[Federal Register Volume 61, Number 129 (Wednesday, July 3, 1996)]
[Notices]
[Pages 34862-34867]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16889]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. American National Can Co. & KMK Maschinen AG; 
Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Stipulation, and Competitive Impact Statement have

[[Page 34863]]

been filed with the United States District Court for the District of 
Columbia in United States v. American National Can Co. and KMK 
Maschinen AG, Civil No. 96-01458.
    The Complaint alleges that the defendants violated section 1 of the 
Sherman Act by entering a series of agreements, the purpose and effect 
of which was to eliminate competition between them in the North 
American markets for laminated tubes and laminated tube-making 
equipment and technology. The Complaint further alleges that pursuant 
to those agreements, KMK Maschinen AG (``KMK'') sold its U.S. tube-
making affiliate to American National Can Co. (``ANC'') and agreed to 
sell its laminated tube-making equipment and to license its related 
technology exclusively to ANC, and ANC agreed to buy all its laminated 
tube-making equipment for use in North America from KMK and not to 
acquire or use anyone else's equipment or technology there while at the 
same time discontinuing its own manufacture of such equipment.
    The proposed Final Judgment would end the extant exclusive, 
laminated tube-making equipment and technology arrangement between the 
defendants, and would bar them from collecting any payment from each 
other under that agreement. It also would enjoin defendants from 
entering agreements that restrict certain rights of any party relating 
to laminated tubes or laminated tube-making equipment or technology, 
where the parties compete directly against each other in the same 
segment of the laminated tube market (tubes, equipment, or technology) 
to which the restraint applies.
    Laminated tubes are collapsible tubular containers of multiple, 
laminated plastic layers used to package virtually all toothpaste and 
many pharmaceutical products.
    Public comment on the proposed Final Judgment is invited within the 
statutory 60-day comment period. Such comments and responses thereto 
will be published in the Federal Register and filed with the Court. 
Comments should be directed to Mary Jean Moltenbrey, Chief, Civil Task 
Force, U.S. Department of Justice, Antitrust Division, 325 7th Street, 
NW., Suite 300, Washington, DC 20530 (202/616-5935).
Rebecca P. Dick,
Deputy Director of Operations.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    In the matter of; UNITED STATES OF AMERICA, Plaintiff, v. 
AMERICAN NATIONAL CAN CO., and KMK MASCHINEN AG, Defendant; Civil 
Action No. 96-01458, Filed June 25, 1996, Judge Thomas Pennfield 
Jackson.

Stipulation

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, that:
    1. The Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto for purposes of this action, 
and venue of this action is proper in the District of Columbia;
    2. The parties consent that a Final Judgment in the form hereto 
attached may be filed and entered by the Court, upon the motion of any 
party or upon the Court's own motion, at any time after compliance with 
the requirements of the Antitrust Procedures and Penalties Act (15 
U.S.C. Sec. 16(b)-(h)), and without further notice to any party or 
other proceedings, provided that plaintiff has not withdrawn its 
consent, which it may do at any time before the entry of the proposed 
Final Judgment by serving notice thereof on defendant and by filing 
that notice with the Court;
    3. Each defendant agrees to be bound by the provisions of the 
proposed Final Judgment pending its approval by the Court; and
    4. In the event plaintiff withdraws its consent or if the proposed 
Final Judgment is not entered pursuant to this Stipulation, this 
Stipulation shall be of no effect whatsoever, and the making of this 
Stipulation shall be without prejudice to any party in this or any 
other proceeding.

    Dated: June 24, 1996.

    For Plaintiff:
Anne K. Bingaman,
Assistant Attorney General.
Joel I. Klein,
Deputy Assistant Attorney General.
Rebecca P. Dick,
Deputy Director of Operations.
Mary Jean Moltenbrey,
Chief, Civil Task Force.
Robert J. Zastrow,
Assistant Chief, Civil Task Force.
Thomas H. Liddle.
Scott A. Scheele,
DC Bar No. 429061, Attorneys, Antitrust Division, U.S. Department of 
Justice, Suite 300, Liberty Place Building, 325 7th Street, N.W., 
Washington, DC 20530.
    For Defendant American National Can Co.:

McDermott, Will & Emery
David Marx, Jr.,
A Member of the Firm.

    For Defendant KMK Maschinen Ag:

Wilmer, Cutler & Pickering
Rajiv P. Santwan,
Chief Executive, KMK Maschinen AG.
C. Loring Jetton, Jr.,
A Member of the Firm, D.C. Bar No. 83766.

Final Judgment

    Plaintiff, United States of America, filed its Complaint on June 
25, 1996; plaintiff and defendants, by their respective attorneys, have 
consented to entry of this Final Judgment without trial or adjudication 
of any issue of fact or law, and defendants have agreed to be bound by 
the provisions of this Final Judgment pending its approval by the 
Court. This Final Judgment shall not be evidence against or an 
admission by any party with respect to any issue of fact or law herein.
    Now, therefore, before the taking of any testimony and upon consent 
of the parties, it is hereby Ordered, Adjudged, and Decreed as follows:

I

Jurisdiction

    This Court has jurisdiction of the subject matter of this action 
and of each of the parties consenting hereto. The Complaint states a 
claim upon which relief may be granted against defendants under Section 
1 of the Sherman Act, 15 U.S.C. 1.

II

Definitions

    As used in this Final Judgment:
    A. ``Agreement'' means any contract, arrangement, or understanding, 
whether oral or written, or any term or provision thereof, together 
with any modification or amendment thereto;
    B. ``Laminated tube'' means a collapsible, squeeze-to-use tubular 
package with a sideseam that consists of a body of multiple laminated 
plastic layers separated by a layer of either plastic or aluminum foil 
that serves as a barrier to moisture, light, gases, or other agents; a 
tube head attached to the body; and may include a cap;
    C. ``Laminated tube-making equipment'' means machinery, apparatus, 
or devices for making and/or assembling laminated tubes, including 
forming a tube head, sealing or otherwise connecting it to a laminated 
tube body, or capping the laminated tube;
    D. ``Laminated tube-making technology'' means any form of 
intellectual property relating to (i) the design, development, 
construction, or operation of laminated tube-making equipment or any 
component, feature, or use thereof; (ii) the fabrication of laminated 
tubes or any component

[[Page 34864]]

thereof; or (iii) the material used in making laminated tubes; but only 
to the extent such component, feature, use, or material relates to 
laminated tubes and not to other types of packaging;
    E. ``North America'' means the United States of America, Canada, 
and the United Mexican States.

III

Applicability

    This Final Judgment applies to each defendant; to each of its 
officers, directors, agents, employees, successors, assigns, 
subsidiaries, divisions, and any other organizational unit controlled 
by either defendant; and to all other persons in active concert or 
participation with any of them who shall have received actual notice of 
this Final Judgment by personal service or otherwise.

IV

Injunctive Relief

    Each defendant is enjoined and prohibited from:
    A. Maintaining, enforcing, carrying out, or claiming any right or 
operating under the 1987 License and Technical Assistance Agreement 
(LTAA) between American National Can Co. and KMK Karl Maegerle Lizenz 
AG;
    B. Collecting or attempting to collect any royalties, fees, or 
other payments under the LTAA for (i) the manufacture, sale, or use in 
North America of laminated tubes or laminated tube-making equipment or 
(ii) the license, sale, or use in North America of laminated tube-
making technology;
    C. Entering into, maintaining, enforcing, carrying out, or claiming 
any right under any agreement with any person who
    (1) Owns or has the right to use, license, and transfer laminated 
tube-making technology that restricts the right of any party to the 
agreement to use, license, or transfer in North America laminated tube-
making technology that it owns or has the right to use at the time of 
the agreement,
    (2) Manufactures or sells laminated tube-making equipment that 
restricts the right of any party to the agreement to manufacture or 
sell such equipment in North America using or incorporating only 
laminated tube-making technology that it owns or has the right to use 
at the time of the agreement, or
    (3) Manufactures or sells laminated tubes in North America that 
restricts the right of any party to the agreement to manufacture or 
sell, but not use, laminated tubes in North America.
    The prohibitions of this Section IV.C shall not apply to either 
defendant's acquisition of substantially all of any person's assets or 
voting securities relating to laminated tube-making equipment or 
technology, provided that (1) the defendant gives the Antitrust 
Division of the United States Department of Justice written notice of 
the proposed acquisition at least 30 days prior to its consummation, 
and (2) if within that 30-day period the Antitrust Division requests 
additional information and/or documentary material relevant to the 
proposed acquisition, the defendant extends the consummation thereof 
for at least an additional 20 days after the date on which the 
Antitrust Division receives all the information and documentary 
material requested from the defendant.

V

Notification

    Within 60 days of entry, each defendant shall provide a copy of 
this Final Judgment by mail or personal service to its officers, 
directors, and managerial employees responsible for defendant's 
laminated tubes and/or laminated tube-making equipment or technology 
businesses, and to its current laminated tube-making technology 
licenses in North America. Thereafter, each defendant shall distribute 
a copy of this Final Judgment to any new such officer, director, or 
managerial employee within 60 days of a person's assumption of duties 
as an officer, director, or manager of that defendant.

VI

Compliance Information

    A. To determine or secure compliance with this Final Judgment, from 
time to time, duly authorized representatives of plaintiff, upon 
written request of the Assistant Attorney General in charge of the 
Antitrust Division, or reasonable notice to a defendant at its 
principal office and subject to any lawful privilege, shall be 
permitted:
    1. Access during normal office hours to inspect and copy all books, 
ledgers, accounts, correspondence, memoranda, and other records and 
documents in the defendant's possession, custody, and control relating 
to any matters contained in this Final Judgment; and
    2. To interview the defendant's officers, employees, or agents 
regarding such matters, who may have counsel present, subject to the 
defendant's reasonable convenience but without its restraint or 
interference.
    B. Upon written request of the Assistant Attorney General in charge 
of the Antitrust Division to a defendant's principal office, and 
subject to any lawful privilege, the defendant shall submit such 
written reports, under oath if requested, relating to any matters 
contained in this Final Judgment, as may be requested.
    C. No information or documents obtained pursuant to this section 
shall be divulged by plaintiff to any person other than a duly 
authorized representative of the Executive Branch of the United States, 
except in the course of legal proceedings to which the United States is 
a party, or for the purpose of securing compliance with this Final 
Judgment, or as otherwise required by law.
    D. If at the time information or documents are furnished by a 
defendant to plaintiff, the defendant represents and identifies in 
writing the material in any such information or documents for which a 
claim of protection may be asserted under Rule 26(c)(7) of the Federal 
Rules of Civil Procedure, and the defendant marks each pertinent page 
of such material, ``subject to claim of protection under Rule 26(c)(7) 
of the Federal Rules of Civil Procedure,'' then plaintiff shall give 10 
days' notice to the defendant before divulging such material in any 
legal proceeding (other than a grand jury proceeding) to which the 
defendant is not a party.

VII

Retention of Jurisdiction

    Jurisdiction is retained by this Court for the purpose of enabling 
any party to this Final Judgment to apply to this Court at any time for 
further orders or directions as may be necessary or appropriate to 
implement or construe this Final Judgment, to modify or terminate any 
provision thereof, to enforce compliance therewith, and to punish 
violations thereof.

VIII

Term

    This Final Judgment shall expire ten years from the date of its 
entry.

IX

Public Interest

    Entry of this Final Judgment is in the public interest.
Dated:-----------------------------------------------------------------

Court approval subject to the Antitrust Procedures and Penalties 
Act, 15 U.S.C. 16.

----------------------------------------------------------------------
United States District Judge

Certificate of Service

    I hereby certify that copies of the foregoing Complaint, 
Stipulation (to which is attached a copy of a proposed Final Judgment), 
and Competitive Impact Statement were served this 25th day of June 
1996, by first class mail, postage prepaid, upon:


[[Page 34865]]


David Marx, Jr., Esq., McDermott, Will & Emory, 31st Floor, 227 West 
Monroe Street, Chicago, IL 60606-5096

Counsel for Defendant, American National Can Co.

C. Loring Jetton, Jr., Esq., Wilmer, Cutler & Pickering, 2445 M Street, 
N.W., Washington, D.C. 20037-1420

Counsel for Defendant KMK Maschinen AG.
Thomas H. Liddle,
Attorney, Antitrust Division, U.S. Department of Justice, 325 7th 
Street, N.W., Washington, D.C. 20530.

Competitive Impact Statement

    Pursuant to section 2(b) of the Antitrust Procedures and Penalties 
Act (15 U.S.C. 16(b), the United States of America hereby files this 
Competitive Impact Statement relating to the proposed Final Judgment 
submitted for entry in this civil antitrust action against American 
National Can Co. (``ANC'') and KMK Maschinen AG (``KMK'').

I

Nature and Purpose of the Proceeding

    The government filed this civil antitrust suit on June 25, 1996, 
alleging that defendants violated Section 1 of the Sherman Act by 
engaging in a combination and conspiracy that unreasonably restrains 
interstate trade and commerce in the manufacture of laminated tubes and 
laminated tube-making equipment, and in the license and transfer of 
related laminated tube-making technology. The Complaint alleges that 
this combination and conspiracy consisted of a series of continuing 
agreements between defendants, the purpose and effect of which was to 
eliminate competition between them in the North American markets for 
laminated tubes and laminated tube-making equipment and technology. 
Specifically, KMK agreed to sell its laminated tube-making equipment 
and license its related technology exclusively to ANC, and ANC 
purchased KMK's U.S. laminated tube-making facility. These agreements 
harmed competition in several ways:
    (a) They eliminated KMK as a competitor in the laminated tubes 
market, thereby reducing competition among tube manufacturers in the 
United States;
    (b) They precluded KMK from selling laminated tube-making equipment 
or from licensing laminated tube-making technology to persons other 
than ANC for 15 years, and gave ANC effective control over KMK's 
existing laminated tube-making equipment in North America, thereby 
reducing competition among equipment manufacturers in the United 
States; and
    (c) They gave ANC effective control over KMK's laminated tube-
making technology in North America, thereby reducing competition 
generally in the United States laminated tube, laminated tube-making 
equipment, and related technology markets.
    The complaint seeks: (1) A declaration that these agreements 
violate section 1 of the Sherman Act; and (2) an injunction preventing 
defendants from enforcing, maintaining, or renewing any such agreement 
or entering into or engaging in any other agreement having a similar 
purpose or effect.
    The United States and the defendants have stipulated that the Court 
may enter the proposed Final Judgment at any time after compliance with 
the Antitrust Procedures and Penalties Act, 15 U.S.C. 16 (b)-(h). Under 
the provisions of section 2(e) of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(e), the proposed Final Judgment may not be 
entered unless the Court finds that its entry is in the public 
interest.

II

The Practices and Events Giving Rise to the Alleged Sherman Act 
Violations

A. The Markets Involved

1. Laminated Tubes

    Laminated tubes are collapsible tubular containers of multiple, 
laminated plastic layers used to package virtually all toothpaste and 
many pharmaceutical products sold in the United States. These tubes 
preserve the product within a flexible tube without permitting air or 
moisture to enter the tube. Other packaging materials either cost more 
than or lack the barrier characteristics of laminated tubes. Thus, 
there are no viable economic substitutes for laminated tubes. Annual 
retail sales of such tubes in North America are about $110 million, or 
1.1 billion tubes, of which approximately 800 million are sold to 
toothpaste manufacturers; approximately 300 million are sold to 
pharmaceutical manufacturers and others.
    The market for laminated tubes is highly concentrated. Three 
companies manufacture over 95% of such tubes sold in the United States. 
ANC is the largest competitor with total sales comprising over 60% of 
the United States toothpaste tube market. There are only two other 
competitors in the United States that have 5% or more of the laminated 
tubes market. It is not economically feasible to ship laminated tubes 
into North America.
    Successful new entry into, or expansion within, the laminated tube 
market is difficult. To be successful, a new entrant must acquire 
expensive laminated tube-making equipment and essential, related 
patented and unpatented laminated tube-making technology. The up-front 
investment in plant, machinery, research, technology, and sales is 
substantial relative to the profit opportunity available in a commodity 
market like this one.

2. Laminated Tube-Making Equipment

    Laminated tube-making equipment consists of machinery used to 
manufacture laminated tubes. This equipment cannot efficiently be used 
for any other purpose, nor can other machines easily or efficiently be 
converted or adapted to make laminated tubes. Thus, there are no viable 
economic substitutes for this equipment.
    The market for laminated tube-making equipment is highly 
concentrated. Besides KMK, only two companies worldwide currently 
manufacture such equipment.
    KMK is, therefore, one of only a very few firms in the world that 
can provide laminated tube-making equipment for sale in the United 
States. KMK has sold such equipment worldwide, and its equipment enjoys 
a good reputation in the industry. KMK has numerous patents in 
countries around the world, including the United States.
    Successful new entry into, or expansion within, the market for 
laminated tube-making equipment is difficult. To be successful, a new 
entrant must acquire or develop essential patented and unpatented 
laminated tube-making technology. Such technology is expensive to 
acquire or develop relative to the sales opportunity for the equipment.

3. Laminated Tube-Making Technology

    The use of both patented and unpatented tube-making technology is 
essential to the profitable manufacture of laminated tubes and 
laminated tube-making equipment. There are only a few competing forms 
of such technology today, and KMK, ANC, and an affiliate of ANC's 
parent hold the rights to three of the four leading types of the 
technology worldwide.
    Development of new competitive technology would require substantial 
investment with highly uncertain returns. New entry into the laminated 
tube-making technology market cannot reasonably be expected in the 
foreseeable future.

[[Page 34866]]

B. Illegal Agreements
    In 1987, before entering into the agreements discussed below, both 
ANC and KMK were vertically integrated companies that owned rights to 
laminated tube-making technology, manufactured laminated tube-making 
equipment for use in the United States, and manufactured and sold 
laminated tubes in the United States.
    In late 1987, KMK and ANC entered into several agreements, the 
purpose and effect of which was to eliminate competition between them 
in the North American laminated tube and tube-making equipment markets.
    Pursuant to one of these agreements ANC purchased Swisspack 
Corporation, KMK's U.S. affiliate, for just under $15 million, although 
the laminated tube-making equipment covered by the transaction was 
valued at less than $5 million. As a result of its selling Swisspack to 
ANC, KMK exited the North American laminated tube market.
    On the same day ANC acquired Swisspack, ANC and KMK entered into a 
License and Technology Assistance Agreement (``LTAA''). Pursuant to 
that agreement, KMK gave ANC an exclusive license to use KMK's 
laminated tube-making technology, and an exclusive right to but its 
tube-making equipment, in North America (``exclusivity provision''). In 
exchange, ANC agreed to license any laminated tube-making technology 
and buy all laminated tube-making equipment for use in North America 
only from KMK, and not to acquire or use any third party's laminated 
tube-making equipment or technology there. At or about the time of 
these agreements, ANC discontinued the manufacture of laminated tube-
making equipment. By precluding KMK from selling laminated tube-making 
equipment or licensing laminated tube-making technology to others in 
North America, these agreements reduced competition in the North 
American laminated tube, laminated tube-making equipment, and laminated 
tube-making technology markets.
    Several yeas after entering into these agreements, ANC was acquired 
by Pechiney SA, a French company, one of whose existing subsidiaries, 
Cotuplas SA, manufactures laminated tube-making equipment. Since being 
acquired by Pechiney SA, ANC has obtained substantially all its 
laminated tube-making equipment from the Pechiney SA subsidiary. Until 
very recently, however, ANC has enforced the exclusivity provisions of 
the LTAA against KMK, preventing KMK, its equipment, and its technology 
from competing with ANC in North America. KMK brought these agreements 
to the attention of the United States and cooperated in its 
investigation; after learning that the United States had commenced its 
investigation into these agreements, ANC agreed with KMK not to 
interfere with KMK's right to sell its laminated tube-making equipment 
or to license its tube-making technology in North America.

III

Explanation of the Proposed Final Judgment and Its Anticipated Effect 
on Competition

A. Terms
    The proposed Final Judgment provides for injunctive relief that is 
intended to eliminate any residual anticompetitive effects of the 
restrictive agreements and other conduct challenged by the Complaint, 
and to prevent defendants from entering into similar agreements that 
would have the same effect. Section IV.A of the Final Judgment would 
terminate the defendants' 1987 LTAA and its exclusivity provisions, 
thus freeing KMK to sell or license its own laminated tube-making 
equipment and technology to anyone in North America. Section IV.B would 
bar defendants from collecting any payment from each other pursuant to 
the LTAA for the manufacture, sale, license, or use in North America of 
laminated tube-making equipment or technology.
    Section IV.C of the Judgment would enjoin each defendant from 
entering certain agreements that restrict the right of any party (i) to 
use, license, or transfer in North America laminated plastic tube-
making technology that the party owns or has the right to use at the 
time of the agreement, or (ii) to manufacture or sell laminated plastic 
tubes or tube-making equipment in North America, where such agreements 
likely would lessen competition among the parties. Such agreements 
would be barred if (i) at the time of the agreement both parties 
compete directly against each other in any of the three vertically 
related laminated plastic tube markets--i.e., technology, equipment, or 
tubes, and (ii) the restraint involved applies to that common market.
    For example, Section IV.C would prohibit either defendant from 
entering into an agreement with a tube-making equipment manufacturer 
that restricted any party from manufacturing or selling tube-making 
equipment in North America because both parties to such an agreement 
would be competitors in the tube-making equipment market. Section IV.C 
would not bar agreements that are essentially vertical in nature. For 
example, KMK and a company that does not manufacture tube-making 
equipment could enter into an agreement with KMK granting that company 
an exclusive right to use KMK's equipment in North America.
    Finally, Section IV.C would require that defendants give the 
Department of Justice notice of, and provide certain discovery rights 
concerning, any acquisition of a laminated plastic tube competitor that 
included an agreement not to compete. This notification will enable the 
Department to investigate and prevent any anticompetitive acquisition, 
including any transaction that does not require notification under the 
Hart-Scott-Rodino Act, before it takes place, and thus would prevent 
these parties from engaging in anticompetitive non-reportable transfers 
such as their 1987 transaction.
B. Effect on Competition
    The proposed Final Judgment will ensure that KMK will be able to 
compete in all three North American laminated plastic tube markets. KMK 
will be able to sell laminated plastic tubes, sell or lease tube-making 
equipment, and license or transfer laminate tube technology. Existing 
tube manufacturers will benefit from increased competition in the sale 
of laminate tube-making equipment and technology. New entrants into the 
North American laminated tube market now will have access to the 
requisite equipment and technology, which may lead to greater 
competition in the manufacture and sale of laminated tubes.
    To preserve incentives to enter for those firms who may be 
reluctant to make the requisite investment without exclusive rights to 
technology or equipment, the injunction against exclusive licenses or 
otherwise restrictive agreements would apply only to those with persons 
already competing in the same level of the laminated tube market 
(technology, equipment, or tubes) as the defendant.
    Similarly, to preserve important incentives to innovate, especially 
where a defendant is likely to be the primary source of the investment, 
the injunction would not bar that defendant from acquiring exclusive 
rights in laminated tube-making technology or equipment that is 
developed or marketed jointly with customers or suppliers, provided 
they are not also competitors in the same market level as that 
defendant.
    The injunctive provisions also would exempt restrictions on sale to 
third parties of equipment made for a particular customer incorporating 
that customer's own technology.

[[Page 34867]]

    Finally, prior notice to the Department of any acquisition by a 
defendant of a laminated tube competitor imposing non-compete 
obligations would ensure that the Department has an opportunity to get 
discovery and challenge any such arrangement deemed anticompetitive.

IV

Remedies Available to Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages suffered, as well as costs and reasonable attorney's fees. 
Entry of the proposed Final Judgment will neither impair nor assist the 
bringing of such actions. Under the provisions of section 5(a) of the 
Clayton Act, 15 U.S.C. 16(a), the Judgment has no prima facie effect in 
any subsequent lawsuits that may be brought against the defendants in 
the matter.

V

Procedures Available for Modification of the Proposed Judgment

    As provided by the Antitrust Procedures and Penalties Act, any 
person believing that the proposed Final Judgment should be modified 
may submit written comments to Mary Jean Moltenbrey, Chief, Civil Task 
Force, U.S. Department of Justice, Antitrust Division, 325 7th Street, 
NW., Suite 300, Washington, DC 20530, within the 60-day period provided 
by the Act. These comments, and the Department's responses, will be 
filed with the Court and published in the Federal Register. All 
comments will be given due consideration by the Department of Justice, 
which remains free, pursuant to a stipulation signed by the United 
States and defendants, to withdraw its consent to the proposed Judgment 
at any time prior to entry. Section VII of the proposed Final Judgment 
provides that the Court retains jurisdiction over this action, and the 
parties may apply to the Court for any order necessary or appropriate 
for modification, interpretation, or enforcement of the Final Judgment.

VI

Determinative Materials/Documents

    No materials or documents of the type described in section 2(b) of 
the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b), were 
considered by the United States in formulating the proposed Final 
Judgment. However, a letter, dated June 21, 1996, from plaintiff's 
counsel to counsel for defendant KMK, acknowledging KMK's right under 
current law to seek relief from the compliance provisions of Section VI 
in the event it believes a conflict has arisen between any request for 
information or documents under those provisions and foreign law, was 
considered determinative by KMK in agreeing to the proposed Judgment 
and is attached hereto as Exhibit A.

VII

Alternative to the Proposed Final Judgment

    The alternative to the proposed Final Judgment is a full trial on 
the merits. While the Department is confident it would succeed in such 
a trial, this case involves difficult issues of law and fact, as well 
as obvious risks and costs to the United States, and success is not 
certain. The Final Judgment to which the parties have agreed provides 
virtually all the relief the Government sought in its complaint, and 
that relief will fully and effectively open the markets involved to 
competition.

    Dated: June 25, 1996.
      Respectfully submitted,
Thomas H. Liddle,
Scott A. Scheele,
DC Bar No. 429061, Attorneys, U.S. Department of Justice, Antitrust 
Division, 325 7th Street, NW, Washington, DC 20530.

U.S. Department of Justice

Antitrust Division

Liberty Place Building, Washington, DC 20530

June 21, 1996.
MJM:RJZ
60-3083-0001

C. Loring Jetton, Jr., Esq.,
Wilmer, Cutler & Pickering, 2445 M Street, N.W., Washington, D.C. 
20037-1420, Fax (202) 663-6463.

Re: KMK Maschinen AG/Laminated Tubes

    Dear Mr. Jetton: During our negotiations of a consent decree in 
this case, you suggested the possibility that a conflict could arise 
between the compliance provisions in Section VI of the proposed 
decree, which authorize the Assistant Attorney General to inspect 
documents or conduct interviews and to request written reports, and 
laws or orders of foreign governments, which appear to prohibit 
compliance with such provisions. Of course, we would attempt to work 
with KMK to avoid any such conflict in exercising our rights under 
Section VI. In the event that we could not reach agreement with you, 
however, KMK would be free to seek relief from the decree court from 
its obligations to comply with any Section VI request. Under the 
principles set forth in Societe Internationale v. Rogers, 357 U.S. 
197 (1958) and its progeny, KMK would have the burden of showing 
that (1) compliance with the request is prohibited by foreign law, 
(2) KMK was not in any way responsible for creating the conflict 
between the judgment and foreign law, and (3) KMK has exercised its 
best efforts to obtain any waiver or permission from the foreign 
government and other relevant person(s) that would enable it to 
comply with the request.
      Sincerely yours,
Robert J. Zastrow,
Assistant Chief, Civil Task Force.
[FR Doc. 96-16889 Filed 7-2-96; 8:45 am]
BILLING CODE 4410-01-M