• On December 14, the European Union’s Court of First Instance in Luxembourg is expected to rule on GE Electric’s appeal over its bid for Honeywell International, which was blocked by the European Commission in 2001. The case triggered much trans-Atlantic tension as the first all-American deal blocked by European regulators after receiving clearance in the United States. The European Commission claimed that the combination would have enabled the merged entity to leverage the respective market power of the two companies into the products of one another. Although both companies appear to have no plans to resuscitate the deal, a successful appeal may provide critical guidance on how the European Commission should approach future prohibition decisions when reviewing merger cases.
  • On November 28, the French Competition Council fined six of the most luxurious hotels in Paris for price-fixing. The Competition Council alleged that the Crillon, Bristol, Meurice, Piazza Ath駭馥, Ritz and George V hotels operated a cartel in the super-luxury end of the Paris hotel market which constituted a market in itself. The hotels were alleged to have regularly exchanged confidential commercial information through meetings and messages, on a weekly and monthly basis. The hotels were fined between €55,000 and €248,000 each by the Competition Council.
  • On November 28, it was reported that Madrid’s Fifth Commercial Court ordered Spanish telecommunications company, Telefica, to pay €670,000 in compensation to Conduit, an Ireland-based directory services group. The award stemmed from complaints made in 2003 to Spain’s telecommunications regulator that the former state monopoly had provided “inaccurate and incomplete” subscriber information to Conduit, in breach of EU directives on market liberalization. The award may lead to increased litigation against Telefica for preventing access to various telephone markets, and may also encourage law suits in the Spanish electricity industry, where there have been allegations of competitive abuse in the liberalized market.
  • On November 23, following an agreement with the Attorney General of Canada, Labatt Brewing Company pleaded guilty to a charge of price maintenance on discount beer sold by nine independent convenience/grocery retailers in Sherbrooke and elsewhere in Qu饕ec, before the Court of Quebec. The Court fined Labatt $250,000 which was equal to the largest fine in a previous price maintenance case, and issued a prohibition order against the company. Under the prohibition order, Labatt will have to inform all of its Quebec independent convenience/grocery retailers in writing that under Canada’s Competition Act, the company or its representatives cannot by agreement, threat, promise or similar means, attempt to influence upward, or discourage the reduction of the price of alcoholic beverages.
  • On November 21, the UK’s Competition Appeals Tribunal (“CAT”) held that Sports World International could reclaim certain legal costs it had incurred while acting as a “whistle-blower” during a cartel investigation by the UK’s antitrust regulator, the Office of Fair Trading (“OFT”). The CAT held that, “We bear in mind in particular, as general matters, the voluminous nature of the proceedings, that this was the first time a whistleblower had been called on by the OFT to assist it in such proceedings, and that on the face of the costs schedules the great majority of the work was done at associate rather than partner level.” This precedent may lead to future cost applications against alleged cartel members by companies who benefit from the UK’s new cartel amnesty program, and continue to cooperate with the OFT’s cartel investigations.
  • On November 21, Ms. Neelie Kroes, European Competition Commission, criticized the European professional services sector, and claimed that its was characterized by restrictive rules that were unnecessarily hindering competition. For example, she mentioned outdated price fixing regulation, bans on advertising, and severe restrictions on business structure and inter-professional co-operation as examples of highly restrictive rules which distort competition and “would be considered unacceptable in most spheres of economic activity.” In particular, she criticized excessive obstacles or entry requirements to the legal profession in Europe, which “serve to limit supply and drive up prices, and which cannot be justified as being in the public interest.”
  • On November 17, the BBC reported that the Mexican antitrust authorities had imposed its highest fine ever on a Coca-Cola subsidiary and its distributors following a complaint by a shopkeeper, Ms. Chavez, that her distributors had ceased to deliver supplies when she refused distributor demands that she no longer sell rival Coke brands. Pepsi also later complained to Mexican authorities. According to the BBC, fines totaled $68 million, of which $13 million was the result of Ms. Chavez’s complaint, and $53 million from Pepsi’s complaint.
  • On November 17, the European Commission confirmed that it had received improved commitments from the English Football Association Premier League (“FAPL”) regarding the sale of the FAPL’s media rights for the 2007 season onwards. The commitments follow an investigation by the Commission, into the sale by the FAPL of media rights to the Premier League competition on behalf of the individual clubs. Live TV rights will be sold in six balanced packages with no one bidder being allowed to buy all six packages. European Competition Commissioner, Neelie Kroes, said, “The commitments offered by the Premier League should ensure that the media rights are sold in a fair and transparent manner and give British football fans greater choice and better value.”
  • On November 16, the UK’s Office of Fair Trading (“OFT”) provisionally found that sunglasses brand, Oakley, and the UK department chain, House of Fraser, had entered into an agreement to fix the minimum prices of Oakley sunglasses in breach of the Chapter I prohibition of the UK’s Competition Act 1998. The OFT has issued a statement of objections to the parties setting out its provisional findings that from November 5, 2001 to March 2004, Oakley supplied House of Fraser with its sunglasses on condition that House of Fraser agreed to sell them at prices no lower than the Oakley suggested selling price. The OFT has given the parties the opportunity to make written and oral representations on the statement of objections, which the OFT will take into account before making its final decision and as to the appropriate amount of any penalties.
  • On November 16, Ms. Neelie Kroes, European Competition Commissioner, told her fellow European Commissioners that she wanted to increase her department’s jurisdiction to review mergers by reviewing those deals that currently fall outside the EU Merger Regulation by virtue of the two-thirds rule. The two-thirds rule prevents the European Commission from scrutinizing deals where the merging companies earn two-thirds of their turnover in one and the same EU country. The rule is designed to ensure that the European Commission does not analyze transactions that are largely of interest to one EU country, and have little or no EU cross-border significance. The catalyst for Ms. Kroes’ comments comes from the Commission’s lack of jurisdiction over the proposed takeover of Spanish energy group Endesa by its rival Gas Natural. The €22.5bn ($26.3 billion) deal will create one of the biggest energy groups in a liberalized, pan-European market but evades Commission jurisdiction due to the two-thirds rule. The decision to clear or block the deal will rest with the Spanish antitrust authority.
  • On November 14-18, the 5th UN Review Conference on Competition Policy took place in Antalya, Turkey. The conference reviewed the application and implementation of the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices, which is to date the only multilateral agreement on antitrust policy. It provides a set of equitable rules for the control of anti-competitive practices, recognizes the development dimension of antitrust law and policy, provides a framework for international cooperation and exchange of best practices in this area, including the provision of technical assistance and capacity building for interested member countries. The Conference reaffirmed the validity of the UN Set on Competition, and called upon all member States to make every effort to implement its provisions.
  • On November 14, it was reported that Microsoft was seeking support from the Department of Justice and the White House in their attempts to annul a Decision adopted on June 1, 2005, by the European Commission which it believes will undermine its ability to protect valuable trade secrets. The Financial Times reported that Microsoft has also circulated a memorandum to several U.S. companies asking them to lobby the U.S. government in its support. Microsoft believes that the Decision which was issued in connection with the last year’s landmark antitrust ruling against Microsoft “would allow licensees to distribute the source code of the software implementing confidential Microsoft technologies, with the result that the trade secrets embodied in such code would be readily available to the public.” The memorandum suggests four talking points that should be raised including one which reads, “The European Commission’s trade secrets decision will establish a precedent that could adversely impact the value of trade secrets which are substantial business assets for many U.S. companies, including mine.”
  • On November 8, the French Competition Council fined France T駘馗om €80 million for preventing its competitors from accessing the wholesale ADSL Internet market. The Council alleged that France T駘馗om prevented its competitors from making wholesale offers to Internet Service Providers that were competitive with those made by France T駘馗om and amounted to a refusal to access essential telecom infrastructure. The Council took the view that these practices were extremely serious, and had caused significant damage to the economy. It considered that France T駘馗om’s anti-competitive practices effectively led to the closure of the market for broadband Internet (“ADSL”), thereby guaranteeing that France T駘馗om remained the sole ADSL wholesale supplier in the country.