[Federal Register Volume 73, Number 119 (Thursday, June 19, 2008)]
[Notices]
[Pages 34948-34961]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-13029]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Cengage Learning Holdings I, L.P., Cengage
Learning Holdings II L.P., Cengage Learning, Inc., Apax/Tl Holdings,
LLC, Education Media and Publishing Group Limited, and Houghton Mifflin
Harcourt Publishing Company; Proposed Final Judgment and Competitive
Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Asset Preservation Stipulation and Order, and Competitive Impact
Statement have been filed with the United States District Court for the
District of Columbia in United States v. Cengage Learning Holdings I,
L.P., Civil Action No. 1:08-cv-00899. On May 28, 2008, the United
States filed a Complaint alleging that the proposed acquisition by
Cengage Learning of the assets of Houghton Mifflin College Division
would violate section 7 of the Clayton Act, 15 U.S.C. 18. The proposed
Final Judgment, filed at the same time as the Complaint, requires
Cengage Learning to divest assets related to textbooks and educational
materials used in 14 college-level courses.
Copies of the Complaint, proposed Final Judgment, and Competitive
Impact Statement are available for inspection at the Department of
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth
Street, NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-
2481), on the Department of Justice's Web site at http://www.usdoj.gov/atr, and at the Office of the Clerk of the United States District Court
for the District of Columbia. Copies of these materials may be obtained
from the Antitrust Division upon request and payment of the copying fee
set by Department of Justice regulations.
Public comment is invited within 60 days of the date of this
notice. Such comments, and responses thereto, will be published in the
Federal Register and filed with the Court. Comments should be directed
to James J. Tierney, Chief, Networks & Technology Enforcement Section,
Antitrust Division, Department of Justice, 600 E Street, NW., Suite
9500, Washington, DC 20530 (telephone: 202-307-6200).
Patricia A. Brink,
Deputy Director of Operations, Antitrust Division.
The United States District Court for the District of Columbia
United States of America, United States Department of Justice,
Antitrust Division, 600 E Street, NW., Suite 9500, Washington, DC
20530, Plaintiff, v. Cengage Learning Holdings I, L.P., Cengage
Learning Holdings II L.P., Cengage Learning, Inc., Apax/Tl Holdings,
LLC, Education Media and Publishing Group Limiited, and Houghton
Mifflin Harcourt Publishing Company, Defendants
Case No.:
Judge:
Case: 1:08-cv-00899, Assigned To: Bates, John D., Assign. Date: 5/28/
2008, Description: Antitrust.
Complaint
The United States of America, acting under the direction of the
Attorney General of the United States, brings this civil antitrust
action to enjoin the proposed acquisition by Cengage Learning, Inc. and
related entities (collectively ``Cengage''), of the assets of the
Houghton Mifflin College Division (``HM College'') from Houghton
Mifflin Harcourt Publishing Company and a related entity (collectively
``Houghton Mifflin''), and to obtain equitable and other relief. The
United States complains and alleges as follows:
I. Nature of the Action
1. On or about November 30, 2007, Cengage and Houghton Mifflin
entered into an agreement for Cengage to acquire the assets of HM
College for approximately $750 million.
2. Cengage and HM College publish textbooks and other educational
materials and are direct competitors in the development, publication,
and sale of textbooks and ancillary print and electronic (including
Internet-based) educational materials (collectively ``textbooks and
ancillary materials'') used in numerous courses taught at higher
education institutions throughout the United States.
For the courses listed in Appendix A of this Complaint (hereinafter
``the Overlap Courses''), Cengage and HM College publish textbooks and
ancillary materials that compete head-to-head with each other and are
close substitutes.
3. The markets for textbooks and ancillary materials used in the
Overlap Courses are highly concentrated and have high barriers to
entry. Cengage's proposed acquisition of the assets of HM College would
eliminate competition between Cengage and HM College in these markets.
4. The United States brings this action to prevent Cengage's
proposed acquisition of the assets of HM College because it is likely
to substantially lessen competition in the development, publication,
and sale of textbooks and ancillary materials used in the Overlap
Courses in violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.
18.
II. Parties to the Proposed Acquisition
5. Cengage Learning, Inc. is a Delaware corporation with its
headquarters in Stamford, Connecticut. Cengage Learning Holdings I,
L.P., a limited partnership with its headquarters in Stamford,
Connecticut, is the ultimate parent entity of Cengage Learning, Inc.
Cengage Learning Holdings II L.P., a limited partnership with its
headquarters in Stamford Connecticut, is an intermediate entity between
Cengage Learning Holdings I, L.P. and Cengage Learning, Inc. Apax/TL
Holdings, LLC, a Delaware limited liability company, is the general
partner in Cengage Learning Holdings I, L.P. The above entities
(collectively ``Cengage'') develop, publish, and sell textbooks and
ancillary materials for use
[[Page 34949]]
in the United States and elsewhere. Cengage is the second largest
publisher of textbooks and ancillary materials used in courses taught
at higher education institutions in the United States and ranks among
the top three sellers of such textbooks and materials for each of the
Overlap Courses. Cengage had total revenues of about $1.7 billion in
the twelve-month period ending September 30, 2007, including about $1
billion in revenues from the sale of higher education textbooks and
ancillary materials.
6. Houghton Mifflin Harcourt Publishing Company (formerly Houghton
Mifflin Company) is a Massachusetts corporation with its headquarters
in Boston, Massachusetts. Education Media and Publishing Group Limited,
a Cayman Islands corporation with its headquarters in Dublin, Ireland,
is the ultimate parent entity of Houghton Mifflin Harcourt Publishing
Company. The above entities (collectively ``Houghton Mifflin'')
develop, publish, and sell textbooks and ancillary materials for use in
the United States and elsewhere. Houghton Mifflin's HM College Division
is the fifth largest publisher of textbooks and ancillary materials
used in courses taught at higher education institutions in the United
States and ranks among the top three sellers of such textbooks and
materials for each of the Overlap Courses. Houghton Mifflin has total
annual revenues of about $2.5 billion, and estimated 2007 revenues of
about $230 million from the sale of textbooks and ancillary materials
by HM College.
III. Jurisdiction and Venue
7. The United States brings this action under Section 15 of the
Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain the
Defendants from violating section 7 of the Clayton Act, 15 U.S.C. 18.
8. Defendants' activities in developing, publishing, and selling
textbooks and ancillary materials for use in the Overlap Courses are in
the flow of and substantially affect interstate trade and commerce.
This Court has subject matter jurisdiction over this action pursuant to
section 12 of the Clayton Act, 15 U.S.C. 22, and 28 U.S.C. 1331,
1337(a), and 1345.
9. Defendants sell higher education textbooks and ancillary
materials in, and have consented to venue and personal jurisdiction in,
this judicial district. Venue is proper under 15 U.S.C. 22 and 28
U.S.C. 1391(d).
IV. Trade and Commerce
A. Relevant Product Markets for Textbooks and Ancillary Materials
10. Publishers market and sell textbooks and ancillary materials
for use in courses taught at higher education institutions. In most
cases, instructors select the textbooks and ancillary materials that
will be used for their courses, and students buy the selected textbooks
and ancillary materials.
11. Textbooks are often supplemented with ancillary educational
materials, such as teacher's editions, audio-visual teaching tools,
Internet content, CD-ROMs, workbooks, and study guides. These materials
are often offered by publishers for free or as part of a discounted
package to induce instructors to select a particular textbook and to
induce students to purchase the publisher's textbooks and ancillary
materials.
12. Textbooks and ancillary materials are used as the primary
teaching materials in each of the Overlap Courses. Textbooks provide
the core written material for the Overlap Courses and serve as the
foundation for instructors' overall lesson plans. While instructors
could use alternative teaching materials (such as copies of lecture
notes and articles), they generally select textbooks to serve as the
primary teaching materials for their courses because accessing and
creating alternative teaching materials is often a more time-consuming,
costly, and inefficient method of delivering high quality content to
their students. Instructors using textbooks and ancillary materials
would not turn to any alternative teaching materials in sufficient
numbers to defeat a small but significant increase in the price of any
textbooks and ancillary materials for the Overlap Courses, or a small
but significant decrease in the quality of such textbooks and other
materials.
13. Students taking the Overlap Courses are unlikely to have any
significant alternatives to purchasing new textbooks for these courses.
Although used textbooks, if available, can sometimes serve as
alternatives for new textbooks, used textbooks are not uniformly
available in large numbers. Moreover, instructors often require
students to use the newest textbook editions. Publishers generally
revise textbooks every three to four years and revised textbooks often
differ substantially from their prior edition, limiting the extent to
which used textbooks may be substituted for new editions of the same
textbooks. Students would not turn to purchasing used textbooks in
sufficient numbers to defeat a small but significant increase in the
price of a new edition of the textbooks.
14. Each Overlap Course is a separate course focused on a different
subject and therefore requires instructors and students in the course
to use the textbooks and ancillary materials that have been developed
for that course. For each Overlap Course, the textbooks and ancillary
materials for that course constitute a separate relevant product market
and a line of commerce pursuant to Section 7 of the Clayton Act.
B. The Relevant Geographic Market
15. Defendants market and sell textbooks and ancillary materials
for use in courses taught at higher education institutions throughout
the United States. Market participants for each relevant product market
alleged herein are those publishers from which instructors select
textbooks and ancillary materials for use as primary teaching materials
in their courses. A hypothetical monopolist of the textbooks and
ancillary materials sold for use in any Overlap Course in the United
States could profitably lower the rate of quality improvements in and/
or increase the price of such textbooks and ancillary materials in the
United States. For each relevant product market alleged herein, the
United States constitutes a relevant geographic market pursuant to
Section 7 of the Clayton Act.
C. Anti Competitive Effects: Loss of Price and Product Quality
Competition
16. In each relevant product and geographic market alleged herein,
Cengage and HM College offer leading textbooks and ancillary materials
that are close substitutes for a significant number of customers in
that market. In each such market, Cengage and HM College are among the
few firms with a significant presence that compete to provide textbooks
and ancillary materials and consistently account for at least 35
percent of all sales. Using a standard concentration measure called the
Herfindahl-Hirschman Index (or ``HHI,'' defined and explained in
Appendix B), the proposed acquisition would substantially raise market
concentration in highly concentrated markets, increasing the HHI by
more than 500 and producing a post-merger HHI in excess of 3000 in each
relevant market.
17. Cengage and HM College compete head-to-head to be selected by
instructors to provide textbooks and ancillary materials for each
Overlap Course in the United States. This competition has provided
significant
[[Page 34950]]
incentives for each to publish new titles and improve product quality
and has disciplined pricing decisions. The proposed acquisition would
eliminate this competition in each relevant market, increasing the
likelihood that Cengage will unilaterally increase prices or reduce its
investment or other efforts to develop new or improved textbooks and
ancillary materials.
18. The proposed acquisition is likely to substantially lessen
competition in the development, publication, and sale of textbooks and
ancillary materials in each of the relevant markets, in violation of
Section 7 of the Clayton Act.
D. Entry: New Entrants Will Not Defeat an Exercise of Market Power
19. In each relevant product and geographic market alleged herein,
there is unlikely to be timely entry by any firm that would be
sufficient to defeat the likely anticompetitive effects of the proposed
acquisition. Successful entry into developing, publishing, and selling
textbooks and ancillary materials in each of the relevant markets is
difficult, time-consuming, and costly.
20. Successful entry generally can be achieved only over many years
and after at least one or more textbook revision cycles. Significant
investment and effort are required to assemble authors, editorial
staff, and reviewing professors, to develop and obtain licenses to
copyrighted content and ancillary educational materials, and to train a
knowledgeable sales force. The outcome of such effort would be highly
uncertain because, among other things, the reputation of a successful
incumbent textbook is difficult for a publisher of a new textbook to
challenge. The leading textbooks in each relevant market have been
published for some time and are well-known to instructors. Most
instructors switch textbooks infrequently because they develop course
syllabi, lesson plans, homework, tests, and other materials that
conform to the textbooks they use, and changing textbooks usually
requires modifications to course syllabi and other materials.
V. Violations Alleged
21. The United States incorporates the allegations of paragraphs 1
through 20 above.
22. The proposed acquisition of HM College by Cengage would
substantially lessen competition in interstate trade and commerce in
violation of section 7 of the Clayton Act, 15 U.S.C. 18.
23. Unless restrained, the acquisition would likely have the
following anticompetitive effects, among others:
a. Actual and future competition between Cengage and Houghton
Mifflin in the development, publication, and sale of textbooks and
ancillary materials in each relevant product and geographic market
alleged herein will be eliminated;
b. Competition in the development, publication, and sale of
textbooks and ancillary materials in each relevant market will be
substantially lessened; and
c. The rate of quality improvements in the textbooks and ancillary
materials in each relevant market likely will decline and/or prices for
such textbooks and ancillary materials likely will increase.
VI. Request for Relief
24. The United States requests that this Court:
a. Adjudge and decree the proposed acquisition to violate section 7
of the Clayton Act, 15 U.S.C. 18;
b. Enjoin and restrain the Defendants and all persons acting on
their behalf from consummating the proposed acquisition or from
entering into or carrying out any contract, agreement, plan, or
understanding, the effect of which would be to combine HM College with
the operations of Cengage;
c. Award the United States its costs for this action; and
d. Grant the United States such other and further relief as the
Court deems just and proper.
Respectfully submitted,
For Plaintiff United States of America:
Thomas O. Barnett (D.C. Bar 426840),
Assistant Attorney General.
James J. Tierney (D.C. Bar 434610), Chief, Networks &
Technology Enforcement Section.
David L. Meyer (D.C. Bar 414420), Deputy Assistant Attorney
General.
Scott A. Scheele (D.C. Bar 429061), Assistant Chief, Networks
& Technology Enforcement Section.
Patricia A. Brink, Deputy Director of Operations.
Janet J. Brody.
Justine K. Donahue (D.C. Bar 476255).
Aaron Comenetz (D.C. Bar 479572).
John C. Filippini (D.C. Bar 165159).
Kent Brown.
Aaron Brodsky.
Attorneys, Networks & Technology Enforcement Section.
Antitrust Division, United States Department of Justice, 600 B Street,
NW., Suite 9500, Washington, DC 20530, (202) 307-6200, Dated: May 28,
2008.
Appendix A
Overlap Courses
Business: Introductory.
Foreign Languages and Literature: French: Language: Business French.
Foreign Languages and Literature: French: Language: Intermediate.
Foreign Languages and Literature: German: Language: Grammar.
Foreign Languages and Literature: Italian: Language: Elementary.
Foreign Languages and Literature: Italian: Language: Intermediate.
History: Western Civilization Survey: 1500 to Present.
History: Western Civilization Survey: 1750 to Present.
History: Western Civilization Survey: Prehistory to 1715.
History: Western Civilization Survey: Prehistory to Present.
History: World History Survey: 1400 to 1750.
History: World History Survey: 1500 to Present.
History: World History Survey: Prehistory to Present.
Interdisciplinary Studies: Orientation to College.
Appendix B
Herfindahl-Hirschman Index
``HHI'' means the Herfindahl-Hirschman Index, a commonly
accepted measure of market concentration. It is calculated by
squaring the market share of each firm competing in the market and
then summing the resulting numbers. For example, for a market
consisting of four firms with shares of 30%, 30%, 20%, and 20%, the
HHI is 2600 (302 + 302 +202 + 202 = 2600). The HHI takes into
account the relative size distribution of the firms in a market and
approaches zero when a market consists of a large number of small
firms. The HHI increases both as the number of firms in the market
decreases and as the disparity in size between those firms
increases.
Markets in which the HHI is between 1000 and 1800 points are
considered to be moderately concentrated, and those in which the HHI
is in excess of 1800 points are considered to be highly
concentrated. See Horizontal Merger Guidelines Sec. 1.51 (revised
Apr. 8, 1997). Transactions that increase the HHI by more than 100
points in concentrated markets presumptively raise antitrust
concerns under the guidelines issued by the U.S. Department of
Justice and Federal Trade Commission. See id.
The United States District Court for the District of Columbia
United States of America, Plaintiff, v. Cengage Learning Holdings
I, L.P., Cengage Learning Holdings II L.P., Cengage Learning, Inc.,
Apax/Tl Holdings, LLC, Education Media and Publishing Group
Limited, and Houghton Mifflin Harcourt Publishing Company,
Defendants
Case No.: Judge: Case: 1:08-Cv-00899, Assigned To: Bates, John D.,
Assign. Date: 5/28/2008, Description: Antitrust.
Final Judgment
Whereas, plaintiff, United States of America, filed its Complaint
on May 28, 2008, and the United States and Defendants, Cengage and
Houghton
[[Page 34951]]
Mifflin, as defined below, by their respective attorneys, have
consented to the entry of this Final Judgment without trial or
adjudication of any issue of fact or law, and without this Final
Judgment constituting any evidence against or admission by any party
regarding any issue of fact or law;
And whereas, Defendants agree to be bound by the provisions of this
Final Judgment pending its approval by the Court;
And whereas, the essence of this Final Judgment is the prompt and
certain divestiture of certain rights or assets by the Defendants to
assure that competition is not substantially lessened;
And whereas, the United States requires Defendants to make certain
divestitures for the purpose of remedying the loss of competition
alleged in the Complaint;
And whereas, Defendants have represented to the United States that
the divestitures required below can and will be made and that
Defendants will later raise no claim of hardship or difficulty as
grounds for asking the Court to modify any of the divestiture
provisions contained below;
Now Therefore, before any testimony is taken, without trial or
adjudication of any issue of fact or law, and upon consent of the
parties, it is ordered, Adjudged and decreed:
I. Jurisdiction
This Court has jurisdiction over the subject matter and each of the
parties to this action. The Complaint states a claim upon which relief
may be granted against Defendants under Section 7 of the Clayton Act,
as amended (15 U.S.C. 18).
II. Definitions
As used in this Final Judgment:
A. ``Cengage'' means Defendants Cengage Learning Holdings I, L.P, a
limited partnership with its headquarters in Stamford, Connecticut;
Cengage Learning Holdings II L.P., a limited partnership with its
headquarters in Stamford, Connecticut, which is controlled by Cengage
Learning Holdings I, L.P.; Cengage Learning, Inc., a Delaware
corporation with its headquarters in Stamford, Connecticut, which is
controlled by Cengage Learning Holdings II L.P.; and Apax/TL Holdings,
LLC, a Delaware limited liability company that is the general partner
in Cengage Learning Holdings I, L.P.; their successors, assigns,
subsidiaries, divisions, groups, affiliates, partnerships, joint
ventures; and their directors, officers, managers, agents, and
employees.
B. ``Houghton Mifflin'' means Defendants Education Media and
Publishing Group Limited, a Cayman Islands corporation with it
headquarters in Dublin, Ireland, and Houghton Mifflin Harcourt
Publishing Company, a Massachusetts corporation with its headquarters
in Boston, Massachusetts, which is an indirect wholly-owned subsidiary
of Education Media and Publishing Group Limited; their successors,
assigns, subsidiaries, divisions, groups, affiliates, partnerships,
joint ventures; and their directors, officers, managers, agents, and
employees.
C. ``Divestiture Assets'' means all of the textbooks described in
Exhibit A attached hereto and associated ancillary educational
materials offered or under development by any of the Defendants for use
with any such textbook. Each textbook includes all versions that are
customizations of, components of supplements to, derivations of,
volumes that address specific subjects or periods included in the
subject matter of, or brief or ``essentials'' versions of the textbook,
but does not include any customized publication sold prior to the
filing of the Complaint in this matter that both (i) is not authored or
co-authored by any author listed in Exhibit A, and (ii) contains
content from an author identified in, or a textbook described in,
Exhibit A that comprises less than twenty-five (25) percent of the
publisher-provided content (hereafter ``Excluded Customized
Publications''). The associated ancillary educational materials include
all materials in any form or format offered or under development for
use with any textbook, including teacher editions or aids, excerpts,
workbooks, outlines, summaries, study guides, notebooks, charts, audio,
video, software, CD-ROMs, DVD-ROMs, Internet and broadcast components,
all other technology components, teacher support and staff development
materials, and any other materials. The associated ancillary
educational materials include (i) materials that are or will be offered
specifically for use with any textbook listed on Exhibit A; (ii)
materials that are or will be offered primarily for use with any such
textbook, meaning at least fifty (50) percent of the total units of
such materials shipped in the United States during the twelve-month
period prior to the filing of the Complaint in this matter were
associated with the sale of any such textbook (or for materials still
under development, meaning at least fifty (50) percent of the total
units of such materials forecast to be shipped in the United States
during the twelve-month period following development are forecast to be
associated with the sale of any such textbook) (hereafter ``Category
(ii) Ancillary Materials''); and (iii) a one-year, nonexclusive,
royalty-free license to use materials that have been offered during the
twelve-month period prior to the filing of the Complaint in this matter
for use in association with any of the textbooks described in Exhibit A
but are offered primarily for use with other textbooks, meaning at
least fifty (50) percent of the units of such materials shipped in the
United States during the twelve-month period prior to the filing of the
Complaint in this matter were associated with the sale of other
textbooks. (The textbooks and associated ancillary educational
materials are hereafter collectively referred to as ``Divested
Textbooks.'')
(1) The Divestiture Assets Include:
(a) All tangible assets used in the development, production,
servicing, marketing, distribution, and sale of the Divested Textbooks,
including, but not limited to, all records relating to historic and
current research data and activities and development activities
relating to the Divested Textbooks; all original and digital artwork,
film plates, and other reproductive materials relating to the Divested
Textbooks; all manuscripts, illustrations, any other content, and any
revisions or revision plans thereof in print or digital form; all
finished inventory; all licenses, permits and authorizations issued by
any governmental organization relating to the Divested Textbooks; all
contracts, teaming arrangements, agreements, commitments,
certifications, and understandings relating to the Divested Textbooks,
including, but not limited to, author permissions and agreements,
publishing agreements, research agreements, other similar agreements,
and supply and distribution agreements; all customer lists, contracts,
purchase orders, accounts, and credit records, or similar records of
all sales and potential sales of the Divested Textbooks; all sales
support and promotional materials, advertising materials, and
production, sales and marketing files relating to the Divested
Textbooks; at the option of the Acquirer(s), computers and other
tangible assets used primarily for the production or distribution of
the Divested Textbooks; and all performance and all other records
relating to the Divested Textbooks; and
(b) All intangible assets used in the development, production,
servicing, marketing, distribution, and sale of the Divested Textbooks,
including, but not limited to; all patents, licenses and sublicenses,
intellectual property,
[[Page 34952]]
copyrights, contract rights, trademarks (registered and unregistered),
trade names, service marks, service names, including all titles of
existing products comprising or relating to the Divested Textbooks, but
only including nonexclusive licenses to use the corporate trademarks or
trade names of Cengage or Houghton Mifflin sufficient to allow any
Acquirer to sell finished inventory or other materials that have
already been marked with such trademarks or trade names; all technical
information, computer software and related documentation, know-how,
trade secrets, drawings, blueprints, designs, design protocols,
specifications for materials, quality assurance and control procedures,
and manuals used for any purpose relating to the Divested Textbooks or
that Defendants provide to their own employees, customers, suppliers,
agents or licensees for use in relation to the Divested Textbooks; and
all other intangible research data concerning historic and current
research and development efforts relating to the Divested Textbooks.
(2) The Divestiture Assets Do Not Include:
(a) Except to the extent included in the non-exclusive license of
materials described in Section II.C.(1)(b), the company names, company
Internet domain names, and company trademarks of Defendants or any of
their affiliates, or portions or elements thereof, including, but not
limited to, ``Cengage'', ``South-Western'', ``Wadsworth'', ``Brooks
Cole'', ``Heinle'', ``Houghton Mifflin'', ``HM'', and ``HMCo'';
(b) Defendants' employee records that may not be produced under
applicable law; and
(c) Originals of books or records, as well as the information
management systems used to create and store such books and records,
that Defendants are required by law to retain or that Defendants
determine are necessary or advisable to retain, provided that copies of
any such books or records, or data sets that can be accessed by
information management systems, are provided in a form useable by the
Acquirer(s), subject to customary confidentiality assurances, to any
Acquirer(s) or potential Acquirer(s).
D. ``Acquirer'' or ``Acquirers'' means the entity or entities to
whom Defendants divest the Divestiture Assets.
III. Applicability
A. This Final Judgment applies to Cengage and Houghton Mifflin, as
defined above, and all other persons in active concert or participation
with any of them who receive actual notice of this Final Judgment by
personal service or otherwise. Notwithstanding any other provision of
this Final Judgment, Houghton Mifflin's obligations under sections
IV.A, IV.H, V.A, V.B, V.D, VI.A shall cease upon completion of its sale
of the Divestiture Assets to Cengage as part of its sale to Cengage of
the assets of the Houghton Mifflin College Division.
B. If prior to complying with sections IV and V of this Final
Judgment, Defendants sell or otherwise dispose of all or substantially
all of their assets or of lesser business units that include the
Divestiture Assets, they shall require the purchaser to be bound by the
provisions of this Final Judgment. Defendants need not obtain such an
agreement from the Acquirer(s) of the Divestiture Assets pursuant to
this Final Judgment.
IV. Divestitures
A. Defendants are ordered and directed, within forty-five (45)
calendar days after the filing of the Complaint in this matter, or five
(5) calendar days after notice of the entry of this Final Judgment by
the Court, whichever is later, to divest the Divestiture Assets in a
manner consistent with this Final Judgment to one or more Acquirers
acceptable to the United States, in its sole discretion. The United
States, in its sole discretion, may agree to one or more extensions of
this time period not to exceed thirty (30) calendar days in total, and
shall notify the Court in such circumstances. Defendants agree to use
their best efforts to divest the Divestiture Assets as expeditiously as
possible.
B. In accomplishing the divestitures ordered by this Final
Judgment, Defendants promptly shall make known, by usual and customary
means, the availability of the Divestiture Assets. Defendants shall
inform any person making inquiry regarding a possible purchase of the
Divestiture Assets that they are being divested pursuant to this Final
Judgment and provide that person with a copy of this Final Judgment.
Defendants shall offer to furnish to all prospective Acquirers, subject
to customary confidentiality assurances, all information and documents
relating to the Divestiture Assets customarily provided in a due
diligence process except such information or documents subject to the
attorney-client privilege or work-product doctrine. Defendants shall
make available such information to the United States at the same time
that such information is made available to any other person.
C. Defendants shall provide the Acquirer(s) and the United States
the identity of any personnel responsible for any editorial content of
any Divestiture Asset, and any personnel involved in the management,
sale, marketing, development, design, layout, production, research,
operation, delivery, distribution, acquisition or maintenance of
licenses or other rights to copyrights or other intellectual property,
or provision or development of seminars or training activities relating
to any of the Divestiture Assets, to enable the Acquirer(s) to make
offers of employment. Defendants will not interfere with any
negotiations or attempts by the Acquirer(s) to employ or contract with
any of Defendants' officers, directors, employees, or any other persons
responsible for any such activity related to any Divestiture Asset and,
if requested, will release any such person from any non-compete
agreement with any of the Defendants.
D. Defendants shall permit prospective Acquirers of the Divestiture
Assets to have reasonable access to personnel responsible for the
Divestiture Assets (as described in section IV.C of this Final
Judgment); and to have access to any and all financial, operational, or
other documents and information customarily provided as part of a due
diligence process.
E. Defendants shall warrant to all Acquirers of the Divestiture
Assets that each asset is complete, intact, fully functional and
operational on the date of sale, provided that, for any asset that is
in development at the time of sale, Defendants shall describe the
extent to which the asset is complete, intact, functional and
operational and project the amount of time, money and effort required
to complete the development. Defendants shall warrant to all Acquirers
of the Divestiture Assets that each asset has been preserved,
maintained, developed, sold, and operated as required by the Asset
Preservation Stipulation and Order filed simultaneously with the Court.
F. Defendants shall not take any action that will impede in any way
the permitting, publication, marketing, sale, development,
administration, acquisition or maintenance of related licenses or other
rights to copyrights or other intellectual property, function,
operation or divestiture of the Divestiture Assets. Defendants shall
use their best efforts to facilitate the assignment to the Acquirer(s)
of all of the tangible and intangible assets included in the
Divestiture Assets that Defendants presently hold or use pursuant to a
license or any other agreement.
[[Page 34953]]
G. Defendant Cengage shall have the right to obtain from the
Acquirer(s) of the Divestiture Assets:
(1) With respect to each Excluded Customized Publication, a one-
year, non-exclusive, royalty-free license to continue to include in
that publication Divestiture Asset-related content;
(2) With respect to Category (ii) Ancillary Materials, a one-year,
non-exclusive, royalty-free license to continue to sell such materials
in association with textbooks that are not described on Exhibit A
where, prior to the filing of the Complaint in this matter, such
materials were sold in association with those textbooks; and
(3) With respect to copyrighted art, photographs, illustrations,
charts, graphs, or other similar content that, at the time of the
filing of the Complaint in this matter, were included within both the
Divestiture Assets and other textbooks and products (other than content
written, developed produced or copyrighted by, or otherwise
attributable to, (i) any author identified in Exhibit A with respect to
any course associated with that author in Exhibit A, or (ii) the
author's co-authors or successor authors), a non-exclusive, royalty-
free license to continue to use such content (i) in the other textbooks
and products in which it is now included, (ii) in future textbooks and
ancillary educational materials other than textbooks and materials
offered for use in any course listed in Exhibit A, and (iii) with the
permission of the Acquirer(s) of all of the Divested Assets applicable
to any course listed in Exhibit A, in future textbooks and ancillary
materials for use in that course.
H. Unless the United States otherwise consents in writing, the
divestitures pursuant to section IV, or by trustee appointed pursuant
to section V, of this Final Judgment, shall include the entire
Divestiture Assets, and shall be accomplished in such a way as to
satisfy the United States, in its sole discretion, that the Divestiture
Assets can and will be used by the Acquirer(s) as part of a viable,
ongoing higher education textbook publishing business. Divestiture of
the Divestiture Assets may be made to one or more Acquirers, provided
that in each instance it is demonstrated to the sole satisfaction of
the United States that the Divestiture Assets will remain viable and
the divestiture of such assets will remedy the competitive harm alleged
in the Complaint. The divestitures, whether pursuant to section IV or
section V of this Final Judgment:
(1) Shall be made to an Acquirer(s) that, in the United States's
sole judgment, has the intent and capability (including the necessary
managerial, operational, technical and financial capability) of
competing effectively in the higher education textbook publishing
business; and
(2) Shall be accomplished so as to satisfy the United States, in
its sole discretion, that none of the terms of any agreement between an
Acquirer(s) and Defendants give Defendants the ability unreasonably to
raise the Acquirer's costs, to lower the Acquirer's efficiency, or
otherwise to interfere in the ability of the Acquirer to compete
effectively.
V. Appointment of Trustee
A. If Defendants have not divested the Divestiture Assets within
the time period specified in section IV.A of this Final Judgment,
Defendants shall notify the United States of that fact in writing. Upon
application of the United States, the Court shall appoint a trustee
selected by the United States and approved by the Court to effect the
divestiture of the Divestiture Assets.
B. After the appointment of a trustee becomes effective, only the
trustee shall have the right to sell the Divestiture Assets. The
trustee shall have the power and authority to accomplish the
divestiture to an Acquirer(s) acceptable to the United States at such
price and on such terms as are then obtainable upon reasonable effort
by the trustee, subject to the provisions of sections IV, V, and VI of
this Final Judgment, and shall have such other powers as this Court
deems appropriate. Subject to section V.D of this Final Judgment, the
trustee may hire at the cost and expense of Defendants any investment
bankers, attorneys, or other agents, who shall be solely accountable to
the trustee, reasonably necessary in the trustee's judgment to assist
in the divestitures.
C. Defendants shall not object to a sale by the trustee on any
ground other than the trustee's malfeasance. Any such objections by
Defendants must be conveyed in writing to the United States and the
trustee within ten (10) calendar days after the trustee has provided
the notice required under section VI of this Final Judgment.
D. The trustee shall serve at the cost and expense of Defendants,
on such terms and conditions as the United States approves, and shall
account for all monies derived from the sale of the assets sold by the
trustee and all costs and expenses so incurred. After approval by the
Court of the trustee's accounting, including fees for its services and
those of any professionals and agents retained by the trustee, all
remaining money shall be paid to Defendants and the trust shall then be
terminated. The compensation of the trustee and any professionals and
agents retained by the trustee shall be reasonable in light of the
value of the Divestiture Assets and based on a fee arrangement
providing the trustee with an incentive based on the price and terms of
the divestiture and the speed with which it is accomplished, but
timeliness is paramount.
E. Defendants shall use their best efforts to assist the trustee in
accomplishing the required divestitures. The trustee and any
consultants, accountants, attorneys, and other persons retained by the
trustee shall have full and complete access to the personnel, books,
records, and facilities of the businesses to be divested, and
Defendants shall develop financial and other information relevant to
such businesses as the trustee may reasonably request, subject to
reasonable protection for trade secrets or other confidential research,
development, or commercial information. Defendants shall take no action
to interfere with or to impede the trustee's accomplishment of the
divestitures.
F. After its appointment, the trustee shall file monthly reports
with the United States and the Court setting forth the trustee's
efforts to accomplish the divestitures ordered under this Final
Judgment. To the extent such reports contain information that the
trustee deems confidential, such reports shall not be filed in the
public docket of the Court. Such reports shall include the name,
address, and telephone number of each person who, during the preceding
month, made an offer to acquire, expressed an interest in acquiring,
entered into negotiations to acquire, or was contacted or made an
inquiry about acquiring, any interest in the Divestiture Assets, and
shall describe in detail each contact with any such person. The trustee
shall maintain full records of all efforts made to divest the
Divestiture Assets.
G. If the trustee has not accomplished the divestitures ordered
under this Final Judgment within six (6) months after its appointment,
the trustee shall promptly file with the Court a report setting forth:
(1) The trustee's efforts to accomplish the required divestitures, (2)
the reasons, in the trustee's judgment, why the required divestitures
have not been accomplished, and (3) the trustee's recommendations. To
the extent such reports contain information that the trustee deems
confidential, such reports shall not be filed in the public docket of
the Court. The trustee shall at the same time furnish such report to
the United States, which shall have the right to make additional
[[Page 34954]]
recommendations consistent with the purpose of the trust. The Court
thereafter shall enter such orders as it shall deem appropriate to
carry out the purpose of the Final Judgment, which may, if necessary,
include extending the trust and the term of the trustee's appointment
by a period requested by the United States.
VI. Notice of Proposed Divestitures
A. Within two (2) business days following execution of a definitive
divestiture agreement, Defendants or the trustee, whichever is then
responsible for effecting the divestitures required herein, shall
notify the United States of any proposed divestiture(s) required by
section IV or V of this Final Judgment. If the trustee is responsible,
it shall similarly notify Defendants. The notice shall set forth the
details of the proposed divestiture(s) and list the name, address, and
telephone number of each person not previously identified who offered
or expressed an interest in or desire to acquire any ownership interest
in the Divestiture Assets, together with full details of the same.
B. Within fifteen (15) calendar days of receipt by the United
States of such notice, the United States may request from Defendants,
the proposed Acquirer(s), any other third party, or the trustee, if
applicable, additional information concerning the proposed
divestiture(s), the proposed Acquirer(s), and any other potential
Acquirer. Defendants and the trustee shall furnish any additional
information requested within fifteen (15) calendar days of the receipt
of the request, unless the parties shall otherwise agree.
C. Within thirty (30) calendar days after receipt of the notice or
within twenty (20) calendar days after the United States has been
provided the additional information requested from Defendants, the
proposed Acquirer(s), any third party, and the trustee, whichever is
later, the United States shall provide written notice to Defendants and
the trustee, if there is one, stating whether or not it objects to the
proposed divestiture(s). If the United States provides written notice
that it does not object, the divestiture(s) may be consummated, subject
only to Defendants' limited right to object to the sale under section
V.C of this Final Judgment. Absent written notice that the United
States does not object to the proposed Acquirer or upon objection by
the United States, a divestiture proposed under section IV or section V
of this Final Judgment shall not be consummated. Upon objection by
Defendants under section V.C, a divestiture proposed under section V
shall not be consummated unless approved by the Court.
VII. Financing
Defendants shall not finance all or any part of any purchase made
pursuant to section IV or section V of this Final Judgment.
VIII. Preservation of Assets
Until the divestitures required by this Final Judgment have been
accomplished, Defendants shall take all steps necessary to comply with
the Asset Preservation Stipulation and Order entered by this Court.
Defendants shall take no action that would jeopardize the divestitures
ordered by this Court.
IX. Affidavits
A. Within twenty (20) calendar days of the filing of the Complaint
in this matter, and every thirty (30) calendar days thereafter until
the divestitures have been completed under section IV or section V of
this Final Judgment, Defendants shall deliver to the United States an
affidavit as to the fact and manner of its compliance with section IV
or section V. Each such affidavit shall include the name, address, and
telephone number of each person who, during the preceding thirty (30)
calendar days, made an offer to acquire, expressed an interest in
acquiring, entered into negotiations to acquire, or was contacted or
made an inquiry about acquiring, any interest in the Divestiture
Assets, and shall describe in detail each contact with any such person
during that period. Each such affidavit shall also include a
description of the efforts Defendants have taken to solicit buyers for
the Divestiture Assets, and to provide required information to
prospective Acquirers, including the limitations, if any, on such
information. Assuming the information set forth in the affidavit is
true and complete, any objection by the United States to information
provided by Defendants, including limitations on information, shall be
made within fourteen (14) calendar days of receipt of such affidavit.
B. Within twenty (20) calendar days of the filing of the Complaint
in this matter, Defendants shall deliver to the United States an
affidavit that describes in reasonable detail all actions Defendants
have taken and all steps Defendants have implemented on an ongoing
basis to comply with section VIII of this Final Judgment. Defendants
shall deliver to the United States an affidavit describing any changes
to the efforts and actions outlined in Defendants' earlier affidavits
filed pursuant to this section within fifteen (15) calendar days after
the change is implemented.
C. Defendants shall keep all records of all efforts made to
preserve and divest the Divestiture Assets until one year after such
divestitures have been completed.
X. Compliance Inspection
A. For the purposes of determining or securing compliance with this
Final Judgment, or of determining whether the Final Judgment should be
modified or vacated, and subject to any legally recognized privilege,
from time to time authorized representatives of the United States
Department of Justice, including consultants and other persons retained
by the United States, shall, upon written request of an authorized
representative of the Assistant Attorney General in charge of the
Antitrust Division, and on reasonable notice to Defendants, be
permitted:
(1) Access during Defendants' regular office hours to inspect and
copy, or at the option of the United States, to require Defendants to
provide electronic or hard copies of, all books, ledgers, accounts,
records, data, and documents in the possession, custody, or control of
Defendants, relating to any matters contained in this Final Judgment;
and
(2) To interview, either informally or on the record, Defendants'
officers, employees, or agents, who may have their individual counsel
present, regarding such matters. The interviews shall be subject to the
reasonable convenience of the interviewee and without restraint or
interference by Defendants.
B. Upon the written request of an authorized representative of the
Assistant Attorney General in charge of the Antitrust Division,
Defendants shall submit written reports or responses to written
interrogatories, under oath if requested, relating to any of the
matters contained in this Final Judgment as may be requested.
C. No information or documents obtained by the means provided in
this section shall be divulged by the United States to any person other
than an authorized representative of the executive branch of the United
States, except in the course of legal proceedings to which the United
States is a party (including grand jury proceedings), or for the
purpose of securing compliance with this Final Judgment, or as
otherwise required by law.
D. If at the time information or documents are furnished by
Defendants to the United States, Defendants represent and identify in
writing the material in any such information or
[[Page 34955]]
documents to which a claim of protection may be asserted under Rule
26(c)(7) of the Federal Rules of Civil Procedure, and Defendants mark
each pertinent page of such material, ``Subject to claim of protection
under Rule 26(c)(7) of the Federal Rules of Civil Procedure,'' then the
United States shall give Defendants ten (10) calendar days notice prior
to divulging such material in any legal proceeding (other than a grand
jury proceeding).
XI. No Reacquisition
Defendant Cengage may not reacquire any part of the Divestiture
Assets during the term of this Final Judgment.
XII. Retention of Jurisdiction
This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and
directions as may be necessary or appropriate to carry out or construe
this Final Judgment, to modify any of its provisions, to enforce
compliance, and to punish violations of its provisions.
XIII. Expiration of Final Judgment
Unless this Court grants an extension, this Final Judgment shall
expire ten (10) years from the date of its entry.
XIV. Public Interest Determination
Entry of this Final Judgment is in the public interest. The parties
have complied with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16, including making copies available to the
public of this Final Judgment, the Competitive Impact Statement, and
any comments thereon and the United States's responses to comments.
Based upon the record before the Court, which includes the Competitive
Impact Statement and any comments and response to comments filed with
the Court, entry of this Final Judgment is in the public interest.
Date:
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. 16.
United States District Judge.
Exhibit A
------------------------------------------------------------------------
Course Textbooks
------------------------------------------------------------------------
Business: Introductory....... All textbooks that relate to the study of
introduction to business with which
Louis Boone has been or will be
associated, and all textbooks that
relate to the study of introduction to
business with which David Kurtz has been
or will be associated.
Foreign Languages and All textbooks with which Jean-Luc
Literature: French: Penfornis has been or will be
Language: Business French. associated.
Foreign Languages and All textbooks that relate to the study of
Literature: French: French language or literature at the
Language: Intermediate. intermediate level with which Michael
Oates has been or will be associated,
all textbooks with which Jacques Dubois
has been or will be associated, all
textbooks with which Simone Renaud has
been or will be associated, all
textbooks with which Dominique Van Hooff
has been or will be associated, all
textbooks that relate to the study of
French language or literature at the
intermediate level with which Jean-Paul
Valette has been or will be associated,
and all textbooks that relate to the
study of French language, or literature
at the intermediate level with which
Rebecca Valette has been or will be
associated.
Foreign Languages and All textbooks with which Kimberly Sparks
Literature: German: has been or will be associated, and all
Language: Grammar. textbooks with which Van Horn Vail has
been or will be associated.
Foreign Languages and All textbooks with which Marcel Danesi
Literature: Italian: has been or will be associated, and all
Language: Elementary. textbooks with which Suzanne Branciforte
has been or will be associated.
Foreign Languages and All textbooks with which Marcel Danesi
Literature: Italian: has been or will be associated, and all
Language: Intermediate. textbooks with which Francesca Italiano
has been or will be associated.
History: Western Civilization All textbooks with which John McKay has
Survey: 1500 to Present. been or will be associated.
History: Western Civilization All textbooks with which John McKay has
Survey: 1750 to Present. been or will be associated.
History: Western Civilization All textbooks with which John McKay has
Survey: Prehistory to 1715. been or will be associated.
History: Western Civilization All textbooks with which John McKay has
Survey: Prehistory to been or will be associated.
Present.
History: World History All textbooks with which John McKay has
Survey: 1400 to 1750. been or will be associated.
History: World History All textbooks with which John McKay has
Survey: 1500 to Present. been or will be associated.
History: World History All textbooks with which John McKay has
Survey: Prehistory to been or will be associated.
Present.
Interdisciplinary Studies: All textbooks with which John Gardner has
Orientation to College. been or will be associated.
------------------------------------------------------------------------
[[Page 34956]]
The United States District Court for the District of Columbia
United States of America, Plaintiff, v. Cengage Learning Holdings I,
L.P., Cengage Learning Holdings II L.P., Cengage Learning, Inc., Apax/
Tl Holdings, LLC, Education Media and Publishing Group Limited, and
Houghton Mifflin Harcourt Publishing Company, Defendants
Case No.: Judge: Case: 1:08Cv-00899, Assigned To: Bates, John D.,
Assign. Date: 5/28/2008, Description: Antitrust.
Competitive Impact Statement
Plaintiff United States of America (``United States''), pursuant to
section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or
``Tunney Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact
Statement relating to the proposed Final Judgment submitted for entry
in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
The United States filed a civil antitrust Complaint on May 28,
2008, seeking to enjoin the proposed acquisition by Cengage Learning,
Inc., and related entities (collectively ``Cengage''), of the assets of
the Houghton Mifflin College Division (``HM College'') from Houghton
Mifflin Harcourt Publishing Company, and a related entity (collectively
``Houghton Mifflin''). The Complaint alleges that the likely effects of
this acquisition would be to substantially lessen competition in the
development, publication, and sale of textbooks and ancillary
educational materials (collectively ``textbooks and ancillary
materials'') used in fourteen higher education courses listed in
Appendix A (hereinafter ``the Overlap Courses''), in violation of
section 7 of the Clayton Act, 15 U.S.C. 18. The loss of competition
caused by the acquisition would likely result in a reduced rate of
quality improvements in, and/or increased prices for, the textbooks and
ancillary materials used in each of the fourteen courses in the United
States.
At the same time the Complaint was filed, the United States also
filed an Asset Preservation Stipulation and Order (``APSO'') and a
proposed Final Judgment, which are designed to eliminate the
anticompetitive effects of the acquisition. Under the proposed Final
Judgment, which is explained more fully below, the Defendants are
required to divest all tangible and intangible assets used in the
development, production, servicing, marketing, distribution and sale of
certain textbooks in the Overlap Courses and all associated ancillary
educational materials (collectively ``Divestiture Assets''). Until the
divestitures required by the Final Judgment have been accomplished, the
APSO requires the Defendants to preserve and maintain the value of and
goodwill in the Divestiture Assets, and continue to operate the
Divestiture Assets as economically viable, competitive, and ongoing
business properties.
The United States and Defendants have stipulated that the proposed
Final Judgment may be entered after compliance with the APPA. Entry of
the proposed Final Judgment would terminate this action, except that
the Court would retain jurisdiction to construe, modify, or enforce the
provisions of the proposed Final Judgment and to punish violations
thereof.
II. Description of the Events Giving Rise to the Alleged Violations
A. The Defendants and the Proposed Transaction
Cengage Learning, Inc. is a Delaware corporation with its
headquarters in Stamford, Connecticut. Cengage Learning Holdings I,
L.P., a limited partnership with its headquarters in Stamford,
Connecticut, is the ultimate parent entity of Cengage Learning, Inc.
Cengage Learning Holdings II L.P., a limited partnership with its
headquarters in Stamford Connecticut, is an intermediate entity between
Cengage Learning Holdings I, L.P. and Cengage Learning, Inc. Apax/TL
Holdings, LLC, a Delaware limited liability company, is the general
partner in Cengage Learning Holdings I, L.P. The above entities
(collectively ``Cengage'') develop, publish and sell textbooks and
ancillary materials for use in the United States and elsewhere. Cengage
is the second largest publisher of textbooks and ancillary materials
used in courses taught at higher education institutions in the United
States and ranks among the top three sellers of such textbooks and
materials for each of the Overlap Courses. Cengage had total revenues
of about $1.7 billion in the twelve-month period ending September 30,
2007, including about $1 billion in revenues from the sale of higher
education textbooks and ancillary materials.
Houghton Mifflin Harcourt Publishing Company (formerly Houghton
Mifflin Company) is a Massachusetts corporation with its headquarters
in Boston, Massachusetts. Education Media and Publishing Group Limited,
a Cayman Islands corporation with its headquarters in Dublin, Ireland,
is the ultimate parent entity of Houghton Mifflin Harcourt Publishing
Company. The above entities (collectively ``Houghton Mifflin''),
develop, publish and sell textbooks and ancillary materials for use in
the United States and elsewhere. Houghton Mifflin's HM College Division
is the fifth largest publisher of textbooks and ancillary materials
used in courses taught at higher education institutions in the United
States and ranks among the top three sellers of such textbooks and
materials for each of the Overlap Courses. Houghton Mifflin has total
annual revenues of about $2.5 billion, and estimated 2007 revenues of
about $230 million from the sale of textbooks and ancillary materials
by HM College.
On or about November 30, 2007, Cengage and Houghton Mifflin entered
into an agreement for Cengage to acquire the assets of HM College for
approximately $750 million.
B. The Competitive Effects of the Transaction
1. Textbooks and Ancillary Materials
Publishers market and sell textbooks and ancillary materials for
use in courses taught at higher education institutions. In most cases,
instructors select the textbooks and ancillary materials that will be
used for their courses, and students buy the selected textbooks and
ancillary materials.
Textbooks are often supplemented with ancillary educational
materials, such as teacher's editions, audio-visual teaching tools,
Internet content, CD-ROMs, workbooks, and study guides. These ancillary
materials are often offered by publishers for free or as part of a
discounted package to induce instructors to select a particular
textbook and to induce students to purchase the publisher's textbooks
and ancillary materials. Textbooks and ancillary materials are used as
the primary teaching materials in each of the Overlap Courses.
2. Relevant Product Markets
The Complaint alleges that for each Overlap Course, the textbooks
and ancillary materials for that course constitute a separate relevant
product market and a line of commerce pursuant to section 7 of the
Clayton Act.
Textbooks and ancillary materials are used as the primary teaching
materials in each of the Overlap courses. Textbooks provide the core
written material for the Overlap Courses and serve as the foundation
for instructors' overall lesson plans. While instructors could use
alternative teaching materials (such as copies of lecture notes and
[[Page 34957]]
articles), they generally select textbooks to serve as the primary
teaching materials for their courses because accessing and creating
alternative teaching materials is often a more time-consuming, costly,
and inefficient method of delivering high quality content to their
students. Instructors using textbooks and ancillary materials would not
turn to any alternative teaching materials in sufficient numbers to
defeat a small but significant increase in the price of any textbooks
and ancillary materials for the Overlap Courses, or a small but
significant decrease in the quality of such textbooks and other
materials.
Students taking the Overlap Courses are unlikely to have any
significant alternatives to purchasing new textbooks for their Overlap
Courses. Although used textbooks, if available, can sometimes serve as
alternatives for new textbooks, used textbooks are not uniformly
available in large numbers. Moreover, instructors often require
students to use the newest textbook editions. Publishers generally
revise textbooks every three to four years, and revised textbooks often
differ substantially from their prior edition, limiting the extent to
which used textbooks may be substituted for new editions of the same
textbooks. Students would not turn to purchasing used textbooks in
sufficient numbers to defeat a small but significant increase in the
price of a new edition of the textbooks.
3. Relevant Geographic Market
The Complaint alleges that Defendants market and sell textbooks and
ancillary materials for use in courses taught at higher education
institutions throughout the United States. Market participants for each
relevant product market alleged in the Complaint are those publishers
from which instructors select textbooks and ancillary materials for use
as primary teaching materials in their courses. A hypothetical
monopolist of the textbooks and ancillary materials sold for use in any
Overlap Course in the United States could profitably lower the rate of
quality improvements in, or increase the price of, such textbooks and
ancillary materials in the United States. Therefore, for each relevant
product market alleged in the Complaint, the United States constitutes
a relevant geographic market pursuant to section 7 of the Clayton Act.
4. Anticompetitive Effects of the Acquisition
In each relevant product and geographic market alleged in the
Complaint, Cengage and HM College offer leading textbooks and ancillary
materials that are close substitutes for a significant number of
customers in that market. In each such market, Cengage and HM College
are among the few firms with a significant presence that compete to
provide textbooks and ancillary materials, and together they account
for at least 35 percent of all sales. Using a standard concentration
measure called the Herfindahl-Hirschman Index (``HHI''), the proposed
acquisition would substantially raise market concentration in highly
concentrated markets, increasing the HHI by more than 500 and producing
a post-merger HHI in excess of 3000 in each relevant market.
Cengage and HM College compete head-to-head to have their textbooks
and ancillary materials selected by instructors for each Overlap Course
in the United States. This competition has provided significant
incentives for each to publish new titles and improve product quality,
and it has also disciplined pricing decisions. Although textbooks are
purchased by students who do not select the books, the Department's
investigation revealed that when institutions and instructors request
price concessions at the time they are selecting textbooks, publishers
such as Cengage and HM College have competed to provide them. The
proposed acquisition would eliminate the competition between Cengage
and HM College in each relevant market, increasing the likelihood that
Cengage will unilaterally increase prices or reduce its investment or
other efforts to develop new or improved textbooks and ancillary
materials.
The proposed acquisition therefore is likely to substantially
lessen competition in the development, publication, and sale of
textbooks and ancillary materials in each of the relevant markets
alleged in the Complaint, in violation of section 7 of the Clayton Act.
5. Entry Would Not Likely Constrain the Acquisition's Adverse Effects
The Complaint alleges that, in each of the relevant product and
geographic markets, there is unlikely to be timely entry by any firm
that would be sufficient to defeat the likely anticompetitive effects
of the proposed acquisition. Successful entry into developing,
publishing, and selling textbooks and ancillary materials in each of
the relevant markets is difficult, time-consuming, and costly.
Successful entry generally can be achieved only over many years and
after at least one or more textbook revision cycles. Significant
investment and effort are required to assemble authors, editorial staff
and reviewing professors, to develop and obtain licenses to copyrighted
content and ancillary educational materials, and to train a
knowledgeable sales force. The outcome of any such effort would be
highly uncertain, because, among other things, the reputation of a
successful incumbent textbook is difficult for a publisher of a new
textbook to challenge. The leading textbooks in each relevant market
have been published for some time and are well-known to instructors.
Most instructors switch textbooks infrequently because they develop
course syllabi, lesson plans, homework, tests, and other materials that
conform to the textbooks they use, and changing textbooks often
requires modifications to course syllabi and other materials.
III. Explanation of the Proposed Final Judgment
A. The Required Divestitures
Section IV.A of the proposed Final Judgment requires that the
Defendants divest the existing or future textbooks described in
Appendix A, which are used in the Overlap Courses, and associated
ancillary educational materials used with those textbooks. The
Divestiture Assets may be sold to more than one acquirer with approval
of the United States. Section II.C specifies that the divested
textbooks include all supplements to, derivations of, and customized
versions of the textbooks, except the Defendants are not required to
divest existing publications that were customized for specific
institutions that contain only a small amount of content (less than
25%) written by an author listed on Appendix A. The description of
Divestiture Assets in Section II.C will ensure that the acquirer or
acquirers shall have access to all ancillary educational materials
offered with a divested textbook. The Defendants are required to divest
all associated ancillary materials offered specifically or primarily
for use with the textbooks. With respect to other ancillary educational
materials that are offered primarily for use with Defendants' other
textbooks, but are also offered with divested textbooks, the Defendants
are required to grant the acquirer(s) a one-year license to use any
such materials. To the extent an acquirer desires to continue to
provide these other ancillary materials to instructors and students who
use a divested textbook, the one-year license is intended to provide
the acquirer a sufficient period of time to continue selling the
[[Page 34958]]
Defendants' materials while it develops substitute materials.
The Divestiture Assets also include all tangible and intangible
assets related to the divested textbooks and any ancillary educational
materials associated with those textbooks. For example, section
II.C(1)(a) provides that the Divestiture Assets include, among other
things, all original artwork, illustrations and other content, and all
contracts, author permissioning agreements and other agreements related
to the divested textbooks and ancillary materials. In addition, section
II.C(1)(b) provides that the Divestiture Assets include, among other
things, licenses and sublicenses to intellectual property of any kind
that is used in the development, production, servicing, marketing,
distribution, and sale of any of the divested textbooks or ancillary
materials.
The Divestiture Assets do not include Defendants' company names or
trademarks, except that the Divestiture Assets include nonexclusive
licenses to use the corporate trademarks or trade names of Cengage or
Houghton Mifflin sufficient to allow the acquirer(s) to sell finished
inventory or other materials that have already been marked with such
trademarks or trade names. This provision will ensure that the
acquirer(s) will not infringe the Defendants' intellectual property
rights in the course of distributing the finished inventory.
Sale of the Divestiture Assets according to the terms of the
proposed Final Judgment will preserve competition between the textbooks
and ancillary materials to be divested and the textbooks and ancillary
materials that Cengage will retain and will thus eliminate the
anticompetitive effects of the proposed acquisition in each relevant
market alleged in the Complaint. In each of the Overlap Courses, the
textbooks to be divested, alone or in combination with each other, are
among the leading textbooks sold by Defendants. For several of the
Overlap Courses, the Final Judgment requires the divestiture of all of
the significant textbooks Cengage or HM College offers for sale. For
others, the textbooks to be divested are the publications by one
Defendant that are close substitutes with textbooks offered by the
other Defendant, and thus as to which there is meaningful competition
between Cengage and HM College that would have been eliminated by the
proposed acquisition.
B. Selected Provisions of the Proposed Final Judgment
In antitrust cases involving acquisitions in which the United
States seeks a divestiture remedy, the United States seeks to require
completion of the divestiture(s) within the shortest period of time
reasonable under the circumstances. A quick divestiture has the
benefits of restoring competition lost in the acquisition and reducing
the possibility that the value of the assets will be diminished.
Section IV.A of the proposed Final Judgment requires the Defendants to
divest the Divestiture Assets within forty-five (45) calendar days
after the filing of the Complaint in this matter, or five (5) calendar
days after notice of the entry of this Final Judgment by the Court,
whichever is later.\*1\ Section IV.H requires that the Divestiture
Assets be divested in such a way as to satisfy the United States in its
sole discretion that the Divestiture Assets will remain viable and can
and will be operated by the acquirer(s) as part of a viable,
competitively-effective, ongoing higher education textbook publishing
business and that the divestiture of such assets will remedy the
competitive harm alleged in the Complaint.
---------------------------------------------------------------------------
\*1\ The proposed Final Judgment also provides that this time
period may be extended by the United States in its sole discretion
for a period not to exceed thirty (30) calendar days, and that the
Court will receive notice of any such extension.
---------------------------------------------------------------------------
Sections IV.B, IV.C, IV.D, and IV.E include specific obligations
and prohibitions that require the Defendants to cooperate with
prospective acquirer(s) and facilitate the divestitures. Similarly,
section IV.F requires the Defendants to use their best efforts to
facilitate the assignment to the acquirer(s) of all assets included in
the Divestiture Assets that Defendants hold or use pursuant to a
license or any other agreement.
Section V.G creates a limited exception to the Defendants'
obligation to divest the Divestiture Assets in their entirety by
allowing Cengage to retain a nonexclusive license to certain
intellectual property that is used jointly in divested textbooks and
textbooks that are not being divested. Cengage has the right to obtain
a one-year license to continue to include content written by an author
on Appendix A in certain customized publications that are not required
to be divested and to continue to sell for use with textbooks that will
not be divested ancillary educational materials that are primarily, but
not exclusively, used with the divested textbooks. This license is
intended to allow Cengage a sufficient period of time to continue its
limited use of the divested content while it develops substitute
content. Cengage also has the right to a license to continue using any
copyrighted art, charts or similar content that has been included in
both divested textbooks and textbooks that will not be divested, other
than content attributable to the authors of the divested textbooks.
Cengage may continue to use this content in all existing and future
textbooks and ancillary materials, except that Cengage must obtain the
consent of the acquirer(s) to use the content in future textbooks or
ancillary materials that will compete with the divested textbooks and
ancillary materials.
Section V.A of the proposed Final Judgment provides that in the
event the Defendants do not accomplish the divestitures within the
periods prescribed in section IV.A of the proposed Final Judgment, the
Court will appoint a trustee selected by the United States to effect
the divestitures. Section IV.H requires that any sale of the
Divestiture Assets by a trustee be acceptable to the United States, in
its sole discretion, and specifies that any divestiture by a trustee
must satisfy the same criteria that a divestiture by Defendants must
satisfy. Section V.B provides that, after a trustee is appointed, only
the trustee will have the right to sell the Divestiture Assets, and
section V.C precludes Defendants from objecting to a sale by the
trustee on any ground other than the trustee's malfeasance. Section V.E
requires Defendants to use their best efforts to assist the trustee in
accomplishing the divestitures.
If a trustee is appointed, section V.D provides that Defendants
will pay all costs and expenses of the trustee. The trustee's
commission will be structured so as to provide an incentive for the
trustee based on the price obtained and the speed with which the
divestitures are accomplished. After his or her appointment, section
V.F requires the trustee to file monthly reports with the Court and the
United States setting forth his or her efforts to accomplish the
required divestitures. Section V.G requires that, if the required
divestitures have not been accomplished within six (6) months after a
trustee's appointment, the trustee and the United States will both make
recommendations to the Court, which shall enter such orders as
appropriate to carry out the purpose of the Final Judgment, which may
include extending the trust or the term of the trustee's appointment.
C. The Asset Preservation Stipulation and Order
To ensure that the Divestiture Assets will be preserved,
maintained, marketed, and further developed, and continue to be
operated as economically viable and ongoing business properties,
[[Page 34959]]
until the divestitures required by the proposed Final Judgement have
been accomplished, the United States and Defendants have agreed that
the Court may enter the APSO that was filed simultaneously with the
proposed Final Judgment.
Sections V.A and V.B of the APSO provide that Defendants are
required to preserve and maintain the value and goodwill of the
Divestiture Assets. Prior to the completion of the divestitures,
Defendants must maintain and increase the sales and revenues of the
Divestiture Asset-related products and services, and maintain all
operational, promotional, developmental, advertising, sales, technical,
customer-service and marketing funding and other support for the
Divestiture Assets. Defendants must also ensure that the Divestiture
Assets arc fully maintained in operable and saleable condition and
continue to be developed and updated, and maintain and adhere to normal
sales, development, updating, and support schedules for the Divestiture
Assets. Section V.C requires the Defendants to provide sufficient
capital to maintain the Divestiture Assets and to maintain the
Divestiture Assets as economically viable, competitive, and ongoing
business properties. Section V.D prevents the Defendants from
transferring or otherwise disposing of the Divestiture Assets.
These asset preservation obligations should suffice to preserve
competition during the brief 45-day period between consummation of the
acquisition and completion of the required divestitures. Defendants
will be required to continue their ongoing efforts--which have in part
been stimulated by competition between them--to make improvements to
the textbooks to be divested, and to maintain or increase the sales of
those books. Moreover, the period between consummation and divestiture
is likely to occur during the summer months when instructors do not
typically select textbooks for their courses, and thus when competitive
sales efforts are less meaningful.
Section VI of the APSO requires the Defendants to appoint a person
or persons to oversee the implementation of Defendants' obligations
under the proposed Final Judgment and the APSO. The appointed person(s)
will be responsible for ensuring Defendants' compliance with the asset
preservation requirements specified in section V of the APSO, will have
complete managerial responsibility for the Divestiture Assets, and will
have authority to direct and implement all steps necessary to ensure
Defendants' full compliance with section V. Any person(s) appointed to
oversee the Divestiture Assets must receive a compensation package that
provides a significant incentive to increase sales of the Divestiture
Assets.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of section 5(a) of the Clayton Act, 15 U.S.C.
16(a), the proposed Final Judgment has no prima facie effect in any
subsequent private lawsuit that may be brought against Defendants.
V. Procedures Available for Modification of the Proposed Final Judgment
The United States and Defendants have stipulated that the proposed
Final Judgment may be entered by the Court after compliance with the
provisions of the APPA, provided that the United States has not
withdrawn its consent. The APPA conditions entry upon the Court's
determination that the proposed Final Judgment is in the public
interest.
The APPA provides a period of at least sixty (60) days preceding
the effective date of the proposed Final Judgment within which any
person may submit to the United States written comments regarding the
proposed Final Judgment. Any person who wishes to comment should do so
within sixty (60) days of the date of publication of this Competitive
Impact Statement in the Federal Register, or the last date of
publication in a newspaper of a summary of this Competitive Impact
Statement, whichever is later. All comments received during this period
will be considered by the United States Department of Justice, which
remains free to withdraw its consent to the proposed Final Judgment at
any time prior to the Court's entry of judgment. The comments and the
response of the United States will be filed with the Court and
published in the Federal Register.
Written comments should be submitted to: James J. Tierney, Chief,
Networks & Technology Enforcement Section, Antitrust Division, United
States Department of Justice, 600 E Street, NW., Suite 9500,
Washington, DC 20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
The United States considered, as an alternative to the proposed
Final Judgment, a full trial on the merits against Defendants. The
United States could have continued the litigation and sought
preliminary and permanent injunctions against the proposed acquisition.
The United States is satisfied, however, that the divestiture of assets
described in the proposed Final Judgment will preserve competition in
the development, publication and sale of textbooks and ancillary
materials in the relevant markets alleged in the Complaint. Thus, the
proposed Final Judgment would achieve all or substantially all of the
relief the United States would have obtained through litigation, but
avoids the time, expense, and uncertainty of a full trial on the merits
of the Complaint.
VII. Standard of Review Under the APPA for the Proposed Final Judgment
The Clayton Act, as amended by the APPA, requires that proposed
consent judgments in antitrust cases brought by the United States be
subject to a sixty-day comment period, after which the Court shall
determine whether entry of the proposed Final Judgment ``is in the
public interest.'' 15 U.S.C. 16(e)(1). In making that determination,
the court, in accordance with the statute as amended in 2004, is
required to consider:
(A) The competitive impact of such judgment, including termination
of alleged violations, provisions for enforcement and modification,
duration of relief sought, anticipated effects of alternative remedies
actually considered, whether its terms are ambiguous, and any other
competitive considerations bearing upon the adequacy of such judgment
that the court deems necessary to a determination of whether the
consent judgment is in the public interest; and
(B) The impact of entry of such judgment upon competition in the
relevant market or markets, upon the public generally and individuals
alleging specific injury from the violations set forth in the complaint
including consideration of the public benefit, if any, to be derived
from a determination of the issues at trial.
15 U.S.C. 16(e)(1)(A) &; (B). In considering these statutory
factors, the
[[Page 34960]]
court's inquiry is necessarily a limited one as the government is
entitled to ``broad discretion to settle with the defendant within the
reaches of the public interest.'' United States v. Microsoft Corp., 56
F.3d 1448, 1461 (D.C. Cir. 1995); see generally United States v. SBC
Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) (assessing public
interest standard under the Tunney Act).\2\
---------------------------------------------------------------------------
\2\ The 2004 amendments substituted ``shall'' for ``may'' in
directing relevant factors for a court to consider and amended the
list of factors to focus on competitive considerations and to
address potentially ambiguous judgment terms. Compare 15 U.S.C.
16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns,
489 F.Supp. 2d at 11 (concluding that the 2004 amendments ``effected
minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------
As the United States Court of Appeals for the District of Columbia
Circuit has held, under the APPA, a court considers, among other
things, the relationship between the remedy secured and the specific
allegations set forth in the government's complaint, whether the decree
is sufficiently clear, whether enforcement mechanisms are sufficient,
and whether the decree may positively harm third parties. See
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the
relief secured by the decree, a court may not ``engage in an
unrestricted evaluation of what relief would best serve the public.''
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152
F.Supp. 2d 37, 40 (D.D.C. 2001). Courts have held that:
[t]he balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the public in consenting to
the decree. The court is required to determine not whether a
particular decree is the one that will best serve society, but
whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.
Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\3\
In determining whether a proposed settlement is in the public interest,
a district court ``must accord deference to the government's
predictions about the efficacy of its remedies, and may not require
that the remedies perfectly match the alleged violations.'' SBC
Commc'ns, 489 F.Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461
(noting the need for courts to be ``deferential to the government's
predictions as to the effect of the proposed remedies''); United States
v. Archer-Daniels-Midland Co., 272 F.Supp. 2d 1, 6 (D.D.C. 2003)
(noting that the court should grant due respect to the United States'
prediction as to the effect of proposed remedies, its perception of the
market structure, and its views of the nature of the case).
---------------------------------------------------------------------------
\3\ Cf. BNS, 858 F.2d at 464 (holding that the court's
``ultimate authority under the [APPA] is limited to approving or
disapproving the consent decree''); United States v. Gillette Co.,
406 F.Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the
court is constrained to ``look at the overall picture not
hypercritically, nor with a microscope, but with an artist's
reducing glass''). See generally Microsoft, 56 F.3d at 1461
(discussing whether ``the remedies [obtained in the decree are] so
inconsonant with the allegations charged as to fall outside of the
`reaches of the public interest''').
---------------------------------------------------------------------------
Courts have greater flexibility in approving proposed consent
decrees than in crafting their own decrees following a finding of
liability in a litigated matter. ``[A] proposed decree must be approved
even if it falls short of the remedy the court would impose on its own,
as long as it falls within the range of acceptability or is `within the
reaches of public interest.' '' United States v. Am. Tel. &; Tel. Co.,
552 F.Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United
States v. Gillette Co., 406 F.Supp. 713, 716 (D. Mass. 1975)), aff'd
sub nom. Maryland v. United States, 460 U.S. 1001 (1983); see also
United States v. Alcan Aluminum Ltd., 605 F.Supp. 619, 622 (W.D. Ky.
1985) (approving the consent decree even though the court would have
imposed a greater remedy). To meet this standard, the United States
``need only provide a factual basis for concluding that the settlements
are reasonably adequate remedies for the alleged harms.'' SBC Commc'ns,
489 F. Supp. 2d at 17.
Moreover, the court's role under the APPA is limited to reviewing
the remedy in relationship to the violations that the United States has
alleged in its Complaint, and does not authorize the court to
``construct [its] own hypothetical case and then evaluate the decree
against that case.'' Microsoft, 56 F.3d at 1459. Because the ``court's
authority to review the decree depends entirely on the government's
exercising its prosecutorial discretion by bringing a case in the first
place,'' it follows that ``the court is only authorized to review the
decree itself,'' and not to ``effectively redraft the complaint'' to
inquire into other matters that the United States did not pursue. Id.
at 1459-60. As this Court recently confirmed in SBC Communications,
courts ``cannot look beyond the complaint in making the public interest
determination unless the complaint is drafted so narrowly as to make a
mockery of judicial power.'' SBC Commc'ns, 489 F.Supp. 2d at 15.
In its 2004 amendments, Congress made clear its intent to preserve
the practical benefits of utilizing consent decrees in antitrust
enforcement, adding the unambiguous instruction that ``[n]othing in
this section shall be construed to require the court to conduct an
evidentiary hearing or to require the court to permit anyone to
intervene.'' 15 U.S.C. 16(e)(2). The language wrote into the statute
what Congress intended when it enacted the Tunney Act in 1974, as
Senator Tunney explained: ``[t]he court is nowhere compelled to go to
trial or to engage in extended proceedings which might have the effect
of vitiating the benefits of prompt and less costly settlement through
the consent decree process.'' 119 Cong. Rec. 24,598 (1973) (statement
of Senator Tunney). Rather, the procedure for the public interest
determination is left to the discretion of the court, with the
recognition that the court's ``scope of review remains sharply
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC
Commc'ns, 489 F.Supp. 2d at 11.\4\
---------------------------------------------------------------------------
\4\ See United States v. Enova Corp., 107 F.Supp. 2d 10, 17
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the
court to make its public interest determination on the basis of the
competitive impact statement and response to comments alone'');
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ]
61,508, at 71,980 (W.D. Mo. 1977) (``Absent a showing of corrupt
failure of the government to discharge its duty, the Court, in
making its public interest finding, should * * * carefully consider
the explanations of the government in the competitive impact
statement and its responses to comments in order to determine
whether those explanations are reasonable under the
circumstances.''); S. Rep. No. 93-298, 93d Cong., 1st Sess., at 6
(1973) (``Where the public interest can be meaningfully evaluated
simply on the basis of briefs and oral arguments, that is the
approach that should be utilized.'').
---------------------------------------------------------------------------
VIII. Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Dated: May 28, 2008.
Respectfully submitted,
Jane J. Brody, Justine K. Donahue (DC Bar 476255), Aaron
Comenetz (DC Bar 479572), John C. Filippini (DC Bar
165159), Kent Brown, Aaron Brodsky.
Attorneys, Networks &; Technology Enforcement Section, Antitrust
Division, United States Department of
[[Page 34961]]
Justice, 600 E Street, NW., Suite 9500, Washington, DC 20530, (202)
307-6200.
Appendix A
------------------------------------------------------------------------
Course Textbooks
------------------------------------------------------------------------
Business: Introductory................. All textbooks that relate to
the study of introduction to
business with which Louis
Boone has been or will be
associated, and all textbooks
that relate to the study of
introduction to business with
which David Kurtz has been or
will be associated.
Foreign Languages and Literature: All textbooks with which Jean-
French: Language: Business French. Luc Penfornis has been or will
be associated.
Foreign Languages and Literature: All textbooks that relate to
French: Language: Intermediate. the study of French language
or literature at the
intermediate level with which
Michael Oates has been or will
be associated, all textbooks
with which Jacques Dubois has
been or will be associated,
all textbooks with which
Simone Renaud has been or will
be associated, all textbooks
with which Dominique Van Hooff
has been or will be
associated, all textbooks that
relate to the study of French
language or literature at the
intermediate level with which
Jean-Paul Valette has been or
will be associated, and all
textbooks that relate to the
study of French language or
literature at the intermediate
level with which Rebecca
Valette has been or will be
associated.
Foreign Languages and Literature: All textbooks with which
German: Language: Grammar. Kimberly Sparks has been or
will be associated, and all
textbooks with which Van Horn
Vail has been or will be
associated.
Foreign Languages and Literature: All textbooks with which Marcel
Italian: Language: Elementary. Danesi has been or will be
associated, and all textbooks
with which Suzanne Branciforte
has been or will be
associated.
Foreign Languages and Literature: All textbooks with which Marcel
Italian: Language: Intermediate. Danesi has been or will be
associated, and all textbooks
with which Francesca Italiano
has been or will be
associated.
History: Western Civilization Survey: All textbooks with which John
1500 to Present. McKay has been or will be
associated.
History: Western Civilization Survey: All textbooks with which John
1750 to Present. McKay has been or will be
associated.
History: Western Civilization Survey: All textbooks with which John
Prehistory to 1715. McKay has been or will be
associated.
History: Western Civilization Survey: All textbooks with which John
Prehistory to Present. McKay has been or will be
associated.
History: World History Survey: 1400 to All textbooks with which John
1750. McKay has been or will be
associated.
History: World History Survey: 1500 to All textbooks with which John
Present. McKay has been or will be
associated.
History: World History Survey: All textbooks with which John
Prehistory to Present. McKay has been or will be
associated.
Interdisciplinary Studies: Orientation All textbooks with which John
to College. Gardner has been or will be
associated.
------------------------------------------------------------------------
[FR Doc. E8-13029 Filed 6-18-08; 8:45 am]
BILLING CODE 4410-11-M