## Facts

- The Boeing Company and Lockheed Martin Corporation were the only two American firms that manufactured expendable launch vehicles (ELVs) used to launch U.S. government medium-to-heavy satellites and other space vehicles.
- Both companies sold ELVs and related launch services primarily to the U.S. Department of Defense (DoD) and other U.S. government customers.
- In 2005, Boeing and Lockheed agreed to form a joint venture, United Launch Alliance, L.L.C. (ULA), to consolidate their ELV development and manufacturing activities for U.S. government business.
- The Federal Trade Commission investigated and issued an administrative complaint alleging that the ULA transaction, as originally structured, would substantially reduce competition in markets for (i) U.S. government medium-to-heavy launch services and (ii) U.S. government space vehicles.
- Boeing, Lockheed, and the FTC executed an agreement containing a proposed consent order intended to resolve the FTC’s competitive concerns without litigation.
- On October 12, 2006, the FTC published its “Analysis of Agreement Containing Consent Order to Aid Public Comment” (71 Fed. Reg. 60,148), explaining the allegations and summarizing the proposed consent order during the public-comment period.
- The FTC’s analysis noted potential entry efforts by Space Exploration Technologies Corp. (SpaceX), while treating the timing and reliability of any medium-to-heavy launch entry as uncertain for purposes of near-term competitive effects.

## Issues

1. Whether Boeing and Lockheed’s consolidation of ELV development/manufacturing into ULA would likely lessen competition in U.S. government medium-to-heavy launch services in violation of Section 7 of the Clayton Act and Section 5 of the FTC Act.
2. Whether the joint venture structure created a risk of harm to competition in government space-vehicle markets, including through discrimination, exclusion, or other conduct tied to launch-related interfaces and services.
3. Whether ULA and its parent companies could obtain competitively sensitive information from other firms (including space-vehicle providers) and use or share it in ways that disadvantage rivals absent enforceable safeguards.
4. Whether a consent order allowing ULA to proceed, while imposing conduct limits and confidentiality protections, was a sufficient remedy for the competitive concerns identified in the complaint.

## Decision

- The FTC issued an administrative complaint and accepted an agreement containing a proposed consent order to resolve the matter, and it released an accompanying analysis to aid the public-comment process.
- The proposed consent order would permit formation of ULA, while imposing conduct obligations aimed at preventing discriminatory treatment that could distort competition involving launch services and space vehicles sold to the U.S. government.
- The proposed order included information-protection measures (firewalls/confidentiality limits) intended to restrict the use or sharing of nonpublic, competitively sensitive information obtained through ULA’s dealings.
- The October 12, 2006 document did not adjudicate liability; it explained the FTC’s allegations and the proposed settlement terms pending public comment and later Commission action.

## Legal Principles

- Section 7 of the Clayton Act prohibits acquisitions or combinations whose effect “may be substantially to lessen competition, or to tend to create a monopoly,” including transactions that eliminate direct rivalry in a highly concentrated market.
- Section 5 of the FTC Act reaches unfair methods of competition and can support administrative enforcement in merger and joint-venture settings.
- In an FTC administrative consent matter, an “analysis to aid public comment” describes the competitive concerns and how proposed order terms are intended to address them; it is not a litigated merits decision.
- When a transaction combines the only two domestic suppliers in a defense-related market, the FTC may seek behavioral limits—such as nondiscrimination commitments and access-related constraints—where those terms are designed to reduce risks of exclusion or unequal treatment affecting adjacent or downstream competition.
- Firewalls and confidentiality provisions are standard remedial tools where a joint venture’s operations could expose parents to rivals’ sensitive business information and create incentives to use that information for competitive advantage.

## Conclusion

In this FTC administrative matter, Boeing and Lockheed’s plan to form United Launch Alliance prompted an FTC complaint alleging likely harm to competition in U.S. government medium-to-heavy launch services and related space-vehicle markets. The October 12, 2006 FTC publication is the agency’s analysis of a proposed consent order—released for public comment—explaining that ULA would be allowed to proceed subject to nondiscrimination obligations and information-firewall protections intended to limit competitive harm.


In re Boeing Co., Lockheed Martin Corp. & United Launch Alliance, File No. 051-0165 (FTC, October 12, 2006)