[Federal Register Volume 68, Number 242 (Wednesday, December 17, 2003)]
[Notices]
[Pages 70295-70303]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-31053]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States and the State of Florida v. Waste Management, Inc., 
and Allied Waste Industries, Inc.; Complaint, Proposed Final Judgment 
and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a Complaint, proposed Final 
Judgment, Hold Separate Stipulation and Order, and Competitive Impact 
Statement were filed with the U.S. District Court for the District of 
Columbia in United States and State of Florida v. Waste Management, 
Inc., and Allied Waste Industries, Inc., Civ. Action No. 1:03CV02076. 
On October 14, 2003, the United States and the State of Florida filed a 
Complaint, which sought to enjoin Waste Management, Inc. (``Waste 
Management'') from acquiring certain small container commercial hauling 
assets in Broward County, Florida from Allied Waste Industries, Inc. 
(``Allied''). The Complaint alleged that Waste Management's acquisition 
of these small container commercial hauling assets from Allied would 
substantially lessen competition resulting in higher prices for small 
container commercial hauling services in Broward County, Florida in 
violation of the Clayton Act, as amended, 15 U.S.C. 18. The proposed 
Final Judgment, also filed on October 14, 2003, requires defendants to 
divest contracts and accounts on selected Allied small container 
commercial hauling routes, to preserve competition in the provision of 
small container commercial hauling services. A Competitive Impact 
Statement filed by the United States describes the Complaint, the 
proposed Final Judgment, and the remedies available to

[[Page 70296]]

private litigants who may have been injured by the alleged violations.
    Copies of the Complaint, proposed Final Judgment, Hold Separate 
Stipulation and Order, and Competitive Impact Statement are available 
for inspection at the U.S. Department of Justice, Antitrust Division, 
325 Seventh Street, NW., Suite 215, Washington, DC 20530 (telephone: 
202-514-2481), and at the Clerk's Office of the United States District 
Court for the District of Columbia, Washington, DC. Copies of these 
materials may be obtained upon request and payment of a copying fee.
    Public comment is invited within the statutory 60-day comment 
period. Such comments and responses thereto will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, 
U.S. Department of Justice, 1401 H Street, NW., Suite 3000, Washington, 
DC 20530 (telephone: 202-307-0924).

Dorothy B. Fountain,
Deputy Director of Operations, Antitrust Division.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    In the matter of: UNITED STATES OF AMERICA, Department of 
Justice, Antitrust Division, 1401 H Street, NW, Suite 3000, 
Washington, DC 20530, and STATE OF FLORIDA, Office of the Attorney 
General, Plaza 1--The Capitol, Tallahassee, Florida 32399-1050, 
Plaintiffs, v. WASTE MANAGEMENT, INC., 1001 Fannin Street, Suite 
4000 Houston, Texas 7702, and ALLIED WASTE INDUSTRIES, INC., 15880 
Greenway-Hayden Loop, Suite 100, Scottsdale, Arizona 85260, 
Defendants.
    Case No. 1:03CV02076
    JUDGE: James Robertson
    DECK TYPE: ANTITRUST
    DATE STAMP: October 14, 2003

Complaint for Injunctive Relief

    Plaintiff United States of America (``United States''), acting 
under the direction of the Attorney General of the United States, 
and Plaintiff State of Florida (``Florida''), acting under the 
direction of its Attorney General, bring this civil antitrust action 
to enjoin the acquisition by Defendant Waste Management, Inc. 
(``Waste Management'') of certain commercial waste collection and 
hauling assets (hereinafter referred to as ``small container 
commercial hauling assets'') from Defendant Allied Waste Industries, 
Inc. (``Allied'') and to obtain equitable and other relief as is 
appropriate. Plaintiffs complain and allege as follows:
    1. Pursuant to an asset purchase agreement and a stock 
agreement, both dated August 15, 2003, Waste Management plans to 
acquire from Allied certain small container commercial hauling 
assets. The proposed transaction would lessen competition 
substantially as a result of Waste Management's acquisition of small 
container commercial hauling assets in Broward County, Florida.
    2. Defendants Waste Management and Allied are two of only three 
significant providers of small container commercial hauling services 
in Broward County. Unless the acquisition is enjoined, consumers of 
small container commercial hauling services in Broward County will 
likely pay higher prices and receive fewer services as a consequence 
of the elimination of the vigorous competition between Waste 
Management and Allied.

I. Jurisdiction and Venue

    3. The United State brings this action under section 15 of the 
Clayton Act, 15 U.S.C. 25, to prevent and restrain the violation by 
Defendants of section 7 of the Clayton Act, 15 U.S.C. 18. Florida 
brings this action under Section 16 of the Clayton Act, 15 U.S.C. 
26, to prevent and restrain the violation by Defendants of Section 7 
of the Clayton Act, 15 U.S.C. 18.
    4. Defendants Waste Management and Allied are located in and 
transact business in the District of Columbia. Venue is therefore 
proper in this District under Section 12 of the Clayton Act, 15 
U.S.C. 22 and 28 U.S.C. 1391(c).
    5. Defendants Waste Management and Allied collect municipal 
solid waste from residential, commercial, and industrial customers. 
In their waste collection businesses, Waste Management and Allied 
make sales and purchases in interstate commerce, ship waste in the 
flow of interstate commerce, and engage in activities that 
substantially affect interstate commerce. The Court has jurisdiction 
over this action and over the parties pursuant to 15 U.S.C. 22 and 
28 U.S.C. 1331 and 1337.

II. Definitions

    6. ``Broward County'' means Broward County, Florida.
    7. ``MSW'' means municipal solid waste, a term of art used to 
describe solid putrescible waste generated by households and 
commercial establishments such as retail stores, offices, 
restaurants, warehouses, and non-manufacturing activities in 
industrial facilities. MSW does not include special handling waste 
(e.g., waste from manufacturing processes, regulated medical waste, 
sewage, and sludge), hazardous waste, or waste generated by 
construction or demolition sites.
    8. ``Small container hauling'' means the business of collection 
MSW from commercial and industrial accounts, usually in 
``dumpsters'' (i.e., a small container with one to ten cubic yards 
of storage capacity), and transporting or ``hauling'' such waste to 
a disposal site by use of a front-end or rear-end load truck. 
Typical commercial waste collection customers include office and 
apartment buildings and retail establishments (e.g., stores and 
restaurants). Small container commercial hauling, as used herein, 
does not include collection of roll-off containers.

III. Defendants and the Transaction

    9. Waste Management is a Delaware corporation with its principal 
office in Houston, Texas. Waste Management is the nation's largest 
waste hauling company. It is engaged in providing waste collection 
and disposal services throughout the United States. In 2002, Waste 
Management reported total revenues of approximately $11.1 billion.
    10. Allied is a Delaware corporation with its principal office 
in Scottsdale, Arizona. Allied is the nation's second largest waste 
hauling company. It is engaged in providing waste collection and 
disposal services throughout the United States. In 2002, Allied 
reported total revenues of approximately $5.5 billion.
    11. On August 15, 2003, Defendants Waste Management and Allied 
entered into an asset purchase agreement and a stock purchase 
agreement purchase to which Waste Management would acquire from 
Allied, inter alia, small container commercial hauling assets in 
Broward County, Florida.

IV. Trade and Commerce

A. The Relevant Service Market

    12. Waste collection firms, or haulers, collect MSW from 
residential, commercial, and industrial establishments and transport 
the waste to a disposal site, such as a transfer station, landfill, 
or incinerator, for processing and disposal. Private waste haulers 
typically contract directly with customers for the collection of 
waste generated by commercial accounts. MSW generated by residential 
customers, on the other hand, is often collected either by local 
governments or by private haulers pursuant to contracts bid by, or 
franchises granted by, municipal authorities.
    13. Small container commercial hauling differs in many important 
respects from the collection of residential or other types of waste. 
An individual commercial customer typically generates substantially 
more MSW than a residential customer. To handle this high volume of 
MSW efficiently, haulers provide commercial customers with dumpsters 
for storing the waste. Haulers organize their commercial accounts 
into routes, and collect and transport the MSW generated by these 
accounts in vehicles uniquely well suited for commercial waste 
collection--primarily front-end load trucks. Less frequently, 
haulers may use more maneuverable, but less efficient, rear-end load 
trucks, especially in those areas in which a collection route 
includes narrow alleyways or streets. Front-end load trucks are 
unable to navigate narrow passageways easily and cannot efficiently 
collect the waste located in them.
    14. On a typical small container commercial hauling route, an 
operator drives a front-end load truck to the customer's container, 
engages a mechanism that grasps and lifts the container over the 
front of the truck, and empties the container into the vehicle's 
storage section where the waste is compacted and stored. The 
operator continues along the route, collecting MSW from each of the 
commercial accounts, until the vehicle is full. The operator then 
drives the front-end load truck to a disposal facility, such as a 
transfer station, landfill, or incinerator, and empties the contents 
of the vehicle. Often, the operator returns to the route and repeats 
the process.
    15. In contrast to a commercial collection route, a residential 
waste collection route is

[[Page 70297]]

significantly more labor intensive. The customer's MSW is stored in 
much smaller containers (e.g., garbage bags or trash cans) and 
instead of front-end load trucks, waste collection firms routinely 
use rear-end load or side-load trucks manned by larger crews 
(usually, two-person or three-person teams). On residential routes, 
crew generally hand-load the customer's MSW, typically by tossing 
garbage bags and emptying trash cans into the vehicle's storage 
section. Because of the differences in the collection processes, 
residential customers and commercial customers usually are organized 
into separate routes. Likewise, other types of collection 
activities, such as the use of roll-off containers (typically used 
for construction debris) and the collection of liquid or hazardous 
waste, are rarely combined with commercial waste collection. This 
separation of routes is due to differences in the hauling equipment 
required, the volume of waste collected, health and safety concerns, 
and the ultimate disposal option used.
    16. The differences in the types and volume of MSW collected and 
in the equipment used in collection services distinguish small 
container commercial hauling from all other types of waste 
collection activities. These differences mean that small container 
commercial building firms can profitably increase their charges for 
small container commercial hauling services without losing 
significant sales or revenues to firms engaged in the provision of 
other types of waste collection services. Thus, small container 
commercial hauling is a line of commerce, or relevant service, for 
purposes of analyzing the effects of the acquisition under Section 7 
of the Clayton Act.

B. The Relevant Geographic Market

    17. Small container commercial hauling services are generally 
provided in highly localized areas because to operate efficiently 
and profitably, a hauler must have sufficient density in its 
commercial waste collection operations (i.e., a large number of 
commercial accounts that are reasonably close together). In 
addition, a front-end load or rear-end load vehicle cannot be 
efficiently driven long distances without collecting significant 
amounts of MSW, which makes it economically impractical for a small 
container commercial hauling firm to service metropolitan areas from 
a distant base. Haulers, therefore, generally establish garages and 
related facilities within each major local area served.
    18. Generally, haulers compete for small container commercial 
hauling customers in ``open'' competition or through competition for 
municipal franchises. In open competition work, a hauler competes 
for individual customers, whereas in franchise work, the hauler is 
awarded a municipal contract that permits the hauler to provide 
service to all of the small container commercial customers in that 
municipality. The municipality decides whether it will grant a 
franchise or allow haulers to compete for customers in open 
competition.
    19. Local small container commercial hauling firms in Broward 
County can profitably increase prices to customers in the open areas 
of Broward County--that is, those not covered by a municipal 
franchise--without losing sales to a municipal franchise, or to more 
distant competitors. The open areas of Broward County is a section 
of the county, or relevant geographic market, for purposes of 
analyzing the effects of the acquisition under Section 7 of the 
Clayton Act.

C. Reduction in Competition as a Consequence of the Acquisition

    20. Defendants Waste Management and Allied directly compete to 
provide small container commercial hauling services for open 
competition in open areas of Broward County, Florida. Waste 
Management and Allied each account for a substantial share of total 
revenues from commercial waste collection services in Broward 
County.
    21. The proposed acquisition would reduce from three to two the 
number of significant firms that compete to provide small container 
commercial hauling services in open areas of Broward County, 
Florida. After the acquisition, Waste Management would control over 
68 percent of total market revenues, which exceed $40 million 
annually. Using a standard measure of market concentration called 
the ``HHI'' (defined and explained in Appendix A), the post-merger 
HHI for small container commercial hauling would be approximately 
5490, an increase of 2063 points over the pre-merger HHI of 3428.

D. Entry Into Commercial Waste Collection of MSW

    22. Significant new entry into small container commercial 
hauling business is difficult and time-consuming. A new entrant into 
small container commercial hauling cannot provide a significant 
competitive constraint on the prices charged by market incumbents 
until it achieves minimum efficient scale and operating efficiencies 
comparable to existing firms. In order to obtain a comparable 
operating efficiency, a new firm must achieve route density similar 
to existing firms. However, an incumbent's use of price 
discrimination and long-term contracts prevents new entrants from 
winning a large enough base of customers to achieve efficient routes 
in sufficient time to constrain the post-acquisition firm from 
significantly raising prices. Differences in the service provided by 
an incumbent hauler to each customer permit the incumbent to meet 
competition easily from new entrants by pricing its services lower 
to any individual customer that wants to switch to the new entrant. 
An incumbent's use of three-to-five year contracts, which may 
contain large liquidated damage provisions for contract termination, 
automatically renew, or permit specified price increases, make it 
more difficult for a customer to switch to a new hauler and obtain 
lower prices for its collection service. These contracts increase 
the cost and time required by an entrant to form an efficient route, 
reducing the likelihood that the entrant will ultimately be 
successful.

E. Harm to Competition

    23. The acquisition of Allied's small container commercial 
hauling assets by Waste Management would remove a significant 
competitor in the small container commercial hauling business in a 
market that is already highly concentrated and difficult to enter. 
In this market, the resulting substantial increase in concentration, 
loss of competition, and absence of any reasonable prospect of 
significant new entry or expansion by market incumbents likely will 
result in higher prices for small container commercial hauling 
services.

V. Violation Alleged

    24. Waste Management's proposed acquisition of Allied's small 
container commercial hauling assets in Broward County, Florida will 
lessen competition substantially and tend to create a monopoly in 
interstate trade and commerce in violation of Section 7 of the 
Clayton Act.
    25. The transaction likely will have the following effects, 
among others:
    a. Competition for small container commercial hauling services 
in open areas of Broward County, Florida will be lessened 
substantially; and
    b. Prices charged by small container commercial hauling firms in 
open areas of Broward County, Florida will likely increase.

VI. Requested Relief

    Plaintiffs request:
    1. That Waste Management's proposed acquisition of Allied's 
small container commercial hauling assets in Broward County, Florida 
be adjudged and decreed to be unlawful and in violation of Section 7 
of the Clayton Act;
    2. That Defendants be permanently enjoined from carrying out the 
acquisition of small container commercial hauling assets in the 
asset purchase and stock purchase agreements dated August 15, 2003, 
or from entering into or carrying out any agreement, understanding, 
or plan, the effect of which would be to exchange those assets 
between the Defendants;
    3. That Plaintiffs receive such other and further relief as the 
case requires and the Court deems proper; and
    4. That Plaintiffs recover the costs of this action.
    Dated: October 14, 2003.
Respectfully submitted,

FOR PLAINTIFF UNITED STATES:
/s/----------

R. Hewitt Pate

Assistant Attorney General.

/s/----------

J. Bruce McDonald

Deputy Assistant Attorney General.

/s/----------

Dorothy B. Fountain

Deputy Director of Operations.

/s/----------

Maribeth Petrizzi

Chief Litigation II Section.
/s/----------
Paul A. Moore III
Maryland Bar.

Karen Y. Douglas

Trial Attorneys, United States Department of Justice, Antitrust 
Division, Litigation II

[[Page 70298]]

Section, 1401 H Street, N.W., Suite 3000, Washington, D.C. 20530, 
(202) 307-0924.

FOR PLAINTIFF STATE OF FLORIDA:

CHARLES J. CRIST, Jr.

Attorney General.

By:
/s/----------

L. CLAYTON ROBERTS

Executive Deputy Attorney General.

PATRICIA A. CONNERS

Director, Antitrust Division

LIZABETH A. LEEDS

Senior Assistant Attorney General
Florida Bar No. 0457991
NICHOLAS J. WEILHAMMER

Assistant Attorney General, Office of the Attorney General, 
Antitrust Division, PL-01, The Capitol, Tallahassee, Florida 32399-
1050, Phone: (850) 414-3600, Fax: (850) 488-9134.

Appendix A--Herfindahl-Hirschman Index Calculations

    ``HHI'' means the Herfindahl-Hirschman Index, a commonly 
accepted measure of market concentration. It is calculated by 
squaring the market share of each firm competing in the market and 
then summing the resulting numbers. For example, for a market 
consisting of four firms with shares of thirty, thirty, twenty, and 
twenty percent, the HHI is 2600 (30\2\ + 30\2\ +20\2\ + 20\2\ = 
2600). The HHI takes into account the relative size and distribution 
of the firms in a market and approaches zero when a market consists 
of a large number of firms of relatively equal size. The HHI 
increases both as the number of firms in the market decreases and as 
the disparity in size between those firms increases.
    Markets in which the HHI is between 1000 and 1800 points are 
considered to be moderately concentrated, and those in which the HHI 
is in excess of 1800 points are considered to be highly 
concentrated. Transactions that increase the HHI by more than 100 
points in highly concentrated markets presumptively raise antitrust 
concerns under the Horizontal Merger Guidelines issued by the U.S. 
Department of Justice and the Federal Trade Commission. See Merger 
Guidelines Sec.  1.51.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, and STATE OF FLORIDA, Plaintiffs, v. 
WASTE MANAGEMENT, INC., and ALLIED WASTE INDUSTRIES, INC., 
Defendants.
    Civil No: 1:03CV02076.
    JUDGE: James Robertson.
    DECK TYPE: Antitrust.
    FILED: October 14, 2003.

Final Judgment

    Whereas, Plaintiffs, the United States of America (``United 
States'') and the State of Florida (``Florida''), filed their 
Complaint on October 14, 2003, and Plaintiffs and Defendants, Waste 
Management, Inc. (``Waste Management'') and Allied Waste Industries, 
Inc. (``Allied''), by their respective attorneys, have consented to 
the entry of this Final Judgment without trial or adjudication of 
any issue of fact or law, and without this Final Judgment 
constituting any evidence against or admission by any party 
regarding any issue of fact or law;
    And whereas, Defendants agree to be bound by the provisions of 
this Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt 
and certain divestiture of certain assets by Defendant Waste 
Management to ensure that competition is not substantially lessened;
    And whereas, Plaintiffs require Defendant Waste Management to 
make certain divestitures in order to remedy the loss of competition 
alleged in the Complaint;
    And whereas, Defendants have represented to Plaintiffs that the 
divestitures required below can and will be made and that Defendants 
will later raise no claims of hardship or difficulty as grounds for 
asking the Court to modify any of the divestitures or other 
injunctive provisions contained below;
    And whereas, Defendant Waste Management shall be enjoined from 
acquiring the assets to be divested, except as provided in this 
Final Judgment;
    Now, therefore, before any testimony is taken, and without trial 
or adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged, and decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and each 
of the parties to this action. The Complaint states a claim upon 
which relief may be granted against Defendants under Section 7 of 
the Clayton Act, as amended, 15 U.S.C. 18.

II. Definitions

    As used in this Final Judgment:
    A. Acquirer means the entity or entities to whom Waste 
Management divests the Relevant Hauling Assets.
    B. Allied means Defendant Allied Waste Industries, Inc., a 
Delaware corporation with its headquarters in Scottsdale, Arizona, 
its successors and assigns, and its subsidiaries, division, groups, 
affiliates, partnerships, joint ventures, and their directors, 
officers, managers, agents, and employees.
    C. MSW means municipal solid waste, a term of art used to 
describe solid putrescible waste generated by households and 
commercial establishments such as retail stores, offices, 
restaurants, warehouses, and non-manufacturing activities in 
industrial facilities. MSW does not include special handling waste 
(e.g., waste from manufacturing processes, regulated medical waste, 
sewage, and sludge), hazardous waste, or waste generated by 
construction or demolition sites.
    D. Relevant Hauling Assets means Allied's small container 
commercial hauling routes 501, 901, 902, 903, 904, 906, 907, 909, 
912, 914, and 915 that operate out of Allied's Broward County, 
Florida division located at 2380 College Avenue, Davie, Florida 
33317 including:
    (1) All tangible assets, including capital equipment, trucks and 
other vehicles, containers, interests, supplies, and if requested by 
the purchaser, real property and improvements to real property 
(i.e., buildings and garages);
    (2) All intangible assets, including hauling-related customer 
lists, leasehold interests, permits, and contracts and accounts 
related to each small container commercial hauling route, and any 
contract or account serviced in whole or in part on any of the 
routes listed above; and
    (3) Relevant Hauling Assets does not include accounts and 
contracts serviced in unincorporated Broward County, accounts 
serviced through a franchise agreement, and accounts and contracts 
serviced in the City of Margate.
    E. Small container commercial hauling means the business of 
collecting MSW from commercial and industrial accounts, usually in 
``dumpsters'' (i.e., a small container with one to ten cubic yards 
of storage capacity), and transporting or ``hauling'' such waste to 
a disposal site by use of a front- or rear-end loader truck. Typical 
small container commercial hauling customers include office and 
apartment buildings and retail establishments (e.g., stores and 
restaurants). Small container commercial hauling, as used herein, 
does not include collection of roll-off containers.
    F. Waste Management means Defendant Waste Management, Inc., a 
Delaware corporation with its headquarter in Houston, Texas, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, joint ventures, and their directors, 
officers, managers, agents, and employees.

III. Applicability

    A. This Final Judgment applies to Waste Management and Allied, 
as defined above, and all other persons in active concert or 
participation with any of them who receive actual notice of this 
Final Judgment by personal service or otherwise.
    B. Defendants shall require, as a condition of the sale or other 
disposition of all or substantially all of their assets, or of 
lesser business units that include the Relevant Hauling Assets, that 
the Acquirer agree to be bound by the provisions of this Final 
Judgment.

IV. Divestiture

    A. Defendant Waste Management is ordered and directed, within 
ninety calendar days after the filing of the Complaint in this 
matter, or five days after notice of the entry of this Final 
Judgment by the Court, whichever is later, to divest the Relevant 
Hauling Assets in a manner consistent with this Final Judgment to an 
Acquirer acceptable to the United States in its sole discretion, 
after consultation with Florida. The United States, in its sole 
discretion, after consultation with Florida, may agree to an 
extension of this time period of up to sixty calendar days, and 
shall notify the Court in such circumstances. Defendants agree to 
use their best efforts to divest the Relevant Hauling Assets as 
expeditiously as possible.
    B. In accomplishing the divestiture ordered by this Final 
Judgment, Defendant Waste Management promptly shall make known, by

[[Page 70299]]

usual and customary means, the availability of the Relevant Hauling 
Assets. Defendants shall inform any person making inquiry regarding 
a possible purchase of the Relevant Hauling Assets that they are 
being divested pursuant to this Final Judgment and provide that 
person with a copy of this Final Judgment. Defendants shall offer to 
furnish to all prospective Acquirers, subject to customary 
confidentiality assurances, all information and documents relating 
to the Relevant Hauling Assets, whichever is then available for 
sale, customarily provided in a due diligence process except such 
information or documents subject to the attorney-client or work-
produce privileges.
    C. Defendants shall provide the United States and Florida, and 
each prospective Acquirer of the Relevant Hauling Assets, 
information relating to the personnel involved in the operation and 
management of the Relevant Hauling Assets to enable the Acquirer to 
make offers of employment. Defendants will not interfere with any 
negotiations by the Acquirer to employ any of Defendants' employees 
whose primary responsibility is the operation or management of the 
Relevant Hauling Assets.
    D. Defendants shall permit each prospective Acquirer of the 
Relevant Hauling Assets to have reasonable access to personnel and 
to make inspections of the physical facilities; access to any and 
all environmental, zoning, and other permit documents and 
information; and access to any and all financial, operational, or 
other documents and information customarily provided as part of the 
a due diligence process.
    E. Defendant Waste Management shall warrant to the Acquirer of 
the Relevant Hauling Assets that each asset will be operational on 
the date of sale.
    F. Defendants shall not take any action that will impede in any 
way the permitting, operation, or divestiture of the Relevant 
Hauling Assets.
    G. Defendant Waste Management shall warrant to the Acquirer of 
the Relevant Hauling Assets that there are no material defects in 
the environmental, zoning or other permits pertaining to the 
operation of each asset, and that following the sale of the Relevant 
Hauling Assets, Defendants will not undertake, directly or 
indirectly, any challenges to the environmental, zoning, or other 
permits relating to the operation of the Relevant Hauling Assets.
    H. Unless the United States, in its sole discretion, after 
consultation with Florida, otherwise consents in writing, the 
divestiture pursuant to Section IV, or by trustee appointed pursuant 
to Section V, of this Final Judgment shall include the entire 
Relevant Hauling Assets, and shall be accomplished in such a way as 
to satisfy the United States, in its sole discretion, after 
consultation with Florida, that the divested assets will be used by 
the Acquirer, as part of a viable, ongoing small container 
commercial hauling business. Divestiture of the Relevant Hauling 
Assets may be made to an Acquirer, provided that it is demonstrated 
to the sole satisfaction of the United States, after consultation 
with Florida, that the Relevant Hauling Assets will remain viable 
and the divestiture of such assets will remedy the competitive harm 
alleged in the Complaint. The divestiture, whether pursuant to 
Section IV or Section V of this Final Judgment.
    1. Shall be made to an Acquirer that, in the United States' sole 
judgment, after consultation with Florida, has the intent and 
capability, including managerial, operational, and financial 
capability, to compete effectively in the small container commercial 
hauling business; and
    2. Shall be accomplished so as to satisfy the United States, in 
its sole discretion, after consultation with Florida, that none of 
the terms of any agreement between an Acquirer and Defendant Waste 
Management gives Defendant Waste Management the ability unreasonably 
to raise the Acquirer's costs, to lower the Acquirer's efficiency, 
or otherwise to interfere in the ability of the Acquirer to compete 
effectively.

V. Appointment of Trustee

    A. If Defendant Waste Management has not divested the Relevant 
Hauling Assets within the time period specified in Section IV.A., 
Defendant Waste Management shall notify the United States of that 
fact in writing. Upon application of the United States, in its sole 
discretion, the Court shall appoint a trustee selected by the United 
States and approved by the Court to effect the divestiture of the 
Relevant Hauling Assets.
    B. After the appointment of the trustee becomes effective, only 
the trustee shall have the right to sell the Relevant Hauling 
Assets.
    C. The trustee shall have the power and authority to 
accomplished the divestiture to an Acquirer acceptable to the United 
States, in its sole discretion, after consultation with Florida, at 
such price and on such terms as are then obtainable upon reasonable 
effort by the trustee, subject to the provisions of Sections IV, V, 
and VI of this Final Judgment, and shall have such other powers as 
this Court deems appropriate. Subject to Section V.E. of this Final 
Judgment, the trustee may hire at the cost and expense of Defendant 
Waste Management any investment bankers, attorneys, or other agents, 
who shall be solely accountable to the trustee, reasonably necessary 
in the trustee's judgment to assist in the divestiture.
    D. Defendant Waste Management shall not object to a sale by the 
trustee on any ground other than the trustee's malfeasance. Any such 
objections by Defendant Waste Management must be conveyed in writing 
to the United States, Florida, and the trustee within ten calendar 
days after the trustee has provided the notice required under 
Section VI.
    E. The trustee shall serve at the cost and expense of Defendant 
Waste Management, on such terms and conditions as the United States 
approves, and shall account for all monies derived from the sale of 
the Relevant Hauling Assets sold by the trustee and all costs and 
expenses so incurred. After approval by the Court of the trustee's 
accounting, including fees for its services and those of any 
professionals and agents retained by the trustee, all remaining 
money shall be paid to Defendant Waste Management and the trust 
shall then be terminated. The compensation of the trustee and any 
professionals and agents retained by the trustee shall be reasonable 
in light of the value of the Relevant Hauling Assets, and based on a 
fee arrangement providing the trustee with an incentive based on the 
price and terms of the divestiture and the speed with which it is 
accomplished, but timeliness is paramount.
    F. Defendants shall use their best efforts to assist the trust 
in accomplishing the required divestiture. The trustee and any 
consultants, accountants, attorneys, and other persons retained by 
the trustee shall have full and complete access to the personnel, 
books, records, and facilities of the business to be divested, and 
Defendants shall develop financial and other information relevant to 
such business as the trustee may reasonably request, subject to 
customary confidentiality protection for trade secret or other 
confidential research, development, or commercial information. 
Defendants shall take no action to interfere with or to impede the 
trustee's accomplishment of the divestiture.
    G. After its appointment, the trustee shall file monthly reports 
with the United States, Florida, and the Court setting forth the 
trustee's efforts to accomplish the divestiture ordered under this 
Final Judgment. To the extent that such reports contain information 
that the trustee deems confidential, such reports shall not be filed 
in the public docket of the Court. Such reports shall include the 
name, address, and telephone number of each person who, during the 
preceding month, made an offer to acquire, expressed an interest in 
acquiring, entered into negotiations to acquire, or was contacted or 
made an inquiry about acquiring, any interest in the Relevant 
Hauling Assets, and shall describe in detail each contact with any 
such person. The trustee shall maintain full records of all efforts 
of all efforts made to divest the Relevant Hauling Assets.
    H. If the trustee has not accomplished such divestiture within 
six (6) months after its appointment, the trustee shall promptly 
file with the Court a report setting forth: (1) The trustee's 
efforts to accomplish the required divestiture, (2) the reasons, in 
the trustee's judgment, why the required divestiture has not been 
accomplished, and (3) the trustee's recommendations. To the extent 
that such reports contain information that the trustee deems 
confidential, such reports shall not be filed in the public docket 
of the Court. The trustee shall, at the same time, furnish such 
report to the United States and Florida. The United States, in its 
sole discretion, after consultation with Florida, shall have the 
right to make additional recommendations consistent with the purpose 
of the trust. The Court thereafter shall enter such orders as it 
shall deem appropriate to carry out the purpose of the Final 
Judgment, which may, if necessary, including extending the trust and 
the term of the trustee's appointment by a period requested by the 
United States.

VI. Notice of Proposed Divestiture

    A. Within two business days following execution of a definitive 
divestiture agreement, Defendant Waste Management or the trustee, 
whichever is then responsible for

[[Page 70300]]

effecting the divestiture required herein, shall notify the United 
States and Florida of any proposed divestiture required by Section 
IV or V of this Final Judgment. If the trustee is responsible, it 
shall similarly notify Defendant Waste Management. The notice shall 
set forth the details of the proposed divestiture and list the name, 
address, and telephone number of each person not previously 
identified who offered or expressed an interest in or desire to 
acquire any ownership interest in the Relevant Hauling Assets 
together with full details of the same.
    B. Within fifteen calendar days of receipt by the United States 
and Florida of such notice, the United States, in its sole 
discretion, after consultation with Florida, may request from 
Defendants, the proposed Acquirer or Acquirers, any other third 
party, or the trustee, if applicable, additional information 
concerning the proposed divestiture, the proposed Acquirer, and any 
other potential Acquirer. Defendants and the trustee shall furnish 
the United States and Florida any additional information requested 
within fifteen calendar days of the receipt of the request, unless 
the parties shall otherwise agree.
    C. Within thirty calendar days after receipt of the notice or 
within twenty calendar days after the United States and Florida have 
been provided the additional information requested from Defendants, 
the proposed Acquirer, any third party, and the trustee, whichever 
is later, the United States, after consultation with Florida, shall 
provide written notice to Defendants and the trustee, if there is 
one, stating whether or not it objects to the proposed divestiture. 
If the United States provides written notice that it does not 
object, the divestiture may be consummated, subject only to 
Defendant Waste Management's limited right to object to the sale 
under Section V.D. of this Final Judgment. Absent written notice 
that the United States does not object to the proposed Acquirer or 
upon objection by the United States, a divestiture proposed under 
Section IV or Section V shall not be consummated. Upon objection by 
Defendant Waste Management under Section V.D., a divestiture 
proposed under Section V shall not be consummated unless approved by 
the Court.

VII. Financing

    Defendants shall not finance all or any part of any purchase 
made pursuant to Section IV or V of this Final Judgment.

VIII. Hold Separate

    Until the divestiture required by this Final Judgment has been 
accomplished, Defendants shall take all steps necessary to comply 
with the Hold Separate Stipulation and Order entered by this Court. 
Defendants shall take no action that would jeopardize the 
divestiture ordered by this Court.

IX. Affidavits

    A. Within twenty calendar days of the filing of the Complaint in 
this matter, and every thirty calendar days thereafter until the 
divestiture has been completed under Section IV or V, Defendants 
shall deliver to the United States and to Florida an affidavit as to 
the fact and manner of its compliance with Section IV or V of this 
Final Judgment. Each such affidavit shall include the name, address, 
and telephone number of each person who, during the preceding thirty 
days, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in the Relevant Hauling 
Assets, and shall describe in detail each contact with any such 
person during that period. Each such affidavit shall also include a 
description of the efforts Defendants have taken to solicit buyers 
for the Relevant Hauling Assets, and to provide required information 
to each prospective Acquirer, including the limitations, if any, on 
such information. Assuming the information set forth in the 
affidavit is true and complete, any objection by the United States, 
in its sole discretion, after consultation with Florida, to 
information provided by Defendants, including limitations on 
information, shall be made within fourteen days of receipt of such 
affidavit.
    B. Within twenty calendar days of the filing of the Complaint in 
this matter, Defendants shall deliver to the United States and 
Florida an affidavit that describes in reasonable detail all actions 
Defendants have taken and all steps Defendants have implemented on 
an ongoing basis to comply with Section VIII of this Final Judgment. 
Defendants shall deliver to the United States and Florida an 
affidavit describing any changes to the efforts and actions outlined 
in Defendants' earlier affidavits filed pursuant to this section 
within fifteen calendar days after the change is implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve the Relevant Hauling Assets, and to divest the Relevant 
Hauling Assets, until one year after such divestiture has been 
completed.

X. Compliance Inspection

    A. For purposes of determining or securing compliance with this 
Final Judgment, or of determining whether the Final Judgment should 
be modified or vacated, and subject to any legally recognized 
privilege, from time to time duly authorized representatives of the 
United States Department of Justice, including consultants and other 
persons retained by the United States, upon written request of a 
duly authorized representative of the Assistant Attorney General in 
charge of the Antitrust Division, or a duly authorized 
representative of the Florida Attorney General's Office, and on 
reasonable notice to Defendants, be permitted:
    1. Access during Defendants' office hours to inspect and copy, 
or at the United States' or Florida's option, to require Defendants 
to provide copies of, all books, ledgers, accounts, records and 
documents in the possession, custody or control of Defendants, 
relating to any matters contained in this Final Judgment; and
    2. To interview, either informally or on the record, Defendants' 
officers, employees, or agents, who may have their individual 
counsel present, regarding such matters. The interviews shall be 
subject to the reasonable convenience of the interviewee and without 
restraint or interference by Defendants.
    B. Upon the written request of a duly authorized representative 
of the Assistant Attorney General in charge of the Antitrust 
Division, or a duly authorized representative of the Florida 
Attorney General's Office, Defendants shall submit such written 
reports, under oath if requested, relating to any of the matters 
contained in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this section and sections IV and VI above shall be divulged by the 
Plaintiffs to any person other than an authorized representative of 
the executive branch of the United States, or the Florida Attorney 
General's Office, except in the course of legal proceedings to which 
the United States or Florida is a party (including grand jury 
proceedings), or for the purpose of securing compliance with this 
Final Judgment, or as otherwise required by law.
    D. If at the time information or documents are furnished by 
Defendants to Plaintiffs, Defendants represent and identify in 
writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(7) of the 
Federal Rules of Civil Procedure, and Defendants mark each pertinent 
page of such material, ``Subject to claim of protection under Rule 
26(c)(7) of the Federal Rules of Civil Procedure,'' then Plaintiffs 
shall give Defendants ten calendar days notice prior to divulging 
such material in any legal proceeding (other than a grand jury 
proceeding).

XI. Notice

    A. Defendant Waste Management shall provide written advance 
notification to representatives of the Antitrust Division of the 
United States Department of Justice and the Florida Attorney 
General's Office during the period ending four years after the Final 
Judgment is entered before acquiring, directly or indirectly, any 
interest in any assets (other than in the ordinary course of 
business), capital stock, or voting securities of any small 
container commercial hauling business that, at any time during the 
twelve months immediately preceding such acquisition, were used to 
provide small container commercial hauling services in Broward 
County, Florida, where that business's small container commercial 
hauling assets generated in excess of $500,000 in revenues per year 
or where total revenues were in excess of $1 million per year.
    B. Such written notification shall be provided to 
representatives of the Antitrust Division and the Florida Attorney 
General's Office at least thirty days prior to acquiring any such 
interest, which period may be shortened by permission of the 
Antitrust Division and the Florida Attorney General's Office.

XII. No Reacquisition

    Defendant Waste Management may not reacquire, lease, or control 
any part of the Relevant Hauling Assets during the term of this 
Final Judgment.

XIII. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this 
Final Judgment to apply to this Court at any time for further orders 
and

[[Page 70301]]

directions as may be necessary or appropriate to carry out or 
construe this Final Judgment, to modify any of its provisions, to 
enforce compliance, and to punish violations of its provisions.

XIV. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten years form the date of its entry.

XV. Public Interest Determination

    Entry of this Final Judgment is in the public interest.

Date:------------------------------------------------------------------
-----------------------------------------------------------------------
Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16.

-----------------------------------------------------------------------
UNITED STATES DISTRICT JUDGE

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, and STATE OF FLORIDA, Plaintiffs, v. 
WASTE MANAGEMENT, INC., and ALLIED WASTE INDUSTRIES, INC., 
Defendants.
    Cast No.: 1:03CV02076.
    JUDGE: James Robertson.
    DECK TYPE: Antitrust.

Competitive Impacts Statement

    Plaintiff United States of America (``United States''), pursuant 
to Section 2(b) of the Antitrust Procedures and Penalties Act 
(``APPA''), 15 U.S.C. 16(b)-(h), files this Competitive Impact 
Statement relating to the proposed Final Judgment submitted for 
entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    Defendant Waste Management, Inc. (``Waste Management'') and 
Defendant Allied Waste Industries, Inc. (``Allied'') entered into an 
asset purchase agreement and a stock purchase agreement, both dated 
August 15, 2003, pursuant to which Waste Management would acquire 
from Allied, inter alia, certain small container commercial hauling 
assets in Broward County, Florida. The United States and the State 
of Florida (``Florida'') filed a civil antitrust Complaint on 
October 14, 2003, seeking to enjoin the proposed acquisition. The 
Complaint alleges that the likely effect of this acquisition would 
be to lessen competition substantially for small container 
commercial hauling services in Broward County, Florida in violation 
of Section 7 of the Clayton Act. This loss of competition would 
result in consumers paying higher prices and receiving fewer 
services for the collection of small container commercial waste.
    At the same time the Complaint was filed, the United States also 
filed a Hold Separate Stipulation and Order and proposed Final 
Judgment, which are designed to eliminate the anticompetitive 
effects of the acquisition. Under the proposed Final Judgment, which 
is explained more fully below, Waste Management is required within 
90 days after the filing of the Complaint, or five days after notice 
of the entry of the Final Judgment by the Court, Whichever is later, 
to divest, as a viable business operation, specified small container 
commercial hauling assets located in Broward County, Florida. Under 
the terms of the Hold Separate Stipulation and Order, Waste 
Management is required to take certain steps to ensure that the 
assets to be divested are fully maintained in operable condition at 
no less than the state they were in at the time the United States, 
Florida, and Defendants agreed to the divestitures outlined below 
and held separate from its other assets and businesses.
    The United States, Florida, and the Defendants have stipulated 
that the proposed Final Judgment may be entered after compliance 
with the APPA. Entry of the proposed Final Judgment would terminate 
this action, except that the Court would retain jurisdiction to 
construe, modify, or enforce the provisions of the proposed Final 
Judgment and to punish violations thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

    Waste Management, with 2002 revenues of approximately $11.1 
billion, is the nation's largest waste collection and disposal 
company, operating throughout the United States. Allied, with 2002 
revenues of approximately $5.5 billion, is the nation's second 
largest waste collection and disposal company. The proposed 
transaction, as initially agreed to by Defendants on August 15, 
2003, would lessen competition substantially as a result of Waste 
Management's acquisition of Allied's small container commercial 
hauling assets in Broward County, Florida. This acquisition is the 
subject of the Complaint and proposed Final Judgment filed by the 
United States and Florida on October 14, 2003.

B. The Competitive Effects of the Transaction on Competition in 
Small Container Commercial Hauling

    Municipal solid waste (``MSW'') is solid, putrescible waste 
generated by households and commercial establishments. Waste 
collection firms, or haulers, contract to collect MSW from 
residential and commercial customers and transport the waste to 
private and public disposal facilities (e.g., transfer stations, 
incinerators, and landfills), which, for a fee, process and legally 
dispose of the waste. Small container commercial hauling is one 
component of MSW collection, which also includes residential and 
other waste collection. Waste Management and Allied compete in the 
collection of small container commercial waste in Broward County, 
Florida.
    Small container commercial hauling is the collection of MSW in 
one to ten cubic yard containers, usually from commercial businesses 
such as office and apartment buildings and retail establishments 
(e.g., stores and restaurants) for shipments to, and disposal at, an 
approved disposal facility. Because of the type and volume of waste 
generated by commercial accounts and the frequency of service 
required, haulers organize small container commercial accounts into 
their own special routes, and generally use specialized equipment to 
store, collect, and transport waste from these accounts to approved 
disposal sites. This equipment (e.g., one- to ten-cubic-yard 
containers for waste storage, and front-end load vehicles commonly 
used for collection and transportation) is uniquely well-suited for 
small container commercial hauling. Providers of other types of 
waste collection services (e.g., residential and roll-off services) 
are not good substitutes for small container commercial hauling 
firms. In their waste collection efforts, these firms use different 
waste storage equipment (e.g., garbage cans or semi-stationary roll-
off containers) and different vehicles (e.g., rear-load, side-load, 
or roll-off trucks), which, for a variety of reasons, cannot be 
conveniently or efficiently used to store, collect, or transport 
waste generated by commercial customers, and hence, are rarely used 
on small container commercial hauling routes. In the event of a 
small but significant and nontransitory increase in price for small 
container commercial hauling, customers would not switch to any 
other alternative. Thus the Complaint alleges that the provision of 
small container commercial hauling constitutes a line of commerce, 
or relevant service, for purposes of analyzing the effects of the 
transaction.
    The Complaint alleges that the provision of small container 
commercial hauling service takes place in compact, highly localized 
geographic markets. The geographic markets are compact and highly 
localized because it is expensive to ship waste long distances in 
either collection or disposal operations. To minimize 
transportations costs and maximize the scale, density, and 
efficiency of their waste collection operations, small container 
commercial hauling firms concentrate their customers and collection 
routes in small areas. Firms with operations concentrated in a 
distant area cannot easily compete against firms whose routes and 
customers are locally based. Distance may significantly limit a 
remote firm's ability to provide commercial waste hauling service as 
frequently or conveniently as that offered by local firms with 
nearby routes. Also, local small container commercial hauling firms 
have significant cost advantages over other firms and can profitably 
increase their charges to local small container commercial hauling 
customers without losing significant sales to firms outside the 
area.
    Small container commercial haulers in Broward County, Florida 
compete for customers either in ``open'' competition or through 
competition for municipal franchises. In open competition areas, 
haulers compete to service individual customers. In areas where 
commercial hauling is controlled by the respective municipality, 
small container commercial haulers compete to be awarded a municipal 
contract, or franchise, that permits the hauler to provide service 
to all of the small container commercial customers in that 
municipality. The municipality decides whether to grant a franchise 
or to allow haulers to compete for customers in open competition. 
Local small container commercial hauling firms in Broward County can 
profitably increase prices to customers in the open areas of Broward 
County--that is, those customers not covered by a municipal

[[Page 70302]]

franchise--without losing sales to a municipal franchise, or to more 
distant competitors.
    Applying this analysis, the Complaint alleges that the open 
competition areas of Broward County, Florida constitute a section of 
the country, or relevant geographic market, for the purpose of 
assessing the competitive effects of a combination of Waste 
Management and Allied in the provision of small container commercial 
hauling services.
    There are significant entry barriers into the provision of small 
container commercial hauling services. A new entrant in the small 
container commercial hauling business must achieve a minimum 
efficient scale and operating efficiencies comparable to those of 
existing firms in order to provide a significant competitive 
constraint on the prices charged by market incumbents. In order to 
obtain comparable operating efficiencies, a new firm must achieve 
route density similar to existing firms. An efficient route usually 
handles eighty or more customers or containers each day. Because 
most customers have their waste collected once of twice a week, a 
new entrant must have several hundred customers in close proximity 
to construct an efficient route. However, the common use of price 
discrimination and long-term contracts by existing small container 
commercial hauling firms can leave too few customers available to 
the entrant in a sufficiently confined geographic area to create an 
efficient route. The incumbent firm can selectively and temporarily 
charge an unbeateably low price to specified customers targeted by 
new entrants. Long-term contracts often run for three to five years 
and may automatically renew or contain large liquidated damage 
provisions for contract termination. Such terms make it more costly 
or difficult for a customer to switch to a new hauler and obtain 
lower prices for its collection service. Because of these factors, a 
new entrant may find it difficult to compete by offering its 
services at pre-entry price levels comparable to the incumbent's 
prices. Also, a new entrant may face an increase in the cost and 
time required to form an efficient route, which may limit the 
entrant's ability to build an efficient route and reduce the 
likelihood that the entrant ultimately will be successful.
    The need for route density, the use of long-term contracts with 
restrictive terms, and the ability of existing firms to price 
discriminate raise significant barriers to entry by new firms, which 
will likely be forced to compete at lower than entry price levels. 
Such barriers in the market for small container commercial hauling 
services have allowed incumbent firms to raise prices successfully.
    In Broward County, Florida, Waste Management's acquisition of 
Allied's small container commercial hauling assets would reduce from 
three to two the number of significant firms that compete to provide 
small container commercial hauling. After the acquisition, Waste 
Management would control over 68 percent of total market revenues, 
which exceed $40 million annually. There is only one other 
significant small container commercial hauling competitor in this 
market.
    The Complaint alleges that a combination of Waste Management and 
Allied in Broward County would remove a significant competitor in 
small container commercial hauling. In this market the resulting 
increase in concentration, loss of competition, loss of competition, 
and absence of any reasonable prospect of entry or expansion by 
market incumbents likely will result in higher prices for small 
container commercial hauling.

III. Explanation of the Proposed Final Judgment

    The divestiture requirement of the proposal Final Judgment will 
eliminate the anticompetitive effects of the acquisition in small 
container commercial hauling in Broward County, Florida by 
establishing a new, independent, and economically viable competitor. 
The proposed Final Judgment requires Waste Management, within ninety 
days after the filing of the Complaint, or five days after notice of 
the entry of the Final Judgment by the Court, whichever is later, to 
divest, as a viable ongoing business, small container commercial 
hauling assets (e.g., routes, trucks, containers, and customer 
lists) in Broward County, Florida. The assets must be divested in 
such a way as to satisfy the United States in its sole discretion, 
after consultation with Florida, that the operations can and will be 
operated by the purchaser as a viable, ongoing business that can 
compete effectively in the relevant market. Defendants must take all 
reasonable steps necessary to accomplish the divestiture quickly and 
shall cooperate with prospective purchasers.
    In the event that Defendants do not accomplish the divestiture 
within the periods prescribed in the proposed Final Judgment, the 
Final Judgment provides that the Court will appoint a trustee 
selected by the United States to effect the divestiture. If a 
trustee is appointed, the proposed Final Judgment provides that 
Waste Management will pay all costs and expenses of the trustee. The 
trustee's commission will be structured so as to provide an 
incentive for the trustee based on the price obtained and the speed 
with which the divestiture is accomplished. After his or her 
appointment becomes effective, the trustee will file monthly reports 
with the Court, the United States, and Florida, setting forth his or 
her efforts to accomplish the divestiture. At the end of six months, 
if the divestiture has not been accomplished, the trustee, the 
United States, and Florida, will make recommendations to the Court, 
which shall enter such orders as appropriate, in order to carry out 
the purpose of the trust, including extending the trust or the term 
of the trustee's appointment.
    The divestiture provisions of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in the 
provision of small container commercial hauling services in Broward 
County, Florida. Under the proposed Final Judgment, Waste Management 
is required to divest customers and contracts on eleven of Allied's 
routes (routes 901, 902, 903, 904, 906, 907, 909, 912, 914, 915, and 
501, except for specific portions of these routes that did not raise 
significant competitive concerns, including accounts and contracts 
serviced in parts unincorporated Broward County, accounts serviced 
through franchise agreements, and accounts and contracts serviced in 
the City of Margate) to a new, independent, and economically viable 
competitor in Broward County, Florida. In addition, Waste Management 
agrees that, if an Allied customer has a single contract with 
accounts and service locations that are on both a route to be 
divested and a route Waste Management will acquire, Waste Management 
will divest the entire contract. The divested assets produce annual 
revenues of over $8 million from small container commercial hauling 
service in the open competition areas of Broward County, which 
represents over 80 percent of Allied's revenues generated in the 
open competition areas.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act (15 U.S.C. 15) provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three 
times the damages the person has suffered, as well as costs and 
reasonable attorney's fees. Entry of the proposed Final Judgment 
will neither impair nor assist the bringing of any private antitrust 
damage action. Under the provisions of section 5(a) of the Clayton 
Act (15 U.S.C. 16(a)), the proposed Final Judgment has no prima 
facie effect in any subsequent private lawsuit that may be brought 
against the Defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States, Florida, and Defendants have stipulated that 
the proposed Final Judgment may be entered by the Court after 
compliance with the provisions of the APPA, provided that the United 
States has not withdrawn its consent. The APPA conditions entry upon 
the Court's determination that the proposed Final Judgment is in the 
public interest.
    The APPA provides a period of at least 60 days preceding the 
effective date of the proposed Final Judgment within which any 
person may submit to the United States written commends regarding 
the proposed Final Judgment. Any person who wishes to comment should 
do so within sixty days of the date of publication of this 
Competitive Impact Statement in the Federal Register. The United 
States will evaluate and respond to the comments. All comments will 
be given due consideration by the Department of Justice, which 
remains free to withdraw its consent to the proposed Final Judgment 
at any time prior to entry. The comments and the response of the 
United States will be filed with the Court and published in the 
Federal Register.
    Written comments should be submitted to: Maribeth Petrizzi, 
Chief, Litigation II Section, Antitrust Division, United States 
Department of Justice, 1401 H Street, NW., Suite 3000, Washington, 
DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the 
Court for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

[[Page 70303]]

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against Defendants. The 
United States could have continued the litigation and sought 
preliminary and permanent injunctions against Waste Management's 
acquisition of certain assets from Allied. The United States is 
satisfied, however, that the divestiture of assets described in the 
proposed Final Judgment will preserve competition for the provision 
of small container commercial hauling services in the relevant 
market identified by the United States and Florida.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty-day comment 
period, after which the Court shall determine whether entry of the 
proposed Final Judgment ``is in the public interest.'' In making 
that determination, the Court may consider:

    (1) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration or relief sought, anticipated effects of 
alternative remedies actually considered, and any other 
considerations bearing upon the adequacy of such judgment;
    (2) The impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including consideration of the 
public benefit, if any, to be derived from a determination of the 
issues at trial.

15 U.S.C. 16(e). As the United States Court of Appeals for the 
District of Columbia Circuit held, the APPA permits a court to 
consider, among other things, the relationship between the remedy 
secured and the specific allegations set forth in the government's 
complaint, whether the decree is sufficiently clear, whether 
enforcement mechanisms are sufficient, and whether the decree may 
positively harm third parties. See United States v. Microsoft, 56 
F.3d 1448, 1458-62 (D.C. Cir. 1995).
    In conducting this inquiry, ``[t]he court is nowhere compelled 
to go to trial or to engage in extended proceedings which might have 
the effect of vitiating the benefits of prompt and less costly 
settlement through the consent decree process.'' 119 Cong. Rec. 
24,598 (1973) (statement of Senator Tunney).\1\ Rather:

    \1\ See United States v. Gillette Co., 406 F. Supp. 713, 716 (D. 
Mass. 1975) (recognizing it was not the court's duty to settle; 
rather, the court must only answer ``whether the settlement achieved 
(was) within the reaches of the public interest''). A ``public 
interest'' determination can be made properly on the basis of the 
competitive Impact Statement and Response to Comments filed pursuant 
to the APPA. Although the APPA authorizes the use of additional 
procedures, 15 U.S.C. 16(f), those procedures are discretionary. A 
court need not invoke any of them unless it believes that the 
comments have raised significant issues and that further proceedings 
would aid the court in resolving those issues. See H.R. Rep. No. 93-
1463, 93rd Cong., 2d Sess. 8-9 (1974), reprinted in 1974 
U.S.C.C.A.N. 6535, 6538.
---------------------------------------------------------------------------

    [a]bsent a showing of corrupt failure of the government to 
discharge its duty, the Court, in making its public interest 
finding, should * * * carefully consider the explanations of the 
government in the competitive impact statement and its responses to 
comments in order to determine whether those explanations are 
reasonable under the circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. (CCH) 
]61,508, at 71,980 (W.D. Mo. May 17, 1977).
    Accordingly, with respect to the adequacy of the relief secured 
by the decree, a court may not ``engage in an unrestricted 
evaluation of what relief would best serve the public.'' United 
States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); 
see also Microsoft, 56 F.3d at 1460-62. Case law requires that:

    [t]he balancing of competing social and political interests 
affected by a proposed antitrust consent decree must be left, in the 
first instance, to the discretion of the Attorney General. The 
court's role in protecting the public interest is one of insuring 
that the government has not breached its duty to the public in 
consenting to the decree. The court is required to determine not 
whether a particular decree is the one that will best serve society, 
but whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requires might undermine the 
effectiveness of antitrust enforcement by consent decree.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\2\
---------------------------------------------------------------------------

    \2\ Cf. BNS, 858 F.2d at 463 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); gillette, 406 F. Supp. at 716 
(noting that, in this way, the court is constrained to ``look at the 
overall picture not hypercritically, nor with a microscope, but with 
an artist's reducing glass''). See generally Microsoft, 56 F. 3d at 
1461 (discussing whether ``the remedies [obtained in the decree are] 
so inconsonant with the allegations charged as to fall outside of 
the `reaches of the public interest' '').
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    The proposed final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it 
mandates certainty of free competition in the future. Court approval 
of a final judgment requires a standard more flexible and less 
strict than the standard required for a finding of liability. ``[A] 
proposed decree must be approved even if it falls short of the 
remedy the court would impose on its own, as long as it falls within 
the range of acceptability or is `within the reaches of public 
interest.' '' United States v. Am. Tel. & Tel. Co., 552 F. Supp. 
131, 151 (D.D.C. 1982) (citations omitted) (quoting Gillette, 406 F. 
Supp. at 716), aff'd sub nom. Maryland v. United States, 460 U.S. 
1001 (1983); see also United States v. Alcan Aluminum Ltd., 605 f. 
Supp. 619, 622 (W.D. Ky. 1985) (approving the consent decree even 
though the court would have imposed a greater remedy).
    Moreover, the Court's role under the APPA is limited to 
reviewing the remedy in relationship to the violations that the 
United States has alleged in its Compliant, and does not authorize 
the Court to ``construct [its] own hypothetical case and then 
evaluate the decree against that case.'' Microsoft, 56 F.3d at 1459. 
Because the ``court's authority to review the decree depends 
entirely on the government's exercising its prosecutorial discretion 
by bringing a case in the first place,'' it follows that ``the court 
is only authorized to review the decree itself,'' and not to 
``effectively redraft the complaint'' to inquire into other matters 
that the United States might have but did not pursue. Id. at 1459-
60.

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment. Dated: November 19, 2003.

Respectfully submitted,
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Paul A. Moore III, Maryland Bar, U.S. Department of Justice, 
Antitrust Division, Litigation II Section, 1401 H Street, NW, Suite 
3000, Washington, DC 20530, (202) 514-8380.

Certificate of Service

    I hereby certify that a copy of the foregoing has been served 
upon Waste Management, Inc., Allied Waste Industries, Inc., and the 
State of Florida by placing a copy of this Competitive Impact 
Statement in the U.S. mail, first class and postage prepaid, 
directed to each of the above-named parties at the addresses given 
below, this 19th day of November, 2003.

Counsel for Defendant Waste Management, Inc., Melanie Sabo, Esquire, 
Preston Gates Ellis & Rouvelas Meeds LLP, 1735 New York Avenue, NW, 
Suite 500, Washington, DC 20006; (202) 628-1700.
Counsel for Defendant Allied Waste Industries, Inc., Mia F. Cohen, 
Esquire, Jones Day Reavis & Pogue, 51 Louisiana Avenue, NW, 
Washington, DC 20001-2113, (202) 879-3971.
Counsel for Plaintiff State of Florida, Lizabeth A. Leeds, Esquire, 
Senior Assistant Attorney General, Office of the Attorney General, 
Antitrust Division, PL-01, The Capitol, Tallahassee, Florida 32399-
1050, Phone: (850) 414-3600, Fax: (850) 488-9134.
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Paul A. Moore III, U.S. Department of Justice, Antitrust Division, 
Litigation II Section, 1401 H Street, NW, Suite 3000, Washington, DC 
20530, (202) 307-0938

[FR Doc. 03-31053 Filed 12-16-03; 8:45 am]
BILLING CODE 4410-11-M