[Federal Register: January 29, 2004 (Volume 69, Number 19)]
[Notices]
[Page 4318-4320]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29ja04-68]
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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]
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