After more than a decade of deliberations, the People’s Republic of China promulgated its Anti-Monopoly Law (“AML”) at the Twenty-Ninth Meeting of the Standing Committee of the Tenth National People’s Congress on August 30, 2007. The new law will go into effect tomorrow, August 1, 2008. Like the Indian Competition Act, which will be effective later this year, the AML is based on Europe’s antitrust statutes broadly covering prohibitions on monopoly agreements, abuse of dominant positions and mergers. The law also has a highly controversial clause that prohibits the abuse of “administrative powers.” It also calls for the creation of an Anti-Monopoly Enforcement Authority (“AEA”), an “umbrella” antitrust regulatory agency.
In 1999, the Government of India formed a committee to make recommendations regarding a modern competition law. The new competition law took the form of the Competition Act, 2002 which was enacted and notified in January 2003. It replaced the Monopolies and Restrictive Trade Practices Act constituted in 1970. However, due to some reservations within the legal and business communities, the Competition (Amendment) Act, 2007 (“Act”) was enacted by Parliament in September 2007 and will be notified later this year.
On July 31, 2008, Bennet Environmental Inc. (“BEI”), a Canadian soil treatment company, pled guilty and agreed to pay $1 million criminal fine for its role in a conspiracy to defraud the U.S. Environmental Protection Agency (“EPA”) at a EPA designated Superfund site, Federal Creosote in Manville, NJ.
On July 30, 2008, the Federal Trade Commission (“FTC”) entered into a settlement agreement that allows McCormick & Company Inc.’s (“McCormick”) proposed $605 million acquisition of Lawry’s and Adolph's brands of seasoned salt products from Unilever N.V. (“Unilever”) to proceed. According to the FTC’s complaint, McCormick’s Season-All brand competes with Lawry’s brands in the manufacture and sale of branded seasoned salt products in the United States. The complaint indicates that these companies have strong brand followings and that even a five to ten percent increase in prices would not cause consumers to switch brands. As a result of the proposed transaction, the FTC believes that McCormick will control 80% of the market for branded seasoned salts and the company would have the ability to unilaterally increase prices on either brand to the detriment of consumers.
ITALIAN MARINE HOSE MANUFACTURERS AND MARINE HOSE EXECUTIVES PLEAD GUILTY FOR ROLE IN WORLDWIDE SCHEME TO RIG BIDS
On June 28, 2008, Manuli Rubber Industries SpA (“Manuli”), an Italian marine hose manufacturer, and Robert L. Furness, the former president of Manuli’s subsidiary Plantation, pled guilty for their role in a worldwide conspiracy to rig bids, fix prices, and allocate market share in the marine hose industry. Manuli agreed to pay $2 million in criminal fines, while Mr. Furness will pay $75,000 and serve a two year prison sentence. Mr. Furness is the third executive at Manuli to be charged for his role in the conspiracy. Additionally, Giovanni Scodeggio, manager of Parker ITR S.r.l.'s Oil & Gas Business Unit, another Italian marine hose manufacture, pled guilty for his role in the same conspiracy. Mr. Scodeggio agreed to let the court decide his prison sentence, to pay a criminal fine of $20,000, and to cooperate with the Department of Justice in their ongoing investigation.
On July 28, 2008, Timothy Pfeil, a former executive for SAS Cargo Group A/S (“SAS”), pled guilty to serve six months in prison for his role in a worldwide conspiracy to fix air cargo rates for shipments to and from the United States. Mr. Pfeil, the second airline executive charged in this conspiracy, will cooperate in the Department of Justice’s ongoing investigation. Earlier this month, SAS pled guilty and agreed to pay a criminal fine of $52 million for its role in the conspiracy. So far nine other airlines, including British Airways, Korean Air Lines, Quantas Airways, Japan Airlines, Cathay Pacific Airways, Martinair Cargo, Air France, and KLM Royal Dutch Airlines, and a former Quantas executive have been charged in the DOJ’s ongoing investigation in the air cargo industry. More than $1.2 billion in criminal fines have been imposed.
N.J. WASTEWATER TREATMENT SUPPLY COMPANY OWNER AND A CONTRACTS ADMINISTRATOR PLEAD GUILTY TO BID RIGGING, FRAUD AND TAX OFFENSES
On July 23, 2008, JMJ Environmental Inc. (“JMJ”), a wastewater treatment company, its owner, John Drimak Jr., and Norman Stoerr, a former contracts administrator, pled guilty to various counts of bid rigging, fraud, and tax evasion. These charges were all in connection with sub-contracts for wastewater treatment services at two Environmental Protection Agency (“EPA”) designated Superfund Sites, Federal Cresote in Manville, NJ and Diamond Alkali in Newark, NJ.
On July 17, 2008, the Federal Trade Commission (“FTC”) issued a complaint challenging the proposed $9 billion acquisition of V&S Vin & Sprit (“V&S”), a wholly owned corporation of the Kingdom of Sweden, by Pernod Ricard (“Pernod”), a wholly owned subsidiary of France-based Pernod. The FTC contends that the transaction is anticompetitive and violates U.S. antitrust laws.
On July 16, 2008, the European Commission (“EC”) announced that it would expand its investigation of the Intel Corporation by filing new antitrust charges. The charges allege that Intel provides inducements, such as discounts, rebates, and marketing payments, to computer manufactures discouraging them to use chips made by Intel’s smaller rival Advanced Micro Devices (“AMD”). Intel’s ubiquitous x86 chips are found in 75 percent of all personal computers and low-cost servers.
On July 14, 2008, the Federal Trade Commission (“FTC”) announced the launch of a new online resource, the FTC Guide to the Antitrust Laws. This resource, written in layman’s terms summarizes the core laws that ban unfair business practices and prevent mergers that harm consumers, and explains how antitrust cases are brought by U.S., State, and international authorities, as well as private parties. Antitrust rules are categorized into four sections: Dealings with Competitors, Dealings in the Supply Chain, Single Farm Conduct, and Mergers.
DOJ REQUIRES DIVESTITURE IN SIGNATURE’S ACQUISITION OF HAWKER BEECHCRAFT’S FLIGHT SUPPORT SERVICE BUSINESS
On July 3, 2008, the Department of Justice (“DOJ”) entered into a settlement agreement allowing Signature Flight Support Corporation to acquire Hawker Beechcraft’s (“Hawker”) fixed based operations (“FBO”). The settlement agreement requires Signature to divest its flight support service assets.
On July 1, 2008, the Department of Justice’s (“DOJ”) Antitrust Division decided to allow External Compliance Officer Inc., a New Jersey based anti-money laundering consulting company, to create a database that would allow money transmitters to better understand the backgrounds of prospective agents. A money transmitter is a company that provides electronic money transfer services to individuals. An agent receives and processes money from senders and distributes the funds to recipients.
On July 1, 2008, Visa Inc. rescinded a rule that required merchants to treat Visa-branded debit cards differently when used as a PIN-debit card (and processed via non-Visa networks) from the same cards when used as signature debit cards and processed on the Visa network. The rule was rescinded in response to the Department of Justice’s (“DOJ”) Antitrust Division’s investigation. Rescinding the rule allows affiliated banks to provide merchants the option of waiving the entry of a PIN for most non-Visa debit transactions initiated from Visa branded debit cards. Before the investigation, Visa prohibited banks from allowing its merchants to waive the PIN, even for “small ticket” transactions ($25 or less) from a non-Visa PIN network. The DOJ’s Antitrust Division began investigating the effects of this regulation on competition in the debit card industry.