EUROPEAN UNION – EUROPEAN COMMISSION
European Commission Fines Six Car Air Conditioning and Engine Cooling Suppliers €155 Million in Cartel Settlement
March 08, 2017
The European Commission imposed fines totaling €155 million on six automobile component suppliers for participating in cartels relating to air conditioning and engine cooling components supplied to car manufacturers in the European Economic Area.
The companies involved included:
- Mahle Behr GmbH & Co KG
- Calsonic Kansei Corporation
- Denso Corporation
- Panasonic Corporation
- Sanden Handling Corporation
- Valeo S.A.
The Commission found that the companies coordinated prices, exchanged commercially sensitive information and allocated markets.
The collusive practices were carried out through:
- Trilateral meetings in Europe
- Bilateral meetings in Europe and Japan
- Email communications
- Telephone discussions
Denso and Panasonic received immunity for certain cartels after disclosing the arrangements to the European Commission.
The fines were determined based on:
- Sales value within the EEA
- Nature of infringement
- Geographic scope
- Duration of cartel activities
UNITED STATES OF AMERICA (‘US’) – FEDERAL TRADE COMMISSION (‘FTC’)
FTC Approves Final Order Against Ophthalmologists’ Illegal Boycott in Puerto Rico
March 03, 2017
The Federal Trade Commission approved a final order settling charges against Cooperativa de Médicos Oftalmólogos de Puerto Rico (‘OFTACOOP’).
OFTACOOP was alleged to have unlawfully coordinated competing ophthalmologists to refuse dealing with:
- MCS Advantage Inc.
- Eye Management of Puerto Rico LLC
MCS attempted to establish a lower-cost healthcare network for eye treatment services in Puerto Rico.
The FTC observed that the boycott prevented the creation of a competitive healthcare network and restrained competition among ophthalmologists.
The consent order prohibited OFTACOOP from:
- Coordinating refusals to deal with payors
- Threatening collective boycotts
- Restricting individual negotiations with payors
- Facilitating agreements on pricing or contract terms
INDIA – COMPETITION COMMISSION OF INDIA (‘CCI’)
CCI Imposes Penalty on Coal India Limited for Abuse of Dominant Position
March 24, 2017
The Competition Commission of India found Coal India Limited (‘CIL’) and its subsidiaries guilty of imposing unfair and discriminatory conditions in Fuel Supply Agreements (‘FSAs’) executed with power producers.
The matter arose from information filed by:
- Maharashtra State Power Generation Company Ltd.
- Gujarat State Electricity Corporation Limited
The Commission held that CIL and its subsidiaries enjoyed dominance in the market for production and supply of non-coking coal in India.
CCI observed that the terms of the Fuel Supply Agreements were unilaterally imposed upon buyers without bilateral negotiation.
The Commission identified unfair clauses relating to:
- Sampling and testing procedures
- Transportation and related expenses
- Supply of ungraded coal
- Compensation restrictions
CCI directed Coal India to:
- Modify the Fuel Supply Agreements
- Consult stakeholders while revising agreements
- Ensure uniformity between agreements
- Adopt fair sampling procedures
A penalty of INR 591.01 crore was imposed on Coal India Limited.
MARKET DEVELOPMENTS
American Guild of Organists Agrees to Settle FTC Charges Restricting Competition
March 31, 2017
The FTC alleged that the American Guild of Organists (‘AGO’) restrained competition among organists and choral conductors through its Code of Ethics.
The Guild was accused of:
- Restricting members from freely accepting work
- Recommending standard fees
- Issuing compensation schedules
- Restricting competitive pricing practices
The FTC noted that these practices increased costs for consumers and limited competition between musicians.
Under the proposed consent order, AGO agreed to:
- Stop issuing compensation schedules
- Allow members to independently seek work
- Implement antitrust compliance programs
- Ensure chapter compliance certification
FTC Requires DaVita to Divest Clinics Following Renal Ventures Acquisition
March 28, 2017
The Federal Trade Commission required DaVita Inc. to divest seven dialysis clinics in connection with its acquisition of Renal Ventures Management LLC.
The FTC observed that the merger would significantly reduce competition in dialysis services across multiple regions including:
- Brick
- Clifton
- Somerville
- Succasunna
- Trenton
- Denton
- Frisco
The Commission noted that the merger could lead to:
- Higher treatment costs
- Reduced quality of services
- Monopoly or near-monopoly market structures
Under the settlement, DaVita agreed to:
- Divest seven clinics
- Retain physician services post-transfer
- Avoid contracting with divested clinic directors for three years
CCI Approves Acquisition of 51% Shareholding in HSCL by NBCC
March 31, 2017
The Competition Commission approved acquisition of 51% shareholding in Hindustan Steel Works Construction Limited (‘HSCL’) by NBCC (India) Limited.
The Commission observed that both parties operated in the construction sector but continued to face competitive constraints from major market participants.
CCI concluded that the transaction was not likely to cause appreciable adverse effect on competition in India.
Notification Regarding De Minimis Exemption Under Competition Act
March 27, 2017
The Central Government granted exemptions under Section 54(a) of the Competition Act for certain acquisitions, mergers and amalgamations.
The exemption applied where:
- Assets did not exceed ₹350 crore in India
- Turnover did not exceed ₹1000 crore in India
The exemption remained effective for five years from publication in the Official Gazette.
CMA Accepts Mastercard and VocaLink Proposal Addressing Competition Concerns
April 11, 2017
The Competition and Market Authority reviewed Mastercard’s proposed acquisition of VocaLink Holdings Ltd.
The investigation focused on competition concerns in payment infrastructure services relating to:
- Bacs payment systems
- Faster Payments Service (FPS)
- LINK ATM network
CMA observed that Mastercard and VocaLink were among the most credible providers of infrastructure services for the LINK ATM network.
To resolve the concerns, the parties proposed commitments including:
- Providing connectivity access to competitors
- Transfer of intellectual property rights
- Contribution towards switching costs for LINK ATM members
The CMA accepted the proposals as sufficient remedies.
CMA Accepts Menzies Proposal Following ASIG Acquisition Concerns
April 25, 2017
The Competition and Market Authority investigated Menzies Aviation’s acquisition of ASIG.
The inquiry related to supply of ground handling services at Aberdeen Airport.
CMA found that the merger would reduce competition by decreasing the number of ground handling providers from three to two.
To resolve competition concerns, Menzies agreed to divest ASIG’s ground handling business at Aberdeen Airport to Dalcross Handling.
European Commission Clears Acquisition of ITP by Rolls-Royce Subject to Conditions
April 19, 2017
The European Commission approved Rolls-Royce’s acquisition of aircraft engine component manufacturer ITP subject to commitments.
The Commission identified concerns relating to the Europrop International GmbH (‘EPI’) military engine consortium.
The merger raised concerns that Rolls-Royce could influence decisions affecting competitiveness of aircraft engine markets.
Rolls-Royce offered commitments modifying EPI governance structures to eliminate conflicts of interest.
The Commission concluded that, with the commitments, the transaction would no longer raise competition concerns.
European Commission Prohibits Merger Between Deutsche Börse and London Stock Exchange
March 29, 2017
The European Commission prohibited the proposed merger between Deutsche Börse AG and London Stock Exchange Group.
The Commission concluded that the transaction would create a de facto monopoly in clearing fixed income instruments across Europe.
The merger would have combined major clearing houses including:
- Eurex
- LCH.Clearnet Ltd
- LCH.Clearnet SA
- Cassa di Compensazione e Garanzia
The Commission also identified concerns regarding downstream markets including:
- Settlement services
- Custody services
- Collateral management
The EC concluded that the merger would significantly restrict competition and therefore prohibited the transaction.
Historical Note – The 1414 Dyer’s Case
English Common Law Reference
The 1414 Dyer’s Case is regarded as one of the earliest restrictive trade agreement cases under English common law.
The court refused to enforce an agreement restricting a dyer from practicing his trade in the same town for six months because the agreement was considered an unlawful restraint of trade.
IN-HOUSE CONTRIBUTORS
Neha
Avsi Malik Sharma
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Doc ID: CL/20/17
