The Federal Trade Commission, which assessed the deal to
ensure it complies with antitrust law, said there was evidence
that combining the BP refinery and a Tesoro refinery, which
nearly abut each other, could reduce the cost of producing the
special, low-carbon gasoline that state law requires be sold in
California.

“Demand for California-grade gasoline has declined over the
last decade and is projected to continue to do so. Additionally,
seven major refiners supply the West Coast, and that number will
not change as a result of the deal,” said the FTC said in a
statement.

California Attorney General Kamala Harris must also approve
the sale before it can proceed. A spokesman for Harris said she
had no immediate comment on the FTC decision.

Tesoro announced in August that it had agreed to buy BP’s
Carson plant. The final purchase price of
the refinery and other assets is $2.375 billion, the company
said in a statement.

Tesoro is the second-largest refiner in California, the
nation’s largest gasoline market, after Chevron Corp.

Adding the Carson refinery to Tesoro’s other two California
refineries gives Tesoro a combined crude oil throughput of
509,800 bpd, or 26 percent of the state’s refining capacity,
according to data from the U.S. Energy Information
Administration.

The sale includes an 800-station retail network and
distribution and storage assets.

Once the transaction is closed, BP’s U.S. downstream
operation will be solely focused on refineries in the northern
continental United States, where cheaper Canadian crude oil is
easily obtained.

The commission, which has one vacant seat, voted 3-0 to
allow the deal to close. Commissioner Joshua Wright was recused.

Other sources told Reuters that the U.S. Federal Trade Commission, which assessed the deal to ensure that it complied with antitrust law, were prepared to approve the purchase within days.

That approval could come as early as Friday, said one source with knowledge of discussions between the company and the agency. It was not known if the FTC will place conditions on the deal’s approval.

The sources could not speak for attribution, citing the need to protect business relationships. A BP spokesman declined to discuss the transaction.

Tesoro announced last August that it had agreed to buy BP’s Carson plant for $2.5 billion. The proposed deal has been awaiting approval by the FTC and by California’s attorney general.

The sale includes an 800-station retail network and distribution and storage assets.

Tesoro is the second-largest refiner in California after Chevron Corp (CVX.N: Quote, Profile, Research, Stock Buzz). California is the largest gasoline market in the United States.

In recent days, owners of BP Arco-branded retail stations in California have been notified to expect the change to Tesoro as early as the first day of June. “June 1, that’s the date for Tesoro to take over,” one of the sources said.

Once the transaction is cleared, BP’s U.S. downstream operation will be solely focused on refineries in the northern continental United States, where cheaper Canadian crude oil is easily obtained.

A Tesoro spokeswoman declined to discuss the status of the deal.

“As previously communicated, we expect the transaction to close before mid-2013,” said Tina Barbee, who declined to elaborate.

An FTC spokesman declined on Thursday to discuss the status of the commission’s review of the transaction. On May 2, Tesoro Chief Executive Greg Goff said the company was near the end of the regulatory review process.

A spokeswoman for California Attorney General Kamala Harris did not have an immediate comment about the pending sale.

In addition to the refinery and retail network, the sale includes more than 100 miles of pipeline, three marine terminals, four land storage terminals and four product marketing terminals.

Tesoro plans to sell the distribution and storage assets to its master limited partnership, Tesoro Logistics LP (TLLP.N: Quote, Profile, Research, Stock Buzz), for about $1 billion, within a year of closing.

Tesoro plans to combine operations of the Carson refinery with its 103,800 bpd refinery in Wilmington, California. The two refineries nearly about one another in the Los Angeles industrial suburbs north of the port of Long Beach.

BP announced plans to sell the Carson refinery as well as its Texas City, Texas, refinery in 2011. Marathon Oil Corp (MRO.N: Quote, Profile, Research, Stock Buzz) purchased the Texas refinery in February as part of a $2.4 billion deal that includes terminals, pipelines and other assets.

(Reporting by Erwin Seba in Houston and Diane Bartz in Washington; editing by Gerald E. McCormick, Tim Dobbyn and Matthew Lewis)

Other sources told Reuters that the U.S. Federal Trade
Commission, which assessed the deal to ensure that it complied
with antitrust law, were prepared to approve the purchase within
days.

That approval could come as early as Friday, said one source
with knowledge of discussions between the company and the
agency. It was not known if the FTC will place conditions on the
deal’s approval.

The sources could not speak for attribution, citing the need
to protect business relationships. A BP spokesman declined to
discuss the transaction.

Tesoro announced last August that it had agreed to buy BP’s
Carson plant for $2.5 billion. The proposed deal
has been awaiting approval by the FTC and by California’s
attorney general.

The sale includes an 800-station retail network and
distribution and storage assets.

Tesoro is the second-largest refiner in California after
Chevron Corp. California is the largest gasoline market
in the United States.

In recent days, owners of BP Arco-branded retail stations in
California have been notified to expect the change to Tesoro as
early as the first day of June. “June 1, that’s the date for
Tesoro to take over,” one of the sources said.

Once the transaction is cleared, BP’s U.S. downstream
operation will be solely focused on refineries in the northern
continental United States, where cheaper Canadian crude oil is
easily obtained.

A Tesoro spokeswoman declined to discuss the status of the
deal.

“As previously communicated, we expect the transaction to
close before mid-2013,” said Tina Barbee, who declined to
elaborate.

An FTC spokesman declined on Thursday to discuss the status
of the commission’s review of the transaction. On May 2, Tesoro
Chief Executive Greg Goff said the company was near the end of
the regulatory review process.

A spokeswoman for California Attorney General Kamala Harris
did not have an immediate comment about the pending sale.

In addition to the refinery and retail network, the sale
includes more than 100 miles of pipeline, three marine
terminals, four land storage terminals and four product
marketing terminals.

Tesoro plans to sell the distribution and storage assets to
its master limited partnership, Tesoro Logistics LP,
for about $1 billion, within a year of closing.

Tesoro plans to combine operations of the Carson refinery
with its 103,800 bpd refinery in Wilmington, California. The two
refineries nearly abut one another in the Los Angeles industrial
suburbs north of the port of Long Beach.

BP announced plans to sell the Carson refinery as well as
its Texas City, Texas, refinery in 2011. Marathon Oil Corp
purchased the Texas refinery in February as part of a
$2.4 billion deal that includes terminals, pipelines and other
assets.

(Reporting by Erwin Seba in Houston and Diane Bartz in
Washington; editing by Gerald E. McCormick, Tim Dobbyn and
Matthew Lewis)

U.S. authorities have termed Apple a go-between among several publishing houses who had long wanted to break Amazon.com Inc’s grip on the low-cost digital book market, which had kept publishers’ prices low.

The Justice Department accused Apple in April 2012 of colluding with five publishers to push up prices as the Silicon Valley giant prepared to launch its iPad in early 2010. It has since settled with the publishers.

The publishers were News Corp’s HarperCollins Publishers Inc, CBS Corp’s Simon & Schuster Inc, Lagardere SCA’s Hachette Book Group, Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH, and Pearson Plc’s Penguin Group.

In a filing dated April 26 and released on Tuesday, Apple said that the major publishers were at the time locked in a battle with online retailer Amazon over selling books cheaply.

But Apple said the publishers had decided, independent of Apple, to eliminate discounts on wholesale book prices of e-books, to sell lucrative hardcover books first to bookstores in a practice called windowing and to take other measures to push Amazon to raise prices.

When Apple, then in the process of developing the iPad, approached the publishers to set up an online bookstore, the electronics giant ran into opposition when it demanded that Apple receive a 30 percent commission, that publishers not undersell them, and that windowing be scrapped.

Each publisher had different counterproposals, Apple said in a filing that described tough negotiations in detail.

“Early — and constant — points of negotiation and contention were over Apple’s price caps and 30 percent commission. After Apple sent draft agency agreements to each publisher CEO on January 11, each immediately opposed Apple’s price tiers and caps,” Apple said in its 81-page proposed findings of fact.

In one case, Apple appealed to News Corp, the parent of HarperCollins, to press the publisher to sign an e-book deal. It did so on January 26, the day before the iPad launch, Apple said in its filing.

For its part, the Justice Department has argued that Apple and the publishers colluded to push prices higher via agency pricing, in which publishers set retail prices, in order to break Amazon’s dominance. The result was to push U.S. e-book prices up by an average of $2 to $3 in a three-day period in early 2010.

Apple disputes this in a second filing, also made on April 26 and released on Tuesday. It says that e-book demand “exploded” with Apple’s iPad launch, and the average retail price of an e-book dropped to $7.34 from $7.97.

In a filing released on Tuesday, the Justice Department said that Steve Jobs, Apple’s CEO at the time, “conceded the price-fixing conspiracy” when he told his biographer that Apple had “told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that’s what you want anyway.’”

Jobs died in October 2011 of complications from pancreatic cancer.

The lawsuit was filed in the U.S. District Court for the Southern District of New York. It is No. 12-cv-2826.

(Reporting by Diane Bartz; Editing by Ros Krasny and Edmund Klamann)

The patent office, part of the U.S. Department of Commerce, is a primary steward of U.S. intellectual property. It has about 13,000 federal employees.

“I do not know anybody else that’s competing for it and anybody who is positioned for it (other) than Terri Rea,” said one person familiar with the process, who asked not to be named to protect business relationships.

A nomination for Rea – or a dark-horse choice – could come more quickly now that President Barack Obama has rounded out his cabinet-level appointments with Chicago businesswoman and Hyatt Hotels heiress Penny Pritzker as Commerce Secretary and Michael Froman, currently a top Obama advisor, to be U.S. Trade Representative.

Obama also this week nominated Thomas Wheeler to be the next chairman of the Federal Communications Commission.

If nominated, Rea would replace David Kappos, a former IBM Corp executive who departed earlier this year after more than three years in the post and is now in private practice.

Kappos, with Rea among his deputies, was popular because of his efforts to upgrade technology for examiners, reduce the backlog of applications, in part by adding examiners, and improve the quality of patents that are issued.

The patent office currently has a backlog of 607,482 applications, according to data from March 2013. As recently as December 2011, the unexamined patent backlog was almost 722,000 patents.

The number of patent examiners on staff in March totaled 7,842 compared with 6,420 in December 2011, an increase of 22 percent. The current 31.1 months it takes, on average, to examine a patent application has eased during that time from 34.9 months.

Rea is a past president of the American Intellectual Property Law Association and of the National Inventors Hall of Fame. She was formerly a partner at Crowell and Moring LLP and is a licensed pharmacist, according to her biography on the patent office website.

One challenge that Rea would face has to do with the ongoing federal budget crunch and the requirement that agencies reduce spending.

The patent office, unlike most of the federal government, is designed to be funded by fees paid by patent owners and applicants.

The president’s fiscal 2014 budget appropriates no money for the office, but requests that it be allowed to spend the $3 billion that it collects in fees. Excess fees are supposed to go into a reserve fund, according to the budget request.

Instead, 5 percent of fees, or about $148 million, are being returned to the general fund under the sequester, according to a report by the Office of Management and Budget dated March 1.

This has angered the patent community. The patent office and Capitol Hill have been fighting for years over whether the agency should be allowed to keep all the money that it collects for patent applications and other fees.

“The sequester people won’t hear that the PTO is exempt. They’re (the patent office) trying to ramp up training and technical improvements and being cut off at the knees,” said a patent expert who also requested anonymity to protect business relationships.

Rea declined to comment for this story.

(Reporting by Diane Bartz; editing by Ros Krasny, G Crosse)

Z.F. Meritor, a joint venture of Meritor Inc (MTOR.N: Quote, Profile, Research, Stock Buzz), indirect subsidiary Meritor Transmission Corp and Z.F. Friedrichshafen AG ZFF.UL, had said Eaton violated antitrust laws by giving loyalty discounts in the form of rebates to truck makers who bought more than a certain percentage of parts from Eaton.

In its claims, Z.F. Meritor focused on long-term arrangements Eaton had with four truck manufacturers in North America: Freightliner, International Truck and Engine Corp, PACCAR Inc (PCAR.O: Quote, Profile, Research, Stock Buzz) and Volvo Group.

The agreements also required the manufacturers to price Eaton’s transmissions more favorably than Meritor’s when both options were made available to purchasers.

“Although we understand that very few petitions are granted by the Supreme Court, we are disappointed that the court decided not to review our appeal,” Eaton said in an emailed statement.

Meritor said it was pleased with the Supreme Court’s refusal to take up the case.

Companies with big market shares may reconsider rebates and other efforts to keep customers when new rivals emerge. “Monopolists may become more wary of engaging in loyalty discounts in response to entry competition,” said Steven Salop, law and economics professor at Georgetown University Law Center.

Only companies with huge market shares are likely to be affected by the Supreme Court’s decision to refuse to take the case, said John Briggs, an antitrust expert with the firm Axinn Veltrop Harkrider LLP.

“This is not a pressing issue except for a small set of companies,” said Briggs. “I don’t believe the market had any meaningful expectation that this would be granted.”

A jury in Delaware federal court ruled against Eaton. A three-judge panel of the 3rd U.S. Circuit Court of Appeals in Philadelphia upheld the finding on a 2-1 vote.

Eaton sought Supreme Court review, arguing that Meritor had failed to show the deals led to the products being sold below cost, a key way of establishing antitrust liability.

Judge Morton Greenberg, the dissenting 3rd Circuit judge, wrote in his opinion that Meritor had neither alleged nor proved that Eaton engaged in below-cost pricing.

Meritor said it was not required to make that claim in order to prove that Eaton was violating antitrust laws.

Meritor’s stock rose 8 percent to $4.87 and shares of Eaton were 4 percent higher at $61.05. Eaton earlier reported a better-than-expected 28 percent rise in operating profit

The case is Eaton Corp v. Z.F. Meritor, U.S. Supreme Court, No. 12-1045.

(Reporting by Lawrence Hurley; Editing by Kevin Drawbaugh, Howard Goller, Gerald E. McCormick and Kenneth Barry)

Z.F. Meritor, a joint venture of Meritor Inc,
indirect subsidiary Meritor Transmission Corp and Z.F.
Friedrichshafen AG, had said Eaton violated antitrust
laws by giving loyalty discounts in the form of rebates to truck
makers who bought more than a certain percentage of parts from
Eaton.

In its claims, Z.F. Meritor focused on long-term
arrangements Eaton had with four truck manufacturers in North
America: Freightliner, International Truck and Engine Corp,
PACCAR Inc and Volvo Group.

The agreements also required the manufacturers to price
Eaton’s transmissions more favorably than Meritor’s when both
options were made available to purchasers.

“Although we understand that very few petitions are granted
by the Supreme Court, we are disappointed that the court decided
not to review our appeal,” Eaton said in an emailed statement.

Meritor said it was pleased with the Supreme Court’s refusal
to take up the case.

Companies with big market shares may reconsider rebates and
other efforts to keep customers when new rivals emerge.
“Monopolists may become more wary of engaging in loyalty
discounts in response to entry competition,” said Steven Salop,
law and economics professor at Georgetown University Law Center.

Only companies with huge market shares are likely to be
affected by the Supreme Court’s decision to refuse to take the
case, said John Briggs, an antitrust expert with the firm Axinn
Veltrop Harkrider LLP.

“This is not a pressing issue except for a small set of
companies,” said Briggs. “I don’t believe the market had any
meaningful expectation that this would be granted.”

A jury in Delaware federal court ruled against Eaton. A
three-judge panel of the 3rd U.S. Circuit Court of Appeals in
Philadelphia upheld the finding on a 2-1 vote.

Eaton sought Supreme Court review, arguing that Meritor had
failed to show the deals led to the products being sold below
cost, a key way of establishing antitrust liability.

Judge Morton Greenberg, the dissenting 3rd Circuit judge,
wrote in his opinion that Meritor had neither alleged nor proved
that Eaton engaged in below-cost pricing.

Meritor said it was not required to make that claim in order
to prove that Eaton was violating antitrust laws.

Meritor’s stock rose 8 percent to $4.87 and shares of Eaton
were 4 percent higher at $61.05. Eaton earlier reported a
better-than-expected 28 percent rise in operating profit

The case is Eaton Corp v. Z.F. Meritor, U.S. Supreme Court,
No. 12-1045.

The Federal Trade Commission, in assessing the $1.26 billion merger to ensure it complies with antitrust law, will likely focus on the emerging frontier – cross-platform data designed to tell advertisers in a holistic way what customers watch on television, listen to on the radio, look at online and see on their mobile devices.

The deal was announced in December. Arbitron shareholders approved the acquisition this month.

An informal Reuters poll of eight antitrust experts found that six believed that the FTC would approve Nielsen’s purchase. A seventh thought a challenge was possible and an eighth had no opinion.

Access to reliable ratings is critical for companies formulating their advertising strategies, to the tune of some $140 billion in 2012 according to data from Kantar Media. The higher the rating and the more attractive the demographic, the more advertisers will be asked to pay for the spot.

One concern with the proposed transaction is that Nielsen, which also measures some online spending, would expand into radio. “It’s putting a lot of eggs in one basket. That’s the biggest concern,” said Brad Adgate, vice president for research at Horizon Media, Inc.

Nielsen declined to discuss the deal in an interview but said it was working with regulators and hoped to announce the completion of the acquisition “as soon possible.”

OLD MEDIA MONOPOLIES STILL MATTER

Nielsen and Arbitron now operate primarily in different markets, which at first glance would make the deal uncontroversial. There are signs, however, they could move into each other’s areas of dominance.

For example, Nielsen measures radio listening in 11 countries but not in the United States, according to its web site, a sign that it could also do so in this country.

And Arbitron has made forays back into television ratings, a business it abandoned in 1993. It entered again in a small way recently through deals with ESPN and others.

By acquiring Arbitron, Nielsen also gains access to data on what is known in industry parlance as “out-of-home,” essentially billboards and other forms of outdoor advertising.

Both Nielsen and Arbitron use devices – with Nielsen the “people meter” and with Arbitron the “portable people meter,” (PPM) a pager-like device which measures what radio station people listen to – which measure consumer demographics, according to Bill Duggan of the Association of National Advertisers, a trade group.

Both also have an online presence, although the big dog in Internet ratings remains comScore Inc. Nielsen, for example, provides various data services including the measurement of traffic to websites. It also provides information about what consumers buy at retail stores.

Once it acquires Arbitron, Nielsen has said it plans to expand its “Watch” measurement that keeps tabs on consumer viewing and listening habits as consumers move from television to computers and mobile devices. Arbitron also measures streaming music over the Web.

THE BUZZ ABOUT MEASURING BUZZ

It is comparatively easy for the FTC to assess the likely effect of the merger on television and radio metrics. Measuring the impact on Internet and mobile space may be tricky.

“The feeling is that Nielsen is buying Arbitron to get a better grip on measuring mobile,” said Adgate. “Nielsen doesn’t have anything similar. Not for mobile they don’t. … This will not be rubber-stamped (by the FTC).”

Arbitron uses its own on-device meters to measure how consumers use mobile phones and tablets.

And, what about the newest frontier of all: combining all four media so that advertisers can see how to get the absolute best bang for their buck, and respond accordingly.

“My area of concern would be foreclosure of potential (cross-platform) competition to Nielsen in particular,” said Ankur Kapoor, an antitrust lawyer with Constantine Cannon LLP. “If you think about where and how people consume media, it’s literally everywhere. To get a meaningful measurement, you have to be cross-platform.”

No other ratings company has the reach of Nielsen, experts said. ComScore is strong in Internet ratings while others – Invidi, Precision Demand, Rentrak, Simulmedia and TRA – could potentially grow into competitors. But for now, advertisers currently cannot avoid using Nielsen, said Adgate.

Jacqueline Grise, a partner with Cooley LLP, was one of several antitrust attorneys who believed the transaction would be approved, but perhaps with conditions such as Arbitron being forced to sell its PPM technology.

“I’d be cautiously optimistic that they can get it through without a fix but even if they don’t I think that they’ve got that fix,” she said.

One unknown that could tip the FTC investigation is what Nielsen or Arbitron customers have told regulators.

A poll of Association of National Advertisers members found that half had “no concerns” about the deal while half had “some” or “serious” concerns, ANA’s Duggan said in a blog post.

(Reporting by Diane Bartz; editing by Ros Krasny and Andrew Hay)

Apple had initially been accused of infringing on six patents for iPhone-related technology covering everything from reducing signal noise to programming the device’s touch screen so a user’s head does not accidentally activate it while talking on the phone.

If Apple had been found guilty of violating the patent, its devices could have been banned from being imported into the United States.

Google can appeal the decision to the U.S. Court of Appeals for the Federal Circuit. “We’re disappointed with this outcome and are evaluating our options,” the company said in a statement. A spokeswoman for Apple declined comment.

The smartphone industry has seen dozens of lawsuits on several continents as Apple vies for market share with companies that make smartphones that use Google’s Android software.

Google acquired the patents in the case – and the lawsuit – when it purchased Motorola Mobility for $12.5 billion in 2012, partly for its library of telecommunications patents.

Google’s Android software, which the company lets handset makers use for free, has become the world’s No. 1 smartphone operating system, ahead of the iOS software used on Apple iPhones.

The ITC, a U.S. trade panel that investigates patent infringement involving imported goods, is a popular venue for patent lawsuits because it can bar the importation of infringing products and because it issues decisions relatively quickly.

Motorola Mobility, which has since been acquired by Google, accused Apple in 2010 of infringing on six of its patents. Two were terminated from the case, and the ITC said last August that Apple was innocent of infringing three others.

But the commission had also asked its internal judge, Thomas Pender, to reconsider its finding that Apple did not violate a fourth patent, which is for a sensor to monitor the location of a user’s head to keep it from maneuvering on the touch screen. Pender found that patent obvious in December, and the full ITC came to the same conclusion on Monday.

The case in the ITC is In the Matter of Certain Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof, 337-745.

(Reporting by Diane Bartz; editing by Ros Krasny and Phil Berlowitz)

The department had filed a lawsuit on January 31 aimed at stopping AB InBev, the world’s largest brewer with some 200 brands, from buying the 50 percent of Modelo it does not already own for $20.1 billion.

The agreement looks like a victory for AB InBev, which knew early on that the Justice Department would balk at allowing it to expand its already significant U.S. presence. Instead, AB InBev’s goal in doing the deal was to expand the sales of Corona and other Modelo brand beers outside the U.S.

The deal requires AB InBev to sell the Piedras Negras brewery in Mexico that makes Corona and other Modelo brand beers for the U.S. market. It also requires the purchaser, Constellation Brands, to expand the brewery so that it can make at least 20 million hectoliters of beer by December 31, 2016.

The other big winner is Constellation, which has been mostly a U.S. wine giant until now. The arrangement would make Constellation the third largest U.S. beer producer after AB InBev and MillerCoors.

AB InBev is the top U.S. beer seller, with 200 brands ranging from big names like Budweiser and Stella Artois to craft-style beers like Shock Top and Goose Island. The No. 2 player is MillerCoors, a joint venture between SABMiller Plc and Molson Coors Brewing Co.

The deal announced on Friday is similar to what AB InBev had offered in mid-February but adds Constellation, which is buying the Piedras Negras plant, as a defendant to the settlement with the department.

This means that pledges that Constellation makes to the court about expanding the plant to make it big enough to serve the U.S. market will be legally binding.

The agreement means that the companies can close as soon as a court approves their settlement. InBev said in a statement that they expected it to close in June 2013.

The case was filed in the U.S. District Court for the District of Columbia. It is United States of America v. Anheuser-Busch InBev and Grupo Modelo. The case is No. 13-cv-00127.

(Reporting by Diane Bartz; editing by Ros Krasny and Phil Berlowitz)