PA 10-176—sHB 5220

General Law Committee

Judiciary Committee


SUMMARY: This act requires any person conducting business in the motor fuel industry that files merger, acquisition, or any other information regarding market concentration in this state with the Federal Trade Commission (FTC) or the U. S. Department of Justice (US DOJ) to simultaneously provide the same information to the state attorney general in compliance with the federal Hart-Scott-Rodino Antitrust Improvements Act (HSR Act, see BACKGROUND).

It authorizes the attorney general to measure the market concentration due to mergers or acquisitions with the Herfindahl-Hirschman Index (HHI, see BACKGROUND). If the attorney general decides to measure market concentration, he or she must use the HHI. Additionally, if the HHI score raises market concentration concerns, the attorney general can request more information, which must remain confidential.

Failure to provide merger, acquisition, or other market concentration documents to the attorney general or failing to comply with his or her investigation could result in civil penalties or court orders for compliance.

The act requires the state to cooperate in the attorney general's investigation with the federal government and other states, including sharing information and evidence it obtains. It prescribes acceptable methods of serving the legal documents.

It also sets conditions on gasoline sales during abnormal market disruptions created by weather conditions, emergencies, and other adverse conditions.

EFFECTIVE DATE: July 1, 2010


Under the bill, if the HHI score is (1) between 1,000 and 1,800 and increases by more than 100 points or (2) equal to or greater than 1,800 and increases by more than 50 points, the attorney general may ask for more information.

If, in the future, the FTC or US DOJ uses different HHI scores to measure market concentration and its changes, the attorney general must use the new scores to determine whether to investigate.


The attorney general may subpoena documentary material that includes written, recorded, or electronic information. The subpoena demand must state: (1) the nature of the investigation; (2) the types of documentary material to be reproduced, specific enough to allow the material to be accurately identified; and (3) a date that allows reasonable time to assemble materials for compliance. The attorney general cannot require any information that would be privileged or precluded from disclosure if demanded in a grand jury investigation.

The material submitted to the attorney general, whether by subpoena or voluntarily, must be held in the attorney general's custody and not be disclosed to the public. The material must be returned when the investigation ends or on the final determination of an action or proceeding.

Under the act, during an antitrust investigation, the attorney general may subpoena individuals to testify in matters relevant to the scope of the alleged violations. Their appearance must be under oath, with a written transcript made. The transcript must be furnished to the person testifying, but not be publically disclosed. The attorney general may also issue written interrogatories with a reasonable time for response. These interrogatories must also be answered under oath and not made public.

If a person fails to provide merger, acquisition, or other market concentration documents or does not comply with the investigation, the attorney general may apply to Hartford Superior Court for an order (1) requiring compliance or (2) imposing a civil penalty of up to $2,000. The court may order compliance upon notifying, and serving the order on, the person. It may impose the penalty after giving notice and conducting a hearing.

Subpoenas, notices of deposition, and written interrogatories may be served (1) on the person or at his usual residence or (2) by registered or certified mail, return receipt requested, with a copy addressed to the person to be served at his or her (a) principal place of business in Connecticut, (b) principal office, or (c) home.


The act requires the attorney general to post a notice on the office's website announcing the beginning and end of any abnormal market disruption or a reasonably anticipated imminent abnormal market disruption.

By law, an “abnormal market disruption” refers to any stress to an energy resource market resulting from weather conditions, acts of nature, failure or shortage of an energy source, strike, civil disorder, war, national or local emergency, oil spill, or other extraordinary adverse circumstance.

By law, sellers may not sell gasoline for an unconscionably excessive price during a period of abnormal market disruption or reasonably anticipated period of abnormal disruption. Prima facie evidence that a price is unconscionably excessive exists when the price is grossly disparate to the price charged in the usual course of business immediately before the disruption or anticipated disruption, and the price increase is not attributable to the seller's costs related to sale of the product.

Under the act, a seller may sell gasoline during an abnormal market disruption or when an abnormal market disruption is reasonably anticipated if his average margin during the longer of either (1) the abnormal market disruption or imminent disruption or (2) 30 days following the attorney general's notice date, is no greater than the seller's maximum margin during the 90 days prior to the abnormal disruption or imminent disruption.

The act defines “margin” to mean, for each grade of product sold, the percentage calculated by the following formula: 100 multiplied by a fraction, the numerator of which is the difference between the sales price per gallon and the product price per gallon and the denominator of which is the product price per gallon. Product price per gallon includes all applicable taxes.



The HHI is a commonly accepted measure of market concentration. It takes into account the relative size and distribution of the firms in a market and approaches zero when a market consists of a large number of firms of relatively equal size. The HHI increases both as the number of firms in the market decreases and as the disparity in size between those firms increases, with a maximum score of 10,000, which is a pure monopoly (U. S. Department of Justice and the Federal Trade Commission, Horizontal Merger Guidelines 1. 151 (1997)).

Markets in which the HHI is between 1,000 and 1,800 points are considered moderately concentrated, and those in which the HHI is in excess of 1,800 are considered concentrated. Transactions that increase the HHI by more than 100 points in moderately concentrated markets and 50 points in concentrated markets raise antitrust concerns.


The HSR Act provides that before certain mergers and acquisitions can close, parties must file forms with the FTC and the US DOJ (15 U. S. C. 18a). The filing requirement is triggered if the transaction value exceeds certain monetary thresholds, which are adjusted over time.

OLR Tracking: DC: SC: PF: PF: ts