On August 7, 2008, William E. Kovacic, the Federal Trade Commission Chairman, announced that Jeffery Schmidt, the Director of the Bureau of Competition for the past two and half years, will be leaving the FTC. Mr. Kovacic has named David P. Wales, the deputy director of the Bureau of Competition, as the Acting Director.
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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.
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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.
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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.
On July 29, 2008, Paul Wilkinson and Christopher Cartwright, two U.S. Department of Defense (“DOD”) contractors, pled guilty to defraud the United States, commit wire fraud and steal trade secrets from Matthew Bittenbender, another U.S. DOD contractor.
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.
Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com
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.
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