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THE COMPETITION (AMENDMENT) ACT,
2007
Competition Official
Proposes 'Blacklisting' Cartelists
A Norwegian competition
regulator has told ethical business index FTSE4Good to
consider companies' history of cartel activity before
including them in its listing.
Kjell Sunnevag, senior
advisor at the Norwegian Competition Authority, says the
move will help dissuade investors from pumping money
into companies that have been found guilty of cartel
activity, and provide another deterrent to would-be
cartelists. "This would be a real contribution to the
fight the authorities wage against cartels," Sunnevag
says. "There are always a number of competing areas,"
Bhangoo says. Officials from the Norwegian government's
pension fund could not be reached for comment. Sunnevag
says he hopes managers at the fund will consider the
change next year during their annual meeting. Sunnevag
acknowledges that the proposal needs to be ironed out.
He and his colleagues have not yet worked out how the
index and the pension fund would handle companies
granted leniency in cartel investigations, or how long a
company would be excluded from the index following a
conviction.
To work out some of those
details, Sunnevag says he wants to consult other
competition authorities to gather their thoughts about
how - and how well - exclusion might work. The authority
hopes to begin that process soon. Jonathan Marciano,
spokesman for the UK's Office of Fair Trading, says that
the authority is in favour of any policy that will help
deter cartels from forming. "The [office] is supportive
of the idea," he says. "But we have not discussed the
issue with our Norwegian partners at a formal level."
(Global
Competition Review, October 26, 2007)
Mexico Fine-Tunes Its
Competition Law
Mexico's Federal
Competition Commission has amended its regulations on
the country's economic competition law.
The new rules clarify
procedures for pre-merger notifications,
predatory-pricing regulation, monopolistic practices and
leniency applications. In particular, the rules specify
that leniency applications should only be made via the
commission's designated contact number or email address,
that the commission has 48 hours to respond, that
applications will be reviewed in strict chronological
order, and that information provided will only be used
for identified procedures. "The commission can now order
audits, inspections and use other means without the need
of judicial warrants," he says. "But this does not mean
that it will not face legal teams that have means beyond
theirs." The new regulations were published in the
commission's official gazette in June 2006, but have
only come into force this month.
"Many of the procedural
novelties incorporated in the regulations were really
envisioned to facilitate filing before the commission,"
she says. "During the consultations, the commission was
open to any proposal that would facilitate procedures."
Ojeda adds that the new rules are incorporate provisions
that provide certainty to leniency applicants. But
Alvaro Sánchez, economic consultant at Valdes Abascal &
Brito Anderson in Mexico City, says the new regulations
are unlikely to affect competition enforcement.
(Global Competition Review, October 24, 2007)
Japan To Tighten Cartel
Measures
Japan's Fair Trade
Commission has proposed raising fines for cartel
ringleaders and expanding incentives for leniency
applicants.
The measures are part of
several proposals to broaden the scope of Japanese
competition law. If accepted, businesses within the same
company group could jointly apply for leniency. The
current system prevents a corporate group from receiving
full immunity if more than one of its companies is
implicated in a cartel. The commission has also
recommended increasing the number of companies that can
qualify for fine reductions in return for co-operating
with investigations. Currently, only three companies can
receive reductions of up to 30 per cent of their fine.
Uesugi says that the proposals would synchronise
Japanese competition law with its European and American
counterparts. "These initiatives are a sign of the
commission's eagerness for international harmonisation
of competition policies, and should be welcomed by
international antitrust community."
(Global Competition Review, October 22, 2007)
Luxembourg Meeting
Weighs Up Cartel Regulation
Competition specialists
from over 30 jurisdictions have gathered in Luxembourg
to discuss the challenges of promoting competition in
small economies. One question has divided panellists:
how best should cartels be regulated using limited
resources?
Dirk Arts, of Allen &
Overy LLP, wonders whether young authorities have the
capacity, "to go after the big boys". "There is a
temptation to pursue the 'easy win' rather than take on
companies with large resources," he says, adding that
political pressure weighs heavily on the fight against
cartels. Páll Gunnar Pálsson, director general of
Iceland's Competition Authority, acknowledges the
difficulties of prosecuting cartels in an environment
where "everybody knows everybody". Small economies can
support only a limited number of competitors, making it
hard to differentiate between cartels and naturally
occurring oligopolies. Delegates agreed that, in
enforcement, 'one size does not fit all'. Michal Gal, of
the University of Haifa in Israel, says it is possible
to "copy and paste" elements of laws from large
jurisdictions, but that economies differ, so "doctrines
must be adapted."
(Global Competition Review, October 17, 2007)
Japan's Leniency
Programme "A Great Success"
The leniency programme
introduced last year by Japan's Fair Trade Commission
has been praised by Commissioner Akira Goto at the IBA
conference in Singapore.
Speaking yesterday at a
session on international cartels, Goto said that the
programme was "a very powerful weapon which, combined
with increased penalties, has changed the mindset of
Japan's business community." Goto said that since the
programme came into effect in January last year, there
had been 150 applications for leniency from companies
involved in cartels, mostly from the construction
sector. This showed how broad the change in mindset had
been, he said. Thomas Mueller, an antitrust partner in
the Washington, DC and Brussels offices of Wilmer Cutler
Pickering Hale & Door LLP, says the Asia-Pacific region
was a significant growth area for cartel prosecutors,
and those who defend alleged cartelists. He said this
growth had been spurred in part by the US Department of
Justice's various investigations into the electronics
industry.
(Global Competition Review, October 16, 2007)
Mittal Challenges
Record Fine
Mittal Steel is appealing
against a US$96 million fine handed down by South
Africa's Competition Tribunal for excessive pricing.
When the fine was handed down last month, Jean Meijer,
of Bowman Gilfillan in Johannesburg, told GCR that
Mittal could potentially face a class action in South
Africa. "The decision will presumably be appealed, but
if Mittal loses the appeal, the door will be open for
any user of steel to claim civil damages," she says,
adding that this may be the "perfect case" for a
US-style class action: "Mittal's pricing policies have
resulted in additional revenue of well over R20 billion
[US$2.8 billion] and this may be a good proxy for the
damages suffered by South Africa consumers." Earlier
this year it was referred to the competition tribunal
for abusing its dominant position in the low carbon wire
rod market. According to the investigating case team,
Mittal Steel reduced competition by offering
discriminatory prices.
(Global Competition Review, October 8, 2007)
Hungary Vows To Avoid
Mol Takeover Dispute
Ferenc Gyurscany, the
Hungarian prime minister, on Friday pledged to avoid a
conflict with Brussels over a planned law that would
protect Mol, the country’s biggest energy group, from
hostile takeovers.
“It’s obvious this
regulation has to meet European Union standards. I hope
we will fulfil this requirement and if we don’t, we have
to change [the draft],” said Mr Gyurscany in a Financial
Times interview.
The prime minister was
responding to a warning from the European Commission
that Budapest would face legal action if its draft law
did not comply with EU rules.
The draft law, which is
due to be ratified this month, is widely seen in the
energy industry as an attempt to block a takeover
approach from Austria’s OMV, which last week made a
$14bn (€10bn, £6.9bn) conditional bid for Mol.
The draft law, popularly
called Lex Mol, will not target foreign bidders as such
but will give the authorities rights to protect assets
of “strategic” importance.
Mr Gyurscany said he was
not against foreign takeovers but he had concerns about
state-controlled companies and sovereign investment
funds.
Although the prime
minister did not name OMV in this context, its biggest
shareholder is the Austrian state.
Mr Gyurscany said: “We
privatised Mol because we believe Mol has to be in
private hands.”
He defended Hungary’s
right to define a few sectors, including energy, as
strategic. He said: “Hungary is one of the most open
economies in this region. We operate a very
market-oriented policy but we should not be silly or
insane.”
Mr Gyurscany said that
while Mol was a private company it was an important
Hungarian company in the sense that it represented
Hungarian corporate culture and was “very sensitive to
Hungary’s interests”.
Mr Gyurscany is trying to
tread a careful line between EU rules and popular
demands for protecting Mol. Almost all Hungarians want
Mol to remain Hungarian-owned and are particularly
annoyed by a hostile approach from Vienna, the former
imperial power.
(The Financial Times, October 6 2007)
Mittal SA Risks Higher
Fine if it Appeals
Steel giant Mittal SA has
been advised to reconsider its decision to possibly
appeal a record fine of nearly R700 million (over $95
million) imposed by the Competition Tribunal of South
Africa, as a group of local steel users may institute a
class action that could see damages of R20 billion being
claimed
Source:
www.sify.com
Published on: September 10, 2007
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British Airways Faces
Fine
A price-fixing
investigation, which netted rare guilty pleas and nearly
$850 million in fines from British Airways PLC and
Korean Air Lines Co., still has several other airlines
in the crosshairs, U.S. officials said.
Source:
Wall Street Journal
Published on:
August 1, 2007
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UK Regulator Says
British Airways Fine a Warning to Business
Sean Williams, executive
director of the U.K. Office of Fair Trading, talks with
Bloomberg's Sara Walker from London about the imposition
of a record penalty of 121.5 million pounds ($247
million) on British Airways Plc for colluding with
Virgin Atlantic Airways on the level of fuel surcharges.
Source:
Wall Bloomberg
Published on:
August 1, 2007
Read More...
British Airways hit by
massive double fine
British Airways has been
fined almost £270 million by British and US authorities
after it admitted "anti-competitive activity" involving
fuel surcharges on long-haul flights. The airline was
fined £121.5 million by the Office of Fair Trading this
morning, then hit with a $300 million (£147 million)
penalty by the Department of Justice in washington.
Source:
Telegraph
Published on:
August 1, 2007
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