[Federal Register Volume 65, Number 251 (Friday, December 29, 2000)]
[Notices]
[Pages 83038-83039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-33258]


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FEDERAL TRADE COMMISSION

[File No. 981 0237]


FMC Corporation; and Asahi Chemical Industry Co. Ltd.; Analysis 
To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION:  Proposed consent agreements.

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SUMMARY: The consent agreements in these two matters settle alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaints that accompany the consent agreements and the terms of the 
consent orders--embodied in the consent agreements--that would settle 
these allegations.

DATES: Comments must be received on or before January 22, 2001.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Michael Antalics, FTC/H-374, 600 
Pennsylvania Ave., NW., Washington, DC 20580. (202) 326-2821.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and section 2.34 of 
the Commission's Rules of Practice (167 CFR 2.34), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for December 21, 200), on the World Wide Web, at ``http://www.ft.gov/
os/2000/12/index.htm.'' A paper copy can be obtained from the FTC 
Public Reference Room, Room H-130, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Ave., NW., 
Washington, DC 20580. Two paper copies of each comment should be filed, 
and should be accompanied, if possible, by a 3\1/2\ inch diskette 
containing an electronic copy of the comment. Such comments or views 
will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Analysis of Proposed Consent Orders To Aid Public Comment

    The Federal Trade Commission has accepted agreements to proposed 
consent orders from FMC Corporation (``FMC'') and from Asahi Chemical 
Industry Co. Ltd. (``Asahi Chemical''). FMC has it principal place of 
business in Chicago, Illinois. Asahi Chemical has its principal place 
of business in Tokyo, Japan.
    The proposed consent orders have been placed on the public record 
for thirty (30) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreements and the comments received, and decide whether it should 
withdraw from the agreements or make final the agreements' proposed 
orders.
    The Commission's multi-count complaint charges that FMC and Asahi 
Chemical (collectively referred to as ``respondents'') have violated 
Section 5 of the Federal Trade Commission Act by conspiring to 
monopolize the world market for microcrystalline cellulose, and by 
agreeing to divide territories for the sale of microcrystalline 
cellulose. In addition, FMC is charged with attempting to monopolize 
the relevant market and with inviting a competitor to collude.
    According to the complaint, microcrystalline cellulose (``MCC'') is 
derived from purified wood cellulose and is used primarily as a binder 
in the manufacture of pharmaceutical tablets. MCC is a component of 
nearly all pharmaceutical tablets sold in the United States today. 
During the term of the conspiracy, FMC was the largest manufacturer and 
seller of MCC in the world. Asahi Chemical was the second largest 
seller of MCC in the world, and the dominant supplier of MCC in Japan.
    The complaint alleges that, for over a decade, FMC engaged in a 
course of conduct designed to neutralize or eliminate competing sellers 
of MCC and to secure monopoly power. In or about 1984, FMC entered into 
a conspiracy with Asahi Chemical to divide territories. FMC agreed that 
it would not sell any MCC product to customers located in Japan or East 
Asia without the consent of Asahi Chemical. In return, Asahi Chemical 
agreed that it would not sell any MCC product to customers located in 
North America or Europe without the consent of FMC.
    In addition, the complaint alleges that FMC invited three smaller 
producers of MCC to join with FMCC in collusive and anticompetitive 
conduct. The three firms solicited by FMC were Ming Tai Chemical Co., 
Ltd. (``Ming Tai''), Wei Ming Pharmaceutical Mfg. Co., Ltd. (``Wei 
Ming''), and the Mendell division of Penwest, Ltd. (``Mendell'').
    According to the complaint, in 1994 Ming Tai and Wei Ming emerged 
as significant suppliers of MCC to portions of the Asian MCC market. 
FMC was concerned that these Taiwan-based manufacturers would next 
compete for FMC's MCC accounts in North America and Europe. In or about 
January 1995, FMC proposed to Ming Tai that it grant FMC the exclusive 
right to distribute all MCC exported from Taiwan by Ming Tai. Also in 
or about January 1995, FMC proposed to Wei Ming that it sell MCC to FMC 
on an exclusive basis. In seeking these arrangements, FMC's intent was 
to exclude competition from the Taiwanese manufacturers and thereby 
secure monopoly power. Neither Ming Tai nor Wei Ming accepted FMC'c 
invitation.
    The compliant further alleges that, in 1995, Mendell posed a 
competitive threat to FMC's position as the dominant seller of MCC to 
pharmaceutical manufacturers in North America and Europe. Mendell had

[[Page 83039]]

recently opened an MCC manufacturing facility in the United States, and 
was actively seeking to expand its sales. In April 1995, FMC proposed 
to Mendell that the two firms enter into a market division agreement. 
Mendell did not accept FMC's invitation.\1\
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    \1\ FMC's efforts to recruit Ming Tai, Wei Ming, and Mendell to 
enter into anticompetitive arrangements, as alleged in the 
complaint, support the attempted monopolization claim. See Complaint 
para. 22. FMC's invitation to Mendell was the most patently 
anticompetitive of the three, and is the basis for an independent 
cause of action. See Complaint para. 23.
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    FMC and Asahi Chemical have signed consent agreements containing 
the proposed consent orders. The proposed consent orders would prohibit 
FMC and Asahi Chemical from:

    (i) Agreeing with competitors to divide or allocate markets, 
customers, contracts, or geographic territories in connection with 
the sale of MCC, or (ii) agreeing with competitors to refrain in 
whole or in part from producing, selling, or marketing MCC. The 
respondents would also be barred from inviting or soliciting such 
agreements not to compete.

    Further, in order to eradicate the anticompetitive effects of the 
alleged conspiracy, FMC is barred from serving as the U.S. distributor 
for any competing manufacturer of MCC (including Asahi Chemical) for a 
period of ten years. Further, for a period of five years, FMC may not 
distribute in the United States any other excipient manufactured by 
Asahi Chemical.\2\
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    \2\ An excipient is an inactive ingredient used in the 
manufacture of pharmaceutical products.
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    The proposed consent orders contain several limited exemptions to 
the above-described provisions intended to permit FMC and Asahi 
Chemical to engage in certain lawful and pro-competitive conduct. For 
example, notwithstanding the broad prohibition on agreeing to divide 
markets, each respondent would be permitted to enter into exclusive 
trademark license agreements, to enforce its intellectual property 
rights, and to abide by reasonable restraints ancillary to lawful joint 
venture agreements. In any action by the Commission alleging violations 
of the consent order, each respondent would bear the burden of proof in 
demonstrating that its conduct satisfied the conditions of the 
exemption.
    The proposed consent orders contain provisions to assist the 
Commission in monitoring the respondents' compliance with the orders. 
FMC would be required to retain copies of written communications with 
competing MCC manufacturers, and upon request, to make such documents 
available to the Commission. Asahi Chemical would be required to 
produce to the Commission all documents reasonably necessary for the 
purpose of determining or securing compliance with the consent order, 
without regard to whether the documents are located in the United 
States or in another jurisdiction.
    The purpose of this analysis is to facilitate public comment on the 
proposed orders, and it is not intended to constitute an official 
interpretation of the agreements and proposed orders or to modify in 
any way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 00-33258 Filed 12-28-00; 8:45 am]
BILLING CODE 6750-01-M