OLR Bill Analysis: An Act Concerning Competition in the Motor Fuel Industry

SUMMARY sHB 5220 (as amended by House “A”)*:

This bill requires any person conducting business in the motor fuel industry that files merger, acquisition, or any other information regarding market concentration in this state with the Federal Trade Commission (FTC) or the U.S. Department of Justice (US DOJ) to simultaneously provide the same information to the attorney general in compliance with the federal Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) (see BACKGROUND in PDF Link Below).

It authorizes the attorney general to measure the market concentration due to mergers or acquisitions with the Herfindahl-Hirschman Index (HHI) (see BACKGROUND in PDF Link Below). If the HHI score raises market concentration concerns, the attorney general can request more information, which must remain confidential.

Failure to provide merger, acquisition, or other market concentration documents to the attorney general or failing to comply with his or her investigation could result in civil penalties or court orders for compliance.

The bill requires the state to cooperate in its investigation with the federal government and other states, including sharing information and evidence it obtains. It prescribes the acceptable methods of serving the legal documents.

It also sets conditions on gasoline sales during abnormal market disruptions created by weather conditions, emergencies, and other adverse conditions.

*House Amendment “A” (1) changes the effective date from January 1, 2011 to July 1, 2010; (2) requires information filed with the attorney general regarding mergers, acquisitions, or other market concentration information to be the same as is required to comply with the HSR Act; (3) requires the attorney general to follow the federal government market concentration standard if it changes; (4) lowers the maximum civil penalty from $5,000 to $2,000; (5) changes the penalty for failing to provide information to the attorney general from a CUTPA violation to a civil fine of up to $2,000; and (6) makes minor and technical changes.

EFFECTIVE DATE: July 1, 2010

HHI

Under the bill, if the HHI score is (1) between 1,000 and 1,800 and increases by more than 100 points or (2) equal to or greater than 1,800 and increases by more than 50 points, the attorney general may ask for more information.

If, in the future, the FTC or US DOJ uses different HHI scores to measure market concentration and its changes, the attorney general must use the new scores to determine whether to investigate.

Link to Download OLR Bill Analysis of sHB 5220

July 1st, 2011|PMPA in the News, From The CT Capitol|Comments Off on OLR Bill Analysis: An Act Concerning Competition in the Motor Fuel Industry