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The Federal Trade Commission will require Solera Holdings, Inc., a leading provider of specialized software to the automotive recycling industry, to divest assets to resolve FTC charges that Solera’s 2012 purchase of rival Actual Systems of America, Inc. was anticompetitive.

Solera will sell the U.S. and Canadian yard management systems (YMS) software business that it acquired from Actual Systems to ASA Holdings, Inc. as part of the FTC settlement.  Solera, through its wholly owned subsidiary Hollander, Inc., and Actual Systems were two of the three leading providers of  YMS in the North American market.

Under a May 29, 2012, agreement, Solera acquired all of the stock of Actual Systems.  Through a separate stock agreement the same day, Solera acquired all the stock of Actual Systems U.K., Ltd and Beech Systems Ltd.  Solera paid approximately $8.7 million in total for the three companies.

According to the FTC, Solera’s acquisition of Actual Systems was anticompetitive and violated federal antitrust laws. The FTC’s complaint alleges the acquisition significantly harmed the market for YMS, which was already highly concentrated.  Combining the two firms eliminated direct and substantial competition between Solera and Actual Systems, likely reduced innovation for YMS and leading to higher prices for its automotive recycling industry customers.

To address the FTC’s competitive concerns and preserve competition, the proposed consent order requires Solera to sell assets related to Actual Systems to ASA Holdings, which was formed by former Actual Systems managers to acquire the divested business. The proposed consent order contains several provisions to ensure the divestiture to ASA Holdings is successful.  For instance, Solera must provide ASA Holdings with a license to the Hollander Interchange, an auto parts database that Hollander maintains and licenses to third parties, for 10 years.  In addition, if Solera does not divest the assets to ASA Holdings within 120 days of when the order becomes final, the FTC can appoint a trustee to oversee the sale of the assets.

The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 4-0.  The FTC will publish a description of the consent agreement package in the Federal Register shortly.  The agreement will be subject to public comment for 30 days, beginning today and continuing through August 22, 2013, after which the Commission will decide whether to make the proposed consent order final.  Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. 

Comments in paper form should be mailed or delivered to:  Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580.  The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.  Comments also can be submitted electronically.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.  When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions.  Each violation of such an order may result in a civil penalty of up to $16,000.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., N.W., Room 7117, Washington, DC 20001. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.