Word: ftc
(lookup in dictionary)
(lookup stats)
Dates: during 1970-1979
Sort By: most recent first
(reverse)
...holdings in Australia. Potential buyers must 1) be able to raise $1 billion, and 2) get approval of the Federal Trade Commission. If qualified, call Kennecott Copper Co. in New York City -and call collect. soon as the U.S.'s biggest copper company acquired Peabody in 1968, the FTC charged it with violation of a dubious antitrust law. That led to a formal FTC ruling in 1971 that Kennecott must get rid of Peabody. The order demanded a divestiture that ranks with the largest in American business history and expanded antitrust law to say, in effect, big mergers...
Kennecott fought the ruling unsuccessfully through the courts (the U.S. Supreme Court refused to hear the case) and even enlisted top politicians, labor leaders and economists to argue on its side. But nothing shook the FTC's resolve. Earlier this month, Kennecott lost what may very well be its last legal appeal when a federal court failed to reverse the order. Despite all the legal maneuvering, the copper company insists that it also has tried to find a way of giving up Peabody without inflicting financial harm upon itself, but the FTC wants it to try harder. The commission...
Given these gloomy alternatives, it is little wonder that Kennecott badly wants to keep Peabody. But that is prevented by a narrow reading by the FTC and the courts of a much debated section of antitrust law; this is the concept that mergers can be stopped not because they reduce competition but because they eliminate "potential" sources of competition. Back in the mid-1960s Kennecott decided that it would make a major attempt to diversify out of copper. Among other things, it bought a small coal field for the purpose, according to Kennecott, of assuring its own fuel supplies...
...FTC also feared that Kennecott's purchase of Peabody marked a trend toward competition-crushing bigness in the coal business. But Peabody's share of total U.S. coal output has remained steady: about 12%. Meanwhile, since 1968, the proportional market share of the eight biggest coal companies has fallen from approximately 41% to 37%, while the share for the 50 biggest companies dropped from 69% to 66%-figures that suggest that the coal business in the U.S. has become less concentrated and more competitive in recent years...
Since the antitrust suit was filed, the Big Three have adjusted their prices to meet those of smaller competitors. In addition, FTC officials say, there has been a "fantastic" increase in the number of small car-rental companies that are winning concession rights in airports. Nonetheless, if the FTC finds reason to think that the Big Three are restricting competition at any time, it has a quick remedy. The new order includes a provision that forbids them to conspire to monopolize the business even outside airports-or face civil penalties of up to $10,000 per violation...