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United States Court of Appeals for the Second Circuit
November 21, 1983, Argued ; February 23, 1984, Decided
Nos. 83-4102, 83-4106, Nos. 413, 414 -- August Term 1983
[*130] MANSFIELD, Circuit Judge:
E.I. Du Pont De Nemours and Company ("Du Pont") and Ethyl Corporation ("Ethyl"), the nation's two largest manufacturers of lead antiknock gasoline additives, petition this court pursuant to § 5(c) of the Federal Trade Commission Act, 15 U.S.C. § 45(c), to review and set aside a final order of the Federal Trade Commission ("FTC") entered with an accompanying opinion on April 1, 1983. The FTC held that Du Pont, Ethyl and two other antiknock compounds manufacturers, PPG Industries, Inc. ("PPG") and Nalco Chemical Company ("Nalco"), had engaged in unfair methods of competition in violation of § 5(a)(1) when each firm independently and unilaterally adopted at different times some or all of three business practices that were neither restrictive, predatory, nor adopted for the purpose of restraining competition. These challenged practices were: (1) the sale of the product by all four firms at a delivered price which included transportation costs, (2) the giving by Du Pont and Ethyl of extra advance notice of price increases, over and above [**4] the 30 days provided by contract, and (3) the use by Du Pont and Ethyl (and infrequently by PPG) of a "most favored nation" clause under which the seller promised that no customer would be charged a higher price than other customers. 1 The Commission reasoned that, although the petitioners' adoption of these practices was non-collusive, they collectively had the effect, by removing some of the uncertainties about price determination, of substantially lessening competition by facilitating price parallelism at non-competitive levels higher than might have otherwise existed. 2 The order is set aside.
[**5] Lead-based antiknock compounds have been used in the refining of gasoline since the 1920s. The compounds are essentially homogeneous, consisting in part of tetraethyl lead (TEL), originally produced in the 1920s, and tetramethyl lead (TML), first produced in 1960. They are now usually sold as mixtures, sometimes with additives. The compounds are added to gasoline to prevent "knock," i.e., premature detonation in a gasoline engine's cylinders. Resistance to knock is measured by octane ratings; for a gasoline refiner use of lead-based antiknock mixtures is the most economic way to raise the octane rating of gasoline for vehicles that take leaded gas. Since the compounds are highly toxic and volatile, great care must be taken in transporting and storing them. Refiners therefore maintain only limited inventories. Since an uninterrupted supply is important, the refiner usually purchases the compounds periodically from at least two antiknock producers pursuant to one-year contracts.
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729 F.2d 128 *; 1984 U.S. App. LEXIS 25197 **; 1984-1 Trade Cas. (CCH) P65,881
E.I. DU PONT DE NEMOURS & COMPANY, Petitioner, v. FEDERAL TRADE COMMISSION, Respondent; ETHYL CORPORATION, Petitioner, v. FEDERAL TRADE COMMISSION, Respondent
Prior History: [**1] Petition by two manufacturers of lead antiknock gasoline additives to review and set aside a final order of the Federal Trade Commission entered pursuant to its decision holding that their adoption of certain trade practices amounted to unfair methods of competition in violation of § 5(a)(1) of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1), even though each acted independently, unilaterally, and without any collusion or coercion. The Commission reasoned that the practices, by reducing some of the uncertainties about price determination, tended to facilitate price parallelism at non-competitive levels thereby preventing competitive pricing that might have otherwise existed.
The order is set aside. Judge Lumbard concurs and dissents in a separate opinion.
practices, prices, antiknock, compounds, increased price, producers, unfair, customers, manufacturers, gasoline, unfair methods of competition, sales, business practice, buyers, anticompetitive, facilitating, discounts, refiners, advance notice, lessened, challenged practice, competitors, non-collusive, notice, anti trust law, favored nation, price change, oligopolistic, unilateral, inelastic
Antitrust & Trade Law, Federal Trade Commission Act, Scope, Banking Law, Federal Acts, Unfair Competition & Practices, General Overview, Robinson-Patman Act, Claims, Coverage, Public Enforcement, US Federal Trade Commission Actions, Judicial Review, Civil Procedure, Jurisdiction, Jurisdictional Sources, Statutory Sources, Remedial Powers, Investigations, Regulated Practices, Trade Practices & Unfair Competition, Actual Monopolization, Anticompetitive & Predatory Practices