November 2006

Anticompetitive practices

The Hungarian Competition Office fines a cartel in the agricultural sector in spite of intensive involvement of the State (Egg Cartel)
Oppenheim (Budapest)
Oppenheim (Budapest)
The HCO initiated proceedings against the Hungarian Association of Egg Producers (HAEP) and some of its members in 2005 in order to verify whether the HAEP and its members breached the cartel prohibition contained in Article 11 of the Hungarian Competition Act (HCA) and Article 81 of the EC (...)

The UK Court of Appeal rules on the fixing of charges for sewerage services (Thames Water Utilities)
Brown Brothers Harriman (BBH) (Luxembourg)
On 29 November 2006, the Court of Appeal reversed the High Court ruling of 19 January 2006 on the claim arising from the Ministry of Defense (hereinafter “the MoD”) on repayments of metered sewerage services provided by the company, Thames Water Limited Utilities (hereinafter “Thames Water”). (...)

The European Commission fines producers and traders of synthetic rubber € 519 M for price fixing and market sharing cartel (Butadiene Rubber, Emulsion Styrene Butadiene Rubber)
DG COMP (Brussels)
EU Delegation to the Republic of South Africa (Pretoria)
"Commission fines producers and traders of synthetic rubber € 519 million for price fixing and market sharing cartel"* On 29 November 2006 the Commission adopted a Decision and imposed fines totalling € 519 050 000 on five groups of companies for participating in a cartel involving price fixing (...)

A Danish Court confirms that reporting of sales prices and contribution margins may amount to resale price fixing (Bestseller)
Plesner (Copenhagen)
On 27 November 2006, the High Court of Western Denmark upheld a decision by the Danish Competition Appeal Tribunal finding that an IT-system through which the supplier was informed on a daily basis of independent retailer’s sales prices and contribution margins on individual items effectively (...)

The UK OFT finds that an exchange of information on independant school fees violates national competition provisions but accepts a "structured settlement" (Independent Schools)
Hogan Lovells (London)
Office of Fair Trading, 20 November 2006, Decision n° CA98/05/2006, Exchange of information on future fees by certain independent fee-paying schools, Case CE/2890-03 In late December 2006, the UK Office of Fair Trading ("OFT") published a decision in which it found the exchange of commercially (...)

The Spanish Competition Authority approves the interchange fee setting scheme proposed by the Spanish payment card systems (Euro 6000 / Servired / 4B System)
Spanish Competition Authority (Madrid)
Compass Lexecon (Madrid)
Merchant associations pressed charges a year ago against the three Payment Card Systems which operate in Spain (EURO 6000, SERVIRED and 4B System), for their multilateral agreement setting interchange fees (Inter-System interchange fees). Interchange fees are fees paid by banks servicing (...)

The Slovenian Competition Authority annuls and voids a decision of a bank association as it restricts competition on market for purchases made by credit installments at the point of sale (Bank Association of Slovenia)
Fatur Law Firm (Ljubljana)
This case started in May 2005, when the Slovenian Competition Authority on the basis of its statutory duty started the proceedings on finding whether the decision of the Bank Association of Slovenia (“BAS”) on introduction of new joint banking product - BankKredit, represents restrictive (...)

Unilateral Practices

The Cypriot Competition Authority dismisses a complaint filed by a consumer against the Cyprus Telecommunications Authority for abuse of dominance on the Internet services market (Philippides / CYTA)
Queen Mary University (London)
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 Latvian Competition Authority rules that Riga’s International Airport has infringed Art. 82 EC by imposing different tax discounts on air navigation services (Riga Airport)
Brown Brothers Harriman (BBH) (Luxembourg)
On 22 November 2006, the Latvian Competition Council (hereinafter “the Council”) ruled that Riga International Airport (hereinafter “the Airport”) infringed article 82 of the EC Treaty (hereinafter “ECT”) by applying the regulation n° 3 (hereinafter “the regulation”) adopted on 23 July 2004 by the (...)

The Latvian Competition Authority declares State-owned airport fees discounts to be contrary to Art. 82 EC (Riga Airport)
Mittal Investments (London)
Summary On 22 November 2006, the Latvian Competition Council declared the system of discounts applied by the “State Joint Stock Company International Airport Riga” (“Airport Riga”) to be contrary to Article 82 (c) of the EC Treaty prohibiting the abuse of a dominant position. The facts In July (...)

The Italian Competition Authority accepts commitments aiming at facilitating competitors’ access to patented drugs (Merck / Principi Attivi)
London School of Economics (London)
Article 5 of Council Regulation (EC) n° 1/2003, of 16 December 2002, on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJEU L 1, 4 January 2003, p. 1-25) allowed National Competition Authorities to accept commitments in proceedings concerning the (...)

The UK Office of Rail Regulation fines railway operators £4.1 M for predatory pricing and exclusionary practices (English Welsh / Scottish Railway)
Ofcom (London)
The United Kingdom railway regulator, the Office of Rail Regulation (ORR), has fined English, Welsh and Scottish Railway Limited (EWS) for predatory pricing and exclusionary behaviour. The ORR found that EWS, the largest freight train operator, abused its dominant position in the supply of coal (...)

The UK Office of Rail Regulation imposes a £4,1M penalty to the largest rail freight operator for abusive discriminatory practices (English Welsh / Scottish Railway)
Quebec Department of Justice (Quebec City)
In 2001 and 2002, various complaints were filed with the UK Director of Fair Trading (DFT), in respect of alleged anti-competitive conduct by the English Welsh and Scottish Railway Limited (EWS). EWS is the largest rail freight operator in Great Britain. Its principal activities are bulk (...)

The Spanish telecommunications regulator fines the incumbent € 20 M for abuse related to access to the subscriber loop but raises questions on its relationship with Spanish Competition Authority regarding competition law enforcement (Telefónica)
Callol, Coca & Asociados (Madrid)
Callol, Coca & Asociados (Madrid)
On the 16 November 2006, the Spanish telecommunications regulator ("Comisión del Mercado de las Telecomunicaciones", CMT) fined the incumbent Telefónica € 20 M for failing to comply with the conditions for access to the subscriber loop applying to third party operators in connection with the (...)

The UK Competition Appeal Tribunal grants interim damages of £2 million in a case of abusive drugs price setting (Healthcare at Home / Genzyme)
Hogan Lovells (London)
Background GenzymeLimited ("Genzyme”) is the manufacturer of Ceredase and Cerezyme, drugs used in the treatment of Gaucher disease. Genzyme also provided home care services to administer its drugs. The home care services were initially subcontracted, firstly to Caremark and then to Healthcare (...)

The Italian Supreme Court upholds the Competition Authority’s decision fining the energy incumbent €4.5 million for having restricted independent importers to sell gas (ENI)
Freshfields Bruckhaus Deringer (Rome)
Freshfields Bruckhaus Deringer (Rome)
On 6 November 2006, the Italian Supreme Administrative Court (Consiglio di stato) endorsed findings that ENI, the vertically integrated Italian gas incumbent, had failed to comply with the Italian Antitrust Authority (IAA) 2002 decision (Blugas-Snam)whereby ENI was found to have hampered the (...)

The Hungarian Competition Authority dismisses the proceedings on abuse of dominant position against the postal sector incumbent but phrases various recommendations on discounts (Hungarian Post)
Oppenheim (Budapest)
Oppenheim (Budapest)
Proceedings, applicable law An abuse of dominant position is prohibited by both Article 82 of the EC Treaty as well as Article 21 of the Hungarian Competition Act (the latter provision contains materially identical rules to its EC counterpart). The HCO stated that in the present case both the (...)

The US DoJ releases a business letter that calls to focus on patent licensing in the standard setting context
Covington & Burling (Washington)
Covington & Burling (San Francisco)
On October 30, 2006 the Antitrust Division released a new business review letter that looks favorably on a standards development organization’s (SDO) proposed patent policy that requires participants to predisclose the maximum royalty rates (...)


The Dutch Trade and Industry Appeals Tribunal confirms the annulation of the Dutch Competition Authority’s merger decision having imposed electricity auction as remedy on the wholesale electricity market (Nuon / Reliant)
Covington & Burling (Brussels)
Introduction In its judgment of 28 November 2006 the Trade and Industry Appeals Tribunal (“Tribunal”) dismissed the appeal lodged by the Dutch Competition Authority (“NMa”) in the Nuon/Reliant merger case. The case started in 2003 following the imposition of structural remedies with a phase II (...)

The Dutch Trade and Industry Appeals Tribunal upholds the Rotterdam court’s cancellation of the Dutch NCA conditional clearance of a merger in the energy sector (Nuon / Reliant)
Netherlands Authority for Consumers & Markets (The Hague)
The acquisition by Nuon of Reliant was originally cleared by the NMa in December 2003 after a phase II investigation. The activities of Nuon and Reliant mainly overlap in regard of the production and wholesale of electricity. The NMa defined the relevant market as the market for the production (...)

The Estonian Competition Authority cleared a merger subject to an ownership dispute to be settled in court (Wõro Kommerts/Oskar LT)
Jones Day (Brussels)
The operation By a decision dated 27 November 2006, the ECA authorised in phase I the acquisition by Wõro Kommerts of Oskar LT (para. 1). Comments The transaction did not raise any competition concerns. However, a shareholder of the target submitted a complaint to the ECA and claimed that (...)

The Hungarian Competition Office gives conditional clearance to the creation of a joint venture in the press logistics sector (MédiaLog Fiege)
Oppenheim (Budapest)
Oppenheim (Budapest)
MédiaLog was founded by various large Hungarian publishing companies such as Ringier Kiadó Kft. (“Ringier”), Népszabadság Kiadó és Nyomdaipari Zrt. (“Népszabadság”), Sanoma Budapest Kiadói Zrt. (“Sanoma”) and a major German logistics company F-LOGAG (“F-LOG”). According to the joint venture agreement 51% of (...)

The Hungarian Competition Authority clears a merger in the press distribution sector subject to non-discrimination and confidentiality remedies (MediaLog)
Lakatos, Köves (Budapest)
The operation Ringier Kft and Népszabadság Zrt. are owned by the Swiss Ringier AG and their main activity is editing daily and weekly papers. Sanoma Zrt. is owned by the Finnish Sanoma WSOY Corporation and its main activities are (i) editing magazines, (ii) editing literary, communicational and (...)

The Hungarian Competition Authority clears a merger in the press sector subject to non-discrimination and confidentiality remedies (Ringier Kiadó)
Lakatos, Köves (Budapest)
The operation Ringier Kft and Népszabadság Zrt. are owned by the Swiss Ringier AG and their main activity is editing daily and weekly papers. Sanoma Zrt. is owned by the Finnish Sanoma WSOY Corporation and its main activities are (i) editing magazines, (ii) editing literary, communicational (...)

A Russian Order provides details on approval of the presentation of a list of persons belonging to one group of persons for the purposes of merger notifications (Order 26 Nov. 2006)
Lefèvre Pelletier
The Russian Federal Law n° 135-FZ “On Protection of Competition” dated 26 July 2006 (hereinafter the “Law”) deals with state monitoring over economic concentration and, in particular, with transactions concluded by a same group (hereinafter the “Group”) leading to economic concentration. By virtue of (...)

The UK OFT accepts undertakings in lieu of a reference to the Competition Commission, including an exclusive licence of intellectual property rights to an upfront purchaser thereby clearing the merger in the equipment for industrial cheese production market (Tetra Laval / Carlisle Process Systems-CPS)
Baker McKenzie (Dusseldorf)
The operation By way of decision of 20 November 2006 the OFT decided to accept undertakings offered by Tetra Laval to address the competition concerns arising from the anticipated acquisition by Tetra Laval of part of CPS from Carlisle Companies Inc. Tetra Laval is a group of companies active (...)

The EU Commission approves a merger between two undertakings operating in the gas sector, electricity generation and retail, and in energy services keeping energy markets in Belgium and France open and contestable through far-reaching remedies (Gaz de France / Suez Group)
European Commission (Brussels)
DG COMP (Brussels)
Gaz de France/Suez: Keeping energy markets in Belgium and France open and contestable through far-reaching remedies* I. Introduction Following an in-depth investigation, the Commission approved under the EU Merger Regulation the merger between Gaz de France (‘GDF‘) and the Suez Group on 14 (...)

The EU Commission conditionally approves an acquisition in the electricity and gas sectors (Gaz de France / Suez Group)
JG Associates (Brussels)
DG COMP (Brussels)
Mergers — Main developments between 1 September and 31 December 2006* On 14 November the Commission gave its conditional approval to the merger of Gaz de France (GDF) and the Suez group. After an in-depth investigation, the Commission initially found that the deal would have anticompetitive (...)

The European Commission clears a merger in the telecommunications network equipment sector (Nokia/Siemens)
JG Associates (Brussels)
DG COMP (Brussels)
"Mergers — Main developments between 1 September and 31 December 2006"* On 13 November, after an intensive Phase I investigation, the Commission gave its unconditional go-ahead to the proposed merger between the Finnish company Nokia and the network equipment business of the German company (...)

The European Commission approves a merger in the manufacturing and supplying of analytical instruments, scientific equipment, consumables and services to the scientific community (Fisher/Thermo Electron)
JG Associates (Brussels)
DG COMP (Brussels)
"Mergers — Main developments between 1 September and 31 December 2006"* On 9 November the Commission approved the proposed acquisition of Fisher Scientific International Inc. by Thermo Electron Corporation. Both Thermo and Fisher are US companies active in the field of manufacturing and (...)

The US DOJ challenges the acquisition of a partial interest of a competing company in the dairy sector (Dairy Farmers)
Allen & Overy (Palo Alto)
The Department of Justice’s challenge to unwind the Dairy Farmers of America (“DFA”) acquisition of a partial interest in Southern Bell Dairy is interesting on a number of levels. This article addresses two issues raised by Dairy Farmers that antitrust attorneys should consider when counseling (...)

The Spanish Competition Authority clears in phase II a merger in the health insurance services sector subject to removal of exclusivity clauses and third party access (Adeslas/Global Consulting/Lince)
PwC (Madrid)
The operation The operation involved the acquisition of joint control of Lince Servicios (and its subsidiaries) by Adeslas and Global Consulting. Lince Servicios was active in the provision of healthcare and health insurance services in the province of Ciudad Real. Before the transaction, (...)

The Portuguese merger regime narrows the time limits for control and the time frame to notify takeover bids (Act, 2 Nov. 2006)
Sérvulo (Lisbon)
Madalena Sutcliffe (Lisbon)
The Portuguese Government recently adopted Decree Law 219/2006 of 2 November 2006 (“DL 219/2006” ). This diploma intends to implement Directive 2004/25/EC of the European Parliament and of the Council, of 21 april 2004, on takeover bids (OJEU L 142, 30 April 2004, pp. 12-23 ; “European Takeover (...)

State Aid

The Cypriot Commissioner for State aid control authorises an aid scheme aimed at incentivising employers/businesses to organise and implement training programmes for their employees (Training programmes)
Queen Mary University (London)
Factual Background On 16 November 2006 the Human Resource Development Authority of Cyprus notified to the Commissioner for State Aid Control a draft aid scheme, entitled “single-company continuing training Programmes in Cyprus”. The aid aims at incentivising employers/undertakings to design, (...)

The Danish Competition Authority finds that a municipality had wrongly calculated the costs of the municipal service provider in relation to home case services and orders the municipality to re-calculate the latter’s costs, taking into account its guidance (Praktisk hjælp / Hjørring Kommune)
Honoré & Fallesen (Copenhagen)
Factual Background A private company complained to the Danish Competition Authority (DCA) about the municipality of Hjørring paying too low a price for the services provided by private companies in the field of home care. Summary of the Court’s findings The DCA stressed that under Section 11a (...)

The Spanish Superior Court of Justice of Castilla and Leon states the conditions for a company restructuring plan to fall within the State aids regime (Instituto Nacional de Empleo)
Hogan Lovells (Madrid)
Allianz (Brussels)
Factual Background: The National Employment Institute refused to grant unemployment benefits to a worker who had been made redundant within the framework of his company’s restructuring plan. The claimant received compensation for dismissal, which raised his income over the threshold of the (...)

The Irish High Court rules that actions regarding State aid measures in the private medical insurance sector to which the EU Commission did not object can not be brought before the national courts, as they fall under Art. 86(2) of the EC treaty (Bupa Ireland)
United Kingdom’s Competition Authority - CMA (London)
Factual Background This case concerns private medical insurance and its operation in the Irish market. Private medical insurance ("PMI") was formally introduced in Ireland in 1957 with the establishment of the Voluntary Health Insurance Board (the "VHI"), in order to enable persons not (...)

The EU Commission holds that the remuneration fee paid to the Italian postal service provider for the distribution of postal savings books does not constitute State aid because it is in line with the principles established by the EU Court of Justice (Cassa Depositi e Prestiti / Poste Italiane)
DG COMP (Brussels)
European Commission - DG BUDG
"Poste Italiane: a market fee can fulfil the Altmark criteria"* On 22 November 2006, the Commission has decided that the remuneration fee paid by ‘Cassa Depositi e Prestiti’(CDP) to ‘Poste Italiane’(PI) for the distribution of postal savings books as of 2004 does not constitute State aid because (...)

The EU Commission adopts community framework for State aid for research and development and innovation
DG COMP (Brussels)
DG GROW (Brussels)
"The new community framework for state aid for research and development and innovation"* On 22/11/2006, the Commission has adopted a new Community framework for state aid for research and development and innovation. The new framework has been published in the Official Journal on 30/12/2006 and (...)

The Austrian Administrative Court refuses to open up the circle of State aid recipients to suppress the selective character of the measure and assumes a total blockage effect of the standstill obligation for past periods (Austrian Energy reimbursements)
University of Vienna
Peter Thyri Competition Counseling Research (Vienna)
Factual Background The EAVG (in the applicable version) provided for a reimbursement of taxes levied on the consumption of electricity on two conditions: 1) Eligibility only of undertakings in the goods manufacturing sector; and 2) electricity consumption above a minimum threshold. From 1997 (...)

The Bulgarian Competition Authority clears State aid in the form of compensation for public transportation services under national State aid rules (Elena Avtotransport)
Kinstellar (Sofia)
By this Decision of 2 November 2006 the Bulgarian Commission for Protection of Competition (“the Commission”) cleared a State aid in the form of compensation for public transportation services, provided on the territory of Municipality of Elena, North-Eastern Bulgaria, by the transport operator (...)


The French Criminal Supreme Court rules that company reselling products bought from its own branch can be convicted of below-cost price reselling (Décathlon)
University of Aix-Marseille
The law that prohibits below-cost price in France is very plainly stated in the French Commercial Code (Article L.442-2) and defines the act as “reselling ... a product below its effective cost. This rather simple definition leaves a lot of room for the French Supreme Court to define what should (...)

The UK Competition Appeal Tribunal awards interim damages in an abuse of dominant position case on the drugs market (Healthcare at Home / Genzyme)
Sanoma (Helsinki)
Introduction On 15 November 2006, the UK Competition Appeal Tribunal (CAT) awarded an interim payment of £ 2 millions to Healthcare at Home Limited (HH) in respect of its damages claim against Genzyme Limited (Genzyme) for infringement of the Chapter II prohibition (abuse of a dominant (...)


The French Constitutional Council rules on electricity and gas tariffs (GDF privatization)
Fréget & Associés (Paris)
French Competition Authority (Paris)
Hanefeld (Paris)
French Constitutional Court (Conseil Constitutionnel), 30 November 2006, Decision n° 2006-543 DC, Law regarding energy sector (“Loi relative au secteur de l’énergie”) Law n° 2006-1537 of 7 December 2006, regarding energy sector, (...)

The French Competition Authority issues an opinion on the broadband access delivered on the national market
French Competition Authority (Paris)
Conseil de la concurrence to lift ex ante regulation on the market for national broadband access.* As part of the market analysis procedure set up by the code of postal and electronic communications law, the Conseil de la concurrence, which was referred to on 25 and 6 October 2006, has just (...)

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