On June 28, 2016, the EU's second-highest court (the General
Court, or GC) confirmed a European Commission (EC) decision to
impose fines for an illegal non - compete provision agreed between
PT (formerly Portugal Telecom) and Telefónica (see here).
This arose out of the July 2010 acquisition by Telefónica of
the Brazilian mobile operator Vivo, which was then jointly owned by
Telefónica and PT. The companies inserted a clause in the
contract providing that they would not compete with each other in
Spain and Portugal as from the end of September 2010. The EC
imposed fines of €67 million on Telefónica and €12
million on PT. The GC turned down several imaginative arguments by
the parties, finding that: PT had failed to demonstrate that the
provision was incidental to the option of purchasing its shares
held by Telefónica (an option initially provided for and
later eliminated from the agreement) and to the resignation of the
members of its management board appointed by the Spanish company (a
resignation provided for in the final version of the
agreement).There was nothing to indicate that the clause contained
a self-assessment obligation (an argument based on the use of the
introductory wording, "to the extent permitted by law")
on which the entry into force of the noncompetition obligation
depended. (PT submitted that the clause contained two separate
obligations — a main self-assessment obligation and a
secondary noncompetition obligation — the second becoming
binding only if its lawfulness was established during the exercise
of the first. There was no evidence that the clause was imposed by
the Portuguese government or that it was in any event necessary for
it to refrain from blocking the agreement relating to the Vivo
operation. There was no reason why a clause providing for
noncompetition on the Iberian market might be considered
objectively essential for a transaction relating to the takeover of
shares in a Brazilian operator. The GC held that the very existence
of the clause was a strong indication of potential competition
between PT and Telefónica on the unrelated Iberian market.
The EC had therefore been correct to find that it amounted to a
bald marketsharing agreement which justified significant fines.
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The Legal Metrology Act, 2009 was passed by the Indian Parliament in order to repeal and replace The Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Enforcement) Act, 1985.
In the wake of liberalization and privatization that was triggered in India in early nineties, a realization gathered momentum that the existing Monopolistic and Restrictive Trade Practices Act, 1969 was not equipped adequately enough to tackle the competition aspect of the Indian economy.
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