-over-year increase' in 
shale oil production from 2021 and promised to continue `bolstering 
production' '').
---------------------------------------------------------------------------

    Second, the majority must also assume that Mr. Hess's post-
merger behavior would have a sufficiently major effect on global oil 
markets ``substantially to lessen competition or tend to create a 
monopoly.'' \39\ No other aspect of this transaction poses any risk 
at all of substantially lessening competition or tending to create a 
monopoly. The Commission's entire theory rests on a prediction about 
the competitive effects of Mr. Hess's conduct.
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 18.
---------------------------------------------------------------------------

    The proposition that Mr. Hess's comments could move global oil 
markets is laughable. The Complaint does not allege that Mr. Hess 
encouraged other U.S. producers to reduce output. Instead, the 
Complaint's primary theory of harm is that ``Mr. Hess's supportive 
messaging to OPEC encourages OPEC's output stabilizing agenda, and . 
. . reduces the unpredictability of the non-OPEC response to OPEC's 
output decisions.'' \40\ The

[[Page 80564]]

Complaint does not allege that Mr. Hess ever discussed non-public 
information with OPEC. Yet it suggests that the international oil 
cartel hangs on his every word, and his musings and suggestions spur 
national governments to action. Mr. Hess should be flattered that 
the Commission thinks so much of his influence. But I do not share 
my colleagues' view about the reach of Mr. Hess's powers. OPEC's 
raison d'etre for decades has been to manage output and raise crude 
oil prices to maximize its member nations' monopoly rents.\41\ OPEC 
does not need the encouragement of the CEO of a midsized American 
producer to pursue its cartel goals.
---------------------------------------------------------------------------

    \40\ Compl. at ] 50.
    \41\ See Org. of the Petroleum Exporting Countries, OPEC: Our 
Mission (``In accordance with its Statute, the mission of the 
Organization of the Petroleum Exporting Countries (OPEC) is to 
coordinate and unify the petroleum policies of its Member Countries 
and ensure the stabilization of oil markets . . .'').
---------------------------------------------------------------------------

    Third, even if the Commission were correct that Mr. Hess's 
conduct would continue unabated as a Chevron director and that the 
conduct substantially affects competition, the majority does not 
state a section 7 claim unless it can show that Mr. Hess's addition 
to the Chevron board would injure competition more than if he were 
to remain Hess Corporation's CEO. If his addition to the Chevron 
board is no more dangerous to competition than his service as Hess 
Corporation's CEO, then the transaction poses no competitive 
risks.\42\ The Complaint proposes two theories for why his addition 
to the Chevron board is worse than the status quo. Both fail.
---------------------------------------------------------------------------

    \42\ See Dep't. of Justice & Fed. Trade Comm'n, Merger 
Guidelines, section 2.3 (Dec. 18, 2023) (``Guideline 3: Mergers Can 
Violate the Law When They Increase the Risk of Coordination'') 
(emphasis added).
---------------------------------------------------------------------------

    The Commission first argues that because Chevron is larger than 
Hess Corporation, Mr. Hess's position on Chevron's board would 
``amplify the importance and likely effect'' of his statements on 
OPEC.\43\ This statement is pure ipse dixit. No allegations in the 
Complaint lend that allegation any plausibility.\44\ And common 
sense suggests otherwise. The CEO of an oil producer directs the 
daily operations of the company. He exercises far more control over 
the company on a daily basis--including on pricing and output 
decisions--than one member of a twelve-person board of directors. 
The statements of an oil-company CEO would therefore likely carry 
much greater weight than the same statements made by one of twelve 
oil-company directors. The Complaint contains nothing suggesting 
that the opposite is true.
---------------------------------------------------------------------------

    \43\ Compl. at ] 50.
    \44\ See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) 
(requiring that a complaint plead ``enough facts to state a claim to 
relief that is plausible on its face.'').
---------------------------------------------------------------------------

    The Complaint also contends that Mr. Hess's service on Chevron's 
board would ``meaningfully increas[e] the likelihood that Chevron 
would align its production with OPEC's output decisions to maintain 
higher prices.'' \45\ But this allegation too is conclusory ipse 
dixit. Nothing in the Complaint explains how this would happen. For 
example, the Complaint does not allege that Mr. Hess's 
communications with OPEC officials had any effect on Hess 
Corporation's capital plans, output decisions, or any other behavior 
by the company. Indeed, under his leadership, Hess Corporation's 
production growth routinely exceeded that of peer companies.\46\ If 
Mr. Hess as CEO, did not curtail Hess Corporation's output in 
response to conversations with OPEC, it beggars belief that he 
could, and would, do so as one of the twelve members of Chevron's 
board.
---------------------------------------------------------------------------

    \45\ Compl. at ] 11.
    \46\ See, e.g., Fitch Maintains Rating Watch Positive on Hess' 
`BBB' Ratings, Fitch Ratings, Inc., (Aug. 21, 2024) (``Hess' growth 
profile differentiates it from most exploration and production (E&P) 
peers''); Sourasis Bose and Sabrina Valle, Oil producer Hess beats 
profit estimates on U.S. production boost, Reuters (July 26, 2023).
---------------------------------------------------------------------------

    But even if the Commission's assumptions were all correct--and 
they are not--the Commission still fails to state a section 7 
violation. Even if Chevron were, at Mr. Hess's instigation, to 
reduce its output, the Complaint does not explain how that output 
would meaningfully affect competition. The combined Chevron-Hess 
Corporation entity will control two percent of the global oil 
market. A reduction in its output would hardly remove a drop from 
the metaphorical bucket.
    That is not to say that I favor Mr. Hess's alleged conduct. (I 
emphasize that the conduct is merely alleged; the Commission has not 
proven anything.) OPEC is not a friend to the American people. Just 
ask any American who lived through 1973. OPEC's goal is to keep oil 
prices high to extract monopoly rents from every consumer of 
petroleum products on the planet--including every single American. 
OPEC's member states include some of America's bitterest foes. I am 
not fond of the idea that American oil executives would share 
encouraging messages with an organization that includes America's 
enemies, the goal of which is to keep our oil prices high. But 
section 7 does not forbid disquieting conduct.\47\ It forbids 
transactions ``the effect'' of which ``may be substantially to 
lessen competition, or to tend to create a monopoly.'' \48\ Nothing 
in the Commission's Complaint suggests that this transaction will 
have such an effect. The Commission should not twist section 7 into 
knots to get at Mr. Hess's alleged conduct.
---------------------------------------------------------------------------

    \47\ Whether Mr. Hess's alleged conduct violated some other 
antitrust law or, any other Federal law, is not at issue in this 
case and I therefore take no position on that question.
    \48\ 15 U.S.C. 18.
---------------------------------------------------------------------------

    Neither judicial nor Commission precedent supports the 
Complaint's theory of section 7. The only time we have ever posited 
this sort of theory before was in a recent unlitigated settlement 
complaint involving the merger of Exxon Corporation and Pioneer 
Natural Resources Company.\49\ And we did so over my dissent.\50\ I 
cannot imagine that the majority Commission would ever risk 
litigating a section 7 claim involving two percent shares of the 
market simply because of one potential director's speeches and 
texts. I therefore doubt that the Commission will ever risk letting 
the courts review the interpretation of section 7 embodied in 
today's Complaint.
---------------------------------------------------------------------------

    \49\ Compl., In re Exxon Mobil Corp., FTC File No. 241 0004 (May 
2, 2024).
    \50\ See Joint Dissenting Statement of Melissa Holyoak, Comm'r, 
Fed. Trade Comm'n, and Andrew N. Ferguson Comm'r, Fed. Trade Comm'n, 
In re ExxonMobil Corp., FTC Matter No. 241 0004 (May 1, 2024).
---------------------------------------------------------------------------

    It is not a coincidence that the Commission has trotted out this 
theory only in settlements. I have lamented repeatedly that the 
majority has a penchant for pressing far-fetched, novel theories in 
complaints it knows will not be litigated, and relying on those 
unadjudicated complaints as a form of precedent for subsequent 
Commission action.\51\ No court should give this consent, or its 
equally lawless predecessor in Exxon-Pioneer, any precedential 
value.\52\ Unadjudicated complaints tell us nothing about the law. 
This Complaint is an accusation leveled by three Commissioners, 
nothing more.\53\
---------------------------------------------------------------------------

    \51\ See Concurring Statement of Andrew N. Ferguson, Comm'r, 
Fed. Trade Comm'n, In re Asbury Automotive Group, Inc., et al., FTC 
Matter No. 222 3135, 2 (Aug. 16, 2024) (``In re Asbury''); see also 
Concurring and Dissenting Statement of Andrew N. Ferguson, Comm'r, 
Fed. Trade Comm'n, In re Invitation Homes, FTC Docket No. 9436, 5 
(Sep. 16, 2024).
    \52\ See Joint Dissenting Statement of Melissa Holyoak, Comm'r, 
Fed. Trade Comm'n, and Andrew N. Ferguson, Comm'r, Fed. Trade 
Comm'n, In re ExxonMobil Corp., FTC Matter No. 241 0004 (May 1, 
2024).
    \53\ See In re Asbury, supra note 24, at 2 (``[U]nadjudicated 
complaints are not the law. A complaint is an accusation, nothing 
more. It is subject neither to adversarial testing--the defining 
feature of the American legal tradition--nor to adjudication by the 
Commission or an impartial Article III judge.'').
---------------------------------------------------------------------------

    One might wonder why I object to a complaint that the merging 
parties are voluntarily settling. The Complaint is the Commission's 
statement of what section 7 means. I believe that statement to be 
woefully incorrect and therefore cannot join it. And the fact of 
settlement should lend no credibility to the majority's outlandish 
interpretation of section 7. Parties settle civil cases when it 
suits their interests even if they would prevail in litigation.\54\ 
This consent agreement is a stark example. The Commission leveraged 
its Hart-Scott-Rodino Act \55\ authority by threatening to hold up 
Chevron and Hess's $53 billion dollar merger even though the lack of 
a plausible section 7 theory had long been obvious. And yes, the 
parties could have told the Commission to make their day and file a 
lawsuit. But that lawsuit would cause months of delay and cost 
countless millions of dollars in legal fees. The merging parties 
surely would have prevailed on this section 7 claim, but the victory 
could very well have been Pyrrhic if market conditions changed in 
the intervening months. They therefore rationally took the quick and 
easy path opened to them by this consent agreement. For Hess 
Corporation's

[[Page 80565]]

shareholders, the consent is all upside: with the merger cleared, 
they will soon get paid. And for Chevron's shareholders, the benefit 
is clear and the cost is minimal: a valuable asset in exchange for 
keeping one person off of the board of directors.
---------------------------------------------------------------------------

    \54\ See id. at 3 (``[M]any firms settle even if they honestly 
believe that they did nothing wrong and that they would prevail in 
litigation. Those firms reasonably conclude that a swift end to the 
Commission's investigation or threatened enforcement advances their 
interests more than a litigation victory.'').
    \55\ 15 U.S.C. 18a.
---------------------------------------------------------------------------

    The Commission majority and the Democratic politicians who urged 
them on will hail today's Complaint and proposed order as a victory. 
Those politicians have loudly urged the Commission to block this 
merger, and today the Commission majority can pretend it delivered, 
even as it allows the merger to proceed.\56\ Fawning press coverage 
will surely follow--a nice bonus for the Democrats as voters head to 
the polls to pick the next President. The American public rightly 
loathes OPEC and has little affection for its perceived friends. Few 
apart from seasoned antitrust practitioners will look under the hood 
of the Commission's antitrust theory. The Commission will tout this 
modest, coerced settlement as a ``win'' and add it to the list of 
``wins'' it uses to calculate a supposed ``90% win rate.'' \57\
---------------------------------------------------------------------------

    \56\ See supra note 7.
    \57\ See Douglas Farrar, X, (Sept. 13, 2024), https://x.com/DouglasLFarrar/status/1834727643171733651 (``FTC Chair Khan has won 
more than 90% of her lawsuits'') (quoting remarks of Rep. Alexandria 
Ocasio-Cortez).
---------------------------------------------------------------------------

    But this settlement is not a victory for the rule of law. ``A 
settlement extracted from an innocent party reveals much about the 
Commission's power, but nothing about the law.'' \58\ The 
Commission's power under the Hart-Scott-Rodino Act is considerable 
and coercive. We do not approve or forbid mergers, but we may sue to 
block them. Lawsuits are expensive and time-consuming, and the mere 
risk of an enforcement action can make an otherwise valuable 
transaction too costly to pursue.\59\ Our gatekeeping function 
therefore gives us the power to exact tolls on merging parties even 
if our legal theory is bunk.\60\ The risk, time, and expense 
associated with convincing a judge that the Commission's theory is 
bunk is coercive enough that merging parties will pay for the 
Commission to go away. But such a settlement does not vindicate the 
rule of law. It is instead a sort of tax on mergers made possible by 
the fact that Congress has made the Commission a merger gatekeeper.
---------------------------------------------------------------------------

    \58\ In re Asbury, supra note 24, at 3.
    \59\ Id. at 4 (``That a firm may break this cycle by litigating 
is no answer to my objection. For most small businesses--and many 
large ones--a Commission investigation is costly. Lawyers are 
expensive, and investigations sometimes last for years. Litigation 
may take many years more. The mere risk of a Commission 
investigation is coercive and can be enough to force some businesses 
to yield.'').
    \60\ See Joint Dissenting Statement of Melissa Holyoak, Comm'r, 
Fed. Trade Comm'n, and Andrew N. Ferguson, Comm'r, Fed. Trade 
Comm'n, In re ExxonMobil Corp., FTC Matter No. 241 0004 (May 1, 
2024).
---------------------------------------------------------------------------

    Today, two merging companies pay a toll to pass through the 
Hart-Scott-Rodino gate. They do not pay the toll because section 7 
requires it. Nothing in section 7 requires Mr. Hess to stay off the 
Chevron board. They pay the toll because the Commission has 
threatened to make their lives difficult if they do not, and they 
have concluded that it is easier to pay than to resist. The 
Commission collects the toll and proclaims victory. But reducing 
antitrust enforcement to a pay-for-peace racket inflicts serious 
injury on the rule of law--and on the Commission's credibility.
    I therefore respectfully dissent.

[FR Doc. 2024-22874 Filed 10-2-24; 8:45 am]
BILLING CODE 6750-01-P