October 2006

Anticompetitive practices

The UK Competition Appeal Tribunal upholds the NCA’s decision imposing fines on check pad suppliers guilty of colluding (Achilles Paper Group/OFT)
Brown Brothers Harriman (BBH) (Luxembourg)
On 31 October 2006, the UK’s Competition Appeal Tribunal (“CAT” or “Tribunal”) unanimously upheld the Office of Fair Trading’s decision (“OFT”) imposing financial penalties on check pad suppliers guilty of horizontal price fixing. This decision was challenged by Achilles Paper Group Limited (...)

The Lithuanian Competition Authority concludes that sharing of confidential information in the wholesale paper distribution markets violates both national competition provisions and Art. 81 EC (Schneidersöhne Baltija)
Gibson Dunn
Competition Council of the Republic of Lithuania (Lietuvos Respublikos konkurencijos taryba), 26 October 2006, UAB Schneidersöhne Baltija, UAB Antalis Lietuva, UAB Libra Vitalis, UAB Lukas and UAB MAP Lietuva, “Wholesalers of paper”, Case n° DS-13 On 26 October 2006, the Lithuanian Competition (...)

The Court of Appeal of England and Wales confirms that a combination of vertical contacts between a manufacturer and retailers can spill over into a horizontal agreement between the retailers, even where there has been no direct contact between them (Argos, Littlewoods and JJB)
Herbert Smith Freehills (London)
All views expressed are strictly personal views of the author. The present case note does not constitute legal advice and should not be relied on as such. On 19 October 2006, the Court of Appeal issued its ruling in an appeal involving Argos, Littlewoods and JJB under the Competition Act (...)

The Court of Appeal of England and Wales dismisses appeals from two decisions of the CAT which had dismissed appeals from two decisions of the OFT finding resale price maintenance and price fixing in respect of replica football kit, toy and games (Argos, Littlewoods, JJB Sports)
Addleshaw Goddard (London)
Description of the impugned case This joint judgment concerned two cases of straightforward RPM concerning, respectively, replica football kits and Hasbro toys and games, that broadened into horizontal collusion. Each case involved vertical RPM agreements and a «horizontal« collusive agreement (...)

The UK Court of Appeal rules on discussions on vertical basis and restricts the CAT’s test (Argos and Littlewood - JJB Sports)
British Institute of International and Comparative Law
Judgment on liability On 30 July 2003, the Competition Appeal Tribunal (“CAT”) handed down its judgment in the Argos and Littlewoods case (hereafter Hasbro) remitting the decision under appeal back to the OFT. On 21 November 2003 (Office of Fair Trading (OFT), 21 November 2003, Decision n° (...)

The Hungarian Competition Office fines three IT companies for collusion in public procurement procedures (Synergon)
Dechert (London)
The Competition Council of the Hungarian Competition Authority has imposed heavy fines on three companies operating in the IT sector (namely Synergon Informatikai PLC- “Synergon”, Montana Információtechnnológiai és Kommunikációs PLC- “Montana” and Hewlett-Packard Magyarország LLC- “Hewlett-Packard”) for (...)

A Hungarian Court applies for the first time both EC and national competition law while sanctioning an exclusive ticketing agreement (Budapest Sports Stadium)
bpv Jadi Nemeth Attorneys
This case was among the first in which EC competition law was applied by a Hungarian court. In October 2006 the Metropolitan Court of Budapest had rejected the appeals of the plaintiffs, and thus confirmed the legal assessment of the decision of the Competition Council of the Hungarian (...)

The French Competition Authority accepts the commitments made to address competition concerns regarding the access of local radios to national advertisement (GIE Les Indépendants)
French Competition Authority
Access of local radios to national advertisement: The Conseil de la concurrence accepts the commitments of GIE Les Indépendants.* In its decision dated October 6th 2006, the Conseil de la concurrence has accepted the commitments proposed by the GIE (economic interest group) Les indépendants, (...)

The French Competition Council agrees to commitments from Hi-Fi and Home Cinema equipment suppliers in order to allow their selective distributors to carry out online selling (Hi-Fi/Home Cinema)
Simmons & Simmons (Paris)
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Hewlett Packard (Boulogne-Billancourt)
On 5 October 2006, the Conseil de la concurrence (French Competition Council) issued a decision in which it accepted to withdraw the litigation proceedings after three of the main companies active in the Hi-fi and home cinema equipment sector (Bose, Focal JM Lab and Triangle) agreed to (...)

The French Competition Authority issues an opinion regarding a sharing of confidential information system designed for hotels under both Art. 81 EC and national provisions (CCI Mulhouse)
White & Case (Paris)
Competition Council (Conseil de la concurrence), 5 October 2006, Opinion 06-A-18, regarding an occupancy indicator project of Mulhouse region hotels (“relatif à un projet d’indicateur d’occupation des hôtels de la région de Mulhouse”) The Background Following a request lodged by the Chamber of (...)

The Turkish Competition Board fines 485 000 € a cement company for price fixing (Lafarge)
Jones Day (Paris)
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Gide Loyrette Nouel
Turkish Competition Board (Türk Rekabet Kurulu), 2 October 2006, Akcansa, Lafarge, Oyak Beton, Nuh Beton, Set beton, Decision n° 06-68/927-266 Pursuant to Article 4 of the Law on the Protection of Competition n° 4054 (“Competition Law” ; See Ercüment Erdem, “Overview on Turkish Competition Law”, (...)

Unilateral Practices

The UK Gas and Electricity Markets Authority accepts commitments following a complaint from an Independent Connection’s Provider against anti-competitive conditions of electricity connection services (SP Manweb)
In October 2002, the Office of Gas and Electricity Markets (Ofgem) received a complaint from an Independent Connection’s Provider (ICP) alleging that SP Manweb, which is wholly owned by Scottish Power UK plc Group, had engaged in anti-competitive behaviour when providing non-contestable (...)

The Malta Commission for Fair Trading upheld as abusive the commercial practices of a private hospital and quashes subsidiary legislation stipulating prices of blood products supplied to private medical undertakings (Malta’s National Blood Transfusion Service)
This case started with a complaint filed with the Director of the Office for Fair Trading (hereinafter referred to as ‘Director’) by Medical Laboratory Services Limited and Golden Shepherd Group Limited (hereinafter referred to as ‘complainants’), two undertakings operating different private (...)

The Lithuanian Competition Authority fines the former telecom incumbent for margin squeeze limiting access to ADSL broadband internet access service (Teo)
Lithuanian Competition Council
On 5 October 2006 the Lithuanian Competition Council (CC) issued a decision establishing a fine of LTL 3,011,000 (approx. EUR 872,046) on TEO LT, AB (TEO) for the abuse of a dominant position prohibited by Article 9 of the Law on Competition. This was the third time that TEO, a former telecom (...)

Mergers

The Belgian Competition Council rules on the extent of veto rights necessary and sufficient for a minority shareholder to exert joint control over a JV within the meaning of merger control (Belgacom - Vodafone Belgium - Belgacom Mobile)
Loyens & Loeff (Bruxelles)
In its Belgacom - Vodafone Belgium - Belgacom Mobile merger decision, the Belgian Competition Council cleared in phase I the increase of Belgacom’s stake in Belgacom Mobile from 75% to 100%, through the acquisition of Vodafone Belgium’s 25% stake. The decision is interesting for two reasons. It (...)

The Norwegian Competition Authority approved a merger in the frozen food sector subject to behavioural remedies, principally price restraints and non-discrimination (Findus/Gro Industrier)
Ernst & Young
The operation The Norwegian Competition Authority (NCA) was notified of the proposed merger of Findus Norge AS (Findus) and Gro Industrier AS (Gro) on 30 November 2006. Findus is a food products company which distributes frozen foods to grocery retail chains and institutional customers in (...)

The Dutch Competition Authority clears a merger in the retail distribution sector subject to stores divestment (Ahold - Konmar Superstores)
Netherlands Authority for Consumers & Markets (The Hague)
,
Eversheds (Amsterdam)
The operation Ahold is a listed company active in the Netherlands through its daughter companies in the field of consumer goods. Laurus is active in the field of supermarkets. The operation entails the acquisition of the assets of 29 Konmar supermarkets by two newly established Ahold daughter (...)

The German Federal Cartel Office prohibits a US-US merger in the laser area cleared by the US Department of Justice, showing its reluctance to apply a more effects-based short-term approach instead of a rather long-term structural approach (Coherent / Excel)
Gleiss Lutz (Munich)
,
Milbank, Tweed, Hadley & McCloy (Munich)
On 25 October 2006, the German Federal Cartel Office prohibited the proposed merger between the two American companies Coherent, Inc. (Coherent) and Excel Technology, Inc. (Excel), each a market leader in the laser area . Facts Coherent is an American company, listed on the US stock exchange, (...)

The Irish Competition Authority blocks merger in building materials sector (Kingspan / Xtratherm)
Baker Botts (Brussels)
,
Merilampi Attorneys
Irish Competition Authority (An tÚdarás Iomaíochta), 25 October 2006, Determination of Merger Notification M/06/039 - Kingspan/Xtratherm , Section 21 of the Competition Act 2002, Proposed acquisition by Kingspan Group plc of Leanort Group Introduction On 25 October 2006, the Irish Competition (...)

The UK Competition Commission cleared a merger in the market for bus and coach services, subject to a divestment remedy (Stagecoach/Scottish Citylink)
Université de Genève
The operation On 23 October 2006, the UK Competition Commission (CC) ex-post cleared the joint-venture between Stagecoach Bus Holdings Limited (Stagecoach Bus) and Braddell plc (Braddell), conditional on the divestment of some of the joint-venture’s ‘Scottish Citylink’ branded (Braddell) or (...)

The Finnish Supreme Administrative Court rules that conditions on merger clearance must be implemented notwithstanding an appeal (Fortum Power and Heat/E.ON Finland)
Roschier (Helsinki)
,
Roschier (Helsinki)
The Finnish Market Court is awaited to hand down its decision regarding the appeal lodged by Fortum Power and Heat Oy (hereinafter “Fortum”), a subsidiary of Fortum Oyj, against the conditions imposed by the Finnish Competition Authority (hereinafter the “FCA”) on the clearance of the acquisition (...)

The French Competition Council uses economic models in a phase II assessment of a merger of salmon producers (Marine Harvest - Pan Fish)
RBB Economics (Brussels)
Introduction On 20 October 2006, the French Competition Council recommended that the proposed acquisition of Marine Harvest NV by Pan fish ASA be cleared, subject to remedies. The main competitive concern raised by the proposed transaction related to potential unilateral effects in the (...)

The UK Telecommunications Regulator opens the door to further consolidation in the radio sector (Radio Advertising Market Research)
Dickson Minto (London)
1. Summary On 19 October 2006 Ofcom, the communications industry regulator in the UK, published research which could have a major impact on the way in which the UK competition authorities assess radio mergers. The research shows that the pricing of radio advertising is constrained by (...)

The UK Office of Fair Trading clears a merger in the retail market for new and used cars, subject to the divestment of four car dealerships (Pendragon/Reg Vardy)
Added Value Capital Partners (AVCP)
The operation Pendragon plc (“Pendragon”) is active in the UK in the retail sale, contract hire and leasing of new and used vehicles and associated servicing, repair and spare part supply services. Reg Vardy plc (Reg Vardy) is also active in these sectors. Pendragon acquired Reg Vardy on 14 (...)

The French Minister of Economics clears a merger in the markets of specialized TV channels with behavioural remedies (France Télévisions-TF1)
University Paris II Panthéon‑Assas
The operation By a letter dated 13 November 2007, the French Minister of Economy, Finance, and Employment authorized the merger between the public audiovisual group France Télévision (“France Télévisions”) and TF1, a private audiovisual group. The merger created “France 24”, the French TV channel of (...)

The Belgian Competition Council cleared a merger in the markets for parking area concessions and motorway restaurant services subject to remedies, including prohibition on bidding for new concessions, or prolonging existing ones and termination of certain supply obligations and fidelity rebate schemes (Autogrill/Carestel)
Freshfields Bruckhaus Deringer (Hong Kong)
The operation By decision dated 9 October 2006, the Belgian Competition Council authorised the merger between Autogrill and Carestel subject to remedies. The merger combined the parties’ fast food and commercial catering activities. The market(s) concerned by remedy(ies) The Belgian (...)

The UK Office of Fair Trading clears a newspaper publishing merger, subject to the divestment of a farming magazine in Northern Ireland (Johnston Press/Local Press)
Added Value Capital Partners (AVCP)
The operation Johnston Press plc (“Johnston”) publishes local newspapers throughout the UK, including 23 local weekly newspapers and one farming periodical in Northern Ireland. Local Press Ltd (“Local”) publishes eight newspapers in Northern Ireland through two separate companies: Derry Journal (...)

The French Minister of Economy clears without conditions a merger in the press sector (Le Monde/ Hachette Fillipacchi)
Fréget - Tasso de Panafieu Avocats (Paris)
,
Lagardère
Minister of Economy, Finances and Industry, 6 October 2006, Letter to the Counsels of Le Monde editing society regarding a concentration in the edition sector (C2006-82) (“Lettre du Ministre de l’économie, des finances et de l’industrie du 6 octobre 2006, aux conseils de la société éditrice du (...)

The French Minister of Economy grants unconditional clearance to a merger in the press sector (Le Monde/Hachette Fillipacchi)
Freshfields Bruckhaus Deringer (Paris)
,
Freshfields Bruckhaus Deringer (Paris)
Minister of Economy, Finances and Industry, 6 October 2006, Letter to the Counsels of Le Monde editing society regarding a concentration in the edition sector (C2006-82) (“Lettre du Ministre de l’économie, des finances et de l’industrie du 6 octobre 2006, aux conseils de la société éditrice du (...)

The Slovenian Competition Authority clears a controversial merger between outdoor billboard space service providers (Europlakat/Metropolis Media)
Fatur
Slovenian Competition Authority (“Urad Republike Slovenije za varstvo konkurence”), October 4th 2006, Decision n° 306-42/2006-76 (not published at the date of release of this comment): see the Press release On 4th October 2006 the Slovenian Competition Authority (“SCA”), on the basis of (...)

The CPC decides to instigate a full investigation phase two due to serious doubts as to the compatibility of a concentration in the market of coated and raw chipboard (Darbo, Sonae)
Neocleous
Factual Background On the 19th of July 2006 Darbo S.A.S and Sonae Industria SGPS S.A., the participating parties, filed a notification of concentration before the Cyprus CPC. The CPC following an evaluation of the information and material filed by the parties decided to instigate a full (...)

State Aid

The Greek Legal Council of State decides that the funding provided to a State institute by the Greek Ministry of National Defence does not constitute illegal State aid, as it merely covers the operating expenses of the Institute, which activities are not economic (Defence Analyses Institute)
International Transport Forum
Factual Background: The District Audit Centre of Athens (Ðåñéöåñåéáêü Åëåãêôéêü ÊÝíôñï Áèçíþí), faced with an authorization of a refund of around €62.000 to the Defence Analyses Institute, which is a legal entity governed by private law, examined the application of the provisions on value added tax (VAT) during the period (...)

The Spanish Superior Court of Justice of the Canary Islands authorises recovery of a State aid granted and paid to a company for breaching its contract of public services (Servicio regular La Gomera)
Hogan Lovells (Madrid)
,
Allianz (Brussels)
Factual Background: Appeal by the Town Hall of La Gomera against a judgment of the Court of Santa Cruz de Tenerife annulling two resolutions which ordered the recovery of a State aid granted and paid in advance to a company rendering public coastal shipping services in La Gomera. The Town Hall (...)

The European Court of Justice issues a judgment constituting a major step forward for State aid recovery policy (Scott Paper/Kimberly Clar)
European Commission - DG COMP (Brussels)
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European Commission - DG COMP (Brussels)
"ECJ Judgement of 5 October 2006 Commission v. France: A major step forward for the recovery policy"* On 5 October 2006, the Court of Justice issued an important judgement for the State aid recovery policy. The article below summarises the facts that gave rise to the case before the Court and (...)

The French Administrative appeal court of Marseilles dismisses the appeal of a tax payer claiming the refund of a judging that the levy was not hypothecated to any aid measures (Tax on meat purchases)
Sheppard Mullin (Brussels)
,
European Court of Justice
Factual Background The claimants seek the annulment of judgments by the administrative tribunal of Nice rejecting their claim for a refund of the tax on meat purchase, instituted by Article 302 ZD of the general tax code. The tax was initially designed to finance the public service of (...)

Procedures

The Belgian government adopts 9 decrees implementing the new Law on the Protection of Economic Competition (Law, 31 Oct. 2006)
Sheppard Mullin (Brussels)
,
French Competition Authority
On 31 October 2006, the Belgian Minister of Economy has adopted nine decrees implementing the new Law on the Protection of Economic Competition. They entered retroactively into force on 1st October 2006, at the same date as the Law itself. These royal decrees cover essentially procedural (...)

The Austrian Highest Court of Appeal confirms obligation to reply fully to the NCA sector inquiries’ requests for information (Austrian cash & carry)
European Court of Justice
By judgment of 11 October 2006 in Case 16 Ok 8/06, the Austrian Highest Court of Appeal in competition matters (Oberster Gerichtshof als Rekursgericht in Kartellrechtssachen) confirmed the judgment of 10 April 2006, Case 29 Kt 80/05-33, of the Vienna High Court in competition matters (...)

The UK House of Lords issues a landmark judgment on delineation of the spheres of competence of the EC Commission and the national courts in the context of the decentralization of EC competition law (Crehan)
White & Case (London)
,
Reed Smith (London)
House of Lords, 19 July 2006, Inntrepreneur Pub Company (CPC) and others v. Crehan, [2006] UKHL 38 The Background This is a recent development in the long line of tying cases in the UK beer market. In this case, the House of Lords allowed the appeal of Inntrepreneur Pub Company against an (...)

The Hellenic Competition Commission heavily fines an undertaking for non-compliance with its past decision condemning abusive rebates and discriminatory practices (Coca-Cola)
Hellenic Institute of International and Foreign Law (HIIFL)
Hellenic Competition Commission (Epitropi Antagonismou), 13 June 2006, Decision 309/V/2006, Coca Cola HBC S.A. The case concerns the imposition by the Hellenic Competition Commission of a penalty of € 8.662.644,00 on Coca Cola HBC S.A. according to Article 9§1(e) of Law 703/1977 for failing to (...)

Regulatory

The UK Competition Appeal Tribunal overturns decision of water Regulator and rules that the price charged was excessive and amounted to a margin squeeze (Dwr Cymru/Albion Water)
KPMG (London)
On 6th October 2006, the Competition Appeal Tribunal (the Tribunal) ruled in favour of Albion Water, concluding that the access price offered by Dwr Cymru for the common carriage of non-potable (partially treated) water through the Ashgrove system to Shotton Paper was excessive. In a further (...)

Public sector

A Dutch Court considers that municipalities should be regarded as economic entities when they grant exclusive rights for outdoor advertising (KPN/JC Decaux)
European Commission - DG HR
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European Court of Justice
KPN is an undertaking which provides telecommunication services within the Netherlands. According to the Dutch Telecommunications Act, KPN had to ensure the availability of at least one public pay telephone in every residential dwelling zone of more than 5000 inhabitants. As KPN wished to (...)

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