Federal Register / Vol. 80, No. 56 / Tuesday, March 24, 2015 / Notices 15609 

Aloha are classified as bulk suppliers. Nor does the 

theory of harm articulated in the Complaint depend 

upon a reduction in the number of competitors in 

the bulk-supplied HIBOB market. I assume, 

arguendo, that the market definition articulated in 

the Complaint is correct and use it throughout this 

statement without loss of generality. 

2See generally James C. Cooper, et al., Vertical 

Antitrust Policy as a Problem of Inference, 23 Int’l 

J. Indus. Org. 639 (2005); Francine Lafontaine & 

Margaret Slade, Exclusive Contracts and Vertical 

Restraints: Empirical Evidence and Public Policy, in 

Handbook of Antitrust Economics (Paolo 

Buccirossi, ed., 2008). 

hard work in this matter. Staff has 

worked diligently to collect and analyze 

evidence related to numerous product 

markets within the Hawaiian gasoline 

industry. Indeed, Staff’s thorough 

investigation has narrowed the scope of 

potential competitive concerns arising 

from the proposed transaction to the 

single theory of harm alleged in the 

Complaint. Based upon the evidence, I 

concluded there is no reason to believe 

the proposed transaction is likely to 

lessen competition in any relevant 

market. It follows, in my view, that the 

Commission should close the 

investigation and allow the parties to 

complete the merger without imposing 

a remedy. 

The Complaint articulates a theory of 

competitive harm arising from the 

proposed transaction based upon the 

possibility that Par, a bulk supplier of 

HIBOB, will foreclose a potential 

downstream customer, Aloha 

Petroleum, Ltd. (‘‘Aloha’’), from its 

ability to import to discipline the prices 

of bulk-supplied HIBOB. Par’s 

acquisition of Mid Pac includes the 

latter’s storage rights at Barbers Point 

Terminal. Mid Pac and Aloha each 

currently have storage rights at Barbers 

Point Terminal sufficient to allow them 

to import HIBOB. After the merger, Par 

and Aloha would share access to the 

terminal. The theory of harm articulated 

in the Complaint is that Par would have 

the incentive and ability to use its 

newly acquired Mid Pac storage rights 

to ‘‘park’’ petroleum products at Barbers 

Point Terminal, and that this strategy 

would reduce or eliminate Aloha’s 

ability to discipline bulk supply prices 

by threatening to import HIBOB, thus 

resulting in higher HIBOB prices which 

would ultimately be passed on to 

Hawaii consumers. 

The theory that Par might exclude 

Aloha in this way is certainly a 

plausible basis for further investigation. 

Indeed, competitive concerns involving 

the potential for exclusion are 

commonly invoked in transactions with 

vertical dimensions, though empirical 

evidence demonstrates vertical 

transactions are generally, but not 

always, procompetitive or competitively 

benign.2 The question, however, is 

whether the record evidence supports 

the theory. In short, the answer is no. 

For Par to have the incentive and ability 

to engage in this strategy, it must be 

profitable for it to do so. Neither 

economic analysis nor record evidence 

gives me reason to believe this is so. The 

evidence strongly suggests such an 

exclusionary strategy would not be 

profitable without Chevron 

Corporation’s (‘‘Chevron’s’’) 

cooperation. Chevron is the only other 

Hawaiian refiner aside from Par capable 

of selling bulk supplies of HIBOB to 

Aloha. Such tacit or explicit 

coordination to exclude Aloha is highly 

unlikely in the HIBOB market. 

Furthermore, the record evidence also 

indicates Aloha, the potential victim of 

the strategy, does not have any reason 

to believe Par would adopt this 

potentially anticompetitive strategy. 

Thus, I have no reason to believe that 

post-acquisition, Par will have the 

incentive and ability to raise prices of 

the bulk supply of HIBOB. 

Prior to entering into a consent 

agreement with the merging parties, the 

Commission must first find reason to 

believe that a merger likely will 

substantially lessen competition under 

Section 7 of the Clayton Act. The fact 

that the Commission believes the 

proposed consent order is costless is not 

relevant to this determination. A 

plausible theory may be sufficient to 

establish the mere possibility of 

competitive harm, but that theory must 

be supported by record evidence to 

establish reason to believe its 

likelihood. Modern economic analysis 

supplies a variety of tools to assess 

rigorously the likelihood of competitive 

harm. These tools are particularly 

important where, as here, the conduct 

underlying the theory of harm—that is, 

vertical integration—is empirically 

established to be procompetitive more 

often than not. Here, to the extent those 

tools were used, they uncovered 

evidence that, consistent with the 

record as a whole, is insufficient to 

support a reason to believe the proposed 

transaction is likely to harm 

competition. Thus, I respectfully dissent 

and believe the Commission should 

close the investigation and allow the 

parties to complete the merger without 

imposing a remedy. 

[FR Doc. 2015–06626 Filed 3–23–15; 8:45 am] 

BILLING CODE 6750–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

National Institutes of Health 

National Heart, Lung, and Blood 

Institute; Notice of Closed Meeting 

Pursuant to section 10(d) of the 

Federal Advisory Committee Act, as 

amended (5 U.S.C. App.), notice is 

hereby given of a meeting of the Board 

of Scientific Counselors, NHLBI. 

The meeting will be closed to the 

public as indicated below in accordance 

with the provisions set forth in section 

552b(c)(6), Title 5 U.S.C., as amended 

for the review, discussion, and 

evaluation of individual intramural 

programs and projects conducted by the 

National Heart, Lung, and Blood 

Institute, including consideration of 

personnel qualifications and 

performance, and the competence of 

individual investigators, the disclosure 

of which would constitute a clearly 

unwarranted invasion of personal 

privacy. 

Name of Committee: Board of Scientific 

Counselors, NHLBI. 

Date: April 27–28, 2015. 

Time: 8:00 a.m. to 6:30 p.m. 

Agenda: To review and evaluate personal 

qualifications and performance, and 

competence of individual investigators. 

Place: Marriott Residence Inn Bethesda, 

7335 Wisconsin Avenue, Bethesda, MD 

20814. 

Contact Person: Robert S. Balaban, Ph.D., 

Scientific Director, National Heart, Lung, and 

Blood Institute, National Institutes of Health, 

Building 10, 10 Center Drive, CRC, 4th Floor, 

Room 1581, Bethesda, MD 20892, 301–496– 

2116, balabanr@nhlbi.nih.gov. 

Information is also available on the 

Institute’s/Center’s home page: 

www.nhlbi.nih.gov/about/committees/nhlbsc, 

where an agenda and any additional 

information for the meeting will be posted 

when available. 

(Catalogue of Federal Domestic Assistance 

Program Nos. 93.233, National Center for 

Sleep Disorders Research; 93.837, Heart and 

Vascular Diseases Research; 93.838, Lung 

Diseases Research; 93.839, Blood Diseases 

and Resources Research, National Institutes 

of Health, HHS) 

Dated: March 18, 2015. 

Michelle Trout, 

Program Analyst, Office of Federal Advisory 

Committee Policy. 

[FR Doc. 2015–06595 Filed 3–23–15; 8:45 am] 

BILLING CODE 4140–01–P 

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