Rules and Regulations. Proposed Consent Agreement

Agency: Federal Trade Commission
Action: Proposed Consent Agreement
Citation: FR Doc. 03-27811 · Docket No. 9307

Summary

The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.

Dates

Comments must be received on or before November 27, 2003.

Supplementary Information

Pursuant to Section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and § 3.25(f) of the Commission's Rules of Practice, 16 CFR 3.25(f), 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 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 Home Page (for October 30, 2003), on the World Wide Web, at http://www.ftc.gov/os/2003/10/index.htm . A paper copy can be obtained from the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, DC 20580, either in person or by calling (202) 326-2222. Public comments are invited, and may be filed with the Commission in either paper or electronic form. Comments filed in paper form should be directed to: FTC/Office of the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., Washington, DC 20580. If a comment contains nonpublic information, it must be filed in paper form, and the first page of the document must be clearly labeled “confidential.” Comments that do not contain any nonpublic information may instead be filed in electronic form (in ASCII format, WordPerfect, or Microsoft Word) as part of or as an attachment to email messages directed to the following email box: consentagreement@ftc.gov . Such comments will be considered by the Commission and will be available for inspection and copying at its principal office in accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of Practice, 16 CFR 4.9(b)(6)(ii)). Analysis of Proposed Consent Order To Aid Public Comment The Federal Trade Commission has accepted for public comment an Agreement Containing Consent Order with Alabama Trucking Association, Inc. (“ATA” or “Respondent”) to resolve matters charged in an Administrative Complaint issued by the Commission on July 9, 2003. The agreement has been placed on the public record for thirty (30) days for receipt of comments from interested members of the public. The Agreement is for settlement purposes only and does not constitute an admission by ATA that the law has been violated as alleged in the Complaint or that the facts alleged in the Complaint, other than jurisdictional facts, are true. The Commission's decision to issue its Complaint in this matter was made after considering whether Respondent's activities were protected by the state action defense. As discussed in detail in Section III below, a key element of the state action defense is the extent to which the State supervises private action. The facts developed during staff's investigation pertaining to the extent to which Alabama supervised rates contained in tariffs filed by Respondent are discussed in this Analysis to illustrate how the Commission analyzed Respondent's ability to establish a state action defense. 1 1 Settlement in this matter precludes the possibility of a litigated record. Thus, the Commission's understanding of the facts as set forth in this Analysis is based on the record developed during staff's investigation. The Commission has decided to include discussion of the relevant parts of the investigatory record to provide the best guidance it can on the scope of the state action defense and to facilitate comment on the proposed Consent Agreement. I. The Commission's Complaint The Complaint alleged that Respondent Alabama Trucking Association, Inc., a corporation, violated Section 5 of the Federal Trade Commission Act. Specifically, the Complaint alleged that Respondent agreed to engage, and had engaged, in a combination and conspiracy, an agreement, concerted action or unfair and unlawful acts, policies and practices, the purpose or effect of which was to unlawfully hinder, restrain, restrict, suppress or eliminate competition among household goods movers in the household goods moving industry. Respondent is an association organized for and serving its members, which are approximately 80 household goods movers that conduct business within the State of Alabama. One of the primary functions of ATA is preparing, and filing with the Alabama Public Service Commission, tariffs and supplements on behalf of its members. These tariffs and supplements contain rates and charges for the intrastate transportation of household goods and for related services. The Complaint alleged that Respondent engaged in initiating, preparing, developing, disseminating, and taking other actions to establish and maintain collective rates, which had the purpose or effect of fixing, establishing or stabilizing rates for the transportation of household goods in the State of Alabama. The Complaint further alleged that Respondent organized and conducted meetings that provided a forum for discussion or agreement between competing carriers concerning or affecting rates and charges for the intrastate transportation of household goods. The Complaint further alleged that Respondent's conduct was anticompetitive because it had the effect of raising, fixing, and stabilizing the prices of household goods moves. The acts of Respondent also had the effect of depriving consumers of the benefits of competition. II. Terms of the Proposed Consent Order The proposed Order would provide relief for the alleged anticompetitive effects of the conduct principally by means of a cease and desist order barring Respondent from continuing its practice of filing tariffs containing collective intrastate rates. Paragraph II of the proposed Order bars Respondent from filing a tariff that contains collective intrastate rates. This provision will terminate Respondent's current practice of filing tariffs that contain intrastate rates that are the product of an agreement among movers in the State of Alabama. This paragraph also prohibits Respondent from engaging in activities such as exchanges of information that would facilitate member movers in agreeing on the rates contained in their intrastate tariffs. For example, the order bars Respondent from providing to other carriers certain non-public information. 2 It also bars Respondent from maintaining a tariff committee or agreeing with movers to institute any automatic intrastate rate increases. 2 A state statute requires that carriers file their tariffs with the state and keep them open to public inspection. Ala Code section 37-3-20. Paragraph III of the proposed Order requires Respondent to cancel all tariffs that it has filed that contain intrastate collective rates. This provision will ensure that the collective intrastate rates now on file in the State of Alabama will no longer be in force, allowing for competitive rates in future individual mover tariffs. Paragraph III of the proposed Order also requires Respondent to cancel any provisions in its governing documents that permit it to engage in activities barred by the Order. Paragraph IV of the proposed Order requires Respondent to send to its members a letter explaining the terms of the Order. This will make clear to members that they can no longer engage in collective rate-making activities. Paragraphs V and VI of the proposed Order require Respondent to inform the Commission of any change in Respondent that could affect compliance with the Order and to file compliance reports with the Commission for a number of years. Paragraph VII of the proposed Order states that the Order will terminate in 20 years. III. Opportunity for Modification of the Order Respondent can seek to modify the proposed Order to permit it to engage in collective rate-making if it can demonstrate that the “state action” defense would apply to its conduct. 3 The state action doctrine dates back to the Supreme Court's 1943 opinion in Parker v. Brown , which held that, in light of the States' status as sovereigns, and given basic principles of federalism, Congress would not have intended the Sherman Act to apply to the activities of States themselves. 4 The defense also has been interpreted in limited circumstances to shield from antitrust scrutiny private firms' activities that are conducted pursuant to state authority. States may not, however, simply authorize private parties to violate the antitrust laws. 5 Instead, a State must substitute its own control for that of the market. 3 16 CFR § 2.51. We discuss the state action defense below in some detail. See also Indiana Household Movers and Warehousemen, Inc., File No. 021-0115 (Mar. 18, 2003) (proposed consent order) available at *