Competition Update - January 2007
22 January 2007
European Commission's second
highest overall cartel fine
The European
Commission has recently imposed a fine of €519 million on companies
involved in a synthetic rubber cartel. This is the Commission's
second highest overall cartel fine. One of the companies got 100%
immunity (and saved €204 million) by blowing the whistle on the
cartel.
Action taken for breaking a seal
during a dawn raid
The European Commission has recently accused E.ON Energie AG of
breaking a seal during a dawn raid conducted in May 2006. If the
Commission concludes that its allegations are correct, it can
impose a fine of up to 1% of the total group turnover of E.ON
Energie in the preceding business year.
New Commission guidelines on
immunity from fines
The European Commission has taken another step to encourage
companies to come forward with information on cartels with the
coming into force of the Commission's new leniency notice on 8th
December 2006. The Commission's leniency regime offers full
immunity against, or a reduction in, a fine which would otherwise
be imposed on a cartel member in return for either blowing the
whistle or coming forward with key information.
The most important developments brought about by this new
notice, which replaces that of 2002, are:
- the provision of helpful clarifications on the information
which a company needs to provide in order to obtain full immunity
against, or a reduction in, a fine;
- the introduction of a "marker" system under which a company
applying for full immunity can guarantee its place in the queue of
informants by providing limited information on the cartel with more
detailed information to follow at a later stage; and
- protection of information provided by companies in so-called
"corporate statements" from disclosure to third parties such as
complainants in damages proceedings.
New Commission guidelines on
setting fines for breaches of EC competition
law
On the 1st September 2006 new Commission
guidelines on the method for setting fines for breaches of Article
81 (which prohibits anti-competitive agreements) and Article 82
(which prohibits the abuse of a dominant position) entered into
force. Neelie Kroes, the EC Competition Commissioner, said "The
three main changes - the new entry fee, the link between the fine
and the duration of the infringement, and the increase for repeat
offenders - send three clear signals to companies. Don't break the
anti-trust rules; if you do, stop it as quickly as possible, and
once you've stopped don't do it again... If companies do not pay
attention to these signals, they will pay a very high price."
(Commission Press Release IP/06/857).
Scrutiny of joint venture
interests in merger control analyses
The Office
of Fair Trading ("OFT") has, for the first time, identified
competition law concerns in a merger which would result in the two
main competitors in a local area becoming parties to a joint
venture. The OFT's concern was that the involvement of these two
main competitors in the joint venture would result in the
coordination of their activities.
GSK Spain - parallel trade in
pharmaceuticals
A partial victory for the pharma industry as the European Court of
First Instance overturns a Commission decision condemning GSK
Spain's "dual-pricing" system for pharmaceuticals. The Court found
that the Commission should have taken greater account of the
special features of the pharmaceutical industry in deciding whether
or not restrictions on parallel trade were justified. The case has
now returned to the Commission for reconsideration.