International Highlights :: Antitrust Lawyer Blog
July 31, 2008

CHINA’S ANTI-MONOPOLY LAW

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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July 31, 2008

INDIA REVIEWS MERGERS

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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July 16, 2008

EU TO EXPAND INTEL ANTITRUST INVESTIGATION

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.

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June 11, 2008

THREE EXECUTIVES SENTENCED IN UK’S FIRST OFFICE OF FAIR TRADE’S CRIMINAL PROSECUTION FOR BID RIGGING

On June 11, 2008, Peter Whittle, David Brammar and Bryan Allison pled guilty for running a cartel in UK’s first criminal prosecution for bid rigging. Mr. Allison and Mr. Whittle were both sentenced to three years in prison while Mr. Brammar received a two and a half year sentence. Mr. Allison also had to pay a fine of £25,000.

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January 16, 2008

COMMISSION LAUNCHES SECTOR INQUIRY INTO PHARMACEUTICALS

On January 16, 2008 the European Commission (the “Commission”) announced that it launched an inquiry into the pharmaceuticals sector under Article 17 of Regulation (EC) 1/2003. The Commission is concerned that competition within the pharmaceuticals sector may be restricted or distorted. In particular, the Commission highlighted the decline of innovation.

In its announcement, the Commission highlighted that market distortion may be occurring in the patenting or exercise of patenting products, vexatious litigation and/or collusive agreements, which may limit consumer choice, reduce economic incentives to invest in research and development and damage public and private health budgets. The Commission is conducting unannounced inspections to gain immediate access to relevant information and is targeting pharmaceutical suppliers of innovative and generic medicines for human use. In addition, the Commission holds the powers to inspect consumer and professional health care organizations and authorities granting patents and marketing authorizations for drugs. The Commission intends to publish its preliminary report for consultation in autumn 2008 and it expects to publish the final report in spring 2009.

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January 11, 2008

OPERA FILES ANTITRUST COMPLAINT AGAINST MICROSOFT

Opera, a Norwegian developer of web-browsers, filed a complaint against Microsoft with the European Commission (the “Commission“) claiming Microsoft is abusing its dominant position by tying its browser, Internet Explorer, to the Windows operating system and by hindering interoperability by not following accepted Web standards. The developer asked the Commission to require Microsoft to unbundle Internet Explorer from Windows and/or carry alternative browsers pre-installed on the desktop and require Microsoft to follow fundamental and open Web standards accepted by the Web-authoring communities. Opera thinks that its requested remedies gives consumers greater freedom and flexibility while, at the same time, ensuring that the Web further develops into a platform for innovation.

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November 18, 2007

E.U. COMMISSION FINES FLAT-GLASS PRICE-FIXING CARTEL

On November 28, 2007, the European Commission (“the Commission”) applied the 2006 Guidelines on Fines for only the second time, fining four companies a total of €486.9 million ($720 million). Asahi, Guardian, Pilkington and Saint-Gobain (“the Parties”) were fined for participating in a flat-glass price-fixing cartel that organized price increases, fixed minimum prices and tried to stabilize or raise prices.

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October 10, 2007

SPANISH GOVERNMENT TO CHALLENGE EUROPEAN COMMISSION’S DECISION TO FINE TELEFÓNICA

The Spanish Government announced on October 8, 2007, that it will bring an action before the Court of First Instance against the Commission’s decision to fine Telefónica. The Spanish Government believes that the Commission’s decision does not respect the Spanish telecoms regulator’s ("CMT") competencies.

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October 10, 2007

COMMISSION INITIATES PHASE II INVESTIGATION INTO THOMSON'S ACQUISITION OF REUTERS

On October 8, 2007, the European Commission (the “Commission”) initiated Phase II proceedings into the proposed acquisition of Reuters by Thomson. The in-depth assessment affords the Commission the opportunity to further examine the impact on competition of the proposed acquisition on the affected markets, notably for the supply of financial information.

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October 2, 2007

COMMISSION APPROVES SONY/BMG MERGER FOR THE SECOND TIME

On January 9, 2004, Sony Corp of Japan and Bertelsmann AG of Germany notified the European Commission (the “Commission) of their intention to combine their global recorded music businesses into a joint venture under the name of SonyBMG. They notified under the old EC Merger Regulation.

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October 1, 2007

GERMAN FEDERAL SUPREME COURT REFERS THE BKARTA’S SPRINGER/PROSIEBEN-SAT1 MERGER PROHIBITIONDECISION BACK TO THE HIGHER REGIONAL COURT DÜSSELDORF

In a recent judgment dated September 30, 2007, the Federal Supreme Court held that even after parties abandon their merger plans due to a prohibition decision by the German Federal Cartel Office ("BKartA"), German courts hold jurisdiction to rule on the question as to whether the BKartA was right to prohibit the proposed merger. The parties do, however, need to demonstrate a special interest in such a court review. The Federal Supreme Court acknowledged that such an interest arises in particular if the purchaser is likely to be confronted with similar arguments by the BKartA that led to the relevant prohibition when notifying potential future acquisitions.

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September 20, 2007

COMMISSION ANNOUNCES PROPOSALS FOR NEW ENERGY PACKAGE

On September 19, 2007, the European Commission (the “Commission”) adopted a package of proposals in order to reform the EU electricity and gas regulatory frameworks. The main proposals concerned unbundling, third country ownership and enhancing the power and independence of national regulators.

The Commission considers that existing legislation allowed companies to maintain network operations and supply and generation activities within a single vertically integrated legal entity and that this legislation damages the EU’s competitiveness. The Commission is therefore proposing new directives concerning the electricity and gas internal markets.

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September 17, 2007

ASSISTANT ATTORNEY GENERAL FOR ANTITRUST ISSUES STATEMENT ON EUROPEAN MICROSOFT DECISION

On September 17, Thomas O. Barnett, Assistant Attorney General for the Department's Antitrust Division, issued a statement scrutinizing the Court of First Instance of the European Communities (“CFI) decision to affirm the substance of the European Commission's (“EC”) March 2004 decision against Microsoft. Mr. Barnett said that “in light of the United States' own antitrust case and judgment against Microsoft, and the importance of the computer industry to consumers and to the global economy, the United States has a particular interest in the CFI’s decision.” He expressed concern that “the standard applied to unilateral conduct by the CFI, rather than helping consumers, may have the unfortunate consequence of harming consumers by chilling innovation and discouraging competition.” He reiterated that there appeared to be a common disconnect between U.S. antitrust enforcement and European antitrust enforcement. "In the United States, the antitrust laws are enforced to protect consumers by protecting competition, not competitors. In the absence of demonstrable consumer harm, all companies, including dominant firms, are encouraged to compete vigorously. U.S. courts recognize the potential benefits to consumers when a company, including a dominant company, makes unilateral business decisions, for example to add features to its popular products or license its intellectual property to rivals or to refuse to do so.” There is a perception that European antitrust regulators are more willing to accept arguments from competitors and seek enforcement remedies that help competitors rather than consumers. The U.S. antitrust agencies are more skeptical of competitor complaints. Mr. Barnett also commented that the DOJ “looks forward to continuing its wide-ranging and positive relationship with the EC on antitrust matters.”

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September 17, 2007

THE COURT OF FIRST INSTANCE ESSENTIALLY UPHOLDS THE EUROPEAN COMMISSION'S DECISION AND FINDS THAT MICROSOFT ABUSED ITS DOMINANT POSITION

In a ruling released on September 17, 2007, the Court of First Instance (the “Court”), the second highest court in Europe, reaffirmed the European Commission’s (“EC”) 2004 decision that Microsoft abused its market power by tying its digital media player to the Windows operating system. By bundling these products together, Microsoft undercut existing competition in the digital media player market and created an anticompetitive market structure. The Court upheld nearly all the key points the 2004 EC decision and, in doing so, delivered a stinging rebuke to Microsoft. The Court’s ruling stated that the EC’s standard of interoperability between the Windows operating system and alternative digital media players was well conceived and that there is no inconsistency between that degree of interoperability and the remedy imposed by the EC.

The Court also upheld the EC directive to share confidential computer code with Microsoft’s competitors, a ruling that contains possible ramifications on other companies that possess market dominance in various software markets. The Court went on to declare that the EUR 497 million ($690 million) fine levied against Microsoft shall stand as is.

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June 26, 2007

JAPANESE ADVISORY PANEL ISSUES RECOMENDATIONS

On June 26, 2007 the Japanese Government’s Advisory Panel on Basic Issues Regarding the Anti-Monopoly Act (“the Panel”) concluded its series of roundtable discussions. Since 2005, the Panel has met in order to discuss and update the Act Concerning Prohibition of Private Monopolization and Maintenance of Fair Trade. The Panel was directed by the Chief Cabinet Secretary and heard testimony from a wide range of experts and concerned citizens. The statement issued by the Panel, and summarized below, is the culmination of these meetings.

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November 14, 2006

Commission approves merger of Gaz de France and Suez, subject to conditions

On November 14, the European Commission approved 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 effects in the gas and electricity wholesale and retail markets in Belgium and in the gas markets in France. The Commission’s concerns related mainly to the removal of the increasing competitive pressure that GDF and Suez had so far exerted (and would have exerted in the foreseeable future) on each other in both Belgium and France. Given the conditions on the markets, including the very high barriers to entry, their respective dominant positions would have been considerably strengthened by the merger.

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