do not normally state whether our approval of a transaction under section 5(2) will relieve the parties from the prohibitions or limitations of other statutes, the relief requested by the parties herein requires us to at least state our intention as to this matter. Section 5(11) of the act provides in relevant part as follows:

any carriers or other corporations, * participating in a transaction approved or authorized under the provisions of this section shall be and they are hereby relieved from the operation of the antitrust laws and of all other restraints, limitations, and prohibitions of law, Federal, State, or municipal, insofar as may be necessary to enable them to carry into effect the transaction so approved or provided for in accordance with the terms and conditions, if any, imposed by the Commission,***,

Applicants have contended that the language of section 5(11) clearly indicates that Commission approval of this transaction under section 5(2) of the act will immunize the entire transaction, as to water carrier operations of the involved carriers in foreign. commerce as well as water carrier operations in coastwise and intercoastal service, from the operation of the antitrust laws.

However, the instant case is quite unusual. Water carriage in foreign commerce, which comprises the overwhelming percentage of the business of Sea-Land and USL, is not only an industry which the Commission does not regulate but is also an industry as to which the Commission has little or no expertise. Furthermore, the Commission does not regulate said industry because Congress has specifically determined that this industry should be regulated by another Federal agency, the FMC.

The FMC, however, does not have jurisdiction, under section 15 of the Shipping Act of 1916, over merger or acquisition of assets agreements which impose no ongoing responsibilities. The transaction herein was found to be in that area of non-FMC jurisdiction by the Court of Appeals for the District of Columbia Circuit in American Mail Line, Ltd. v. Federal Maritime Com'n., supra. Congressional intent in not giving the FMC jurisdiction over these types of transactions was analyzed by the Court of Appeals at page 163 as follows:

while Congress recognized that shipping conferences had some anticompetitive effects, Congress feared that their abolition would further decrease competition by forcing outright acquisitions or mergers among the shipping companies. Congress therefore decided to allow cooperative arrangements to continue but to subject such arrangements to government supervision and regulation. Thus, it was primarily to avoid the greater evil of outright mergers and acquisitions that Congress permitted cooperative working arrangements to exist at all.

From the above statement, it can be seen that Congress did not want the FMC to be able to immunize merger or acquisition of assets agreements, which impose no ongoing responsibilities, of water carriers in foreign commerce from the operation of the antitrust laws by its approval of said agreements. If Congress did not want the FMC to be able to immunize such agreements, then surely it did not wish this Commission to do so merely because a very small portion of the business of the involved water carriers was in intercoastal and coastwise carriage, for which said carriers held operating authority from this Commission.

We have studied the legislative histories of sections 5(11) and 5(13) (subjecting water carriers to section 5 jurisdiction) of the Interstate Commerce Act. It appears that Congress never considered that a case involving possible total antitrust immunity for a primarily non-ICC regulated operation could arise. Congress' main interest in drafting section 5(11) was to facilitate consolidation of railroad carriers, not immunize operations primarily unregulated by this Commission.

The District Court of New Jersey, in dicta, expressed its opinion as to the power of this Commission to immunize the instant transaction from the operation of the antitrust laws, United States v. R. J. Reynolds Tobacco Company, supra, at 663, as follows:

Under these circumstances it would be inappropriate for me to rule on matters affecting ICC jurisdiction with respect to the Merger Agreement. Suffice it to say that in a situation such as that presented here, where only a minimal connection of defendants' operations with interstate commerce is shown, total exemption or immunity from the antitrust laws is not appropriate.

The Commission has in the past limited the immunity, from the operation of other laws, under section 5(11) resulting from approval of a section 5 transaction. In Alleghany Corporation-Control and Purchase, 109 M.C.C. 333, 353, 354 (1970), Alleghany Corporation, then principally an investment company subject to the regulation of the Securities and Exchange Commission, became a fully regulated common carrier by virtue of Commission approval of a section 5 acquisition. In approving said acquisition, the Commission, at pages 353 and 354, limited the immunity pursuant to section 5(11) to "operations conducted in accordnace with the provisions of the Interstate Commerce Act and Commission imposed conditions."

This Commission is obligated to consider the anticompetitive effects of a proposed section 5 transaction in its area of regulation.

See McLean Trucking Co. v. United States, 321 U.S. 67 (1944). The reason behind granting antitrust immunity where the Commission does consider such anticompetitive effects was discussed in Butler Aviation Company v. C.A.B., 389 F. 2d. 517, 522 (2nd Cir., 1968), concerning a provision of the Federal Aviation Act comparable to section 5(11), as follows:

Congress-had it considered the matter-might well have wished to guard agencies against a subconscious temptation to neglect thorough assessment of anticompetitive considerations on the basis that the transaction would remain open to later attack by the Attorney General or in a private suit'

However, it should be obvious that Congress did not intend this Commission to weigh anticompetitive effects in water carriage in foreign commerce. This Commission has little or no expertise in this area. Accordingly, it should be apparent that the antitrust immunity which will result if the Commission does approve the instant transaction must be and will be limited to those portions of the business of the involved carriers which are currently subject to our regulation, i.e., water carrier operations in intercoastal and coastwise service.

We realize that there are certain limited aspects of this transaction which we must examine in their entirety even though they may pertain at least in part to foreign commerce. For example, most of the purchase price herein is undoubtedly consideration for USL's foreign operations. The Commission must, however, determine whether vendees are financially able to meet all of the required financial obligations involved in this transaction as the purchase price is not separable as to intercoastal and foreign operations. As aforestated, anticompetitive effects in water carriage in foreign commerce are, on the other hand, a matter which the Commission cannot, should not, and will not deal with in the instant proceeding.

The Commission cannot and will not affirm its prior decision by merely substituting itself as the agency monitoring compliance with the prescribed conditions, as vendees have suggested. Congress has placed the regulation of foreign commerce in the hands of the FMC. This Commission has neither the statutory mandate nor the regulatory expertise to conduct continuing surveillance of carrier. entities whose activities are predominantly in the field of foreign

commerce.

As aforesaid, Sea-Land and USL are the only containership carriers operating in the intercoastal trade. Accordingly, we must

now determine, knowing that the FMC is unavailable to insure independent and competitive operations of the two involved carriers, whether or not the anticompetitive effects of this transaction in intercoastal water carriage are outweighed by the benefits to the public interest which would result from this transaction.

However, the record in this proceeding is rather stale. Hearings were held in August of 1971, well over 3 years ago. Current information as to USL's financial condition and the competitive structure of the intercoastal water transportation industry are particularly necessary if the Commission is to make an informed determination in this proceeding. Accordingly, further hearings will be set in this proceeding so that these and any other relevant matters pertaining to the commerce within this Commission's jurisdiction may be properly considered.

Of equal importance, we cannot tell in what form applicants would now, in light of this decision, wish this acquisition to be approved. If applicants wish to proceed further, they should inform us explicitly of the authorization which they desire. At that time, we will determine whether the requested authorization differs sufficiently from that originally sought by applicants herein such that republication in the Federal Register will be necessary before the said further hearings can be held.

We do not believe, as suggested by protestant AEL, that the present application herein should be dismissed. The Commission has already developed a large record in this proceeding and to commence consideration of the matter from the beginning again would be unnecessarily wasteful and time consuming. We realize that some of the evidence which need be introduced at the further hearings may have already been introduced in this proceeding. Accordingly, the parties to this proceeding should not reintroduce such evidence, but should merely incorporate it by reference in their presentations.

It is evident that the United States Department of Justice, having brought an action to enjoin implementation of this transaction on the ground that it violates the Federal antitrust laws, has a substantial interest in this proceeding. Accordingly, it will be permitted to intervene herein and participate at further oral hearings, if it files a petition for leave to intervene within 30 days. from the date of service of this order.

FINDINGS

Accordingly, we find, upon reconsideration, that if the Commission approves the instant transaction, the immunity from the operation of the antitrust laws which will result thereby under section 5(11) of the Interstate Commerce Act must be limited to those business activities of the involved carriers which are currently subject to the regulation of this Commission.

We further find that the decision and order of the Commission, Division 3, dated February 25, 1974, should be vacated and set aside.

We further find that further oral hearings should be held herein limited to the issues delineated in the report herein.

We further find that the request of applicants that the Commission merely reaffirm its decision by substituting itself for the FMC in monitoring conditions previously imposed herein should be denied.

We further find that (a) this decision is not a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969; and (b) any contentions and arguments not specifically discussed herein have been considered and found without material significance. An appropriate order will be entered.

348 I.C.C.