Litton Industries, Inc

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF LITTON INDUSTRIES , INC.

Docket 8778. Order, May, 1978. Order reopening the proceeding solely for the purpose of re-examining the question of relief in its entirety; remanding the proceeding to an ad­ ministrative law judge to conduct hearings on the question of relief; and denying respondent s request for oral argument on the petition for recon­ sideration. Commissioner Jones dissenting with statement. DISSENTING STATEMENT BY JO ES; Commissioner:

Today, by its decision to remand the issue of relief to the 1 has in effectadministrative law judge, the Commission reversed itself on its decision and order in the above-captioned case which held that Litton s acquisition of Triumph-Adler had violated Section 7 of the Clayton Act and ordered Litton to divest itself of Triumph-Adler. The Commission has taken this action in response to Litton s petition to the Commission for Reconsideration of the Order of Divestiture or Reopening of the Proceedings.

Under the Commission s Rules of Practice, Petition for Reconsideration filed under Rule 3. 55 are required to be limited to new questions raised by the decision or final order and upon which the petitioner had no opportunity to argue before the Commission. " 2 , The Commissir.n decision was participated in by Comm;ssior:ers ,Jone" Dixon find Drn:Jison wit: Corr. missioner :VIacIntyre ahstaini:Jg. Commi ioner :\lacIntyre is participatir. g in the c' nrellt Conm:issio"1 action and is cOllc\.lrir. g with it.

'Petition for reopenillg are covered by Rule 3. 72(b)(2) which may be grlm ed upon issuance b)' the Commission of an order to show Crust' if the Commission de ermines that changed \"onditions of:act or law or the public interest rt'quires such reoper. ing , pp.

LITTON INDUSTRIES , INC. 1425 142. Dissenting Statement Litton s arguments for reconsideration or reopening proceed on the following grounds:

1. The opinion was premised on an erroneous view of the law that divestiture was mandatory.

2. The Commission in ordering divestiture failed to consider substantial evidence in the record to the effect that IBM and SCM are growing stronger, that all other competitors in the market as a result of this competition devaluation and IBM' s single element typewriter, have been and are continuing to suffer, that Royal cannot survive without Triumph-Adler and that divestiture wil further worsen thc competitive situation (Brief pp. 19-31). 3. A variety of arguments to the effect that the opinion placed too much emphasis on the structure rather than the history of the typewriter industry; that incorrect measurements were made of the markets and industry concentration (Commissioner Dennison s opinion is cited as to these points); that analysis of the office typewriter market and specifically the office manual market is incorrect; that Litton s economic experts were ignored; and that divestiture wiil have adverse effects on the industry and typewriter dealers.

None of these arguments raise new issues of law or fact and each was in fact considered by the Commission before reaching its decision in this case. Nowhere in the opinion, for example, is there any suggestion that divestiture is a mandatory relief provision. All of the circumstances surrounding the market position of IB2VI and SCM were thoroughly argued and considered in both the Initial Decision and the Commission Opinion and add absolutely nothing new for the Commission to consider. All of the other Litton arguments in this petition proceed again on Litton s view of the market which was rejected by the Commission in its opinion. All were fully discussed in this opinion and therefore in no way constitute grounds for reconsideration or reopening.

Litton attached to its petition and brief various affidavits of Litton s executive board of directors which add little to the record with two exceptions. The submitted material indicates that Xerox is apparently on the verge of entering the automatic typewriter market having purchased, in 1971, the automatic typewriter division of Itel Corporation (See Berry affidavit 8; Spelhaug affdavit pp. 2-8). It also indicates that the worsening monetary crises has allegedly made foreign 1426 FEDERAL TRADE COMMISSION DECISIOXS Order 82 F.

typewriters less price competitive with IBM than before. (Mills affidavit p. 2). I see nothing in either ofthese " facts" which affect the Commission s order to divest Triumph-Adler. In fact, it could be argued that IBM' s market position wil now be challenged by Xerox thus lessening the need for Royal' s survival which Litton contends is needed to challenge IBM.

I can find nothing in Litton s petition to reconsider which was not already considered by the Commission. !' or can I find anything in its petition demonstrating either that Triumph-Adler cannot be viably divested nor that some relief short of divestiture offers any possibility of redressing the competitive imbalance and restraint which the Commission found was the consequence of the merger and the basis for its ilegality under Section 7. For this reason, I do not believe that the requisite showing has been made out under our rules to warrant the remand now ordered by the Commission. ORDER REOPENING PROCEEDI G TO RECONSIDER THE ISSUE OF RELIEF This matter is before the Commission upon respondent' Petition for Reconsideration of the Order of Divestiture or Reopening of Proceedings, filed with the Secretary of the Commission on April 9, 1973.

Upon consideration of al1 the papers before it, the Commission has determined that the above-captioned proceeding should be reopened solely for further consideration of the question of relief. Accordingly, It is ordered That the above-captioned proceeding be, and it hereby is, reopened soley for the purpose of re-examining the question of relief in its entirety.

It is further ordered That the above-captioned proceeding be and it hereby is, remanded to an administrative law judge to conduct hearings on the question of relief. In conducting this inquiry, the administrative law judge shall examine the question of appropriate relief in its entirety, and upon completion of the hearings, he shall furnish the Commission with his findings on the issue of relief and his recommendations. It is further ordered That respondent's request for oral argument before the Commission on the instant petition be, and it hereby is, denied.

Chairman Engman not participating, and Commissioner Jones voting in the negative.

A:IERCIAN HOME PRODUCTS CORP., ET AL. 1427 Order