Federal Trade Commission v. Peabody Energy Corp.

Peabody Energy Company (Peabody) and Arch Resources, Inc. (Arch) (defendants) were the two largest coal producers in the United States. Coal supplied 20 percent of electricity in the United States but was losing its electricity-market share due to decreasing gas prices, increasing use of renewable energies such as wind and solar, and decreasing coal production. Nevertheless, coal was projected to continue to be an important part of the country’s electricity for decades. To help mitigate the decline in market share, Peabody and Arch agreed to a joint venture in which they would combine some of their coal operations. The Federal Trade Commission (FTC) (plaintiff) filed suit to block the joint venture, at least temporarily, until it could conduct a full hearing to determine whether the joint venture violated antitrust laws. To that end, the FTC moved for a preliminary injunction. The FTC presented evidence that although there was competition between coal and other energy sources, certain coal customers valued coal because of its unique characteristics. For example, coal could be stockpiled, but gas and renewable energies could not. In addition, certain customers owned established, expensive plants that were configured to produce energy using coal. The FTC produced evidence that the combined entity in the joint venture would account for 65–70 percent of coal produced in the Southern Powder River Basin (SPRB).