Markets Wired

Star Pipe Products, Ltd., a supplier of ductile iron pipe fittings, will pay $120,000 in civil penalties to resolve Federal Trade Commission allegations that it violated a 2012 Commission order prohibiting it from sharing competitively sensitive information. It also has agreed to an order modification that adds training and notification obligations to prevent future violations.

After the FTC issued complaints in 2012 alleging that Star Pipe and two other suppliers of ductile iron pipe fittings engaged in illegal behavior, including conspiring to exchange competitively sensitive sales information and to raise and stabilize prices in the fittings market, Star Pipe agreed to settle the case. The Commission’s May 2012 final order prohibited Star from agreeing, or attempting to agree, to exchange competitively sensitive pricing information with its competitors, and obligated it to follow certain employee-training and compliance reporting obligations

According to the FTC, from August 2012 through June 2013, a senior Star Pipe executive received rival Sigma’s competitively sensitive pricing information from a Sigma sales agent. Star Pipe neither requested that the sender stop providing the information, nor notified the FTC of receipt of the information, both of which were required under the 2012 order. Sigma was unaware of its agent’s activities, but notified the FTC upon learning that Star Pipe had received its information, and terminated the agent upon learning his identity. Star Pipe violated the 2012 final order by failing to request that the communications stop, and by not informing the Commission of the communications either immediately or in its regularly required compliance reports.  

Among the changes to the 2012 order, the modified order requires, for a period of five years, that Star Pipe give a copy of the modified order to its officers, directors, managers and any other employee with pricing authority, provide compliance training for those employees, and submit affidavits that no competitively sensitive information has been received by Star Pipe or sent to a competitor. For 10 years, Star Pipe must notify the Commission if it receives any competitively sensitive information from a rival.  

The Commission vote to file the complaint and proposed civil penalty order in federal court was 3-0. The Commission filed the documents in the U.S. District Court for the District of Columbia on April 25, 2016.

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