International Highlights

February 6, 2014

Google settles EC antitrust lawsuit

On February 5, 2014, Google settled its long-running legal battle with the European Commission caused by its overwhelming control (+90%) of Europe’s search engine market. Under the settlement, Google will offer a number of concessions to its competitors, such as a promise to display results from at least three competitors every time it shows its own results for specialized searches to things like products, restaurants, and travel, and to give rival content providers, such as Yelp, the option to opt out of Google’s specialized searches without negatively affecting their rankings in normal Google searches. In addition, Google will remove conditions that have made it difficult for advertisers to move campaigns to rival sites, and allow sites that use Google’s search tool to show ads from other services. However, Google’s rivals were denied a key request—market test of the settlement measures to determine their effectiveness. Nevertheless, the settlement between Google and the highest antitrust authorities in Europe means the complainants have no recourse other than to take the European Commission itself to court.

Mark Ye

202-589-1834

October 25, 2012

How Does China Conduct Antitrust Reviews of Mergers?

by Doyle, Barlow & Mazard PLLC

Increasingly, China's antitrust reviews of global transactions have resulted in long investigations delaying the closing of many deals. This article outlines the Chinese merger review process and summarizes some of China's merger decisions.

Background

China's Anti-Monopoly Law (“AML”) took effect on August 1, 2008. Three agencies enforce the AML. The Ministry of Commerce (“MOFCOM”) reviews mergers and acquisitions. Non-merger cases are split between the National Development and Reform Commission (“NDRC”) and the State Administration for Industry and Commerce (“SAIC”). The NDRC handles price-related violations and SAIC the non-price related violations.

September 21, 2012

Department of Justice Touts Its Antitrust Practice

by Doyle, Barlow & Mazard PLLC

On September 19, Joseph Wayland, head of the Antitrust Division of the Department of Justice, spoke of the Division's recent performance and future outlook at Georgetown Law's 6th Annual Global Antitrust Enforcement Symposium.

In his speech, he highlighted recent successes in tough litigation cases such as the one brought against AU Optronics Corporation for price fixing. With strong legal showings over the past two years, Wayland claimed, the Antitrust Division hopes to demonstrate its strong commitment to preventing unfair market practices and maintaining a competitive market. At the same time, Wayland also touted the Antitrust Division's impressive track record as a key factor in its ability to intimidate firms and resolve negotiations before litigations need to be filed, as was the case with the 3M and Avery merger deal as well as the AT&T and T-Mobile merger which was shelved after a mere four months. According to Wayland, the Division always prefers to settle cases in this way, opting for negotiations and dialog before legal action.

To this end, Wayland credited a great deal of the Division's successes to what he called “front office” workers, a group of individuals consisting of senior managers and directors of criminal and civil enforcement who scrutinize and filter merger cases, selecting the ones in which litigations seem likely and leaving out the ones the pose no real harm to competition. Through this practice, as Wayland pointed out, the Division is able to maximize its resources and commit itself fully to only the most pressing anti-competitive matters. This is not to say, however, that the Antitrust Division has softened on its litigation abilities. As Wayland reiterated throughout his speech, the Division has taken measures to bolster its legal capabilities to ensure that when litigations do occur, it can win.

September 20, 2012

Canada Publishes New Competition Enforcement Guidelines

by Doyle, Barlow & Mazard PLLC

On September 20, 2012, Canada's Competition Bureau published the final version of its Enforcement Guidelines on the abuse of dominance provisions (sections 78 and 79) of the Competition Act. The Competition Bureau's release of the Enforcement Guidelines replaces all of the Bureau's previous publications on the abuse of dominance provisions.

Abuse of dominance occurs when a dominant firm (or group of firms) in a market engage in a practice of anticompetitive acts that result, or are likely to result, in a substantial prevention or lessening of competition. Sections 78 and 79 of the Competition Act allow the Competition Tribunal, on application by the Commissioner of Competition, to prohibit dominant firms from engaging in anticompetitive practices, or to order such further remedial action as is reasonable and necessary to restore competition in the market.

To prove an abuse of dominance, three elements must be established:

June 25, 2012

Seventh Circuit Sets Forth Elements for a Claim to Meet FTAIA

by Doyle, Barlow & Mazard PLLC

On June 27th, 2012, the 7th Circuit established elements extending the reach of United States antitrust law to certain cases where foreign companies engage in anticompetitive conduct outside the United States. (Minn-Chem, Inc., et al., v. Agrium Inc., No. 10-1712, slip op. (7th Cir. June 27, 2012)).

Background

In Minn-Chem, indirect U.S. potash purchasers alleged price-fixing and other antitrust conduct between potash suppliers. Because potash (minerals and salts used mainly in agricultural fertilizers) is a homogeneous commodity, a buyer will choose amongst suppliers largely based on price. Seventy one percent (71%) of the world's potash market is dominated by seven international entities that allegedly restrained the global supply of potash allowing for the entities to inflate prices.

December 31, 2011

China’s Ministry of Commerce Passes Measures on Unreported Transactions

by Doyle, Barlow & Mazard PLLC

On December 30, 2011, China's Ministry of Commerce (“MOFCOM”), the government agency tasked with merger review, formally promulgated new rules providing MOFCOM with clear procedural rules (and powers) to investigate and deal with reportable transactions that were not notified. These Provisional Measures on the Investigation and Treatment of Failure to Report Concentration of Undertakings (“Provisional Measures”) went into effect on February 1, 2012.

What Deals Should Be Reported

In a 2008 Order, China's State Council required that a transaction that is a merger, acquisition or even a joint venture where one entity has the ability to exert decisive influence over another must be notified and cleared by MOFCOM if it meets certain threshold elements:

November 1, 2011

The Foreign Trade Antitrust Improvements Act, Twombly & Iqbal: Is Compliance Practical?

by Doyle, Barlow & Mazard PLLC

On September 23, 2011, the Seventh Circuit Court of Appeals dismissed a case brought by a group of corporations that filed an antitrust suit against the major players in the potash industry, ruling that plaintiffs failed to allege specific facts sufficient to plead a plausible “direct, substantial, and reasonably foreseeable” connection between the alleged foreign anticompetitive activity and the domestic potash market. As the Foreign Trade and Antitrust Improvements Act (“FTAIA” or “Act”) develops through case law, antitrust lawyers and academics hoped that this latest case, Minn-Chem Inc. v. Agrium Inc., would provide more guidance in interpreting the Act's three-step test. However, it seems that this case spurred more questions than answers.

The FTAIA limits enforcement of U.S. antitrust laws in situations where there are no clear effects on U.S. consumers. The Act aims to regulate foreign trade or commerce with foreign nations via a three-step test: (1) Did the conduct involve U.S. import trade or import commerce? (2) If not, does the conduct involve trade with foreign nations? and (3) If the conduct involves trade with foreign nations, does it have a “direct, substantial, and reasonably foreseeable effect” on the U.S. market?

Minn-Chem Inc. v. Agrium Inc. Background

August 3, 2011

When Private Enforcement Meets Leniency

by Doyle, Barlow & Mazard PLLC

On June 14, 2011, the European Court of Justice decided that EU law allows third parties, who are suing cartel members for money damages, access to information and evidence gathered in criminal antitrust investigations. The decision may mean the end for leniency procedures, now that cartel members looking for a way out are faced with potential disclosure of the often incriminating information they provide the competition authorities.

Leniency in the framework of imposing fines for infringement of competition rules

Leniency procedures are the center of the fight against practices that restrict competition. Cartels can be fined and eliminated because one of its members brings enough information and evidence to the competition authorities in exchange for leniency or a reduced fine. A recent judgment of the European Court of Justice (“ECJ”), analyzed in this text, ruled that national laws that allow this disclosure of information are possible.

March 16, 2011

Canadian Competition Bureau Blocks First Merger After 6 Years – And It’s A Non-Reportable, Consummated Transaction

by Doyle, Barlow & Mazard PLLC

On January 26, 2011, in a surprising enforcement action, the Canadian Competition Bureau publically announced its application to the Competition Tribunal for an order to undo the consummated acquisition by CCS Corporation (“CCS”) of Complete Environmental Inc. (“Complete”) and its proposed Babkirk Secure Landfill in northeastern British Columbia (Babkirk”). The Competition Bureau determined, following a thorough review of the transaction, that CCS's acquisition of Complete would substantially reduce potential competition for the disposal of hazardous waste in northeastern British Columbia. Specifically, the Competition Bureau is seeking an order from the Competition Tribunal dissolving the merger and requiring CCS to divest itself of Complete entirely, or, in the alternative, to divest other appropriate assets to address the Bureau's concerns.

CCS operates the only two secure landfills in British Columbia. A “secure” landfill is designed, constructed and operated to keep hazardous waste confined for an indefinite period of time. These landfills accepted hazardous waste of the type generated by oil and gas producers in northeastern British Columbia. Complete was poised to enter the secure landfill business by opening Babkirk, a competing site near one of CCS' secure landfills. Before opening Babkirk, however, the owners of Complete sold the entire company to CCS, resulting in Complete and Babkirk becoming owned subsidiary of CCS. An independent competing Babkirk was never opened. CCS's acquisition of the Babkirk would give CCS control of all three operational secure landfills in British Columbia. Had CCS not acquired Babkirk, the new secure landfill would have been CCS's only competitor.

The CCS/Complete transaction was not reportable under the Canadian Competition Act. The Competition Bureau learned of the transaction and obtained a “hold separate” from CCS relating to the Babkirk landfill pending completion of its investigation of the landfill competition concerns. Subject to the hold separate, CCS completed it acquisition of Complete on January 7, 2011.

January 10, 2011

EU Revises Rules On Horizontal Cooperation Agreements

by Doyle, Barlow & Mazard PLLC

The European Union recently published new revised rules regarding the assessment of horizontal cooperation agreements (i.e. agreements concluded between competitors). These new modifications primarily concern issues of standardization, information exchange, and research and development (“R&D”). Now, businesses operating in the EU may better assess their compliance with EU antitrust law to avoid penalties and litigation. The new regulations come in two parts: (1) a set of “Horizontal Guidelines” and (2) pair of Block Exemption Regulations (“BERs”).

EU Commission Vice President Joaquin Almunia commented: “One of the overarching goals of the new rules is to contribute to the Commission's Europe 2020 strategy, in particular by promoting innovation and competitiveness. The new Guidelines and Block Exemption Regulations will give companies the necessary freedom to cooperate in a globalized market place, while at the same time minimizing the risk of agreements that are harmful to industry or consumers.”

The new “Horizontal Guidelines” set up a basic framework for analyzing common types of horizontal cooperation agreements, including those in the areas of R&D, production, purchasing, commercialization, standardization, standard terms, and information exchange. Included in the Guidelines is a revised chapter on standardization agreements. The chapter promotes an open and transparent standard-setting system in order to increase the transparency of licensing costs for intellectual property rights (“IPRs”). Access will be given on “fair, reasonable, and non-discriminatory” (“FRAND”) terms to interested businesses and individuals. In addition, it features detailed criteria on what constitutes a so-called “safe-harbour” agreement so that companies may assess the extent to which their agreements line up with EU competition law. The Guidelines also feature a new chapter on information exchange, which explains how to assess the compatibility of information exchanges with EU competition law. This chapter allows competitors, for example, to increase prices without incurring the risk of losing market shares or triggering a price war during the adjustment period to new prices. The chapter also includes real-life examples of typical information exchange scenarios.