United States v. Learfield Communications, LLC; IMG College, LLC; and A-L Tier I LLC: Response to Public Comment, 7593-7605 [2020-02586]
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response and the public comment have
been published in the Federal Register,
pursuant to 15 U.S.C. 16(d).
DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Learfield
Communications, LLC; IMG College,
LLC; and A–L Tier I LLC: Response to
Public Comment
Pursuant to the Antitrust Procedures
and Penalties Act, 15 U.S.C. 16(b)–(h),
the United States hereby publishes
below the Response to Public Comment
on the Proposed Final Judgment in
United States v. Learfield
Communications, LLC; IMG College,
LLC; and A–L Tier I LLC, Civil Action
No. 1:19–cv–00389–EGS, which was
filed in the United States District Court
for the District of Columbia on February
3, 2020, together with a copy of the
comment received by the United States.
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 also be obtained from the
Antitrust Division upon request and
payment of the copying fee set by
Department of Justice regulations.
Amy R. Fitzpatrick,
Counsel to the Senior Director for
Investigations and Litigation.
United States District Court for the
District of Columbia
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United States of America, Plaintiff, v.
Learfield Communications, LLC, IMG College,
LLC and A–L Tier I LLC, Defendants.
CASE: 1:19–cv–00389–EGS
Response of Plaintiff United States to
Public Comment on the Proposed Final
Judgment
As required by the Antitrust
Procedures and Penalties Act (the
‘‘APPA’’ or ‘‘Tunney Act’’), 15 U.S.C.
16(b)–(h), the United States hereby
responds to the public comment
received by the United States regarding
the proposed Final Judgment in this
case. After careful consideration, the
United States continues to believe that
the proposed remedy will address the
harm alleged in the Complaint and is
therefore in the public interest. The
proposed Final Judgment will ensure
that the Defendants and their employees
and agents will not impede competition
by agreeing not to compete, entering
into joint ventures that reduce
competition, or sharing competitively
sensitive information with their
competitors. The United States will
move the Court for entry of the
proposed Final Judgment after this
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I. Procedural History
On October 5, 2017, Learfield
Communications, LLC (‘‘Learfield’’) and
IMG College, LLC (‘‘IMG’’) announced a
proposed merger. After investigating
whether the merger would violate
Section 7 of the Clayton Act, 15 U.S.C.
18, by substantially lessening
competition, the United States did not
challenge the transaction. On December
27, 2018, the United States informed the
parties of this decision, and the
Defendants became free to close their
proposed merger.
During the course of the merger
investigation, however, the United
States discovered evidence of a
potential separate violation of the
antitrust laws. This evidence indicated
that the parties, during a prior period of
conduct, had agreed or otherwise
coordinated with one another, as well as
between themselves and other
competitors, in a manner that denied
their college customers the benefits of
competition in violation of Section 1 of
the Sherman Act, 15 U.S.C. 1.
Following an investigation of that
separate conduct, on February 14, 2019,
the United States filed a civil antitrust
complaint alleging that the Defendants
agreed or otherwise coordinated to limit
competition, resulting in an unlawful
restraint of trade in the multimedia
rights (‘‘MMR’’) management market
under Section 1 of the Sherman Act.
The Complaint seeks injunctive relief to
enjoin the Defendants from engaging in
similar conduct in the future.
Simultaneously with the filing of the
Complaint, the United States filed a
proposed Final Judgment, a Stipulation
signed by the parties that consents to
entry of the proposed Final Judgment
after compliance with the requirements
of the Tunney Act, and a Competitive
Impact Statement describing the events
giving rise to the alleged violation and
the proposed Final Judgment.
The proposed Final Judgment
prohibits sharing of competitively
sensitive information, agreeing not to
bid or agreeing to jointly bid, and,
absent approval from the United States,
entering into or extending MMR joint
ventures. It also requires the Defendants
to implement antitrust compliance
training programs.
The United States caused the
Complaint, the proposed Final
Judgment, and the Competitive Impact
Statement to be published in the
Federal Register on February 28, 2019,
see 84 FR 6,824, and caused notice
regarding the same, together with
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directions for the submission of written
comments relating to the proposed Final
Judgment, to be published in The
Washington Post for seven days
beginning on February 27, 2019 and
ending on March 5, 2019. The 60-day
period for public comment ended on
May 6, 2019. During the public
comment period, the United States
received the comment described below
in Section IV and attached as Exhibit A.
II. Standard of Judicial Review
The Clayton Act, as amended by the
APPA, requires that proposed consent
judgments in antitrust cases brought by
the United States be subject to a 60-day
comment period, after which the Court
shall determine whether entry of the
proposed Final Judgment ‘‘is in the
public interest.’’ 15 U.S.C. 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. 16(e)(1)(A) & (B). 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); United States v. U.S.
Airways Grp., Inc., 38 F. Supp. 3d 69,
75 (D.D.C. 2014) (explaining that the
‘‘court’s inquiry is limited’’ in Tunney
Act settlements); United States v. InBev
N.V./S.A., No. 08–1965 (JR), 2009 U.S.
Dist. LEXIS 84787, at *3 (D.D.C. Aug.
11, 2009) (noting that a court’s review
of a consent judgment is limited and
only inquires ‘‘into whether the
government’s determination that the
proposed remedies will cure the
antitrust violations alleged in the
complaint was reasonable, and whether
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the mechanism to enforce the final
judgment are clear and manageable’’).
As the U.S. 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 in the government’s
complaint, whether the proposed Final
Judgment is sufficiently clear, whether
its enforcement mechanisms are
sufficient, and whether it may positively
harm third parties. See Microsoft, 56
F.3d at 1458–62. With respect to the
adequacy of the relief secured by the
proposed Final Judgment, a court may
‘‘not to make de novo determination of
facts and issues.’’ United States v. W.
Elec. Co., 993 F.2d 1572, 1577 (D.C. Cir.
1993) (quotation marks omitted); see
also Microsoft, 56 F.3d at 1460–62;
United States v. Alcoa, Inc., 152 F.
Supp. 2d 37, 40 (D.D.C. 2001); United
States v. Enova Corp., 107 F. Supp. 2d
10, 16 (D.D.C. 2000); InBev, 2009 U.S.
Dist. LEXIS 84787, at *3. Instead, ‘‘[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.’’ W. Elec. Co., 993
F.2d at 1577 (quotation marks omitted).
‘‘The court should bear in mind the
flexibility of the public interest inquiry:
The court’s function is not to determine
whether the resulting array of rights and
liabilities is one that will best serve
society, but only to confirm that the
resulting settlement is within the
reaches of the public interest.’’
Microsoft, 56 F.3d at 1460 (quotation
marks omitted). More demanding
requirements would ‘‘have enormous
practical consequences for the
government’s ability to negotiate future
settlements,’’ contrary to congressional
intent. Id. at 1456. ‘‘The Tunney Act
was not intended to create a
disincentive to the use of the consent
decree.’’ Id.
The United States’ predictions about
the efficacy of the remedy are to be
afforded deference by the Court. See,
e.g., Microsoft, 56 F.3d at 1461
(recognizing courts should give ‘‘due
respect to the Justice Department’s . . .
view of the nature of its case’’); United
States v. Iron Mountain, Inc., 217 F.
Supp. 3d 146, 152–53 (D.D.C. 2016) (‘‘In
evaluating objections to settlement
agreements under the Tunney Act, a
court must be mindful that [t]he
government need not prove that the
settlements will perfectly remedy the
alleged antitrust harms[;] it need only
provide a factual basis for concluding
that the settlements are reasonably
adequate remedies for the alleged
harms.’’) (internal citations omitted);
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United States v. Republic Servs., Inc.,
723 F. Supp. 2d 157, 160 (D.D.C. 2010)
(noting ‘‘the deferential review to which
the government’s proposed remedy is
accorded’’); United States v. ArcherDaniels-Midland Co., 272 F. Supp. 2d 1,
6 (D.D.C. 2003) (‘‘A district court must
accord due respect to the government’s
prediction as to the effect of proposed
remedies, its perception of the market
structure, and its view of the nature of
the case’’). The ultimate question is
whether ‘‘the remedies [obtained by the
Final Judgment are] so inconsonant with
the allegations charged as to fall outside
of the ‘reaches of the public interest.’ ’’
Microsoft, 56 F.3d at 1461 (quoting W.
Elec. Co., 900 F.2d at 309).
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, and does not authorize the
Court to ‘‘construct [its] own
hypothetical case and then evaluate the
decree against that case.’’ Microsoft, 56
F.3d at 1459; see also U.S. Airways, 38
F. Supp. 3d at 75 (noting that the court
must simply determine whether there is
a factual foundation for the
government’s decisions such that its
conclusions regarding the proposed
settlements are reasonable); InBev, 2009
U.S. Dist. LEXIS 84787, at *20 (‘‘the
‘public interest’ is not to be measured by
comparing the violations alleged in the
complaint against those the court
believes could have, or even should
have, been alleged’’). 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.
Microsoft, 56 F.3d at 1459–60.
In its 2004 amendments to the APPA,
Congress made clear its intent to
preserve the practical benefits of using
consent judgments proposed by the
United States in antitrust enforcement,
Public Law 108–237 § 221, and added
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); see also
U.S. Airways, 38 F. Supp. 3d at 76
(indicating that a court is not required
to hold an evidentiary hearing or to
permit intervenors as part of its review
under the Tunney Act). This language
explicitly wrote into the statute what
Congress intended when it first enacted
the Tunney Act in 1974. As Senator
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Tunney 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 Sen. Tunney). ‘‘A court
can make its public interest
determination based on the competitive
impact statement and response to public
comments alone.’’ U.S. Airways, 38 F.
Supp. 3d at 76 (citing Enova Corp., 107
F. Supp. 2d at 17).
III. The Section 1 Investigation, the
Harm Alleged in the Complaint, and the
Proposed Final Judgment
The proposed Final Judgment is the
culmination of a thorough,
comprehensive investigation conducted
by the Antitrust Division of the U.S.
Department of Justice into the
Defendants’ conduct involving the
Defendants’ joint ventures with each
other to service specific universities
which sought to outsource the
management of their MMR as well as
the Defendants’ similar joint ventures
with other competitors.
The Complaint alleges that, under the
guise of legitimate business
arrangements, these joint ventures
denied universities the benefits of
competition between the competitors.
The Complaint further alleges that the
Defendants have used, or attempted to
use, joint ventures as a way to co-opt
smaller competitors and remove them
from submitting competitive bids and
that the Defendants’ non-compete
agreements have had similar effects. By
using and enforcing non-compete
agreements, for example, Defendant
Learfield prevented Defendant IMG
from competing on a school’s MMR
contract when it came up for renewal.
Based on the evidence gathered, the
United States concluded that the
Defendants’ use of joint ventures and
non-compete agreements were
anticompetitive and violated Section 1
of the Sherman Act, 15 U.S.C. 1,
because they had detrimental effects on
competition among MMR providers.
The Defendants’ use of joint ventures
and non-compete agreements harmed
the competitive process by suppressing
or eliminating competition, reduced the
revenues received by universities for
licensing their MMR, and caused the
quality of MMR management to
decrease. The United States seeks the
proposed Final Judgment to restore and
protect competition. The Defendants
have agreed to abide by the provisions
of the proposed Final Judgment during
the pendency of the Tunney Act
proceedings (Dkt. No. 2.1 at 2).
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The proposed Final Judgement
provides an effective and appropriate
remedy for this competitive harm by
enjoining the Defendants from: (1)
Directly or indirectly communicating
competitively sensitive information
related to bidding for an MMR contract;
and (2) agreeing with any MMR
competitor not to bid, or to bid jointly,
on an MMR contract. The Defendants,
for example, may not discuss their
negotiating strategies or proposed prices
relating to any particular university’s
MMR business with any other MMR
competitor. Invitations or suggestions to
jointly bid are also prohibited.
The proposed Final Judgment also
creates a mechanism for joint ventures
involving the Defendants to continue or
be created if the collaboration will not
reduce the number of competitors
bidding on a university’s MMR
business. Pursuant to the proposed
Final Judgment, the Defendants may
apply to the United States for
authorization to continue a joint venture
that is about to expire or create a new
joint venture to service a university’s
MMR needs. The United States will
undertake a case-by-case analysis of any
such application to determine whether
the joint venture is likely to eliminate or
enhance competition.
Under some circumstances, joint
ventures may be efficient and
procompetitive. See, e.g., U.S. Dept. of
Justice & FTC, Antitrust Guidelines for
Collaborations Among Competitors, at 6
(2000) (‘‘A collaboration may allow its
participants to better use existing assets,
or may provide incentives for them to
make output-enhancing investments
that would not occur absent the
collaboration.’’). However, ‘‘labeling an
arrangement a ‘joint venture’ will not
protect what is merely a device to raise
price or restrict output; the nature of the
conduct, not its designation, is
determinative.’’ Id. at 9 (internal
citations omitted). The United States
routinely investigates joint
arrangements between competitors to
determine whether they violate the
antitrust laws. Pursuant to the proposed
Final Judgment, the Defendants have
consented to the United States making
that determination in its sole discretion
without requiring the United States to
prove to a Court that a proposed new or
continuing collaboration involving a
Defendant violates Section 1 of the
Sherman Act.
Finally, the proposed Final Judgment
includes robust mechanisms that will
allow the United States and the Court to
monitor the effectiveness of the relief
and to enforce compliance.
• The proposed Final Judgment
requires each Defendant to designate an
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Antitrust Compliance Officer who will
be responsible for implementing
training and compliance programs and
ensuring compliance with the Final
Judgment. Among other duties, the
Antitrust Compliance Officer will be
required to distribute copies of the Final
Judgment and ensure that training on
the requirements of the Final Judgment
and the antitrust laws is provided to the
Defendants’ management. Moreover,
each Defendant, through its CEO,
General Counsel, or Chief Legal Officer,
must certify annual compliance with the
Final Judgment.
• The proposed Final Judgment
requires each Defendant to establish an
antitrust whistleblower policy and to
remedy and report violations of the
Final Judgment.
• The proposed Final Judgment
provides that the United States retains
and reserves all rights to enforce the
provisions of the proposed Final
Judgment, including its rights to seek an
order of contempt from the Court. The
Defendants have agreed that in any civil
contempt action, any motion to show
cause, or any similar action brought by
the United States regarding an alleged
violation of the Final Judgment, the
United States may establish the
violation and the appropriateness of any
remedy by a preponderance of the
evidence and that the Defendants have
waived any argument that a different
standard of proof should apply. This
provision aligns the standard for
compliance obligations with the
standard of proof that applies to the
underlying offense that the compliance
commitments address.
• The proposed Final Judgment
provides additional clarification
regarding the interpretation of the
provisions of the proposed Final
Judgment. The Defendants agree that
they will abide by the proposed Final
Judgment, and that they may be held in
contempt of this Court for failing to
comply with any provision of the
proposed Final Judgment that is stated
specifically and in reasonable detail,
whether or not it is clear and
unambiguous on its face, and as
interpreted in light of its procompetitive
purpose.
• Should the Court find in an
enforcement proceeding that one or
more Defendants violated the Final
Judgment, the proposed Final Judgment
permits the United States to apply to the
Court for a one-time extension of the
Final Judgment, together with such
other relief as may be appropriate. In
addition, in order to compensate
American taxpayers for any costs
associated with the investigation and
enforcement of violations of the
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proposed Final Judgment, the proposed
Final Judgment provides that in any
successful effort by the United States to
enforce the Final Judgment against one
or more Defendants, whether litigated or
resolved before litigation, the
Defendants agree to reimburse the
United States for any attorneys’ fees,
experts’ fees, or costs incurred in
connection with any enforcement effort,
including the investigation of the
potential violation.
IV. Summary of Public Comment and
the United States’ Response
The United States received a
comment concerning the proposed Final
Judgment from JMI Sports, LLC
(‘‘JMIS’’). JMIS competes against the
Defendants to offer MMR services to
universities and at times has partnered
with the Defendants or their
predecessors. JMIS does not claim that
the provisions of the proposed Final
Judgment are insufficient to enjoin the
unlawful restraints of trade alleged in
the Complaint. JMIS, however, states
that it believes uncertainty exists
regarding the scope of the relief the
United States secured from the
Defendants in ways that affect its
position as a competitor. JMIS,
therefore, seeks clarification regarding
the settlement’s scope, particularly ‘‘the
process through which [the United
States] will vet proposed extensions or
expansions to existing joint ventures
involving’’ the Defendants. See
Attachment A at 2. JMIS also requests
that the United States fully disclose the
settlement’s terms, and that any
settlement provisions that are not
currently part of the proposed Final
Judgment be incorporated into it before
entry by the Court. It also asks for
clarification of terms that are not part of
the proposed Final Judgment.
A. The Proposed Final Judgment
Appropriately Authorizes the United
States To Make Case-by-Case
Determinations of Proposed Joint
Ventures
JMIS seeks additional guidance on
how under the proposed Final Judgment
the United States will conduct its
analysis of joint ventures proposed by
the Defendants. JMIS also asks whether
it and other non-parties may seek
permission under the proposed Final
Judgment to form or continue joint
ventures with the Defendants. It also
mistakenly complains that the proposed
Final Judgment prohibits
communications between it and the
Defendants that are necessary to form or
continue joint ventures. See Attachment
A at 4.
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Additional guidance on how the
United States will evaluate joint
ventures pursuant to Paragraph IV.C. of
the proposed Final Judgment is not
necessary. As noted above, the United
States routinely investigates joint
arrangements between competitors to
determine whether those arrangements
violate the U.S. antitrust laws and has
published guidance on this subject. See
U.S. DOJ & FTC, Antitrust Guidelines for
Collaborations Among Competitors
(2000). If a proposed joint venture is not
the type of agreement that would tend
to raise price or to reduce output such
that it would be condemned as per se
illegal, the United States conducts a
fact-specific inquiry to determine its
legality. By its nature, such an analysis
‘‘entails a flexible inquiry and varies in
focus and detail depending on the
nature of the agreement and the market
circumstances.’’ See id. at 10 (internal
citations omitted). Because these
analyses require a case-by-case
approach, there is no additional
guidance that the United States could
provide to JMIS at this time. JMIS and
others seeking to form joint ventures
with the Defendants in order to pursue
MMR contracts, however, should
consider whether they need to form a
joint venture in order to compete for an
MMR contract or whether the joint
venture would merely eliminate a
competitor.
The proposed Final Judgment permits
the Defendants to make an application
to the United States for authorization to
enter into, renew, or extend a joint
venture. See Proposed Final Judgment at
Paragraph IV.C. This provision will not
hinder JMIS’s ability to form joint
ventures with the Defendants. Because
joint ventures are voluntary business
arrangements, the Defendants must first
be willing to enter into, renew, or
extend a joint venture with JMIS or
other competitors. As a willing
participant, it would be in a Defendant’s
interest to apply for the required
permission from the United States, and
it would be unnecessary for the
proposed Final Judgment to provide a
mechanism for non-parties such as JMIS
or others to make the application
instead.
Finally, contrary to JMIS’s assertation,
the proposed Final Judgment already
provides an exception to the provisions
in Section IV prohibiting the Defendants
from directly or indirectly
communicating with competitors
concerning bids or bidding. To continue
or form a joint venture that may
enhance competition, the proposed
Final Judgment at Paragraph V.D.
permits the Defendants, after securing
advice of counsel and in consultation
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with an Antitrust Compliance Officer, to
communicate with a competitor
concerning the formation of a joint
venture. Therefore, the proposed Final
Judgment already incorporates the
exception to the prohibition on
communications between competitors
that JMIS seeks.
litigation risk for seeking to enjoin the
transaction.
The United States understands that
JMIS seeks, through its comment, to
incorporate the commitments made in
Defendant Learfield’s letter into the
proposed Final Judgment in this matter.
Those commitments, however, do not
relate to the allegations in the
B. The Proposed Final Judgment
Complaint that the United States
Embodies All Relief Obtained To
brought in this matter, which challenges
Resolve the Complaint’s Obligations and the Defendants’ agreements between
No Amendments Are Warranted
themselves and with other smaller MMR
competitors as unlawful restraints of
The United States, as requested by
trade in violation of Section 1. The
JMIS, confirms that the proposed Final
commitments relate to an ease-of-entry
Judgment embodies the entirety of its
defense that the Defendants could have
settlement with the Defendants to
resolve the allegations in the Complaint, made if the United States had brought
a Section 7 challenge to their merger.
and there are no settlement provisions
Because the commitments made in
that are not embodied in the proposed
Defendant Learfield’s letter, including
Final Judgment. The United States
those relating to employees and early
alleged the Defendants unlawfully
termination of certain customer
restrained trade in violation of Section
contracts, are unrelated to the
1 of the Sherman Act, 15 U.S.C. 1, by
allegations in the Complaint and
agreeing or otherwise coordinating to
because the proposed Final Judgment
limit competition between themselves
already encompasses all of the relief
and between themselves and smaller
necessary to remedy the Defendants’
competitors. As discussed above in
Section III, the proposed Final Judgment Section 1 violations, no amendments to
the proposed Final Judgment are
effectively enjoins the Defendants from
warranted or justified.
unlawfully restraining trade by
As noted above, the D.C. Circuit
prohibiting agreements not to bid or to
explained in Microsoft, 56 F.3d at 1459–
bid jointly, by barring the sharing of
60, that the ‘‘court’s authority to review
competitive sensitive information, and
the decree depends entirely on the
by prohibiting joint ventures with MMR government’s exercising its
competitors that reduce competition.
prosecutorial discretion by bringing a
The United States separately
case in the first place.’’ Because the
investigated whether the merger of IMG United States did not bring a Section 7
and Learfield would violate Section 7 of case, the modifications proposed by
the Clayton Act. After consideration of
JMIS fall outside the scope of this
the facts, evidence, and chances of
Tunney Act review. Expanding the
prevailing at trial, the United States did public interest review to encompass
not challenge that merger. Near the
relief related to an uncharged allegation,
conclusion of the investigation into that would amount to ‘‘effectively
merger, but before the United States had redraft[ing] the complaint’’ to inquire
made its enforcement decision,
into matters the United States did not
Defendant Learfield informed the
pursue. Id. The Tunney Act process
United States that Learfield and IMG
does not empower the district court ‘‘to
had unilaterally implemented several
review the actions or behavior of the
irrevocable changes to certain business
Department of Justice; the court is only
practices affecting the contractual rights authorized to review the decree itself.’’
of their employees and customers that
Id. It is unnecessary to include the
would be implemented upon closing of
commitments made in Defendant
the merger. See Exhibit B.1 These
Learfield’s letter in the proposed Final
commitments were presented to the
Judgment, in part because the
commitments are not related to
United States. The making of these
commitments additionally increased the addressing the Defendants’
anticompetitive joint ventures and non1 Because Learfield and IMG notified their
compete agreements or preventing
employees and customers of their new contractual
future anticompetitive arrangements
rights resulting from the commitments, all industry
with their competitors. The
participants directly impacted by the commitments
commitments, therefore, are not
were fully informed. JMIS and other MMR
required to remedy the Section 1
competitors were not notified, because they are not
customers or employees of Learfield or IMG.
violation alleged in the Complaint and
Learfield’s letter is now being made public. JMIS
consideration of whether to amend the
and other competitors, therefore, will not need to
proposed Final Judgment to include
rely on information gathered from other industry
them falls outside the scope of the
participants to learn about the irrevocable changes
undertaken by Learfield and IMG.
Tunney Act public interest inquiry.
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V. Conclusion
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After careful consideration of the
public comment, the United States
continues to believe that the proposed
Final Judgment, as drafted, provides an
effective and appropriate remedy for the
antitrust violations alleged in the
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Complaint, and is therefore in the
public interest. The United States will
move this Court to enter the proposed
Final Judgment after the comment and
this response are published as required
by 15 U.S.C. 16(d).
Dated: February 3, 2020.
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Respectfully submitted,
Owen M. Kendler,
U.S. Department of Justice, Antitrust
Division, 450 Fifth Street NW, Suite 4000,
Washington, DC 20530, Tel.: (202) 305–8376,
Fax: (202) 514–7308, Email: Owen.Kendler@
usdoj.gov.
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7604
[FR Doc. 2020–02586 Filed 2–7–20; 8:45 am]
BILLING CODE 4410–11–C
DEPARTMENT OF JUSTICE
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Antitrust Division
Notice Pursuant to the National
Cooperative Research and Production
Act of 1993—IMS Global Learning
Consortium, Inc.
Notice is hereby given that, on
January 28, 2020, pursuant to Section
6(a) of the National Cooperative
Research and Production Act of 1993,
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15 U.S.C. 4301 et seq. (‘‘the Act’’), IMS
Global Learning Consortium, Inc. (‘‘IMS
Global’’) has filed written notifications
simultaneously with the Attorney
General and the Federal Trade
Commission disclosing changes in its
membership. The notifications were
filed for the purpose of extending the
Act’s provisions limiting the recovery of
antitrust plaintiffs to actual damages
under specified circumstances.
Specifically, Convergence, Markham,
CANADA; Curriki, Chicago, IL; EdGate
Correlation Service, LLC, Gig Harbor,
WA; Kentucky Department of
Education, Frankfort, KY; State
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University of New York, Albany, NY;
VidGrid, Saint Paul, MN; and
Xtremelabs LLC, Redmond, WA; have
been added as parties to this venture.
Also, Motivis Learning, Salem, NH;
BNED LoudCloud, LLC, New York, NY;
Colorado State University Online, Fort
Collins, CO; New York City Department
of Education, Brooklyn, NY; Trinity
Education Group, Highland, MD; and
Brigham Young University-Idaho,
Rexburg, ID, have withdrawn as parties
to this venture.
No other changes have been made in
either the membership or planned
activity of the group research project.
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Federal Register / Vol. 85, No. 27 / Monday, February 10, 2020 / Notices
Agencies
[Federal Register Volume 85, Number 27 (Monday, February 10, 2020)]
[Notices]
[Pages 7593-7605]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02586]
[[Page 7593]]
=======================================================================
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Learfield Communications, LLC; IMG College, LLC;
and A-L Tier I LLC: Response to Public Comment
Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C.
16(b)-(h), the United States hereby publishes below the Response to
Public Comment on the Proposed Final Judgment in United States v.
Learfield Communications, LLC; IMG College, LLC; and A-L Tier I LLC,
Civil Action No. 1:19-cv-00389-EGS, which was filed in the United
States District Court for the District of Columbia on February 3, 2020,
together with a copy of the comment received by the United States.
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 also be obtained from the Antitrust Division upon request and
payment of the copying fee set by Department of Justice regulations.
Amy R. Fitzpatrick,
Counsel to the Senior Director for Investigations and Litigation.
United States District Court for the District of Columbia
United States of America, Plaintiff, v. Learfield
Communications, LLC, IMG College, LLC and A-L Tier I LLC,
Defendants.
CASE: 1:19-cv-00389-EGS
Response of Plaintiff United States to Public Comment on the Proposed
Final Judgment
As required by the Antitrust Procedures and Penalties Act (the
``APPA'' or ``Tunney Act''), 15 U.S.C. 16(b)-(h), the United States
hereby responds to the public comment received by the United States
regarding the proposed Final Judgment in this case. After careful
consideration, the United States continues to believe that the proposed
remedy will address the harm alleged in the Complaint and is therefore
in the public interest. The proposed Final Judgment will ensure that
the Defendants and their employees and agents will not impede
competition by agreeing not to compete, entering into joint ventures
that reduce competition, or sharing competitively sensitive information
with their competitors. The United States will move the Court for entry
of the proposed Final Judgment after this response and the public
comment have been published in the Federal Register, pursuant to 15
U.S.C. 16(d).
I. Procedural History
On October 5, 2017, Learfield Communications, LLC (``Learfield'')
and IMG College, LLC (``IMG'') announced a proposed merger. After
investigating whether the merger would violate Section 7 of the Clayton
Act, 15 U.S.C. 18, by substantially lessening competition, the United
States did not challenge the transaction. On December 27, 2018, the
United States informed the parties of this decision, and the Defendants
became free to close their proposed merger.
During the course of the merger investigation, however, the United
States discovered evidence of a potential separate violation of the
antitrust laws. This evidence indicated that the parties, during a
prior period of conduct, had agreed or otherwise coordinated with one
another, as well as between themselves and other competitors, in a
manner that denied their college customers the benefits of competition
in violation of Section 1 of the Sherman Act, 15 U.S.C. 1.
Following an investigation of that separate conduct, on February
14, 2019, the United States filed a civil antitrust complaint alleging
that the Defendants agreed or otherwise coordinated to limit
competition, resulting in an unlawful restraint of trade in the
multimedia rights (``MMR'') management market under Section 1 of the
Sherman Act. The Complaint seeks injunctive relief to enjoin the
Defendants from engaging in similar conduct in the future.
Simultaneously with the filing of the Complaint, the United States
filed a proposed Final Judgment, a Stipulation signed by the parties
that consents to entry of the proposed Final Judgment after compliance
with the requirements of the Tunney Act, and a Competitive Impact
Statement describing the events giving rise to the alleged violation
and the proposed Final Judgment.
The proposed Final Judgment prohibits sharing of competitively
sensitive information, agreeing not to bid or agreeing to jointly bid,
and, absent approval from the United States, entering into or extending
MMR joint ventures. It also requires the Defendants to implement
antitrust compliance training programs.
The United States caused the Complaint, the proposed Final
Judgment, and the Competitive Impact Statement to be published in the
Federal Register on February 28, 2019, see 84 FR 6,824, and caused
notice regarding the same, together with directions for the submission
of written comments relating to the proposed Final Judgment, to be
published in The Washington Post for seven days beginning on February
27, 2019 and ending on March 5, 2019. The 60-day period for public
comment ended on May 6, 2019. During the public comment period, the
United States received the comment described below in Section IV and
attached as Exhibit A.
II. Standard of Judicial Review
The Clayton Act, as amended by the APPA, requires that proposed
consent judgments in antitrust cases brought by the United States be
subject to a 60-day comment period, after which the Court shall
determine whether entry of the proposed Final Judgment ``is in the
public interest.'' 15 U.S.C. 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. 16(e)(1)(A) & (B). 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); United States v.
U.S. Airways Grp., Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014)
(explaining that the ``court's inquiry is limited'' in Tunney Act
settlements); United States v. InBev N.V./S.A., No. 08-1965 (JR), 2009
U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a
court's review of a consent judgment is limited and only inquires
``into whether the government's determination that the proposed
remedies will cure the antitrust violations alleged in the complaint
was reasonable, and whether
[[Page 7594]]
the mechanism to enforce the final judgment are clear and
manageable'').
As the U.S. 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 in
the government's complaint, whether the proposed Final Judgment is
sufficiently clear, whether its enforcement mechanisms are sufficient,
and whether it may positively harm third parties. See Microsoft, 56
F.3d at 1458-62. With respect to the adequacy of the relief secured by
the proposed Final Judgment, a court may ``not to make de novo
determination of facts and issues.'' United States v. W. Elec. Co., 993
F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); see also
Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 F.
Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 F.
Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787, at
*3. Instead, ``[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.'' W.
Elec. Co., 993 F.2d at 1577 (quotation marks omitted). ``The court
should bear in mind the flexibility of the public interest inquiry: The
court's function is not to determine whether the resulting array of
rights and liabilities is one that will best serve society, but only to
confirm that the resulting settlement is within the reaches of the
public interest.'' Microsoft, 56 F.3d at 1460 (quotation marks
omitted). More demanding requirements would ``have enormous practical
consequences for the government's ability to negotiate future
settlements,'' contrary to congressional intent. Id. at 1456. ``The
Tunney Act was not intended to create a disincentive to the use of the
consent decree.'' Id.
The United States' predictions about the efficacy of the remedy are
to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at
1461 (recognizing courts should give ``due respect to the Justice
Department's . . . view of the nature of its case''); United States v.
Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In
evaluating objections to settlement agreements under the Tunney Act, a
court must be mindful that [t]he government need not prove that the
settlements will perfectly remedy the alleged antitrust harms[;] it
need only provide a factual basis for concluding that the settlements
are reasonably adequate remedies for the alleged harms.'') (internal
citations omitted); United States v. Republic Servs., Inc., 723 F.
Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to
which the government's proposed remedy is accorded''); United States v.
Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A
district court must accord due respect to the government's prediction
as to the effect of proposed remedies, its perception of the market
structure, and its view of the nature of the case''). The ultimate
question is whether ``the remedies [obtained by the Final Judgment are]
so inconsonant with the allegations charged as to fall outside of the
`reaches of the public interest.' '' Microsoft, 56 F.3d at 1461
(quoting W. Elec. Co., 900 F.2d at 309).
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, and does not authorize the Court to
``construct [its] own hypothetical case and then evaluate the decree
against that case.'' Microsoft, 56 F.3d at 1459; see also U.S. Airways,
38 F. Supp. 3d at 75 (noting that the court must simply determine
whether there is a factual foundation for the government's decisions
such that its conclusions regarding the proposed settlements are
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``the `public
interest' is not to be measured by comparing the violations alleged in
the complaint against those the court believes could have, or even
should have, been alleged''). 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. Microsoft, 56
F.3d at 1459-60.
In its 2004 amendments to the APPA, Congress made clear its intent
to preserve the practical benefits of using consent judgments proposed
by the United States in antitrust enforcement, Public Law 108-237 Sec.
221, and added 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); see also U.S. Airways, 38 F. Supp. 3d
at 76 (indicating that a court is not required to hold an evidentiary
hearing or to permit intervenors as part of its review under the Tunney
Act). This language explicitly wrote into the statute what Congress
intended when it first enacted the Tunney Act in 1974. As Senator
Tunney 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
Sen. Tunney). ``A court can make its public interest determination
based on the competitive impact statement and response to public
comments alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova
Corp., 107 F. Supp. 2d at 17).
III. The Section 1 Investigation, the Harm Alleged in the Complaint,
and the Proposed Final Judgment
The proposed Final Judgment is the culmination of a thorough,
comprehensive investigation conducted by the Antitrust Division of the
U.S. Department of Justice into the Defendants' conduct involving the
Defendants' joint ventures with each other to service specific
universities which sought to outsource the management of their MMR as
well as the Defendants' similar joint ventures with other competitors.
The Complaint alleges that, under the guise of legitimate business
arrangements, these joint ventures denied universities the benefits of
competition between the competitors. The Complaint further alleges that
the Defendants have used, or attempted to use, joint ventures as a way
to co-opt smaller competitors and remove them from submitting
competitive bids and that the Defendants' non-compete agreements have
had similar effects. By using and enforcing non-compete agreements, for
example, Defendant Learfield prevented Defendant IMG from competing on
a school's MMR contract when it came up for renewal.
Based on the evidence gathered, the United States concluded that
the Defendants' use of joint ventures and non-compete agreements were
anticompetitive and violated Section 1 of the Sherman Act, 15 U.S.C. 1,
because they had detrimental effects on competition among MMR
providers. The Defendants' use of joint ventures and non-compete
agreements harmed the competitive process by suppressing or eliminating
competition, reduced the revenues received by universities for
licensing their MMR, and caused the quality of MMR management to
decrease. The United States seeks the proposed Final Judgment to
restore and protect competition. The Defendants have agreed to abide by
the provisions of the proposed Final Judgment during the pendency of
the Tunney Act proceedings (Dkt. No. 2.1 at 2).
[[Page 7595]]
The proposed Final Judgement provides an effective and appropriate
remedy for this competitive harm by enjoining the Defendants from: (1)
Directly or indirectly communicating competitively sensitive
information related to bidding for an MMR contract; and (2) agreeing
with any MMR competitor not to bid, or to bid jointly, on an MMR
contract. The Defendants, for example, may not discuss their
negotiating strategies or proposed prices relating to any particular
university's MMR business with any other MMR competitor. Invitations or
suggestions to jointly bid are also prohibited.
The proposed Final Judgment also creates a mechanism for joint
ventures involving the Defendants to continue or be created if the
collaboration will not reduce the number of competitors bidding on a
university's MMR business. Pursuant to the proposed Final Judgment, the
Defendants may apply to the United States for authorization to continue
a joint venture that is about to expire or create a new joint venture
to service a university's MMR needs. The United States will undertake a
case-by-case analysis of any such application to determine whether the
joint venture is likely to eliminate or enhance competition.
Under some circumstances, joint ventures may be efficient and
procompetitive. See, e.g., U.S. Dept. of Justice & FTC, Antitrust
Guidelines for Collaborations Among Competitors, at 6 (2000) (``A
collaboration may allow its participants to better use existing assets,
or may provide incentives for them to make output-enhancing investments
that would not occur absent the collaboration.''). However, ``labeling
an arrangement a `joint venture' will not protect what is merely a
device to raise price or restrict output; the nature of the conduct,
not its designation, is determinative.'' Id. at 9 (internal citations
omitted). The United States routinely investigates joint arrangements
between competitors to determine whether they violate the antitrust
laws. Pursuant to the proposed Final Judgment, the Defendants have
consented to the United States making that determination in its sole
discretion without requiring the United States to prove to a Court that
a proposed new or continuing collaboration involving a Defendant
violates Section 1 of the Sherman Act.
Finally, the proposed Final Judgment includes robust mechanisms
that will allow the United States and the Court to monitor the
effectiveness of the relief and to enforce compliance.
The proposed Final Judgment requires each Defendant to
designate an Antitrust Compliance Officer who will be responsible for
implementing training and compliance programs and ensuring compliance
with the Final Judgment. Among other duties, the Antitrust Compliance
Officer will be required to distribute copies of the Final Judgment and
ensure that training on the requirements of the Final Judgment and the
antitrust laws is provided to the Defendants' management. Moreover,
each Defendant, through its CEO, General Counsel, or Chief Legal
Officer, must certify annual compliance with the Final Judgment.
The proposed Final Judgment requires each Defendant to
establish an antitrust whistleblower policy and to remedy and report
violations of the Final Judgment.
The proposed Final Judgment provides that the United
States retains and reserves all rights to enforce the provisions of the
proposed Final Judgment, including its rights to seek an order of
contempt from the Court. The Defendants have agreed that in any civil
contempt action, any motion to show cause, or any similar action
brought by the United States regarding an alleged violation of the
Final Judgment, the United States may establish the violation and the
appropriateness of any remedy by a preponderance of the evidence and
that the Defendants have waived any argument that a different standard
of proof should apply. This provision aligns the standard for
compliance obligations with the standard of proof that applies to the
underlying offense that the compliance commitments address.
The proposed Final Judgment provides additional
clarification regarding the interpretation of the provisions of the
proposed Final Judgment. The Defendants agree that they will abide by
the proposed Final Judgment, and that they may be held in contempt of
this Court for failing to comply with any provision of the proposed
Final Judgment that is stated specifically and in reasonable detail,
whether or not it is clear and unambiguous on its face, and as
interpreted in light of its procompetitive purpose.
Should the Court find in an enforcement proceeding that
one or more Defendants violated the Final Judgment, the proposed Final
Judgment permits the United States to apply to the Court for a one-time
extension of the Final Judgment, together with such other relief as may
be appropriate. In addition, in order to compensate American taxpayers
for any costs associated with the investigation and enforcement of
violations of the proposed Final Judgment, the proposed Final Judgment
provides that in any successful effort by the United States to enforce
the Final Judgment against one or more Defendants, whether litigated or
resolved before litigation, the Defendants agree to reimburse the
United States for any attorneys' fees, experts' fees, or costs incurred
in connection with any enforcement effort, including the investigation
of the potential violation.
IV. Summary of Public Comment and the United States' Response
The United States received a comment concerning the proposed Final
Judgment from JMI Sports, LLC (``JMIS''). JMIS competes against the
Defendants to offer MMR services to universities and at times has
partnered with the Defendants or their predecessors. JMIS does not
claim that the provisions of the proposed Final Judgment are
insufficient to enjoin the unlawful restraints of trade alleged in the
Complaint. JMIS, however, states that it believes uncertainty exists
regarding the scope of the relief the United States secured from the
Defendants in ways that affect its position as a competitor. JMIS,
therefore, seeks clarification regarding the settlement's scope,
particularly ``the process through which [the United States] will vet
proposed extensions or expansions to existing joint ventures
involving'' the Defendants. See Attachment A at 2. JMIS also requests
that the United States fully disclose the settlement's terms, and that
any settlement provisions that are not currently part of the proposed
Final Judgment be incorporated into it before entry by the Court. It
also asks for clarification of terms that are not part of the proposed
Final Judgment.
A. The Proposed Final Judgment Appropriately Authorizes the United
States To Make Case-by-Case Determinations of Proposed Joint Ventures
JMIS seeks additional guidance on how under the proposed Final
Judgment the United States will conduct its analysis of joint ventures
proposed by the Defendants. JMIS also asks whether it and other non-
parties may seek permission under the proposed Final Judgment to form
or continue joint ventures with the Defendants. It also mistakenly
complains that the proposed Final Judgment prohibits communications
between it and the Defendants that are necessary to form or continue
joint ventures. See Attachment A at 4.
[[Page 7596]]
Additional guidance on how the United States will evaluate joint
ventures pursuant to Paragraph IV.C. of the proposed Final Judgment is
not necessary. As noted above, the United States routinely investigates
joint arrangements between competitors to determine whether those
arrangements violate the U.S. antitrust laws and has published guidance
on this subject. See U.S. DOJ & FTC, Antitrust Guidelines for
Collaborations Among Competitors (2000). If a proposed joint venture is
not the type of agreement that would tend to raise price or to reduce
output such that it would be condemned as per se illegal, the United
States conducts a fact-specific inquiry to determine its legality. By
its nature, such an analysis ``entails a flexible inquiry and varies in
focus and detail depending on the nature of the agreement and the
market circumstances.'' See id. at 10 (internal citations omitted).
Because these analyses require a case-by-case approach, there is no
additional guidance that the United States could provide to JMIS at
this time. JMIS and others seeking to form joint ventures with the
Defendants in order to pursue MMR contracts, however, should consider
whether they need to form a joint venture in order to compete for an
MMR contract or whether the joint venture would merely eliminate a
competitor.
The proposed Final Judgment permits the Defendants to make an
application to the United States for authorization to enter into,
renew, or extend a joint venture. See Proposed Final Judgment at
Paragraph IV.C. This provision will not hinder JMIS's ability to form
joint ventures with the Defendants. Because joint ventures are
voluntary business arrangements, the Defendants must first be willing
to enter into, renew, or extend a joint venture with JMIS or other
competitors. As a willing participant, it would be in a Defendant's
interest to apply for the required permission from the United States,
and it would be unnecessary for the proposed Final Judgment to provide
a mechanism for non-parties such as JMIS or others to make the
application instead.
Finally, contrary to JMIS's assertation, the proposed Final
Judgment already provides an exception to the provisions in Section IV
prohibiting the Defendants from directly or indirectly communicating
with competitors concerning bids or bidding. To continue or form a
joint venture that may enhance competition, the proposed Final Judgment
at Paragraph V.D. permits the Defendants, after securing advice of
counsel and in consultation with an Antitrust Compliance Officer, to
communicate with a competitor concerning the formation of a joint
venture. Therefore, the proposed Final Judgment already incorporates
the exception to the prohibition on communications between competitors
that JMIS seeks.
B. The Proposed Final Judgment Embodies All Relief Obtained To Resolve
the Complaint's Obligations and No Amendments Are Warranted
The United States, as requested by JMIS, confirms that the proposed
Final Judgment embodies the entirety of its settlement with the
Defendants to resolve the allegations in the Complaint, and there are
no settlement provisions that are not embodied in the proposed Final
Judgment. The United States alleged the Defendants unlawfully
restrained trade in violation of Section 1 of the Sherman Act, 15
U.S.C. 1, by agreeing or otherwise coordinating to limit competition
between themselves and between themselves and smaller competitors. As
discussed above in Section III, the proposed Final Judgment effectively
enjoins the Defendants from unlawfully restraining trade by prohibiting
agreements not to bid or to bid jointly, by barring the sharing of
competitive sensitive information, and by prohibiting joint ventures
with MMR competitors that reduce competition.
The United States separately investigated whether the merger of IMG
and Learfield would violate Section 7 of the Clayton Act. After
consideration of the facts, evidence, and chances of prevailing at
trial, the United States did not challenge that merger. Near the
conclusion of the investigation into that merger, but before the United
States had made its enforcement decision, Defendant Learfield informed
the United States that Learfield and IMG had unilaterally implemented
several irrevocable changes to certain business practices affecting the
contractual rights of their employees and customers that would be
implemented upon closing of the merger. See Exhibit B.\1\ These
commitments were presented to the United States. The making of these
commitments additionally increased the litigation risk for seeking to
enjoin the transaction.
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\1\ Because Learfield and IMG notified their employees and
customers of their new contractual rights resulting from the
commitments, all industry participants directly impacted by the
commitments were fully informed. JMIS and other MMR competitors were
not notified, because they are not customers or employees of
Learfield or IMG. Learfield's letter is now being made public. JMIS
and other competitors, therefore, will not need to rely on
information gathered from other industry participants to learn about
the irrevocable changes undertaken by Learfield and IMG.
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The United States understands that JMIS seeks, through its comment,
to incorporate the commitments made in Defendant Learfield's letter
into the proposed Final Judgment in this matter. Those commitments,
however, do not relate to the allegations in the Complaint that the
United States brought in this matter, which challenges the Defendants'
agreements between themselves and with other smaller MMR competitors as
unlawful restraints of trade in violation of Section 1. The commitments
relate to an ease-of-entry defense that the Defendants could have made
if the United States had brought a Section 7 challenge to their merger.
Because the commitments made in Defendant Learfield's letter, including
those relating to employees and early termination of certain customer
contracts, are unrelated to the allegations in the Complaint and
because the proposed Final Judgment already encompasses all of the
relief necessary to remedy the Defendants' Section 1 violations, no
amendments to the proposed Final Judgment are warranted or justified.
As noted above, the D.C. Circuit explained in Microsoft, 56 F.3d at
1459-60, that 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.'' Because the United States did not
bring a Section 7 case, the modifications proposed by JMIS fall outside
the scope of this Tunney Act review. Expanding the public interest
review to encompass relief related to an uncharged allegation, would
amount to ``effectively redraft[ing] the complaint'' to inquire into
matters the United States did not pursue. Id. The Tunney Act process
does not empower the district court ``to review the actions or behavior
of the Department of Justice; the court is only authorized to review
the decree itself.'' Id. It is unnecessary to include the commitments
made in Defendant Learfield's letter in the proposed Final Judgment, in
part because the commitments are not related to addressing the
Defendants' anticompetitive joint ventures and non-compete agreements
or preventing future anticompetitive arrangements with their
competitors. The commitments, therefore, are not required to remedy the
Section 1 violation alleged in the Complaint and consideration of
whether to amend the proposed Final Judgment to include them falls
outside the scope of the Tunney Act public interest inquiry.
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V. Conclusion
After careful consideration of the public comment, the United
States continues to believe that the proposed Final Judgment, as
drafted, provides an effective and appropriate remedy for the antitrust
violations alleged in the Complaint, and is therefore in the public
interest. The United States will move this Court to enter the proposed
Final Judgment after the comment and this response are published as
required by 15 U.S.C. 16(d).
Dated: February 3, 2020.
Respectfully submitted,
Owen M. Kendler,
U.S. Department of Justice, Antitrust Division, 450 Fifth Street NW,
Suite 4000, Washington, DC 20530, Tel.: (202) 305-8376, Fax: (202)
514-7308, Email: [email protected].
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[FR Doc. 2020-02586 Filed 2-7-20; 8:45 am]
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