ANTITRUST ALERT
ANTITRUST ALERT
A Global Resource for Compliance Officers & Legal Advisors
ANTITRUST ALERT
A Global Resource for Compliance Officers & Legal Advisors
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McDermott’s Antitrust M&A Snapshot Published on July 17, 2016

by , and | Jul 27, 2016 | , , , , , ,

McDermott’s Antitrust M&A Snapshot is a resource for in-house counsel and others who deal with antitrust M&A issues but are not faced with these issues on a daily basis. In each quarterly issue, we will provide concise summaries of Federal Trade Commission (FTC), Department of Justice (DOJ) and European Commission (EC) news and events related to M&A, including significant ongoing investigations, trials and consent orders, as well as analysis on the trends we see developing in the antitrust review process.

United States: January – June Update

The Federal Trade Commission (FTC) and US Department of Justice (DOJ) have been actively challenging mergers and acquisitions in the first half of 2016. In some instances, the parties abandoned their deal once the FTC or DOJ issued a complaint, in others, the parties entered into consent agreements with the agencies. In matters where a divestiture is an acceptable remedy, the FTC and DOJ have required robust divestitures with financially and competitively viable buyers. There is increasing pressure for broad divestitures and for upfront buyers in industries where the agencies do not have ample experience and where there may not be multiple competitive buyers willing to acquire the assets.

In merger challenges, the agencies have been successful in obtaining preliminary injunctions in Washington, DC, but have been less successful outside of their home court. The agencies have successfully argued price discrimination markets, where sales of products to a narrow group of customers were the market, and courts are accepting the agencies’ narrow market definition. We also see a trend in challenges due to innovation, where the merging parties are the market leaders in new developments and research and development in particular areas. Investigations continue to take many months, with many approaching or exceeding a year.

EU: January – June Update

In the EU, there has been a noticeable increase in the number of notified transactions to the European Commission (from 277 notifications in 2013 to 337 in 2015). Most of these transactions have been cleared by the EU regulator in Phase I without any commitments. However, there have still been a number of antitrust interventions requiring the merging parties to offer, often far-reaching, remedies. One industry has recently seen a particularly high ratio of antitrust intervention is the telecoms sector. For example, in the merger between the mobile operators Telenor and TeliaSonera, the parties abandoned the transaction due to European Commission opposition to the transaction. The European Commission publicly announced that the transaction would not have been cleared, and that the remedies offered by the companies were not convincing. A prohibition decision was also issued, despite the offered remedies, in the failed combination of Telefónica UK’s “O2” and Hutchison 3G UK’s “Three”. This transaction involved the longest merger control review by the European Commission to end up in a prohibition decision (243 calendar days, compared to the average of 157 calendar days to block a deal).

With regard to current trends in merger control remedies at the level of the European Commission, there continues to be [...]

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Significant Number of Dawn Raids Shows Increased Antitrust and Criminal Law Enforcement in Italian Pharmaceutical Sector

by | Dec 1, 2014 |

On 27 November, the Italian Competition Authority dawn raided a major South African company for alleged excessive pricing of its oncology products in Italy. According to a complaint by one of the most active consumer associations in Italy, the group would have required the Italian Medicines Agency (AIFA) to align the price of its products, which are covered by the National Health Service (NHS), with the higher prices applied in other European countries, threatening the withdrawal of the products from the Italian market.

This new investigation is just the latest of many dawn raids that have taken place in Italy throughout 2014 relating to alleged bid rigging and other antitrust and criminal law infringements by pharmaceutical companies, including their participation in public tenders for the supply of products to the NHS. The significant number of dawn raids this year shows increased antitrust and criminal law enforcement in Italy in the pharmaceutical sector.

Two good examples of this trend are the €182.5 million in fines imposed in February 2014 on two major international groups for alleged collusive conduct concerning the sale of drugs for treating eye illnesses, and the investigation started by the Authority in January 2014 into alleged infringements in the sale of octreotide acetate in Italy. In the first case, the NHS would have suffered an overall cost increase of over €45 million in 2012 and likely damages of approximately €540 million in 2013 and €615 million in 2014. The second case relates, as do many of the investigations started this year, to alleged collusive conduct in public tenders for the supply of products to the NHS.

As soon as a proceeding is started in one Member State, international groups should brace themselves for potential complaints and investigations in all other countries where they have a presence or do business. As a recent example, the February 2014 fines were followed in April 2014 by unannounced inspections by the French Competition Authority at the premises of the same two pharmaceutical groups. In May 2014, former EU Competition Commissioner Joaquín Almunia reportedly indicated that the European Commission was gathering more information on the conduct of the two companies and was in contact with the national competition authorities of several EU Member States to assess whether or not further action would be needed. On 25 November 2014, a Belgian consumer association filed a complaint before the Belgian Competition Authority against the two pharmaceutical companies concerning the same alleged conduct.

Closer Cooperation Between the Commission and National Competition Authorities

Since the entry into force of Regulation No 1/2003 and the European Commission Notice on Cooperation within the Network of Competition Authorities of 27 April 2004, the Commission and the national competition authorities within the European Economic Area can cooperate more easily and more closely. They can now

  • Inform each other about pending cases, even during informal proceedings
  • Exchange and use information, including documents, statements and digital information, collected by other national competition authorities
  • At the latest, 30 days before the adoption of [...]

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New EU Consumer Contracts Legislation Comes Into Force on 13 June 2014: E-Commerce Businesses Should Review Terms and Conditions of Sale Now

by | Jun 9, 2014 | ,

by Rohan Massey, Lionel Lesur, Veronica Pinotti, Vincent Schröder

All e-commerce businesses active in the European Economic Area (EEA) should review their current processes, policies, terms and documentation and implement any changes before 13 June 2014 to ensure they are compliant with the new national laws of the EU Member States implementing EU Directive No 2011/83/EU on consumer rights. In those Member States that fail to implement the Directive into their national laws, the provisions of the Directive will directly apply.

Please click here  to read the full article.



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State Aid Procedural Regulation Grants More Powers to the European Commission

by | Aug 1, 2013 |

by Martina Maier and Robert Bäuerle, with contribution from Katharina Dietz, a paralegal at McDermott Will & Emery’s Brussels office

New rules of procedure in EU State aid investigations will enter into force very soon.  The European Commission will, for the first time, have the opportunity to request information from entities other than the EU Member State concerned, such as public and private companies that are not subject of a State aid investigation themselves.  Companies will be obliged to respond to the information request and fines might be imposed for failing to respond on time or providing incorrect, misleading or incomplete information.  Other major changes include a more restrictive approach in dealing with complaints and the European Commission now being able to conduct inquiries across various EU Member States into a particular sector.

To read the full article, click here.



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Merger Control Notifications in Several EU Member States – Best Practices on Cooperation Between Competition Authorities

by | Nov 10, 2011 | ,

by Martina Maier and Philipp Werner

The European Union’s (EU) national competition authorities (NCA) and the European Commission have agreed upon best practices on cooperation in cross-border mergers.  The best practices’ stated aim is to enhance cooperation in merger cases where the European Commission Merger Regulation does not apply and the merger needs to be notified in more than one EU Member State.The best practices follow a public consultation on draft best practices started earlier this year.

The best practices do not make cooperation between NCAs compulsory. The merging parties will not be able to insist that NCAs should cooperate in a multi-jurisdictional filing. Rather, NCAs will apply them in cases where they think cooperation could be beneficial for the NCAs, the merging parties and third parties, in particular where the merger raises similar comparable jurisdictional or substantive questions and concerns similar or the same product markets.

The best practices discuss a number of areas and instruments for facilitating a multi-jurisdictional merger review process, such as:

  • Exchange of certain basic non-confidential information
  • Aligning timelines in the review process and with regard to remedies
  • Regular contacts and updates between NCAs with regard to timing and with regard to decisions to open in-depth investigations
  • Dicussions of substantive analysis such as market definitions or possible anti-competitive effects of the merger

Merging parties are encouraged to contact each NCA where the merger will be filed and provide them with basic information, such as the jurisdiction where the merger will be filed, the date of the proposed filing and the sectors involved, to facilitate cooperation among the agencies. Also, the best practices support joint pre-notification contacts where useful. The best practices further highlight, that it will be for the merging parties to coordinate the timing and also the substance of possible remedies, e.g. where a remedy accepted in one Member State has an impact on the effectiveness of the remedy in another Member State.

Most important, the best practices clearly point out that it is fully within the merging parties’ respectively third parties’ discretion to provide waivers to the NCAs to exchange confidential information, that such information will be protected under national law in all Member States and that it will not be used for any purpose other than the review of the relevant merger. To this end a model waiver form can be found in the annex to the best practises. However, it should be noted that the best practice paper states that once a waiver has been provided, the parties will not be informed about the actual scope and timing of the exchange of the confidential information.

The best practices and its annex can be accessed here.



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ECJ Gets Tough with The Commission on Parental Liability

by | Oct 20, 2011 |

by Martina Maier and Philipp Werner

In Elf Aquitaine SA v Commission, the European Court of Justice ruled on 29 September 2011 that Elf Aquitaine was not jointly and severally liable as a parent company for the involvement of its wholly owned subsidiary in the cartel for monochloroaecetic acid.  Taken with a number of recent judgments, this suggests that European  courts are getting tougher with the Commission on parental liability.

To read the full article, click here. 



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EU’s Top Competition Court Rules that Companies Seeking Damages May Have Access to Leniency Statements

by | Jul 15, 2011 | ,

by Martina Maier, Philipp Werner, Andrea Hamilton and David Henry

A recent decision by the Court of Justice of the European Union may make it easier for prospective claimants to obtain at least those leniency statements and related materials that are submitted to the national competition authorities of the EU Member States.  Companies doing business in the European Union are urged strongly to follow developments in this area and factor the risk of disclosure into the decision of whether or not to apply for leniency.

To read the full article, click here.



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