United States, et al. v. Waste Management, Inc., et al.; Response to Public Comments, 15962-15967 [2021-06147]

Download as PDF 15962 Federal Register / Vol. 86, No. 56 / Thursday, March 25, 2021 / Notices DEPARTMENT OF JUSTICE Antitrust Division United States, et al. v. Waste Management, Inc., et al.; Response to Public Comments Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)–(h), the United States hereby publishes below the Response to Public Comments on the Proposed Final Judgment in United States, et al. v. Waste Management, Inc., et al., Civil Action No. 1:20–cv–03063–JDB, which was filed in the United States District Court for the District of Columbia on March 19, 2021, together with a copy of the two comments received by the United States. A copy of the comments and the United States’ response to the comments is available at https://www.justice.gov/ atr/case/us-and-plaintiff-states-v-wastemanagement-inc-and-advanceddisposal-services-inc. Copies of the comments and the United States’ response are available for inspection at the Office of the Clerk of the United States District Court for the District of Columbia. Copies of these materials may also be obtained from the Antitrust Division upon request and payment of the copying fee set by Department of Justice regulations. Suzanne Morris, Chief, Premerger and Division Statistics, Antitrust Division. United States District Court for the District of Columbia United States of America, State of Florida, State of Illinois, State of Minnesota, Commonwealth of Pennsylvania, and State of Wisconsin, Plaintiffs, v. Waste Management, Inc., and Advanced Disposal Services, Inc., Defendants. Case No. 1:20–cv–03063 (JDB) Response of Plaintiff United States to Public Comments on the Proposed Final Judgment As required by the Antitrust Procedures and Penalties Act (the ‘‘APPA’’ or ‘‘Tunney Act’’), 15 U.S.C. 16(b)–(h), the United States hereby responds to the public comments received about the proposed Final Judgment in this case. After careful consideration of the two comments received, the United States continues to believe that the proposed remedy will provide an effective and appropriate remedy for the antitrust violations alleged in the Complaint and is therefore in the public interest. The United States will move the Court for entry of the proposed Final Judgment VerDate Sep<11>2014 17:52 Mar 24, 2021 Jkt 253001 after the public comments and this Response have been published in the Federal Register, pursuant to 15 U.S.C. 16(d). I. Procedural History On April 14, 2019, Waste Management, Inc. (‘‘WMI’’) agreed to acquire all of the outstanding common stock of Advanced Disposal Services, Inc. (‘‘ADS’’) for approximately $4.9 billion. On June 24, 2020, WMI and ADS agreed to a revised purchase price of approximately $4.6 billion. On October 23, 2020, the United States and the State of Florida, State of Illinois, State of Minnesota, Commonwealth of Pennsylvania, and State of Wisconsin (the ‘‘Plaintiff States’’) filed a civil antitrust Complaint seeking to enjoin WMI from acquiring ADS because the proposed acquisition would substantially lessen competition for small container commercial waste (‘‘SCCW’’) collection and municipal solid waste (‘‘MSW’’) disposal in 57 local markets in the United States in violation of Section 7 of the Clayton Act, 15 U.S.C. 18. Simultaneously with the filing of the Complaint, the United States and the Plaintiff States filed a proposed Final Judgment, an Asset Preservation Stipulation and Order signed by the United States, the Plaintiff States, and Defendants consenting to the entry of the proposed Final Judgment after compliance with the requirements of the APPA, and a Competitive Impact Statement describing the transaction and the proposed Final Judgment. The United States caused the Complaint, the proposed Final Judgment, and the Competitive Impact Statement to be published in the Federal Register on November 3, 2020, see 85 FR 70,004 (November 3, 2020), and caused notice regarding the same, together with directions for the submission of written comments relating to the proposed Final Judgment, to be published in The Washington Post for seven days, from November 2, 2020, through November 8, 2020. The 60-day period for public comment ended on January 7, 2021. During the public comment period, the United States received the two comments described below in Section IV and attached in Appendix A. II. The Complaint and the Proposed Final Judgment The proposed Final Judgment is the culmination of a thorough, comprehensive investigation conducted by the Antitrust Division of the U.S. Department of Justice into WMI’s proposed acquisition of ADS. As alleged in the Complaint, WMI is the largest PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 solid waste hauling and disposal company in the United States and provides waste collection, recycling, and disposal services in 49 states. ADS is the fourth-largest solid waste hauling and disposal company in the United States and provides waste collection, recycling, and disposal services in 16 states. Based on the evidence gathered during its investigation, the United States concluded that WMI’s proposed acquisition of ADS would likely substantially lessen competition in the markets for SCCW collection and MSW disposal in 57 local markets in the United States, resulting in higher prices and a lower quality and level of service for customers in these markets. Accordingly, the United States and the Plaintiff States filed a civil antitrust lawsuit to block the acquisition as a violation of Section 7 of the Clayton Act, 15 U.S.C. 18. The proposed Final Judgment is designed to preserve competition in each of the affected geographic markets that were alleged in the Complaint. It requires WMI and ADS to divest a total of 15 landfills, 37 transfer stations, 29 hauling locations, and over 200 waste and recycling collection routes, together with related ancillary assets. The required divestitures, together with the other requirements of the proposed Final Judgment, will address the anticompetitive effects of the acquisition in SCCW collection or MSW disposal service in the areas alleged in the Complaint. The divestiture of these assets to an independent, economically viable acquirer will ensure that customers of these services in the geographic markets alleged in the Complaint will continue to receive the benefits of competition that otherwise would be lost as a result of the transaction. Pursuant to Paragraph V(B) of the Asset Preservation Stipulation and Order, which the Court entered on October 27, 2020 (Dkt. No. 8), Defendants are required to comply with all of the terms and provisions of the proposed Final Judgment. Following the Court’s entry of the Asset Preservation Stipulation and Order, and as required by Paragraph IV(A) of the proposed Final Judgment, Defendants completed the required divestiture to GFL Environmental Inc. (‘‘GFL’’), which took ownership of the assets and has begun incorporating them into its operations. GFL is now the fourth-largest SCCW collection and MSW disposal provider in North America. E:\FR\FM\25MRN1.SGM 25MRN1 Federal Register / Vol. 86, No. 56 / Thursday, March 25, 2021 / Notices III. Standard of Judicial Review The Clayton Act, as amended by the APPA, requires that proposed consent judgments in antitrust cases brought by the United States be subject to a 60-day comment period, after which the Court shall determine whether entry of the proposed Final Judgment ‘‘is in the public interest.’’ 15 U.S.C. 16(e)(1). In making that determination, the Court, in accordance with the statute as amended in 2004, is required to consider: (A) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration of relief sought, anticipated effects of alternative remedies actually considered, whether its terms are ambiguous, and any other competitive considerations bearing upon the adequacy of such judgment that the court deems necessary to a determination of whether the consent judgment is in the public interest; and (B) the impact of entry of such judgment upon competition in the relevant market or markets, upon the public generally and individuals alleging specific injury from the violations set forth in the complaint including consideration of the public benefit, if any, to be derived from a determination of the issues at trial. 15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors, the Court’s inquiry is necessarily a limited one as the government is entitled to ‘‘broad discretion to settle with the defendant within the reaches of the public interest.’’ United States v. Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); United States v. U.S. Airways Grp., Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (explaining that the ‘‘court’s inquiry is limited’’ in Tunney Act settlements); United States v. InBev N.V./S.A., No. 08–1965 (JR), 2009 U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a court’s review of a consent judgment is limited and only inquires ‘‘into whether the government’s determination that the proposed remedies will cure the antitrust violations alleged in the complaint was reasonable, and whether 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 VerDate Sep<11>2014 17:52 Mar 24, 2021 Jkt 253001 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 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. ArcherDaniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (‘‘A district court must accord due respect to the government’s prediction as to the effect of proposed remedies, its perception of the market structure, and its view of the nature of PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 15963 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 § 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 E:\FR\FM\25MRN1.SGM 25MRN1 15964 Federal Register / Vol. 86, No. 56 / Thursday, March 25, 2021 / Notices comments alone.’’ U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova Corp., 107 F. Supp. 2d at 17). IV. Summary of Public Comments and the Response of the United States During the 60-day public comment period, the United States received comments from: (1) Solid Waste Agency of Lake County, Illinois (‘‘SWALCO’’); and (2) Solid Waste Agency of Northern Cook County, Illinois (‘‘SWANCC’’). The comments are attached in the accompanying Appendix A and are summarized below. After reviewing these comments, the United States continues to believe that the proposed Final Judgment is in the public interest. A. Public Comments From Solid Waste Agency of Lake County, Illinois and Solid Waste Agency of Northern Cook County, Illinois SWALCO and SWANCC are both intergovernmental organizations that advise and assist member communities with solid waste management issues and provide them with a variety of waste reduction and recycling programs and resource materials. SWALCO is composed of members from 43 municipalities in Lake County, Illinois, and SWANCC has 23 member communities in Northern Cook County, Illinois. In their comments, SWALCO and SWANCC assert that the proposed Final Judgment should be revised to include the sale of collection routes and assets in the Chicago, Illinois area (‘‘Chicago area’’). In the alternative, SWALCO proposes that WMI be required to commit to take waste to the divested MSW disposal assets in Chicago or to sell those MSW disposal assets to Lakeshore Recycling Systems, Inc. instead of GFL, which, after approval by the United States, acquired the Divestiture Assets. SWALCO and SWANCC both assert that such modifications are necessary to make the divested disposal facilities ‘‘economically viable’’ and to create a ‘‘strong fourth vertically integrated competitor.’’ SWALCO further asserts that because the United States required the divestiture of vertically integrated operations in other markets, it should do so in the Chicago area as well. Finally, SWALCO and SWANCC state that the approved acquirer, GFL, has not shown a commitment to the Chicago area since the close of the divestiture transaction because it has not bid for certain hauling contracts. SWANCC further suggests that GFL will not be able to attract sufficient independent collection providers to the divested MSW disposal assets, and thus, GFL VerDate Sep<11>2014 17:52 Mar 24, 2021 Jkt 253001 will eventually sell the assets to a larger market participant. B. Response of the United States Entry of the proposed Final Judgment is in the public interest, and SWALCO’s and SWANCC’s recommendations—to revise the proposed Final Judgment to require the sale of additional collection routes and assets, to require WMI to commit to take waste to the divested MSW disposal assets, or to require that the divested MSW disposal assets be sold to Lakeshore Recycling Systems instead of GFL—are unnecessary. As explained in more detail below, the United States continues to believe that the proposed Final Judgment presents an adequate remedy for four primary reasons. First, the divestiture of collection routes and assets in the Chicago area is not necessary to ensure the success of the MSW disposal divestiture assets. Second, to the extent SWALCO and SWANCC assert that the sale of additional collection routes and assets is necessary to remedy a competitive concern in collection in the Chicago area, they seek a remedy for harm not alleged by the United States in its Complaint. Third, GFL’s decision not to bid on certain collection contracts is not evidence of a lack of commitment to the Chicago area MSW disposal markets. Fourth, the alternative proposals—to require WMI to commit to take waste to the divested MSW disposal assets in the Chicago area or to require that these divested MSW disposal assets be sold to Lakeshore Recycling Systems instead of GFL—are unnecessary to ensure the viability of the MSW divestitures and to remedy the harm alleged in the Complaint. 1. The MSW Disposal Assets in the Chicago Area Do Not Need To Be Operated With Collection Routes and Assets To Be Viable SWALCO’s and SWANCC’s recommendation to revise the proposed Final Judgment to require the sale of collection routes and assets is unnecessary to ensure the viability of the MSW disposal divestiture assets in the Chicago area. The MSW disposal divestiture assets in the Chicago area are viable without also requiring divestiture of collection routes and assets. As part of a thorough vetting process of the required divestitures and GFL as the approved acquirer, the United States specifically examined the viability of the assets to be divested. As part of this process, the United States conducted interviews with GFL, examined the GFL’s business plans, financial plans, and additional related documents, and interviewed other market participants. PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 Through this process, the United States determined that divestiture of collection routes and assets in the Chicago area is not necessary to ensure the viability and competitiveness of the divested MSW disposal assets in the Chicago area. In significant part, this is because a number of independent collection providers in the Chicago area (including Flood Brothers Disposal and, as SWALCO notes, Lakeshore Recycling Services) need MSW disposal options for the waste they collect. GFL will be motivated and able to compete to provide MSW disposal services for these firms, which will provide GFL with the waste flow to make the MSW disposal divestiture assets viable. By partnering with independent collection providers, GFL will be able to compete with vertically-integrated waste management companies to serve communities such as SWALCO and SWANCC. In short, GFL does not itself need to collect waste in order to run a successful waste disposal business in the Chicago area, as it can contract with others that collect that waste. Furthermore, the fact that the United States required the divestiture of both collection and disposal assets in other markets does not mean that the United States should have done the same in the Chicago area. The United States examines each market individually and on its own merits. In some markets in which the United States alleged harm resulting from the transaction, the United States determined that divestiture of both collection and MSW disposal assets was necessary, primarily because there were not sufficient independent collection firms in the area to provide waste volume to support the MSW disposal divestiture assets. In other markets, the United States determined that the merger would significantly reduce competition in SCCW collection, and thus, the divestiture of collection assets was necessary to remedy the alleged harm in SCCW collection. As noted above, in the Chicago area, the United States determined that there were a sufficient number of independent collection firms that would provide waste volume to the MSW disposal divestiture assets acquired by GFL. For this reason, and as discussed below, the United States did not allege harm in waste collection in the Chicago area. The divestiture of collection routes and assets in the Chicago area is therefore not required to remedy any competitive harm alleged in the Complaint. E:\FR\FM\25MRN1.SGM 25MRN1 Federal Register / Vol. 86, No. 56 / Thursday, March 25, 2021 / Notices 2. The Complaint Does Not Allege Harm in the Chicago Area’s Collection Markets SWALCO’s and SWANCC’s recommendations to revise the proposed Final Judgment to require the sale of collection routes and assets in the Chicago area is unnecessary and beyond the scope of the allegations in the Complaint. The United States conducted a thorough investigation of the effects of the transaction in the Chicago area (including Lake County and Northern Cook County, Illinois). Based on this investigation, the United States did not find a basis to allege harm in any collection market in the Chicago area and, therefore, did not require the divestiture of collection routes or assets in the Chicago area. Rather, the Complaint alleged competitive harm in multiple MSW disposal markets in the Chicago area. Because the additional relief sought by SWALCO and SWANCC is not required to remedy any harm alleged in the Complaint, consideration of whether to amend the proposed Final Judgment to include this relief falls outside the scope of the Tunney Act’s public interest inquiry. As the D.C. Circuit explained in Microsoft, 56 F.3d at 1459– 60, the ‘‘court’s authority to review the decree depends entirely on the government’s exercising its prosecutorial discretion by bringing a case in the first place.’’ Because the United States did not allege harm in any collection market in the Chicago area, the modifications proposed by SWALCO and SWANCC fall outside the scope of this Tunney Act review. Expanding the public interest review to encompass relief related to an uncharged allegation would amount to ‘‘effectively redraft[ing] the complaint’’ to inquire into matters the United States did not pursue. Microsoft, 56 F.3d at 1459. 3. GFL Is Committed To Operating the Chicago Area MSW Disposal Assets SWALCO and SWANCC assert that GFL has not shown a commitment to the Chicago-area market because GFL did not bid on two recent municipal collection opportunities in SWALCO’s area and has not yet pursued such collection opportunities in SWANCC’s area.1 SWANCC argues that this 1 While SWALCO’s and SWANCC’s comments refer to both residential waste collection and SCCW VerDate Sep<11>2014 17:52 Mar 24, 2021 Jkt 253001 suggests GFL might sell the Divestiture Assets in the Chicago area at a later date. But the divestiture to GFL in the Chicago area is aimed at preventing harm in MSW disposal, not waste collection. As noted above, the United States did not allege harm in any waste collection market in the Chicago area. The absence of bidding activity by GFL for specific collection opportunities does not warrant modification of the proposed Final Judgment. GFL’s commitment to compete in the Chicago area should be judged by its activities and plans for competing in the market in which the United States alleged harm: The MSW disposal market. Thus, GFL’s decision not to bid on particular contracts to provide collection services is not evidence of a lack of commitment to the MSW disposal market and does not impact the evaluation of whether the remedy for the Chicago-area MSW disposal market alleged in the Complaint is in the public interest. The United States has reviewed GFL’s financial and operational plans for the relevant MSW disposal divestiture assets as a part of its vetting process. The United States determined that GFL has both the intent and capability to serve the Chicago area with the MSW disposal divestiture assets, thus meeting the standard established by the United States in the proposed Final Judgment for approval of the acquirer of the Chicago-area MSW disposal divestiture assets. 4. SWALCO’s Alternative Proposals Are Also Unnecessary For the same reasons that there is no need to divest collection assets to GFL in the Chicago area, there is no need to revise the proposed Final Judgment to require WMI to guarantee that it will take waste to the MSW disposal divestiture assets in the Chicago area, as SWALCO proposes. As described above, the MSW disposal divestiture assets are viable without a commitment of this sort from WMI. MSW volumes from independent collection firms will be sufficient to support the successful operation of the MSW disposal collection bids in the Chicago area, the primary focus of the relevant bids is residential collection. As explained in the Complaint, residential waste collection is a distinct service from SCCW collection. The United States did not allege harm in any residential waste collection market and comments related to residential collection are outside the scope of the Court’s Tunney Act review. See Microsoft, 56 F.3d at 1459–60. PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 15965 divestiture assets in the Chicago area. Moreover, a commitment of this sort would create an ongoing entanglement between competitors and could have the effect of disincentivizing GFL from competing vigorously in the marketplace. Such a commitment is therefore not only unnecessary, but also potentially harmful to competition in the Chicago area. Further, in accordance with Paragraph IV(A) of the proposed Final Judgment, the United States has found GFL to be an appropriate acquirer for the MSW disposal assets, and the proposed Final Judgment should not be modified to require the sale of the MSW disposal divestiture assets in the Chicago area to Lakeshore Recycling Services, as SWALCO proposes. Paragraph IV(D) of the proposed Final Judgment requires Defendants to sell the MSW disposal divestiture assets in the Chicago-area to a purchaser who ‘‘has the intent and capability (including the necessary managerial, operational, technical, and financial capability) to compete effectively’’ in the MSW disposal business. The goal of a divestiture is to ‘‘ensure that the purchaser possesses both the means and the incentive to maintain the level of premerger competition in the market of concern.’’ U.S. Dep’t of Justice, Merger Remedies Manual (2020), available at https:// www.justice.gov/atr/page/file/1312416/ download, at 4–6 (internal citations omitted). Accordingly, in vetting a divestiture buyer, the ‘‘appropriate remedial goal [of the United States] is to ensure that the selected purchaser will effectively preserve competition according to the requirements in the consent decree.’’ Id. at 24. The United States has done so here. The buyer here, GFL, is a significant waste management company in North America. In addition to other nonhazardous waste services, it provides MSW disposal and SCCW collection services across Canada and the United States. The United States extensively vetted GFL’s ability to operate the Divestiture Assets, including the MSW disposal divestiture assets in the Chicago area, and, as described above, determined that GFL has both the capability and intent to operate those assets competitively. GFL therefore is an appropriate buyer for the MSW disposal divestiture assets in the Chicago area. V. Conclusion E:\FR\FM\25MRN1.SGM 25MRN1 15966 Federal Register / Vol. 86, No. 56 / Thursday, March 25, 2021 / Notices After careful consideration of the public comments, the United States continues to believe that the proposed Final Judgment, as drafted, provides an effective and appropriate remedy for the antitrust violations alleged in the Complaint, and is therefore in the public interest. The United States will move this Court to enter the Final Judgment after the comments and this response are published as required by 15 U.S.C. 16(d). Gabriella Moskowitz (D.C. Bar #1044309) Trial Attorney, U.S. Department of Justice, Antitrust Division, 450 Fifth Street NW, Suite 8700, Washington, DC 20530 Telephone: (202) 598–8885 Fax: (202) 514–9033 Email: gabriella.moskowitz@usdoj.gov Dated: March 19, 2021. Respectfully submitted, For Plaintiff United States: /s/ lllllllllllllllllll Appendix A HUNTON ANOREV\IS KURlH LLP RIVERFRONT PLAZA, EAST TOWER 951 EAST BYRD STREET RICHMOND, VIRGINIA 23219-4074 TEI.. 804 • 788 • 8200 FAX 804 • 788 • 8218 JOHNS. MARTIN DIRECT DIAL: 804 • 788 • 8774 December 28, 2020 Via UPS Overnight Ms. Katrina Rouse, Chief, Defense, Industrials and Aerospace Section, U.S. Department of Justice, Antitrust Division, 450 5th Street NW, Suite 8700, Washington, DC 20530 Re: United States of America, et al. v. Waste Management Inc. et al, No 1:20– cv–3063 (D.D.C.) Dear Ms. Rouse: On behalf of my client, the Solid Waste Agency of Lake County, IL (SWALCO), we are submitting comments regarding Waste Management Inc.’s (WMI) proposed divestment to GFL of municipal waste management infrastructure assets located in Illinois pursuant to the consent decree in the above referenced matter. We appreciate the open lines of communication and thorough review conducted by Steve Harris, Jeremy Cline and others on your team during this process. As first indicated in our June 14, 2019 letter to the Department of Justice our primary concern is to maintain the current level of competition in the northern Illinois waste management market despite losing a key competitor as a result of WMI’s acquisition of Advanced Disposal. During our discussions we stressed the need for a viable, vertically integrated fourth competitor in our market, as we stare down a market with only three such competitors due to WMI’s acquisition. In several other markets, including neighboring Wisconsin and several other states, the consent decree requires the divestment of numerous hauling facilities and hauling routes. We do not agree with the position that the VerDate Sep<11>2014 17:52 Mar 24, 2021 Jkt 253001 Department of Justice took in Illinois by requiring the divestment of assets in the Illinois market to GFL, without including collection assets as part of the required divestment. Having three transfer stations and one landfill in the Illinois market without any collection assets does not result in a strong fourth vertically integrated competitor in our marketplace. The only way it will is if GFL makes a strong commitment to competing in the Illinois market or it sells the assets to an independent hauler in this market. What has been GFL’s commitment so far in growing its presence in the Lake County market since the DOJ’s announcement on November 3, 2020? My client, SWALCO, had to make the first introduction to GFL’s municipal hauling sales representatives as there are several municipal hauling franchise contract opportunities upcoming in Lake County. GFL was added to the hauler contact list that SWALCO provides its 43 municipal members. GFL was invited to bid on two hauling contracts (residential and commercial franchises) in the Village of Deerfield and attended the mandatory preproposal meeting. Proposals were due on December 21, 2020 and GFL did not bid on either opportunity; this is not the type of commitment that will result in a viable fourth vertically integrated competitor in the Lake County market. Furthermore, with respect, we disagree with the Department’s view that, in Illinois, a divestment of a landfill and transfer stations alone is sufficient to preserve competition because of the existing competition in the hauling market. By definition, GFL’s PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 failure to bid described above is clear evidence of a lack of competition in that market; had Waste Management and Advanced remained separate, we would have expected to see bids from both; with the divestiture, we received one bid from the surviving entity and none from GFL. Without a serious commitment from GFL to replace the competition lost in the hauling market, we are certain that our member agencies will see less competition for hauling, and seriously concerned about the long term survival of the divested transfer stations and landfill without a committed garbage flow. On behalf of SWALCO’s 43 municipal members and the County of Lake, SWALCO requests that the Department of Justice amend its final judgement or take other appropriate action to require that WMI provide hauling assets to GFL or provide it a guaranteed commitment to dispose of waste at the three transfer stations and landfill divested to GFL at a daily tonnage rate necessary for those facilities to be economically viable. Another alternative satisfactory to SWALCO is to require GFL to sell all the assets to Lakeshore Recycling Systems, Inc. the only independent hauler in the Chicago market with the size and market share necessary to compete with the three publicly traded and vertically integrated companies currently operating in the Lake County and Chicagoland markets. Please feel free to contact me with any questions or comments you may have. Sincerely, /s/ John S. Martin, Partner Hunton Andrews Kurth LLP E:\FR\FM\25MRN1.SGM 25MRN1 EN25MR21.003</GPH> EMAIL: majjpi@t:11:IDJOOAK mm Federal Register / Vol. 86, No. 56 / Thursday, March 25, 2021 / Notices JSM/ejr cc: Mr. Walter S. Willis Stephen Harris, Esq. 15967 Jeremy Cline, Esq. BILLING CODE 4410–11–P .$o1~1V. . . . . . . . . flf. ,-aol"ffierl't(OQlrC-..nty1mm1111a!!il!Rl\!!i!~lllllllllllllllllllllilllHll.l[IIIIIIIIH!llil&tlli!ll.iMlltli'llllllllfflll!l\lllllllllJ1••1111111.illllillllliillllil' ·pei:eii:iber:2!>,1020 Ms. Katriiia k<iuse Chief; Detense, lnd!!Sirials anil. 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LikeWlstl,ihosewifh·haufulgc.ontra<$Clll\.•CO!ltrolthedestltllltiono.fthtiwaste·lhroµgh•fhei)'owit trans1'& stations and. to their own .landfills, lher¢hymaking those assets. valuable, Ili.·the•~smce thel)eparl:lneitf<ifJllStlee11t11ioiilil:ed ils jl(isltion wri=mij·the.·sa1e•of fheamts;GPL has tilk#h• little action other thaii ti> in~ theins'elvi\S to ~a~ Despite opportunities tb bldfor lil\l.tling conttacts !ll)d despite ¥ve 011treach to.GFL aboi.\t thQ$e. QPjxlrtilnfti(!$,{3flL has not pursued e\ti:llt onti .hauling•eontraet,. the Departrneri.t'soo!i¢l!hat.S!tiallerin<lependentfuiillers·wiU liild th:eir.waY,.i:Q·GtL~s assets is nots11bstai1tiJl!ed by• any data,. There is nothing preventing(,FVs competiton from attracting thQse indeJ)lllllierits unttlsl1¢h tiine as GFL detennines to sell ~trans~ statfon and landfillassetsitll{:qµired .fl"Qm AOSIWMI toano!her one ofthe giants th1itCOl!trQls :the waste stteam--thei:ebY•fi:iriber decyeiising. eon1petitiott in themai'ketto·the.dettim!ll'.ltOflllt _.. On behaifllfiiie 23 ll'leri)bel' mu\ifolpijitk,s, $Wi\1\ICC itqµtl$1lithat th~ ~ e r i t ofJiliiti~ COlldj!i<>ri a~lll'QV~lupontl!etransferof!Jauling~~and~•toQ:fL;otllltlll'llative1Y·llPO!i•c:,th~ptO()ftli3tGfL wi!lhave.suffitjentto11lllil! to ~ain a sustainable eompetitw in tb1:> mllrl«rtptace. ........,........ ~ , Olivid V11nVoore1, Ex~utiveDireetor ttlli.a emalr. Stl!phen H~iS; oo:t JeremyCline; DtlJ [FR Doc. 2021–06147 Filed 3–24–21; 8:45 am] VerDate Sep<11>2014 17:52 Mar 24, 2021 Jkt 253001 PO 00000 Frm 00091 Fmt 4703 Sfmt 9990 E:\FR\FM\25MRN1.SGM 25MRN1 EN25MR21.004</GPH> BILLING CODE 4410–11–C

Agencies

[Federal Register Volume 86, Number 56 (Thursday, March 25, 2021)]
[Notices]
[Pages 15962-15967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06147]



[[Page 15962]]

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DEPARTMENT OF JUSTICE

Antitrust Division


United States, et al. v. Waste Management, Inc., et al.; Response 
to Public Comments

    Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 
16(b)-(h), the United States hereby publishes below the Response to 
Public Comments on the Proposed Final Judgment in United States, et al. 
v. Waste Management, Inc., et al., Civil Action No. 1:20-cv-03063-JDB, 
which was filed in the United States District Court for the District of 
Columbia on March 19, 2021, together with a copy of the two comments 
received by the United States.
    A copy of the comments and the United States' response to the 
comments is available at https://www.justice.gov/atr/case/us-and-plaintiff-states-v-waste-management-inc-and-advanced-disposal-services-inc. Copies of the comments and the United States' response are 
available for inspection at the Office of the Clerk of the United 
States District Court for the District of Columbia. Copies of these 
materials may also be obtained from the Antitrust Division upon request 
and payment of the copying fee set by Department of Justice 
regulations.

Suzanne Morris,
Chief, Premerger and Division Statistics, Antitrust Division.

United States District Court for the District of Columbia

    United States of America, State of Florida, State of Illinois, 
State of Minnesota, Commonwealth of Pennsylvania, and State of 
Wisconsin, Plaintiffs, v. Waste Management, Inc., and Advanced 
Disposal Services, Inc., Defendants.

Case No. 1:20-cv-03063 (JDB)

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

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

I. Procedural History

    On April 14, 2019, Waste Management, Inc. (``WMI'') agreed to 
acquire all of the outstanding common stock of Advanced Disposal 
Services, Inc. (``ADS'') for approximately $4.9 billion. On June 24, 
2020, WMI and ADS agreed to a revised purchase price of approximately 
$4.6 billion. On October 23, 2020, the United States and the State of 
Florida, State of Illinois, State of Minnesota, Commonwealth of 
Pennsylvania, and State of Wisconsin (the ``Plaintiff States'') filed a 
civil antitrust Complaint seeking to enjoin WMI from acquiring ADS 
because the proposed acquisition would substantially lessen competition 
for small container commercial waste (``SCCW'') collection and 
municipal solid waste (``MSW'') disposal in 57 local markets in the 
United States in violation of Section 7 of the Clayton Act, 15 U.S.C. 
18.
    Simultaneously with the filing of the Complaint, the United States 
and the Plaintiff States filed a proposed Final Judgment, an Asset 
Preservation Stipulation and Order signed by the United States, the 
Plaintiff States, and Defendants consenting to the entry of the 
proposed Final Judgment after compliance with the requirements of the 
APPA, and a Competitive Impact Statement describing the transaction and 
the proposed Final Judgment. The United States caused the Complaint, 
the proposed Final Judgment, and the Competitive Impact Statement to be 
published in the Federal Register on November 3, 2020, see 85 FR 70,004 
(November 3, 2020), and caused notice regarding the same, together with 
directions for the submission of written comments relating to the 
proposed Final Judgment, to be published in The Washington Post for 
seven days, from November 2, 2020, through November 8, 2020. The 60-day 
period for public comment ended on January 7, 2021. During the public 
comment period, the United States received the two comments described 
below in Section IV and attached in Appendix A.

II. The Complaint and the Proposed Final Judgment

    The proposed Final Judgment is the culmination of a thorough, 
comprehensive investigation conducted by the Antitrust Division of the 
U.S. Department of Justice into WMI's proposed acquisition of ADS. As 
alleged in the Complaint, WMI is the largest solid waste hauling and 
disposal company in the United States and provides waste collection, 
recycling, and disposal services in 49 states. ADS is the fourth-
largest solid waste hauling and disposal company in the United States 
and provides waste collection, recycling, and disposal services in 16 
states.
    Based on the evidence gathered during its investigation, the United 
States concluded that WMI's proposed acquisition of ADS would likely 
substantially lessen competition in the markets for SCCW collection and 
MSW disposal in 57 local markets in the United States, resulting in 
higher prices and a lower quality and level of service for customers in 
these markets. Accordingly, the United States and the Plaintiff States 
filed a civil antitrust lawsuit to block the acquisition as a violation 
of Section 7 of the Clayton Act, 15 U.S.C. 18.
    The proposed Final Judgment is designed to preserve competition in 
each of the affected geographic markets that were alleged in the 
Complaint. It requires WMI and ADS to divest a total of 15 landfills, 
37 transfer stations, 29 hauling locations, and over 200 waste and 
recycling collection routes, together with related ancillary assets. 
The required divestitures, together with the other requirements of the 
proposed Final Judgment, will address the anticompetitive effects of 
the acquisition in SCCW collection or MSW disposal service in the areas 
alleged in the Complaint. The divestiture of these assets to an 
independent, economically viable acquirer will ensure that customers of 
these services in the geographic markets alleged in the Complaint will 
continue to receive the benefits of competition that otherwise would be 
lost as a result of the transaction.
    Pursuant to Paragraph V(B) of the Asset Preservation Stipulation 
and Order, which the Court entered on October 27, 2020 (Dkt. No. 8), 
Defendants are required to comply with all of the terms and provisions 
of the proposed Final Judgment. Following the Court's entry of the 
Asset Preservation Stipulation and Order, and as required by Paragraph 
IV(A) of the proposed Final Judgment, Defendants completed the required 
divestiture to GFL Environmental Inc. (``GFL''), which took ownership 
of the assets and has begun incorporating them into its operations. GFL 
is now the fourth-largest SCCW collection and MSW disposal provider in 
North America.

[[Page 15963]]

III. Standard of Judicial Review

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

    (A) the competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

    15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory 
factors, the Court's inquiry is necessarily a limited one as the 
government is entitled to ``broad discretion to settle with the 
defendant within the reaches of the public interest.'' United States v. 
Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); United States v. 
U.S. Airways Grp., Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) 
(explaining that the ``court's inquiry is limited'' in Tunney Act 
settlements); United States v. InBev N.V./S.A., No. 08-1965 (JR), 2009 
U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a 
court's review of a consent judgment is limited and only inquires 
``into whether the government's determination that the proposed 
remedies will cure the antitrust violations alleged in the complaint 
was reasonable, and whether 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 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

[[Page 15964]]

comments alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova 
Corp., 107 F. Supp. 2d at 17).

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

    During the 60-day public comment period, the United States received 
comments from: (1) Solid Waste Agency of Lake County, Illinois 
(``SWALCO''); and (2) Solid Waste Agency of Northern Cook County, 
Illinois (``SWANCC''). The comments are attached in the accompanying 
Appendix A and are summarized below. After reviewing these comments, 
the United States continues to believe that the proposed Final Judgment 
is in the public interest.

A. Public Comments From Solid Waste Agency of Lake County, Illinois and 
Solid Waste Agency of Northern Cook County, Illinois

    SWALCO and SWANCC are both intergovernmental organizations that 
advise and assist member communities with solid waste management issues 
and provide them with a variety of waste reduction and recycling 
programs and resource materials. SWALCO is composed of members from 43 
municipalities in Lake County, Illinois, and SWANCC has 23 member 
communities in Northern Cook County, Illinois. In their comments, 
SWALCO and SWANCC assert that the proposed Final Judgment should be 
revised to include the sale of collection routes and assets in the 
Chicago, Illinois area (``Chicago area''). In the alternative, SWALCO 
proposes that WMI be required to commit to take waste to the divested 
MSW disposal assets in Chicago or to sell those MSW disposal assets to 
Lakeshore Recycling Systems, Inc. instead of GFL, which, after approval 
by the United States, acquired the Divestiture Assets.
    SWALCO and SWANCC both assert that such modifications are necessary 
to make the divested disposal facilities ``economically viable'' and to 
create a ``strong fourth vertically integrated competitor.'' SWALCO 
further asserts that because the United States required the divestiture 
of vertically integrated operations in other markets, it should do so 
in the Chicago area as well. Finally, SWALCO and SWANCC state that the 
approved acquirer, GFL, has not shown a commitment to the Chicago area 
since the close of the divestiture transaction because it has not bid 
for certain hauling contracts. SWANCC further suggests that GFL will 
not be able to attract sufficient independent collection providers to 
the divested MSW disposal assets, and thus, GFL will eventually sell 
the assets to a larger market participant.

B. Response of the United States

    Entry of the proposed Final Judgment is in the public interest, and 
SWALCO's and SWANCC's recommendations--to revise the proposed Final 
Judgment to require the sale of additional collection routes and 
assets, to require WMI to commit to take waste to the divested MSW 
disposal assets, or to require that the divested MSW disposal assets be 
sold to Lakeshore Recycling Systems instead of GFL--are unnecessary. As 
explained in more detail below, the United States continues to believe 
that the proposed Final Judgment presents an adequate remedy for four 
primary reasons. First, the divestiture of collection routes and assets 
in the Chicago area is not necessary to ensure the success of the MSW 
disposal divestiture assets. Second, to the extent SWALCO and SWANCC 
assert that the sale of additional collection routes and assets is 
necessary to remedy a competitive concern in collection in the Chicago 
area, they seek a remedy for harm not alleged by the United States in 
its Complaint. Third, GFL's decision not to bid on certain collection 
contracts is not evidence of a lack of commitment to the Chicago area 
MSW disposal markets. Fourth, the alternative proposals--to require WMI 
to commit to take waste to the divested MSW disposal assets in the 
Chicago area or to require that these divested MSW disposal assets be 
sold to Lakeshore Recycling Systems instead of GFL--are unnecessary to 
ensure the viability of the MSW divestitures and to remedy the harm 
alleged in the Complaint.
1. The MSW Disposal Assets in the Chicago Area Do Not Need To Be 
Operated With Collection Routes and Assets To Be Viable
    SWALCO's and SWANCC's recommendation to revise the proposed Final 
Judgment to require the sale of collection routes and assets is 
unnecessary to ensure the viability of the MSW disposal divestiture 
assets in the Chicago area. The MSW disposal divestiture assets in the 
Chicago area are viable without also requiring divestiture of 
collection routes and assets.
    As part of a thorough vetting process of the required divestitures 
and GFL as the approved acquirer, the United States specifically 
examined the viability of the assets to be divested. As part of this 
process, the United States conducted interviews with GFL, examined the 
GFL's business plans, financial plans, and additional related 
documents, and interviewed other market participants. Through this 
process, the United States determined that divestiture of collection 
routes and assets in the Chicago area is not necessary to ensure the 
viability and competitiveness of the divested MSW disposal assets in 
the Chicago area. In significant part, this is because a number of 
independent collection providers in the Chicago area (including Flood 
Brothers Disposal and, as SWALCO notes, Lakeshore Recycling Services) 
need MSW disposal options for the waste they collect. GFL will be 
motivated and able to compete to provide MSW disposal services for 
these firms, which will provide GFL with the waste flow to make the MSW 
disposal divestiture assets viable. By partnering with independent 
collection providers, GFL will be able to compete with vertically-
integrated waste management companies to serve communities such as 
SWALCO and SWANCC. In short, GFL does not itself need to collect waste 
in order to run a successful waste disposal business in the Chicago 
area, as it can contract with others that collect that waste.
    Furthermore, the fact that the United States required the 
divestiture of both collection and disposal assets in other markets 
does not mean that the United States should have done the same in the 
Chicago area. The United States examines each market individually and 
on its own merits. In some markets in which the United States alleged 
harm resulting from the transaction, the United States determined that 
divestiture of both collection and MSW disposal assets was necessary, 
primarily because there were not sufficient independent collection 
firms in the area to provide waste volume to support the MSW disposal 
divestiture assets. In other markets, the United States determined that 
the merger would significantly reduce competition in SCCW collection, 
and thus, the divestiture of collection assets was necessary to remedy 
the alleged harm in SCCW collection. As noted above, in the Chicago 
area, the United States determined that there were a sufficient number 
of independent collection firms that would provide waste volume to the 
MSW disposal divestiture assets acquired by GFL. For this reason, and 
as discussed below, the United States did not allege harm in waste 
collection in the Chicago area. The divestiture of collection routes 
and assets in the Chicago area is therefore not required to remedy any 
competitive harm alleged in the Complaint.

[[Page 15965]]

2. The Complaint Does Not Allege Harm in the Chicago Area's Collection 
Markets
    SWALCO's and SWANCC's recommendations to revise the proposed Final 
Judgment to require the sale of collection routes and assets in the 
Chicago area is unnecessary and beyond the scope of the allegations in 
the Complaint. The United States conducted a thorough investigation of 
the effects of the transaction in the Chicago area (including Lake 
County and Northern Cook County, Illinois). Based on this 
investigation, the United States did not find a basis to allege harm in 
any collection market in the Chicago area and, therefore, did not 
require the divestiture of collection routes or assets in the Chicago 
area. Rather, the Complaint alleged competitive harm in multiple MSW 
disposal markets in the Chicago area.
    Because the additional relief sought by SWALCO and SWANCC is not 
required to remedy any harm alleged in the Complaint, consideration of 
whether to amend the proposed Final Judgment to include this relief 
falls outside the scope of the Tunney Act's public interest inquiry. As 
the D.C. Circuit explained in Microsoft, 56 F.3d at 1459-60, the 
``court's authority to review the decree depends entirely on the 
government's exercising its prosecutorial discretion by bringing a case 
in the first place.'' Because the United States did not allege harm in 
any collection market in the Chicago area, the modifications proposed 
by SWALCO and SWANCC fall outside the scope of this Tunney Act review. 
Expanding the public interest review to encompass relief related to an 
uncharged allegation would amount to ``effectively redraft[ing] the 
complaint'' to inquire into matters the United States did not pursue. 
Microsoft, 56 F.3d at 1459.
3. GFL Is Committed To Operating the Chicago Area MSW Disposal Assets
    SWALCO and SWANCC assert that GFL has not shown a commitment to the 
Chicago-area market because GFL did not bid on two recent municipal 
collection opportunities in SWALCO's area and has not yet pursued such 
collection opportunities in SWANCC's area.\1\ SWANCC argues that this 
suggests GFL might sell the Divestiture Assets in the Chicago area at a 
later date. But the divestiture to GFL in the Chicago area is aimed at 
preventing harm in MSW disposal, not waste collection. As noted above, 
the United States did not allege harm in any waste collection market in 
the Chicago area. The absence of bidding activity by GFL for specific 
collection opportunities does not warrant modification of the proposed 
Final Judgment. GFL's commitment to compete in the Chicago area should 
be judged by its activities and plans for competing in the market in 
which the United States alleged harm: The MSW disposal market. Thus, 
GFL's decision not to bid on particular contracts to provide collection 
services is not evidence of a lack of commitment to the MSW disposal 
market and does not impact the evaluation of whether the remedy for the 
Chicago-area MSW disposal market alleged in the Complaint is in the 
public interest.
---------------------------------------------------------------------------

    \1\ While SWALCO's and SWANCC's comments refer to both 
residential waste collection and SCCW collection bids in the Chicago 
area, the primary focus of the relevant bids is residential 
collection. As explained in the Complaint, residential waste 
collection is a distinct service from SCCW collection. The United 
States did not allege harm in any residential waste collection 
market and comments related to residential collection are outside 
the scope of the Court's Tunney Act review. See Microsoft, 56 F.3d 
at 1459-60.
---------------------------------------------------------------------------

    The United States has reviewed GFL's financial and operational 
plans for the relevant MSW disposal divestiture assets as a part of its 
vetting process. The United States determined that GFL has both the 
intent and capability to serve the Chicago area with the MSW disposal 
divestiture assets, thus meeting the standard established by the United 
States in the proposed Final Judgment for approval of the acquirer of 
the Chicago-area MSW disposal divestiture assets.
4. SWALCO's Alternative Proposals Are Also Unnecessary
    For the same reasons that there is no need to divest collection 
assets to GFL in the Chicago area, there is no need to revise the 
proposed Final Judgment to require WMI to guarantee that it will take 
waste to the MSW disposal divestiture assets in the Chicago area, as 
SWALCO proposes. As described above, the MSW disposal divestiture 
assets are viable without a commitment of this sort from WMI. MSW 
volumes from independent collection firms will be sufficient to support 
the successful operation of the MSW disposal divestiture assets in the 
Chicago area. Moreover, a commitment of this sort would create an 
ongoing entanglement between competitors and could have the effect of 
disincentivizing GFL from competing vigorously in the marketplace. Such 
a commitment is therefore not only unnecessary, but also potentially 
harmful to competition in the Chicago area.
    Further, in accordance with Paragraph IV(A) of the proposed Final 
Judgment, the United States has found GFL to be an appropriate acquirer 
for the MSW disposal assets, and the proposed Final Judgment should not 
be modified to require the sale of the MSW disposal divestiture assets 
in the Chicago area to Lakeshore Recycling Services, as SWALCO 
proposes. Paragraph IV(D) of the proposed Final Judgment requires 
Defendants to sell the MSW disposal divestiture assets in the Chicago-
area to a purchaser who ``has the intent and capability (including the 
necessary managerial, operational, technical, and financial capability) 
to compete effectively'' in the MSW disposal business. The goal of a 
divestiture is to ``ensure that the purchaser possesses both the means 
and the incentive to maintain the level of premerger competition in the 
market of concern.'' U.S. Dep't of Justice, Merger Remedies Manual 
(2020), available at https://www.justice.gov/atr/page/file/1312416/download, at 4-6 (internal citations omitted). Accordingly, in vetting 
a divestiture buyer, the ``appropriate remedial goal [of the United 
States] is to ensure that the selected purchaser will effectively 
preserve competition according to the requirements in the consent 
decree.'' Id. at 24. The United States has done so here.
    The buyer here, GFL, is a significant waste management company in 
North America. In addition to other non-hazardous waste services, it 
provides MSW disposal and SCCW collection services across Canada and 
the United States. The United States extensively vetted GFL's ability 
to operate the Divestiture Assets, including the MSW disposal 
divestiture assets in the Chicago area, and, as described above, 
determined that GFL has both the capability and intent to operate those 
assets competitively. GFL therefore is an appropriate buyer for the MSW 
disposal divestiture assets in the Chicago area.

V. Conclusion

[[Page 15966]]

    After careful consideration of the public comments, the United 
States continues to believe that the proposed Final Judgment, as 
drafted, provides an effective and appropriate remedy for the antitrust 
violations alleged in the Complaint, and is therefore in the public 
interest. The United States will move this Court to enter the Final 
Judgment after the comments and this response are published as required 
by 15 U.S.C. 16(d).

Dated: March 19, 2021.

Respectfully submitted,

For Plaintiff United States:
/s/--------------------------------------------------------------------
Gabriella Moskowitz (D.C. Bar #1044309)

Trial Attorney, U.S. Department of Justice, Antitrust Division, 450 
Fifth Street NW, Suite 8700, Washington, DC 20530
Telephone: (202) 598-8885
Fax: (202) 514-9033
Email: [email protected]

Appendix A
[GRAPHIC] [TIFF OMITTED] TN25MR21.003

December 28, 2020

Via UPS Overnight

Ms. Katrina Rouse, Chief, Defense, Industrials and Aerospace Section, 
U.S. Department of Justice, Antitrust Division, 450 5th Street NW, 
Suite 8700, Washington, DC 20530

Re: United States of America, et al. v. Waste Management Inc. et al, No 
1:20-cv-3063 (D.D.C.)

Dear Ms. Rouse:

    On behalf of my client, the Solid Waste Agency of Lake County, IL 
(SWALCO), we are submitting comments regarding Waste Management Inc.'s 
(WMI) proposed divestment to GFL of municipal waste management 
infrastructure assets located in Illinois pursuant to the consent 
decree in the above referenced matter. We appreciate the open lines of 
communication and thorough review conducted by Steve Harris, Jeremy 
Cline and others on your team during this process.
    As first indicated in our June 14, 2019 letter to the Department of 
Justice our primary concern is to maintain the current level of 
competition in the northern Illinois waste management market despite 
losing a key competitor as a result of WMI's acquisition of Advanced 
Disposal. During our discussions we stressed the need for a viable, 
vertically integrated fourth competitor in our market, as we stare down 
a market with only three such competitors due to WMI's acquisition.
    In several other markets, including neighboring Wisconsin and 
several other states, the consent decree requires the divestment of 
numerous hauling facilities and hauling routes. We do not agree with 
the position that the Department of Justice took in Illinois by 
requiring the divestment of assets in the Illinois market to GFL, 
without including collection assets as part of the required divestment. 
Having three transfer stations and one landfill in the Illinois market 
without any collection assets does not result in a strong fourth 
vertically integrated competitor in our marketplace. The only way it 
will is if GFL makes a strong commitment to competing in the Illinois 
market or it sells the assets to an independent hauler in this market.
    What has been GFL's commitment so far in growing its presence in 
the Lake County market since the DOJ's announcement on November 3, 
2020? My client, SWALCO, had to make the first introduction to GFL's 
municipal hauling sales representatives as there are several municipal 
hauling franchise contract opportunities upcoming in Lake County. GFL 
was added to the hauler contact list that SWALCO provides its 43 
municipal members. GFL was invited to bid on two hauling contracts 
(residential and commercial franchises) in the Village of Deerfield and 
attended the mandatory pre-proposal meeting. Proposals were due on 
December 21, 2020 and GFL did not bid on either opportunity; this is 
not the type of commitment that will result in a viable fourth 
vertically integrated competitor in the Lake County market.
    Furthermore, with respect, we disagree with the Department's view 
that, in Illinois, a divestment of a landfill and transfer stations 
alone is sufficient to preserve competition because of the existing 
competition in the hauling market. By definition, GFL's failure to bid 
described above is clear evidence of a lack of competition in that 
market; had Waste Management and Advanced remained separate, we would 
have expected to see bids from both; with the divestiture, we received 
one bid from the surviving entity and none from GFL. Without a serious 
commitment from GFL to replace the competition lost in the hauling 
market, we are certain that our member agencies will see less 
competition for hauling, and seriously concerned about the long term 
survival of the divested transfer stations and landfill without a 
committed garbage flow.
    On behalf of SWALCO's 43 municipal members and the County of Lake, 
SWALCO requests that the Department of Justice amend its final 
judgement or take other appropriate action to require that WMI provide 
hauling assets to GFL or provide it a guaranteed commitment to dispose 
of waste at the three transfer stations and landfill divested to GFL at 
a daily tonnage rate necessary for those facilities to be economically 
viable. Another alternative satisfactory to SWALCO is to require GFL to 
sell all the assets to Lakeshore Recycling Systems, Inc. the only 
independent hauler in the Chicago market with the size and market share 
necessary to compete with the three publicly traded and vertically 
integrated companies currently operating in the Lake County and 
Chicagoland markets.
    Please feel free to contact me with any questions or comments you 
may have.
Sincerely,

/s/
John S. Martin, Partner
Hunton Andrews Kurth LLP


[[Page 15967]]


JSM/ejr

cc: Mr. Walter S. Willis
Stephen Harris, Esq.
Jeremy Cline, Esq.
BILLING CODE 4410-11-P
[GRAPHIC] [TIFF OMITTED] TN25MR21.004

[FR Doc. 2021-06147 Filed 3-24-21; 8:45 am]
BILLING CODE 4410-11-C

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