Antitrust Alert : International Antitrust Attorneys: McDermott Will & Emery Law Firm

by David Henry and Wilko van Weert

In a recent judgment, a District Court in the Netherlands (the DCA) handed down a judgment in what is the first substantive damages judgment in the Netherlands for a breach of competition law.  In issuing the declaration of liability, the DCA held that ABB must pay damages to the Dutch grid operator TenneT for the overcharge that arose as a result of the gas insulated switchgear cartel, putting aside arguments by ABB that any damages should take into account the fact that the overcharge had been passed on to customers of TenneT. The court considered that in this case the indirect purchasers were likely to benefit from compensation to the direct customer.

To read the full article, click here.

• Print
• Share Link

by Philip Bentley and Philipp Werner

A judgment of the EU General Court in March 2011, upheld on appeal by the Court of Justice of the European Union (CJEU) on January 22, 2013, is potentially good news for parent companies.  Where both a parent company and its subsidiary bring separate court challenges against a cartel fine for which they were held jointly and severally liable, the parent company should benefit from any reduction in fine that the court grants to the subsidiary, provided that the challenges brought by the two companies have the “same object”.  

In light of these judgments, it would appear that a parent company’s argument should be similar to that adopted by its subsidiary when challenging a fine imposed jointly and severally on both of them.  At the same time, the parent company may wish to contest the fact that it was held jointly and severally liable for the subsidiary’s infringement.  This would require the parent to demonstrate that it did not exercise a “decisive influence” over the subsidiary’s commercial policy.  Reconciling this latter argument with a challenge to the subsidiary’s fine is, however, likely to require skilful drafting of the parent company’s pleadings.

To read the full article, click here.

• Print
• Share Link

by Philip Bentley, QC and Philipp Werner

Joaquín Almunia, the European Union’s Commissioner for Competition, has announced that the European Commission hopes to settle around half of its outstanding cartel cases in 2013.  It’s time to review the European Union’s settlement procedure.

To read the full article, click here. 

• Print
• Share Link

by Martina Maier, Philipp Werner and Robert Bäuerle

The German Federal Cartel Office (FCO) has imposed an administrative fine for the submission of incomplete information in a merger notification.  The missing information concerned details about shareholdings essential for the competitive assessment analysis.  The shareholdings belong to a private individual who controlled the notifying party.  Companies and their shareholders required to submit notifications should be aware that the omission of information in merger notifications before the FCO can result in fines not only for the notifying company but also for the company(ies) and individual(s) controlling it.

To read the full article, click here.

• Print
• Share Link

by Philip Bentley and Philipp Werner

On 29 November 2012, the EU General Court (GC) issued a provisional order suspending the European Commission’s decision to communicate to the High Court of England and Wales a copy of Alstom’s reply to the statement of objections in the gas insulated switchgear cartel.  The statement of objections, which contained confidential business secrets, had been requested by the High Court in the context of a follow-on damages claim brought by National Grid, one of Alstom’s former customers.

For defendants, it will be reassuring to know that the GC will not allow the Commission to disclose contentious documents until the matter has been debated fully in court.  Plaintiffs will be relieved that they are not completely shut out of court on the issue of access to Commission documents that might support their claim for damages.  The matter does have to be debated at length, however, and the result is likely to be a set of nuanced and finely balanced rules that turn on the circumstances of each individual case.

This order is, therefore, another piece in the increasingly complex puzzle of procedures on access to documents in the European Union for the purposes of follow-on damages actions.  There are also wider issues surrounding document protection that must be considered carefully.

To read the full White Paper, click here.

• Print
• Share Link

by Henry L.T. Chen, Frank Schoneveld, Jared Nelson and Sean Pan

Recently China’s National Development and Reform Commission (NDRC) imposed an RMB 353 million (USD 56.7 million) penalty against an international price-fixing cartel of LCD manufacturers, the largest the NDRC has ever imposed for antitrust infringement.  The penalty is China’s first enforcement action against an international cartel and sends a strong signal to multinational corporations operating in China that enforcement actions against cartels will not be limited to Chinese entities.

To read the full article, click here.

• Print
• Share Link

by Veronica Pinotti, Philipp Werner, Robert Bäuerle and Lionel Lesur

The network of European antitrust regulators, the European Competition Network, has revised its model leniency programme for cartels.  Major changes include a broader scope for summary applications when applying for leniency in more than three EU Member States, the application of leniency programmes to cartels with vertical elements, clarifications on the non-disclosure obligation, and unification of the level of protection for oral and written statements by leniency applicants. The changes will take effect once the individual competition authorities have  implemented them in their individual leniency programmes.

To read the full article, click here.

• Print
• Share Link

by Frank Schoneveld

In the last six months, China's antitrust enforcement agencies have signed five Memorandums of Cooperation with antitrust authorities in the United States, European Union, South Korea, Australia and Brazil. During this same period, Chinese antitrust enforcement agencies have substantially increased their personnel resources.  So far, in 2012 more than 10 cartel investigations have been opened by China’s antitrust enforcement agencies, resulting in fines of millions of dollars in four cases in the last four months alone.  (In the previous three years there had been only three cartel cases with total reported fines of less than US$1 million).

Why all of this activity?  The implications seem clear, and it is not just a matter of reading the tea leaves (so to speak): the Chinese antitrust enforcement agencies are clearly gearing up to implement an even more aggressive enforcement agenda that will now include international cartels that affect China. As a Director of China's antitrust enforcement agency - the National Development and Reform Commission (NDRC) - stated in a speech on November 2, 2012: "We will increase our anti-price monopoly enforcement capability and strive to investigate and penalize a number of large cases that are influential domestically and internationally". Senior Chinese antitrust officials have privately confirmed that they were planning to execute on this agenda as soon as the new Politburo was in place.  Now that this has occurred, we can expect to see a significant uptick in the number of cartel investigations and prosecutions in China, which can subject offenders to fines of up to 10 percent of their annual revenues and confiscation of illegal gains. The "priority" industries reportedly targeted for scrutiny include energy, insurance, motor vehicles, travel and the internet.

The risks associated with the enforcement agencies more aggressive enforcement agenda are compounded by the fact that companies will now be subjected to heightened risk of follow-on private class actions in China.  In particular, the Court rules now make it easier for private plaintiffs to commence class actions in Chinese courts and the Supreme People's Court recently held that once a cartel agreement has been found to exist, the burden of proof shifts to the defendant to prove that the agreement did not result in any restriction of competition.

These developments demonstrate that corporations active in China need to ramp up their antitrust compliance efforts without delay to reduce the risk of being targeted for investigation and serious financial exposure. As a first step, conducting an antitrust compliance audit is advisable to assess potential risk areas and, where appropriate, to position the company to take advantage of the Chinese enforcement agencies' leniency application procedures.  

• Print
• Share Link

by Louise Aberg,  Lionel Lesur and  Philipp Werner

On November 6, 2012, the Court of Justice of the European Union (CJEU) ruled that the European Commission was entitled to represent the European Union in an action for damages before national courts.  The CJEU ruled that the Charter of Fundamental Rights of the European Union did not prevent the Commission from taking an action for damages against the cartel participants for harm suffered by the European Union as a result of anti-competitive behavior that the Commission had already sanctioned by rendering an infringement decision.  Companies should therefore bear in mind that the Commission is no longer just the investigator, prosecutor and judge of a cartel, but also a potential damages claimant.

To read the full article, click here.

• Print
• Share Link

by Henry L.T. Chen, Frank Schoneveld, Jared Nelson and Sean Pan

Several major actions taken against price-fixing cartels by China’s enforcement authorities in the last year have sent a clear message that this is not a temporary campaign.  It is a new reality.

To read the full article, click here.

• Print
• Share Link

by Martina Maier, Philipp Werner and Robert Bäuerle

On 18 October, the German Federal Parliament (Bundestag) adopted several changes to German competition law.  The new legislation still has to be passed by the second chamber of the German parliament (Bundesrat) but the changes are expected to come into force on 1 January 2013.  Overall, the changes are less far-reaching than many of the proposals discussed during the preparatory phase of the reform.  The changes, however, are significant and will have to be taken into account by companies doing business in Germany. The article summarizes the main points of the reform.

To read the full article, click here.

• Print
• Share Link

by Andrea Hamilton, David Henry and Philipp Werner

EU Court rules that European Commission must undertake an individual and specific review of requested cartel documents before it can deny a damages claimant access thereto.

To read the full article, click here. 

• Print
• Share Link

by Martina Maier and Philipp Werner

Under German law, companies may escape cartel fines by undertaking an internal restructuring.  The German competition authority has indicated a willingness to reallocate such cases to the European Commission, which can impose a fine on the corporate group regardless of any internal restructuring.  Commission officials speaking at a conference have suggested recently that the Commission would be willing to take over cartel cases from EU Member States, even at a late stage in the proceedings, in order to fine undertakings for their anti-competitive behaviour.

To read the full article, click here.

• Print
• Share Link

by Martina Maier and Philipp Werner

Under German law, companies may escape cartel fines by undertaking an internal restructuring.  The German competition authority has indicated a willingness to reallocate such cases to the European Commission, which can impose a fine on the corporate group regardless of any internal restructuring.  Commission officials speaking at a conference have suggested recently that the Commission would be willing to take over cartel cases from EU Member States, even at a late stage in the proceedings, in order to fine undertakings for their anti-competitive behaviour.

To read the full article, click here.

• Print
• Share Link

by Henry L.T. Chen, Frank Schoneveld and Brian Fu

China’s National Development and Reform Committee recently imposed the largest fine ever on a sodium hydrosulphite manufacturer for price fixing and other anticompetitive activities.

To read the full article, click here. 

• Print
• Share Link

by David Henry, Martina Maier and Philipp Werner

In the wake of the seminal European Court of Justice (ECJ) ruling in case C-360/09 - Pfleiderer AG v Bundeskartellamt, Amtsgericht Bonn (Bonn local court), in a decision rendered on 18 January 2012 (case 51 Gs 53/09), has refused to give a damages claimant access to leniency submissions held by the German Federal Cartel Office (FCO).  Although strongly welcomed by the FCO, the decision is a blow to potential damages claimants in Germany, especially as it is not open to appeal.

To read the full article, click here. 

• Print
• Share Link

by Philip Bentley QC, Philipp Werner and Christoph Voelk

In response to a request from the English High Court, which is currently reviewing a cartel damage claim, the European Commission has submitted an amicus curiae brief on the disclosure of leniency documents.  The Commission’s opinion is that national courts should not order the disclosure of leniency documents prepared specifically for the purpose of an application under the EU leniency programme.  In contrast, the applicant’s reply to the statement of objections and the replies to requests for information could be ordered to be disclosed, insofar as they do not concern leniency material.

To read the full article, click here.

• Print
• Share Link

by Wilko van Weert

The European Commission has invited comments as it reviews the current regime for Technology Transfer Agreements.  All stakeholders that have worked with the current set of rules will have a real interest in its improvement and should find it worthwhile to take part in the consultation process.  In order to be involved in the shaping of these proposals and not just in the polishing of them, it is important to submit comments ahead of the 3 February 2012 deadline.

To read the full article, click here. 

• Print
• Share Link

by Nicole Castle

On December 2, 2011, the Seventh Circuit Court of Appeals granted plaintiffs’ petition for rehearing en banc and vacated the opinion issued by a Seventh Circuit panel in Minn-Chem, Inc. v. Agrium Inc., No. 10-1712.  The Seventh Circuit panel had issued an order on September 23, 2011, directing the district court to dismiss a class-action price-fixing complaint against global producers of potash, a mineral used primarily in agricultural fertilizer. 

The plaintiffs alleged a global price-fixing cartel among Canadian, Russian and Belarusian producers of potash, alleging that they fixed potash prices in Brazil, China and India, and the inflated prices in these overseas markets in turn influenced the price of potash sold in the United States.  The defendants moved to dismiss the complaint under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, arguing first that the district court lacked subject-matter jurisdiction under the Foreign Trade Antitrust Improvements Act (FTAIA), 15 U.S.C. § 6a, and alternatively, that the complaint did not satisfy the pleading requirements of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009).  The district court denied the motion to dismiss and the defendants appealed. 

On September 23, 2011, the Seventh Circuit panel reversed the district court and remanded with instruction that the district court dismiss the complaint.  The Seventh Circuit panel held that the complaint failed to satisfy either of the import-related exceptions to the FTAIA.  According to the panel, defendants’ anticompetitive conduct did not “involve” U.S. imports and did not “directly affect” the price of U.S. imports.  The panel used the “plausibility” standard of Twombly and Iqbal to determine whether plaintiffs had adequately pled that the anticompetitive conduct fell within one of the FTAIA’s exceptions.  However, the Seventh Circuit panel did not reach the question of broader sufficiency of the complaint under Twombly and Iqbal.

Plaintiffs then filed the current petition for rehearing en banc.  In their petition, plaintiffs argued that the panel’s opinion conflicted with the Seventh Circuit’s decision in In re Text Messaging Antitrust Litigation, 630 F.3d 622 (7th Cir. 2010).  Plaintiffs also argued that the panel misinterpreted the import-commerce exception in determining whether plaintiffs alleged sufficient anticompetitive conduct that “involved” U.S. import commerce.  According to plaintiffs, the panel’s decision regarding the import-commerce exception conflicted with the Third Circuit's decision in Animal Sci. Prods., Inc. v. China Minmetals Corp., No. 10-2288, 2011 WL 3606995 (3d Cir. Aug. 17, 2011).    

• Print
• Share Link

by Philipp Werner

The General Court rejects intervention of damages claimants in appeal before the European courts by taking a narrow and rather formalistic view of legal interest in the appeals.  While it is true that damages actions are legally possible as stand-alone actions, the reality in Europe is that third parties’ damages actions stand and fall with the decision that finds an infringement.

To read the full article, click here.

• Print
• Share Link

Public Consultation on Settlement and Compliance Programs Launched by the French Competition Authority
by Louise-Astrid Aberg and Lionel Lesur

On October 14, the French Competition Authority (FCA) launched a two-month public consultation for guidelines on settlement and compliance programs.  Both these guidelines have been highly anticipated since they were first announced last May.

The draft settlement guidelines contain details on the FCA's approach and decisional practices which were developed under the control of the French courts.  Among the guidelines, the FCA determined that settlement is possible in all cases where infringement on competition law has taken place, including cartels, vertical restraints and single firm conduct.  In the event of infringement, settlement becomes an option only after the parties have been formally charged.  Once parties fully acknowledge their participation in anticompetitive conduct, the casehandler in charge of the matter would decide whether to respond positively to their request for a settlement.  Parties retain the same procedural rights that they would in an ordinary procedure; in particular, they would be granted access to file.  The FCA would reward parties who wish to settle with a fine reduction of 10 percent.  In contrast to the settlement procedure of the European Commission (EC), it would not be possible to cumulate both a settlement reduction and a leniency reduction.  However, parties settling with the FCA may decide to adopt behavioral or structural remedies which would enable them to benefit from an additional reduction of 5-15 percent.  With regard to cartels, parties would benefit from a reduction up to 10 percent if they commit to changing their behavior in the future, in particular, by implementing a compliance program.

The draft guidelines elaborate further on the benefits of implementing a compliance program.  The FCA clarifies several instances in which a compliance program would enable a party to benefit from a reduction of its fine.  In the course of ordinary proceedings resulting in the imposition of a fine, the existence of a compliance program or the lack of it would not act as an attenuating or an aggravating circumstance.  However, in the case of a settlement procedure, the commitment to implement a compliance program would be considered a commitment by the company to change its behavior in the future and would, thus, enable the party to benefit from a reduction of its fine.  In this sense, the FCA and the EC agree that implementing compliance program would not have a significant effect on a fine that is set outside of a settlement procedure.  The FCA only differs with respect to the specific context of a settlement procedure.

A fine reduction of up to 10 percent may not be easy to obtain.  A compliance program would only be considered by the FCA if it includes the following characteristics: (i) the company's top executives are strongly committed to the program, (ii) the company has designated persons to oversee the program and take charge of its implementation, (iii) the company has taken effective measures to implement information, training and awareness programs, (iv) the company employs effective control, audit and alert mechanisms and (v) the company has an effective monitoring mechanism.  These requirements are prerequisites without which parties would not be able to claim a reduction of their fine on the basis of their foreseen compliance program.  Please note, however, that satisfying these prerequisites is not necessarily enough to obtain a reduction of their fine.

Some may argue that a 10 percent reduction would not be enough to encourage companies to spend time and resources implementing compliance programs. However, the FCA's vision is that such programs would enable companies to detect cartels more easily in the future and, thus, be the first in line to apply for leniency.

It remains to be seen whether these two sets of guidelines will be adopted at the end of the public consultation. If adopted, they could become useful tools for French competition lawyers and provide incentives for companies to implement compliance programs..

To read the full press release, click here

Italy's Prime Minister Announces New Cabinet
by Veronica Pinotti and Martino Sforza

Italy’s new Prime Minister, Mario Monti, has named the members of his new cabinet, which will start to work on economic reforms next week, once the Italian Parliament has passed its final vote of confidence on Monti. 

All the new cabinet members are high profile individuals from academia, industry and the public sector, none are politicians or affiliated with any political party.

Antonio Catricalà, current Chairman of the Italian Competition Authority, was named under-secretary to the Prime Minister's office and Secretary of the Council of Ministers.  There are a number of potential candidates to take Catricalà’s role at the Italian Competition Authority, including Lorenzo Bini Smaghi (former member of the ECB’s Executive Board) Luigi Fiorentino (current Secretary General of the Italian Competition Authority) and Pasquale de Lise (current President of the Council of State, the higher court for administrative cases in Italy).

In addition to Catricalà, with whom McDermott Italian lawyers have worked on many antitrust cases before the Italian Competition Authority, we have also crossed paths with other members of Monti's new cabinet including Corrado Passera, the current CEO of Intesa-San Paolo, who has been appointed as head of the newly-formed Ministry of Economic Development, Infrastructure and Transport; Elsa Fornero, also a board member of Intesa-San Paolo, who has been named head of the Ministry of Welfare and Francesco Profumo, the current President of the Politecnico University in Turin, who has been named head of the Ministry of Education.

• Print
• Share Link

by Martina Maier, Philipp Werner and Lionel Lesur

The European Commission’s new guidelines for best practices during antitrust procedures introduce some new elements that could be beneficial for companies under investigation, complainants and interested third parties if handled in the right way.

To read the full article, click here.

• Print
• Share Link

by Philipp Werner and Lionel Lesur

A French court has added another layer of complexity to cartel cases in the European Union.  The Commercial Court in Paris has ordered the French competition authority to disclose documents relating to an antitrust investigation.  The order concerns non-confidential versions of written and oral statements gathered during the investigation.

The ruling may strengthen plaintiffs' position in damages actions.  The French court's ruling only concerns settlements before the French competition authority but other European countries may follow France's lead.  According to the European Court of Justice's recent Pfleiderer judgement, national courts must decide whether plaintiffs may have access to documents submitted to national Member State authorities.

The number of private damages actions in the European Union is constantly increasing.  Most of these actions are "follow-on action," based on an infringement decision by the European Commission or the antitrust authority of an EU member State.  Plaintiffs can rely on the infringement decision as proof for the antitrust infringement but must further substantiate and prove the harm suffered as a result of the cartel.  They are therefore seeking access to information contained in the antitrust authorities' files, in particular to leniency applications, the confidential version of the infringement decision and also settlement documents.  It is still unclear whether plaintiffs will have access to leniency documents submitted to national antitrust authorities.

• Print
• Share Link

by Philipp Werner

The German Supreme Court, in a landmark ruling handed down on 28 June 2011, has held that members of a cartel are able to defend themselves against a claim for damages by raising the defense that the relevant applicants have passed on the damage caused by higher prices onto a downstream market (the so-called "passing-on defense").  At the same time, the Supreme Court held that indirect purchasers have standing to claim damages following a violation of the antitrust rules.

The judgment is of considerable practical importance. In parallel with efforts at EU level to encourage private antitrust enforcement, actions for damages in Germany against members of a cartel have increased in number and significance.  In the majority of cases, it is the amount of damages which is the subject of proceedings, since the relevant infringement of the rules has already been established pursuant to a legally binding administrative decision in accordance with § 33(4) ARC.

Cartelists, therefore, face in addition to fines also damages claims potentially reaching into the millions.  The level of damages is assessed on the basis of the difference between the cartel price and a given hypothetical market price.  As a result of the passing-on defense, the level of damages claimed can, however, be considerably reduced.  Economic studies show that in theory direct purchasers pass on to a large extent higher (cartelised) prices on to their customers. In practice, however, the passing on of damage can be difficult to prove, since the defendant does not have information at its disposal relating to the prices charged by damages claimants on downstream markets.

The admissibility of the passing-on defense was, on a number of grounds, denied by both the first instance court and the Berlin High Court.  It was, however, accepted by the Düsseldorf Higher Regional Court. Indeed, in the literature, the issue has been extensively debated.  It was, inter alia, open to question whether § 33(3)(2) ARC ("If a good or service is purchased at an excessive price, a damage shall not be excluded on account of the resale of the good or service") excludes the possibility to plea the passing-on defense.  It was also argued that the passing-on defense would undermine the effectiveness of private antitrust enforcement. In contrast, the Supreme Court made it clear that in accordance with the general principles underlying the calculation of damages, the passing on of damage must be taken into account.

Given the lower sums of damages available and the clear difficulties relating to the discharging of the burden of proof, it is questionable whether indirect purchasers will make use of their right to bring a claim. It is therefore expected that the passed on part of the damage resulting from a cartel will in practice remain unclaimed.

For more information, please see our previous blog entry, "German Supreme Court Allows Indirect Purchaser Claims and Passing-On Defense in Cartel Damages Actions."

• Print
• Share Link

by Frank Schoneveld and Joseph F. Winterscheid

On June 24, 2011, Assistant Attorney General Christine Varney announced that the U.S. antitrust enforcement agencies will be signing a cooperation agreement with their Chinese counterparts.  As a consequence, companies can now expect to see the Chinese authorities participating in coordinated “dawn raids” and related cooperative enforcement initiatives with the U.S. and EU antitrust enforcers in international cartel cases. 

To read the full article, click here.

• Print
• Share Link

by Martina Maier and Philipp Werner

On Tuesday, June 28, 2011, the German supreme court (Bundesgerichtshof-BGH) has clarified two important questions concerning cartel damages actions in Germany.

First, indirect purchasers as well as direct purchasers are entitled to seek damages from cartel members. Second, cartel members can use the "passing-on" defence and argue that their customers have passed on the damage suffered from the cartel (BGH, judgement of 28 June 2011 - KZR 75/10).

• Print
• Share Link

by Veronica Pinotti and Martino Sforza

In Europe, the interplay between antitrust and criminal law at the national level may vary significantly by jurisdiction. Some European Union member states, such as the United Kingdom, Ireland, and Romania, have criminalized competition law. Other jurisdictions, such as Germany and Italy, do not envisage criminal penalties for anticompetitive practices; however, such conduct may sometimes qualify as a separate criminal offense.  The following cases, across Europe, show that there appears to be a general trend towards more effective enforcement against serious antitrust violations – including by means of criminal penalties against individuals – and not only in the countries with criminal competition laws.

To read the full article, please visit:  http://mwe.com/info/pubs/pinotti0611.pdf

• Print
• Share Link

by Martina Maier, Philipp Werner and David Henry

The European Court of Justice (ECJ) ruling of 14 June 2011 followed a case that originated in Germany.  Pfleiderer, a firm in the wood industry, was considering a damages claim against members of a paper cartel.  It sought access to the cartel files held by the German Competition Authority (FCO) in order to substantiate its claim.  A dispute followed over whether disclosing the documents of companies who had cooperated with the FCO would undermine the national leniency programme since potential leniency applicants would fear eventual disclosure.

A German court asked the ECJ for a preliminary ruling whether or not the provisions of EU competition law are to be interpreted as meaning that cartel victims can be granted access to leniency applications received by an EU Member State competition authority.

The ECJ has held  that it was for the courts and tribunals of each EU Member State on the basis of their own national law to determine the conditions under which such access must be permitted or refused by weighing the interests protected by EU law.  The upshot of this ruling is therefore that each judge in each Member State has a discretion as to what type of leniency document can be disclosed to a cartel victim.  The ECJ has therefore distanced itself from recommendations made by the Advocate General who suggested that documents which existed before the cartel was uncovered could be disclosed  but said that submissions drafted for the purpose of revealing the infringement should be protected.

For leniency applicants, weighing the decision whether to apply for leniency has now become even more complex. On the one hand, a potential leniency applicant stands to benefit from immunity, or a reduction, from fines. On the other hand,  it will now have to take into consideration not only the remaining risk of a fine and criminal sanctions but also the the fact that private damages claimant might get easier access to incriminating evidence. Such complexity is all the more greater given that the ECJ's ruling may lead to different results in different European countries.

• Print
• Share Link

by Wilko van Weert

The Japan Fair Trade Commission (JFTC) has issued two Communications on the extent to which industry coordination intended to deal with the aftermath of the great Tohoku earthquake catastrophe will or will not run afoul of Japanese antitrust rules.  The JFTC’s guidance does not apply to business activities outside Japan. 

To read the full article, please visit: http://www.mwe.com/info/news/ots0511d.htm.

• Print
• Share Link

by Henry L.T. Chen, Frank Schoneveld and Michael Xu

The China Automobile Dealers Association recently issued a formal complaint to Mercedes-Benz Beijing regarding its allegedly illegal “double limit” policy for car dealers—minimum prices and restrictions on sales into other dealers` territories—revealing tension between a widespread industry practice and China’s Anti-Monopoly Law. 

To read the full article, please visit: http://www.mwechinalaw.com/news/2011/chinalawalert0411a.htm.

• Print
• Share Link

by Jon B. Dubrow, Gregory E. Heltzer, Blake H. Winbourne and Carrie G. Amezcua

The U.S. Federal Trade Commission and the U.S. Commodity Futures Trading Commission signed a memorandum of understanding that will facilitate the sharing of non-public information for “official law enforcement purposes,” and increase investigation risks for firms.

To read the full article, please visit: http://www.mwe.com/info/news/ots0411i.htm.

• Print
• Share Link

by Philipp Werner

Following a 2007 cartel decision of the Greek competition authority imposing a total fine of EUR 48.3m on seven companies for information sharing, price fixing and retail price maintenance, a Greek court handed down a criminal judgment yesterday (12 April 2011), imposing fines of 9,000 euros on each of the three managers of one of the firms. The case was brought by the public prosecutor.

While the amount of the fines is relatively low, this appears to be the first such criminal conviction in Greece. It shows that the criminalisation of antitrust laws in Europe gains ground.

The Greek law applicable at the time of the infringement made provision only for pecuniary sanction but has changed since and now includes the possibility of prison sentences.

• Print
• Share Link

by Martina Maier, Philipp Werner and David Henry

The European Court of Justice recently expanded upon the scope of the law in relation to pricing practices of vertically integrated companies. The ruling impacts dominant, vertically integrated companies active both within and outside regulated markets, such as telecoms. All dominant, vertically integrated undertakings on both sides of the Atlantic must be sure to tailor their commercial pricing policies in such manner that they comply with the EU dominance rules.

To read the full article, please visit: http://mwe.com/info/news/bb030911.htm. 
 

• Print
• Share Link

by Henry L.T. Chen and Frank Schoneveld

China’s State Administration for Industry and Commerce has imposed the first fines for violation of the country’s Anti-Monopoly Law on a concrete cartel.  The swift action indicates business operators should anticipate more widespread and vigorous investigations by the newly empowered Chinese competition regulatory authorities.

To read the full article, please visit:  http://www.mwechinalaw.com/news/2011/chinalawalert0211c.htm.
 

• Print
• Share Link

by Nicole L. Castle

Today the Department of Justice announced that Horizon Lines LLC agreed to plead guilty and pay a $45 million fine for its involvement in price fixing coastal water freight services between the continental U.S. and Puerto Rico.  This plea is the result of an ongoing federal antitrust investigation into price fixing and bid rigging in the coastal water freight transportation industry.  As a result of the investigation, five former executives have been charged and sentenced to serve prison time.  
 

For additional information, please visit: http://www.justice.gov/atr/public/press_releases/2011/267605.htm

• Print
• Share Link

by Martina Maier and Philipp Werner

The German Federal Cartel Office (FCO) announced yesterday that it has launched a sector inquiry into food retailers.  The FCO will focus its study on foodstuffs and luxury foodstuffs without explicitly naming particular goods in its press release but broadly stating that the enquiry will only focus on “selected product groups”.  According to the official statement from the FCO, which is only available in German, the authority seeks to improve its “understanding” of the relationship between retailers and suppliers.  The FCO plans to have a close look into the market power of the large retailers.  The assessment will also focus on “whether and to what degree the leading retailers enjoy a purchasing advantage over their competitors”.

The retailer market in Germany is very concentrated, with only four large retailers holding about 85 percent of the market.  The FCO thus plans not only to shed light into the  buyer power of the large retailers but will also focus on whether the “consolidation process” in the retail market has also led to a concentration in the procurement markets to the benefit of the largest retailers.

The sector enquiry should, according to the official statement from the FCO, support its analysis of the food purchasing market which is currently being investigated following dawn raids at the premises of more than 15 companies on the retail and the manufacturing level of branded products, mainly foodstuffs, on suspicion of co-ordinated retail price-fixing, in January 2010.

If the FCO will start an investigation into individual companies in the food retail market and how the sector enquiry will affect the investigation into branded goods, started in January 2010, remains unclear.  The case draws parallels to the UK where the Office of Fair Trading launched several market investigations and market studies into the UK food retailer and manufacturer markets.

• Print
• Share Link

by Veronica Pinotti, Philipp Werner and Martino Sforza

On 6 November 2010, the Italian Competition Authority launched an investigation into the role of large-scale retail distribution in Italy's food sector.  The investigation aims at assessing potential antitrust issues in this sector, and will focus on the agreements and strategic negotiations between suppliers and large-scale distributors, the role of centralised purchasing, the use of private-label brands, and their likely effects on the final prices of food products.  This obviously also has an impact on large multinational food and beverage suppliers.

Companies involved will soon receive detailed questionnaires and requests for information, which need to be handled with care by antitrust attorneys in order to minimise the risk of a potential ad hoc investigation.  In the past, the Authority's sectoral investigations have proven to be the prelude to specific investigations against individual companies predicated on the basis of the information gathered during the sectoral investigation.  It is therefore of utmost importance to have specialised assistance at this early stage of the investigation.  It is also crucial for companies to engage outside counsel to conduct an effective audit and create a tailored compliance programme in order to be prepared for potential dawn raids and prepare an effective defence.  In addition, the whole vertical relationship between suppliers and distributors may have to be reviewed in the light of the European Commission's new vertical guidelines and experience from other Member States.

The food and beverage industry is under investigation in a number of jurisdictions, and a comprehensive strategy in dealing with these inquiries is therefore critical.  McDermott Will & Emery is particularly well-placed to assist companies in this connection, not only by reason of its extensive experience in the sector in Italy, but also by reason of its experience in dealing with similar investigations in other EU Member States.

• Print
• Share Link

McDermott Will & Emery's International News, Issue 2, 2010, covers a range of legal developments of interest to those operating internationally.  This issue focuses on Antitrust and Competition.

In this issue...

• Merger Control: Gun Jumping Goes Global
• International Cartel Enforcement: On the Rise and More Severe
• China's Anti-Monopoly Law: Experience and Lessons Learned After Two Years
• Antitrust Enforcement Under the Obama Administration: One Year Later
• Class Actions: An EU Update
• Information Sharing under EU Competition Law: Handle with Care

The full issue can be found at: http://www.mwe.com/info/news/int0210.htm.
 

• Print
• Share Link