GCR October 2003
The architects of enforcement
International cartels - Superior Propane - Hong Kong’s telecoms sector
Journal Feature
An interview with Peter Vandeghinste, in-house competition counsel at Nestle SA
Before joining Nestlé, Peter Vandeghinste was a partner at Puelinckx-Schilz-Linden-Grolig (later Liedekerke) in Brussels. He went in-house in 1993 and is now assistant vice-president of the Nestlé group
An interview with Konrad von Finckenstein
Despite a full diary as Canadian Commissioner of Competition, Konrad von Finckenstein has managed to steer the International Competition Network through its first year. David Samuels met him shortly after its first meeting in Naples to discuss the ups and downs of launching the organisation
The US enforcement agencies and the wider antitrust world
At the ABA's annual meeting in August, antitrust specialists discussed whether the US is still the centre of the antitrust universe. Christine Sommer, of Baker & Miller PLLC in Washington, DC attended and now reports
Merger sessions dominate Fiesole
The sixth running of the IBA's competition event in Fiesole, Italy, this September was dominated by merger sessions and timely speeches. John Jolliffe and David Samuels report
ACCC leniency proposals balance hard line on hard core collusion
Simon Writer of Allens Arthur Robinson, Sydney outlines the Australian Competition and Consumer Commission's recently announced leniency policy, which offers whistleblowing individuals and companies the carrot of immunity alongside the stick of criminal sanctions
Remedies: the practical common ground between the US and the EU
As efforts aimed at narrowing the gap between US and EC merger control continue, it is worth noting the similarity in remedy policies on both sides of the Atlantic—and how it came about. Thomas Mueller and Jan Heithecker of Wilmer Cutler & Pickering, Brussels and Berlin report
Implications of the Airtours case
Maya Barr of Steptoe & Johnson LLP, Brussels, reviews events that led to the Court of First Instance's judgment on Airtours, and asks what it all means for the assessment of market power
The 2002 Amendment to Austrian antitrust
Rainer Roniger and Lukas Flener, of Haarmann Hemmelrath Hügel, Vienna and Brussels, explain the changes introduced by the recent amendment of Austria’s antitrust law and note that tougher penalties and investigative powers are at the disposal of the new authorities
The new block exemption system in Hungary
Earlier this year new decrees introducing block exemptions came into force in Hungary which offer broader safe harbour protections but increase the exposure of firms with over 30 per cent market share. By Zoltán H Barakonyi and Andrea Soós of Martonyi és Kajtár Baker & McKenzie, Budapest
'Gun-jumping': what are the standards governing pre-consummation activities?
With what is permissible conduct prior to completion of a transactions increasingly unclear, even 'routine' pre-merger activity may attract the unwelcome attention of the antitrust authorities. Joseph G Krauss, partner of Hogan & Hartson, LLP, Washington, DC explains why companies need to be cautious
Opinion
Rating the Enforcers: a reply from Denmark
Svend Hylleberg, Chairman of the Danish Competition Council, has accepted GCR's invitation to to reply to the research we published in July. Here are his thoughts
Corporate Counsel
EU: Motor vehicle distribution
The new EU block exemption Regulation for motor vehicle distribution and servicing agreements is being presented by the Commission as introducing increased competition between car dealers, making cross-border car purchases easier, and generally giving the consumer a better deal. However, the strength of the manufacturers' lobby was such that the Commission had to compromise during the drafting of the Regulation, in particular as regards the delay in prohibiting the use of restrictive 'location clauses', and many are sceptical as to whether the resulting text will have the market impact predicted by the Commission.
Joanna Goyder
Freshfields Bruckhaus Deringer
Brussels
Community News
Lowe wows Fiesole
Belief in the idea that Europe might embrace real change in the field of merger review rather than cosmetic adjustment has strengthened following a speech from EC Competition Director General Philip Lowe in September.
Business gives ICN a cautious thumbs-up
Representatives of big business emerged from the International Competition Network's first meeting in Naples last week for the most part impressed.
DoJ imprisons French executive
The US Department of Justice has persuaded a French executive to accept a jail term in the US for organising a cartel.
Shock as Swiss enforcer quits
The president of the Swiss Competition Commission, Roland von Bueren, dropped a bombshell on competition lawyers in Switzerland early September by resigning.
US agencies's activity at pre-Clinton level
An influential US think-tank, the American Antitrust Institute, has released research suggesting that the much touted policy of 'continuity in enforcement', proclaimed by the Bush appointees, is a fiction.
Japanese authority announces new chairman
Kazuhiko Takeshima is to replace Yasuchika Negoro as chairman of the Japan Fair Trade Commission, it has been announced. Takeshima's appointment was approved by the Japan Diet on July 31.
Fels to bow out in 2004
The chairman of the Australian Competition and Consumer Commission (ACCC), Allan Fels, has announced that he will not be seeking a further term as head of the agency.
Argentina names two new chief enforcers
Argentina has announced the appointment of new personnel in two key enforcement jobs.
Singapore recruits top economist to develop new law
Singapore's Ministry of Trade and Industry has made its first high-profile appointment, as the island state bids to introduce a broad-based competition law by 2005.
DG Comp announces programme for November event
The European Commission has released details of the programme at its forthcoming conference on merger control to be held in Brussels in November. The event is a follow-up to the highly successful 'birthday party' held two years ago to celebrate 10 years of the EC Merger Regulation.
James reveals extent of M&A downturn
US Justice Department head Charles James seems to be doing a better job of spreading the word about the agency's results and priorities. James was criticised (as reported in GCR earlier this year) for being less good than counterpart Timothy Muris at conveying 'the agenda'.
Energy regulators wade in over E.ON/Ruhrgas
Europe's energy regulators have expressed concern over the possible merger of E.ON and Ruhrgas, two major German power companies.
NERA bounces back in Europe
Economics consulting firm NERA has bought Law and Business Economics, the firm founded by former Oxford academic Mark Williams, thereby, it could be argued, returning as a European 'player' in one fell swoop.
George Addy joins Davis Ward Phillips & Vineberg
George Addy, former head of Canada's Competition Bureau, has moved from Osler Hoskins & Harcourt to Davies Ward Phillips & Vineberg, in Toronto. He will head the firm's competition group formerly led by Cal Goldman, who left in December.
White & Case Tokyo recruits antitrust specialist
White & Case has recruited a noted figure in Japanese competition circles, Jiro Tamura, who specialises in antimonopoly law, trade law and regulation.
Steuer moves to Mayer Brown Rowe & Maw
The head of Kaye Scholer's antitrust practice, Richard Steuer, has joined Mayer Brown Rowe & Maw
Khemani rejoins World Bank
Shyam Khemani has rejoined the World Bank in Washington DC following a two-year absence during which he worked for Law & Economics Consulting Group (LECG) in Paris.
Howrey Simon, Brussels, adds Greek
Paris Anestis has become the newest partner- level recruit at Howrey Simon Arnold & White's office in Brussels.
Baker & McKenzie hires top Italian competition academic
Baker & McKenzie has opened a third Italian office, joining forces with Studio Bernini e Associati in Bologna.
Linklaters firm lures head of legal from Italian Authority
Gianni, Origoni, Grippo & Partners, the Italian firm in a relationship with Linklaters, has hired Piero Fattori, formerly of the Italian Antitrust Authority.
O'Melveny & Myers plugs into NY deal market
O'Melveny & Myers has purchased O'Sullivan LLP, a private equity firm in New York.
McDermott Will & Emery opens a second German office
Continuing its European expansion, US firm McDermott Will & Emery has opened an office in Düsseldorf. Four partners – Thomas Hauss, Konstantin Günther, Alexander Hirsch and Völker Teigelköotter, all formerly at the firm of Menold & Aulinger – form the core of the new office.
Ashurst adds German abilities
The expansion of Ashurst Morris Crisp's competition group continues apace. The firm has now secured the services of a German competition specialist, Ute Zinsmeister. She joined the partnership officially on September 1.
Tamar Ben-David changes firm in Tel
Israeli antitrust specialist Tamar Ben- David has joined Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.
Brazilian competition lawyer murdered
It is with profound sorrow that GCR records the death in late July of the Brazilian lawyer Eugenio da Costa e Silva
Charles River hires two in DC
Charles River Associates has announced the appointment of Dr Robert Litan, the co-director of the Brookings Joint Center on Regulatory Studies, as a senior consultant.
Luostarinen Mettala recruits
The Finnish firm Luostarinen Mettala Raikkonen has recruited 46-year-old Janne Tuulos, who has spent the last seven years as vice-president for project finance at Nokia Networks Oy.
Alston & Bird hires three partners from Kirkland & Ellis
Three partners from Kirkland & Ellis have joined Alston & Bird, boosting the firm's international trade and regulatory group
Pricewaterhouse Coopers recruits Morrison
PricewaterhouseCoopers has recruited Eric Morrison, a senior economist at the UK's Office of Fair Trading.
ALEA elects Canadian president
Professor Michael Trebilcock has been elected president of the American Law and Economics Association
King & Spalding opens London office
King & Spalding will establish its first office outside the United States when it opens in London later this year
Honore goes to the the CFI
Michael Honoré, an associate at Ashurst Morris Crisp in Brussels, has been appointed legal secretary to Bo Vesterdorf, the president of the Court of First Instance in Luxembourg
Cleary Gottlieb takes associate from Slaughter and May
Cleary Gottlieb Steen & Hamilton has hired Shaun Goodman, a senior associate in Slaughter and May's competition group
Riddle of US antitrust chief's resignation
Following Charles James's shock announcement that he is to resign many DC-based specialists are still asking, "why?"
Fasken hires former competition tribunal head
William McKeown QC is to join the Toronto office of Fasken Martineau.
Behind the Headlines
Study proves mergers are efficient
A study just out has proved that large mergers can deliver substantial efficiencies, exactly as the architects of deals claim
GE to acquire ABB structured finance unit
General Electric is to expand its financial operations by acquiring the structured finance unit of Swiss firm ABB
Bunge buys Cereol
Bunge Limited is buying a controlling (54.69 per cent) interest in Cereol, the European oilseed processing company
Global packaging deal announced
The Ball Corporation has announced its intention to buy Schmalbach-Lubeca, the German drinks-can manufacturer
Asian rubber companies win US extraterritoriality appeal
Three of the world's largest producers of rubber thread have been cleared by the US Court of Appeals, 4th circuit, of allegations that they entered into a conspiracy to fix the prices worldwide
EU investigates State aid for chipmaker
The European Commission has launched an investigation into alleged use of subsidies by the South Korean Commerce Ministry of Samsung and Hynix to lower the cost of DRAM microchips
EC sends Telefonica/Sogecable back to Spain
The European Commission will allow Spain to rule on how the Telefónica/Sogecable merger affects competition in its telecommunications sector.
Madrid and Brussels in tug-of-war over telecoms deal
The Spanish government and the European Commission are engaged in a tussle for jurisdiction over Telefónica/Sogecable, a merger that will create Spain's only digital television operator.
Commission clears EY/Andersen France merger
The European Commission has approved the merger between Ernst & Young and Andersen France
Schneider divests LeGrand
French electrical appliances giant Schneider Electric has concluded the sale of LeGrand to the Wendel venture capital consortium, which consists of Wendel Investissement and Kohlberg Kravis Roberts
Scottish milk saga ends
One of the longest UK competition investigations of recent times has sputtered its last. The Office of Fair Trading is closing its file on Robert Wiseman Dairies.
Interbrew completes Bass divestiture
August also saw a second of the UK's 'sagas' conclude when Interbrew completed the sale of Bass Brewers to the Adolph Coors Company.
Lufthansa/Austrian Airlines alliance cleared
The European Commission has approved the partnership between Lufthansa and Austrian Airlines after the two airlines succeeded in allaying the Commission's competition concerns
Hutchison Whampoa buys Dutch drug retailer
The Hong Kong-based conglomerate Hutchison Whampoa has agreed to purchase Dutch drugstore chain Kruidvat Holding, it has been announced
Finmeccanica buys Marconi Mobile Holdings
Italian high-tech company Finmecanica has completed the purchase of the Marconi Mobile Holdings from the debt-stricken British company Marconi
Commission launches second raid on brewers
Competition officials from the European Commission have conducted dawn raids on the headquarters of brewers Carlsberg in Denmark and Heineken in the Netherlands
Commission settles GFU
The European Commission has decided to accept the commitments offered by certain Norwegian gas producers and close one of the largest cartel matters of the last two years: the GFU case
AirFrance/Alitalia agreement under scrutiny
The European Commission appears not to be happy with the proposed cooperation agreement between Alitalia and AirFrance.
EC clears Nestle/L'Oreal joint venture
The European Commission has cleared a joint venture between L'Oréal and Nestlé to develop 'beauty nutrients'.
Staples acquires European mail order business
Pinault Printemps Redoute is to sell its European mail order business to US office supplies retailer Staples. The sale has been valued at €825 million.
Novartis buys Slovenian pharmaceutical manufacturer
Swiss pharmaceuticals firm Novartis is to acquire Lek, a Slovenian company that owns a portfolio of generic pharmaceutical companies
Carlton and Granada abandon plans for full merger
UK television broadcasters Carlton and Granada are to proceed with an agreement to combine key parts of their operations, but have dropped plans to merge after lawyers at Slaughter and May (retained by Carlton) and Lovells (retained by Granada) said that such a deal would be blocked on competition grounds.
Bertelsmann bags Zomba
German-based media group Bertelsmann (BMG) has agreed to buy the US music company Zomba in a deal worth US$3 billion.
Liberty Media tries again in Europe
Liberty Media Corporation has agreed to buy Dutch cable operator Casema from France Télécom, it has been announced
German recycler tests new German law
Duales System, a German-based recycling company, has become the first company to apply for exemption from German cartel law as allowed by a change in German law in 1999
Mexican agency renews hostilities with Telmex
Mexico's Federal Competition Commission has resumed its attack on the local services of Teléfonos de Mexico (Telmex), the former state monopoly telephone company, accusing it of practices akin to predatory pricing
Phillips/Conoco merger finally clears in US
The teams squiring the Phillips/Conoco deal on the US leg of its notification have reached a compromise with the US Federal Trade Commission that both sides deem acceptable.
ADM bags Minnesota Corn
Minnesota Corn Processors LLC is to merge with a subsidiary of Archer Daniel Midland.
FTC clears Burger King sale
Delaware Champion Holdings has obtained antitrust clearance for its acquisition of Burger King from British drinks vendor Diageo
DoJ and MathWorks reach compromise
The DoJ's civil antitrust suit against The MathWorks Inc appears amicably resolved after the technology firm agreed to put a piece of key software up for sale
DoJ supports BellSouth before FCC
As enforcers consider how to regulate telecommunications markets in a downturn, the US Department of Justice has hinted that it may be willing to allow independent Bell Operating Companies ('Baby Bells') to enter the long-distance market as long as they are prepared to be open to competition.
Global Briefing
Canada: Competition Bureau proposes to double merger filing fees
The Competition Bureau has proposed changes to the 'transaction size' threshold for pre-merger notification (from C$35 million to C$50 million) as well as doubling the current C$25,000 filing fee and making Advisory Opinions more expensive but binding, The Bureau has also announced proposed legislative changes that would greatly enhance its investigative ability in respect of electronic data..
Canada: Investigators want electronic information
John Clifford and Mark Opashinov
McMillan Binch
Toronto
Denmark: Milk producer abused dominant position
In an abuse of dominant position case, the Danish Competition Authority has ruled against against Arla Foods.
Jan-Erik Svensson
Gorrissen Federspiel Kierkegaard
Copenhagen
Germany: E.ON/Ruhrgas acquisition
The concept of ministerial authorisation is rarely invoked and is controversial. Since the introduction of merger control in Germany in 1973, a ministerial authorisation has been granted only in seven cases, and five further applications have been dismissed. The ministerial authorisation in the E.ON/Ruhrgas case was the first to be issued by the Ministry since 1989 and is the first authorisation ever to be challenged in court by third parties.
Moreover, the E.ON/Ruhrgas case evidences an increased preparedness of interested third parties to attack mergers of competitors by challenging formal clearance decisions and ministerial authorisations in court and to apply for injunctions in order to prevent the merging parties from implementing their transaction.
Tilman Siebert
Freshfields Bruckhaus Deringer
Berlin
India: Competiton Act to replace obsolete MRTP law
The Competition Bill, 2001 which was laid before the Indian Parliament in the winter session last year, is still pending. The Department of Company Affairs (DCA) has proposed a leniency provision in the Bill for cartel members who disclose information about their operations. The proposed leniency provision may be included in the Bill if it is cleared by the relevant Standing Committee on Home Affairs and is approved by the Cabinet. In this era of globalisation, when the Indian Economy is opening up to face the challenges of worldwide competition, the proposed competition law, which shifts the focus from regulating monopolies to encouraging competition, needs to passed as early as possible.
Atul Chitale
A Y Chitale & Associates,
Delhi
Mexico: Highlights of the Federal Competition Commission's 2001 Annual Report
The Mexican Federal Competition Commission has released its annual activity review.
Gabriel Castañeda
Castañeda y Asociados
Mexico City
New Zealand: The new licensing regime
Microsoft has introduced a new 'software assurance' licensing regime in New Zealand, generating much debate, including suggestions that it is anti-competitive. Recently, the Commerce Commission considered a complaint that the new 'software assurance' regime contravenes the Commerce Act 1986.
Jenine Briggs and Peter Hinton
Simpson Grierson
Auckland
Spain: Pay-TV merger referred to national authorities
The EU Commission's decision to refer the merger of the two digital satellite platforms operating in Spain to the Spanish competition authorities confirms the national scope of the markets for pay-TV and hints at the same issues raised in Telepiù/Stream before the Italian authorities.
Gorka Navea
Freshfields Bruckhaus Deringer
Madrid
Switzerland: 'Provisional consummation' and collective dominance
In a recent merger case the Swiss Competition Commission clarified its earlier case law with respect to provisional consummation and issued new guidelines on the assessment of collective dominance.
Marcel Meinhardt and Astrid Waser
Lenz & Staehelin
Zurich
Taiwan: New ruling of Fair Trade Commission on joint ventures
Taiwan has extended its law to ensure that 'joint ventures' now folow the same notification path as other entities.
Lawrence S Liu and Stephen C Wu
Lee and Li
Taipei
UK: The Enterprise Bill: draft guidelines
The Enterprise Bill, currently due to receive the Royal Assent later this year, is seen as a major step towards the Government's objective of making the UK the 'best place in the world to do business'. Its far-reaching reforms include a new merger regime, a new regime for investigating markets, a criminal offence for individuals engaging in cartel arrangements, disqualification for directors engaging in certain anticompetitive activities and a new system of super-complaints.
Janet Gillen
Freshfields Bruckhaus Deringer
London
Franchising: Termination of clothing dealership was not anti-competitive
The appeals court elaborated on what is obvious to most observers: "We also cannot close our eyes to the fact that 42nd's proposed geographic market is absurdly small. The central business district of Highland Park – not even the whole of Highland Park! – would have to be something of a consumer's black hole for us to think that trendy shoppers wanting better prices on designer jeans and T-shirts could not venture to other commercial areas to find them. It doesn't take a cartographer to know that Highland Park is located in the densely populated north shore suburbs of Chicago, nor does it take a market researcher to know that 'Chicagoland' is home to many shopping venues where consumers could find designer jeans and T-shirts. By any sensible awareness of commercial reality, 42nd was swimming in a much larger competitive sea than the complaint lets on."
Philip F Zeidman and Steven B Feirman
Piper Rudnick LLP
Washington, DC
Franchising: Tying claim against Subway derailed
In addition to finding that the plaintiff was unlikely to prevail on the market power element of a per se tying chain, the court also held the plaintiff was unlikely to establish that the POS system and the Subway franchise were two separate products (as opposed to being two elements of a single product). In reaching this conclusion, the court observed that "a franchisee would never purchase a Subway POS system without also having purchased a Subway franchise."
Philip F Zeidman and Steven B Feirman
Piper Rudnick LLP
Washington, DC
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