United States v. Association of Retail Travel Agents: Public Comments and Response on Proposed Final Judgment

DEPARTMENT OF JUSTICE

Antitrust Division

United States v. Association of Retail Travel Agents: Public

Comments and Response on Proposed Final Judgment

Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C.

16(b)-(h), the United States publishes below the comments received on

the proposed Final Judgment in United States v. Association of Retail

Travel Agents, Civil Action No. 94-2305 (PF), United States District

Court for the District of Columbia, together with the response of the

United States to the comments.

Copies of the response and the public comments are available on

request for inspection and copying in room 3233 of the Antitrust

Division, U.S. Department of Justice, Tenth Street and Pennsylvania

Avenue, NW., Washington, DC. 20530, and for inspection at the Office of

the Clerk of the United States District Court for the District of

Columbia, United States Courthouse, Third Street and Constitution

Avenue, NW., Washington, DC 20001.

Constance K. Robinson,

Director of Operations, Antitrust Division.

United States' Response to Public Comments

Introduction

In the United States District Court for the District of Columbia

United States of America, Plaintiff, v. Association of Retail

Travel Agents, Defendant. [Civil No: 94-2305 (PF).]

Pursuant to section 2(d) of the Antitrust Procedures and Penalties

Act (``APPA''), 15 U.S.C. 16(d), the United States responds to public

comments on the proposed Final Judgment submitted for entry in this

civil antitrust proceeding.

This action began on October 25, 1994, when the United States filed

a Complaint alleging that the Association of Retail Travel Agents

(hereinafter ``ARTA'') had entered into a contract, combination or

conspiracy in restraint of trade in violation of section 1 of the

Sherman Act (15 U.S.C. 1). The Complaint alleges that ARTA, a trade

association, all of whose members are [[Page 10872]] travel agents, and

its members agreed on commission levels and other terms of trade on

which to transact business with providers of travel services, and

encouraged and participated in a group boycott with the intent to

induce certain providers of travel services to agree to certain

commission levels and practices. The Complaint seeks an order enjoining

ARTA from inviting or encouraging such concerted action by travel

agents.

Simultaneously with the filing of the Complaint, the United States

filed a proposed Final Judgment, a Competitive Impact Statement

(``CIS'') and a Stipulation signed by ARTA for entry of the proposed

Final Judgment. The proposed Final Judgment resolves the antitrust

violation alleged in the Complaint by enjoining ARTA from inviting or

encouraging travel agents to deal with travel providers only on agreed

terms. This prohibition includes any agreements on Specified commission

levels. The proposed Final Judgment also prohibits ARTA from adopting

or disseminating any rules, policies, or statements that have the

purpose or effect of advocating or encouraging such a concerted refusal

to deal. Finally, the proposed Final Judgment requires ARTA

periodically to inform its members, officers and board members on the

requirements of the proposed Final Judgments and the antitrust laws.

As required by the APPA, on December 8, 1994, ARTA filed with this

Court a description of written and oral communications on its behalf

within the reporting requirements of section 15(g) of the APPA. A

summary of the terms of the proposed Final Judgment and CIS, and

directions for the submission of written comments relating to the

proposal were published in the Washington Post for seven consecutive

days beginning November 13, 1994. The proposed Final Judgment and CIS

were published in the Federal Register on November 17, 1994. 59 FR

59422 (1994).

The 60-day period for public comments commenced on November 18,

1994 and expired on January 16, 1995. The United States has received

one comment on the proposed Final Judgment, from the Independent Travel

Agencies of America Association, Inc. (``ITAA''). That comment is being

filed with the Court along with this response.

I. Legal Standards Governing the Court's Public Interest

Determination

The procedural requirement of the Tunney Act are intended to

eliminate secrecy from the consent decree process, to ensure that the

Justice Department has access to information from the widest spectrum

of persons with knowledge of the issues bearing on the consent decree,

and to create a public record of the reasoning behind the government's

consent to the decree. Hearings on H.R. 9703, H.R. 9947, and S. 782,

Consumer Decree Bills Before the Subcomm. on Monopolies and Commercial

Law of the House Judiciary Committee, 93rd Cong. 1st Sess. 40 (1977)

(hereinafter ``Hearings'') (Statement of Senator Tunney.) See also

United States v. Western Electric Co., 993 F.2d 1572 (D.C. (Cir.),

cert. denied, 114 S. Ct. 487 (1993); United States v. American Tel. and

Tel. Co., 552 F. Supp. 131, 148 (D.D.C. 1982), aff'd sub nom. Maryland

v. United States, 460 U.S. 1001 (1983).

The issue in a Tunney Act proceeding is whether the relief provided

by the decree adequately protects the public interest. Although the

Tunney Act requires the Court to make an independent determination that

a decree is in the public interest, the Court's role is limited.

Congress intended to preserve the viability of the consent decree

process by avoiding lengthy and protracted judicial proceedings, and

therefore, ``[t]he balancing of competing social and political

interests affected by a proposed antitrust consent decree must be left,

in the first instance, to the discretion of the Attorney General.''

United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981).

The Court's public interest inquiry must be conducted in light of

the ``violations set forth in the complaint.'' 15 U.S.C. 16(b). The

enforcement agency's decision about what charges to bring in its

complaint is a matter generally ``committed to the agency's absolute

discretion.'' Heckler v. Chaney, 470 U.S. 821, 831 (1985).

II. Public Comments

ITAA states that the proposed Final Judgment should be modified to

require ARTA to agree (a) not to lobby or ``foster legislation'' that

would discriminate against travel agencies that are not members of

ARTA, and (b) not to use the press to discriminate, or to cause travel

suppliers to discriminate, against non-ARTA travel agencies. ITAA's

comment does not discuss how such remedies are related to, or would

cure, the violations alleged in the Complaint, nor explain why the

proposed remedies would otherwise be appropriate.

Upon careful consideration, the government does not believe there

is any reason to modify the proposed Final Judgment. As noted, the

Complaint in this case alleges a boycott by ARTA to induce travel

suppliers to agree to commission rates and other terms. It does not

allege any activity directed toward or utilizing legislation or the

press. Nor does it allege any activity involving or directed toward

travel agents activity involving or directed toward travel agents that

are not ARTA members. Moreover, it does not appear that the relief

proposed by ITAA would prevent or mollify the violations that are

alleged in the complaint. The lack of a connection between ITAA's

proposed relief and any alleged antitrust violation is particularly

apparent here because attempts to petition a legislature, standing

alone, are normally not subject to the antitrust laws. See Eastern

Railroads Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S.

127 (1961).

III. Conclusion

The decree provides relief entirely adequate to redress the harm

caused by defendant's conduct. Entry of the decree is in the public

interest. ITAA's comment and this response will be published in the

Federal Register.

Dated: February 14, 1995.

Anne K. Bingaman,

Assistant Attorney General.

Robert E. Litan,

Deputy Assistant Attorney General.

Respectfully submitted,

Roger W. Fones,

Donna N. Kooperstein,

Robert D. Young,

Nina B. Hale,

Attorneys, Transportation, Energy, and Agriculture Section, Antitrust

Division, Department of Justice.

Certificate of Service

I hereby certify that I have caused a copy of the foregoing UNITED

STATES RESPONSE TO PUBLIC COMMENTS to be served upon Alexander Anolik,

693 Sutter St., 6th Floor, San Francisco, CA 94102 by first class mail,

postage prepaid.

Dated: February 14, 1995.

Robert D. Young,

Transportation, Energy and Agriculture Section, Antitrust Division,

Department of Justice.

November 1,1994.

Mr. Roger Fones,

Chief, Transportation, Energy and Agriculture Section, Antitrust

Division, Judiciary Center Building, 555 4th Street, NW, Rm 9104,

Washington, DC 20001

Re: United States of America v. Association of Retail Travel Agents

Case Number 1:94CVO2305

Dear Mr. Fones: I am General Counsel of the Independent Travel

Agencies of America Association. We represent in excess of 5000

independent travel agencies across the [[Page 10873]] country. We at

ITAA and many of our members have read with great interest your

release of Tuesday October 25, 1994, ``Travel Agent Trade

Association Agrees To End Anticompetitive Practices'' as well as the

``Complaint'' the ``Stipulation'' the proposed ``Final Judgment''

and the ``Competitive Impact Statement''.

In accordance with the Section V of the Competitive Impact

Statement on behalf of this association and our members we would

like to register our comments as the Final Judgment when implemented

will have a great effect upon many, if not all, of our members.

The Final judgment should be modified as follows:

1. ARTA should agree not to lobby or foster legislation in any

state that would discriminate in any way against non-ARTA travel

agencies.

2. ARTA should agree not to use the press to discriminate

against non-ARTA travel agencies.

3. ARTA should agree not to use the press to cause suppliers of

travel not to want to work with non-ARTA travel agencies.

Thank you for your time and trouble and if you have any

questions with regard to these proposed modifications please contact

me directly.

Sincerely,

Alan A. Benjamin

[FR Doc. 95-4800 Filed 2-27-95; 8:45 am]

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