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Post date: January 19 2000

State Seeks Competition In Waste Hauling

In a move designed to preserve competition in the waste hauling business in Westchester County, Attorney General Spitzer today filed an antitrust action that would block the proposed acquisition of two local corporate groups by one of the nation's largest waste hauling firms.

The Attorney General's complaint, filed in the U.S. District Court for the Southern District of New York, charges that the acquisitions would harm consumers and give Allied Waste Industries of Scottsdale, Arizona, control of more than half of the county's commercial waste hauling market.

The proposed consent decree would require Allied to divest of its current operations in Westchester as a condition of completing the acquisition. Without admitting wrongdoing, Allied has agreed to the proposed consent decree, which will now be reviewed by a federal judge.

"Allied's planned acquisition of the Suburban Companies and Galante company would eliminate half of the major competitors in commercial waste hauling in Westchester Country," Spitzer said. "This situation is unacceptable because it would violate antitrust laws and lead to substantially higher prices for consumers."

Under the proposed consent decree, Allied is required to divest all of its present five commercial routes operated by its subsidiary, Valley Carting Corp. In addition, Allied is required to divest of one of Suburban's present routes.

As a further condition of the consent decree, Allied must grant the purchaser of these routes certain rights to dispose of commercial waste at transfer stations in Mount Kisco and Mamaroneck. These rights will not increase the permitted capacity of those facilities.

The Attorney General's office must approve the purchaser of these divested assets and monitor competition in the industry. The decree also requires Allied to refrain for five years from further purchases of small container commercial waste haulers or commercial transfer stations if such acquisitions represent more than $500,000 per year in revenues, unless Allied obtains approval from the Attorney General's office. Allied also is required to set up an anti-trust compliance program among its Westchester managers. If Allied fails to accomplish the agreed-upon divestitures within 90 days, the Attorney General's Office may apply to the Court for the appointment of a trustee.

In recent years, a number of waste hauling firms in Westchester, including the Suburban and Galante companies, have been the subject of federal criminal prosecutions for racketeering and other offenses. One such prosecution resulted in a September 1997 agreement by Suburban and its principal owner under which Suburban is subject to monitoring and the oversight of U.S. District Court Judge Jed S. Rakoff. Under that agreement, Allied's acquisition of Suburban is subject to Judge Rakoff's approval. It is anticipated that finalization of the present antitrust decree also will be before Judge Rakoff.

The Attorney General's investigation was supervised by Harry First, Chief of the Antitrust Bureau, and conducted by Assistant Attorneys General Richard Grimm and George Mesires.