August 2007

Anticompetitive practices

The Chinese National People’s Congress adopts its first antimonopoly law
Pillsbury Winthrop Shaw Pittman (Beijing)
,
Paul Hastings (Beijing)
On August 30, the Standing Committee of the National People’s Congress adopted the Antimonopoly Law of the People’s Republic of China (the “AML”) after 13 years of drafting and deliberation and much anticipation by companies active in the Chinese market or competing against Chinese producers. (...)

A Hungarian Appeal Court upholds the NCA decision fining EUR 28 M construction companies in several public procurement procedures for motorway-construction (Betonút, Debmút, Egút, Hídépítő, Strabag)
bpv Jadi Nemeth Attorneys
Facts of the case July, August 2002: the National Motorway Co Ltd (NM) issues invitations to motorway construction works February 2003: ex-officio proceedings of the GVH commenced in order to establish whether the construction companies committed collusive bidding September and October (...)

A French Court of Appeal declares void a commissioning agreement containing a mutual exclusivity obligation on the basis of Art. 81 EC (Prim’Co)
White & Case (Paris)
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French Competition Authority
In a case dated 28 August 2007, the Court of Appeal of the city of Pau confirmed a judgment by the Tribunal de Grande Instance of Mont de Marsan in which the first judge annulled a Commissioning contract for violation of Article L. 420-1 of the French Commercial Code, the French equivalent of (...)

The Belgian Competition Council holds unlawful minimum tariffs imposed to members of a professional association on both national and EU provisions but without imposing any fine (Veterinaries Association)
Liège University - IEJE
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CÎME
The Veterinarians’ Association (“VA”) is a professional order which represents all the veterinarians established in Belgium. Its primary task is to establish a code of conduct (“the code of conduct”) which regulates various aspects of the veterinarian profession in Belgium. It also holds (...)

The Higher Regional Court of Düsseldorf specifies the criteria for concluding non-competition clauses to the detriment of minority shareholders (AnzeigenblattGU)
Gleiss Lutz (Munich)
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Milbank, Tweed, Hadley & McCloy (Munich)
In three cases dated 15 August 2007 and 26 June 2008 the German Higher Regional Court of Düsseldorf decided on the compatibility with competition law of non-competition clauses to the detriment of minority shareholders. In two of the cases, appeals against denial of leave to appeal are pending (...)

The German Competition Authority holds that risk pooling by insurance companies for insuring liability risks of auditing firms violates Art. 81 EC but excludes insurance for "Big 4" (Allianz - Axa - R+V - Ergo)
CRA International (London)
Summary Four large insurance companies active in the German market (Allianz, Axa, R+V and Ergo) had operated a joint venture for the purpose of insuring liability risks of auditing firms. The joint venture goes back to a state sponsored company founded in the 1930s, which the members of the (...)

The Bulgarian Supreme Administrative Court quashes an NCA decision penalising agreements thwarting parallel imports of premium branded beverages (Diageo Brands)
Kinstellar (Sofia)
The first two sections of the article are derived from another article by the same author concerning the NCA decision in the case ; see Dessislava Fessenko, The Bulgarian Commission for Protection of Competition fined foreign-based suppliers for thwarting parallel imports of premium branded (...)

The German Competition Authority prohibits insurance cartel for insurance for pecuniary loss liability risks of auditors and chartered accountants (Versicherungsstelle Wiesbaden)
Norton Rose Fulbright
In a decision dated 10 August 2007, the German Federal Cartel Office (FCO) prohibited four of the major German insurance companies from continuing to insure the pecuniary loss liability risks of auditors and chartered accountants jointly via a joint insurance pool (with an exemption for (...)

The Czech Office for the Protection of Competition terminates proceedings on alleged anticompetititive non-compete provision without imposing any fine (CS Sport/Tipsport)
Government of the Czech Republic
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European Court of Justice
Office for the Protection of Competition (Úrad pro ochranu hospodárské souteže), 8 August 2007, Ceskoslovensky Sport vs. Tipsport, nyr) On 8 August 2007, the Czech Office for the Protection of Competition terminated the proceedings in the Tipsport case, initiated in 2006, without adopting a final (...)

The Italian Competition Authority adopts a decision fining four ostomy device manufacturers for alleged bid rigging (Gare per la fornitura di dispositivi per stomia)
Ashurst
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Legance - Studio Legale Associato
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Pirelli
Introduction On 3 August 2007, the Italian Competition Authority (ICA) adopted a decision fining four ostomy device manufacturers for an alleged bid rigging. The decision is interesting as it shows the difficulty that pharmaceutical companies face when participating in a tender procedure. In (...)

The Italian Competition Authority enforces unfair commercial practice rules
Bonelli Erede Pappalardo (Rome)
Since Legislative Decree 146/2007 ("LD 146/2007") came into force last year, the Italian Competition Authority (the "ICA" or "AGCM") has mainly focused on promoting consumer welfare in terms of better prices, choice, quality, affordability, and safety, by enforcing the new rules on unfair (...)

The UK OFT imposes its highest ever fine and applies leniency in the course of civil and criminal law proceedings (British Airways)
Sanoma
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Clayton Utz (Sydney)
The United Kingdom’s Office of Fair Trading (OFT) recently confirmed that it had been investigating price coordination between British Airways plc (BA) and Virgin Atlantic plc (Virgin) in relation to long haul passenger and cargo businesses and flights to and from the UK. The OFT investigated (...)

Unilateral Practices

The Hungarian Competition Authority’s first investigation based on the Hungarian Trade Act ends with undertakings imposed in the large retail distribution sector without final decision on alleged abuse of dominant position (Tesco)
Hogan Lovells
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Hogan Lovells
The Hungarian Competition Authority (“HCA”) ordered Tesco to give undertakings in the first proceedings based on the Hungarian Trade Act without concluding whether or not there had been an infringement of the prohibition of abuse of dominant position. Summary In July 2006, the Hungarian (...)

The Italian Competition Authority closes investigations on the conclusion of new electricity supply contracts by imposing remedies to the incumbent operator (Enel)
Desogus Law Office (Cagliari)
The factual background On 18 October 2007 the Italian Competition Authority (AGCM) closed investigations on the Enel Distribuzione (ED) policy for the conclusion of new electricity supply contracts after ED committed to conform the above policy to competition rules. The market concerned is (...)

The Italian Competition Authority accepts for the first time commitments but also imposes fines in the same case (Vodafone / TIM / Wind)
Paul Hastings (Milano)
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Linklaters (Milan)
On 3 August 2007, the Italian Antitrust Authority ("IAA") closed proceedings initiated against three telecom companies (Tim, Vodafone and Wind) with a decision which affirmed important principles in Italian procedural competition law. There is, however, room for debate as to whether the (...)

The Italian Competition Authority accepts commitments from the main mobile phone operators following investigations on alleged abuse of joint dominant position (Vodafone / TIM / Wind)
Studio Legale DDPV
The Italian antitrust Authority closed an investigation against the main mobile phone operators in Italy (Telecom Italia Mobile SpA , Vodafone Omnitel and Wind) for an alleged abuse of their joint dominant position in the markets of telecommunication services in Italy. In particular, the (...)

The Bulgarian Competition Authority revisits the practices on the market for granulated slag, this time under the angle of abuse of dominance (Kremikovtzi)
Commission for the Protection of Competition, 2 August 2007, Decision n° 628, Kremikovtzi (MSWord Doc.) In July 2006, the Bulgarian Commission for the Protection of Competition (CPC) prohibited a de facto exclusive agreement between Cemeco OOD (Cemeco), a cement producer, and the steel plant (...)

The Lisbon Court of Commerce quashes the Competition Authority’s first ever abuse of dominant position infringement decision in the underground ducts’ telecom network access case, upheld on appeal (PT Comunicações)
European Court of Justice
I. The case, the PCA’s decision and the judgments After receiving complaints from telecom undertakings “TvTel Comunicações” and “Cabovisão”, the Portuguese Competition Authority (hereinafter “PCA”) launched an investigation in 2003 into the allegations that Portugal Telecom Comunicações (hereinafter (...)

Mergers

The French Minister of Economics cleared a merger in the sector of home equipment with remedies, including divestiture (CAFOM/FINCAR)
University Paris II Panthéon‑Assas
The operation By a letter dated 31 August 2007, the French Minister of Economy, Finance, and Employment following the French Competition Council’s opinion dated 16 June 2007, authorised the acquisition of the supply department of Financière Caraïbe (“FINCAR”) by Central d’Achat France Outre Mer (...)

The Spanish Court for the Defence of Competition proposes the clearance, with certain conditions, of a merger in the maritime transport sector (Balearia / Buquebus)
Herbert Smith Freehills (Madrid)
The Court for the Defence of Competition has proposed the Government not to oppose a merger between two companies that provide fast-ferry services between the South of Spain and the North of Africa, including the Spanish city of Ceuta. This transaction consists in the acquisition of Buquebus, (...)

The Romanian Competition Council, after having rejected first remedies proposed, cleared in phase II a foreign to foreign merger with remedies similar to those accepted by the EC Commission (Kronospan-Constantia)
Fruth Oprisan
The operation At the international level, the economic concentration took place by acquisition of sole control over some assets of the Group CONSTANTIA INDUSTRIES AG by the company KRONOSPAN HOLDING GmbH. Both the acquiring and the acquired undertakings achieve a certain turnover in Romania . (...)

The Turkish Competition Authority cleared a merger in the chewing gum market subject to divestiture and limitation of the duration of the confidentiality obligation (Greencastle-Intergum)
Esin
The operation Greencastle is a wholly owned subsidiary of Cadbury Schweppes which is London based public company. Cadbury Schweppes is active in the business of production and marketing of confectionery and beverages. At the time of the notification, Cadbury was active in the Turkish (...)

The Turkish Competition Board clears a merger in the chewing-gum market conditional to the transfer of a brand license and appoints a trustee (Intergum/Cadbury Schweppes)
Mey
,
Derman Düren Akol
Greencastle Drinks Limited (“Greencastle Drinks”) applied on June 8, 2007 to the Turkish Competition Board (the “Board”) for obtaining the approval of the latter regarding the transfer of 100% of the shares in (i) Intergum Gida San. ve Tic. A.S . (“Intergum Gida”), (ii) Dandy Sakiz ve Sekerleme (...)

The Brussels Court of appeal invalidates a decision by the Belgian Competition Council to lift the restrictions imposed on a cinema chain merger, and inter alia prohibition of exclusivity/priority clause (Kinepolis)
European Commission - DG COMP (Brussels)
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European Commission - DG COMP (Brussels)
Introduction On the 23rd of August 2007, the Brussels Court of Appeal accepted the request of UGC, Utopolis and FCB to revoke a decision by the Belgian Competition Council concerning the cinema chain Kinepolis. This latter decision lifted the restrictions imposed on Kinepolis in 1997 when the (...)

The Italian Competition Authority clears a merger between stock exchange markets without imposing conditions (London Stock Exchange/Borsa Italiana)
National University of Singapore
Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato, ’“AGCM”), 22 August 2007, London Stock Exchange/Borsa Italiana, Case C8699, Provvedimento n° 17132, Bollettino n° 30/2007 On 22 August 2007, the Italian Competition Authority authorised the acquisition of the control of (...)

The Dutch Competition Authority clears merger after having serious doubts in first phase decision (Coöperatie Bloemenveiling Aalsmeer)
De Nederlandsche Bank (DNB)
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Smeets Van Empel advocaten (Amsterdam)
1. Introduction On 21 August 2007, the Dutch Competition Authority (Nederlandse Mededingingsautoriteit,hereinafter "NMa") cleared a merger between Coöperatie Bloemenveiling Aalsmeer U.A. ("Bloemenveiling Aalsmeer") and Coöperatieve Bloemenveiling FloraHolland U.A. ("FloraHolland"). Both (...)

The European Commission clears merger between two US providers of electronic travel distribution services (GDS) (Travelport, Worldspan)
European Commission - DG COMP (Brussels)
"Bargaining and two-sided markets: the case of Global Distribution Systems (GDS) in Travelport’s acquisition of Worldspan"* As emphasised in a series of recent articles, the two- (or multi-)sided nature of a market should explicitly be considered in evaluating the existence and magnitude of (...)

The European Commission clears a merger in the electronic travel distribution services through a global distribution system (GDS) (Travelport/Worldspan)
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European Commission - DG COMP (Brussels)
"Merger control: Main developments between 1 May and 31 August 2007"* On 21 August the Commission cleared Travelport‘s proposed acquisition of sole control of Worldspan. Both companies provide electronic travel distribution services through a Global Distribution System (GDS). There were (...)

The French Minister for Economics sanctions for the first time for a breach of merger remedies (Carrefour-ED/Treff)
Freshfields Bruckhaus Deringer (Paris)
In its decision dated 7 November 2003, the Minister had granted conditional clearance to the acquisition by the Carrefour group, via its subsidiary Erteco, of the company Sonnenglut Weinkellerei (hereinafter Sonnenglut), owner of food discount stores operating under the brand Treff Marché. (...)

The European Commission refers the examination of a proposed acquisition in the satellite communications services to the UK OFT (Apax Partners /Telenor Satellite)
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European Commission - DG COMP (Brussels)
"Merger control: Main developments between 1 May and 31 August 2007"* In May the UK Office of Fair Trading (OFT) formally requested the Commission, pursuant to Article 22 of the Merger Regulation, to examine the proposed acquisition of Norwegian Telenor Satellite Services, a company providing (...)

The Dutch Competition Authority clears an acquisition of a radio while reviewing exclusive broadcasting rights (Radio 538 - Talpa/RTL)
Freshfields Bruckhaus Deringer (Amsterdam)
The Dutch Competition Authority (NMa) cleared on 13 August 2007 the proposed acquisition because it concluded that the transaction will not result in the creation or strengthening of a dominant position. The transaction entailed the creation of a new entity ‘Newco’ by RTL NL . Talpa would (...)

A German Court specifies the requirements and the procedure for granting an exemption to the merger non-consummation rule before NCA clearance (Phonak/GN ReSound)
Angermann
Facts of the case A Swiss undertaking and a Danish one, both producing technology for hearing aids, intended to merge, and notified the concentration to the German competition authority, the Federal Cartel Office (FCO), due to the facts that the participating undertakings reached the turnover (...)

The European Commission clears, subject to divestiture, a merger in the components manufacturing industry (Luvata/Eco)
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European Commission - DG COMP (Brussels)
"Merger control: Main developments between 1 May and 31 August 2007"* On 3 August the Commission approved the proposed acquisition of the Italian company Eco by the Finnish group Luvata. The Commission’s decision was conditional upon the divestiture of one of Luvata‘s plants in Europe. Luvata (...)

The Dutch Competition Authority sets out a brisk pace in the mental healthcare sector (AMC De Meren - Jellinek Mentrum)
De Brauw Blackstone Westbroeck (Amsterdam)
Healthcare providers, such as general practitioners, pharmacists, physiotherapists, providers of exceptional medical care under the Exceptional Medical Expenses Act, hospitals and convalescent centres are undertakings. The same applies to suppliers of medical aids, pharmaceutical wholesalers (...)

The Spanish Competition Authority cleared in phase II with remedies a merger in the maritime freight and passenger transport sector, after review and acceptance of the remedies by the Council of Ministries (Balearia / Buquebus)
PwC (Madrid)
The operation The merger involved the acquisition of 100% of Buquebus shares by Gestión Naviera, the parent company of Balearia. The transaction agreement contained a non-compete clause, which committed the selling party not to compete with the merged company in the market for freight and (...)

The French Minister of Economy grants clearance to a merger in the markets for milk collection and milk supply (Orlait/Comalait)
Darrois Villey Maillot Brochier
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Scemla Loizon Veverka & de Fontmichel (SLV&F)
In its decision dated 2 August 2007, the French Minister granted clearance of Orlait’s acquisition of direct sole control of Comalait and indirect sole control of all Comalait’s subsidiaries. Orlait is active in the sectors of long-keeping milk trading and supply, and of long-keeping cream (...)

The French Minister of Economy reviews the risk of coordinated effects and grants second-phase clearance to a concentration in the press sector, following the annulment by the Supreme Administrative Court of a previous authorisation decision that failed to find joint control (L’Est Républicain / BFCM / Socpresse)
Allen & Overy (Paris)
Letter of the Minister of Economy of 28 August 2007 authorising a concentration in the publishing sector - BFCM / L’ Est Républicain / EBRA / Delaroche, C2007-27 (Lettre du ministre de l’économie, des finances et de l’emploi du 28 août 2007, au conseil de la BFCM et de L’ Est Républicain, relative à (...)

State Aid

The Danish Competition Authority, applying national provisions on State aid, orders municipalities to re-calculate and adjust the settlement prices in relation to municipal services (Fritvalgspriser på ældreområdet)
Lexxion Publisher
Factual Background The Danish Competition Authority (DCA) has received a number of complaints from private companies which provide eldercare services to the Danish municipalities. The complaints concern in particular the fact that the prices paid by the municipalities (the “settlement prices”) (...)

The Dutch District Court holds that the reimbursement of stranded costs - qualified by the European Commission as State aid - is included in the scope of an earlier positive Commission decision (Nederlands Elektriciteit)
Hogan Lovells (Amsterdam)
Factual Background In 1989, four electricity producers decided to collaborate on a demonstration project for coal gasification. The company incorporated to implement the project was named Demkolec and was a subsidiary of N.V. SEP (SEP), which was jointly owned by the collaborating electricity (...)

Procedures

The Austrian Cartel Court opposes to damages action ruling that an application seeking a declaratory judgement on a past infringement lack legitimate interest (MGE-RB Parndorf)
Salzburg University
On 31 August, 2007, the Austrian Cartel Court rejected an application seeking a declaratory judgement on a past infringement of Austrian and EC provisions on the grounds that the applicants failed to prove a legitimate interest. Background MGE-RB Parndorf GmbH (“MGE-RB”) operates a factory (...)

An Austrian Court awards for the first time damages to the customers of cartel members ("Driving schools cartel")
DORDA
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DORDA
Regional Civil Court of Graz as Appellate Court, 17 August 2007, Case n° 17 R 91/07p, "Grazer Fahrschulen", not yet published Background For several years the Austrian Federal Chamber of Workers and Employees ("AK") has closely monitored prices of driving schools in different regions of (...)

A Portuguese Court of Commerce declares as partially extinct the infringement procedure against owner of a television channel and cable television operator which gave rise to the imposition of a € 3 M fine (PT Multimédia, CATVP and SIC)
Samsung (Portugal)
On 10 August 2007, the Lisbon Court of Commerce (Court) declared as partially extinct the infringement procedure regarding SIC (owner of a Portuguese private television channel), PT Multimédia and TV Cabo (cable television operator) within the appeal of the decision issued by the Portuguese (...)

A Portuguese Court of Commerce declares as partially extinct the infringement procedure against owner of a television channel and cable television operator which gave rise to the imposition of a € 3 M fine (PT Multimédia, CATVP and SIC)
Samsung (Portugal)
On 10 August 2007, the Lisbon Court of Commerce (Court) declared as partially extinct the infringement procedure regarding SIC (owner of a Portuguese private television channel), PT Multimédia and TV Cabo (cable television operator) within the appeal of the decision issued by the Portuguese (...)

A German Court deals with Art. 81 EC and § 1 ARC as part of the ordre public with respect to the enforcement of foreign arbitral awards (Schott)
Eberhard Karls University
I. Preliminary remarks and facts of the case The field of civil antitrust litigation is much debated about with respect to the enforcement of national and European competition laws before the German courts. Yet also important and even more complex in some way is the question how and to what (...)

A Dutch Court holds that a State aid to a coal gasification plant notified to the EU Commission is included in the scope of a former positive Commission decision and refuses to await the second Commission’s decision (Demkolec/NV SEP)
European Commission - DG HR
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European Court of Justice
The case at hand concerns an experimental coal gasification plant, Demkolec, owned by NV SEP, the legal predecessor of Nederlands Elektriciteit Administratiekantoor (NEA). The Dutch public authorities decided to support the building of Demkolec for environmental reasons. Since the beginning, (...)

The UK Office of Fair Trading inflicts a record penalty of € 175 M - highest penalty ever imposed - for price fixing over long-haul surcharges following criminal and civil investigations (British Airways)
WTG Events
Office of Fair Trading, August 1st 2007, British Airways PLC , not yet published OFT Press Release, August 1st2007, n° 113/07, British Airways to pay record £121.5m penalty in price fixing investigation British Airways PLC (“BA”) has been hit with a £121.5 mln (€174.40 mln) fine by the Office of (...)

Regulatory

The Chinese Parliament adopts a new Anti-Monopoly Law
Jones Day (Beijing)
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Winston & Strawn (New York)
After 14 years of consultation, deliberation, and delays, China finally adopted a new Anti-Monopoly Law (« AML ») on August 30, 2007, which became effective on August 1, 2008. The first comprehensive antitrust law in China, it presents serious compliance challenges and risks for Chinese and (...)

The Chinese Congress adopts a new Anti-Monopoly Law implementing wide ranging reforms across Chinese antitrust and merger controls
Jones Day (Beijing)
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Jones Day (Beijing)
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Winston & Strawn (New York)
China’s National People’s Congress (« NPC ») finally adopted a new Anti-Monopoly Law (« AML ») in August after more than 10 years of drafting. The law will take effect on August 1, 2008. I. Overview The new AML is a tremendous leap forward for China, bringing it squarely into the modern world of (...)

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