[Federal Register Volume 69, Number 19 (Thursday, January 29, 2004)]
[Notices]
[Pages 4318-4320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1901]


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DEPARTMENT OF JUSTICE

Antitrust Division


Responses to Public comments on the Proposed Final Judgment in 
United States v. General Electric Company and Instrumentarium OYJ

    Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 
16(b)-(h), the United States hereby publishes the one comment received 
on the proposed Final Judgment in United States v. General Electric 
Company and Instrumentarium OYJ, Civil No. 1:03CV01923, filed in the 
United States District Court for the District of Columbia, together 
with the response of the United States to the comment. On September 16, 
2003, the United States filed a Complaint alleging that General 
Electric Company's proposed acquisition of Instrumentarium OYJ would 
substantially lessen competition in the sale and development of patient 
monitors used to take the vital physiologic measurements of patients 
requiring critical care (``critical care monitors'') and of mobile, 
full-size C-arms used for surgical, orthopedic, pain management, and 
basic vascular procedures, in violation of Section 7 of the Clayton 
Act. To restore competition in these markets, the proposed Final 
Judgment, if entered, would require General Electric company to fully 
divest two Instrumentarium OYJ businesses: Spacelabs, which was its 
primary critical care monitors business, and Ziehm, the business 
through which it developed and sold C-arms. Public comment was invited 
within the statutory 60-day comment period. The comment and the 
response of the United States thereto are hereby published in the 
Federal Register, and shortly thereafter these documents will be 
attached to a Certificate of Compliance with Provisions of the 
Antitrust Procedures and Penalties Act and filed with the Court, 
together with a motion urging the Court to enter the proposed Final 
Judgment. Copies of the Complaint, the proposed Final Judgment, and the 
Competitive Impact Statement are currently available for inspection in 
Room 200 of the Antitrust Division, Department of Justice, 325 Seventh 
Street, NW., Washington, DC 20530, telephone: (202) 514-2481 and the 
Clerk's Office, United States District Court for the District of 
Columbia, 333 Constitution Avenue, NW., Washington, DC 20001. (The 
United States's Certificate of Compliance with Provisions of the 
Antitrust Procedures and Penalties Act will be made available at the 
same locations shortly after they are filed with the Court.) Copies of 
any of these materials may be obtained upon request and payment of a 
copying fee.

J. Robert Kramer II,
Director of Operations, Antitrust Division.

Response to Public Comment

    Pursuant to the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h) (``Tunney Act''), the United 
States hereby responds to the public comment received regarding the 
proposed Final Judgment in this case. After careful consideration of 
the comment, the United States continues to believe that the 
proposed Final Judgment will provide an effective and appropriate 
remedy for the antitrust violation

[[Page 4319]]

alleged in the Complaint. The United States will move the Court for 
entry of the proposed Final Judgment after the public comment and 
this Response have been published in the Federal Register, pursuant 
to 15 U.S.C. 16(d).
    On September 16, 2003, the United States filed the Complaint in 
this matter alleging that the proposed acquisition of 
Instrumentarium OYJ (``Instrumentarium'') by General Electric 
Company (``GE'') would violate Section 7 of the Clayton Act, as 
amended, 15 U.S.C. 18. Simultaneously with the filing of the 
Complaint, the United States filed a proposed Final Judgment and a 
Stipulation signed by the United States and the defendants 
consenting to the entry of the proposed Final Judgment after 
compliance with the requirements of the Tunney Act. Pursuant to 
those requirements, the United States filed a Competitive Impact 
Statement (``CIS'') in this Court on October 30, 2003; published the 
proposed Final Judgment and CIS in the Federal Register on November 
12, 2003; and published a summary of the terms of the proposed Final 
Judgment and CIS, together with directions for the submission of 
written comments relating to the proposed Final Judgment, in the 
Washington Post for seven days beginning on November 9, 2003 and 
ending on November 16, 2003. The 60-day period for public comments, 
during which one comment was received as described below, expired on 
January 12, 2004.

I. Background

    As explained more fully in the Complaint and CIS, this 
transaction lessened competition in the sale and development of 
patient monitors used to take the vital physiologic measurements of 
patients requiring critical care (``critical care monitors'') and of 
mobile, full-size C-arms used for surgical, orthopedic, pain 
management, and basic vascular procedures. To restore competition in 
these markets, the proposed Final Judgment, if entered, would 
require GE to fully divest two Instrumentarium businesses: 
Spacelabs, which was its primary critical care monitors business, 
and Ziehm, the business through which it developed and sold C-arms. 
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. Legal Standard Governing the Court's Public Interest Determination

    Upon the publication of the public comment and this Response, 
the United States will have fully complied with the Tunney Act and 
will move the Court for entry of the proposed Final Judgment as 
being ``in the public interest.'' 15 U.S.C. 16(e). The Court, in 
making its public interest determination, should apply a deferential 
standard and should withhold its approval only under limited 
conditions. Specifically, the Court should review the proposed Final 
Judgment in light of the violations charged in the complaint and 
``withhold approval only if any of the terms appear ambiguous, if 
the enforcement mechanism is inadequate, if third parties will be 
positively injured, or if the decree otherwise makes `a mockery of 
judicial power.' '' Mass. Sch. of Law v. United States, 118 F.3d 
776, 783 (D.C. Cir. 1997) (quoting United States v. Microsoft Corp., 
56 F.3d 1448, 1462 (D.C. Cir. 1995)).
    It is not proper during a Tunney Act review ``to reach beyond 
the complaint to evaluate claims that the government did not make 
and to inquire as to why they were not made.'' Microsoft, 56 F.3d at 
1459; see also United States v. Archer-Daniels-Midland Co., 272 F. 
Supp. 2d 1, 6-7 (D.D.C. 2003) (rejecting argument that court should 
consider effects in markets other than those raised in the 
complaint); United States v. Pearson PLC, 55 F. Supp. 2d 43, 45 
(D.D.C. 1999) (noting that a court should not ``base its public 
interest determination on antitrust concerns in markets other than 
those alleged in the government's complaint''). Because ``[t]he 
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 the United 
States might have but did not pursue. Microsoft, 56 F.3d at 1459-60; 
see also United States v. W. Elec. Co., 993 F.2d 1572, 1577 (D.C. 
Cir. 1993) (noting that a Tunney Act proceeding does not permit ``de 
novo determination of facts and issues'' because ``[t]he balancing 
of competing social and political interests affected by a proposed 
antitrust decree must be left, in the first instance, to the 
discretion of the Attorney General'' (citations omitted)).
    Moreover, the United States is entitled to ``due respect'' 
concerning its ``prediction as to the effect of proposed remedies, 
its perception of the market structure, and its view of the nature 
of the case'' Archer-Daniels-Midland Co., 272 F. Supp. 2d at 6 
(citing Microsoft, 56 F.3d at 1461).

III. Summary of Public Comment

    The United States received a comment from one entity, Visiontec 
(comment attached as Exhibit 1). Visiontec, a company providing 
electronic services, states that it entered into a manufacturing 
agreement with Spacelabs in September 2001, prior to 
Instrumentarium's purchase of Spacelabs. Visiontec expressed 
concerns about Instrumentarium's adherence to this manufacturing 
agreement, claiming that Instrumentarium made a deliberate decision 
not to adhere to the agreement after its purchase of Spacelabs, and 
that the pace at which Visiontec is being disengaged has accelerated 
since General Electric's acquisition of Instrumentarium was 
announced. Visiontec asked that the United States provide 
assistance, including the imposition of provisions to protect it, 
prior to approving the acquisition of Spacelabs.

IV. The United States' Response to Comment

    The concerns raised in the comment appear to relate to a 
possible contractual dispute between Visiontec and Spacelabs, 
Instrumentarium, or GE. They do not relate to the sufficiency of the 
relief in the proposed Final Judgment, whether the proposed Final 
Judgment is in the public interest, or otherwise raise issues 
appropriate for action by the Antitrust Division. Thus, Visiontec's 
concerns do not provide any basis for establishing any conditions in 
connection with the divestitures required by the proposed Final 
Judgment or warrant any other action by the United States.

V. Conclusion

    After careful consideration of this public comment, the United 
States has concluded that entry of the proposed Final Judgment will 
provide an effective and appropriate remedy for the antitrust 
violation alleged in the Complaint and is, therefore, in the public 
interest. Pursuant to Section 16(d) of the Tunney Act, the United 
States is submitting the public comment and Response to the Federal 
Register for publication. After the comment and Response are 
published in the Federal Register, the United States will move this 
Court to enter the proposed Final Judgment.

    Dated this ---- day of January 2004.

 Respectfully submitted,

Joan Hogan,
DC No. 451240, Litigation III Section, Antitrust Division, United 
States Department of Justice, 325 7th Street, NW., Suite 300, 
Washington, DC 20530.

Certificate of Service

    The undersigned certifies that a copy of the Response to Public 
Comment was served on the following counsel by electronic mail in 
PDF format or hand delivery, this ----th day of January 2004:

Deborah L. Feinstein,
Arnold & Porter, 555 Twelfth Street, NW., Washington, DC 20004-1206.

Joan Hogan, DC Bar No. 451240,
U.S. Department of Justice, Antitrust Division, 325 Seventh Street, 
NW., Suite 300, Washington, DC 20530.

October 24, 2003

Mr. James R. Wade
Chief, Litigation III Section
Antitrust Division
U.S. Department of Justice
325 Seventh Street, NW., Suite 300
Washington, DC 20530

    Dear Mr. Wade,
    I am writing with regard to the proposed acquisition of 
Instrumentarium OYJ by General Electric Corporation, specifically 
the part of the settlement reached that includes General Electric 
divestiture of Instrumentarium's Spacelabs subsidiary.
    Visiontec is a privately held company providing electronic 
manufacturing services located in Spokane, Washington. It began a 
seven-year manufacturing agreement with Spacelabs in September 2001, 
prior to being purchased by Instrumentarium in 2002. Visiontec 
produces approximately 50% of the electronic circuit cards used in 
Spacelabs medical equipment sold to hospitals. Spacelabs is 
Visiontec's largest customer.
    After the Instrumentarium purchase of Spacelabs completed in 
June of 2002, Instrumentarium made a deliberate decision not to 
adhere to the manufacturing agreement originally between Spacelabs 
and Visiontec prior to the acquisition. Since General Electric's 
acquisition announcement of

[[Page 4320]]

Instrumentarium, the pace and approach at which to disengage 
Visiontec has accelerated.
    As Instrumentarium's subsidiary Spacelabs is being positioned to 
be sold, it has selectively and deliberately moved product from 
Visiontec, delayed and then cancelled orders that should have been 
produced by the terms of the manufacturing agreement. 
Instrumentarium has effectively and so stated that the manufacturing 
agreement was only a working document. These actions are preventing 
Visiontec the ability to pay back an obligation originally 
established with Spacelabs as well as preventing a recovery of the 
investment made by Visiontec.
    As a result of Instrumentarium positioning Spacelabs in the most 
favorable position to be sold, some of that favorable positioning is 
coming at Visiontec's unwarranted expense. This is causing Visiontec 
cash flow and financial distress, severely damaging its ability to 
service its other customers, and a loss of fifty percent of its 
high-tech manufacturing work force.
    It appears Instrumentarium's approach is to cause so much 
financial distress, that Visiontec becomes a non-viable company and 
thereby allowing them to remove Visiontec and the existing orders 
from the Spacelab books to better position Spacelabs for the 
prospective buyers.
    Due to Visiontec's size, we would like to request assistance 
from the Department of Justice as to what kind of positive options 
may be available prior to approving the acquisition. We also request 
that the business practices of Instrumentarium's subsidiary 
Spacelabs dealing with Visiontec regarding the seven-year 
manufacturing agreement originally established with Spacelabs be 
reviewed.
    Prior to completion of the acquisition approval by the 
Department of Justice, Visiontec would ask for suitable provisions 
to be established allowing Visiontec to remain viable for at least 
two years, otherwise the result is the company closes down.
 Sincerely,

Rick L. Hansen,
President & CEO.
     RLH\2355
c. Attorney General--State of Washington
Chuck Cleveland. P.S.
[FR Doc. 04-1901 Filed 1-28-04; 8:45 am]
BILLING CODE 4410-11-M