616-2771
WWW.USDOJ.GOV
TDD (202) 514-1888
JUSTICE DEPARTMENT APPROVES PROPOSAL BY ASSOCIATION OF
INDEPENDENT CORRUGATED CONVERTERS TO ALLOW JOINT SELLING BY
ITS MEMBERS
WASHINGTON, D.C. -- The Department of Justice today approved a proposal
by the Association of Independent Corrugated Converters (AICC)that would allow its
members to jointly sell corrugated paper materials to customers who would like to
purchase their supplies from one source.
In a business review letter issued today by Joel I. Klein, Assistant Attorney
General in charge of the Antitrust Division, the Department said that AICC's proposal
would not likely raise risks to competition because its members are not direct
competitors with one another. The Department also said that the proposal may allow
AICC's members to compete more effectively and efficiently which could have a
procompetitive effect.
AICC is a trade association of non-publicly traded manufacturers of corrugated
paper packaging material. AICC members collectively account for only 15-20 percent of
all corrugated paper packaging materials sold in the United States.
According to the proposal, a number of corrugated paper customers only want to
purchase materials from manufacturers who have enough plants to efficiently supply all
of the customer's national or regional accounts. AICC believes that its members have
lost a significant amount of national and regional business to larger multiplant
manufacturers, as a result of their small size and the limited number of plants.
To remedy its members' competitive disadvantage, AICC proposes to establish a
model that would allow its members to form joint selling entities (JSE) that could
efficiently sell to national and regional accounts. Under the AICC model, one member
would organize the JSE and select other members, who were not rivals of the lead
member in any market, to help it bid on national or regional accounts. The lead
member would negotiate the contract with the customer and subcontract portions of the
work to the other participants in the JSE or invite bids from other members. No
member of the JSE, other than the lead member, would be advised of the prices
quoted by any other member, or of the price quoted by the lead member to the
customer. The JSE would not contain any member that is capable of meeting, by itself,
the needs of the national or regional customer. The lead member would not solicit a bid
from any other member for a portion of a customer's business that the lead member
could itself supply. Participation in any JSE would be voluntary; and could be
terminated by any member who had satisfied its contractual obligation to specific
customers. Participation in a JSE for one contract would not prevent a member from
bidding against the JSE, either singularly or as part of another JSE, for other
customers. Various JSE's could compete against each other and no JSE would identify
its existence or membership to any other JSE.
Under the Department's Business Review Procedure, an organization may
submit a proposed action to the Antitrust Division and receive a statement as to
whether the Division will challenge the action under the antitrust laws.
A file containing the business review request and the Department's response
may be examined in the Antitrust Documents Group of the Antitrust Division, Suite 215,
Liberty Place, 325 7th Street, N.W., Department of Justice, Washington, D.C. 20004.
After a 30-day period, the documents supporting the business review will be added to
the file.
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