June 2006

Anticompetitive practices

An economic assessment of damages actions for breach of antitrust rules: Foreword of the 2006 edition
Autorité de contrôle prudentiel
The Commission has shown, with its December 2005 Green Paper on damages actions for breach of EC antitrust rules and the joint Working Paper its willingness to develop “private enforcement” of EC community law. One of the main reasons to encourage private parties to bring damages actions related (...)

A Dutch Court of First Instance declares an exclusive distribution agreement on the market of ballast materials for the construction of railways void according to the Dutch Competition Act (Rotim/Ballast)
European Commission - DG HR
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Dutch Ministry of Security and Justice
Rotim is a Dutch company importing, selling and distributing ballast materials for railways. Basalt is a company established in Germany which produces ballast materials. In 1983, Rotim concluded an agreement with Basalt, the so-called “Liefervertrag’, according to which Rotim had the exclusive (...)

The European Commission issues new Fining Guidelines
Linklaters (London)
On Wednesday, the European Commission issued new Guidelines on the method of setting fines on companies infringing competition law - replacing the old 1998 Guidelines. The stated aims of the new Guidelines are to bring greater transparency and predictability to fining practice and to increase (...)

The Brussels Court of Appeal upholds the NCA decision holding that the exclusive joint selling of football television rights is not infringing Art. 81.1 EC (Jupiler League - Belgacom Skynet)
Leuven University
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VMMa
Relevant facts On 9 May 2005, the LBV, a joint selling body with the exclusive right to sell TV broadcasting rights of the Jupiler League on behalf of the participating football clubs, had awarded all the packages of rights to Belgacom Skynet. Telenet, Belgacom’s competitor on the Belgian (...)

The Austrian Supreme Court confirms the NCA’s decision fining a cartel between cement producers having planned a joint production facility on the basis of the new cartel law with references to EC Law ("Austrian Cartel Cement")
DORDA
This is a decision of the Austrian Supreme Court (OGH) acting as Court of Appeal in Cartel Matters (Rekursgericht in Kartellrechtssachen) to the decision of the Higher Regional Court in Vienna (Oberlandesgericht Wien) n° 25 Kt 183/04 and n° 25 Kt 184/04. The decision is remarkable, first because (...)

The Bulgarian Commission for Protection of Competition fines foreign-based suppliers for thwarting parallel imports of premium branded beverages (BG IN / Diageo Brands)
Kinstellar (Sofia)
By Decision n° 136 of 22 June 2006 (the “CPC decision”), the Bulgarian Commission for Protection of Competition (the “CPC”) fined three foreign-based beverage suppliers for preventing parallel imports of premium branded alcohols into Bulgaria. The CPC decision is noteworthy for introducing the (...)

A German Court prohibits long term gas supply agreements between the incumbent and regional and local distributors on the bases of both Art. 81, 82 EC and German competition law (E.ON Ruhrgas)
Hengeler Mueller (Dusseldorf)
Court of Appeal Düsseldorf (Oberlandesgericht Düsseldorf), 20 June 2006, VI-2 Kart 1/06 (V) - E.ON Ruhrgas Federal Cartel Office (Bundeskartellamt), 13 January 2006, Decision B 8 - 113/03, E.ON Ruhrgas I. Background The practice of long term gas supply agreements with purchase obligations of (...)

The Hungarian Competition Office establishes that the provisions on the advertising of legal services of the lawyers code of ethics restrict competition under Art. 81.1 EC (Hungarian Bar Association)
KNP Law Nagy Koppany Varga & Partners
Summary of Facts Proceedings were initiated ex officio by the Hungarian Competition Office (HCO) against the Hungarian Bar Association (Bar) in order to determine whether the following provisions of the Code of Ethics (Code) and the official position of its presidency (Position) qualify as (...)

The Hungarian Competition Office finds certain advertising restrictions on lawyers contrary to Art. 81 EC and its national equivalent (Hungarian Bar Association)
Oppenheim
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Oppenheim - Budapest
The Hungarian Competition Office (HCO) initiated proceedings against the Hungarian Bar Association (HBA) in order to verify whether certain rules of the HBA regulating advertising by attorneys as well as the content of webpages of attorneys infringe Article 81 of the EC Treaty and Article 11 of (...)

The Italian Competition Authority fines the main suppliers of jet fuel in the Italian market for anticompetitive practices (Rifornimenti Aeroportuali)
London School of Economics
On 9 April 2004, a complaint concerning alleged anticompetitive practices on the market for the supply and storage of jet fuel was lodged before the Autorità Garante della Concorrenza e del Mercato (hereinafter, the “NCA”). According to the complaint, major oil companies controlled the storage and (...)

The Hungarian Competition Office finds agreements and practices on the motor vehicles repair and maintenance service market to be contrary to Art. 81. EC (Hyundai/Mobis Parts Europe)
Gide Loyrette Nouel
Background / Facts of the case Hyundai Motor Company (“HMC”) started to reorganize its distribution system in Hungary from September 1, 2004 accordingly to the Regulation (EC) n° 1400/2002, of 31 July 2002, on the application of Article 81(3) of the Treaty to categories of vertical agreements and (...)

The Austrian Cartel Court finds that the cooperation in the savings bank sector violates Art. 81.1 EC but fulfils for the most part the criteria of Art. 81.3 EC (Erste Bank)
Reidlinger Schatzmann Rechtsanwälte
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Bpv Hügel (Vienna)
In a decision of 13 June 2006, the Austrian Cartel Court found that the cooperation agreements concluded between the majority of players in the Austrian savings banks sector violated Article 81(1) EC, but was for the most part exempt under Article 81(3) EC. In Austria, banking operations have (...)

The Cyprus Competition Authority imposes a fine on three pay-TV operators for restrictive exclusive distribution agreements (Channel LTV...)
International Transport Forum
On June 2, 2006 the Commission for the Protection of Competition (hereinafter C.P.C.) put an end to its ex-officcio investigation of the pay-TV industry in Cyprus imposing a total fine of CY£ 535 on Channel LTV, Multichoice Ltd (LTV’s platform administrator) and NETMED NV (Multichoice’s majority (...)

Unilateral Practices

The Italian competition authority closes proceedings for alleged breach of Art. 82 EC following commitments made by the undertaking on the audiovisual rights market (Mediaset - Diritti Calcistici II)
London School of Economics
Background and procedure The present case note concerns the follow-up of a decision to open proceedings adopted by the Italian NCA in March 2005 that was commented in a previous issue of e-Competitions (P. Ibañez Colomo, “ The Italian competition authority opens proceedings against Reti (...)

The French Competition Authority orders interim measures to address anticompetitive practives in the sector of collective nursery (Bouc’choux)
French Competition Authority (Paris)
Press Release published on the official website of the French Competition Authority. Sector of collective nursery: The Conseil de la concurrence orders association managing nurseries (Bouches-du-Rhône département) to suspend application of amendment to employees’ work contract to ensure good (...)

The Cyprus Competition Authority dismisses a complaint filed by a consumer for abuse of dominance on the Internet services market (Philipilides / Cyprus Telecommunications Authority)
International Transport Forum
On 26 June 2006 the Cyprus Commission for the Protection of Competition (C.P.C.) dismissed a complaint filed by Mr. Alexis Philippides, a consumer and client of the Cyprus Telecommunications Authority (CYTA), against the latter for abuse of dominance in the market of Internet connection (...)

The Austrian Highest Court of Appeal in competition matters confirms imposition of fines on Austrian film distributor for abuse of dominant position (Constantin)
European Court of Justice (Luxembourg)
In its judgment of 26 June 2006 in Case 16 Ok 3/06, the Austrian Highest Court of Appeal in competition matters (Oberster Gerichtshof als Rekursgericht in Kartellrechtssachen) confirmed the judgment of 21 December 2005, Case 26 Kt 95/03-50, of the Vienna High Court in competition matters (...)

The Canadian Federal Court of Appeal ruled that the Competition Tribunal had made an error in law in applying paragraphs 79(1)(b) and 79(1)(c) of the Competition Act and defined, for the first time, the meaning and framework of abuse of dominance provisions (Canada Pipe)
Université de Laval
Facts Canada Pipe Company Co., acting through its division Bibby Ste-Croix, offered distributors a loyalty rebate program so called the “stocking distributor program” (SDP) under which Canada Pipe gave significant rebates and discounts to distributors that purchase all of their requirements for (...)

The Spanish Supreme Court annuls previous decisions fining the telecom incumbent for abuse of dominant position (Retevisión / Telefónica)
Cuatrecasas, Goncalves Pereira (Madrid)
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European Commission - DG COMP
On June 20, 2006, the Spanish Supreme Court (Tribunal Supremo, “TS”) annulled the judgment of September 22, 2003, of the Spanish National High Court (Audiencia Nacional, “AN”). This last judgment partially upheld a Decision of the former Spanish Competition Authority (Tribunal de Defensa de la (...)

The Polish Competition Authority fines a sport news paper 500 000 € for unfair and abusive prices (Marquard Media Polska)
French National Research Agency (ANR)
On June 12, 2006 the President of the Office of Competition and Consumer Protection (hereafter : OCCP President) rendered his final decision concerning the practices of the publisher Marquard Media Polska Sp. z o. o. (hereafter : Marquard Media). This decision terminates the antimonopoly (...)

The Estonian Competition Authority ends proceedings against the telecommunications incumbent operator without finding abuse in the market of wholesale unbundled access to the local loop (Elisa / Elion)
EFTA Surveillance Authority
Introduction On October 17th, 2005 the Estonian subsidiary of a Finnish telecom operator Elisa filed a complaint with the Estonian Communications Board claiming that the Estonian telecom incumbent Elion Ettevõtted AS (Elion) had committed an abuse of its dominant position. According to the (...)

Mergers

The Turkish Competition Authority clears a merger in the chemicals sector subject to limitation of the duration of confidentiality obligation (SAN/BASF-Lanxess)
Esin
The operation BASF is a German company which is the parent company of BASF Group, a globally active company in the chemicals market. The activities of BASF can be subdivided into 5 different businesses: chemicals, plastics, performance products, agricultural products, oil-gas products. BASF is (...)

The Spanish Competition Authority clears in phase II a merger in the markets for passenger and freight maritime transport subject to removal of structural links with competitors and limitation of exclusive rights on port infrastructure (Trasmediterranea / Europa Ferrys / Viajes Eurotras)
PwC (Madrid)
The operation The operation involved the acquisition of Euroferrys and Viajes Eurotras by Trasmediterránea. The transaction contract included a non-compete agreement, whereby the shareholders of the purchased companies committed not to develop activities competing with Euroferrys, for a term (...)

The Dutch Competition Authority clears in phase II a merger in the rental housing and units market despite high market shares (Woonstichting Hertog Hendrik van Lotharingen / Woningstichting SWS))
Skadden, Arps, Slate, Meagher & Flom (Brussels)
Introduction On 22 November 2005, Woonstichting Hertog Hendrik van Lotharingen ("HHvL") and Woningstichting SWS ("SWS") notified their merger plans to the Dutch Competition Authority (the "NMa"). The parties to the merger offer rental housing and rental units in the municipalities surrounding (...)

The UK Office of Fair Trading clears a merger in the retail pharmacy services sector, subject to the divestment of four retail pharmacies (Admenta Lloyds/IPCC)
Eli Lilly and Company (London)
The operation Lloyds is owned by Admenta Holdings Limited, a subsidiary of the German company Celesio AG, which also owns the pharmaceutical wholesaler AAH. Independent Pharmacy Care Centres plc (IPCC) comprises 34 retail pharmacies and one drug store (the latter does not have an NHS (...)

The Portuguese Competition Authority blocks a merger in the highways operation sector but the Minister of Economy finally overturns the Competition Authority’s decision (AEA / Brisa - AEO)
Cuatrecasas, Goncalves Pereira (Lisbon)
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Cuatrecasas, Goncalves Pereira (Lisbon)
NB: This case is referrenced under two different dates: 7 April 2006 for the NCA’s decision, and 7 June 2006 for the Minister’s decision. The comment below concerns these two decisions. On 24 March 2005, Brisa - Auto-Estradas de Portugal, S.A. (“Brisa”), through its wholly-owned subsidiary Via (...)

The EU Commission conditionally clears a merger in the industrial and specialty gases industry (Linde / BOC)
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European Commission - DG COMP
"Mergers — Main developments between 1 May and 31 August 2006"* In June the Commission gave conditional approval to the proposed takeover of the UK-based company BOC by the German company Linde. Both companies are active in industrial and specialty gases. The initial market investigation found (...)

The EU Commission conditionally clears a merger between companies both active in industrial and specialty gases including helium (Linde / BOC)
European Commission - DG COMP
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European Commission
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European Commission - DG COMP
"Linde/BOC: Concentration in the industries of industrial gases, specialty gases and helium"* On 6 June 2006, the European Commission approved, subject to conditions, the acquisition by Linde AG (“Linde”) of The BOC group (“BOC”). Both companies are active in industrial and specialty gases (...)

The Spanish Competition Authority conditionally clears in phase II a merger in the wholesale distribution to pharmacy stores sector (Cofares/Hefame)
RBB Economics
The operation The operation involved the merger of Cofares and Hefame to create a new wholesale distributor of pharmacy products. Both Cofares and Hefame specialised in the wholesale distribution of pharmacy and parapharmacy products. They also provided other complementary services to (...)

The European Commission conditionally clears a merger in the steel industry (Arcelor/Mittal)
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European Commission - DG COMP
"Mergers — Main developments between 1 May and 31 August 2006"* In June the Commission granted conditional clearance to the proposed acquisition of the company Arcelor S.A.(Luxembourg) by the Mittal Steel Company N.V. Both parties to the transaction are major steel producers. Mittal Steel, a (...)

The Finnish Competition Authority clears a merger in the electricity market subject to divestitures and supply of virtual capacities (E.ON Finland/Fortum)
Fujitsu (Helsinki)
In its decision of June 22nd, 2006, the Finnish Competition Authority (the “FCA”) cleared the acquisition of control of E.ON Finland Oyj (“E.ON Finland” ), a member of the international E.ON AG Group, by Fortum Power and Heat Oy, a subsidiary of the Finland-based energy company Fortum Oyj (...)

The Bulgarian competition authority clears an acquisition in the filmmaking industry subject to conditions and upholds a State action immunity for gun-jumping (New Image Bulgaria/Boyana Film)
The Bulgarian Commission for the Protection of Competition (CPC or Commission) authorised the acquisition of the main national filmmaking studios, Boyana Film EAD (“Boyana”) by the US-based New Image Inc. and its Bulgarian subsidiary New Image Bulgaria EOOD (together, “New Image”). The main (...)

State Aid

The Irish High Court refuses an application for a stay in proceedings seeking recovery of State aid as a lowcost air carrier had failed to demonstrate that it would suffer irreparable harm if the stay was not granted (Ryanair)
Freshfields Bruckhaus Deringer (Tokyo)
Brief description of the facts and legal issues The High Court refused an application for a stay in proceedings seeking recovery of State aid as Ryanair had failed to demonstrate that it would suffer irreparable harm if the stay was not granted. Parties: The plaintiff: Kingdom of Belgium The (...)

The Dutch Supreme Court rules that the provisions of Art. 87 and 88 EC do not aim to protect private property, thus not affecting the validity of an expropriation order (Municipality of the Hague)
Hogan Lovells (Amsterdam)
The Supreme Court rules that the provisions of Article 87 and 88 EC Treaty do not aim to protect private property. Therefore, in the event that a construction project - resulting in the expropriation of private property - is incompatible with article 87 and 88 EC Treaty it will not affect the (...)

The Greek Supreme Court rules that a provision of national law, limiting the compensation due to those employed in the public sector upon retirement to a certain level, does not constitute aid within the meaning of Art. 87.1 EC ("Olympic Airway employee")
International Transport Forum
Factual background The applicant was employed by the Greek national flag carrier from 1968 to 1999, when he retired. Upon retirement, he was paid 12 million drachmas, pursuant to Mandatory Law 173/1967. In 2000, he brought an action before the court of first instance of Athens, asking for the (...)

The Dutch Court of Appeal finds that failure to notify a State aid measure with the European Commission does not constitute a tortious act of the beneficiary of such aid (Baby Dan)
Hogan Lovells (Amsterdam)
Factual Background Baby Dan A/S (Baby Dan) develops, produces and sells safety equipment for children from the age of 0-5 years. One of the products produced by Baby Dan is a safety stair gate under the name ’Danamic’. Baby Dan’s competitors, De Risse and WeDeKa, produce a similar stair gate (...)

The Amsterdam Court of Appeal refuses to recognise the tortious liability of recipients of State aids that have not been notified to the EC Commission in accordance with Art. 88.3 EC (Baby Dan)
European Commission - DG HR
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European Court of Justice (Luxembourg)
Court of Appeal of Amsterdam (Gerechtshof Amsterdam), 29 June 2006, Baby Dan A/S v. De Risse, WeDeKa, Bruca Producten B.V. and De Sluis Groep N.V. , Case 829/05 (LJN: AZ1425) Baby Dan is a company which produces security devices for babies, such as stair gates, i.e. gates impeding babies’ (...)

The European Commission approves State guarantee granted by the Austrian government in the banking sector (BAWAG-PSK)
European Commission - DG COMP
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European Commission - DG COMP
"Enforcement of State aid control in the banking sector: BAWAG-PSK"* On 27 June 2006 the Commission decided to approve a State guarantee of € 900 million granted to BAWAG-PSK by Austria. The guarantee provided collateral for specific bad loans with the consequence that the assets remained (...)

The Dutch Council of State rules that the transfer of the building site to a housing corporation for no consideration may constitute a form of State aid that should have been notified to the European Commission (Het Vergeten Dorp)
Hogan Lovells (Amsterdam)
Factual Background On 16 December 2004, the Municipality of The Hague approved a zoning plan in which the development of a large housing complex for, inter alia, 300 student housing units was approved. The construction of this housing complex required very substantial investments from the (...)

The Danish Competition Authority refuses to deal with a price fixing behaviour under State aid provisions of the Danish Competition Act (Virkninger af KMS’ prisfastsættelse)
Lexxion Publisher
Factual Background Public law provided that the National Survey and Cadastre (in Danish “Kort- og Matrikelstyrelsen” - hereafter “KMS”) could sell a number of different products - for example topographic maps and orthophotos - at prices which in the period 2000-2007, ranged from 44-70% of the (...)

The French Council of State finds that a parafiscal tax imposed in the field of producers of foie gras should not have been notified as State aid as no State resources were involved (Confédération paysanne)
Sheppard Mullin (Brussels)
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European Court of Justice (Luxembourg)
Factual Background The appellant seeks the annulment of the extension of an interprofessional agreement concluded in the legal framework of the field of foie gras. The decree which is disputed here extended the scope of a provision of the rural Code on the implementation of actions of (...)

The French Administrative Supreme Court holds that aids financed by interprofessional contributions levied by a professional organization do not amount to State aid (Confédération paysanne)
Kramer Levin Naftalis & Frankel (Paris)
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Eversheds Sutherland (Paris)
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Eversheds Sutherland (Paris)
French Supreme Administrative Court (Conseil d’État, 1ère et 6ème sous-sections réunies), 21 June 2006, Confédération paysanne, n° 271450 This case illustrates enforcement by national Courts of EC State aid rules. Pursuant to article 88(3) EC, national courts have jurisdiction to uphold the rights of (...)

The French Council of State applies the ECJ State aid Casino case law to dismiss the action of wolesalers claiming the unlawfulness of the tax to support the trade and craft sectors (TACA)
Sheppard Mullin (Brussels)
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European Court of Justice (Luxembourg)
Factual Background A federation of wholesalers, supported by undertakings active in the sector, seeks the annulment (excès de pouvoir) of a decree modifying the implementation of a tax to support the trade and craft sectors (TACA). The TACA is a progressive tax borne directly by retail stores (...)

Procedures

The Czech Competition Authority annuls in appeal its earlier decision invalidating the vehicle distribution agreements concluded between a car manufacturer representative and authorised dealers due to breach of defence rights (AuTec/BMW)
University Paris I Panthéon-Sorbonne
By the decision of 30 June 2006 rendered on appeal the President of the Office for the Protection of Competition (hereafter the “Office”) set aside the Office decision invalidating the vehicle distribution’s contracts and servicing agreements concluded between AuTec Group, a.s., the representative (...)

The Italian Government adopts a decree granting new powers to the NCA and removing certain restrictions to competition in the liberal professions (Bersani’s Decree Law)
Shearman & Sterling (Rome)
The Italian government has adopted, on 30th June 2006, a decree containing urgent measures aimed, inter alia, to improve the state of the Italian economy. Some of the measures envisaged in the decree are relevant to competition law. Among these, the most significant are : the granting of new (...)

The Portuguese Parliament approves the bill proposed by the Government establishing a leniency regime (Law 29 June 2006)
Sérvulo & Associados
The Portuguese Parliament has just approved, on the 29th of June 2006, the bill proposed by the Government (proposal 64/X) establishing for the first time in Portugal a leniency regime under competition law. The Act was adopted with the favourable votes of the Socialist Party, Social Democratic (...)

British Courts allow the US to seek extradition of a suspect on charges of price fixing and obstruction of justice (Ian Norris)
WTG Events
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Brown Brothers Harriman (BBH) (Luxembourg)
1. The facts The US Department of Justice (DOJ) is increasingly willing to pursue criminal price-fixing cartels affecting US markets. The Ian Norris decision is a landmark decision for the reason that it is the first time the US is seeking the extradition of a foreigner for an antitrust crime. (...)

A UK Court of Appeal holds that, when the Competition Appeal Tribunal set aside a decision of the OFT or sectoral regulators, and ordered a reinvestigation by the OFT or the regulator, the CAT does not have jurisdiction to set time limits for completion of that investigation (Ofcom & OFT/Floe Telecom)
University College London
Summary The Court of Appeal (England and Wales) has held that, when the Competition Appeal Tribunal (CAT) has set aside a decision of the Office of Fair Trading (OFT) or sectoral regulators, and has ordered a reinvestigation by the OFT or the regulator in question, the CAT does not have (...)

The New Belgian competition law enters into force as of the 1st October 2006
Sheppard Mullin (Brussels)
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French Competition Authority (Paris)
On October 1st, 2006, the new Belgian competition law entered into force. The objective of the reform was twofold: to bring Belgian law in line with recent developments at the EU level and reinforce the Belgian competition authority. The new Competition Act (further abbreviated as “the Act”) has (...)

Regulatory

The German telecommunications regulator imposes ex post price regulation on the incumbent in the retail fixed access and local and national voice calls markets in spite of critical comments of the EC Commission based on the Framework Directive (Deutsche Telekom)
Conseil départemental du Calvados
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Fréget - Tasso de Panafieu Avocats (Paris)
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French Competition Authority (Paris)
The decision of European Commission (the Commission ) is legally founded in article 7(3) of the 2002 Framework Directive on electronic communications networks and services (the “Framework Directive” ) which empowers the Commission, through its Society and Media, and Competition (...)

Public sector

The French Competition Council refers a bid-rigging case "likely to be qualified as criminal" to the public prosecutor (Furiani stadium)
WTG Events
French Competition council (Conseil de la concurrence), 6 June 2006, Decision n° 06-D-13, relating to practices implemented in the frame of a public tendering concerning the reconstruction of the stadium Armand Cesari in Furiani (“relative à des pratiques mises en œuvre dans le cadre d’un marché (...)

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