- On April 4, it was reported that Microsoft sent a letter accepting most of the European Commission’s demands to satisfy its antitrust concerns, but asked for further dialog some matters regarding the licensing of its source code. Microsoft has accepted 20 out of the EU Commission’s 26 demands, and says that it will work as quickly as possible to settle the remaining six. Following a dispute over the name of the Media-free version of Windows XP, and being threatened with fines for not cooperating to the EU’s expectations, Microsoft announced that the product name will be Windows XP “N.” One of the remaining stumbling blocks to full compliance is source code licensing. The Commission has raised concerns at the proposed fees, claiming that they are too expensive, and also voiced concerns that Microsoft is locking open-source projects out of the licensing program. A Microsoft spokesperson stated that this is an area that warrants further discussion with the Commission.
- On March 31, the Competition Commission of Singapore (“CCS”) released draft guidelines as part of its preparation for Phase II implementation of the Competition Act 2004. The Guidelines indicate how the CCS will interpret, and give effect to the infringement provisions of the Act which comes into force in January 2006.
- On March 31, Intel announced that its Japanese subsidiary will accept the Recommendation from the Japan Fair Trade Commission ruling that it must eliminate discounts which allegedly prevented competitors from gaining access to the market. Intel released a press statement that it disagreed with the allegations contained in the Recommendation but that the cease and desist order would not prevent it from meeting the needs of its customers. The Japan’s Fair Trade Commission had declared that certain of Intel’s business practices were in violation of its Anti-Monopoly laws. The decision focused on rebates paid to five Japanese PC manufacturers which allegedly induced them to limit their chip purchases from rival manufacturers, obliging them to buy 90% or even 100% of their chip requirements from Intel. The European Commission cooperated with the FTC investigation, and has also been investigating Intel’s business practices for the past three years.
- On March 29, the Korean Times reported that South Korea’s Fair Trade Commission is expected to heavily fine the country’s telecommunications service providers, including the fixed-line monopoly KT Corp., Hanaro Telecom Inc. and Dacom Corp, following evidence of alleged price-fixing in the supply of voice and data services.
- On March 29, the UK’s Office of Fair Trading (“OFT”) referred to the Competition Commission (“CC”) the anticipated acquisition of the London Stock Exchange plc (“LSE”) by either Deutsche Bse AG (DBAG) or Euronext N.V. (“Euronext”). The OFT decided that the test for reference was met in relation to the supply of on-exchange trading services for equities in the UK in both cases. In respect of DBAG’s bid, additional concerns arose in relation to the supply of clearing services for equities trades in the UK. Sir John Vickers, OFT Chairman, said, “The proposed bids for the LSE come at a time of emerging competition in equities trading between the LSE, DBAG and Euronext. Although such competition has so far been episodic, it needs to be investigated whether either merger would lessen future competition in equities trading in the UK. The CC will also want to consider the effects of the mergers on competition in clearing services, particularly with the DBAG bid.” Although DBAG and Euronext each proposed constructive undertakings instead of reference, the OFT considered that neither proposal was at this stage able to resolve all competition concerns in a sufficiently clear-cut manner. The CC must report by September 12, 2005.
- On March 28, it was reported that Ajit Patel and Kirta Pate, CEO and COO respectively of Goldshield Group, the drug supplier, were arrested in London on suspicion of fixing the price of generic drugs to the UK’s National Health Service. In April 2002, the UK’s Serious Fraud Office (“SFO”) raided six companies involved in the supply of two blood thinning drugs: Goldshield, Regent-GM Laboratories, Ivax, Ranbaxy, Generics UK (a subsidiary of Merck) and Kent Pharmaceuticals. More than 200 officers raided 11 homes and 16 business addresses among the biggest ever carried out by the SFO. The SFO’s investigation is continuing. All the above companies deny any illegal activity.
- On March 24, it was reported that Sendo, a cellular phone set manufacturer, had complained to the European Commission about Ericsson, which it alleges is in a cartel aimed at preventing new entrants to the European mobile handset market. Sendo stated that small/new companies are asked to pay excessive royalties to use GSM and GPRS technology, and the European Telecommunications Standards Institute, and its licensing regime is being misused “under the cloak of a cartel”. Meanwhile, Ericsson has sued Sendo for infringement of its patents and is claiming monetary damages as well as an injunction against the continued sale and marketing of Sendo’s mobile phones.
- On March 23, the German Cartel Office imposed fines totaling 130m on ten insurance companies for colluding to increase industrial insurance premiums on general insurance and liability policies. In particular, the insurers agreed not to make counter-offers for business from clients in industrial insurance, fire coverage, transport and building insurance. The cartel office concluded that the net effect of the premium increases reduced competition between the insurance companies to the detriment of their clients. The alleged abuses took place from 1999 through at least 2002. Ulf Boege, head of the country’s Federal Cartel Office, stated that, “The executives of those companies in question have consciously violated the cartel law in order to bring to an end the intensive competition among insurers.”
- On March 23, the Italian Competition Authority launched an investigation of Italian TV channels, RTI, Mediaset and Finivest in relation to an alleged distortion of competition concerning the acquisition of broadcasting rights of Italian soccer games. In particular, the Italian Competition Authority is concerned at the competitive effect of the signing-up of first negotiation and preemption rights of certain home matches of a number of large Italian soccer clubs at a time when a rival satellite channel’s broadcast rights are about to expire. It was also reported that the Authority will examine the overall state of competition in the industry by investigating the role of the Italian Soccer Federation, the Italian national professional league, soccer clubs, and soccer players’ agents.
- On March 18, the Sydney Morning Herald reported that the Australian Competition and Consumer Commission (“ACCC”) had begun proceedings in federal court against three companies (Barton Mines Corporation, Barton International Incorporated and Barton International Australia) alleging an illegal market-sharing agreement for the purchasers of alluvial garnet. On the previous day, a federal court imposed fines totaling AU$23.3 million on 16 companies and individuals who owned and operated BP, Shell, Ampol/Caltex, Swift, Apco and Mobil branded stations in the town of Balarat for colluding to increase petrol prices in the Ballarat area between June 1999 and December 2000. The ACCC had first taken action back in 2001, alleging the group had regularly met to fix petrol prices, and then contacted outlets to put their plan into action. The fines imposed were a record for the petrol industry in Australia.
- On March 16, Argentina’s government office for the protection of consumers’ rights filed a complaint against Shell and Esso before the country’s antitrust authority for alleged oligopoly abuse. SDC has requested severe sanctions against the multinational companies for alleged non-justified increases of petrol prices that the customers have recently been charging to customers.
- On March 16, the Greek government released legislation which will grant the country’s Competition Commission wider powers. For example, it will be able to take direct action in the market, and will be empowered to issue regulatory rulings. The Commission will gain statutory status, and staffing levels will be raised from 80 to 150. The bill is expected to enacted with three months.
- On March 15, the European Commission confirmed that Microsoft and Time Warner had withdrawn their notification regarding their proposal to acquire joint control of ContentGuard due to Thomson’s acquisition of a 33% interest in the company. The Commission had launched an in-depth investigation due to the concern that Microsoft may attempt to block competitors’ access to ContentGuard’s valuable Digital Rights Management patents. The Commission stated that following a substantial change in ContentGuard’s Governing rules, and the entry of Thomson as a key shareholder, Microsoft would no longer have the ability to impose a licensing policy that would put its rivals in the Digital Rights Management market at a competitive disadvantage.
- On March 14, the Swedish government released proposals for a new law which will require companies found guilty of cartel activity to pay compensation to consumers as well as competitors. The law will also allow competition authorities to raid the company’s executive private premises in addition to their offices.
- On March 10, European Competition Commissioner, Ms. Neelie Kroes, announced at the International Bar Association’s European Competition Law Conference in Brussels, the Commission’s intention to establish a new Directorate devoted exclusively to cartel enforcement. The Directorate will bring together the resources, the people, and the investigative and procedural expertise, needed for effective action against cartels. The creation of this new Directorate is a concrete expression of the zero tolerance policy the European Commission is committed to implement in the face of this serious type of anticompetitive practice. In the same speech, she announced that the Commission will conduct antitrust investigations of markets which are key to the EU’s overall competitiveness, such as the financial services and energy sectors, where competition does not appear to be functioning as well as it might. The Commission will also present a Green Paper by the end of the year which will set out various options for improving the current system of private antitrust enforcement within the EU.
- On March 10, the Wall Street Journal reported that the Japanese Fair Trade Commission had received a complaint from Coach, the New York based luxury handbag group, alleging that LVHM, the leading luxury handbag manufacturer in Japan, has been using anticompetitive practices in the sale of handbags in department stores by threatening to withdraw its brand from stores that also stocked Coach bands.