Competition Law Newsletter December 2013
INFORMATION; UPDATES AND ANALYSIS
Covering August, September, October and November 2013
- Legal Pronouncements
- United States of America
- European Union
- United Kingdom
- Republic of India (comprising pronouncements on anti-competitive agreements, abuse of dominant position)
- Market Developments
- United States of America
- European Union
- United Kingdom
- Republic of India
United States of America
United States of America v. JTEKT Corporation1
September 26, 2013
JTEKT Corporation, Japan (‘JTEKT’) and the United States of America have entered into a Plea Agreementdated September 19, 2013, in respect of two count charges contained in
the Information, whereby it is alleged that ‘JTEKT’ and its co-conspirators participated in a combination and conspiracy to suppress and eliminate competition in the automotive parts industry.
Under count one of the Information, JTEKT will be charged with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by
EOR projects implemented in the oil sector.
agreeing to allocate markets, rig bids for, and to fix, stabilize, and maintain the prices of bearings sold to Toyota Motor Company, certain of its subsidiaries, and other Japanese automobile manufacturers and Japanese automobile component manufacturers (‘Japanese automobile and component manufacturers’) in the United States and elsewhere, from at least as early as 2000 and continuing until as late as early 2011, in violation of the Sherman Antitrust Act, 15 U.S.C. § 1. Under count two of the Information, JTEKT will be charged with participating in a conspiracy tosuppress and eliminate competition in the automotive parts industry by agreeing to allocate markets, rig bids for, and to fix, stabilize, and maintain the prices of electric powered steeringassemblies sold to Nissan Motor Company Ltd. and certain of its subsidiaries (‘Nissan’) in the United States and elsewhere, from at least as early as 2005 and continuing until as late as October 2011, in violation of the Sherman Antitrust Act, 15 U.S.C. § 1.
The ‘Sentencing Agreement’ as contained in the ‘Plea Agreement’ stipulates the ‘Guidelines Fine Range’ as $129.09 million to $258.18 million.
United States of America v. KuoHsuan “Chuck” Chang2
November 04, 2013
KuoHsuan “Chuck” Chang and the United States of America have entered into a Plea Agreement dated November 04, 2013, in respect of two count charges contained in the Information, in respect of a combination and conspiracy to suppress and restrain competition by rigging bids to obtain selected propertiesoffered at public auctions in San Francisco County, in unreasonable restraint of interstate trade and commerce, in violation of the Sherman Antitrust Act, 15 U.S.C. § 1.
Under count one of the Information, the defendant will be charged for participating in a conspiracy to rig bids to obtain the selected properties. The primary purpose of this conspiracy was to suppress and restrain competition to purchase the selected properties at non-competitive prices.
Under count two of the Information, the defendant and his co-conspirators will be charged for wilfully and knowingly agreeing to devise and intending to devise and participate in a scheme and artifice to defraud mortgage holders, other holders of debt secured by the selected properties, and in some cases, the defaulting homeowners and to obtain money and property from them by means of materially false and fraudulent pretenses, representations, and promises.
The ‘Sentencing Agreement’ as contained in the ‘Plea Agreement’ lays down fines for both countsseparately.
United States of America v. Daniel Rosenbledt3
November 05, 2013
Daniel Rosenbledtand the United States of America have entered into a PleaAgreement dated October 17, 2013, in respect of four count charges contained in the Information.
Count one of the Information charges the defendant with participating in a conspiracy to suppress and restrain competition by rigging bids to obtain selected properties offered at public real estate foreclosure auctions in San Mateo County, in the Northern District of California, in violation of the Sherman Act, 15 U.S.C. § 1. Count two of the Information charges the defendant with conspiracy to commit mail fraud in San Mateo County, California, during 2008 to 2011.
Count three of the Information charges the defendant with participating in a conspiracy to suppress and restrain competition by rigging bids to obtain selected properties offered at public real estate foreclosure auctions in San Francisco County, in the Northern District of California, in unreasonable restraint of interstate trade and commerce, in violation of the Sherman Act, 15 U.S.C. § 1.
Count four of the Information charges the defendant with conspiracy to commit mail fraud in violation of 18 U.S.C. § 1349, in San Francisco County, California, during 2009 to 2011.
The ‘Sentencing Agreement’ as contained in the ‘Plea Agreement’ lays down fines compositely for counts one and three; and two and four. United States of America v. Mitsuba Corporation4
November 06, 2013
Mitsuba Corporation, Japan (‘Mitsuba’) and the United States of America have entered into a Plea Agreement dated September 26, 2013, in respect of charges contained in the Information.
Under count one of the Information, ‘Mitsuba’ and its co-conspirators participated in a combination and conspiracy to suppress and eliminate competition in the automotive parts sold to automobile manufacturers in the United States and elsewhere. The said conspiracy resulted in unreasonable restraint of interstate and foreign trade and commerce in violation of the Sherman Antitrust Act, 15 U.S.C. § 1.
Further, under count two the defendant will be charged for altering, destroying, mutilating, concealing, covering up, falsifying and making false entries in documents and tangible objects with the intent to impede, obstruction and influence the investigation of the conduct charged in count one.
The defendant under the ‘Plea Agreement’, agreed to pay a criminal fine of $ 135 million, in instalments without any interest and within five years from the date of imposition of the sentence.
United States of America v. Yasuhiko Ueno5
November 21, 2013
Three high-level executives of Tokyo-based Takata Corp. have pleaded guilty for their participation in aconspiracy to fix prices of seatbelts installed in cars sold in the United States. The executives have also agreed to serve time in a U.S. prison. According to the one-count felony charges filed separately against each of the executives in the U.S. District Court for the Eastern District of Michigan in Detroit, Yasuhiko Ueno, SaburoImamiya and YoshinobuFujino participated in a conspiracy to rig bids for, and to fix,stabilize and maintain the prices of seatbelts sold to Toyota Motor Corp., Honda Motor Co. Ltd., Nissan Motor Co. Ltd., Fuji Heavy Industries Inc. – more commonly known by its brand name, Subaru – and Mazda Motor Corp. in the United States and elsewhere. The three executives have agreed to serve prison sentences ranging from 14 to 19 months, and to cooperate with the department’s ongoing investigation. Ueno has agreed to serve 19 months in prison and to pay a $20,000 criminal fine. Imamiya has agreed to serve 16 months in prison and to pay a $20,000 criminal fine. Fujino has agreed to serve 14 months in prison and to pay a $20,000 criminal fine.
According to the charges, the Takata executives and their co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and communications to coordinate bids submitted to the automobile manufacturers. Each of the executives is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine for an individual may be increased to twice the gain derived from the crime or
twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Antitrust: Commission opens proceedings against container liner shipping companies 6
November 22, 2013
The European Commission has opened formal antitrust proceedings against several container liner shipping companies to investigate whether they engaged in concerted practices, in breach of the European Union (EU)antitrust rules. Container liner shipping is the transport of containers by ship at a fixed time schedule on a specific route between a range of ports at one end and another range of ports at the other end. Since 2009, these companies have been making regular public announcements of price increase intentions through press releases on their websites and in the specialised trade press. These announcements are made several times a year and contain the amount of increase and the date of implementation, which is generally similar for all announcing companies. The announcements are usually made by the companies successively a few weeks before the announced implementation date.
The Commission has concerns that this practice may allow the companies to signal future price intentions to each other and may harm competition and customers by raising prices on the market for container liner shipping transport services on routes to and from Europe. The Commission will now investigate whether this behaviour amounts to a concerted practice in breach of Article 101 of the Treaty on the Functioning of the European Union (TFEU) and of Article 53 of the European Economic Area (EEA) Agreement.
Commission fines four North Sea shrimps traders € 28 million for price fixing cartel7
November 27, 2013
The European Commission has fined four European North Sea shrimps traders a total of € 28 716 000 for operating a cartel in breach of EU antitrust rules. Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’) prohibits cartels and restrictive business practices. The companies are Heiploeg, KlaasPuul, Kok Seafood (all of the Netherlands) and Stührk (of Germany). Between June 2000 and January 2009,Heiploeg and KlaasPuul agreed to fix prices and share sales volumes of North Sea shrimps in Belgium, France, Germany and the Netherlands. Kok Seafood participated at least from February 2005 and Stührk was involved in price fixing in Germany in the period from March 2003 to November 2007. The coordinated price level at which the retailer bought their shrimps directly affected the prices charged to the end-consumers. The size of the market varies heavily from year to year depending on the volumes landed by the fishermen and the price paid, but is always at least €100 million. The companies involved have high combined market shares in the European Economic Area (‘EEA’), estimated to bearound 80%. The purpose of the cartel was to freeze the market by stabilising the suppliers’ market shares in order to facilitate price increases and stimulate profitability. The cartel affected the EU market and sales in Belgium, Germany, France and the Netherlands in particular. The cartel took the form of a range of informal bilateral contacts primarily between Heiploeg and KlaasPuul but also involving Stührk and Kok Seafood. The discussions usually covered a wide range of aspects of their business, including their purchase prices from fishermen, conduct towards other traders on the market, market sharing, and prices charged to specific important customers that often set the benchmark price for other customers.
Fines: The fines were set on the basis of the EU 2006 Guidelines on fines. The Commission took into account the companies’ sales of the products concerned in the EU, the very serious nature of the infringement, its scope and its duration. The fines on two of the companies were significantly below the legal maximum. KlaasPuul received full immunity under the Commission’s 2006 Leniency Notice, as it brought the cartel to the Commission’s attention and provided valuable information to prove the infringement.
United Kingdom (UK)
Office of Fair Trading (‘OFT’) issues statement ofobjections in mobility scooters sector8
September 24, 2013
The OFT has issued a Statement of Objections alleging that Pride Mobility Products Limited (‘Pride’), a manufacturer of mobility scooters based in Bicester, Oxfordshire, and some of its retailers, haveinfringed competition law.
The OFT has provisionally concluded that the parties entered into agreements, or engaged in concerted practices, that prevented the UK-wide online retailers in question from advertising online prices below Pride’s Recommended Retail Price for certain models of mobility scooter. These practices may have limited consumers’ ability to get value for money.
The OFT’s provisional finding is that these practices occurred over various periods in relation to different retailers between 2010 and 2012.The companies will now have an opportunity to respond to the Statement of Objections and the OFT will carefully consider any representations they make before deciding whether competition law has in fact been infringed.
Republic of India
Anti-competitive agreements including cartels
M/s Reliance Big Entertainment Private Limited v. Tamil Nadu Film Exhibitors Association (now known as Tamil Nadu Theatre Owners Association)9
November 05, 2013
The information was filed by M/s Reliance Big Entertainment Private Limited (‘the informant’) againstTamil Nadu Film Exhibitors Association (‘the opposite party’/ TNFEA) alleging inter alia contravention of the provisions of sections 3 and 4 of the Competition Act, 2002 (‘Act’).
As per the agreement between the informant and M/s Balaji Real Media Private Limited, the informant was entitled to distribute a film titled Osthiin Tamil language, which was a remake of Hindi filmDabbang. The film was scheduled for release on 08.12.2011. The informant granted the said exclusive distribution rights of the film for the Territory of Tamil Nadu, Kerala and Karnataka to M/s Kural TV Creations Pvt. Ltd. (‘M/s Kural TV’). Further, the informant assigned the Satellite Rights
of the said film to M/s Sun TV Network Ltd. (‘M/s Sun TV’). However, the informant received an e-mail from M/s Kural TV informing the informant that the opposite party association has decided not to screen the said film in any of the screens of its members since the said film’s Satellite Rights were granted to M/s Sun TV. M/s Kural TV expressed inability to block and book the theaters because of the same. The informant further avers that it learnt from various newspaper articles that M/s Sun TV owed some money to few of the members of the opposite party association and in order to recover this money from M/s Sun TV, the opposite party association decided to ban all the films which are either produced or distributed by M/s Sun TV or even the films whose Satellite Rights are granted to M/s Sun TV. The informant lastly stated that banning its said film in the theatres in Tamil Nadu just because the Satellite Rights of the said film were granted to M/s Sun TV was highly unfair and clearly in contravention of the provisions of the Act. Thus, the informant alleged that the opposite party association was acting mala fide and in an arbitrary manner by boycotting the said film of the informant with an effort to secure a claim of its members against
a third party i.e., against M/s Sun TV.
The Commission has ordered and directed the opposite party to cease and desist from indulging in anti-competitive conduct in future. The Commission inter alia issued the following directions to be observed by the film trade associations: (a) The associations should not compel any producer, distributor or exhibitor to become its member as a pre-condition for exhibition of their films in the territories under their control and modify their rules accordingly; (b) The associations should not keep any clause in rules and regulations which makes any discrimination between regional and non-regional films and impose conditions which are discriminatory against non-regional films; (c) The rules of restrictions on the number of screens on the basis of language or the manner in which a particular film is to be exhibited should be done away with; (d) Associations should not put any condition regarding hold back period for release of films through other media like, CD, Satellite etc. These decisions should be left to the concerned parties and; (e) The condition of compulsory registration of films as a pre-condition for release of any film and existing rules of association as discussed in the preceding paras of this order on the issue should be dispensed with. The Commission has decided to impose a penalty on the opposite party at the rate of 10 % of its average turnover which has been calculated as per the Income/ Receipts of the association as evidenced by Income and Expenditure Accounts for the relevant last 3 years.
Abuse of dominant position
M/s SRMB Srijan Limited v. CRISIL Limited 10
November 12, 2013
In this case it has been alleged that CRISIL Ltd. (‘the opposite party’) is in abuse of dominance through imposition of unfair or discriminatory conditions in the “Ratings & Surveillance Agreement” in contravention of section 4 of the Act. The opposite party is a rating agency that offers comprehensive range of rating services such as rating all types of bank facilities such as term loans, project loans, etc. The Informant alleged that opposite party was India’s first, largest and most prominent credit rating agency and had a market share of 60% in the Indian ratings market. The Informant contended that it entered into a Rating & Surveillance Agreement with the opposite party for rating bank loans amounting to INR 125 Crores. The Informant stated that it declined to accept the rating, stating that the rating rationale was not appropriate. The opposite party replied that rating was not an annual exercise and could be reviewed any time during the year, depending upon information or additional development. The Informant, dissatisfied with the rating service of opposite party, requested opposite party that the Agreement be terminated with immediate effect and the present rating be immediately withdrawn and removed from all forms of public dissemination. The Informant contended that instead of terminating the Agreement, the opposite party continued to disseminate the rating found to be unsuitable by the Informant. The Informant stated that despite categorically terminating the Agreement, it was being compelled to continue with the Agreement, as the opposite party was using pressure tactics to defame the Informant by way of false information on its website and other media regarding non-cooperation of the Informant.The opposite party mentioned that non-payment of the fee would result in contravention of the Reserve Bank of India (‘RBI’)
guidelines and might have an adverse impact on the Informant’s credit rating.
As per the Informant, the illegal actions of the opposite party regarding rating had a negative impact on creditworthiness and reputation of the Informant for the purpose of assessment of the Informant’s group companies by the bankers as both companies had a combined exposure of INR 250 crores. It was also stated that there had been a loss of up to 2% of incremental interest on these bank limits during this period, besides losses on account of reduction in concession of banker charges and loss of goodwill with the bankers, thereby reducing the prospect of future business expansion by the Informant.
The Informant contended that the opposite party, by imposing unfair and discriminatory conditions in sale of services of rating, had abused its dominance in the relevant market in contravention of the provisions of section 4 of the Act.
The Commission is of the opinion that the opposite party was prima facie a dominant enterprise in the relevant market of provision of credit rating services for availing banking facilities in India. Further, it appears that the opposite party was following the regulatory guidelines provided by SEBI for rating agencies and the alleged conduct of the opposite party prima facie was not abusive in terms of the provisions of section 4 of the Act. Commission held that there arose no competition concern actionable under section 4 of the Act.
In the matter of notice given under Section 6(2) of the Competition Act, 2002 given by Zulia Investments Pte.Ltd. and Kinder Investments Pte.Ltd. 11
August 08, 2013
CCI imposed penalty on Temasek (Holdings) Private Limited and its two subsidiaries namely, Zulia Investments Pte. Ltd.and Kinder Investments Pte.
Ltd.(collectively referred to as the ‘Acquirers’) for failure to give notice to CCI under Section 6(2) of the Act.
In the instant case, the Acquirers gave notice to CCI under section 6(2) of the Act on 6thJune, 2013 with a delay of around 399 days.It has been submitted by the Acquirers that thedelay in giving notice to CCI was due to their acting on an erroneous legal advice.
The Acquirers in response to the show cause notice submitted that upon getting conformation from the second set of Indian counsel, Temasek took immediate steps to the collate necessary information and prepare the Notification Form and that the Acquirers have expeditiously and voluntarily filed the Notification Form as soon as they became aware of the 30-day requirement to notify the ‘Proposed Transaction’ (i.e., proposed acquisition of 439,000,000 new ordinary shares of DBS Group holdings Ltd.) with the Hon’ble CCI.The Acquirers requested CCI to take a lenient view and condone the delay by not imposing any penalty under Section 43A of the Act.
CCI observed that in terms of Section 43A of the Act, it shall impose on such person orenterprise a penalty whichmay extend to 1% of the total turnover or the assets, whichever is higher, of such a combination of the Acquirers and DBS Group holdings Ltd.However, considering the response of the Acquirers to the show cause notice, submissions made by the Acquirers through their legalrepresentatives in the course of the personal hearing before the Commission held on 1st
August, 2013, additional submissions made on 1st August, 2013 by the Acquirers, particularly the fact that the Acquirers had voluntarily given the notice under sub-section (2) of Section 6 of the Act before the consummation of the combination, and also the fact that theproposed combination was pursuant to an acquisition of theshareholding of one foreignenterprise by another foreign enterprise, CCI considered it appropriate to impose a penalty of INR50,00,000/- on the Acquirers.
|DO YOU KNOW?|
Canada was the first country to enact competition statute in 1889 – “The Act for the Prevention and Suppression of Combinations formed in restraint of Trade”which was passed one year before the United States enacted the most famous legal statute on competition law, the Sherman Antitrust Act of 1890.
United States of America
Department of Justice proposes remedy to address apple’s price fixing12
August 2, 2013
The Department of Justice(‘DOJ’) and 33 State Attorneys General submitted to the court a proposedremedy to address Apple Inc.’s illegal conduct, following the July 10, 2013, U.S. District Court for the Southern District of New York decision finding that Apple conspired to fix the prices of e-books in the United States. The proposed relief is intended to standstill Apple’s anticompetitive conduct, restore lost competition and prevent a recurrence of the illegal activities.The department’s proposal, if approved by the court, will require Apple to terminate its existing agreements with the five major publishers with which it conspired – Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, which does business as Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc. – and to refrain for five years from entering new e-book distribution contracts which would restrain Apple from competing on price. Under the Department’s proposed remedy, Apple will be prohibited from again serving as a conduit of information among the conspiring publishers or from retaliating against publishers for refusing to sell e-books on agency terms. Apple will also be prohibited from entering into agreements with suppliers of e-books, music, movies, television shows or other content that are likely to increase the prices at which Apple’s competitor retailers may sell that content. To reset competition to the conditions that existed before the conspiracy, Apple must also for two years allow other e-book retailers like Amazon and Barnes & Noble to provide links from their e-book apps to their e-bookstores, allowing consumers who purchase and read e-books on their iPads and iPhones easily to compare Apple’s prices with those of its competitors.
Additionally, the DOJ is asking the court to appoint an external monitor to ensure that Apple’s internal antitrust compliance policies are sufficient to catch anticompetitive activities before they result in harm to consumers. The monitor, whose salary and expenses will be paid by Apple, will work with an internal antitrust compliance officer who will be hired by and report exclusively to the outside directors comprising Apple’s audit committee. The antitrust compliance officer will be responsible for training Apple’s senior executives and other employees about the antitrust laws and ensuring that Apple abides by the relief ordered by the court.
DOJ files antitrust lawsuit challenging proposed merger between U.S. Airways and American Airlines13
August 13, 2013
The DOJ, Antitrust Division, six state attorneys general and the District of Columbia filed a civil antitrust lawsuit challenging the proposed $11 billion merger between US Airways Group Inc. and American Airlines’ parent corporation, AMR Corp. According to the DOJ the said merger, would result in the creation of the world’s largest airline, would substantially lessen competition for commercial air travel in local markets throughout the United States and result in passengers paying higher airfares and receiving less service.
Both the airlines compete directly on more than a thousand routes where one or both offer connecting service, representing tens of billions of dollars in annual revenues. They engage in head-to-head competition with nonstop service on routes worth about $2 billion in annual route-wide revenues. Eliminating this head-to-head competition would give the merged airline the incentive and ability to raise airfares, the department said in its complaint.
Further, according to the complaint, the vast majority of domestic airline routes are already highly concentrated. The merger would create the largest airline in the world and result in four airlines controlling more than 80 percent of the United States commercial air travel market. In the absence of the merger, US Airways and American will continue to provide important competitive constraints on each other and on other airlines. Currently, US Airways competes vigorously for price-conscious travellers by offering discounts of up to 40% for connecting flights on other airlines’ nonstop routes under its ‘Advantage Fares program. The other legacy airlines – American, Delta and United – routinely match the nonstop fares where they offer connecting service in order to avoid inciting costly fare wars. The Advantage Fares strategy has been successful for US Airways because its network is different from the networks of the larger carriers. If the proposed merger is completed, the combined airline’s network will look more like the existing American, Delta and United networks, and as a result, the Advantage Fares program will likely be eliminated, resulting in higher prices and less services for consumers.
It is also alleged that the merger is likely to result in higher ancillary fees, such as fees charged forchecked bags and flight changes. In recent years, the airlines have introduced fees for those services, which were previously included in the price of a ticket. These fees have become huge profit centers for the airlines. In 2012, domestic airlines generated more than $6 billion in fees from checked bags and flight changes alone. The legacy carriers often match each other when one introduces or increases a fee, and if others do not match the initiating carrier tends to withdraw the change. By reducing the number of airlines, the merger will likely make it easier for the remaining carriers to coordinate fee increases, resulting in higher fees for consumers.
Former Airline executive sentenced to serve 87 months in prison for schemes to defraud Illinois–based Ryan International Airlines1
September 12, 2013
Wayne E. Kepple , the former executive of Ryan International Airlines, a charter airline company located in Rockford, III., was sentenced to serve 87 months in prison and to pay $529,998 in restitution forparticipating in kickback schemes to defraud Ryan.
On November 04, 2011, Kepple pleaded guilty in U.S. District Court in West Palm Beach, Fla., to three counts of conspiracy to commit wire fraud and honest services fraud and three counts of wire fraud. The charges against Kepple stem from a kickback scheme involving Robert A. Riddell, the former owner and operator of an airline security and ground service company, as well as separate kickback schemes involving David A. Chaisson, the former owner and operator of an Indiana flight management services company, James E. Murphy, the former owner and operator of a Florida aviation fuel supply company, and others.
Ryan provided air passenger and cargo services for corporations, private individuals and the U.S.government – including the U.S. Department of Defense and the U.S. Department of Homeland Security.
According to court documents, Kepple was in charge of contracting with providers of goods and services on behalf of Ryan and approving the invoices submitted by the providers to Ryan for payment. FromOctober 2005 through at least August 2009, Kepple participated in three separate conspiracies in which he received kickback payments of more than $520,000 from Riddell, Murphy, Chaisson and others in exchange for Kepple awarding them Ryan airline services and fuel contracts. According to courtdocuments, the payments from Chaisson and Riddell included the proceeds of fabricated invoices submitted by their companies to Ryan.
As a result of the ongoing investigation, four individuals, including Kepple, have pleaded guilty and been sentenced to prison. On October 28, 2011, Murphy was sentenced to serve 23 months in prison and to pay $42,500 in restitution and Chaisson was sentenced to serve 16 months in prison and to pay $50,742 in restitution. On January 27, 2012, Riddell was sentenced to serve 24 months in prison and to pay $131,540 in restitution. Kepple’s 87–month sentence reflects his central role in multiple kickback schemes.
On August 13, 2013, a fifth individual, Sean E. Wagner, and his company, Aviation Fuel International Inc. (‘AFI’), a Florida–based airline fuel supply company, were indicted for participating in a conspiracy to defraud Ryan by making kickback payments to Kepple in exchange for awarding business to AFI. That case is ongoing.
Commission market tests commitments proposed by Deutsche Bahn concerning pricing system for traction current in Germany15
August 15, 2013
The European Commission is inviting comments from interested parties on commitments offered by the German railway incumbent Deutsche Bahn (‘DB’) regarding its pricing system for traction current inGermany. Traction current is electricity used to power locomotives.
DB Energie, the DB subsidiary providing traction current to railway companies, is the only tractioncurrent supplier in Germany. The Commission has concerns that DB Energie’s pricing system, and in particular discounts that only railway companies of the DB Group can achieve fully, may have hampered the development of competition on the markets for rail freight and long-distance passenger transport, in breach of EU antitrust rules.
To dispel these concerns, DB has offered to introduce a new pricing system for traction current thatwould apply uniformly to all railway companies and should enable other electricity providers to directly supply traction current to railway companies. If the market test confirms that the proposedcommitments remedy the competition concerns, the Commission may make them legally binding on DB.
DB offered the following commitments to address the Commission’s concerns:
1) DB Energie will introduce a new pricing system fortraction current with separate prices for electricity and for access to the traction current grid. The grid access fee is subject to approval by the Germanregulator (Bundesnetzagentur).
2)DB Energie will apply a single price for electricity without volume or duration-based discounts.
3)DB Energie will pay non-DB railway companies a one-time retroactive refund of 4% of their latest annual traction current invoice.
4)DB will provide the Commission with the necessary data to assess if the price levels charged by DB under the new pricing system would lead to a margin squeeze.
The commitments would apply as from 2014 for five years.
Commission consults on commitments offered by Samsung Electronics regarding use of standard essential patents16
October 17, 2013
The European Commission invites comments from interested parties on commitments offered bySamsung Electronics (Samsung) in relation to the enforcement of the standard essential patents (‘SEPs’) it owns in the field of mobile communications. The Commission has concerns that Samsung’s seeking of injunctions against Apple in the European Economic Area (‘EEA’) on the basis of its mobile SEPs may have amounted to an abuse of a dominant position prohibited by EU antitrust rules. To remedy these concerns, Samsung has offered to abstain from seeking injunctions for mobile SEPs for a period of five years against any company that agrees to a particular licensing framework. The Commission will further look into the comments received, that the commitments address the competition concerns, it may decide to make them legally binding on Samsung.
United Kingdom (UK)
United States of America17
September 05, 2013
The OFT announced the appointment of Cavendish Elithorn as an Executive Director, on temporary promotion, taking over from Sonya Branch who is going on maternity leave.
Cavendish will be responsible for a large part of the OFT’s front-line delivery work, overseeingcompetition and consumer enforcement cases and merger reviews, and will sit on the Board and Executive Committee. Reporting to OFT Chief Executive Clive Maxwell, he will work alongside Vivienne Dews, the OFT’s other Executive Director, who oversees market studies, consumer credit regulation, corporate services and transition.
Cavendish currently leads the OFT’s Goods and Consumer Group and the Pipeline and PerformanceGroup, covering a wide range of work (competition and consumer enforcement as well as market studies and super-complaints) and leading for the OFT on Consumer Enforcement. He joined the OFT in 2004 having previously worked as a Senior Manager at Capital One Bank (Europe) and has held anumber of roles including Transformation Director and Senior Director of Policy.
New competition authority comes into existence18
October 01, 2013
The Competition and Markets Authority (‘CMA’) will bring together the Competition Commission (‘CC’) with the competition and certain consumer functions of the Office of Fair Trading (‘OFT’) in order to promote competition, both within and outside the UK, for the benefit of consumers.
The CMA will not initially be taking on any casework, which will remain with the OFT and CC until April 2014, but as a shadow body it will be empowered to make the necessary preparations to allow the new authority to assume its responsibilities next year.
The CMA’s overall ambition is to be consistently one of the leading competition and consumer agencies in the world. To achieve this it has proposed five goals which are to:
deliver effective enforcement
extend competition frontiers
refocus consumer protection
develop integrated performance
achieve professional excellence
OFT consults on draft guidance for letting agents and landlords19
October 16, 2013
The OFT has launched a consultation on draft guidance which aims to help professionals in the private rented sector, including letting agents and landlords, to comply with the law.
The OFT’s draft guidance seeks to clarify how the law applies to the lettings market. It identifies trading practices that could breach legislation, such as not giving sufficient information to tenants about what fees they will have to pay, or making misleading statements about a property.
The draft guidance sets out the OFT’s views about how the legislation might apply at each step of the lettings process: from when lettings professionals first advertise their services, to the interactions they have with tenants prior to moving into a property, through to when a tenancy agreement comes to an end.
Republic of India
Competition Commission of India and DG, Competition of the European Commission sign MOU on Cooperation in the Field of Competition Laws 20
November 21, 2013
The CCI and the Directorate General(‘DG’) for Competition of the European Competition Commission have signed a Memorandum of Understanding on Cooperation in the Field of Competition Laws (‘MoU’). The MoU was signed during the ongoing 3rd BRICS International Competition Conference at New Delhi.
The two sides have agreed to exchange non-confidential information, experiences and views with regard to (a) Competition policy and enforcement, (b) Operational issues, (c) Multilateral competitioninitiatives, (d) Competition advocacy and (e) Technical cooperation initiatives in the area of competition law and its enforcement.
The MoU provides for assistance to be provided between two sides wherein on the request of one side that may believe adverse impact of competition of its territory on account of action by the other side, the other side shall initiate appropriate enforcement activities as per their applicable competition law.
CCI and DG, Competition, European Commission shall also take steps to minimise any potentially adverse effects of one side’s enforcement activities on the other side’s interests in the application of their respective competition laws. The MoU also provides for meetings between two sides to (a) Discuss current issues, experiences and new developments of mutual interest with respect to competition policy development, legislation and enforcement or the operation of the present MoU;
(b) Exchange non-confidential information on the competition environment in economic sectors of common interest;
(c) Exchange views with respect to multilateral competition initiatives.
DG, Competition, EU and CCI, India will apply theprovisions of this MoU on a voluntary basis.Consequent to the signing of MoU between the DG, Competition, EU and CCI, the MoU has come into effect.
Heads of Competition authorities of Brazil, Russia, India, China and South Africa (BRICS) sign the Delhi Accord 21
November 22, 2013
The Heads of the Competition Authorities of the Federative Republic of Brazil, the Russian Federation, the Republic of
DOJ files antitrust lawsuit challenging proposed merger between U.S. Airways and American Airlines13
August 13, 2013
India, the People’s Republic of China and the Republic of South Africa signed a JointAccord namely ‘DELHI ACCORD’ on during the ongoing 3rd BRICS International Competition Conference (‘ICC’) at New Delhi.
BRICS Competition Authorities, reflecting the principle of mutual trust and respect, considered the need of establishing good communication between the BRICS Competition Authorities on competition lawand policy to further improving and strengthening the relationship between the BRICS Competition Authorities.
BRICS Competition Authorities, while recognising the benefits of technical cooperation among thecompetition agencies, in sound and effective enforcement of competition laws expressed their resolve and commitment to exchange views on different aspects of competition policy.
The heads of theCompetition Authorities of BRICS recommended the publication of the material of the 3rd BRICS ICC on their respective websites for the purpose of competition advocacy.
DOJ files antitrust lawsuit challenging proposed merger between U.S. Airways and American Airlines13
August 13, 2013
Our next issue: April 2014