The U.S. Department of Justice (DOJ) says it will require Waste Management Inc., (WM), Houston, and Deffenbaugh Disposal Inc. (DDI), Kansas City, Kansas, to divest commercial container route services in the Topeka, Kansas, area, and in two areas in northwestern Arkansas for WM to proceed with its acquisition of DDI. Without these divestitures, the DOJ says the transaction has the potential to result in higher rates for customers in those areas.
According to the DOJ, its Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed acquisition. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns outlined in the lawsuit.
“This deal threatened to weaken competition in small container commercial waste service in three cities and surrounding areas,” says Assistant Attorney General Bill Baer of the DOJ Antitrust Division. “Competition between Waste Management and Deffenbaugh historically has resulted in lower prices and better service. By requiring the divestiture of Deffenbaugh’s small container commercial waste service routes in these cities, today’s proposed settlement will ensure that businesses in Kansas and Arkansas will benefit from continuing competition among waste haulers.”
According to the department’s complaint, in and around Topeka and in the Van Buren/Fort Smith, Arkansas region, WM and DDI are currently two of three major providers of small container commercial waste services. In these areas the combination of WM and DDI would have resulted in only two major competitors. In the Springdale, Arkansas, area, WM and DDI are currently two of four major providers. In each of these areas, the loss of competition may have resulted in higher prices and reduced quality in small container waste collection service.
The proposed divestitures have been designed to address these competitive concerns. Under the terms of the proposed consent decree, WM must divest DDI’s small container commercial waste routes in each of the three markets.
The proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period. The competitive impact statement can be read here.