Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Commissioner Ohlhausen dissents from AmeriGas, Blue Rhino consent agreements, (Nov 3, 2014)

By Greg Hammond, J.D.

FTC Commissioner Maureen Ohlhausen has released a dissenting statement, opposing the Commission’s proposed consent agreements with AmeriGas Partners, L.P. and Ferrellgas Partners, L.P. (Blue Rhino). If approved, the consent agreements will settle the FTC’s claims that the companies colluded by secretly agreeing to maintain a united front to push their joint customer, Walmart, to accept fill reductions (In the Matter of Ferrellgas Partners, L.P., File No. 111 0195, Dkt. No. 9360).

The allegations in this case “fit poorly, at best, in the Section 1 case law,” Ohlhausen stated. “I am not aware of any Section 1 case that involved an alleged agreement among competitors to coerce a single customer to accept a decrease in product size that the competitors had pursued independently and that in no way precluded independent negotiation of the product’s price between each competitor and the customer.”

First, the Commissioner noted that the majority’s treatment of the alleged conduct as per se unlawful depended on an unfounded assertion that the parties agreed to keep their prices fixed. Specifically, she noted that “neither the majority’s assertion that the parties ‘secretly agreed not to deviate from a proposed price increase’ nor their characterization of the alleged agreement as ‘a per se unlawful naked restraint on price competition’ find any support in the complaint or the evidence presented to the Commission.”

Second, Ohlhausen suggested that, even if there was a valid theory under Section 1, the evidence the Commission did present failed to demonstrate that there was any agreement. Further, there was no supporting proof that Walmart was susceptible to pressure, that the parties were actually coercing Walmart, that the fill reductions were going to unravel, or that the parties would have returned to the higher fill levels, Ohlhausen said.

Lastly, the Commissioner concluded that, even assuming there was a valid theory and sufficient evidence to support a Section 1 violation, she was not convinced that bringing the case was in the public interest. Specifically, she noted that the alleged conduct occurred roughly six years prior to the complaint being filed, and that AmeriGas and Blue Rhino reached private settlements agreeing to pay up to $10 million and $25 million, respectively, to settle those private claims. Blue Rhino also agreed to provide antitrust compliance training to company personnel.

“Although the Commission may have discovered some smoke, there clearly was no fire in this case—whether fueled by propane or otherwise,” the Commissioner stated. “In short, there was very weak evidence supporting what I saw as, at best, a novel Section 1 case. I therefore did not have reason to believe that the parties had committed a Section 1 violation.”

Attorneys: Jay N. Varon (Foley & Lardner LLP) for AmeriGas Partners, L.P. Daniel M. Wall and Niall E. Lynch (Latham & Watkins LLP) for Ferrellgas Partners, L.P. Eric D. Edmondson, for the FTC Bureau of Competition.

Companies: AmeriGas Partners, L.P.; Ferrellgas Partners, L.P.

News: Antitrust FederalTradeCommissionNews