UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

The Associated Octel Company Ltd., a corporation, Great Lakes Chemical Corporation, a corporation, and Ethyl Corporation, a corporation

DOCKET NO.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that The Associated Octel Company Ltd., Great Lakes Chemical Corporation, and Ethyl Corporation, corporations, hereinafter sometimes collectively referred to as "respondents," have violated the provisions of Section 5 of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH ONE: For the purpose of this complaint, "lead antiknock compounds" means gasoline additives that contain tetraethyl or tetramethyl lead, and that increase the octane rating of gasoline. Currently in the United States, lead antiknock compounds are added to aviation gasoline for piston engine aircraft and to certain motor gasoline for racing cars.

PARAGRAPH TWO: Respondent Great Lakes Chemical Corporation ("Great Lakes") is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business located at One Great Lakes Boulevard, West Lafayette, Indiana 47906.

PARAGRAPH THREE: Respondent The Associated Octel Company Ltd. ("Octel") is a corporation organized and existing under and by virtue of the laws of the United Kingdom with its office and principal place of business located at Oil Sites Road, Ellesmere Port, South Wirral, England, United Kingdom. Octel is a wholly-owned subsidiary of Great Lakes.

PARAGRAPH FOUR: Octel is now, and has for several years been, the world’s largest manufacturer and seller of lead antiknock compounds. As of 1993, Octel operated production facilities in Ellesmere Port, England, Bussi, Italy and Paimboeuf, France. Its sales of lead antiknock compounds in 1993 were in excess of $540 million, representing approximately 60 percent of worldwide sales of lead antiknock compounds.

PARAGRAPH FIVE: For several years up to and including 1993, Octel sold lead antiknock compounds to independent distributors for resale to refineries and gasoline blenders located throughout the United States. In 1994, Octel began to sell directly to U.S. customers.

PARAGRAPH SIX: Respondent Ethyl Corporation ("Ethyl") is a corporation organized, existing and doing business under and by virtue of the laws of the State of Virginia, with its office and principal place of business located at 330 South Fourth Street, Richmond, Virginia 23217.

PARAGRAPH SEVEN: Ethyl was for several years the second largest manufacturer of lead antiknock compounds in the world. As of 1993, Ethyl operated one production facility located in Sarnia, Ontario. Its sales of lead antiknock compounds in 1993 were in excess of $245 million, representing approximately 30 percent of worldwide sales of lead antiknock compounds.

PARAGRAPH EIGHT: During the relevant time period, Ethyl has sold lead antiknock compounds to refineries and gasoline blenders located throughout the United States.

PARAGRAPH NINE: The acts and practices of Octel and Ethyl, including the acts and practices alleged herein, are in commerce or affect commerce, as "commerce" is defined in § 4 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 44.

PARAGRAPH TEN: The relevant line of commerce in which to evaluate the competitive effects of respondents’ acts and practices is the manufacture and sale of lead antiknock compounds.

PARAGRAPH ELEVEN: The relevant geographic market is the world.

PARAGRAPH TWELVE: The relevant market set forth above is highly concentrated, whether measured by the Herfindahl-Hirschman Index ("HHI") or two-firm and four-firm concentration ratios.

PARAGRAPH THIRTEEN: Entry into the relevant market is difficult or unlikely.

PARAGRAPH FOURTEEN: Between October 1993 and March 1994, Octel and Ethyl entered into a series of contracts, agreements, and understandings -- written and unwritten -- regarding the manufacture, distribution, and sale of lead antiknock compounds. Among the important undertakings are the following:

(a) Ethyl agreed to cease manufacturing lead antiknock compounds.

(b) Octel agreed to supply to Ethyl each year, for re-sale, a limited volume of lead antiknock compounds at a discount price.

(c) Octel and Ethyl agreed that the maximum volume of lead antiknock compounds supplied to Ethyl each year through 1998 would be thirty five thousand metric tons. Octel and Ethyl agreed that the maximum volume of lead antiknock compounds supplied to Ethyl during each subsequent year would be a fixed portion of Octel’s annual capacity to manufacture compounds. Under the contract, Octel is free to reduce its productive capacity, but must notify Ethyl one year in advance of such action.

(d) Octel and Ethyl agreed that the price of lead antiknock compounds purchased by Ethyl for re-sale to customers in the United States and certain other countries would be adjusted each year, depending upon the change in the average sale price charged by Octel to retail customers located in the United States and certain other countries.

(e) Octel agreed to notify Ethyl each year of the change in the average sale price charged by Octel to retail customers located in the United States and certain other countries, and to make its books and records, including sales contracts and invoices, available for inspection by an independent auditor reporting to Ethyl.

(f) Octel agreed to cease the bulk shipping of lead antiknock compounds, and to transfer to Ethyl certain ocean going vessels dedicated to transporting lead antiknock compounds.

(g) Ethyl agreed to provide to Octel all bulk shipping services required by Octel for the distribution of lead antiknock compounds.

PARAGRAPH FIFTEEN: In March 1994, Ethyl closed its facility for the production of lead antiknock compounds located in Sarnia, Ontario.

PARAGRAPH SIXTEEN: The acts and practices of respondents, as alleged herein, had the effect, or the tendency and capacity, to increase the likelihood of coordinated interaction among sellers of lead antiknock compounds, to restrain competition unreasonably, to increase prices and to injure consumers.

PARAGRAPH SEVENTEEN: The acts and practices of respondents, as alleged herein, constitute unfair methods of competition in or affecting commerce in violation of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45. These acts and practices, or the effects thereof, will continue or recur in the absence of appropriate relief.

WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade Commission on this day of , 1998 issues its complaint against respondents.

By the Commission.

Donald S. Clark
Secretary

SEAL:

ISSUED: