INDIA – COMPETITION COMMISSION OF INDIA (‘CCI’) COMPETITION ACT, 2002 (‘ACT’)
CCI Imposes Penalty on Ghaziabad Development Authority for Abuse of Dominant Position
February 28, 2018
Shri Satyendra Singh, an allottee under the Pratap Vihar residential housing scheme launched by the Ghaziabad Development Authority (‘GDA’) for the Economically Weaker Sections (‘EWS’), alleged that GDA arbitrarily increased the sale price of flats from ₹2,00,000 to ₹7,00,000 without any enabling provision in the scheme brochure or allotment letter.
The Competition Commission of India directed the Director General to investigate the matter regarding abuse of dominant position.
The investigation concluded that consumers in the relevant market were heavily dependent on GDA and that the authority imposed unfair conditions on allottees.
The Director General found that GDA imposed penal interest at the rate of 10.5% per annum for delay in payment by allottees without any corresponding liability upon GDA for delay in possession of flats.
GDA argued that it was not an enterprise under the Competition Act and that escalation of prices was standard practice in such projects.
However, the CCI observed that GDA was engaged in economic activities for commercial consideration and that the allottees, belonging to the EWS category, had little or no alternative recourse.
The Commission held that the conduct of GDA amounted to abuse of dominant position under Section 4(1) read with Section 4(2)(a)(i) of the Competition Act.
Accordingly, the CCI imposed a penalty of ₹1,00,60,794 on GDA for anti-competitive conduct.
CCI Issues Order Against Google for Search Bias and Imposes Penalty
February 08, 2018
Matrimony.com and Consumer Unity and Trust Society (‘CUTS’) filed information against Google LLC and Google Private Limited alleging contravention of Section 4 of the Competition Act.
The informants alleged that Google manipulated search engine result pages and steered users towards its own products and vertical partners.
It was further alleged that Google’s algorithms unfairly favoured its own services and captured consumer attention prominently.
The Competition Commission of India directed the Director General to investigate the matter.
The investigation found that Google enjoyed a dominant position in the markets for online general web search services and online search advertising services in India.
The Commission observed that Google’s search algorithms harmed consumers by prioritising Google’s own services rather than presenting neutral search results.
Consequently, the CCI imposed a penalty at the rate of 5% of Google’s average total revenue generated from India operations for the financial years 2013, 2014 and 2015.
The total penalty imposed amounted to ₹135.86 crore for contravention of Section 4(2)(a)(i) of the Competition Act.
UNITED KINGDOM (‘UK’) – COMPETITION AND MARKET AUTHORITY (‘CMA’)
CMA Clears Anticipated Merger Between Aviagen Group Holding Inc. and Hubbard Holding SAS Inc.
February 28, 2018
Aviagen Group Holding Inc. agreed to acquire most of the business of Hubbard Holding SAS Inc.
Both parties were prominent players in the broiler stock breeding industry and operated globally.
The CMA found that Aviagen had a high share of supply in conventional chicken parent stock, but the increment resulting from the merger was insufficient to substantially lessen competition.
The investigation also noted that Hubbard operated in slow-growing chicken parent stock, whereas Aviagen did not supply that product in the UK.
Accordingly, the CMA concluded that there was no realistic prospect of substantial lessening of competition and approved the merger.
UNITED STATES OF AMERICA (‘US’) – FEDERAL TRADE COMMISSION (‘FTC’)
Alimentation Couche-Tard Divests Fuel Stations to Acquire Holiday Companies Inc.
February 16, 2018
Alimentation Couche-Tard (‘ACT’), a multinational convenience store operator, proposed acquisition of Holiday Companies Inc. involved acquisition of over 380 retail fuel outlets across ten states.
The FTC received complaints alleging that the acquisition would increase the risk of unilateral and coordinated anti-competitive effects in those markets.
To address competition concerns, ACT and its affiliate CrossAmerica Partners LP agreed to divest ten fuel stations located in Minnesota and Wisconsin.
The FTC observed that the divestitures would reduce potential anti-competitive effects resulting from the acquisition.
The acquisition was approved subject to a thirty-day public comment period.
Seven & I Holdings Co Ltd Required to Divest Retail Fuel Outlets in $3.3 Billion Acquisition
January 19, 2018
Seven & I Holdings Co Ltd, parent company of 7-Eleven, proposed acquisition of Sunoco LP raised competition concerns in multiple local fuel retail markets across the United States.
The FTC complaint alleged that the acquisition would result in highly concentrated markets and could enable unilateral price increases.
To address these concerns, 7-Eleven agreed to sell 26 retail fuel outlets and allow Sunoco to retain 33 outlets that otherwise would have been acquired.
Under the consent agreement, Sunoco retained full control over fuel pricing and supply at these locations.
The FTC continued evaluation of the proposed consent order following a public comment period.
MARKET DEVELOPMENTS
CCI Approves Merger of Shree Renuka Sugars Ltd by Wilmar Sugar Holdings Ltd
February 02, 2018
Wilmar Sugar Holdings Ltd, a wholly owned subsidiary of Wilmar International Limited, sought approval for acquiring sole control over Shree Renuka Sugars Ltd.
The proposed combination involved termination of the existing joint venture agreement and restructuring of the board of directors.
The Competition Commission of India noted overlap between the parties only in the sugar market.
The Commission further observed that Wilmar Group was engaged in trading raw and refined sugar, while Shree Renuka Sugars was engaged in manufacturing and distribution of sugar and ethanol.
The CCI concluded that the proposed combination was not likely to have an appreciable adverse effect on competition in India and approved the transaction.
Reliance Aerospace Ltd Merger with Thales India Private Limited Approved by CCI
February 09, 2018
Reliance Aerostructure Limited and Thales India Private Limited filed a joint notice before the Competition Commission of India for a proposed joint venture.
The proposed combination involved Reliance Aero holding 51% equity share capital and TIPL holding 49% equity share capital.
The venture was proposed as part of offset obligations relating to the Rafale aircraft agreement between the Governments of India and France.
The CCI found that the parties were not engaged in activities relating to production, supply or services at different stages of the same production chain.
Accordingly, the CCI approved the proposed combination under Section 31(1) of the Competition Act.
Cott Facility Merger by Refresco Raises Competition Concerns
January 17, 2018
Refresco Group N.V proposed acquisition of Cott Corporation raised competition concerns before the UK Competition and Market Authority.
The CMA investigation focused on the APET juice drinks segment in the United Kingdom.
The investigation revealed that only two factories in the UK produced APET products using a specialised aseptic process.
Refresco proposed divestment of the APET facility in Nelson, Lancashire, including customer contracts, personnel and associated assets.
However, the CMA remained concerned that substantial lessening of competition could still arise despite the commitments offered.
Consequently, the matter was referred for a Phase 2 investigation under Section 33(1) of the Competition Act.
European Commission Fines Maritime Car Carriers and Car Parts Suppliers €546 Million
February 21, 2018
Several maritime carriers including CSAV, K-Line, MOL, NYK and WWL-EUKOR formed a cartel in the market for maritime transportation of motor vehicles.
The cartel operated from late 2006 to late 2012 and involved coordination of prices, customer allocation and exchange of commercially sensitive information.
The investigation found that the parties agreed to maintain market status quo and assist each other in tenders by quoting artificially high prices.
The anti-competitive conduct significantly affected European car importers and consumers.
MOL later submitted an immunity application assisting the Commission’s investigation.
The Commission imposed total fines amounting to €546 million on the parties for cartelisation and anti-competitive conduct.
European Commission Approves Discovery’s Acquisition of Scripps Subject to Conditions
February 06, 2018
Discovery Communications Inc. proposed acquisition of Scripps Network Interactive Inc. raised competition concerns in Europe.
The transaction would have resulted in Discovery controlling approximately 20% of ad-supported pay-TV audiences in Europe.
To secure approval, Discovery offered commitments including allowing third-party distribution of Polish TV channels TVN24 and TVN24 BiS.
The Commission observed that the commitments adequately addressed concerns relating to increased bargaining power in Poland.
The Commission further concluded that limited overlaps existed in other European regions and therefore approved the acquisition subject to compliance with the commitments.
IN-HOUSE CONTRIBUTORS
Parnika Medhekar
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Doc ID: CL/25/18
