India Law Journal

Competition Law Corner

COMPETITION LAW UPDATE (AUGUST 2013 TO JANUARY 2014)


KOREA 1. Korea Fair Trade Commission imposes heavy punishment for collusion. The Korea Fair Trade Commission (‘KFTC’) has issued corrective orders to 7 companies namely, Hyundai, Tata Daewoo, Daewoo Songdo, Daimler, Man, Volvo and Scania for colluding to fix prices of heavy duty commercial vehicles and the KFTC also imposed a fine of 116 billion Won. The allegation before KFTC was that of ‘collusion’ which was done by exchanging of information relating to the price of the vehicles, sales volume, finance information etc. The KFTC observed that the companies under investigation own 100% of the market share in heavy duty vehicles and there has been sharing of trade secrets in a systematic and continues manner between the manufacturers which had resulted in this collusion. 2. Correction orders issued to Air Asia X on its No-Refund Policy. The KFTC ordered corrections on the No-Refund policy of Air Asia X’s adhesion contract. The orders followed from Air Asia X, the largest low cost carrier in Asia, offering fares and additional services on non-refundable basis on 17 classes of tickets (in-flight services.. Prior to the orders, the charges and additional services were non-refundable. However, in light of the correction orders, the fares and in-flight services are being made refundable based on the departure date. Pursuant to the orders, Air Asia X has been issuing refunds to customers of Korea from October 21, 2013. The refunds are being issued after a certain rate of cancellation fee based on the departure date. This policy was drawn by Air Asia in pursuance to all foreign low cost carriers having adopted and having to operate a No-Refund policy as their business model. The KFTC is one of the first to issue corrective measures for such a policy. Even Turkish Airlines has agreed to revise its policy in pursuance to the decision of the KFTC. 3. Daewoo Shipbuilding & Marine Engineering fined for unfair trade practices. 1. http://eng.ftc.go.kr/bbs.do?command=getList&type_cd=52&pageId=0201 2. http://eng.ftc.go.kr/bbs.do South Korea's Daewoo Shipbuilding & Marine Engineering (‘DSME’) which is engaged in building and selling special purpose ships, submarines, destroyers, battle ships etc. was fined KRW 26.7 billion for undertaking "unfair trade practices" of unilateral cutting of prices with 89 local subcontractors in 2008-09 for assembling, painting and other works related to manufacturing ships. Along with the fines, the KFTC ordered DSME to pay a total of KRW 43.6 billion to compensate for the losses that the subcontractors had to sustain due to its forceful price cuts. This is one of the largest fines imposed upon a defense contractor in South Korea and is the latest in a series of cases in which the KFTC has accused local defense companies of wrongdoing in business activities. SINGAPORE 4. Competition Commission of Singapore (‘CCS’) clears the decision received from Visa Worldwide (‘Visa’) regarding its Multilateral Interchange Fee system (‘MIF’). Visa received a decision from the CCS as to whether its MIF system would violate the Section 34 of the Competition Act, 2004, which prohibits anti-competitive agreements. MIF is a fee paid from the merchant’s bank to the cardholder’s bank in respect of any transaction. This fee is commonly understood to be passed, to some extent and in some form, to the merchants themselves, either through a “merchant service fee” charged by the merchant’s bank, or simply bundled with other fees charged to the merchant.CCS assessed whether Visa’s MIF system has the effect of preventing, restricting or distorting competition within Singapore. After extensive consultation with the relevant stakeholders and a careful review of the facts and evidence, CCS concluded that the evidence available to it does not suggest that the MIF system has resulted in an appreciable adverse effect on competition in Singapore, in any of the relevant markets considered. Such being the case, CCS issued a clearance decision on Visa’s MIF system. 5. CCS cleared the way for Jetstar to coordinate passenger and cargo services with Qantas. CCS, after detailed investigation under Section 34 of the Competition Act 2004, has cleared the way for Qantas Airways Limited and Jetstar Airways Pty Limited in light of 3. http://www.ccs.gov.sg/content/ccs/en/Media-and-Publications/Media-Releases/ccs-issu es-a-clearance-decision-on-visas-mif-system.html 4. http://www.ccs.gov.sg/content/ccs/en/Media-and-Publications/Media-Releases/ccs-issues-a-cle arance-decision-on-qantas-jetstar-s-proposed-con.html the Jetstar Pan Asian Strategy. The Jetstar Pan-Asian Strategy pursued by Qantas Airways will enable them to operate low-cost carriers under the Jetstar brand by virtue of joint ventures in a many Asian jurisdictions. Under the strategy, the parties to the Proposed Conduct would coordinate on network, scheduling, pricing, marketing, purchasing, customer service and resourcing decisions. The CCS found that some parts of the plans to coordinate services would raise competition concerns but this would be counterbalanced by economic benefits to passengers. The CCS also emphasised that the presence of budget airlines on routes could ‘‘generally increase the level of competitiveness through increased capacity and reduced prices from existing airlines’’. JAPAN 6. The Japan Fair Trade Commission (‘JFTC’) slapped a ¥740 million fine on 36 companies for fixing bids related to power line construction. The JFTC issued cease and desist orders and imposed approximately 740 million Yen against 36 engineering companies, such as Transmission Line Construction Co. Ltd, Kandenko Co. Ltd, Sumitomo Electric Industries Ltd. and others, participating in the bidding process for building over-head transmission facility works and underground transmission line works, ordered by TEPCO group firm. The JFTC found that the companies restrained competition by acting in concert with one another and that TEPCO also facilitated the bid-rigging by inviting only selected enterprises to the bidding process. The 36 firms rigged the bids far back in January 2012 by deciding beforehand, who the successful bidders would be. The quantum of fines was as follows- Transmission Line Construction Co. was fined around ¥110 million, Kandenko Co. Ltd about ¥100 million and Osaka-based Sumitomo Electric Industries Ltd. roughly ¥30 million. TAIWAN 7. Samsung Electronics Co. was fined NT$10 million by Taiwan's Fair Trade Commission (‘TFTC’) for using an advertising campaign. 5. http://www.jftc.go.jp/en/pressreleases/yearly-2013/Dec/131220.html 6. http://focustaiwan.tw/news/aeco/201310240019.aspx The Taiwan branch of Samsung Electronics Co. was fined NT$10 million by TFTC for using an advertising campaign that gave misleading impressions about consumers' views on Samsung and its rivals, including HTC Corp., on local online forums. The electronics giant's campaign consisted of Internet posts purported to be from satisfied customers praising Samsung at the expense of its rivals' products, which is in violation of fair trade rules, the TFTC said in a statement. OpenTide Taiwan Co. and Sales and Profit International Co., were the marketing companies hired by Samsung Taiwan to make the posts, which were also fined NT$3 million and NT$50,000, respectively. INDIA 8. The Competition Commission of India (‘CCI’) penalises Coal India Ltd. (‘CIL’) for abuse of its dominance. The CCI has slapped a fine of Rs.1, 773.05 crores on Coal India Ltd. (CIL) for abusing its dominant position in the supply of the dry fuel - its first major penalty on a state-owned company. The CCI found that CIL is operating independently of market forces and enjoys an undisputed dominance in the market for production and supply of non-coking coal. CIL and its subsidiaries were found to be “imposing unfair/discriminatory conditions in fuel supply agreements (FSA) with the power producers for supply of non-coking coal. Apart from issuing a cease and desist order against CIL and its subsidiaries, the CCI has directed modification of FSAs. 9. CCI imposes a fine of 3.8 crores on Hiranandani Hospital. Hiranandani Hospital has been found guilty by the CCI of entering into an exclusive agreement with Cryobanks (provider of stem cell services). The Informant, a ‘soon-to-be-mother’, wanted to avail the services of M/s Life Cell India Pvt. Ltd. for banking of stem cells and was registered with Dr. LH Hiranandani Hospital (hospital) for the delivery of her child. The hospital refused to accede to the request of the Informant, to let Life Cell collect the umbilical cord blood owing to its exclusive agreement with Cryobanks. The CCI held that the impugned agreement was in contravention of the provisions of section 3(1) of the Competition Act, 2002, and had adverse effect on 7. http://www.cci.gov.in/May2011/OrderOfCommission/27/592012.pdf 8. Mr. Ramakant Kini v. Dr. L.H. Hiranandani Hospital, Powai, Mumbai, Case No. 39/2012. competition since the nature of service was long term (21 years). Accordingly, the CCI under section 27 of the Competition Act, 2002 declared the agreement between the hospitals as null and void. The hospital was directed to cease and desist from entering into similar agreements with any stem cell bank in future and a penalty of Rs. 3.8 crores was levied for the violations. 10. Concept of relevant turnover recognized by the Competition Appellate Tribunal (‘COMPAT’). In its landmark judgment, the COMPAT, recognized the concept of 'Relevant Turnover' for calculation of penalty in cartel cases, instead of calculating the same on overall turnover of the entire company/group. The COMPAT upheld the CCI’s findings against the three Aluminum Phosphide tablet manufacturers United Phosphorus, Excel Crop and Sandhya Organics of forming a cartel and manipulating bids of Food Corporation of India to supply ALP tablets. However, the COMPAT modified the penalties imposed by CCI and ordered 9% penalty on the 'Relevant Turnover'. 11. COMPAT upholds CCI’s Order in the LPG matter but remands it back to the CCI on the issue of penalty. The CCI had slapped 44 LPG companies liable for engaging in the process of bid-rigging. The COMPAT noted that existence of an association is itself sufficient, as it gives opportunity to the competitors to interact and discuss the trade problems and that it nullifies the need to prove that the party actually discussed the prices and took part in the meeting and agreed with the analysis and findings of the CCI. With respect to penalty, the CCI had imposed a penalty of 7% and has failed to give a reason as to why such rates were resorted to, and the COMPAT held that an unreasoned discretion was exercised. In view of the same, the COMPAT remanded back the matter on the question penalties to the CCI. 9. http://compat.nic.in/upload/PDFs/octordersApp2013/29_10_13.pdf 10. M/s International Cylinder (P) Ltd. and Ors v. Competition Commission of India, Appeal No. 21/2012. 12. India and European Union (‘EU’) sign MoU to increase cooperation between the European Commission’s (‘EC’) competition department and the Competition Commission of India. Vice President of the EC, Joaquín Almunia, and Chairman of the CCI, Ashok Chawla, signed a Memorandum of Understanding (‘MoU’) to increase cooperation between the EC's competition department and the CCI. The MoU creates a dedicated framework to further strengthen cooperation between the EC and the CCI in the area of competition law enforcement. Under the new framework, the parties may engage in discussions on competition legislation, share non-confidential information on legislation, enforcement, multilateral competition initiatives and advocacy. The MoU also provides that one authority may request the other to carry out enforcement activities; and provides a mechanism for avoidance of conflicts if enforcement activity of one authority affects the other in its own enforcement activity. AUSTRALIA 13. Australian Competition and Consumer Commission (‘ACCC’) fails to establish contravention of section 46 of the Competition and Consumer Act, 2010 by Cement Australia. The Federal Court in Australian Competition and Consumer Commission v Cement Australia Pty Ltd & Ors [2013] made an interim declaration that Cement Australia, did not contravene Section 46 of the Competition and Consumer Act,2010 but rather was in contravention of section 45. The ACCC had alleged that in the market for concrete grade fly ash in South East Queensland, Cement Australia had substantial market power, which it used for the purpose of locking out its competitors. The allegation of violation of section 46 of the Competition and Consumer Act, 2010 was essentially a predatory bidding case where it was alleged that Cement Australia used its market power during a tender process in order to win an exclusive supply of a product thus leading to foreclosure of its competitors. The ACCC had also alleged that Cement Australia entered into contracts, arrangements or understandings with power stations in South East Queensland for the supply of fly ash which had the effect of substantially lessening the competition. 11. http://europa.eu/rapid/press-release_IP-13-1143_en.htm 12. ACCC v. Cement Australia [2013] FCA 909. 14. Full Federal Court emphasis on community values in the Lux Vacuum Cleaner case. The ACCC brought proceedings in the Federal Court, claiming that Lux Distributors Pty Ltd. had engaged in unconscionable conduct in the context of selling vacuum cleaners to elderly women in their homes and had subjected to unfair and pressuring sales tactics by inducing them to purchase a vacuum for a price of up to $2280. The full federal court giving the precise meaning of unconscionable conduct under the Australian Consumer Law, and its predecessor the Trade Practices Act, 1974, held that Lux representatives had contravened a range of direct-selling provisions in the Australian Consumer Law and State legislation. The decision is significant because of the approach taken by the Full Court. The Full Court, overturning the decision of the Federal Court, renewed emphasis on "community values". 15. Federal Court imposes $1.1 million fine on Australia Power and Gas Co. (‘APG’) Federal court ordered APG to pay a fine of $1.1 Million for illegal door-to-door selling practices which followed from an action initiated by the ACCC alleging that APG salesmen indulged in false or misleading representations by calling consumers and negotiating agreements for the supply of retail electricity or gas by APG. The court held that APG made false or misleading representations and engaged in unconscionable act during door-to-door selling which involved a consumer who was from a Non-English speaking background. The Court further declared that APG breached various Unsolicited Consumer Agreement provisions of the Australian Consumer Law, which are designed to protect the rights of consumers in door-to-door transactions. The Federal Court also stressed on the aspect that APG breached consumer agreements by not clearly advising the consumers that their purpose was to seek the consumer’s agreement to a supply of retail electricity and/or gas by APG and failed to provide information relating to their identity. The Court also made orders for APG to publish corrective website and newspaper notices and to make a contribution to ACCC’s costs. EUROPE 13. Australian Competition and Consumer Commisiion v. Lux Distributors Pty Ltd [2013] FCAFC 90) 14. http://www.accc.gov.au/media-release/australian-power-and-gas-ordered-by-consent- to-pay-11-million-for-door-to-door-sales-conduct 16. EU antitrust regulators slapped 1.7 billion euro penalty on eight financial institutions including Deutsche Bank, RBS and JP Morgan. EU antitrust regulators slapped a record 1.7 billion euro penalty on eight financial institutions including Deutsche Bank, RBS and JPMorgan for participating in illegal cartels in markets for financial derivatives covering the European Economic Area (‘EEA’). The fines imposed by the Commission are for key interest rate benchmark rigging. The fines are along the lines of interest rate derivatives (e.g. forward rate agreements, swaps, futures, options) which are financial products used by banks or companies for managing the risk of interest rate fluctuations. These financial products are traded worldwide and play a key role in the global economy. They derive their value from the level of a benchmark interest rate, such as the London interbank offered rate (‘LIBOR’) – which is used for various currencies including the Yen - or the Euro Interbank Offered Rate (‘EURIBOR’), for the euro. Deutsche Bank, which has yet to be fined by U.S. and UK regulators as part of separate investigations into benchmark interest-rate fixing, received the highest fine of 725.4 million Euros. Also, fined were JPMorgan and Citigroup, Swiss bank UBS and Britain's Barclays avoided fines of 2.5 billion Euros and 690 million respectively for revealing the existence of the cartel. 17. European Court of Justice (‘ECJ’) dismisses gas insulated switchgear cartel appeals by Siemens, Mitsubishi and Toshiba. The ECJ dismissed appeals by Siemens AG, Mitsubishi Electric Corp. and Toshiba Corp. against General Court judgments related to the gas insulated switchgear (‘GIS’) cartel which existed between 1988-2004 and imposed a fine of €750 Million. GIS is used as a major component for electric substations to convert electrical current from high to low tension and vice versa. Its function is to protect the transformer from overload and/or insulate the circuit and any faulty transformer. Siemens argued that its right to a fair trial had been breached because it was unable to cross-examine the ABB employees that revealed the cartel. It also challenged the evidence used by the Commission to substantiate its case. However, all the grounds of appeal were dismissed by the five senior judges of ECJ. The General Court had dismissed the action brought by Siemens AG and annulled the fines imposed on both Mitsubishi and Toshiba on the basis that the Commission had infringed the principle of equal treatment in calculating the fines 15. http://europa.eu/rapid/press-release_IP-13-1208_en.htm 16. http://curia.europa.eu/jcms/upload/docs/application/pdf/2013-12/cp130161en.pdf of the Japanese producers. In its judgment, the ECJ rejected Siemens’ claims that the General Court erred in determining the duration of Siemens’ participation and in the calculation of the fine imposed on it. Likewise, the ECJ also dismissed claims by Mitsubishi and Toshiba that the General Court erred in upholding the Commission’s findings that they participated in the infringement. The ECJ confirmed the fines and they were placed as €396.56 million and imposed on the German company Siemens AG. Mitsubishi Electric and Toshiba were fined €113.92 million and €86.25 million respectively. In addition, two Japanese companies were also ordered to pay an amount of €4.65 million jointly and severally. 18. EC fined four European North Sea shrimps traders for a total of €28 Million for operating a cartel in breach of EU antitrust rules The European Union has fined the traders Heiploeg, Klaas Puul, Kok Seafood (all of the Netherlands) and Stührk (of Germany) who operated between June 2000 and January 2009 and fixed the prices and share sales volumes of North Sea shrimps in Belgium, France, Germany and the Netherlands. Kok Seafood had been participating in the cartel since February 2005 and Stührk was involved in the price fixing in Germany from March 2003 to November 2007. The cartel existed in the form of informal bilateral contracts entered into by the parties. Klaas Puul received full immunity from fines under the Commission's 2006 Leniency Notice, as it was the first to provide information about the cartel. This cartel had undermined competition in the market for North Sea shrimps for several years, a market which is important for consumers in several EU countries, since the coordinated price level at which the retailers bought their shrimps directly affected the prices charged to end-consumer. The companies which are involved in the cartel have a high combined market share in the EEA which is estimated to be 80%. The purpose for which the cartel existed was to enhance profitability by stabilizing the supplier’s market share. The fines were set on the basis of the EU 2006 Guidelines on fines. The EC also took into consideration the companies’ sales of the products, the serious nature of infringement, its scope and duration. UNITED KINGDOM 19. UK Competition Commission directs Ryanair to reduce shareholding in Aer Lingus 17. http://europa.eu/rapid/press-release_IP-13-1175_en.htm UK Competition Commission (‘CC’) directed Ryanair Holdings plc (‘Ryanair’) to reduce its 29.8% shareholding in rival Aer Lingus Group plc (‘Aer Lingus’) to 5 per cent, accompanied by obligations on Ryanair to neither seek or accept board representations nor acquire more shares. The decision follows the prohibition by the European Commission (‘EC’) of Ryanair’s third attempt to acquire Aer Lingus. The CC ruled that Ryanair’s gradual acquisition of its existing minority shareholding created a relevant merger situation and had led or could have been expected to lead to a substantial lessening of competition between the airlines. The CC was also of the opinion that Aer Lingus’s commercial policy and strategy was likely to be affected by Ryanair’s minority shareholding, particularly because it was likely to prevent Aer Lingus from being acquired by, or combining with another airline and block special resolutions. 20. London Luton Airport Operations Ltd held liable for abuse of dominant position. The Arriva The Shires Ltd v. London Luton Airport Operations Ltd. case involved a claim by Arriva against Luton for abuse of its dominant position. Arriva had operated a bus route from the airport to London Victoria for 30 years. On each occasion that Arriva’s contract expired, it had been rolled forward. Subsequently, some changes took place in the management at Luton. Luton decided not to roll forward Arriva’s contract upon its expiry in April 2013. Instead, they invited coach operators to bid for the right to operate the route. Arriva submitted a bid, but the right was won by a competitor, National Express. National Express was granted the exclusive right to operate a route from Luton to London. The court held Luton liable for abusing its dominant position in awarding an exclusive concession to operate a service from the airport’s bus station to National Express for a period of seven years with a right of first refusal on services to new destinations in London. The court further went on to say that it was not necessary for there to be some commercial benefit to be gained by a dominant undertaking from its conduct for it to constitute an abuse. 18. http://www.competition-commission.org.uk/media-centre/latest-news/2013/Aug/cc-requires- ryanair-to-sell-shareholding 19. Arriva The Shires Ltd -v- London Luton Airport Operations Limited [2014] EWHC 64 (Ch). 21. Competition Commission prohibits merger between The Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust and Poole Hospital NHS Foundation Trust The proposed merger between the Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust and Poole Hospital NHS Foundation Trust was prohibited by the CC on the ground that there was not enough evidence to show overall benefits for local patients. The trusts provide a wide range of hospitals and community based services to patients. The CC went on to say that the merger would damage patient interest by eliminating competition, as opposed to the claims of the hospitals that the merger would allow them to provide a better range of specialty services. Further, the CC looked into the proposals given by the hospital and had doubts regarding analysis of the reconfiguration of A&E, in particular of the balance between the benefit of concentrating expertise on one site and the harm to patients who lived near the minor unit; that there was significant doubt that the maternity hospital would be built, given the pressure on NHS finances over the next few years; that there was similar doubt about the reconfiguration of haematology. SOUTH AFRICA 22. Competition Commission (‘Commission’) blocks Van Schaik from acquiring Juta Bookshops. The Commission blocked the merger between Van Schaik and Juta Bookshops as it is likely to result in substantial prevention of competition. The merger was exempted from notification being a “small merger” but the parties still notified the Commission. To ascertain the dynamics of the market, a questionnaire was submitted by the commission to students at the University of Stellenbosch, University of Cape Town, University of Johannesburg, Tshwane University of Technology Main and Arcadia Campus which helped in determining the impact of the merger to competition in the sector The Commission concluded that the merger created a market structure susceptible to abuse 20. http://www.competition-commission.org.uk/media-centre/latest-news/2013/Oct/cc- makes-final-decision-on-hospitals-merger 21. http://www.compcom.co.za/assets/Uploads/AttachedFiles/MyDocuments/Commission-blocks- Van-Schaik-from-acquiring-Juta-Bookshops.pdf and would be detrimental to students by reducing choice and resulting in higher prices for academic books. 23. Supreme Court of Appeal (‘SCA’) upholds an appeal against cartel activity allegedly entered into by Yara South Africa (Pty) Ltd and Omnia Fertilizer Ltd. The SCA upheld an appeal against a judgment of the Competition Appeal Court invalidating a complaint referred to the Competition Tribunal (‘Tribunal’) by the Competition Commission (‘Commission’) against cartel activity allegedly entered into by Yara South Africa Pty Ltd (‘Yara’) and Omnia Fertilizer Ltd (Omnia’). The dispute in this matter arose out of a complaint lodged with the Commission, citing Sasol Chemical Industries Proprietary’ (‘Sasol’) for imposing unfair price increases in respect of certain raw materials it supplied to the complainant company. Pursuant to the complaint, the Commission conducted an investigation which confirmed the price increase allegation and the claim of cartel activity made against Sasol, Omnia and Yara. As a result, the Commission referred the complaints to the Tribunal for adjudication. The legality of this referral formed the substance of the dispute. Omnia argued that the initial complaint brought to the Commission was directed against Sasol alone and, further, was limited to Sasol’s conduct as it related to price increases The SCA confirmed Omnia’s position, and that the complaint referred to the Tribunal indeed extended beyond the cause of action raised by the original complaint. However, the SCA went further and stated that complaints made by private persons may well trigger separate complaints and, in such cases, the Commission need only decide to initiate a new complaint, investigate that complaint and, if appropriate, refer that complaint to the Tribunal. 24. Inquiry into private healthcare sector granting Commission formal powers to conduct market inquiries. The Commission has announced that the Former Chief Justice Sandile Ngcobo will chair the five-member panel leading the market inquiry into the private healthcare sector in South Africa. This inquiry is the first of its kind, after amendments made to the 22. http://africanantitrust.com/2013/09/16/south-africa-supreme-court-of-appeal- upholds-competition-commission-appeal-relating-to-investigatory-powers/ 23. http://www.moneyweb.co.za/moneyweb-south-africa/competition- commission-announces-healthcare-inquir Competition Act, 1998 that came into effect on April 1 2013, granting the Commission formal powers to conduct market inquiries. The market inquiry will be a formal inquiry in respect of the general state of competition in a market for particular goods or services, without necessarily referring to the conduct or activities of any particular named firm. As part of its market inquiry powers, the Commission has the power to summon any person who is believed to be able to furnish information on the subject of the inquiry in question or who has possession of any documentation which has a bearing on that subject. 25. Black farmers approached the Competition Commission (‘Commission’) in bid to block Afgri R 2.5bn sale. Black farmers approached the Commission in a bid to block a R2.5bn takeover of agricultural services group Afgri, arguing that the sale to US investors is anticompetitive and will “further isolate blacks from the food value chain”. The 30,000-strong African Farmers Association of SA (‘Afasa’) approached the Commission to oppose the purchase of 100% of Afgri by AgriGroupe, a consortium consisting mainly of North American investors but including a local black economic empowerment (‘BEE’) group. Afasa claims it has government backing for its move. Afasa also claims that the R2.5bn price offered, which is based on Afgri’s issued shares, represents just a fraction of what the company’s assets are worth and what South Africa might have to pay to replace it. UNITED STATES OF AMERICA 26. Federal Trade Commission settles charges between Honeywell and Intermec. The Fair Trade Commission (‘FTC’) has approved a final order settling charges that Honeywell International Inc.’s acquisition of rival scan engine manufacturer Intermec Inc. was anticompetitive. Scan engines are used in products such as retail store scanners to translate an image into a digital format that can be interpreted and analyzed by a computer. The FTC’s complaint charged that the proposed acquisition would reduce competition in the U.S. market for two-dimensional (2D) bar code scanners. The companies and a third competitor, Motorola, are the only 2D scan engine makers in the 24. http://www.myburghinc.co.za/farmers-in-a-bid-to-block-foreign-direct-investment-of-afgri/ 25. http://www.ftc.gov/news-events/press-releases/2013 U.S. that have intellectual property portfolios broad enough to protect against potential patent-infringement lawsuits. FTC’s order preserves competition in the market for 2D scan engines by requiring Honeywell to license its and Intermec’s patents for 2D scan engines to Datalogic IPTECH s.r.l for the next 12 years. The FTC’s vote approving the final order was 4-0. The order enables Datalogic to gain access to patents required by it to enter the U.S. market and restore the lost competition. 27. Actavis, Inc. agrees rights and assets of three four generics to settle FTC charges. International drug manufacturer Actavis, Inc. has agreed to sell all rights and assets to four generic pharmaceuticals – three oral contraceptives and an osteoporosis treatment – to settle FTC charges that its proposed $8.5 billion acquisition of drug-maker Warner Chilcott plc would be anticompetitive. As part of the proposed settlement, Actavis is seeking FTC’s approval to sell the rights and assets for each drug to New Jersey-based Amneal Pharmaceuticals L.L.C. The settlement also requires Actavis to enter into agreements to supply generic versions of the banned drugs Femcon FE and Loestrin 24 FE to Amneal for two years and to relinquish its first-filer marketing exclusivity for generic Lo Loestrin FE and Atelvia products to preserve the incentives of the companies currently leading the patent litigations against Warner Chilcott related to those products. According to the FTC’s complaint, Actavis and Warner Chilcott are the only two significant manufacturers of generic Femcon FE, and the proposed acquisition would eliminate current competition between them in the market for this drug. For pharmaceutical products, the price generally decreases as the number of generic competitor’s increases. Accordingly, the reduction in the number of suppliers would likely have a direct and substantial effect on pricing. 28. FTC settles charges between aviation parts manufacturers. FTC has approved a final order settling charges that General Electric Company’s (‘GE’) acquisition of the aviation business of Italy’s Avio SpA (‘Avio’) would be anticompetitive. GE and Pratt & Whitney are the only two firms that manufacture 26. http://www.ftc.gov/news-events/press-releases/2013/09/ftc-settles-charges-actavis%E 2%80%99s-proposed-85-billion-acquisition 27. http://www.ftc.gov/news-events/press-releases/2013/08/ftc-approves-final-order- settling-charges-general-electrics engines used on Airbus’s A320 neo aircraft. The FTC’s complaint alleges that GE’s acquisition of Avio would substantially lessen competition, giving GE the ability and incentive to disrupt the design and certification of Avio’s accessory gearbox, or AGB, a critical component in Pratt & Whitney’s PW1100G engine. The settlement with the FTC, first announced in July 2013, now prevents GE from interfering with Avio’s development of the AGB for the PW1100G engine, or accessing Pratt & Whitney’s proprietary information about the AGB that is shared with Avio. The order also prohibits GE from interfering with Avio’s staffing decisions as they relate to its work on the AGB for the PW1100G engine and allows Pratt & Whitney to have representatives on site at the GE/Avio facility. CANADA 29. Competition Bureau not to appeal in the Visa and MasterCard case. The Competition Bureau (‘Bureau’) said it will not appeal a tribunal decision to dismiss a Bureau complaint that accused Visa and MasterCard of exerting too much power in forcing merchants to accept credit cards that carry higher fees. It will instead focus its efforts on finding other ways to address competition issues in the supply of credit card services in Canada. The Competition Tribunal sided with Visa and MasterCard in a ruling in July that found the card companies did not violate the Competition Act. However, it also found that restrictions imposed on merchants by Visa and MasterCard preventing them from applying a surcharge for those customers paying with credit cards may have had a negative effect on competition. The Bureau has tied up with the federal government and relevant stakeholders to bring about changes in the credit card market. In furtherance to the Bureau's ongoing efforts to promote the benefits of competition, it has been increasing its level of advocacy and regulatory interventions. 30. Individual Pleads Guilty to Charges for Fraudulent and Misleading Telemarketing Calls. 28. http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03614.html 29. http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03637.html The Bureau initiated investigation in August, 2006 and found that 2 telemarketing operators were using questionable tactics in Montreal. The above operation was shut down and it was also found that Mr. Tremblay contributed in the scheme and assisted in financial management. The Bureau’s investigation determined that some of the alleged tactics used during the telemarketing calls included implying that the caller represented a business that had an existing relationship with the victim’s company, indicating that certain products or services were required under government rules, or implying that the call was being made on behalf of a government agency. Gilles Tremblay was sentenced for 9 months of imprisonment and 12 months of probation. He pleaded guilty to 9 counts of deceptive telemarketing under the Competition Act and 2 counts of fraud under the criminal code. 31. Regulators approve Glencore and Agrium deal. The Competition Bureau reached an agreement with Agrium Inc. to resolve matters relating to acquisition of majority of Viterra Inc.’s retail agri-products business from Glencore International plc. This deal will make Agrium the dominant farm retailer in Canada. Agrium, already the biggest U.S. retail seller of fertilizer, chemicals and seed, will get 210 stores across Western Canada from Glencore in the deal approved by Canada's Competition Bureau,. The Bureau concluded that the acquisition would likely lead to a substantial lessening or prevention of competition in the retail supply of anhydrous ammonia and urea to farmers in certain areas of Alberta and Saskatchewan. Agrium's deal, however, has rankled some farmers, who wanted the regulator to scale back the purchase to prevent the company from becoming too powerful in the sale of fertilizer and other crop supplies. ISRAEL 32. Anti-trust authority opens investigation on Google-Waze deal. The Israel Antitrust Authority opened its investigation on whether Google’s purchase of Waze, a free downloadable navigation application with more than 50 million subscribers, should have obtained permission from the authority before the merger and whether it could create a monopoly in the Israeli market. Waze reported a purchase 30. http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03601.html 31. http://www.timesofisrael.com/antitrust-body-investigates-google-waze-merger/ price of $966 million in cash in its financial report for the second quarter of 2013. The purchase was completed in mid-May. Google has said that Waze will remain a separate service and an independent company. The antitrust authority has asked Google Israel’s general manager and Waze Israel’s CEO for financial and other information. The merger is also being investigated by the FTC in the United States as well as Britain’s Office for Fair Trading. 33. Israel's parliament passes the Law for Promoting Competition and Minimization of Centralization (‘Law’) The Law has introduced new requirements for taking into consideration market centralization and sectoral competitiveness. Along with this a Committee for Minimization of Centralization (CMC), chaired by the Antitrust Commissioner has been formed. To increase market competitiveness, the Law has introduced limitations on control by "Pyramidal Structure Corporations." The Law has defined control as the ability to direct the activities of a corporation and recognizes a presumption that a person who controls half of the shares or who enjoys half of the control in certain type of shares in a corporation is presumed to have control over the corporation.

Complied by TRIPTI MALHOTRA, Associate and NIDHI SINGH, Senior Associate, Luthra & Luthra Law Offices; Edited and Revised by KANIKA CHAUDHARY NAYAR, Senior Associate and G. R. BHATIA, Partner and Head of Competition Law Practice Group, Luthra & Luthra Law Offices.