Competition Law: INFORMATION, UPDATES AND ANALYSIS, Nov 2015

United Kingdom

Competition and Market Authority (‘CMA’)

Investigation into online booking of hotels closed, dated September 16, 2015

The Office of Fair Trading (’OFT’) had commenced its investigation on September 10, 2010 into whether agreements between InterContinental Hotels Group and each of Booking.com and Expedia.co.in (‘Parties’) placing discounting restrictions on online hotel agents with respect to room only hotel accommodation were anti-competitive in nature. In January, 2014 however, the OFT decided to accept commitments from the Parties to remove restrictions on offering discounts from headline rates for hotel rooms in the UK, subject to certain conditions. These changes remove from their contracts with hotels, certain “rate parity” or “most favored nation” restrictions that prevent hotels from offering cheaper room rates on competing online travel agents’ sites than they offer on Booking.com or Expedia.co.in.



European Union

European Competition Commission (‘European Commission’) General Court

European Commission fines suppliers of optical disc drivers, 116 million euros for cartelization.
October 21, 2015

The European Commission has fined eight optical disc drive suppliers a total of 116 million euros for having coordinated their behavior in relation to procurement tenders organized by two computer manufacturers. The eight companies who were indulging in the said anti-competitive practices were Philips, Lite-On, their joint venture Philips and Lite-On Digital Solutions, Hitachi-LG Data Storage, Toshiba Samsung Storage Technology, Sony, Sony Optiarc and Quanta Storage. Philips, Lite-On and their joint venture Philips & Lite-On Digital Solutions received full immunity from fines as they were the first to reveal the existence of the cartel. The European Commission’s investigation revealed that between June 2004 and November 2008, the companies participating in the cartel communicated to each other their intentions regarding bidding strategies, shared the results of procurement tenders and exchanged other commercially sensitive information concerning optical disk drives used in laptops and desktops to avoid competition in procurement of tenders organised by Dell and HP. Although the cartel contacts took place outside the European Economic Area, they were implemented on a worldwide basis. The duration of each company’s involvement in the cartel varied and ranged from less than a year to over four years.

General Court reduces fine in Cathode Ray Tube cartel case.
September 9, 2015

On December 5, 2012, the European Commission had imposed fines amounting to approximately 1.47 billion euros on seven undertakings for operating a cartel pertaining to the manufacture of cathode ray tubes. The General Court although rejected the actions bought by Samsung SDI Co. Ltd, LG Electronics and Konikliikje Philips Electronics NV, upheld the arguments raised by Panasonic Corporation (‘Panasonic’), Toshiba Corporation (‘Toshiba’) and MT Picture Display Co. Ltd (‘MTPD’),’ their common subsidiary at that time. It was argued that the European Commission while imposing penalty, had departed from normal procedure by using average of the value of direct European Economic Area sales in the same period, multiplied by the number of Colour Picture Tube (‘CPT’) concerned, rather than the weighted average of the CPTs associated with those sales, in terms of their actual size and the period concerned. The General Court thus reduced the fine imposed on Panasonic for its direct participation from 157.5 million euros to  128.9 million euros, the fine imposed jointly and severally on Panasonic and MTPD from  7.9 million euros to 7.5 million euros and, lastly, the fine jointly and severally borne by Panasonic, Toshiba and MTPD from  86.7 million euros to  82.8 million euros.



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

M/s Gujarat Industries Power Company Limited (GIPCL) and M/s Gujarat State Fertilizers & Chemicals Limited (GSFCL) v M/s Gail (India) Limited
September 8, 2015

M/s Gujarat Industries Power Company Limited (‘GIPCL’) and M/s Gujarat State Fertilizers & Chemicals Limited (‘GSFCL’) (collectively, the ‘Informants’) have executed Gas Supply Agreements (‘GSA’) with M/s GAIL (India) Limited (‘OP’) for purchase of Re-Liquefied Natural Gas (‘RLNG’). The Informants filed information alleging abuse of dominant position and incorporation of anti-competitive, unfair and one-sided clauses in the GSA by the OP. The Informants alleged that the GSA provided for a take or pay clause which forced the Informants to purchase the annual contracted quantity of gas failing which the Informants have to pay for the shortfall by way of off-take under the take or pay clause. The CCI was of the view that in the absence of any other major player i.e., natural gas supplier in the city of Vadodara where the Informants have their plants, OP prima facie appears to be dominant in the relevant market of ‘supply and distribution of natural gas (RLNG) to industrial consumers in Vadodara’. The CCI noted that with respect to the contract with GIPCL, the OP had reduced GIPCL’s take or pay liability under the contract from INR 237.93 crore to INR 49.81 crore. Further, with respect to the contract with GSFCL, the OP had proposed to revise the contracted quantity of RLNG due to the irregular consumption pattern of GSFCL. However, this proposal of OP was rejected by GSFCL by its letter dated 31.12.2013, wherein GSFCL categorically stated that its plants are running to full capacity and there is no need for revision of existing RLNG contract. Further the OP had reduced GSFCL’s take or pay liability to INR 105.45 crore out of a total liability of INR 275.74 crore which was due and payable under the take or pay clause. It was further clarified to the GSFCL by the OP that the Informant can exercise the make-up gas facility for the shortfall in off take. The CCI therefore found the conduct of the OP to be rational and not arbitrary or abusive. Further, in the opinion of the CCI the GSAs appeared to have been executed after thorough discussions and negotiations. It was held that the invocation of the take or pay clause could not be termed unfair. The CCI was therefore of the view that no contravention was made out against the OP under Section 4 of the Competition Act, 2002 (‘Act’).

Cloudwalker Streaming Technologies Private Ltd v Bennett, Coleman and Co. Ltd.
September 29, 2015

Information was filed by Cloudwalker Streaming Technologies Private Limited (‘Informant’) against Bennett Coleman and Co. Ltd (‘OP’) alleging contravention of the provisions of Section 4 of the Act. The Informant which is engaged in the business of distribution of movies had approached the OP for placing advertisements in its newspaper, the Times of India. The Informant was aggrieved by the conduct of the OP fixing rates for the advertisement to be placed by the Informant under the ‘display category’ and not the ‘entertainment category’ which was allegedly three times the price of the latter. The CCI defined the relevant market as the “market for services of procurement of advertisement space in English print media in Mumbai”. The CCI observed that while OP may be one of the leading English daily newspaper in Mumbai but there are various other reputed newspapers enjoying a large readership in the relevant market and inhibiting the OP from exercising monopolistic power independent of market forces. The CCI noted that the Informant also has the option of advertising in electronic media which is widely prevalent in Mumbai. The CCI was therefore of the view that OP cannot be said to be prima facie dominant in the relevant market, under provisions of the section 4 of the Act.

Shri Arvind Sood v Hyundai Motor India Ltd.
September 29, 2015

Information was filed by one Shri Arvind Sood (‘Informant’) against Hyundai Motor India Ltd. (‘OP’) alleging contravention of Sections 3 and 4 of the Act. The Informant alleged that the OP had started bookings for its car Hyundai Creta a Sports Utility Vehicle (‘SUV’) in various cities in India prior to its launch. The Informant had amongst other people booked the car with an authorized dealer by paying an initial booking amount of INR 25,000/-. The grievance of the Informant was with respect to the conduct of OP in collecting the booking amount through its dealers without giving any details of the product. The Informant further alleged that the conduct of collecting the booking amount before launch of the vehicle was unfair and had appreciable affect on the business of other SUV and car manufacturers. The Informant further alleged that the OP had advised its authorized dealers to retain the booking amount aggregating to INR 900 crore till the launch of the said vehicle. The Informant therefore alleged that the OP had entered into anti-competitive agreements with its dealers in terms of section 3(1) of the Act. It was further alleged that OP has engaged in a cartel like behaviour with its dealers in violation of the provisions of section 3(3) of the Act. The CCI was of the opinion that the relevant market in the instant case would be the “market of Sports/ Multi Utility Vehicles in India”. The CCI noted that there are a number of good number of automobile players with comparable size and resources as well as the capability of manufacturing differentiated car models in terms of price, design, type of fuel, engine displacement, distributor network, after sale service etc. which shows that the consumers have a choice in the relevant market. The OP therefore did not appear to be in a dominant position in the relevant market. In the absence of dominance of OP, it could not be said that the OP had contravened the provisions of section 4 of the Act.



United States of America

FTC settles charges concerning anti-competitive acquisition of Tornier N.V. by Wright Medical Group, Inc. reported on September 30, 2015.  

Wright Medical Group, Inc. (‘Wright’) and Tornier N.V. (‘Tornier’) have agreed to sell Tornier’s U.S. rights and assets related to its total ankle replacements and total silastic toe joint replacements to Integra Lifesciences Corporation to settle FTC charges that the proposed $3.3 billion merger of Wright and Tornier would violate federal antitrust laws by substantially reducing competition for these devices. FTC noted Wright and Tornier are close competitors and significant suppliers of these orthopaedic devices in the United States. As a part of the settlement Wright and Tornier will also provide Integra with intellectual property, manufacturing technology, and existing inventory, as well as other assets and assistance to ensure that Integra can effectively compete in the markets. The proposed order also requires Wright and Tornier to supply Integra with total ankle replacements for up to three years and total silastic toe joint replacements for up to a year, while Integra transitions to become an independent competitor in these markets.



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

Notice of Acquisition filed by Koneru Holdings Limited. (C-2015/07/290) September 8, 2015

The proposed acquisition was notified under Section 6(2) of the Competition Act, 2002 (‘Act’) pursuant to a Share Purchase and Business Transfer Agreement dated June 11, 2015. The transaction comprises of a series of interconnected steps involving (a) the acquisition of Saucon Holdings Limited (‘SHL’), PVK Engineers Private Limited (‘PVK’), Aster Private Limited (‘Aster’) and Ideamax Consultancy Services Private Limited (‘Ideamax’) by Koneru Holdings Limited (‘KHL’); and (b) an indirect acquisition of certain identified undertakings (assets and liabilities) of Agrawal Steel Structures (India) Private Limited (‘Agarwal’), Gem Cables and Conductors Limited (‘Gem’), Vijeta Transformers Private Limited (‘Vijeta’) and Sourya Insulators Private Limited (‘Sourya’) by KHL. Subsequent to these transactions, PIPL Holdings Pvt. Ltd. (‘PIHPL’), a wholly owned subsidiary of KHL, proposes to acquire 100% shares of SHL from KHL. (hereinafter B&C, Aster, Agarwal, Gem, Vijeta and Sourya are referred to as ‘Targets’). Further, Puissant Holdings Pvt. Ltd. (‘PHPL’), a wholly owned subsidiary of KHL, would subscribe to non-convertible debentures in PVK. The acquirer, KHL is an investment company incorporated in Mauritius. The targets are primarily engaged in the business of providing engineering, procurement and construction solutions for power transmission and distribution, telecom and railway electrification (‘EPC solutions for electricity and telecom towers’). It was observed that post combination, KHL would become a vertically integrated player present in the business of EPC Solutions for electricity and telecom towers. The CCI noted that post combination, KHL is not likely to be a significant player in the said business based on the small market shares enjoyed by the targets. Further, the CCI noted that there are other vertically integrated players such as KEC International Limited, Kalpatru Power Transmission Limited, Larsen & Tubro Limited, Tata Projects and Jyothi Structures Limited etc. operating in the market which would provide competitive constraint to KHL. In light of the observations, the Commission approved the combination under Section 31(1) of the Act as the proposed combination is not likely to cause an appreciable adverse effect on competition in India.

Notice of acquisition filed by FIH Mauritius Investments Limited and I Investments Limited, C-2015/07/296 dated August 19, 2015

Notice was given to the CCI under Section 6(2) of the Act pursuant to a mandatory requirement of open offer made in accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. FIH Mauritius Investments Limited and I Investments Limited (collectively, ‘Acquirers’) had proposed to acquire 26% of the total equity share capital of IIFL Holdings Limited. The Acquirers belong to the Fairfax group and have been incorporated primarily for the purpose of making investments in India. IIFL Holdings Ltd, the target is primarily engaged in the provision of providing financial services in India, inter alia, merchant banking and investment advisory services, retail broking, asset management, commodities broking, distribution of financial products etc.  Upon enquiry, the CCI noted that there is no change in control of the management of IIFL Holdings Ltd post combination and that its business operations will continue under the present management. It was also observed that there are no veto/special rights granted to the Fairfax Group on account of the proposed transaction. However, the CCI observed that in the event the Acquirers acquire more than 25% of the equity share capital of the Target, they will be in a position to veto strategic decisions of the Target and as a result, will be jointly controlling the Target with the existing promoters of the Target. Therefore a competitive assessment was undertaken, wherein it was noted that there is no horizontal overlap between the parties. Further it was noted that there would not be any change in the competitive landscape with regard to investment advisory services on account of the proposed combination. Accordingly, the CCI was of the opinion that the proposed combination is not likely to have any appreciable adverse effect on competition in India and the combination was approved under Section 31(1) of the Act.

Notice filed by Heidelberg Cement AG, C-2015/08/300 dated September 17, 2015

The notice under Section 31(1) of the Act was given pursuant to the execution of a Share Purchase Agreement dated July 28, 2015 involving the acquisition by Heidelberg Cement AG (‘Heidelberg’) of 45% shareholding of Italcementi S.P.A (‘ISPA’). Further, Heidelberg would file a public offer for buying outstanding shares of ISPA from public in order to acquire approximately 98.89% shareholding in ISPA. Heidelberg is a major producer of cement and other construction material such as aggregates, asphalt etc. In India, Heidelberg, through its subsidiaries, Cochin Cements Limited and Heidelberg Cement India manufactures and sells clinker and different varieties of grey cement such as pozzolona portland cement (‘PPC’) and portland slag cement (‘PSC’), apart from trading of coal, petcoke and gypsum. ISPA is also a global producer of cement and other construction material (aggregates, asphalt etc). In India, ISPA through its subsidiary, Zuari, manufactures and sells clinker and different varieties of grey cement such as Ordinary Portland Cement (‘OPC’), PPC and PSC apart from trading cement products and building material like AAC blocks, admixtures etc. For undertaking a competitive assessment, the CCI delineated the relevant product market as market for grey cement following its earlier decisional practice in Holcim Limited/Lafarge S.A, C-2014/07/190. With regard to the relevant geographic market, the CCI observed that the consumption of cement is generally centred around production clusters. Thereafter the CCI employed the Elzinga Hogarty Test to determine the geographic market, however the determination of the relevant geographic market remained inconclusive and the exact definition was left open. Thereafter, the CCI assessed the proposed combination on the basis of factors stated in Section 20(4) of the Act, opined that the proposed combination is not likely to have an appreciable adverse effect on competition in India and therefore, the same was approved under of Section 31(1) of the Act.

Notice given by Standard Life (Mauritius) 2006 Limited, C-2015/09/308 dated October 7, 2015 

The CCI was notified under Section 6(2) of the Act pursuant to the execution of a Share Sale and Purchase Agreement dated August 14, 2015 between Standard Life (Mauritius) 2006 Limited (‘Acquirer’), Housing Development Finance Corporation Limited (‘Seller’) and HDFC Standard Life Insurance Company Limited (‘Target’). The proposed combination is a purchase of an additional nine per cent shares by the Acquirer from the Seller in the Target. Post combination, the shareholding of the Acquirer will increase from twenty six percent to thirty five per cent. The Acquirer is a company incorporated in Mauritius and does not offer any products in India. The Target is engaged in the business of providing life insurance services in India. The CCI noted that the Acquirer already holds a minority shareholding in the Target and has joint control over it owing to the fact that it enjoys certain affirmative rights in the Target including, inter alia, adopt or amend the annual business plan, close down any business or dispose off or dilute its interest in any of its subsidiaries for the time being and approve any remuneration of whole time directors and managers. However, the rights enjoyed by the Acquirer presently shall remain unchanged and therefore there will not be any change in control of the management/affairs of the Target. As such, it was observed by the CCI that the proposed combination is not likely to cause any appreciable adverse effect on competition in India. The combination was therefore approved under Section 31(1) of the Act. 



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

Acquisition of NordGlass Sp. z.o.o by AGC Automotive Europe S.A.
October 29, 2015

The CMA has cleared the proposed acquisition of NordGlass SP by Automotive Europe (‘NordGlass’), a subsidiary of Asahi Glass Co (‘AGC’) (collectively, ‘Parties’). The CMA observed that the Parties have overlapping business interests in the production and supply of automotive glass (used in automobiles). It was further observed that Asahi supplies float glass to NordGlass which is used as a raw material for the production of automotive glass. Upon undertaking a study of the potential competitive effects of the transaction, it was found that on account of NordGlass’s low market share in the automotive glass segment, the increment in ADC’s market share is negligible and that AGC will continue to face sufficient competitive constraints. It was also found that the products offered by the parties to the transaction are differentiated both in terms of price and quality and therefore the parties are not close competitors.

Acquisition of assets of Shell Group by Motor Fuel Limited.
September 24, 2015

The acquisition relates to the purchase of 90 petrol filling stations belonging to Shell U.K Limited by Motor Fuel Group (collectively, ‘Parties’). Investigation was undertaken with respect to the markets for the retail supply of road fuel (petrol and diesel), auto-LPG and grocery retailing where it was observed that the operations of the companies overlapped. Upon investigation, it was noted that the parties had small individual market shares pre-merger, and therefore there is only a minimal increment in the market shares of the parties in the respective markets and as such the merger will not give rise to a substantial lessening of competition in any of the markets identified herein.

Surrey Hospitals Merger cleared
September 16, 2015

The parties to the transaction, Ashford and St. Peter’s Hospitals NHS Foundation Trust and Royal Surrey County Hospital NHS Foundation Trust (collectively, ‘Parties) provide clinical services from their sites in Ashford, Chertsey and Guildford. The CMA investigated the overlapping health services provided by the Parties i.e elective services, emergency services, services provided to private patients, specialized services and community health services and arrived at the conclusion that competition and consumer choice will not be affected after the merger. It was observed that the presence of a number of nearby hospitals, which attract significant number of patients from the local area are viewed as a credible alternative by both patients and practitioners.

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

FTC settles charges concerning anti-competitive acquisition of Tornier N.V. by Wright Medical Group, Inc. reported on September 30, 2015.  

Wright Medical Group, Inc. (‘Wright’) and Tornier N.V. (‘Tornier’) have agreed to sell Tornier’s U.S. rights and assets related to its total ankle replacements and total silastic toe joint replacements to Integra Lifesciences Corporation to settle FTC charges that the proposed $3.3 billion merger of Wright and Tornier would violate federal antitrust laws by substantially reducing competition for these devices. FTC noted Wright and Tornier are close competitors and significant suppliers of these orthopaedic devices in the United States. As a part of the settlement Wright and Tornier will also provide Integra with intellectual property, manufacturing technology, and existing inventory, as well as other assets and assistance to ensure that Integra can effectively compete in the markets. The proposed order also requires Wright and Tornier to supply Integra with total ankle replacements for up to three years and total silastic toe joint replacements for up to a year, while Integra transitions to become an independent competitor in these markets.



European Competition Commission (‘European Commission’)

European Commission approves acquisition of BG Group by Royal Dutch Shell.
September 2, 2015

The European Commission has approved the $ 70 billion (Seventy Billion Dollars) acquisition of BG Group by Royal Dutch Shell Company (‘Parties). The Parties are multi-national companies primarily operating in the oil and gas sector. The European Commission limited its investigation to where the business activities of the parties overlap, namely in the exploration of oil and gas resources, the LNG liquefaction business and the wholesale supply of LNG. It was observed that, post acquisition, there would still be effective competitive constraints in the market in the form of competitors and that the Parties will not be able to unfairly influence prices. It was further noted that, it was unlikely that the Parties would foreclose competition in Shell’s LNG liquefaction facilities in the North Sea which is used to supply LNG into the European Economic Area, due to the fact that additional liquefaction capacity is being built and will come on-stream in the near future. It was also observed that significant oil and gas transport and processing capacity exists in the North Sea region.                

European Commission approves acquisition of Alstrom’s energy business by General Electric.
September 8, 2015

Following a detailed investigation, the European Commission approved the 12.5 billion euro takeover of the energy related business of French company Alstrom by US Company General Electric (‘GE’). The approval is conditional upon the divestiture of central parts of Alstrom’s heavy duty gas turbines business to Ansaldo of Italy, which is mainly used in gas-fired power plants. The European Commission had raised initial concerns that the transaction would have eliminated one of the major competitors of GE in the heavy duty gas turbines market, which would have been prejudicial to the competitive process. However, the competitive concerns have been removed by the commitments offered by GE. With regard to the other businesses, which are part of the transaction, namely thermal power generation business and grid and renewables, it was observed that the operations of the parties do not overlap and therefore does not raise any competition concerns.

Commission clears Intel’s acquisition of Altera, dated October 14, 2015

The European Commission has cleared the proposed acquisition of Altera by Intel, both of which are engaged in the business of manufacturing different types of semiconductors. The European Commission had focused its investigation on several semiconductor markets where the activities of the companies are overlapping.  The European Commission also investigated the vertical overlap between Intel’s contract manufacturing services and Altera’s activities in the supply of FPGA (field programmable gate arrays) and CPLDs (complex programmable logic devices). The European Commission also investigated potential anti-competitive effects that may arise out of Intel’s premiere position in the market for CPUs, in associated markets. Upon investigation it was found that the proposed acquisition does not have the potential to cause any anti-competitive effects.



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The information in this private circulation is not legal advice and should not be treated as such. The information is taken from public domain and is purely for private and non- commercial purposes. We do not represent that the information is correct, accurate, complete or non- misleading.

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Doc ID: CL/11/15

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