March 2005

Anticompetitive practices

The Portuguese Competition Authority states that the Code of Best Practices notified by three associations in the electric goods sector does not qualify for an individual exemption (AGEFE - ANIMEE - APETCE)
London School of Economics (London)
Autoridade da Concorrência, Decision Código de Boas-Práticas para a distribuição de Material Eléctrico, Press release n° 3/2005, 29 March 2005 The case at hand involves three associations: the Associação Portuguese dos Grossistas de Material Eléctrico, Electrónico, Electrodoméstico, Fotográfico e de (...)

A US District Court holds that the action against multistate tobacco settlement agreement was barred by the state action doctrine (Sanders / Lockyer)
Sheppard Mullin (Los Angeles)
“Active Supervision” Standard Of Midcal Not Applicable To Conduct Of Sovereign. Multistate Tobacco Settlement Is Parker and Noerr Exempt Both For State And Private Parties* In the aftermath of the entry of the Multistate Tobacco Settlement Agreement (“MSA”), and enactment by the California (...)

The Czech Competition Authority states that a contractor’s undertaking not supplying another purchaser for better prices is an anti-competitive agreement (Èeský Telecom / Joyce / Lucent)
Wolf Theiss (Prague)
The Office for the protection of competition of the Czech Republic confirmed on March 25, 2005 its earlier first instance decision, in which it has found that the agreements concluded by Èeský Telecom with two suppliers of ADSL modems represent a prohibited price fixing agreement as they bind the (...)

The Madrid Commercial Court finds that a distribution agreement may not be a ’genuine’ agency agreement and thus may fall within the scope of Art. 81.1 EC (Gebe / BP Oil España)
London School of Economics (London)
Compañía arrendataria del monopolio del petróleo, S.A. (hereinafter, “Campsa”) and Gebe, S.L. (“Gebe”) concluded in July 1988 an agreement concerning the distribution of oil products. The latter operated from premises hired to him by Campsa. The agency agreement included a non-compete obligation and (...)

The French Competition Authority condemns an agricultural economic committee for preventing access to the market and rejects the State’s action doctrine argument (Brittany cauliflowers)
Paris Bar
The French Competition Council condemned on the 15 March 2005 the agricultural economic committee of fruit and vegetables of Brittany (CERAFEL) and several producers’ organizations for maintaining cartels in the wholesale marketing of Brittany cauliflowers. In the light of the recently enforced (...)

The Stockholm City Court applies the Commission’s notice on immunity from fines and reduction of fines in cartel cases before the Competition Authority’s corresponding notice (Keyvent / Building Systems)
Vinge (Stockholm)
Department of Justice (Stockholm)
Background On 30 august 2001, the Swedish Competition Authority (the “SCA”) was contacted by ABB concerning an investigation that ABB, along with its subsidiary, YIT Building Systems AB (“Building Systems”) had conducted. The investigation raised concerns regarding Building Systems’ connections (...)

The Japan Fair Trade Commission imposes surcharges on manufacturers of cold-rolled stainless steel sheets for having implemented an anticompetitive price fixing agreement (Nisshin Steel)
Japan Fair Trade Commission (Tokyo)
JFTC surcharged manufacturers of cold-rolled stainless steel sheets* The Fair Trade Commission of Japan (JFTC), on 11 March 2005, ordered 6 manufacturers to pay surcharges regarding fixing the prices of cold-rolled stainless steel sheets and steel strips (excluding cold-rolled narrow strips) (...)

The Spanish Supreme Court annuls the Competition Authority’s decision because the investigated practices did not have an anticompetitive effect or purpose (Expertos Inmobiliarios)
Herbert Smith Freehills (Madrid)
The judgment of the Spanish Supreme Court (Tribunal Supremo) dated 9 March 2005 reviewed the decision of the Court for the Defence of Competition (“CDC”) of 19 November 1998, which had been appealed by the Spanish Association of Real Estate Agents (Consejo General de los Colegios Oficiales de (...)

The US Court of Appeals holds that the reverse payment settlement between a branded and generic pharma companies did not violate the antitrust laws because the exclusionary effect of the agreement did not exceed the "scope of the patent" (Schering-Plough)
Axinn Veltrop & Harkrider (Hartford)
Over the past decade, practitioners, policy makers and commentators have increasingly debated the issues involved when the antitrust laws intersect with patent rights. Both the antitrust and patent laws are designed to promote competition and, as a result, societal wellbeing. However, the (...)

The Irish Competition Authority makes 47 recommendations to boost competition in the non-life insurance sector
London School of Economics (London)
The Irish National Competition Authority (hereinafter “NCA”) has issued its report and recommendations on enhancing competition in the non-life insurance sector. The recommendations aim to reduce the cost of switching insurer and/or intermediary and to tackle structural and legal barriers to (...)

The Polish Competition Authority fines five taxi companies for entering into an anti-competitive price fixing agreement (Echo Taxi, Tele Taxi a.o.)
Łupińscy & Partners (Warsaw)
Robert Jędrzejczyk i Wspólnicy Spółka komandytowa (Warsaw)
OCCP, Miejskie Przedsi?biorstwo Taksówkowe, Stowarzyszenie Kierowców “ECHO TAXI”, Stowarzyszenie Kierowców “TELE TAXI”, Zwi?zek Przedsi?biorców Transportowych, Zrzeszenie Transportu Prywatnego w Katowicach, 04/03/2005, doc. A In May 2004, the representatives of five local taxi companies from the (...)

The Competition Council of the Hungarian Competition Authority fines the Council for wild animals products and services for price fixing (CWAPS)
Catholic University of Louvain
Hungarian Competition Authority, Council for Wild Animals Products and Services, 1 March 2005 (not yet published) On 1 March 2005, the Competition Council of the Hungarian Competition Authority fined the Council for Wild Animals Products and Services (hereafter “CWAPS”) for price fixing. The (...)

Unilateral Practices

The Czech Competition Authority condemns a major Czech winter sports centre for abuse of dominant position (Skiareal Spindleruv Mlyn)
Wolf Theiss (Prague)
The Office for Protection of Competition of the Czech Republic (“the Office”) confirmed, on appeal, its previous decision in which it found that “Skiareal Spindleruv Mlyn, a.s.” (“Skiareal”), the operator of a major Czech winter sport centre, had abused its dominant position by applying dissimilar (...)

The Spanish Supreme Court reduces a fine due to the lack of clarity of the legal framework that liberalized the market affected by the infringement (BT / Telefónica)
European Commission (Brussels)
ARPA Abogados Consultores (San Sebastian)
On 23 March 2005, the Spanish Supreme Court considered that the lack of clarity of the legal framework that liberalized the market affected by Telefónica’s abusive conduct justified a reduction of the fine the Spanish Competition Authority imposed on Telefónica, S.A. (“Telefónica”) from 3.4 million (...)

The French Competition Authority rejects a complaint on alleged bundling and predatory practices in the Pay-TV sector (TPS / Canal Plus)
Constantine Cannon (Washington)
Hogan Lovells (Brussels)
On June 5th, 1998, TPS filed a complaint with the French Competition Council against rival pay-TV operator Canal Plus. TPS alleged that Canal Plus breached Article L. 420-2 of the French Commercial Code by resorting to bundling and predatory pricing. Article L. 420-2 is the equivalent under (...)

The French Competition Authority rejects a request for interim measures regarding practices in the sector for advertising displays on the rail network and in the sector for passengers transport between Paris and London (Eurostar / SNCF / France Rail Publicité)
French Competition Authority (Paris)
Complaint by British Airways against Eurostar, the SNCF and France Rail Publicité. The Conseil de la concurrence rejects the request for interim measures filed by British Airways.* On 18th November 2004, the Conseil de la concurrence received a complaint from British Airways, regarding an (...)

The Italian Competition Authority finds pharmaceutical companies guilty of abuse of dominant position and imposes a drug production license (Merck / Glaxo)
Studio Legale DDPV (Rome)
Studio Legale Merusi Toscano (Rome)
The Italian national competition authority (“INCA”) recently opened an in-depth investigation in the pharmaceutical sector, for breach of art. 82 of the EC Treaty. This is the first time that the INCA imposes interim measures according to art. 5 of Council Regulation n° 1/2003, of 16 December (...)

The Japanese FTC recommends a processor manufacturer to eliminate exclusivity conditions imposed on five Japanese PC manufacturers for receiving price rebates and advertising subsidies (Intel)
Morrison & Foerster (Tokyo)
Tokyo University of Science
On March 8, 2005, the Fair Trade Commission of Japan ("JFTC") challenged certain rebate and marketing programs of Intel Corp.’s Japanese subsidiary, Intel K.K., and recommended in a proposed order that Intel eliminate certain exclusivity conditions imposed on five Japanese PC manufacturers (...)

The Cypriot Competition Authority punished two undertakings for refusal to supply newspapers (Hellenic / Kronos)
McDermott Will & Emery (Brussels)
On 1 March 2005 the Cypriot Commission for the Protection of Competition unanimously decided in a rather small scale case that two press distribution agencies, Hellenic and Kronos, had abused their dominant position in the market for the distribution of newspapers and magazines. The abuse was (...)


The Norwegian Ministry of Government and Reform prohibited further consolidation in the events ticketing sector unless a divestment was made in Norway (Ticketmaster/BiljettDirekt Ticnet)
Bull Årstad (Stavanger)
The operation Ticketmaster New Venture Holding II AB (Ticketmaster) acquired 100% of the shares in BiljettDirekt Ticnet AB on 28 May 2004. The Norwegian Competition Authority (NCA) was notified of the merger on 1 June 2004. Ticketmaster and BiljettDirekt Ticnet (a Swedish company) distribute (...)

The EU Commission clears, subject to divestiture, an acquisition in the fire alarms industry (Novar / Honeywell)
JG Associates (Brussels)
DG COMP (Brussels)
"Mergers — Main developments between 1 January to 30 April 2005"* The European Commission cleared the proposed acquisition of Novar by Honeywell after Honeywell had proposed to divest Novar‘s fire alarm business in Italy. Honeywell, a US corporation, is an advanced technology manufacturing (...)

The German Bundeskartellamt cleared a merger in the medical equipment market subject to remedies (Smiths Group / MedVest)
Baker McKenzie (Dusseldorf)
The operation On 24 January 2005, the UK company Smiths Group plc (“Smiths”) notified the Bundeskartellamt of its proposed acquisition of the entire share capital of MedVest Holdings Corp., USA (“MedVest”). In the course of the transaction it was planned that MedVest would merge with a newly (...)

The EU Commission acknowledges the withdrawal of a proposed joint acquisition in the digital rights management (DRM) industry (Microsoft / Time Warner / Contentguard)
JG Associates (Brussels)
DG COMP (Brussels)
"Mergers — Main developments between 1 January to 30 April 2005"* Microsoft and Time Warner had notified the Commission of their intention to acquire joint control of Contentguard. Contentguard is one of the main Digital Rights Management (DRM) patent-holders. The Commission launched an (...)

The Norwegian Competition Authority accepts a merger in the broadband telecommunications sector, subject to the divestment of a business unit (Telenor / Tiscali)
Bull Årstad (Stavanger)
The operation Telenor Telecom Solutions AS (Telenor) acquired the entire share capital of in Tiscali AS on 23 August 2004. Telenor Telecom Solutions AS and Tiscali AS provide broadband services in Norway. The market(s) concerned by remedy(ies) The relevant markets defined by the Norwegian (...)

The UK Secretary of State accepted behavioural undertakings to address national security public interest concerns in relation to a merger in the avionics sector (Finmeccanica / BAES)
Added Value Capital Partners (AVCP) (Royston)
The operation BAE Systems (“BAES”) and Finmeccanica are international manufacturers of defence and commercial aerospace systems, including military aircraft, helicopters, surface ships, submarines, radar, avionics, communications, electronics and weapons systems. On 27 January 2005 Finmeccanica (...)

The Spanish Competition Authority clears the creation of a joint venture in aircraft refuelling and lubricant services subject to remedies which were partly removed by the Council of Ministries (Shell España / CEPSA)
PwC (Madrid)
The operation The operation consisted of the creation of Spanish Intoplane Services (SIS), a joint venture controlled by Shell España and CEPSA (each owning 50%). SIS was created as a provider of kerosene and lubricants to civil aircraft at airports. SIS gained concessions to operate in (...)

The Austrian Cartel Court cleared a merger - following initial prohibition - in the market of cellulosic fibres, subject to multiple conditions including undertakings to maintain production and R&D activities in Austria (Lenzing/Tencel)
Taylor Wessing (Berlin)
The operation Lenzing AG produces the cellulosic fibres viscose and lyocell. Tencel only produces lyocell fibres. Lyocell is a chemical fibre extracted from wood. The production process for lyocell is much more environmentally friendly than the production process for viscose. The initial (...)

The EU Commission conditionally clears a merger in the convenience food industry (Chips / Orkla)
JG Associates (Brussels)
DG COMP (Brussels)
"Mergers — Main developments between 1 January to 30 April 2005"* The Commission’s investigation into the proposed acquisition of Chips by Orkla highlighted concerns in certain sectors of the Finnish convenience foods market. In January the Norwegian group Orkla, which is active in branded (...)

State Aid

The French Supreme Administrative Court makes preliminary reference to the EU Court of Justice to confirm its interpretation of the Gemo State aid ruling (Doux)
Sheppard, Mullin, Richter & Hampton (Brussels)
European Court of Justice (Luxembourg)
Brief description of the facts and legal issues The claimant requested the Conseil d’Etat to annul an order ("arrêté") of the Ministry of the Economy, which laid down the method of calculation and rates of slaughter tax, allocated to the financing of the elimination of animal waste and (...)

The French Administrative Courts apply the ECJ’s preliminary ruling qualifying a tax on meat purchases as a State aid (Gemo / Nevers viandes / Lianoudis / Sobledis / Uni service Distribution / Honfleur / Picard surgelés)
European Court of Justice (Luxembourg)
Despite the efforts of public authorities in order to inform citizens about the importance of fruits and vegetables for health, Europeans and especially French, remain attached to the taste and proteins brought by meat. Like every industrial activity, the meat industry produces waste that has (...)

The EU Commission issues a negative decision on an Italian State aid scheme providing business tax incentives in favor of newly listed companies on regulated stock exchanges in the Union
European Commission - Legal Service (Brussels)
"The Italian tax premium in favour of newly listed companies and the notion of selectivity relative to direct business taxation"* Background A recent negative decision by the Commission of 16 March 2005 on an Italian State aid scheme providing generous business tax incentives in favour of (...)

The Belgium Supreme Court recalled that subsequent notification of State aid is insufficient to dispense with obligation to reimburse (Voeder Velghe - De Backer)
Sheppard, Mullin, Richter & Hampton (Brussels)
European Chemicals Agency (Helsinki)
Background The Law of 24 March 1987 on animal health established a system to finance services to combat animal diseases and improve animal hygiene and the health and quality of animals and animal products. The complainants were required to make contributions to this system. The Belgian State (...)

The European Commission declares incompatible aid measures granted to a German producer of phosphoric acid and phosphates (Chemische Werke Piesteritz)
European Commission - DG MOVE (Brussels)
"Restructuring aid in favour of Chemische Werke Piesteritz GmbH"* On 2 March 2005 the European Commission terminated a three year long investigation into aid measures granted to Chemische Werke Piesteritz (CWP), an eastern German producer of phosphoric acid and phosphates. The Commission (...)


The Dutch Court of Appeal refuses to order the execution of an award adopted by an American arbitration panel for breach of a licensing agreement, on the grounds that it violates Art. 81.1 EC and that it is contrary to the public policy (Marketing Displays International / VR)
European Commission - DG HR (Brussels)
The companies concerned, Marketing Displays International (“MDI”) and VR, established in the United States of America and in The Netherlands respectively, are both active in the manufacture and marketing of bill boards. On 7 September 1990, MDI and VR concluded a licensing agreement, by which MDI (...)

The Latvian Supreme Court confirms Competition Authority’s decision of fining loyalty discounts practices in the food retailer sector (Latfood)
Tark Grunte Sutkiene (Riga)
Latfood, previously being in a dominant position, loses a case The 22 March 2005 decision of the Department of Administrative Cases of the Supreme Court Senate closed the proceedings in respect of the 14 November 2001 decision of the Competition Council of the Republic of Latvia on imposing a (...)

The Court of The Hague condemns the Dutch State to make good the damage suffered by an undertaking following the publication by the Competition Authority of a press release (Accel)
European Commission - DG HR (Brussels)
Gerechtshof ’s-Gravenhage, 24 February 2005, Case 04/516, LJN: AS9694 The Dutch competition authority initiated investigation proceedings in 2000 against three subsidiaries of Accel (hereafter “Accel”), which were active in the production and marketing of bicycles. On 28 November 2002, the (...)

The Latvian Senate’s Department of Administrative Cases passes decision addressing "modernisation" of national competition law and procedural issues after coming into effect of EC Reg. n° 1/2003
Tark Grunte Sutkiene (Riga)
What procedural issues have the Latvian courts dealt with after Reg. n° 1/2003 came into force ? The importance of knowing procedural activities It is useful to know the procedural nuances even if the particular procedural activity is performed by a competition institution. Sometimes it is (...)

The Czech Competition Authority refers to Art. 8 ECHR in defining the scope of its investigative powers (Delta / Odkolek - Penam)
Gide Loyrette Nouel (Prague)
PRK Partners (Prague)
This contribution provides a summary of the Czech Competition Office first-instance and appellate decisions addressing the limits to the right to privacy in the context of the Office’s investigation conducted in the business premises of an undertaking suspected of having infringed competition (...)

The UK Office of Fair Trading gives notice of intention to accept commitments to remedy competition concerns about a joint agreement on terms of supply under Art. 81 EC and UK Chapt. I Prohibition (TV Eye)
Freshfields Bruckhaus Deringer (London)
Squire Patton Boggs (London)
OFT, Notice under paragraph 2 of schedule 6a of the Competition Act 1998 of intention to accept binding commitments pursuant to section 31a (2) of the Act (TV Eye Limited), 2 March 2005 The UK Competition Act 1998 was amended, with effect as of 1 May 2004, to allow the OFT to accept binding (...)

The Leeuwarden Dutch Court of Appeal refuses to grant the benefit of the EC vertical restraint block exemption Regulation to a selective distribution system in the bicycle sales market (Batavus)
European Commission - DG HR (Brussels)
KfW (Albania)
Batavus B.V., a bicycle producer, had, for thirty years, a commercial relationship with a retailer, the respondent in the present case, which sold Batavus’ brand bikes. In 2001, Batavus ceased to supply this retailer, which then turned to alternative Batavus dealers in order to obtain supplies. (...)


The French Competition Authority issues an opinion on the conditions in which a basic banking service might be set up (Confédération de la Consommation du Logement et du Cadre de Vie)
French Competition Authority (Paris)
Press Release published on the official website of the French Competition Authority. Universal banking service and competition rules: The Conseil de la concurrence issues its opinion at the request of the CLCV.* The Conseil received a referral from the Confédération de la Consommation du (...)

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