Announced Action for August 26, 1998

Petitions to reopen and modify orders: The FTC has granted the petition from the following entity seeking changes in an FTC order.

• Several consent orders with Columbia/HCA Corporation have been modified by the Commission. The FTC voted to substitute the requirement that Columbia obtain the agency’s approval before acquiring hospitals in certain local areas of the United States or allowing its hospitals in those areas to be acquired with the requirement that the company provide advance written notice 30 days before such sales or acquisitions. The Commission vote to modify the orders was 3-1, with Commissioner Orson Swindle dissenting. In a statement Chairman Robert Pitofsky and Commissioners Sheila F. Anthony and Mozelle W. Thompson said the Commission’s 1995 Prior Approval Policy Statement "directs that the terms of any prior notification requirement be considered ?on a case-by-case basis’ in light of the characteristics of particular markets, market participants and other relevant factors. In the instant case, the Commission will require Columbia to provide thirty (30) days advance notice of any proposed merger or acquisition transaction as defined in the Orders ('first waiting period'). If during this first waiting period the Commission requests further information concerning a proposed transaction, Columbia shall not take any action, other than planning, in furtherance of such a transaction until thirty (30) days after substantially complying with such request for additional information ('second waiting period') or such shorter waiting period as may be granted by letter from the Bureau of Competition." The Commission reasoned that a longer waiting period was necessary in this case because "there is a credible risk that Columbia/HCA would engage in future anticompetitive acquisitions covered by the Orders that would not be subject to the reporting requirements of Section 7A of the Clayton Act, commonly referred to as the HSR Act. Moreover, Columbia/HCA’s violations of Commission Orders earlier this year suggests a reckless disregard with respect to satisfying such obligations."

In a dissenting statement that is attached to each of the orders issued by the Commission, Commissioner Swindle said that he agreed with his colleagues that the Commission should substitute a prior notification requirement for the prior approval provision in each order, but disagreed with the Commission's decision to lengthen the traditional "second" notification period from 20 to 30 days. "In the present matters," said Commissioner Swindle, "the Commission has chosen to lengthen the second period in each of these orders to 30 days. I disagree with the decision to impose on Columbia/HCA a greater burden than other respondents have borne, and to do so for reasons that appear to smack of retribution." He took issue with the explanation for this differential offered by his colleagues, noting that the Commission's Prior Approval Policy Statement, on which the majority relies, "is not a declaration that the Commission is liberated from every agency's obligation to treat parties before it fairly and evenhandedly."

Commissioner Swindle also observed that the consent agreement that the Commission just announced in Commonwealth Land Title Insurance Company -- a case with similarities to the Columbia/HCA situation -- provides for a second notification period lasting only 20 days. "I do not understand how my colleagues can square the relief in Commonwealth with what they have done to Columbia/HCA," he said. With regard to the $2.5 million civil penalty that Columbia/HCA recently paid for violating certain FTC orders, Commissioner Swindle said he did "not see what bearing that misconduct has on the entirely unrelated question of how much time we need to review future acquisitions. If the Commission has based its decision to lengthen the second waiting period on its reaction to respondent's previous behavior, then I would suggest that such a decision is not only arbitrary but punitive. ... Because Columbia/HCA's prior order violations have no demonstrable bearing on the appropriate length of the second waiting period, I dissent from the Commission's unjustified handling of this respondent." (See news release dated April 17, 1998; Docket Nos. C-3472, C-3505, C-3538, C-3544 and 9256; Staff contact is Daniel P. Ducore, 202-326-2526.)

Copies of the orders and the full text of the statements are available from the FTC’s web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording