Antitrust Law Blog : Antitrust Lawyer & Attorney : Sheppard Mullin Law Firm : Antitrust Law Blog

• On August 11, it was reported that a new set of rules relating to foreign investment in Chinese companies will require large international acquisitions to be submitted for competition review to the Ministry of Commerce and State Administration for Industry and Commerce. The threshold for notification are transactions that generate local revenues of more than CNY1.5bn (approx. US$190m) per year, or if either company holds a market share of more than 20%, or if the new entity will hold a combined market share of more than 25%. The new rules will start to apply next month.
• On August 14, Australia's Federal Court imposed a penalty of AU$280,000 on Cambur Industries Pty Ltd, the sole Australian distributor of Bamix and Magimix branded kitchen products, including the dual branded Nespresso / Magimix coffee making machines, for engaging in resale price maintenance. A Cambur sales and marketing manager was also fined AU$32,000. Cambur admitted to the Court that in its dealings with two Adelaide-based authorized retailers, it had breached Section 48 of the Trade Practices Act, by inducing or attempting to induce the retailers not to sell and advertise Cambur products at prices less than prices specified by Cambur; making it known to the retailers that Cambur would not continue to supply Cambur products unless the retailers agreed not to sell and advertise Cambur products at prices less than prices specified by Cambur; and, using statements of prices that were likely to be understood by the retailers as the prices below which Cambur products were not to be sold and advertised for sale. Australian Competition and Consumer Commission Chairman, Mr. Graeme Samuel, said, "Suppliers cannot seek to build brand value by imposing a minimum retail price for goods they have supplied - that is a decision for the retailer. Imposing such minimum retail prices prevents consumers from obtaining lower prices that may otherwise be available through competition".
• On August 2, the Australian Competition and Consumer Commission instituted proceedings in the Federal Court, Sydney, against FCHEM (Aust) Limited, Osmose Australia Pty Ltd, and Mr. Edward Mark Greenacre, the former Managing Director of Osmose Australia Pty Ltd, alleging cartel behavior in the timber preservatives industry. The ACCC's allegations concern conduct over a number of years involving price fixing in relation to the supply of various wood preservative chemicals including CCA (copper chromium arsenic) and LOSP (light organic solvent preservatives). These products are widely used by the timber industry. The ACCC is seeking declarations, injunctions, and pecuniary penalties.
• On August 16, it was reported that Venezuela's antitrust agency, Procompetencia, made public its decision to require airline companies to pay travel agencies a 10% commission fee for all their plane ticket sales. Procompetencia alleged that the progressive reduction of the commission paid to travel agencies over the past several years was an anticompetitive practice carried out by the airlines who had unilaterally imposed their conditions on travel agencies. 
• On August 15, the Norwegian Competition Authority (NCA) announced that it would appeal against an Oslo City Court's judgment to set aside the NCA's decision to impose a fine of NOK 20 million (€2.5 million) on Norwegian airliner, SAS. On June 6, 2005, the NCA imposed the fine on the SAS air carrier group for allegedly abusing its dominant position through predatory behavior on a domestic air route between Oslo and Haugesund between May and June 2004 which allegedly resulted in a smaller carrier, Coast Air, who was SAS’ only competitor on this route, withdrawing from the route. NCA's Director Eivind Kloster-Jensen, said, "We disagree with the reasoning for and the conclusion of the judgment".
• On August 14, it was reported that Russian Federal Prosecutors had been ordered to investigate suspected price fixing by building companies in Moscow and St. Petersburg as property prices increased to record levels. A spokesman for the Prosecutor General confirmed media reports that a probe had been commissioned, and cited a statement on the prosecutor's Web site: "The Prosecutor General has commissioned the Federal Anti-Monopoly Service to organize a probe - on the basis of possible price collusion - of the compliance of anti-monopoly legislation by building organizations when defining prices on housing".
• On August 18, the UK's Competition Commission (CC) published for consultation its proposed remedies designed to increase competition in the home credit market. In its provisional findings report published in April, the CC concluded that the lack of competition in the home credit market, from other credit products, new entrants or among the home credit providers themselves, means that customers face higher prices for their loans than would be expected in a competitive market. Along with the report, the CC also outlined a number of possible remedies to increase competition in the market. Since then, the CC has been discussing those possible remedies with home credit companies and other lenders as well as consumer bodies, credit reference agencies and other arms of government. Following these discussions, the CC is now proposing a package of measures which it considers will be practical and effective in increasing competition in the market to the benefit of customers.
• On August 14, New Zealand's Cease and Desist Commissioner, Terence Stapleton, issued the first Cease and Desist Order to be made under the country's Commerce Act. Cease and Desist orders allow for quick enforcement action against alleged anticompetitive behavior. The Commerce Commission sought the order against port owner Northport Limited for activities at Marsden Point port in Whangarei. Commerce Commission Chair, Paula Rebstock, said that Northport had allegedly attempted to use its monopoly power as the owner of the port to prevent competition in the general cargo marshalling services market: "Northport has attempted to leverage its monopoly power as the port owner to exclude competition in the downstream market for port services. Section 36 of the Commerce Act prohibits companies from using their market power in this way. Other companies must be allowed to compete with Northport’s own joint venture port services company". Since the order was issued, Northport has allowed competitors to marshal at the port, and the Commission has taken no further enforcement or penalty action against Northport.
• On August 14, Italy's antitrust agency alleged that national air carrier, Alitalia SpA, had withheld information about a 2004 acquisition, and that as a result it could be fined up to €4.8 million (US$6.1 million). The deal in question was its €7.1 million (US$9.1 million) acquisition of defunct Gandalf Airlines SA, mostly in order to inherit Gandalf's landing slots at Charles de Gaulle airport in Paris, and at Milan's Linate airport, and some on-the-ground equipment. The fine, if levied, would be calculated based on a percentage of Alitalia's €4.79 billion (US$6.11 billion) revenue last year, and not on the value of the deal in question. The Autorita Garante della Concorrenza e del Mercato said that Alitalia had failed to adequately communicate the acquisition of Gandalfi's assets as required, and even though Gandalfi was no longer operating, it represented a consolidation of the airline sector.

Authored by:

Neil Ray

(415) 774-3269