[Federal Register Volume 74, Number 165 (Thursday, August 27, 2009)]
[Notices]
[Pages 43725-43726]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-20671]
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DEPARTMENT OF AGRICULTURE
DEPARTMENT OF JUSTICE
Antitrust Division
Agriculture and Antitrust Enforcement Issues in Our 21st Century
Economy
AGENCIES: U.S. Department of Agriculture and U.S. Department of
Justice, Antitrust Division.
ACTION: Notice of public hearings and opportunity for comment.
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SUMMARY: The Antitrust Division of the U.S. Department of Justice (DOJ)
and the United States Department of Agriculture (USDA) strongly believe
that a competitive agriculture sector is vitally important to producers
and consumers alike. To this end, the DOJ and USDA, with the
participation of State Attorneys General, intend to hold a series of
public workshops to explore competition issues affecting the
agricultural sector in the 21st Century and the appropriate role for
antitrust
[[Page 43726]]
and regulatory enforcement in that sector. Agricultural producers and
their representatives have expressed concerns about changes in the
agricultural marketplace, including increasing processor concentration
in some commodities. There have been several congressional oversight
hearings related to competition in the agricultural sector, as well as
legislative proposals to restrict the activities of agricultural
processors and intensify federal government scrutiny of agricultural
mergers.
The workshops will address the dynamics of competition in
agriculture markets, including, among other issues, buyer power (also
known as monopsony) and vertical integration. They will examine legal
doctrines and jurisprudence and current economic learning, and will
provide an opportunity for farmers, ranchers, consumer groups,
processors, agribusinesses, and other interested parties to provide
examples of potentially anticompetitive conduct and to discuss any
concerns about the application of the antitrust laws to the
agricultural sector. The goals of the workshops are to promote dialogue
among interested parties and foster learning with respect to the
appropriate legal and economic analyses of these issues as well as to
listen to and learn from parties with real-world experience in the
agricultural sector.
To begin, the DOJ and USDA are soliciting public comments from
lawyers, economists, agribusinesses, consumer groups, academics,
agricultural producers, agricultural cooperatives, and other interested
parties. The DOJ and USDA are interested in comments on the application
of the antitrust laws to monopsony and vertical integration in the
agricultural sector, including the scope, functionality, and limits of
current or potential rules. The DOJ and USDA are also inviting input on
additional topics that might be discussed at the workshops, including
the impact of agriculture concentration on food costs, the effect of
agricultural regulatory statutes or other applicable laws and programs
on competition, issues relating to patent and intellectual property
affecting agricultural marketing or production, and market practices
such as price spreads, forward contracts, packer ownership of livestock
before slaughter, market transparency, and increasing retailer
concentration.
The DOJ and USDA plan to hold the first workshop in early 2010.
While some of these workshops may be held in Washington, DC, others
will be held regionally. The DOJ and USDA plan to publish a more
detailed description of the topics to be discussed before each workshop
and to solicit additional submissions about each topic. The workshops
will be transcribed and placed on the public record. Any written
comments received also will be placed on the public record.
DATES: Any interested person may submit written comments responsive to
any of the topics addressed in this Federal Register notice.
Respondents are encouraged to provide comments as soon as possible, but
no later than December 31, 2009.
ADDRESSES: Written comments should be submitted in both paper and
electronic form to the Department of Justice. All comments received
will be publicly posted. The comments should be submitted as follows:
Two paper copies should be addressed to the Legal Policy Section,
Antitrust Division, U.S. Department of Justice, 450 5th Street, NW.,
Suite 11700, Washington, DC 20001. The Antitrust Division is requesting
that the paper copies of each comment be sent by courier or overnight
service, if possible, because U.S. postal mail at the Department is
subject to delay due to heightened security precautions. The electronic
version of each comment should be submitted by electronic mail to
agriculturalworkshops@usdoj.gov.
FOR FURTHER INFORMATION CONTACT: Mark B. Tobey, Special Counsel for
State Relations and Agriculture, Antitrust Division, U.S. Department of
Justice, 950 Pennsylvania Ave., NW., Washington, DC 20530; telephone:
(202) 532-4763; e-mail: agriculturalworkshops@usdoj.gov. Detailed
agendas and schedules for the workshops will be made available on the
Antitrust Division's Web site, http://www.usdoj.gov/atr.
SUPPLEMENTARY INFORMATION: The Horizontal Merger Guidelines recognize
monopsony power and its exercise as a concern in analyzing potential
competitive effects of proposed mergers and acquisitions. As a general
proposition, the analysis of competitive issues in monopsony cases is
the mirror image of the more common analysis of competitive issues in
monopoly cases. For example, instead of determining whether the merged
firm would gain sufficient market power to raise prices to consumers,
monopsony analysis focuses on whether the merged firm would gain
sufficient market power to depress prices paid to its suppliers.
Likewise, instead of determining whether the buyers could defeat an
attempt by the merged firm to increase prices by a small but
significant and non-transitory amount by switching to alternative
products or alternative suppliers, the issue in a monopsony
investigation is whether the sellers could defeat an attempt by the
merged firm to depress prices by producing other products or by selling
their products to other buyers.
Vertical integration occurs when multiple stages of production, for
example, processing, distribution, or marketing, are brought together
in one firm or are linked by contracts. In many instances, vertical
integration may be procompetitive, allowing firms to reduce their
costs. However, there may be circumstances in which vertical
integration raises antitrust concerns, usually by increasing barriers
to entry, facilitating collusion, or circumventing regulation.
Christine A. Varney,
Assistant Attorney General, Antitrust Division.
Ann Wright,
Deputy Undersecretary for Marketing and Regulatory Programs, Department
of Agriculture.
[FR Doc. E9-20671 Filed 8-26-09; 8:45 am]
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