United States v. Odyssey Investment Partners Fund V, LP et al.; Proposed Final Judgment and Competitive Impact Statement, 34750-34764 [2020-12289]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 85, Number 110 (Monday, June 8, 2020)]
[Notices]
[Pages 34750-34764]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12289]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Odyssey Investment Partners Fund V, LP et al.; 
Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed

[[Page 34751]]

Final Judgment, Stipulation, and Competitive Impact Statement have been 
filed with the United States District Court for the District of 
Columbia in United States of America v. Odyssey Investment Partners 
Fund V, LP et al., Civil Action No. 20-cv-1614. On May 28, 2020, the 
United States filed a Complaint alleging that Communications & Power 
Industries Inc.'s proposed acquisition of General Dynamics SATCOM 
Technologies, Inc. would violate Section 7 of the Clayton Act, 15 
U.S.C. 18. The proposed Final Judgment, filed at the same time as the 
Complaint, requires Communications & Power Industries to divest its 
subsidiary, CPI ASC Signal Division Inc., along with certain tangible 
and intangible assets.
    Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement 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.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, including the name of the submitter, and 
responses thereto, will be posted on the Antitrust Division's website, 
filed with the Court, and, under certain circumstances, published in 
the Federal Register. Comments should be directed to Katrina Rouse, 
Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, 
Department of Justice, 450 Fifth Street NW, Suite 8700, Washington, DC 
20530 (telephone: 202-307-0468).

Suzanne Morris,
Chief, Pre-Merger and Division Statistics.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    United States of America, U.S. Department of Justice, Antitrust 
Division, 450 Fifth Street NW, Suite 8700, Washington, DC 20530, 
Plaintiff, v. Odyssey Investment Partners Fund V, LP, 590 Madison 
Ave., 39th Floor, New York, NY 10022; Communications and Power 
Industries LLC, 811 Hansen Way, Palo Alto, CA 94303; and General 
Dynamics Corporation, 11011 Sunset Hills Road, Reston, VA 20190, 
Defendants.

Civil Action No. 20-cv-1614
Judge: Hon. Thomas F. Hogan

Complaint

    The United States of America (``United States''), acting under the 
direction of the Attorney General of the United States, brings this 
civil antitrust action against Defendants Odyssey Investment Partners 
Fund V, LP (``Odyssey''), Communications and Power Industries LLC 
(``CPI''), and General Dynamics Corporation (``General Dynamics'') to 
enjoin CPI's proposed acquisition of General Dynamics SATCOM 
Technologies, Inc. (``GD SATCOM''), a subsidiary of General Dynamics. 
The United States complains and alleges as follows:

I. Nature of the Action

    1. Pursuant to a purchase agreement dated July 22, 2019, CPI 
intends to acquire GD SATCOM from its parent company, General Dynamics.
    2. CPI and GD SATCOM are the only two significant suppliers of 
large (four meters in diameter and above) ground station antennas for 
geostationary satellites (hereinafter ``large geostationary satellite 
antennas'') for use by the United States military and commercial 
customers in the United States. Large geostationary satellite antennas 
are a key component of communications networks utilized by the U.S. 
Department of Defense (``DoD'') as well as commercial customers, such 
as broadband internet suppliers, in areas that lack access to the main 
telecommunications grid.
    3. Competition between CPI and GD SATCOM has led to lower prices, 
higher quality products, and innovative new solutions for large 
geostationary satellite antennas. The proposed merger would eliminate 
this competition and leave DoD and commercial customers without 
meaningful competitive alternatives, likely resulting in higher prices, 
lower quality, and diminished innovation in the development of these 
important products.
    4. As a result, the proposed acquisition likely would substantially 
lessen competition in the market for the design, manufacture, and sale 
of large geostationary satellite antennas in the United States in 
violation of Section 7 of the Clayton Act, 15 U.S.C. 18.

II. The Defendants

    5. Odyssey, a private equity fund managed by Odyssey Investment 
Partners, is a Delaware limited partnership with its headquarters in 
New York, New York. Odyssey Investment Partners has raised over $5 
billion since its inception and invests in a wide array of industries, 
including aerospace and defense.
    6. CPI is a portfolio company of Odyssey. It is a Delaware 
corporation with its headquarters in Palo Alto, California. CPI is a 
global manufacturer of electronic components and subsystems focused 
primarily on communications and defense markets. CPI had sales of 
approximately $500 million in 2019 and sells satellite communication 
antennas through its subsidiary, CPI ASC Signal Division Inc. (``ASC 
Signal''), a business it acquired in 2017.
    7. General Dynamics is a Delaware corporation with its headquarters 
in Reston, Virginia. General Dynamics's subsidiary, GD SATCOM, designs, 
manufactures, and sells satellite communications systems used in 
commercial, defense, and scientific applications and provides related 
products such as amplifiers and antennas. GD SATCOM earned between $200 
million and $300 million in revenues in 2019.

III. Jurisdiction and Venue

    8. The United States brings this action under Section 15 of the 
Clayton Act, 15 U.S.C. 25, as amended, to prevent and restrain 
Defendants from violating Section 7 of the Clayton Act, 15 U.S.C. 18.
    9. Defendants design, manufacture, and sell large geostationary 
satellite antennas throughout the United States, and their activities 
in these areas substantially affect interstate commerce. This Court 
therefore has subject matter jurisdiction over this action pursuant to 
Section 15 of the Clayton Act, 15 U.S.C. 25, and 28 U.S.C. 1331, 
1337(a), and 1345.
    10. Defendants have consented to venue and personal jurisdiction in 
this judicial district. Venue is therefore proper in this district 
under Section 12 of the Clayton Act, 15 U.S.C. 22 and under 28 U.S.C. 
1391(c).

IV. Large Geostationary Satellite Antennas

A. Background

    11. Satellite communications networks enable secure communications 
links in remote areas that lack access to the main telecommunications 
grid. For example, DoD uses satellite communications networks to 
communicate with military bases in theaters of war, where access to the 
communications grid may be intermittent or even non-existent. 
Similarly, where it is too expensive to run traditional communications 
lines, commercial network operators provide satellite communications 
networks that individual users--or clusters of users in a central 
location--can use to access the internet, television, and voice 
communications services.
    12. Both commercial and military satellite communications networks 
operate in the same way: Information is

[[Page 34752]]

transmitted from a remote user through a satellite in orbit and back 
down through a ground station that is connected to a traditional 
communications grid. This process is reversed as information returns to 
the remote user. At both ends of the satellite communication link, 
there must be an antenna that can ``see'' the satellite(s) with which 
the ground stations are interfacing.
    13. The satellite is the most critical, and expensive, element of a 
satellite communications network. Satellite-based design constraints, 
such as the power of the transmission signal (which is directly 
impacted by limitations on size and weight) and the orbit in which the 
satellite will operate, thus drive other significant design decisions 
for the entire satellite communications network.
    14. The other key component of a satellite communications network 
is the ground station antenna, which connects the satellite to the 
communications grid. As shown below, the ground station antenna 
consists of a parabolic dish, the structure on which the dish is 
mounted, and any motors or other equipment needed to move, or 
``point,'' the dish at the satellite(s) in its network.
BILLING CODE 4410-11-P
[GRAPHIC] [TIFF OMITTED] TN08JN20.000

BILLING CODE 4410-11-C
    15. Several characteristics differentiate ground station antennas, 
but the two most important are the size of the antenna (which is 
typically measured by the diameter of its parabolic dish) and the 
ability of the antenna to track satellites that change their position 
relative to the Earth (as described below, some antennas remain pointed 
in the same direction while others track satellites as they cross the 
sky).
    16. Antenna size is important because larger antennas can receive 
fainter signals (i.e., signals impacted by rain, clouds, or other 
atmospheric conditions) than smaller antennas. As a result, satellite 
networks using larger antennas are more reliable than networks using 
smaller antennas. Additionally, because larger antennas can receive 
fainter signals, the power requirements for the transmitting satellite 
(which must be supplied through batteries and/or solar generation) are 
diminished as compared to transmission to smaller antennas. Satellites 
for larger antennas therefore need not be as large or expensive as 
satellites for smaller antennas. Larger antennas thus decrease the 
overall cost of the satellite communications system.
    17. The other major factor differentiating between types of ground 
station antennas is their ability to track satellites that change their 
position relative to the Earth. For example, satellites in 
geostationary orbit remain in a fixed position relative to the Earth's 
rotation and are more than 20,000 miles above Earth. Antennas for 
geostationary satellites are therefore ``fixed'' and point in one 
direction. Low-earth orbit (``LEO'') and mid-earth orbit (``MEO'') 
satellites, by contrast, are multiple thousands of miles closer to 
earth and rotate the earth every 70 minutes. LEO and MEO satellites 
thus frequently ``cross'' the sky as they orbit and antennas used to 
communicate with them must be ``full-motion'' in order to track the LEO 
and MEO satellites as they move relative to the antennas' positions. 
While full motion antennas duplicate some of the capabilities of fixed 
antennas, they are typically only used for LEO and MEO satellites 
because they are significantly more

[[Page 34753]]

expensive due to the motors and structural design elements necessary to 
ensure accurate full-motion pointing. Fixed antennas are thus more 
cost-effective than full-motion antennas.

B. Relevant Markets

1. Product Market
    18. For DoD customers, satellite communications networks provide 
vital communications links for the battlefield and other remote 
locations. For many uses, DoD requires large geostationary satellite 
antennas in order to guarantee reliable communications connections. DoD 
cannot switch to smaller geostationary antennas without compromising 
the reliability and usefulness of its network. Because switching to 
smaller geostationary antennas would effectively render a satellite 
communications network unfit for its intended use, DoD is unlikely to 
switch to smaller geostationary antennas in response to a small but 
significant increase in price for large geostationary satellite 
antennas.
    19. Commercial customers--whose reliability requirements are not as 
rigid as DoD's--are also unlikely to switch to smaller geostationary 
antennas in the event of a small but significant increase in price for 
large geostationary satellite antennas because, like DoD, doing so 
would decrease the reliability of their network. Further, switching to 
smaller geostationary antennas would require a satellite communications 
network with a larger--and significantly more expensive--satellite at 
its core, thus increasing the overall cost of the network.
    20. Similarly, DoD and commercial customers with geostationary 
satellites are unlikely to switch from fixed to full-motion antennas--
like those used for MEO and LEO satellites--in response to a small but 
significant increase in price of fixed antennas. Even when full-motion 
antennas have similar capabilities to fixed antennas, they are 
significantly more expensive due to the additional motors and equipment 
necessary to ensure accurate full-motion pointing.
    21. For the foregoing reasons, customers will not substitute to 
smaller or full-motion antennas in response to a small but significant 
and non-transitory increase in the price of large geostationary 
satellite antennas. Accordingly, the design, manufacture, and sale of 
large geostationary satellite antennas is a relevant product market and 
line of commerce under Section 7 of the Clayton Act, 15 U.S.C. 18.
2. Geographic Market
    22. For national security reasons, DoD prefers domestic suppliers 
of large geostationary satellite antennas when it is deciding on 
potential antenna sources. Similarly, commercial customers prefer 
domestic suppliers of large geostationary satellite antennas, in part 
because they resell network access to DoD and other government 
customers that prefer to avoid having foreign suppliers for components 
in the transmission chain for sensitive national security-related 
information. For these reasons, neither DoD nor commercial customers 
are likely to turn to any foreign suppliers in the face of a small but 
significant and non-transitory price increase by domestic suppliers of 
large geostationary satellite antennas.
    23. The United States is therefore a relevant geographic market 
within the meaning of Section 7 of the Clayton Act, 15 U.S.C. 18.

C. Anticompetitive Effects of the Proposed Transaction

    24. CPI, through its subsidiary ASC Signal, and GD SATCOM are the 
only two significant suppliers that design, manufacture, and sell large 
geostationary satellite antennas in the United States. The merger would 
give the combined firm an effective monopoly, leaving customers, 
including DoD, without a meaningful competitive alternative for this 
critical component of satellite communications networks.
    25. CPI and GD SATCOM compete for sales of large geostationary 
satellite antennas on the basis of quality, price, and contractual 
terms such as delivery times. This competition has resulted in higher 
quality, lower prices, and shorter delivery times. The combination of 
CPI and GD SATCOM would eliminate this competition and its future 
benefits to customers, including DoD. Post-acquisition, the merged firm 
likely would have the incentive and ability to increase prices and 
offer less favorable contractual terms.
    26. Competition between CPI and GD SATCOM has also fostered 
important industry innovation, leading to antennas that are more 
durable, can withstand more extreme environments, and operate at higher 
bandwidths. The combination of CPI and GD SATCOM would eliminate this 
competition and its future benefits to customers, including DoD. Post-
acquisition, the merged firm likely would have less incentive to engage 
in research and development efforts that lead to innovative and high-
quality products.
    27. The proposed acquisition, therefore, likely would substantially 
lessen competition in the design, manufacture, and sale of large 
geostationary satellite antennas in the United States in violation of 
Section 7 of the Clayton Act, 15 U.S.C. 18.

D. Difficulty of Entry

    28. Entry of additional competitors into the market for the design, 
manufacture, and sale of large geostationary satellite antennas in the 
United States is unlikely to prevent the harm to competition that is 
likely to result if the proposed acquisition is consummated. Production 
facilities for large geostationary satellite antennas require a 
substantial investment in both capital equipment and human resources. A 
new entrant would need to set up a factory to produce parabolic dishes, 
design the complex electronic assemblies and components necessary to 
point the antenna, and build assembly lines and testing facilities. 
Engineering and research personnel would need to be assigned to design, 
test, and troubleshoot the complex manufacturing process that is 
necessary to produce large geostationary satellite antennas. Any new 
products manufactured by such an entrant would also require extensive 
testing and qualification before they could be used by the U.S. 
military. Accordingly, entry would be costly and time-consuming.
    29. As result of these barriers, entry into the market for the 
design, manufacture, and sale of large geostationary satellite antennas 
in the United States would not be timely, likely, or sufficient to 
defeat the anticompetitive effects likely to result from CPI's 
acquisition of GD SATCOM.

V. Violations Alleged

    30. CPI's acquisition of GD SATCOM likely would substantially 
lessen competition in the design, manufacture, and sale of large 
geostationary satellite antennas in the United States in violation of 
Section 7 of the Clayton Act, 15 U.S.C. 18.
    31. Unless enjoined, the acquisition likely would have the 
following anticompetitive effects, among others, related to the 
relevant market:
    (a) Actual and potential competition between CPI and GD SATCOM 
would be eliminated;
    (b) competition generally likely would be substantially lessened; 
and
    (c) prices likely would increase, quality and innovation would 
likely decrease, and contractual terms likely would be less favorable 
to customers.

VI. Request for Relief

    32. The United States requests that this Court:

[[Page 34754]]

    (a) Adjudge and decree that CPI's acquisition of GD SATCOM would be 
unlawful and violate Section 7 of the Clayton Act, 15 U.S.C. 18;
    (b) preliminarily and permanently enjoin and restrain Defendants 
and all persons acting on their behalf from consummating the proposed 
acquisition of GD SATCOM by CPI, or from entering into or carrying out 
any other contract, agreement, plan, or understanding, the effect of 
which would be to combine CPI with GD SATCOM;
    (c) award the United States its costs for this action; and
    (d) award the United States such other and further relief as the 
Court deems just and proper.
Dated: May 28, 2020
Respectfully submitted,

FOR PLAINTIFF UNITED STATES:

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Makan Delrahim (D.C. Bar #457795)
Assistant Attorney General
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Bernard A. Nigro, JR. (D.C. Bar #412357)
Principal Deputy Assistant Attorney General
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Alexander P. Okuliar (D.C. Bar # 481103)
Deputy Assistant Attorney General
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Kathleen S. O'Neill
Senior Director of Investigations & Litigation
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Katrina H. Rouse (D.C. Bar #1013035)
Chief Defense, Industrials, and Aerospace Section
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Jay D. Owen*
Assistant Chief, Defense, Industrials, and Aerospace Section
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Rebecca Valentine (D.C. Bar #989607)
Kevin Quin (D.C. Bar #415268)
Attorneys for the United States, Defense, Industrials, and Aerospace 
Section, U.S. Department of Justice, Antitrust Division, 450 Fifth 
Street NW, Suite 8700, Washington, D.C. 20530, Telephone: (202) 598-
2987, Facsimile: (202) 514-9033, Email: [email protected]

*Lead Attorney to be Noticed

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    United States of America, Plaintiff, v. Odyssey Investment 
Partners Fund V, LP; Communications & Power LLC, and General 
Dynamics Corporation, Defendants.

Civil Action No. 20-cv-1614
Judge: Hon. Thomas F. Hogan

Proposed Final Judgment

    Whereas, Plaintiff, United States of America, filed its Complaint 
on May 28, 2020, the United States and Defendants, Odyssey Investment 
Partners Fund V, LP (``Odyssey''), Communications & Power Industries 
LLC (``CPI''), and General Dynamics Corporation (``General Dynamics''), 
by their respective attorneys, have consented to entry of this Final 
Judgment without trial or adjudication of any issue of fact or law and 
without this Final Judgment constituting any evidence against or 
admission by a party regarding any issue of fact or law;
    And whereas, Defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by Defendants to assure 
that competition is not substantially lessened;
    And whereas, Defendants agree to make a divestiture for the purpose 
of remedying the loss of competition alleged in the Complaint;
    And whereas, Defendants represent that the divestiture and other 
relief required by this Final Judgment can and will be made and that 
Defendants will not later raise a claim of hardship or difficulty as 
grounds for asking the Court to modify any provision of this Final 
Judgment;
    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged, and decreed:

I. Jurisdiction

    The Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against Defendants under Section 7 of the Clayton 
Act, as amended (15 U.S.C. 18).

II. Definition

    As used in this Final Judgment:
    A. ``Acquirer'' means the entity to whom Defendants divest the 
Divestiture Assets.
    B. ``Odyssey'' means Defendant Odyssey Investment Partners Fund V, 
LP, a Delaware limited partnership with its headquarters in New York, 
New York, its successors and assigns, and its subsidiaries, divisions, 
groups, affiliates, including Odyssey Investment Partners, 
partnerships, and joint ventures, and their directors, officers, 
managers, agents, and employees.
    C. ``Odyssey Investment Partners'' means Odyssey Investment 
Partners, LLC, an affiliate of Odyssey and a Delaware limited liability 
company with its headquarters in New York, New York, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships, and joint ventures, and their directors, officers, 
managers, agents and employees.
    D. ``CPI'' means Defendant Communications & Power Industries LLC, a 
Delaware limited liability company with its headquarters in Palo Alto, 
California, its successors and assigns, and its subsidiaries, 
divisions, groups, affiliates, partnerships, and joint ventures, and 
their directors, officers, managers, agents, and employees. As used in 
this definition, the terms subsidiaries, divisions, groups, affiliates, 
partnerships, and joint ventures refer to any person or entity in which 
CPI holds twenty-five (25) percent or more total ownership or control.
    E. ``General Dynamics'' means Defendant General Dynamics 
Corporation, a Delaware corporation with its headquarters in Reston, 
Virginia, its successors and assigns, and its subsidiaries, divisions, 
groups, affiliates, partnerships, and joint ventures, and their 
directors, officers, managers, agents, and employees.
    F. ``GD SATCOM'' means General Dynamics SATCOM Technologies, Inc., 
a Delaware corporation with its headquarters in Fairfax, Virginia, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, and joint ventures, and their directors, 
officers, managers, agents, and employees. GD SATCOM is a wholly-owned 
subsidiary of General Dynamics.
    G. ``ASC Signal'' means CPI ASC Signal Division Inc., a Delaware 
corporation with its headquarters in Plano, Texas, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships, and joint ventures, and their directors, officers, 
managers, agents, and employees. ASC Signal is a wholly-owned 
subsidiary of CPI.
    H. ``Divestiture Assets'' means ASC Signal, including but not 
limited to:
    1. The support facility located at 1120 Jupiter Road, Suite 102, 
Plano, Texas 75074;
    2. The manufacturing facility located at 606 Beech Street West, 
Whitby, Ontario, Canada L1N 0E7;
    3. The testing facility located at 9860 Heron Rd., Ashburn, 
Ontario, Canada L0B 1A0;
    4. The testing facility located at 1411 CR 2740, Caddo Mills, Texas 
75135;
    5. All tangible assets related to or used in connection with ASC 
Signal, including, but not limited to: Research and development 
activities; all manufacturing equipment, tooling and fixed assets, 
personal property, inventory, office furniture, materials, supplies, 
and other tangible property; all licenses, permits, certifications, and 
authorizations issued by any governmental organization; all contracts, 
teaming arrangements,

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agreements, leases, commitments, certifications, and understandings, 
including supply agreements and development and production contracts; 
all customer lists, contracts, accounts, and credit records; all repair 
and performance records; and all other records; and
    6. All intangible assets related to or used in connection with ASC 
Signal, including, but not limited to: All patents; licenses and 
sublicenses; intellectual property; copyrights; trademarks, trade 
names, service marks, and service names; technical information; 
computer software (including software developed by third parties), and 
related documentation; customer relationships, agreements, and 
contracts; know-how; trade secrets; drawings; blueprints; designs; 
design protocols; specifications for materials; specifications for 
parts and devices; safety procedures for the handling of materials and 
substances; quality assurance and control procedures; design tools and 
simulation capability; all manuals and technical information ASC Signal 
provides to its own employees, customers, suppliers, agents, or 
licensees; and all research data concerning historic and current 
research and development efforts, including, but not limited to, 
designs of experiments, and the results of successful and unsuccessful 
designs and experiments.
    I. ``Relevant Personnel'' means all full-time, part-time, or 
contract employees of (i) ASC Signal, and (ii) all additional full-
time, part-time, or contract employees of CPI, wherever located, 
primarily involved in the design, manufacture, or sale of geostationary 
antennas larger than four meters in diameter, including, but not 
limited to, the reflector, pedestal, and tracking and control 
mechanisms used in antennas. Notwithstanding the foregoing, Relevant 
Personnel does not include employees of CPI primarily engaged in human 
resources, legal, or other general or administrative support functions.
    J. ``Regulatory Approvals'' means (i) any approvals or clearances 
pursuant to filings with the Committee on Foreign Investment in the 
United States (``CFIUS''), or under antitrust or competition laws 
required for the Transaction to proceed; and (ii) any approvals or 
clearances pursuant to filings with CFIUS, or under antitrust, 
competition, or other U.S. or international laws required for 
Acquirer's acquisition of the Divestiture Assets to proceed.
    K. ``Transaction'' means the proposed acquisition of GD SATCOM by 
CPI.

III. Applicability

    A. This Final Judgment applies to Odyssey, CPI, and General 
Dynamics, as defined above, and all other persons, in active concert or 
participation with any Defendant, who receive actual notice of this 
Final Judgment.
    B. If, prior to complying with Section IV and Section V of this 
Final Judgment, CPI sells or otherwise disposes of all or substantially 
all of its assets or of lesser business units that include the 
Divestiture Assets, CPI must require the purchaser to be bound by the 
provisions of this Final Judgment. CPI need not obtain such an 
agreement from Acquirer.

IV. Divestiture

    A. CPI is ordered and directed, within the later of sixty (60) 
calendar days after the Court's entry of the Hold Separate Stipulation 
and Order in this matter, or thirty (30) calendar days after Regulatory 
Approvals have been received, to divest the Divestiture Assets in a 
manner consistent with this Final Judgment to an Acquirer acceptable to 
the United States, in its sole discretion. The United States, in its 
sole discretion, may agree to one or more extensions of this time 
period not to exceed ninety (90) calendar days in total, and will 
notify the Court of any extensions. CPI agrees to use its best efforts 
to divest the Divestiture Assets as expeditiously as possible.
    B. In accomplishing the divestiture ordered by this Final Judgment, 
CPI promptly must make known, by usual and customary means, the 
availability of the Divestiture Assets. CPI must inform any person 
making an inquiry regarding a possible purchase of the Divestiture 
Assets that the Divestiture Assets are being divested in accordance 
with this Final Judgment and must provide that person with a copy of 
this Final Judgment. CPI must offer to furnish to all prospective 
Acquirers, subject to customary confidentiality assurances, all 
information and documents relating to the Divestiture Assets 
customarily provided in a due-diligence process; provided, however, 
that CPI need not provide information or documents subject to the 
attorney-client privilege or work-product doctrine. CPI must make this 
information available to the United States at the same time that the 
information is made available to any other person.
    C. CPI must cooperate with and assist Acquirer in identifying and 
hiring all Relevant Personnel, including:
    1. Within ten (10) business days following the filing of the 
Complaint in this matter, CPI must identify all Relevant Personnel to 
Acquirer and the United States, including by providing organization 
charts covering all Relevant Personnel.
    2. Within ten (10) business days following receipt of a request by 
Acquirer or the United States, CPI must provide to Acquirer and the 
United States the following additional information related to Relevant 
Personnel: Name; job title; current salary and benefits including most 
recent bonus paid, aggregate annual compensation, current target or 
guaranteed bonus, if any, and any other payments due to or promises 
made to the employee; descriptions of reporting relationships, past 
experience, responsibilities, and training and educational histories; 
lists of all certifications; and all job performance evaluations. If 
CPI is barred by any applicable laws from providing any of this 
information, within ten (10) business days following receipt of the 
request, CPI must provide the requested information to the full extent 
permitted by law and also must provide a written explanation of CPI's 
inability to provide the remaining information.
    3. At the request of Acquirer, CPI must promptly make Relevant 
Personnel available for private interviews with Acquirer during normal 
business hours at a mutually agreeable location or via teleconference 
or videoconference.
    4. Defendants must not interfere with any efforts by Acquirer to 
employ any Relevant Personnel. Interference includes but is not limited 
to offering to increase the salary or improve the benefits of Relevant 
Personnel unless the offer is part of a company-wide increase in salary 
or benefits that was announced prior to August 5, 2019. Defendants' 
obligations under this paragraph will expire six (6) months after the 
divestiture of the Divestiture Assets pursuant to this Final Judgment.
    5. For Relevant Personnel who elect employment with Acquirer within 
six (6) months of the date on which the Divestiture Assets are divested 
to Acquirer, CPI must waive all non-compete and non-disclosure 
agreements, vest all unvested pension and other equity rights, and 
provide all benefits that those Relevant Personnel otherwise would have 
been provided had the Relevant Personnel continued employment with CPI, 
including but not limited to any retention bonuses or payments CPI may 
maintain reasonable restrictions on disclosure by Relevant Personnel of 
CPI's proprietary non-public information that is unrelated to ASC 
Signal and not otherwise required to be disclosed by this Final 
Judgment.

[[Page 34756]]

    6. For a period of twelve (12) months from the date on which the 
Divestiture Assets are divested to Acquirer, Defendants may not solicit 
to hire Relevant Personnel who were hired by Acquirer within six (6) 
months of the date on which the Divestiture Assets are divested to 
Acquirer unless (a) an individual is terminated or laid off by Acquirer 
or (b) Acquirer agrees in writing that Defendants may solicit to hire 
that individual. Nothing in this paragraph prohibits Defendants from 
advertising employment openings using general solicitations or 
advertisements.
    D. CPI must permit prospective Acquirers of the Divestiture Assets 
to have reasonable access to make inspections of the physical 
facilities and access to all environmental, zoning, and other permit 
documents and information, and all financial, operational, or other 
documents and information customarily provided as part of a due 
diligence process.
    E. CPI must warrant to Acquirer that each asset to be divested will 
be fully operational and without material defect on the date of sale.
    F. Defendants must not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Assets.
    G. CPI must assign, subcontract, or otherwise transfer all 
contracts, agreements, and relationships related to the Divestiture 
Assets, including all supply and sales contracts, to Acquirer, provided 
however, that for any contracts or agreements that require the consent 
of another party to sign, subcontract, or otherwise transfer, CPI must 
use best efforts to accomplish this assignment, subcontracting or other 
transfer. Defendants must not interfere with any negotiations between 
Acquirer and a contracting party.
    H. At the option of Acquirer, and subject to approval by the United 
States in its sole discretion, on or before the date on which the 
Divestiture Assets are divested to Acquirer, CPI must enter into a 
contract to provide transition services for back office, human 
resource, and information technology services and support for ASC 
Signal for a period of up to twelve (12) months on terms and conditions 
reasonably related to market conditions for the provision of the 
transition services. The United States, in its sole discretion, may 
approve one or more extensions of this contract for transition 
services, for a total of up to an additional six (6) months. If 
Acquirer seeks an extension of the term of this contract for transition 
services, CPI must notify the United States in writing at least three 
(3) months prior to the date the contract expires. Acquirer may 
terminate a contract for transition services without cost or penalty at 
any time upon commercially reasonable notice. The employee(s) of CPI 
tasked with providing these transition services must not share any 
competitively sensitive information of Acquirer with any other employee 
of CPI.
    I. CPI must warrant to Acquirer that there are no material defects 
in the environmental, zoning, or other permits pertaining to the 
operation of the Divestiture Assets. Following the sale of the 
Divestiture Assets, Defendants must not undertake, directly or 
indirectly, any challenges to the environmental, zoning, or other 
permits relating to the operation of the Divestiture Assets.
    J. Unless the United States otherwise consents in writing, the 
divestiture pursuant to Section IV or by a Divestiture Trustee 
appointed pursuant to Section V of this Final Judgment must include the 
entire Divestiture Assets, and must be accomplished in such a way as to 
satisfy the United States, in its sole discretion, that the Divestiture 
Assets can and will be used by Acquirer as part of a viable, ongoing 
business of the design, manufacture, and sale of large ground station 
antennas for geostationary satellites, and will remedy the competitive 
harm alleged in the Complaint. The divestiture, whether pursuant to 
Section IV or Section V of this Final Judgment,

    (1) must be made to an Acquirer that, in the United States' sole 
judgment, has the intent and capability (including the necessary 
managerial, operational, technical, and financial capability) of 
competing effectively in the business of the design, manufacture, 
and sale of large ground station antennas for geostationary 
satellites; and
    (2) must be accomplished so as to satisfy the United States, in 
its sole discretion, that none of the terms of any agreement between 
an Acquirer and CPI give CPI the ability unreasonably to raise 
Acquirer's costs, to lower Acquirer's efficiency, or otherwise to 
interfere in the ability of Acquirer to compete effectively.

    K. If any term of an agreement between CPI and Acquirer to 
effectuate the divestiture required by this Final Judgment varies from 
a term of this Final Judgment then, to the extent that CPI cannot fully 
comply with both, this Final Judgment determines CPI's obligations.

V. Appointment of Divestiture Trustee

    A. If CPI has not divested the Divestiture Assets within the period 
specified in Paragraph IV(A), CPI must immediately notify the United 
States of that fact in writing. Upon application of the United States, 
the Court will appoint a Divestiture Trustee selected by the United 
States and approved by the Court to effect the divestiture of the 
Divestiture Assets.
    B. After the appointment of a Divestiture Trustee by the Court, 
only the Divestiture Trustee will have the right to sell the 
Divestiture Assets. The Divestiture Trustee will have the power and 
authority to accomplish the divestiture to an Acquirer acceptable to 
the United States, in its sole discretion, at a price and on terms as 
are then obtainable upon reasonable effort by the Divestiture Trustee, 
subject to the provisions of Sections IV, V, and VI of this Final 
Judgment, and will have other powers as the Court deems appropriate. 
Subject to Paragraph V(D) of this Final Judgment, the Divestiture 
Trustee may hire at the cost and expense of CPI any agents or 
consultants, including, but not limited to, investment bankers, 
attorneys, and accountants, who will be solely accountable to the 
Divestiture Trustee, reasonably necessary in the Divestiture Trustee's 
judgment to assist in the divestiture. Any such agents or consultants 
will serve on such terms and conditions as the United States approves, 
including confidentiality requirements and conflict of interest 
certifications.
    C. Defendants may not object to a sale by the Divestiture Trustee 
on any ground other than malfeasance by the Divestiture Trustee. 
Objections by Defendants must be conveyed in writing to the United 
States and the Divestiture Trustee within ten (10) calendar days after 
the Divestiture Trustee has provided the notice required under Section 
VI.
    D. The Divestiture Trustee will serve at the cost and expense of 
CPI pursuant to a written agreement, on such terms and conditions as 
the United States approves, including confidentiality requirements and 
conflict of interest certifications. The Divestiture Trustee will 
account for all monies derived from the sale of the assets sold by the 
Divestiture Trustee and all costs and expenses so incurred. After 
approval by the Court of the Divestiture Trustee's accounting, 
including fees for any of its services yet unpaid and those of any 
agents and consultants retained by the Divestiture Trustee, all 
remaining money will be paid to CPI and the trust will then be 
terminated. The compensation of the Divestiture Trustee and any agents 
or consultants retained by the Divestiture Trustee must be reasonable 
in light of the value of the Divestiture Assets and based on a fee 
arrangement that provides the Divestiture Trustee with incentives based 
on the price and terms of the divestiture and the speed with which it

[[Page 34757]]

is accomplished, but the timeliness of the divestiture is paramount. If 
the Divestiture Trustee and CPI are unable to reach agreement on the 
Divestiture Trustee's or any agents' or consultants' compensation or 
other terms and conditions of engagement within fourteen (14) calendar 
days of the appointment of the Divestiture Trustee, the United States 
may, in its sole discretion, take appropriate action, including making 
a recommendation to the Court. Within three (3) business days of hiring 
any agent or consultant, the Divestiture Trustee must provide written 
notice of the hiring and rate of compensation to CPI and the United 
States.
    E. CPI must use its best efforts to assist the Divestiture Trustee 
in accomplishing the required divestiture. The Divestiture Trustee and 
any agents or consultants retained by the Divestiture Trustee must have 
full and complete access to the personnel, books, records, and 
facilities of the business to be divested, and CPI must provide or 
develop financial and other information relevant to such business as 
the Divestiture Trustee may reasonably request, subject to reasonable 
protection for trade secrets; other confidential research, development, 
or commercial information; or any applicable privileges. Defendants may 
not take any action to interfere with or impede the Divestiture 
Trustee's accomplishment of the divestiture.
    F. After appointment, the Divestiture Trustee will file monthly 
reports with the United States setting forth the Divestiture Trustee's 
efforts to accomplish the divestiture ordered by this Final Judgment. 
Reports must include the name, address, and telephone number of each 
person who, during the preceding month, made an offer to acquire, 
expressed an interest in acquiring, entered into negotiations to 
acquire, or was contacted or made an inquiry about acquiring, any 
interest in the Divestiture Assets and will describe in detail each 
contact with any such person. The Divestiture Trustee will maintain 
full records of all efforts made to divest the Divestiture Assets.
    G. If the Divestiture Trustee has not accomplished the divestiture 
ordered by this Final Judgment within six months of appointment, the 
Divestiture Trustee must promptly file with the Court a report setting 
forth: (1) The Divestiture Trustee's efforts to accomplish the required 
divestiture; (2) the reasons, in the Divestiture Trustee's judgment, 
why the required divestiture has not been accomplished; and (3) the 
Divestiture Trustee's recommendations. To the extent such report 
contains information that the Divestiture Trustee deems confidential, 
such report will not be filed in the public docket of the Court. The 
Divestiture Trustee will at the same time furnish such report to the 
United States, which will have the right to make additional 
recommendations to the Court consistent with the purpose of the trust. 
The Court thereafter may enter such orders as it deems appropriate to 
carry out the purpose of this Final Judgment, which, if necessary, may 
include extending the trust and the term of the Divestiture Trustee's 
appointment by a period requested by the United States.
    H. If the United States determines that the Divestiture Trustee is 
not acting diligently or in a reasonably cost-effective manner, the 
United States may recommend that the Court appoint a substitute 
Divestiture Trustee.

VI. Notice of Proposed Divestiture

    A. Within two (2) business days following execution of a definitive 
divestiture agreement, CPI or the Divestiture Trustee, whichever is 
then responsible for effecting the divestiture required herein, must 
notify the United States of a proposed divestiture required by this 
Final Judgment. If the Divestiture Trustee is responsible for effecting 
the divestiture, the Divestiture Trustee also must notify Defendants. 
The notice must set forth the details of the proposed divestiture and 
list the name, address, and telephone number of each person not 
previously identified who offered or expressed an interest in or desire 
to acquire any ownership interest in the Divestiture Assets, together 
with full details of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of this notice, the United States may request from Defendants, 
the proposed Acquirer, other third parties, or the Divestiture Trustee, 
if applicable, additional information concerning the proposed 
divestiture, the proposed Acquirer and other prospective Acquirers. 
Defendants and the Divestiture Trustee must furnish the additional 
information requested within fifteen (15) calendar days of the receipt 
of the request, unless the United States provides written agreement to 
a different period.
    C. Within forty-five (45) calendar days after receipt of the notice 
or within twenty (20) calendar days after the United States has been 
provided the additional information requested from Defendants, the 
proposed Acquirer, other third parties, and the Divestiture Trustee, 
whichever is later, the United States must provide written notice to 
Defendants and the Divestiture Trustee, if there is one, stating 
whether or not the United States, in its sole discretion, objects to 
the proposed Acquirer or any other aspect of the proposed divestiture. 
If the United States provides written notice that it does not object, 
the divestiture may be consummated, subject only to Defendants' limited 
right to object to the sale under Paragraph V(C) of this Final 
Judgment. Absent written notice that the United States does not object 
or upon objection by the United States, a divestiture may not be 
consummated. Upon objection by Defendants pursuant to Paragraph V(C), a 
divestiture by the Divestiture Trustee may not be consummated unless 
approved by the Court.
    D. No information or documents obtained pursuant to Section VI may 
be divulged by the United States to any person other than an authorized 
representative of the executive branch of the United States, except in 
the course of legal proceedings to which the United States is a party 
(including grand-jury proceedings), for the purpose of evaluating a 
proposed Acquirer or securing compliance with this Final Judgment, or 
as otherwise required by law.
    E. In the event of a request by a third party for disclosure of 
information under the Freedom of Information Act, 5 U.S.C. 552, the 
Antitrust Division will act in accordance with that statute, and the 
Department of Justice regulations at 28 CFR part 16, including the 
provision on confidential commercial information, at 28 CFR 16.7. 
Persons submitting information to the Antitrust Division should 
designate the confidential commercial information portions of all 
applicable documents and information under 28 CFR 16.7. Designations of 
confidentiality expire ten years after submission, ``unless the 
submitter requests and provides justification for a longer designation 
period.'' See 28 CFR 16.7(b).
    F. If at the time a person furnishes information or documents to 
the United States pursuant to Section VI, that person represents and 
identifies in writing information or documents for which a claim of 
protection may be asserted under Rule 26(c)(1)(G) of the Federal Rules 
of Civil Procedure, and marks each pertinent page of such material, 
``Subject to claim of protection under Rule 26(c)(1)(G) of the Federal 
Rules of Civil Procedure,'' the United States must give that person ten 
calendar days' notice before divulging the material in any legal 
proceeding (other than a grand-jury proceeding).

[[Page 34758]]

VII. Financing

    Defendants may not finance all or any part of Acquirer's purchase 
of all or part of the Divestiture Assets made pursuant to this Final 
Judgment.

VIII. Hold Separate

    Until the divestiture required by this Final Judgment has been 
accomplished, Defendants must take all steps necessary to comply with 
the Hold Separate Stipulation and Order entered by the Court. 
Defendants will take no action that would jeopardize the divestiture 
ordered by the Court.

IX. Affidavits

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, and every thirty (30) calendar days thereafter until 
the divestiture required by this Final Judgment has been completed, 
Defendants must deliver to the United States an affidavit describing 
the fact and manner of Defendants' compliance with this Final Judgment. 
Odyssey's affidavits must be signed by the Vice Chairman and a Managing 
Principal of Odyssey Investment Partners; CPI's affidavits must be 
signed by its Chief Financial Officer and its highest-ranking officer; 
and General Dynamics's affidavits must be signed by General Dynamics 
Mission Systems' President and General Counsel. The United States, in 
its sole discretion, may approve different signatories for each 
affidavit. Each affidavit must include the name, address, and telephone 
number of each person who, during the preceding thirty (30) calendar 
days, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, an interest in the Divestiture Assets, and 
must describe in detail each contact with such persons during that 
period. Each affidavit also must include a description of the efforts 
Defendants have taken to solicit buyers for and complete the sale of 
the Divestiture Assets, and to provide required information to 
prospective Acquirers. Each affidavit also must include a description 
of any limitations placed by Defendants on information provided to 
prospective Acquirers. If the information set forth in the affidavit is 
true and complete, objection by the United States to information 
provided by Defendants to prospective Acquirers must be made within 
fourteen (14) calendar days of receipt of the affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, Defendants must deliver to the United States an 
affidavit that describes in reasonable detail all actions Defendants 
have taken and all steps Defendants have implemented on an ongoing 
basis to comply with Section VIII of this Final Judgment. Defendants 
must deliver to the United States an affidavit describing any changes 
to the efforts and actions outlined in Defendants' earlier affidavits 
filed pursuant to Section IX within fifteen (15) calendar days after 
the change is implemented.
    C. CPI must keep all records of all efforts made to preserve and 
divest the Divestiture Assets until one year after the divestiture has 
been completed.

X. Compliance Inspection

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of related orders such as a Hold Separate 
Stipulation and Order or of determining whether this Final Judgment 
should be modified or vacated, and subject to any legally-recognized 
privilege, from time to time authorized representatives of the United 
States, including agents retained by the United States, must, upon 
written request of an authorized representative of the Assistant 
Attorney General in charge of the Antitrust Division, and reasonable 
notice to Defendants, be permitted:

    (1) Access during Defendants' office hours to inspect and copy, 
or at the option of the United States, to require Defendants to 
provide electronic copies of all books, ledgers, accounts, records, 
data, and documents in the possession, custody, or control of 
Defendants, relating to any matters contained in this Final 
Judgment; and
    (2) to interview, either informally or on the record, 
Defendants' officers, employees, or agents, who may have their 
individual counsel present, regarding such matters. The interviews 
must be subject to the reasonable convenience of the interviewee and 
without restraint or interference by Defendants.

    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
Defendants must submit written reports or respond to written 
interrogatories, under oath if requested, relating to any of the 
matters contained in this Final Judgment.
    C. No information or documents obtained pursuant to Section X may 
be divulged by the United States to any person other than an authorized 
representative of the executive branch of the United States, except in 
the course of legal proceedings to which the United States is a party 
(including grand jury proceedings), for the purpose of securing 
compliance with this Final Judgment, or as otherwise required by law.
    D. In the event of a request by a third party for disclosure of 
information under the Freedom of Information Act, 5 U.S.C. 552, the 
Antitrust Division will act in accordance with that statute, and the 
Department of Justice regulations at 28 CFR part 16, including the 
provision on confidential commercial information, at 28 CFR 16.7. 
Defendants submitting information to the Antitrust Division should 
designate the confidential commercial information portions of all 
applicable documents and information under 28 CFR 16.7. Designations of 
confidentiality expire ten years after submission, ``unless the 
submitter requests and provides justification for a longer designation 
period.'' See 28 CFR 16.7(b).
    E. If at the time that Defendants furnish information or documents 
to the United States pursuant to Section X, Defendants represent and 
identify in writing information or documents for which a claim of 
protection may be asserted under Rule 26(c)(1)(G) of the Federal Rules 
of Civil Procedure, and Defendants mark each pertinent page of such 
material, ``Subject to claim of protection under Rule 26(c)(1)(G) of 
the Federal Rules of Civil Procedure,'' the United States must give 
Defendants ten (10) calendar days' notice before divulging the material 
in any legal proceeding (other than a grand jury proceeding).

XI. Notification

    A. Unless a transaction is otherwise subject to the reporting and 
waiting period requirements of the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''), 
Odyssey and CPI, without providing advance notification to the United 
States, may not directly or indirectly acquire any assets of or any 
interest in, including a financial, security, loan, equity, or 
management interest, an entity involved in the design, manufacture, and 
sale of large ground station antennas for geostationary satellites in 
the United States during the term of this Final Judgment.
    B. Odyssey and CPI must provide the notification required by 
Section XI in the same format as, and in accordance with the 
instructions relating to, the Notification and Report Form set forth in 
the Appendix to Part 803 of Title 16 of the Code of Federal Regulations 
as amended, except that the information requested in Items 5 through 8 
of the instructions must be provided only about the design, 
manufacture, and sale of large ground station antennas for 
geostationary satellites. Notification must be provided at least thirty 
(30)

[[Page 34759]]

calendar days before acquiring any such interest, and must include, 
beyond the information required by the instructions, the names of the 
principal representatives who negotiated the agreement on behalf of 
each party, and all management or strategic plans discussing the 
proposed transaction. If, within the 30-day period following 
notification, representatives of the United States make a written 
request for additional information, Odyssey and CPI may not consummate 
the proposed transaction or agreement until thirty (30) calendar days 
after submitting all requested information. Early termination of the 
waiting periods in this Paragraph may be requested and, where 
appropriate, granted in the same manner as is applicable under the 
requirements and provisions of the HSR Act and rules promulgated 
thereunder. Section XI will be broadly construed and any ambiguity or 
uncertainty regarding the filing of notice under Section XI will be 
resolved in favor of filing notice.
    C. Paragraphs XI(A) and XI(B) will only apply to Odyssey to the 
extent it continues to hold an interest in CPI.

XII. Limitations on Reacquisition

    Odyssey and CPI may not reacquire any part of or any interest in 
the Divestiture Assets during the term of this Final Judgment

XIII. Retention of Jurisdiction

    The Court retains jurisdiction to enable any party to this Final 
Judgment to apply to the Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XIV. Enforcement of Final Judgment

    A. The United States retains and reserves all rights to enforce the 
provisions of this Final Judgment, including the right to seek an order 
of contempt from the Court. Defendants agree that in a civil contempt 
action, a motion to show cause, or a similar action brought by the 
United States regarding an alleged violation of this Final Judgment, 
the United States may establish a violation of this Final Judgment and 
the appropriateness of a remedy therefor by a preponderance of the 
evidence, and Defendants waive any argument that a different standard 
of proof should apply.
    B. This Final Judgment should be interpreted to give full effect to 
the procompetitive purposes of the antitrust laws and to restore the 
competition the United States alleged was harmed by the challenged 
conduct. Defendants agree that they may be held in contempt of, and 
that the Court may enforce, any provision of this Final Judgment that, 
as interpreted by the Court in light of these procompetitive principles 
and applying ordinary tools of interpretation, is stated specifically 
and in reasonable detail, whether or not it is clear and unambiguous on 
its face. In any such interpretation, the terms of this Final Judgment 
should not be construed against either party as the drafter.
    C. In an enforcement proceeding in which the Court finds that 
Defendants have violated this Final Judgment, the United States may 
apply to the Court for a one-time extension of this Final Judgment, 
together with other relief that may be appropriate. In connection with 
a successful effort by the United States to enforce this Final Judgment 
against a Defendant, whether litigated or resolved before litigation, 
that Defendant agrees to reimburse the United States for the fees and 
expenses of its attorneys, as well as all other costs including 
experts' fees, incurred in connection with that enforcement effort, 
including in the investigation of the potential violation.
    D. For a period of four (4) years following the expiration of this 
Final Judgment, if the United States has evidence that a Defendant 
violated this Final Judgment before it expired, the United States may 
file an action against that Defendant in this Court requesting that the 
Court order: (1) Defendant to comply with the terms of this Final 
Judgment for an additional term of at least four years following the 
filing of the enforcement action; (2) all appropriate contempt 
remedies; (3) additional relief needed to ensure the Defendant complies 
with the terms of this Final Judgment; and (4) fees or expenses as 
called for by Section XIV.

XV. Expiration of Final Judgment

    Unless the Court grants an extension, this Final Judgment will 
expire ten (10) years from the date of its entry, except that after 
five (5) years from the date of its entry, this Final Judgment may be 
terminated upon notice by the United States to the Court and Defendants 
that the divestiture has been completed and the continuation of this 
Final Judgment no longer is necessary or in the public interest.

XVI. Public Interest Determination

    Entry of this Final Judgment is in the public interest. The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16, including by making available to the 
public copies of this Final Judgment, the Competitive Impact Statement, 
comments thereon, and the United States' responses to comments. Based 
upon the record before the Court, which includes the Competitive Impact 
Statement and any comments and responses to comments filed with the 
Court, entry of this Final Judgment is in the public interest.

Date:
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[Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16]

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United States District Judge

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    United States of America, Plaintiff, v. Odyssey Investment 
Partners Fund V, LP; Communications & Power Industries LLC, and 
General Dynamics Corporation, Defendants.

Civil Action No. 20-cv-1614
Judge: Hon. Thomas F. Hogan

Competitive Impact Statement

    The United States of America, under Section 2(b) of the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(b)-(h) (the ``APPA'' or 
``Tunney Act''), files this Competitive Impact Statement relating to 
the proposed Final Judgment submitted for entry in this civil antitrust 
proceeding.

I. Nature and Purpose of the Proceeding

    On July 22, 2019, Communications and Power Industries LLC (``CPI'') 
agreed to acquire General Dynamics SATCOM Technologies, Inc. (``GD 
SATCOM'') from its parent company, General Dynamics Corporation 
(``General Dynamics''), for approximately $175 million. The United 
States filed a civil antitrust Complaint on May 28, 2020 seeking to 
enjoin the proposed acquisition. The Complaint alleges that the likely 
effect of this acquisition would be to substantially lessen competition 
for the design, manufacture, and sale of large ground station antennas 
for geostationary satellites (``large geostationary satellite 
antennas'') in violation of Section 7 of the Clayton Act, 15 U.S.C. 18.
    At the same time the Complaint was filed, the United States filed a 
Hold Separate Stipulation and Order (``Stipulation and Order'') and 
proposed Final Judgment, which are designed to address the 
anticompetitive effects of the acquisition. Under the proposed Final 
Judgment, which is explained more fully below, CPI is required to 
divest its subsidiary CPI ASC Signal Division Inc. (``ASC Signal''), 
which houses the entirety of CPI's business

[[Page 34760]]

that competes in the design, manufacture, and sale of large 
geostationary satellite antennas. Under the terms of the Stipulation 
and Order, CPI will take certain steps to ensure that ASC Signal is 
operated as a competitively independent, economically viable, and 
ongoing business concern, which will remain independent and 
uninfluenced by CPI or its parent company, Odyssey Investment Partners 
Fund V, LP (``Odyssey''), and that competition is maintained during the 
pendency of the required divestiture.
    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment will terminate this action, except that the 
Court will retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. Description of Events Giving Rise to the Alleged Violation

(A) The Defendants and the Proposed Transaction

    Odyssey, a private equity fund managed by Odyssey Investment 
Partners, is a Delaware limited partnership with its headquarters in 
New York, New York. Odyssey Investment Partners has raised over $5 
billion since its inception and invests in a wide array of industries, 
including aerospace and defense. CPI is a portfolio company of Odyssey. 
It is a Delaware corporation with its headquarters in Palo Alto, 
California. CPI is a global manufacturer of electronic components and 
subsystems focused primarily on communications and defense markets. CPI 
had sales of approximately $500 million in 2019 and sells satellite 
communication antennas through its subsidiary, ASC Signal, a business 
it acquired in 2017.
    General Dynamics is a Delaware corporation with its headquarters in 
Reston, Virginia. General Dynamics's subsidiary, GD SATCOM, designs, 
manufactures, and sells satellite communications systems used in 
commercial, defense, and scientific applications and provides related 
products such as amplifiers and antennas. GD SATCOM earned between $200 
million and $300 million in revenues in 2019.
    Pursuant to a purchase agreement dated July 22, 2019, CPI intends 
to acquire GD SATCOM from General Dynamics for approximately $175 
million.

(B) Industry Background

    Satellite communications networks enable secure communications 
links in remote areas that lack access to the main telecommunications 
grid. For example, the Department of Defense (``DoD'') uses satellite 
communications networks to communicate with military bases in theaters 
of war, where access to the communications grid may be intermittent or 
even non-existent. Similarly, where it is too expensive to run 
traditional communications lines, commercial network operators provide 
satellite communications networks that individual users--or clusters of 
users in a central location--can use to access the internet, 
television, and voice communications services.
    Both commercial and military satellite communications networks 
operate in the same way: Information is transmitted from a remote user 
through a satellite in orbit and back down through a ground station 
that is connected to a traditional communications grid. This process is 
reversed as information returns to the remote user. At both ends of the 
satellite communication link, there must be an antenna that can ``see'' 
the satellite(s) with which the ground stations are interfacing.
    The satellite is the most critical, and expensive, element of a 
satellite communications network. Satellite-based design constraints, 
such as the power of the transmission signal (which is directly 
impacted by limitations on size and weight) and the orbit in which the 
satellite will operate, thus drive other significant design decisions 
for the entire satellite communications network.
    The other key component of a satellite communications network is 
the ground station antenna, which connects the satellite to the 
communications grid. The ground station antenna consists of a parabolic 
dish, the structure on which the dish is mounted, and any motors or 
other equipment needed to move, or ``point,'' the dish at the 
satellite(s) in its network.
    Several characteristics differentiate ground station antennas, but 
the two most important are the size of the antenna (which is typically 
measured by the diameter of its parabolic dish) and the ability of the 
antenna to track satellites that change their position relative to the 
Earth (as described below, some antennas remain pointed in the same 
direction while others track satellites as they cross the sky).
    Antenna size is important because larger antennas can receive 
fainter signals (i.e., signals impacted by rain, clouds, or other 
atmospheric conditions) than smaller antennas. As a result, satellite 
networks using larger antennas are more reliable than networks using 
smaller antennas. Additionally, because larger antennas can receive 
fainter signals, the power requirements for the transmitting satellite 
(which must be supplied through batteries and/or solar generation) are 
diminished as compared to transmission to smaller antennas. Satellites 
for larger antennas therefore need not be as large or expensive as 
satellites for smaller antennas. Larger antennas thus decrease the 
overall cost of the satellite communications system.
    The other major factor differentiating between types of ground 
station antennas is their ability to track satellites that change their 
position relative to the Earth. For example, satellites in 
geostationary orbit remain in a fixed position relative to the Earth's 
rotation and are more than 20,000 miles above Earth. Antennas for 
geostationary satellites are therefore ``fixed'' and point in one 
direction. Low-earth orbit (``LEO'') and mid-earth orbit (``MEO'') 
satellites, by contrast, are multiple thousands of miles closer to 
earth and rotate the earth every 70 minutes. LEO and MEO satellites 
thus frequently ``cross'' the sky as they orbit and antennas used to 
communicate with them must be ``full-motion'' in order to track the LEO 
and MEO satellites as they move relative to the antennas' positions. 
While full motion antennas duplicate some of the capabilities of fixed 
antennas, they are typically only used for LEO and MEO satellites 
because they are significantly more expensive due to the motors and 
structural design elements necessary to ensure accurate full-motion 
pointing. Fixed antennas are thus more cost-effective than full-motion 
antennas.

(C) Relevant Markets

3. Product Market
    For DoD customers, satellite communications networks provide vital 
communications links for the battlefield and other remote locations. 
For many uses, DoD requires large geostationary satellite antennas in 
order to guarantee reliable communications connections. DoD cannot 
switch to smaller geostationary antennas without compromising the 
reliability and usefulness of its network. Because switching to smaller 
geostationary antennas would effectively render a satellite 
communications network unfit for its intended use, the Complaint 
alleges that DoD is unlikely to switch to smaller geostationary 
antennas in response to a small but significant

[[Page 34761]]

increase in price for large geostationary satellite antennas.
    According to the Complaint, commercial customers--whose reliability 
requirements are not as rigid as DoD's--are also unlikely to switch to 
smaller geostationary antennas in the event of a small but significant 
increase in price for large geostationary satellite antennas because, 
like DoD, doing so would decrease the reliability of their network. 
Further, switching to smaller geostationary antennas would require a 
satellite communications network with a larger--and significantly more 
expensive--satellite at its core, thus increasing the overall cost of 
the network.
    Similarly, the Complaint alleges that DoD and commercial customers 
with geostationary satellites are unlikely to switch from fixed to 
full-motion antennas--like those used for MEO and LEO satellites--in 
response to a small but significant increase in price of fixed 
antennas. Even when full-motion antennas have similar capabilities to 
fixed antennas, they are significantly more expensive due to the 
additional motors and equipment necessary to ensure accurate full-
motion pointing.
    According to the Complaint, customers will not substitute to 
smaller or full-motion antennas in response to a small but significant 
and non-transitory increase in the price of large geostationary 
satellite antennas. Therefore, the Complaint alleges that the design, 
manufacture, and sale of large geostationary satellite antennas is a 
relevant product market and line of commerce under Section 7 of the 
Clayton Act, 15 U.S.C. 18.
4. Geographic Market
    The Complaint alleges that the relevant geographic market for large 
geostationary satellite antennas is the United States. For national 
security reasons, DoD prefers domestic suppliers of large geostationary 
satellite antennas when it is deciding on potential antenna sources. 
Similarly, commercial customers prefer domestic suppliers of large 
geostationary satellite antennas, in part because they resell network 
access to DoD and other government customers that prefer to avoid 
having foreign suppliers for components in the transmission chain for 
sensitive national security-related information. For these reasons, 
neither DoD nor commercial customers are likely to turn to any foreign 
suppliers in the face of a small but significant and non-transitory 
price increase by domestic suppliers of large geostationary satellite 
antennas.

(D) Anticompetitive Effects of the Proposed Transaction

    As alleged in the Complaint, CPI, through its subsidiary ASC 
Signal, and GD SATCOM are the only two significant suppliers that 
design, manufacture, and sell large geostationary satellite antennas in 
the United States. The merger would give the combined firm an effective 
monopoly, leaving customers, including DoD, without a meaningful 
competitive alternative for this critical component of satellite 
communications networks.
    According to the Complaint, CPI and GD SATCOM compete for sales of 
large geostationary satellite antennas on the basis of quality, price, 
and contractual terms such as delivery times. This competition has 
resulted in higher quality, lower prices, and shorter delivery times. 
The combination of CPI and GD SATCOM would eliminate this competition 
and its future benefits to customers, including DoD. Post-acquisition, 
the merged firm likely would have the incentive and ability to increase 
prices and offer less favorable contractual terms.
    As described in the Complaint, competition between CPI and GD 
SATCOM has also fostered important industry innovation, leading to 
antennas that are more durable, can withstand more extreme 
environments, and operate at higher bandwidths. The combination of CPI 
and GD SATCOM would eliminate this competition and its future benefits 
to customers, including DoD. Post-acquisition, the merged firm likely 
would have less incentive to engage in research and development efforts 
that lead to innovative and high-quality products.

(E) Entry

    According to the Complaint, entry of additional competitors into 
the market for the design, manufacture, and sale of large geostationary 
satellite antennas in the United States is unlikely to prevent the harm 
to competition that is likely to result if the proposed acquisition is 
consummated. Production facilities for large geostationary satellite 
antennas require a substantial investment in both capital equipment and 
human resources. A new entrant would need to set up a factory to 
produce parabolic dishes, design the complex electronic assemblies and 
components necessary to point the antenna, and build assembly lines and 
testing facilities. Engineering and research personnel would need to be 
assigned to design, test, and troubleshoot the complex manufacturing 
process that is necessary to produce large geostationary satellite 
antennas. Any new products manufactured by such an entrant would also 
require extensive testing and qualification before they could be used 
by the U.S. military. As a result, the Complaint alleges that entry 
would be costly and time-consuming.

III. Explanation of the Proposed Final Judgment

    The divestiture required by the proposed Final Judgment will remedy 
the loss of competition alleged in the Complaint by establishing an 
independent and economically viable competitor in the design, 
manufacture, and sale of large geostationary satellite antennas. 
Paragraph IV(A) of the proposed Final Judgment requires CPI, within the 
later of 60 calendar days after the entry of the Stipulation and Order 
by the Court or 30 calendar days after all regulatory approvals needed 
to complete the transaction and divestiture have been received, to 
divest the Divestiture Assets. The assets must be divested in such a 
way as to satisfy the United States in its sole discretion that they 
can and will be operated by the purchaser as a viable, ongoing business 
that can compete effectively in the design, manufacture, and sale of 
large geostationary satellite antennas. The regulatory approvals are 
defined in Paragraph II(J) of the proposed Final Judgment and include 
approvals or clearances pursuant to filings with the Committee on 
Foreign Investment in the United States (``CFIUS'') or under antitrust 
or competition laws required for CPI's acquisition of GD SATCOM and 
approvals or clearances pursuant to filings with CFIUS or under 
antitrust, competition, or other U.S. or international laws or 
regulations required for the divestiture of the Divestiture Assets. The 
Divestiture Assets are defined as ASC Signal, and include four 
facilities (a support facility in Plano, Texas, a manufacturing 
facility located in Whitby, Ontario, and testing facilities located in 
Ashburn, Ontario and Caddo Mills, Texas) and all tangible and 
intangible assets related to or used in connection with the ASC Signal. 
CPI must take all reasonable steps necessary to accomplish the 
divestiture quickly and must cooperate with prospective purchasers.
    The proposed Final Judgment also contains provisions intended to 
facilitate the acquirer's efforts to hire employees supporting ASC 
Signal. Paragraph IV(C) of the proposed Final Judgment requires CPI to 
provide the acquirer and the United States with organization charts and 
information relating to these employees and to make them available for 
interviews, and it

[[Page 34762]]

provides that the Defendants must not interfere with any negotiations 
by the acquirer to hire them. In addition, for employees who elect 
employment with the acquirer, CPI must waive all non-compete and non-
disclosure agreements, vest all unvested pension and other equity 
rights, and provide all benefits that the employees would generally be 
provided if transferred to a buyer of an ongoing business. This 
paragraph further provides that the Defendants may not solicit to hire 
any employee of the Divestiture Assets who was hired by the acquirer, 
unless that individual is terminated or laid off by the acquirer or the 
acquirer agrees in writing that the Defendants may solicit to hire that 
individual. The non-solicitation period runs for 12 months from the 
date of the divestiture.
    Paragraph IV(H) of the proposed Final Judgment requires CPI, at the 
acquirer's option, to enter into a transition services agreement for 
back office, human resource, and information technology services and 
support for ASC Signal for a period of up to 12 months. The paragraph 
further provides that the United States, in its sole discretion, may 
approve one or more extensions of this transition services agreement 
for a total of up to an additional six months. Paragraph IV(H) also 
provides that employees of CPI tasked with providing any transition 
services must not share any competitively sensitive information of the 
acquirer with any other employee of Defendants.
    Paragraph IV(G) of the proposed Final Judgment facilitates the 
transfer of customers and other contractual relationships from CPI to 
the acquirer. CPI must transfer all contracts, agreements, and 
relationships to the acquirer and must make best efforts to assign, 
subcontract, or otherwise transfer contracts or agreements that require 
the consent of another party before assignment, subcontracting or other 
transfer.
    If CPI does not accomplish the divestiture within the period 
prescribed in the proposed Final Judgment, Section V of the proposed 
Final Judgment provides that the Court will appoint a divestiture 
trustee selected by the United States to effect the divestiture. If a 
divestiture trustee is appointed, the proposed Final Judgment provides 
that CPI will pay all costs and expenses of the trustee. The 
divestiture trustee's commission will be structured so as to provide an 
incentive for the trustee based on the price obtained and the speed 
with which the divestiture is accomplished. After the divestiture 
trustee's appointment becomes effective, the trustee will provide 
periodic reports to the United States setting forth his or her efforts 
to accomplish the divestiture. At the end of six months, if the 
divestiture has not been accomplished, the divestiture trustee and the 
United States will make recommendations to the Court, which will enter 
such orders as appropriate, in order to carry out the purpose of the 
trust, including by extending the trust or the term of the divestiture 
trustee's appointment.
    Section XI of the proposed Final Judgment requires Odyssey and CPI 
to notify the United States in advance of acquiring an entity involved 
in the design, manufacture, and sale of large ground station antennas 
for geostationary satellites in the United States in a transaction that 
would not otherwise be reportable under the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''). 
The proposed Final Judgment further provides for waiting periods and 
opportunities for the United States to obtain additional information 
analogous to the provisions of the HSR Act. Because CPI and GD Satcom 
are the only two significant suppliers of these products in the United 
States, it is important for the Division to receive notice of even 
small transactions that have the potential to eliminate competition in 
this market through the acquisition of an important startup or new 
entrant. Requiring notification of any acquisition of an entity 
involved in the design, manufacture, and sale of large ground station 
antennas for geostationary satellites in the United States will permit 
the United States to assess the competitive effects of that acquisition 
before it is consummated and, if necessary, seek to enjoin the 
transaction.
    The proposed Final Judgment also contains provisions designed to 
promote compliance and make the enforcement of the Final Judgment as 
effective as possible. Paragraph XIV(A) provides that the United States 
retains and reserves all rights to enforce the provisions of the Final 
Judgment, including its rights to seek an order of contempt from the 
Court. Under the terms of this paragraph, 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 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.
    Paragraph XIV(B) provides additional clarification regarding the 
interpretation of the provisions of the proposed Final Judgment. The 
proposed Final Judgment is intended to restore competition the United 
States alleges would otherwise be harmed by the transaction. 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, as interpreted in light of this 
procompetitive purpose.
    Paragraph XIV(C) of the proposed Final Judgment provides that if 
the Court finds in an enforcement proceeding that Defendants have 
violated the Final Judgment, the United States may apply to the Court 
for a one-time extension of the Final Judgment, together with such 
other relief as may be appropriate. In addition, to compensate American 
taxpayers for any costs associated with investigating and enforcing 
violations of the Final Judgment, Paragraph XIV(C) provides that in any 
successful effort by the United States to enforce the Final Judgment 
against a Defendant, whether litigated or resolved before litigation, 
that Defendant will reimburse the United States for attorneys' fees, 
experts' fees, and other costs incurred in connection with any 
enforcement effort, including the investigation of the potential 
violation.
    Paragraph XIV(D) states that the United States may file an action 
against a Defendant for violating the Final Judgment for up to four 
years after the Final Judgment has expired or been terminated. This 
provision is meant to address circumstances such as when evidence that 
a violation of the Final Judgment occurred during the term of the Final 
Judgment is not discovered until after the Final Judgment has expired 
or been terminated or when there is not sufficient time for the United 
States to complete an investigation of an alleged violation until after 
the Final Judgment has expired or been terminated. This provision, 
therefore, makes clear that, for four years after the Final Judgment 
has expired or been terminated, the United States may still challenge a 
violation that occurred during the term of the Final Judgment.
    Finally, Section XV of the proposed Final Judgment provides that 
the Final Judgment will expire ten years from the date of its entry, 
except that after five years from the date of its entry, the Final 
Judgment may be terminated upon

[[Page 34763]]

notice by the United States to the Court and Defendants that the 
divestiture has been completed and that the continuation of the Final 
Judgment is no longer necessary or in the public interest.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment neither impairs 
nor assists the bringing of any private antitrust damage action. Under 
the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the 
proposed Final Judgment has no prima facie effect in any subsequent 
private lawsuit that may be brought against Defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least 60 days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 60 
days of the date of publication of this Competitive Impact Statement in 
the Federal Register, or the last date of publication in a newspaper of 
the summary of this Competitive Impact Statement, whichever is later. 
All comments received during this period will be considered by the U.S. 
Department of Justice, which remains free to withdraw its consent to 
the proposed Final Judgment at any time before the Court's entry of the 
Final Judgment. The comments and the response of the United States will 
be filed with the Court. In addition, comments will be posted on the 
U.S. Department of Justice, Antitrust Division's internet website and, 
under certain circumstances, published in the Federal Register.
    Written comments should be submitted to: Katrina Rouse, Chief, 
Defense, Industrials, and Aerospace Section, Antitrust Division, U.S. 
Department of Justice, 450 Fifth Street, NW, Suite 8700, Washington, DC 
20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    As an alternative to the proposed Final Judgment, the United States 
considered a full trial on the merits against Defendants. The United 
States could have continued the litigation and sought preliminary and 
permanent injunctions against CPI's acquisition of GD SATCOM. The 
United States is satisfied, however, that the divestiture of assets 
described in the proposed Final Judgment will remedy the 
anticompetitive effects alleged in the Complaint, preserving 
competition for the design, manufacture, and sale of large 
geostationary satellite antennas. Thus, the proposed Final Judgment 
achieves all or substantially all of the relief the United States would 
have obtained through litigation, but avoids the time, expense, and 
uncertainty of a full trial on the merits of the Complaint.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    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 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 ``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); see also United States v. Deutsche Telekom AG, No. 19-2232 
(TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More demanding 
requirements would ``have enormous practical consequences for the 
government's ability to negotiate future

[[Page 34764]]

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 (``[T]he 
`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).

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

Dated: May 28, 2020

Respectfully submitted,

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

Jay D. Owen,
Assistant Chief.
Defense, Industrials, and Aerospace Section, Antitrust Division, 
U.S. Department of Justice, 450 Fifth St. NW, Suite 8700, 
Washington, DC 205, Telephone (202) 598-2987, Facsimile (202) 514-
9033, [email protected].

[FR Doc. 2020-12289 Filed 6-5-20; 8:45 am]
 BILLING CODE 4410-11-P