UNITED STATES OF AMERICA (‘US’) – FEDERAL TRADE COMMISSION (‘FTC’)
FTC Requires Fertilizer Companies PotashCorp and Agrium to Divest Production Facilities as Condition for Merger
December 27, 2017
Potash Corporation and Agrium Inc., both fertilizer and chemical companies, entered into a merger agreement which raised competition concerns before the Federal Trade Commission.
The FTC observed that the proposed merger would adversely affect competition in two key markets:
- Superphosphoric Acid (‘SPA’), a highly concentrated phosphate crop nutrient.
- 65-67% concentration nitric acid sold in several US states.
The FTC noted that PotashCorp and Agrium were two of only three major SPA manufacturers in North America and that overseas imports were minimal.
With respect to nitric acid, the parties were major suppliers in Ohio, Kentucky, Pennsylvania, Maryland, West Virginia and New Jersey.
The FTC concluded that the merger would eliminate competition between the parties and increase the likelihood of price increases.
To settle the concerns, the parties agreed to divest two of Agrium’s U.S. facilities, including one SPA production facility and one nitric acid facility.
The merger was approved subject to the divestiture conditions.
UNITED KINGDOM (‘UK’) – COMPETITION AND MARKET AUTHORITY (‘CMA’)
CMA Imposes Fine on Laundry Companies for Market Sharing Arrangement
December 20, 2017
Micronclean Limited and Berendsen Cleanroom Services Limited, two leading specialist laundry service providers in the United Kingdom, entered into reciprocal trademark licence arrangements under which they agreed not to compete with each other.
The agreement divided the market geographically:
- Micronclean served customers north of a line drawn between London and Anglesey.
- Berendsen served customers south of that line.
The companies also agreed not to compete for certain customers irrespective of their location.
The Competition and Market Authority held that the arrangement substantially lessened competition and could result in:
- Higher prices
- Reduced consumer choice
- Lower service standards
- Reduced innovation in the market
The CMA imposed a total fine of 1.7 million pounds on the parties for violation of competition law.
INDIA – COMPETITION COMMISSION OF INDIA (‘CCI’)
CCI Holds Viacom 18, UFO Movies and Others Not in Abuse of Dominant Position
December 29, 2017
Shri Arjun, owner of M/s Prakash Cinema in Madhya Pradesh, filed information alleging abuse of dominant position by film producers, suppliers of Digital Cinema Equipment (‘DCE’) and Film & TV Producers Guild of India Ltd.
The Informant alleged that Opposite Party No. 7 wrongfully terminated an agreement for installation of DCE equipment required for screening films.
It was further alleged that the opposite parties prevented the Informant from carrying on business by denying access to DCE technology.
The Competition Commission of India held that only one entity can hold a dominant position under the Competition Act and therefore collective abuse allegations could not be sustained.
The CCI observed that several players were present in the DCE market, including:
- Opposite Parties No. 4–7
- Interworld
- Prasad Extreme Digital Cinema Network Pvt. Ltd.
The Commission held that the market remained competitive and Opposite Party No. 7 was not dominant in the relevant market.
With respect to allegations against Film & TV Producers Guild of India Ltd., the CCI observed that no evidence existed to substantiate the allegations.
The information was therefore ordered to be closed.
Shri Vijay Menon v. Maharashtra State Power Generation Co. Ltd.
November 30, 2017
The Informant challenged a tender condition introduced by Maharashtra State Power Generation Company Limited which disqualified bidders against whom inquiries or penalties for anti-competitive conduct were pending before the CCI or other courts.
The Informant alleged that such conditions violated the objectives of the Competition Act and amounted to abuse of dominant position.
The Competition Commission of India held that the Opposite Party, being a consumer, retained the discretion to prescribe disqualification conditions based on prior experience and operational requirements.
The Commission concluded that no competition law issue arose from the facts presented and no contravention of the Competition Act was made out.
MARKET DEVELOPMENTS
EC Approves Lufthansa’s Proposed Acquisition of Air Berlin Assets Through LGW Subject to Conditions
December 21, 2017
The European Commission examined Lufthansa’s proposed acquisition of Air Berlin assets through Luftfahrtgesellschaft Walter GmbH (‘LGW’).
The Commission assessed whether Lufthansa’s increased slot portfolio at various European airports would restrict market entry or expansion opportunities for competitors.
The EC identified concerns primarily at Düsseldorf airport in Germany where the acquisition could adversely affect passengers through reduced competition.
To address competition concerns, Lufthansa agreed to limit transfer of slots at Düsseldorf airport for the summer season.
Following the commitments, the EC concluded that the transaction would no longer raise competition concerns and approved the acquisition subject to compliance with the commitments.
EC Approves Acquisition of Zodiac Aerospace by Safran
December 21, 2017
The European Commission reviewed the proposed acquisition of Zodiac Aerospace by Safran.
Both parties were engaged in supplying aircraft electrical systems globally.
The EC found that the merged entity would continue to face strong competition from other established suppliers in the market.
The Commission also concluded that alternative suppliers would remain available in vertically related markets and therefore the merged entity would not have the ability to foreclose competition.
The acquisition was approved unconditionally as the EC concluded that it would not adversely affect competition in the relevant market.
CMA Approves Merger Between Just Eat and Hungryhouse
November 16, 2017
Just Eat PLC proposed acquisition of Hungryhouse Limited was examined by the Competition and Market Authority.
Both companies operated web-based food ordering platforms in the United Kingdom.
The CMA observed that Hungryhouse was significantly smaller in scale and exerted only limited competitive pressure on Just Eat.
The investigation further found that Hungryhouse had been operating at losses and faced increasing competition from:
- Deliveroo
- UberEats
- Direct restaurant ordering systems
The CMA concluded that the acquisition would not result in substantial lessening of competition in the relevant market.
CCI Approves Proposed Combination of Airtel and Tata Teleservices Limited
November 16, 2017
The proposed combination involved acquisition of 100% of the consumer mobile business of Tata Teleservices Limited and Tata Teleservices (Maharashtra) Limited by Airtel.
The CCI observed that Airtel’s spectrum holding in Bihar could exceed spectrum caps but noted that sufficient unsold spectrum remained available in all telecom circles.
The Commission further found that Tata was not a close competitor of Airtel because:
- Tata offered only 2G and 3G services.
- Tata did not intend to launch 4G services.
- Tata’s market share had been consistently declining.
The CCI also noted strong competitive constraints from Aircel, RJio and Vodafone-Idea in all telecom circles.
The proposed combination was approved as it was not likely to cause appreciable adverse effect on competition in India.
Government Exempts Certain Oil and Gas CPSE Combinations from Competition Act Provisions
November 22, 2017
The Central Government exercised powers under Section 54 of the Competition Act and exempted combinations involving Central Public Sector Enterprises operating in the oil and gas sector from Sections 5 and 6 of the Competition Act.
The exemption applied to enterprises operating under:
- The Petroleum Act, 1934
- The Oilfields (Regulation and Development) Act, 1948
The exemption also covered wholly and partly owned subsidiaries operating in the oil and gas sector.
The exemption remained valid for a period of five years from publication in the Official Gazette.
IN-HOUSE CONTRIBUTORS
Avsi Malik Sharma
Parnika Medhekar
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Doc ID: CL/24/18
