• On May 31, the European Commission stated that it expects to make a decision by the end of July on whether to impose new fines on Microsoft Corp., which faces a June 1 deadline for complying with an earlier Commission decision, which requires the company to share, under certain conditions, its Windows server code with rivals to make the industry more competitive in the European marketplace. The Commission can fine Microsoft up to 5 percent of its daily global sales for each day that a decision is not applied to its satisfaction. Microsoft has said it has been working with the Commission on resolving the dispute, which is believed to center on pricing and royalties that can be charged to allow software competitors to better dovetail their products with Microsoft’s Windows platform.
  • On May 27, the European Commission cleared under the EU Merger Regulation, the proposed acquisition of Hexal, a German producer of generic medicines, and its US sister company, Eon Labs, by Swiss pharmaceuticals company, Novartis, in a deal which creates the largest European producer of generics. The Commission’s clearance is subject to a number of conditions intended to safeguard competition in areas where the transaction raised competition concerns. To remedy these concerns, Novartis has committed to sell off specific pharmaceutical products in Poland, Germany and Denmark. European Competition Commissioner, Neelie Kroes, stated, “Effective competition through generic medicines is important for health care systems across Europe, and ensuring continued competition from generics is vital to keeping downward pressure on health care costs. The commitments given by Novartis will maintain this competition and ensure that consumers continue to benefit from a choice of suppliers and lower prices.”
  • On May 26, the Australian Competition and Consumer Commission (“ACCC”) confirmed that it had begun legal proceedings which alleged price-fixing by two petrol retailers in a suburb of Brisbane. The ACCC has claimed in Federal Court that during periods in 2002 to 2004 the retailers made, and gave effect to, arrangements that they would agree the time within the weekly price cycle that they would each increase their prices for unleaded petrol, and the amount they would each charge. It is further alleged that the two retailers made, and gave effect to, an arrangement to increase their respective prices for liquefied petroleum gas (“LPG”) in November 2002.
  • On May 26, the UK’s Office of Fair Trading (“OFT”) referred the market for personal current account banking services in Northern Ireland to the UK’s Competition Commission for further investigation. This follows the OFT’s analysis of a super-complaint submitted by UK consumer group, Which?, in conjunction with the General Consumer Council for Northern Ireland about personal current accounts in Northern Ireland. Sir John Vickers, OFT Chairman, said “Our analysis of the evidence presented to date gives us reasonable grounds to suspect that there are features of this market which restrict competition. It is now for the Competition Commission to undertake a thorough investigation of the market and, if necessary, to put appropriate remedies in place.”
  • On May 26, South Korea’s Fair Trade Commission fined KT Corp., a record 115.9 billion won (US $115 million) for price collusion in broadband Internet and land-line telephone services with two smaller rivals, Hanarotelecom and Dacom Corp. The fine represents the largest fine ever imposed in South Korea against a single company. Hanarotelecom, owned by New York-based American International Group Inc. and Newbridge Capital Ltd., was fined 2.4 billion won. Dacom Corp. received a fine of 1.48 billion won. According to the antitrust agency, KT and Hanarotelecom allegedly participated in a series of meetings between April and June 2003 to arrange the price collusion.
  • On May 24, it was reported that European Competition Commissioner, Neelie Kroes, may use the Commission’s legal powers to ensure that Italy’s national regulators do not impose unfair conditions on foreign bids for Italian banks, Banca Nazionale del Lavoro SpA and Banca Antonveneta SpA. The European Commission has requested the Bank of Italy to explain the conditions placed on Spain’s Banco Bilbao Vizcaya Argentaria SA on its $8.2 billion offer for Rome-based Lavoro. The EU has also requested information on the Italiain regulator’s resistance to a $7.9 billion bid by ABN Amro Holding NV, the biggest Dutch bank, for Antonveneta. Both deals had received antitrust clearance from the Commission . Ms. Kroes and, Financial Services Commissioner, Charlie McCreevy, are on a drive to open up Europe’s banking markets to cross-border mergers.
  • On May 18, the New Zealand Commerce Commission reported that it had issued warnings to individual doctors who had met last year, and collectively decided to set a maximum fee level for a specific group of patients. The Commission investigation found that these doctors had met, and collectively decided on maximum patient fees charged for patients aged between 6 and 17. The New Zealand Commerce Act prohibits a range of anti-competitive conduct, including price fixing between competitors. “An agreement as to maximum fees results in a base price being created, thereby harming patients through higher average prices,” said Commission General Manager Geoff Thorn. However, Mr Thorn said the Commission’s investigation had found no significant detriment in this instance.
  • On May 18, Germany’s Bundeskartellamt, issued a general invitation to the 4th Annual Conference of the International Competition Network (“ICN”) to be held in Bonn between June 6 and June 8. In its invitation, the Bundeskartellamt remarks how the ICN is proving to be a valuable forum for international antitrust agencies to increase their cooperation efforts, and discuss increased convergence between members different cartel laws, and their application. This is particularly important in view of globalization and the opportunities it has created for international cooperation between companies, and the ensuing danger of the formation of extensive cartels, or the abuse of market power. This year, the Bundeskartellamt expects around 300 participants from over 70 countries, making it the ICN’s largest event to date.
  • On May 18, the European Commission adopted a Communication entitled, “A stronger EU-US Partnership and a more Open Market for the 21st century.” It contains a wide range of practical policy proposals for a joint EU-US strategy to boost economic integration, and to strengthen the broader framework of EU-US relations. Among other things, the document discusses ways of improving regulatory co-operation in the areas of antitrust policy, and government procurement. In particular, the Communication acknowledges that as the EU and US economies have become ever more intertwined, mergers and acquisitions on one side of the Atlantic have increasingly had antitrust consequences for the other jurisdiction. The European Commission and the US competition agencies have cooperated intensively under the 1991 and 1998 agreements, coordinating enforcement activities and exchanging non-confidential information. However, with respect to the joint investigation of international cartels, the lack of a framework permitting exchange of confidential information has hindered effective cooperation. The Communication, therefore, encourages the EU and the US to explore ways to overcome the obstacles to such information exchanges.
  • On May 18, the Irish Competition Authority welcomed the publication of a Consumer Strategy Group Report, and the announcement by the Irish Minister for Enterprise, Trade & Employment of the establishment of the National Consumer Agency. John Fingleton, Chair of the Competition Authority, stated that, “The report of the Consumer Strategy Group is a landmark in Irish public policy as it is the first comprehensive report written completely from the consumer’s perspective. There is a long legacy in this country of anti-consumer policy and culture. This legacy is frequently driven by public restrictions in what the OECD has termed an “underlying policy biases of producer over consumer interests”. The Consumer Strategy Group Report provides a guide to building a pro-consumer environment in this country by modernizing consumer protection and by removing or modifying regulation that harms consumers.”
  • On May 15, following an action brought by the French Minister of the Economy, the French Competition Council fined 21 construction companies for bid rigging in relation to a government tender for the building of various civil engineering structures along a freeway in the Manche region. The French Competition Council held that the companies participated in a cartel to share the market. The companies allegedly divided up the 51 available building contracts by exchanging information on the content of their offers and agreeing to submit artificially high offers to allow one particular cartel member to win an allotted contract. Due to the seriousness of these bid-rigging practices, the total amount fined was €17.3 million, and the largest fine for an individual company was €4,300,000.
  • On May 13, it was reported that the Czech competition agency, UOHS, had launched an investigation into allegations of a cartel on banking fees involving three domestic banks, Ceska sporitelna, Komercni banka and Ceskoslovenska obchodni banka. Czech banks have been criticized for high fees, which are some of the highest in Europe. Representatives of the banks have denied any cartel agreement and have highlighted how banks in other European countries can charge low, and even zero fees, because they have a high interest income. Since the Czech Republic has some of Europe’s lowest interest rates, the banks arguably have to charge higher fees to ensure profitability. The Czech Retail Inspection Office, COI, is also reportedly preparing to investigate the level of the banks’ fees due to an increase in the number of complaining banking customers.
  • On May 12, the Canadian Competition Bureau announced that Mitsubishi Corporation (“Mitsubishi”) was convicted and fined CAN $1 million by the Ontario Superior Court of Justice for aiding and abetting the implementation in Canada of a foreign-directed conspiracy to fix the price of graphite electrodes. “Cartels deny Canadians the benefit of honest marketplace competition,” said Denyse MacKenzie, Senior Deputy Commissioner of Competition. “Anyone who helps to implement a price-fixing conspiracy risks heavy criminal penalties.” Between 1992 and 1997, members of the cartel allegedly agreed to fix the prices of graphite electrodes sold in Canada and around the world. A former Mitsubishi manager allegedly facilitated a number of conspiracy meetings by arranging transportation and acting as a translator for the cartel’s members. During the conspiracy, Canadian prices for graphite electrodes used in steel production supposedly doubled. Tokyo-based Mitsubishi is the sixth party convicted in Canada in connection to the graphite electrodes cartel.
  • On May 11, the Irish Competition Authority agreed settlement terms with the Vintners Federation of Ireland following High Court action taken by the Authority. The Competition Authority had initiated legal proceedings in 1998 in relation to allegations of price fixing in the sale of alcoholic drinks. The Vintners Federation denied all the Competition Authority’s allegations, but agreed to not recommend to its members any prices, margins, increases in prices and increases in margins earned on the sale to the public of alcoholic beverages on premises owned, managed or controlled by its members.
  • On May 10, the Norwegian Competition Authority warned that it was considering prohibiting or imposing commitments on the merger between US companies, National Oilwell Inc., and Varco International Inc. In its preliminary review, the Authority’s assessment was that the merger would restrict competition in the markets for equipment and components used in oil and gas drilling and production. Both companies have Norwegian subsidiaries that are involved in the oil and gas related industry on the Norwegian continental shelf. The merged entity will allegedly strengthen its position in several markets. In its continued review of the transaction, the Norwegian Competition Authority will consider whether any commitments by the parties to modify the merger will eliminate potential competition concerns.
  • On May 4, the Canadian Competition Tribunal ordered the Commissioner of Competition to pay the costs of Canada Pipe Company Ltd. (the “Company”) in an action where the Company successfully defended itself against allegations of abuse of dominant position and exclusive dealing in violation of the Canadian Competition Act. The Tribunal held that an upward adjustment of the costs was justified in light of the “novel economic issues and the amount of work involved.” The Tribunal acknowledged that few abuse of dominant position cases, an “important and relatively new” area of civil liability under the Competition Act, have been decided by the Tribunal, and that the Tribunal’s ruling could have far-reaching implications for its compliance. This is the first decision of its kind in Canada since legislative amendments were passed in June 2002, giving the Tribunal jurisdiction to award costs of proceedings before it in accordance with the rules applicable to the Federal Court of Canada. Whether it will chill actions to enforce the Act remains to be seen.