Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Ductile iron pipe distributor settles FTC price fixing charges, (Aug 9, 2016)

By Edward L. Puzzo, J.D.

Fortiline, LLC, a company that distributes ductile iron pipe, fittings and accessories throughout the United States, has agreed to settle Federal Trade Commission charges that it violated federal antitrust law by inviting a competitor to raise and fix prices. According to the FTC's announcement, this is the first case where the FTC has challenged an invitation to collude by a firm that is both a direct competitor with, and a distributor for, the invitee (FTC v Fortiline, LLC, FTC File No. 151-0000).

According to the FTC's administrative complaint, on two occasions in 2010, Fortiline invited a competing firm, identified as Manufacturer A, which mainly manufactures ductile iron pipe but was also engaged in direct sales to contractors, to collude on pricing in North Carolina and most of Virginia. In some areas, Fortiline competes with this firm, and in other areas, distributes its products. Manufacturer A offered lower prices to contractors in order to entice them to buy direct, and to forgo distributor value-added services. In response, Fortiline and other distributors, along with their manufacturers, reduced their own prices in order to compete against Manufacturer A. The FTC’s complaint alleges that on two occasions when Fortiline was competing with Manufacturer A, Fortiline communicated an invitation to collude on ductile iron pipe pricing. Both these communications relayed Fortiline’s dissatisfaction with Manufacturer A’s lower pricing to contractors, and its preference that both Fortiline and Manufacturer A submit bids to contractors using the same higher pricing.

The proposed consent order would prohibit Fortiline from entering into, attempting to enter into, or inviting any agreement with any competitor to raise or fix prices, divide markets, or allocate customers. The Commission vote to issue the complaint and accept the proposed consent order for public comment was 2-1, with Commissioner Ohlhausen dissenting from the proposed consent order.

The FTC will publish the consent package in the Federal Register shortly. The consent agreement will be subject to public comment for 30 days continuing through Sept. 8, 2016, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the "Supplementary Information" section of the Federal Register notice.

Companies: Fortiline, LLC

News: Antitrust FederalTradeCommissionNews