The nation's four manufacturers of lead-based antiknock gasoline additives have violated antitrust laws by maintaining a pattern of identical prices on their products that lessens competition and injures consumers, a Federal Trade Commission judge ruled yesterday.
Administrative Law Judge Ernest G. Barnes upheld a 1979 FTC complaint against Ethyl Corp., E.I. duPont de Nemours & Co., PPG Industries Inc. and Nalco Chemical Co., producers of the lead-based additives blended with gasoline to improve engine performance. The complaint covers 1974 to 1979, when leaded gasoline was still the most common fuel for automobiles.
Barnes' ruling rests on a controversial approach to antitrust enforcement that is certain to be scrutinized by the FTC commissioners.
Barnes noted that the complaint doesn't charge the producers with price fixing or other conspiratorial action. There is no accusation that the companies were trying to suppress competition, he said. And the FTC didn't charge that there was anything illegal or unreasonable about the companies' marketing practices in themselves, he added.
Instead, the companies engaged in an open form of price signalling through press releases and other public announcements that let each company know in advance what others intended to charge. And that, in turn, tended to promote identical pricing decisions and discourage companies from price-cutting, "chilling the vigor of price competition," the judge said.
Twenty of 24 price increases announced during the period covered by the complaint were identical, all effective the same day. In the other four cases, identical prices took effect within a few days of each other, Barnes said.
The judge also condemned the companies' use of a pricing formula that adjusted transportation charges so that the price to customers, upon delivery, was the same regardless of the method and distance of transporting the products to the customers' refineries.
This enabled the companies "to match prices and avoid the rigors of competition," the judge said.
His order, if upheld by the full FTC and the courts, would forbid the four companies from announcing a price change before the effective date, exchanging sales information except in connection with a true sale between them, and disclosing price changes to the press until 30 days after the change.
Du Pont said it will appeal the ruling.