INTERNATIONAL ANTITRUST HIGHLIGHTS
- On July 12, the European Commission imposed a penalty payment of €280.5 million on Microsoft for its continued non-compliance with some of its obligations under the Commission’s March 2004 Decision. That Decision found that Microsoft had abused its dominant position under Article 82 EC, and required Microsoft to disclose complete and accurate interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers. Should Microsoft continue to fail to comply, the Decision also increases the amount of the daily penalty payment to which Microsoft could be subject to €3 million per day. European Competition Commissioner, Neelie Kroes, stated:
" Microsoft has still not put an end to its illegal conduct. I have no alternative but to levy penalty payments for this continued non-compliance. No company is above the law. Any businesses operating in the EU must obey EU law". In a press release, Microsoft's General Counsel, Brad Smith, responded: "The fine announced today is larger than the fines the Commission has imposed for even the most severe competition law infringements, such as price-fixing cartels. When you consider Microsoft’s massive efforts to comply with this ruling, and the fact that more than a dozen companies are already using similar documentation provided in the U.S. to ship actual products, we do not believe this fine is justified." - On July 13, the European Court of First Instance (CFI) annulled the decision of the European Commission which approved the creation of a joint venture between Sony and Bertelsmann Music Group (BMG) under Article 8(2) of the old EC Merger Regulation (Regulation 4064/89). The CFI has found that the two main reasons why the Commission concluded that there was not a collective dominant position on the markets for recorded music (the lack of transparency and absence of retaliatory measures) were not adequately supported by the Commission's reasoning or examination. The Commission's decision was, therefore, annulled due to the Commission's manifest error of assessment.
- On July 24, the European Commission cleared the proposed merger between the French company, Alcatel, and the US firm, Lucent Technologies, under the EU Merger Regulation. The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. The Commission held that the main competitive impact of the proposed transaction would be on the supply of optical networking equipment (in particular, on optical core switches - OCS), and broadband access solutions (in particular, Digital Subscriber Line Access Multiplexers - DSLAM). However, the Commission’s investigation revealed that, despite the considerable market shares the merged entity would have in these product areas, the market structure would remain competitive even after the proposed transaction. In particular, a number of effective competitors would remain in the market and customers (mostly network operators) would be able to sufficiently constrain the merged entity through their countervailing power in bidding procedures that are a characteristic of the industry.
- On July 17, Portugal's antitrust agency, the AdC, fined four salt-producing companies €910,000 for alleged cartel activity. The AdC alleged that Vatel, Salexpor, Salmex and Vitasal, who between them represent between 75% and 90% of salt sales in Portugal, colluded for 8 years by fixing prices, and dividing up sales territories. The cartel allegedly ran from 1997 until March 2005 when the AdC launched its investigation following a complaint. The cartel allegedly affected salt sales for the food sector as well as for the industrial sector, and its negative impact on customers was estimated at €5.6 million. The four companies received different fines based on the collaboration of each with the AdC's investigation.
- On July 12, the Dutch antitrust agency, the NMa, fined 12 manufacturers of prefab concrete products for alleged cartel offences. The NMa imposed fines amounting to a total of more than €3 million on nine manufacturers of prefab concrete piles, and fines of well over €2 million on three manufacturers of concrete floor elements. The highest individual fine amounted to more than €1 million. The NMa alleged that the nine companies producing concrete piles held periodical meetings between 1 January, 1998, and December 31, 2001, to coordinate their individual production and sales volumes. The NMa alleged that the three manufacturers of concrete floor elements held periodical meetings between 1 January, 1998, and March 2003, to coordinate their individual sales volumes. The NMa has warned that it will continue to monitor the construction sector for any further potential cartel activity.
- On July 20, the Korean Fair Trade Commission (KFTC) imposed fines of US$2.83 million on four chicken processors for alleged price-fixing practices. The KFTC alleged that the four companies colluded to fix prices for processed chickens. Halim, the country's leading chicken processor, was fined 1.24 billion won (approx. $1.3 m), and Maniker Co., the No. 2 company, 557 million won (approx. $0.6 million).
- On July 13, the French Conseil de la Concurrence accepted undertakings offered by France Telecom and Pages Jaune (Yellow Pages) Group after an investigation into allegations that France Telecom had engaged in discriminatory practices by selling subscriber lists that were less complete than those for its internal use, thereby inhibiting new entrants from competing, and Pages Jaune had prevented new entrants from accessing its database. France Telecom has offered to increase the amount of data provided to new entrants, and Pages Jaune has agreed to allow new entrants to access its databases until the end of July 2006, and share its commercial names database until the end of March 2007.
- On July 17, it was reported that an Australian class action lawsuit brought against three international vitamin suppliers for alleged price fixing had settled for $30.5 million AUD ($23 million USD). Roche Holding AG, BASF AG and Sanofi-Aventis SA were accused of fixing prices for a range of vitamin products used for animal nutrition or health over 10 years in the 1990s. The plaintiffs alleged that Australian farmers and businesses lost market share or paid inflated prices, and filed the country's first ever cartel class action suit. If the Federal Court approves the proposed settlement, it will be the first successfully concluded cartel class action in Australia.
- On July 19, the European Commission announced that it had appointed Ms Nadia Calvino as Deputy Director-General for Competition, in charge of mergers. Ms Calvino has held a number of posts in the competition defense service of the Spanish Ministry of Economy and Finance, and, most recently, was Director General of Competition. She will take up her post within DG Competition in the coming weeks, and will be responsible for developing and formulating EU/Commission policies in the mergers field. Prior to this appointment, Philip Lowe, the Director General for Competition, had been covering the mergers position.
Neil Ray
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