[Federal Register Volume 64, Number 112 (Friday, June 11, 1999)]
[Notices]
[Pages 31638-31647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14469]


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DEPARTMENT OF JUSTICE

Antitrust Division
[Civil No. 98 CV 7168 (FB)(MDG)]


United States, State of New York, Commonwealth of Pennsylvania 
and State of Florida v. Waste Management, Inc., Ocho Investment Corp., 
Eastern Environmental Services, Inc.; Response to Public Comments on 
Antitrust Consent Decree

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that on May 21, 1999, the United 
States filed its responses to public comments on the proposed Final 
Judgment in United States v. Waste Management, Inc. and Eastern 
Environmental Services, Inc., Civil No. 98 CV 7168 (FB)(MDG) (E.D.N.Y., 
filed Dec. 31, 1998), with the United States District Court in 
Brooklyn, New York.
    On November 17, 1998, the United States, New York, Pennsylvania and 
Florida filed a Complaint, which alleged that Waste Management's 
proposed acquisition of Eastern Environmental

[[Page 31639]]

would violate Section 7 of the Clayton Act, 15 U.S.C. 18, by 
substantially lessening competition in waste collection and/or disposal 
in nine markets around the country, including the New York, NY 
(disposal of commercial and residential municipal solid waste); 
Pittsburgh and Bethlehem/Allentown, PA (disposal of municipal solid 
waste); Carlisle/Chambersburg, PA area (collection of commercial waste 
and disposal of municipal solid waste); and Miami/Ft. Lauderdale, and 
suburban Tampa, FL (collection of commercial waste). The proposed Final 
Judgment, filed on December 31, 1998, requires Waste Management and 
Eastern to divest commercial waste collection and/or municipal solid 
waste disposal operations in each of the geographic areas alleged in 
the Amended Complaint.
    Public comment was invited within the statutory 60-day comment 
period. The public comments and the United States's responses thereto 
are hereby published in the Federal Register and have been filed with 
the Court. Copies of the Amended Complaint, Hold Separate Stipulation 
and Order, proposed Final Judgment, Competitive Impact Statement, and 
the United States's Certificate of Compliance wit Provisions of the 
Antitrust Procedures and Penalties Act (to which the public comments 
and the United States's responses are attached) are available for 
inspection in Room 215 of the Antitrust Division, Department of 
Justice, 325 7th Street, NW, Washington, D.C. 20530 (telephone: 202-
514-2481) and at the Office of the Clerk of the United States District 
Court for the Eastern District of New York, 225 Cadman Plaza East, 
Brooklyn, New York 11201.
    Copies of any of these materials may be obtained upon request and 
payment of a copying fee.
Constance K. Robinson,
Director of Operations and Merger Enforcement, Antitrust Division.

United States's Certificate of Compliance With Provisions of the 
Antitrust Procedures and Penalties Act

    The United States of America hereby certified that it has complied 
with the provisions of the Antitrust Procedures and Penalties Act 
(``APPA''), 15 U.S.C. 16(b)-(h), and states;
    1. The Complaint in this case was filed on November 17, 1998, and 
an Amended Complaint was filed on December 1, 1998. The proposed Final 
Judgment (``Judgment'') and the Hold Separate Stipulation and Order 
(``Hold Separate Order'') were filed on December 31, 1998. The 
government's Competitive Impact Statement was filed on February 2, 
1999.
    2. Pursuant to 15 U.S.C. 16(b), the Judgment, Hold Separate Order, 
and Competitive Impact Statement were published in the Federal Register 
on February 26, 1999 (64 Fed. Reg. 9527). A copy of the notice is 
attached as Exhibit 1.
    3. Pursuant to 15 U.S.C. 16(d), the United States furnished copies 
of the Amended Complaint, Hold Separate Order, proposed Final Judgment 
and Competitive Impact Statement to anyone requesting them.
    4. Pursuant to 15 U.S.C. 16(c), a summary of the terms of the 
proposed Judgment and the Competitive Impact Statement were published 
in The New York Times, a newspaper of general circulation in New York, 
NY, and in the The Washington Post, a newspaper of general circulation 
in the District of Columbia. Copies of the certificates of publication 
from The New York Times and The Washington Post appear in Exhibit 2.
    5. On January 11, 1999, the defendants--Waste Management, Inc., 
Eastern Environmental Services, Inc., and Ocho Acquisition 
Corporation--filed with the Court a joint statement describing their 
communications with employees of the United States Department of 
Justice concerning the proposed Final Judgment, as required by 15 
U.S.C. 16(g).
    6. During the 60-day comment period after publication of notice in 
the Federal Register, The New York Times and The Washington Post, the 
United States received five written comments on the proposed 
settlement. These comments were from: (a) the Pulaski County, Kentucky 
Solid Waste Management District; (b) the Environmental Committee of the 
Pocono Mountains Chamber of Commerce in Stroudsburg, Pennsylvania; (c) 
the Schuylkill County, Pennsylvania Office of Solid Waste and Resource 
Management; (d) the Monroe County, Pennsylvania Municipal Waste 
Management Authority; (e) Recycle Worlds Consulting Corporation of 
Madison, Wisconsin.
    7. The United States evaluated and responded to each of the 
comments it received. The comments did not convince the United States 
that it should withdraw its consent to the proposed settlement. The 
complete text of the comments and the responses appear in Exhibits 3-7; 
they are summarized below.

A. The Pulaski County, KY Comment

    The Pulaski County Solid Waste Management District complained that 
a combination of Waste Management and Eastern would substantially 
eliminate competition in the collection and disposal of the county's 
residential waste. In our response, we point out that Pulaski County 
has entered into a long-term contract for collection and disposal of 
its waste, which does not expire until sometime in the year 2002. Under 
these circumstances, we note, it is highly unlikely that the merger had 
eliminated any existing competition between the defendants in waste 
collection or disposal services. In our views, it is simply to early to 
predict whether the merger would eliminate any significant potential 
competition that may occur after the contract expires in 2002.

B. The Monroe County, PA Comments

    The Monroe County Municipal Solid Waste Authority and the Pocono 
Mountains Chamber of Commerce, both based in Stoudsburg, PA, asserted 
that the governments should have sought and obtained divestiture relief 
that would eliminate the anticompetitive effects of the defendants' 
merger in Monroe County, Pennsylvania. In that market, these 
commentators point out, a combination of Waste Management and Eastern 
would control eighty percent of more of the collection and disposal of 
the county's municipal waste. In its response, the United States 
pointed out that the proposed Final Judgment requires the defendant to 
divest the Waste Management commercial hauling routes in the Scranton/
Wilkes-Barre, PA area, which is about 30 miles from the major 
population center of Monroe Country, and that the earlier Final 
Judgment in United States v. USA Waste Services, Inc. and Waste 
Management, Inc., No. 1:98 CV 1616 (N.D. Ohio, filed July 17, 1998), 
requires Waste Management to divest commercial waste hauling routes in 
the Allentown, PA area, which is only about 20 miles south of Monroe 
County. These divestiutes, once approved by the courts, would install 
in each of these areas one or more new competitors whose operations 
would be sufficiently close to provide a serious competitive check on 
the combination's ability to raise prices after consummating their 
merger.

C. The Schuylkill County Comment

    The Schuylkill County Office of Solid Waste and Resource Management 
(``OSWRM''), based in Pottsville, PA, similarly complained that the 
governments should have sought and obtained divestiture relief that 
would eliminate the anticompetitive effects of the merger in Schuylkill 
County, PA. OSWRM alleged that the merger would leave Waste Management 
as the

[[Page 31640]]

dominant commercial waste hauler in Schuylkill County.
    In our response, we pointed out that the United States did not seek 
relief with respect to commercial hauling in Schuylkill County because 
the amount of commerce was relatively small (Eastern's operations had 
less than $1 million in annual revenue), and Schuylkill County, like 
Monroe County, is reasonable close to two areas in which divestitures 
mandated by the pending final Judgment and the consent decree in USA 
Waste case would establish independent competitiors fully capable of 
disciplining an exercise of market power by Waste Management after it 
merges with Eastern.

D. The Recycle Worlds Consulting Corp. Comment

    RecycleWorlds, a private waste industry consultant, expressed 
concern that the Final Judgment would not halt the wave of mega-mergers 
currently sweeping through the nation's waste industry. In this rapidly 
consolidating industry, some markets, RecycleWorlds explained, may 
become dominated by a handful of large integrated waste collection and 
disposal firms, and more prone to collusive price increases by the few 
remaining competitors. To prevent Waste Management from squeezing waste 
collection competitors by increasing the prices at landfills sites at 
which they dispose their waste, RecycleWorlds would require Waste 
Management to divest its waste collection operations or its waste 
disposal operations in any market in which it competes with Eastern. 
Failing that, RecycleWorlds urged the government not to approve any 
asset divestiture under the Judgment to any of the handful of major 
integrated waste firms, such as Republic, Allied or BFI. These firms 
may be more inclined to cooperate with Waste Management in raising 
prices in some markets in order to avoid potential price wars with 
Waste Management elsewhere.
    In its response, the United States noted that it does not believe 
that requiring Waste Management to divest all collection or disposal 
operations in any overlap market would be more procompetitive than the 
divestitures ordered by the pending Judgment. Indeed, pursuing Recycle 
World's alternative may result in Waste Management obtaining vast 
market power in waste collection or in waste disposal services since, 
in effect, if Waste Management agrees to divest one line of business it 
can obtain an overwhelming market share in the other line. As to 
Recycle World's second point, the United States will not approve any 
proposed divestiture under the Judgment that may substantially lessen 
competition in any market. To that end, the Antitrust Division recently 
rejected Waste Management's proposal to divest these assets under the 
decree to Allied Waste Services, Inc. Allied, the nation's third 
largest waste industry firm, had agreed to acquire Browning-Ferris 
Industries, Inc., the industry's second firm. The pervasive competitive 
overlaps between the Allied/BFI operations and the disposal and 
collection operations ordered divested under the Judgment convinced the 
United States that the proposed divestiture would not advance 
competition in any market.
    8. Pursuant to 15 U.S.C. 16(b)-(h), the United States has arranged 
to publish in the Federal Register by May 29, 1999, a copy of the 
comments and the United States's responses.
    9. With these steps having been taken, the parties have fulfilled 
their obligations under the APPA. Pursuant to the Hold Separate Order 
that the Court entered on December 31, 1998, the Court may now enter 
the proposed Judgment, if it determines that the entry of the Judgment 
is in the public interest. For the reasons set forth in the Competitive 
Impact Statement, and in its responses to the public comments, the 
United States strongly believes that the Judgment is in the public 
interest and that the Court therefore promptly should enter it.

    Dated: May 20, 1999.

    Respectfully submitted,
Anthony E. Harris, Esquire (AH 5876)
U.S. Department of Justice, Antitrust Division, 1401 H Street, NW, 
Suite 3000, Washington, DC 20530, (202) 307-6583.

Exhibit 1

    Exhibit 1 was unable to be published in the Federal Register. A 
copy can be obtained from the Documents Office of the U.S. 
Department of Justice, Antitrust Division, 325 7th Street, NW., Room 
215, Washington, DC 20530, or call (202) 514-2481. It is can also be 
obtained from the Federal Register, Volume 64 No. 38, Page 9527-9541 
dated Friday, February 26, 1999.

Exhibit 2

    Exhibit 2 Advertising Order forms was unable to be published in 
the Federal Register. A copy can be obtained from the Document 
Office of the U.S. Department of Justice, Antitrust Division, 325 
7th Street, NW, Room 215, Washington, DC or (202) 514-2481.

Exhibit 3

March 26, 1999.
J. Robert Kramer II,
Chief, Litigation II, Anti-Trust Division, United States Department 
of Justice, 1401 H Street N.W., Suite 3000, Washington, DC 20530

Re: United States of America, State of New York, Commonwealth of 
Pennsylvania, and State of Florida vs. Waste Management, Inc., Ocho 
Acquisition Corp., and Eastern Environmental Services, Inc.

United States District Court/Eastern District of New York Case 
Number: 98-7168

    Dear Mr. Kramer: This letter will advise of my representation of 
the Pulaski County (KY) Solid Waste Management District. The 
District Board has approved a Resolution opposing the acquisition of 
Eastern Environmental Services, Inc., by Waste Management, Inc. The 
Resolution is enclosed, and is submitted to you pursuant to the 
public comment period, and should be included as comment on the 
acquisition and above-referenced litigation and proposed final 
judgment therein.
    If you need any additional information relative to this matter, 
please do not hesitate to contact me at one of the above-listed 
telephone numbers or address. Thank you for your assistance in this 
regard.

        Very truly yours,
Jeffrey Scott Lawless,
Travis, Pruitt & Lawless.
Enclosure: Resolution

cc:
    Board Members
    Solid Waste Coordinator

Resolution of the Board of the Pulaski County Solid Waste 
Management District

    Whereas the Pulaski County Solid Waste Management District is a 
Solid Waste Management District established pursuant to the provisions 
of Chapter 109 of the Kentucky Revised Statutes, and as such is given 
the authority to operate and contract for services relative to the 
operation of solid waste management facilities, and said district is 
further given the authority under the Pulaski County Solid Waste 
Management Ordinance, to make, amend, revoke, and enforce reasonable 
rules and regulations, governing the storage, collection, 
transportation, processing, and disposal of solid waste, and shall 
prepare, update, implement, and maintain the Solid Waste Management 
Plan for the Pulaski County geographical area, said County being a 
political subdivision of the Commonwealth of Kentucky, with an 
estimated population of 56,000, and;
    Whereas, as of or about 1996, there were within Pulaski County, 
Kentucky, two independent, locally owned entities engaged in the 
collection and transportation of solid waste, said entities being ``B & 
M Sanitation Service, Inc.'' and ``G & W Disposal, Inc.'' and since 
that time, said entities

[[Page 31641]]

have been acquired, either by merger or stock acquisition, by Waste 
Management Inc., and;
    Whereas, as of 1999, there were five (5) landfills operating in the 
Commonwealth of Kentucky, within a one-hundred (100) mile radius of 
Pulaski County, which engage in the processing or disposal of solid 
waste, being more particularly identified (with the respective owners 
of each) as follows:

(1) Lilly, Kentucky (Waste Management, Inc.)
(2) Williamsburg, Kentucky (Waste Management, Inc.)
(3) Irvine, Kentucky (Waste Management, Inc.)
(4) Pulaski Landfill (Eastern Environmental Services, Inc.)
(5) Stanford, Kentucky (Republic)

and;
    Whereas, the District is a party to an agreement with G & W 
Disposal, Inc., (now Waste Management, Inc.) for the provision of solid 
waste collection services to citizens and residents of Pulaski County, 
Kentucky, and the District is further a party to an Agreement with 
Pulaski Grading, Inc. (a subsidiary of Eastern Environmental Services, 
Inc.), for the provision of solid waste disposal services to and for 
the benefit of the citizens and residents of Pulaski county, Kentucky, 
and that said agreements expire by their terms during calendar year 
2002, and;
    Whereas, the United States Department of Justice and others have 
initiated an action in the United States District Court for the Eastern 
District of New York, styled United States of America, State of New 
York, Commonwealth of Pennsylvania, and State of Florida v. Waste 
Management, Inc., Ocho Acquisition Corp., and Eastern Environmental 
Services, Inc., 98-7168, contesting the acquisition (hereinafter the 
``Acquisition'') of Eastern Environmental Services, Inc. (hereinafter 
``Eastern''), and Waste Management, Inc., (hereinafter ``Waste 
Management'') and according to the pleadings of record therein, the 
Acquisition ``would substantially reduce competition in disposal of 
municipal solid waste in'' five highly concentrated markets, `'and that 
it would substantially lessen competition in commercial waste 
collection services in four highly concentrated'' markets, and further, 
it is alleged that ``the loss of competition would likely result in 
consumers paying higher prices and receiving fewer or lesser quality 
services for the collection and disposal of waste'', and;
    Whereas on December 31, 1998, the Plaintiffs in the aforementioned 
litigation filed a Proposed Settlement that would permit Waste 
Management to complete its acquisition of Eastern, but would require 
said Defendants to divest certain waste collection and disposal assets 
in such a way as to preserve competition in the market areas identified 
in the pleadings; and,
    Whereas, pursuant to the Competitive Impact Statement filed of 
record in the aforementioned action:

    Significant new entry into [affected waste collection and 
disposal] markets would be difficult, time consuming, and unlikely 
to occur soon. Many customers of commercial waste collection firms 
have entered into ``Evergreen'' contracts, tieing them to a market 
incumbent for indefinitely long periods of time. In competing for 
uncommitted customers, market incumbents can price discriminate, 
i.e. selectively (and temporarily) charge unbeatably low prices to 
customers targeted by entrants, a tactic that would strongly 
discourage a would-be competitor for competing for such accounts, 
which, if won, may be very unprofitable to serve. The existence of 
long-term contracts are price discrimination substantially increases 
any would-be new entrant's costs and time necessary for it to build 
its customer base and obtain efficient scale and route density to 
become an effective competitor in the market.

and, the District does hereby adopt said statement as its own finding, 
as a correct and accurate statement of the nature of waste collection 
activity as its exists in Pulaski County, Kentucky, as the District has 
in the past entered into such extended contracts for the provision of 
collection and disposal services (specifically, the most recent 
contracts being of a ten year duration), and;
    Whereas the District does hereby make a finding that the 
acquisition by Waste Management of aforementioned Pulaski County-area 
solid waste collectors, and the proposed acquisition by Waste 
Management of Eastern, significantly reduces the competitive options of 
the District and its citizens, for the collection and disposal of 
residential and commercial waste, and would likely result in an 
increase (or a refusal to negotiate further reductions) in the fees and 
charges for collection and disposal of the residential and commercial 
waste of the District and its citizens, and;
    Whereas, as was noted in the Competitive Impact Statement, and the 
District does hereby find:

    Entry into the disposal of municipal solid waste is difficult. 
Government permitting laws and regulations make obtaining a permit 
to construct or expand a disposal site an expensive and time-
consuming task. Significant new entry into these markets is unlikely 
to occur in any reasonable period of time, and is not likely to 
prevent exercise of market power after the [Acquisition].

and

    [In the Pulaski County geographic area] Waste Management's 
acquisition of Eastern would remove a significant competitor in 
disposal of municipal solid waste. With the elimination of Eastern, 
[Waste Management] will no longer compete as aggressively since it 
will not have to worry about losing business to Eastern. The 
resulting substantial increase in concentration, loss of 
competition, and absence of reasonable prospect of significant new 
entry or expansion by market incumbents likely ensure that customers 
will pay substantially higher prices for disposal of municipal solid 
waste, collection of [residential or] commercial waste, or both, 
following the [Acquisition], and;

    Whereas, the District desires to eliminate the anti-competitive 
effects of the Acquisition in collection and disposal of municipal 
solid waste from Pulaski County, Kentucky.
    Now, therefore, be it hereby resolved, by the Board of the Pulaski 
County Solid Waste Management District, as follows:
    (A) That the Pulaski County Solid Waste Management District opposes 
and objects to the Acquisition of Eastern Environmental Service, Inc., 
by Waste Management, Inc.
    (B) The the Pulaski County Solid Waste Management District 
respectfully requests that the United States Department of Justice, 
Anti-Trust Division, modify the proposed Final Judgment as follows:

    1. That Eastern Environmental Services, Inc., be required to 
sell, on or before a reasonable date certain, its interest in the 
Pulaski Landfill, (located at Dixie Ben Road, Pulaski County, 
Kentucky, being License Number 100-00008, issued by the Natural 
Resources and Environmental Protection Cabinet, Division on Waste 
Management), to the Pulaski County Solid Waste Management District, 
Pulaski County, Kentucky, or any other purchaser acceptable to both 
the United States, the Commonwealth of Kentucky, and the Pulaski 
County Solid Waste Management District.

Or alternatively:

    2. That Waste Management, Inc. or Eastern Environmental 
Services, Inc., be required to open and obtain a continuous 
operating permit issued by the Kentucky Department of Natural 
Resources for the operation of a landfill to be located in Pulaski 
County, Kentucky, and that said landfill be thereupon leased to the 
District for a term of years, subject to the approval of the 
Commonwealth of Kentucky, and the District.

Or alternatively:

    3. That Waste Management be required to develop, construct, and 
implement an alternative solid waste management or disposal 
facility, whereby the efficiency of extracting ``recovered 
material'' is increased, waste requiring disposal is reduced, solid 
waste is managed in an environmentally

[[Page 31642]]

protected manner, and solid waste is converted to beneficial by-
products or materials; and that such facility be operated jointly 
with, or solely by, the Pulaski County Solid Waste Management 
District, for a period not to exceed twenty years.

    (C) That this Resolution be communicated to the United States 
Department of Justice, Anti-Trust Division, to the attention of the 
following: J. Robert Kramer, II, Chief, Litigation II, Anti-Trust 
Division, United States Department of Justice, 1401 H Street N.W., 
Suite 3000, Washington, DC 20503.

and that said comments be evaluated by the United States Department of 
Justice, so that the concerns of the residents and citizens of Pulaski 
County, Kentucky may be addressed and included in such manners as the 
United States Department of justice Antitrust Division may, under the 
circumstances, consider appropriate.\1\
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    \1\ Although some acquisitions, like some snakes, are 
beneficial, the Kentucky Court of Appeals once noted that ``may 
snakes are poisonous, and only the zoologist, herpetologist, or 
experienced woodsman is able to distinguish those which are not'' 
Lawson v. Commonwealth, 164 S.W.2d 972 (1942). The District would 
therefore defer to the good judgment of the ``experienced woodsmen'' 
of the Department of Justice's Anti-Trust Division.
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    Adopted this the 18th day of March, 1999.
Pulaski County Solid Waste Management District
Charles T. Estes,
Board Chairman.

Attest: Donna Turner,
Secretary.

Jeffrey Scott Lawless, Attorney,
Travis, Pruitt & Lawless, P.O. Drawer 30, Somerset, KY 42502-0030.

Jeffrey Scott Lawless, Esquire,
Travis, Pruitt & Lawless, 207 East Mt. Vernon Street, Post Office 
Drawer 30, Somerset, KY 42502-0030

Re: Comment on Proposed Final Judgment in United States, State of 
New York, et al, v. Waste Management, Inc., Eastern Environmental 
Services, Inc., No. 98 CV 7168 (JB) (E.D.N.Y., December 31, 1998)

    Dear Mr. Lawless: This letter responds to your letter of March 
26, 1999 commenting on the Final Judgment in this case on behalf of 
your client, the Pulaski County, Kentucky Solid Waste Management 
District. The Amended Compliant in this case charged, among other 
things, that Waste Management's acquisition of Eastern Environmental 
would substantially lessen competition in collection or disposal of 
municipal solid waste in 12 markets in New York, Pennsylvania, and 
Florida. The proposed consent decree, now pending in federal 
district court in Brooklyn, New York, would settle the case by 
requiring the defendants to divest a number of waste collection 
routes and waste disposal facilities in the markets alleged in the 
Complaint.\1\ This relief, if approval by the Court, would establish 
one or more new competitors in each of the markets for which relief 
was sought, replacing the competitive rivalry lost when Waste 
Management acquired Eastern Environmental.
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    \1\ The markets alleged in the Amended Complaint, and for which 
divestiture relief was obtained in the Final Judgment, include the 
disposal of municipal solid waste in the Pittsburgh, Carlisle-
Chambersburg, and Bethlehem, PA areas, and in New York City, NY 
(commercial and residential); and collection of commercial waste in 
the Carlisle-Chambersburg, Bethlehem, and Scranton, PA; suburban 
Tampa (Hillsborough Co.) and Miami/Ft. Lauderdale, FL (Dade and 
Broward counties) areas.
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    In your letter, you express concern that neither the complaint 
nor the proposed Judgment address the competitive effects of the 
merger in the collection and disposal of residential waste in 
Pulaski County, Kentucky. A combination of Waste Management and 
Eastern Environmetal would control four of the five landfills within 
a 100 mile radius radius of Pulaski County.
    The United States did not allege that a combination of Waste 
Management and Eastern Environmental would raise serious competitive 
problems in the collection and disposal of Pulaski County because 
the county has long-term agreements with Waste Management and with 
Eastern Environmental, which provide that the residential waste will 
be collected by Waste Management and that disposal of that waste 
will be handled by Eastern Environmental. These agreements, which do 
not expire until at 2002, effectively preclude competition between 
Waste Management and Eastern for the county's collection and 
disposal of waste. In addition, in this case, we believe that it 
would be difficult to predict what the competitive landscape will 
look like in 2002 when Pulaski County is once again in the market 
for a firm to collect and to dispose of its resident's waste. For 
that reason, we were not prepared to allege, or attempt to prove, 
that the proposed merger would be anticompetitive in Pulaski County, 
KY.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your 
comment and this response will be published in the Federal Register 
and filed with the Court.

        Sincerely yours,


J. Robert Kramer II,

Chief, Litigation II Section.

Exhibit 4

J. Robert Cramer, II
    Chief, Litigation II Section, Antitrust Division, U.S. 
Department of Justice, 1401 H Street NW, Suite 3000, Washington, DC 
20530

cc: Pennsylvania Attorney General Fisher

    Dear J. Robert Cramer, II: The Pocono Mountains Chamber of 
Commerce Environmental Committee would like to offer its comments on 
the issue referenced above.
    Our Committee serves the Chamber of Commerce's Executive 
Committee and Board of Directors, reviewing environmental issues and 
advising on appropriate Executive Committee and Board actions. The 
Environmental Committee also comments directly, where appropriate, 
on environmental issues impacting Monroe County. The Environmental 
Committee feels the referenced merger does not serve the best 
interests of Monroe County citizens.
    The results of the merger is that one parent company will 
control collection and disposal of a disproportionate amount of the 
county's municipal waste. The county's other haulers are independent 
operators. These haulers will be unable to compete for commercial 
waste collection and municipal collection contracts. And, since none 
of these smaller companies owns a disposal facility, Waste 
Management will control their tipping fees. Recent history has shown 
that the independents are charged higher tipping fees than Waste 
Management charges its own haulers.
    Since the merger a number of commercial businesses have 
contacted the Environmental Committee, reporting that their 
commercial collection rates have nearly tripled. While our committee 
understands that Waste Management has submitted a divestiture plan 
intended to alleviate concerns of this nature, this plan has done 
nothing to relieve the onerous effect the merger has had on Monroe 
County.
    Our informed opinion is that approval of the merger will 
adversely effect the interest of Monroe County's citizens and 
businesses.
    Thank you for the opportunity to file these comments. Please 
contact us if we can answer any other questions.

        Respectfully,
Michael Beckenbach,
Chairman, Pocono Mountains Chamber of Commerce Environmental Committee.

Mr. Michael Beckenbach,
Chairman, Environment Committee, Pocono Mountains Chamber of 
Commerce, c/o Gallagher & Gallagher, Stroudsburg Division, 701 Main 
Street, Stroudsburg, PA 18360

Re: Comment on Proposed Final Judgment in United States, State of 
New York, et al. v. Waste Management, Inc., Eastern Environmental 
Services, Inc., No. 98 CV 7168 (JB) (E.D.N.Y., December 31, 1998)

    Dear Mr. Beckenbach: This letter responds to your letter of 
April 10, 1999 commenting on the Final Judgment in the above case. 
The Amended Complaint in the case charged, among other things, that 
Waste Management's acquisition of Eastern Environmental would 
substantially lessen competition in collection or disposal of waste 
in a number of markets throughout the Northeast and in Florida. In 
northeastern Pennsylvania, the Amended Complaint alleged, the merger 
would substantially reduce competition in the collection of 
commercial waste in the Scranton/Wilkes-Barre market. The proposed 
Final Judgment now pending in federal district court in Brooklyn, 
New York would settle the case with respect to the Scranton market 
by, inter alia, requiring Waste Management to divest its front-end 
loader commercial waste

[[Page 31643]]

collection routes that service Luzerne and Lackawanna counties, 
which comprise much of the greater metropolitan Scranton/Wilkes-
Barre, PA area. This divestiture, if approved by the Court, would 
establish an independent competitor in the market for which relief 
was sought, and replace the competitive rivalry lost when Waste 
Management acquired Eastern Environmental.
    In your letter, you express concern that neither the complaint 
in this case nor the proposed consent decree address the competitive 
effects of the merger in Monroe County, PA, in which a combination 
of Waste Management and Eastern would dominate municipal and 
commercial waste collection services, controlling over eighty 
percent of all waste collected. The combined firm has already 
substantially increased its prices for collection of municipal 
waste. We believe that the proposed Judgment, and the pending decree 
in the earlier USA Waste/Waste Management case,\1\ address this 
competitive issue.
---------------------------------------------------------------------------

    \1\ United States v. USA Waste Services, Inc., Waste Management, 
Inc., et al., No. 1:98 CV 1616 (N.D. Ohio, filed July 17, 1998). The 
consent decree in the USA Waste case ordered Waste Management to 
divest its commercial waste collection routes that service the City 
of Allentown, and Lehigh and Northampton counties. Those routes were 
sold to Republic Services, Inc., which installed a large independent 
competitor in the commercial waste collection market in the 
Allentown, PA area.
---------------------------------------------------------------------------

    Monroe County is a thinly populated area that abuts and lies 
directly southeast of the Scranton/Wilkes-Barre area. Its business 
and population center--Stroudsburg--is about 30 miles from the 
Scranton/Wilkes-Barre area and about 25 miles north of the city of 
Allentown and Northampton and Lehigh counties in Pennsylvania.
    The divestitures of commercial waste collection routes ordered 
by this Judgment and the decree in the USA Waste case would 
establish independent commercial waste haulers in the Scranton/
Wilkes-Barre and Allentown areas. Given the proximity of these 
markets to Monroe County, the rivalry offered by the new competitors 
should be sufficient to discipline any post-merger exercise of 
market power by the combined Waste Management and Eastern in the 
collection of commercial waste. These new competitors may also be 
capable of vigorous competition in the collection of the county's 
residential waste, a market not addressed in our complaint or the 
consent decree.
    In addition, the next two largest waste haulers in Monroe County 
following Waste Management's acquisition of Eastern would be Hopkins 
and Muscaro, each of which is about the same size as Eastern in 
Monroe County. Thus, after the merger, there may be as many as four 
other competitors in the market--Hopkins, Muscaro, and the two 
decree firms--capable of competing as vigorously as Eastern prior to 
its acquisition by Waste Management.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your 
comment and this response will be published in the Federal Register 
and filed with the Court.

        Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

Exhibit 5

J. Robert Kramer, II,
Chief, Litigation II Section, Antitrust Division, U.S. Department of 
Justice, 1401 H Street, NW., Suite 3000, Washington, DC 20530

Re: United States, et al. v. Waste Management, Ocho Acquisition 
Corp. and, Eastern Environmental Services, Inc. Civil No. 98 CV 7168 
(FB)

    Dear Mr. Kramer: On behalf of the residents of Schuylkill 
County, please consider the contents of this letter as public 
comment in response to a proposed final judgment in the above 
referenced matter which was advertised in the Federal Register on 
February 26, 1999 pursuant to the provisions of the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(b)-(h).
    The County of Schuylkill is a political subdivision established 
by Pennsylvania law and is authorized by Act 101, the Municipal 
Waste Planning, Recycling and Waste Reduction Act of 1988, to 
provide for disposal capacity for municipal waste generated within 
its boundaries. For the past nine years, this has been accomplished 
by providing individuals, municipalities and the commercial sector 
reasonable and cost effective municipal waste collection and 
disposal alternatives through capacity assurance and operation 
contracts with permitted waste processing and disposal facilities. 
The County also licenses haulers of municipal waste, which allows 
the County to properly track the disposition of its waste. The 
ability of the County to provide this valuable service has been 
substantially impaired by the recent merger of Waste Management, 
Inc. and Eastern Environmental Services, Inc. The County believes 
that the proposed settlement does not meet the requirements of the 
Clayton Antitrust Act and is not in the public interest for reasons 
listed below.
    1. Schuylkill County is located in East Central Pennsylvania and 
is in fact adjacent to market areas named in the complaint as being 
adversely affected from a competitive standpoint by the merger. A 
regional map is enclosed with this letter identifying the municipal 
waste hauling, processing and disposal operations that serve 
Schuylkill County. The County has identified that the result of the 
merger would be that one company would control the collection and 
disposal of approximately 66% of the County's municipal waste 
stream. This figure is backed-up by two sources of information: (1) 
PA Dept. Of Environmental Protection's Waste Destination Reports and 
(2) the County's hauler licensing database which indicates the 
merged companies would own 95% of the commercial front-end load 
container capacity; 44% of the rear-load capacity; and 60% of the 
roll-off container capacity.
    2. Remaining haulers within the county are small, independent 
companies that are unable to compete in two important and specific 
areas, commercial waste collection and municipal contracting. The 
independent haulers do not have the necessary equipment to conduct 
commercial collection effectively. Also, the small companies cannot 
compete effectively for large municipal contracts. Typically, the 
only hauling companies that bid on municipal contracts in Schuylkill 
County are Waste Management, Pine Grove Hauling Co. (Eastern) and 
J.P. Mascaro. Mascaro usually is the high bidder due to the long 
distance to their nearest disposal facility. The result of the 
merger has been, and will be, a substantial reduction in competition 
in those specific areas.
    3. Since the merger, it is well documented that Waste Management 
has raised its rates significantly for the collection of commercial 
and residential waste.
    4. The proposed settlement agreement has already been 
implemented with the requirement that the companies divest certain 
relevant assets. However, these divestitures have no effect on the 
competitive disadvantages created by the merger in this area.
    5. The County encourages municipal governments to join together 
to bid waste collection contracts to more cost effectively manage 
their municipal waste streams. However, with no competitive bidders, 
those efforts will fail.
    Consequently, the County feels that the proposed judgement 
provides no relief in the area from the anti-competitive effects of 
the merger of Waste Management and Eastern Environmental, and the 
public interests will not be served by the approval of the proposed 
consent decree.
    The County appreciates this opportunity to file written 
comments. Please contact me if you have any questions or require 
additional information.

        Sincerely,
Wayne Bowen,
County Environmental Coordinator.

Enclosures.

cc:
    Board of County Commissioners
    U.S. Senator Specter
    U.S. Senator Santorum
    U.S. Rep. Holden
    Senator Rhoades
    Rep. Argall
    Rep. Allen
    Rep. Lucyk
    William McDonnell, PADEP NE Regional Office
    Jim Snyder, PADEP Central Office
    Bob Shafer
    Michael O'Rourke, Esq.
    Mark Scarbinsky
    Mary Kay Bernosky, Esq.

    The Major MSW Hauling Operations and Processing/Disposal 
Facilities Serving Schuylkill County Map of April 1999 was not able 
to be published in the Federal Register. A copy can be obtained from 
the Documents Office of the U.S. Department of Justice, Antitrust 
Division, 325 7th Street, NW., Room 215, Washington, DC 20530 or 
(202) 514-2481.

[[Page 31644]]

Major MSW Hauling Operations and Processing/Disposal Facilities 
Servicing Schuylkill County, April 1999

Hauling Operations

In-County
     Waste Management
    1. Pottsville (consolidated with Deitrick Coal Twp.)
    2. Frackville (consolidated with Deitrick Coal Twp.)
     Eastern Environmental
    3. Pine Grove Hauling, Port Clinton (consolidated with Deitrick 
Coal Twp.)
    4. Pine Grove Hauling, Schuylkill Haven (formerly Minchoff) 
(consolidated with Deitrick Coal Twp.)
 Other major or potential major competitors
    None
Out-of-County
     Waste Management
    5. Deitrick Sanitation, Coal Twp., Northumberland Co.
    6. Waste Management, Allentown, Lehigh County
    7. Waste Management, Scranton, Lackawanna County
    8. Grand Central Sanitation, Pen Argyl, Northampton County
 Eastern Environmental
    9. Altamere, Mt Carmel, Northumberland Co. (consolidated with 
Deitrick Coal Twp.)
    10. Pine Grove Hauling, Lansford, Carbon County (formerly 
Knepper Sanitation) (consolidated with Deitrick Coal Twp.)
 Other Major or Potential Major Competitors
    11. BFI, Leesport, Berks Co.
    12. Mascaro, Nantocke, Luzerne Co., Reading, Berks Co., Lehigh 
Co.
    13. Republic, Allentown, Lehigh Co. (acquired routes from Waste 
Management Allentown per Justice Department)
    14. Slusser, Hazleton, Luzerne Co.
    15. Carbon Service, Lehighton, Carbon Co.

Disposal/Transfer Facilities

In-County
     Waste Management
    16. BSC transfer station, Pottsville (currently not accepting 
waste)
     Eastern Environmental
    17. Coldren Transfer Station, Port Clinton (Pine Grove Hauling)
    18. Pine Grove Landfill
     Other Major or Potential Major Competitors
    19. Tamaqua Transfer Station
    20. NSLA Transfer Station
    21. CES Landfill, Foster Twp.
Out-of-County
     Waste Management
    22. Deitrick Transfer Station Coal Twp., Northumberland Co.
    23. Transfer Station, New Smithville, Lehigh Co.
    24. Grand Central Landfill, Pen Argyl, Northampton Co.
    25. Dauphin Meadows Landfill, Dauphin Co.
    26. Modern Landfill, York Co.
    27. Pottstown Landfill, Montgomery Co.
    28. G.R.O.W.S. Landfill, Bucks Co.
    29. Tullytown Landfill, Bucks Co.
     Eastern Environmental
    30. Bethlehem Landfill, Northampton, Co.
    31. Alliance Landfill, Lackawanna Co.
     Other Major or Potential Major Competitors
    32. Mascaro Transfer Facility, Lehigh Co.
    33. Keystone Landfill, Lackawanna Co.
    34. Chrin Landfill, Northampton Co.
    35. Pioneer Crossing Landfill (Mascaro), Berks Co.
    36. Conestoga Landfill (BFI), Berks Co.

Impact of Waste Management/Eastern Merger

Number of hauling operations controlled by merger--10 (67%)
    Controlled by others--5 (33%)
Number of disposal facilities controlled by merger--9 (64%)
    Controlled by others--5 (36%)
Number of transfer facilities controlled by merger--4 (57%)
    Controlled by others--3 (43%)
Total controlled by merger--23 (64%)
    Controlled by others--13 (36%)

Mr. Wayne Bowen,
Environmental Coordinator, Office of Solid Waste and Resource 
Management, Schuykill County Courthouse, 401 North Second Street, 
Pottsville, Pennsylvania 17901-2528

Re: Comment on Proposed Final Judgment in United States, State of 
New York, et al. v. Waste Management, Inc., Eastern Environmental 
Services, Inc., No. 98 CV 7168 (JB) (E.D.N.Y., December 31, 1998)

    Dear Mr. Bowen: This letter responds to your letter of April 26, 
1999 commenting on the Final Judgment in the above case. The Amended 
Complaint in the case charged, among other things, that Waste 
Management's acquisition of Eastern Environmental would 
substantially lessen competition in collection or disposal of waste 
in a number of markets throughout the Northeast and in Florida. In 
south central Pennsylvania, the Amended Complaint alleged, the 
merger would substantially reduce competition in the collection of 
commercial waste in the Scranton/Wilkes-Barre market. The proposed 
Final Judgment now pending in federal district court in Brooklyn, 
New York would settle the case with respect to the Scranton/Wilkes-
Barre market by, inter alia, requiring Waste Management to divest 
its front-end loader commercial waste collection routes that service 
Luzerne and Lackawanna counties, which comprise much of the greater 
metropolitan Scranton/Wilkes-Barre PA area. This divestiture, if 
approved by the Court, would establish an independent competitor in 
the market for which relief was sought, and replace the competitive 
rivalry lost when Waste Management acquired Eastern Environmental.
    In your letter, you express concern that neither the Complaint 
in this case nor the proposed Judgment address the competitive 
effects of the merger in Schuylkill County, PA, in which a 
combination of Waste Management and Eastern Environmental would 
dominate municipal and commercial waste collection services, 
controlling over eighty percent of all waste collected. The combined 
firm has already substantially increased its prices for collection 
of municipal waste. We believe that the proposed Judgment, and the 
pending decree in the earlier USA Waste/Waste Management case,\1\ 
may address the competitive issues you have raised.
---------------------------------------------------------------------------

    \1\ United States v. USA Waste Services, Inc., Waste Management, 
Inc., et al., No. 1:98 CV 1616 (N.D. Ohio, filed July 17, 1998). The 
consent decree in the USA Waste case ordered Waste Management to 
divest its commercial waste collection routes that service the City 
of Allentown, and Lehigh and Northampton counties. Those routes were 
divested to Republic Services, Inc., which installed a very large 
independent competitor into the commercial waste collection market 
in the Allentown, PA area.
---------------------------------------------------------------------------

    Schuylkill County is a thinly populated area that abuts and lies 
directly southwest of the Scranton/Wilkes-Barre area. Though the 
county's business and population center, Pottsville, is about 40 
miles from the Scranton/Wilkes-Barre area, it is only about 25 miles 
west of the city of Allentown and Northampton and Lehigh counties in 
Pennsylvania.
    As you point out, the Final Judgment does not require Waste 
Management to divest any of the commercial route operations that it 
acquired from Eastern in Schuylkill County. The Division did not 
seek divestiture relief with respect to that market for several 
reasons. First, the total amount of commercial waste collection 
business that Waste Management assumed through acquiring Eastern was 
small, less than $1 million in annual revenues. Second, Schuylkill 
County abuts several counties in which the Judgment required Waste 
Management to divest route operations. The divestitures of 
commercial waste collection routes mandated by this Judgement and 
the decree in the USA Waste case, once implemented, would establish 
relatively large independent commercial waste haulers in both the 
Scranton/Wilkes-Barre and Allentown areas. Given the proximity of 
these markets to Schuylkill County, rivalry offered by the new 
competitors may be sufficient to discipline any exercise of market 
power in commercial waste collection by the combined Waste 
Management and Eastern. Also, the new commercial waste hauling 
competitors established by these judgments may be capable of 
offering vigorous competition in the collection of the country's 
residential waste, a market not addressed in our complaint or the 
consent decree.\2\
---------------------------------------------------------------------------

    \2\ In general, barriers to entry into the collection of 
residential waste are not as formidable as those that impede entry 
into the collection of commercial waste. For this reason, the 
Division did not challenge the combination's effect on the market 
for collecting the county's residential waste. Of course, entry into 
collection of residential waste could be very difficult in those 
situations in which the area's disposal facilities are controlled by 
a waste collection rival. That is not the case here.
---------------------------------------------------------------------------

    Finally, I should point out that the Judgment and the decree in 
the USA Waste case mandate that Waste Management divest two large 
landfills, Modern and Bethlehem, that you indicate also service the 
Schuylkill County market. The divestitures of these landfills will 
introduce additional competition in the disposal of waste from the 
Schuylkill County area.
    Thank you for bringing your concerns to our attention; we hope 
this information will

[[Page 31645]]

help alleviate them. Pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec. 16(d), a copy of your comment and this 
response will be published in the Federal Register and filed with 
the Court.

        Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

Exhibit 6

April 22, 1999.
J. Robert Kramer, II,
Chief, Litigation II Section, Antitrust Division, U.S. Department of 
Justice, 1401 H Street, NW, Suite 3000, Washington, DC 20530

Re: United States, et al. v. Waste Management, Inc., Ocho 
Acquisition Corp. and Eastern Environmental Services, Inc. Civil No. 
98 CV 7168 (FB)

    Dear Mr. Kramer: Please consider the contents of this letter as 
public comment in response to an invitation for public comment on 
proposed Final Judgment in the above referenced matter which was 
advertised in the Federal Register on February 26, 1998 pursuant to 
the provision of the Antitrust Procedures and Penalties Act, 15 
U.S.C. 16(b)-(h).
    The Monroe County Municipal Waste Management Authority is a 
political subdivision established by Pennsylvania law under the 
Municipal Authorities Act, of 1945. The Authority by agreement with 
the County, and as authorized by ACT 101 is responsible for 
implementing the County's Municipal Waste Management Plan. The 
Authority operates a waste management system highlighted by the 
licensing of all municipal waste haulers within the County, and 
providing individuals, municipalities, and companies reasonable and 
cost effective municipal waste collection and disposal alternatives 
through contracts with disposal and transfer facilities. The ability 
of the Authority to provide this service has been substantially 
impacted by the recent merger of Waste Management Inc. and Eastern 
Environmental Services, Inc. The Authority believes that the 
proposed settlement does not meet the requirements of the Clayton 
Antitrust Act, and is not in the public interest for the following 
reasons.
    Monroe County is located in northeastern Pennsylvania near, and 
in fact adjacent to market areas named in the complaint as being 
adversely affected from a competitive standpoint by the merger. A 
regional map is enclosed with these comments identifying the 
location in Monroe County. In earlier comments, a copy of which is 
enclosed, the Authority identified that the net result of the merger 
would be that one company would control the collection of 
approximately 72% of the County's municipal waste stream, and the 
disposal of approximately 82% of the municipal waste generated 
within the county.
    Remaining haulers within the County are small, independent 
companies which are unable to compete in two important and specific 
areas, commercial waste collection and municipal contracting. 
Furthermore, none of these small independent haulers own disposal 
facilities, and are required to dispose of the waste at facilities 
owned by Waste Management which controls disposal fees, often 
charging independent haulers a higher tipping fee for disposal than 
is charged to its own hauling company.
    The independent haulers do not have the necessary equipment to 
conduct commercial collection effectively, or to transport municipal 
waste loads long distance to obtain competitive tipping rates. Also, 
the small companies cannot compete effectively for large municipal 
contracts. In addition to Waste Management and Eastern, only one 
company has responded to municipal requests for competitive bidding. 
The result of the merger has been, and will be, a substantial 
reduction in competition in those specific areas.
    Since the above merger, it is well documented that Waste 
Management has nearly tripled rates for the commercial collection of 
municipal waste. Copies of relevant information in this regard is 
enclosed. The Authority has been inundated with telephone calls and 
written communications complaining of the new pricing structures.
    The Authority has been urging municipal governments to join 
together to bid waste collection contracts to more effectively 
mandate the municipal waste stream. However, with no competitive 
bidders, those efforts will fail.
    The proposed settlement agreement has already been implemented 
with the requirement that the companies divest certain relevant 
assets. However, these divestitures have had no effect on the 
competitive disadvantages created by the merger in this area.
    Consequently, we feel that the proposed judgment provides no 
relief in this area from the anti-competitive effects of the merger 
of Waste Management and Eastern Environmental, and the public 
interest will not be served by the approval of the consent degree in 
this case.
    We appreciated the opportunity to file written comments. Kindly 
contact the undersigned if we can provide further information, or 
answer any questions.

        Sincerely,
Dean D.W. DeLong,
Executive Director.

    Enclosures to Exhibit 6 letter from Dean D.W. DeLong, Executive 
Director of Municipal Waste Management Authority of Stroudsburg, PA 
was unable to be published in the Federal Register. A copy be 
obtained form the Document Office of the U.S. Department of Justice, 
Antitrust Division, 325 7th Street, N.W., Room 215, Washington, D.C. 
20530 or (202) 514-2481.

Mr. Dean D.W. DeLong,
Executive Director, Monroe County Municipal Waste Management 
Authority, 912 Main Street, Suite 203, Stroudsburg, PA 18360

Re: Comment on Proposed Final Judgment in United States, State of 
New York, et al. v. Waste Management, Inc., Eastern Environmental 
Services, Inc., No. 98 CV 7168 (JB) (E.D.N.Y., December 31, 1998)

    Dear Mr. DeLong: This letter responds to your letter of April 
22, 1999 commenting on the Final Judgment in the above case. The 
Amended Complaint in the case charged, among other things, that 
Waste Management's acquisition of Eastern Environmental would 
substantially lessen competition in collection or disposal of waste 
in a number of markets throughout the Northeast and in Florida. In 
northeastern Pennsylvania, the Amended Complaint alleged, the merger 
would substantially reduce competition in the collection of 
commercial waste in the Scranton/Wilkes-Barre market. The proposed 
Final Judgment now pending in federal district court in Brooklyn, 
New York would settle the case with respect to the Scranton market 
by, inter alia, requiring Waste Management to divest its front-end 
loader commercial waste collection routes that service Luzerne and 
Lackawanna counties, which comprise much of the greater metropolitan 
Scranton/Wilkes-Barre, PA area. This divestiture, if approved by the 
Court, would establish an independent competitor in the market for 
which relief was sought, and replace the competitive rivalry lost 
when Waste Management acquired Eastern Environmental.
    In your letter, you express concern that neither the Complaint 
in this case nor the proposed Judgment address the competitive 
effects of the merger in Monroe County, PA, in which a combination 
of Waste Management and Eastern Environmental would dominate 
municipal and commercial waste collection services, controlling over 
eighty percent of all waste collected. The combined firm has already 
substantially increased its prices for collection of municipal 
waste. We believe that the proposed Judgment, and the pending decree 
in the earlier USA Waste/Waste Management case,\1\ address the 
competitive issues you have raised.
---------------------------------------------------------------------------

    \1\ United States v. USA Waste Services, Inc., Waste Management, 
Inc., et al., No. 1:98 CV 1616 (N.D. Ohio, filed July 17,1998). The 
consent decree in the USA Waste case ordered Waste Management to 
divest its commercial waste collection routes that service the City 
of Allentown, and Lehigh and Northampton counties. Those routes were 
divested to Republic Services, Inc., which installed a large 
independent competitor in the commercial waste collection market in 
the Allentown, PA area.
---------------------------------------------------------------------------

    Monroe county is a thinly populated area that abuts and lies 
directly southeast of the Scranton/Wilkes-Barre area. Its business 
and population center--Stroudsburg--is about 30 miles form the 
Scranton/Wilkes-Barre area and about 25 miles north of the city of 
Allentown and Northampton and Lehigh counties in Pennsylvania.
    The divestitures of commercial waste collection routes mandated 
by this Judgment and the decree in the USA Waste case, once 
implemented, would establish a relatively large independent 
commercial waste hauler in both the Scranton/Wilkes-Barre and 
Allentown areas. Given the proximity of these markets to Monroe 
County, the rivalry offered by the new competitors should be 
sufficient to discipline any exercise of market power by the 
combined Waste Management and Eastern Environmental in the 
collection of commercial waste. The new competitors established by 
these antitrust judgments may also be capable of vigorous 
competition in

[[Page 31646]]

the collection of the county's residential waste, a market not 
addressed in our complaint or the consent decree.\2\
---------------------------------------------------------------------------

    \2\ In general, barriers to entry into the collection of 
residential waste are not as formidable as those that impede entry 
into the collection of commercial waste. For this reason, the 
Division did not challenge the combination's effect on the market 
for collecting the county's residential waste. Of course, as you 
point out, entry into collection of residential waste could be very 
difficult in those situations in which the area's disposal 
facilities are controlled by a waste collection rival. That is not 
the case here. In Monroe County, there is at least one other major 
independent landfill (owned by DeNaples) that accepts significant 
amounts of the county's waste. Moreover, the closest landfill owned 
by Eastern Environmental apparently accepted less than 200 tons of 
waste annually from Monroe County, and hence did not compete 
directly against the Waste Management landfill.
---------------------------------------------------------------------------

    In addition, the next two largest waste haulers in Monroe County 
following Waste Management's acquisition of Eastern would be Hopkins 
and Muscaro, each of which is about the same size as Eastern in 
Monroe County. Thus, after the merger, there may be as many as four 
other competitors in the market--Hopkins, Muscaro, and the two 
decree firms--capable of competing as vigorously as Eastern prior to 
its acquisition by Waste Management.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your 
comment and this response will be published in the Federal Register 
and filed with the Court.

        Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

Exhibit 7

    Exhibit 7 letter with attachments from Peter Anderson of Recycle 
Worlds Consulting of Madison, WI dated April 27, 1999 was unable to 
be published in the Federal Register. A copy can be obtained from 
the Document Office of the U.S. Department of Justice, Antitrust 
Division, 325 7th Street, NW, Room 215, Washington, DC 20530 or 
(202) 514-2481.

May 20, 1999.
Mr. Peter Anderson,
President, RecycleWorlds Consulting Corp., 4513 Vernon Blvd., Suite 
15, Madison, Wisconsin 53705-4964

Re: Comment on Proposed Final Judgment in United States, State of 
New York, et al. v. Waste Management, Inc., Eastern Environmental 
Services, Inc., No. 98 CV 7168(JB) (E.D.N.Y., December 31, 1998)

    Dear Mr. Anderson: This letter responds to your April 27, 1999 
comment on the proposal Final Judgment in the above case. The 
Amended Complaint charged, among other things, that Waste 
Management's acquisition of Eastern Environmental would 
substantially lessen competition in collection or disposal of 
municipal solid waste in 12 markets in New York, Pennsylvania, and 
Florida. The proposed consent decree, now pending in Federal 
district court in Brooklyn, New York, would settle the case by 
requiring the defendants to divest a number of waste collection 
routes and waste disposal facilities in the markets alleged in the 
Complaint.\1\ This relief, if approved by the Court, would establish 
one or more new competitors in each of the markets for which relief 
was sought, replacing the competitive rivalry lost when Waste 
Management acquired Eastern Environmental.
---------------------------------------------------------------------------

    \1\ The markets alleged in the Amended Compliant, and for which 
divestiture relief was obtained in the Final Judgment, include the 
disposal of municipal solid waste in the Pittsburgh, Carlisle-
Chambersburg, and Bethlehem, PA areas, and in New York City, NY 
(commercial and residential); and collection of commercial waste in 
the Carlisle-Chambersburg, Bethlehem, and Scranton, PA; suburban 
Tampa (Hillsborough Co.) and Miami/FT. Lauderdale, FL (Dade and 
Broward counties) areas.
---------------------------------------------------------------------------

    In a transaction approved by the United States and the State of 
New York, Waste Management divested to Republic Services, Inc. the 
rights to Eastern's proposal to dispose of New York City's 
residential waste in early January 1999, See Judgment section IV(B), 
On April 20, 1999, the United States, however, rejected Waste 
Management's proposal to sell the other waste collection and 
disposal assets under this decree to Allied Waste Industries, Inc. 
(``Allied''). Such a sale, we concluded, would raise serious 
competitive concerns in waste collection or disposal, or both, in 
virtually all of the markets for which the Judgment has ordered 
relief.\2\ Of course, if Waste Management has not divested these 
assets to an acceptable purchaser within five days after entry of 
the Judgment, the United States will promptly seek, and the Court 
will likely appoint, a trustee to complete the sale. See Judgment 
sections V(A) and (B) and Hold Separate Stipulation and Order, 
section IV(F).
---------------------------------------------------------------------------

    \2\ In early March 1999, Allied announced that it had agreed to 
acquire Browning-Ferris Industries, Inc., for $7.5 billion. Allied 
is the Nation's fourth largest waste collection and disposal firm; 
BFI is the Nation's second largest waste firm. That combination 
would, by itself, raise serious competition concerns in a number of 
waste disposal and collection markets throughout the country. 
Selling the assets under the decree to a combination of Allied/BFI 
would result in a significant reduction in actual and potential 
competition in waste disposal services thought the Northeast--a 
regional market including major cities along the Eastern seaboard, 
such as New York, Boston, Philadelphia, Baltimore and Washington--as 
well as a reduction in localized competition for waste disposal 
services in the Pittsburgh, PA area, and for commercial waste 
collection services in the Miami/Ft. Lauderdale, FL area, and 
potentially in the Carlisle-Chambersburg, PA area.
---------------------------------------------------------------------------

    In your comment, you assert that the diversitures ordered by 
this Judgment do not go far enough to eliminate the competitive 
problems in the Nation's waste industry. To be sure, the decree in 
this case and in other recent Government antitrust cases (e.g., 
United States v. USA Waste, Inc., Waste Management, Inc., No. 1:98 
1616 (N.D. Ohio, filed July 21, 1998)) have not prevented the wave 
of consolidations, currently sweeping through this industry. Indeed, 
several recent mega mergers have significantly reduced the number of 
major competitors, and that has perhaps made several waste markets 
and more susceptible to collusive post-merger price increases. To 
cure these competitive problems, you propose a fairly ``dramatic 
remedy,'' i.e., require that Waste Management divest all of its 
waste disposal or collection operations in markets where there are 
substantial competitive overlaps between its operations and those of 
Eastern. If this not not done, then you propose that we ensure that 
the assets divested under the Judgment are not sold to a large 
integrated national waste firm, but to a municipal agency or a small 
stand-along independent--entities that, in your view, may have a 
greater incentive to vigorously compete against defendants' 
operations.
    We do not believe that requiring Waste Management to divest all 
of its waste collection or disposal operations in any market in 
which its operations overlap with Eastern's would produce a more 
procompetitive result than the relief currently in the Judgment. 
Indeed, pursuing your proposal would permit Waste Management to 
acquire the lion's share of any number of waste collection or 
disposal markets, since, in effect, you propose that if Waste 
Management agrees to abandon one line of business, it would be free 
to monopolize the other.
    We do, however, agree with your conclusion that Waste 
Management's divestiture of the decree assets to a firm such as 
Allied/BFI is undesirable because it would significantly reduce 
competition and enhance opportunities for cooperative post-merger 
price increases. We have so informed Waste Management, and we are 
prepared to have management and sale to these crucial waste assets 
transferred to a trustee, if Waste Management does not promptly 
divest these operations to a purchases acceptable to the United 
States.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your 
comment and this response will be published in the Federal Register 
and filed with the Court.

        Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

Certificate of Service

    I certify that on May 20, 1999, I caused a copy of the foregoing 
United States's Certificate of Compliance with Provisions of the 
Antitrust Procedures and Penalties Act to be served on the parties in 
this case by mailing the pleading first-class, postage prepaid, to

[[Page 31647]]

a duly-authorized legal representative of each of the parties, as 
follows:

Jonathan L. Greenblatt, Esquire,
Steven C. Sunshine, Esquire,
Michael Strub, Jr., Esquire,
Shearman & Sterling, 801 Pennsylvania Avenue, NW, Washington, D.C. 
20004-2604.

James R. Weiss, Esquire,
Preston Gates Ellis & Rouvelas Meeds LLP, 1735 New York Avenue, NW, 
Washington, DC 20006-8425.

Counsel for Defendants Waste Management, Inc. and Ocho Acquisition 
Corp.

Neal R. Stoll, Esquire,
Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, NY 
10022-3897.

Counsel for Defendant Eastern Environmental Services, Inc.

Richard E. Grimm,
Kay Taylor,
Assistant Attorneys General, Antitrust Bureau, Office of the Attorney 
General, State of New York, 120 Broadway, Suite 26-01, New York, NY 
10271.

Counsel for Plaintiff State of New York

James A. Donahue, III,
Chief Deputy Attorney General,

Benjamin L. Cox,
Deputy Attorney General, 14th Floor, Strawberry Square, Harrisburg, PA 
17120.

Counsel for Plaintiff Commonwealth of Pennsylvania

Lizabeth A. Leeds,
Douglas L. Kilby,
Assistant Attorneys General, Antitrust Section, PL-01, The Capitol, 
Tallahassee, FL 32399-1050

Counsel for Plaintiff State of Florida

Anthony E. Harris, Esq. AH 5876,
U.S. Department of Justice, Antitrust Division, 1401 H Street, NW, 
Suite 3000, Washington, DC 20530, (202) 307-6583.
[FR Doc. 99-14469 Filed 6-10-99; 8:45 am]
BILLING CODE 4410-11-M