[Federal Register Volume 75, Number 140 (Thursday, July 22, 2010)]
[Notices]
[Pages 42749-42752]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17978]
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FEDERAL TRADE COMMISSION
[File No. 091 0032]
Fidelity National Financial, Inc.; Analysis of the Agreement
Containing Consent Order to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint and the terms of the consent order -- embodied in the consent
agreement -- that would settle these allegations.
DATES: Comments must be received on or before August 16, 2010.
ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form. Comments should refer to ``Fidelity
National Financial, File No. 091 0032'' to facilitate the organization
of comments. Please note that your comment -- including your name and
your state -- will be placed on the public record of this proceeding,
including on the publicly accessible FTC website, at (http://www.ftc.gov/os/publiccomments.shtm).
Because comments will be made public, they should not include any
sensitive personal information, such as an individual's Social Security
Number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. Comments also
should not include any sensitive health information, such as medical
records or other individually identifiable health information. In
addition, comments should not include any ``[t]rade secret or any
commercial or financial information which is obtained from any person
and which is privileged or confidential. . . .,'' as provided in
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which
confidential treatment is requested must be filed in paper form, must
be clearly labeled ``Confidential,'' and must comply with FTC Rule
4.9(c), 16 CFR 4.9(c).\1\
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\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR
4.9(c).
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Because paper mail addressed to the FTC is subject to delay due to
heightened security screening, please consider submitting your comments
in electronic form. Comments filed in electronic form should be
submitted by using the following weblink: (https://public.commentworks.com/ftc/fidelitynationalfinancial) and following
the instructions on the web-based form. To ensure that the Commission
considers an electronic comment, you must file it on the web-based form
at the weblink: (https://public.commentworks.com/ftc/fidelitynationalfinancial). If this Notice
[[Page 42750]]
appears at (http://www.regulations.gov/search/index.jsp), you may also
file an electronic comment through that website. The Commission will
consider all comments that regulations.gov forwards to it. You may also
visit the FTC website at (http://www.ftc.gov/) to read the Notice and
the news release describing it.
A comment filed in paper form should include the ``Fidelity
National Financial, File No. 091 0032'' reference both in the text and
on the envelope, and should be mailed or delivered to the following
address: Federal Trade Commission, Office of the Secretary, Room H-135
(Annex D), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC
is requesting that any comment filed in paper form be sent by courier
or overnight service, if possible, because U.S. postal mail in the
Washington area and at the Commission is subject to delay due to
heightened security precautions.
The Federal Trade Commission Act (``FTC Act'') and other laws the
Commission administers permit the collection of public comments to
consider and use in this proceeding as appropriate. The Commission will
consider all timely and responsive public comments that it receives,
whether filed in paper or electronic form. Comments received will be
available to the public on the FTC website, to the extent practicable,
at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of
discretion, the Commission makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC website. More information, including
routine uses permitted by the Privacy Act, may be found in the FTC's
privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm).
FOR FURTHER INFORMATION CONTACT: Joseph Lipinsky (206-220-4473), FTC
Northwest Regional Office, FTC, 600 Pennsylvania Avenue, NW,
Washington, D.C. 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec. 2.34 the
Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that
the above-captioned consent agreement containing a consent order to
cease and desist, having been filed with and accepted, subject to final
approval, by the Commission, has been placed on the public record for a
period of thirty (30) days. The following Analysis to Aid Public
Comment describes the terms of the consent agreement, and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC Home Page
(for July 16, 2010), on the World Wide Web, at (http://www.ftc.gov/os/actions.shtm). A paper copy can be obtained from the FTC Public
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington,
D.C. 20580, either in person or by calling (202) 326-2222.
Public comments are invited, and may be filed with the Commission
in either paper or electronic form. All comments should be filed as
prescribed in the ADDRESSES section above, and must be received on or
before the date specified in the DATES section.
Analysis of Agreement Containing Consent Order to Aid Public Comment
I. Introduction
The Federal Trade Commission (``Commission'' or ``FTC'') has
accepted, subject to final approval, an Agreement Containing Consent
Order (``Consent Agreement'') from Fidelity National Financial, Inc.
(``Fidelity''). Fidelity purchased three title insurance subsidiaries
from LandAmerica Financial, Inc. (``LandAmerica''). The subsidiaries
were Commonwealth Land Title Insurance Company (``Commonwealth''),
Lawyers Title Insurance Company (``Lawyers''), and United Capital Title
Insurance Company (``United''). Fidelity's acquisition of Commonwealth
and Lawyers created likely anticompetitive effects that the proposed
Consent Agreement resolves. Under the terms of the proposed Consent
Agreement, Fidelity is required, among other things, to divest one
share of its ownership interest in a joint title plant serving the
Portland, Oregon, metropolitan area, and divest a copy of its title
data serving Benton, Jackson, Linn, and Marion Counties, in Oregon.
Additionally, Fidelity will sell a copy of title data that LandAmerica
had provided to a third party, Data Trace, to a pre-approved purchaser
to remedy the competitive concern in three counties in the Detroit,
Michigan, metropolitan area.
The proposed Consent Agreement has been placed on the public record
for thirty (30) days for receipt of comments by interested persons.
Comments received during this period will become part of the public
record. After thirty (30) days, the Commission will again review the
proposed Consent Agreement, and will decide whether it should withdraw
from the proposed Consent Agreement, modify it, or make it final.
On November 25, 2008, Fidelity and LandAmerica entered into an
acquisition agreement under which Fidelity acquired LandAmerica's title
insurance subsidiaries for an amount valued, at the time of entering
into the acquisition agreement, at approximately $258 million
(``Acquisition''). The Commission's Complaint alleges that Fidelity's
acquisition violates Section 7 of the Clayton Act, as amended, 15
U.S.C. Sec. 18, and Section 5 of the Federal Trade Commission Act, as
amended, 15 U.S.C. Sec. 45, by eliminating an actual, direct, and
substantial competitor from certain local markets in the United States.
II. Description of the Parties and the Acquisition
Fidelity, a publicly traded company, is based in Jacksonville,
Florida. Its title insurance services facilitate the purchase, sale,
transfer, and finance of residential and commercial real estate.
Fidelity provides title insurance to residential and commercial
property buyers and sellers, real estate agents and brokers,
developers, attorneys, mortgage brokers and lenders, and title
insurance agents through its subsidiaries, Fidelity National Title
Company, Title Insurance Company, Ticor Title Insurance Company,
Commonwealth, and Lawyers.
LandAmerica was a publicly traded company based in Glen Allen,
Virginia, that operated through wholly owned subsidiaries. LandAmerica
generated the majority of its income from its title insurance
subsidiaries, Commonwealth and Lawyers.
On Tuesday, December 16, 2008, the United States Bankruptcy Court
for the Eastern District of Virginia held a hearing on LandAmerica's
motion to sell its subsidiaries to Fidelity. The bankruptcy court took
testimony from LandAmerica, Fidelity, the unsecured creditors
committee, the secured creditors committee, and the FTC. The court
found that Fidelity's purchase of the LandAmerica title insurance
subsidiaries was in the best interest of the estate, and approved the
sale of the subsidiaries to Fidelity.
III. Title Information Services
Title insurance companies insure clients against the risk that
clear title is not transferred during the sale of property. Risks
include failure to detect defective deeds or to discover liens, adverse
court judgments, or encumbrances created by other security interests.
In order to conduct title searches in a timely fashion, title insurers
need access to the most accurate, up-to-date, and conveniently
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arranged title information. That information is found, among other
places, in title plants, which are private collections of historic and
current information about the status of title to real property. Because
title information is essential to conducting a title search, ownership
of, or access to, a title plant is a title insurer's primary
competitive asset.
IV. The Complaint
The Commission's Complaint alleges that Fidelity's acquisition of
LandAmerica's title insurance subsidiaries may substantially lessen
competition in the provision of title information services in several
counties in Oregon, and three counties making up the Detroit, Michigan,
metropolitan area, in violation of Section 7 of the Clayton Act, as
amended, 15 U.S.C. Sec. 18, and Section 5 of the Federal Trade
Commission Act, as amended, 15 U.S.C. Sec. 45.
The Complaint alleges that the relevant product market in which to
analyze the effects of the acquisition is the provision of title
information services. ``Title information services'' means access to
selected information contained in a title plant that is used to
determine ownership of, and interests in, real property in connection
with the underwriting and issuance of title insurance policies.
The Complaint also alleges that the relevant geographic markets are
local in nature. Title information is generated and collected on a
county level and, because of the highly local character of the real
estate markets in which the title information services are used,
geographic markets for title information services are highly localized
and consist of the county or other local jurisdiction embraced by the
real property information contained in the title plant. The three
geographic areas of concern outlined in the Complaint are: (1) the tri-
county Portland, Oregon, metropolitan area consisting of Clackamas,
Multnomah, and Washington Counties; (2) Benton, Jackson, Linn, and
Marion Counties, in Oregon; and (3) the tri-county Detroit, Michigan,
metropolitan area consisting of Oakland, Macomb, and Wayne Counties.
In the Portland, Oregon, metropolitan area, the acquisition of
LandAmerica's subsidiaries vested Fidelity with a controlling interest
in the sole title plant providing title insurance information services.
Absent the proposed relief regarding the title plant serving the
Portland metropolitan area, Fidelity's acquisition of LandAmerica's
subsidiaries increases the risk that Fidelity would unilaterally
restrict or withhold access to title information, thus eliminating the
potential for a new title insurance company to enter.
In Benton, Jackson, Linn, and Marion Counties in Oregon, the
acquisition of LandAmerica's subsidiaries reduced the number of
independent title plants providing title information services in these
counties from four to three. Absent the proposed relief in these
counties, Fidelity's acquisition would increase the risk of collusion
among the remaining market participants to restrict or withhold access
to title information, thus eliminating the potential for a new title
insurance company to enter.
In three counties in the Detroit, Michigan, metropolitan area,
Fidelity's purchase of LandAmerica's subsidiaries may give Fidelity the
power to affect the competitive significance of Data Trace, an
independent title information services provider. Data Trace, in which
LandAmerica once had an ownership interest, is a provider of title
plant information services in the Detroit metropolitan area.
Based on the facts above, the Complaint alleges that Fidelity's
acquisition of LandAmerica's subsidiaries could eliminate actual,
direct, and substantial competition between Fidelity and LandAmerica's
subsidiaries in the relevant markets; increase Fidelity's ability to
unilaterally exercise market power in the Detroit and Portland
metropolitan areas; and substantially increase the level of
concentration and enhance the probability of coordination in Benton,
Jackson, Linn, and Marion Counties, in Oregon.
As stated in the Complaint, entry would not be timely, likely, or
sufficient to deter or counteract the anticompetitive effects of this
acquisition. There are relatively long time frames and large capital
expenses associated with building and maintaining title plants. Among
other things, intensive time and labor are required in each local
jurisdiction to develop effective data collection technology and to
compile historical data.
V. The Terms of the Consent Agreement
The proposed Consent Agreement will remedy the Commission's
competitive concerns resulting from Fidelity's acquisition in each of
the relevant markets discussed above. Pursuant to the proposed Consent
Agreement, Fidelity will divest one share of its ownership interest in
a joint title plant that serves the Portland, Oregon, metropolitan area
to Northwest Title. This will remedy the competitive harm in that local
market by ensuring that Fidelity no longer owns a majority of the only
joint title plant serving that market. The proposed Consent Agreement
also requires Fidelity to divest a copy of each of the title plants
serving Benton, Jackson, Linn, and Marion Counties, in Oregon to
Northwest Title. The sale of the title plants in Benton, Jackson, Linn,
and Marion counties will eliminate the competitive harm that otherwise
would have resulted in those markets by restoring the number of
independent title plant owners within each county to the pre-
acquisition level.
Northwest Title is a privately-held company that is part of a
family of six companies involved in real estate. Although the company
will be a new entrant in the relevant markets, it does have experience
in the title insurance business, and has pre-existing relationships
with entities and individuals in the real estate market, mortgage
banking industry, and related businesses. Moreover, Northwest Title is
financially viable and is positioned to quickly achieve the remedial
purposes of the proposed Consent Agreement.
Additionally, pursuant to the proposed Consent Agreement, Fidelity
will sell a copy of the title data that LandAmerica's subsidiaries had
provided to Data Trace to a pre-approved purchaser, for the three
counties making up the Detroit, Michigan, metropolitan area.
Finally, the proposed Consent Agreement requires Fidelity to
provide the Commission with prior written notice before acquiring fifty
(50) percent or more of any joint title plant in the following states:
California, Colorado, Nevada, New Mexico, Oregon, and Texas. In all of
these states, Fidelity's acquisition of LandAmerica's subsidiaries
increased Fidelity's ownership interest in joint title plants. Without
this prior notification provision, in the future Fidelity could gain a
controlling interest in joint plants serving these states without the
FTC's knowledge.
VI. Opportunity for Public Comment
The Consent Agreement has been placed on the public record for
thirty (30) days for receipt of comments by interested persons.
Comments received during this period will become part of the public
record. After thirty (30) days, the Commission will review the Consent
Agreement again and the comments received and will decide whether it
should withdraw from the Consent Agreement, modify it, or make it
final. By accepting the Consent Agreement subject to final approval,
the
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Commission anticipates that the competitive problems alleged in the
Complaint will be resolved. The purpose of this analysis is to inform
and invite public comment on the Consent Agreement, including the
proposed divestitures, and to aid the Commission in its determination
of whether to make the Consent Agreement final. This analysis is not
intended to constitute an official interpretation of the Consent
Agreement, nor is it intended to modify the terms of the Consent
Agreement in any way.
By direction of the Commission.
Donald S. Clark
Secretary.
[FR Doc. 2010-17978 Filed 7-21-10: 7:20 am]
BILLING CODE 6750-01-S