The European Commission has formally opened the debate it trailed at Fordham on reform of the merger regulation. Henry Lesguillons, Nathalie Jalabert-Doury and Niamh McCarthy of Jeantet & Associés offer a critique of the Monti Green Paper

The Green Paper produced by Mario Monti last year was too detailed for an immediate response. Now that its ideas have had time to percolate, David Samuels sought the reaction of leading practitioners

In December 2001, the Canadian Government offered to extend Competition Commissioner Konrad von Finckenstein’s term in office. GCR spoke to him shortly after he accepted about the Bureau’s perceived lack of independence, the OECD forum and where Canada stands on GE/Honeywell

Gönenç Gürkaynak* of White & Case, New York believes that the over-zealous application of the ‘presumption of concerted practice’ provision in Turkey’s Competition Act is contrary to fundamental competition law principles

Modern Irish competition law was 10 years old in October. Vincent Power of A & L Goodbody, Dublin reviews the first decade and considers what lessons can be learnt from the application of an EUbased system in a small common law jurisdiction

The UK Competition Commission Appeals Tribunal has handed down a decision on dominance in the pharmaceutical sector with wideranging implications. Claire Harris of Allen & Overy, Brussels reports

There was plenty of optimism at a special event held in Dublin to discuss proposed changes to Irish competition law. James Eyers reports

Amid doubts about Mexican President Vincente Fox’s commitment to running an effective competition policy, Mexico’s chief antitrust enforcer, Sanchez Ugarte (chairman of the Mexican Federal Competition Commission), has made a robust speech calling for three years of targeted action.

The bill that would have reformed Brazil’s competition regime has been dropped by the government after 18 months of what now appears to be fruitless debate.

Konrad von Finckenstein has accepted the Canadian Government’s invitation to continue as its chief competition enforcer until 2007.

The Irish Competition Authority has appointed four members to a newlyestablished panel which will advise the authority on legal policy, management and strategic issues.

Cezary Banasinski is to take over as president of the Polish Competition and Consumer Protection Office, it was announced late last year. His principal role will be to oversee enforcement of Poland’s merger control law, the ‘Act on the Protection of Competition and Consumers’, which came into force in 2000.

Following the hiring of Amelia Fletcher from Frontier Economics, the UK Office of Fair Trading has announced what appears to be another ‘bold’ appointment - suggesting it is faring better in the recruitment market.

The UK’s Office of Fair Trading is pressing for the introduction of jail terms of up to five years for serious cartel offenders.

The UK’s Office of Fair Trading is pressing for the introduction of jail terms of up to five years for serious cartel offenders.

Within the last five weeks, Davies Ward Phillips & Vineberg LLP has lost not one, but two of its leading competition partners. Of the two departees - Cal Goldman and Paul Crampton - Goldman is the more senior. He is now at Blake Cassels & Graydon LLP.

Steptoe & Johnson has announced the opening of an office in Brussels. The new office is on Avenue Louise - also home to James Day, Squire Sanders and Clifford Chance, among other firms - and will focus on competition, e-commerce and telecommunications & technology advice.

Stibbe joined the existing alliance between Herbert Smith and Gleiss Lutz on January 1 - a 'significant milestone' for the alliance’s international strategy, according to a joint statement.

Marques Mendes & Associados, the Portugese law firm, has appointed Luis Morais to its Lisbon office. Morais is resuming private practice after several years in public office.

Baker & McKenzie has strengthened its London competition practice by recruiting senior associate Keith Jones from Norton Rose.

Michael Antalics has left the US Federal Trade Commission for the Washington, DC office of O’Melveny & Myers.

Stephen Axinn, senior partner at Axinn Veltrop Harkrider in New York, confirmed in December that the firm was opening a Washington DC office.

Australia’s two largest fruit canners, SPC and Ardmona, have merged after providing the ACCC, the Australian enforcement agency, with undertakings to remedy competition concerns.

The European Commission has fined eight companies e855.22 million for operating a cartel in the vitamins market between 1989 and 1999. And, for the first time, it has granted a 100 per cent reduction under its Leniency Notice.

In a deal valued at US$1.6 billion, Johnson Wax Professional has agreed to buy DiverseyLever, an institutional and industrial cleaning business owned by Unilever.

The European Commission has come down hard on five German banks, fining them a total of e100.8 million for fixing charges for the exchange of eurozone currencies.

The European Commission has extended the deadline for its Phase I review of Cargill’s e474-million purchase of Montedison’s 56 per cent stake in Cerestar to January 21 following a request by the UK Department of Trade and Industry to be allowed to undertake part of the investigation itself.

Alfred Taubman, the former chairman of auction house Sotheby’s, was convicted in New York last week of conspiring with the management of rival auction house Christie’s to fix commissions.

In a significant ruling, the Columbia District Court has cleared the way for the acquisition by Sungard Data Systems of the business of troubled firm Comdisco, a disaster recovery company which filed for Chapter 11 protection in July.

Phillips Petroleum has announced a ‘merger of equals’ with Conoco that will create the third-largest integrated energy company in the US, and the largest gasoline retailer.

Amgen, the world’s biggest biotechnology company, announced a US$16- billion buyout of Immunex, (a rival) on December 17.

Following a series of abortive attempts to break into the ‘premium juices’ market, Coca-Cola has finally made an acquisition: Odwalla Inc, the US juice maker. A deal has been announced worth around US$181 million.

Plans for an alliance between British Airways and American Airlines suffered a major blow on December 17 when the US Department of Justice (DoJ) advised the Department of Transportation (DOT) to oppose the deal - unless the airlines divest sufficient landing slots at London’s Heathrow airport to allow other airlines to offer nine daily round trips from London to New York and Boston. BA and AA say that is too high a price to pay for the antitrust immunity they are seeking.

Comcast Corporation and AT&T Broadband have announced a US$72- billion merger; the deal - one of the largest put together last year would - create the biggest cable and broadband service provider in the US.

In the recent landmark decision of the Federal Court in ACCC v Universal Music Australia Pty Ltd and Warner Music Australia Pty Ltd, market shares of less than 30 per cent combined with other non-price factors were found to have given both companies a substantial degree of market power.

Emma Marsh and Bashi Kumar
Allens Arthur Robinson
Sydney

Divestiture order fails while Bureau attempts to ensure more clarity in enforcement of Competition Act. New legislative amendments are likely to result in increased private party litigation.

John Clifford and Mark Opashinov
McMillan Binch
Toronto

In December the Colombian Aviation Authority finally approved the merger between Avianca and Aces, the two main airlines in Colombia.

Alfonso Miranda Londoño
Chemas Miranda Asociados
Bogotá DC

The Doha agreement is remarkable for several reasons. First of all, it shows how the Commission has been able to meet the concerns of the US authorities about bureaucratic approaches and second-guessing of their decisions by international bodies as well as those of third world countries about new agreements that would not take into account their specific difficulties and needs, without sacrificing the main aim of its proposal. It also shows that the sharply differing views of the EU and US authorities in GE/Honeywell need not disrupt the further development of cooperation and international approaches to antitrust governance. Finally, a multilateral framework will favour greater coherence between jurisdictions and discourage governments from unfairly assisting their domestic players in the global market.

Lucio Lanucara
Freshfields Bruckhaus Deringer
Brussels

This Supreme Court ruling will probably increase the likelihood of anti-competitive practices escaping prohibition because the Council fails to take measures, especially in the current situation where the number of complaints is increasing and procedures are likely to take longer. In practice it may well lead to cases being closed for lack of Council resources.

Angélique de Brousse and Stéphanie Yon
Freshfields Bruckhaus Deringer,
Paris

The principle of subsidiarity is interpreted by the Federal Cartel Office as a basis for an efficient sharing of competence between national competition authorities and the European Commission. According to this principle, merger cases should be dealt with by the authority best placed to perform a competition assessment. This results in referrals from the European Commission to national competition authorities but also vice versa

Carel Maske
Freshfields Bruckhaus Deringer
Berlin

The Competition Bill 2001 proposes the most radical changes in Irish competition law since it was modernised along the lines of the EC competition rules in 1991. The proposals will increase penalties for hard-core infringements; eliminate the notification procedure before the Competition Authority, thereby enabling it to concentrate on the investigation and prosecution of serious competition law infringements; streamline the procedures for merger review and introduce new measures to facilitate the enforcement of EC competition law in Ireland.

Gerald FitzGerald
McCann FitzGerald
Dublin

The overturning of the IAA’s conditional clearance decision was not entirely unexpected, although the grounds were not those anticipated. Legal and economics commentators had focused on the speculative character of the IAA’s ‘portfolio effects’ theory (ie the argument that Enel would enjoy a non-replicable advantage by combining electricity and telecoms services). As for the TAR decision, it seems questionable.

While Enel’s decreasing market share may appear to indicate an absence of market power, the TAR seems to have failed to properly assess Enel’s dominance in the upstream market, which would seem to confer a competitive advantage in the supply market also, despite the introduction of a power exchange mechanism.

Gian Luca Zampa
Freshfields Bruckhaus Deringer
Rome

The dramatic and tragic events of September 11 2001 and the mounting problems facing the airline sector were given by the CA as the main reasons for its change of opinion. It could be argued that the economic circumstances of Braathens and the bleak outlook for the airline industry as a whole were already sufficiently clear at the time the CA gave its original opinion and should have warranted a finding of ‘failing firm’. However, September 11 and the subsequent focus on the problems of the airline sector could be said to have helped solve the CA’s dilemma, forcing it to accept near total dominance of the Norwegian domestic market by SAS.

Jonas W Myhre
Wikborg, Rein & Co
Oslo

This new Regulation constitutes another important step in the modernisation of competition rules in Spain. It will update the Spanish merger control rules to cope with the increasingly complex transactions which are taking place in Spain. In addition, it will introduce a more transparent procedure in relation to market definition, as the parties will be able to rely on the past practice of the first-tier competition authority.

Álvaro Iza
Freshfields Bruckhaus Deringer
Madrid

A Swedish Government Committee has suggested amendments to the Swedish Competition Act to strengthen the authorities’ ability to fight cartels. The main proposals are to introduce a leniency programme for companies that reveal cartels and increased secrecy protection in the investigation phase before the Competition Authority, both for informants and complainants. Following an interim report by the Committee, the Government has announced a statutory change to the Secrecy Act, strengthening the secrecy protection for the Swedish Competition Authority’s investigations, which will enter into force on March 1 2002.

Johan Coyet
Mannheimer Swartling
Stockholm

In the merger control procedure regarding Allianz AG and Dresdner Bank AG, the Swiss Competition Commission examined the banking, insurance and one-stop finance business of the parties. It thereby indicated the possibility that it may change the established definitions of the relevant insurance product markets according to the practice of the European Commission.

Marcel Meinhardt and Daniela Fischli
Lenz & Staehelin
Zurich

Independent research has confirmed that competition in the domestic gas and electricity supply markets in England, Scotland and Wales is well established. In the light of this, the Office of Gas and Electricity Markets has proposed that all remaining price controls be abolished as a means of regulating gas and electricity suppliers. It is proposed that the use of powers of investigation and enforcement under competition law will replace price control regulation.

Alison Baker
Freshfields Bruckhaus Deringer
London

The Computer Associates case demonstrates that, at any rate with respect to enforcement of the HSR Act, the Bush Administration is willing to be at least as aggressive as the Clinton Administration was. The case also provides some practical examples of the type of conduct and contractual provisions that merging parties should avoid.

Ronan P Harty
Davis Polk & Wardwell
New York

The contrasting decisions regarding ‘e-croachment’ in Drug Emporium and Conroy’s exemplify how seemingly minor differences in the language of franchise agreements, and in the operation of franchise systems, can lead to differing results. Arbitration decisions are not binding legal precedent. But in light of the growing significance of e-commerce in franchised systems of distribution, lawyers can be expected to study those two decisions with more than usual interest, in the context of disputes as well as in counselling.

Philip F Zeidman and Steven B Feirman
Piper Marbury Rudnick & Wolfe LLP
Washington, DC