Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC Seeks Public Comment on Settlement of Cast Iron Soil Pipe Industry Purchase, (Apr 2, 2013)

By Jody Coultas, J.D.

The Federal Trade Commission is accepting public comments on a proposed consent order, settling charges that Charlotte Pipe and Foundry Company’s 2010 purchase of Star Pipe Products, Inc.’s cast iron soil pipe (CISP) business was anticompetitive (In the Matter of Charlotte Pipe and Foundry Company and Randolph Holding Company LLC, FTC File No. 111 0034).

Charlotte Pipe is one of the largest producers and sellers of CISP products in the United States. CISP products are important components of pipeline systems used to transport wastewater from buildings to municipal sewage systems, to vent plumbing systems, and to transport rainwater to storm drains. Charlotte Pipe and one other company made up at least 90 percent of all domestic sales of CISP products as of 2010.

In 2007, Star Pipe entered the U.S. CISP market and allegedly competed aggressively on price and service. Instead of trying to compete with Star Pipe, Charlotte Pipe purchased Star Pipe’s CISP business. The companies also entered into an agreement under which Star Pipe and its employees kept the acquisition secret, and agreed not to compete with Charlotte Pipe in the CISP market for six years.

The FTC alleged that the purchase substantially lessened competition in U.S. markets for CISP products, eliminated a “maverick firm” that could put pricing pressure on Charlotte Pipe, and allowed Charlotte Pipe to raise prices.

Under the proposed order, Charlotte Pipe would be prohibited from enforcing a confidentiality and non-compete agreement with Star Pipe, and would be required to publicly disclose its prior acquisitions of other CISP importers and notify the Commission before making future acquisitions in the industry. Charlotte Pipe had acquired other firms in the CISP market through transactions that were not disclosed to the public. The order also would arguably allow Star Pipe and its employees to enter the CISP market and compete directly against Charlotte Pipe in the immediate future.

Interested parties can submit comments electronically or in paper form. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. Comments may be submitted electronically here.

Companies: Charlotte Pipe and Foundry Company; Star Pipe Products, Inc.

News: Antitrust FederalTradeCommissionNews