```

[Federal Register Volume 80, Number 56 (Tuesday, March 24, 2015)]
[Notices]
[Pages 15605-15609]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-06626]

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

FEDERAL TRADE COMMISSION

[File No. 141 0171]

Par Petroleum Corporation and Mid Pac Petroleum, LLC; Analysis of 
Proposed Consent Order To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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

SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair methods of competition. 
The attached Analysis to Aid Public Comment describes both the 
allegations in the draft complaint and the terms of the consent order--
embodied in the consent agreement--that would settle these allegations.

[[Page 15606]]

DATES: Comments must be received on or before April 17, 2015.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/parmidpacconsent online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Par Petroleum 
Corporation--Consent Agreement; File No. 141-0171'' on your comment and 
file your comment online at https://ftcpublic.commentworks.com/ftc/parmidpacconsent by following the instructions on the web-based form. 
If you prefer to file your comment on paper, write ``Par Petroleum 
Corporation--Consent Agreement; File No. 141-0171'' 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, Suite CC-5610 (Annex D), Washington, DC 20580, or deliver 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, 
Suite 5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Anna Kertesz, Bureau of Competition, 
(202-326-2511), 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing consent orders 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 thirty (30) 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 March 18, 2015), on the World Wide Web, at 
http://www.ftc.gov/os/actions.shtm.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before April 17, 2015. 
Write ``Par Petroleum Corporation--Consent Agreement; File No. 141-
0171'' 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 public Commission Web 
site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of 
discretion, the Commission tries to remove individuals' home contact 
information from comments before placing them on the Commission Web 
site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone'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 that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which . . . is privileged or confidential,'' as discussed in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
---------------------------------------------------------------------------

    \1\ 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 
4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/parmidpacconsent by following the instructions on the web-based 
form. If this Notice appears at http://www.regulations.gov/#!home, you 
also may file a comment through that Web site.
    If you file your comment on paper, write ``Par Petroleum 
Corporation--Consent Agreement; File No. 141-0171'' 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., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, 
Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your 
paper comment to the Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that 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 that 
it receives on or before April 17, 2015. You can find more information, 
including routine uses permitted by the Privacy Act, in the 
Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Order To Aid Public Comment

Introduction

    The Federal Trade Commission (``Commission'') has accepted from Par 
Petroleum Corporation (``Par''), subject to final approval, an 
Agreement Containing Consent Order (``Consent Agreement'') designed to 
remedy the anticompetitive effects resulting from Par's proposed 
acquisition of 100% of the outstanding voting securities of Koko'oha 
Investments, Inc. (``Koko'oha''), which owns all of the membership 
interests of Mid Pac Petroleum, LLC (``Mid Pac''). Under the terms of 
the proposed Decision and Order (``Order'') contained in the Consent 
Agreement, Par must terminate its acquired storage and throughput 
rights at Aloha Petroleum, Ltd.'s (``Aloha'') Barbers Point Terminal 
(``Barbers Point Terminal'').
    The Consent Agreement has been placed on the public record for 30 
days to solicit comments from interested persons. Comments received 
during this period will become part of the public record. After 30 
days, the Commission will again review the Consent Agreement and the 
comments received, and will decide whether it should withdraw from the 
Consent Agreement, modify it, or make the Order final.

The Parties

    Par, a publicly-traded diversified energy company based in Houston, 
Texas, engages in the refining, bulk supply, transportation, and 
marketing of

[[Page 15607]]

petroleum products in Hawaii through its wholly-owned subsidiary, 
Hawaii Independent Energy, LLC (``HIE''). HIE owns and operates the 
94,000 barrel-per-day Kapolei refinery on Oahu and refined product 
terminals in Hawaii. HIE markets gasoline through its Tesoro-branded 
retail locations and wholesale and retail sales to third parties.
    Koko'oha, through its wholly-owned subsidiary Mid Pac, engages in 
the bulk supply, marketing, and distribution of petroleum products in 
Hawaii. Mid Pac owns and operates refined products terminals and is the 
exclusive licensee of the ``76'' gasoline brand in Hawaii. Mid Pac 
markets gasoline through its branded retail locations and wholesale and 
retail sales to third parties.

The Proposed Acquisition

    Pursuant to an Agreement and Plan of Merger dated June 2, 2014, Par 
proposes to acquire Koko'oha for $107 million (the ``Acquisition''). 
The Commission's Complaint alleges that the Acquisition, if 
consummated, would violate 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, by substantially lessening competition in the 
market for bulk supply of Hawaii-grade gasoline blendstock (``HIBOB'') 
in the state of Hawaii.

The Relevant Market

    The relevant product market in which to analyze the competitive 
effects of the Acquisition is the bulk supply of HIBOB. Refineries 
produce HIBOB from crude oil. HIBOB is the only gasoline blendstock 
that, when combined with ethanol, yields gasoline that meets the 
standards and specifications of Hawaii law. No substitute exists for 
HIBOB for motor vehicles that must use Hawaii-grade gasoline.
    Bulk supply means the provision of larger-than-truckload volumes of 
petroleum products, which can come from local refineries or via ocean-
going vessels. Bulk suppliers need bulk volumes of gasoline blendstock 
(either through their own refinery operations or through imports) and 
terminal capacity. Bulk suppliers deliver bulk supply of HIBOB into 
gasoline terminals for storage and local distribution, or for further 
pipeline or marine shipment. No alternative exists to the bulk supply 
of HIBOB.
    The relevant geographic market in which to assess the competitive 
effects of the Acquisition is Hawaii. Bulk suppliers refine HIBOB in, 
or import it into, Hawaii.

The Structure of the Market

    Bulk supply of HIBOB comes from either the two local refineries or 
imports from out of state via ocean-going vessels. Par and Chevron 
Corporation (``Chevron'') are the only local refiners. Non-refiners 
Aloha and Mid Pac can supply bulk volumes to Hawaii, for distribution 
throughout the state, by receiving imported HIBOB cargoes through 
Barbers Point Terminal. This is the only terminal in Hawaii not owned 
by a local refiner that can receive full waterborne cargoes of HIBOB 
from out of state. By virtue of a long-term storage and throughput 
agreement, Mid Pac holds substantial storage and throughput rights at 
Barbers Point Terminal, which provides Mid Pac with sufficient terminal 
access to handle and distribute imported HIBOB cargoes.\2\ The four 
bulk suppliers--Par, Mid Pac, Chevron, and Aloha--own or control access 
to all of the Hawaii gasoline terminals that handle bulk volumes of 
HIBOB.
---------------------------------------------------------------------------

    \2\ Aloha entered the storage and throughput agreement with Mid 
Pac in mid-2005, shortly after the Commission sought to enjoin 
Aloha's acquisition of Trustreet Properties LLP, Aloha's fifty-
percent partner in the Barbers Point Terminal at the time. The 
Commission subsequently dismissed its complaint in that matter. See 
Press Release, Fed. Trade Comm'n, FTC Resolves Aloha Petroleum 
Litigation (Sept. 6, 2005), available at https://www.ftc.gov/news-events/press-releases/2005/09/ftc-resolves-aloha-petroleum-litigation.
---------------------------------------------------------------------------

Effects of the Acquisition

    The Acquisition is likely to substantially lessen competition and 
lead to higher prices for bulk supply of HIBOB in Hawaii. The potential 
for competitive harm from the Acquisition stems from the importance of 
imports in establishing HIBOB prices. Although Aloha and Mid Pac 
typically buy bulk supply of HIBOB from Par and Chevron, Aloha and Mid 
Pac use their import capabilities to obtain favorable HIBOB bulk supply 
prices from the local refiners. Aloha and Mid Pac's import capabilities 
serve to constrain local refiners' bulk supply prices of HIBOB.
    The Acquisition would weaken the threat of imports and relax a 
competitive constraint on HIBOB bulk supply prices. Although the 
Acquisition reduces from four to three the number of bulk suppliers of 
HIBOB, the increase in concentration from the loss of Mid Pac does not 
give rise to competitive concerns. Mid Pac's ability to command import 
parity pricing makes it a bulk supply market participant, but the 
evidence did not show that Mid Pac's participation in bulk supply or 
downstream markets is competitively significant. However, Par's 
acquisition of Mid Pac's storage rights at Barbers Point Terminal would 
result in Par and Aloha sharing access to the terminal. Through these 
acquired rights, Par could limit Aloha's use of the terminal and hamper 
Aloha's ability to import bulk supply of HIBOB, thus weakening Aloha's 
ability to use its import capabilities to obtain better bulk supply 
prices. With Aloha as a weakened competitor, Par could unilaterally 
exercise market power post-merger or increase the likelihood and degree 
of coordination between Par and Chevron. As a result, the Acquisition 
likely would increase the price of bulk supply of HIBOB, which would 
ultimately lead to higher gasoline prices for Hawaii consumers.

Entry Conditions

    Entry into the relevant line of commerce in the relevant section of 
the country would not be timely, likely, or sufficient to deter or 
counteract the anticompetitive effects arising from the Acquisition. 
The prospect of new entry through construction of a refinery or import-
capable terminal is extremely remote, given the financial, regulatory, 
and logistical challenges such entry would need to surmount. It is also 
unlikely that a new entrant would import HIBOB to counteract the 
competitive harm described above, as current bulk suppliers have no 
incentive to offer terminal access to create or support entry by a new 
bulk supply competitor.

The Decision and Order

    The Order resolves the competitive concerns raised by the 
Acquisition by preserving flexibility for HIBOB imports at Barbers 
Point Terminal. The Order requires Par to terminate its rights at 
Barbers Point Terminal within 5 days after the closing date of the 
Acquisition. The Order allows Par to retain only those rights necessary 
to load a limited number of tanker trucks at Barbers Point Terminal 
truck rack. These rights would not interfere with the storage and 
handling of full cargoes of imported HIBOB at Barbers Point Terminal. 
The Commission must approve any modification to Par's rights to load 
products at Barbers Point Terminal or any new agreement relating to 
storage or throughput rights at Barbers Point Terminal. Par may renew 
or extend the agreement that permits the loading of tanker trucks at 
Barbers Point Terminal truck rack, without prior Commission approval.
    In addition, the Order obligates Par to provide the Commission 
prior written notice of an acquisition of any leasehold, ownership, or 
any other

[[Page 15608]]

interest in any assets engaged in the bulk supply of HIBOB in Hawaii. 
In light of the post-acquisition structure of the HIBOB bulk supply 
market, Par's future acquisition of any interest enumerated above could 
raise competitive concerns that may warrant careful investigation by 
the Commission. However, Par may acquire, without prior written notice, 
rights or assets not used for bulk supply, which would not result in an 
increase in concentration in the relevant market. Specifically, the 
Order excludes from prior written notice the acquisitions of: (i) 
Pipeline throughput rights, (ii) barges or other vessels engaged only 
in inter-island movement of HIBOB, or (iii) petroleum product terminals 
or other storage facilities that are unable to receive at least 150,000 
barrels of petroleum products in a single delivery from out of state on 
ocean-going vessels. The acquisition of these rights or assets would 
not raise competitive concerns in the bulk supply of HIBOB in Hawaii.
    To ensure Par's compliance with the Order, Par must submit periodic 
compliance reports and give the Commission prior notice of certain 
events that might affect its compliance obligations arising from the 
Order. Lastly, the Order terminates after 10 years.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement, and it is not intended to constitute an official 
interpretation of the Order or to modify its terms in any way.

    By direction of the Commission, Commissioner Wright dissenting.
Donald S. Clark,
Secretary.

Statement of the Federal Trade Commission \1\ In the Matter of Pac 
Petroleum Corporation and Mid Pac Petroleum, LLC
---------------------------------------------------------------------------

    \1\ Chairwoman Ramirez, Commissioner Brill, Commissioner 
Ohlhausen, and Commissioner McSweeny join in this statement.
---------------------------------------------------------------------------

    The Commission has reason to believe the proposed acquisition of 
Koko'oha Investment Inc.'s wholly-owned subsidiary Mid Pac Petroleum, 
LLC by Par Petroleum Corporation is likely to substantially lessen 
competition in the bulk supply of Hawaii-grade gasoline blendstock, in 
violation of Section 7 of the Clayton Act. The transaction is likely to 
impede the ability of Aloha Petroleum, Ltd., the only remaining bulk 
supplier without a local refinery, to use imports to constrain the 
local refiners' bulk supply prices. Par has agreed to settle the 
Commission's charges. Our remedy counteracts the alleged potential 
anticompetitive effects of the proposed acquisition without eliminating 
any of the efficiencies from the combination of Par and Mid Pac.
    As set forth in the complaint, the competitive concerns from this 
acquisition stem from the unique characteristics of the Hawaiian market 
for bulk supply of Hawaii-grade gasoline blendstock (``HIBOB''), which 
is blended with ethanol to make finished gasoline. Other than Par and 
Chevron, Aloha is the only owner of a commercial gasoline terminal in 
Hawaii that is capable of receiving economical shipments of imported 
HIBOB--the Barbers Point terminal. Pursuant to a long-term storage and 
throughput agreement, Mid Pac currently shares access to Barbers 
Point.\2\ Par and Chevron can produce more gasoline (HIBOB and other 
gasoline blending components) than is consumed in Hawaii, rendering 
imports unnecessary. However, Aloha's ability to threaten credibly to 
import HIBOB constrains the prices charged by the local refiners and, 
ultimately, the price paid by Hawaii gasoline consumers. Aloha's 
ability to threaten to import at Barbers Point thus is key to 
negotiations with Par and Chevron.
---------------------------------------------------------------------------

    \2\ Mid Pac acquired its rights to the Barbers Point terminal in 
2005 after the Commission's challenge of Aloha's acquisition of 
Trustreet Properties LLP, which was Aloha's 50 percent partner in 
the terminal at the time.
---------------------------------------------------------------------------

    The Commission's investigation uncovered evidence that Par's 
acquisition of Mid Pac's throughput and storage rights at Barbers Point 
would give Par the incentive and ability to reduce Aloha's capability 
to constrain prices through importing, thereby increasing the price 
Aloha pays for bulk supply. As an incumbent local refiner that seeks to 
supply Aloha, Par would have an incentive to use the Barbers Point 
rights strategically and differently than Mid Pac. By storing 
substantial amounts of gasoline for an extended period, Par could 
reduce the size of an import cargo that Aloha could receive at the 
terminal. This would force Aloha to spread substantial fixed freight 
costs over a smaller number of barrels of gasoline, which would 
significantly increase its cost-per-barrel of importing. Contrary to 
Commissioner Wright's assertion, the evidence shows that market 
participants, including Aloha itself, believe Par might profitably seek 
to adopt this strategy.
    Our reason to believe that Par would take steps leading to this 
competitive harm also flows from evidence and analysis suggesting that 
the benefits to Par of such a strategy outweigh its likely costs. The 
costs to Par associated with storing the amount of product necessary to 
tie up Aloha's import capability at Barbers Point appear modest at 
best. At the same time, Par stands to benefit significantly, in its 
bulk supply and downstream businesses, from even a slight increase in 
bulk supply prices.
    Moreover, even if the benefit to Par depends on Chevron following 
Par's strategy, evidence from the investigation suggests a substantial 
risk that Chevron would respond in that fashion. As the only other 
incumbent local refiner and potential local supplier to Aloha, Chevron 
also stands to benefit if Aloha's import costs are increased. 
Regardless of where in the supply chain it occurs, any increase in 
prices would harm Hawaii gasoline consumers.
    The proposed consent order is narrowly tailored to address these 
specific competitive concerns by requiring the termination of Par's 
acquired storage and throughput rights at Aloha's Barbers Point 
terminal.\3\ There is no evidence that this particular remedy would 
eliminate any of the efficiencies arising from the acquisition. The 
prior approval and notice provisions in the proposed consent order 
provide additional safeguards to alert the Commission of any future 
agreements or acquisitions that might similarly harm competition, while 
imposing minimal reporting requirements on Par. Under these 
circumstances, we believe that the remedy furthers the public interest.
---------------------------------------------------------------------------

    \3\ Aloha and Par had entered into negotiations regarding the 
termination of Par's storage and throughput rights at the Barbers 
Point terminal before the Commission identified this as a 
competitive concern.
---------------------------------------------------------------------------

Dissenting Statement of Commissioner Joshua D. Wright In the Matter of 
Par Petroleum Corporation/Koko'oha Investments, Inc. (Mid Pac 
Petroleum, LLC)

    The Commission has voted to issue a Complaint and a Decision & 
Order against Par Petroleum Corporation (``Par'') to remedy the 
allegedly anticompetitive effects of Par's proposed acquisition of Mid 
Pac Petroleum, LLC (``Mid Pac''). I dissented from the Commission's 
decision because the evidence is insufficient to provide reason to 
believe Par's acquisition will substantially lessen competition in bulk 
supply of Hawaii-grade gasoline blendstock (``HIBOB'') in the state of 
Hawaii, in violation of Section 7 of the Clayton Act.\1\ I commend 
Staff for their

[[Page 15609]]

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.
---------------------------------------------------------------------------

    \1\ The Complaint alleges Mid Pac and Aloha participate in the 
bulk supply of HIBOB by virtue of the fact that they could command 
import parity pricing. While I am not persuaded by that assertion, 
my analysis of the transaction's likely competitive effects does not 
turn upon whether Mid Pac and 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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \2\ See 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).
---------------------------------------------------------------------------

    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
```