Seven & i Holdings Co., Ltd.; Analysis of Agreement Containing Consent Orders To Aid Public Comment, 38343-38348 [2021-15350]

Download as PDF Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices distribute existing stocks of these voluntarily canceled products for 18months after the effective date of the publication of the Cancellation Order in the Federal Register. Thereafter, registrants will be prohibited from selling or distributing these products identified in Table 1 of Unit II, except for export consistent with FIFRA section 17 (7 U.S.C. 136o) or for proper disposal. B. For Product 1021–2600 khammond on DSKJM1Z7X2PROD with NOTICES For product 1021–2600, the registrant has requested that the cancellation becomes effective September 30, 2022. Because the Agency has identified no significant potential risk concerns associated with this pesticide product, upon cancellation of this product cancellation, identified in Table 1A of Unit II, EPA anticipates allowing registrants to sell and distribute existing stocks of this voluntarily canceled product for 1 year after the effective date of the product cancellation, which will be September 30, 2023. Thereafter, registrants will be prohibited from selling or distributing this product identified in Table 1A of Unit II, except for export consistent with FIFRA section 17 (7 U.S.C. 136o) or for proper disposal. The registrants may continue to sell and distribute existing stocks of all other products listed in Table 1 of Unit II until July 20, 2022, which is 1 year after the publication of the Cancellation Order in the Federal Register. Thereafter, the registrants are prohibited from selling or distributing all other products listed in Table 1, except for export in accordance with FIFRA section 17 (7 U.S.C. 136o), or proper disposal. Persons other than the registrants may sell, distribute, or use existing stocks of products listed in Table 1 & Table 1A of Unit II until existing stocks are exhausted, provided that such sale, distribution, or use is consistent with the terms of the previously approved labeling on, or that accompanied, the canceled products. Authority: 7 U.S.C. 136 et seq. Dated: July 9, 2021. Marietta Echeverria, Director, Registration Division, Office of Pesticide Programs. [FR Doc. 2021–15394 Filed 7–19–21; 8:45 am] BILLING CODE 6560–50–P FEDERAL RESERVE SYSTEM FEDERAL TRADE COMMISSION Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company [File No. 201 0108] The notificants listed below have applied under the Change in Bank Control Act (Act) (12 U.S.C. 1817(j)) and § 225.41 of the Board’s Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)). The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board’s Freedom of Information Office at https://www.federalreserve.gov/foia/ request.htm. Interested persons may express their views in writing on the standards enumerated in paragraph 7 of the Act. Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington, DC 20551–0001, not later than August 4, 2021. A. Federal Reserve Bank of Chicago (Colette A. Fried, Assistant Vice President) 230 South LaSalle Street, Chicago, Illinois 60690–1414: 1. The Richard R. Drake Family Trust—B, Radcliffe, Iowa; Cynthia A. Shirar, Marshalltown, Iowa; Edwin A. Drake, West Des Moines, Iowa; and Bryan S. Drake, Radcliffe, Iowa; all individually and as co-trustees; to join the Drake Family Control Group, a group acting in concert, to retain voting shares of Drake Holding Company, and indirectly retain voting shares of Security State Bank, both of Radcliffe, Iowa. Board of Governors of the Federal Reserve System, July 15, 2021. Michele Taylor Fennell, Deputy Associate Secretary of the Board. [FR Doc. 2021–15384 Filed 7–19–21; 8:45 am] BILLING CODE P VerDate Sep<11>2014 17:00 Jul 19, 2021 Jkt 253001 38343 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 Seven & i Holdings Co., Ltd.; Analysis of Agreement Containing Consent Orders To Aid Public Comment Federal Trade Commission. Proposed consent agreement; request for comment. AGENCY: ACTION: The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis of Proposed Consent Orders to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders—embodied in the consent agreement—that would settle these allegations. DATES: Comments must be received on or before August 19, 2021. ADDRESSES: Interested parties may file comments online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Please write: ‘‘Seven & i Holdings Co., Ltd.; File No. 201 0108’’ on your comment, and file your comment online at www.regulations.gov by following the instructions on the web-based form. If you prefer to file your comment on paper, please mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC–5610 (Annex D), Washington, DC 20580; or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. FOR FURTHER INFORMATION CONTACT: Nicholas Bush (202–326–2848), Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis of Agreement Containing Consent Orders to Aid Public Comment describes the terms of the consent agreement and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC SUMMARY: E:\FR\FM\20JYN1.SGM 20JYN1 khammond on DSKJM1Z7X2PROD with NOTICES 38344 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices website at this web address: https:// www.ftc.gov/news-events/commissionactions. You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before August 19, 2021. Write ‘‘Seven & i Holdings, Ltd.; File No. 201 0108’’ on your comment. Your comment— including your name and your state— will be placed on the public record of this proceeding, including, to the extent practicable, on the www.regulations.gov website. Due to protective actions in response to the COVID–19 pandemic and the agency’s heightened security screening, postal mail addressed to the Commission will be subject to delay. We strongly encourage you to submit your comments online through the www.regulations.gov website. If you prefer to file your comment on paper, write ‘‘Seven & i Holdings, Ltd.; File No. 201 0108’’ on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC–5610 (Annex D), Washington, DC 20580; or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service. Because your comment will be placed on the publicly accessible website at www.regulations.gov, you are solely responsible for making sure that your comment does not include any sensitive or confidential information. In particular, your comment should not include any sensitive personal information, such as your or anyone else’s Social Security number; date of birth; driver’s license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. You are also solely responsible for making sure your comment does not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, your comment should not include any ‘‘trade secret or any commercial or financial information which . . . is privileged or confidential’’—as provided by Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)— including in particular competitively sensitive information such as costs, sales statistics, inventories, formulas, VerDate Sep<11>2014 17:00 Jul 19, 2021 Jkt 253001 patterns, devices, manufacturing processes, or customer names. Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled ‘‘Confidential,’’ and must comply with FTC Rule 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c). Your comment will be kept confidential only if the General Counsel grants your request in accordance with the law and the public interest. Once your comment has been posted on www.regulations.gov—as legally required by FTC Rule 4.9(b)—we cannot redact or remove your comment from that website, unless you submit a confidentiality request that meets the requirements for such treatment under FTC Rule 4.9(c), and the General Counsel grants that request. Visit the FTC website at https:// www.ftc.gov to read this Notice and the news release describing this matter. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding, as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before August 19, 2021. For information on the Commission’s privacy policy, including routine uses permitted by the Privacy Act, see https://www.ftc.gov/ site-information/privacy-policy. Analysis of Agreement Containing Consent Orders To Aid Public Comment I. Introduction The Federal Trade Commission (‘‘Commission’’) has accepted for public comment, subject to final approval, an Agreement Containing Consent Orders (‘‘Consent Agreement’’) from Seven & i Holdings Co., Ltd., a Japanese company, 7-Eleven, Inc., the U.S. subsidiary, (collectively, ‘‘7-Eleven’’) and Marathon Petroleum Corporation (‘‘Marathon’’) (collectively, the ‘‘Respondents’’). The Consent Agreement is designed to remedy the anticompetitive effects that likely are resulting from 7-Eleven’s consummated acquisition of Marathon’s wholly-owned subsidiary Speedway LLC (‘‘Speedway’’). The Commission also issued the Order to Maintain Assets included in the Consent Agreement. Pursuant to Commission Rules of Practice, a consent agreement was proposed prior to Respondents’ consummation of the transaction, but PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 the Commission had not accepted the proposal because a majority did not find certain provisions in the proposal sufficient to fully resolve competitive concerns stemming from the transaction. 7-Eleven closed on the acquisition on May 14, 2021 with full knowledge the acquisition was in violation of Section 7 of the Clayton Act and Section 5 of the FTC Act. Respondents subsequently agreed to a revised proposed Decision and Order (‘‘Order’’), described herein, that restores competition lost from the transaction. Under the terms of the Order included in the Consent Agreement, 7-Eleven must divest to Commission-approved Buyers certain Speedway retail fuel outlets and related assets in 291 local markets, and certain 7-Eleven retail fuel outlets and related assets in 2 local markets, across 20 states. The Order requires the divestitures to take place no later than 180 days after May 14, 2021, the day 7Eleven closed on its acquisition of Marathon’s assets. The Commission prefers divestitures to upfront buyers that occur close in time with the closing of the main transaction, but Commission orders will allow for a longer divestiture period when specific, demonstrable circumstances warrant. In this matter, the Commission recognizes that the particular logistical and regulatory requirements of transferring 293 stations across 20 states necessitates a longer process of rolling divestitures to three Buyers. To ensure that as many divestitures happen as quickly as possible, the Order requires that 7Eleven divests the outlets to the Buyers based on the Buyer-approved divestiture schedules incorporated into the Order, and that 7-Eleven meets specific divestiture benchmarks at 90, 120, and 150 days. The Order to Maintain Assets requires Respondents to operate and maintain each divestiture outlet in the normal course of business through the date the Commission-approved Buyer acquires the outlet. In addition, the Order and Order to Maintain Assets require that until 7-Eleven divests the outlets, it must maintain separate retail fuel pricing teams and keep information related to pricing decisions for the divestiture outlets separate from the retail fuel pricing for 7-Eleven’s other outlets. The Order also prohibits 7-Eleven from enforcing noncompete provisions in its franchise agreements against current franchisees or others who might seek employment at the divestiture outlets. This provision reduces the likelihood any 7-Eleven noncompete provisions will have a chilling effect on E:\FR\FM\20JYN1.SGM 20JYN1 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices franchisees or others in seeking employment or doing business with the divestiture outlets. Given that 7-Eleven consummated an illegal transaction, expressly safeguarding the Buyers’ access to essential employees or business partners is particularly necessary to protect the effectiveness of the divestitures. The Commission has placed the Consent Agreement on the public record for 30 days to solicit comments from interested persons. Comments received during this period will become part of the public record. After 30 days, the Commission will review the comments received and decide whether it should withdraw, modify, or make the Order final. II. The Respondents Seven & i Holdings Co., Ltd., a publicly-traded company headquartered in Tokyo, Japan, owns and operates convenience stores and retail fuel outlets worldwide under the 7-Eleven brand. 7-Eleven, Inc. owns, operates, and franchises approximately 9,000 stores in the United States, making it the largest convenience store chain in the country. Roughly 46 percent of 7Eleven’s stores offer fuel. 7-Eleven’s revenue in 2020 totaled over $20 billion, with fuel sales accounting for over $13 billion. Marathon, a publicly-traded company headquartered in Findlay, Ohio, operates a vertically-integrated refining, marketing, retail, and transportation system for petroleum and petroleum products. Marathon is the largest U.S. refiner, with approximately 2.9 million barrels per day of crude oil refining capacity. In 2020, Marathon’s revenues totaled over $69 billion. Marathon’s former wholly-owned subsidiary, Speedway, controls and sets retail fuel pricing at 3,898 retail transportation fuel and convenience stores across the United States, making it the third-largest domestic chain of company-owned and -operated retail fuel outlets and convenience stores. Speedway’s 2020 retail business revenues totaled over $19 billion, with sales of nearly 6 billion gallons of gasoline and diesel in 2019. khammond on DSKJM1Z7X2PROD with NOTICES III. The Transaction Pursuant to an Asset Purchase Agreement dated August 2, 2020, 7Eleven acquired substantially all of Marathon’s Speedway retail assets for approximately $21 billion, subject to adjustments (the ‘‘Transaction’’). 7Eleven and Marathon also entered into a 15-year agreement under which Marathon will supply and transport fuel to the Speedway business, with a base VerDate Sep<11>2014 17:00 Jul 19, 2021 Jkt 253001 volume of 7.7 billion gallons per year of gasoline and diesel. The Commission’s Complaint alleges the Transaction violates Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45, by substantially lessening competition for the retail sale of gasoline and/or the retail sale of diesel in 293 local markets across 20 states. IV. The Retail Sale of Gasoline and Diesel The Commission’s Complaint alleges that relevant product markets in which to analyze the Transaction are the retail sale of gasoline and the retail sale of diesel. Consumers require gasoline for their gasoline-powered vehicles and can purchase gasoline only at retail fuel outlets. Likewise, consumers require diesel for their diesel-powered vehicles and can purchase diesel only at retail fuel outlets. The retail sale of gasoline and the retail sale of diesel constitute separate relevant markets because the two are not interchangeable. Vehicles that run on gasoline cannot run on diesel and vehicles that run on diesel cannot run on gasoline. The Commission’s Complaint alleges 293 local relevant geographic markets in which to assess the competitive effects of the Transaction within the following states: Arizona; California; Florida; Illinois; Indiana; Kentucky; Massachusetts; Michigan; North Carolina; New Hampshire; Nevada; New York; Ohio; Pennsylvania; Rhode Island; South Carolina; Tennessee; Utah; Virginia; and West Virginia. The geographic markets for retail gasoline and retail diesel are highly localized, depending on the unique circumstances of each area. Each relevant market is distinct and factdependent, reflecting many considerations, including commuting patterns, traffic flows, and outlet characteristics. Consumers typically choose between nearby retail fuel outlets with similar characteristics along their planned routes. The geographic markets for the retail sale of diesel are similar to the corresponding geographic markets for retail gasoline, as many diesel consumers exhibit preferences and behaviors similar to those of gasoline consumers. The Transaction substantially lessens competition in each of these local markets, resulting in 264 highly concentrated markets for the retail sale of gasoline and 153 highly concentrated markets for the retail sale of diesel fuel, with many of the 293 markets presenting concerns for both products. Retail fuel outlets compete on price, PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 38345 store format, product offerings, and location, and pay close attention to competitors in close proximity, on similar traffic flows, and with similar store characteristics. In each of the local gasoline and diesel retail markets, the Transaction reduces the number of competitively constraining independent market participants to three or fewer. 7Eleven will be able to raise prices unilaterally in markets where 7-Eleven and Speedway are close competitors. Absent the Transaction, 7-Eleven and Speedway would have continued to compete head to head in these local markets. Moreover, the Transaction enhances the incentives for interdependent behavior in local markets where, including 7-Eleven, only two or three competitively constraining independent market participants remain. Two aspects of the retail fuel industry make it vulnerable to such coordination. First, retail fuel outlets post their fuel prices on price signs that are visible from the street, allowing competitors easily to observe each other’s fuel prices. Second, retail fuel outlets regularly track their competitors’ fuel prices and change their own prices in response. These repeated interactions give retail fuel outlets familiarity with how their competitors price and how changing prices affect fuel sales. Entry into each relevant market will not be timely, likely, or sufficient to deter or counteract the anticompetitive effects arising from the Transaction. Significant entry barriers include the availability of attractive real estate, the time and cost associated with constructing a new retail fuel outlet, and the time associated with obtaining necessary permits and approvals. V. The Order The Order remedies the Transaction’s likely anticompetitive effects by requiring 7-Eleven to divest Speedway retail fuel outlets in 291 local markets, and 7-Eleven retail fuel outlets in 2 local markets, in three separate packages, to CrossAmerica Partners LP (‘‘CAPL’’), Jacksons Food Stores, Inc. (‘‘Jacksons’’), and Anabi Oil Corporation (‘‘Anabi’’) (collectively, the ‘‘Buyers’’). CAPL is a publicly-traded master limited partnership and a wholesale supplier of motor fuels, a convenience store operator, and an owner and lessor of real estate used in the retail distribution of motor fuels. CAPL distributes branded and unbranded fuel to approximately 1,800 locations and owns or leases approximately 1,100 sites, including 150 company-operated sites. E:\FR\FM\20JYN1.SGM 20JYN1 khammond on DSKJM1Z7X2PROD with NOTICES 38346 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices In 2020, the Commission fined Alimentation Couche-Tard Inc. (‘‘ACT’’) and its then-affiliate CAPL $3.5 million to settle allegations that the companies violated a 2018 Commission order requiring divestitures of 10 retail fuel outlets related to ACT’s acquisition of Holiday Companies. ACT controlled CAPL’s general partner when the alleged order violation occurred and agreed to divest a package of retail fuel outlets that were part of CAPL’s retail network to resolve the Commission’s concerns. The alleged order violation resulted from, among other things, ACT’s failure to divest the CAPL outlets by the Commission-imposed deadline. The alleged violation does not disqualify CAPL from consideration as an acceptable buyer in this instance. CAPL has not been affiliated with ACT in any way since November 2019, when Mr. Joseph V. Topper, Jr. and his organization, the Topper Group, acquired the controlling interest in CAPL’s general partner from ACT, and thereby severed completely CAPL’s affiliation with ACT. CAPL has since revamped its management. Mr. Topper now serves as CAPL’s chairman of the board, and he and his organization have the ability to appoint all members of CAPL’s board as well as control CAPL’s operations and activities. Moreover, prior to Mr. Topper acquiring control of CAPL, ACT agreed to indemnify CAPL for penalties and legal costs associated with the alleged order violation. The two other Buyers are Jacksons and Anabi. Jacksons is a privately-held corporation that controls a chain of over 230 Chevron-, Shell-, and Texacobranded retail fuel locations in six western states. Jacksons also is a joint venture partner in Jackson Energy, a wholesale fuel supply company that distributes gasoline and diesel fuel to retail fuel outlets in the western United States. Anabi, a privately-owned and operated retail fuel supplier, is one of the largest Shell-branded distributors in California and controls retail fuel locations in California, Nevada, and Alaska. The Commission is satisfied that the Buyers present no competitive problems in markets where they will acquire divested assets and are otherwise qualified to acquire and operate the assets in their respective divestiture packages. The Order requires 7-Eleven to divest: (a) 105 Speedway retail fuel outlets and a single 7-Eleven retail fuel outlet to CAPL; (b) 63 Speedway retail fuel outlets to Jacksons; and (c) 123 Speedway retail fuel outlets and a single 7-Eleven retail fuel outlet to Anabi. To ensure that 7-Eleven is incentivized to complete all of the divestitures in an VerDate Sep<11>2014 17:00 Jul 19, 2021 Jkt 253001 expedient manner, the Order requires 7Eleven to: (1) Divest on Buyer-approved divestiture schedules, and (2) divest no fewer than a certain number of outlets at certain points within the 180 day divestiture period. Specifically, Paragraph II.A of the Order requires Respondents to divest pursuant to the Buyer-approved divestiture schedules. Under Paragraph XI.A.1 of the Order, 7-Eleven is required to submit to the Commission the Buyerapproved divestiture schedules— identifying the divestiture date for each location—within 60 days after May 14. The Buyers will control the divestiture schedules, and those schedules are enforceable by the Commission against 7-Eleven. The Order also requires 7Eleven to meet certain divestiture benchmarks—with no fewer than 20 percent of each package divested within 90 days, an additional 20 percent of each package divested within 120 days, and an additional 20 percent of each package divested within 150 days of the main Transaction closing. 7-Eleven will have to complete all of the divestitures within 180 days. Taken together, this divestiture process will incentivize 7Eleven to complete the divestitures in a timely and expeditious manner, and give the Commission close oversight into the divestiture schedules. The Order contains additional provisions designed to ensure the effectiveness of the relief, and to prevent 7-Eleven from having access to critical competitive information regarding the divestiture outlets. The Order requires 7-Eleven and Marathon to maintain the economic viability, marketability, and competitiveness of each divestiture asset until the divestitures are complete. Also, the Order requires Respondents to designate an Asset Maintenance Manager to oversee operations of the divestiture assets to ensure the Respondents maintain the divestiture assets’ full economic viability, marketability, and competitiveness until the divestitures are completed and to help facilitate the transfer of the divestiture assets to the Buyers. Additionally, the Order requires the Respondents to establish a divestiture pricing team that will handle retail fuel pricing at the divestiture outlets, and to prevent access and disclosure of that pricing information to anyone other than the divestiture pricing team. The Asset Maintenance Manager will oversee the divestiture pricing team to ensure that confidential pricing information is not shared with other employees at 7-Eleven who may price retail fuel at competing stations. The Order requires the Respondents to institute information technology PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 procedures, authorizations, protocols, and any other controls necessary to prevent unauthorized disclosure or access of information to or from the divestiture pricing team. Finally, the Order appoints The Claro Group as an independent third-party Monitor to oversee the Respondents’ compliance with the requirements of the Order and to oversee the Asset Maintenance Manager. The Order also contains provisions regarding Respondents’ employees and franchisees, designed to protect the viability of the divestiture assets. Section V contains provisions to ensure that the Buyers face no impediments in hiring employees necessary to operate the divestiture assets as competitively as Speedway operated them before the Transaction. Paragraph V.E prohibits 7Eleven from enforcing noncompete provisions against current franchisees or others who might seek employment at the divestiture outlets. This provision reduces the likelihood that the noncompete provisions will have a chilling effect on franchisees or others in seeking employment or doing business with the divestiture outlets. Given that 7-Eleven has consummated an illegal transaction, expressly safeguarding the Buyers’ access to essential employees or business partners is particularly necessary to protect the effectiveness of the divestitures. In addition to requiring retail fuel outlet divestitures, the Order also requires 7-Eleven, for a period of five years, to obtain prior Commission approval before purchasing any of the divested outlets, and for a period of ten years, to provide the Commission prior notice of future acquisitions of the divested outlets and of Commissionidentified retail fuel outlets located in the 293 local markets at issue and three additional markets. These three additional markets raised concerns that are addressed by Speedway’s near-term exit from the markets for reasons outside its control. The prior notice provision is necessary because an acquisition in close proximity to divested assets likely would raise the same competitive concerns as the Transaction and may fall below the Hart-Scott-Rodino Act premerger notification thresholds. The purpose of this analysis is to facilitate public comment on the Order, and the Commission does not intend this analysis to constitute an official interpretation of the Order or to modify its terms in any way. The Offices of the California and Florida Attorneys General participated in both the investigation and the consent process. E:\FR\FM\20JYN1.SGM 20JYN1 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices By direction of the Commission, Chair Lina Khan not participating. April J. Tabor, Secretary. khammond on DSKJM1Z7X2PROD with NOTICES Joint Concurring Statement of Commissioners Rebecca Kelly Slaughter and Rohit Chopra Today, the Commission accepted for public comment an order that would resolve competitive concerns raised by the illegal acquisition of a Marathon Petroleum subsidiary by Seven & i Holdings (collectively ‘‘7-Eleven’’). The approximately $21 billion deal involved nearly 4,000 retail fuel and convenience store locations. On May 14, 2021, the parties consummated the deal, despite knowing that the Commission had outstanding—but resolvable—concerns about the transaction and about the parties’ proposal to resolve those concerns at the time. The agreement to merge and the decision to consummate substantially lessened competition in 293 local geographic markets across twenty states, in violation of Section 5 of the FTC Act and Section 7 of the Clayton Act. While Commission staff had worked diligently to resolve the competitive concerns raised by the transaction, negotiating hundreds of divestitures to three different buyers, the parties had not reached a settlement that the Commission could accept when they closed. The job of the Commission is to pursue the correct outcome in cases, not the expedient one. Here, it was important to take the few extra weeks necessary to ensure that the resolution would effectively preserve competition and that any risk would be borne by the parties, not by consumers, workers, and other market participants. Today’s settlement achieves that in a few key ways. First, the order holds 7-Eleven accountable for executing divestitures quickly and efficiently. The Commission’s general preference is for divestitures to happen as close in time to the transaction as is practicable in order to protect competition.1 Here, 1 See, e.g., Press Release, Fed. Trade Comm’n, FTC Requires Divestitures as Condition of 7-Eleven, Inc. Parent Company’s $3.3 Billion Acquisition of Nearly 1,100 Retail Fuel Outlets from Competitor Sunoco (Jan. 18, 2020), https://www.ftc.gov/newsevents/press-releases/2018/01/ftc-requiresdivestitures-condition-7-eleven-inc-parentcompanys (requiring the parties divest 26 stations over the course of 90 days); Press Release, Fed. Trade Comm’n, FTC Approves Final Order Imposing Conditions on Arko Holdings Ltd.’s Acquisition of Empire Petroleum Partners, LLC (Oct. 7, 2020), https://www.ftc.gov/news-events/ press-releases/2020/10/ftc-approves-final-orderimposing-conditions-arko-holdings-ltds (ordering divestiture of 7 stations over the course of 20 days); Press Release, Fed. Trade Comm’n, FTC Approves VerDate Sep<11>2014 17:00 Jul 19, 2021 Jkt 253001 38347 given the scope and complexity of the required divestitures, a longer end date is justified, provided the divestitures happen on an ongoing basis. Today’s proposal includes provisions with rolling divestiture timelines, benchmarked at 90, 120, and 150 days, and completed within 180 days from May 14, 2021—the date of the illegal merger. If 7-Eleven fails to follow these benchmarks and the buyers’ schedules, 7-Eleven will be in violation of today’s proposed order. Second, 7-Eleven will be prohibited from enforcing noncompete provisions against current franchisees or others who might seek employment at the divestiture outlets. Noncompete provisions generally prevent workers and small business franchises from fairly bargaining for employment and opportunity. In this instance, they could also prevent divestiture buyers from accessing the talent that could best facilitate their ability to restore competition in the relevant markets. The prohibition in the order is consistent with prior Commission action,2 but is especially important in this case, given that 7-Eleven consummated an illegal transaction. Expressly safeguarding the buyers’ access to essential employees or business partners is particularly necessary to protect the effectiveness of the divestitures. The terms of this order are wellgrounded in Commission precedent and reflect learned experience from past orders. The Commission’s past experiences show that divestitures that are not carefully constructed end up failing to adequately protect consumers, workers, and competition.3 It is disturbing that 7-Eleven failed to resolve these matters before consummating their illegal transaction. Typically, merging parties will wait for the Commission to accept an order for public comment before closing on their transaction. Here, the transaction involved billions of dollars in thousands of unique geographic markets across the United States; when parties propose transactions this large and complex, with obvious violations of the law, they must accept that proper review may take time. Notwithstanding that scope, in this case, Commission staff conducted an extensive investigation, identified overlaps, vetted divestiture buyers, and negotiated terms of divestitures with the parties—all in a matter of months. Working through the remaining concerns at the Commission level would not have been and was not timeconsuming. 7-Eleven chose to close under a cloud of legal uncertainty rather than to resolve its issues with the Commission; it learned that this Commission will not be dared into accepting settlements we do not find adequate. We hope other parties will learn that working constructively with the Commission— rather than consummating an illegal merger—is a more effective and responsible path. Final Order Imposing Conditions on Tri Star Energy, LLC’s Acquisition of Certain Assets of Hollingsworth Oil Company, Inc., C & H Properties, and Ronald L. Hollingsworth (Aug. 14, 2020), https://www.ftc.gov/news-events/press-releases/ 2020/08/ftc-approves-final-order-imposingconditions-tri-star-energy (ordering divestiture of 2 stations over the course of 10 days); but see Press Release, Fed. Trade Comm’n, FTC Requires Retail Fuel Station and Convenience Store Operator Alimentation Couche-Tard Inc. and its affiliate CrossAmerica Partners LP to Divest 10 Fuel Stations in Minnesota and Wisconsin as a Condition of Acquiring Holiday Companies (Dec. 15, 2017), https://www.ftc.gov/news-events/press-releases/ 2017/12/ftc-requires-retail-fuel-stationconvenience-store-operator (allowing 120 days to find a buyer for and divest 10 stations; the Commission later alleged the parties violated the divestiture order, and the parties agreed to pay a $3.5 million civil penalty to the FTC to settle those allegations). 2 See Statement of Commissioners Rohit Chopra and Rebecca Kelly Slaughter in the Matter of DTE Energy/Generation Pipeline, Fed. Trade Comm’n (Sept. 12, 2019), https://www.ftc.gov/system/files/ documents/public_statements/1544138/joint_ statement_of_chopra_and_slaughter_dte_energygeneration_pipeline_9-13-19.pdf; Press Release, Fed. Trade Comm’n, FTC Approves Final Order Imposing Conditions on Merger of Air Medical Group Holdings, Inc. and AMR Holdco, Inc. (May 3, 2018), https://www.ftc.gov/news-events/pressreleases/2018/05/ftc-approves-final-order-imposingconditions-merger-air-medical (divestiture of air ambulance services in Hawaii). Statement of Commissioners Noah Joshua Phillips and Christine S. Wilson PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 Today, the Federal Trade Commission has accepted for public comment a consent agreement resolving all competition concerns presented by Seven & i Holdings Co.’s acquisition of nearly 4,000 gas stations from Marathon Petroleum Corporation. A settlement in this matter is long overdue. As we noted in our statement of May 14, 2021,1 the day on which the parties consummated their transaction, the Commission had 3 See Press Release, Fed. Trade Comm’n, FTC Releases Staff Study Examining Commission Merger Remedies between 2006 and 2012 (Feb. 3, 2017), https://www.ftc.gov/news-events/press-releases/ 2017/02/ftc-releases-staff-study-examiningcommission-merger-remedies; Fed. Trade Comm’n, A Study of the Commission’s Divestiture Process (1999), https://www.ftc.gov/sites/default/files/ documents/reports/study-commissions-divestitureprocess/divestiture_0.pdf. 1 See Statement of Commissioners Noah Joshua Phillips & Christine S. Wilson, Seven & i Holdings Co., Ltd./Marathon Petroleum Corp., FTC File No. 201–0108 (May 14, 2021), https://www.ftc.gov/ system/files/documents/publicstatements/1590067/ 2010108sevenmarathonphillipswilson statement.pdf. E:\FR\FM\20JYN1.SGM 20JYN1 38348 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices ample opportunity to act before the parties merged.2 To the extent the Analysis to Aid Public Comment or other statements issued suggest that Seven & i Holdings or its U.S. subsidiary 7-Eleven Inc. acted in bad faith, the public is free to read our earlier statement and Seven & i Holding’s side of the story,3 the veracity of which no commissioner has disputed in the month since they were issued. Those accounts paint a different, and regrettable, picture of what happened. We thank our staff for their diligence, professionalism, and responsiveness throughout this process; the Commission’s failures here are in no way a reflection of their efforts. [FR Doc. 2021–15350 Filed 7–19–21; 8:45 am] BILLING CODE 6750–01–P DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health National Institute of Neurological Disorders and Stroke; Notice of Closed Meeting Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting. The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy. khammond on DSKJM1Z7X2PROD with NOTICES Name of Committee: National Institute of Neurological Disorders and Stroke Special 2 Indeed, the settlement before the Commission on May 14 required the divestiture of 293 fuel outlets, see Press Release, 7-Eleven Inc., Response to FTC Commissioner Statement (May 14, 2021), https://corp.7-eleven.com/corppress-releases/05-142021-7-eleven-inc-response-to-ftc-commissionerstatement; and the settlement unanimously accepted by the Commission today similarly requires the divestiture of 293 fuel outlets. Commissioners Slaughter and Chopra highlight the order provision that prohibits Seven & i’s subsidiary 7-Eleven from enforcing noncompete provisions against current franchisees or others who might seek employment at the divestiture outlets. This narrow provision is consistent with previous Commission orders that impose conditions to ensure that divested assets have access to the employees necessary to ensure the success of the divestiture. 3 Statement of Commissioners Noah Joshua Phillips & Christine S. Wilson, supra note 1; Press Release, 7-Eleven, Inc., supra note 2. VerDate Sep<11>2014 17:00 Jul 19, 2021 Jkt 253001 Emphasis Panel; Accelerating Medicine Partnership in Parkinson’s Disease (AMP PD). Date: July 30, 2021. Time: 10:00 a.m. to 6:00 p.m. Agenda: To review and evaluate grant applications. Place: National Institutes of Health, Neuroscience Center, 6001 Executive Boulevard, Rockville, MD 20852 (Virtual Meeting). Contact Person: Mirela Milescu, Ph.D., Scientific Review Officer, Scientific Review Branch, Division of Extramural Activities, NINDS/NIH, NSC, 6001 Executive Blvd., Suite 3208, MSC 9529, Rockville, MD 20852, mirela.milescu@nih.gov. This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle. (Catalogue of Federal Domestic Assistance Program Nos. 93.853, Clinical Research Related to Neurological Disorders; 93.854, Biological Basis Research in the Neurosciences, National Institutes of Health, HHS) Dated: July 15, 2021. David W. Freeman, Program Analyst, Office of Federal Advisory Committee Policy. [FR Doc. 2021–15367 Filed 7–19–21; 8:45 am] BILLING CODE 4140–01–P DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health Center for Scientific Review; Notice of Closed Meeting Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting. The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy. Name of Committee: Center for Scientific Review Special Emphasis Panel; Member Conflict: Vascular and Hematology. Date: August 23, 2021. Time: 2:00 p.m. to 5:00 p.m. Agenda: To review and evaluate grant applications. Place: National Institutes of Health, Rockledge II, 6701 Rockledge Drive, Bethesda, MD 20892, (Virtual Meeting). Contact Person: Larry Pinkus, Ph.D. Scientific Review Officer, Center for PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 Scientific Review, National Institutes of Health, 6701 Rockledge Drive, Room 4132, MSC 7802 Bethesda, MD 20892, (301) 435– 1214, pinkusl@csr.nih.gov. (Catalogue of Federal Domestic Assistance Program Nos. 93.306, Comparative Medicine; 93.333, Clinical Research, 93.306, 93.333, 93.337, 93.393–93.396, 93.837–93.844, 93.846–93.878, 93.892, 93.893, National Institutes of Health, HHS) Dated: July 14, 2021. Miguelina Perez, Program Analyst, Office of Federal Advisory Committee Policy. [FR Doc. 2021–15329 Filed 7–19–21; 8:45 am] BILLING CODE 4140–01–P DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health National Institute of Allergy and Infectious Diseases; Notice of Closed Meeting Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting. The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy. Name of Committee: National Institute of Allergy and Infectious Diseases Special Emphasis Panel; NIAID Clinical Trial Planning Grant (R34 Clinical Trials Not Allowed) and NIAID Clinical Trial Implementation Cooperative Agreement (U01 Clinical Trial Required). Date: August 16, 2021. Time: 1:00 p.m. to 5:00 p.m. Agenda: To review and evaluate grant applications. Place: National Institute of Allergy and Infectious Diseases, National Institutes of Health, 5601 Fishers Lane, Room 3G58, Rockville, MD 20892 (Virtual Meeting). Contact Person: Anuja Mathew, Ph.D., Scientific Review Officer, Scientific Review Program, Division of Extramural Activities, National Institute of Allergy and Infectious Diseases, National Institutes of Health, 5601 Fishers Lane, Room 3G58, Rockville, MD 20852, 301–761–6911, anuja.mathew@ nih.gov. (Catalogue of Federal Domestic Assistance Program Nos. 93.855, Allergy, Immunology, and Transplantation Research; 93.856, Microbiology and Infectious Diseases Research, National Institutes of Health, HHS) E:\FR\FM\20JYN1.SGM 20JYN1

Agencies

[Federal Register Volume 86, Number 136 (Tuesday, July 20, 2021)]
[Notices]
[Pages 38343-38348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-15350]


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FEDERAL TRADE COMMISSION

[File No. 201 0108]


Seven & i Holdings Co., Ltd.; Analysis of Agreement Containing 
Consent Orders To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement; request for comment.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair methods of competition. 
The attached Analysis of Proposed Consent Orders to Aid Public Comment 
describes both the allegations in the complaint and the terms of the 
consent orders--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before August 19, 2021.

ADDRESSES: Interested parties may file comments online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Please write: ``Seven & i 
Holdings Co., Ltd.; File No. 201 0108'' on your comment, and file your 
comment online at www.regulations.gov by following the instructions on 
the web-based form. If you prefer to file your comment on paper, please 
mail your comment to the following address: Federal Trade Commission, 
Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 
(Annex D), Washington, DC 20580; or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Nicholas Bush (202-326-2848), Bureau 
of Competition, Federal Trade Commission, 600 Pennsylvania Avenue NW, 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis of Agreement Containing Consent Orders to Aid Public 
Comment describes the terms of the consent agreement and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC

[[Page 38344]]

website at this web address: https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before August 19, 2021. 
Write ``Seven & i Holdings, Ltd.; File No. 201 0108'' on your comment. 
Your comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the www.regulations.gov website.
    Due to protective actions in response to the COVID-19 pandemic and 
the agency's heightened security screening, postal mail addressed to 
the Commission will be subject to delay. We strongly encourage you to 
submit your comments online through the www.regulations.gov website.
    If you prefer to file your comment on paper, write ``Seven & i 
Holdings, Ltd.; File No. 201 0108'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite 
CC-5610 (Annex D), Washington, DC 20580; or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible 
website at www.regulations.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else's Social 
Security number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure your comment does not include any 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 
16 CFR 4.10(a)(2)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on www.regulations.gov--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from that website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website at https://www.ftc.gov to read this Notice and 
the news release describing this matter. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding, as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before August 19, 2021. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

I. Introduction

    The Federal Trade Commission (``Commission'') has accepted for 
public comment, subject to final approval, an Agreement Containing 
Consent Orders (``Consent Agreement'') from Seven & i Holdings Co., 
Ltd., a Japanese company, 7-Eleven, Inc., the U.S. subsidiary, 
(collectively, ``7-Eleven'') and Marathon Petroleum Corporation 
(``Marathon'') (collectively, the ``Respondents''). The Consent 
Agreement is designed to remedy the anticompetitive effects that likely 
are resulting from 7-Eleven's consummated acquisition of Marathon's 
wholly-owned subsidiary Speedway LLC (``Speedway''). The Commission 
also issued the Order to Maintain Assets included in the Consent 
Agreement. Pursuant to Commission Rules of Practice, a consent 
agreement was proposed prior to Respondents' consummation of the 
transaction, but the Commission had not accepted the proposal because a 
majority did not find certain provisions in the proposal sufficient to 
fully resolve competitive concerns stemming from the transaction. 7-
Eleven closed on the acquisition on May 14, 2021 with full knowledge 
the acquisition was in violation of Section 7 of the Clayton Act and 
Section 5 of the FTC Act.
    Respondents subsequently agreed to a revised proposed Decision and 
Order (``Order''), described herein, that restores competition lost 
from the transaction. Under the terms of the Order included in the 
Consent Agreement, 7-Eleven must divest to Commission-approved Buyers 
certain Speedway retail fuel outlets and related assets in 291 local 
markets, and certain 7-Eleven retail fuel outlets and related assets in 
2 local markets, across 20 states. The Order requires the divestitures 
to take place no later than 180 days after May 14, 2021, the day 7-
Eleven closed on its acquisition of Marathon's assets. The Commission 
prefers divestitures to upfront buyers that occur close in time with 
the closing of the main transaction, but Commission orders will allow 
for a longer divestiture period when specific, demonstrable 
circumstances warrant. In this matter, the Commission recognizes that 
the particular logistical and regulatory requirements of transferring 
293 stations across 20 states necessitates a longer process of rolling 
divestitures to three Buyers. To ensure that as many divestitures 
happen as quickly as possible, the Order requires that 7-Eleven divests 
the outlets to the Buyers based on the Buyer-approved divestiture 
schedules incorporated into the Order, and that 7-Eleven meets specific 
divestiture benchmarks at 90, 120, and 150 days.
    The Order to Maintain Assets requires Respondents to operate and 
maintain each divestiture outlet in the normal course of business 
through the date the Commission-approved Buyer acquires the outlet. In 
addition, the Order and Order to Maintain Assets require that until 7-
Eleven divests the outlets, it must maintain separate retail fuel 
pricing teams and keep information related to pricing decisions for the 
divestiture outlets separate from the retail fuel pricing for 7-
Eleven's other outlets.
    The Order also prohibits 7-Eleven from enforcing noncompete 
provisions in its franchise agreements against current franchisees or 
others who might seek employment at the divestiture outlets. This 
provision reduces the likelihood any 7-Eleven noncompete provisions 
will have a chilling effect on

[[Page 38345]]

franchisees or others in seeking employment or doing business with the 
divestiture outlets. Given that 7-Eleven consummated an illegal 
transaction, expressly safeguarding the Buyers' access to essential 
employees or business partners is particularly necessary to protect the 
effectiveness of the divestitures.
    The Commission has placed the Consent Agreement on the public 
record for 30 days to solicit comments from interested persons. 
Comments received during this period will become part of the public 
record. After 30 days, the Commission will review the comments received 
and decide whether it should withdraw, modify, or make the Order final.

II. The Respondents

    Seven & i Holdings Co., Ltd., a publicly-traded company 
headquartered in Tokyo, Japan, owns and operates convenience stores and 
retail fuel outlets worldwide under the 7-Eleven brand. 7-Eleven, Inc. 
owns, operates, and franchises approximately 9,000 stores in the United 
States, making it the largest convenience store chain in the country. 
Roughly 46 percent of 7-Eleven's stores offer fuel. 7-Eleven's revenue 
in 2020 totaled over $20 billion, with fuel sales accounting for over 
$13 billion.
    Marathon, a publicly-traded company headquartered in Findlay, Ohio, 
operates a vertically-integrated refining, marketing, retail, and 
transportation system for petroleum and petroleum products. Marathon is 
the largest U.S. refiner, with approximately 2.9 million barrels per 
day of crude oil refining capacity. In 2020, Marathon's revenues 
totaled over $69 billion. Marathon's former wholly-owned subsidiary, 
Speedway, controls and sets retail fuel pricing at 3,898 retail 
transportation fuel and convenience stores across the United States, 
making it the third-largest domestic chain of company-owned and -
operated retail fuel outlets and convenience stores. Speedway's 2020 
retail business revenues totaled over $19 billion, with sales of nearly 
6 billion gallons of gasoline and diesel in 2019.

III. The Transaction

    Pursuant to an Asset Purchase Agreement dated August 2, 2020, 7-
Eleven acquired substantially all of Marathon's Speedway retail assets 
for approximately $21 billion, subject to adjustments (the 
``Transaction''). 7-Eleven and Marathon also entered into a 15-year 
agreement under which Marathon will supply and transport fuel to the 
Speedway business, with a base volume of 7.7 billion gallons per year 
of gasoline and diesel.
    The Commission's Complaint alleges the Transaction violates Section 
7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the 
Federal Trade Commission Act, as amended, 15 U.S.C. 45, by 
substantially lessening competition for the retail sale of gasoline 
and/or the retail sale of diesel in 293 local markets across 20 states.

IV. The Retail Sale of Gasoline and Diesel

    The Commission's Complaint alleges that relevant product markets in 
which to analyze the Transaction are the retail sale of gasoline and 
the retail sale of diesel. Consumers require gasoline for their 
gasoline-powered vehicles and can purchase gasoline only at retail fuel 
outlets. Likewise, consumers require diesel for their diesel-powered 
vehicles and can purchase diesel only at retail fuel outlets. The 
retail sale of gasoline and the retail sale of diesel constitute 
separate relevant markets because the two are not interchangeable. 
Vehicles that run on gasoline cannot run on diesel and vehicles that 
run on diesel cannot run on gasoline.
    The Commission's Complaint alleges 293 local relevant geographic 
markets in which to assess the competitive effects of the Transaction 
within the following states: Arizona; California; Florida; Illinois; 
Indiana; Kentucky; Massachusetts; Michigan; North Carolina; New 
Hampshire; Nevada; New York; Ohio; Pennsylvania; Rhode Island; South 
Carolina; Tennessee; Utah; Virginia; and West Virginia.
    The geographic markets for retail gasoline and retail diesel are 
highly localized, depending on the unique circumstances of each area. 
Each relevant market is distinct and fact-dependent, reflecting many 
considerations, including commuting patterns, traffic flows, and outlet 
characteristics. Consumers typically choose between nearby retail fuel 
outlets with similar characteristics along their planned routes. The 
geographic markets for the retail sale of diesel are similar to the 
corresponding geographic markets for retail gasoline, as many diesel 
consumers exhibit preferences and behaviors similar to those of 
gasoline consumers.
    The Transaction substantially lessens competition in each of these 
local markets, resulting in 264 highly concentrated markets for the 
retail sale of gasoline and 153 highly concentrated markets for the 
retail sale of diesel fuel, with many of the 293 markets presenting 
concerns for both products. Retail fuel outlets compete on price, store 
format, product offerings, and location, and pay close attention to 
competitors in close proximity, on similar traffic flows, and with 
similar store characteristics. In each of the local gasoline and diesel 
retail markets, the Transaction reduces the number of competitively 
constraining independent market participants to three or fewer. 7-
Eleven will be able to raise prices unilaterally in markets where 7-
Eleven and Speedway are close competitors. Absent the Transaction, 7-
Eleven and Speedway would have continued to compete head to head in 
these local markets.
    Moreover, the Transaction enhances the incentives for 
interdependent behavior in local markets where, including 7-Eleven, 
only two or three competitively constraining independent market 
participants remain. Two aspects of the retail fuel industry make it 
vulnerable to such coordination. First, retail fuel outlets post their 
fuel prices on price signs that are visible from the street, allowing 
competitors easily to observe each other's fuel prices. Second, retail 
fuel outlets regularly track their competitors' fuel prices and change 
their own prices in response. These repeated interactions give retail 
fuel outlets familiarity with how their competitors price and how 
changing prices affect fuel sales.
    Entry into each relevant market will not be timely, likely, or 
sufficient to deter or counteract the anticompetitive effects arising 
from the Transaction. Significant entry barriers include the 
availability of attractive real estate, the time and cost associated 
with constructing a new retail fuel outlet, and the time associated 
with obtaining necessary permits and approvals.

V. The Order

    The Order remedies the Transaction's likely anticompetitive effects 
by requiring 7-Eleven to divest Speedway retail fuel outlets in 291 
local markets, and 7-Eleven retail fuel outlets in 2 local markets, in 
three separate packages, to CrossAmerica Partners LP (``CAPL''), 
Jacksons Food Stores, Inc. (``Jacksons''), and Anabi Oil Corporation 
(``Anabi'') (collectively, the ``Buyers'').
    CAPL is a publicly-traded master limited partnership and a 
wholesale supplier of motor fuels, a convenience store operator, and an 
owner and lessor of real estate used in the retail distribution of 
motor fuels. CAPL distributes branded and unbranded fuel to 
approximately 1,800 locations and owns or leases approximately 1,100 
sites, including 150 company-operated sites.

[[Page 38346]]

    In 2020, the Commission fined Alimentation Couche-Tard Inc. 
(``ACT'') and its then-affiliate CAPL $3.5 million to settle 
allegations that the companies violated a 2018 Commission order 
requiring divestitures of 10 retail fuel outlets related to ACT's 
acquisition of Holiday Companies. ACT controlled CAPL's general partner 
when the alleged order violation occurred and agreed to divest a 
package of retail fuel outlets that were part of CAPL's retail network 
to resolve the Commission's concerns. The alleged order violation 
resulted from, among other things, ACT's failure to divest the CAPL 
outlets by the Commission-imposed deadline.
    The alleged violation does not disqualify CAPL from consideration 
as an acceptable buyer in this instance. CAPL has not been affiliated 
with ACT in any way since November 2019, when Mr. Joseph V. Topper, Jr. 
and his organization, the Topper Group, acquired the controlling 
interest in CAPL's general partner from ACT, and thereby severed 
completely CAPL's affiliation with ACT. CAPL has since revamped its 
management. Mr. Topper now serves as CAPL's chairman of the board, and 
he and his organization have the ability to appoint all members of 
CAPL's board as well as control CAPL's operations and activities. 
Moreover, prior to Mr. Topper acquiring control of CAPL, ACT agreed to 
indemnify CAPL for penalties and legal costs associated with the 
alleged order violation.
    The two other Buyers are Jacksons and Anabi. Jacksons is a 
privately-held corporation that controls a chain of over 230 Chevron-, 
Shell-, and Texaco-branded retail fuel locations in six western states. 
Jacksons also is a joint venture partner in Jackson Energy, a wholesale 
fuel supply company that distributes gasoline and diesel fuel to retail 
fuel outlets in the western United States. Anabi, a privately-owned and 
operated retail fuel supplier, is one of the largest Shell-branded 
distributors in California and controls retail fuel locations in 
California, Nevada, and Alaska. The Commission is satisfied that the 
Buyers present no competitive problems in markets where they will 
acquire divested assets and are otherwise qualified to acquire and 
operate the assets in their respective divestiture packages.
    The Order requires 7-Eleven to divest: (a) 105 Speedway retail fuel 
outlets and a single 7-Eleven retail fuel outlet to CAPL; (b) 63 
Speedway retail fuel outlets to Jacksons; and (c) 123 Speedway retail 
fuel outlets and a single 7-Eleven retail fuel outlet to Anabi. To 
ensure that 7-Eleven is incentivized to complete all of the 
divestitures in an expedient manner, the Order requires 7-Eleven to: 
(1) Divest on Buyer-approved divestiture schedules, and (2) divest no 
fewer than a certain number of outlets at certain points within the 180 
day divestiture period.
    Specifically, Paragraph II.A of the Order requires Respondents to 
divest pursuant to the Buyer-approved divestiture schedules. Under 
Paragraph XI.A.1 of the Order, 7-Eleven is required to submit to the 
Commission the Buyer-approved divestiture schedules--identifying the 
divestiture date for each location--within 60 days after May 14. The 
Buyers will control the divestiture schedules, and those schedules are 
enforceable by the Commission against 7-Eleven. The Order also requires 
7-Eleven to meet certain divestiture benchmarks--with no fewer than 20 
percent of each package divested within 90 days, an additional 20 
percent of each package divested within 120 days, and an additional 20 
percent of each package divested within 150 days of the main 
Transaction closing. 7-Eleven will have to complete all of the 
divestitures within 180 days. Taken together, this divestiture process 
will incentivize 7-Eleven to complete the divestitures in a timely and 
expeditious manner, and give the Commission close oversight into the 
divestiture schedules.
    The Order contains additional provisions designed to ensure the 
effectiveness of the relief, and to prevent 7-Eleven from having access 
to critical competitive information regarding the divestiture outlets. 
The Order requires 7-Eleven and Marathon to maintain the economic 
viability, marketability, and competitiveness of each divestiture asset 
until the divestitures are complete. Also, the Order requires 
Respondents to designate an Asset Maintenance Manager to oversee 
operations of the divestiture assets to ensure the Respondents maintain 
the divestiture assets' full economic viability, marketability, and 
competitiveness until the divestitures are completed and to help 
facilitate the transfer of the divestiture assets to the Buyers. 
Additionally, the Order requires the Respondents to establish a 
divestiture pricing team that will handle retail fuel pricing at the 
divestiture outlets, and to prevent access and disclosure of that 
pricing information to anyone other than the divestiture pricing team. 
The Asset Maintenance Manager will oversee the divestiture pricing team 
to ensure that confidential pricing information is not shared with 
other employees at 7-Eleven who may price retail fuel at competing 
stations. The Order requires the Respondents to institute information 
technology procedures, authorizations, protocols, and any other 
controls necessary to prevent unauthorized disclosure or access of 
information to or from the divestiture pricing team. Finally, the Order 
appoints The Claro Group as an independent third-party Monitor to 
oversee the Respondents' compliance with the requirements of the Order 
and to oversee the Asset Maintenance Manager.
    The Order also contains provisions regarding Respondents' employees 
and franchisees, designed to protect the viability of the divestiture 
assets. Section V contains provisions to ensure that the Buyers face no 
impediments in hiring employees necessary to operate the divestiture 
assets as competitively as Speedway operated them before the 
Transaction. Paragraph V.E prohibits 7-Eleven from enforcing noncompete 
provisions against current franchisees or others who might seek 
employment at the divestiture outlets. This provision reduces the 
likelihood that the noncompete provisions will have a chilling effect 
on franchisees or others in seeking employment or doing business with 
the divestiture outlets. Given that 7-Eleven has consummated an illegal 
transaction, expressly safeguarding the Buyers' access to essential 
employees or business partners is particularly necessary to protect the 
effectiveness of the divestitures.
    In addition to requiring retail fuel outlet divestitures, the Order 
also requires 7-Eleven, for a period of five years, to obtain prior 
Commission approval before purchasing any of the divested outlets, and 
for a period of ten years, to provide the Commission prior notice of 
future acquisitions of the divested outlets and of Commission-
identified retail fuel outlets located in the 293 local markets at 
issue and three additional markets. These three additional markets 
raised concerns that are addressed by Speedway's near-term exit from 
the markets for reasons outside its control. The prior notice provision 
is necessary because an acquisition in close proximity to divested 
assets likely would raise the same competitive concerns as the 
Transaction and may fall below the Hart-Scott-Rodino Act premerger 
notification thresholds.
    The purpose of this analysis is to facilitate public comment on the 
Order, and the Commission does not intend this analysis to constitute 
an official interpretation of the Order or to modify its terms in any 
way. The Offices of the California and Florida Attorneys General 
participated in both the investigation and the consent process.


[[Page 38347]]


    By direction of the Commission, Chair Lina Khan not 
participating.
April J. Tabor,
Secretary.

Joint Concurring Statement of Commissioners Rebecca Kelly Slaughter and 
Rohit Chopra

    Today, the Commission accepted for public comment an order that 
would resolve competitive concerns raised by the illegal acquisition of 
a Marathon Petroleum subsidiary by Seven & i Holdings (collectively 
``7-Eleven''). The approximately $21 billion deal involved nearly 4,000 
retail fuel and convenience store locations. On May 14, 2021, the 
parties consummated the deal, despite knowing that the Commission had 
outstanding--but resolvable--concerns about the transaction and about 
the parties' proposal to resolve those concerns at the time. The 
agreement to merge and the decision to consummate substantially 
lessened competition in 293 local geographic markets across twenty 
states, in violation of Section 5 of the FTC Act and Section 7 of the 
Clayton Act. While Commission staff had worked diligently to resolve 
the competitive concerns raised by the transaction, negotiating 
hundreds of divestitures to three different buyers, the parties had not 
reached a settlement that the Commission could accept when they closed.
    The job of the Commission is to pursue the correct outcome in 
cases, not the expedient one. Here, it was important to take the few 
extra weeks necessary to ensure that the resolution would effectively 
preserve competition and that any risk would be borne by the parties, 
not by consumers, workers, and other market participants. Today's 
settlement achieves that in a few key ways.
    First, the order holds 7-Eleven accountable for executing 
divestitures quickly and efficiently. The Commission's general 
preference is for divestitures to happen as close in time to the 
transaction as is practicable in order to protect competition.\1\ Here, 
given the scope and complexity of the required divestitures, a longer 
end date is justified, provided the divestitures happen on an ongoing 
basis. Today's proposal includes provisions with rolling divestiture 
timelines, benchmarked at 90, 120, and 150 days, and completed within 
180 days from May 14, 2021--the date of the illegal merger. If 7-Eleven 
fails to follow these benchmarks and the buyers' schedules, 7-Eleven 
will be in violation of today's proposed order.
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    \1\ See, e.g., Press Release, Fed. Trade Comm'n, FTC Requires 
Divestitures as Condition of 7-Eleven, Inc. Parent Company's $3.3 
Billion Acquisition of Nearly 1,100 Retail Fuel Outlets from 
Competitor Sunoco (Jan. 18, 2020), https://www.ftc.gov/news-events/press-releases/2018/01/ftc-requires-divestitures-condition-7-eleven-inc-parent-companys (requiring the parties divest 26 stations over 
the course of 90 days); Press Release, Fed. Trade Comm'n, FTC 
Approves Final Order Imposing Conditions on Arko Holdings Ltd.'s 
Acquisition of Empire Petroleum Partners, LLC (Oct. 7, 2020), 
https://www.ftc.gov/news-events/press-releases/2020/10/ftc-approves-final-order-imposing-conditions-arko-holdings-ltds (ordering 
divestiture of 7 stations over the course of 20 days); Press 
Release, Fed. Trade Comm'n, FTC Approves Final Order Imposing 
Conditions on Tri Star Energy, LLC's Acquisition of Certain Assets 
of Hollingsworth Oil Company, Inc., C & H Properties, and Ronald L. 
Hollingsworth (Aug. 14, 2020), https://www.ftc.gov/news-events/press-releases/2020/08/ftc-approves-final-order-imposing-conditions-tri-star-energy (ordering divestiture of 2 stations over the course 
of 10 days); but see Press Release, Fed. Trade Comm'n, FTC Requires 
Retail Fuel Station and Convenience Store Operator Alimentation 
Couche-Tard Inc. and its affiliate CrossAmerica Partners LP to 
Divest 10 Fuel Stations in Minnesota and Wisconsin as a Condition of 
Acquiring Holiday Companies (Dec. 15, 2017), https://www.ftc.gov/news-events/press-releases/2017/12/ftc-requires-retail-fuel-station-convenience-store-operator (allowing 120 days to find a buyer for 
and divest 10 stations; the Commission later alleged the parties 
violated the divestiture order, and the parties agreed to pay a $3.5 
million civil penalty to the FTC to settle those allegations).
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    Second, 7-Eleven will be prohibited from enforcing noncompete 
provisions against current franchisees or others who might seek 
employment at the divestiture outlets. Noncompete provisions generally 
prevent workers and small business franchises from fairly bargaining 
for employment and opportunity. In this instance, they could also 
prevent divestiture buyers from accessing the talent that could best 
facilitate their ability to restore competition in the relevant 
markets. The prohibition in the order is consistent with prior 
Commission action,\2\ but is especially important in this case, given 
that 7-Eleven consummated an illegal transaction. Expressly 
safeguarding the buyers' access to essential employees or business 
partners is particularly necessary to protect the effectiveness of the 
divestitures.
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    \2\ See Statement of Commissioners Rohit Chopra and Rebecca 
Kelly Slaughter in the Matter of DTE Energy/Generation Pipeline, 
Fed. Trade Comm'n (Sept. 12, 2019), https://www.ftc.gov/system/files/documents/public_statements/1544138/joint_statement_of_chopra_and_slaughter_dte_energy-generation_pipeline_9-13-19.pdf; Press Release, Fed. Trade Comm'n, 
FTC Approves Final Order Imposing Conditions on Merger of Air 
Medical Group Holdings, Inc. and AMR Holdco, Inc. (May 3, 2018), 
https://www.ftc.gov/news-events/press-releases/2018/05/ftc-approves-final-order-imposing-conditions-merger-air-medical (divestiture of 
air ambulance services in Hawaii).
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    The terms of this order are well-grounded in Commission precedent 
and reflect learned experience from past orders. The Commission's past 
experiences show that divestitures that are not carefully constructed 
end up failing to adequately protect consumers, workers, and 
competition.\3\ It is disturbing that 7-Eleven failed to resolve these 
matters before consummating their illegal transaction. Typically, 
merging parties will wait for the Commission to accept an order for 
public comment before closing on their transaction. Here, the 
transaction involved billions of dollars in thousands of unique 
geographic markets across the United States; when parties propose 
transactions this large and complex, with obvious violations of the 
law, they must accept that proper review may take time. Notwithstanding 
that scope, in this case, Commission staff conducted an extensive 
investigation, identified overlaps, vetted divestiture buyers, and 
negotiated terms of divestitures with the parties--all in a matter of 
months. Working through the remaining concerns at the Commission level 
would not have been and was not time-consuming.
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    \3\ See Press Release, Fed. Trade Comm'n, FTC Releases Staff 
Study Examining Commission Merger Remedies between 2006 and 2012 
(Feb. 3, 2017), https://www.ftc.gov/news-events/press-releases/2017/02/ftc-releases-staff-study-examining-commission-merger-remedies; 
Fed. Trade Comm'n, A Study of the Commission's Divestiture Process 
(1999), https://www.ftc.gov/sites/default/files/documents/reports/study-commissions-divestiture-process/divestiture_0.pdf.
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    7-Eleven chose to close under a cloud of legal uncertainty rather 
than to resolve its issues with the Commission; it learned that this 
Commission will not be dared into accepting settlements we do not find 
adequate. We hope other parties will learn that working constructively 
with the Commission--rather than consummating an illegal merger--is a 
more effective and responsible path.

Statement of Commissioners Noah Joshua Phillips and Christine S. Wilson

    Today, the Federal Trade Commission has accepted for public comment 
a consent agreement resolving all competition concerns presented by 
Seven & i Holdings Co.'s acquisition of nearly 4,000 gas stations from 
Marathon Petroleum Corporation. A settlement in this matter is long 
overdue. As we noted in our statement of May 14, 2021,\1\ the day on 
which the parties consummated their transaction, the Commission had

[[Page 38348]]

ample opportunity to act before the parties merged.\2\
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    \1\ See Statement of Commissioners Noah Joshua Phillips & 
Christine S. Wilson, Seven & i Holdings Co., Ltd./Marathon Petroleum 
Corp., FTC File No. 201-0108 (May 14, 2021), https://www.ftc.gov/system/files/documents/publicstatements/1590067/2010108sevenmarathonphillipswilsonstatement.pdf.
    \2\ Indeed, the settlement before the Commission on May 14 
required the divestiture of 293 fuel outlets, see Press Release, 7-
Eleven Inc., Response to FTC Commissioner Statement (May 14, 2021), 
https://corp.7-eleven.com/corppress-releases/05-14-2021-7-eleven-inc-response-to-ftc-commissioner-statement; and the settlement 
unanimously accepted by the Commission today similarly requires the 
divestiture of 293 fuel outlets. Commissioners Slaughter and Chopra 
highlight the order provision that prohibits Seven & i's subsidiary 
7-Eleven from enforcing noncompete provisions against current 
franchisees or others who might seek employment at the divestiture 
outlets. This narrow provision is consistent with previous 
Commission orders that impose conditions to ensure that divested 
assets have access to the employees necessary to ensure the success 
of the divestiture.
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    To the extent the Analysis to Aid Public Comment or other 
statements issued suggest that Seven & i Holdings or its U.S. 
subsidiary 7-Eleven Inc. acted in bad faith, the public is free to read 
our earlier statement and Seven & i Holding's side of the story,\3\ the 
veracity of which no commissioner has disputed in the month since they 
were issued. Those accounts paint a different, and regrettable, picture 
of what happened.
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    \3\ Statement of Commissioners Noah Joshua Phillips & Christine 
S. Wilson, supra note 1; Press Release, 7-Eleven, Inc., supra note 
2.

    We thank our staff for their diligence, professionalism, and 
responsiveness throughout this process; the Commission's failures here 
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are in no way a reflection of their efforts.

[FR Doc. 2021-15350 Filed 7-19-21; 8:45 am]
BILLING CODE 6750-01-P