On September 17, the European Court of First Instance (CFI) essentially rejected the appeal by Microsoft against the European Commission's (EC) decision that it had abused its dominant position.  The CFI upheld the EC's finding that Microsoft had breached Article 82 by virtue of its refusal to grant interoperability information, and its bundling of Windows Media Player with the Windows PC operating system.  The CFI also confirmed the €497 million fine imposed on Microsoft, and the EC's remedies requiring the provision of interoperability information, and the unbundling of Windows Media Player.  However, the CFI concluded that the mechanism for the appointment of a monitoring trustee was unlawful.  It concluded that the EC had no authority to compel Microsoft to grant a monitoring trustee powers that the EC itself is not authorized to confer on a third party, or to require Microsoft to pay the costs of the monitoring trustee.

On September 17, the CFI also handed down its judgment upholding a decision of the EC that documents seized during an EC antitrust investigation were not covered by legal professional privilege.  The CFI confirmed that communications between in-house counsel, and internal clients, are not privileged in relation to EC competition investigations, and it set out the procedure that EC officials should follow if a dispute as to privilege arises during an on-site investigation.  In this case, Azko Nobel v. EC, which concerned disputed documents uncovered during a "dawn raid", the CFI held that even though specific recognition of the role of in-house lawyers, and the protection of communications with such lawyers was relatively more common today than when previously considered in the case of AM & S in 1982, it was nevertheless not possible to identify tendencies which were uniform or had clear majority support in that regard in the laws of the Member States.  The CFI also highlighted the fact that a considerable number of Member States do not allow in-house lawyers to be admitted to the Bar or Law Society, and therefore do not recognize them as lawyers established in private practice.  Thus, "the protection only applies to the extent that the lawyer is independent, that is to say, not bound to his client by a relationship of employment".

On September 19, the Canadian Competition Bureau announced that Ibiden Co. Ltd. of Japan had pleaded guilty to aiding and abetting an alleged conspiracy to fix the price of isostatic graphite which is commonly used in electrical discharge machinery to make dies for the continuous casting of metals, and in the manufacture of semi-conductor chips, and other mechanical applications.  “Ibiden’s significant and early cooperation in connection with this inquiry assisted the Commissioner’s investigation of other individuals and corporations for violations of the Competition Act,” said Denyse MacKenzie, Senior Deputy Commissioner of Competition.  “In the circumstances, we recommended lenient treatment, despite the serious nature of the offence”.  The Federal Court of Canada fined the company $50,000.  Ibiden is the third company to plead guilty in relation to alleged anti-competitive conduct concerning the supply, and sale, in Canada of semi-machined and block isostatic graphite.

On September 20, the UK's Office of Fair Trading (OFT) sent a statement of objections to the five large supermarkets and five dairy processors alleging that they breached the Chapter I prohibition of the Competition Act 1998 by colluding, through exchange of confidential information, to fix the prices of dairy products in 2002, and 2003.  It believes that the practices restricted the competitive process and led to higher prices, resulting in an estimated cost to consumers of about £270 million. The OFT also noted that the parties were aware that their actions might be anti-competitive.  The OFT has previously warned the  supermarkets about the risks of such collusion.  The supermarkets, and dairy processors, will now have the opportunity to make written, and oral representations in response to the allegations contained in the statement of objections.

On October 1, the EC announced that it had initiated formal antitrust proceedings against Qualcomm Incorporated concerning an alleged breach of EC Treaty rules on abuse of a dominant market position (Article 82).  Qualcomm is a holder of intellectual property rights in the CDMA and WCDMA standards for mobile telephone.  The WCDMA standard forms part of the 3G (third generation) standard for European mobile phone technology (also referred to as "UMTS").  This follows complaints lodged with the EC by Ericsson, Nokia, Texas Instruments, Broadcom, NEC and Panasonic, all mobile phone and/or chipsets manufacturers. The complaints allege that Qualcomm's licensing terms and conditions are not Fair, Reasonable and Non-Discriminatory ("FRAND") and, therefore, may breach EC competition rules.  The economic principle underlying FRAND commitments is that essential patent holders should not be able to exploit the extra power they have gained as a result of having technology based on their patent incorporated in the standard.  The investigation will focus on the issue of whether the licensing terms and royalties imposed by Qualcomm are, as alleged by the complainants, not fair, reasonable and non-discriminatory.  This initiation of proceedings does not imply that the EC has proof of an infringement.  It only signifies that the EC will conduct an in-depth investigation of the case as a matter of priority.  There is no strict deadline for the Commission to complete inquiries into alleged anticompetitive conduct.

On September 6, the Netherlands Competition Authority (NMa) held that Apple is not engaging in ‘tying practices’ linking its sales of the portable music player iPod, to music services provided by its online music store iTunes.  “Consumers who purchase music via Apple’s internet store are able to – and are permitted to – play this music on other players than an iPod,” explained René Jansen, member of the Board of the NMa.  “Furthermore, consumers may transfer music files bought from other online music stores to an iPod. There is no question of a tying arrangement.”  The NMa reached this conclusion after looking into a complaint lodged by the Consumentenbond, the Dutch consumers’ association, on the issue of Apple’s alleged abuse of a dominant position.  The NMa has dismissed the complaint.

On September 19, the EC announced a proposal for a new legislative package to reform the regulation of the energy sector. Under the proposals the operation of electricity and gas transmission networks from supply and generation activities will need to be effectively unbundled. As a derogation from such ownership unbundling, the EC is, however, proposing an alternative option whereby network assets could continue to be owned by a vertically integrated energy company, but the transmission operations must be transferred to an independent system operator company designated by the member state and approved by the EC.  The EC is also proposing a number of measures to make regulation more effective, including the establishment of a European Agency for the Cooperation of National Regulators, strengthening the powers of national regulators, formalizing co-operation between transmission system operators, and improving access regulation and transparency.

On September 19, the EC fined seven companies over €328m for allegedly operating a cartel on the markets for fasteners, and attaching machines in Europe and worldwide, in violation of EC Treaty rules that outlaw restrictive business practices (Article 81).  The EC alleged that the companies agreed on coordinated price increases, fixed minimum prices, allocated customers, shared markets, and exchanged other commercially important and confidential information. Prym group received full immunity from fines under the EC's leniency program in respect of the worldwide cartel on the markets for other fasteners and attaching machines, as it was the first to provide information about this cartel.  In addition, the fines imposed on Prym group for its involvement in the other infringements discovered were also lowered as a result of the company's cooperation.  Smaller reductions of the fines were also granted to two companies as a result of their cooperation under the EC's leniency program.  EC Competition Commissioner, Neelie Kroes, said: "It is unacceptable that the major fastening technology producers colluded for such a long time to maintain artificial price levels and to share customers and markets for products which are used every day by a lot of consumers. The highest management of these companies was well aware that this conduct was illegal, but decided to continue anyway".

On September 1, a new Competition Act (NCA) entered into force in Spain, replacing the 1989 Competition Act.  One of the most significant changes introduced by the NCA is the creation of a new competition authority, the National Competition Commission (NCC), which replaces the two organisms responsible for applying competition law under the 1989 Act (the Service for the Defence of Competition and the Tribunal for the Defence of Competition).  The NCC will now hold the investigation and decision-making powers.  It will consist of the Directorate of Investigation, which will carry out the investigation of the cases, and the Council, which will be the decision-making body, and will be composed of the President of the NCC and six members.  The NCA also contains a classification of infringements, which did not exist under the 1989 Act, establishing three different types of infringements: minor infringements, serious infringements, and very serious infringements.  This new classification will have a direct impact on the level of fines, as minor infringements will only be penalized with a maximum fine of 1% of the total turnover of the undertaking concerned, whilst serious, and very serious infringements will have maximum fines of 5%, and 10% respectively.

On September 5, the Belgian Competition Council published for consultation a new draft Notice on immunity from fines and reduction of fines in cartel cases.  The draft Leniency Notice, which is intended to replace the current Leniency Notice is based on the Model Leniency Program of the European Competition Network.  The amendments introduced by the draft Leniency Notice primarily aim at providing more guidance, and clarity, for companies applying for immunity from and/or reduction of fines and bring the Belgian leniency program in line with the European Commission's Leniency Notice.  Like the European Commission's leniency program, the draft Leniency Notice grants immunity to applicants who, in addition to meeting certain conditions set out in the draft notice, are the first to submit information and evidence that will enable the Belgian competition authority to carry out a "targeted inspection" in connection with the alleged cartel or find an infringement of Article 2 of the Belgian Competition Law, or Article 81 of the EC Treaty.