- On July 29, the UK’s Competition Commission (“CC”) provisionally concluded that the proposed acquisition of London Stock Exchange plc (“LSE”) by Deutsche Bse AG or Euronext NV would substantially lessen competition. The CC found that either merger would make it more difficult for other exchanges to compete with LSE in trading UK equities because of both bidders’ ownership or control over the future provision of clearing services to LSE. Any exchange attempting to compete with LSE and win the business of trading firms on the LSE would require access to LSE’s clearing services provider. The CC will now start discussions with interested parties concerning actions that could be taken to remove the anti-competitive effects of the proposed mergers.
- On July 28, it was reported that Cemex Germany, which is part of Cemex SA De CV, Lafarge SA and Dyckerhoff AG, will be named as defendants in a 140 million damages claim being brought by twenty-weight corporate customers. The claim, for alleged price-fixing, is due to be filed with a German state court in Duesseldorf, according to a German press sources. These customer actions follow-on from fines totaling approximately 660 million imposed in April 2003 by the German Cartel Office, the Bundeskartellamt on the six largest German manufacturers: Alsen AG, Dyckerhoff AG, HeidelbergCement AG, Lafarge Zement GmbH, Readymix AG, and Schwenk Zement KG. The companies allegedly operated anticompetitive market allocation and quota agreements from the 1970s until 2002. The geographic markets affected were the four regional cement markets eastern Germany, Westphalia, northern Germany and southern Germany.
- On July 27, it was reported that the Greek Competition Commission had imposed fines on importers and representatives of Hyundai and KIA cars on the Greek market. The Commission held that the dealers in the two representatives networks had allegedly set minimum sales quantities and car parts and services prices contrary to Article 81 of the EC Treaty and Greek competition law. The Commission held that these requirements limited the independence of authorized car dealers, and inhibited competition in the domestic car market.
- On July 27, the Australian Competition and Consumer Commission issued a draft decision proposing to deny an immunity request for authorization made by the Royal Australian Institute of Architects for a range of arrangements and activities, including a code of professional conduct and fee guides. The ACCC was concerned that certain aspects of the arrangements were likely to be highly anticompetitive, including a number of provisions in the Institute’s proposed code of conduct and fee guidance material. However, in the event that these concerns are addressed, the ACCC may grant authorization to the Institute.
- On July 26, Argentina’s Economy Minister Roberto Lavagna said the country’s competition bureau would fine all of the country’s cement producers for colluding on prices and dividing the country’s market between 1981 and 1999. The fine is the largest ever imposed by the country’s antitrust agency. The Economy Ministry said that the fines are on conduct by all cement companies in the country, and ”[t]he behavior of companies has hurt consumers of cement, who would have otherwise faced lower prices”. Loma Negra SA, owned by Construcoes e Comercio Camargo Correa SA, the country’s biggest cement producer with 48.35 percent of the market in 1999, was fined 138.7 million pesos ($48.5 million); Juan Minetti SA, controlled by Holcim Ltd, the second largest, was fined 100 million pesos.
- On July 26, the UK’s OFT confirmed that it had written to eight major credit card companies to consult on its provisional conclusion that the levels of default charges they impose (e.g. for late payments) are excessive. A charge currently of around ｣20 to ｣25 is payable if a cardholder fails to pay his credit card bill on the due date, exceeds his credit limit, or pays on time but by a direct debit or check that is not honored. The OFT has rejected the credit card companies arguments that their default charge provisions are fair, and given them three months in which to provide suitable undertakings or otherwise to address the concerns it has raised.
- On July 24, the Polish Consumer and Competition Protection Office launched an anti-monopoly proceeding to investigate the conditions of the tender organized by the Polish Football Association for football match television rights. It is alleged that France’s Canal+ was treated more favorably than other bidders by guaranteeing that Canal+ would automatically win the tender only if its offer, which could be presented within 10 days of the last bid, was as good as the best offer. If the companies are found guilty, they may face fines of up to 10 percent of their revenue.
- On July 22, the UK’s Office of Fair Trading (“OFT”) confirmed that it had recently searched the premises of twenty-two companies in Nottinghamshire, Leicestershire, Derbyshire and South Yorkshire under warrant as part of an investigation into allegations of collusive tendering for public and private contracts in the construction industry between 2000 and 2005. The investigation is currently being conducted under the OFT’s civil powers under the Competition Act 1998. However, the OFT has not ruled out the possibility that the investigation may uncover some behaviors in breach of the criminal cartel offence under section 188 of the UK’s Enterprise Act 2002.
- On July 21, the UK’s Office of Fair Trading (“OFT”) released research revealing that nearly a quarter of small and medium sized enterprises (SMEs) across Britain believe they are harmed by unfair practices such as cartel price fixing, and collusion to set tender prices. The research found that one in three SMEs say they are aware of anti-competitive activities in their industries, and one in five (22 per cent) feel they have been a victim of anti-competitive behavior. The OFT is now calling on SMEs to recognize anti-competitive practices in their markets, and work with the OFT to take action against companies who break competition law.
- On July 21, the Slovak Antitrust Office (“PMU”) reduced its original fine of SKK 2.1 million on a group of pig breeders for violating the competition protection law to SKK 1.69 million, after hearing arguments that several farmers had not participated in a final vote in support of an allegedly cartel agreement. In January, the PMU held that the group had allegedly participated in a horizontal cartel, and agreed to fix prices. “The agreement should have prevented market competition. By this action it limited consumers’ opportunities to benefit from sharp competition,” commented Mr. Jurkovic, a spokesman for the PMU. This was the first case uncovered by the Slovak Antitrust Office following the country’s recent revision to its competition protection laws.
- On July 20, following an investigation launched after complaints filed by private TV broadcasters Antena 3 and Telecinco, Spain’s antitrust agency, Sercicio de Defensa de Competencia (“SDC”) held that the Afyve and Agedi, both music producers’ rights management associations, had abused their dominant positions by discriminating in favor of Televisi Espala, the state-owned television broadcaster. In particular, the SDC uncovered evidence that the fees charged to Antena 3 and Telecinco were considered excessively high since they were based on Antena 3’s and Telecinco’s respective annual turnovers, whilst the fees paid by TVE for 18 years of use of Agedi’s rights are some ten times lower. The SDC report has been submitted to the Spanish Competition Court, Tribunal de Defensa de Competencia, which will issue a final decision within a year.
- On July 12, European Commission official conduced ‘dawn raids’ at Intel’s offices in the UK, Germany, Spain and Italy, and also searched the offices of computer retailers and manufactures, including Dell. The raids come two weeks after AMD, a rival computer chip manufacturer, filed antitrust complaints against Intel in the US and Japan, accusing the company of abusive monopolistic behavior on a global scale. Intel denies any wrongdoing, and says that it is fully cooperating with the investigators.
Authored by:
Neil Ray
415-774-3269
nray@sheppardmullin.com