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Uruguay joins the competition club

Uruguay is ushering in a 'new era' of competition law, following the introduction of its inaugural antitrust act.The new law unites all of Uruguay's pre-existing antitrust regulation for the first time. Specifically, it defines the terms 'dominant market' and 'relevant market', and expressly prohibits abuse of dominance and other restrictive practices.

According to the law, Uruguay's competition agency will investigate alleged anti-competitive conduct using 'rule of reason' analysis, rather than identifying per se violations, as some commentators had expected. Lucia Grazioli, of Pescadere Facal Peri Labandera & Pezzutti in Montevideo, says the new law aims to protect consumers by promoting competition and free market access. "In general, every market shall be governed by the principles and rules of free competition, except for certain limitations considered to be in the general interest," he says.

Source: Global Competition Review
Published on: September 27, 2007

FTC launches international co-operation scheme

The US Federal Trade Commission is setting up a pilot programme to strengthen relationships with international competition agencies.The programme will allow foreign competition officials to join the commission as 'fellows' for approximately three months. The FTC's chair, Deborah Platt Majoras, launched the scheme at a conference in Washington, DC, yesterday. The first international fellow, from CADE, Brazil's competition authority, starts work at the commission today.

A fellow from Canada's Competition Bureau will join the FTC next month; a third, from Hungary's Competition Authority, is expected to start in January 2008. Thomas Mueller, of Morrison & Foerster LLP in New York, says the programme demonstrates the FTC's continuing efforts to "forge co-operative relationships with their counterparts abroad." "Past efforts have focused on the EU," he adds. "But that relationship is strong and fairly institutionalised. Current efforts appear to be aimed at bringing other countries who have demonstrated an interest in antitrust enforcement into the fold."

Source: Global Competition Review
Published on: September 27, 2007

Barnett demands greater consensus on unilateral conduct

Thomas Barnett, assistant attorney general of the US Department of Justice's antitrust division, has called for "more dialogue and more careful thought" about unilateral conduct. Speaking today at a conference at Georgetown Law School in Washington, DC, which is sponsored by Howrey LLP and Wachtell Lipton Rosen & Katz, Barnett affirmed the importance of vigorous enforcement of unilateral conduct. However, he warned that rather than helping consumers, unduly restrictive standards "can have the unfortunate consequence of harming consumers by chilling innovation and discouraging competition".

Barnett said he had often spoken out against inappropriate enforcement, and admitted that the United States had previously failed to appreciate "the potential competitive effect of many activities".However, he also warned other antitrust authorities to be "careful to consider the geographic scope of their actions". Quoting the US Supreme Court in the Empagran case, Barnett said antitrust enforcement can often create "a risk of interference with a foreign nation's ability independently to regulate its own commercial affairs".

Last week, Barnett criticised the Court of First Instance's decision to uphold the European Commission's case against Microsoft. DG Comp fined the US software company almost $1bn in 2004 for abusing its dominant position. His comments drew a stinging rebuke from the European competition commissioner, Neelie Kroes, who called then "totally unacceptable".

Source: Global Competition Review
Published on: September 26, 2007

Kroes slams 'unacceptable' DOJ criticism

European competition commissioner Neelie Kroes has hit back at criticism from the US Department of Justice over this week's Microsoft ruling. In a sharply-worded press release, the head of the DOJ's antitrust division, Thomas Barnett, faulted the European Court of First Instance's decision to uphold the commission's €500 million fine. In particular, Barnett levelled his sights on the court's approach to dominant firm conduct. The ruling "may have the unfortunate consequence of harming consumers by chilling innovation and discouraging competition," he said. Speaking to reporters in Brussels on Wednesday, Kroes called Barnett's comments "totally unacceptable". "The European Commission does not pass judgment on rulings by US courts, and we expect the same degree of respect from US authorities on rulings by EU courts," she said.

However, Philip Marsden, director of Competition Law Forum at the British Institute of International and Comparative Law, says Barnett will have considered the consequences of his criticism before speaking out. "I think it's a very bold move from the DOJ to comment on a court judgment, but it shows how important it is to have a clear rational theory of consumer harm," he says.
"Barnett is meeting Kroes next week in New York, and he could have said something to her privately then, but he obviously he felt it was so important that he wanted to use this route."

However, the public sparring is unlikely to significantly affect the agencies' strong relationship, Marsden predicts. "I wouldn't expect this sort of rift to affect that relationship, but I would expect it to bring into sharp relief where the line is drawn," he says.

Source: Global Competition Review
Published on: September 20, 2007

Competition comes to the Caribbean

The community of Caribbean nations - Caricom - is to launch its inaugural Competition Commission on 30 November. Barbara Lee, head of Jamaica's Fair Trading Commission, says the launch will be "a big event in the life of the region." Caricom's chairman, the Barbadan prime minister Owen Arthur, said the establishment of a competition authority was crucial, following the liberalisation of cross-border investment rules. "I want to stress how important this is, that having created a free market, we must now make it a fair market," he said earlier this year. Daniel Sokol, antitrust specialist at the University of Missouri-Columbia, spoke at the OECD's workshop 'Increasing Competition in Latin America and the Caribbean' earlier this year. Sokol told GCR today that the Caricom commission should build on the competition culture established by the existing authorities. "However, outside of the EU, regional competition bodies have had, for the most part, limited effectiveness," he says.

Source: Global Competition Review
Published on: September 19, 2007

Fels rejects "radical" Australian law

The former head of Australia's Competition and Consumer Commission, Allan Fels, has dismissed a new law aimed at prohibiting predatory pricing. The so-called Birdsville amendment, which is in the final stages of enactment, would adapt Australia's Trade Practices Act to reduce the burden of proof in predatory pricing cases.

Currently, businesses must prove that a competitor has substantial market power. If the amendments are adopted, complainants need only show that companies hold a substantial share of the market. Fels, who stood down as chairman of the ACCC in 2003, says the proposal is "a radical departure from laws anywhere in the world. Wolfgang Hellmann, of Blake Dawson Waldron in Sydney, agrees. "The amendments are extraordinary, a real backward step for competition regulation in Australia," he says. "These new concepts and ambiguities can only result in uncertainty and litigation. As a result, companies with significant market shares will need to consider their position carefully before engaging in discounting below a fully allocated cost level. This is an outcome which is likely to be to the detriment of consumers."

"The Australian government and the big business lobby made no concessions [to the concerns]. There were no significant 'moderate' proposals to adapt the dominance law, and the result is that the small business lobby has succeeded in persuading the government to enact a law which will astonish most people around the world." Depending on the timing of the forthcoming Australian election, the new bill could become law during the September/October sitting of parliament.

Source: Global Competition Review
Published on: September 19, 2007

Indian parliament clears competition bill

India's competition law is tipped to come into force by mid-2008, after the country's parliament this week approved the competition amendment bill. The bill, which still requires presidential approval, establishes the Competition Commission as the country's market regulator, replacing the Monopolies and Restrictive Trade Practices Commission (MRTPC).

It also includes provisions for mandatory merger notification and the establishment of a three-member Competition Appellate Tribunal to hear appeals against commission decisions.

Saroj Jha, of Fox Mandal Little, says the bill fleshes out aspects of the 2002 competition act: "Apart from clarifying the composition and powers of the commission and the tribunal, the bill also enhances the limits of the penalties which may be imposed," he says. Atul Chitale, head of the merger and competition team at A Y Chitale & Associates, says the bill gives the commission more teeth to tackle competition infringements: "The competition commission would be a powerful body with very wide powers," he says. "It would go a long way in maintaining healthy competition among Indian corporations and businesses."

Source: Global Competition Review
Published on: September 14, 2007

Competition panel to become fully operational by mid-2008

The government today said the Competition Commission of India, set up to safeguard the interest of consumers against misuse of market dominance by large corporates, will become fully operational by mid-2008.

Source: www.outlookindia.com
Published on: September 13, 2007

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‘Let there be a judicial body initially'

The Competition (Amendment) Bill 2007 has been passed by the Parliament. It is worth recalling how the Act was stuck up in litigation before it took off in the Supreme Court. The court decided on the writ petition (Brahm Dutt vs Union of India) on January 20, 2003.

Source: The Economic Times
Published on: September 13, 2007

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Parliament passes Competition Bill

New Delhi, Sept 10: The Parliament today passed the Competition (Amendment) Bill, 2007, which seeks to provide statutory powers to the Competition Commission of India (CCI). After the assent by the President to the Bill, the Government will operationalise the CCI that was set up in 2003.

Source: www.dailyindia.com
Published on: September 13, 2007

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South Africa: Amendments to Competition Act expected

The director-general of Trade and Industry, Tshediso Matona, said Cabinet is reviewing draft amendments to the Competition Act. Although these amendments would not, in Matona's view, fundamentally overturn the existing provisions of the Act, it would significantly strengthen the Competition Commission's ability to prevent market domination and price collusion.

Parallel to these amendments, government is also looking at the relationship between economic regulators and the DTI. These relationships, and the interaction between different regulators, need to be clearly defined, in order to prevent arbitrage as companies shop around for the regulator that would give them the answers they wanted. Telecommunications, banking and the carbon-steel industry is identified as specific focus areas.

DTI Minister Mandisi Mpahlwa recently informed Parliament that the effectiveness of the Competition Commission is being addressed, as part of the revision of the Competition Act. This follows after continuous criticism that the Commission authorities take too long to reach decisions.

The plan is to grant the Commission greater investigative power to be more effective in its function. This "extra muscle" will be aimed at targeting industries notorious for price-fixing, such as banking, telecommunications and carbon steel industries. Fungai Sibanda, chief director for policy and legislation at the DTI, warned that the review of competition policy could be a long process.

The Competition Commission plans to afford more protection to whistle-blowers on competition issues. This appears from the annual report of the Commission, tabled in Parliament on Monday, suggesting more legal certainty for potential informants on cartel behaviour and related issues. A discussion paper was drawn up by the Commission, and discussions with the various stakeholders are to follow.

Source: Global Competition Review
Published on: September 7, 2007

Brazil's New Leniency Tool Enters Force

Brazilian competition officials can now accept direct settlements from defendants in cartel access. A regulation legitimising such settlements entered effect today. Officials hope the regulation will allow clear-cut cases to be settled quickly with the payment of an appropriate sum, rather than fought hard at every stage. The prospect of direct settlements was trailed earlier this year but it has taken long negotiations between tiers of the enforcement system to finalise the details. Until now, cartel members in Brazil have had no incentive to co-operate with competition officials if the missed the first leniency slot. In Brazil, only the first whistleblower qualifies for immunity.

The sums resulting from direct settlements could be as little as one per cent of an infringing company's annual turnover, but no ceiling is included in the new law, which Brazil's government approved in June. Ana Paula Martinez, director of the competition department at Brazil's Secretariat of Economic Law says, "Settling cartel cases is a win-win game that benefits the government, cooperative defendants, the judicial system, and the public at large... Early co-operation on the part of the defendants will save public resources, cut down litigation, enable early payment of a significant sum of money and provide expedited treatment and more certainty and transparency to the business community."

Source: Global Competition Review
Published on: September 6, 2007

Israeli Authority Secures Jail Time

An Israeli liquified petroleum gas distributor faces 100 days in jail for his part in a cartel, following a plea bargain with the country's Antitrust Authority. As part of the plea bargain, which is still subject to court approval, SuperGas's former head of commerce, Moshe Oldek, will also pay a 150,000 shekel (US$36,000) fine, with the company paying 3.8 million shekels (US$920,000).

SuperGas is the latest liquified petroleum gas company to offer a plea bargain to the authority, after it pressed criminal charges against the four dominant companies - Pasgas, Amisragas, Supergas and Dorgas - in 2004. Executives from Pasgas, Amisragas and Supergas have now all admitted to colluding to stifle competition between 1994 and 1996. Dorgas' trial is still being heard in Jerusalem District Court. Oldek is the first of the executives to accept imprisonment for his role in the cartel. Pasgas's chief executive officer decided to pay a larger fine of 1.25 million shekels (US$300,000), and serve 14 days community service, while Amisragas's chief executive had to pay 1 million shekels (US$240,000), and serve 30 days community work.

According to the authority, the case "is one of the most substantial litigation cases in Israel and the largest scale criminal antitrust case ever led by the authority. The process involved 215 prosecution witnesses and over 30,000 documents containing relevant evidence," it says in a statement.

Source: Global Competition Review
Published on: September 6, 2007