FTC Order Restores Competition in Market for Magnesium Plates for Photoengraving

Magnesium Elektron, a leader in the production of magnesium plates used for photoengraving, has settled Federal Trade Commission charges that its acquisition of rival plate manufacturer Revere Graphics Worldwide, Inc. was anticompetitive and a violation of the antitrust laws.  The proposed order resolves the FTC’s allegations, and restores the competition eliminated by the merger by requiring Magnesium Elektron to sell necessary intellectual property and technical know-how used to manufacture magnesium plates for photoengraving applications to Kansas-based Universal Engraving.

The FTC’s complaint alleges that Magnesium Elektron’s acquisition of Revere violated the FTC Act and Section 7 of the Clayton Act. In September 2007, Magnesium Elektron acquired the worldwide assets of Revere for approximately $15 million. According to the FTC, the companies were the only two manufacturers and sellers of magnesium plates for photoengraving in the world at that time.  Photoengraving is a process used to produce printing plates by photographic means.

The proposed consent order is designed to remedy the anticompetitive effects of the acquisition by requiring Magnesium Elektron to sell technology and know-how used to manufacture magnesium plates for photoengraving to Universal Engraving. While Universal Engraving does not currently manufacture or sell magnesium plates, it is uniquely positioned to become an effective competitor in this market because it already sells other metals used in the photoengraving process to customers affected by the merger.

The proposed order also contains provisions to help ensure that the divestiture to Universal Engraving is successful. It requires Magnesium Elektron to initially supply Universal Engraving with magnesium plates, allowing Universal to immediately enter the market in competition with Magnesium Elektron.  It also requires Magnesium Elektron, for a period of time, to provide Universal Engraving with the technical assistance it may need to manufacture and sell magnesium plates for photoengraving.  Finally, the proposed order provides Universal Engraving with access to chemicals that are used and sold with magnesium plates for photoengraving applications.

The Commission’s vote approving the complaint and proposed settlement order was 5-0.  The order will be subject to public comment for 30 days, until November 13, 2012, after which the Commission will decide whether to make it final.  Comments should be sent to:  FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.  Comments can be submitted electronically.

NOTE:  The Commission issues a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.  The issuance of a complaint is not a finding or ruling that the respondent has violated the law.  A consent agreement is for settlement purposes only and does not constitute an admission of a law violation.  When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions.  Each violation of such an order may result in a civil penalty of $16,000.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action.  To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., Room 7117, Washington, DC 20580.  To learn more about the Bureau of Competition, read Competition Counts.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

(FTC File No. 091-0094)