- On March 2, the Canadian Competition Bureau that Robert J. Hart, a former senior vice president of UCAR International Inc. (now GrafTech International Ltd.), pleaded guilty, and was fined $50,000 by the Canadian Federal Court for his role in an alleged conspiracy to fix the price of graphite electrodes. "This conviction sends a message that executives involved in price fixing conspiracies that harm the Canadian marketplace are personally accountable under the Competition Act," said John Pecman, Acting Deputy Commissioner of Competition. "The Competition Bureau will continue to aggressively pursue corporations and individuals involved in cartels to ensure Canadians can enjoy the benefits of competition." Mr. Hart, a U.S. citizen, is the second individual, and the fifth party, to plead guilty in Canada to participating in the graphite electrodes cartel.
- On February 25, the European Commission confirmed that it was starting an investigation into the pricing of Apple Computer's iTunes following a referral from the UK's Office of Fair Trading ("OFT"). Which?, the UK's consumers association had requested the OFT to investigate the pricing since it appeared that downloading song tracks in the UK was more expensive than on the rest of continental Europe. The case will examine whether the alleged differential pricing, and potential restricting of access to the same tracks through foreign websites, is compatible with EU antitrust law.
- On February 24, the UK's OFT has suggested that it is due to take action against a number of cartels in the construction industry, as it welcomed the news that the Competition Appeals Tribunal ("CAT") had upheld the OFT's decision against nine contractors in the West Midlands and the fine imposed on Apex Asphalt. The OFT Chairman, John Vickers, stated that, "Evidence of cartel activity in the construction industry - from leniency applications and site visits is mounting." According to the Financial Times, the new round of "cartel-busting activity" in the sector will include large fines, and also raise the possibility of the UK's first criminal cartel prosecution, or, director disqualification, resulting from cartel behavior.
- On February 22-23, the European Commission, assisted by officials from Member State competition authorities, launched simultaneous "dawn raids" at the premises of some of the major European manufacturers of flat and car glass in the UK, Germany, Belgium and France. Dawn raids are the first step in a Commission investigation into suspected cartel activity. The Commission stated that it was looking for evidence of co-ordination of price-increases, agreement on the introduction of an "energy surcharge" in the flat glass sector, the allocation of customers, and agreement on supply quotas and prices by car glass producers. Flat glass is used mainly in the manufacture of glass products used by the building sector, and in a processed form by the car industry. Pilkington Plc, the world's largest maker of car windshields, French glass producer, Saint-Goblain, Glaverbel of Belgium, and Guardian of the US, were amongst the companies raided.
- On February 22, the Swedish Market Court fined five multinational oil companies a total of SEK112 million. The Market Court established that StatOil, OKQ8, Shell, Preem, and Hydro, had operated an alleged cartel in a serious infringement of the law, warranting the heavy fines. The companies had allegedly met in 1999 to collaborate on environmental matters, but had allegedly colluded on prices and rebates. The Swedish Competition Authority had raided the firms in December that year. The Director-General of the Swedish Competition Authority, Claes Norgen, welcomed the decision to fine the firms heavily, stating that it would significantly improve the Authority's chances of combating and prosecuting cartels in the future. Decisions by the Swedish Market Court cannot be appealed.
- On February 16, the UK's Office of Fair Trading ("OFT") decided not to transfer to the European Commission jurisdiction to examine the bids for London Stock Exchange plc ("LSE") by Deutsche Bse AG and Euronext NV. Neither bid met the threshold for merger notification to Brussels. Both bids are notifiable in the UK, and the bid by Deutsche Bse AG has also been notified in Germany. The OFT nevertheless carefully considered whether to ask the European Commission to examine the bids. A national competition authority may make such a request, under Article 22 of the EC Merger Regulation, if it considers that the European Commission is better placed to deal with the case. However, the OFT concluded that the UK was the appropriate forum to retain jurisdiction over both bids for a number of reasons, including the fact that on preliminary assessment, the primary competitive impact of the proposed transactions appears to be in the UK, which is where the majority of the LSE's customers are located, and the OFT has considerable experience in the markets concerned. As the case proceeds, the OFT will work closely with European counterparts, in particular with the Competition Directorate of the European Commission in Brussels and the Bundeskartellamt in Bonn..
- On February 16, it was reported that sixteen German gas suppliers in the German state of Bavaria agreed to freeze price rises until June 2005, in exchange for the state's economy ministry, which acts as the state's cartel office, dropping its investigation. The investigation had been prompted by allegations that the gas suppliers were over-charging the companies, had the most expensive rates in the states out of 110 companies, and that had planned to further raise their prices by 10%. The state ministry stated that closing the case was the most consumer-friendly solution.
- On February 14, the South African Competition Commission held that the country's leading tobacco manufacturer, British American Tobacco (BAT), used anti-competitive practices to maintain its dominant position on the market. It recommended a fine to the Competition Tribunal of up to 10% of the company's turnover, and to declare various incentives schemes to be declared void. The decision followed a complaint by Japan Tobacco International (JTI) that alleged that BAT had entered into illegal exclusive retail agreements and incentive schemes to promote its brands irrespective of the price of competitors' products.
- On February 10, the European Commission sent 'statements of objections' to the German mobile network operators ("MNOs"), T-Mobile and Vodafone, because the Commission believes the companies' practices may be contrary to EU's competition rules on abuse of monopoly power (EC Treaty, Article 82). In particular, the Commission has challenged the high rates that T-Mobile and Vodafone have charged other MNOs for international roaming services at the wholesale level. The Commission's investigation suggested that T-Mobile and Vodafone abused their dominant positions in the German market for the provision of international roaming services at wholesale level on their own networks. The abuse consisted of charging unfair and excessive prices to European MNOs. The Commission action aims to ensure that European consumers are not overcharged when they use their mobile phones on their travels around the EU.
- On February 8, it was reported that six Japanese manufacturers of aluminum foil - Mitsubishi Aluminum, Nippon Foil Manufacturing, Tokia Aluminum Foil, Toyo Aluminum, Sumikei Aluminum Foil and Sun Aluminum - had been "raided" by the Japanese Fair Commission on suspicion of price fixing. The Aluminum Foil Industry Association was also raided.
- On February 7, the Mexican antitrust authority (Comisi Federal de Competencia) ("CFC") closed its investigation of a complaint filed by pharmaceutical company, Rimsa, against Roche, for monopolization practices in the distribution of Filgrastim. Filgrastim is an analgesic drug, which Roche imports from its manufacturer, and markets through its own Mexican distribution company. Rimsa alleged that Roche had agreed with Filgrastim's drug manufacturer to restrict the number of licensed distributors in the country. The CFC concluded that the allegations alone were not enough to establish that Roche had attempted to drive out its competitors out of the market.
- China Business Weekly, a state-run media company, reported that efforts to introduce a new Chinese anti-monopoly law have accelerated because of concerns that foreign multinationals are dominating certain industries. The report in China Business Weekly claimed that the draft of the new anti-monopoly rules could be turned into law by the end of 2005 (see also Legal update, Chinese Anti-monopoly Law will be issued this year). The draft of the anti-monopoly law has been a work in progress for over a decade but has not yet moved beyond the drafting stage. The report says that one reason for this is the existence of state monopolies. In addition, the report sheds light on the issue of which government department will oversee compliance with this law.
- On February 4, Reuters reported that Japan's Fair Trade Commission is close to notifying Intel that its alleged business practice of paying rebates to computer manufacturers to limit their purchase of rival competitor computer processors violates Japanese antitrust law.
- On February 3, the Slovak Parliament approved an amendment creating the Antimonopoly Office of the Slovak Republic ("AO") increased competencies in the field of assessing ,and deciding upon abusive pricing by companies having a dominant position on a market. The amendment expressly includes unfair pricing as one of the categories of potential abuse by a dominant undertaking listed in the statute. Effective March 1, 2005, AO will be entitled to investigate and adopt decisions in cases where dominant players have imposed unfair prices, and impose a fine amounting to 10% of the turnover.
- On February 2, the Australian Federal Government announced that it would introduce criminal penalties for serious cartel conduct. The proposed criminal cartel offence will prohibit a person from making or giving effect to a contract, arrangement or understanding between competitors that contains a provision to fix prices, restrict output, divide markets or rig bids, where the contract, arrangement or understanding is made or given effect to with the intention of dishonestly obtaining a gain from customers who fall victim to the cartel. The maximum penalties for the offence will be a term of imprisonment of five years and a fine of $220,000 for individuals and a fine for corporations that is the greater of $10 million or three times the value of the benefit from the cartel, or where the value cannot be determined, 10 per cent of annual turnover. The Government will discuss the proposal with the Australian States and Territories over the next three months.