[Federal Register: May 21, 2003 (Volume 68, Number 98)]
[Notices]
[Page 27863-27864]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21my03-71]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Village Voice Media, LLC, & NT Media, LLC;
Public Comments and Plaintiff's Response
Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C.
16(b) and (d), the United States hereby publishes below the written
comments received on the proposed Final Judgment in United States of
America v. Village Voice Media, LLC, and NT Media, LLC, Civil Action
No. 1:03CV0164, filed in the United States District Court for the
Northern District of Ohio, together with the United States' response to
the comments.
Copies of the comments and the United States' response are
available for inspection at the United States Department of Justice,
Antitrust Division, 325 Seventh Street, NW., Suite 300, Washington, DC
20530, and at the Office of the Clerk, United States District Court for
the Northern District of Ohio, Carl B. Stokes United States Court
House, 801 West Superior Avenue, Cleveland, OH 44113-1830. Copies of
these materials may be obtained upon request and payment of a copying
fee.
Constance K. Robinson,
Director of Operations.
Response to Public Comments
Pursuant to the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h) (``APPA'' or ``Tunney Act''), the
United States hereby responds to the public comments received regarding
the Proposed Final Judgment in this case.
I. Background
On January 27, 2003, the United States filed the Complaint in this
matter to terminate the Defendants' illegal agreement to allocate
markets for advertisers in, and readers of, alternative newsweeklies in
metropolitan Cleveland, Ohio, and Los Angeles, California, in violation
of Section 1 of the Sherman Act, 15 U.S.C. 1. Simultaneously with the
filing of the Complaint, the United States filed a Proposed Final
Judgment. A Competitive Impact Statement (``CIS'') was also filed with
the Court on February 3, 2003, and published in the Federal Register,
along with the Proposed Final Judgment, on February 12, 2003 (see 68 FR
7132). Pursuant to 15 U.S.C. 16(c), a summary of the terms of the
Proposed Final Judgment and CIS was published in The Plain Dealer
during the period of February 6 through 12, 2003, and The Washington
Post, a newspaper of general circulation in the District of Columbia,
during the period of February 14 through 20, 2003.
As explained more fully in the Complaint and CIS, prior to entering
into their unlawful agreement, Defendants NT Media (``New Times'') and
Village Voice Media were head-to-head competitors in publishing
alternative newsweeklies in Cleveland and Los Angeles. In October 2002,
New Times agreed to shut down its Los Angeles alternative newsweekly,
the New Times Los Angeles, if Village Voice Media closed its newsweekly
in Cleveland, the Cleveland Free Times. Thus, Defendants ``swapped''
markets, leaving New Times with a monopoly in Cleveland and Village
Voice Media with a monopoly in Los Angeles. This unlawful agreement
eliminated the competition that had brought advertisers in both cities
lower advertising rates, more promotional opportunities and better
service, and that had benefitted readers with a higher quality product.
The Proposed Final Judgment requires, in part, that New Times and
Village Voice Media terminated their unlawful agreement, allow affected
advertisers in Los Angeles and Cleveland to terminate their contracts,
notify the United States before entering into any merger, sale, or
joint venture involving their alternative newsweeklies, and divest the
assets of the New Times Los Angles and the Cleveland Free Times to new
entrants in those markets. The proposed consent decree also prohibits
the companies from entering into any market or customer allocation
agreements in the future.
The sixty-day period for public comment expired on April 21, 2003.
As of today, the United States has received written comments from; (1)
Citizens for Voluntary Trade, whose president filed an amicus motion
with this Court, (2) Gary Beberman, and (3) Denise D'Anne. The United
States has carefully considered the views expressed in these comments,
but nothing in the comments has altered the United States' conclusion
that the Proposed Final Judgment is in the public interest. Pursuant to
section 16(d) of the Tunney Act, the United States is now filing with
this Court its response to such comments. Once these comments and this
response are published in the Federal Register, the United States will
have fully compiled with the Tunney Act and will file a motion for
entry of the Proposed Final Judgment.
II. Response to Public Comments
A. Citizens for Voluntary Trade's Comment
In its written comment, Citizens for Voluntary Trade (``CVT'')
states that the First Amendment to the U.S. Constitution preempts the
Proposed Final Judgment, as ``[e]ven the most `anti-competitive'
conduct is protected by the First Amendment.'' (CVT Comment at 2, a
copy of which is attached at Exhibit A.)
The Supreme Court as long ago as 1945 dismissed this assertion. The
restraints imposed by these private arrangements are not protected by
the First Amendment. Citizen Publishing Co. v. United States, 394 U.S.
131 (1969); Associated Press v. United States, 326 U.S. 1, 20 (1945).
Neither news gathering nor news dissemination are being regulated by
the Proposed Final Judgment, which addresses only the Defendants' per
se illegal restraints on certain business or commercial practices. The
Defendants' unreasonable restraints on competition--which the Proposed
Final Judgment remedies--comport neither with the antitrust laws nor
with the First Amendment. As the Supreme Court held in the Associated
Press case, and reiterated twenty-four years later in the Citizen
Publishing decision:
It would be strange indeed * * * if the grave concern for
freedom of the press which prompted adoption of the First Amendment
should be read as a command that the government was without power to
protect that freedom. The First Amendment, far from providing an
argument against application of the Sherman Act, here provides
powerful
[[Page 27864]]
reasons to the contrary. That Amendment rests on the assumption that
the widest possible dissemination of information from diverse and
antagonistic sources is essential to the welfare of the public, that
a free press is a condition of a free society. Surly a command that
the government itself shall not impede the free flow of ideas does
not afford nongovernmental combinations a refuge if they impose
restraints upon that constitutionally guaranteed freedom. Freedom to
publish means freedom for all and not for some. Freedom to publish
is guaranteed by the Constitution, but freedom to combine to keep
others from publishing is not. Freedom of the press from
governmental interference under the First Amendment does not
sanction repression of that freedom by private interests. The First
Amendment affords not the slightest support for the contention that
a combination to restrain trade in news and views has any
constitutional immunity.\1\
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\1\ Citizen Publ'g, 394 U.S. at 139-40 (quoting Associated
Press, 326 U.S. at 20).
In his amicus brief, S.M. Oliva, CVT's president, does not address
the merits of the Proposed Final Judgment but rather objects to certain
procedural aspects of the Proposed Final Judgment. In particular, Oliva
alleges that the United States intentionally violated the Tunney Act by
requiring the Defendants to complete certain divestitures within thirty
days after the filing of the Complaint. (Amicus brief at 3, a copy of
which is attached as Exhibit B.)
First, nothing in the Tunney Act precludes the United States from
taking or refraining from certain actions during the sixty-day comment
period. The statute also does not prohibit the Defendants from
divesting certain assets and refraining from certain action before this
Court enters the Proposed Final Judgment.
Second, contrary to Mr. Oliva's assertion, the required
divestitures do not preclude this Court from evaluating whether entry
of the Proposed Final Judgment is in the public interest or declining
to enter the order if it believes the settlement is unacceptable. As
Section IV(A) of the Hold Separate Stipulation and Order provides, the
United States may withdraw its consent to the Proposed Final Judgment
at any time before the entry of the Proposed Final Judgment. Moreover,
the Hold Separate Stipulation and Order contemplates that this Court
may not enter the Proposed Final Judgment. By divesting certain assets
and refraining from any action in furtherance of their illegal market
allocation agreement, the Defendants have assumed the risk that the
United States might withdraw its consent and proceed to trial or that
this Court may decline the Proposed Final Judgment.
Furthermore, the divestitures at issued are common in many other
Tunney act proceedings, It is customary in the vast majority of mergers
that are resolved by consent in the form of proposed final judgments to
permit the defendants to merge at the time when the complaint and
proposed final judgment are filed, subject to the defendant's
obligations under the proposed final judgment to take steps to divest
certain specified assets. In these mergers, the defendants are
generally allowed to complete the merger prior to the close of the
sixty-day comment period and entry of the final judgment by the court.
The defendants in such cases, as here, understand that the proposed
final judgment is subject to public comment, that the United States may
revoke its consent at any time before the final judgment is entered,
and that the final judgment will not be entered unless a court finds
that it is in the public interest.
Third, to delay any remedial measures until after the sixty-day
comment period expires might undermine the effectiveness of the relief.
As the CIS states, ``[g]iven that Defendants had closed the Cleveland
Free Times and New Times Los Angeles in October 2002, a quick and
effective remedy was necessary to reestablish competition.'' (CIS at
14.) Readers and advertisers will sooner benefit in Cleveland and Los
Angeles as a result of a quick and effective divestiture.
B. Gary Beberman's Comment
In his e-mail, Mr. Beberman writes that the United States ``may
have been correct that the Village voice was colluding in anti-
competitive behavior'' but that ``their actions were merely attempts to
survive.'' (A copy of Mr. Beberman's comment is attached as Exhibit C.)
Mr. Beberman, however, never states whether he supports or opposes
entry of the Proposed Final Judgment. And any critique of whether this
investigation should have been brought in the first place amounts to a
challenge of the initial exercise of the United States' prosecutorial
discretion, which is outside the scope of this proceeding. See, e.g.,
United States v. Western Elec. Co., 993 F.2d 1572, 1577 (D.C. Cir.
1993)(noting that Tunney Act proceeding does not permit ``de novo
determination of facts and issues'' because ``[t]he balancing of
competing social and political interests affected by a proposed
antitrust decree must be left, in the first instance, to the discretion
of the Attorney General'')(citations omitted). Likewise, Mr. Beberman's
comments about another case, United States v. Microsoft Corp., are
extraneous to this matter. (Also, the sixty-day comment period in that
case ended on January 28, 2002, and the United States District Court
for the District of Columbia entered the final judgment on November 12,
2002.)
C. Denise D'Anne's Comment
Mr. D'Anne thanked the United States for pursuing this action. (A
copy of Ms. D'Anne's comment is attached as Exhibit D.)
III. Conclusion
After careful consideration of these public comments, the United
States has concluded that entry of the Proposed Final Judgment will
provide an effective and appropriate remedy for the antitrust violation
alleged in the Complaint, and is therefore in the public interest.
Pursuant to seciton 16(d) of the APPA, the United States is submitting
these public comments and this response to the Federal Register for
publication. After these comments and this response are published in
the Federal Register, the United States will move this Court to enter
the Proposed Final Judgment.
Dated: May 1, 2003.
Maurice E. Stucke,
Carol A. Bell,
Matthews J. Bester,
Attorneys for the United States, United States Department of
Justice, Antitrust Division, Litigation III Section, 325 Seventh
Street, NW., Suite 300, Washington, DC 20530, (202) 305-1489
(telephone), (202) 514-1517 (facsimile), Maurice.Stucke@usdoj.gov.
Jon R. Smibert,
Attorney for the United States, United States Department of Justice,
Antitrust Division, Cleveland Field Office, 55 Erieview Plaza, Suite
700, Cleveland, Ohio 44114-1816, (216) 522-4070, telephone, (216)
522-8332, facsimile, Jon.Smiber@usdoj.gov.
Certificate of Service
I hereby certify that I served a copy of the foregoing Response to
Public Comments via First Class United States Mail, this 1st day of
May, 2003, on:
Melanie Sabo,
Preston Gates Ellis & Rouvelas Meeds, LLP, 1735 New York Avenue,
NW., Suite 500, Washington, DC 20006-5209, Counsel for Defendant
Village Voice Media, LLC.
Joseph Kattan,
Gibson, Dunn & Crutcher, LLP, 1050 Connecticut Avenue, NW.,
Washington, DC 20036, Counsel for Defendant NT Media, LLC.
Carol A. Bell,
Attorney for the United States, United States Department of Justice,
Antitrust Division, Litigation III Section, 325 Seventh Street, NW.,
Suite 300, Washington, DC 20530, (202) 307-3076.
[FR Doc. 03-12745 Filed 5-20-03; 8:45 am]
BILLING CODE 4410-11-M