11328 Federal Register / Vol. 66, No. 37 / Friday, February 23, 2001 / Notices

1The Court entered the Hold Separate Stipulation

and Order on May 12, 2000.

Certificate of Service

I hereby certify under penalty of

perjury that a copy of the

COMPETITIVE IMPACT STATEMENT

has been served upon Aktiebolaget

Volvo; Volvo Trucks North America,

Inc.; Renault S.A.; Renault V.I.S.A.; and

Mack Trucks, Inc., by placing a copy of

the aforementioned document in the

U.S. Mail, directed to each of the abovenamed parties at the addresses given

below, this 6th day of February, 2001.

Aktiebolaget Volvo and Volvo, Trucks North

America, Inc., c/o Kevin Arquit, Esq.,

Clifford Chance Rogers & Wells LLP, 200

Park Avenue, New York, NY 10166–0153.

Renault S.A., Renault V.I.S.A. and Mack

Trucks, Inc., c/o Richard J. Urowsky, Esq.,

Sullivan & Cromwell, 125 Broad Street,

New York, NY 10004–2498.

Federick H. Parmenter,

Virginia Bar No.: 18184, Senior Trial

Attorney, U.S. Department of Justice,

Antitrust Division, 1401 H Street, NW.,

Suite 3000, Washington, DC 20530, (202)

307–0620.

[FR Doc. 01–4517 Filed 2–22–01; 8:45 am]

BILLING CODE 4410–11–M

DEPARTMENT OF JUSTICE

Antitrust Division

[Civil No. 00–CV–954 (RMU)]

Public Comments and Response on

Proposed Final Judgment United

States v. Alcoa Inc. and Reynolds

Metals Company

Pursuant to the Antitrust Procedures

and Penalties Act, 15 U.S.C. § 16(b)–(h),

the United States of America hereby

publishes below the comments received

on the proposed Final Judgment in

United States v. Alcoa Inc., et al., Civil

Action No. 00–CV–954 (RMU), filed in

the United States District Court for the

District of Columbia, together with the

United States’ response to the

comments.

Copies of the comments and response

are available for inspection in Room 215

of the U.S. Department of Justice,

Antitrust Division, 325 7th Street, NW.,

Washington, DC 20530, telephone: (202)

514–2481, and at the office of the Clerk

of the United States District Court for

the District of Columbia, United States

Courthouse, Third Street and

Constitution Avenue, NW., Washington,

DC 20001. Copies of any of these

materials may be obtained upon request

and payment of a copying fee.

Constance K. Robinson,

Director of Operations, Antitrust Division.

United States’ Response to Public

Comments

Pursuant to the requirements of the

Antitrust Procedures and Penalties Act

(‘‘APPA’’ or ‘‘Tunney Act’’), 15 U.S.C.

16(b)–(h), the United States hereby

responds to the two public comments

received regarding the proposed Final

Judgment in this case.

I. Background

On May 3, 2000, the United States

filed a civil antitrust complaint alleging

that the proposed acquisition by Alcoa

Inc. (‘‘Alcoa’’) of Reynolds Metals

Company (‘‘Reynolds’’) would, if

consummated, violate Section 7 of the

Clayton Act, 15 U.S.C. 18. The

Complaint alleged that the proposed

merger would substantially lessen

competition in the refining and sale of

both smelter grade alumina (‘‘SGA’’),

which is used to produce aluminum

ingots, and chemical grade alumina

(‘‘CGA’’ or ‘‘hydrate’’), an ingredient

used in numerous industrial and

consumer products. This competition

has benefited consumers through lower

prices and higher output. The proposed

merger of Alcoa and Reynolds would

substantially increase the concentration

of the SGA and CGA markets, and the

loss of competition would substantially

enhance Alcoa’s control over the prices

of SGA and CGA, while also increasing

the likelihood of anticompetitive

coordination among the few remaining

competitors in the SGA and CGA

markets.

Simultaneously with the filing of the

Complaint, the United States filed a

proposed Final Judgment and Hold

Separate Stipulation and Order that

would permit Alcoa to complete its

acquisition of Reynolds, but would

require divestitures to preserve

competition in the relevant markets.1

The proposed Final Judgment requires

Alcoa and Reynolds to divest all of

Reynolds’ interest in the Worsley Joint

Venture, established by agreement dated

February 7, 1980, and subsequently

amended (the ‘‘Worsley Interest’’) and

all assets, interests, and rights owned by

Reynolds at Reynolds’ alumina refinery

located near Corpus Christi, Texas, that

are used or held for use for alumina

refining (the ‘‘Corpus Christi Assets’’)

(collectively referred to as the

‘‘Divestiture Assets’’) to an acquirer or

acquirers acceptable to the Antitrust

Division of the Department of Justice

(‘‘DOJ’’ or ‘‘Department’’). The Worsley

Interest must be divested within two

hundred seventy (270) days after the

filing of the Complaint, or five (5) days

after notice of entry of the Final

Judgment by the Court, whichever is

later. The Corpus Christi Assets must be

divested within one hundred eighty

(180) days after the filing of the

Complaint, or five (5) days after notice

of entry of the Final Judgment by the

Court, whichever is later.

Until the required divestitures are

completed, the terms of a Hold Separate

Stipulation and Order entered into by

the parties apply to ensure that the

Divestiture Assets shall be maintained

and operated as independent, ongoing,

economically viable, and active

competitors in the manufacture and sale

of SGA and CGA.

On December 14, 2000, the United

States notified Alcoa, pursuant to Part

VI of the proposed Final Judgment, that

it had no objection to Alcoa’s proposed

sale of the Corpus Christi Assets to BPU

Reynolds, Inc., and no objection to

Alcoa’s proposed sale of the Worsley

Interest to Billiton plc.

The United States, Alcoa and

Reynolds have stipulated that the

proposed Final Judgment may be

entered after compliance with the

APPA. In compliance with the APPA,

the United States filed the Competitive

Impact Statement (‘‘CIS’’) in this docket

on June 6, 2000. The Complaint,

proposed Final Judgment and CIS were

published in the Federal Register on

June 21, 2000. The 60-day comment

period required by the APPA has now

expired with the United States having

received two comments: one from the

American Antitrust Institute and one

from Mr. Charles A. Stille.

II. Response to the Public Comments

A. Legal Standard Governing the Court’s

Public Interest Determination

The Tunney Act directs the Court to

determine whether entry of the

proposed Final Judgment ‘‘is in the

public interest.’’ 15 U.S.C. 16(e). In

making that determination, the ‘‘court’s

function is not to determine whether the

resulting array of rights and liabilities is

one that will best serve society, but only

to confirm that the resulting settlement

is within the reaches of the public

interest.’’ United States v. Western Elec.

Co., 993 F.2d 1572, 1576 (D.C. Cir.),

cert. denied, 510 U.S. 984 (1993). The

Court should evaluate the relief set forth

in the proposed Final Judgment and

should enter the Judgment if it falls

within the government’s ‘‘rather broad

discretion to settle with the defendant

Federal Register / Vol. 66, No. 37 / Friday, February 23, 2001 / Notices 11329

2Section IV.I. also provides protections against

Alcoa’s using any agreements with the purchaser or

purchasers to prevent them from competing to the

fullest extent against Alcoa:

None of the terms of any agreement between the

purchaser or purchasers and Defendants, including

any joint venture, governance, operation or

shareholder agreements, shall give Defendants the

ability to limit the purchaser’s capacity or output,

to raise a purchaser’s costs, to lower a purchaser’s

efficiency, or otherwise to interfere in the ability of

the purchaser or purchasers to compete effectively.

3For example, in Fiscal Year 1999 and 2000, the

Department resolved 38 merger cases by consent

decree, 36 of which involved divestitures.

within the reaches of the public

interest.’’ United States v. Microsoft

Corp., 56 F.3d 1448, 1461 (D.C. Cir.

1995); accord United States v.

Associated Milk Producers, 534 F.2d

113, 117–18 (8th Cir.), cert. denied, 429

U.S. 940 (1976). The Court should

review the proposed Final Judgment ‘‘in

light of the violations charged in the

complaint and * * * withhold approval

only (a) if any of the terms appear

ambiguous, (b) if the enforcement

mechanism is inadequate, (c) if third

parties will be positively injured, or (d)

if the decree otherwise makes a

‘mockery of judicial power.’’’

Massachusetts Sch. of Law at Andover,

Inc. v. United States, 118 F.3d 776 783

(D.C. Cir. 1997) (quoting Microsoft, 56

F.3d at 1462). The Tunney Act does not

empower the Court to reject the

remedies in the proposed Final

Judgment based on the belief that ‘‘other

remedies were preferable,’’ Microsoft, 56

F.3d at 1460, nor does it give the Court

authority to impose different terms on

the parties. See, e.g., United States v.

American Tel. & Tel. Co., 552 F. Supp

131, 153, n.95 (D. D.C. 1982) (‘‘AT&T’’),

aff’d sub nom. Maryland v. United

States, 460 U.S. 1001 (1983) (mem.);

accord H.R. Rep. No. 93–1463, at 8

(1974).

B. Response to American Antitrust

Institute

The American Antitrust Institute

(‘‘AAI’’) is ‘‘pleased’’ with the proposed

Final Judgment but requests a second

round of public comment once specific

buyers have been found for the

Divestiture Assets. AAI expresses

concern that Alcoa will sell the assets to

a ‘‘weak or otherwise inappropriate

buyer’’ and believes that an additional

round of comments ‘‘will help us avoid

this result.’’

The Department objects to AAI’s

proposed second round of comments for

three principal reasons. First, such a

procedure would be inconsistent with

procedures that courts have routinely

applied in reviewing proposed Final

Judgments. Second, such a procedure is

unnecessary given the incentives and

ability that the Department has to assure

that divestitures are accomplished in a

manner that protects competition.

Third, the procedure proposed by AAI

would itself create problems that might

make divestitures in antitrust cases

more difficult to accomplish.

1. The Tunney Act was enacted in

1974. Since that time, the Department

has negotiated hundreds of consent

decrees in merger cases that call for the

divestiture of assets. In each instance,

the public has been accorded an

opportunity to comment upon the terms

of the proposed Final Judgment. Often

the court has proceeded to review and

then enter the proposed Final Judgment

before the purchaser of the to-bedivested assets has been selected,

relying upon the Department to monitor

the divestiture process. The Department

has been unable to identify a single

instance in which a court deferred entry

of a proposed Final Judgment that was

otherwise in the public interest in order

to receive a second round of comments

regarding the divestiture selection

process.

AII has offered no basis for subjecting

this case to a different process. Without

explanation, AAI contends that the

Department is subject to ‘‘institutional

pressure’’ to accept ‘‘any typically

competent buyer’’ and argues that this is

not a ‘‘sufficiently high standard.’’ Yet,

the test that the Department will apply

to prospective purchasers in this case is

no different than it applies in any other

case. The Department is no less

interested in assuring the preservation

of competition in the SGA and CGA

markets than is AAI, but AAI has simply

provided the Court with no reason to

deviate from the procedures that are

routinely followed in other cases that

are subject to the Tunney Act.

2. The procedures urged upon the

Court by AAI are unnecessary because

the Department has the incentives and

ability to assure that the divestiture

process is conducted in a proper

manner. After concluding that the

proposed transaction between Alcoa

and Reynolds would be anticompetitive,

the Department agreed to the proposed

Final Judgment as a way to preserve the

competition that existed prior to Alcoa’s

acquisition of Reynolds. Accordingly,

the proposed Final Judgment is

designed to ensure that the buyers of the

divested assets will compete effectively

against Alcoa and others in the industry,

and the Department conducts a

thorough investigation, as described

below, before approving any particular

purchaser.

The proposed Final Judgment

contains provisions that (1) give the

United States sole approval of the

purchaser(s) of all the divested assets,

(2) set forth the standards that the

United States applies in evaluating

proposed purchasers, and (3) require

defendants Alcoa and Reynolds to

provide information to the United States

about the process undertaken by the

defendants to select a buyer, as well as

requiring information from defendants

and the prospective purchaser for

evaluation of the purchaser.

With regard to the standards that the

proposed buyers must satisfy to be

approved by the United States, Section

IV.I. of the Proposed Final Judgment

states:

The divestitures, whether pursuant to

Section IV or Section V of this Final

Judgment, shall be made to a purchaser or

purchasers with respect to whom it is

demonstrated to the United States’ sole

satisfaction that (a) the purchaser or

purchasers have the intent to compete

effectively in the refining and sale of SGA or

CGA; and (b) the purchaser or purchasers

have the managerial, operational, and

financial capability to compete effectively in

the refining and sale of SGA or CGA.

The proposed Final Judgment also

gives the United States the means to

obtain information necessary to assess

the process by which the buyer or

buyers are selected, the capability of the

buyers, and the transaction terms.

Section VI.A. states that notice shall be

given that:

[S]ets forth the details of the proposed

transaction and lists the name, address, and

telephone number of each person not

previously identified who offered to, or

expressed an interest in or a desire to,

acquire any ownership interest in the

business to be divested that is the subject of

the binding contract, together with full

details of the same.

One the United States receives such

notice, Section VI.B. provides that:

The United States, in its sole discretion,

may request from Defendants, the trustee, the

proposed purchaser or purchasers, or any

other third party additional information

concerning the proposed divestitures, the

proposed purchaser or purchasers, and any

other potential purchaser.

The provision also establishes

deadlines by which time the

information must be provided.2

After obtaining notice that the

defendants have entered into a proposed

transaction with a prospective

purchaser of the divested assets, the

Department begins an investigation into

the transaction and prospective

purchaser to review the selection

process and analyze the managerial and

financial ability of each purchaser.3

Typically, Department staff requests

from the defendants detailed

information about the transaction, any

previous or ongoing association with the

11330 Federal Register / Vol. 66, No. 37 / Friday, February 23, 2001 / Notices

4 In addition to these provisions requiring that

information be provided to the United States,

Section X.A.1. of the proposed Final Judgment

obligates Alcoa and Reynolds to permit compliance

inspections by representatives of the Department of

Justice of their ‘‘books, ledgers, accounts,

correspondence, memoranda, and other records and

documents in the possession or under the control

of the Defendants * * * relating to any matters

contained in this Final Judgment and the Hold

Separate Stipulation and Order.’’ Pursuant to

Section X.A.2., the United States may also

interview, informally or on the record, ‘‘officers,

employees, and agents * * * regarding any such

matters.’’ Section X.B. states that: ‘‘Upon the

written request of the Assistant Attorney General in

charge of the Antitrust Division, Defendants shall

submit written reports, under oath if requested,

with respect to any of the matters contained in this

Final Judgment and the Hold Separate Stipulation

and Order.’’

5For example, the Department reviews a

prospective purchaser’s business plan. Disclosure of

such information could itself be anticompetitive by

revealing to the defendants the purchaser’s strategy

for competing against them. It is precisely to guard

against this risk that Section X.C. of the proposed

Final Judgment provides protections against

disclosure of the information obtained by the

United States in the course of the approval process.

purchaser, and financial information

about the assets. From the purchaser,

staff typically will obtain financial

statements, the proposal business plan,

financing plans, and information about

the proposed purchaser’s assets.

Interviews of relevant personnel, other

bidders, competitors, and investment

bankers are also often conducted. The

Department’s team of lawyers,

economists, and financial analysts

examines this information and makes a

recommendation to approve or

disapprove the purchaser. This

recommendation typically whether the

purchaser has the operational,

managerial, and financial capacity to

compete effectively over the long term,

and whether the purchase agreement is

free of any terms that might limit the

purchaser’s ability to compete

effectively. This recommendation is

reviewed within the Department and

approved or disapproved. The parties

are informed of the decision and, only

if the decision is positive, may they

proceed with the sale.

Other provisions permit the United

States to review Alcoa’s and Reynolds’

adherence to the proposed Final

Judgment’s terms, both before and after

the divestitures occur, by imposing

obligations on Alcoa and Reynolds to

provide information about their

compliance with the proposed Final

Judgment’s divestiture provisions.

Section VII.A. requires periodic

affidavits ‘‘as to the fact and manner of

compliance with Section IV or Section

V of this Final Judgment.’’ The affidavits

must include specific information about

the defendants’ attempts to solicit a

purchaser or purchasers for the divested

assets.4

In sum, the proposed Final

Judgment’s provisions empower the

United States to review and approve the

proposed purchaser or purchasers of the

assets to be divested, and with these

provisions, the United States is able to

ensure that the purchasers of the assets

are capable of competing effectively in

the relevant markets. The various factors

that AAI suggests are relevant to

assessing a proposed purchaser,

including ‘‘financial strength,

operational experience, and

management quality of the new owners,

as well as their history of competitive

(or collusive) behavior,’’ are examined

by the United States under the

provisions of the proposed Final

Judgment.

3. The procedures proposed by AAI

could actually have a counterproductive

effect of making divestitures more

difficult to accomplish. In conducting

its investigation of proposed

divestitures, the Department routinely

obtains and relies upon highly sensitive

competitive and financial information

that a proposed purchaser is willing to

provide to the Department on a

confidential basis but would not be

willing to make available publicly. The

procedure envisioned by AAI, requiring

the Department to provide a public

explanation of why it approved a

particular purchaser so that the public

could comment, would inevitably

require the Department to disclose such

information, even though disclosure of

such information could itself be

competitively undesirable.5

Moreover, the procedures proposed

by AAI would potentially delay the

achievement of effective remedies to

anticompetitive mergers. A second

round of comments could delay entry of

the proposed Final Judgment, which

would extend the divestiture deadlines

contained therein.

Any needless delay in the

consummation of the divestitures would

deny the public the benefits of the

competition contemplated by the

proposed Final Judgment.

A second round of public comment

would also risk involving the Court in

an inquiry that is not envisioned by the

Tunney Act. Courts have repeatedly

held that it is not within the ‘‘public

interest’’ standard of Tunney Act to

determine the ‘‘best’’ remedy or buyer.

See Western Electric, 999 F.2d at 1516

(‘‘the court’s function is not to

determine whether the resulting array of

rights and liabilities ‘‘is one that will

best serve society,’’ but only to confirm

that the resulting ‘‘settlement is, within

the reaches of the public interest.,

(citing and quoting United States v.

Bechtel Corp., 648 F.2d 660, 666 (9th

Cir. 1981).’’) There is no suggestion in

the AAI request that the public

comment process would be confined to

consideration of the purchaser approved

by the Department; indeed its comments

suggest that it would want the

Department to provide information from

which AAI could evaluate the

competitive potential of all potential

buyers and urge the Court to secondguess the Department’s decision. This is

not an inquiry contemplated by the

Tunney Act. See Microsoft, 56 F.3d at

1461.

For all of the foregoing reasons, the

Court should reject AAI’s proposal for a

second round of public comments.

C. Response to Mr. Stille

Mr. Stille questions whether Alcoa, as

the world’s largest aluminum company,

is a monopoly and whether there is

competition in the aluminum industry

in the United States, but does not

provide a basis to reject the proposed

Final Judgment. In its investigation into

what Mr. Stille refers to as the overall

‘‘aluminum industry,’’ the Department

determined that the industry consists of

numerous separate product markets

with varying geographic dimensions—

some are local, some are worldwide.

The Department then assessed the

competitive implications of the loss of

an independent Reynolds in those

markets in which the merging firms

compete with each other. After a

thorough investigation, the Department

concluded that competition would

likely be substantially lessened in two

markets, the worldwide for SGA and the

North American market for CGA.

Accordingly, the Department brought a

case alleging that anticompetitive effects

would be likely in those markets, and

obtained relief in those markets

designed to remedy the competitive

harms posed by the proposed

acquisition. Mr. Stille’s comment does

not offer any basis to conclude that the

relief obtained is inadequate to redress

the harm alleged in the complaint.

Because he argues for a case—one

focused on the ‘‘aluminum industry’’—

different from the one that the

Department brought and does not

address the relief ordered by the

proposed Final Judgment, Mr. Stille’s

comment raises issues not relevant to

this Tunney Act proceeding. The

Tunney Act does not contemplate a

judicial reevaluation of the

government’s determination of which

violations to allege in the Complaint.

‘‘Constitutional questions * * * would

be raised if courts were to subject the

government’s exercise of its

Federal Register / Vol. 66, No. 37 / Friday, February 23, 2001 / Notices 11331

1See Robert Pitofsky, ‘‘The Nature and Limits of

Restructuring in Merger Review’’ (Feb. 17, 2000), or

at http://www.ftc.gov/speeches/pitofsky/

restruct.htm.

2 Ibid., note 13, citing Richard G. Parker, ‘‘Global

Merger Enforcement’’ (Sept. 28, 1999), available at

http://www.ftc.gov/speeches/other/barcelona.htm.

3Federal Trade Commission Bureau of

Competition Staff, ‘‘A Study of the Commission’s

Divestiture Process’’ (1999).

4As reported in the press release announcing the

1999 study of the divestiture process, William Baer,

then director of the FTC’s Bureau of Competition,

assessed the study as follows: ‘‘The study confirms

the importance of one of the approaches currently

being used by the Commission, the so-called ‘upfront buyer,’ where the buyer of the assets to be

divested is identified earlier in the process. The use

of the up-front buyer both reduces the likelihood

that consumers will be harmed while waiting for

the divestiture, and also assures that there will be

an acceptable buyer.’’

prosecutorial discretion to nondeferential review.’’ Massachusetts Sch.

of Law at Andover, Inc., 118 F.3d at 783

(citing Microsoft, 56 F.3d at 1457–59).

The government’s decision not to bring

a particular case based on the facts and

law before it at a particular time, like

any other decision not to prosecute,

‘‘involves a complicated balancing of a

number of factors which are peculiarly

within [the government’s] expertise.’’

Heckler v. Chaney, 470 U.S. 821, 831

(1985). Thus, the Court may not look

beyond the Complaint ‘‘to evaluate

claims that the government did not

make and to inquire as to why they were

not made.’’ Microsoft, 56 F.3d at 1459;

see also Milk Producers, 534 F.3d at

117–18.

The legal precedent discussed above

holds that the scope of a Tunney Act

proceeding is limited to whether entry

of this particular proposed Final

Judgment, agreed to by the parties as

settlement of this case, is in the public

interest. Thus, the entry of a

governmental antitrust decree forecloses

no private party from seeking and

obtaining appropriate antitrust remedies

for defendants’ activities. Defendants

will remain liable for any illegal acts,

and any private party may challenge

such conduct if and when appropriate.

III. Conclusion

After careful consideration of the

comments, the United States concludes

that entry of the proposed Final

Judgment will provide an effective and

appropriate remedy for the antitrust

violation alleged in the Complaint and

is in the public interest. The United

States will move the Court to enter the

proposed Final Judgment after the

public comments and this Response

have been published in the Federal

Register, as 15 U.S.C. 16(d) requires.

For Plaintiff United States of America:

Dated: January 16th, 2001.

Respectfully submitted,

Janet R. Urban,

Maryland Bar #222–32–2468.

Mark S. Hegedus,

D.C. Bar #435525.

Andrew K. Rosa,

Hawaii Bar #6366.

Michelle J. Livingston,

D.C. Bar #461268.

Trial Attorneys,

U.S. Department of Justice, Antitrust

Division, 325 Seventh Street, NW., Suite 500,

Washington, DC 20530, (202) 307–6470, (202)

307–2441 (facsimile).

Certificate of Service

I hereby certify that I have caused a

copy of the foregoing United States’

Response to Public Comments to be

served on counsel for Defendants in this

matter in the manner set forth below:

By first class mail, postage prepaid, and by

facsimile: Mark Leddy, Cleary, Gottlieb,

Steen & Hamilton, 2000 Pennsylvania

Avenue, NW., Washington, DC 20006–

1801.

Michael H. Byowitz, Wachtell, Lipton, Rosen

& Katz, 51 West 52nd Street, New York, NY

10019–6150.

January 16, 2001.

Andrew K. Rosa,

Hawaii Bar #6366, Trial Attorney, Antitrust

Division, U.S. Department of Justice, 325

Seventh Street, NW., Suite 500,

Washington, DC 20530, (202) 307–0886,

(202) 616–2441 (fax).

The American Antitrust Institute

June 22, 2000.

Roger Fones, U.S. Department of Justice, 325

Seventh Street, NW, Suite 500,

Washington, DC 20530.

Dear Mr. Fones: We are writing to convey the

comments of The American Antitrust

Institute regarding the proposed Final

Judgment in United States of America v.

Alcoa Inc. and Reynolds Metals Company

(U.S. District Court, District of Columbia,

Civil Action Number 1:00CV00954). Prior to

a decision in that case, please publish these

comments in the Federal Register, along with

the Government’s responses to them,

pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. 16(b)–(h).

We are pleased that the proposed Final

Judgment (in conjunction with the European

Commission’s requirement) would have the

defendants sell off all of Reynolds’ current

alumina-refining capacity as a condition of

the lawful merger of these two companies. As

one can see from the AAI’s monograph

analyzing the competitive impact of this

merger, previously provided to the Antitrust

Division of the U.S. Department of Justice

(http://www.antitrustinstitute.org, 2/23 link

under ‘‘Recent Activities’’), we focused on

the alumina market in our own analysis,

because we feel that this market is where the

merger poses the largest competitive threat.

Whether the proposed settlement of this

investigation will preserve competition in the

alumina market, however, cannot be

determined at this time. The United States

chose to condition its approval of the merger

only on certain ‘‘divestitures’’ in the abstract,

without having first approved particular

buyers for the divested assets, as the antitrust

agencies have sometimes done in other

mergers. Given that decision, we would ask

the Justice Department and the Court to allow

a second phase of public comment once

specific buyers have been found for the

divested assets. At this point, the

institutional pressure is great for the Justice

Department to accept any typically

competent buyer of the assets, and in this

industry we feel that that may not be a

sufficiently high standard. A second—

possibly quite brief—public comment period

would help insure that a higher standard is

reached.

As Federal Trade Commission Chairman

Robert Pitofsky noted in a February 17, 2000,

speech about restructuring (including

divestitures) in the merger-review process,

‘‘the Commission in recent years has often

insisted on knowing who the buyer or buyers

[of divested assets] are likely to be, and on

seeing the buyers’ business plan,’’ before

entering a consent agreement.1 Indeed,

Chairman Pitofsky noted, ‘‘[a] buyer up-front

is now required in about 60% of Commission

divestitures.’’2

In our view, this is a laudable trend.

Consider the conclusions of a 1999 study

conducted by the FTC’s Bureau of

Competition in collaboration with the Bureau

of Economics, which Chairman Pitofsky

discussed in his February speech. The study

reviewed 35 orders entered into between

1990 and 1994 that required the divestiture

of assets as a result of FTC action, and

determined which ones had succeeded in

creating viable operations in the relevant

market.3 The result, according to Chairman

Pitofsky, was that ‘‘[i]n those instances in

which divestiture did not work out, it usually

was because the seller engaged in strategic

conduct to seek out marginally effective

buyers . . . or buyers, because of

informational disadvantages and lack of

experience in the particular markets

involved, were unduly optimistic about their

ability to compete effectively with the

acquired assets.’’ In other words, ineffective

divestitures are generally caused by a poor

selection of buyers.4

This is precisely our concern in the Alcoa/

Reynolds case. We believe the new owners of

the divested alumina refineries must be able

to run them at least as efficiently as Reynolds

has done in the past, and must be at least as

well-positioned as Reynolds has been to

compete with Alcoa for alumina sales, in

order to insure against diminished

competition. These determinations must be

made on a case-by-case basis, considering the

financial strength, operational experience,

and management quality of the new owners,

as well as their history of competitive (or

collusive) behavior. Our research suggests

that Alcoa is an unusually well-managed

company in an industry where poor, highcost, tradition-bound management is not

uncommon. Thus, many of the potential

buyers of the divested assets might have high

overhead costs or unsophisticated

management practices that would prevent

them from competing meaningfully against a

newly strengthened Alcoa.

Moreover, a buyer’s suitability depends on

what it is likely to do with its new alumina

11332 Federal Register / Vol. 66, No. 37 / Friday, February 23, 2001 / Notices

capacity. Will it sell at least as much alumina

to third parties as Reynolds did, or will it use

more of the alumina in its own aluminum

smelter? To the extent that the alumina is

used internally, will it simply substitute for

third-party alumina that the owner

previously purchased on the open market, or

will it be used to expand aluminum

production? The answers to such questions

are buyer-specific, and could dramatically

affect the future competitive dynamics of the

aluminum industry.

For the above reasons, we once again urge

the United States to allow some form of

public comment on the proposed Final

Judgment after buyers are found for the

divested assets, even if the comment period

is relatively brief. This is an industry with

huge barriers to entry, relatively few large

players, highly inelastic demand, and a

history of antitrust problems. We cannot

afford to tip the scales in an anticompetitive

direction by allowing Alcoa to find weak or

otherwise inappropriate buyers for the assets

it is being asked to divest. A public

explanation of the Government’s reasons for

approving specific buyers and a brief public

comment on the buyers will help us avoid

this result.

Sincerely,

Albert Foer,

President, American Antitrust Institute.

Matthew Siegel,

Research Fellow, American Antitrust

Institute.

cc: The District Court for the District of

Columbia, The Hon. Joel Klein, Assistant

Attorney General for Antitrust.

700 S. Courthouse Road, Arlington, VA,

22204, June 8, 2000.

Ms. Janet Reno, Attorney General, The

Department of Justice, Constitution Avenue

at 10th Street, NW, Washington, DC 20530.

Dear Ms. Reno: One wonders why the

federal government will permit the

Aluminum Company of America (ALCOA) to

take over Reynolds Metals Company

(REYNOLDS).

On May 15, 1911, the Supreme Court

dissolved Standard Oil Company.

The 13-year-old lawsuit against AT&T by

the Justice Department was settled on

January 8, 1982.

Now, the Justice Department is trying to

break-up Microsoft Corporation.

If the above mentioned companies were

and are monopolies, why isn’t ALCOA

included in that category, since it will

become the world’s largest aluminum

producer? Where is the competition in the

aluminum industry in the United States.

Sincerely,

Charles A. Stille.

[FR Doc. 01–4516 Filed 2–22–01; 8:45 am]

BILLING CODE 4410–11–M

DEPARTMENT OF LABOR

Office of the Secretary

Submission for OMB Review;

Comment Request

February 16, 2001.

The Department of Labor (DOL) has

submitted the following public

information collection requests (ICRs) to

the Office of Management and Budget

(OMB) for review and approval in

accordance with the Paperwork

Reduction Act of 1995 (Pub. L. 104–13,

44 U.S.C. Chapter 35). A copy of each

individual ICR, with applicable

supporting documentation, may be

obtained by contacting the Department

of Labor. To obtain documentation

contact Darrin King at (202) 693–4129 or

E-Mail King-Darrin@dol.gov.

Comments should be sent to Office of

Information and Regulatory Affairs,

Attn: OMB Desk Officer for ETA, Office

of Management and Budget, Room

10235, Washington, DC 20503 ((202)

395–7316), within 30 days from the date

of this publication in the Federal

Register.

The OMB is particularly interested in

comments which:

• Evaluate whether the proposed

collection of information is necessary

for the proper performance of the

functions of the agency, including

whether the information will have

practical utility;

• Evaluate the accuracy of the

agency’s estimate of the burden of the

proposed collection of information,

including the validity of the

methodology and assumptions used;

• Enhance the quality, utility, and

clarity of the information to be

collected; and

• Minimize the burden of the

collection of information on those who

are to respond, including through the

use of appropriate automated,

electronic, mechanical, or other

technological collection techniques or

other forms of information technology,

e.g., permitting electronic submission of

responses.

Type of Review: Extension of a

currently approved collection.

Agency: Employment and Training

Administration (ETA).

Title: One-Stop Labor Market

Information Grant Plan and Progress

Reports.

OMB Number: 1205–0417.

Affected Public: State, Local, or Tribal

Government and Federal Government.

Frequency: Annually and semiannually.

Number of Respondents: 54.

Number of Annual Responses: 162.

Estimated Time Per Response: 36

hours to prepare and submit an annual

plan and 6 hours to prepare and submit

a semi-annual progress report.

Total Burden Hours: 2,592.

Total Annualized Capital/Startup

Costs: $0.

Total Annual Costs (operating/

maintaining systems or purchasing

services): $0.

Description: ETA is requesting OMB

approval for a grant annual plan

narrative and two progress reports as

part of the requirements for receiving

One-Stop Labor Market Information

(OS/LMI) core products and services

reimbursement.

Type of Review: Extension of a

currently approved collection.

Agency: Employment and Training

Administration (ETA).

Title: One-Stop Occupational

Employment Statistics Survey Plan and

Progress Reports.

OMB Number: 1205–0418.

Affected Public: State, Local, or Tribal

Government and Federal Government.

Frequency: Annually and semiannually.

Number of Respondents: 54.

Number of Annual Responses: 162.

Estimated Time Per Response: 36

hours to prepare and submit an annual

plan and 6 hours to prepare and submit

a semi-annual progress report.

Total Burden Hours: 2,592.

Total Annualized Capital/Startup

Costs: $0.

Total Annual Costs (operating/

maintaining systems or purchasing

services): $0.

Description: ETA is requesting OMB

approval for a grant annual narrative

and two progress reports as part of the

requirements for receiving One-Stop

Occupational Employment Statistics

survey grant.

Ira L. Mills,

Departmental Clearance Officer.

[FR Doc. 01–4499 Filed 2–22–01; 8:45 am]

BILLING CODE 4510–30–M

DEPARTMENT OF LABOR

Employment Standards

Administration, Wage and Hour

Division

Minimum Wages for Federal and

Federally Assisted Construction;

General Wage Determination Decisions

General wage determination decisions

of the Secretary of Labor are issued in

accordance with applicable law and are

based on the information obtained by

the Department of Labor from its study

of local wage conditions and data made