[Federal Register Volume 85, Number 130 (Tuesday, July 7, 2020)]
[Notices]
[Pages 40653-40655]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14508]
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FEDERAL TRADE COMMISSION
[File No. 201-0074]
Tri Star Energy, LLC; Analysis of Consent Orders To Aid Public
Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair methods of competition.
The attached Analysis to Aid Public Comment describes both the
allegations in the 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 6, 2020.
ADDRESSES: Interested parties may file comments online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please write: ``Tri Star
Energy, LLC; File No. 201-0074'' on your comment, and file your comment
online at https://www.regulations.gov by following the instructions on
the web-based form. If you prefer to file your comment on paper, please
mail your comment to the following address: Federal Trade Commission,
Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610
(Annex D), Washington, DC 20580; or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Ashley Masters (202-326-2291), Bureau
of Competition, Federal Trade Commission, 600 Pennsylvania Avenue NW,
Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 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 of Agreement Containing Consent Orders 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 website (for
June 24, 2020), at this web address: https://www.ftc.gov/news-events/commission-actions.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before August 6, 2020.
Write ``Tri Star Energy, LLC; File No. 201-0074'' on your comment. Your
comment--including your name and your state--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the https://www.regulations.gov website.
Due to the public health emergency in response to the COVID-19
outbreak and the agency's heightened security screening, postal mail
addressed to the Commission will be subject to delay. We strongly
encourage you to submit your comments online through the https://www.regulations.gov website.
If you prefer to file your comment on paper, write ``Tri Star
Energy, LLC; File No. 201-0074'' on your comment and on the envelope,
and mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite
CC-5610 (Annex D), Washington, DC 20580; or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex
[[Page 40654]]
D), Washington, DC 20024. If possible, submit your paper comment to the
Commission by courier or overnight service.
Because your comment will be placed on the publicly accessible
website at https://www.regulations.gov, you are solely responsible for
making sure that your comment does not include any sensitive or
confidential information. In particular, your comment should not
include any sensitive personal information, such as your or anyone
else'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. You are also solely responsible for making sure your comment
does not include any sensitive health information, such as medical
records or other individually identifiable health information. In
addition, your comment should not include any ``trade secret or any
commercial or financial information which . . . is privileged or
confidential''--as provided by Section 6(f) of the FTC Act, 15 U.S.C.
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)--including in
particular competitively sensitive information such as costs, sales
statistics, inventories, formulas, patterns, devices, manufacturing
processes, or customer names.
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). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request, and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on the public FTC website--as legally required by FTC Rule
4.9(b)--we cannot redact or remove your comment from the FTC website,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC website at http://www.ftc.gov to read this Notice and
the news release describing this matter. The FTC Act and other laws
that 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 on or before August 6, 2020. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
Analysis of Consent Orders To Aid Public Comment
I. Introduction
The Federal Trade Commission (``Commission'') has accepted for
public comment, subject to final approval, an Agreement Containing
Consent Orders (``Consent Agreement'') from Tri Star Energy, LLC (``Tri
Star'') and Hollingsworth Oil Company, Inc., C & H Properties, and
Ronald L. Hollingsworth (``Hollingsworth'' and collectively, the
``Respondents''). The Consent Agreement is designed to remedy the
anticompetitive effects that likely would result from Tri Star's
proposed acquisition of retail fuel assets from Hollingsworth.
Under the terms of the proposed Consent Agreement, Tri Star must
divest to the upfront buyer, Cox Oil Company, Inc. (``Cox''), retail
fuel assets in two local markets in Tennessee. Tri Star must complete
the divestiture within 10 days after the closing of Tri Star's
acquisition of Hollingsworth. The Commission and Respondents have
agreed to an Order to Maintain Assets that requires Respondents to
operate and maintain each divestiture outlet in the normal course of
business through the date Cox acquires the outlet.
The Commission has placed the proposed Consent Agreement on the
public record for 30 days to solicit comments from interested persons.
Comments received during this period will become part of the public
record. After 30 days, the Commission will again review the proposed
Consent Agreement and the comments received, and will decide whether it
should withdraw from the Consent Agreement, modify it, or make it
final.
II. The Respondents
Respondent Tri Star, a company headquartered in Nashville,
Tennessee, owns and operates convenience stores and retail fuel outlets
throughout Tennessee, Alabama, Georgia, and Kentucky. Tri Star operates
89 convenience stores with attached retail fuel outlets, including 82
in Tennessee. Tri Star's convenience stores operate under the Twice
Daily, Hightail, and t-Fuel names, and its retail fuel outlets sell
under a variety of third-party branded and unbranded fuel banners. Tri
Star also supplies fuel to a network of 285 dealer locations.
Respondent Mr. Ronald L. Hollingsworth, a resident of the state of
Tennessee, controls both Hollingsworth Oil Company, Inc. and C & H
Properties, entities operating in Tennessee. Hollingsworth operates a
network of 54 convenience stores under the Sudden Service name with
attached retail fuel outlets throughout middle Tennessee. Hollingsworth
provides a variety of third-party branded and unbranded fuels at its
Sudden Service outlets and to 172 wholesale fuel locations.
III. The Proposed Acquisition
On March 6, 2020, Tri Star entered into an agreement to acquire
certain retail fuel outlets and other interests, from Hollingsworth and
related entities (the ``Acquisition''). The Acquisition would expand
Tri Star's presence throughout middle Tennessee.
The Commission's Complaint alleges that the Acquisition, if
consummated, would violate Section 7 of the Clayton Act, as amended, 15
U.S.C. 18, and that the Acquisition agreement constitutes a violation
of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C.
45, by substantially lessening competition for the retail sale of
gasoline and the retail sale of diesel in each of two local markets in
Tennessee.
IV. The Retail Sales of Gasoline and Diesel
The Commission's Complaint alleges that the relevant product
markets in which to analyze the Acquisition are the retail sale of
gasoline and the retail sale of diesel fuel. Consumers require gasoline
for their gasoline-powered vehicles and can purchase gasoline only at
retail fuel outlets. Likewise, consumers require diesel for their
diesel-powered vehicles and can purchase diesel only at retail fuel
outlets. The retail sale of gasoline and the retail sale of diesel fuel
constitute separate relevant markets because the two are not
interchangeable--vehicles that run on gasoline cannot run on diesel and
vehicles that run on diesel cannot run on gasoline.
The Commission's Complaint alleges the relevant geographic markets
in which to assess the competitive effects of the Acquisition are two
local markets in and around Whites Creek, Tennessee, and Greenbrier,
Tennessee.
The geographic markets for retail gasoline and retail diesel are
highly localized, ranging up to a few miles, depending on local
circumstances. Each relevant market is distinct and fact-dependent,
reflecting a number of considerations, including commuting
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patterns, traffic flows, and outlet characteristics. Consumers
typically choose between nearby retail fuel outlets with similar
characteristics along their planned routes. The geographic markets for
the retail sale of diesel are likely similar to the corresponding
geographic markets for retail gasoline as many diesel consumers exhibit
the same preferences and behaviors as gasoline consumers.
The Acquisition would eliminate competition in these local markets,
resulting in a merger to monopoly in each market for the retail sale of
gasoline and the retail sale of diesel fuel. Retail fuel outlets
compete on price, store format, product offerings, and location, and
pay close attention to competitors in close proximity, on similar
traffic flows, and with similar store characteristics. The combined
entity would be able to raise prices unilaterally in the two local
markets. Absent the Acquisition, Tri Star and Hollingsworth would
continue to compete head to head in these local markets.
Entry into each relevant market would not be timely, likely, or
sufficient to deter or counteract the anticompetitive effects arising
from the Acquisition. Significant entry barriers include the
availability of attractive real estate, the time and cost associated
with constructing a new retail fuel outlet, and the time associated
with obtaining necessary permits and approvals.
V. The Proposed Consent Agreement
The proposed Consent Agreement would remedy the Acquisition's
likely anticompetitive effects by requiring Tri Star to divest certain
Tri Star and Hollingsworth retail fuel assets to Cox in each local
market.
The proposed Consent Agreement requires that the divestiture be
completed no later than 10 days after Tri Star consummates the
Acquisition. The proposed Consent Agreement further requires Tri Star
and Hollingsworth to maintain the economic viability, marketability,
and competitiveness of each divestiture asset until the divestiture to
Cox is complete. For up to twelve months following the divestiture, Tri
Star and Hollingsworth must make available transitional services, as
needed, to assist Cox with the divestiture assets.
In addition to requiring outlet divestitures, the proposed Consent
Agreement also requires Respondents to provide the Commission notice
before re-acquiring the divested outlets for ten years. The prior
notice provision is necessary because an acquisition of either or both
divested assets would likely raise the same competitive concerns and
may fall below the HSR Act premerger notification thresholds.
The proposed Consent Agreement contains additional provisions
designed to ensure the effectiveness of the proposed relief. For
example, Respondents have agreed to an Order to Maintain Assets that
will issue at the time the proposed Consent Agreement is accepted for
public comment. The Order to Maintain Assets requires Respondents to
operate and maintain each divestiture outlet in the normal course of
business, through the date the Respondents complete the divestiture.
The Commission may appoint an independent third party as a Monitor to
oversee the Respondents' compliance with the requirements of the
proposed Consent Agreement.
The purpose of this analysis is to facilitate public comment on the
proposed Consent agreement, and the Commission does not intend this
analysis to constitute an official interpretation of the proposed
Consent Agreement or to modify its terms in any way.
By direction of the Commission, Commissioner Slaughter not
participating.
April J. Tabor,
Secretary.
[FR Doc. 2020-14508 Filed 7-6-20; 8:45 am]
BILLING CODE 6750-01-P