The ABA Antitrust Section’s FTC Committee lunch was held in Washington, DC last month. John Gledhill reports on what amounted to a discreet unveiling of the Commission’s new competition policy

Despite the catastrophe in the United States, which forced the withdrawal of some speakers, the IBA managed to stage an impressive event at Fiesole, near Florence, reports David Samuels

Reacting to accusations that its 1996 Leniency Notice is ineffective in cartel cases, the European Commission has announced plans to revamp its programme. Julian Joshua* and Nils von Hinten-Reed,1 both former Commission officials, question whether the new proposal will in fact increase the potential benefits of cooperating with the Commission or lead to more effective enforcement

Merger policy has been something of a problem area in Ireland, but forthcoming legislation is hopefully about to change all that. Sebastian O’Meara spoke to the chairman of the Irish Competition Authority about his domestic concerns as well as European cooperation, modernisation and the Global Competition Initiative

Alistair Lindsay, a partner in the European Antitrust Group at international law firm Allen & Overy, considers whether the principal issues in GE/Honeywell could have been addressed by behavioural remedies

By Janet L McDavid of Hogan & Hartson, Phillip A Proger of Jones Day Reavis & Pogue, Michael J Reynolds of Allen & Overy and J William Rowley QC and A Neil Campbell of McMillan Binch

John R Parker, Jr, (senior vice president and general counsel) born Anderson, South Carolina, 1951; admitted to bar, 1985, Georgia; 1986, US Court of Appeals, 11th Circuit; Supreme Court of Georgia. Education: University of Georgia (BA, 1973); University of Virginia; University of North Carolina (JD, 1985). Articles editor, University of North Carolina Law Review, 1984-85. Law clerk for the: Hon Albert J Henderson, 11th Circuit Court of Appeals, 1985-86; Hon J L Edmondson, 11th Circuit Court of Appeals, 1986-87.The Coca-Cola Co, 1987-93; vice president and general counsel, The Coca- Cola Bottling Company of New York, 1993-95. Division counsel, Nordic and Northern Eurasia, 1995-96, Coca-Cola Enterprises Inc; general counsel, Europe Group, 1996-99. Member: State Bar of Georgia.

London Economics’s growth phase looks set to continue. The economic consultancy announced it has opened a 'new' Brussels office on August 1.

Linklaters has transferred Anne Wachsmann, a specialist in French and EU competition law, to Paris. The firm says the French competition group has taken on more work following the recent reform of France's competition rules.

Bredin Prat has reinforced its competition law department by recruiting EU and French competition specialist Hugues Calvet for its Paris office.

German firm Haarmann Hemmelrath is continuing to expand its Brussels office by admitting Robert Moldén to the partnership there.

To further strengthen its Brussels team, Cleary Gottlieb Steen & Hamilton will transfer partner David Gelfand from Washington DC to Brussels. The relocation was announced on July 30.

Italian law firm Frignani & Associati has beaten off rivals to secure the services of one of the most senior competition specialists in Italy.

Our recent special report ‘the GCR 100’ - recently reviewed by the international business press - included two mistakes.

New Zealand’s competition watchdog, the Competition Commission, is looking to recruit eight new management-level staff to keep up with its expanding caseload.

King & Spalding continues to develop its antitrust group in Washington, DC, appointing Jeff Spigel as partner. The election to the firm’s partnership will become effective on January 1, 2002.

GE Capital Bank, the financial arm of General Electric, has agreed to buy Heller Financial from Japan’s Fuji Bank.

Two of India’s leading mobile phone service operators, BPL Communications and Birla-Tata-AT&T (Batata), announced a merger in early July that will create the country’s largest cellular phone company.

The Australian Federal Government has approved Singapore Telecommunications’ purchase of Cable & Wireless Optus. The deal, valued at A$14 billion, faced a drawn-out regulatory process as Canberra and Washington scrutinised how sensitive information transmitted through an Optus satellite would be affected by SingTel control.

The Japanese electronics giant Sony and the Swedish mobile phone company Ericsson have agreed to unite their mobile phone services in a new company to be called SonyEricsson.

Earlier this year Time Inc reached an agreement to acquire IPC Group Limited, parent company of IPC Media, from Cinven, a private equity firms.

Cendant Corporation, a hotel and real estate franchiser and rental car operator, has been asked by the European Commission to resubmit the notification of its acquisition of Galileo International Inc, a provider of computerised reservation systems to the travel industry.

Food giant Nestlé has offered to make divestments in Spain, Greece and Italy to secure European Commission approval of its acquisition of the largest pet food company in the US, Ralston Purina.

UK sugar company Tate & Lyle was fined in October 1998 by the European Commission for infringing Article 81(1) in both the retail and industrial sectors of the UK sugar market. It has now managed to get that fine reduced from e14 million to e5.6 million - but that only reprsents an overall reduction of 60 per cent

The European Commission is investigating UEFA, European football’s governing body, over its arrangements for selling rights to televise Champions League games. The Commission has sent a statement of objections to UEFA outlining how the system - which grants all the free and pay-TV rights exclusively to one broadcaster per territory for up to four years - could have anti-competitive effects.

After a process lasting two-and-a-half years, the Identrus electronic signature joint venture has finally been granted approval by the European Commission.

Royal Dutch Shell’s joint venture with RWE-DEA is to be investigated by the German Cartel Office (Bundeskartellamt) and the European Commission.

The Italian Antitrust Authority has fined Alitalia for abusing its dominant position by paying bonuses to travel agents to distribute its airline tickets between 1997 and 2000. This, ruled the Authority, limited the access of Alitalia’s competitors to the transportation market.

Italenergia, a vehicle set up by the Fiat Group and various partners to buy Montedison, the Italian conglomerate, has now been approved by the European Commission.

Jeppesen Sanderson, Inc, the world’s leading provider of flight information services, has been bought by the Boeing company for US$1.5 billion in cash.

Two large former state monopolies are fighting for control of Poland’s PKN Orlen, central/eastern Europe’s largest oil refiner and retailer. OMV AG of Austria and Mol of Hungary, both oil and gas companies, are keen to buy a stake in PKN Orlen.

The United Kingdom’s WPP Group and France’s Havas Advertising are about to enter phase two of their battle for control of Tempus, the independent media-buying agency.

E.ON, the Düsseldorf chemicals and energy group, will sell its steel business Klockner & Co to Balli Group of the UK. The deal, which values Klockner at US$960 million, will allow E.ON to concentrate on its core energy business as required by a condition of another bid for the UK electricity generator and retailer Powergen.

Walt Disney, the US media and entertainment company, has announced that it is purchasing Fox Family Worldwide from News Corporation and Saban Entertainment. Disney is paying US$3 billion in cash and assuming US$2.3 billion in debt for the channel and associated assets.

Hewlett-Packard and Compaq, the second- and third-largest personal computer makers in the world respectively, have agreed to merge.

The recent guidelines issued by the National Commission for the Defence of Competition in an advisory opinion defining ‘control’ allow practitioners filing merger notifications to better determine what transactions are to be considered ‘economic concentrations’ requiring notification to the Commission in the event certain turnover thresholds set out in the Defence of Competition Law are met.

Dante Marcelo Ramos, LLM
Allende & Brea
Buenos Aires

Key recent enforcement action by the Australian Competition and Consumer Commission indicates its willingness to pursue anti-competitive conduct whether it was engaged in as part of a global agreement or which has an impact on a remote rural area within Australia.

Emma Marsh
Allens Arthur Robinson
Sydney

Among other developments, recent practice suggests that mergers in the financial sector (which includes banks and insurance companies) can be reviewed by the SIC, and are not the exclusive preserve of the Superintendancy of Banks, as previously thought.

Alfonso Miranda Londoño
Director,Centre for Studies in Competiton Law
Bogota

Following on from previous meetings, the representatives of competition regulators from Denmark, Finland, the Faroe Islands, Greenland, Iceland, Norway and Sweden met in September in Denmark to discuss competition issues of common interest, and a number of matters were looked at. Competition problems in the aviation sector have been the subject of particular attention, and a task force has been established to draft a proposal for improved competition within this industry.

Jan-Erik Svensson
Gorrissen Federspiel Kierkegaard
Copenhagen

Since 1996 the Commission has followed the US example of promising no or lesser sanctions for cartel participants who give assistance and information to the authorities, the aim being to destabilise cartels and help in their detection. It now proposes to amend its 1996 Notice so as to increase certainty, while raising the stakes still higher.

Joanna Goyder
Freshfields Bruckhaus Deringer
Brussels

In two recent cases the Competition Council has had to consider the question of excessive pricing in network industries, finding a violation in one instance.

Christian Wik & Mikko Alkio
Roschier-Holmberg & Waselius
Helsinki

This decision highlights the complementary roles of the French Competition Council and the Telecommunications Regulation Authority in establishing and maintaining fair and durable competition in the telecommunications sector.

Charlotte Breuvart
Freshfields Bruckhaus Deringer
Paris

The changeover to the euro will mean a slight reduction in the thresholds for pre-merger notification, which were last lowered by the Sixth amendment of the ARC in 1999 from Dm2 billion (combined worldwide turnover) to Dm1 billion. Together with the effect of inflation, the new euro thresholds are expected to further increase the number of transactions which have to be notified and the overall workload of the Federal Cartel Office.

Carel Maske
Freshfields Bruckhaus Deringer
Berlin

This judgment suggests that the Competition Authority’s policy of increasingly imposing very large fines in cartel cases may lead to particularly strict review by the administrative courts of procedural as well as substantive issues. Together with the new trend at the Authority towards imposing no fine in cases where it is not clear that any wilful anticompetitive conduct has occurred, this indicates that fines are likely to be imposed less frequently in the future than has been the case hitherto.

The judgment contributes to legal certainty in this area for companies in that it clarifies the meaning of the procedural rules concerned. Also, because the Consiglio di Stato gave importance to the fact that the Authority had already gathered much of the information on the relationships between the oil companies and the retailers in its advisory investigation on the fuel oil markets and had not deemed it necessary to open an investigation at the time, it gives comfort to market players in those cases in which the Authority, after the conclusion of an advisory investigation, has decided not to open any investigation.

Strict review by administrative courts of the Authority’s findings in cases where large fines are imposed can help to establish a viable middle ground between the proactive policy of the Authority and rights of defence.

Lucio Lanucara
Freshfields Bruckhaus Deringer
Brussels

SAS’s purchase of Braathens presents the Norwegian Competition Authority with a serious dilemma. It would be difficult for it to accept a de facto monopoly in the Norwegian domestic market, which will be the situation if the CA gives its consent to the acquisition. On the other hand, to have two national carriers competing on all destinations in the domestic market of a sparsely-populated country with 4.5 million inhabitants is unique in Europe, and, realistically, the Norwegian market cannot sustain two big operators. By signalling a preliminary ‘no’ to the deal, the CA has on the face of it come out in favour of competition. However, the bases of the CA’s decision are being criticised, among other things for not offering a coherent financial analysis of Braathens. In any case, it remains to be seen whether the CA’s approach is realistic and just how long Braathens would be able to stay afloat. As for the suggested ‘shortterm measures’, it appears that the CA may have exceeded its competence and that such measures would require not only the approval of the Norwegian transport authorities but possibly also clearance at EEA level. And even if the measures the CA is deemed competent to propose are implemented in one month’s time, they may prove to be too little too late for Braathens.

Jonas W Myhre
Wikborg,Rein & Co
Oslo

This case is the first in which the reciprocity clause provided for in the Spanish Hydrocarbons Act has been enforced. However, the decision of the NEC may be challenged before the Minister of Economy. This case illustrates the difficulties that companies from countries which have not implemented the Directive may face when trying to gain access to the Spanish energy markets. This is in addition to the restrictions affecting acquisitions of shareholdings in Spanish energy companies by State-owned companies. The Spanish authorities have provisionally blocked the voting rights corresponding to EDF’s indirect acquisition of a stake in Hidrocantábrico (the fourth-largest electricity company in Spain) through EnBW.

The European Commission is analysing these restrictions and its decision is expected shortly.

Álvaro Iza
Freshfields Bruckhaus Deringer
Madrid

In a unique judgment, the Swedish Market Court has decided to prohibit SAS from applying its frequent flyer programme, EuroBonus, on Swedish domestic routes where SAS or any airline cooperating with SAS and also applying EuroBonus meets competition.

Johan Coyet
Mannheimer Swartling
Stockholm

In a decision concerning a joint venture between Rhône-Poulenc and Merck & Co, neither of which is domiciled or has subsidiaries or branches in Switzerland, the Federal Supreme Court held that the Swiss Competition Law Act is applicable to a concentration if there are appreciable effects on the Swiss Market. As the companies concerned had closed the JV during the one-month mandatory suspension period, the Swiss Competition Commission imposed substantial fines.

Daniela Fischli
Lenz & Staehelin
Zurich

The White Paper published in July this year provides a 'blueprint to build a world-class competition regime' for the UK. The main proposals are aimed principally at facilitating the detection and deterrence of severe anticompetitive practices, modernising and improving the monopolies and mergers provisions of the Fair Trading Act and raising the profile of competition policy.

Alison Jones
Freshfields Bruckhaus Deringer
London

P2P - or peer-to-peer - commerce is the next step in the evolution of the internet as a commercial tool. The antitrust analysis of P2Ps follows closely the analysis of B2Bs. The principal difference is a greater need for participant education.

David H Evans
Jones, Day, Reavis & Pogue
Washington, DC

In light of this decision by an influential court, suppliers and franchisers should carefully consider the prices at which they sell to dealers and franchisees, and whether they may appear to have an ulterior motive if the prices negatively impact a dealer’s or franchisee’s business. At a minimum, this decision makes it easier for resellers to hold their supplier responsible for competitive difficulties they face in marketplace.

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