Public Comments and Response on Proposed Final Judgment, 28527-28549 [E9-13549]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 74, Number 114 (Tuesday, June 16, 2009)]
[Notices]
[Pages 28527-28549]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-13549]


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DEPARTMENT OF JUSTICE

Antitrust Division


Public Comments and Response on Proposed Final Judgment

    Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 
16(b)-(h), the United States hereby publishes below the comments 
received on the proposed Final Judgment in United States et al. v. 
Republic Services, Inc. and Allied Waste Industries, Inc., No. 1:08-CV-
02076-RWR, which were filed in the United States District Court for the 
District of Columbia on May 14, 2009, together with the response of the 
United States to the comments.
    Copies of the comments and the response are available for 
inspection at the Department of Justice Antitrust Division, 325 Seventh 
Street, NW., Room 200, 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, 333 Constitution Avenue, NW., 
Washington, DC 20001. Copies of any of these materials may be obtained 
upon request and payment of a copying fee.

Patricia Brink,
Deputy Director of Operations, Antitrust Division.

United States District Court for the District of Columbia

    United States of America, State of California, Commonwealth of 
Kentucky, State of Michigan, State of North Carolina, State of Ohio, 
Commonwealth of Pennsylvania, and State of Texas, Plaintiffs, v. 
Republic Services, Inc., and Allied Waste Industries, Inc., 
Defendants.

Civil Action No.: 1:08-cv-02076
Judge: Hon. Richard W. Roberts
Description: Antitrust
Date Stamp: May 14, 2009

Response of the United States to Public Comments on the Proposed Final 
Judgment

    Pursuant to the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h) (``APPA'' or ``Tunney Act''), the 
United States hereby responds to five public comments received 
regarding the proposed Final Judgment in this case. After careful 
consideration of the five comments, the United States continues to 
believe that the proposed Final Judgment will provide an effective and 
appropriate remedy for the antitrust violations alleged in the 
Complaint. The United States will move the Court for entry of the 
proposed Final Judgment after the public comments and this Response 
have been published in the Federal Register, pursuant to 15 U.S.C. 
16(d).

I. Procedural History

    On December 3, 2008, the United States and the State of California, 
Commonwealth of Kentucky, State of Michigan, State of North Carolina, 
State of Ohio, Commonwealth of Pennsylvania, and State of Texas (the 
``States'') filed the Complaint in this ma tter, alleging that 
defendant Republic Services, Inc.'s (``Republic'') acquisition of 
defendant Allied Waste Industries, Inc. (``Allied''), if permitted to 
proceed, would combine two of only a few significant providers of small 
container commercial waste collection or municipal solid waste 
(``MSW'') disposal services in several markets in violation of Section 
7 of the Clayton Act, 15 U.S.C. 18. Simultaneously, the United States 
filed a proposed Final Judgment and a Hold Separate Stipulation and 
Order signed by the United States, the States and the defendants 
consenting to the entry of the proposed Final Judgment after compliance 
with the requirements of the APPA.
    Pursuant to those requirements, a Competitive Impact Statement 
(``CIS'') also was filed in this Court on December 3, 2008; the 
proposed Final Judgment and CIS were published in the Federal Register 
on December 16, 2008, see 73 FR 76,383 (2008); and a summary of the 
terms of the proposed Final Judgment and CIS, together with directions 
for the submission of written comments relating to the proposed Final 
Judgment, was published for seven days in The Washington Post on 
December 31, 2008 through January 6, 2009. The defendants filed the 
statement required by 15 U.S.C. 16(g) on April 24, 2009. The 60-day 
public comment period ended on March 9, 2009; five comments were 
received, as described below and attached hereto.

II. The Investigation and Proposed Resolution

    After Republic and Allied announced their plans to merge, the 
United States Department of Justice (the ``United States'') conducted 
an extensi ve investigation into the competitive effects of the 
proposed transaction. As part of this investigation, the United States 
obtained documents and information from the merging parties and others 
and conducted more than 600 interviews with customers, competitors, and 
other individuals knowledgeable about the industry. The investigative 
staff carefully analyzed the information provided and thoroughly 
considered all of the issues presented. The United States considered 
the potential competitive effects of the transaction on small container 
commercial waste collection or MSW disposal services in a number of 
geographic areas, obtaining information about these services and these 
areas from market participants. The United States concluded that the 
combination of Republic and Allied likely would lessen competition in 
small container commercial waste collection or MSW disposal services in 
15 separate geographic markets.

[[Page 28528]]

    Small container commercial waste collection service is the 
collection of MSW from commercial businesses such as office and 
apartment buildings and retail establishments (e.g., stores and 
restaurants) for shipment to, and disposal at, an approved disposal 
facility. Because of the type and volume of waste generated by 
commercial accounts and the frequency of service required, haulers 
organize commercial accounts into routes, and generally use specialized 
equipment to store, collect, and transport MSW from these accounts to 
approved MSW disposal sites. This equipment (e.g., one- to ten-cubic-
yard containers for MSW storage, and front-end load vehicles commonly 
used for collection and transportation of MSW) is un iquely well suited 
to providing small container commercial waste collection service. 
Providers of other types of waste collection services (e.g., 
residential, hazardous waste, and roll-off services) are not good 
substitutes for small container commercial waste collection firms. In 
these types of waste collection efforts, firms use different waste 
storage equipment (e.g., garbage cans or semi-stationary roll-off 
containers) and different vehicles (e.g., rear-load, side-load, or 
roll-off trucks), which, for a variety of reasons, cannot be used 
conveniently or efficiently to store, collect, or transport MSW 
generated by commercial accounts and, hence, rarely are used on small 
container commercial waste collection routes. In the event of a small 
but significant increase in price for small container commercial waste 
collection services, customers would not switch to any other 
alternative.
    A number of Federal, State, and local safety, environmental, 
zoning, and permit laws and regulations dictate critical aspects of 
storage, handling, transportation, processing and disposal of MSW. In 
order to be disposed of lawfully, MSW must be disposed in a landfill or 
incinerator permitted to accept MSW. Anyone who attempts to dispose of 
MSW in an unlawful manner risks severe civil and criminal penalties. In 
some areas, landfills are scarce because of significant population 
density and the limited availability of suitable land. Accordingly, 
most MSW generated in these areas is burned in an incinerator or taken 
to transfer stations where it is compacted and transported on tractor 
trailer trucks to a more distant, permanent MSW disposal site. A 
transfer station is an intermediate disposal site for processing and 
temporary storage of MSW before transfer in bulk to more distant 
landfills or incinerators for final disposal.
    Because of the strict laws and regulations that govern MSW 
disposal, there are no good substitutes for MSW disposal in landfills, 
incinerators, or at transfer stations located near the source of the 
waste. Firms that do not offer MSW disposal cannot gain significant 
sales from MSW haulers by offering lower prices. MSW disposal generally 
occurs in localized markets. Because of transportation costs and travel 
time to more distant MSW disposal facilities, a substantial percentage 
of the MSW generated in an area is disposed of at nearby landfills or 
transfer stations. In the event that a local disposal facility imposed 
a small but significant increase in the price of disposal of MSW, 
haulers of MSW generated in that area could not profitably turn to more 
distant disposal sites.
    After its investigation, the United States concluded that the 
proposed transaction would lessen competition in the provision of non-
franchised small container commercial waste collection or MSW disposal 
services in 15 areas: Los Angeles, California; San Francisco, 
California; Denver, Colorado; Atlanta, Georgia; northwestern Indiana; 
Lexington, Kentucky; Flint, Michigan; Cape Girardeau, Missouri; 
Charlotte, North Carolina; Cleveland, Ohio; Philadelphia, Pennsylvania; 
Greenville-Spartanburg, South Carolina; Fort Worth, Texas; Houston, 
Texas; and Lubbock, Texas. In each of these areas, Republic and Allied 
are two of only a few significant firms providing small container 
commercial waste collection or MSW disposal services.
    As explained more fully in the Complaint and the CIS, this loss of 
competition would result in consumers paying higher prices and 
receiving fewer services for the collection and disposal of MSW. 
Complaint ] 23 et seq.; CIS ] II(B). As alleged in the Complaint, the 
proposed acquisition of Allied by Republic would remove a significant 
competitor in small container commercial waste collection and MSW 
disposal services in already highly concentrated and difficult-to-enter 
markets. Complaint ] 25. In each of these markets, the resulting 
substantial increase in concentration, loss of competition, and absence 
of any reasonable prospect of significant new entry or expansion by 
market incumbents likely would result in higher prices for small 
container commercial waste collection or MSW disposal services. Id.
    The proposed Final Judgment is designed to preserve competition in 
each of the 15 affected geographic markets. It requires Republic and 
Allied to divest a total of 87 commercial waste hauling routes, nine 
landfills and 10 transfer stations, together with ancillary assets and, 
in three cases, access to landfill disposal capacity. The divestiture 
provisions of the proposed Final Judgment will eliminate the 
anticompetitive effects of the acquisition in small container 
commercial waste collection and MSW disposal services in each of these 
areas. The divestiture of these assets to an independent, economically 
viable competitor will ensure that users of these services in each 
market will continue to receive the benefits of competition that 
otherwise would be lost.

III. Summary of Public Comments and the Response of the United States

    During the 60-day public comment period, the United States received 
comments from: (1) The Center for a Competitive Waste Industry 
(``CCWI''); (2) Ms. June Guidotti; (3) the Pennsylvania Independent 
Waste Haulers Association (``PIWHA''); (4) Metro Disposal; and (5) the 
Cuyahoga County Solid Waste District. The comments are attached in the 
accompanying Appendix and are summarized below. After reviewing the 
five comments, the United States continues to believe that the proposed 
Final Judgment is in the public interest.

A. Public Comment From the CCWI

1. Summary of the CCWI's Comment
    The CCWI, through its attorney David Balto, asserts that ``[t]he 
DOJ must strengthen the [proposed Final Judgment] to remedy the 
significant competitive problems posed by this merger.'' CCWI Comment, 
at 1. The CCWI comment may be summarized in eight points.
    First, the CCWI argues that ``[t]here should be divestitures of 
assets in both the [small container commercial waste collection] and 
[municipal solid waste] disposal markets in local affected geographic 
areas not named in the [proposed Final Judgment].'' CCWI Comment, at 
14.
    Second, the CCWI argues that ``[b]ecause [the] markets consist of 
oligopolies' [sic] with lock holds on local landfills, which create 
bottlenecks that impede new entry, divested assets should be sold to 
independent haulers with the right to contract for airspace in the 
merger companies' landfills.'' Id. In effect, the CCWI requests that 
the proposed Final Judgment be modified to preclude the sale of assets 
to the top five municipal solid waste companies.
    Third, instead of the divestiture of landfills to qualified 
purchasers, the

[[Page 28529]]

CCWI seeks a modification to the proposed Final Judgment that would 
give independent haulers nondiscriminatory access to landfills. CCWI 
Comment, at 11-12.
    Fourth, the CCWI advocates for additional airspace disposal rights 
to be included in the proposed Final Judgment. CCWI Comment, at 9.
    Fifth, the CCWI asserts that the proposed Final Judgment should be 
``modified to immediately impose the use of a monitor trustee to ensure 
compliance with the order,'' citing to a prior case for support. CCWI 
Comment, at 6-7.
    Sixth, the CCWI advocates for the inclusion of certain behavioral 
remedies in the proposed Final Judgment, stating that ``[u]se of the 
merged companies' evergreen contracts ought to be discontinued, 
especially in their term lengths, renewal provisions, liquidated 
damages, and escalator clauses.'' CCWI Comment, at 14. The CCWI cites 
to a prior consent decree that contained such behavioral relief. Id. at 
7.
    Seventh, the CCWI proposes that ``the goal of encouraging new 
entrants in the commercial waste hauling industry will be better served 
by requiring the divested assets in each individual market to be 
offered for sale individually rather than in a package,'' such as the 
requirements in the proposed Final Judgment relating to the sale of 
Divestiture Assets in Atlanta, Georgia; Cleveland, Ohio; Philadelphia, 
Pennsylvania; and Fort Worth, Texas. CCWI Comment, at 10.
    Lastly, the CCWI asserts that the proposed Final Judgment departs 
from past enforcement actions by allowing Republic to acquire an asset, 
the Newnan Transfer Station, that Allied previously was required to 
divest as a condition of the Allied/BFI merger in 1999.\(1)\ CCWI 
Comment, at 6.
2. Response of the United States to CCWI's Comment
a. The Final Judgment Need Not Remedy Competitive Concerns Not 
Addressed in the Complaint
    The CCWI's comment that the United States should have alleged harm 
to competition in small container commercial waste collection and MSW 
disposal services in other areas is outside the scope of this Tunney 
Act proceeding. As explained by this Court, in a Tunney Act proceeding, 
the district court should not second-guess the prosecutorial decisions 
of the United States regarding the nature of the claims brought in the 
first instance; ``rather, the court is to compare the complaint filed 
by the United States with the proposed consent decree and determine 
whether the proposed decree clearly and effectively addresses the 
anticompetitive harms initially identified.'' United States v. Thomson 
Corp., 949 F. Supp. 907, 913 (D.D.C. 1996); accord United States v. 
Microsoft Corp., 56 F.3d 1448, 1459 (D.C. Cir. 1995) (in APPA 
proceeding, ``district court is not empowered to review the actions or 
behavior of the Department of Justice; the court is only authorized to 
review the decree itself ''); United States v. BNS Inc., 858 F.2d 456, 
462-63 (9th Cir. 1988) (``the APPA does not authorize a district court 
to base its public interest determination on antitrust concerns in 
markets other than those alleged in the government's complaint''). This 
Court has held that ``a district court is not permitted to `reach 
beyond the complaint to evaluate claims that the government did not 
make and to inquire as to why they were not made.' '' United States v. 
SBC Commc'ns, Inc., 489 F. Supp. 2d 1, 14 (D.D.C. 2007) (quoting 
Microsoft, 56 F.3d at 1459).
    The CCWI's suggestion that the 2004 Amendments to the Tunney Act 
require a more extensive review of the United States's exercise of its 
prosecutorial judgment conflicts with this Court's holding in SBC 
Communications. In SBC Communications, this Court held that ``a close 
reading of the law demonstrates that the 2004 amendments effected 
minimal changes, and that this Court's scope of review remains sharply 
proscribed by precedent and the nature of [APPA] proceedings.'' SBC 
Commc'ns, 489 F. Supp. 2d at 11. This Court explained that because 
``review [under the 2004 amendments] is focused on the `judgment,' it 
again appears that the Court cannot go beyond the scope of the 
complaint.'' Id.
    In short, the Tunney Act, as amended in 2004, requires the Court to 
evaluate the effect of the ``judgment upon competition'' as alleged in 
the Complaint. In this case, therefore, the remedy in the proposed 
Final Judgment must correspond to the harm to competition in small 
container commercial waste collection and MSW disposal services in the 
15 geographic markets identified in the Complaint. See 15 U.S.C. 
16(e)(1)(b). Because the United States did not allege that Republic's 
acquisition of Allied would cause competitive harm in additional 
markets, it is not appropriate for the Court to determine whether the 
acquisition will have anticompetitive effects in other regions of the 
country.
b. There Is No Evidence That Selling Assets to an Appropriate Large 
National Firm Would Be Less Competitive Than a Sale to a Smaller Firm
    The United States has carefully considered the CCWI's concern that 
divested assets should be sold only to regional haulers, but 
respectfully disagrees. The United States does not have any evidence 
that would lead it to conclude categorically that the divestiture of 
assets to a large national waste firm would be less competitive than a 
sale to a small regional firm. In fact, larger firms might enjoy some 
competitive advantages, such as better access to capital and more 
extensive experience, that might make them more formidable competitors 
than regional haulers.
    The proposed Final Judgment does not require Republic to accept a 
particular offer, only that any Acquirer of the divested assets meet 
the conditions set out in Paragraph IV(I)(1) and (2). These provisions 
require the divested assets to be sold to a purchaser who ``has the 
intent and capability (including the necessary managerial, operational, 
technical, and financial capability) of competing effectively in the 
disposal or hauling business.'' The divestitures in the proposed Final 
Judgment thus are designed to preserve competition in the marketplace.
c. Divestiture of an Entire Landfill Is Essential to Restoring 
Competition to Pre-Merger Levels
    The CCWI states that ``the [proposed Final Judgment] should be 
modified to confer upon independent haulers * * * the legal right to 
acquire 15-year contracts for space in Republic/Allied landfills in all 
markets that are highly concentrated under the Merger Guidelines, or at 
least the 15 markets that are the subject of the [proposed Final 
Judgment].'' CCWI Comment, at 9. Essentially, the CCWI argues against 
the sale of complete landfill assets to a prospective purchaser, 
preferring instead to carve landfills into separate, discrete portions 
to be made available to independent waste haulers. The United States 
has considered this issue and has determined that such relief is 
contrary to the public interest. As stated in the U.S. Department of 
Justice Antitrust Division's Policy Guide to Merger Remedies, the 
United States believes it is important that a divestiture include all 
assets necessary for a purchaser to be an effective, stand-alone long-
term competitor. See U.S. Dep't of Justice, Antitrust Division Policy 
Guide to Merger Remedies, Sec.  III(B) (2004) (``Remedies Guide''). 
Under the CCWI

[[Page 28530]]

proposal, the proposed relief would interfere with a landfill owner's 
ability to manage and operate the assets successfully. In particular, a 
landfill owner typically attempts to capture as much volume pursuant to 
long-term contracts under the requisite permits. The profitability of a 
landfill depends upon a variety of factors, including the volume 
disposed at the site on a daily basis. Under the CCWI's proposal, the 
landfill owner no longer would have control over critical operational 
elements of the landfill, such as determining the price charged for 
disposal services, establishing the duration of contracts, and managing 
expected daily volumes at the facility. The CCWI proposal would create 
uncertainty as to whether the landfill assets would be fully utilized, 
as independent haulers might not remain in business over the life of a 
divested landfill. Predicting which small container commercial waste 
collection service provider would use what capacity over the life of 
the landfill would be nearly impossible. Thus, this proposed remedy 
could jeopardize the competitive significance of the landfill assets.
    The proposed remedy proffered by the CCWI also would require the 
United States to oversee and enforce contracts between the defendants 
and non-vertically integrated MSW haulers for an undetermined period of 
time. As stated in the Remedies Guide, structural remedies, such as 
those in the proposed Final Judgment, are preferred in merger cases 
because they are relatively clean and certain, and generally avoid 
managing or regulating the merged firm's post-merger business conduct. 
Remedies Guide Sec.  III(A). For the reasons identified above, the 
CCWI's proposal would be more difficult, cumbersome, and costly to 
administer. The United States believes that the remedies in the 
proposed Final Judgment will address the alleged competitive harm more 
effectively and preserve competition in each of the affected areas.
d. No Additional Airspace Disposal Rights Are Necessary
    The CCWI argues for the inclusion of additional landfill disposal 
rights or ``airspace rights'' in the Final Judgment.\(2)\ Simply 
because the proposed Final Judgment includes additional airspace rights 
in Houston, Texas, Northwest Indiana, and Philadelphia, Pennsylvania, 
the CCWI argues that such relief is warranted in other areas. The 
United States conducted a case-by-case analysis of the specific facts 
in each market. In eight areas in which the United States determined 
the acquisition would result in competitive harm in the market for MSW 
disposal Charlotte, North Carolina; Greenville-Spartanburg, South 
Carolina; Fort Worth, Texas; Denver, Colorado; San Francisco, 
California; Los Angeles, California; Cleveland, Ohio; and Flint, 
Michigan the proposed Final Judgment requires the divestiture of an 
entire landfill. In two other areas Atlanta, Georgia and Cape 
Girardeau, Missouri transfer stations are the preferred option for MSW 
disposal because the distance to landfills makes them an unattractive 
option for the direct haul of MSW. In as much as MSW disposal 
competitors permanently utilize transfer stations, the divestiture of 
transfer stations in these areas is sufficient to remedy the 
competitive harm in MSW disposal.\(3)\ In the Philadelphia, 
Pennsylvania, Northwest Indiana, and Houston, Texas areas, the proposed 
Final Judgment requires the defendants to sell airspace rights at the 
buyer's option. These airspace rights generally were intended as an 
option during a transitional period to assist an Acquirer who might not 
yet have a plan for final MSW disposal. If the proposed buyer already 
has an ultimate disposal option(s) in a market, it is not required to 
purchase these airspace rights.
    In the Philadelphia area, the proposed Final Judgment requires the 
divestiture of the Girard Point Transfer Station and the Philadelphia 
Recycling and Transfer Station, as well as, at the option of the 
Acquirer, airspace rights at Republic's Modern Landfill for a period of 
18 months. Proposed Final Judgment ] II(H)(1)(j). These airspace rights 
are designed to assist an Acquirer that may not have an ultimate 
disposal option for a transitional period.
    In the Northwest Indiana area, the proposed Final Judgment requires 
the divestiture of Allied's Valparaiso Transfer Station, various small 
container commercial waste collection assets, and, at the option of the 
Acquirer, airspace rights at Allied's Newton County Development 
Corporation Landfill (``Newton County Landfill'') for a two-year 
period. Proposed Final Judgment ] II(H)(1)(i). Pre-merger, both Allied 
and Republic owned a transfer station in this area. The proposed Final 
Judgment requires the sale of Allied's Valparaiso Transfer Station, 
which will preserve pre-merger competition. With regard to landfill 
options, pre-merger, both Republic and Allied operate landfills in the 
area--Republic's Forest Lawn Landfill and Allied's Newton County 
Landfill. Because Republic's Forest Lawn Landfill is expected to be 
open for only two more years, the proposed Final Judgment requires the 
sale of airspace capacity at Allied's Newton County Landfill for the 
expected remaining life of the Forest Lawn Landfill at the Acquirer's 
option. Therefore, the remedy preserves competition that otherwise 
would be lost as a result of the merger.
    In the Houston, Texas area, the proposed Final Judgment requires 
the divestiture of Republic's Hardy Road Transfer Station, Republic's 
Seabreeze Environmental Landfill, 32 Republic small container 
commercial waste collection routes, and, at the option of the Acquirer, 
airspace rights at Allied's Blue Ridge Landfill for a ten-year period. 
Proposed Final Judgment ]] II(H)(2)(f) & II(I)(6). The United States 
sought airspace rights at Allied's Blue Ridge Landfill, because the 
landfill may be a more convenient and cost-efficient disposal option 
for the divested hauling routes in the southern and western areas of 
Houston and Harris County. The Houston divestiture package in the 
proposed Final Judgment is comparable to the remedy in United States v. 
USA Waste Service,\(4)\ in which the Modified Final Judgment required 
divestiture of Waste Management, Inc.'s (``WMI'') Hardy Road Transfer 
Station, USA Waste's Brazoria County Landfill, 31 WMI small container 
commercial waste collection routes, and, at the option of the Acquirer, 
airspace rights at WMI's Atascocita or Security landfills for a period 
of ten years. Republic used its prior purchase of the group of assets 
to compete effectively and grow its business in the Houston, Texas 
area. Therefore, the remedy is sufficient to preserve competition in 
this area.
e. A Monitoring Trustee Is Unnecessary
    The CCWI emphasizes the need for a monitoring trustee in this case. 
A monitoring trustee would be responsible for reviewing a defendant's 
compliance with its decree obligations to sell the assets as a viable 
enterprise to an acceptable purchaser and to abide by injunctive 
provisions to hold separate certain assets from a defendant's other 
business operations. The CCWI cites to United States v. Computer 
Associates Int'l \(5)\ as support for its contention that additional 
oversight is needed to ensure compliance with the proposed Final 
Judgment.
    The United States has considered the CCWI's position and 
respectfully disagrees. In Computer Associates, a trustee was appointed 
at the outset to sell the divested assets because the United States had 
reason to believe that the parties would not effectuate the 
divestitures in a timely manner. Here, the United States had no reason 
to

[[Page 28531]]

believe that the defendants would not comply promptly with the 
divestiture requirements of the proposed Final Judgment, and the 
defendants have done so. The CCWI 's conclusion that a monitoring 
trustee is necessary in this matter rests on an assumption that the 
United States's own monitoring efforts will not suffice, and it is 
counter to the position stated in the Remedies Guide on the use of 
monitoring trustees in merger-related actions.
    Remedies Guide Sec.  IV(I)(3). According to Section IV(I)(3) of the 
Remedies Guide, ``[i]n a typical merger case, a monitoring trustee's 
efforts would simply duplicate, and could potentially conflict with, 
the Division's own decree enforcement efforts * * * [and] should be 
reserved for relatively rare situations where a monitoring trustee with 
technical expertise unavailable to the Division could perform a 
valuable role.'' Id. In this particular case, the Division has 
sufficient knowledge of the industry to ensure compliance with the 
proposed Final Judgment.
    f. Restriction of Evergreen Contracts Is Unnecessary
    The CCWI states that the United States ``fails to limit the ability 
of the merged firm to use evergreen contracts.'' CCWI Comment, at 7. In 
seeking the discontinuance of such contracts, the CCWI cites to a 
single prior enforcement action in which the United States employed 
such a remedy.\(6)\ CCWI Comment, at 7. Simply because that prior 
consent decree contained such a remedy, the CCWI believes similar 
provisions are necessary in this case.
    As stated above, see supra Part III.2.c, the structural remedy of a 
divestiture is preferable to a behavioral remedy in merger cases 
because of the speed, certainty, cost, and efficacy associated with 
such a remedy. Unlike a structural remedy, a behavioral remedy of 
contract relief is less certain and is required only when warranted by 
the facts of the case. The United States has extensive experience 
reviewing mergers in the waste industry, and it reviews each 
transaction and each implicated geographic area on a case-by-case 
basis. The United States has considered this issue and has concluded 
that the modification of contracts is not necessary to preserve 
effective competition in the markets identified in the Complaint.
    The United States conducted a thorough market-by-market 
investigation, which included hundreds of hours of interviews with 
customers and competitors of the merging parties. The United States 
heard no specific concern that would warrant the type of relief 
suggested by the CCWI. The United States determined that the proposed 
remedy, i.e., the divestiture of all or most small container commercial 
waste collection routes of one of the merging parties in each affected 
market, is sufficient to provide effective competition in small 
container commercial waste collection services in each market and is 
consistent with prior Antitrust Division practice.
    The proposed Final Judgment would require the divestiture of either 
Republic's or Allied's entire small container commercial waste 
collection business in six of the nine geographic areas in which it has 
alleged competitive harm to competition in the provision of small 
container commercial waste collection services: Cape Girardeau, 
Missouri; Charlotte, North Carolina; Fort Worth, Texas; Greenville-
Spartanburg, South Carolina; Lexington, Kentucky; and Lubbock, Texas. 
The sale of the entire small container commercial waste collection 
business preserves the pre-merger market structure in each of these 
markets. Accordingly, no additional contract relief is necessary.
    In the remaining three areas in which the United States has alleged 
competitive harm to competition in the provision of small container 
commercial waste collections services Houston, Texas, Atlanta, Georgia, 
and Northwest Indiana the proposed Final Judgment would require the 
divestiture of most of either Allied's or Republic's small container 
commercial waste collection business. In the Houston, Texas area, the 
small container commercial waste collection routes and related assets 
that would be divested pursuant to the proposed Final Judgment, 
Proposed Final Judgment ] II(I)(6), represent a set of assets 
comparable to those divested in USA Waste.\(7)\ In USA Waste, the 
defendants divested 31 routes; by comparison in this case, the proposed 
Final Judgment includes 32 routes. Republic, as the purchaser of the 
Houston assets in USA Waste, was able to use these assets as a platform 
for entry into the area and to grow and become an effective, fully 
integrated, and viable competitor in the area. No contract relief was 
required to remedy any market in USA Waste, including Houston, Texas. 
In the present case, the divestiture of the small container commercial 
waste collection assets, coupled with the related sale of disposal 
assets, once again will enable a qualified acquirer to provide 
effective competition in the Houston, Texas area, much as Republic was 
able to do. Therefore, contract relief is not necessary here.
    In the Atlanta, Georgia area, the proposed Final Judgment would 
require the divestiture of all of Allied's routes in the northern and 
eastern areas of Atlanta, where Allied and Republic most directly 
overlapped and competed most intensely. Proposed Final Judgment ] 
II(I)(1). Numerous factors affect waste transport and disposal in the 
area, such as local requirements that require MSW to be disposed at 
designated disposal facilities, congestion, traffic patterns, and local 
ordinances. In light of these factors, haulers typically do not travel 
outside the northern and eastern portions of the area. The remedy here 
was designed to preserve the small container commercial waste 
collection competition that existed pre-merger. The United States has 
approved Advanced Disposal Services, Inc., which already has a presence 
in the area, as the Acquirer of these assets. With a footprint in the 
area, Advanced Disposal not only will replace competition lost as a 
result of the merger, but will become a more efficient competitor. 
Therefore, contract relief is not necessary here.
    In the Northwest Indiana area, the proposed Final Judgment would 
require the divestiture of most of Allied's small container commercial 
waste collection business in Porter, LaPorte, and Lake Counties. 
Proposed Final Judgment ] II(I)(9). In these areas, Republic and Allied 
competed most directly to provide customers with small container 
commercial waste collection services. The proposed Final Judgment 
addresses the harm alleged in the Complaint by requiring the 
divestiture of those routes necessary to create an effective 
competitor. To the extent the CCWI argues that additional routes or 
contract relief, might be necessary to create an effective remedy in 
MSW disposal, the United States concluded that this is not necessary 
because there are numerous hauling competitors in the area to support 
the divested Valparaiso Transfer Station. Therefore, the proposed 
remedy is sufficient to restore competition to pre-merger levels.
g. The Individual Sale of All the Divestiture Assets Is Not Necessary
    The CCWI suggests that the proposed Final Judgment be modified to 
require that the Divestiture Assets in each market be offered for sale 
separately and that no Divestiture Assets be sold together as a bundle. 
The CCWI cites to the requirements in the proposed Final Judgment that 
the assets in Atlanta, Georgia, Cleveland, Ohio, Philadelphia, 
Pennsylvania, and Fort Worth, Texas be sold separately from the 
Divestiture Assets in the other areas. Proposed Final Judgment ] IV(A).

[[Page 28532]]

    The United States has considered the CCWI's position and 
respectfully disagrees. Based on its extensive experience in overseeing 
divestitures of assets in antitrust cases, the United States has 
concluded that it is most efficient to allow the defendants to manage 
the process of selling divestiture assets, which may include the 
bundling of assets. In particular, a sale of bundled divestiture assets 
typically results in a quicker divestiture and a more efficient 
utilization of the divestiture assets by the acquirer. As always, the 
United States retains the authority to review a proposed acquirer of 
divestiture assets to determine whether the respective acquirer will 
fully utilize a package of divestiture assets.
    In this case, based on a fact-specific investigation of potential 
buyers in each area, the United States concluded that competition would 
benefit from the separate sale of the Divestiture Assets in the 
Atlanta, Georgia, Cleveland, Ohio, Philadelphia, Pennsylvania, and Fort 
Worth, Texas areas.\(8)\ Specifically, the separate sale of the 
Divestiture Assets in each of these four markets may permit a local or 
regional waste firm to acquire them and combine such assets with their 
own existing assets already serving these markets. The decision of the 
United States to require the sale of the Divestiture Assets in certain 
markets separately was also based on the recognition that approval of a 
single purchaser of all of the Divestiture Assets in the 15 relevant 
markets would be unlikely given the potential competitive overlap in 
some of these markets by some likely purchasers. For the reasons above, 
the CCWI's proposal is both unnecessary and contrary to the purposes of 
antitrust relief. If implemented, the proposal could substantially 
lengthen the divestiture process.
h. Republic's Acquisition of the Newnan Transfer Station Would Not 
Substantially Diminish Competition for the Provision of MSW Disposal 
Services in the Atlanta, Georgia Area
    The CCWI states that the proposed Final Judgment ``permits Allied 
to reacquire assets it was required to divest as a condition of 
previous final judgments,'' which ``represents a departure from 
previous agreements preventing such reacquisitions.'' CCWI Comment, at 
6. The CCWI cites to Republic acquiring the Newnan Transfer Station, a 
disposal asset that was required to be divested in 1999 pursuant to the 
terms of a Final Judgment entered in Allied/BFI.
    In 1999, in connection with the acquisition by Allied of Browning 
Ferris, Industries, Allied was required to divest the Newnan Transfer 
Station located in Newnan, Georgia, which at the time was serving the 
Atlanta, Georgia area. As part of the Final Judgment entered in Allied/
BFI, Republic acquired the Newnan Transfer Station from Allied and owns 
it today. Paragraph VIII(A) of the Allied/BFI Modified Final Judgment 
prohibits for a ten-year period Allied's reacquisition of divested 
assets without the prior written consent of the United States. Although 
Republic's acquisition of Allied will recombine the Newnan Transfer 
Station with Allied's other disposal assets in the Atlanta area, the 
United States has consented to this recombination because it concluded 
that the Newnan Transfer Station no longer participates meaningfully in 
the Atlanta market for MSW disposal services, and no competitive issues 
exist in the rural areas southwest of Atlanta served by the Newnan 
Transfer Station. Specifically, the United States found that, although 
Allied used the Newnan Transfer Station to serve the Atlanta MSW 
disposal market as of 1999 and that facility competed directly with 
transfer stations in the Atlanta area that Allied was acquiring in the 
Allied/BFI merger the focus of the Newnan Transfer Station has changed 
under Republic's ownership, and other transfer stations in the Atlanta 
area now accept the MSW that previously was disposed at the Newnan 
Transfer Station. Waste flow reports show that the Newnan Transfer 
Station disposes of waste generated in rural areas southwest of Atlanta 
and competes much less directly with other disposal facilities in the 
Atlanta area. Accordingly, the United States concluded that the 
proposed acquisition of Allied by Republic, whereby Allied's MSW 
disposal assets would be recombined with the Newnan Transfer Station, 
would not substantially diminish competition for the provision of MSW 
disposal services in the Atlanta, Georgia area. Instead, the 
divestiture of Republic's Central Gwinnett Transfer Station and 
Allied's BFI Smyrna Transfer Station will be an effective remedy for 
the anticompetitive effects of the proposed acquisition on MSW disposal 
services in this market.

B. Public Comment From June Guidotti

1. Summary of Ms. Guidotti's Comment
    Ms. June Guidotti owns property adjacent to Republic's Potrero 
Hills Landfill. Guidotti Comment, at 1. As a neighbor to the Potrero 
Hills Landfill, Ms. Guidotti, through her counsel William Reustle, 
asserts that the Potrero Hills Landfill ``should be put back to its 
original status as a marsh environment.'' Id. Ms. Guidotti further 
contends that ``Republic Services should be required to forever clean 
up and be accountable for the damage they have caused to untold plants 
and marine life.'' Id. Also, she requests that ``Republic Services 
(Allied Services) bear the costs to make the land useable once again, 
and to restore it to its prior pristine condition.'' Id.
2. Response of the United States to Ms. Guidotti's Comment
    In this antitrust suit, the allegations in the Complaint are based 
on current market conditions. In the current market, Potrero Hills is 
being used as a landfill. Given its current use as a landfill, the 
proposed divestiture will remedy the competitive harm that would have 
resulted from the merger. Whether the landfill continues to operate is 
within the purview of the State of California and local authorities; 
nothing in the proposed Final Judgment affects their authority or 
precludes the responsible State and local authorities from 
discontinuing the operation of a landfill on the site. The decision 
whether to permit the continuing use of the site for waste disposal 
should be left to the appropriate regulatory entities.

C. Public Comment From the Pennsylvania Independent Waste Haulers 
Association

1. Summary of the PIWHA's Comment
    The PIWHA submitted a comment through counsel, Anthony Mazillo and 
Leonard Dimare. In the comment, the PIWHA opined that the proposed 
Final Judgment should be revised to: (1) Require the ``divestiture of 
the Quickway transfer station * * * and the T.R.C. transfer station * * 
*, or at least one of them, instead of the Girard Point transfer 
station * * * and the Philadelphia Recycling and Transfer Station;'' 
PIWHA Comment, at 1, (2) require the sale of the ``divested facilities 
* * * to small, independent acquirers, if possible, and should permit 
the sale of each facility * * * to separate acquirers''; id., (3) 
``permit seller financing''; id., (4) require ``the two facilities in 
the Philadelphia area * * * to be sold separately to two different 
acquirers;'' id. at 3, and (5) ``require the defendants to offer three 
(3) year disposal contracts to all waste haulers.'' Id. at 1.

[[Page 28533]]

2. Response of the United States to the PIWHA's Comment
a. The Divestitures in the Proposed Final Judgment Will Preserve 
Competition
    The proposed Final Judgment requires the defendants to divest the 
Girard Point Transfer Station and the Philadelphia Recycling and 
Transfer Station. Proposed Final Judgment ] II(H)(2)(h)(i)-(ii). The 
Final Judgment also requires that the Acquirer of the transfer stations 
be offered the option of an 18-month disposal agreement at Republic's 
Modern Landfill in York, Pennsylvania for the final disposal of waste 
received at the transfer stations. Proposed Final Judgment ] 
II(H)(1)(j). The PIWHA's comment asserts that this proposed remedy is 
insufficient for several reasons. First, PIWHA states that, although 
PIWHA does not have access to the defendants' financial data, 
``marginal profitability of the Girard Point and [Philadelphia 
Recycling and Transfer Station] facilities has been the distinct 
impression of various PIWHA members.'' PIWHA Comment, at 2. Also, the 
PIWHA asserts that the Girard Point Transfer Station and the 
Philadelphia Recycling and Transfer Station are ``substantially further 
geographically from haulers servicing Bucks and Montgomery counties 
than Quickway and TRC, and, accordingly, are more costly for those 
haulers to use.'' Id.
    With regard to the financial viability of the Philadelphia assets, 
the bidding process for these assets has generated interest from 
several proposed purchasers; this demonstrated interest is persuasive 
evidence of the substantial value of the two transfer stations as 
ongoing business concerns.
    With regard to the PIWHA's contention that the United States should 
have selected different MSW disposal assets, the United States 
respectfully disagrees. The relief proposed by the PIWHA goes beyond 
the scope of the allegations in the Complaint and, as discussed in Part 
III.A.2(a) above, should not be considered by the Court. The United 
States alleged in the Complaint that the merger would have the effect 
of reducing competition in the market for MSW disposal services in the 
Philadelphia, Pennsylvania area--which identifies specifically in 
Philadelphia County--and not in the areas identified by the PIWHA. 
Complaint ] 22. Both the Girard Point Transfer Station and the 
Philadelphia Recycling and Transfer Station are located in Philadelphia 
County and are accessible to MSW haulers in Philadelphia County. Based 
on current market conditions, the ordered divestitures of Republic's 
Girard Point Transfer Station and Allied's Philadelphia Recycling and 
Transfer Station will alleviate the competitive concerns alleged in the 
Complaint by introducing a new MSW disposal services competitor into 
the Philadelphia, Pennsylvania area described in the Complaint.
b. The Divestiture Will Be Sold to a Viable and Competitive Firm
    As stated in Part III.A.2(b) above, Paragraphs IV(I)(1) and (2) of 
the proposed Final Judgment require the divested assets to be sold to a 
purchaser that ``has the intent and capability (including the necessary 
managerial, operational, technical, and financial capability) of 
competing effectively in the disposal and hauling business.'' When 
presented with a proposed acquirer of the Divestiture Assets, the 
United States will evaluate the proposed acquirer to determine whether 
it meets these requirements. Thus, the proposed Final Judgment already 
addresses this aspect of the PIWHA's comment.
c. Requiring the Separate Sale of the Philadelphia Assets Will Not 
Resolve Harm Alleged in Complaint
    With regard to separating the Divestiture Assets in the 
Philadelphia area, the United States does not believe that this 
proposal is appropriate. The goal of the divestiture of the Girard 
Point Transfer Station and Philadelphia Recycling and Transfer Station 
facilities to one acquirer is to find a purchaser that possesses both 
the means and the incentive to maintain the level of premerger 
competition in the area. In this area, transfer stations are the 
primary disposal option for haulers of MSW in this market because 
roadways in much of the area are highly congested and MSW landfills 
generally are too far from collection routes for the direct haul of MSW 
to landfills to be economical. Because transfer stations are the 
primary disposal options for haulers in this area, an acquisition of 
both transfer stations is necessary for a new competitor to compete for 
large municipal contracts in the area. Such contracts require a firm to 
handle large volumes of waste. The proposed remedy will enable a 
purchaser to maintain the premerger level of competition between 
Republic and Allied.
d. Seller Financing is Strongly Disfavored
    The PIWHA advocates the need for seller financing of the 
Divestiture Assets. PIWHA Comment, at 3-4. Seller financing essentially 
is a loan provided by the seller of an asset to the buyer, to cover 
part or all of the sale price. The PIWHA argues that small independent 
purchasers will not have access to the capital needed to bid on the 
assets. Id. at 3. In its view, the benefits of seller financing 
outweigh the ``potential problems'' associated with it. Id.
    The United States strongly disfavors seller financing of the 
divestitures for several reasons. Remedies Guide Sec.  IV(G). First, 
the seller may retain partial control over the assets, which could 
weaken the purchaser's competitiveness. Second, the seller's incentive 
to compete may be impeded because of the seller's concern that vigorous 
competition may jeopardize the purchaser's ability to repay the debt. 
Third, the seller may have some legal claim on the Divestiture Assets 
in the event the purchaser goes into bankruptcy. Fourth, the seller may 
use the ongoing relationship as a conduit for the exchange of 
competitively sensitive information. Lastly, a purchaser's inability to 
obtain financing from banks or other lending institutions may raise 
questions about the purchaser's viability. The United States believes 
that it is unnecessary to accept the risks associated with seller 
financing when a satisfactory divestiture is likely to occur without 
them.
e. Requiring the Defendants to Offer Three-Year Disposal Contracts Is 
Unnecessary
    In its comment, the PIWHA requests that ``the defendants be 
required to offer three year disposal contracts to all haulers, not 
just the larger ones as is currently the case.'' PIWHA Comment, at 4. 
The PIWHA believes that ``large, vertically integrated waste industry 
firms are generally unwilling to offer smaller haulers disposal 
contracts for a term exceeding one year.'' Id. Thus, PIHWA asserts that 
a three-year disposal contract requirement will benefit the independent 
haulers and, ultimately, competition generally in the Philadelphia, 
Pennsylvania area. Id.
    The United States does not believe that additional injunctive 
relief is necessary to eliminate the competitive effects from the 
merger in the Philadelphia area. The proposed Final Judgment should be 
no more restrictive than necessary to keep the Divestiture Assets 
competitive. Remedies Guide Sec.  II. The United States has no evidence 
that the defendants' merger would raise competitive issues warranting 
the imposition of the additional relief proposed by the PIWHA. Because 
the Divestiture Assets will remain competitive without such injunctive 
relief, the remedy in the proposed Final

[[Page 28534]]

Judgment is sufficient to resolve the harm alleged in the Complaint.

D. Public Comment From Metro Disposal

1. Summary of Metro Disposal's Comment
    Metro Disposal operates small container commercial waste collection 
and MSW disposal services principally in the Cleveland, Ohio area. In 
its comment, Metro Disposal asserts that the proposed Final Judgment 
should be revised to include the sale of 15 small container commercial 
waste collection routes in Cuyahoga County along with the sale of the 
Harvard Road Transfer Station and an unspecified number of additional 
routes in the town of Mansfield to the purchaser of the Oakland Marsh 
Landfill. Metro Disposal Comment, at 2. Metro Disposal further asserts 
that the Divestiture Assets will not be attractive ``[w]ithout having 
some guarantee of volumes into the Harvard transfer [station].'' Id.
2. Response of the United States to Metro Disposal's Comment
    The United States conducted a thorough investigation into small 
container commercial waste collection and MSW disposal services in the 
Cleveland, Ohio area. During the investigation, the United States 
conducted many interviews of market participants to determine the 
competitive impact of the proposed merger. Based on the investigation 
and current market conditions, the ordered divestitures of Allied's 
Superior Oakland Marsh Landfill and Republic's Harvard Road Transfer 
Station will alleviate the competitive concerns alleged in the 
Complaint by introducing a new MSW disposal services competitor to the 
market. A new competitor should provide a significant competitive 
alternative to the defendants' MSW disposal services in the Cleveland 
market. Metro Disposal's proposal to revise the proposed Final Judgment 
to require the sale of small container commercial waste collection 
routes in effect would require a remedy in a market in which no 
competitive harm has been alleged, and therefore would exceed the scope 
of the Complaint. The United States has no evidence that the merger 
would have anticompetitive effects in the market for small container 
commercial waste collection services in the Cleveland area. Numerous 
competitors for the provision of small container commercial waste 
collection services will remain in the Cleveland area following the 
merger. Because the merger will not cause competitive harm in this 
market, the additional remedy proposed by Metro Disposal is 
unnecessary.
    With regard to Metro Disposal's concern that additional MSW volumes 
are necessary for the continued viability of the Harvard Road Transfer 
Station and Superior Oakland Marsh Landfill, the United States 
respectfully disagrees. In its investigation, the United States found 
that the Harvard Road Transfer Station is centrally located in the City 
of Cleveland and is accessible to MSW haulers in Cuyahoga County. In 
addition, the Superior Oakland Marsh landfill will provide the Acquirer 
with an option for the final disposal of MSW. In the Cleveland, Ohio 
area, there are several independent haulers who are seeking additional 
disposal options. Accordingly, in addition to internalizing its own MSW 
in the transfer station and landfill, the Acquirer of the Divestiture 
Assets will be able to compete for third-party volumes to supply these 
disposal facilities. Thus, the ordered divestitures of Allied's 
Superior Oakland Marsh Landfill and Republic's Harvard Road Transfer 
Station will alleviate the competitive concerns alleged in the 
Complaint by introducing a new MSW disposal services competitor into 
the Cleveland, Ohio area, thereby maintaining the pre-merger level of 
competition.

E. Public Comment From the Cuyahoga Solid Waste District

1. Summary of the Cuyahoga Solid Waste District's Comment
    Like Metro Disposal, the Cuyahoga Solid Waste District urges that 
``sufficient small container commercial collection routes in the 
Cleveland, Ohio market area be added to the Relevant Hauling Assets'' 
to make ``the sale of the Harvard Road Transfer Station and the Oakland 
Marsh Landfill a financially viable transaction necessary to attract a 
qualified buyer.'' Cuyahoga Comment, at 2. The Cuyahoga Solid Waste 
District also asserts that the proposed Final Judgment should prohibit 
Republic from acquiring transfer station assets in Cuyahoga County, 
including the Broadview Heights Recycling Center. Id.
2. Response of the United States to the Cuyahoga Solid Waste District's 
Comment
    As explained in Part III.D.2. above, the United States has seen no 
evidence of anticompetitive harm in the Cleveland, Ohio market for 
small container commercial waste collection services, and the Complaint 
contains no allegation of such harm; accordingly, the relief proposed 
by the Cuyahoga Solid Waste District goes beyond the scope of the 
Complaint and should not be considered by the Court. Moreover, 
independent haulers generate sufficient volumes of MSW to support the 
types of volumes needed to supply the Harvard Road Transfer Station and 
Oakland Marsh Landfill. With regard to the Cuyahoga Solid Waste 
District's suggestion that Republic be barred from acquiring transfer 
station assets in Cuyahoga County, the United States already has 
addressed this concern in Section VII of the proposed Final Judgment:

    [D]efendants, without providing advance notification to United 
States and the Relevant State, shall not directly or indirectly 
acquire, any (1) interest in any business engaged in a relevant 
service in a relevant area, (2) assets (other than in the ordinary 
course of business) used in a relevant service in a relevant area, 
(3) capital stock, or (4) voting securities of any person that, at 
any time during the twelve (12) months immediately preceding such 
acquisition, was engaged in MSW disposal or small container 
commercial waste collection in any relevant area, where that 
person's annual revenues in the relevant area from MSW disposal and/
or small container commercial waste collection service were in 
excess of $500,000 annually. For clarity, this provision also 
applies to an acquisition of disposal facilities that serve a 
relevant area but are located outside the relevant area, whether or 
not they are physically located in the relevant area.

    Section VII of the proposed Final Judgment requires the defendants 
to notify the United States and the Relevant State if they plan to 
acquire any additional assets in the area, including Broadview Heights 
Recycling Center. Such notification would provide the United States and 
the Relevant State the opportunity to investigate, review, and 
ultimately determine whether the defendants' potential acquisition of 
additional small container commercial waste collection or MSW disposal 
assets in the Cleveland, Ohio area would present the potential for 
anticompetitive harm. The Cuyahoga Solid Waste District's concern thus 
is addressed in the proposed Final Judgment.

IV. Standard of Judicial Review

    Upon the publication of the Comments and this Response, the United 
States will have fully complied with the Tunney Act and will move for 
entry of the proposed Final Judgment as being ``in the public 
interest.'' 15 U.S.C. 16(e)(1), as amended.
    The Tunney Act states that, in making that determination, the Court 
shall consider:
    A. The competitive impact of such judgment, including termination 
of alleged violations, provisions for

[[Page 28535]]

enforcement and modification, duration of relief sought, anticipated 
effects of alternative remedies actually considered, whether its terms 
are ambiguous, and any other competitive considerations bearing upon 
the adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    B. The impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and individuals 
alleging specific injury from the violations set forth in the complaint 
including consideration of the public benefit, if any, to be derived 
from a determination of the issues at trial.
    15 U.S.C. 16(e)(1)(A)-(B); see generally United States v. AT&T 
Inc., 541 F. Supp. 2d 2, 6 n.3 (D.D.C. 2008) (listing factors that the 
Court must consider when making the public-interest determination); 
United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1, 11 (D.D.C. 
2007) (concluding that the 2004 amendments to the Tunney Act ``effected 
minimal changes'' to scope of review under Tunney Act, leaving review 
``sharply proscribed by precedent and the nature of Tunney Act 
proceedings'').\(9)\
    As the United States Court of Appeals for the District of Columbia 
Circuit has held, under the APPA, a court considers, among other 
things, the relationship between the remedy secured and the specific 
allegations set forth in the government's complaint, whether the decree 
is sufficiently clear, whether enforcement mechanisms are sufficient, 
and whether the decree may positively harm third parties. See United 
States v. Microsoft Corp., 56 F.3d 1448, 1458-62 (D.C. Cir. 1995). With 
respect to the adequacy of the relief secured by the decree, a court 
may not ``engage in an unrestricted evaluation of what relief would 
best serve the public.'' United States v. BNS, Inc., 858 F.2d 456, 462 
(9th Cir. 1988) (citing United States v. Bechtel Corp., 648 F.2d 660, 
666 (9th Cir. 1981)); see also Microsoft, 56 F.3d at 1460-62. Courts 
have held that:

[t]he balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

    Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted); cf. 
BNS, 858 F.2d at 464 (holding that the court's ``ultimate authority 
under the [APPA] is limited to approving or disapproving the consent 
decree''); United States v. Gillette Co., 406 F. Supp. 713, 716 (D. 
Mass. 1975) (noting that, in this way, the court is constrained to 
``look at the overall picture not hypercritically, nor with a 
microscope, but with an artist's reducing glass''); see generally 
Microsoft, 56 F.3d at 1461 (discussing whether ``the remedies [obtained 
in the decree are] so inconsonant with the allegations charged as to 
fall outside of the `reaches of the public interest' '').
    The government is entitled to broad discretion to settle with 
defendants within the reaches of the public interest. AT&T Inc., 541 F. 
Supp. 2d at 6. In making its public-interest determination, a district 
court ``must accord deference to the government's predictions about the 
efficacy of its remedies, and may not require that the remedies 
perfectly match the alleged violations.'' SBC Commc'ns, 489 F. Supp. 2d 
at 17; see also Microsoft, 56 F.3d at 1461 (noting the need for courts 
to be ``deferential to the government's predictions as to the effect of 
the proposed remedies''); United States v. Archer-Daniels-Midland Co., 
272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that the court should grant 
due respect to the United States's prediction as to the effect of 
proposed remedies, its perception of the market structure, and its 
views of the nature of the case).
    Court approval of a consent decree requires a standard more 
flexible and less strict than that appropriate to court adoption of a 
litigated decree following a finding of liability. ``[A] proposed 
decree must be approved even if it falls short of the remedy the court 
would impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of public interest.' '' United 
States v. Am. Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982) 
(citations omitted) (quoting United States v. Gillette Co., 406 F. 
Supp. 713, 716 (D. Mass. 1975)), aff'd sub nom. Maryland v. United 
States, 460 U.S. 1001 (1983); see also United States v. Alcan Aluminum 
Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) (approving the consent 
decree even though the court would have imposed a greater remedy). To 
meet this standard, the United States ``need only provide a factual 
basis for concluding that the settlements are reasonably adequate 
remedies for the alleged harms.'' SBC Commc'ns, 489 F. Supp. 2d at 17.
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its complaint, rather than to ``construct [its] own 
hypothetical case and then evaluate the decree against that case.'' 
Microsoft, 56 F.3d at 1459. Because the ``court's authority to review 
the decree depends entirely on the government's exercising its 
prosecutorial discretion by bringing a case in the first place,'' it 
follows that ``the court is only authorized to review the decree 
itself,'' and not to ``effectively redraft the complaint'' to inquire 
into other matters that the United States did not pursue. Id. at 1459-
60. As this Court recently confirmed in SBC Communications, courts 
``cannot look beyond the complaint in making the public interest 
determination unless the complaint is drafted so narrowly as to make a 
mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
    In its 2004 amendments to the Tunney Act, Congress made clear its 
intent to preserve the practical benefits of utilizing consent decrees 
in antitrust enforcement, adding the unambiguous instruction that 
``[n]othing in this section shall be construed to require the court to 
conduct an evidentiary hearing or to require the court to permit anyone 
to intervene.'' 15 U.S.C. 16(e)(2). The amendments codified what 
Congress intended when it passed the Tunney Act in 1974, as Senator 
Tunney then explained: ``[t]he court is nowhere compelled to go to 
trial or to engage in extended proceedings which might have the effect 
of vitiating the benefits of prompt and less costly settlement through 
the consent decree process.'' 119 Cong. Rec. 24,598 (1973) (statement 
of Senator Tunney). Rather, the procedure for the public-interest 
determination is left to the discretion of the court, with the 
recognition that the court's ``scope of review remains sharply 
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC 
Commc'ns, 489