United States of America v. Iron Mountain Inc., et al.; Public Comment and Response on Proposed Final Judgment, 61244-61248 [2016-21287]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 81, Number 172 (Tuesday, September 6, 2016)]
[Notices]
[Pages 61244-61248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21287]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE

Antitrust Division


United States of America v. Iron Mountain Inc., et al.; Public 
Comment 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 comment 
received on the proposed Final Judgment in United States of America v. 
Iron Mountain Inc., et al., Civil Action No. 1:16-cv-00595-APM, 
together with the Response of the United States to Public Comment.
    Copies of the comment and the United States' Response are available 
for inspection on the Antitrust Division's website at https://www.justice.gov/atr, and at the Office of the Clerk of the United 
States District Court for the District of Columbia. Copies of these 
materials may be obtained from the Antitrust Division upon request and 
payment of the copying fee set by Department of Justice regulations.

Patricia A. Brink,
Director of Civil Enforcement.

United States District Court for the District of Columbia

    United States of America, Plaintiff, v. Iron Mountain Inc., and 
Recall Holdings Ltd., Defendants.

Civil Action No. 1:16-cv-00595-APM Judge Amit P. Mehta

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

    Pursuant to the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec.  16(b)-(h) (``APPA'' or ``Tunney Act''), 
the United States hereby responds to a single public comment received 
regarding the proposed Final Judgment in this case. After consideration 
of the submitted comment, the United States continues to believe that 
the proposed Final Judgment provides 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 comment and this Response have been published 
in the Federal Register pursuant to 15 U.S.C. Sec.  16(d).

I. Background

    On March 31, 2016, the United States filed the Complaint in this 
matter, alleging that defendant Iron Mountain Inc.'s (``Iron 
Mountain'') acquisition of defendant Recall Holdings Ltd. (``Recall'') 
likely would substantially lessen competition in the provision of hard-
copy records management services in several markets in the United 
States in violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  
18. The Complaint further alleged that, as a result of the acquisition 
as originally proposed, prices for these services likely would have 
increased and customers would have received services of lower quality.
    At the same time the Complaint was filed, the United States filed a 
proposed Final Judgment, a Hold Separate Stipulation and Order, and a 
Competitive Impact Statement (``CIS'') that explains how the proposed 
Final Judgment is designed to remedy the likely anticompetitive effects 
of the proposed acquisition. As required by the Tunney Act, the United 
States published the proposed Final Judgment and CIS in the Federal 
Register on April 11, 2016. See 81 Fed. Reg. 21,383 (Apr. 11, 2016). In 
addition, the United States ensured that a summary of the terms of the 
proposed Final Judgment and CIS, together with directions for the 
submission of written comments, were published in The Washington Post 
on seven different days during the period of April 4, 2016, to April 
10, 2016. See 15 U.S.C. Sec.  16(c). The 60-day waiting period for 
public comments ended on June 10, 2016. One comment was received and is 
described below and attached as Exhibit 1.

II. The Investigation and Proposed Resolution

    After Iron Mountain and Recall announced their plans to merge, the 
United States conducted an investigation into the competitive effects 
of the proposed transaction. The United States considered the potential 
competitive effects of the transaction on hard-copy records management 
services (``RMS'') in a number of geographic areas. As a part of this 
investigation, the United States obtained documents and information 
from the merging parties and others and conducted more than 160 
interviews with customers, competitors, and other individuals 
knowledgeable about the industry.

[[Page 61245]]

    RMS involves the off-site storage of records and the provision of 
services related to records storage. For a variety of legal and 
business reasons, companies frequently must keep hard-copy records for 
significant periods of time. Given the physical space required to store 
any substantial volume of records and the effort required to manage 
stored records, many customers contract with RMS vendors such as Iron 
Mountain and Recall to provide these services. RMS vendors typically 
pick up records from customers and bring them to a secure off-site 
facility, where they index the records to allow their customers to keep 
track of them. RMS vendors retrieve stored records for customers upon 
request and often perform other services related to the storage, 
tracking, and shipping of records. For example, they sometimes destroy 
stored records on behalf of the customer once preservation is no longer 
required.
    Customers often procure RMS through competitive bidding and have 
contracts that usually specify fees for each service provided (e.g., 
pick-up, monthly storage, retrieval, delivery, and transportation). 
Most customers purchase RMS in only one city. Customers with operations 
in multiple cities sometimes purchase RMS from a single vendor pursuant 
to a single contract. But, other multi-city customers purchase RMS 
under separate contracts for each city, often using different vendors 
in different cities.
    The provision of RMS generally occurs in localized markets in a 
radius around a metropolitan area. Customers generally require a 
potential RMS vendor to have a storage facility located within a 
certain proximity to the customers' locations. Customers generally will 
not consider vendors located outside a particular radius, because the 
vendor will not be able to retrieve and deliver records on a timely 
basis. The travel radius a customer is willing to consider is usually 
measured in time, rather than miles, as retrieval of records is often a 
time-sensitive matter. Transportation costs also likely render a 
distant RMS vendor uncompetitive with vendors located closer to the 
customer.
    After its investigation, the United States concluded that the 
proposed transaction likely would substantially lessen competition in 
the provision of RMS in 15 metropolitan areas: Detroit, Michigan; 
Kansas City, Missouri; Charlotte, North Carolina; Durham, North 
Carolina; Raleigh, North Carolina; Buffalo, New York; Tulsa, Oklahoma; 
Pittsburgh, Pennsylvania; Greenville/Spartanburg, South Carolina; 
Nashville, Tennessee; San Antonio, Texas; Richmond, Virginia; San 
Diego, California; Atlanta, Georgia; and Seattle, Washington. In each 
of these geographic areas, Iron Mountain and Recall are two of only a 
few significant firms providing RMS. As explained more fully in the 
Complaint and the CIS, in each of these areas, the resulting 
substantial increase in concentration and loss of head-to-head 
competition between Iron Mountain and Recall likely would result in 
higher prices and lower quality service for RMS customers in each of 
the relevant metropolitan areas. Complaint ] 18; CIS Sec.  II(B).
    The proposed Final Judgment is designed to address competitive 
concerns in each of these 15 metropolitan areas. The proposed Final 
Judgment contemplates divesting Recall assets in 13 metropolitan areas 
to Access CIG, LLC (``Access'') and Recall assets in the remaining two 
metropolitan areas (Atlanta and Seattle) to Acquirers who will be 
identified to and approved by the United States in the future. 
Divestiture of the assets to independent, economically viable 
competitors will ensure that customers of these services will continue 
to receive the benefits of competition.
    The proposed Final Judgment requires the divestiture of over 26 
Recall facilities, together with associated assets, including customer 
contracts. With respect to customer contracts, the proposed Final 
Judgment addresses the situation in which a Recall customer has records 
stored in more than one metropolitan area, which are covered by the 
same contract, and as a result of the divestitures, a portion of their 
records will be stored by Defendants and another portion will be stored 
by an Acquirer. Section II.L of the proposed Final Judgment defines 
these customers as ``Split Multi-City Customers.'' To protect the 
interests of Split Multi-City Customers, Section IV.J of the proposed 
Final Judgment allows Split Multi-City Customers to terminate or 
otherwise modify their existing Recall contracts to enable them to 
transfer their records from an RMS facility retained by Defendants to a 
facility owned by an Acquirer without paying permanent withdrawal fees, 
retrieval fees, or other fees required under their contracts with 
Recall. This will ensure that the Acquirer of the Divestiture Assets 
can compete to provide RMS to customers that are served by both 
divested RMS facilities and RMS facilities retained by Defendants.

III. Standard of Judicial Review

    The Tunney Act requires that proposed consent judgments in 
antitrust cases brought by the United States be subject to a 60-day 
public comment period, after which the court shall determine whether 
entry of the proposed Final Judgment ``is in the public interest.'' 15 
U.S.C. Sec.  16(e)(1). In making that determination, the court, in 
accordance with the statute as amended in 2004, is required to 
consider:

(A) the competitive impact of such judgment, including termination 
of alleged violations, provisions for 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. Sec.  16(e)(1). In considering these statutory factors, the 
court's inquiry is necessarily a limited one as the government is 
entitled to ``broad discretion to settle with the defendant within the 
reaches of the public interest.'' United States v. Microsoft Corp., 56 
F.3d 1448, 1461 (D.C. Cir. 1995); see also United States v. SBC 
Commc'ns, Inc., 489 F. Supp. 2d 1, 10-11 (D.D.C. 2007) (assessing 
public-interest standard under the Tunney Act); United States v. InBev 
N.V./S.A., No. 08-cv-1965 (JR), 2009 U.S. Dist. LEXIS 84787, at *3 
(D.D.C. Aug. 11, 2009) (discussing nature of review of consent judgment 
under the Tunney Act; inquiry is limited to ``whether the government's 
determination that the proposed remedies will cure the antitrust 
violations alleged in the complaint was reasonable, and whether the 
mechanisms to enforce the final judgment are clear and manageable'').
    Under the APPA, a court considers, among other things, the 
relationship between the remedy secured and the specific allegations 
set forth in the Complaint, whether the decree is sufficiently clear, 
whether the enforcement mechanisms are sufficient, and whether the 
decree may positively harm third parties. See Microsoft, 56 F.3d at 
1458-62. 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)). Instead, courts have held that:


[[Page 61246]]


[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).

    In determining whether a proposed settlement is in the public 
interest, ``the court `must accord deference to the government's 
predictions about the efficacy of its remedies.''' United States v. 
U.S. Airways Grp., Inc., 38 F. Supp. 3d 69, 76 (D.D.C. 2014) (quoting 
SBC Commc'ns, 489 F. Supp. 2d at 17); see also Microsoft, 56 F.3d at 
1461 (noting that the government is entitled to deference as to its 
``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' ``prediction as to the effect of the proposed remedies, its 
perception of the market structure, and its views of the nature of the 
case''); United States v. Morgan Stanley, 881 F. Supp. 2d 563, 567-68 
(S.D.N.Y. 2012) (explaining that the government is entitled to 
deference in choice of remedies).
    Courts ``may not require that the remedies perfectly match the 
alleged violations.'' SBC Commc'ns, 489 F. Supp. 2d at 17. Rather, the 
ultimate question is 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.' '' Microsoft, 56 F.3d at 1461. 
Accordingly, 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; see also 
United States v. Apple, Inc., 889 F. Supp. 2d 623, 631 (S.D.N.Y. 2012). 
And 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 the public 
interest.'' United States v. Am. Tel. & Tel. Co., 552 F. Supp. 131, 151 
(D.D.C. 1982) (citations and internal quotations omitted); 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).
    In its 2004 amendments to the Tunney Act,\1\ Congress made clear 
its intent to preserve the practical benefits of using 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. Sec.  16(e)(2). 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 the Tunney Act proceedings.'' 
SBC Commc'ns, 489 F. Supp. 2d at 11; see also United States v. Enova 
Corp., 107 F. Supp. 2d 10, 17 (D.D.C. 2000) (``[T]he Tunney Act 
expressly allows the court to make its public interest determination on 
the basis of the competitive impact statement and response to public 
comments alone.''); US Airways, 38 F. Supp. 3d at 76 (same).
---------------------------------------------------------------------------

    \1\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for courts to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
Sec.  16(e) (2004) with 15 U.S.C. Sec.  16(e)(1) (2006); see also 
SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004 
amendments ``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------

IV. Summary of Public Comment and the Response of the United States

A. Summary of NRC's Comment

    During the 60-day public comment period, the United States received 
one comment from National Records Centers, Inc. (``NRC''). NRC is a 
nationwide RMS provider that competes with the Defendants and Access in 
multiple metropolitan areas. NRC asserts that the ``proposed 
acquisition will have an anticompetitive effect and a detrimental 
impact on the customers of Iron Mountain, Recall, and Access throughout 
the United States'' and urges the United States to ``re-think the Iron 
Mountain/Recall merger in its totality,'' and block the merger.
    In the alternative, NRC urges modification of the proposed Final 
Judgment to allow all Recall customers affected by the merger to 
transfer their records to any RMS provider without penalty. NRC 
believes the proposed Final Judgment limits customer choice by forcing 
customers to switch to Access as the divestiture buyer (or to another 
approved Acquirer). NRC argues that, in lieu of requiring divestitures 
to Access (or to another Acquirer), the United States ``should just 
simply allow those customers affected by the merger out of their 
contracts, without penalty, should they choose to do so'' such that 
customers could select their RMS vendor instead of ``staying with 
[Defendants] or going to [Access or another Acquirer].''
    NRC also proposes two modifications to the proposed Final Judgment 
and contends the proposed definition of Split Multi-City Customer is 
overly restrictive. First, NRC argues that Split Multi-City Customers 
should be allowed to terminate their contracts with Defendants without 
penalty under Section IV.J and switch to NRC or some other RMS vendor. 
NRC would also extend the period for a customer to elect to move its 
records without penalty under Section IV.J from one to three years. 
Second, NRC proposes that the definition of Split Multi-City Customer 
be broadened by deleting the following from Section II.L: ``A Split 
Multi-City Customer does not include a Recall customer that has 
separate contracts for each Recall facility in which it stores 
records.''

B. Response of the United States to NRC's Comment

1. Divestitures in the 15 Relevant Geographic Markets Are Sufficient To 
Preserve Competition
    NRC complains that limiting divestitures to 15 geographic areas is 
not enough to protect competition. However, because competition for the 
provision of RMS generally occurs in localized markets in a radius 
around a metropolitan area, requiring divestitures in those local 
geographic areas in which the transaction would result in substantial 
increase in concentration and loss of head-to-head competition between 
Iron Mountain and Recall is appropriate to preserve competition.
    As described in Section II above, because of a strong customer 
desire for timely pick-up and delivery of records, customers typically 
procure services from RMS vendors located within the same metropolitan 
area as the customer. RMS vendors located outside a given local 
geographic area generally are considered by customers to be located too 
far away to be a viable RMS vendor. Further, RMS vendors located 
outside the local geographic area generally are unable to compete 
effectively as the distance from the customer's locations to the RMS 
vendor's facilities render the RMS vendor uncompetitive on price as 
well as service. Even large customers that choose one vendor across 
multiple local geographic areas generally require the single RMS vendor 
to be present in all of the local geographic areas where

[[Page 61247]]

the customer is located. Accordingly, the United States focused on the 
potential competitive impact of the transaction on the local geographic 
level.
    Over the course of its investigation, the United States determined 
that the proposed acquisition likely would lessen competition in 15 
local geographic markets that are identified in the Complaint. The 
United States did not identify a competitive problem in any other 
geographic markets where Iron Mountain and Recall compete. Because 
Defendants agreed to a divestiture remedy to address the competitive 
issues in the 15 relevant geographic markets, the United States 
determined that blocking the merger was not necessary and that 
requiring divestitures in the affected 15 relevant geographic markets 
is sufficient to protect competition.
2. Access Is an Appropriate Buyer for the Divested Assets
    NRC complains that Access is not an appropriate buyer for the 
Divestiture Assets. Access is a multi-city RMS vendor and the third-
largest RMS vendor nationally, but it lacks RMS facilities in the 13 
metropolitan areas where it is acquiring RMS facilities from the 
Defendants. Because Access lacked RMS facilities in these areas, it was 
not a viable competitive alternative to Iron Mountain or Recall to 
serve customer locations in these areas. The divestiture of Recall's 
RMS assets to Access in these areas establishes Access as a viable 
competitor in those areas and, thus, maintains existing competition 
that would otherwise be lost. The proposed Final Judgment does not 
direct Defendants to sell divestiture assets in the remaining two 
areas--Seattle and Atlanta--to Access, as Access is a significant 
competitor in these areas.
    While the identity of the Acquirer or Acquirers of the assets in 
Seattle and Atlanta has yet to be determined, any proposed Acquirer 
will be subject to the United States' approval under Section IV of the 
proposed Final Judgment. Pursuant to Section IV.L, Defendants must 
divest the Divestiture Assets in such a way as to satisfy the United 
States that the assets can and will be operated by the purchasers as 
viable, ongoing records management businesses that can compete 
effectively in the relevant markets. Because Access (and other 
Acquirers) will effectively replace the lost competition, the proposed 
Final Judgment is in the public interest. See Microsoft, 56 F.3d at 
1459-61 (noting that the government has discretion to settle ``within 
the reaches of the public interest'').
3. Limiting the Right To Terminate Recall Contracts to Customers in the 
15 Relevant Geographic Markets Is Sufficient To Preserve Competition
    NRC proposes a modification to Section IV.J to grant all Recall 
customers, wherever they are located, the right to terminate their 
contracts with Recall without penalty in order to switch to NRC or some 
other RMS vendor. The proposed Final Judgment is not designed to assist 
NRC or other RMS vendors to obtain Recall customers. The purpose of the 
proposed Final Judgment is to ensure that the Acquirers of the Divested 
Assets will be viable, ongoing RMS businesses that can compete 
effectively in the 15 relevant geographic markets. Because the United 
States determined that the transaction would likely lead to competitive 
harm in 15 local geographic areas, the proposed Final Judgment is 
designed only to address competitive harm to customers who are served 
in some capacity by Defendants' RMS facilities located in the 15 
relevant geographic markets alleged in the Complaint. NRC's proposal 
would expand the scope of the decree beyond the 15 relevant geographic 
markets alleged in the Complaint. Including all Recall customers 
outside the 15 markets would far exceed what is necessary to remedy the 
harm found by the United States and alleged in the Complaint. See 
Microsoft, 56 F.3d at 1459-60 (discussing nature of review of consent 
decrees as limited to the allegations made).
4. The Definition of Split Multi-City Customers Is Appropriate for the 
Preservation of Competition
    NRC proposes that the last sentence of Section II.L of the proposed 
Final Judgment, which states that ``[a] Split Multi-City Customer does 
not include a Recall customer that has separate contracts for each 
Recall facility in which it stores records,'' be struck. The proposed 
Final Judgment is designed to allow customers with the preference for a 
single vendor pursuant to a single contract to transfer their records 
such that the records will not be stored at facilities managed by 
different vendors (i.e., Iron Mountain and an Acquirer of the 
Divestiture Assets). As noted above, some customers prefer to use a 
single vendor pursuant to a single contract for all their RMS needs, 
while other customers use separate contracts for different metropolitan 
areas. The proposed Final Judgment limits this right to customers who 
have expressed this preference by having a single contract with a 
single vendor. The proposed Final Judgment does not include customers 
who have chosen to disaggregate their RMS business with separate 
contracts for each metropolitan area in which they store records. The 
contracts for disaggregated customers will either be divested or 
retained by Defendants, as appropriate, depending on whether each 
contract covers services in one of the 15 relevant geographic markets 
where harm is alleged. For that reason, the definition of Split Multi-
City Customers is an effective and appropriate remedy for the antitrust 
violations alleged in the Complaint. See Microsoft, 56 F.3d at 1459-61 
(discussing government's ``broad discretion to settle with the 
defendant within the reaches of the public interest'').
5. Allowing Split Multi-City Customers One Year To Transfer Records Is 
Appropriate for the Preservation of Competition
    NRC proposes that Split Multi-City Customers be allowed to transfer 
their records to any RMS provider for a period of three years rather 
than the one-year period allowed under Section IV.J. The goal of the 
divestitures is to allow for the divested assets to be operated as 
viable, ongoing businesses that can compete effectively in the relevant 
markets. It is in the best interest of the industry and competition 
that any period of disruption or uncertainty in the relevant markets be 
minimized. For these reasons, limiting to a one-year period the right 
of Split Multi-City Customers to transfer their records provides an 
effective and appropriate remedy for the antitrust violations alleged 
in the Complaint. See Microsoft, 56 F.3d at 1459-61 (discussing 
government's ``broad discretion to settle with the defendant within the 
reaches of the public interest'').

V. Conclusion

    After reviewing the one public comment, the United States continues 
to believe that the proposed Final Judgment provides an effective and 
appropriate remedy for the antitrust violations alleged in the 
Complaint, and is in the public interest. The United States will move 
this Court to enter the Final Judgment soon after the comment and this 
Response are published in the Federal Register.

Dated: August 29, 2016

Respectfully submitted,

_____/s/_____
Soyoung Choe
U.S. Department of Justice, Antitrust Division
Networks & Technology Enforcement Section

[[Page 61248]]

450 Fifth Street NW., Suite 7100
Washington, DC 20530
Telephone: (202) 598-2436
Facsimile: (202) 514-9033
Email: soyoung.choe@usdoj.gov

Certificate of Service

    I hereby certify that on this 29th day of August, 2016, the 
foregoing Notice of Extension of Time was filed using the Court's CM/
ECF system, which shall send notice to all counsel of record.

_____/s/_____
Soyoung Choe
U.S. Department of Justice, Antitrust Division
Networks & Technology Enforcement Section
450 Fifth Street NW., Suite 7100
Washington, DC 20530
Telephone: (202) 598-2436
Facsimile: (202) 514-9033
Email: soyoung.choe@usdoj.gov

May 31, 2016
Via Federal Express
United States Department of Justice
450 Fifth Street
Suite 7100
Washington, DC 20530

Attn: Maribeth Petrizzi
Chief Litigation II Section
Antitrust Division

Dear Sirs/Madam:

    Please accept these public comments from Robert S. Moran, Jr., the 
undersigned, a partner of the law firm of McBreen & Kopko in connection 
with the pending matter captioned United States vs. Iron Mountain Inc. 
(``Iron Mountain'') and Recall Holdings Ltd. (``Recall''); Proposed 
Final Judgment and Competitive Impact Statement Civil Action No. 1-16-
cv-00595. Please be advised that the undersigned represents National 
Records Centers, Inc. (``NRC'') a nationwide provider of records 
management services (``RMS'') throughout the United States. NRC 
competes directly with Iron Mountain, Recall and Access CIG, LLC 
(``Access'') in many markets.
    It is our position that the proposed acquisition will have an 
anticompetitive effect and a detrimental impact on the customers of 
Iron Mountain, Recall and Access throughout the United States. NRC 
urges the Department of Justice to completely re-think the Iron 
Mountain/Recall merger in its totality. Combining the number one 
company in the industry with the number two company is unfair and 
anticompetitive by its very nature. Approving such an anticompetitive 
combination of businesses by merely causing business number two to shed 
some of its business is clearly not enough to result in open and fair 
competition. Forcing divestiture of this business to the number three 
company in the industry makes no sense at all. Instead of forcing this 
divestiture to a huge and growing company, the Department of Justice 
should just simply allow those customers affected by the merger out of 
their contracts, without penalty, should they chose to do so. Then 
those customers could pick their service provider by price and service 
and not be forced with the unhappy choice of staying with company two 
or going to company three. Customers are much better served with 
choices. The foundation of our pro-competition philosophy is choice. 
The Department of Justice should not engineer a Proposed Final Judgment 
that serves to limit customer choices.
    It is our further position that the Proposed Final Judgment 
requires changes, at a minimum, to make it more equitable and to 
address our anti-competitive concerns.
    First, we see no reason why any customer of Recall (not just a 
``Split-City Customer'') should not have the right to terminate its 
contract with Recall without penalty. This is fair and reasonable.
    Second, the definition for ``Split Multi-City Customer'' is overly 
restrictive. The definition used in the Proposed Final Judgment 
contains the qualification that ``a Split Multi-City Customer does not 
include a Recall customer that has separate contracts for each Recall 
facility in which it stores records''. It is our belief that this 
qualifying statement should be deleted from the Split Multi-City 
Customer definition.
    In the Proposed Final Judgment Section IV ``Divestitures'', 
subparagraph J it is provided that for a period of one ( 1) year from 
the date of the sale of any Divestiture Assets to an Acquirer, 
defendant shall allow any Split Multi-City Customer to terminate or 
otherwise modify its contract with Recall so as to enable the Split 
Multi-City Customer to transfer some or all of its records to that 
Acquirer without penalty or delay and shall not enforce any contractual 
provision providing for permanent withdrawal fees, retrieval fees, or 
other fees associated with transferring such customers' records from a 
Recall Management Facility to a facility operated by Acquirer''.
    We see no reason why provision J does not allow that any Split 
Multi-City Customer can have the discretion to terminate or otherwise 
modify its contract with Recall so as to enable the Split Multi-City 
Customer to transfer some or all of its records to any other person or 
entity engaged in the records management business and not solely to 
Access. In this way fair and open competition for the business of any 
Split Multi-City Customer would occur allowing either Access or any 
other service provider to win the business. The substantial benefit to 
any Split Multi-City Customer is obvious. To restrict the discretion of 
these Split Multi-City Customers so that they have to do business with 
Access is unfair and inequitable. Also the qualification to the 
definition of Split Multi-City Customer further has anti-competitive 
affects and restricts open and fair competition.
    It is our sincere hope that the acquisition of Recall by Iron 
Mountain not go forward. If it were to go forward then Recall customers 
in the affected markets should be free (without penalty) to choose any 
new service provider. Should the Department of Justice move forward 
with this Proposed Final Judgment, NRC strongly encourages the 
Department of Justice to modify the proposed Final Judgment in two 
ways. First, to delete the qualification to the definition of Split 
Multi-City Customer and second, to modify Provision IV Subsection J to 
enlarge the period from one (1) year to three (3) years and to allow 
any Split Multi-City Customer to terminate or otherwise modify its 
contract with Recall so as to enable the Split Multi-City Customer to 
transfer its records without penalty or delay to any records storage 
provider and not only to Access.
    The foregoing is submitted respectfully and in the interest of fair 
and open competition to enhance the opportunity for any records storage 
company to obtain the business that is being divested as part of this 
proposed Final Judgment.
    Thank you.

Very truly yours,

/s/--------------------------------------------------------------------

Robert S. Moran, Jr.

RSM:km

[FR Doc. 2016-21287 Filed 9-2-16; 8:45 am]
 BILLING CODE P