Competition Law: INFORMATION, UPDATES AND ANALYSIS, May 2017

European Union– European Competition Commission (‘European Commission’)

European Commission fines six car air conditioning and engine cooling suppliers € 155 million in cartel settlement
March 8, 2017

The European Commission has fined Mahle Behr GmbH & Co KG (Germany), Calsonic Kansei Corporation (Japan), Denso Corporation (Japan), Panasonic Corporation (Japan), Sanden Handling Corporation (Japan) and Valeo S.A. (France) a total of € 155 million for taking part in one or more of four cartels concerning supplies of air conditioning and engine cooling components to car manufacturers in the European Economic Area (‘EEA’). All six suppliers acknowledged their involvement in the cartels and agreed to settle the case. Denso was not fined for three of the cartels as it revealed their existence to the European Commission. Panasonic was not fined for one of the cartels as it revealed its existence to the

European Commission. These six car component suppliers coordinated prices or markets, and exchanged sensitive information, for the supply of climate control components and engine cooling components to certain car manufacturers in the EEA. The coordination took place at meetings, notably through trilateral meetings in Europe in one of the cartels, and through other collusive contacts in Europe and Japan through bilateral meetings, by e-mail or phone. The fines were set on the basis of the European Commission’s 2006 Guidelines on fines. In setting the level of fines, the European Commission took into account, in particular, the sales value in the EEA achieved by the cartel participants for the products in question, the serious nature of the infringement, its geographic scope and its duration.



United States of America (‘US’) - Federal Trade Commission (‘FTC’)

FTC approves final order settling charges that a group of ophthalmologists in Puerto Rico illegally boycotted a health plan
March 3, 2017

Cooperativa de Médicos Oftalmólogos de Puerto Rico (‘OFTACOOP’) had entered into an unlawful agreement with competing ophthalmologists in Puerto Rico not to deal with a health plan MCS Advantage, Inc., (‘MCS’) and its network administrator, Eye Management of Puerto Rico, LLC (‘Eye Management’). MCS was trying to establish a lower cost provider network for its members who sought medical treatment for eye problems in Puerto Rico. However, because of the refusal by ophthalmologists, the plan to provide lower cost provider network had to be abandoned. OFTACOOP is a healthcare cooperative in Puerto Rico comprising about 100 ophthalmologists. According to the complaint, OFTACOOP unreasonably retrained prices and other forms of competition among ophthalmologists in Puerto Rico. The final consent order prohibits OFTACOOP from making or facilitating agreements among ophthalmologists to refuse to deal, or threaten to refuse to deal, with any payor regarding any term, including price terms; or to not deal individually with any payor, or with any payor other than through OFTACOOP.

India – Competition Commission of India (‘CCI’)

CCI imposes penalty on CIL and its subsidiaries for abusing dominant position
March 24, 2017

CCI has found Coal India Limited (‘CIL’) and its subsidiaries to be in contravention of Section 4(2)(a)(i) of the Competition Act, 2002 for imposing unfair/ discriminatory conditions in Fuel Supply Agreements (‘FSAs’) entered into with the power producers for supply of non-coking coal. The final order has been passed on a batch of information filed by Maharashtra State Power Generation Company Ltd. and Gujarat State Electricity Corporation Limited against CIL and its subsidiaries namely Mahanadi Coalfields Ltd., Western Coalfields Ltd. and South Eastern Coalfields Ltd. The order has been passed by CCI pursuant to the directions issued by Competition Appellate Tribunal remanding the matter back while setting aside the original order of CCI in which a penalty of INR 1773.05 crore had been imposed upon CIL. After hearing the parties afresh in terms of the directions issued by Competition Appellate Tribunal, CCI held that CIL through its subsidiaries operates independently of market forces and enjoys dominance in the relevant market of production and supply of non-coking coal in India. CCI noted in the order that CIL did not evolve/ draft/ finalize the terms and conditions of FSAs through a bilateral process and the same were imposed upon the buyers through a unilateral conduct. Apart from issuing a cease and desist order against CIL and its subsidiaries, CCI has directed modification of FSAs in light of the findings and observations recorded in the order. The impugned clauses related to sampling and testing procedure, charging transportation and other expenses for supply of ungraded coal from the buyers, capping compensation for supply of 2 stones etc. For effecting the modifications in FSAs, CIL has been ordered to consult all the stakeholders. CIL has also been directed to ensure uniformity in the agreements executed with old and new power producers as well as agreements executed with private and PSU power producers. Further, CCI has imposed a penalty of INR 591.01 crore on CIL for the abusive conduct. While reducing penalty, CCI noted the steps taken by CIL to improve the sampling procedure even post-passing of the original order by CCI. However, while holding the extant sampling procedure as unfair, CIL has been directed to incorporate suitable modifications in FSAs to provide a fair and equitable sampling and testing procedure besides considering the feasibility of sampling at the unloading-end in consultation with power producers and adopting international best practices.



United States of America (‘US’) - Federal Trade Commission (‘FTC’)

American Guild of Organists agree to settle FTC charges that its rules restrained competition and harmed consumers
March 31, 2017

According to FTC’s complaint, the American Guild of Organists (‘AGO’) restrained competition amongst its members and others, in violation of Section 5 of the Federal Trade Commission Act as amended 15U.S.C. § 45. This was done by following a ‘Code of Ethics’ which restrained members of AGO from freely seeking or accepting work and by recommending that its members use standard fees. AGO directed its members to follow the compensation schedules and formulas developed by AGO for determining the charges for their services. AGO is a non-profit trade association with approximately 15,000 members organized in more than 300 chapters throughout USA and abroad. The members of AGO are organists and choral conductors who provide services for a fee. According to FTC the Code of Ethics adopted and maintained by AGO limits the competition between the members. The Code of Ethics and the compensation schedules likely increased the prices of the services offered by the members. It also imposed additional cost on the consumers in so much as if a consumer wanted a particular organist to perform at a function, the consumer was required to pay for the organist who actually performed as well as the incumbent organist of the venue location even though only the former performed at the function. The proposed consent order settling FTC’s charges requires AGO to stop restraining its members from soliciting work as musicians and to stop issuing compensation schedules, guidance, or model contract provisions for members to use to determine their compensation. AGO is also required to implement an antitrust compliance program pursuant to which it must stop recognizing chapters that fail to certify their compliance with the order’s provisions.

FTC requires kidney dialysis chain to divest assets as a condition of acquiring competitor
March 28, 2017

Under a proposed settlement, DaVita, Inc. a national outpatient kidney-dialysis chain is required to divest its ownership in seven clinics; five in suburban and urban areas of New Jersey and two on the outskirts of Dallas, Texas. The proposed settlement has been entered into to settle FTC charges that DaVita, Inc.’s $358 million acquisition of Renal Ventures Management, LLC (‘Renal’) would be anticompetitive. DaVita Inc. is the second-largest provider of outpatient dialysis services in the United States and Renal is the seventh-largest. According to the complaint the merger will have anticompetitive effects in Brick, Clifton, Somerville, Succasunna, and Trenton markets of New Jersey and Denton and Frisco markets of Dallas. At present DaVita Inc. and Renal directly compete in these markets. The merger would result either in a monopoly or a reduction in competition from three to two. In terms of the complaint, the likely effect of the merger would be an increase in price and reduced quality for dialysis patients. Further, entrants of new competition is not likely in these markets as the markets do not have sufficient kidney specialists to support competition. Under the terms of the proposed settlement DaVita Inc. is required to obtain agreements from the medical directors of the divested clinics that they will continue to provide physician services after being acquired by the buyer. In terms of the settlement DaVita Inc. is also barred from contracting with the medical directors of the divested clinics for a period of three years.



United States of America (‘US’) - Federal Trade Commission (‘FTC’)

American Guild of Organists agree to settle FTC charges that its rules restrained competition and harmed consumers
March 31, 2017

According to FTC’s complaint, the American Guild of Organists (‘AGO’) restrained competition amongst its members and others, in violation of Section 5 of the Federal Trade Commission Act as amended 15U.S.C. § 45. This was done by following a ‘Code of Ethics’ which restrained members of AGO from freely seeking or accepting work and by recommending that its members use standard fees. AGO directed its members to follow the compensation schedules and formulas developed by AGO for determining the charges for their services. AGO is a non-profit trade association with approximately 15,000 members organized in more than 300 chapters throughout USA and abroad. The members of AGO are organists and choral conductors who provide services for a fee. According to FTC the Code of Ethics adopted and maintained by AGO limits the competition between the members. The Code of Ethics and the compensation schedules likely increased the prices of the services offered by the members. It also imposed additional cost on the consumers in so much as if a consumer wanted a particular organist to perform at a function, the consumer was required to pay for the organist who actually performed as well as the incumbent organist of the venue location even though only the former performed at the function. The proposed consent order settling FTC’s charges requires AGO to stop restraining its members from soliciting work as musicians and to stop issuing compensation schedules, guidance, or model contract provisions for members to use to determine their compensation. AGO is also required to implement an antitrust compliance program pursuant to which it must stop recognizing chapters that fail to certify their compliance with the order’s provisions.

FTC requires kidney dialysis chain to divest assets as a condition of acquiring competitor
March 28, 2017

Under a proposed settlement, DaVita, Inc. a national outpatient kidney-dialysis chain is required to divest its ownership in seven clinics; five in suburban and urban areas of New Jersey and two on the outskirts of Dallas, Texas. The proposed settlement has been entered into to settle FTC charges that DaVita, Inc.’s $358 million acquisition of Renal Ventures Management, LLC (‘Renal’) would be anticompetitive. DaVita Inc. is the second-largest provider of outpatient dialysis services in the United States and Renal is the seventh-largest. According to the complaint the merger will have anticompetitive effects in Brick, Clifton, Somerville, Succasunna, and Trenton markets of New Jersey and Denton and Frisco markets of Dallas. At present DaVita Inc. and Renal directly compete in these markets. The merger would result either in a monopoly or a reduction in competition from three to two. In terms of the complaint, the likely effect of the merger would be an increase in price and reduced quality for dialysis patients. Further, entrants of new competition is not likely in these markets as the markets do not have sufficient kidney specialists to support competition. Under the terms of the proposed settlement DaVita Inc. is required to obtain agreements from the medical directors of the divested clinics that they will continue to provide physician services after being acquired by the buyer. In terms of the settlement DaVita Inc. is also barred from contracting with the medical directors of the divested clinics for a period of three years.



Republic of India – Competition Commission of India (‘CCI’)

CCI approves acquisition of 51% shareholding by NBCC (India) Limited in Hindustan Steel Works Construction Limited
Combination Registration No. C-2017/03/491
March 31, 2017

The combination pertained to acquisition of 51% shareholding in Hindustan Steel Works Construction Limited (‘HSCL’) by NBCC (India) Limited (‘NBCC’). HSCL and NBCC are collectively referred to as the Parties. NBCC directly and through its subsidiaries is engaged in provision of construction services and operates in segments of project management consultancy (‘PMC’), Engineering Procurement and Construction (‘EPC’), and real estate. NBCC has pan India presence and the company has also undertaken projects abroad. HSCL is incorporated as a construction agency of Government of India under Ministry of Steel, to mobilize indigenous capability for putting up integrated steel plants in the country. HSCL has diversified into other sectors like civil construction, construction of buildings, rods, railway projects etc. CCI noted that NBCC and HSCL are both currently engaged in construction sector. CCI observed that the Parties do not have a significant presence in any of the markets likely to be affected by the proposed combination and the combined entity would continue to face competitive constraints from other significant players such as Larsen and Toubro, Reliance Infrastructure, NCC Limited, Gammon, Lanco etc. CCI noted that that the proposed combination was not likely to cause any appreciable adverse effect on competition in any potential relevant market in India. The combination was accordingly approved by the CCI.

Notification regarding (a) de minimis exemption; (b) relevant assets and turnover in case a portion of an enterprise or division or business is being acquired, taken control of, merged or amalgamated with another enterprise
March 27, 2017

The Central Government, in exercise of the powers conferred by Section 54 (a) of the Competition Act, 2002, has exempted enterprises which are parties to:

  1. any acquisition referred to in clause (a) of section 5 of the Competition Act, 2002;
  2. acquiring of control by a person over an enterprise when such person has already direct or indirect control over another enterprise engaged in production, distribution or trading of a similar or identical or substitutable goods or provision of a similar or identical or substitutable service, referred to in clause (b) of section 5 of the Competition Act, 2002; and
  3. any merger or amalgamation, referred to in clause (c) of section 5 of the Competition Act, 2002

where the value of assets being acquired, taken control of, merged or amalgamated is not more than Rupees Three Hundred and Fifty Crore in India or turnover of not more than Rupees One Thousand Crore in India, from the provisions of Section 5 of the Competition Act, 2002 for a period of five years from the date of publication of the said notification in the official gazette (i.e., March 29, 2017).



United Kingdom (‘UK’) – Competition and Market Authority (‘CMA’)

CMA accepts proposal of Mastercard and VocaLink to address competition concerns arising from the purchase of VocaLink by Mastercard
April 11, 2017

Mastercard UK Holdco Ltd., a subsidiary of Mastercard International Incorporated (‘Mastercard’) has agreed to purchase VocaLink Holdings Ltd. (‘VocaLink’). Mastercard owns and operates credit and debit card schemes: Mastercard, Maestro and Cirrus and has also bid to supply infrastructure services to UK interbank payment systems. VocaLink is a supplier of payment infrastructure services to 3 major UK interbank payment systems: Bacs, (automated clearing system allowing credit and debit payments between bank accounts), Faster Payments Service (‘FPS’) (enables near ‘real-time’ payments between bank accounts within the UK) and the LINK ATM network. CMA assessed the merger inter alia in the context of loss of competition in payment infrastructure services to Bacs, FPS and LINK ATM scheme. CMA found that VocaLink and Mastercard are the 2 of the 3 most credible providers of infrastructure services to the LINK ATM network operating across the UK. The merger would therefore reduce the number of bidders and limit the possibility of the LINK ATM scheme to obtain competitive rates when tendering for an infrastructure provider. However, in the provision of payment infrastructure services to Bacs or FPS, CMA did not find any concerns as there are many credible alternatives to VocaLink and Mastercard. CMA has accepted the following proposal made by VocaLink and Mastercard to address the competition concerns identified by CMA:

  • VocaLink will make its existing network connectivity available to a new supplier of infrastructure services to LINK ATM. This will allow a competitor to use VocaLink’s connectivity to members of the LINK ATM network, rather than having to build its own;
  • VocaLink will transfer to LINK ATM the intellectual property rights relating to the LINK LIS5 messaging standard, which members of the network use to communicate when customers use cash machines; and
  • Mastercard will contribute to the cost to LINK ATM members of changing to a new supplier of infrastructure services to LINK ATM.

CMA accepts offer of Menzies to address competition concerns arising out of purchase of ASIG by Menzies
April 25, 2017

Menzies Aviation plc and Menzies Aviation Inc. (‘Menzies’) has agreed to acquire ASIG Holdings Limited and ASIG Holdings Corp. (‘ASIG’) (the ‘Merger’). Menzies and ASIG are together referred to as the Parties. CMA had entered into an inquiry with respect to the said Merger. CMA found that the Parties overlap in the supply of ground handling services (which include baggage, ramp, passenger, airside cargo handling and de-icing services) at Aberdeen Airport (‘ABZ’). CMA was of the opinion that there is a realistic prospect of substantial lessening of competition in relation to the supply of ground handling services at ABZ as a result of the Merger. This is because the parties compete closely at ABZ and the Merger would reduce the number of ground handlers from three to two. Further, evidence received by CMA indicated that ground handlers currently not present at ABZ do not exert sufficient constraint on the Parties post-Merger. CMA has accepted Menzies’ offer to sell the ground handling business of ASIG at ABZ to Dalcross Handling as sufficient remedy to address CMA’s competition concerns.



European Union (‘EU’) – European Competition Commission (‘EC’)

European Commission clears acquisition of ITP by Rolls-Royce subject to certain conditions
April 19, 2017

The European Commission has cleared under Article 1 of EU Merger Regulation the proposed acquisition of aircraft engine components maker ITP (Spain) by aircraft engine maker Rolls-Royce (UK). The decision is conditional on Rolls-Royce eliminating a conflict of interest concerning the EPI engine consortium. Rolls-Royce, together with ITP, MTU of Germany and Safran of France, is a member of the military engine consortium Europrop International GmbH (‘EPI’). EPI designs and manufactures the engine powering the Airbus A400M, which competes with the Lockheed Martin C-130J aircraft, powered by a Rolls-Royce engine. The European Commission had concerns that the transaction, as originally notified, would have enabled Rolls-Royce, by acquiring ITP, to obtain additional influence on the decision-making process of the EPI consortium, on matters that affect its competitiveness against the Lockheed Martin C-130J. In order to remove these concerns, Rolls-Royce offered commitments in relation to the EPI governance rules that will eliminate the conflict of interest created by the merger and ensure that the EPI consortium remains competitive. The European Commission also investigated whether the relationship between ITP and Rolls-Royce raised competition concerns. In particular, the European Commission examined whether the merged entity would have the ability and incentive to shut out the supply of ITP’s engine components to other manufacturers of aircraft engines competing with Rolls-Royce. However, the European Commission concluded that, after the merger, Rolls-Royce would neither have the ability nor the incentive to do so. The European Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance by Rolls-Royce of its commitments.

European Commission refuses to accept the proposed merger between Deutsche Börse and London Stock Exchange
March 29, 2017

The European Commission has prohibited the proposed merger between Deutsche Börse AG (‘DBAG’) and London Stock Exchange Group (‘LSEG’) under Article 1 of the EU Merger Regulation. The European Commission’s investigation concluded that the proposed merger would have created a de facto monopoly in the markets for clearing fixed income instruments. The proposed merger would have combined the activities of the two largest European stock exchange operators, DBAG and LSEG. The proposed merger would have led to a de facto monopoly in clearing of fixed income instruments (bonds and repurchase agreements) in Europe, where the parties are the only relevant providers of these services. In particular, the merger would have combined DBAG’s Frankfurt based clearing house Eurex with LSEG’s clearing houses LCH.Clearnet (which comprises London based LCH.Clearnet Ltd and Paris based LCH.Clearnet SA) and Rome based Cassa di Compensazione e Garanzia. This monopoly in clearing fixed income instruments would also have had a knock-on effect on the downstream markets for settlement, custody and collateral management. Service providers in these markets depend on transaction feeds from clearing houses. As DBAG’s Clearstream competes with these service providers, the proposed merged entity would have had the ability and the incentive to divert transaction feeds to Clearstream and foreclose other competitors. In addition, the merger would have removed horizontal competition for trading and clearing of single stock equity derivatives (based on stocks of Belgian, Dutch and French companies).

The 1414 Dyer’s is the first known restrictive trade agreement to be examined under English common law. A dyer had given a bond not to exercise his trade in the same town as the plaintiff for six months but the plaintiff had promised nothing in return. The court refused to grant any relief to the plaintiff for the dyer’s breach of agreement because the agreement was held to be a restriction on trade.

In house contributors

  • Neha
  • Avsi Malik Sharma


In House Contributions
– Neha
-Avsi Malik Sharma

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Doc ID: CL/20/17

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