Honeywell International, Inc.; Analysis of Agreement Containing Consent Order To Aid Public Comment, 58305-58307 [2013-22966]

Download as PDF 58305 Federal Register / Vol. 78, No. 184 / Monday, September 23, 2013 / Notices individual/failed/banklist.html or contact the Manager of Receivership Oversight in the appropriate service center. Dated: September 16, 2013. Federal Deposit Insurance Corporation. Pamela Johnson, Regulatory Editing Specialist. INSTITUTIONS IN LIQUIDATION [In alphabetical order] FDIC Ref. No. Bank name City 10488 ................ First National Bank also operating as The National Bank of El Paso. The Community’s Bank .................................................................... Edinburg ...................................... TX 9/13/2013 Bridgeport ................................... CT 9/13/2013 10489 ................ [FR Doc. 2013–23055 Filed 9–20–13; 8:45 am] BILLING CODE 6714–01–P FEDERAL TRADE COMMISSION [File No. 131 0070] Honeywell International, Inc.; Analysis of Agreement Containing Consent Order To Aid Public Comment Federal Trade Commission. Proposed consent agreement. AGENCY: ACTION: The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations. DATES: Comments must be received on or before October 15, 2013. ADDRESSES: Interested parties may file a comment at https:// ftcpublic.commentworks.com/ftc/ honeywellintermecconsent online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write ‘‘Honeywell Intermec, File No. 131 0070’’ on your comment and file your comment online at https:// ftcpublic.commentworks.com/ftc/ honeywellintermecconsent by following the instructions on the web-based form. If you prefer to file your comment on paper, mail or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Room H–113 (Annex D), 600 Pennsylvania Avenue NW., Washington, DC 20580. FOR FURTHER INFORMATION CONTACT: David Morris (202–326–3156), FTC, Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580. SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal Trade emcdonald on DSK67QTVN1PROD with NOTICES SUMMARY: VerDate Mar<15>2010 20:16 Sep 20, 2013 Jkt 229001 Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for September 13, 2013), on the World Wide Web, at http:// www.ftc.gov/os/actions.shtm. A paper copy can be obtained from the FTC Public Reference Room, Room 130–H, 600 Pennsylvania Avenue NW., Washington, DC 20580, either in person or by calling (202) 326–2222. You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before October 15, 2013. Write ‘‘Honeywell Intermec, File No. 131 0070’’ on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at http:// www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to remove individuals’ home contact information from comments before placing them on the Commission Web site. Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone’s Social Security number, date of birth, driver’s license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or PO 00000 Frm 00039 Fmt 4703 Sfmt 4703 State Date closed other individually identifiable health information. In addition, do not include any ‘‘[t]rade secret or any commercial or financial information which . . . is privileged or confidential,’’ as discussed in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names. If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).1 Your comment will be kept confidential only if the FTC General Counsel, in his or her sole discretion, grants your request in accordance with the law and the public interest. Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at https:// ftcpublic.commentworks.com/ftc/ honeywellintermecconsent by following the instructions on the web-based form. If this Notice appears at http:// www.regulations.gov/#!home. you also may file a comment through that Web site. If you file your comment on paper, write ‘‘Honeywell Intermec, File No. 131 0070’’ on your comment and on the envelope, and mail or deliver it to the following address: Federal Trade Commission, Office of the Secretary, Room H–113 (Annex D), 600 Pennsylvania Avenue NW., Washington, DC 20580. If possible, submit your paper comment to the Commission by courier or overnight service. 1 In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c), 16 CFR 4.9(c). E:\FR\FM\23SEN1.SGM 23SEN1 58306 Federal Register / Vol. 78, No. 184 / Monday, September 23, 2013 / Notices Visit the Commission Web site at http://www.ftc.gov to read this Notice and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before October 15, 2013. You can find more information, including routine uses permitted by the Privacy Act, in the Commission’s privacy policy, at http://www.ftc.gov/ftc/privacy.htm. emcdonald on DSK67QTVN1PROD with NOTICES Analysis of Agreement Containing Consent Order To Aid Public Comment I. Introduction The Federal Trade Commission (‘‘Commission’’) has accepted from Honeywell International Inc. (‘‘Honeywell’’), subject to final approval, an Agreement Containing Consent Orders (‘‘Consent Agreement’’). The Consent Agreement, which contains a proposed Decision and Order (‘‘Order’’), is designed to remedy the anticompetitive effects resulting from Honeywell’s proposed acquisition of Intermec Inc. (‘‘Intermec’’). Pursuant to an agreement signed on December 9, 2012 (the ‘‘Agreement’’), Honeywell plans to acquire 100 percent of the voting securities of Intermec for an aggregate purchase price of approximately $600 million (the ‘‘Acquisition’’). The proposed Acquisition would result in an effective duopoly in the market for twodimensional scan engines (‘‘2D scan engines’’) in the United States. The Commission’s Complaint alleges that the proposed Acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as amended 15 U.S.C. 45, by lessening competition in the market for 2D scan engines in the United States. The Consent Agreement remedies the alleged violation by replacing the lost competition in the 2D scan engine market that would result from the proposed Acquisition. Under the terms of the Consent Agreement, Honeywell will license all of the United States patents necessary to make twodimensional scan engines (‘‘2D scan engines’’) to Datalogic IPTECH s.r.l., a subsidiary of Datalogic S.p.A. (‘‘Datalogic’’). The Consent Agreement and proposed Order have been placed on the public record for 30 days to solicit comments from interested persons. Comments received during this period will become VerDate Mar<15>2010 20:16 Sep 20, 2013 Jkt 229001 part of the public record. After 30 days, the Commission will review the Consent Agreement and the comments received, and decide whether it should withdraw, modify or make final the Consent Agreement and proposed Order. II. The Parties Honeywell is a diversified technology and manufacturing company headquartered in Morristown, New Jersey with worldwide operations. Honeywell develops, manufactures and sells 2D scan engines and devices into which 2D scan engines are incorporated through its wholly-owned subsidiaries, Hand Held Products, Inc. and Metrologic Instruments, Inc. d/b/a Honeywell Scanning and Mobility. Headquartered in Everett, Washington, Intermec is a leading manufacturer and seller of scan engines and other automated identification and data capture equipment including barcode scanners, barcode printers, RFID systems and voice recognition systems. III. Scan Engines The relevant line of commerce in which to analyze the effects of the proposed Acquisition is 2D scan engines. 2D scan engines have a 2D image sensor that captures an image (such as a barcode) through a digital photograph. The 2D scan engine then translates the image into a digital format that computer processors can interpret and analyze. Products such as retail store scanners, kiosks and rugged mobile handheld computers utilize 2D scan engines to capture and decode digital data. Customers of 2D scan engines demand compact scanners that can accurately read all types of one-dimensional and 2D images, and that have a good field of view and reading range. 2D scan engines are the only scanning products that meet these specifications. Onedimensional scan engines are unable to read most types of 2D images and are not viable substitutes for 2D scan engines. Scanning functions on smart phones and similar consumer devices do not offer the speed, accuracy, reading range or field of view of 2D scan engines. As a result, customers would likely not switch to alternate scanning products (such as one-dimensional scan engines or smart phones) in response to a five to ten percent increase in the price of 2D scan engines in sufficient numbers to make that price increase unprofitable to a hypothetical monopolist. The relevant geographic area in which to analyze the effects of the Acquisition on the 2D scan engine market is the PO 00000 Frm 00040 Fmt 4703 Sfmt 4703 United States. 2D scan engine suppliers who want to sell their scan engines to customers who intend to incorporate the scan engines into products that will be sold into the United States must own or have a license to U.S. patents covering 2D scan engine technology and be able to indemnify their customers against the threat of a patent suit. The market for 2D scan engines in the United States is highly concentrated. Honeywell, Intermec and Motorola are the three most significant participants in the 2D scan engine market in the United States. Post-Acquisition, the combined share of the two firms—Honeywell and Motorola—would be in excess of 80%. Additionally, Honeywell, Intermec and Motorola are the only 2D scan engine firms in the U.S. that have deep and broad portfolios of relevant intellectual property (‘‘IP’’) that insulate them and their customers from infringement suits. There are a number of fringe 2D scan engine manufacturers who sell 2D scan engines to customers outside of the United States, and to a lesser extent, to customers who incorporate the scan engines into products sold in the United States. In aggregate, the fringe competitors’ account for less than 20% of all 2D scan engines sold in the United States. While the fringe competitors are increasingly important competitors to Honeywell, Intermec and Motorola outside of the United States as a result of their growing technical capabilities, they are constrained from expanding their sales of 2D scan engines into products that will be sold in the United States because they do not possess the relevant U.S. IP rights. Without ownership of, or a license to, the relevant IP, the fringe competitors are not a significant competitive constraint to Honeywell, Intermec and Motorola for the sale of 2D scan engines for use in products sold in the United States. The proposed Acquisition increases the likelihood of coordinated interaction between Honeywell and the major remaining player in the market, Motorola. Industry participants recognize that Honeywell, Intermec and Motorola are the ‘‘Big Three’’ players in the market. As noted above, the fringe 2D scan engine competitors do not constrain the pricing of the ‘‘Big Three.’’ Accordingly, the proposed Acquisition increases the risk that the two remaining players, Honeywell and Motorola, will compete less aggressively, diminishing the level of competition in the market. New entry, repositioning or expansion will not be sufficient to deter or counteract the anticompetitive effects of the proposed Acquisition in a timely manner. The most significant barrier to entry and expansion in the United E:\FR\FM\23SEN1.SGM 23SEN1 Federal Register / Vol. 78, No. 184 / Monday, September 23, 2013 / Notices emcdonald on DSK67QTVN1PROD with NOTICES States is IP. For example, although 2D scan engine companies other than Honeywell, Intermec and Motorola have the ability to, and do, manufacture 2D scan engines, customers who incorporate the scan engines into products for sale into the United States are generally unwilling to purchase from them because they cannot provide customers with indemnification from patent infringement suits. IV. The Consent Agreement The Consent Agreement eliminates the competitive concerns raised by Honeywell’s proposed acquisition of Intermec by requiring Honeywell to license Honeywell and Intermec’s U.S. patents covering technology used in 2D scan engines. The Consent Agreement requires Honeywell to license the relevant patents to Datalogic, or another licensee approved by the Commission through a license agreement approved by the Commission. Datalogic has the industry experience, reputation and resources to replace Intermec as an effective competitor in the U.S. 2D scan engine market. It is headquartered in Bologna, Italy, with its North American design headquarters in Eugene, Oregon. Datalogic is well positioned to replace the competition that will be eliminated as a result of the proposed Acquisition. The company has developed 2D scan engines that it markets outside of the U.S. These 2D scan engines are of similar quality to those offered by Honeywell and Intermec. However, Datalogic does not currently compete against Honeywell and Intermec in the sale of 2D scan engines in the U.S. Datalogic also sells products that incorporate 2D scan engines, such as in-counter checkout scanners and airport kiosk scanners (where it is one of the global leaders), hand held scanners (where it is a top player globally), and rugged mobile computers (where it is the fourth-largest player globally). Pursuant to the Consent Agreement, Datalogic (or another approved licensee) would receive a license to all of the Honeywell and Intermec U.S. IP covering technology used in 2D scan engines and related devices (excluding non-retail fixed scanners) necessary to produce and sell 2D scan engines in the U.S. Obtaining the proposed license from Honeywell would enable the approved licensee to sell products without fear of an IP suit and to offer the required indemnification to market 2D scan engines in the U.S. The license extends for twelve years, which is the life of the primary blocking patents owned by Honeywell. In addition to licensing the U.S. patents, the Consent VerDate Mar<15>2010 20:16 Sep 20, 2013 Jkt 229001 Agreement prohibits Honeywell from filing infringement actions against the approved licensee, its suppliers and customers based on the approved licensee’s 2D scan engines or related devices. This provides the approved licensee with global freedom to research, develop, market and sell its 2D scan engines and related devices without fear of infringement suits by Honeywell. The Consent Agreement also prohibits Honeywell from selling or assigning the patents included in the license to anyone who does not agree to abide by the terms of the Order with respect to those acquired patents. The purpose of this analysis is to facilitate public comment on the Consent Agreement, and it is not intended to constitute an official interpretation of the proposed Order or to modify its terms in any way. By direction of the Commission. Donald S. Clark, Secretary. [FR Doc. 2013–22966 Filed 9–20–13; 8:45 am] BILLING CODE 6750–01–P DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Disease Control and Prevention Statement of Organization, Functions, and Delegations of Authority Part C (Centers for Disease Control and Prevention) of the Statement of Organization, Functions, and Delegations of Authority of the Department of Health and Human Services (45 FR 67772–76, dated October 14, 1980, and corrected at 45 FR 69296, October 20, 1980, as amended most recently at 78 FR 35936, dated June 14, 2013) is amended to reorganize the National Center for Health Statistics, Centers for Disease Control and Prevention. Section C–B, Organization and Functions, is hereby amended as follows: Delete in its entirety the titles and functional statements for the Division of Vital Statistics (CPCC) and insert the following: Division of Vital Statistics (CPCC). Plans and administers complex data collection systems and conducts a program of methodologic and substantive public health research activities based on the nationwide collection of data from vital records, follow back surveys, and demographic surveys of people in the childbearing ages. (1) Participates in the development of policy, long-range plans, and PO 00000 Frm 00041 Fmt 4703 Sfmt 4703 58307 programs of the Center; (2) directs, plans, and coordinates the vital statistics program of the United States; (3) administers the vital statistics cooperative program, including the National Death Index; (4) develops standards for vital statistics data collection including electronic systems, data reduction, and tabulation; (5) interprets, classifies, and compiles complex demographic, economic, health, and medical data; (6) serves as the United States representative to the World Health Organization (WHO), regarding the International Classification of Diseases (ICD) for mortality data and the classification and coding of cause of death; (7) conducts research to determine cross-national comparability of causes of death to further enhance the ICD and make appropriate recommendations to WHO; (8) conducts research on data collection methodology, survey methodology, data quality and reliability, and statistical computation as related to vital and survey statistics; (9) conducts multidisciplinary research directed toward development of new scientific knowledge on the demographics of reproduction, natality, and mortality; (10) performs theoretical and experimental investigations into the content of the vital statistics data collection effort; (11) develops sophisticated approaches to making vital statistics data available to users, including techniques to avoid disclosure of confidential data; (12) conducts descriptive analyses and sophisticated multivariate analyses that integrate vital statistics data across multiple surveys or data sets; (13) provides technical assistance and consultation to international, State, and local offices with vital registration responsibilities on vital registration, vital statistics, and data processing; (14) researches, designs, develops, and implements state-of-the-art computing systems for collecting, storing, and retrieving vital records and for subsequent analysis and dissemination; (15) conducts methodological research on the tools for evaluation, utilization, and presentation of vital statistics and related survey data and medical classification; (16) assesses the security of the DVS IT systems and data files and develops and implements strategies to minimize any security risks; (17) produces and publishes a wide variety of vital statistics analytic reports and tabulations in multiple formats; and (18) develops and sustains collaborative partnerships within NCHS, CDC, DHHS, and externally with public, private, E:\FR\FM\23SEN1.SGM 23SEN1

Agencies

[Federal Register Volume 78, Number 184 (Monday, September 23, 2013)]
[Notices]
[Pages 58305-58307]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-22966]


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FEDERAL TRADE COMMISSION

[File No. 131 0070]


Honeywell International, Inc.; Analysis of Agreement Containing 
Consent Order To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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

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

DATES: Comments must be received on or before October 15, 2013.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/honeywellintermecconsent online or on 
paper, by following the instructions in the Request for Comment part of 
the SUPPLEMENTARY INFORMATION section below. Write ``Honeywell 
Intermec, File No. 131 0070'' on your comment and file your comment 
online at https://ftcpublic.commentworks.com/ftc/honeywellintermecconsent by following the instructions on the web-based 
form. If you prefer to file your comment on paper, mail or deliver your 
comment to the following address: Federal Trade Commission, Office of 
the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW., 
Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: David Morris (202-326-3156), FTC, 
Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for September 13, 2013), on the World Wide Web, 
at http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained 
from the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue 
NW., Washington, DC 20580, either in person or by calling (202) 326-
2222.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before October 15, 
2013. Write ``Honeywell Intermec, File No. 131 0070'' on your comment. 
Your comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to 
remove individuals' home contact information from comments before 
placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which . . . is privileged or confidential,'' as discussed in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
---------------------------------------------------------------------------

    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/honeywellintermecconsent by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home. you also may file a comment through that Web site.
    If you file your comment on paper, write ``Honeywell Intermec, File 
No. 131 0070'' on your comment and on the envelope, and mail or deliver 
it to the following address: Federal Trade Commission, Office of the 
Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW., 
Washington, DC 20580. If possible, submit your paper comment to the 
Commission by courier or overnight service.

[[Page 58306]]

    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before October 15, 2013. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Order To Aid Public Comment

I. Introduction

    The Federal Trade Commission (``Commission'') has accepted from 
Honeywell International Inc. (``Honeywell''), subject to final 
approval, an Agreement Containing Consent Orders (``Consent 
Agreement''). The Consent Agreement, which contains a proposed Decision 
and Order (``Order''), is designed to remedy the anticompetitive 
effects resulting from Honeywell's proposed acquisition of Intermec 
Inc. (``Intermec'').
    Pursuant to an agreement signed on December 9, 2012 (the 
``Agreement''), Honeywell plans to acquire 100 percent of the voting 
securities of Intermec for an aggregate purchase price of approximately 
$600 million (the ``Acquisition''). The proposed Acquisition would 
result in an effective duopoly in the market for two-dimensional scan 
engines (``2D scan engines'') in the United States. The Commission's 
Complaint alleges that the proposed Acquisition, if consummated, would 
violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and 
Section 5 of the Federal Trade Commission Act, as amended 15 U.S.C. 45, 
by lessening competition in the market for 2D scan engines in the 
United States.
    The Consent Agreement remedies the alleged violation by replacing 
the lost competition in the 2D scan engine market that would result 
from the proposed Acquisition. Under the terms of the Consent 
Agreement, Honeywell will license all of the United States patents 
necessary to make two-dimensional scan engines (``2D scan engines'') to 
Datalogic IPTECH s.r.l., a subsidiary of Datalogic S.p.A. 
(``Datalogic'').
    The Consent Agreement and proposed Order have been placed on the 
public record for 30 days to solicit comments from interested persons. 
Comments received during this period will become part of the public 
record. After 30 days, the Commission will review the Consent Agreement 
and the comments received, and decide whether it should withdraw, 
modify or make final the Consent Agreement and proposed Order.

II. The Parties

    Honeywell is a diversified technology and manufacturing company 
headquartered in Morristown, New Jersey with worldwide operations. 
Honeywell develops, manufactures and sells 2D scan engines and devices 
into which 2D scan engines are incorporated through its wholly-owned 
subsidiaries, Hand Held Products, Inc. and Metrologic Instruments, Inc. 
d/b/a Honeywell Scanning and Mobility.
    Headquartered in Everett, Washington, Intermec is a leading 
manufacturer and seller of scan engines and other automated 
identification and data capture equipment including barcode scanners, 
barcode printers, RFID systems and voice recognition systems.

III. Scan Engines

    The relevant line of commerce in which to analyze the effects of 
the proposed Acquisition is 2D scan engines. 2D scan engines have a 2D 
image sensor that captures an image (such as a barcode) through a 
digital photograph. The 2D scan engine then translates the image into a 
digital format that computer processors can interpret and analyze. 
Products such as retail store scanners, kiosks and rugged mobile 
handheld computers utilize 2D scan engines to capture and decode 
digital data.
    Customers of 2D scan engines demand compact scanners that can 
accurately read all types of one-dimensional and 2D images, and that 
have a good field of view and reading range. 2D scan engines are the 
only scanning products that meet these specifications. One-dimensional 
scan engines are unable to read most types of 2D images and are not 
viable substitutes for 2D scan engines. Scanning functions on smart 
phones and similar consumer devices do not offer the speed, accuracy, 
reading range or field of view of 2D scan engines. As a result, 
customers would likely not switch to alternate scanning products (such 
as one-dimensional scan engines or smart phones) in response to a five 
to ten percent increase in the price of 2D scan engines in sufficient 
numbers to make that price increase unprofitable to a hypothetical 
monopolist.
    The relevant geographic area in which to analyze the effects of the 
Acquisition on the 2D scan engine market is the United States. 2D scan 
engine suppliers who want to sell their scan engines to customers who 
intend to incorporate the scan engines into products that will be sold 
into the United States must own or have a license to U.S. patents 
covering 2D scan engine technology and be able to indemnify their 
customers against the threat of a patent suit.
    The market for 2D scan engines in the United States is highly 
concentrated. Honeywell, Intermec and Motorola are the three most 
significant participants in the 2D scan engine market in the United 
States. Post-Acquisition, the combined share of the two firms--
Honeywell and Motorola--would be in excess of 80%. Additionally, 
Honeywell, Intermec and Motorola are the only 2D scan engine firms in 
the U.S. that have deep and broad portfolios of relevant intellectual 
property (``IP'') that insulate them and their customers from 
infringement suits.
    There are a number of fringe 2D scan engine manufacturers who sell 
2D scan engines to customers outside of the United States, and to a 
lesser extent, to customers who incorporate the scan engines into 
products sold in the United States. In aggregate, the fringe 
competitors' account for less than 20% of all 2D scan engines sold in 
the United States. While the fringe competitors are increasingly 
important competitors to Honeywell, Intermec and Motorola outside of 
the United States as a result of their growing technical capabilities, 
they are constrained from expanding their sales of 2D scan engines into 
products that will be sold in the United States because they do not 
possess the relevant U.S. IP rights. Without ownership of, or a license 
to, the relevant IP, the fringe competitors are not a significant 
competitive constraint to Honeywell, Intermec and Motorola for the sale 
of 2D scan engines for use in products sold in the United States.
    The proposed Acquisition increases the likelihood of coordinated 
interaction between Honeywell and the major remaining player in the 
market, Motorola. Industry participants recognize that Honeywell, 
Intermec and Motorola are the ``Big Three'' players in the market. As 
noted above, the fringe 2D scan engine competitors do not constrain the 
pricing of the ``Big Three.'' Accordingly, the proposed Acquisition 
increases the risk that the two remaining players, Honeywell and 
Motorola, will compete less aggressively, diminishing the level of 
competition in the market.
    New entry, repositioning or expansion will not be sufficient to 
deter or counteract the anticompetitive effects of the proposed 
Acquisition in a timely manner. The most significant barrier to entry 
and expansion in the United

[[Page 58307]]

States is IP. For example, although 2D scan engine companies other than 
Honeywell, Intermec and Motorola have the ability to, and do, 
manufacture 2D scan engines, customers who incorporate the scan engines 
into products for sale into the United States are generally unwilling 
to purchase from them because they cannot provide customers with 
indemnification from patent infringement suits.

IV. The Consent Agreement

    The Consent Agreement eliminates the competitive concerns raised by 
Honeywell's proposed acquisition of Intermec by requiring Honeywell to 
license Honeywell and Intermec's U.S. patents covering technology used 
in 2D scan engines. The Consent Agreement requires Honeywell to license 
the relevant patents to Datalogic, or another licensee approved by the 
Commission through a license agreement approved by the Commission.
    Datalogic has the industry experience, reputation and resources to 
replace Intermec as an effective competitor in the U.S. 2D scan engine 
market. It is headquartered in Bologna, Italy, with its North American 
design headquarters in Eugene, Oregon. Datalogic is well positioned to 
replace the competition that will be eliminated as a result of the 
proposed Acquisition. The company has developed 2D scan engines that it 
markets outside of the U.S. These 2D scan engines are of similar 
quality to those offered by Honeywell and Intermec. However, Datalogic 
does not currently compete against Honeywell and Intermec in the sale 
of 2D scan engines in the U.S. Datalogic also sells products that 
incorporate 2D scan engines, such as in-counter checkout scanners and 
airport kiosk scanners (where it is one of the global leaders), hand 
held scanners (where it is a top player globally), and rugged mobile 
computers (where it is the fourth-largest player globally).
    Pursuant to the Consent Agreement, Datalogic (or another approved 
licensee) would receive a license to all of the Honeywell and Intermec 
U.S. IP covering technology used in 2D scan engines and related devices 
(excluding non-retail fixed scanners) necessary to produce and sell 2D 
scan engines in the U.S. Obtaining the proposed license from Honeywell 
would enable the approved licensee to sell products without fear of an 
IP suit and to offer the required indemnification to market 2D scan 
engines in the U.S. The license extends for twelve years, which is the 
life of the primary blocking patents owned by Honeywell. In addition to 
licensing the U.S. patents, the Consent Agreement prohibits Honeywell 
from filing infringement actions against the approved licensee, its 
suppliers and customers based on the approved licensee's 2D scan 
engines or related devices. This provides the approved licensee with 
global freedom to research, develop, market and sell its 2D scan 
engines and related devices without fear of infringement suits by 
Honeywell. The Consent Agreement also prohibits Honeywell from selling 
or assigning the patents included in the license to anyone who does not 
agree to abide by the terms of the Order with respect to those acquired 
patents.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement, and it is not intended to constitute an official 
interpretation of the proposed Order or to modify its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2013-22966 Filed 9-20-13; 8:45 am]
BILLING CODE 6750-01-P