General Railway Signal Co

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

IN THE MATTER OF GENERAL RAILWAY SIGNAL CO., ET AL.

MODIFYING ORDER IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND CLAYTON ACTS Docket C-837. Consent Order, Sept. 24, 1964—Modifying Order, Dec. 10, 1987 The Federal Trade Commission has modified a 1964 consent order (66 F.T.C. 882) by permitting General Railway Signal Co. to engage in any conduct or enter any agreement that is ancillary to and reasonably necessary for the formation or operation of a joint venture that is lawful under the antitrust laws. ORDER MODIFYING CONSENT ORDER ISSUED SEPTEMBER 24, 1964 On August 12, 1987, General Railway Signal Company (“General Railway”), filed a “request to reopen proceeding and modify order” (“request”), pursuant to Section 2.51 of the Commission’s Rules of Practice. The request asks the Commission to reopen the proceeding and modify the consent order issued September 24, 1964, (“the order”) to permit General Railway to engage in any conduct or enter any agreement that is ancillary to and reasonably necessary for the formation or operation of a joint venture that is lawful under the antitrust laws.

The Commission has previously considered the petition of American Standard Inc. (“American Standard”), successor to respondent Westinghouse Air Brake Co. (“WABCO”), which requested, among other things, that the Commission modify the order in Docket No. C-837 to permit American Standard to engage in lawful joint venture activity. On November 18, 1986, the Commission granted that request in the public interest, finding that American Standard had made an adequate showing that currently evolving technological and economic factors in the railroad signaling equipment and systems industry have created a competitive need for American Standard to participate in joint ventures to research, develop and produce integrated railroad systems and to bid for turnkey railroad projects. After reviewing General Railway’s Request and other relevant information, the Commission has concluded that it is in the public interest to modify the order to permit General Railway to engage in conduct that is ancillary to and reasonably necessary for the formation or operation of any joint venture that is lawful under the antitrust laws. General Railway has made an adequate showing that the same industry conditions that warranted modification of the order to Modifying Order 110 F.T.C.

permit American Standard to engage in lawful joint venture activity also warrant modification of the order to extend General Railway the same relief. The currently evolving technological and economic factors in the railroad signaling equipment and systems industry cited by General Railway, and previously cited by American Standard, have created a competitive need for General Railway to also participate in joint ventures to research, develop and produce integrated railroad systems and to bid for turnkey railroad projects. The order’s present language, designed to restrain conduct that might facilitate collusive agreements, could be interpreted to prohibit otherwise lawful joint venture activity. It is in the public interest to modify the order to enable General Railway to participate in otherwise lawful joint venture activity because the competitive injury that General Railway will likely suffer if it cannot engage in such lawful activity is not outweighed by any need to retain the order in its current form.! Accordingly, It is ordered, That this matter be and it hereby is reopened and that the Commission’s order issued on September 24, 1964, be and it hereby is modified to make the new subparagraph (4), which was previously added by the Commission on November 13, 1986, read as follows:

(4) Nothing contained in the foregoing paragraphs of the order shall be construed to prohibit respondents WABCO and General Railway Signal Company from engaging in any conduct or entering into any agreement that is ancillary to and reasonably. necessary for the formation or operation of a joint venture that is lawful under the antitrust laws.

! The order’s provisions are aimed at horizontal conduct and agreements. The order language prohibiting agreements with “any other person, persons or business entity not a party hereto” is limited by the existing exemption for any “bona fide offer, agreement or transaction with any other person, persons or business entity to purchase or sell railroad signaling and control systems or railroad signaling equipment at prices, terms or conditions of sale independently determined and offered and independently accepted.” The new modification for lawful joint venture activities will be a further limitation. The “any other person ... not a party hereto” language will, in practical effect, mean only vendors of signaling equipment or systems. WYOMING STATE BOARD OF CHIROPRACTIC EXAMINERS 145 145 Complaint