67254 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Notices

Locust Street, St. Louis, Missouri

63166–2034:

1. Hardin County Bancorp, Inc.,

Rosiclare, Illinois; to become a bank

holding company by acquiring 100

percent of the voting shares of State

Bank of Rosiclare, Rosiclare, Illinois.

Board of Governors of the Federal Reserve

System, December 20, 2001.

Robert deV. Frierson,

Deputy Secretary of the Board.

[FR Doc. 01–31875 Filed 12–27–01; 8:45 am]

BILLING CODE 6210–01–S

FEDERAL TRADE COMMISSION

Remedial Use of Disgorgement

AGENCY: Federal Trade Commission

(FTC or Commission).

ACTION: Notice; request for comments.

SUMMARY: The Commission is requesting

comments on the use of disgorgement as

a remedy for violations of the HartScott-Rodino (HSR) Act, FTC Act and

Clayton Act.

DATES: Comments must be received by

March 1, 2002.

ADDRESSES: Public comments are

invited, and may be filed with the

Commission in either paper or

electronic form. An original and one (1)

copy of any comments filed in paper

form should be submitted to the

Document Processing Section, Office of

the Secretary, Room 159–H, Federal

Trade Commission, 600 Pennsylvania

Avenue, NW., Washington, DC 20580. If

a comment contains nonpublic

information, it must be filed in paper

form, and the first page of the document

must be clearly labeled ‘‘confidential.’’

Comments that do not contain any

nonpublic information may instead be

filed in electronic form (in ASCII

format, WordPerfect, or Microsoft Word)

as part of or as an attachment to email

messages directed to the following email

box: disgorgementcomment@ftc.gov.

FOR FURTHER INFORMATION CONTACT: John

Graubert, Office of General Counsel,

FTC, 600 Pennsylvania Avenue, NW.,

Washington, DC 20580, (202) 326–2186,

jgraubert@ftc.gov.

SUPPLEMENTARY INFORMATION: The

Commission has considerable

experience with the use of monetary

equitable remedies in consumer

protection cases. In contract, the

Commission has considered

disgorgement or other forms of

monetary equitable relief in fewer

competition matters and obtained

disgorgement in two recent matters, FTC

v. Mylan Laboratories, et al. and FTC v.

The Hearst Trust et al. The Commission

accordingly solicits comments on the

factors the Commission should consider

in applying this remedy and how

disgorgement should be calculated. The

Commission is not re-examining its

statutory authority to seek disgorgement

or other monetary equitable relief in

competition cases.

Comments may address any or all of

the following questions. However, other,

related comments are also welcome:

1. Are there particular violations of

the Clayton Act, the HSR Act, the

competition provisions of the FTC Act,

or final orders of the Commission in

competition cases where disgorgement

would be especially appropriate or, in

contrast, less useful? Should the resort

to disgorgement depend on whether, in

conjunction with an HSR Act violation

or order violation, the underlying

transaction or conduct constitutes an

illegal acquisition under section 7 of the

Clayton Act, or constitutes

monopolization or attempted

monopolization under section 5 of the

Federal Trade Commission Act?

2. How should the Commission

calculate the amount of disgorgement

appropriate for particular law violations

under each of the statutes? For example,

if the Commission sought disgorgement

for violations of the HSR Act, how

should disgorgement be calculated

when the unlawful gain includes (or

consists solely of) tax savings, stock

market profits, or other gain not directly

related to antitrust injury? Should

disgorgement be calculated to remove

all profits earned from the acquisition,

all profits attributable to antitrust harm,

or some other approach? How should

the Commission assess benefits obtained

in an unlawful acquisition, or other

transaction, that do not flow directly

from immediate injury to customers,

e.g., where the violator reduces its

investments in future technology

because of a reduction in the

competition it faces? Is the approach

used to calculate disgorgement in S.E.C.

v. First City Financial Corporation, Ltd.,

890 F.2d 1215 (D.C. Cir. 1989),

appropriate for the Commission’s use?

3. What other factors should the

Commission consider in determining

whether to seek disgorgement? How

should the Commission weight and

what is the relevance to the Commission

of the following factors in determining

whether to seek disgorgement: (i) The

impact that seeking such a remedy may

have on other aspects of any settlement

negotiations, e.g., delay in obtaining

divestiture or other structural relief; (ii)

the adequacy of other forms of relief

(including civil penalties); (iii) the

egregiousness of the conduct at issue;

(iv) the extent of harm to the market

generally or to indirect purchasers who

may be unable to pursue a claim; (v) the

ability of an affected party to secure

relief independently of the Commission,

e.g., by private actions; (vi) the

advantages or disadvantages of litigation

in federal court rather than in an

administrative proceeding; and (vii) the

possible tradeoff between addressing

past harm more thoroughly (through

disgorgement) and an interest in

obtaining relief quickly (through a

conduct or structural remedy) so as to

limit the effects of a continuing

violation?

4. Should pending or potential private

litigation, actions by state attorneys

general, or civil or criminal prosecution

by the Antitrust Division of the

Department of Justice, affect the

Commission’s decision to seek

disgorgement? Is this decision any

different from the Commission’s

decision to seek other equitable relief,

e.g., divestiture, in cases where other

related private or public litigation exists

or its possible? Will Commission

disgorgement claims encourage or

discourage the decision of private

parties or states to bring or continue

litigation, or settlement negotiations, in

such cases? If so, what would the

ultimate effect on consumer welfare be

under each such scenario?

5. In light of the fact that

disgorgement and restitution have

distinct theoretical underpinnings and

equitable rationales, are there

circumstances in competition cases in

which one or the other of these

remedies is more appropriate? What are

the considerations that should inform

such decisions?

6. When and how should

disgorgement funds recovered by the

Commission be distributed as restitution

when there is parallel private litigation?

For example, should any recovery of

disgorgement or restitution by the

Commission affect the calculation of or

be used to pay attorney’s fees in parallel

litigation, and, if so, in what way? In

any restitution program, how should

direct and indirect purchasers be

treated? How should the Commission

proceed if its own action and parallel

private action are not consolidated

before a single judge?

The Commission is also interested in

learning about parties’ experiences in

analogous circumstances involving

disgorgement with other federal or state

agencies and in other enforcement areas.

By direction of the Commission.

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Notices 67255

Dated: December 19, 2001.

Donald S. Clark,

Secretary.

[FR Doc. 01–31885 Filed 12–27–01; 8:45 am]

BILLING CODE 6750–01–M

FEDERAL TRADE COMMISSION

[File No. 021 0002]

INA-Holding Schaeffler KG, et al.;

Analysis 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 or

deceptive acts or practices or unfair

methods of competition. The attached

Analysis to Aid Public Comment

describes both the allegations in the

draft complaint that accompanies the

consent agreement 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 January 22, 2002.

ADDRESSES: Comments filed in paper

form should be directed to: FTC/Office

of the Secretary, Room 159–H, 600

Pennsylvania Avenue, NW.,

Washington, DC 20580. Comments filed

in electronic form should be directed to:

consentagreement@ftc.gov, as

prescribed below.

FOR FURTHER INFORMATION CONTACT: Nick

Koberstein, FTC, Bureau of

Competition, 600 Pennsylvania Avenue,

NW., Washington, DC 20580, (202) 326–

2743.

SUPPLEMENTARY INFORMATION: Pursuant

to section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46(f), and section 2.34 of the

Commission’s rules of practice, 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 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

December 21, 2001), on the World Wide

Web, at ‘‘http://www.ftc.gov/os/2001/

12/index.htm.’’ A paper copy can be

obtained from the FTC Public Reference

Room, Room 130–H, 600 Pennsylvania

Avenue, NW., Washington, DC 20580,

either in person or by calling (202) 326–

2222.

Public comments are invited, and may

be filed with the Commission in either

paper or electronic form. Comments

filed in paper form should be directed

to: FTC/Office of the Secretary, Room

159–H, 600 Pennsylvania Avenue, NW.,

Washington, DC 20580. If a comment

contains nonpublic information, it must

be filed in paper form, and the first page

of the document must be clearly labeled

‘‘confidential.’’ Comments that do not

contain any nonpublic information may

instead be filed in electronic form (in

ASCII format, WordPerfect, or Microsoft

Word) as part of or as an attachment to

email messages directed to the following

email box: consentagreement@ftc.gov.

Such comments will be considered by

the Commission and will be available

for inspection and copying at its

principal office in accordance with

section 4.9(b)(6)(ii) of the Commission’s

rules of practice, 16 CFR 4.9(b)(6)(ii)).

Analysis of Agreement Containing

Consent Orders To Aid Public Comment

The Federal Trade Commission

(‘‘Commission’’) has accepted, subject to

final approval, an Agreement

Containing Consent Orders (‘‘Consent

Agreement’’) from INA-Holding

Schaeffler KG (‘‘INA’’) and FAG

Kugelfischer Georg Scha ̈fer AG (‘‘FAG’’),

which is designed to remedy the

anticompetitive effects resulting from

INA’s acquisition of FAG. Under the

terms of the Consent Agreement, INA

and FAG will be required to divest

FAG’s cartridge ball screw support

bearing (‘‘CBSSB’’) business. FAG’s

CBSSB business will be divested to

Aktiebolaget SKF (‘‘SKF’’), and will take

place no later than twenty (20) business

days from the date on which INA begins

its acquisition of FAG.

The proposed Consent Agreement has

been placed on the public record for

thirty (30) days for receipt of comments

by interested persons. Comments

received during this period will become

part of the public record. After thirty

(30) days, the Commission will again

review the proposed Consent Agreement

and the comments received, and will

decide whether it should withdraw from

the proposed Consent Agreement or

make final the Decision and Order.

Pursuant to a cash tender offer

announced on September 13, 2001, INA

proposes to acquire all of the

outstanding shares of FAG. The total

value of the transaction is

approximately $650 million. The

Commission’s Complaint alleges 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 Federal

Trade Commission Act, as amended, 15

U.S.C. 45, in the worldwide market for

the research, development, manufacture

and sale of CBSSBs.

FAG and INA are the only two

suppliers of CBSSBs in the world.

CBSSBs are critical components in

many industrial machine tools, and are

utilized by machine tool original

equipment manufacturers (‘‘OEMs’’)

around the world. Machine tools are

machines that are used in the

production of other equipment, and

include grinding machines, milling

machines, and laser drilling and cutting

systems. Machine tool OEMs utilize

CBSSBs to reduce the friction associated

with the rotation of a rolling screw. This

rotation is used to control linear motion

for accurate positioning, and is vital to

the proper functioning of certain

machine tools. Although other types of

bearings can be used to accomplish this

purpose, CBSSBs are easier, less

expensive, and less time intensive to

use than the potential alternatives.

CBSSBs also allow end users of machine

tools to replace the bearings easily,

quickly and without incurring

substantial cost. Moreover, once a

machine tool is designed with CBSSBs,

the process of switching to an

alternative type of bearing would

require a costly and time consuming

redesign of the tool. For these reasons,

it is highly unlikely that OEMs, or end

users, would switch from CBSSBs to

alternative technologies even if CBSSB

prices increased significantly.

The global market for CBSSBs is

highly concentrated. If the proposed

acquisition is consummated, the

combined firm would monopolize the

worldwide market for CBSSBs. Prior to

the acquisition, INA and FAG frequently

competed against each other for CBSSB

business, and this competition

benefitted CBSSB customers. By

eliminating competition between the

two competitors in this highly

concentrated market, the proposed

acquisition would allow the combined

firm to exercise market power

unilaterally, thereby increasing the

likelihood that purchasers of CBSSBs

would be forced to pay higher prices

and that innovation, service levels, and

product quality in this market would

decrease.

There are significant impediments to

new entry into the CBSSB market. A

new entrant into the CBSSB market

would need to undertake the difficult,

expensive and time-consuming process

of researching and developing a line of

CBSSB products, acquiring the

necessary production assets, and

developing the expertise needed to