Marathon Petroleum Corporation
Volume 167 · 167 F.T.C. 165
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Marathon Petroleum Corporation, 167 F.T.C. 165 (2019). Consumer Law Library, https://consumerlawlibrary.org/decisions/v167-0004
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IN THE MATTER OF MARATHON PETROLEUM CORPORATION, EXPRESS MART FRANCHISING CORP., PETR-ALL PETROLEUM CONSULTING CORPORATION, AND REROB, LLC CONSENT ORDER, ETC. IN REGARD TO ALLEGED VIOLATIONS OF SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT AND SECTION 7 OF THE CLAYTON ACT Docket No. C-4661; File No. 181 0152 Complaint, October 23, 2018 Decision, February 4, 2019 This consent order addresses the $255 million acquisition by Marathon Petroleum Corporation of certain assets of Petr-All Petroleum Consulting Corporation, Express Mart Franchising Corp., and REROB, LLC. The complaint alleges that the transaction would violate Section 7 of the Clayton Act and Section 5 of the Federal Trade Commission Act by substantially lessening competition for the retail sale of gasoline and the retail sale of diesel in five local markets within the following cities: Farmington, Fayetteville, Johnson City, Rochester, and Whitney Point in New York. The consent order requires Marathon to divest certain Speedway and Express Mart retail fuel outlets and related assets to Sunoco in the five local markets. Participants For the Commission: Helder Agostinho, Catharine Bill, and Carrie Isaac. For the Respondents: Peter Love, Jones Day; Grayson T. Walter, Bond, Schoeneck & King, PLLC.
COMPLAINT Pursuant to the Clayton Act and the Federal Trade Commission Act ("FTC Act"), and its authority thereunder, the Federal Trade Commission ("Commission"), having reason to believe that Respondent Marathon Petroleum Corporation has, through its wholly owned subsidiary Speedway LLC, entered into an agreement to acquire retail fuel outlets and other interests from Express Mart Franchising Corp., Petr-All Petroleum Consulting Corporation, and REROB, LLC (collectively "Express Mart"), that such acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, and that a proceeding in respect thereof would be in the public interest, hereby issues this complaint, stating its charges as follows. I. RESPONDENTS Marathon Petroleum Corporation 1. Respondent Marathon Petroleum Corporation ("Marathon") 1s a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of VOLUME 167 Complaint Delaware, with its office and principal place of business located at 539 South Main Street, Findlay, Ohio, 45840. Speedway LLC ("Speedway") is a wholly owned subsidiary of Marathon. 2. Respondent Marathon, through its wholly owned subsidiary Speedway, is, and at all times relevant herein has been, engaged in, among other things, the retail sale of gasoline and diesel fuel in the United States.
3. Respondent Marathon and the corporate entities under its control are, and at all times relevant herein have been, engaged in commerce, as "commerce" is defined in Section 1 of the Clayton Act as amended, 15 U.S.C. § 12, and Section 4 of the FTC Act, as amended, 15 U.S.C. § 44.
Express Mart 4. Express Mart is comprised of three affiliated entities: a. Respondent Express Mart Franchising Corp. is a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of New York, with its office and principal place of business located at 7401 Round Pond Road, Syracuse, New York, 13212;
b. Respondent Petr-All Petroleum Consulting Corporation is a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of New York, with its office and principal place of business located at 7401 Round Pond Road, Syracuse, New York 13212; and c. Respondent REROB, LLC is a limited liability company organized, existing, and doing business under, and by virtue of, the laws of the State of New York, with its office and principal place of business located at 7401 Round Pond Road, Syracuse, New York 13212.
5. Express Mart is, and at all times relevant herein has been, engaged in, among other things, the retail sale of gasoline and diesel fuel in the United States. 6. Express Mart is, and at all times relevant herein has been, engaged in commerce, as "commerce" is defined in Section 1 of the Clayton Act as amended, 15 U.S.C. § 12, and Section 4 of the FTC Act, as amended, 15 U.S.C. § 44.
II. THE PROPOSED ACQUISITION 7. Pursuant to an Asset Purchase Agreement dated April 13, 2018, Marathon proposes to acquire, through its wholly owned subsidiary Speedway, retail outlets and other interests from Express Mart (the "Acquisition"). Marathon proposes to acquire the interests of the following Express Mart affiliated entities, each of which was a New York corporation or company at the time the Asset Purchase Agreement was signed: Express Mart Franchising Corp.; Petr-All Petroleum Consulting Corporation; and REROB, LLC. MARATHON PETROLEUM CORPORATION 167 Complaint 8. The Acquisition is subject to Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18.
III. THE RELEVANT MARKET 9. Relevant product markets in which to analyze the effects of the Acquisition are the retail sale of gasoline and the retail sale of diesel. Consumers require gasoline for their gasoline-powered vehicles and can purchase gasoline only at retail fuel outlets. Consumers require diesel for their diesel-powered vehicles and can purchase diesel only at retail fuel outlets. No economic or practical alternative to the retail sale of gasoline or diesel exists. 10. Relevant geographic markets in which to analyze the effects of the Acquisition include five local markets within the following cities: Farmington, Fayetteville, Johnson City, Rochester, and Whitney Point in New York.
11. The relevant 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 such features as commuting patterns, traffic flows, and outlet characteristics unique to each market. Consumers typically choose between nearby retail fuel outlets with similar characteristics along their planned routes. IV. MARKET STRUCTURE 12. With regard to the retail sale of gasoline, the Acquisition, if consummated, would reduce the number of competitively constraining independent market participants from three to two in four local markets, and from four to three in one local market. The Acquisition would result in a highly concentrated market in each of these five markets. 13. With regard to the retail sale of diesel, the Acquisition, if consummated, would create a merger to monopoly in three markets, and reduce the number of competitively constraining independent market participants from three to two in one local market, and from four to three in one local market. The Acquisition would result in a highly concentrated market in each of these five markets.
V. BARRIERS TO ENTRY 14. 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. VI. EFFECTS OF THE ACQUISITION 15. The effects of the Acquisition, if consummated, may be substantially to lessen competition or to tend to create a monopoly in the relevant markets in violation of Section 7 of VOLUME 167 Order to Maintain Assets the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45, by:
a. increasing the likelihood that Respondents Marathon and Express Mart would unilaterally exercise market power in the relevant markets; and b. increasing the likelihood of collusive or coordinated interaction between any remaining competitors in the relevant markets.
VII. VIOLATIONS CHARGED 16. The Acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45. 17. The Asset Purchase Agreement entered into by Marathon, through its wholly owned subsidiary Speedway, and Express Mart constitutes a violation of Section 5 of the FTC Act, as amended, 15 U.S.C. § 45.
IN WITNESS WHEREOF, the Federal Trade Commission, having caused this Complaint to be signed by the Secretary and its official seal affixed, at Washington, D.C., this twenty-third day of October, 2018, issues its Complaint against Respondents. By the Commission.
ORDER TO MAINTAIN ASSETS The Federal Trade Commission ("Commission") initiated an investigation of the proposed acquisition by Respondent Marathon Petroleum Corporation, through its wholly owned subsidiary, Speedway LLC (collectively "Marathon"), of retail fuel outlets and other interests from Respondent REROB, LLC, Petr-All Petroleum Consulting Corporation, and Express Mart Franchising Corp. (collectively "Express Mart"). The Commission's Bureau of Competition prepared and furnished to Respondents the Draft Complaint, which it proposed to present to the Commission for its consideration. If issued by the Commission, the Draft Complaint would charge Respondents with violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45. Respondents and the Bureau of Competition executed an agreement ("Agreement Containing Consent Orders" or "Consent Agreement") containing (1) an admission by Respondents of all the jurisdictional facts set forth in the Draft Complaint, (2) a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by Respondents that the law has been violated as alleged in the Draft Complaint, or MARATHON PETROLEUM CORPORATION 169 Order to Maintain Assets that the facts alleged in the Draft Complaint, other than jurisdictional facts, are true, (3) waivers and other provisions as required by the Commission's Rules, and (4) a proposed Decision and Order and Order to Maintain Assets.
The Commission considered the matter and determined to accept the executed Consent Agreement and to place such Consent Agreement on the public record for a period of 30 days for the receipt and consideration of public comments. Now, in further conformity with the procedure described in Commission Rule 2.34, 16 C.F.R. § 2.34, the Commission issues its Complaint, makes the following jurisdictional findings, and issues this Order to Maintain Assets: 1. Respondent Marathon Petroleum Corporation is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business located at 539 South Main Street, Findlay, Ohio 45840.
2. Speedway, LLC is a limited liability company organized, existing, and doing business under, and by virtue of, the laws of the State of Delaware, with its office and principal place of business located at 500 Speedway Drive, Enon, Ohio 45323. Speedway LLC is a wholly-owned subsidiary of Respondent Marathon Petroleum Corporation.
3. Respondent Express Mart Franchising Corp. is a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of New York, with its office and principal place of business located at 7401 Round Pond Road, Syracuse, New York 13212.
4. Respondent Petr-All Petroleum Consulting Corporation is a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of New York, with its office and principal place of business located at 7401 Round Pond Road, Syracuse, New York 13212.
5. Respondent REROB, LLC is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business located at 7401 Round Pond Road, Syracuse, New York 13212.
6. Sunoco LP is a limited partnership organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its headquarters and principal place of business located at 8111 Westchester Drive, Suite 600, Dallas, Texas 75225.
7. The Federal Trade Commission has jurisdiction over the subject matter of this proceeding and over the Respondents, and the proceeding is in the public interest. VOLUME 167 Order to Maintain Assets I.
IT IS ORDERED that, as used in this Order to Maintain Assets, the following definitions, and all other definitions used in the Consent Agreement and the Decision and Order, and Appendix A, which is attached to the Decision and Order and identifies the Retail Fuel Assets, are incorporated herein by reference and made a part hereof, shall apply: A. "Marathon" means Marathon Petroleum Corporation, its directors, officers, employees, agents, representatives, successors, and assigns; its joint ventures, subsidiaries, divisions, groups, and affiliates, in each case controlled by Marathon (including Speedway, LLC), and the respective directors, officers, employees, agents, representatives, successors, and assigns of each. B. "Express Mart" means Express Mart Franchising Corp., its directors, officers, employees, agents, representatives, successors, and assigns; its joint ventures, subsidiaries, partnerships, divisions, groups, and affiliates, in each case controlled by Express Mart, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.
C. "Petr-All Petroleum Consulting Corporation" means Petr-All Petroleum Consulting Corporation, its directors, officers, employees, agents, representatives, successors, and assigns; its joint ventures, subsidiaries, partnerships, divisions, groups, and affiliates, in each case controlled by Petr-All Consulting Corporation, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.
D. "REROB" means REROB, LLC, its directors, officers, employees, agents, representatives, successors, and assigns; its joint ventures, subsidiaries, partnerships, divisions, groups, and affiliates, in each case controlled by REROB, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.
E. "Respondents" means Marathon, Express Mart, Petr-All Petroleum Consulting Corporation, and REROB, individually and collectively.
F. "Acquisition Date" means the date the Acquisition is consummated. G. "Commission Agent" means a Person who enters into an agreement with Sunoco to operate a Retail Fuel Outlet Business at any Retail Fuel Location identified on Appendix A of the Decision and Order.
H. "Confidential Wholesale Information" means any confidential information that Sunoco obtains as a wholesaler of Fuel Products to the Retail Fuel Location identified as OPIS No. 156396, including wholesale price and wholesale volume information, and any discounts or rebates applied to Sunoco's provision of Fuel Products to the Retail Fuel Location identified as OPIS No. 156396. MARATHON PETROLEUM CORPORATION 171 Order to Maintain Assets I. "Confidential Business Information" means all information owned by, or in the possession or control of, Respondents that is not in the public domain and to the extent that it is related to or used in connection with the Retail Fuel Assets or the conduct of the Retail Fuel Outlet Business(es). The term "Confidential Business Information" excludes the following:
1. Information that is contained in documents, books, or records of Respondents that is provided to an Acquirer that is unrelated to the Retail Fuel Assets or that is e xclusively related to the Respondents' retained businesses; and 2. Information that (a) is or becomes generally available to the public other than as a result of disclosure in breach of the prohibitions of this Order; (b) is or was developed independently of, and without reference to, any Confidential Business Information; (c) is necessary to be included in Respondents' mandatory regulatory filings; (d) the disclosure of which is consented to by an Acquirer; (e) is necessary to be exchanged in the course of consummating the Acquisition or transactions pursuant to the Divestiture Agreement; (f) is disclosed in complying with the Order; (g) the disclosure of which is necessary to allow Respondents to comply with the requirements and obligations of the laws of the United States and other countries, and decisions of Governmental Entities; or (h) is disclosed in obtaining legal advice.
J. "Decision and Order" means the:
1. Proposed Decision and Order contained in the Consent Agreement in this matter until the issuance of a final and effective Decision and Order by the Commission; and 2. Final Decision and Order issued by the Commission following the issuance and service of a final Decision and Order by the Commission in this matter.
K. "Divestiture Date" means the date on which Respondents (or a Divestiture Trustee) close on a transaction to divest the Retail Fuel Assets. L. "Firewalled Employees" means any Sunoco employee(s) that are designated by Sunoco to be officially and directly responsible for establishing, setting, or changing the retail prices of Fuel Products at Speedway 7653, identified in Appendix A of the Decision and Order.
M. "Inventories" means all inventories of every kind and nature for retail sale associated with the Retail Fuel Assets, including: (1) all Fuel Products, kerosene, and other petroleum-based motor fuels stored in bulk and held for sale to the public; and (2) all usable, non-damaged and non-out of date products and items VOLUME 167 Order to Maintain Assets held for sale to the public, including, without limitation, all food-related items requiring further processing, packaging, or preparation and ingredients from which prepared foods are made to be sold.
N. "Monitor" means any Person appointed by the Commission to serve as a Monitor pursuant to Paragraph V. of the Decision and Order and Paragraph V. of this Order to Maintain Assets.
O. "Orders" means the Decision and Order in this matter and this Order to Maintain Assets.
P. "Transfer Date" means the date on which the operation of the Retail Fuel Outlet Business at each Retail Fuel Location is transferred to Sunoco or a Commission Agent. The Transfer Date may be after the Divestiture Date. II.
IT IS FURTHER ORDERED that from the date this Order to Maintain Assets becomes final and effective until the Transfer Date:
A. Respondents shall maintain the viability, marketability, and competitiveness of the Retail Fuel Assets, and shall not cause the wasting or deterioration of any of the Retail Fuel Assets. Respondents shall not cause the Retail Fuel Assets to be operated in a manner inconsistent with applicable laws, nor shall it sell, transfer, encumber, or otherwise impair the viability, marketability, or competitiveness of the Retail Fuel Assets.
B. Respondents shall conduct the business of the Retail Fuel Assets in the regular and ordinary course of business, in accordance with past practice (including regular repair and maintenance efforts), and otherwise direct and ensure this result, and shall use best efforts to preserve the existing relationships with suppliers, customers, employees, and others having business relations with the Retail Fuel Assets in the regular and ordinary course of business, in accordance with past practice.
C. Respondents shall not terminate the operation of any of the Retail Fuel Assets, and shall continue to maintain the Inventories of each of the Retail Fuel Assets at levels and selections in the regular and ordinary course of business, in accordance with past practice.
D. Respondents shall maintain the organization and properties of each of the Retail Fuel Assets, including current business operations, physical facilities, working conditions, staffing levels, and a work force of equivalent size, training, and expertise associated with each of the Retail Fuel Assets. Among other actions as may be necessary to comply with these obligations, Respondents shall, without limitation:
MARATHON PETROLEUM CORPORATION 173 Order to Maintain Assets 1. Maintain all operations at each of the Retail Fuel Assets in the regular and ordinary course of business, in accordance with past practice, including maintaining customary hours of operation and departments; 2. Use best efforts to retain employees at each of the Retail Fuel Assets; when vacancies occur, replace the employees in the regular and ordinary course of business, in accordance with past practice; and not transfer any employees from any of the Retail Fuel Assets;
3. Provide each employee of the Retail Fuel Assets with reasonable financial incentives, including continuation of all employee benefits and regularly scheduled raises and bonuses, to continue in his or her position pending divestiture of the Retail Fuel Assets;
4. Not transfer Inventories from any Retail Fuel Asset, other than in the ordinary course of business, in accordance with past practice; 5. Make all payments required to be paid under any contract or lease when due, and otherwise pay all liabilities and satisfy all obligations associated with each of the Retail Fuel Assets, in each case in a manner in accordance with past practice;
6. Maintain the Books and Records of each of the Retail Fuel Assets; 7. Not display any signs or conduct any advertising (e.g., direct mailing, point-of-purchase coupons) that indicates that Respondents are moving operations at any Retail Fuel Asset to another location, or that indicates a Retail Fuel Asset will close;
8. Not conduct any "going out of business," "close out," "liquidation," or similar sales or promotions at or relating to any Retail Fuel Asset; 9. Not materially change or modify the existing pricing or advertising practices, marketing, or merchandising programs and policies, or price zones for or applicable to any of the Retail Fuel Assets, other than changes or modifications in the regular and ordinary course of business, in accordance with past practices and business strategy;
10. Provide each of the Retail Fuel Assets with sufficient working capital to operate at least at current rates of operation, to meet all capital calls with respect to such businesses, and to carry on, at least at their scheduled pace, all capital projects, business plans, and promotional activities for each of the Retail Fuel Assets;
11. Continue, at least at their scheduled pace, any additional expenditures for each of the Retail Fuel Assets authorized prior to the date the Consent VOLUME 167 Order to Maintain Assets Agreement was signed by Respondents including, but not limited to, all repairs, renovations, distribution, marketing, and sales expenditures; 12. Provide such resources as may be necessary to respond to competition and to prevent any diminution in sales at each of the Retail Fuel Assets; 13. Make available for use by each of the Retail Fuel Assets funds sufficient to perform all routine maintenance and all other maintenance as may be necessary to, and all replacements of, any assets related to the operation of the Retail Fuel Assets;
14. Provide support services to each of the Retail Fuel Assets at least at the level as were being provided to such Retail Fuel Assets by Respondents as of the date the Consent Agreement was signed by Respondents; and 15. Maintain, and not terminate or permit the lapse of, any Governmental Permits necessary for the operation of any Retail Fuel Asset. E. The purpose of this Order to Maintain Assets is to: (1) maintain and preserve the Retail Fuel Assets as viable, marketable, competitive, and ongoing businesses until the divestiture required by the Decision and Order is achieved; (2) ensure that Respondents obtain no Confidential Business Information relating to the Retail Fuel Assets, except in accordance with the provisions of the Orders; (3) prevent interim harm to competition pending the divestiture and other relief; and (4) remedy any anticompetitive effects of the Acquisition. III.
IT IS FURTHER ORDERED that:
A. Respondents shall cooperate with and assist the Acquirer or the respective Commission Agents, when applicable, to evaluate and retain any and all Retail Fuel Employee necessary to operate the Retail Fuel Assets in substantially the same manner as Respondents prior to the divestiture, including but not limited to: 1. Not later than 20 days after Respondents sign the Consent Agreement, Respondents shall (i) identify all Retail Fuel Employees (ii) allow the Acquirer or Commission Agent to inspect the personnel files and other documentation of all Retail Fuel Employees, to the extent permissible under applicable laws, and (iii) allow the Acquirer or Commission Agent an opportunity to interview any Retail Fuel Employee;
2. Respondents shall (i) not offer any incentive to any Retail Fuel Employee to decline employment with the Acquirer or Commission Agent, (ii) remove any contractual impediments that may deter any Retail Fuel Employee from accepting employment with the Acquirer or Commission MARATHON PETROLEUM CORPORATION 175 Order to Maintain Assets Agent, including but not limited to, any non-compete or confidentiality provision of employment or other contracts with Respondent that would affect the ability of such employee to be employed by the Acquirer or Commission Agent, and (iii) not otherwise interfere with the recruitment, hiring, or employment of any Retail Fuel Employee by the Acquirer or Commission Agent; and 3. Respondents shall (i) vest all current and accrued pension benefits as of the date of transition of employment with the Acquirer or Commission Agent for any Retail Fuel Employee who accepts an offer of employment from the Acquirer or Commission Agent and (ii) provide each Retail Fuel Employee with reasonable financial incentive as necessary to accept offers of employment with the Acquirer or Commission Agent.
B. For a period of 2 years after the Divestiture Date, Respondents shall not solicit or induce any Retail Fuel Employee who has accepted an offer of employment with an Acquirer or Commission Agent to terminate such employment; provided, however, that Respondents may (i) advertise for employees in newspapers, trade publications, or other media not targeted specifically at the Retail Fuel Employees; (ii) hire Retail Fuel Employees if employment has been terminated by an Acquirer or a Commission Agent, or who apply for employment with Respondents, so long as such Retail Fuel Employees were not solicited by Respondents in violation of this paragraph; or (iii) hire any Retail Fuel Employees if the Acquirer or Commission Agent has notified Respondents in writing that the Acquirer or Commission Agent does not intend to make an offer of employment to that Retail Fuel Employee, or where such an offer has been made and the Retail Fuel Employee has declined the offer.
IV.
IT IS FURTHER ORDERED that:
A. Respondents shall (i) not disclose, directly or indirectly, (including as to Respondents' employees) and (ii) not use for any reason or purpose, any Confidential Business Information received or maintained by Respondents relating to the Retail Fuel Assets, Retail Fuel Outlet Business, and the postdivestiture Retail Fuel Outlet Business; provided, however, that Respondents may disclose or use such Confidential Business Information in the course of: 1. Performing their obligations or as permitted under this Order, the Order to Maintain Assets, or the Divestiture Agreement; or 2. Complying with financial reporting requirements, obtaining legal advice, prosecuting or defending legal claims, investigations, or enforcing actions threatened or brought against the Retail Fuel Assets, Retail Fuel Outlet VOLUME 167 Order to Maintain Assets Business or the post-divestiture Retail Fuel Outlet Business, or as required by law.
B. If disclosure or use of any Confidential Business Information is permitted to Respondents' employees or to any other Person under Paragraph IV.A. of this Order, Respondents shall limit such disclosure or use (i) only to the extent such information is required, (ii) only to those employees or Persons who require such information for the purposes permitted under Paragraph IV.A., and (iii) only after such employees or Persons have signed an agreement to maintain the confidentiality of such information.
C. Respondents shall enforce the terms of this Paragraph IV. as to their employees or any other Person, and take such action as is necessary to cause each of their employees and any other Person to comply with the terms of this Paragraph IV., including implementation of access and data controls, training of employees, and all other actions that Respondents would take to protect their own trade secrets and proprietary information.
V.
IT IS FURTHER ORDERED that:
A. Robert E. Ogle shall serve as the Monitor pursuant to the agreement executed by the Monitor and Respondents and attached as Appendix C ("Monitor Agreement") and Non- Public Appendix D ("Monitor Compensation") of the Decision and Order. The Monitor is appointed to assure that Respondents expeditiously comply with all of their obligations and perform all of their responsibilities as required by the Orders.
B. No later than one day after the Acquisition Date, Respondents shall transfer to the Monitor all rights, powers, and authorities necessary to permit the Monitor to perform his duties and responsibilities, pursuant to the Orders and consistent with the purposes of the Orders.
C. Respondents shall enter into an agreement with the Monitor, subject to the prior approval of the Commission, that (i) shall become effective no later than one (1) day after the date the Commission appoints the Monitor, and (ii) confers upon the Monitor all rights, powers, and authority necessary to permit the Monitor to perform his duties and responsibilities on the terms set forth in the Orders and in consultation with the Commission:
1. The Monitor shall (i ) monitor Respondent's compliance with the obligations set forth in the Orders and (ii) act in consultation with the Commission or its staff, and shall serve as an independent third party and not as an employee or agent of the Respondent or of the Commission. MARATHON PETROLEUM CORPORATION 177 Order to Maintain Assets 2. Respondents shall (i) ensure that the Monitor has full and complete access to all Respondents' personnel, books, records, documents, and facilities relating to compliance with this Order and the Decision and Order or to any other relevant information as the Monitor may reasonably request, and (ii) cooperate with, and take no action to interfere with or impede the ability of, the Monitor to perform his duties pursuant to the Orders; 3. The Monitor (i) shall serve at the expense of Respondents, without bond or other security, on such reasonable and customary terms and conditions as the Commission may set, and (ii) may employ, at the cost and expense of Respondents, such consultants, accountants, attorneys, and other representatives and assistants as are reasonably necessary to carry out the Monitor's duties and responsibilities;
4. Respondents shall indemnify the Monitor and hold him harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the performance of his duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparation for, or defense of, any claim, whether or not resulting in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from the Monitor's gross negligence or willful misconduct; and 5. Respondents may requrre the Monitor and each of the Monitor's consultants, accountants, attorneys, and other representatives and assistants to sign a customary confidentiality agreement; provided, however, that such agreement shall not restrict the Monitor from providing any information to the Commission.
D. The Monitor shall report in writing to the Commission (i) every 30 days after this Order to Maintain Assets is issued, and (ii) at any other time as requested by the staff of the Commission, concerning Respondents' compliance with the Orders. E. The Commission may require the Monitor and each of the Monitor's consultants, accountants, attorneys, and other representatives and assistants to sign a confidentiality agreement related to Commission materials and information received in connection with the performance of the Monitor's duties. F. The Monitor's power and duties shall terminate when this Order to Maintain Ass ets terminates at which time the Monitor's power and duties shall continue pursuant to the Decision and Order, or at such other time as directed by the Commission.
G. If at any time the Commission determines that the Monitor has ceased to act or failed to act diligently, or is unwilling or unable to continue to serve, the VOLUME 167 Order to Maintain Assets Commission may appoint a substitute Monitor, subject to the consent of Respondents, which consent shall not be unreasonably withheld: 1. If Respondents have not opposed, in writing, including the reasons for opposing, the selection of the substitute Monitor within 5 days after notice by the staff of the Commission to Respondents of the identity of any substitute Monitor, then Respondents shall be deemed to have consented to the selection of the proposed substitute Monitor; and 2. Respondents shall, no later than 5 days after the Commission appoints a substitute Monitor, enter into an agreement with the substitute Monitor that, subject to the approval of the Commission, confers on the substitute Monitor all the rights, powers, and authority necessary to permit the substitute Monitor to perform his or her duties and responsibilities pursuant to this Order to Maintain Assets on the same terms and conditions as provided in this Paragraph V.
H. The Commission may on its own initiative or at the request of the Monitor issue such additional orders or directions as may be necessary or appropriate to assure compliance with the requirements of this Order.
VI.
IT IS FURTHER ORDERED that Sunoco shall:
A. Prior to the Divestiture Date, institute all measures and take all actions as are necessary and appropriate to prevent the direct or indirect access to, or disclosure, or use, of Confidential Wholesale Information by any Firewalled Employees except as is expressly permitted or required by the Orders or by the Divestiture Agreement, where such measures shall include, but not be limited to, prohibiting any of its Firewalled Employees from receiving, having access to, using, or continuing to use or disclose any Confidential Wholesale Information. B. Within thirty (30) days after the Divestiture Date and every 30 days thereafter until the Decision and Order becomes final, file with the Commission and submit to the Monitor a verified written report setting forth in detail the manner and form in which it has complied and is complying with the provisions of Paragraph VI.A. of this Order to Maintain Assets. After the Decision and Order becomes final, the reporting obligations under this Order to Maintain Assets shall cease and the reporting obligations contained in the Decision and Order shall control, including therein that Sunoco's annual reports due pursuant to the Decision and Order may be consolidated and filed with the Commission on the same timing as the reports of compliance required to be submitted by Respondent Sunoco pursuant to the Decision and Order issued in In the Matter of Seven & i Holdings Co., Ltd., 7-Eleven, Inc., and Sunoco LP, FTC Docket No. C-4641. MARATHON PETROLEUM CORPORATION 179 Order to Maintain Assets VII.
IT IS FURTHER ORDERED that within 30 days after the date this Order to Maintain Assets is issued by the Commission, and every 30 days thereafter until Respondents have fully complied with this Order to Maintain Assets, Respondents shall submit to the Commission a verified written report setting forth in detail the manner and form in which they intend to comply, are complying, and have complied with all the provisions of this Order to Maintain Assets; provided, however, that, after the Decision and Order in this matter becomes final and effective, the reports due under this Order to Maintain Assets may be consolidated with, and submitted to the Commission on the same timing as, the reports required to be submitted by Respondents pursuant the Decision and Order. Respondents shall submit at the same time a copy of its report concerning compliance with this Order to the Monitor. Respondents shall include in its reports, among other things that are required from time to time, a full description of the efforts to comply with this Order.
VIII.
IT IS FURTHER ORDERED that Respondents shall notify the Commission at least thirty (30) days prior to:
A. Any proposed dissolution of the Respondents;
B. Any proposed acquisition, merger, or consolidation of the Respondents; C. Any other change in Respondents, including, but not limited to, assignment and the creation or dissolution of subsidiaries, if such change might affect compliance obligations arising out of the Orders.
IX.
IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Order to Maintain Assets, and subject to any legally recognized privilege, and upon written request and upon 5 days' notice to Respondents, with respect to any matter contained in this Order to Maintain Assets, Respondents shall, without restraint or interference, permit any duly authorized representative of the Commission: A. Access, during business office hours of the Respondents and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda and all other records and documents in the possession, or under the control, of the Respondents related to compliance with this Order, which copying services shall be provided by the Respondents at their expense; and B. To interview officers, directors, or employees of the Respondents, who may have counsel present, regarding such matters.
VOLUME 167 Decision and Order X.
IT IS FURTHER ORDERED that this Order to Maintain Assets shall terminate on the later of:
A. Three days after the Commission withdraws its acceptance of the Consent Agreement pursuant to the provisions of Commission Rule 2.34, 16 C.F.R. § 2.34; B. The day after Respondents or a Divestiture Trustee completes the divestiture required by Paragraph II.A. of the Decision and Order; provided, however, that if at the time such divestiture has been completed, the Decision and Order in this matter is not yet final, then this Order to Maintain Assets shall terminate the day after the Decision and Order becomes final;
C. The day after Respondents, with the concurrence of the Acquirer, certifies in writing to the Commission as to the completion of all Transition Services provided by Respondents to the Acquirer pursuant to any Transition Services Agreement approved by the Commission; or D. The day the Commission otherwise directs that this Order to Maintain Assets is terminated.
By the Commission.
DECISION AND ORDER [Public Record Version] The Federal Trade Commission ("Commission") initiated an investigation of the proposed acquisition by Respondent Marathon Petroleum Corporation, through its wholly owned subsidiary, Speedway LLC (collectively "Marathon"), of retail fuel outlets and other interests from Respondents REROB, LLC, Petr-All Petroleum Consulting Corporation, and Express Mart Franchising Corp. (collectively "Express Mart"). The Commission's Bureau of Competition prepared and furnished to Respondents the Draft Complaint, which it proposed to present to the Commission for its consideration. If issued by the Commission, the Draft Complaint would charge Respondents with violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45. Respondents and the Bu reau of Competition executed an agreement ("Agreement Containing Consent Order" or "Consent Agreement") containing (1) an admission by Respondents of all the jurisdictional facts set forth in the Draft Complaint, (2) a statement that the signing of said agreement is for settlement purposes only and does not constitute an MARATHON PETROLEUM CORPORATION 181 Decision and Order admission by Respondents that the law has been violated as alleged in the Draft Complaint, or that the facts as alleged in the Draft Complaint, other than jurisdictional facts, are true, (3) wruvers and other provisions as required by the Commission's Rules, and (4) a proposed Decision and Order and Order to Maintain Assets.
The Commission considered the matter and determined that it had reason to believe that Respondents have violated the said Acts and that a complaint should issue stating its charges in that respect. The Commission accepted the Consent Agreement and placed it on the public record for a period of 30 days for the receipt and consideration of public comments; at the same time, it issued and served its Complaint and Order to Maintain Assets. The Commission duly considered any comments received from interested persons pursuant to Commission Rule 2.34, 16 C.F.R. § 2.34. Now, in further conformity with the procedure described in Commission Rule 2.34, 16 C.F.R. § 2.34, the Commission makes the following jurisdictional findings, and issues the following Decision and Order ("Order"):
1. Respondent Marathon Petroleum Corporation is a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of Delaware, with its office and principal place of business located at 539 South Main Street, Findlay, Ohio 45840.
2. Speedway, LLC is a limited liability company organized, existing, and doing business under, and by virtue of, the laws of the State of Delaware, with its office and principal place of business located at 500 Speedway Drive, Enon, Ohio 45323. Speedway LLC is a wholly-owned subsidiary of Respondent Marathon Petroleum Corporation.
3. Respondent Express Mart Franchising Corp. is a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of New York, with its office and principal place of business located at 7401 Round Pond Road, Syracuse, New York 13212.
4. Respondent Petr-All Petroleum Consulting Corporation is a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of New York, with its office and principal place of business located at 7401 Round Pond Road, Syracuse, New York 13212.
5. Respondent REROB, LLC is a limited liability company organized, existing, and doing business under, and by virtue of, the laws of the State of New York, with its office and principal place of business located at 7401 Round Pond Road, Syracuse, New York 13212.
6. Sunoco LP is a limited partnership organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its headquarters and principal place of business located at 8111 Westchester Drive, Suite 600, Dallas, Texas 75225.
VOLUME 167 Decision and Order 7. The Federal Trade Commission has jurisdiction over the subject matter of this proceeding and over the Respondents and the proceeding is in the public interest. ORDER I.
IT IS HEREBY ORDERED that, as used in this Order, the following definitions shall apply:
A. "Marathon" means Marathon Petroleum Corporation, its directors, officers, employees, agents, representatives, successors, and assigns; its joint ventures, subsidiaries, divisions, groups, and affiliates, in each case controlled by Marathon (including Speedway, LLC), and the respective directors, officers, employees, agents, representatives, successors, and assigns of each. B. "Express Mart" means Express Mart Franchising Corp., its directors, officers, employees, agents, representatives, successors, and assigns; its joint ventures, subsidiaries, partnerships, divisions, groups, and affiliates, in each case controlled by Express Mart, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.
C. "Petr-All Petroleum Consulting Corporation" means Petr-All Petroleum Consulting Corporation, its directors, officers, employees, agents, representatives, successors, and assigns; its joint ventures, subsidiaries, partnerships, divisions, groups, and affiliates, in each case controlled by Petr-All Consulting Corporation, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.
D. "REROB" means REROB, LLC, its di rectors, officers, employees, agents, representatives, successors, and assigns; its joint ventures, subsidiaries, partnerships, divisions, groups, and affiliates, in each case controlled by REROB, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.
E. "Respondents" means Marathon, Express Mart, Petr -All Petroleum Consulting Corporation, and REROB, individually and collectively.
F. "Commission" means the Federal Trade Commission.
G. "Acquirer" means: (i) Sunoco or (ii) any other Person that acquires the Retail Fuel Assets pursuant to this Order.
H. "Acquisition" means the proposed acquisition described in the Asset Purchase Agreement by and between Petr-All Petroleum Consulting Corporation, Express MARATHON PETROLEUM CORPORATION 183 Decision and Order Mart Franchising Corp., REROB, LLC, and Speedway, LLC, dated as of April 13, 2018.
I. "Acquisition Date" means the date the Acquisition is consummated. J. "Books and Records" means all originals and all copies of any operating, financial, environmental, governmental compliance, regulatory, or other information, documents, data, databases, printouts, computer files (including files stored on a computer's hard drive or other storage media), electronic files, books, records, ledgers, papers, instruments, and other materials, whether located, stored, or maintained in traditional paper format or by means of electronic, optical, or magnetic media or devices, photographic or video images, or any other format or media, relating to the Retail Fuel Assets, including, but not limited to, real estate files; environmental reports; environmental liability claims and reimbursement data, information, and materials; underground storage tank (UST) system registrations and reports; registrations, licenses, and permits (to the extent transferable); regulatory compliance records, data, and files; applications, filings, submissions, communications, and correspondence with Governmental Entities; inventory data, records, and information; purchase order information and records; supplier, vendor, and procurement files, lists, and related data and information; credit records and information; account information; marketing analyses and research data; service and warranty records; warranties and guarantees; equipment logs, operating guides and manuals; employee lists and contracts, salary and benefits information, and personnel files and records (to the extent permitted by law); financial statements and records; accounting records and documents; telephone numbers and fax numbers; and all other documents, information, and files of any kind that are necessary for an Acquirer to operate the Retail Fuel Outlet Business(es) in a manner consistent with the purposes of this Order. K. "Commission Agent" means a Person who enters into an agreement with Sunoco to operate a Retail Fuel Outlet Business at any Retail Fuel Location identified on Appendix A.
L. "Confidential Business Information" means all information owned by, or in the possession or control of, Respondents that is not in the public domain and to the extent that it is related to or used in connection with the Retail Fuel Assets or the conduct of the Retail Fuel Outlet Business(es). The term "Confidential Business Information" excludes the following:
1. Information that is contained in documents, books, or records of Respondents that is provided to an Acquirer that is unrelated to the Retail Fuel Assets or that is exclusively related to the Respondents' retained businesses; and 2. Information that (a) is or becomes generally available to the public other than as a result of disclosure in breach of the prohibitions of this Order; (b) VOLUME 167 Decision and Order is or was developed independently of, and without reference to, any Confidential Business Information; (c) is necessary to be included in Respondents' mandatory regulatory filings; (d) the disclosure of which is consented to by an Acquirer; (e) is necessary to be exchanged in the course of consummating the Acquisition or transactions pursuant to the Divestiture Agreement; (f) is disclosed in complying with the Order; (g) the disclosure of which is necessary to allow Respondents to comply with the requirements and obligations of the laws of the United States and other countries, and decisions of Governmental Entities; or (h) is disclosed in obtaining legal advice.
M. "Confidential Wholesale Information" means any confidential information that Sunoco obtains or has access to as a wholesaler of Fuel Products to the Retail Fuel Location identified as OPIS No. 156396, including wholesale price and wholesale volume information, and any discounts o r rebates applied to Sunoco's provision of Fuel Products to the Retail Fuel Location identified as OPIS No. 156396.
N. "Consent" means any approval, consent, ratification, waiver, or other authorization.
O. "Contract(s)" means all agreements, contracts, licenses, leases (including, but not limited to, ground leases and subleases), consensual obligations, binding commitments, promises and undertakings (whether written or oral and whether express or implied), whether or not legally binding.
P. "Cost" means costs not t o exceed the actual cost of labor, goods and material, travel, third-party vendors, and other expenditures that are directly incurred by Respondents to provide and fulfill any Transition Services; provided, however, that with respect to the transitional supply of Fuel Products, Fuel Products Cost shall be calculated net of any rebates, RIN sharing, or other discounts or allowances and shall not include any mark-up, profit, overhead, minimum volume penalties, or other upward adjustments by Respondents.
Q. "Divestiture Agreement" means (i) the Sunoco Acquisition Agreement or (ii) any other agreement between Respondents (or a Divestiture Trustee) and an Acquirer that receives the prior approval of the Commission to divest the Retail Fuel Assets, including all related ancillary agreements, schedules, exhibits, and attachments thereto that have received the Commission's prior approval. R. "Divestiture Date" means the date on which Respondents (or the Divestiture Trustee) close on a transaction to divest the Retail Fuel Assets. S. "Divestiture Trustee" means the Person appointed by the Commission pursuant to Paragraph VI. of this Order.
MARATHON PETROLEUM CORPORATION 185 Decision and Order T. "Equipment" means all tangible personal property (other than Inventories) of every kind owned or leased by Respondents in connection with the operation of the Retail Fuel Outlet Business associated with the Retail Fuel Assets at each of the locations specified in Appendix A to this Order, including, but not limited to all: fixtures, furniture, computer equipment and third-party software, office equipment, telephone systems, security systems, registers, credit card systems, credit card invoice printers and electronic point of sale devices, money order machines and money order stock, shelving, display racks, walk-in boxes, furnishings, signage, canopies, fuel dispensing equipment, UST systems (including all fuel storage tanks, fill holes and fill hole covers and tops, pipelines, vapor lines, pumps, hoses, Stage I and Stage II vapor recovery equipment, containment devices, monitoring equipment, cathodic protection systems, and other elements associated with any of the foregoing), parts, tools, supplies, and all other items of equipment or tangible personal property of any nature or other systems used in the operation of the Retail Fuel Outlet Business associated with the Retail Fuel Assets at each of the locations specified in Appendix A to this Order, together with any express or implied warranty by the manufacturers or sellers or lessors of any item or component part thereof, to the extent such warranty is transferrable, and all maintenance records and other documents relating thereto.
U. "Firewalled Employees" means any Sunoco employee(s) that are designated by Sunoco to be officially and directly responsible for establishing, setting, or changing the retail prices of Fuel Products at Speedway 7653, identified in Appendix A of this Order.
V. "Fuel Products" means refined petroleum gasoline and diesel products. W. "Governmental Entity" means any federal, state, local, or non -U.S. government, or any court, legislature, governmental agency or commission, or any judicial or regulatory authority of any government.
X. "Governmental Permit(s)" means all Consents, licenses, permits, approvals, registrations, certificates, rights, or other authorizations from any Governmental Entity(ies) necessary to effect the complete transfer and divestiture of the Retail Fuel Assets to an Acquirer and for such Acquirer to operate any aspect of a Retail Fuel Outlet Business.
Y. "Inventories" means all inventories of every kind and nature for retail sale associated with the Retail Fuel Assets, including: (1) all Fuel Products, kerosene, and other petroleum-based motor fuels stored in bulk and held for sale to the public; and (2) all usable, non-damaged and non-out of date products and items held for sale to the public, including, without limitation, all food-related items requiring further processing, packaging, or preparation and ingredients from which prepared foods are made to be sold.
VOLUME 167 Decision and Order Z. "Monitor" means any Person appointed by the Commiss ion to serve as a Monitor pursuant to Paragraph V. of this Order or Paragraph V. of the Order to Maintain Assets.
AA. "Order to Maintain Assets" means the Order to Maintain Assets incorporated into and made a part of the Consent Agreement.
BB. "Person" means any individual, or any partnership, joint venture, firm, corporation, limited liability company, limited liability partnership, joint stock company, association, trust, unincorporated organization, or other business entity. CC. "Prior Notice Outlet" means (i) the Retail Fuel Assets and (ii) any existing retail fuel facility (including any successors) identified in Non-Public Appendix B. DD. "Products" means any Fuel Products or merchandise products relating to the Retail Fuel Outlet Business(es).
EE. "Respondents' Brands" means all of Respondents' trademarks, trade dress, logos, service marks, trade names, brand names, and all associated intellectual property rights, including rights to the names "Speedway" and "Express Mart." FF. "Retail Fuel Assets" means all of Respondents' right, title, and interest in and to all property and assets, real, personal, or mixed, tangible and intangible, of every kind and description, wherever located, relating to, used in, or reserved for use in, each Retail Fuel Outlet Business location identified in Appendix A of this Order, including, but not limited to:
1. All real property interests (including fee simple interests and real property leases and leasehold interests), including all easements and rights-of-way, together with all buildings and other structures, facilities, appurtenances, and improvements located thereon or affixed thereto (including all attached machinery, fixtures, and heating, plumbing, electrical, lighting, ventilating and air-conditioning equipment), whether owned, leased, or otherwise held;
2. All Equipment, including any Equipment removed from any location of the Retail Fuel Outlet Business since the date of the announcement of the Acquisition and not replaced;
3. All Inventories;
4. All Contracts and all outstanding offers or solicitations to enter into any Contract, and all rights thereunder and related thereto, to the extent transferable, and at the Acquirer's option;
MARATHON PETROLEUM CORPORATION 187 Decision and Order 5. All Governmental Permits, and all pending applications therefor or renewals thereof, to the extent transferable;
6. All intangible rights and property, including intellectual property, owned or licensed (as licensor or licensee) by Respondents (to the extent transferable or licensable), going concern value, goodwill, and telephone and telecopy listings; and 7. Books and Records; provided, however, that in cases in which Books and Records included in the Retail Fuel Assets contain information: (a) that relates both to the Retail Fuel Assets and to other, retained businesses of Respondents and cannot be segregated in a manner that preserves the usefulness of the information as it relates to the Retail Fuel Assets, or (b) where Respondents have a legal obligation to retain the original copies, then Respondents shall be required to provide only copies of the materials containing such information with appropriate redactions to the Acquirer. In instances where such copies are provided to an Acquirer, the Respondents shall provide to such Acquirer access to original materials under circumstances where copies of materials are insufficient for regulatory or evidentiary purposes;
Provided, however, that the Retail Fuel Assets need not include the Retained Assets.
GG. "Retail Fuel Employee" means any full -time, part-time, or contract individual employed by Speedway or Express Mart, as applicable, at their respective locations identified in Appendix A of this Order, as of April 13, 2018, or by Respondents at the time of the divestiture required by Paragraph II. of this Order and whose job responsibilities primarily relate or related to the Retail Fuel Outlet Business.
HH. "Retail Fuel Location" means: (1) any facility engaged m the retail sale, promotion, marketing, and provision of Fuel Products and other fuels, automotive services, and related services; and (2) any property site where construction of a retail facility to be engaged in the retail sale, promotion, marketing, and provision of Fuel Products and other fuels, automotive services, and related services is planned or underway.
II. "Retail Fuel Outlet Business" means all business activities co nducted by Speedway or Express Mart, as applicable, prior to the Acquisition Date at or relating to each of Speedway's or Express Mart's respective locations identified in Appendix A of this Order, including, but not limited to: (1) the retail sale, promotion, marketing, and provision of Fuel Products, and other fuels, automotive products, and related services; and (2) the operation of associated convenience stores and related businesses and services, including, but not limited to the retail sale, promotion, marketing and provision of food and grocery products (including VOLUME 167 Decision and Order dairy and bakery items, snacks, gum, and candy), foodservice and quick-serve restaurant items, beverages (including alcoholic beverages), tobacco products, general merchandise, ATM services, gaming and lottery tickets and services, money order services, car wash services, and all other businesses and services associated with the business operated or to be operated at each location identified in Appendix A of this Order.
JJ. "Retained Assets" means Respondents' assets other than the Retail Fuel Assets to be divested pursuant to this Order, and assets excluded from the Divestiture Agreement approved by the Commission, including but not limited to, the following assets excluded from the Sunoco Acquisition Agreement: 1. Any government permit, license or similar right that is not legally transferable to Acquirer;
2. All claims and rights of Respondents to federal, state and local income tax refunds, credits and benefits;
3. Books and Records of Respondents not relating to the interests transferred to Acquirer under the Sunoco Acquisition Agreement;
4. Respondents' receivables regardless of when accrued; 5. Cash on hand and any bank account of Respondents other than Speedway Store Cash, as defined in the Sunoco Acquisition Agreement; 6. Trucks, vehicles and other rolling stock;
7. Assets, property improvements, equipment or goods located at the locations identified in Appendix A of this Order which are not owned by Respondents and which are identified on Schedule 1.1(b)(vii) of the Sunoco Acquisition Agreement;
8. All rights or obligations under all agreements, leases, licenses, contracts, notes, mortgages, indentures, arrangements or other obligations of Respondents, other than the Speedway Assumed Contracts and the Real Property Lease, as defined in the Sunoco Acquisition Agreement, including, without limitation: (ii) any employment agreements, employee plans or other employment related contracts or arrangements; and (ii) any contract representing any indebtedness;
9. Proceeds from any underground storage tank fund or private insurance claim that are payable to Respondents for investigations, corrective action and/or remediation performed by Respondents at the locations listed in Appendix A of this Order prior to or after the Acquisition Date; MARATHON PETROLEUM CORPORATION 189 Decision and Order 10. Inventories or any supplies such as coffee cups, napkins, motor oil, sandwiches and other inventory or supplies bearing the "Speedway" name, or other proprietary name and/or logos;
11. All lottery tickets located at the locations listed in Appendix A of this Order as of the Acquisition Date;
12. All intellectual property rights of Respondents; 13. All Respondents' employees, including all such employees employed at the locations listed in Appendix A of this Order, unless otherwise required by this Order; and 14. Any computers and point of sale equipment listed on the Excluded Speedway Equipment portion of Schedule 1.1(a)(iii) of the Sunoco Acquisition Agreement.
KK. "Sunoco" means Sunoco LP, its partners, directors, officers, employees, agents, representatives, successors, and assigns; its joint ventures, partnerships, subsidiaries, divisions, groups, and affiliates, in each case controlled by Sunoco LP, including, but not limited to, Susser Petroleum Property Company LLC, Sunoco Retail LLC, Stripes LLC, Town & Country Food Stores, Inc., MACS Retail LLC, Sunoco Finance Corp., and Sunoco LLC, and the respective partners, directors, officers, employees, agents, representatives, successors, and assigns of each.
LL. "Sunoco Acquisition Agreement" means the asset purchase agreement between Sunoco and Speedway LLC, dated October 5, 2018, including related ancillary agreements, amendments, schedules, exhibits, and attachments, thereto, that have been approved by the Commission to accomplish the requirements of this Order, attached as Non-Public Appendix E.
MM. "Third Party(ies)" means any Person other than the Respondents or an Acquirer. NN. "Transition Services" means technical services, personnel, assistance, training, the supply of Products, and other logistical, administrative, and other transitional support as required by an Acquirer and approved by the Commission to facilitate the transfer of the Retail Fuel Assets from the Respondents to an Acquirer, including, but not limited to, services, training, personnel, and support related to: audits, finance and accounting, accounts receivable, accounts payable, employee benefits, payroll, pensions, human resources, information technology and systems, maintenance and repair of facilities and equipment, Fuel Products supply, purchasing, quality control, R&D support, technology transfer, use of Resp ondents' Brands for transitional purposes, operating permits and licenses, regulatory compliance, sales and marketing, customer service, and supply chain management and customer transfer logistics.
VOLUME 167 Decision and Order OO. "Transition Services Agreement(s)" means any agreements t hat receive the prior approval of the Commission between Respondents and an Acquirer to provide, at the option of the Acquirer, Transition Services (or training for an Acquirer to provide services for itself), necessary to transfer the Retail Fuel Assets to the Acquirer and to operate the Retail Fuel Outlet Businesses in a manner consistent with the purposes of this Order.
II.
IT IS FURTHER ORDERED that:
A. No later than 90 days after the Acquisition Date, Respondents shall divest the Retail Fuel Assets, absolutely and in good faith, at no minimum price, as an on going business, to Sunoco pursuant to the Sunoco Acquisition Agreement. B. If Respondents have divested the Retail Fuel Assets to Sunoco prior to the date this Order becomes final, and if, at the time the Commission determines to make this Order final, the Commission notifies Respondents that: 1. Sunoco is not acceptable as the acquirer of the Retail Fuel Assets, then Respondents shall immediately rescind the Sunoco Acquisition Agreement, and shall divest the Retail Fuel Assets no later than 120 days from the date this Order is issued, absolutely and in good faith, at no minimum price, to a Person that receives the prior approval of the Commission and in a manner that receives the prior approval of the Commission; or 2. The manner in which the divestiture of the Retail Fuel Assets to Sunoco was accomplished is not acceptable, the Commission may direct Respondents, or appoint a Divestiture Trustee, to effect such modifications to the manner of divestiture of the Retail Fuel Assets as the Commission may determine are necessary to satisfy the requirements of this Order. C. No later than the Divestiture Date, Respondents shall obtain, at their sole expense, all Consents from Third Parties and all Governmental Permits that are necessary to effect the complete transfer and divestiture of the Retail Fuel Assets to the Acquirer and for the Acquirer to operate any aspect of a Retail Fuel Outlet Business;
Provided, however, that:
1. Respondents may satisfy the requirement to obtain all Consents from Third Party(ies) by certifying that the Acquirer has entered into equivalent agreements or arrangements directly with the relevant Third Party(ies) that are acceptable to the Commission, or has otherwise obtained all necessary consents and waivers; and MARATHON PETROLEUM CORPORATION 191 Decision and Order 2. With respect to any Governmental Permits relating to the Retail Fuel Assets that are not transferable, allow the Acquirer to operate the Retail Fuel Assets under Respondents' Governmental Permits pending the Acquirer's receipt of its own Governmental Permits, and provide such assistance as the Acquirer may reasonably request in connection with its efforts to obtain such Governmental Permits.
D. Respondents shall:
1. At the option of the Acquirer, and pursuant to a Transition Services Agreement or provisions in a Divestiture Agreement and in a manner that receives the prior approval of the Commission, provide Transition Services to the Acquirer for a period of 12 months from the Divestiture Date;
2. Provide the Transition Services at a price not to exceed Cost and of a quality and quantity sufficient for the Acquirer to operate the Retail Fuel Outlet Business(es) in substantially the same manner as Speedway or Express Mart, as applicable, at their respective locations identified in Appendix A of this Order, prior to the Acquisition Date (including the ability to develop new services and products and increase sales of current services and products);
Provided, however, that Respondents shall give priority to the Acquirer's requirements for Transition Services over Respondents' own requirements and take all actions that are reasonably necessary to ensure uninterrupted Transition Services;
Provided further that (i) Acquirer may terminate any Transition Services at any time upon commercially reasonable notice to the Respondents and without cost or penalty to the Acquirer and (ii) at Acquirer's request, Respondents shall file with the Commission any request for prior approval to extend the term of any Transition Services needed to achieve the purposes of this Order, so long as the total duration of any Transition Services does not exceed eighteen 18 months (including the initial 12-month term); and Provided further that Respondents shall not seek to limit the damages (such as indirect, special, and consequential damages) that Acquirer would be entitled to receive m the event of Respondents' breach of any agreement relating to Transition Services.
E. The purpose of the divestiture of the Retail Fuel Assets is to ensure the continued use of the assets in the same businesses in which such assets were engaged at the time of the announcement of the Acquisition by Respondents and to remedy the lessening of competition resulting from the Acquisition as alleged in the Commission's Complaint.
VOLUME 167 Decision and Order III.
IT IS FURTHER ORDERED that:
A. Respondents shall cooperate with and assist the Acquirer or the Commission Agent, as applicable, to evaluate and retain any and all Retail Fuel Employee necessary to operate the Retail Fuel Assets in substantially the same manner as Respondents prior to the divestiture, including but not limited to: 1. Not later than 20 days after Respondents sign the Consent Agreement, Respondents shall (i) identify all Retail Fuel Employees (ii) allow the Acquirer or Commission Agent to inspect the personnel files and other documentation of all Retail Fuel Employees, to the extent permissible under applicable laws, and (iii) allow the Acquirer or Commission Agent an opportunity to interview any Retail Fuel Employee outside the presence or hearing of Respondents, and to make an offer of employment; 2. Respondents shall (i) not offer any incentive to any Retail Fuel Employee to decline employment with the Acquirer or Commission Agent, (ii) remove any contractual impediments that may deter any Retail Fuel Employee from accepting employment with the Acquirer or Commission Agent, including but not limited to, any non-compete or confidentiality provision of employment or other contracts with Respondent that would affect the ability of such employee to be employed by the Acquirer or Commission Agent, and (iii) not otherwise interfere with the recruitment, hiring, or employment of any Retail Fuel Employee by the Acquirer or Commission Agent; and 3. Respondents shall (i) vest all current and accrued pension benefits as of the date of transition of employment with the Acquirer or Commission Agent for any Retail Fuel Employee who accepts an offer of employment from the Acquirer or Commission Agent and (ii) provide each Retail Fuel Employee with reasonable financial incentive as necessary to accept offers of employment with the Acquirer or Commission Agent.
B. For a period of 2 years after the Divestiture Date, Respondents shall not solicit or induce any Retail Fuel Employee who has accepted an offer of employment with an Acquirer or Commission Agent to terminate such employment; provided, however, that Respondents may (i) advertise for employees in newspapers, trade publications, or other media not targeted specifically at the Retail Fuel Employees; (ii) hire Retail Fuel Employees if employment has been terminated by an Acquirer or Commission Agent, or who apply for employment with Respondents, so long as such Retail Fuel Employees were not solicited by Respondents in violation of this paragraph; or (iii) hire any Retail Fuel Employees if the Acquirer or Commission Agent has notified Respondents in writing that the Acquirer or Commission Agent does not intend to make an offer of employment MARATHON PETROLEUM CORPORATION 193 Decision and Order to that Retail Fuel Employee, or where such an offer has been made and the Retail Fuel Employee has declined the offer.
IV.
IT IS FURTHER ORDERED that:
A. Respondents shall (i) not disclose (including as to Respondents' employees) and (ii) not use for any reason or purpose, any Confidential Business Information received or maintained by Respondents relating to the Retail Fuel Assets, Retail Fuel Outlet Business, and the post-divestiture Retail Fuel Outlet Business, provided, however, that Respondents may disclose or use such Confidential Business Information in the course of:
1. Performing their obligations or as permitted under this Order, the Order to Maintain Assets, or the Divestiture Agreement; or 2. Complying with financial reporting requirements, obtaining legal advice, prosecuting or defending legal claims, investigations, or enforcing actions threatened or brought against the Retail Fuel Assets, Retail Fuel Outlet Business or the post-divestiture Retail Fuel Outlet Business, or as required by law.
B. If disclosure or use of any Confidential Business Information is permitted to Respondents' employees or to any other Person under Paragraph IV.A. of this Order, Respondents shall limit such disclosure or use (i) only to the extent such information is required, (ii) only to those employees or Persons who require such information for the purposes permitted under Paragraph IV.A., and (iii) only after such employees or Persons have signed an agreement to maintain the confidentiality of such information.
C. Respondents shall enforce the terms of this Paragraph IV. as to their employees or any other Person, and take such action as is necessary to cause each of their employees and any other Person to comply with the terms of this Paragraph IV., including implementation of access and data controls, training of employees, and all other actions that Respondents would take to protect their own trade secrets and proprietary information.
V.
IT IS FURTHER ORDERED that:
A. Robert Ogle shall serve as the Monitor pursuant to the agreement executed by the Monitor and Respondents and attached as Appendix C ("Monitor Agreement") and Non- Public Appendix D ("Monitor Compensation"). The Monitor is VOLUME 167 Decision and Order appointed to assure that Respondents expeditiously comply with all of their obligations and perform all of their responsibilities as required by this Order. B. No later than one day after the Acquisition Date, Respondents shall transfer to the Monitor all rights, powers, and authorities necessary to permit the Monitor to perform his duties and responsibilities, pursuant to the Order and consistent with the purposes of the Order.
C. Respondents shall enter into an agreement with the Monitor, subject to the prior approval of the Commission, that (i) shall become effective no later than one (1) day after the date the Commission appoints the Monitor, and (ii) confers upon the Monitor all rights, powers, and authority necessary to permit the Monitor to perform his duties and responsibilities on the terms set forth in this Order and in consultation with the Commission:
1. The Monitor shall (i) monitor Respondent's compliance with the obligations set forth in this Order and (ii) act in consultation with the Commission or its staff, and shall serve as an independent third party and not as an employee or agent of the Respondent or of the Commission. 2. Respondents shall (i) ensure that the Monitor has full and complete access to all Respondents' personnel, books, records, documents, and facilities relating to compliance with this Order and the Order to Maintain Assets or to any other relevant information as the Monitor may reasonably request, and (ii) cooperate with, and take no action to interfere with or impede the ability of, the Monitor to perform his duties pursuant to this Order and the Order to Maintain Assets;
3. The Monitor (i) shall serve at the expense of Respondents, without bond or other security, on such reasonable and customary terms and conditions as the Commission may set, and (ii) may employ, at the cost and expense of Respondents, such consultants, accountants, attorneys, and other representatives and assistants as are reasonably necessary to carry out the Monitor's duties and responsibilities;
4. Respondents shall indemnify the Monitor and hold him harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the performance of his duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparation for, or defense of, any claim, whether or not resulting in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from the Monitor's gross negligence or willful misconduct; and 5. Respondents may require the Monitor and each of the Monitor's consultants, accountants, attorneys, and other representatives and MARATHON PETROLEUM CORPORATION 195 Decision and Order assistants to sign a customary confidentiality agreement; provided, however, that such agreement shall not restrict the Monitor from providing any information to the Commission.
D. The Monitor shall report in writing to the Commission (i) every 30 days after this Order is issued, (ii) no later than 10 days after Respondents have completed their obligations as required by Paragraph II. of this Order ("Final Report"), and (iii) at any other time as requested by the staff of the Commission, concerning Respondents' compliance with this Order and/or the Order to Maintain Assets. E. The Commission may require the Monitor and each of the Monitor's consultants, accountants, attorneys, and other representatives and assistants to sign a confidentiality agreement related to Commission materials and information received in connection with the performance of the Monitor's duties. F. The Monitor's power and duties shall terminate 10 business days aft er the Monitor has completed his final report pursuant to Paragraph V.D.(ii) of this Order, or at such other time as directed by the Commission. G. If at any time the Commission determines that the Monitor has ceased to act or failed to act diligently, or is unwilling or unable to continue to serve, the Commission may appoint a substitute Monitor, subject to the consent of Respondents, which consent shall not be unreasonably withheld: 1. If Respondents have not opposed, in writing, including the reasons for opposing, the selection of the substitute Monitor within 5 days after notice by the staff of the Commission to Respondents of the identity of any substitute Monitor, then Respondents shall be deemed to have consented to the selection of the proposed substitute Monitor; and 2. Respondents shall, no later than 5 days after the Commission appoints a substitute Monitor, enter into an agreement with the substitute Monitor that, subject to the approval of the Commission, confers on the substitute Monitor all the rights, powers, and authority necessary to permit the substitute Monitor to perform his or her duties and responsibilities pursuant to this Order on the same terms and conditions as provided in this Paragraph V.
H. The Commission may on its own initiative or at the request of the Monitor issue such additional orders or directions as may be necessary or appropriate to assure compliance with the requirements of this Order.
VOLUME 167 Decision and Order VI.
IT IS FURTHER ORDERED that:
A. If Respondents have not fully complied with the divestiture and other obligations as required by Paragraph II. of this Order, the Commission may appoint a Divestiture Trustee to divest the Retail Fuel Assets and perform Respondents' other obligations in a manner that satisfies the requirements of this Order. The Divestiture Trustee appointed pursuant to this Paragraph may be the same Person appointed as Monitor.
B. In the event that the Commission or the Attorney General brings an action pursuant to § 5(l) of the Federal Trade Commission Act, 15 U.S.C. § 45(l), or any other statute enforced by the Commission, Respondents shall consent to the appointment of a Divestiture Trustee in such action to divest the relevant assets in accordance with the terms of this Order. Neither the appointment of a Divestiture Trustee nor a decision not to appoint a Divestiture Trustee under this Paragraph shall preclude the Commission or the Attorney General from seeking civil penalties or any other relief available to it, including a court-appointed Divestiture Trustee, pursuant to § 5(l) of the Federal Trade Commission Act, or any other statute enforced by the Commission, for any failure by the Respondents to comply with this Order.
C. The Commission shall select the Divestiture Trustee, subject to the consent of Respondents, which consent shall not be unreasonably withheld. The Divestiture Trustee shall be a person with experience and expertise in acquisitions and divestitures. If Respondents have not opposed, in writing, including the reasons for opposing, the selection of any proposed Divestiture Trustee within 10 days after notice by the staff of the Commission to Respondents of the identity of any proposed Divestiture Trustee, Respondents shall be deemed to have consented to the selection of the proposed Divestiture Trustee.
D. Within ten 10 days after appointment of a Divestiture Trustee, Respondents shall execute a trust agreement that, subject to the prior approval of the Commission, transfers to the Divestiture Trustee all rights and powers necessary to permit the Divestiture Trustee to effect the relevant divestiture or other action required by the Order.
E. If a Divestiture Trustee is appointed by the Commission or a court pursuant to this Order, Respondents shall consent to the following terms and conditions regarding the Divestiture Trustee's powers, duties, authority, and responsibilities: 1. Subject to the prior approval of the Commission, the Divestiture Trustee shall have the exclusive power and authority to assign, grant, license, divest, transfer, deliver, or otherwise convey the relevant assets that are required by this Order to be assigned, granted, licensed, divested, MARATHON PETROLEUM CORPORATION 197 Decision and Order transferred, delivered, or otherwise conveyed, and to take such other action as may be required to divest the Retail Fuel Assets and perform Respondents' other obligations in a manner that satisfies the requirements of this Order;
2. The Divestiture Trustee shall have 12 months from the date the Commission approves the trustee agreement described herein to accomplish the divestiture, which shall be subject to the prior approval of the Commission. If, however, at the end of the 12-month period, the Divestiture Trustee has submitted a plan of divestiture or believes that the divestiture can be achieved within a reasonable time, the divestiture period may be extended by the Commission, or in the case of a court-appointed Divestiture Trustee, by the court;
3. Subject to any demonstrated legally recognized privilege, the Divestiture Trustee shall have full and complete access to the personnel, books, records, and facilities related to the relevant assets that are required to be assigned, granted, licensed, divested, delivered, or otherwise conveyed by this Order and to any other relevant information, as the Divestiture Trustee may request. Respondents shall develop such financial or other information as the Divestiture Trustee may request and shall cooperate with the Divestiture Trustee. Respondents shall take no action to interfere with or impede the Divestiture Trustee's accomplishment of the divestiture. Any delays in divestiture caused by Respondents shall extend the time for divestiture under this Paragraph VI. in an amount equal to the delay, as determined by the Commission or, for a court-appointed Divestiture Trustee, by the court;
4. The Divestiture Trustee shall use commercially reasonable best efforts to negotiate the most favorable price and terms available in each contract that 1s submitted to the Commission, subject to Respondents' absolute and unconditional obligation to divest expeditiously and at no minimum price. The divestiture shall be made in the manner and to an Acquirer as required by this Order; provided, however, if the Divestiture Trustee receives bona fide offers from more than one acquiring entity, and if the Commission determines to approve more than one such acquiring entity, the Divestiture Trustee shall divest to the acquiring entity selected by Respondents from among those approved by the Commission; provided further, however, that Respondents shall select such entity within 5 days of receiving notification of the Commission's approval;
5. The Divestiture Trustee shall serve, without bond or other security, at the cost and expense of Respondents, on such reasonable and customary terms and conditions as the Commission or a court may set. The Divestiture Trustee shall have the authority to employ, at the cost and expense of VOLUME 167 Decision and Order Respondents, such consultants, accountants, attorneys, investment bankers, business brokers, appraisers, and other representatives and assistants as are n necessary to carry out the Divestiture Trustee's duties and responsibilities. The Divestiture Trustee shall account for all monies derived from the divestiture and all expenses incurred. After approval by the Commission and, in the case of a court-appointed Divestiture Trustee, by the court, of the account of the Divestiture Trustee, including fees for the Divestiture Trustee's services, all remaining monies shall be paid at the direction of the Respondents, and the Divestiture Trustee's power shall be terminated. The compensation of the Divestiture Trustee shall be based at least in significant part on a commission arrangement contingent on the divestiture of all of the relevant assets that are required to be divested by this Order;
6. Respondents shall indemnify the Divestiture Trustee and hold the Divestiture Trustee harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the performance of the Divestiture Trustee's duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparation for, or defense of, any claim, whether or not resulting in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from gross negligence or willful misconduct by the Divestiture Trustee. For purposes of this Paragraph VI.E.6., the term "Divestiture Trustee" shall include all Persons retained by the Divestiture Trustee pursuant to Paragraph VI.E.5. of this Order;
7. The Divestiture Trustee shall have no obligation or authority to operate or maintain the Retail Fuel Assets required to be divested by this Order; 8. The Divestiture Trustee shall report in writing to Respondents and to the Commission every 60 days concerning the Divestiture Trustee' s efforts to accomplish the divestiture; and 9. Respondents may require the Divestiture Trustee and each of the Divestiture Trustee's consultants, accountants, attorneys, and other representatives and assistants to sign a customary confidentiality agreement; provided, however, such agreement shall not restrict the Divestiture Trustee from providing any information to the Commission. F. The Commission may require the Divestiture Trustee and each of the Divestiture Trustee's consultants, accountants, attorneys, and other representatives and assistants to sign a confidentiality agreement related to Commission materials and information received in connection with the performance of the Divestiture Trustee's duties.
MARATHON PETROLEUM CORPORATION 199 Decision and Order G. If the Commission determines that a Divestiture Trustee has ceased to act or failed to act diligently, the Commission may appoint a substitute Divestiture Trustee in the same manner as provided in this Paragraph VI. H. The Commission or, in the case of a court-appointed Divestiture Trustee, the court, may on its own initiative or at the request of the Divestiture Trustee issue such additional orders or directions as may be necessary or appropriate to accomplish the divestitures and other obligations or action required by this Order. VII.
IT IS FURTHERED ORDERED that:
A. For a period of 10 years from the date this Order is issued, Respondents shall not, without providing advance written notification to the Commission ("Notification") in the manner described in this paragraph, acquire, directly or indirectly, through subsidiaries or otherwise, any leasehold, ownership interest, or any other interest, in whole or in part, in any Prior Notice Outlet. B. With respect to the Notification:
1. The prior notification required by this Paragraph VII. shall be given on the Notification and Report Form set forth in the Appendix to Part 803 of Title 16 of the Code of Federal Regulations as amended (hereinafter referred to as ''the Notification"), and shall be prepared and transmitted in accordance with the requirements of that part, except that no filing fee will be required for any such notification, notification shall be filed with the Secretary of the Commission, notification need not be made to the United States Department of Justice, and notification is required only of the Respondents and not of any other party to the transaction. 2. Respondents shall include a description of the proposed acquisition and provide:
a. A map showing all retail fuel outlets by ownership (e.g., OPIS Corporate Brand) within 5 driving miles of the relevant Prior Notice Outlet;
b. For each retail fuel outlet owned by Respondents within 5 driving miles of the relevant Prior Notice Outlet, a list of the retail fuel outlets that Respondents monitored at any time within the preceding 12-month period (to the extent such information is available); and VOLUME 167 Decision and Order c. Respondents' pricing strategy in relation to each monitored retail fuel outlet identified in response to Paragraph VII.B.2.(b) of this Order.
3. Respondents shall provide the Notification to the Commission at least 30 days prior to consummating the transaction (hereinafter referred to as the "first waiting period"). If, within the first waiting period, representatives of the Commission make a written request for additional information or documentary material (within the meaning of 16 C.F.R. § 803.20), Respondents shall not consummate the transaction until 30 days after submitting such additional information or documentary material. 4. Early termination of the waiting periods in this Paragraph VII. may be requested and, where appropriate, granted by letter from the Bureau of Competition. Provided, however, that prior notification shall not be required by this Paragraph for a transaction for which notification is required to be made, and has been made, pursuant to Section 7A of the Clayton Act, 15 U.S.C. § 18a.
5. Respondent shall provide a copy of each Notification described in Paragraph VII.B. of this Order to the State of New York at the same time that such Notification is transmitted to the Commission. VIII.
IT IS FURTHERED ORDERED that:
A. The Divestiture Agreement shall be incorporated by reference into this Order and made a part hereof, and Respondents shall comply with all terms of the Divestiture Agreement. Any failure by Respondents to comply with the terms of a Divestiture Agreement shall constitute a violation of this Order. The Divestiture Agreement shall not limit or contradict, or be construed to limit or contradict, the terms of this Order. In the event of a conflict between the terms of this Order and a Divestiture Agreement, or any ambiguity in the language used in a Divestiture Agreement, the terms of this Order shall govern to resolve such conflict or ambiguity.
B. Respondents shall not modify, replace, or extend the terms of the Divestiture Agreement without the prior approval of the Commission, except as otherwise provided in Rule 2.41(f)(5) of the Commission's Rules of Practice and Procedure, 16 C.F.R. § 2.41(f)(5).
MARATHON PETROLEUM CORPORATION 201 Decision and Order IX.
IT IS FURTHER ORDERED that Sunoco shall:
A. Prior to the Divestiture Date, institute all measures and take all actions as are necessary and appropriate to prevent the direct or indirect access to, or disclosure, or use, of Confidential Wholesale Information by any Firewalled Employees except as is expressly permitted or required by the Orders or by the Divestiture Agreement, where such measures shall include, but not be limited to, prohibiting any of its Firewalled Employees from receiving, having access to, using, or continuing to use or disclose any Confidential Wholesale Information. B. Within thirty (30) days after the Divestiture Date, one (1) year from the date this Order is issued, annually for the next 9 years on the anniversary of the date this Order is issued, and at other times as the Commission may require, file with the Commission and submit to the Monitor a verified written report setting forth in detail the manner and form in which it has complied and is complying with the provisions of Paragraph IX.A. of this Order. Sunoco's annual reports due pursuant to this Order may be consolidated and filed with the Commission on the same timing as the reports of compliance required to be submitted by Respondent Sunoco pursuant to the Decision and Order issued in In the Matter of Seven & i Holdings Co., Ltd., 7-Eleven, Inc., and Sunoco LP, FTC Docket No. C-4641. X.
IT IS FURTHER ORDERED that:
A. Respondents shall:
1. notify Commission staff via email at [email protected] of the Acquisition Date no later than 5 days after the Acquisition Date, and; 2. submit the complete Divestiture Agreement to the Commission at [email protected] and [email protected] no later than 30 days after the Divestiture Date.
B. Respondents shall submit verified written reports ("compliance reports") m accordance with the following:
1. An interim compliance report 30 days after the Order is issued, and every 30 days thereafter until Respondents have fully complied with the provisions of Paragraph II of this Order;
2. An annual compliance report one year after the date this Order is issued, and annually for the next 9 years on the anniversary of that date; and VOLUME 167 Decision and Order 3. Additional compliance reports as the Commission or its staff may request. C. Each compliance report shall set forth in detail the manner and form in which Respondents intend to comply, are complying, and have complied with this Order. Each compliance report shall contain sufficient information and documentation to enable the Commission to determine independently whether Respondents are in compliance with the Order. Conclusory statements that Respondents have complied with their obligations under the Order are insufficient. Respondents shall include in their reports, among other information or documentation that may be necessary to demonstrate compliance, a full description of the measures Respondents have implemented or plan to implement to ensure that they have complied or will comply with each paragraph of the Order, and a description of all substantive contacts or negotiations for the divestitures and the identities of all parties contacted. Respondents shall retain copies of all material written communications to and from such parties, as well as all non-privileged internal memoranda, reports, and recommendations concerning completing their obligations under the Order for a period of 3 years, and shall provide copies of those records to Commission staff upon request.
D. Each compliance report shall be verified in the manner set forth in 28 U.S.C. § 1746 by the Chief Executive Officer or another officer or employee specifically authorized to perform this function. Respondents shall submit an original and 2 copies of each compliance report as required by Commission Rule 2.41(a), 16 C.F.R. § 2.41(a), including a paper original submitted to the Secretary of the Commission and electronic copies to the Secretary at [email protected] and to the Compliance Division at [email protected]. In addition, Respondents shall provide a copy of each compliance report to the Monitor if the Commission has appointed one in this matter.
XI.
IT IS FURTHER ORDERED that Respondents shall notify the Commission at least 30 days prior to:
A. Any proposed dissolution of the Respondents;
B. Any proposed acquisition, merger, or consolidation of the Respondents; or C. Any other change in the Respondents, including, but not limited to, assignment and the creation or dissolution of subsidiaries, if such change might affect compliance obligations arising out of this Order.
XII.
IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Order, and subject to any legally recognized privilege, and upon written MARATHON PETROLEUM CORPORATION 203 Decision and Order request and upon 5 days' notice to Respondents, Respondents shall, without restraint or interference, pennit any duly authorized representative ofthe Commission: A. Access, dming business office hams of the Respondents and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda and all other records and documents in the possession, or under the control, of the Respondents related to compliance with this Order, which copying services shall be provided by the Respondents at their expense; and B. To interview officers, directors, or employees of the Respondents, who may have counsel present, regarding such matters.
XIII.
IT IS FURTHER ORDERED that this Order shall te1minate on Febrna1y 4, 2029. By the Commission.
Appendix A Retail Fuel and Convenience Store Properties To Be Divested Owner State Area Property Name & Address Speedway New York Rochester 3000 S. Winton Road, Rochester, NY 7653 14623 Express Mart New York Johnson City 306 719 Main Street, Johnson City, NY 13790 Speedway New York Whitney Point 7728 2811 US-11, Whitney Point, NY 13 862 VOLUME 167 Decision and Order ,- ,- , Owner State Area Property Name & Address Speedway New York Fannington 7733 1429 NY-332, Frumington, NY 14425 Speedway New York Fayetteville 407 East Genesee Street, Fayetteville, NY 7899 13066 Non-Public Appendix B Prior Notice Outlets [Redacted From the Public Record Version, But Incorporated By Reference] Appendix C Monitor Agreement Non-Public Appendix D Monitor Compensation [Redacted From the Public Record Version, But Incorporated By Reference] MARATHON PETROLEUM CORPORATION 205 Analysis to Aid Public Comment Non-Public Appendix E Sunoco Acquisition Agreement [Redacted From the Public Record Version, But Incorporated By Reference] 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 Marathon Petroleum Corporation ("Marathon") and Express Mart Franchising Corp., Petr-All Petroleum Consulting Corporation, and REROB, LLC ("Express Mart" and collectively, the "Respondents"). The Consent Agreement is designed to remedy the anticompetitive effects that likely would result from Marathon's proposed acquisition of retail fuel outlets and other interests from Express Mart.
Under the terms of the proposed Consent Agreement, Marathon must divest to the upfront buyer Sunoco LP ("Sunoco") retail fuel outlets and related assets in five local markets in New York. Marathon must complete the divestiture within 90 days after the closing of Marathon's acquisition of Express Mart. 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 Sunoco 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 Marathon, a publicly traded company headquartered in Findlay, Ohio, operates a vertically integrated refining, marketing, retail, and transportation system. Marathon's wholly owned subsidiary, Speedway LLC ("Speedway"), owns and operates 2,74 0 convenience stores located in 21 states, making it the second-largest chain of company-owned and -operated gasoline and convenience stores in the United States. In addition, independent entrepreneurs own and operate 5,600 Marathon-branded retail fuel outlets in 20 states and the District of Columbia.
VOLUME 167 Analysis to Aid Public Comment Respondent Express Mart is a collection of closely held New York State S Corporations and limited liability companies headquartered in Syracuse, New York. Express Mart owns and operates convenience stores and retail fuel outlets stations primarily along the I-90 corridor in the Syracuse-Rochester- Buffalo region of upstate New York. Express Mart's network includes 77 convenience stores with attached fuel stations, as well as 11 franchise locations owned by independent contract dealers operating under the Express Mart banner. Express Mart's convenience stores operate under the Express Mart name, while its retail fuel stations operate primarily under the Sunoco banner.
III. The Proposed Acquisition On April 13, 2018, Marathon, through its wholly owned subsidiary Speedway, entered into an agreement to acquire certain retail fuel outlets and other interests, from Express Mart (the "Transaction"). The Transaction would expand Speedway's presence across upstate New Yo rk. The Commission's Complaint alleges that the Transaction, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and that the Transaction 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 five local markets in New York. IV. The Retail Sales of Gasoline and Diesel The Commission's Complaint alleges that the relevant product markets in which to analyze the Transaction are the retail sale of gasoline and the retail sale of diesel. 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 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 Transaction include five local markets within the following cities: Farmington, Fayetteville, Johnson City, Rochester, and Whitney Point in New York. 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 factdependent, reflecting a number of considerations, including commuting 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 may be similar to the corresponding geographic markets for retail gasoline as many diesel consumers exhibit the same preferences and behaviors as gasoline consumers. The Transaction would substantially increase the market concentration in each of the five local markets, resulting in five highly concentrated markets for the retail sale of gasoline and the retail sale of diesel. In four of the five local gasoline retail markets, the Transaction would MARATHON PETROLEUM CORPORATION 207 Analysis to Aid Public Comment reduce the number of competitively constraining independent market participants from three to two. In the fifth local gasoline retail market, the Transaction would reduce the number of competitively constraining independent participants from four the three. In three of the five retail diesel markets, the Transaction would result in a merger to monopoly. In the fourth diesel market, the Transaction would reduce the number of competitively constraining independent participants from three to two. In the fifth diesel market, the Transaction would reduce the number of competitively constraining independent participants from four to three. The Transaction would substantially lessen competition for the retail sale of gasoline and the retail sale of diesel in these local markets. 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 markets where Marathon and Express Mart are close competitors. Absent the Transaction, Marathon and Express Mart would continue to compete head to head in these local markets.
Moreover, the Transaction would enhance the incentives for interdependent behavior in local markets where only two or three competitively constraining independent market participants would remain. Two aspects of the retail fuel industry make it vulnerable to such coordination. First, retail fuel outlets post their fuel prices on price signs that are visible from the street, allowing competitors to observe each other's fuel prices without difficulty. Second, retail fuel outlets regularly track their competitors' fuel prices and change their own prices in response. These repeated interactions give retail fuel outlets familiarity with how their competitors price and how changing prices affect their sales.
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 Marathon to divest certain Speedway and Express Mart retail fuel outlets and related assets to Sunoco in five local markets.
The proposed Consent Agreement requires that the divestiture be completed no later than 90 days after Marathon consummates the Acquisition. This Agreement protects the Commission's ability to obtain complete and effective relief given the small number of outlets to be divested. The proposed Consent Agreement further requires Marathon and Express Mart to maintain the economic viability, marketability, and competitiveness of each divestiture asset until the divestiture to Sunoco is complete. For up to twelve months following the divestiture, Marathon and Express Mart must make available transitional services, as needed, to assist the buyer of each divestiture asset.
VOLUME 167 Analysis to Aid Public Comment In addition to requiring outlet divestitures, the proposed Consent Agreement also requires Respondents to provide the Commission notice before acquiring designated outlets in the five local areas for ten years. The prior notice provision is necessary because acquisitions of the designated outlets likely raise competitive concerns and may fall below the HSR Act premerger notification thresholds.
Presently, in Rochester, New York, one local market of concern, Sunoco serves as the wholesale supplier to a retail fuel outlet that is an independent competitor to Speedway and Express Mart. By purchasing the Speedway outlet, Sunoco will also become a competitor to the outlet for which it is currently a wholesale supplier. To address this concern, Sunoco has agreed to implement a firewall between its wholesale and retail fuel pricing businesses in that local market. The firewall will restrict Sunoco retail pncmg personnel's access to wholesale information, prohibiting Sunoco retail from knowing, among other information, how its pricing decisions affect the competing location's volumes.
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 divestiture of the outlet. During this period, and until such time as the buyer no longer requires transitional assistance, the Order to Maintain Assets authorizes the Commission to appoint an independent third party as a Monitor to oversee the Respondents' compl iance 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. A & O ENTERPRISES INC 209 Complaint