Civil Non-Merger Cases, Antitrust Division

Appendix C:
Antitrust Division Civil Non-Merger Cases
June 1, 1996 through September 30, 1999

United States v. Women's Hospital Foundation and Women's Physician Health Organization (4/23/96)

This complaint alleged that a Baton Rouge hospital authorized its affiliated physician organization to develop a minimum fee schedule for its member doctors and to negotiate with managed care plans on behalf of the hospital and the doctors. In so doing, the hospital was trying to prevent other Baton Rouge area hospitals from being able to offer lower cost inpatient obstetrical services, while the doctors were trying to protect their fee structure. Together with the complaint, the Division filed a proposed consent decree that prohibited the defendants from fixing compensation levels or exchanging information about current or prospective compensation, except in carefully limited circumstances. The U.S. District Court for the Middle District of Louisiana entered that decree on September 16, 1996.

(Description of photograph: A health care provider adjusts a patient's head before the patient enters an MRI unit.

United States v. City of Stilwell, Oklahoma and Stilwell Area Development Authority (4/25/96)

In the first antitrust case brought by the Department of Justice against a municipal utility system, the Division challenged the "all-or-none" utility policy of the Stilwell Area Development Authority as an unlawful tying arrangement and as monopolization. The City of Stilwell refused to provide water and sewer services to certain area residents and businesses that did not agree also to buy electricity from the city. Stilwell has a legal monopoly over water and sewer service, but faces competition in the electricity market in some areas from Ozarks Rural Electrical Cooperative. The City of Stilwell enforced its "all-or-none" policy by cutting off water service to Ozarks' customers and refusing to issue building permits to real estate developers who did not agree to choose city-supplied electricity for new construction. Some months after the filing of the complaint, the City entered into a settlement that prohibits the City from conditioning the purchase of water and sewer services on the purchase of electricity, requires the City to inform potential water and sewer customers that their purchase of such service is not related to their choice of electric service provider, and requires the City to establish an antitrust compliance program. This decree was entered by the U.S. District Court for the Eastern District of Oklahoma on November 5, 1998.

United States v. Association of Family Practice Residency Directors (5/28/96)

A trade association representing approximately 95 percent of all U. S. family practice residency programs adopted "ethical" rules that prevented hospitals from competing to attract prospective residents. The rules prevented residency programs from offering individualized economic inducements to candidates and from attempting to persuade those already in their first year of residency training to transfer to a competing program. At the same time as the Complaint was filed, the Division filed a proposed consent decree requiring the Association to withdraw the challenged guidelines. The U.S. District Court in Kansas City, Missouri, entered the decree on August 15, 1996.

United States v. A&L Mayer Associates, Inc., A&L Mayer, Inc. and Fibras Saltillo, S.A. De C.V. (5/30/96)

United States v. Brush Fibers, Inc. (8/29/96)

United States v. Ixtlera, S.A. and MFC Corp. (9/26/96)

The Division filed companion civil and criminal charges concerning a conspiracy to fix wholesale and resale prices of tampico fiber, a vegetable fiber grown in Mexico and used to make bristles in such items as household scrub brushes and brooms. Three related cases were brought against (1) a tampico wholesaler and two affiliated companies, (2) a tampico distributor, and (3) the other wholesaler and its affiliated distributor. The firms had conspired to fix the wholesale price of tampico and to enhance and preserve the price fix at the wholesale level by setting resale prices to be charged by their exclusive U.S. distributors. The cases were each settled by consent decrees, entered by the U.S. District Court in Philadelphia on August 16, November 19, and December 10, 1996.

United States v. AnchorShade, Inc. (6/20/96)

In this case, the Division filed a complaint alleging resale price maintenance in the sale of boat umbrellas. The Division alleged that AnchorShade, Inc., conspired to fix the price of outdoor boat umbrellas that it sold to dealers throughout the United States. Dealers agreed to maintain the minimum resale price as a condition of receiving additional umbrellas from AnchorShade and to discount only in order to meet competition and only if they obtained written approval in advance from AnchorShade. Under the terms of the consent decree, filed at the same time as the complaint, AnchorShade may not enter into retail price maintenance agreements with its dealers or threaten to terminate any dealer for pricing below AnchorShade's resale price. The decree was entered by the District Court for the Southern District of Florida on October 8, 1996.

United States v. American National Can Co. and KMK Maschinen AG (6/25/96)

This case charged that the American National Can Co. (ANC) and KMK Maschinen AG, a Swiss firm, violated Section 1 of the Sherman Act when they agreed that KMK would stop making or selling in the United States laminated tubes like those used for toothpaste, that KMK would grant ANC an exclusive license to KMK's laminated tube-making technology in North America, and that ANC would stop making tube-manufacturing equipment. The consent decree, filed the same day as the complaint, allows KMK to reenter the North American laminated tubes market by terminating this exclusive deal, makes ANC's license non-exclusive, and prohibits future market allocation agreements between the firms. The decree was entered by the U.S. District Court for the District of Columbia on February 12, 1997.

United States v. Alex Brown & Sons, Inc., et al. (Nasdaq market makers) (7/17/96)

In this civil action, the Division filed suit against 24 market-making Nasdaq securities firms. Nasdaq is a computerized public market in which investors can buy and sell over-the-counter stocks. The complaint charged these Nasdaq market makers with inflating the quoted "inside spread" in certain Nasdaq stocks. The 24 firms adhered to and enforced a "quoting convention" which updated the prices they quoted by a quarter (25 cents) rather than an eighth (12.5 cents) whenever an individual dealer's spread (the difference between the price at which an individual market-maker offers to buy a stock and the price at which it offers to sell the same stock, on a per share basis) was 75 cents or more. Consequently, spreads were kept artificially wide and investors paid higher trading costs for buying and selling stocks on the Nasdaq market. The consent decree, filed simultaneously with the complaint, prohibits the market makers from agreeing with other market makers to adhere to the quoting convention or to in any way fix prices. The settlement includes an enforcement mechanism that requires the settling firms to monitor and tape record 3.5 percent (or 70 hours per week) of their Nasdaq traders' telephone calls and permits an unannounced Division representative to listen in on trader conversations as they occur. The decree was entered April 24, 1997 by the U.S. District Court for the Southern District of New York. Entry of the decree was appealed by an intervenor, but entry of the judgment was upheld by the Second Circuit on August 6, 1998.

(Description of photograph: A close-up of the daily stock market listings from a newspaper, with the tip of a pencil pointing to the figure "23 3/15.")

United States v. General Electric Company (8/1/96)

In this case, the Division alleged that the General Electric Company's licenses for medical imaging equipment software violated Sections 1 and 2 of the Sherman Act by restricting licensee hospitals from competing with GE in the servicing of third-party medical equipment. For each type of advanced imaging equipment GE makes (such as CT scanners, X-ray machines, and MRI systems), it designs specialized software that improves the speed of any needed maintenance or repair work. GE required hospitals seeking to license this software in order to service their own equipment in-house to agree not to compete with GE in servicing medical equipment of any kind or manufacture owned by other hospitals, clinics, or doctors. The restriction applied even though the licensed GE software could not be used with the other equipment to be serviced. This license term forced hospitals to choose between licensing the specialized software and continuing to offer medical equipment service to nearby medical facilities. In May 1996, in response to the Department's investigation, GE relaxed some of these restrictions. In its complaint, however, the Department alleged that the new licenses still unreasonably limited competition in servicing some equipment and restricted competition in some markets for medical imaging equipment as well. In response to GE's motion to dismiss, the court dismissed the Section 2 claim but denied the motion as to the Section 1 claim. Subsequently GE agreed to settle the case and cease obtaining or enforcing the restrictive licensing provisions. The U.S. District Court for the District of Montana entered the decree on January 11, 1999.

United States and the State of New York v. American Radio Systems, Inc.,The Lincoln Group, L.P., and Great Lakes Wireless Talking Machine LLC (10/24/96)

The case challenged a proposed radio merger along with an existing joint sales agreement (JSA) between one of the merging parties and a third-party radio station. American Radio Systems (ARS), a large radio station owner and operator, owned three stations in Rochester, New York, and had a joint sales agreement with a fourth station owned by Great Lakes, giving ARS control over the sale of advertising on that station. In the merger, ARS sought to acquire four additional Rochester radio stations from the Lincoln Group. The merger was likely to substantially lessen competition, and the JSA had already eliminated price competition between the ARS stations and the Great Lakes station without accomplishing any procompetitive efficiencies. The Division challenged the merger as a violation of Section 7 of the Clayton Act and challenged the JSA as a violation of Section 1 of the Sherman Act. The proposed consent decree required ARS to divest three stations and terminate the JSA with the Great Lakes station. The U.S. District Court for the District of Columbia entered the final judgment on January 31, 1997.

State of Oregon, State of Washington, State of California, United States v. Jeff Mulkey, Jerry Hampel, Todd Whaley, Brad Pettinger, Joseph Speir, Thomas Timmer, Richard Sheldon, Dennis Sturgell, Allen Gann, and Russell Smotherman (2/11/97)

In this case, the Division, along with the states of California, Oregon, and Washington, charged ten West Coast commercial crab fishermen with leading a conspiracy to raise the sale price charged by fishermen to crab processors and boycotting all processors until they agreed to pay the fixed price for crab. The defendants agreed to raise the price they charged to processors and secured similar commitments from competing fishermen, using threats, intimidation, and coercion where necessary. In furtherance of the conspiracy, the fishermen set up a group boycott, known as a "tie-up" in the industry, in which they refused to fish for crab until all commercial seafood fishermen in every major California, Oregon, and Washington port were receiving at least the fixed minimum price. As a result of the agreement, prices to consumers rose, and the supply of crab available to processors was significantly reduced during the course of the boycott. The complaint charged the defendants with violating state laws as well as Section 1 of the Sherman Act. The consent decree enjoins the defendants from entering into or enforcing any agreement to fix prices or restrict the supply of seafood or engaging in any conduct in furtherance of such an agreement. The U.S. District Court in Portland, Oregon, entered the Final Judgment on June 16, 1997.

United States v. Seminole Fertilizer Corp. (6/18/97)

United States v. Norsk Hydro USA Inc., et al. (2/19/98)

These cases charged Seminole Fertilizer Corporation, formerly a major fertilizer manufacturer, Norsk Hydro USA, Inc., and Farmland Industries with colluding to restrain competitive bidding for the purchase at bankruptcy auction of a Tampa, Florida, facility used to store ammonia, a primary raw material used for the production of diammonium phosphate fertilizer. The Division alleged that Seminole and two of its competitors, Norsk Hydro USA Inc. and Farmland Industries Inc., met in March 1992 and agreed that Seminole would withdraw from the storage facility auction, eliminating Norsk's chief rival as a viable competing bidder. The Division filed a separate complaint against Norsk Hydro and Farmland Industries. The Division filed proposed consent decrees simultaneously with the complaints pursuant to which the defendants agreed not to enter into agreements with others illegally setting the price of assets used in the production and distribution of fertilizer and being sold under the auspices of a court or federal agency. The defendants also agreed not to submit joint bids for fertilizer assets without first notifying the seller of the asset and the person administering the sale of the asset that the bid was jointly proposed. The Seminole decree was entered by the U.S. District Court for the Middle District of Florida in September 1997, and the Norsk/Farmland decree was entered by the same court on May 18, 1998.

United States v. Rochester Gas & Electric Corp. (6/24/97)

This contested case challenged an agreement between RG&E and the University of Rochester designed to limit competition in the Rochester electricity market. The University had been planning to build a "cogeneration" plant, which would have produced electricity as a byproduct of producing steam for heating and cooling campus buildings. The Division alleged that RG&E threatened to cut off research grants to the University if it built the plant and promised to give the University hundreds of thousands of dollars for a conservation program if it did not. The Division also alleged that RG&E agreed to give the University an exceptionally low electricity rate. The University agreed not to participate or even study participation in any other project that would provide other current RG&E customers with energy from anyone other than RG&E, and it agreed not to build the new plant. Instead, it continued to produce steam using a coal plant built in 1929. Both the United States and RG&E moved for summary judgment. On February 17, 1998, the Court granted partial summary judgment for the United States, ruling that RG&E was not protected by the state action defense. This decision precipitated a settlement that bars RG&E from enforcing this agreement or entering into a similar one with another actual or potential competitor. The consent judgment was entered on June 18, 1998. Subsequent to announcement of the settlement, the University of Rochester issued requests for proposal to build a new and efficient cogeneration plant.

United States v. AIG Trading Corp., BP Exploration & Oil, Inc., and Cargill International, S.A. (7/18/97)

The Division filed suit against three major oil trading firms, AIG Trading Corp., BP Exploration, and Cargill International, alleging that they exchanged information in order to facilitate an agreement to lower the commissions they paid to brokers in the United States for certain Brent crude oil contracts. Brent crude oil is produced in the North Sea. A Brent spread contract is the simultaneous purchase and sale of two contracts, for different months forward, for Brent crude oil. A Brent CFD is a commercial transaction based on the difference between the current published price for Brent crude oil that is already loaded or available to be loaded on a specific day and the future price for Brent crude oil to be loaded in the next month forward. The trading firms had been paying separate full commissions to brokers for both sides of the paired contracts and wanted to reduce the amount they paid. The complaint alleges that from July 1992 through May 1993, AIG, BP, Cargill, and others conspired to exchange current and prospective brokerage commission information on Brent spread contracts and CFDs and lowered the brokerage commissions they paid to brokers in the United States. The proposed order, filed at the same time as the complaint, prohibits AG, BP, and Cargill from agreeing with any other trader to fix, lower, raise, stabilize, or maintain any brokerage commission for Brent spread contracts and CFDs or to exchange any information for these purposes. The proposed settlement also prohibits these companies from requesting or advising other traders to lower, raise, or change any brokerage commissions for Brent spread contracts and CFDs. The final order was entered on October 10, 1997, in the U.S. District Court for the Southern District of New York.

United States v. Microsoft Corp. (Contempt Petition) (10/20/97)

The Division alleged that by bundling its Internet Explorer browser with its Windows 95 operating system, Microsoft had violated the consent decree entered in 1995. The District Court entered a preliminary injunction prohibiting the practice, and Microsoft appealed. On June 23, 1998, the D.C. Court of Appeals reversed the lower court's decision and lifted the injunction. The three-judge panel held that the district court judge had denied Microsoft certain procedural rights and that it was inappropriate for it to have appointed a "special master" to advise the court on technical issues. The Court of Appeals remanded the case, which was then supplanted by the subsequent complaint alleging violations of the Sherman Act.

(Description of photograph: A laptop PC open on a table.)

United States v. Tom Paige Catering Co. and Valley Foods, Inc. (12/16/97)

The Division alleged that two Ohio food service contractors had established a joint venture in order illegally to eliminate competition between them for bids on food service contracts with the Cleveland Head Start Program. Head Start, a program funded by the U.S. government, provides comprehensive developmental services, including free lunches, for low-income preschool children. According to the complaint, lunch prices for Head Start programs in Cleveland rose by 50 percent after the joint venture began in 1994. The proposed Stipulation and Order, filed with the complaint in the United States District Court for the Northern District of Ohio, requires the two companies to dissolve their joint venture and prohibits them from engaging in similar activities with each other or other food service contractors. The Final Judgment was entered on May 15, 1998.

United States v. International Business Machines Corporation and Storage Technology Corporation (12/18/97)

The Division charged that a 1996 distribution agreement between International Business Machines Corporation (IBM) and Storage Technology Corporation (STK) restrained competition between the two companies in the multibillion dollar market for mainframe computer disk storage subsystems. IBM and STK are two of only four major independent competitors worldwide in the development, production, and marketing of mainframe disk storage subsystems, which store and provide ultrafast access to data. The complaint challenged a 1996 agreement that imposed substantial financial penalties on STK if it sold its mainframe disk storage systems to anyone other than IBM and imposed financial penalties on IBM if it did not buy a fixed quantity of disk storage subsystems products from STK. According to the complaint, these and other anticompetitive terms effectively eliminated STK as an independent competitor in the market. On March 20, 1998, the United States District Court for the District of Columbia entered the proposed Stipulation and Order, which prohibits IBM and STK from maintaining contract provisions that would financially penalize STK for marketing mainframe disk storage subsystems to customers other than IBM. The settlement also limits, after 1998, the amount of mainframe disk storage subsystems that STK may sell through IBM, unless STK also makes substantial sales to customers other than IBM.

United States v. Microsoft Corp. (Monopolization) (5/18/98)

The Division challenged a variety of practices by Microsoft designed to monopolize the Internet browser market in order to protect Microsoft's monopoly position in the personal computer operating systems market. The complaint alleged that, among other things, Microsoft illegally bundled its Internet browser with its Windows operating system, attempted to divide markets with its competitors, and imposed exclusionary terms and conditions in its contracts with various customers and vendors in violation of Sections 1 and 2 of the Sherman Act. The court consolidated a parallel action of 20 state attorneys general with the federal action, and also consolidated trial on the merits with the preliminary injunction hearing. Trial began on October 19, 1998. The Division and Microsoft each submitted the direct testimony of 12 witnesses in written form as directed by the court. Cross-examination of these witnesses was heard in open court. On rebuttal, each side presented three witnesses. The parties have submitted proposed findings of fact to the court, which heard oral argument on the proposed findings on September 21, 1999. On November 5, 1999, Judge Jackson issued his findings of fact. On December 6, 1999 the Division filed Plaintiffs' Joint Proposed Conclusions of Law.

Oral argument on the collateral issues of public access to depositions took place on October 20, 1998, before the United States Court of Appeals for the D.C. Circuit. On January 29, 1999, the Court of Appeals upheld the district court's holding, supported by the Department, that the Publicity in Taking Evidence Act requires public access to depositions in government Sherman Act cases, subject to reasonable protections to be imposed by the district court.

United States v. Federation of Physicians and Dentists, Inc. (8/12/98)

The Division seeks to prohibit the defendant Federation of Physicians and Dentists, Inc. (the Federation), whose members include nearly all of the independent orthopedic surgeons in Delaware, from continuing its Section 1 conspiracy with its member physicians to negotiate jointly with various managed care plans to obtain higher fees for the Federation's otherwise competing orthopedic surgeons. The complaint alleges that the Federation's representatives and its member orthopedic surgeons reached an understanding that the members would negotiate only through the Federation and would resist the efforts of BlueCross BlueShield of Delaware (BC/BS) to reduce the fees it paid orthopedic surgeons in Delaware to the level of fees it paid to other medical specialists in Delaware and to orthopedic surgeons in nearby states. The complaint further alleges that, pursuant to that understanding, nearly all of the members of the Federation rejected a BC/BS fee proposal and terminated their individual provider services contracts with BC/BS. Trial has been set for April 2000.

(Description of photograph: A health care provider pointing to an X-ray clipped against a light board on the wall.)

United States v. Medical Mutual of Ohio (9/23/98)

Medical Mutual of Ohio, Ohio's largest health care insurer, discouraged discounting and price competition among health plans in the Cleveland area by use of a most favorable rate or MFR (sometimes referred to as most-favored-nation or MFN) contract provision. The MFR provision required hospitals contracting with Medical Mutual to charge other health plans 15 to 30 percent more than they charged Medical Mutual. Its purpose was to raise hospital costs for competing health plans, thereby limiting their ability to compete with Medical Mutual. Medical Mutual aggressively enforced the provision with well over 100 hospital audits, resulting in millions of dollars in penalties paid by the hospitals over the years. After Medical Mutual was notified that the Division's suit was imminent, it announced that it would stop enforcing its MFR provision. This announcement did not adequately protect consumers, since there was a risk that, absent a decree, Medical Mutual would reinstate the MFR provision or implement other policies with similar anticompetitive effects. Medical Mutual then agreed to entry of a consent decree, which was entered by the U.S. District Court for the Northern District of Ohio on January 29, 1999.

United States v. Visa U.S.A. Inc., Visa International Corp., and MasterCard International Incorporated (10/7/98)

On October 7, 1998 the Antitrust Division filed a complaint in the Southern District of New York alleging that Visa and MasterCard, the nation's two largest credit card networks, have adopted rules and practices that limit competition in the credit card network market. The complaint identifies two separate, but interrelated, competitive problems. First, Visa and MasterCard are jointly owned and controlled by the same group of large banks; as a result, those two networks, which account for 75 percent of the market, do not compete vigorously against each other. Second, Visa and MasterCard have adopted rules that restrict the ability of their member banks to do business with other credit card networks. In particular, both networks prohibit their member banks from issuing American Express and Discover cards, while allowing the banks to issue cards on both bank networks. Trial is set for the summer of 2000.

United States v. Mercury PCS II, LLC

United States v. Omnipoint Corp.

United States v. 21st Century Bidding Corp. (11/10/98)

The Division filed civil complaints in U.S. District Court in Washington, D.C., charging Mercury PCS II, LLC, of Jackson, Mississippi; Omnipoint Corp. of Bethesda, Maryland; and 21st Century Bidding Corp. of Newport Beach, California, with using coded bids during FCC auctions to negotiate agreements among bidders eliminating competition for licenses to certain bandwidth. According to the complaints, the FCC conducted an auction for more than 1000 personal communications services (PCS) radio spectrum licenses to be used to provide digital wireless telephone services similar to cellular phone service, covering 493 cities or regions, from August 1996 to January 1997. On occasion, each of the defendants coded the final three digits of its bid to correspond with the FCC number for a particular city or region for which the defendant wanted a license. Each defendant used the codes to highlight the license it wanted and to invite firms that had been competing for that license to agree to cease bidding for it, in exchange for an agreement that the defendant would not to bid against them in other markets they wanted. In its complaints, the Division alleged that, as a result of these agreements, the government received less money than it otherwise would have for licenses in Indianapolis, Indiana; Toledo, Ohio; and Lubbock, Texas. A proposed consent decree was filed along with each complaint. The final judgments for 21st Century and Omnipoint were entered on February 24, 1999; the final judgment for Mercury PCS was entered on April 29, 1999.

United States v. Dentsply International, Inc. (1/5/99)

The complaint alleged that Dentsply International, Inc., has unlawfully maintained a monopoly in the market for artificial teeth in the United States by entering into restrictive dealing arrangements with more than 80 percent of the nation's tooth distributors, preventing them from selling products made by Dentsply's competitors. Dentsply's efforts to deprive rivals of an effective distribution network have resulted in increased prices for artificial teeth, reduced innovation, prevented other firms from competing effectively, and deterred entry into the market. Litigation is pending in the U.S. District Court for the District of Delaware. Trial is expected in 2000.

United States v. Federation of Certified Surgeons and Specialists, Inc. and Pershing Yoakley & Associates, P.C. (1/26/99)

On January 26, 1999, the Division filed suit to stop a large number of general and vascular surgeons in Tampa, Florida, from increasing their fees to artificially high levels through illegal joint contract negotiations and boycotts. The complaint named as defendants the Federation of Certified Surgeons and Specialists, Inc. (FCSSI), a corporation formed by 29 competing general and vascular surgeons to obtain higher fees for their services from managed care plans, and Pershing Yoakley and Associates, P.C. (PYA), an accounting and consulting firm that represented FCSSI in negotiations. The FCSSI surgeons made up the vast majority of the general and vascular surgeons with operating privileges at five Tampa hospitals; in 1996, they performed 87 percent of the general and vascular surgeries at the hospitals. The complaint, filed in Tampa, alleges that PYA approached health plans on behalf of FCSSI surgeons to negotiate higher fees and informed each of them that the surgeons would terminate their contracts and refuse to participate in the plan's network unless it contracted with all FCSSI surgeons under terms proposed by PYA. In one instance, 28 FCSSI surgeons terminated their contracts with a health plan before the plan capitulated to PYA's demands. A final judgment was entered on June 1, 1999, which prohibits illegal contract negotiations and boycotts.

United States v. Citadel Communications Corp., Triathlon Broadcasting Company, and Capstar Broadcasting Corporation (4/28/99)

On Wednesday April 28, 1999, the Antitrust Division filed a civil antitrust action in United States District Court in Washington, D.C., to terminate a joint sales agreement (JSA) between Citadel Communications Corporation and Triathlon Broadcasting Company. Under the JSA, Citadel set prices and sold radio advertising time for not only its own radio stations in Colorado Springs, Colorado, and Spokane, Washington, but also for competing stations owned by Triathlon. In both markets, Citadel and Triathlon had been direct competitors, and the JSA between them ended competition to the detriment of advertisers. In Colorado Springs, the Complaint alleges that Citadel set prices for stations constituting 58 percent of the radio advertising market and also attempted to eliminate certain discounts by agreements with its remaining competitors. In Spokane, the Complaint alleges that Citadel set prices for 44 percent of the radio advertising market under the JSA with Triathlon. In addition, Triathlon then bought more stations, representing an additional 26 percent of the market. Competition between these new Triathlon stations and the Citadel/Triathlon JSA was substantially diminished because of Triathlon's common ownership and because Triathlon received part of the revenue from the JSA. When the Division filed the action, it also filed a negotiated final judgment requiring Citadel and Capstar Broadcasting Corporation (Triathlon's successor) to terminate the JSA and requiring Capstar to divest one station in Spokane. Under the terms of the final judgment, neither Citadel nor Capstar will own stations representing more than approximately 40 percent of the radio advertising market in either Colorado Springs or Spokane. The final judgment also prevents both Citadel and Capstar from acquiring additional stations or entering JSAs in either market without notice to the Division. The Judgment was entered on August 26, 1999.

United States v. AMR Corporation, American Airlines Inc., and AMR Eagle Holding Corporation (5/13/99)

On May 13, 1999, the Antitrust Division filed suit in Wichita, Kansas, against American Airlines Inc., the second largest airline in the United States, for monopolizing and attempting to monopolize airline passenger service to and from Dallas/Ft. Worth International Airport (DFW). American dominates DFW, the third largest airport in the United States, flying more than 70 percent of all nonstop passengers who use the airport. The complaint charges that American repeatedly sought to drive small, start-up airlines out of DFW by saturating their routes with additional flights and cutting fares. After it drove out a new entrant, American reestablished high fares and reduced its service. The complaint describes on American's responses to Vanguard Airlines, Sun Jet, and Western Pacific in four DFW spoke routes: Wichita, Kansas, and Kansas City, Missouri (Vanguard); Long Beach, California (Sun Jet); and Colorado Springs, Colorado (Western Pacific). The complaint alleges that American's conduct was predatory because the costs of some of the flights it added exceeded the revenues they generated. American expected to recoup those temporary losses, however, by charging higher fares after an entrant left the market.
Updated June 25, 2015

Was this page helpful?

Was this page helpful?
Yes No