UNITED STATES OF AMERICA – FEDERAL TRADE COMMISSION (‘FTC’)
FTC Approves ProMedica Divestiture of St. Luke Hospital
June 24, 2016
The Federal Trade Commission approved ProMedica Health System Inc.’s divestiture of St. Luke’s Hospital.
The acquisition of St. Luke by ProMedica in 2010 had previously been held to be anti-competitive and likely to substantially lessen competition in:
- General acute-care inpatient hospital services
- Inpatient obstetric services
The FTC observed that the merger would increase prices for commercial health plans in Lucas County, Ohio.
The ruling was upheld by the U.S. Court of Appeals for the Sixth Circuit.
Under the FTC order, ProMedica was required to divest St. Luke Hospital to an FTC-approved buyer to ensure independent operation of the hospital.
UNITED KINGDOM – COMPETITION AND MARKETS AUTHORITY (‘CMA’)
CMA Fines ITW Limited for Resale Price Maintenance
May 24, 2016
The Competition and Markets Authority imposed a fine of £2,298,820 on ITW Limited for engaging in resale price maintenance in internet sales of Foster commercial refrigerators.
The investigation revealed that Foster Refrigerator implemented a “minimum advertised price” policy between 2012 and 2014.
The company threatened dealers with:
- Higher supply prices
- Supply restrictions
- Commercial sanctions
The CMA held that the conduct restricted online price competition and prevented dealers from independently setting discounted prices.
The practice was found to negatively affect both online and offline competition in the refrigerator market.
CMA Fines Ultra Finishing Ltd. for RPM Practices
May 10, 2016
The Competition and Markets Authority imposed fines of £786,668 on Ultra Finishing Ltd. for engaging in resale price maintenance concerning internet sales of Hudson Reed and Ultra branded bathroom products.
The investigation found that Ultra introduced online trading guidelines recommending that online prices should not fall below specified discount levels.
The company monitored reseller websites and threatened enforcement actions including:
- Reduction of wholesale terms
- Supply restrictions
- Withdrawal of image usage rights
The CMA concluded that the conduct prevented resellers from independently competing on online prices.
The fine was reduced because Ultra admitted the infringement and committed to improving compliance.
EUROPEAN UNION – EUROPEAN COMMISSION (‘EC’)
EC Fines Pometon €6.2 Million for Steel Abrasives Cartel
May 25, 2016
The European Commission fined Italian abrasives producer Pometon S.p.A. for participating in a cartel involving steel abrasives in the European Economic Area.
The cartel coordinated:
- Steel abrasive pricing
- Scrap surcharge mechanisms
- Customer allocation practices
The steel abrasives were used in industries including:
- Steel manufacturing
- Automotive industry
- Metallurgy
- Petrochemical industry
The EC found that cartel participants coordinated pricing through a common “scrap surcharge” formula based on fluctuations in metal scrap prices.
The cartel also involved agreements not to compete for specific customers.
REPUBLIC OF INDIA – COMPETITION COMMISSION OF INDIA (‘CCI’)
CCI Dismisses Complaint Against Bennett Coleman & Company Limited
CCI Case No. 35/2016 | June 02, 2016
The Informant alleged that Bennett Coleman & Company Limited abused its dominant position through combo newspaper offers involving:
- The Times of India
- Mumbai Mirror
- The Economic Times
- Maharashtra Times
The allegation stated that newspaper vendors compelled consumers to purchase unwanted newspapers along with The Times of India.
The Competition Commission observed that all newspapers were separately available for purchase and consumers retained freedom of choice.
The CCI further noted that any misconduct by vendors could not automatically be attributed to the publisher.
Accordingly, the matter was closed under Section 26(2) of the Competition Act.
CCI Dismisses Complaint Against Nissan Motors
CCI Case No. 46/2016 | June 07, 2016
The Informant alleged deficiencies relating to a Nissan Micra vehicle including:
- Defective engine
- Unusual sound
- Improper servicing
- Negligent handling of repairs
The Competition Commission observed that the allegations essentially concerned deficiency of services rather than abuse of dominant position.
The CCI held that none of the alleged conduct attracted Section 4(2) of the Competition Act.
Accordingly, the complaint was dismissed.
MARKET DEVELOPMENTS
Ball Corporation to Divest Aluminium Can Plants Following Rexam Acquisition
June 28, 2016
Ball Corporation agreed to divest eight U.S. aluminium can plants and related assets to Ardagh Group S.A. to resolve FTC concerns regarding its proposed acquisition of Rexam PLC.
The FTC observed that the acquisition would likely lessen competition in regional aluminium beverage can markets across the United States.
The concerns included:
- Higher prices
- Reduced product quality
- Reduced innovation
- Increased coordinated interaction
The divestiture was intended to preserve effective competition in the beverage can market.
Heidelberg Cement and Italcementi Agree to Divest U.S. Assets
June 17, 2016
Heidelberg Cement AG and Italcementi S.p.A. agreed to divest cement assets to settle FTC concerns arising from their proposed merger.
The merger was expected to reduce competition in metropolitan areas including:
- Baltimore-Washington DC
- Richmond
- Virginia Beach
- Syracuse
- Indianapolis
The FTC alleged that the merger would reduce the number of significant suppliers and increase the likelihood of coordinated pricing.
The parties agreed to divest:
- A cement plant in Martinsburg, West Virginia
- Up to 11 cement distribution terminals
CCI Approves Future Consumer Enterprise Acquisition
C-2016/03/384 | May 11, 2016
The Competition Commission approved Future Consumer Enterprise Limited’s acquisition of the consumer products division business of Grasim Industries Limited.
The transaction related to FMCG products including:
- Skin care products
- Baby care products
- Home care wet wipes
- Sanitizers
The Commission observed that the parties had insignificant market shares and faced strong competition from established players.
Accordingly, the transaction was approved.
CCI Approves Tyco / Johnson Controls Merger
C-2016/02/376 | June 01, 2016
The Competition Commission approved the merger between Tyco International PLC and Johnson Controls Inc.
The overlap analysis focused on:
- Electronic security systems
- Fire detection systems
- Alarm systems
The Commission observed that combined market shares remained relatively low and that strong competitors continued to exert competitive pressure.
The CCI further noted that there was no significant vertical overlap affecting Indian markets.
The combination was therefore approved.
Peninsula / Croner Merger Inquiry
May 09, 2016
The Competition and Markets Authority reviewed Peninsula Business Services Group Limited’s acquisition of Croner Group Limited.
The investigation focused on overlaps in:
- Tax fee protection insurance
- Employment law consultancy
- Human resources consultancy
- Health and safety consultancy
The CMA concluded that sufficient competitive pressure would remain post-merger and therefore no substantial lessening of competition would arise.
Severn Trent / United Utilities Merger Inquiry
May 03, 2016
The Competition and Markets Authority assessed the proposed merger between Severn Trent Plc and United Utilities Group Plc.
The parties operated in retail water and sewerage services for non-household customers.
The CMA observed that following market reforms scheduled for April 2017, multiple competitors would actively compete for customers.
Accordingly, the authority concluded that the merger would not substantially lessen competition.
EC Approves Heidelberg Cement Acquisition of Italcementi
M.7774 | May 26, 2016
The European Commission approved Heidelberg Cement AG’s acquisition of Italcementi S.p.A. subject to commitments.
The Commission identified competition concerns in:
- Grey cement markets in Belgium
- Adjacent regional cement markets
- Aggregates and ready-mix concrete markets
The EC observed that the merged entity would hold market shares exceeding 50% in certain areas.
To address concerns, Heidelberg Cement agreed to divest Italcementi’s Belgian business operations.
The commitments resolved the identified competition concerns and the merger was approved.
EC Prohibits Hutchison Acquisition of Telefonica UK
May 11, 2016
The European Commission prohibited Hutchison’s proposed acquisition of Telefonica UK’s “O2” business.
The merger would have reduced the number of major mobile network operators in the UK market.
The Commission concluded that the transaction would likely result in:
- Higher mobile service prices
- Reduced consumer choice
- Reduced network innovation
- Lower service quality
The EC further observed that the proposed remedies offered by Hutchison were insufficient to eliminate competition concerns.
Accordingly, the proposed acquisition was blocked.
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The information in this private circulation is not legal advice and should not be treated as such.
The information is taken from public domain and is purely for private and non-commercial purposes.
We do not represent that the information is correct, accurate, complete or non-misleading.
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Doc ID: CL/15/16
