United States, State of Illinois, and State of Missouri v. Allied Waste Industries, Inc. and Browning-Ferris Industries, Inc.; Proposed Final Judgment and Competitive Impact Statement

DEPARTMENT OF JUSTICE

Antitrust Division

United States, State of Illinois, and State of Missouri v. Allied

Waste Industries, Inc. and Browning-Ferris Industries, Inc.; Proposed

Final Judgment and Competitive Impact Statement

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. 16(b)-(h), that a Complaint, Hold Separate

Stipulation and Order, and a proposed Final Judgment were filed with

the United States District Court for the District of Columbia in United

States, State of Illinois and State of Missouri v. Allied Waste

Industries, Inc., and Browning-Ferris Industries, Inc., Civil No.

1:99CV 00894 on April 8, 1999. A Competitive Impact Statement was filed

on April 21, 1999. The proposed Final Judgment is subject to approval

by the Court after the expiration of the statutory 60-day public

comment period and compliance with the Antitrust Procedures and

Penalties Act, 15 U.S.C. 16(b)-(h).

The Complaint alleged that the proposed acquisition by Allied Waste

Industries, Inc. (``Allied'') of certain small container waste hauling

assets from Browning-Ferris Industries, Inc. (``BFI'') in the St. Louis

market would violate Section 7 of the Clayton Act, 15 U.S.C. 18. The

St. Louis market was defined as the City of St. Louis and St. Louis

County in Missouri, and the Illinois counties of St. Clair, Madison,

and Monroe. The proposed Final Judgment, filed at the same time as the

Complaint, required Allied, among other things (1) to divest 12 of

BFI's small container waste hauling routes serving the St. Louis market

and related assets; (2) to offer less restrictive contracts to small

container commercial waste hauling customers, and (3) not to acquire

any commercial waste hauling assets in the St. Louis market for five

years.

A Competitive Impact Statement filed by the United States describes

the Complaint, the proposed Final Judgment, the industry, and the

remedies to be implemented by Allied. Copies of the Complaint, Hold

Separate

[[Page 23860]]

Stipulation and Order, proposed Final Judgment, and the Competitive

Impact Statement are available for inspection in Room 215 in Room 215

of the U.S. Department of Justice, Antitrust Division, 325 7th Street,

NW, Washington, DC, and at the office of the Clerk of the United States

District Court for the District of Columbia, Washington, DC. Copies of

any of these materials may be obtained upon request and payment of a

copying fee.

Public comment is invited within the statutory 60-day comment

period. Such comments, and response thereto, will be published in the

Federal Register and filed with the Court. Comments should be directed

to J. Robert Kramer II, Litigation II Section, Antitrust Division,

United States Department of Justice, 1401 H Street, NW, Suite 3000,

Washington, DC 20530 (telephone: 202-307-0924).

Constance K. Robinson,

Director of Operations and Merger Enforcement Antitrust Division.

HOLD SEPARATE STIPULATION AND ORDER

It is hereby stipulated and agreed by and between the undersigned

parties, subject to approval and entry by the Court, that:

I

Definitions

As used in this Hold Separate Stipulation and Order;

A. ``Allied'' means Allied Waste Industries, Inc. a Delaware

corporation with its headquarters in Scottsdale, Arizona, and includes

its successors and assigns, and its subsidiaries, divisions, groups,

affiliates, directors, officers, managers, agents, and employees.

B. ``BFI'' means Browning-Ferris Industries, Inc., a Delaware

corporation with its headquarters in Houston, Texas, and includes its

successors and assigns, and its subsidiaries, divisions, groups,

affiliates, directors, officers, managers, agents, and employees.

C. ``Commercial waste hauling'' means the collection and

transportation to a disposal site of trash and garbage (but not medical

waste: organic waste; special waste, such as contaminated soil; sludge;

or recycled, materials) from commercial and industrial customers.

Commercial waste hauling means using front-end load and rear-end load

trucks to service small containers in the St. Louis area. Typical

customers include office and apartment buildings and retail

establishments (e.g., stores and restaurants).

D. ``Relevant Hauling Assets'' means (1) BFI Illinois commercial

waste hauling routes 906, 909, 916 and 940 (as described in Exhibit A

attached to the proposed Final Judgment) and BFI Missouri commercial

waste hauling routes 902, 904, 906, 907, 908, 921, 926 and 940 (as

described in Exhibit B attached to the proposed Final Judgment)

including Saturday service in connection with the customers serviced on

those routes; (2) all tangible assets, including capital equipment,

trucks and other vehicles, containers, interests, permits, and supplies

[except real property nd improvements to real property (i.e.,

buildings)] used in connection with those routes; and (3) all

intangible assets, including hauling-related customer lists, contracts

and accounts used in connection with those routes.

E. ``Small container'' means a 1 to 10 cubic yard container

typically made of steel and often known as a dumpster.

F. ``St. Louis market'' means the City of St. Louis and St. Louis

County, Missouri; and the Illinois counties of St. Clair, Madison and

Monroe.

G. ``Relevant State'' means the state in which the Relevant Hauling

assets are located.

II

Objectives

The Final Judgment filed in this case is meant to ensure Allied's

prompt divestitures of the Relevant Hauling Assets for the purpose of

establishing a viable competitor in the commercial waste hauling

business in the St. Louis market, to remedy the effects that plaintiffs

allege would otherwise result from Allied's acquisition of certain BFI

assets. This Hold Separate Stipulation and Order ensures, prior to such

divestitures, that the Relevant Hauling Assets are an independent,

economically viable, and ongoing business concern; and that competition

is maintained during the pendency of the ordered divestitures.

III

Jurisdiction and Venue

The Court has jurisdiction over the subject matter of this action

and over each of the parties hereto, and venue of this action is proper

in the United States District Court for the District of Columbia.

IV

Compliance With and Entry of Final Judgment

A. The parties stipulate that a Final Judgment in the form attached

hereto may be filed with and entered by the Court, upon the motion of

any party or upon the Court's own motion, at any time after compliance

with the requirements of the Antitrust Procedures and Penalties Act (15

U.S.C. Sec. 16), and without further notice to any party or other

proceedings, provided that the United States has not withdrawn its

consent, which it may do at any time before the entry of the proposed

Final Judgment by serving notice thereof on Allied and by filing that

notice with the Court.

B. Allied shall abide by and comply with the provisions of the

proposed Final Judgment, pending the Judgment's entry by the Court, or

until expiration of time for all appeals of any Court ruling declining

entry of the proposed Final Judgment, and shall, from the date of the

signing of this Stipulation by the parties, comply with all the terms

and provisions of the proposed Final Judgment as though the same were

in full force and effect as an order of the Court.

C. Allied shall not consummate the transaction sought to be

enjoined by the Complaint herein before the Court has signed this Hold

Separate Stipulation and Order.

D. This Stipulation shall apply with equal force and effect to any

amended proposed Final Judgment agreed upon in writing by the parties

and submitted to the Court.

E. In the event (1) the United States has withdrawn its consent, as

provided in Section IV(A) above, or (2) the proposed Final Judgment is

not entered pursuant to this Stipulation, the time has expired for all

appeals of any Court rule declining entry of the proposed Final

Judgment, and the Court has not otherwise ordered continued compliance

with the terms and provisions of the proposed Final Judgment, then the

parties are released from all further obligations under this

Stipulation, and the making of this Stipulation shall be without

prejudice to any party in this or any other proceeding.

F. Allied represents that the divestitures ordered in the proposed

Final Judgment can and will be made, and that Allied will later raise

no claim of hardship or difficulty as grounds for asking the Court to

modify any of the divestiture provisions contained therein.

V

Hold Separate Provisions

Until the divestitures required by the Final Judgment have been

accomplished:

A. Allied shall preserve, maintain, and operate the Relevant

Hauling Assets, as independent competitive

[[Page 23861]]

businesses, with management, sales and operations of such assets held

entirely separate, distinct and apart from those of Allied's other

operations. Allied shall not coordinate the marketing of, or

negotiation or sales by, any Relevant Hauling Asset with Allied's other

operations. Within twenty (20) days after the filing of the Hold

Separate Stipulation and Order, or thirty (30) days after the entry of

this Order, whichever is later, Allied will inform plaintiffs of the

steps Allied has taken to comply with this Hold Separate Stipulation

and Order.

B. Allied shall take steps necessary to ensure that (1) the

Relevant Hauling Assets will be maintained and operated as independent,

ongoing, economically viable and active competitors in the waste

hauling business in the St. Louis market; (2) management of the

Relevant Hauling Assets will not be influenced by Allied; and (3) the

books, records, competitively sensitive sales, marketing and pricing

information, and decision-making concerning the Relevant Hauling

Assets, will be kept separate and apart from Allied's other operations.

Allied's influence over the Relevant Hauling Assets shall be limited to

that necessary to carry out Allied's obligations under this Hold

Separate Stipulation and Order and the Final Judgment.

C. Allied shall use all reasonable efforts to maintain and increase

the sales and revenues of the Relevant Hauling Assets, and shall

maintain at 1998 or at previously approved levels, whichever are

higher, all promotional, advertising, sales, technical assistance,

marketing and merchandising support for the Relevant Hauling Assets.

D. Allied shall provide sufficient working capital to maintain the

Relevant Hauling Assets as economically viable, and competitive ongoing

businesses.

E. Allied shall take all steps necessary to ensure that the

Relevant Hauling Assets are fully maintained in operable condition at

no lower than their current capacity or sales, and shall maintain and

adhere to normal repair and maintenance schedules for the Relevant

Hauling Assets.

F. Allied shall not, except as part of a divestiture approved by

plaintiffs in accordance with the terms of the proposed Final Judgment,

remove, sell, lease, assign, transfer, pledge or otherwise dispose of

any of the Relevant Hauling Assets.

G. Allied shall maintain, in accordance with sound accounting

principles, separate, accurate and complete financial ledgers, books

and records and report on a periodic basis, such as the last business

day of every month, consistent with past practices, the assets,

liabilities, expenses, revenues and income of the Relevant Hauling

Assets.

H. Except in the ordinary course of business or as is otherwise

consistent with this Hold Separate Stipulation and Order, Allied shall

not hire, transfer, terminate, or otherwise alter the salary agreements

for the Allied or BFI employee who, on the date of Allied's signing of

this Hold Separate Stipulation and Order, either: (1) works at a

Relevant Hauling Asset, or (2) is a member of management referenced in

Section V(I) of this Hold Separate Stipulation and Order.

I. Until such time as the Relevant Hauling Assets are divested

pursuant to the terms of the final Judgment, the Relevant Hauling

Assets shall be managed by Stephen Zykan. Mr. Zykan shall have complete

managerial responsibility for the Relevant Hauling Assets of Allied and

BFI, subject to the provisions of this Order and the Final Judgment. In

the event that Mr. Zykan is unable to perform his duties, Allied shall

appoint, subject to the approval of the United States, after

consultation with the Relevant States, a replacement within ten (10)

working days. Should Allied fail to appoint a replacement acceptable to

the United States, after consultation with the Relevant States, within

(10) working days, the United States shall appoint a replacement.

J. Allied shall take no action that would interfere with the

ability of any trustee appointed pursuant to the Final Judgment to

complete the divestitures pursuant to the Final Judgment to purchasers

acceptable to the United States, after consultation with the Relevant

State.

K. This Hold Separate Stipulation and Order shall remain in effect

until consummation of the divestitures contemplated by the Final

Judgment or until further order of the Court.

FOR PLAINTIFF UNITED STATES OF AMERICA:

Arthur A. Feiveson, Illinois Bar No. 3125793

U.S. Department of Justice, Antitrust Division, Litigation II Section,

1401 H Street, NW, #3000, Washington, DC 20530, (202) 307-0901.

FOR DEFENDANT: ALLIED WASTE INDUSTRIES, INC.

Tom D. Smith,

Jones, Day, Reavis & Pogue, 1450 G Street, NW, Washington, DC 20005.

FOR DEFENDANT BROWNING-FERRIS INDUSTRIES, INC.:

David M. Foster,

Fulbright & Jaworski L.L.P., 801 Pennsylvania Avenue, NW., Washington,

DC 20004-2615.

FOR PLAINTIFF STATE OF ILLINOIS

James E. Ryan,

Attorney General.

By:

Christine H. Rosso,

Assistant Attorney General, Antitrust Bureau, Office of the Attorney

General, State of Illinois, 100 W. Randolph, Chicago, Illinois 60601,

(312) 814-5610.

FOR PLAINTIFF STATE OF MISSOURI

Jeremiah W. (Jay) Nixon,

Attorney General.

By:

J. Robert Sears,

Assistant Attorney General, Office of the Attorney General, State of

Missouri, 1530 Rax Court, Jefferson City, Missouri 65109, (573) 751-

3321.

Order

It is so ordered by the Court, this ______ day of ______.

----------------------------------------------------------------------

United States District Judge

FINAL JUDGMENT

Whereas, plaintiffs, the United States of America, the State of

Illinois, and the State of Missouri, and defendants Allied Waste

Industries, Inc., (``Allied''), and Browning-Ferris Industries, Inc.

(``BFI''), by their respective attorneys, having consented to the entry

of this Final Judgment without trial or adjudication of any issue of

fact or law herein, and without this Final Judgment constituting any

evidence against or an admission by any party with respect to any issue

of law or fact herein; and that this Final Judgment shall settle all

claims made by plaintiffs in their Complaint filed on April 8, 1999;

And whereas, defendants have agreed to be bound by the provisions

of this Final Judgment pending its approval by the Court;

And whereas, the essence of this Final Judgment, is, in the event

of the acquisition of certain BFI assets by Allied, the prompt and

certain

[[Page 23862]]

divestiture of the identified assets to assure that competition is not

substantially lessened;

And whereas, plaintiffs require Allied to make certain divestitures

for the purpose of establishing a viable competitor in the commercial

waste hauling business in the St. Louis area;

And whereas, Allied has represented to plaintiffs that the

divestitures ordered herein can and will be made and that Allied will

later raise no claims of hardship or difficulty as grounds for asking

the Court to modify any of the divestiture provisions contained below;

And whereas, the United States, the states of Illinois and Missouri

currently believe that entry of this Final Judgment is in the public

interest;

Now, therefore, before the taking of any testimony, and without

trial or adjudication of any issue of fact or law herein, and upon

consent of the parties hereto, it is hereby ordered, adjudged, and

decreed as follows:

I

Jurisdiction

This Court has jurisdiction over each of the parties hereto and

over the subject matter of this action. The Complaint states a claim

upon which relief may be granted against defendants, as hereinafter

defined, under Section 7 of the Clayton Act, as amended (15 U.S.C. 18).

II

Definitions

As used in this Final Judgment:

A. ``Allied'' means defendant Allied Waste Industries, Inc., A

Delaware corporation with its headquarters in Scottsdale, Arizona and

includes its successors and assigns, and its subsidiaries, divisions,

groups, affiliates, directors, officers, managers, agents, and

employees.

B. ``BFI'' means defendant Browning-Ferris Industries, Inc., a

Delaware corporation with its headquarters in Houston, Texas, and

includes its successors and assigns, and its subsidiaries, divisions,

groups, affiliates, directors, officers, managers, agents, and

employees.

C. ``Commercial waste hauling'' means the collection and

transportation to a disposal site of trash and garbage (but not medical

waste; organic waste; special waste, such as contaminated soil; sludge;

or recycled materials) from commercial and industrial customers.

Commercial waste hauling means using frontend load and rearend load

trucks to service small containers in the St. Louis market. Typical

customers include office and apartment buildings and retail

establishments (e.g., stores and restaurants).

D. ``Small container'' means a 1 to 10 cubic yard container

typically made of steel and often known as a dumpster.

E. ``Relevant Hauling Assets'' means (1) BFI Illinois commercial

waste hauling routes 906, 909, 916 and 940 (as described in Exhibit A)

and BFI Missouri commercial waste hauling routes 902, 904, 906, 907,

908, 921, 926 and 940 (as described in Exhibit B) including Saturday

service in connection with the customers serviced on those routes; (2)

all tangible assets, including capital equipment, trucks and other

vehicles, containers, interests, permits, and supplies [except real

property and improvements to real property (i.e., buildings)] used in

connection with those routes; and (3) all intangible assets, including

hauling-related customer lists, contracts and accounts used in

connection with those routes.

F. ``St. Louis market'' means the City of St. Louis and St. Louis

County, Missouri; and the Illinois counties of St. Clair, Madison and

Monroe.

G. ``Relevant State'' means the state in which the Relevant Hauling

Assets are located.

III

Applicability

A. The provisions of this Final Judgment apply to defendants, their

successors and assigns, subsidiaries, directors, officers, managers,

agents, and employees, and all other persons in active concert or

participation with any of them who shall have received actual notice of

this Final Judgment by personal service or otherwise.

B. Allied shall require, as a condition of the sale or other

disposition of all or substantially all of its relevant hauling assets,

that the acquiring party agree to be bound by the provisions of this

Final Judgment.

IV

Divestitures

A. Allied is hereby ordered and directed in accordance with the

terms of this Final Judgment, within one hundred and twenty (120)

calendar days after the filing of the Hold Separate Stipulation and

Order in this case, or five (5) days after notice of the entry of this

Final Judgment by the Court, whichever is later, to sell the Relevant

Hauling Assets as a viable, ongoing business to a purchaser acceptable

to the United States in its sole discretion, after consultation with

the Relevant State.

B. Allied shall use its best efforts to accomplish the divestitures

as expeditiously and timely as possible. The United States, in its sole

discretion, after consultation with the Relevant State, may extend the

time period for any divestiture an additional period of time not to

exceed sixty (60) calendar days.

C. In accomplishing the divestitures ordered by this Final

Judgment, Allied promptly shall make known, by usual and customary

means, the availability of the Relevant Hauling Assets. Allied shall

inform any person making an inquiry regarding a possible purchase that

the sale is being made pursuant to this Final Judgment and provide such

person with a copy of this Final Judgment. Allied shall also offer to

furnish to all prospective purchasers, subject to customary

confidentiality assurance, all information regarding the Relevant

Hauling Assets customarily provided in a due diligence process except

such information subject to attorney-client privilege or attorney work-

product privilege. Allied shall make available such information to the

plaintiffs at the same time that such information is made available to

any other person.

D. Allied shall not interfere with any negotiations by any

purchaser to employ any Allied (or former BFI employee) who works at,

or whose principal responsibility concerns, any hauling business that

is part of the Relevant Hauling Assets.

E. As customarily provided as part of a due diligence process,

Allied shall permit prospective purchasers of the Relevant Hauling

Assets to have access to personnel and to make such inspection of such

assets; access to any and all environmental, zoning, and other permit

documents and information; and access to any and all financial,

operational, or other documents and information.

F. Allied shall warrant to any and all purchasers of the Relevant

Hauling Assets that each asset will be operational on the date of sale.

G. Allied shall not take any action, direct or indirect, that will

impede in any way the operation of the Relevant Hauling Assets.

H. Allied shall warrant to the purchaser of the Relevant Hauling

Assets that there are no material defects in the environmental, zoning,

or other permits pertaining to the operation of each asset, and that

with respect to all Relevant Hauling assets, Allied will not undertake,

directly or indirectly, following the divestiture of each asset, any

challenges to the environmental,

[[Page 23863]]

zoning, or other permits pertaining to the operation of the asset.

I. Unless the United States, after consultation with the Relevant

State, otherwise consents in writing, the divestitures pursuant to

Section IV, whether by Allied or by trustee appointed pursuant to

Section V of this Final Judgment, shall include all Relevant Hauling

Assets, and be accomplished by selling or otherwise conveying each

asset to a purchaser in such a way as to satisfy the United States, in

its sole discretion, after consultation with the Relevant State, that

the Relevant Hauling Assets can and will be used by the purchaser as

part of a viable, ongoing business or businesses engaged in waste

hauling. The divestiture, whether pursuant to Section IV or Section V

of this Final Judgment, shall be made to a purchaser or purchasers for

whom it is demonstrated to the United States's sole satisfaction, after

consultation with the Relevant State, that the purchaser: (1) Has the

capability and intent of competing effectively in the waste hauling

business in the Relevant Area; (2) has or soon will have the

managerial, operational, and financial capability to compete

effectively in the commercial waste hauling business in the St. Louis

market; and (3) is not hindered by the terms of any agreement between

the purchaser and Allied which gives Allied the ability unreasonably to

raise the purchaser's costs, lower the purchaser's efficiency, or

otherwise interfere in the ability of the purchaser to compete

effectively in the St. Louis market.

V

Appointment of Trustee

A. In the event that Allied has not sold the Relevant Hauling

Assets within the time period specified in Section IV of this Final

Judgment, the Court shall appoint, on application of the United States,

a trustee selected by the United States, to effect the divestiture of

each such asset not sold.

B. After the appointment of a trustee becomes effective, only the

trustee shall have the right to sell the Relevant Hauling Assets. The

trustee shall have the power and authority to accomplish any and all

divestitures at the best price then obtainable upon a reasonable effort

by the trustee, subject to the provisions of Sections IV and VIII of

this Final Judgment, and shall have such other powers as the Court

shall deem appropriate. Subject to Section V(C) of this Final Judgment,

the trustee shall have the power and authority to hire at the cost and

expense of Allied any investment bankers, attorneys, or agents

reasonably necessary in the judgment of the trustee to assist in the

divestitures, and such professionals and agents shall be accountable

solely to the trustee. The trustee shall have the power and authority

to accomplish the divestitures at the earliest possible time to a

purchaser or purchasers acceptable to the United States, upon

consultation with the Relevant State, and shall have such other powers

as this Court shall deem appropriate. Allied shall not object to a sale

by the trustee on any grounds other than the trustee's malfeasance. Any

such objections by Allied must be conveyed in writing to the relevant

plaintiffs and the trustee within ten (10) calendar days after the

trustee has provided the notice required under Section VI of this Final

Judgment.

C. The trustee shall serve at the cost and expense of Allied, on

such terms and conditions as the Court may prescribe, and shall account

for all monies derived from the sale of each asset sold by the trustee

and all costs and expenses so incurred. After approval by the Court of

the trustee's accounting, including fees for its services and those of

any professionals and agents retained by the trustee, all remaining

money shall be paid to Allied and the trust shall then be terminated.

The compensation of such trustee and of any professionals and agents

retained by the trustee shall be reasonable in light of the value of

the divested business and based on a fee arrangement providing the

trustee with an incentive based on the price and terms of the

divestiture and the speed with which it is accomplished.

D. Allied shall use its best efforts to assist the trustee in

accomplishing the required divestitures, including best efforts to

effect all necessary regulatory approvals. The trustee and any

consultants, accountants, attorneys, and other persons retained by the

trustee shall have full and complete access to the personnel, books,

records, and facilities of the businesses to be divested, and Allied

shall develop financial or other information relevant to the businesses

to be divested customarily provided in a due diligence process as the

trustee may reasonably request, subject to customary confidentiality

assurances. Allied shall permit bona fide prospective acquirers of each

Relevant Hauling Asset to have reasonable access to personnel and to

make such inspection of physical facilities and any and all financial,

operational or other documents and other information as may be relevant

to the divestitures required by this Final Judgment.

E. After its appointment, the trustee shall file monthly reports

with the parties and the Court setting forth the trustee's efforts to

accomplish the divestitures ordered under this Final Judgment,

provided, however, that to the extent such reports contain information

that the trustee deems confidential, such reports shall not be filed in

the public docket of the court. Such reports shall include the name,

address and telephone number of each person who, during the preceding

month, made an offer to acquire, expressed an interest in acquiring,

entered into negotiations to acquire, or was contacted or made an

inquiry about acquiring, any interest in the business to be divested,

and shall describe in detail each contact with any such person during

that period. The trustee shall maintain full records of all efforts

made to sell the businesses to be divested.

F. If the trustee has not accomplished such divestitures within six

(6) months after its appointment, the trustee thereupon shall file

promptly with the Court a report setting forth (1) the trustee's

efforts to accomplish the required divestitures, (2) the reasons, in

the trustee's judgment, why the required divestitures have not been

accomplished, and (3) the trustee's recommendations, provided, however,

that to the extent such reports contain information that the trustee

deems confidential, such reports shall not be filed in the public

docket of the Court. The trustee shall at the same time furnish such

report to the parties, who shall each have the right to be heard and to

make additional recommendations consistent with the purpose of the

trust. The Court shall enter thereafter such orders as it shall deem

appropriate in order to carry out the purpose of the trust which may,

if necessary, include extending the trust and the term of the trustee's

appointment by a period requested by the United States.

VI

Notification

Within two (2) business days following execution of a definitive

agreement, contingent upon compliance with the terms of this Final

Judgment, to effect, in whole or in part, any proposed divestiture

pursuant to Sections IV or V of this Final Judgment, Allied or the

trustee, whichever is then responsible for effecting the divestiture,

shall notify plaintiffs of the proposed divestiture. If the trustee is

responsible, it shall similarly notify Allied. The notice shall set

forth the details of the proposed transaction and list the name,

address, and telephone number of each

[[Page 23864]]

person not previously identified who offered to, or expressed an

interest in or a desire to, acquire any ownership interest in the

business to be divested that is the subject of the binding contract,

together with full details of same. Within fifteen (15) calendar days

of receipt by plaintiffs of such notice, the United States, in its sole

discretion, after consultation with the Relevant State, may request

from Allied, the proposed purchaser, or any other third party

additional information concerning the proposed divestiture and the

proposed purchaser. Allied and the trustee shall furnish any additional

information requested from them within fifteen (15) calendar days of

the receipt of the request, unless the parties shall otherwise agree.

Within thirty (30) calendar days after receipt of the notice or within

twenty (20) calendar days after plaintiffs have been provided the

additional information request from Allied, the proposed purchaser, and

any third party, whichever is later, the United States, after

consultation with the Relevant State, shall provide written notice to

Allied and the trustee, if there is one, stating whether or not it

objects to the proposed divestiture. If the United States provides

written notice to Allied and the trustee that it does not object, then

the divestiture may be consummated, subject only to Allied's limited

right to object to the sale under Section V(B) of this Final Judgment.

Upon objection by the United States, a divestiture proposed under

Section IV or Section V shall not be consummated. Upon objection by

Allied under the provision in Section V(B), a divestiture proposed

under Section V shall not be consummated unless approved by the Court.

VII

Affidavits

A. Within twenty (20) calendar days of the filing of the Hold

Separate Stipulation and Order in this matter and every thirty (30)

calendar days thereafter until the divestiture has been completed

whether pursuant to Section IV or Section V of this Final Judgment,

Allied shall deliver to plaintiffs an affidavit as to the fact and

manner of compliance with Sections IV and V of this Final Judgment.

Each such affidavit shall include, inter alia, the name, address, and

telephone number of each person who, at any time after the period

covered by the last such report, made an offer to acquire, expressed an

interest in acquiring, entered into negotiations to acquire, or was

contacted or made an inquiry about acquiring, entered into negotiations

to acquire, or was contacted or made an inquiry about acquiring, and

interest in the businesses to be divested, and shall describe in detail

each contact with any such persons during that period. Each such

affidavit shall also include a description of the efforts that Allied

has taken to solicit a buyer for any and all Relevant Hauling Assets

and to provide requested information to prospective purchasers,

including the limitations, if any, on such information. Assuming the

information set forth in the affidavit is true and complete, any

objection by the Untied States, after consultation with the Relevant

State, to information provided by Allied, including limitations on

information, shall be made within fourteen (14) days of receipt of such

affidavit.

B. Within twenty (20) calendar days of the filing of the Hold

Separate Stipulation and Order in this matter. Allied shall deliver to

plaintiffs an affidavit which describes in detail all actions Allied

has taken and all steps Allied had implemented on an on-going basis to

preserve the Relevant Hauling Assets pursuant to Section VIII of this

Final Judgment and the Hold Separate Stipulation and Order entered by

the Court. The affidavit also shall describe, but not be limited to,

Allied's efforts to maintain and operate each Relevant Hauling Asset as

an active competitor, maintain the management, staffing, sales,

marketing and pricing of each asset, and maintain each asset in

operable condition at current capacity configurations. Allied shall

deliver to plaintiffs an affidavit describing any changes to the

efforts and actions outlined in Allied's earlier affidavit(s) filed

pursuant to this Section within fifteen (15) calendar days after the

change is implemented.

C. Until one year after such divestiture has been completed, Allied

shall preserve all records of all efforts made to preserve the Relevant

Hauling Assets and to effect the ordered divestitures.

VIII

Hold Separate Order

Until the divestitures required by the Final Judgment have been

accomplished, Allied shall take all steps necessary to comply with the

Hold Separate Stipulation and Order entered by this Court. Defendants

shall take no action that would jeopardize the sale of the Relevant

Hauling Assets.

IX

Financing

Allied is ordered and directed not to finance all or any part of

any acquisition by any person made pursuant to Sections IV or V of this

Final Judgment.

X

Contractual Revisions

A. In accordance with paragraph X B, below, Allied shall alter the

contracts it uses with its smaller container solid waste commercial

customers in the St. Louis market to the form contained in the attached

Exhibit C, except for contracts for terms of less than two years.

B. Except for contracts for terms of less than two years, Allied

shall offer contracts in the form attached as Exhibit C to all new

small container solid waste commercial customers or customers that sign

new contracts for small container solid waste commercial service

effective on the date Allied acquires the FBI assets. Allied shall

offer such contracts to all other small container solid waste

commercial customers in the St. Louis market by December 1, 1999.

XI

Acquisitions

Allied is hereby ordered and directed that for a period of five (5)

years after notice of the entry of this Final Judgment, Allied shall

not acquire any commercial waste hauling company, any commercial waste

hauling route, or any relevant hauling assets located in the City of

St. Louis, Missouri; St. Louis County, Missouri; and in the Illinois

counties of St. Clair, Madison and Monroe.

XII

Compliance Inspection

For purposes of determining or securing compliance with the Final

Judgment and subject to any legally recognized privilege, from time to

time:

A. Duly authorized representatives of the United States Department

of Justice, upon written request of the Attorney General or of the

Assistant Attorney General in charge of the antitrust Division, or upon

written request of duly authorized representatives of the Attorney

General's Office of any Relevant State, and on reasonable notice to

Allied made to its principal offices, shall be permitted:

(1) Access during office hours of Allied to inspect and copy all

books, ledgers, accounts, correspondence, memoranda, and other

records and documents in the possession or under the control of

Allied, who may have counsel present, relating to the matters

contained in this Final judgment and the Hold Separate Stipulation

and Order; and

(2) Subject to the reasonable convenience of Allied and without

restraint or interference from it, to interview, either

[[Page 23865]]

informally or on the record, its officers, employees, and agents,

who may have counsel present, regarding any such matters.

B. Upon the written request of the Attorney General or of the

Assistant Attorney General in charge of the Antitrust Division, or upon

the written request of the Attorney General's Office of any Relevant

State, Allied shall submit such written reports, under oath if

requested, with respect to any matter contained in the Final Judgment

and the Hold Separate Stipulation and Order.

C. No information or documents obtained by the means provided in

Sections VII or XII of this Final Judgment shall be divulged by a

representative of the plaintiffs to any person other than a duly

authorized representative of the Executive Branch of the United States,

or the Attorney General's Office of any Relevant State, except in the

course of legal proceedings to which the United States or any relevant

State is a party (including grand jury proceedings), or for the purpose

of securing compliance with this Final Judgment, or as otherwise

required by law.

D. If at the time information or documents are furnished by Allied

to plaintiffs, Allied represents and identifies in writing the material

in any such information or documents to which a claim of protection may

be asserted under Rule 26(c)(7) of the Federal Rules of Civil

Procedure, and Allied marks each pertinent page of such material,

``Subject to claim of protection under Rule 26(c)(7) of the Federal

Rules of Civil Procedure,'' then ten (10) calendar days notice shall be

given by plaintiffs to Allied prior to divulging such material in any

legal proceeding (other than a grand jury proceeding) to which Allied

is not a party.

XIII

Retention of Jurisdiction

Jurisdiction is retained by this Court for the purpose of enabling

any of the parties to this Final Judgment to apply to this Court at any

time for such further orders and directions as may be necessary or

appropriate for the construction or carrying out of this Final

Judgment, for the modification of any of the provisions hereof, for the

enforcement of compliance herewith, and for the punishment of any

violations hereof.

XIV

Termination

Unless this Court grants an extension, this Final Judgment will

expire upon the tenth anniversary of the date of its entry.

XV

Public Interest

Entry of this Final Judgment is in the public interest.

Dated:-----------------------------------------------------------------

----------------------------------------------------------------------

United States District Judge

COMPETITIVE IMPACT STATEMENT

The United States, pursuant to Section 2(b) of the Antitrust

Procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b)-(h), files

this Competitive Impact Statement related to the proposed Final

Judgment submitted for entry in this civil antitrust proceeding.

I

Nature and Purpose of the Proceeding

The United States filed a civil antitrust Complaint under Section

15 of the Clayton Act, 15 U.S.C. 25, on April 8, 1999, alleging that

the proposed acquisition of Browning-Ferris Industries, Inc.'s

(``BFI'') small container commercial waste hauling assets in the St.

Louis market by Allied Waste Industries, Inc. (``Allied'') would

constitute a violation of Section 7 of the Clayton Act, 15 U.S.C. 18.

The States of Illinois and Missouri, by and through their respective

Attorneys General, are co-plaintiffs with the United States in this

action.\1\

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\1\ The APPA obligates only the United States to file a

Competitive Impact Statement.

---------------------------------------------------------------------------

The Complaint alleges that the effect of the acquisition may be

substantially to lessen competition in small containerized commercial

waste hauling services in the St. Louis market, which includes the City

of St. Louis and St. Louis County in Missouri, and the Illinois

counties of St. Clair, Madison and Monroe.

Plaintiffs seek, among other relief, a permanent injunction

preventing the defendants from, in any manner, combining their small

container commercial waste hauling assets in the St. Louis market. By

the terms of a Hold Separate Stipulation and Order, which was filed

simultaneously with the proposed Final Judgment, defendant Allied must

take certain steps to ensure that, until the required divestiture has

been accomplished, the BFI assets as outlined in the proposed Final

Judgment will be held separate and apart from defendant Allied's other

assets and businesses. Allied must, until the required divestiture is

accomplished, preserve and maintain the specified BFI assets as

saleable and economically viable ongoing concerns.

The United States, its co-plaintiffs, and the defendants also have

filed a Hold Separate Stipulation and Order by which the parties

consented to the entry of a proposed Final Judgment designed to

eliminate the anticompetitive effects of the acquisition. Under the

proposed Final Judgment, as explained more fully below, Allied would be

required within 120 days after the filing of the Hold Separate

Stipulation and Order, or 5 days after notice of the entry of the Final

Judgment by the Court, to divest, as viable business operations, a

specified number of BFI's small container commercial waste hauling

routes and assets serving the St. Louis market. If Allied did not do so

within the time frame in the proposed Final Judgment, a trustee

appointed by the Court would be empowered for an additional six months

to sell those assets. If the trustee is unable to do so in that time,

the Court could enter such orders as it shall deem appropriate to carry

out the purpose of the trust, which may, if necessary, include

extending the trust and the trustee's appointment by a period requested

by the United States, after consultation with its co-plaintiffs.

Additionally, under the proposed Final Judgment, as explained more

fully below, defendant Allied would be required to offer less

restrictive contracts to its small container commercial waste hauling

customers in the St. Louis market; and be prohibited from acquiring any

commercial waste hauling company, any commercial waste hauling route,

or any relevant hauling assets in the St. Louis market for 5 years

after notice of the entry of proposed Final Judgment.

The United States, its co-plaintiffs, and the defendants have

stipulated that the proposed Final Judgment may be entered after

compliance with the APPA. Entry of the proposed Final Judgment would

terminate this action, except that the Court would retain jurisdiction

to construe, modify, or enforce the provisions of the proposed Final

Judgment and to punish violations thereof.

II

Description of the Events Giving Rise to the Alleged Violation

Allied and BFI are two of the three largest companies engaged in

the commercial waste hauling and disposal business, with operations

throughout the United States. In 1998, Allied reported domestic

revenues of nearly $1.6 billion while BFI reported domestic revenues of

nearly $4.7 billion.

[[Page 23866]]

Allied and BFI agreed to a sale to Allied of BFI's small container

commercial waste hauling assets in St. Louis market, as part of an

asset swap agreement dated February 11, 1999.

A. The Solid Waste Hauling Industry

Solid waste hauling involves the collection of paper, food,

construction material and other solid waste from homes, businesses and

industries, and the transporting of that waste to a landfill or other

disposal site. These services may be provided by private haulers

directly to residential, commercial and industrial customers, or

indirectly through municipal contracts and franchises.

Service to commercial customers accounts for a large percentage of

total hauling revenues. Commercial customers include restaurants, large

apartment complexes, retail and wholesale stores, office buildings, and

industrial parks. These customers typically generate a substantially

larger volume of waste than that generated by residential customers.

Waste generated by commercial customers is generally placed in metal

containers of one to ten cubic yards provided by their hauling company.

One to ten cubic yard containers are called ``small containers.'' Small

containers are collected primarily by frontend load vehicles that lift

the containers over the front of the truck by means of a hydraulic

hoist and empty them into the storage section of the vehicle, where the

waste is compacted. Specially-rigged rearend load vehicles can also be

used to service some commercial small container customers, but these

trucks generally are not as efficient as frontend load vehicles and are

limited in the sizes of containers they can safely handle. Frontend

load vehicles can drive directly up to a container and hoist the

container in a manner similar to a forklift hoisting a pallet: the

containers do not need to be manually rolled into position by a truck

crew as with a rearend load vehicle. Service to commercial customers

that use small containers is called ``small containerized hauling

service.''

Solid waste hauling firms also provide service to residential and

industrial (or ``roll-off'') customers. Residential customers,

typically households and small apartment complexes that generate small

amounts of waste, use noncontainerized solid waste hauling service,

normally placing their waste in plastic bags or trash cans at curbside.

Rearend load vehicles are generally used to collect waste from

residential customers and from those commercial customers that generate

relatively small quantities of solid waste, similar in the amount and

kind to those generated by residential customers. Generally, rearend

loaders use a one or two person crew to manually load the waste into

the rear of the vehicle.

Industrial or roll-off customers include factories and construction

sites. These customers either generate non-compactible waste, such as

concrete or building debris, or very large quantities of compactible

waste. They deposit their waste into very large containers (usually 20

to 40 cubic yards) that are loaded onto a roll-off truck and

transported individually to the disposal site where they are emptied

before being returned to the customer's premises. Some customers, like

shopping malls, use large, roll-off containers with compactors. This

type of customer generally generates compactible trash, like cardboard,

in very great quantities; it is more economical for this type of

customer to use roll-off service with compactor than to use a number of

small containers picked up multiple times a week.

B. Small Containerized Commercial Waste Hauling Service

There are no practical substitutes for small containerized

commercial waste hauling service. Small containerized commercial waste

hauling service customers will not generally switch to noncontainerized

service because it is too impractical and costly for those customers to

bag and carry their trash to the curb for hand pick-up. Small

containerized commercial waste hauling service customers also value the

cleanliness and relative freedom from scavengers afforded by that

service. Similarly, roll-off service is much too costly and takes up

too much space for most small containerized commercial waste hauling

service customers. Only customers that generate the largest volumes of

solid waste can economically consider roll-off service, and for

customers that do generate large volumes of waste, roll-off service is

usually the only viable option. Accordingly, small container commercial

waste hauling service is a line of commerce and a relevant product

market.

Solid waste hauling services are generally provided in very

localized areas. Route density (a large number of customers that are

close together) is necessary for small containerized commercial waste

hauling firms to be profitable. In addition, it is not economically

efficient for heavy trash hauling equipment to travel long distances

from customers without collecting significant amounts of waste. Thus,

it is not efficient for a hauler to serve major metropolitan areas from

a distant base. Haulers, therefore, generally establish garages and

related facilities within each major local area served. Local laws or

regulations that restrict where waste can be disposed of may further

localize markets. Flow control regulations designate the disposal

facilities where trash picked up within a geographic area must be

disposed. Other local regulations may also prohibit the depositing of

trash from outside a particular jurisdiction in disposal facilities

located within that jurisdiction. These laws and regulations dictate

that haulers operate only in these local jurisdictions so that they may

use the designated disposal facilities.

The Complaint alleges the St. Louis market as a relevant geographic

market for small containerized commercial waste hauling services. This

market includes the City of St. Louis and St. Louis County in Missouri,

and the Illinois counties of St. Clair, Madison and Monroe.

Allied and BFI compete with each other in small containerized

commercial waste hauling services in the relevant geographic market,

which is highly concentrated and becomes substantially more

concentrated as a result of the proposed acquisition. In the St. Louis

market, Allied and BFI each have over a 25% share of the small

containerized commercial waste hauling business. The acquisition would

increase the Herfindahl-Hirschmann Index (``HHI''),\2\ a measure of

market concentration, by about 1400 to about 3900 in the St. Louis

market.

---------------------------------------------------------------------------

\2\ The Herfindahl-Hirschmann Index (``HHI'') is a measure of

market concentration calculated by squaring the market share of each

firm competing in the market and then summing the resulting numbers.

For example, for a market consisting of four firms with shares of

30, 30, 20, and 20 percent, the HHI is 2600 (30 squared (900) plus

30 squared (900) plus 20 squared (400) plus 20 squared (400) =

2600). The HHI, which takes into account the relative size and

distribution of the firms in a market, ranges from virtually zero to

10,000. The index approaches zero when a market is occupied by a

large number of firms of relatively equal size. The index increases

as the number of firms in the market decreases and as the disparity

in size between the leading firms and the remaining firms increases.

---------------------------------------------------------------------------

A new entrant cannot constrain the prices of larger incumbents

until it achieves minimum efficient scale and operating efficiencies

comparable to the incumbent firms. In small containerized commercial

waste hauling service, achieving comparable operating efficiencies

required achieving route destiny comparable to existing firms, which

typically takes a substantial

[[Page 23867]]

period of time. A substantial barrier to entry is the use of long-term

contracts coupled with selective pricing practices by incumbent firms

to deter new entrants into small containerized commercial waste hauling

service and to hinder them in winning enough customers to build

efficient routes. Further, even if a new entrant endures and grows to a

point near minimum efficient scale, the entrant will often be purchased

by an incumbent firm and will be removed as a competitive threat.

Solid waste hauling is an industry highly susceptible to tacit or

overt collusion among competing firms. Overt collusion has been

documented in more than a dozen criminal and civil antitrust cases

brought in the last decade and a half. Such collusion typically

involves customer allocation and price fixing, and where it has

occurred, has been shown to persist for many years.

The elimination of one of a small number of significant

competitors, such as would occur as a result of the proposed

transaction in the St. Louis market, significantly increases the

likelihood that consumers in these markets are likely to face higher

prices or poorer quality service.

Based on the foregoing and other facts, the Complaint alleges that

the effect of the proposed acquisition may be substantially to lessen

competition in the above-described geographic area in the small

containerized commercial waste hauling service market in violation of

Section 7 of the Clayton Act.

III

Explanation of the Proposed Final Judgment

The provisions of the proposed Final Judgment are designed to

eliminate the anticompetitive effects of the acquisition in small

containerized commercial waste hauling services in the St. Louis market

by establishing a new, independent and economically viable competitor

in that market. The proposed Final Judgment requires Allied, within 120

days after the filing of the Hold Separate Stipulation and Order, or 5

days after notice of the entry of the Final Judgment by the Court, to

divest, as a viable ongoing business or businesses, a specified number

of BFI's small container commercial waste hauling routes and assets

serving the St. Louis market. The divestiture would include both the

small containerized commercial waste hauling service assets and other

assets as may be necessary to insure the viability of the small

container business. If Allied cannot accomplish this divestiture within

the above-described period, the proposed Final Judgment provides that,

upon application by the United States as plaintiff, the Court will

appoint a trustee to effect the divestiture.

The proposed Final Judgment provides that the assets must be

divested in such a way as to satisfy plaintiff United States (after

consultation with the states of Illinois and Missouri) that the

operations can and will be operated by the purchaser or purchasers as a

viable, ongoing business or businesses that can compete effectively in

the relevant market. Similarly, if the divestiture is accomplished by

the trustee, the assets must be divested in such a way as to satisfy

plaintiff United States (after consultation with the states of Illinois

and Missouri) that the business or businesses can and will be operated

as viable, independent competitors by the purchaser or purchasers. The

defendants must take all reasonable steps necessary to accomplish the

divestiture and shall cooperate with prospective purchasers and, if one

is appointed, with the trustee.

If a trustee is appointed, the proposed Final Judgment provides

that Allied will pay all costs and expenses of the trustee. The

trustee's commission will be structured so as to provide an incentive

for the trustee based on the price obtained and the speed with which

divestiture is accomplished. After his or her appointment becomes

effective, the trustee will file monthly reports with the parties and

the Court, setting forth the trustee's efforts to accomplish

divestiture. At the end of six months, if the divestiture has not been

accomplished, the trustee and the parties will make recommendations to

the Court which shall enter such orders as appropriate in order to

carry out the purpose of the trust, including extending the trust or

the term of the trustee's appointment.

The proposed Final Judgment also requires Allied to offer less

restrictive contracts (attached to the proposed Final Judgment as

Exhibit C) to small containerized commercial waste hauling customers in

the St. Louis market. These contractual changes involve shortening from

three years to two years the term of contracts Allied uses, limiting

renewals to one year periods, and substantially reducing the amount of

liquidated damages. The proposed Final Judgment requires that these

revised contracts shall be offered to all new, small, containerized

commercial waste hauling customers and to existing customers that sign

new contracts for small containerized commercial waste hauling service,

effective beginning the date Allied acquires the BFI assets. By

December 1, 1999, Allied must offer the revised contract to all other

small containerized commercial waste hauling service customers in the

St. Louis market.

The United States concluded that a change in the types of contracts

used with small containerized commercial waste hauling service

customers in the St. Louis market, in conjunction with the required

divestiture, will adequately address the competitive concerns posed by

Allied's acquisition of the BFI assets. Several factors led to the

decision, including the number of existing competitors in the market;

the size of the population and number and density of commercial

establishments requiring small containerized commercial waste hauling

service; and the number of haulers that currently do not provide, but,

absent the long-term contracts that now exist, could provide small

containerized commercial waste hauling service in the market. Requiring

Allied to offer less restrictive contracts within the St. Louis market

eliminates a major barrier to entry and expansion. Haulers already

serving the market will be able to more easily expand their current or

build new routes and nearby haulers will be able to build routes, thus

constraining any possible anticompetitive price increase by the post-

acquisition firm.

The proposed Final Judgment also prohibits Allied from acquiring

any commercial waste hauling company, any commercial waste hauling

route, or any relevant hauling assets in the St. Louis market for 5

years after notice of the entry of the proposed Final Judgment. The

United States concluded that this restriction would ensure continued

competition in the market by preventing Allied from acquiring small

containerized commercial waste hauling routes which would have had the

effect of undercutting the relief required by the proposed Final

Judgment by effecting the entry and expansion of other market

participants and stifling competition in small containerized commercial

waste hauling.

The relief sought in the St. Louis market alleged in the complaint

has been tailored to insure that, given the specific conditions in this

market, the relief will protect consumers of small containerized

commercial waste hauling services from higher prices and poorer quality

service that might otherwise result from the acquisition.

[[Page 23868]]

IV

Remedies Available to Potential Private Litigants

Section 4 of the Clayton Act (15 U.S.C. 15) provides that any

person who has been injured as a result of conduct prohibited by the

antitrust laws may bring suit in federal court to recover three times

the damages the person has suffered, as well as costs and reasonable

attorneys' fees. Entry of the proposed Final Judgment will neither

impair nor assist the bringing of any private antitrust damage action.

Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C.

16(a)), the proposed Final Judgment has no prima facie effect in any

subsequent private lawsuit that may be brought against the defendants.

V

Procedures Available for Modification of the Proposed Final Judgment

The United States and defendants have stipulated that the proposed

Final Judgment may be entered by the Court after compliance with the

provisions of the APPA, provided that the United States has not

withdrawn its consent. The APPA conditions entry upon the Court's

determination that the proposed Final Judgment is in the public

interest.

The APPA provides a period of at least 60 days preceding the

effective date of the proposed Final Judgment within which any person

may submit to the United States written comments regarding the proposed

Final Judgment. Any person who wishes to comment should do so within

(60) days of the date of publication of this Competitive Impact

Statement in the Federal Register. The United States will evaluate and

respond to the comments. All comments will be given due consideration

by the Department of Justice, which remains free to withdraw its

consent to the proposed Final Judgment at any time prior to entry. The

comments and the response of the United States will be filed with the

Court and published in the Federal Register.

Written comments should be submitted to: J. Robert Kramer II,

Chief, Litigation II Section, Antitrust Division, United States

Department of Justice, 1401 H Street, NW, Suite 3000, Washington, DC

20530.

The proposed Final Judgment provides that the Court retains

jurisdiction over this action, and the parties may apply to the Court

for any order necessary or appropriate for the modification,

interpretation, or enforcement of the Final Judgment.

VI

Alternatives to the Proposed Final Judgment

The United States considered, as an alternative to the proposed

Final Judgment, litigation against defendants Allied and BFI. The

United States could have brought suit and sought preliminary and

permanent injunctions against Allied's acquisition of the BFI assets.

The United States is satisfied, however, that the divestiture of the

assets, the contract relief, and the prohibition on acquisitions, as

outlined in the proposed Final Judgment, will promote small

containerized commercial waste hauling service competition in the St.

Louis market and lower entry barriers that would otherwise

substantially lessen competition in this market. The United States is

satisfied that the proposed relief will prevent the acquisition from

having anticompetitive effects in the St. Louis market, will maintain

the structure of the St. Louis market that existed prior to the

acquisition, will preserve the existence of independent competitors in

this area, and will allow for new entry and expansion by existing firms

in this market.

VII

Standard of Review Under the APPA for the Proposed Supplemental Order

The APPA requires that proposed consent judgments in antitrust

cases brought by the United States be subject to a sixty-day comment

period, after which the Court shall determine whether entry of the

proposed supplemental Order ``is in the public interest.'' In making

that determination, the Court may consider--

(1) The competitive impact of such judgment, including termination

of alleged violations, provisions for enforcement and modification,

duration or relief sought, anticipated effects of alternative remedies

actually considered, and any other considerations bearing upon the

adequacy of such judgment;

(2) The impact of entry of such judgment upon the public generally

and individuals alleging specific injury from the violations set forth

in the complaint including consideration of the public benefit, if any,

to be derived from a determination of the issues at trial.

15 U.S.C. 16(e) (emphasis added). As the Court of Appeals for the

District of Columbia Circuit recently held, the APPA permits a court to

consider, among other things, the relationship between the remedy

secured and the specific allegations set forth in the government's

complaint, whether the decree is sufficiently clear, whether

enforcement mechanisms are sufficient, and whether the decree may

positively harm third parties. See United States v. Microsoft, 56 F. 3d

1448, 1458-62 (D.C. Cir. 1995). The courts have recognized that the

term `` `public interest' take[s] meaning from the purposes of the

regulatory legislation.'' NAACP v. Federal Power Comm'n, 425 U.S. 662,

669 (1976). Since the purpose of the antitrust laws is to preserve

``free and unfettered competition as the rule of trade,'' Northern

Pacific Railway Co. v. United States, 356 U.S. 1, 4 (1958), the focus

of the ``public interest'' inquiry under the APPA is whether the

proposed Final Judgment would serve the public interest in free and

unfettered competition. United States v. American Cyanamid Co., 719 F.

2d 558, 565 (2d Cir. 1983), cert. denied, 465 U.S. 1101 (1984); United

States v. Waste Management, Inc., 1985-2 Trade Cas. para.66,651, at

63,046 (D.D.C. 1985). In conducting this inquiry, ``the Court is

nowhere compelled to go to trial or to engage in extended proceedings

which might have the effect of vitiating the benefits of prompt and

less costly settlement through the consent decree process.'' \3\

Rather,

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\3\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette

Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest''

determination can be made properly on the basis of the Competitive

Impact Statement and Response to Comments filed pursuant to the

APPA. Although the APPA authorizes the use of additional procedures,

15 U.S.C. Sec. 16(f), those procedures are discretionary. A court

need not invoke any of them unless it believes that the comments

have raised significant issues and that further proceedings would

aid the court in resolving those issues. See H.R. 93-1463, 93rd

Cong. 2d Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News

6535, 6538.

[a]bsent a showing of corrupt failure of the government to discharge

its duty, the Court, in making its public interest finding, should .

. . carefully consider the explanations of the government in the

competitive impact statement and its responses to comments in order

to determine whether those explanations are reasonable under the

---------------------------------------------------------------------------

circumstances.

United States v. Mid/America Dairymen, Inc., 1977-1 Trade Cas.

para.61,508, at 71,980 (W.D. Mo. 1977).

Accordingly, with respect to the adequacy of the relief secured by

the decree, a Court may not ``engage in an unrestricted evaluation of

what relief would best serve the public.'' United States v. BNS, Inc.,

858 F. 2d 456, 462 (9th Cir. 1988) quoting United States v. Bechtel

Corp., 648 F. 2d 660, 666 (9th Cir.), cert denied, 454 U.S. 1083

(1981). See also Microsoft, 56 F. 3d 1448 (D.C. Cir. 1995). Precedent

requires that:

[[Page 23869]]

the 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. The court's

role in protecting the public interest is one of insuring that the

government has not breached its duty to the public in consenting to

the decree. The court is required to determine not whether a

particular decree is the one that will best serve society, but

whether the settlement is `within the reaches of the public

interest.' More elaborate requirements might undermine the

effectiveness of antitrust enforcement by consent decree.\4\

\4\United States v. Bechtel, 648 F. 2d at 666 (citations

omitted) (emphasis added); see United States v. BNS, Inc., 858 F. 2d

at 463; United States v. National Broadcasting Co., 449 F. Supp.

1127, 1143 (C.D. Cal. 1978); United States v. Gillette Co., 406 F.

Supp. at 716. See also United States v. American Cyanamid Co., 719

F. 2d at 565.

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A proposed consent decree is an agreement between the parties which

is reached after exhaustive negotiations and discussions. Parties do

not hastily and thoughtlessly stipulate to a decree because, in doing

so, they

waive their right to litigate the issues involved in the case and

thus save themselves the time, expense, and inevitable risk of

litigation. Naturally, the agreement reached normally embodies a

compromise; in exchange for the saving of cost and the elimination

of risk, the parties each give up something they might have won had

they proceeded with the litigation.

United States v. Armour & Co., 402 U.S. 673, 681 (1971).

The proposed Final Judgment therefore, should not be reviewed under

a standard of whether it is certain to eliminate every anticompetitive

effect of a particular practice or whether it mandates certainty of

free competition in the future. Court approval of a final judgment

requires a standard more flexible and less strict than the standard

required for a finding of liability. ``[A] proposed decree must be

approved even if it falls short of the remedy the court would impose on

its own, as long as it falls within the range of acceptability or is

`within the reaches of public interest.' (citations omitted).'' \5\

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\5\ United States v. American Tel. and Tel Co., 552 F. Supp.

131, 150 (D.D.C. 1982), aff'd sub nom. Maryland v. United States,

460 U.S. 1001 (1983) quoting United States v. Gillette Co., supra,

406 F. Supp. at 716; United States v. Alcan Aluminum, Ltd., 605 F.

Supp. 619, 622 (W.D. Ky. 1985).

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VIII

Determinative Documents

There are no determinative materials or documents within the

meaning of the APPA that were considered by the United States in

formulating the proposed Final Judgment.

Dated: April 22, 1999.

Respectfully submitted,

Arthur A. Feiveson,

IL Bar #3125793.

David R. Bickel,

DC Bar #393409.

Thomas J. Horton

Denise Cheung,

U.S. Department of Justice, Antitrust Division, Litigation II Section,

1401 H Street, NW, Suite 3000, Washington, DC 20530, (202) 307-0924.

Certificate of Service

I hereby certify that a copy of the foregoing has been served upon

Allied Waste Industries, Inc., Browning-Ferris Industries, Inc., the

Office of the Attorney General of the State of Illinois, and the Office

of the Attorney General of the State of Missouri, by placing a copy of

this Competitive Impact Statement in the U.S. mail, directed to each of

the above-named parties at the address given below, this 22d day of

April, 1999.

Allied Waste Industries, Inc., c/o Tom D. Smith, Jones Day Reavis &

Pogue, Metropolitan Square, 1450 G Street, NW, Washington, DC 20005-

2088

Browning-Ferris Industries, Inc., c/o David M. Foster, Fulbright &

Jaworski, 801 Pennsylvania Avenue, NW, Washington, DC 20004-2615

State of Illinois, Christine H. Rosso, Assistant Attorney General,

Office of the Attorney General, Antitrust Bureau, 100 W. Randolph,

Chicago, IL 60601

State of Missouri, J. Robert Sears, Assistant Atorney General,

Office of the Attorney General, 1530 Rax Court, Jefferson City,

Missouri 65109

Arthur A. Feiveson,

Attorney, U.S. Department of Justice, Antitrust Division, 1401 H

Street, NW, Suite 3000, Washington, DC 20530, (202) 307-0924.

[FR Doc. 99-11076 Filed 5-3-99; 8:45 am]

BILLING CODE 4410-11-M