Trucking Not on Trustbusters’ List
But with consolidation a major feature of the trucking landscape, it may be useful to explore just how concentrated the industry can become before it raises antitrust flags at the Department of Justice.
Would the merger of two or more national less-than-truckload carriers, for instance, be of concern to regulators?
The answer is, maybe.
But the government raised no objections to Allied Holdings’ acquisition of Ryder Automotive Carriers last year, even though the deal meant that one company would be hauling two-thirds of all new vehicles sold in the U.S. and Canada.
Nor has United Parcel Service’s dominance of the small-package delivery market led to any federal investigation, although there has been some civil litigation.
General Parcel Service, a Florida-based regional package carrier, filed an antitrust lawsuit against UPS in 1995, arguing that UPS’s volume-based national discounts were anticompetitive. A judge ruled, however, that UPS’s practices were legal and dismissed the suit. GPS did not appeal the decision.
Obviously, size is not the only key to determining whether companies are engaged in anticompetitive behavior.
According to Mr. Nannes, market share “is a starting point for our analysis.”
The department also looks at “ease of entry” and pricing practices to determine if violations of the Sherman Antitrust Act have occurred.
The Justice Department’s much-publicized suit against Microsoft Corp. targets the software company’s practice of requiring personal computer manufacturers to install its Internet browser along with its Windows operating system software.
The issue is not Microsoft’s virtual monopoly on operating systems for personal computers, but whether it is using that market-leading position to stifle competition.
“The Microsoft case is not unique,” Mr. Nannes said in a speech to the American Bar Association in Boston. “It’s an example of the way in which antitrust analysis has evolved — and will continue to do so — to meet and address changes in the marketplace that have profound competitive implications for producers and consumers.”
There’s a lot going on “beyond Microsoft,” Mr. Nannes recently told members of the Association for Transportation Law, Logistics and Policy in Washington, D.C.
For one thing, passage of the Ocean Shipping Reform Act of 1998 accomplished what antitrust lawyers have tried unsuccessfully to do for years — eliminate collective ratemaking among ship lines. Twice before in this century, antitrust enforcement was stopped by congressional action granting immunity to ship lines, Mr. Nannes said.
Antitrust immunity applies to collective ratemaking for trucking, too, but that could end soon. The Surface Transportation Board is supposed to decide by the end of the year whether to continue antitrust immunity for trucking rate bureaus and the national freight classification.
On the railroad front, Mr. Nannes pointed out that DOJ was on the record as a strong opponent of the Union Pacific-Southern Pacific merger, which has been a disaster for many shippers. The department took a much quieter approach to the Norfolk Southern-CSX buyout of Conrail and got pretty much what it wanted — the breakup of the Northeast monopoly into two competitive rail systems.
Antitrust lawyers also will monitor the merger of the Canadian National and Illinois Central rail systems, which is awaiting STB approval next year.
For truckers, other than the LTL sector, it appears to be all quiet on the antitrust front.
“It’s fair to say that truckload transactions are unlikely to be of great interest,” Mr. Nannes said.
ost antitrust cases today involve illegal price fixing.
Out of 100 grand jury investigations under way, more than two dozen are looking into suspected international cartel behavior, Mr. Nannes said.
he effort appears to be paying off. In the last fiscal year, the DOJ Antitrust Division collected more
han $267 million in criminal fines. More than 90% of the fines were imposed in cases involving international cartel behavior, and about 50% of the corporate defendants were foreign-based, he said.
Mr. Bearth covers the trucking business for TT.
