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Competition Law Corner by Luthra & Luthra Offices  
COMPETITION LAW UPDATE (APRIL 2012 TO DECEMBER 2012)
ASIA

  1. Hyundai Mobis slapped with Corrective Order for unfairly demanding lower prices from subcontractors

    The Korea Fair Trade Commission (KFTC) imposed 2.295 billion won in fines and corrective order on Hyundai Mobis Co., Ltd. for demanding lower prices from its 12 subcontractors from June 2008 to May 2011. The main allegations were:

    i. Deciding subcontract payment at a lower price than the minimum bid when selecting subcontractors with competitive bidding;

    ii. Cutting the unit price under the pretext of quantity increase, productivity improvement, and process upgrade that did not exist;

    iii. Applying the price that was lowered under the pretext of quantity increase retroactively to all previous orders. Hyundai Mobis Co., Ltd. corrected the error voluntarily by paying an amount of 1.59 billion Won (including arrears of interest) for violation of law to 12 subcontractors after receiving FTC examiner’s report.

    It was confirmed that Hyundai Mobis made the price cut under the pretext of productivity improvement using its superior position, hence, attracting heavy fine.

  2. Unlawful Samil Pharmaceutical Co., Ltd., Slapped with Corrective Order for Offering Rebate; company to be prosecuted:

    KFTC slapped Samil Pharmaceutical Co. Ltd., with 176 million won in fine and corrective order for unfairly luring customers. Samil Pharmaceutical Co. Ltd., had been offering financial benefits worth 2.1 billion won such as cash, gift card, and goods to hospitals and clinics to increase and maintain the prescription of the company’s

    1. http://eng.ftc.go.kr/bbs.do
    2. http://eng.ftc.go.kr/bbs.do
    medicines and medical supplies such as Brufen and Gliptide tablets from Jan. 2008 to Oct. 2010. While selling 34 medicines and medical supplies to 302 hospitals and clinics across the nation, they offered rebate equivalent to 10%~30% of the prescription amount. The company offered 15% of prescription sales as rebate for Mucothiol-S Powder and Mucothiol- S Tab. (cough remedy and expectorant) in the guise of landing fee because, based on the company’s self-evaluation of those medicines, which were new products of the company, they were no different from the existing cough remedy and expectorant of other companies on the market in terms of effectiveness. Further, the company also offered 30% of prescription sales as rebate for Azath dry syrup (antibiotics), aiming at securing new customers and maintaining them. The company thought dominating the market early would be important in increasing sales and set the amount of rebate because the medicine had nothing to differentiate itself from the existing antibiotics of other companies. Hence, KFTC after its investigation placed a fine of 76 million won and a corrective order for unfairly luring customers.

  3. Hong Kong enacts the first cross-sector competition law:

    The Hong Kong's Legislative Council has been voted to enact as Hong Kong's first cross-sector competition law, the Competition Ordinance (CO). The law has been classified under two heads which are prohibitions against anti-competitive agreements and abuse of market power. Further, the general merger control regime is not being introduced at this stage. However, the CO does provide a revised merger regime for telecoms-related mergers which have replaced the existing regime. The CO provides the regulatory authorities with powers to investigate suspected breaches with significant penalties and other relief powers.

  4. European Commission signs EU cooperation agreement with China:

    A Memorandum of Understanding has been entered into between The High Representative of the Union for Foreign Affairs and Security Policy, Commission Vice-President, and the Chairman of the Chinese National Development and Reform Commission and the Vice Minister of the State Administration of Industry and Commerce for increasing cooperation between the European Commission's competition department and China's antitrust authorities. The Memorandum of

    3.http://www.cliffordchance.com/publicationviews/publications/
    2012/06/hong_kong_enactscompetitionlaw.html
    4.http://www.mondaq.com/x/201126/Antitrust+Competition
    /European+Union+Commission+Signs+EU+Cooperation
    +Agreement+With+China
    Understanding has created a dedicated framework for strengthening cooperation and coordination between the aforesaid Commissions. Further, the said Memorandum covers legislation, enforcement and technical cooperation regarding cartels, other restrictive agreements and the abuse of dominant market positions. Under such framework, the Commissions may engage in discussions on competition legislation and share non-confidential information on competition investigations.

  5. CCS Publishes Revised Guidelines On Merger Procedures:

    The Competition Commission of Singapore (CCS) has published its revised guidelines on Merger Procedures 2012 (Guidelines), which will come into effect on 1 July 2012. The three key benefits for businesses brought about by the revision are:

    a. Introduction of a new service where CCS offers confidential advice to merger parties: The CCS is providing merging companies for confidential advice for the time being, in order to get an indication from CCS on whether or not their mergers would infringe the Competition Act.

    b. Introduction of new turnover guidelines that give greater certainty to SMEs: CCS is unlikely to investigate a merger situation which involves small businesses wherein the turnover in Singapore in the financial year preceding the transaction of each of the parties being below S$5 million, and a combined worldwide turnover in the financial year preceding the transaction of all of the parties being below S$50 million.

    c.Learer instructions on what information is needed in making a merger filing to CCS: The application Form M1 for merger filing has been revised for greater clarity and comprehensiveness.

  6. Heineken's acquisition of APB approved by CCS:

    5.http://www.ccs.gov.sg/content/ccs/en/Media-and-Publications
    /Media-Releases/ccs_publishes_revisedguidelinesonmergerprocedures.html
    6.http://www.ccs.gov.sg/content/ccs/en/Public-Register-and-Consultation
    /Public-Register/Mergers-and-Acquisitions.detail.acquisition_by
    _heinekeninternationalbvofasiapacificbrewerieslimi.html
    The CCS has granted clearance for the acquisition by Heineken International B.V. (HIBV), of Fraser and Neave, Ltdd's, (F&N), direct and indirect interests in Asia Pacific Breweries Ltd (APB), and F&N's interest in the non-APB assets held by Asia Pacific Investment Private Ltd (APIPL). Upon completion of the Transaction, Heineken will own in aggregate a 95.3% stake in APB. After completion of the Transaction, HIBV will make a mandatory general offer (MGO), for all the shares of APB that the Heineken group does not already own, in accordance with the Singapore Code on Takeovers and Mergers. Subsequently, Heineken will seek to delist APB. Further, details of the MGO will be provided in the MGO Announcement to be made by Credit Suisse and Citi on behalf of HIBV on completion of the Transaction. The CCS has held that the transaction won’t infringe Section 54 prohibition of the Singapore Competition Act, 2004.

AUSTRALIA

  1. Australian Competition and Consumer Commission (ACCC) approves Arrangement of Glencore International Plc and Viterra:

    The ACCC cleared the arrangement between a wholly owned subsidiary of Glencore International Plc (Glencore) and Viterra Inc. (Viterra) under which Glencore will acquire all issued and outstanding common shares of Viterra for $16.25 per share, in cash (Arrangement). Following a review of the proposed acquisition under section 50 of the Competition and Consumer Act 2010, the ACCC stated that they will not intervene or seek to prevent the Arrangement. The ACCC weighed the impact of the proposed bid on Australian and global markets for coal, copper, nickel, cobalt and zinc and concluded that the acquisition was unlikely to give the merged group too much market power.

  2. ACCC adds condition to Nestle’s acquisition of Pfizer Inc:

    ACCC has attached a condition to its approval of Nestle SA's proposed US$11.9 billion acquisition of Pfizer Inc.'s infant nutrition business, requiring it to license the brand portfolio in Australia to an approved independent purchaser. The agreement/

    7.http://www.accc.gov.au/media-release/accc-not-to-oppose-glencore
    -international-plc%E2%80%99s-proposed-acquisition-of-viterra-inc
    8.http://www.accc.gov.au/media-release/accc-to-not-oppose-
    acquisition-by-nestl%C3%A9-of-pfizer-nutrition
    undertaking requires Nestle to sell an exclusive 10-year license for Pfizer's S-26 and SMA brands, followed by a further 10-year "black out" period in which Nestle won't be allowed to re-enter the market with Pfizer's brands. Nestle beat off rivals including Danone SA (BN.FR) to secure a deal for Pfizer's business, although approval from antitrust bodies in several countries is necessary.

  3. ACCC clears Qantas-Emirates alliance:

    ACCC has cleared Qantas Airlines and Emirates Airlines for their plan to coordinate passenger and freight operations across their networks. The ACCC considered the alliance which would benefit Australian consumers at large. It has granted five-year authorisation rather than the 10 years which was also sought by the airlines in their application. However, the ACCC will require the two carriers to maintain a base level of capacity on trans-Tasman routes between Australia and New Zealand, which may be increased by a "specified growth factor" to prevent them from manipulating capacity and fares. The airlines would implement the alliance from April 2013.

  4. Australia introduces new 'price signaling' law:

    The Australian Competition and Consumer Act 2010 introduced the law against 'price signaling' (or 'price facilitation' or 'tacit collusion') which came into force on 6 June 2012. The said price signaling reforms apply only to the deposit taking and advance activities of 'authorised deposit taking institutions', as prescribed under the Competition and Consumer Regulations 2010. Such institutions include credit unions, building societies, specialist credit card institutions, providers of purchased payment facilities and authorised non-operating holding companies. This step by the ACCC is providing legislative teeth to prosecute a 'tacit collusion loophole'. However, this initiative has done little to stem the debate over whether cartel prohibitions under the Competition and Consumer Act 2010 are adequate to regulate anti-competitive price signaling particularly in the banking sector.

  5. Federal Court in Sydney has fined Emirates Airline AUD$10 million for engaging in price fixing:

    9.http://transition.accc.gov.au/content/index.phtml/itemId/1078153/display/acccDecision
    10.http://www.australiancompetitionlaw.org/law/pricesignalling.html
    11.http://www.theaustralian.com.au/travel/network-news/m-price-
    fixing-fine-for-emirates-airline/story-e6frg8ro-1226494229142
    ACCC started formal proceedings against Singapore Airlines, Cathay Pacific, Air New Zealand and Thai Airways. ACCC has levied the highest fine ever which runs upto $68 million after fully investigating the matter on the cartel conduct which is in breach of the Competition and Consumer Act 2010, relating to alleged price fixing of fuel and other surcharges. Emirates has agreed to illegal conduct relating to a fuel surcharge, a security surcharge and a customs fee on air freight carried from Indonesia to Australia and other countries between October 2001 and May 2006 which is part of the settlement.

CANADA

  1. Six Guilty Pleas for Fixing Gas Prices in Victoriaville:

    Five individuals and one company pleaded guilty to criminal charges for conspiring to fix the price of gasoline at the pump in Victoriaville, Quebec before the Competition Bureau. Société Coopérative Agricole des Bois-Francs (owner of the Sonic banner station in Victoriaville) has pleaded guilty and has been fined$124,000. Charges were laid in June 2008 and July 2010 against 38 individuals and 14 companies for fixing the price of gas at pumps in Victoriaville, Thetford Mines, Magog and Sherbrooke, Quebec. Further, twenty seven individuals and seven companies have pleaded guilty in this case, with fines totaling over $3 million.

  2. Competition Bureau sues Bell, Rogers and Telus over alleged misleading advertising:

    The Competition Bureau has sued Bell, Rogers and Telus carriers over ads that promote so-called premium texting services. In addition to there demands of stopping such ads, the government agency is seeking full customer refunds for any charges incurred and a $10 million penalty from each carrier, plus an additional $1 million from the Canadian Wireless Telecommunications Association. Further, allegations of misleading advertising practices among Canada's big telecom companies has been a recurring subject for some time.

    12.http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03459.html
    13.http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03498.html
  3. Air Canada, United Continental Holdings Ltd. has reached deal with Competition Bureau:

    Air Canada and United Continental Holdings Ltd. reached an agreement with the Competition Bureau to preserve competition on 14 high-demand routes between Canada and the United States. The agreement is to address concerns over a proposed joint venture between the two airlines that will see them merge their flight operations on Canada U.S. routes. The said deal would ensure that passengers aren’t hit with higher prices and reduced choice on high-use routes as a result of the proposed joint ventured and coordination agreements. Under terms of the agreement, Air Canada and United Continental won’t implement their joint venture or use existing coordination agreements on 14 Canada and U.S. routes. The airlines are prohibited on those 14 routes from coordinating their prices, coordinating the number of seats available at each price, pooling revenue or costs and sharing commercially sensitive information.

  4. Korean Air Pleads Guilty to Price-Fixing Conspiracy:

    Korean Air Lines Co., Ltd. (Korean Air) has pleaded guilty to the conspiracy under the Competition Act and was fined $5.5 million for its participation in an air cargo price-fixing cartel between 2002 and 2006. Cargolux, Air France, KLM, Martinair, Qantas, and British Airways have pleaded guilty to fixing air cargo surcharges for shipments on certain routes from Canada.

EUROPEAN UNION

  1. EU General Court Reduces Fines in Dutch Bitumen Cartel Appeal:

    The General Court (GC) reduced the fine imposed on Shell from € 108 million to € 81 million, finding that the European Commission had not provided sufficient proof that Shell had acted as leader of the cartel. The GC also capped the liability of one member of Ballast Nedam group at € 3.45 million, but did not alter the original figure of € 4.65 million imposed on other members of the group. In the decision under appeal, the European Commission (EC) found that a large number of companies had participated

    14.http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03506.html
    15.http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03482.html
    16.http://www.mondaq.com/x/205982/Cartels+Monopolies/EU+Genera
    l+Court+Reduces+Fines+In+Dutch+Bitumen+Cartel+Appeal
    in a single and continuous infringement of Article 101 Treaty on the Functioning of the EU (TFEU) by regularly fixing, for the period 1994 to 2002, prices for the sale of road pavement bitumen in the Netherlands.

  2. EC fines producers of TV and computer monitor tubes € 1.47 billion for two decade-long cartels:

    The EC has fined seven international groups of companies a total of € 1 470 515 000 for participating in either one or both of two distinct cartels in the sector of cathode ray tubes (CRT). For almost ten years, between 1996 and 2006, these companies fixed prices, shared markets, allocated customers between themselves and restricted their output on a worldwide basis.. The infringements found by the Commission therefore cover the entire European Economic Area (EEA). Chunghwa, LG Electronics, Philips and Samsung SDI participated in both cartels, while Panasonic, Toshiba, MTPD (currently a Panasonic subsidiary) and Technicolor (formerly Thomson) participated only in the cartel for television tubes. Chunghwa received full immunity from fines under the Commission's 2006 Leniency Notice for the two cartels, as it was the first to reveal their existence to the Commission. Other companies received reductions of their fines for their cooperation in the investigation under the Commission's leniency programme.

  3. EC accepts legally binding commitments from Simon & Schuster, Harper Collins, Hachette, Holtzbrinck and Apple for sale of e-books:

    EC has adopted a decision that renders legally binding commitments offered by Apple and four international publishers - Simon & Schuster, Harper Collins, Hachette Livre, Verlagsgruppe Georg von Holtzbrinck. The EC concerns were that the joint switch by these companies from a wholesale model, where the retail price of e-books is determined by the retailer, to agency contracts that contained the same key terms for retail prices including an unusual retail price Most Favoured Nation (MFN) clause, maximum retail price grids and the same 30% commission payable to Apple. Further, that the switch to these agency contracts may have been coordinated between the publishers and Apple, as part of a common strategy aimed at raising retail prices for e-books or preventing the introduction of lower retail prices for e-books on a global scale.

  4. EC welcomes General Court judgments on appeals in calcium carbide cartel:

    17.http://europa.eu/rapid/press-release_IP-12-1317_en.htm?locale=en
    18.http://europa.eu/rapid/press-release_MEMO-12-983_en.htm
    The EC had found 9 companies, namely, Akzo Nobel, Almamet, Donau Chemie, Ecka Granulate, Novácke chemické závody, SKW Stahl-Metallurgie and TDR Metalurgija, for having colluded, directly or as liable parent company, on prices and customers for the sales of calcium carbide powder, calcium carbide granulates and magnesium granulates in a substantial part of the EEA. The General Court (“GC”) judgment confirms the validity of the EC's approach for the finding of an infringement and the setting of the fines of these companies. The GC confirmed both the fines imposed by the EC for this serious infringement of EU antitrust rules, and the EC's assessment of the claims that these companies were unable to pay the fines.

  5. EC re-imposes fines on Mitsubishi and Toshiba for gas insulated switchgear cartel following Court judgments:

    In 2007, EC imposed fines of over €750 million on 20 companies for their participation in a cartel on the market for gas insulated switchgear. Gas insulated switchgear (GIS) is heavy electrical equipment used to control energy flows in electricity grids. Mitsubishi and Toshiba brought actions for annulment of the Commission's decision before the EGC. GC fully upheld the Commission's finding that Mitsubishi and Toshiba had infringed Article 101 of the TFEU, but annulled their fines because in setting these fines the Commission had used sales figures for a different reference year than for other cartelists. EC has re-adopted a decision fining Mitsubishi Electric Corporation and Toshiba Corporation for their participation in a cartel on the markets for gas insulated switchgears, after part of the original decision. Individually, Mitsubishi Electric Corporation was fined 74817000 Euros and Toshiba Corporation, 56793000 Euros and jointly, Mitsubishi Electric Corporation and Toshiba Corporation have been fined 4650000 Euros.

  6. EC opens proceedings against Microsoft to investigate possible non-compliance with browser choice commitments:

    EC initiated proceedings against Microsoft on the allegation whether the company has failed to comply with its 2009 commitments to offer users a choice screen enabling them to easily choose their preferred web browser. The EC believes that Microsoft may

    19.http://europa.eu/rapid/press-release_IP-12-705_en.htm
    20.europa.eu/rapid/press-release_IP-12-800_en.htm
    have failed to roll out the choice screen with Windows 7 Service Pack 1, which was released in February 2011. This is despite the fact that, in December 2011, Microsoft indicated in its annual compliance report to the Commission that it was in compliance with its commitments.

  7. EC fines nine producers of window mountings €86 million for price fixing cartel:

    EC has fined nine European producers of mountings for windows a total of € 85 876 000 for operating a cartel by which they agreed on common price increases, in breach of EU antitrust rules. The collusion lasted from November 1999 to July 2007 and affected European buyers of windows across all Member States of the EU and EEA. The cartel had a direct impact on customers in the EEA because mountings are an important component of windows and window-doors sold throughout Europe. The size of the market is estimated to be at least € 1 billion. The companies involved have high combined market shares in the EEA, especially for turn-and-tilt mountings where this figure is estimated to be above 80%.

  8. EC imposes € 169 million fine on freight forwarders for operating four price fixing cartels:

    EC has fined 14 international groups of companies a total of € 169 million for participating in the period 2002-2007 in four distinct cartels aimed at fixing prices and other trading conditions for international air freight forwarding services, in breach of EU antitrust rules. The freight forwarders colluded on surcharges and charging mechanisms concerning important trade lanes, in particular the Europe-USA and the China/Hong Kong-Europe lanes. Participants and duration varied in each of the four cartels. Deutsche Post (including its subsidiaries DHL and Exel) received full immunity from fines under the Commission's 2006 leniency notice for all four cartels, as it was the first to reveal their existence the Commission. Freight forwarders offer door-to-door air freight forwarding services to businesses and consumers. In four distinct cartels, the cartelists established and coordinated four different surcharges and charging mechanisms, which are component elements of the final price billed to customers for these services.

  9. EC approves acquisition of part of French insurance company Gan Eurocourtage by rival Allianz of Germany:

    21.http://europa.eu/rapid/press-release_IP-12-313_en.htm?locale=en
    22.http://europa.eu/rapid/press-release_IP-12-314_en.htm?locale=en
    The European Commission has cleared under the EU Merger Regulation the proposed acquisition by the French subsidiary of the German Allianz insurance group of a non-life insurance portfolio belonging to the French insurance company Gan Eurocourtage SA. The portfolio comprises insurance contracts and related brokerage businesses, assets and liabilities. The Commission's investigation confirmed that the notified operation would not raise competition concerns because it would not significantly alter the market structure. The Commission in particular examined the competitive effects of the proposed acquisition on the production, underwriting and distribution of non-life insurance and assistance services in France, which is the only country in the EEA where the two companies' activities overlap. Given the small market share increase resulting from the transaction, the relatively low combined market shares of the parties and the presence of a number of credible competitors, the Commission concluded that the transaction would not raise competition concerns.

  10. EC approves acquisition of Cable & Wireless Worldwide Plc by Vodafone:

    The European Commission has cleared the proposed acquisition of Cable & Wireless Worldwide Plc (CWW) by Vodafone Group Plc under the EU Merger Regulation. Both companies provide fixed and mobile telecommunications services in EEA. The Commission concluded that the transaction would raise no competition concerns, as the parties' activities are largely complementary. CWW's main activity is related to fixed telecoms, whereas Vodafone is mainly active in mobile telecoms. Vodafone and CWW's activities overlap in a number of markets in the fixed and mobile telecommunications markets in the UK. However, the Commission found that the impact of the transaction on these markets is likely to be small as the combined entity would continue to face significant competition from other market players post-transaction. The transaction also gives rise to a number of vertical relationships in the fixed and mobile telecommunication markets mainly in the UK and Ireland. However, the Commission's investigation showed that the parties would not be able to shut out fixed or mobile operators from the markets for combined fixed-mobile services, because of the parties' lack of sufficient market power.

  11. EC approves Glencore's acquisition of Xstrata, subject to conditions:

    23.http://europa.eu/rapid/press-release_IP-12-742_en.htm
    24.http://europa.eu/rapid/press-release_IP-12-1252_en.htm
    The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Xstrata, the largest metals and mining group, by Glencore. The clearance is conditional on the termination of Glencore's off-take arrangements for zinc metal in the EEA with Nyrstar, the world's largest zinc metal producer, and the divestiture of Glencore's minority shareholding in Nyrstar. The EC had concerns that the merged entity would have the ability and incentive to raise prices for zinc metal, an important input for many EU industries. Following the merger, the merged entity would have the ability and incentive to control the level of zinc metal supplies in the EEA. In order to remove the concerns of the Commission Glencore committed (a) to terminate its exclusive long-term off-take agreement with Nyrstar, the largest European zinc metal producer, in so far as the agreement relates to commodity zinc products produced by Nyrstar in the EEA, (b) not to buy directly or indirectly any EEA zinc metal quantities from Nyrstar for a period of ten years, (c) not to engage, for ten years, in any other practices which have the effect of materially restricting Nyrstar's ability or incentive to compete effectively with Glencore in zinc metal in the EEA, and (d) to divest Glencore's minority shareholding in Nyrstar of around 7.79 %. Further, EC concluded that the transaction, as modified by the commitments, would not raise competition concerns anymore.

  12. EC Network refines its Model Leniency Programme:

    The European Competition Network (ECN), has strengthened the Model Leniency Programme (MLP), around which ECN competition authorities align their own leniency procedures. The MLP was adopted in 2006 to make it easier for companies to apply for leniency. The ECN has now, in particular, clarified and simplified the information that must be provided by companies that are applying to several different authorities.

    The three main changes are:

    a. All leniency applicants applying to the Commission in cases concerning more than three Member States will be able to submit a summary application to national competition authorities. Previously, only the first applicant, i.e. the immunity applicant, was entitled to use summary applications under the MLP - although some national authorities had already extended the right to all applicants.

    25.http://ec.europa.eu/competition/ecn/mlp_2012_faq_en.pdf
    b. In addition, the ECN has agreed on a standard template for summary applications, which companies will be able to use in all Member States.
    c. Finally, the ECN has published a list of national authorities which accept summary applications in English.

INDIA

  1. Cease and desist’ order against Motion Pictures Association:

    The Competition Commission of India (CCI) passed its final order today against Northern India Motion Pictures Association (NIMPA) directing it to cease and desist from indulging in anti-competitive conduct. The order has been issued in a case filed by M/s Shri Ashtavinayak Cine Vision Limited against NIMPA and other film associations alleging inter-alia contravention of the provisions of section 3 (anti-competitive agreements) of the Competition Act, 2002. The Commission found NIMPA’s practices of pressurizing the distributors to settle the monetary disputes with its members to be in contravention of the provisions of Competition Act.

  2. CCI slaps Rs 252 crore fine on United Phosphorus for cartelization:

    A penalty of Rs 252.44 crores was levied on United Phosphorus for discrepancies in bidding in a tender floated by the Food Corporation of India (FCI) and collective boycott of another tender of the FCI. The total value of the 2009 tender was approximately Rs 24 crore and the company's share on this was approximately Rs 8 crore. The CCI observed that the companies are situated at different locations and they have quoted the same price which can’t be mere coincidence since the cost of transportation and of manufacturing tablets would be different for each company which means that the price quoted would have to be different as the cost structure of the three companies is different.

  3. CCI imposes a fine of Rs 60 Cr on Explosives Manufactures:

    26.http://articles.economictimes.indiatimes.com/2012-05-09/news/
    31641576_1_mpa-competition-act-competition-commission
    27.http://www.business-standard.com/article/companies/cci
    -slaps-penalty-of-rs-252-cr-on-united-phosphorus-112042600115_1.html
    28.http://cci.gov.in/May2011/OrderOfCommission/062011.pdf
    The information in this case was filed by M/s Coal India Limited under section 19 (1) (a) of the Act against explosives manufacturers/suppliers in India along with their associations, Explosive Manufacturers Welfare Association (EMWA) and Explosives Manufacturers Association of India (EMAI) for their anti competitive acts. It is observed that there was a concerted action among Gulf Oil Corporation Limited, Ideal Industrial Explosives Limited, Regenesis Industries, Solar Industries, Balastec India, Indian Explosives, Emul Tek India, Black Diamond Explosives and S Keltech Energies, not to participate in the reverse auction held for the supply of bulk and cartridge explosives. It has caused the collective boycott of auction process and manipulation of the process of bidding which is in violation of Section 3(3)(b) of the Act. The act and conduct of the opposite parties of boycott of reverse auction when seen together with the past conduct of quoting identical rates and controlling the supply of explosives establishes that this was done with a view to manipulate the process of bidding in violation of section 3(3)(d) of the Act.

  4. CCI finds no evidence of cartelisation by Tyre Manufacturers:

    The regulator was investigating alleged cartelisation charges against five major tyre companies - Apollo Tyres, Birla Tyres, MRF, Ceat, and JK Tyre -- which control 95 per cent of the tyre market, and also the Automotive Tyre Manufacturers' Association, since 2010. The CCI did not find any documentary evidence of existence of an agreement. However, it concluded that it would be appropriate and logical to inquire into cases of anti-competitive agreements on the basis of circumstantial evidence. It was observed that parallel behavior in prices, similarities in dispatch, supply accompanied with other factors indicating coordinated behaviour among the firms may become a basis for finding contravention.

  5. COMPAT absolves Microsoft of anti-competitive allegations:

    29.http://cci.gov.in/May2011/OrderOfCommission/202008.pdf
    30.http://compat.nic.in/upload/PDFs/octordersApp2012/09_10_12.pdf
    The Competition Appellate Tribunal (COMPAT) has upheld the CCI’s ruling that Microsoft did not abuse its dominant position regarding sale of software licenses. The CCI passed the order against allegations that Microsoft offered software licenses at a lower price to original equipment manufacturers (OEM) while business houses had to buy the same at higher prices from the company. The COMPAT held that the ultimate product which was offered, was not a software of Microsoft Office or Microsoft Word but were three distinct and separate licenses; and different IP rights bear different prices. Further, the COMPAT stated that no evidence of discriminatory or unfair pricing was brought before the COMPAT. Hence, it was held that there was no hindering of competition and the appeal was dismissed.

  6. CCI approved acquisition of Barclays’ credit card business by Standard Chartered Bank:

    Vide order dated November 21, 2012, the CCI gave its approval to the acquisition by Standard Chartered Bank (SCB) of the performing loan portfolios of personal installment loans, loans against property and home loan finance of Barclay’s Bank PLC India Branch (Barclays India) and the performing loan portfolios of personal installment loans and loans against property of Barclays Investment and Loans (India) Limited (BILIL). The CCI considered the number of accounts and outstanding of Barclays India and BILIL in the relevant segments, the total portfolio of Barclays India and BILIL as well as the related assets constitutes a very small percentage of the overall size of the loan segment in India. This coupled with the fact that there are other players who are engaged in the same line of business led the CCI to conclude that the proposed transaction was unlikely to have any adverse effect on competition.

SOUTH AFRICA

  1. Competition Commission of South Africa Approves Media24 and Paarl Media Merger:

    Competition Tribunal of South Africa (Competition Tribunal) has approved the proposed merger between South African companies Media24, the Paarl Media Group and the Natal Witness. The Competition Commission of South Africa (Competition

    31.http://cci.gov.in/May2011/OrderOfCommission/
    CombinationOrders/C-2012-11-90.pdf
    32.http://www.ventures-africa.com/2012/05/south-africa-competition
    -commission-approves-media24-paarl-media-merger/
    Commission) and Caxton publishers and printers had provided submissions on potential competition and public interest concerns with the merger. The Competition Commission held that since Media24 and Natal Witness already jointly own Africa Web, a company which prints community newspapers in KwaZulu-Natal and the Eastern Cape, the merger would result in Media24 increasing its share in Africa Web. The Competition Tribunal cleared the merger but with several conditions like Media24 group should not influence the operations and strategies of Africa Web and that it, together with Paarl Media, notify the commission of any future mergers with small, independent publishers.

  2. Competition Commission refers Collusion Case Against Oil Companies:

    The Competition Commission has referred a case of price fixing and market division regarding the supply of diesel to the Competition Tribunal for adjudication. The parties were members of South African Petroleum Industry Association (SAPIA) and are oil companies active in the production, marketing and distribution of various petroleum products in South Africa. The investigation revealed collusive conduct through extensive exchanges of commercially sensitive information by the respondent oil companies. The oil companies used the wholesale list selling price as their list price, and their conduct prevented competitive discounting off this benchmark. The Competition Commission concluded that the oil companies had engaged in price fixing and market division in contravention of Section 4(1)(b) of the Act. Further, the Competition Commission has requested the Competition Tribunal to levy an administrative penalty amounting to 10% of total turnover of the respondent's turnover in and export from South Africa in the preceding financial year.

  3. Competition Commission approves Glencore / Xstrata merger subject to conditions:

    The Competition Commission has recommended that the Competition Tribunal approve the acquisition of Xstrata Plc. (Xstrata) by Glencore International Plc. (Glencore) subject to conditions regarding employment. Glencore is a leading global trader in a number of key commodities including coal. It also has interests in mining. In South Africa, Glencore is active in anthracite and thermal coal mining through its

    33.http://www.compcom.co.za/assets/Uploads/AttachedFiles/
    MyDocuments/Competition-Commission-refers-a-case-of-collusion-against-oil-companies.pdf
    34.http://www.compcom.co.za/assets/Uploads/AttachedFiles/
    MyDocuments/Commission-approves-Glencore-Xstrata-merger-subject-to-conditions.pdf
    shareholding interests in Xstrata, Shanduka, Umcebo and Optimum. Glencore and Xstrata have a pre-existing relationship in that Glencore is the largest shareholder in Xstrata with an interest of 33.65% and Glencore acts as a trader of Xstrata coal. Through this transaction, it was proposed that Glencore will acquire the remaining issued shares which it does not currently own in Xstrata. Glencore and Xstrata are both miners of thermal coal in South Africa (horizontal overlap). The Competition Commission's investigation found that, although the proposed transaction is unlikely to substantially prevent or lessen competition in South Africa, it raises public interest concerns in that the merging parties intend to retrench 180 employees.

  4. Lafarge arrives at settlement with Competition Commission:

    Lafarge would pay an administrative penalty of ZAR 149m or 6 percent of its 2010 turnover in the South African Customs Union (South Africa, Botswana, Lesotho, Swaziland and Namibia) as per the terms of the settlement. The settlement agreement reached by the Commission with AfriSam is scheduled to pay a fine of ZAR125m or 3 percent of its turnover in the same period. The Competition Commission will also be pursuing the case against Natal Portland Cement. Earlier, indications were to take both Lafarge and NPC to the tribunal as both the companies were not involved in further settlement talks. However, with the agreement with Lafarge, NPC will be solely facing the Competition Tribunal.

  5. Namibian Competition Law: Revised threshold after withdrawal of initial merger regulations:

    The Namibian Competition Law revised the monetary merger notification thresholds and threshold criteria for application of the abuse of dominance provisions in Namibia in December 2012. These regulations determined that the merger control provisions of the Act would not be applicable where the merging parties’ prescribed turnover and asset values exceeded both the thresholds. These regulations amended the previously published threshold requirements for both the determination of a dominant position in the Namibian market and in respect of the class of mergers that are excluded from the duty to notify the NCC.

    35.http://www.compcom.co.za/assets/Uploads/AttachedFiles/
    MyDocuments/FINAL-MEDIA-RELEASE-Lafarge.pdf
    36.http://www.werksmans.com/legal-briefs-view/namibian-competition
    -law-revised-threshold-after-withdrawal-of-initial-merger-regulations     /
    The new thresholds entered into force on the date of publication and therefore apply to all mergers in Namibia after 24 December 2012. According to these regulations, the merger control provisions of the Namibian Act will not be applicable to a merger if: -

    • the combined annual turnover in, into or from Namibia or the combined assets of the acquiring undertaking and target undertaking (and any combination thereof) is equal to or valued below N$20 million;
    • And the annual turnover in, into or from Namibia, or the asset value of the target undertaking is equal to or valued below N$10 million.

    The triggering of any of the aforementioned thresholds would require notification. Both the earlier and the current regulations, determined that the NCC reserves the right to demand a notification of every merger it considers necessary to deal with even where it falls outside the compulsory notification thresholds. The merging parties will then have to submit a notification to the NCC within 30 days after a written demand by the NCC to do so.

  6. Competition Tribunal confirms Trident Steel’s fine:

    AVENG subsidiary Trident Steel’s R8.6m fine set by the Competition Commission was confirmed by the Competition Tribunal. The settlement followed a commission investigation which found that Trident Steel and its competitor, Macsteel Service Centres, had contravened the Competition Act by agreeing to fix the prices of all steel products manufactured by Evraz Highveld Steel and Vanadium. The Competition Commission found that while acting as distributors of Highveld Steel’s products, the two companies agreed on a premium to charge all domestic resellers and wholesalers.

THE UNITED KINGDOM

  1. U.K. Competition Commission rules against Akzo Nobel/Metlac deal:

    37.http://www.bdlive.co.za/business/industrials/2012/
    12/20/tribunal-confirms-tridents-fine
    38.http://www.competition-commission.org.uk/media-centre
    /latest-news/2012/sep/cc-provisionally-rules-against-akzonobel-metlac-merger
    U.K.’s Competition Commission (CC) decided to block Akzo Nobel NV's bid to takeover rival Metlac Holding Srl since the combination is likely to reduce competition for metal packaging coatings used in beverage cans. The two companies together cater towards 40 and 55 percent of metal packaging coatings for beer and beverage metal packaging and between 35 and 50 percent of metal packaging coatings for food, caps and closures and general line metal packaging in Europe. The CC has held that the proposed combination would prevent Akzo Nobel from completing the exercise of its call optionm. The merger, according to CC would create an entity that controlled nearly half of the European metal package coatings market.

  2. CC makes final ruling on Phoenix Gas price control:

    The Northern Ireland Authority for Utility Regulation passed its order in the Phoenix Natural Gas Ltd (PNGL) price control inquiry. PNGL is the largest gas distribution business in Northern Ireland. The regulator proposed price control would have removed allowances from PNGL’s regulated asset base, which was determined in 2007 as the basis for future price controls. The Commission largely maintained the conclusions from its August provisional ruling, reinforcing its view on the significant costs associated with unexpected regulatory interventions. As per CC’s final ruling only a small revision to PNGL’s regulated asset value (£13.6 million of the £74 million sought by the utility regulator) should be made.

  3. OFT clears London Stock Exchange Group’s acquisition of LCH.Clearnet:

    The OFT has cleared the anticipated acquisition by the London Stock Exchange Group plc (LSEG) of majority control of LCH, Clearnet Group Limited (LCH.Clearnet). LSEG owns a number of trading venues including the London Stock Exchange, Turquoise and MTS. LCH.Clearnet is an international clearing house. The OFT held that the parties did not compete with each other in relation to the vast majority of their activities but LCH, Clearnet provided clearing services for trades executed on LSEG trading venues. The OFT assessed whether post-transaction the parties would foreclose or otherwise harm their rival. The OFT framed its investigation by looking separately at the trading and clearing of equities securities, fixed income securities and exchange traded derivatives.

    39.http://www.competition-commission.org.uk/media-centre/latest-news/
    2012/dec/cc-final-determination-on-ni-gas-price-control-is-published
    40.http://www.oft.gov.uk/news-and-updates/press/2012/118-12#.Ujats9L7BN0
THE UNITED STATES OF AMERICA

  1. Gas companies go back to the table with Justice Department:

    The settlement reached between the Department of Justice (DOJ) and local gas operators Gunnison Energy Corporation and SG Interests Ltd. was denied by a District Court after review. The two companies actually signed a memorandum of understanding laying out the arrangement, which stipulated SG as the bidder that would assign a 50 percent interest in the leases to GEC after the sale, garnering the companies’ four new leases. The DOJ held that the companies walked away from the sale paying $94,000, or just $25 an acre, for mineral leases that could have gone for much more in a truly competitive auction. Further, the companies violated the Sherman Act in colluding to limit competition and the False Claims Act by lying to the government about GEC’s intention not to bid

  2. Credit Card Fees And Practices Face Antitrust Scrutiny:

    The DOJ are examining swipe fees and the practices credit card companies require merchants to follow. In several lawsuits, DOJ alleges that the swipe fees are at supra-competitive levels, and that the credit card companies impose rules that insulate themselves from competition that could drive those fees down. While some lawsuits are proceeding, settlements in other lawsuits are already bringing changes to the industry. In addition, Congress has enacted the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which reduces the swipe fees for debit (but not credit) cards and imposes other rules designed to encourage competition.

  3. Settlement with Penguin on E-books:

    41.http://www.crestedbuttenews.com/index.php?option=com
    _content&task=view&id=4608&Itemid=40
    42.http://www.mondaq.com/unitedstates/x/212512/Antitrust+
    Competition/Credit+Card+Fees+And+Practices+Face+Antitrust+Scrutiny
    43.http://www.justice.gov/atr/public/press_releases/2012/290409.htm
Publishers LLC, which does business as Macmillan, as the only defendants standing against the federal government’s charges that Apple, the multimedia and computer giant, conspired with several publishers in the fall of 2009 to force e-book prices several dollars above the $9.99 charged by Amazon.com on its popular Kindle device. Under the settlement, Penguin will be prohibited for two years from entering into new agreements that constrain retailers’ ability to offer discounts or other promotions to consumers to encourage the sale of the Penguin’s e-books and Penguin must submit to a strong antitrust compliance program that includes telling federal officials about any joint e-book ventures or any communications with other publishers.
G.R. BHATIA is a Partner, KANIKA CHOUDHARY is a Senior Associate & NIDHI SINGH and TRIPTI MALHOTRA are Associates with the Competition Practice Group at Luthra & Luthra Law Offices, India at its New Delhi office.
 
 
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