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. Last Updated: 07/27/2016

FTC Files Suit to Prevent BP-Arco Merger

SAN FRANCISCO -- The U.S. Federal Trade Commission has sued to block BP Amoco PLC's $27 billion purchase of Atlantic Richfield Corp., alleging BP exercises monopoly power by selectively raising some customers' prices .

The FTC on Friday asked a federal court for a preliminary injunction to prevent BP Amoco from completing its year-old plan to buy Arco. District Judge Susan Illston set the first hearing in the case for March 10.

The FTC complaint alleges that BP Amoco's dominant position in crude oil exploration and production on the U.S. West Coast has been enhanced by discriminatory pricing policies aimed at cutting out competitors.

"BP exercises monopoly power by selling ANS [Alaska North Slope] crude to individual customers at different prices according to their 'trigger points,'" the brief charges.

BP charges West Coast refiners more than Asian refiners, net of transport cost, "in order to restrict the supply of crude oil on the West Coast and elevate its price to West Coast customers," the FTC said.

The FTC's suit also alleges the proposed deal would substantially increase BP Amoco's holdings of pipelines and storage facilities at Cushing, Oklahoma, where the price for oil traded on the New York Mercantile Exchange is set.

Officials at BP Amoco and Arco had no comment Friday, but had said earlier they intended to fight for the merger.