Question
June 22, 1994
Via Fax (redacted)
Nancy Ovuka
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
6th & Pennsylvania Avenue, NW
Room 303
Washington, D.C. 20580
Re: Request for Staff Interpretation of Section 7A of the Clayton Act
Dear Ms. Ovuka:
This letter requests an interpretation of Section 7A of the Clayton Act, 15 USC 18a, (the "HSR Act") as applied to the transfer of a used (redacted) having a fair market value in excess of $15 million to a manufacturer of new (redacted) from the same manufacturer. The manufacturer is not engaged in the business of providing (redacted) transportation for hire, either regularly scheduled or by charter. The palates fulfill the size-of-person criteria.
Th question presented is whether the acquisition of a used (redacted) as a trade-in by a manufacturer of (redacted) is an "acquisition of goods . . . transferred in the ordinary course of business," within the meaning of Section 7A(c)(1) of the Clayton Act, 15 USC 18A(c) (1), and therefore exempt from the requirement to file a Notification and Report Form.
The sale of (redacted) is addressed in a report on an FTC Staff Interpretation as Number 1, at ABA, Section of Antitrust Law, Premerger Notification Practice Manual 1 (1985). In Example A of that Interpretation the Staff first dealt with a sale by an (redacted) manufacturer of a $16 million (redacted) to an (redacted) The Staff concluded that such a transaction was in the ordinary course of the manufacturer's business because the manufacturer does not use (redacted) as an income-producing asset. The Staff contrasted that situation with the sale by one (redacted) of an (redacted) to another (redacted). The Staff observed that even though (redacted) buy and sell (redacted) frequently, they are not in the business of selling (redacted). Rather, they use the (redacted) as productive assets.
The Staff's key concept is use as a productive asset by the seller. The concept serves the two purposes of the HSR Act, i.e., (1) to afford antitrust enforcement agencies time to review in advance combinations of going business enterprises in the (redacted) transportation industry that might violate Section 7 of the Clayton Act, (ii) to avoid burdening the process with reviews of hundreds of ordinary-course sales of high-value (redacted)
Requiring Notification for a manufacturer's receipt of an (redacted) as a trade-in would serve neither of the HSR's purposes, i.e, it is not the combination of going business enterprises in the (redacted) transportation industry, and it would unduly burden the process of trading-used (redacted) on new (redacted)
Therefore, we request confirmation that a Notification and Report Form need not be filed with respect to the above-described used-(redacted) trade-in. In view of the palates' desire to consummate the transaction at the earliest possible time, we would appreciate your giving this request expedited treatment.
Respectfully submitted,
(Redacted)
(Redacted)