United States District Court, District of Columbia
P. Mehta, United States District Judge.
United States filed this action against Iron Mountain, Inc.
(“Iron Mountain”), and Recall Holdings Ltd.
“Defendants”), alleging that Iron Mountain's
proposed acquisition of Recall would violate Section 7 of the
Clayton Act, 15 U.S.C. § 18. See Compl., ECF
No. 1, ¶¶ 3, 25. The United States filed with its
Complaint a Hold Separate Stipulation and Order, ECF No. 4-1,
which the court executed, ECF No. 9; a proposed Final
Judgment, ECF No. 4-2; and a Competitive Impact Statement,
ECF No. 3 [hereinafter CIS]. Thereafter, as required by the
Antitrust Procedures and Penalties Act, 15 U.S.C. §
16(b)-(h) (the “Tunney Act”), the United States
published and subjected the proposed Final Judgment to a
60-day public comment period, which expired on May 25, 2015,
see Mot. and Mem. of the United States, ECF No. 15
[hereinafter U.S. Mot.], at 3. The public comment period
elicited a single response-from National Records Center,
Inc.-to which the United States responded and published the
comment and response in the Federal Register.
See Resp. of the United States to Public Comment,
ECF No. 13 [hereinafter U.S. Resp.]. The United States now
asks the court to enter the agreed-upon Final Judgment, which
would permit Iron Mountain and Recall to complete the
proposed transaction subject to conditions intended to remedy
the violations identified in the Complaint. See U.S.
Product and Geographic Markets
Mountain is the largest hard-copy records management services
(“RMS”) provider in the United States, with
reported worldwide revenues of approximately $3.1 billion in
2014. CIS at 3. Recall is the country's second-largest
RMS provider, with worldwide revenues of $836.1 million in
2014. Id. The relevant product market-RMS-involves
the off-site storage of records and the provision of related
services, such as indexing, transporting, and destroying
records. Id. at 3-4. “[T]he Complaint alleges
that a hypothetical monopolist of RMS could profitably
increase its prices by at least a small but significantly
non-transitory amount . . . [and] customers would not switch
to any other alternative.” Id. at 5.
customers include companies throughout the United States,
ranging from Fortune 500 companies to small local businesses.
Id. at 4. The relevant geographic market, however,
is a metropolitan area or a radius around such area.
Id. at 5. That is because customers typically
require a RMS vendor to have a storage facility located
within a certain proximity of the customer's location.
Id. Vendors outside a particular radius are not
competitive with closer-in vendors because longer-distance
“vendor[s] will not be able to retrieve and deliver
records on a timely basis” and because such vendors are
likely to incur higher transportation costs, rendering them a
more costly alternative. Id. The Complaint
identifies 15 metropolitan areas-the relevant geographic
markets-in which RMS vendors “could profitably increase
prices to local customers without losing significant sales to
more distant competitors.” Id.; Compl. ¶
Merger between Iron Mountain and Recall
8, 2015, Iron Mountain reach an agreement to acquire all the
outstanding shares of Recall, a transaction valued at $2.6
billion. CIS at 1. After the proposed merger's
announcement, the United States, through the Department of
Justice, conducted an investigation into the potential
anti-competitive effects of the proposed transaction on RMS
consumers in various geographic areas. U.S. Resp. at 2.
“As part of [this] investigation, the United States
obtained documents and information from the merging parties
and others and conducted more than 160 interviews with
customers, competitors, and other persons with knowledge of
the [RMS] industry.” Id. at 2-3.
its investigation, the United States concluded that the
proposed merger likely would lessen competition in 15
metropolitan areas. Id. at 4; Compl. ¶ 17.
“In each of these geographic areas, Iron Mountain and
Recall are two of only a few significant firms providing
RMS.” U.S. Resp. at 4. Furthermore, in each of those
areas, the United States found, the merger would result in a
“substantial increase in concentration and loss of
head-to-head competition between Iron Mountain and
Recall” and “likely would result in higher prices
and lower quality services for RMS customers.”
address these competitive concerns, the United States
required, as a condition of approving the merger, a
divestiture of Recall's assets. In 13 metropolitan areas,
Recall will be required to sell its assets to a third-party,
Access CIG, LLC (“Access”), and in two
metropolitan areas, Recall will be required to sell its
assets to a to-be-determined buyer acceptable to the United
States. Id. The required divestiture will include
the sale of 26 Recall storage facilities, along with
associated assets, such as customer contracts. Id.
According to the United States, the “[d]ivestiture of
the assets to independent, economically viable competitors
will ensure that customers of [RMS] will continue to receive
the benefits of competition.” Id.
United States filed this action against Iron Mountain and
Recall, alleging that the proposed merger would violate
Section 7 of the Clayton Act, 15 U.S.C. § 18.
See Compl. ¶¶ 3, 25. The United States
filed with its Complaint a Hold Separate Stipulation and
Order, which the court entered on April 7, 2016, ECF No. 9.
The purpose of that Stipulation and Order was to
“ensure, prior to [the] divestitures, that the
Divestiture Assets remain independent [and] economically
viable[, ] . . . [that] ongoing business concerns . . .
remain independent and uninfluenced by Iron Mountain, and
that competition is maintained during the pendency of the