February 2006

Anticompetitive practices

The US Supreme Court overturns a Court of Appeals decision clarifying that pricing decisions of a fully integrated joint venture that eliminates competition between the partners is not subject to Section 1 of the Sherman Act (Dagher / Texaco)
Sidley Austin (Washington)
WilmerHale (Washington)
Matheson Keys & Kordzik (Austin)
The Supreme Court issued two unanimous opinions in antitrust cases. These are the second and third antitrust opinions of the Term; in recent years the Court has taken one or at most two antitrust cases per Term, so this reflects a greater than usual level of antitrust activity at the (...)

The US Supreme Court immunizes from antitrust liability price-fixing agreements of a legitimate joint venture (Texaco / Dagher)
University of Central Florida - Department of Legal Studies
Something Radical is Afoot: Texaco, Inc. v. Dagher and the Revolutionary Treatment of Price Fixing in the Joint Venture Context* This article analyzes a 2006 decision by the U.S. Supreme Court in Texaco, Inc. v. Dagher, which immunized joint venturers from antitrust liability for fixing the (...)

The US Supreme Court rules unanimously that the joint venture’s unified price between two companies’ brands of gasoline was not price-fixing (Texaco / Dagher)
Paul Hastings (Washington)
Joint Ventures and The Supreme Court’s Decision in Texaco, Inc V Dagher: A Win for Substance Over Form* NOTE: In the summer of 2004, the Court of Appeals for the Ninth Circuit issued its opinion in Dagher v. Saudi Refining, Inc., holding that the decision of a legitimate joint venture between (...)

The Spanish Competition Court declares null and void an exclusive agreement to provide on-line gambling services since it would create a de facto monopoly which would foreclose the market (Bingo Simultaneo, AEAM/Red Madrid)
Hogan Lovells (Madrid)
The Asociación de Empresarios de Azar de Madrid (hereinafter, “the AEAM”), an association of owners of gambling centres -in particular bingo - in the Madrid area, lodged on 18 June 2003 a complaint before the Spanish Servicio de Defensa de la Competencia (“the Servicio”) against the Red de (...)

The Bulgarian Supreme Administrative Court endorses a minimum premium tariff for green card insurance as pro-competitive (Vitosha)
Kinstellar (Sofia)
In a case concerning alleged price fixing, the Bulgarian Supreme Administrative Court (the “SAC”) ruled out anti-competitive objectives and effects of a minimum premium tariff for Green Card insurance and held that eight insurance companies had not breached the domestic antitrust rules by (...)

The Dutch District Court of Maastricht assesses compatibility of a franchise agreement with EC competition law (BBQ Franchise)
JBT Corporation (Netherlands)
Clifford Chance (Amsterdam)
In January 2006 summary proceedings were brought before the District Court of Maastricht by a franchisee (hereafter: the claimant) against its franchisor BBQ Franchise B.V. (hereafter: BBQ). The District Court applied EC competition law to set out the limits of what can and cannot be arranged (...)

The US DOJ requires termination of West Virginia Medical Center market allocation agreement (Charleston Area Medical Center / HCA)
Jones Day (Washington)
On February 6, 2006, the Department of Justice (« DOJ ») filed a lawsuit in U.S. District Court in Charleston, West Virginia alleging that a market allocation agreement between Charleston Area Medical Center, Inc. (« CAMC ») and HCA Inc. (« HCA ») violated Section 1 of the Sherman Act. The DOJ (...)

The Paris Court of Appeal upholds the NCA decision fining a cartel in the public passenger urban transport market with reference to the EC Commission’s notice on effect on trade (Keolis / Connex / Transdev)
Kramer Levin Naftalis & Frankel (Paris)
Eversheds Sutherland (Paris)
Background In a decision dated July 5, 2005 (See J.-P. de la Laurencie et M. Courtaigne-Op, The French Competition Authority fined three French major companies for implementing a cartel in the public passenger urban transport market, with potential appreciable effect on trade between Member (...)

The Belgian Supreme Court held that obligatory opening and closing hours for pharmacists violate the Competition Act (L. A./Council of the Order of Pharmacists)
Background information I In Belgium, the function of pharmacist is a legally protected and regulated profession. To ensure the regular and normal administration of healthcare, i.e. the distribution of drugs, pharmacists are legally compelled to take part of an on-call service. This service (...)

A Dutch Court considers that a certification scheme aimed at securing qualitative criteria does not infringe Art. 81 EC nor Dutch competition provision (Agrofino / SRB and SET)
European Commission - DG HR (Brussels)
Rechtbank ’s Gravenhage, 1 February 2006, Case 243470 Agrofino produces soil. The company is market leader in Belgium and is active in the Southern provinces of the Netherlands. Its soil complies with the legal requirements of Belgium and France. SRB and SET registered the trademark “QualiTree (...)

The Slovenian Competition Authority acts for the first time in its capacity of sanctioning body while holding that provisions of a professional association restrict competition on the regulated book market (Piano)
Fatur Law Firm (Ljubljana)
This case started in February 2005, when a small independent book publisher Piano complained to the Slovenian Competition Authority that General conditions of operation of Slovenian book market, especially the provisions on uniform price and maximum discount, represents restrictive agreement (...)

Unilateral Practices

The UK Competition Authority issues interim measures direction pending completion of investigation for alleged predatory pricing and exclusionary price discrimination of the London Metal Exchange (LME)
European Commission - Legal Service (Brussels)
The Office of Fair Trading (OFT) has issued an interim measures direction to the London Metal Exchange (LME) under section 35 of the Competition Act 1998. This is the first time that the OFT has employed these powers. The interim measures direction prevents LME from extending the trading hours (...)

The Austrian Supreme Court upholds the Competition Authority’s decision ordering the postal incumbent to cease abusive tying via its price offers on the market for day delivery of newspapers and magazines (Österreichische Post)
Reidlinger Schatzmann Rechtsanwälte (Vienna)
DORDA (Wien)
On 10 May 2005, the Austrian Cartel Court ordered Österreichische Post AG (“Post”) to cease to abuse its dominant position on the market for day delivery of newspapers and magazines. The abuse in question was constituted by certain clauses contained in the terms and conditions offered by Post to (...)

The French Competition Authority orders interim measures to address anticompetitive practices implemented in the press distribution sector (NMPP & SAEM-TP)
French Competition Authority (Paris)
Press distribution: The Conseil de la concurrence orders NMPP and SAEM-TP to temporarily suspend the application of a new interprofessional protocol reached with press distributors.* In September 2005, the Conseil de la concurrence received a complaint from the companies “Messageries Lyonnaises (...)

The EU Commission renders legally binding commitments offered by the largest rough diamonds producer to phase out diamond purchases from the most important competitor (De Beers)
DG COMP (Brussels)
DG COMP (Brussels)
"De Beers: commitments to phase out diamond purchases from the most important competitor"* 1. Overview On 22 February 2006 the Commission adopted a decision pursuant to Article 9 of Regulation 1/2003 (hereafter: ‘Reg. 1/2003’) which rendered binding the commitments offered by De Beers in order (...)

The Italian Competition Authority fines gas supplier for abuse of dominant position in wholesale supply of natural gas on the basis of Art. 82 EC (Trans Tunisian Pipeline / ENI)
Studio Legale DDPV (Rome)
Italian Regulatory Authority for Energy, Networks and Environment (Rome)
On 15 February 2006, The Italian Competition Authority (the “Authority”), alleged that ENI had abused its dominant position in the market of wholesale supply of natural gas in Italy (the “relevant Market”) by impeding the entry of competitors into the Relevant Market (“Authority decision”). The (...)

The Polish Competition Authority rules on collective dominance in the mobile telephony sector (Polska Telefonica Cyfrowa / Centertel / Polkomtel)
COMPER Fornalczyk i Wspólnicy (Lodz)
Article 25 recital 2 of the Polish Telecommunication Act provides the President of the Polish Office of Electronic Communication (Telecom Regulator) with the power to consult the Competition Authority regarding the market structure in question. The President of the Polish Office of Competition (...)

The Finnish Competition Authority finds no evidence of abuse of dominance by an airline company having declined cooperation with a competitor (Finnair / Flying Finn Oy)
Accountor Holding Oy (Espoo)
In a recent decision, dated 13 February 2006 (Decision n° 932/61/2993), the Finnish Competition Authority (“FCA”) did not find sufficient grounds to sanction the Finnair Corporation (“Finnair”), a Finland-based airline company, for an alleged abuse of a dominant position. A request of action (...)

The Danish Competition Appeal Tribunal annuls the Competition Authority’s decision condemning the telecommunications incumbent for abuse of dominance through margin squeeze (TDC)
Plesner (Copenhagen)
On 10 February 2006, the Danish Competition Appeal Tribunal (“D-CAT”) partially annulled a decision by the Danish Competition Council (“DCC”) condemning the Danish incumbent telecommunications operator, TDC, for abusing its dominant position under section 11(1) of the Danish Competition Act by (i) (...)

The Danish District Court of Århus imposed a fine on a dairy company for abusing its dominant position via a marketing contribution (Arla Foods)
Plesner (Copenhagen)
Background Arla Foods Amba (“Arla”) is Denmark’s largest diary company with an annual turnover in 2003-2004 of DKK 47,608 million (EUR 6,390 million). Hirtshals Andelsmejeri (“Hirtshals”) is a smaller diary company in competition with Arla. In October 2003 Hirtshals contacted the Danish (...)

The German Competition Authority finds a supplier guilty of abusing its dominant position under Art. 82 EC by preventing customers from freely refilling from competing suppliers (Soda Club)
Freshfields Bruckhaus Deringer (Berlin)
Freshfields Bruckhaus Deringer (Berlin)
German Federal Cartel Office finds Soda Club guilty of Article 82 Abuse In a decision of 9 February 2006, the German Federal Cartel Office (“FCO”) found that Soda Club (“SC”), a producer of water carbonating systems, had violated Article 82 EC and section 19 of the Act against Restraints of (...)

The Italian Competition Authority obliges a pharmaceutical company to grant a drug production license (Glaxo - Principi attivi)
Freshfields Bruckhaus Deringer (Rome)
On 8 February 2006, the Italian Antitrust Authority (IAA) closed a one-year long Article 82 investigation in relation to Glaxo refusal to grant a production license to FIS (Fabbrica Italiana Sintetici), for manufacturing in Italy an active compound essential for the production of triptans (...)

The French Competition Authority accepts commitments to address competition concerns in the press distribution sector in New Caledonia and French Polynesia (NMPP)
French Competition Authority (Paris)
Press distribution: NMPP offers the Conseil de la concurrence a commitment to introduce prices enabling independent exporters to distribute press in New Caledonia and French Polynesia under economically viable conditions.* As part of litigation proceedings brought by the company Export Press (...)

The Czech Competition Authority annuls a first-instance decision concerning an alleged discrimination by a car manufacturer of leasing companies (Skoda)
Wolf Theiss (Prague)
Czech Ministry of Justice (Prague)
By a decision on appeal rendered on 3 February, 2006, the President of the Czech Office for the Protection of Competition has annulled a first instance decision according to which ŠKODA AUTO a.s. (“Škoda”), a Czech car manufacturer belonging to the Volkswagen group, had allegedly abused of its (...)


The Danish Competition Council approved a joint venture in the market for the supply of fertilisers, subject to the commitment to abolish the parties’ downstream exclusivity agreements (Ferti Supply)
Kromann Reumert (Copenhagen)
The operation The joint venture was between Dansk Landbrugs Grovvareselskab a.m.b.a. (“DLG”), AgroDanmark a.m.b.a. (“AgroDK”) and Norwegian company Yara Danmark A/S (“Yara”). The new entity, Ferti Supply, was to take over the parties’ fertilizer wholesale activities, which involved the purchase, sale (...)

The EU Commission conditionally approves a merger in the foil sector (Solvay / Renolit)
JG Associates (Brussels)
DG COMP (Brussels)
Mergers — Main developments between 1 January and 30 April 2006* On 22 February the European Commission cleared the proposed acquisition of the industrial foil business of the Belgian company Solvay by the German company Renolit. Effective competition in the foil sector is important because of (...)

The US FTC Chairman announces reforms to streamline the merger review process
Skadden, Arps, Slate, Meagher & Flom (New York)
Skadden, Arps, Slate, Meagher & Flom (Washington)
Skadden, Arps, Slate, Meagher & Flom (New York)
On February 16, 2006, Federal Trade Commission (“FTC”) Chairman Deborah Platt Majoras announced a number of “reforms” to the merger review process to “…address the increased burden on parties and the staff ” and “streamline the merger review process by formalizing well-defined best practices.” These (...)

The US FTC simplifies the process of in-depth merger reviews for foreign and domestic companies
White & Case (Washington)
White & Case (Washington)
Marking an important reform to US antitrust policy, regulators at the Federal Trade Commission (‘FTC’) have announced changes meant to simplify the process of in-depth merger reviews for foreign and domestic companies. In February, the FTC, the agency that shares antitrust oversight of mergers (...)

The UK Competition Appeal Tribunal considers the reasonableness of a Competition Commission’s decision regarding the remedy of divestment (Somerfield)
University College London
Facts of the case Somerfield plc ("Somerfield" or "the applicant"), applied to the Competition Appeal Tribunal pursuant to section 120 of the Enterprise Act 2002 ("the Act") for a judicial review of the Competition Commission’s decision ("the CC"), contained in a document entitled "A Report on (...)

The French Supreme Administrative Court validates the Competition Council’s analysis and upholds the clearance decision of the French Minister of Economy regarding a share acquisition in the enterprise resource planning software solutions sector (CEGID SA / CCMX Holding)
On July 23, 2004 the acquisition of 100% of the shares of CCMX Holding (“CCMX”) by Cegid SA (“Cegid”) thereby conferring Cegid sole control of CCMX, was notified to the French Minister of Economy (the “Minister”). Both parties were active in the design, development and marketing of ERP software (...)

The Norwegian Government finally cleared on social dimension grounds a merger with remedies whereas the NCA, confirmed by the Ministry of Government Administration, originaly prohibited the merger (Prior/Nordgården)
Bull Årstad (Stavanger)
The operation The merger involved Prior Norge BA acquiring control of the entire share capital of Nordgården AS, which included Nordgården’s 70% shareholding in its subsidiary Eggprodukter AS. The merger was completed on 31 March 2005. The Norwegian Competition Authority (NCA) was notified of the (...)

The Icelandic Competition Authority clears a merger in the television industry, subject to remedies, including restrictions on board membership (Saga/Storm)
PwC (Reykjavik)
The operation On 26 October 2005 the Icelandic Competition Authority (ICA) was notified that Saga film hf (Saga) had acquired all the shares of Storm ehf (Storm). Saga produces TV shows, films and advertisements and is a subsidiary of 365 ljosvakamidlar ehf (365). 365 runs both free and (...)

The UK Competition Authority clears a merger in the market for the supply of retail pharmacy services, subject to the divestment of a large number of stores (Boots / Alliance Unichem)
Added Value Capital Partners (AVCP) (Royston)
The operation Boots operates 1,423 health and beauty stores in the UK and operates pharmacies in 1,350 of these stores. It intended to acquire Alliance UniChem, an international pharmaceutical distribution company, which operates 958 pharmacies in the UK. The market(s) The OFT considered the (...)

The Spanish competition authorities conditionally clear a major merger in the energy sector raising substantial EC and national procedural issues (Gas Natural / Endesa)
European Commission (Brussels)
Garrigues (Brussels)
On 12 September 2005, GAS NATURAL (“GN”), the incumbent natural gas utility in Spain, notified the Spanish competition authorities of its takeover bid for the entire share of ENDESA, Spain’s main electricity utility . The merger would therefore bring together the nation’s largest natural gas (...)

State Aid

The French Civil Supreme Court rejects the arguments based on the unlawfulness of the Aubry Law on the reduction of the working time on the basis of State Aid reasoning, judging that the measure is of general application (Aides Aubry)
Sheppard, Mullin, Richter & Hampton (Brussels)
European Court of Justice (Luxembourg)
Factual Background The appellant is the legal representative for a society and seeks the annulment of the judgment of the court of appeal of Rennes. On 31 December 1999, the society Tricotages de l’AA concluded a collective agreement for the reduction of working time pursuant to the law of 13 (...)

The French Administrative Supreme Court decides that the contracts signed by an airline company with the Strasbourg airport are State aid subject to the obligation of prior notification to the EU Commission (Ryanair)
Schmitt Avocats (Paris)
By a decision of 27 February 2006, the Conseil d’Etat, the French Administrative Supreme Court, definitively closed the case concerning the conditions under which a new route between Strasbourg and London was opened and exploited by the low cost airline company Ryanair (hereafter “Ryanair”). The (...)

The French Administrative Supreme Court upholds the annulment of a decision by the Commercial Court of Strasbourg finding that the support measures granted to a low-cost airplane company constituted unlawful State aid in the application of the private investor test (Ryanair)
Sheppard, Mullin, Richter & Hampton (Brussels)
European Court of Justice (Luxembourg)
Factual Background The claimant, a low cost airline established in Ireland, sought the annulment of the deliberation of the chamber of commerce of Strasbourg and the decisions of its president to sign, in execution of this deliberation, two agreements (principal agreement and supplemental (...)

The Italian Supreme Court holds that a cooperative societies’ tax break should be qualified as a State aid because it involves a lower tax income into the public budget and refers the case to the EU Court of Justice for a preliminary ruling (Maricoltori Alto Adriatico)
Eujus (Rome)
Factual background Under Italian tax rules, cooperative societies benefit from significant tax exemptions. After an inspection of the Italian tax policy, the local tax office of Monfalcone decided that Mr. F.M.’s individual income tax return, for the years 1984, 1985 and 1986, was inaccurate. (...)

The EU Commission finds that public participation in an Austrian securitisation scheme is not a State aid
Agency for the Cooperation of Energy Regulators (ACER) (Ljubljana)
"Commission finds public participation in Austrian securitisation scheme is not State aid"* On 9 February 2006, the Commission authorised the public participation of Austria Wirtschaftsservice GmbH (aws), a public body that administers the award of grants to Austrian companies, in a bond (...)

The Spanish Supreme Court annuls an aid scheme to shipbuilding in Galicia which had not been notified to the EU Commission (Government of Galicia)
Hogan Lovells (Madrid)
Allianz (Brussels)
Factual Background: Appeal by the Central Administration against the regional Decree of Galicia 217/1994 on aids for the shipbuilding sector ("Decree 217/1994"), on the grounds that it represented a State aid scheme that had not been notified to the European Commission before being passed. The (...)


The Dutch Appeal Tribunal holds that separation of functions must be applied to all levels within administrative authority (Fortis)
De Nederlandsche Bank (Amsterdam)
Smeets Van Empel advocaten (Amsterdam)
A. Facts and procedure On 9 February 2006 the Dutch Trade and Industry Appeals Tribunal (‘Tribunal’) gave a judgment on appeal against a ruling of the District Court of Rotterdam (“District Court”). The case concerns the administrative decision of 5 September 2001 by which the Netherlands (...)

A Swedish Court allows the NCA to search private office facilities of a CEO in a company suspected of being part of an illegal cartel (Hälsingefrakt)
On January 13th, 2006, the Stockholm District Court granted a motion from the Swedish Competition Authority concerning a dawn raid against seven companies suspected of being part of an illegal cartel. During this raid suspicion arose that relevant documents were to be found at the private (...)

The Hungarian Competition Council establishes that the advertisements of a tooth-paste producer are contrary to competition provisions (Colgate-Palmolive)
Bassola (Budapest)
The Competition Council of the Hungarian Competition Authority (“GVH” - Gazdasági Versenyhivatal) established in its decision of 2 February 2006 that Colgate-Palmolive Magyarország Kft.`s conduct infringed the rules on the prohibition of unfair manipulation of consumer choice of the Hungarian (...)

The OECD holds a roundtable on prosecuting cartels without direct evidence
OECD - Competition Division (Paris)
Key documents: Executive Summary with key findings, Detailled Summary of the discussion, Background note Executive summary, by the Secretariat Considering the discussion at the roundtable, the delegatesí written submissions and the Secretariatís background paper, several key points emerge: 1. (...)


The European Commission issues its preliminary results of its sector inquiry into the energy sector
DG COMP (Brussels)
"European Energy Sector — Quo Vadis? First results of the Sector Inquiry"* The energy sector is of fundamental importance to the European economy, and to the well-being of citizens of the European Union. Debate about the future direction of European energy policy has been vigorous for most of (...)

The German Federal Court of Justice asks lower Court to verify computation of electricity network access price in retrial (Strom II plus)
CRA International (London)
Federal Court Decision Until 2005, Germany’s electricity sector was privatised but unregulated. Instead, electricity companies with networks agreed voluntarily to set access prices on the basis of a voluntary framework agreement called “Strom II plus” (“Power II plus"). The plaintiff is an (...)

The Italian Supreme Administrative Court confirms the annulment of the "virtual power plants" regulator’s decision aimed to address the problem of lack of competition in the electricity sector (AEEG/ENEL)
European Court of Justice (Luxembourg)
In implementing Directive 2003/54, Italian Law 481/1995 gave AEEG (the independent regulatory authority) the task of regulating and monitoring the gas and energy markets. For this purpose, AEEG can, inter alia, fix maximum tariffs to be applied to the regulated services; define guidelines for (...)

The OECD holds a roundtable on concessions
OECD - Competition Division (Paris)
Key documents: Executive Summary with key findings, Detailled Summary of the discussion, Background note Executive summary, by the Secretariat Considering the discussion at the roundtable, the delegatesí written submissions and the Secretariatís background paper, several key points emerge: (1) (...)

The OECD holds a roundtable on access to key transport facilities
OECD - Competition Division (Paris)
Executive summary, by the Secretariat Considering the discussion at the roundtable, the delegatesí submissions and the background paper, several key points emerge. (1) New entrants in transportation markets often require access to key infrastructure. Public policies about infrastructure access (...)

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