UK: Focus Antitrust: Competition Weekly Email Alert - 20 April 2011

Last Updated: 26 April 2011
Article by Paul Stone

In the News

The OFT has issued its decision finding that Reckitt Benckiser has abused its dominant position, contrary to Article 102 TFEU and the Chapter II prohibition of the Competition Act 1998, by withdrawing and de-listing Gaviscon Original Liquid from the NHS prescription channel in 2005, following expiry of its patent but before the publication of the generic name for it. This meant that NHS prescriptions were issued for the patent protected Gaviscon rather than for generic alternatives. The OFT found that Reckitt Benckiser's actions had the object of limiting pharmacy choice and hindering competition from generic medicines and has imposed a fine of £10.2 million. Click here.

The High Court has delivered a judgment upholding a claim by Purple Parking Limited and Meteor Parking Limited that Heathrow Airport Limited (HAL) had breached the Chapter II prohibition of the Competition Act 1998 in relation to the provision by it of access to the forecourts at Heathrow Airport Terminals 1, 3 and 5. The High Court found that HAL had abused its dominant position by applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage, in breach of Article 18(2)(c) of the Competition Act.

The CAT has delivered its final judgments in the appeals against the OFT's construction bid-rigging/cover pricing decision. In the six penalty only appeals it found that that the OFT had erred in a number of respects. The relevant turnover used in calculating the starting point of the fines should have been for the business year prior to the infringement and not the decision. Further, the OFT had applied the Minimum Deterrent Threshold mechanistically which resulted in excessive and disproportionate fines. In addition, the CAT found that the OFT had failed sufficiently to consider the particular circumstances of the industry in calculating the penalties imposed. The total fines imposed were reduced from roughly £5.5 million to about £1.5 million. Click here. On the appeals by Crest Nicholson plc and ISG Pearce Limited (ISG), the CAT dismissed the appeal on liability but once again held that the ultimate penalties imposed were disproportionate and excessive, reducing the penalty imposed from £5,188,846 to £950,000. Click here. On the appeal by Quarmby Construction Company Limited and St James Securities Holdings Limited (Quarmby), the CAT has dismissed the grounds of appeal on liability, however again reduced the fine from £881,749 to £213,750. Click here.

The European Commission has imposed fines totalling EUR315.2 million on Procter & Gamble and Unilever for participation in an illegal cartel which lasted three years, covered several EU countries and was aimed at stabilising market positions and at coordinating prices. A third company, Henkel, received full immunity from fines under the Commission's Leniency Notice. The decision was reached using the settlement procedure. Click here.

EU

European Courts

  • The General Court has dismissed an appeal by Visa Europe Limited and Visa International Service against the European Commission's decision that found that the refusal to grant Morgan Stanley membership of the Visa network constituted a breach of Article 101 TFEU. Click here.
  • Advocate General Kokott has delivered her opinions on the appeals by Solvay SA against the judgments of the General Court's judgments which were handed down in December 2009 and largely upheld European Commission decisions finding that Solvay had breached Articles 101 and 102 TFEU by virtue of its practices in the soda ash market. AG Kokott, having found that the General Court had made errors of law in its assessment of alleged breaches of Solvay's rights to access to the file, to a hearing and to have its case adjudicated upon within a reasonable time, has recommended that the General Court's judgments be annulled. She also recommended that the Commission's decisions finding the Articles 101 and 102 infringements should be annulled. Click here.

Article 101

  • Details of an appeal brought by AU Optronics against the European Commission's finding that six manufacturers of LCD panels operated an illegal cartel involving price-fixing, and illegal information exchange have been published in the Official Journal. AU Optronics claims that the Commission made a number of errors in applying Article 101 TFEU and in calculating the fine imposed on the company. Click here.

Mergers – Invitation to Comment

Mergers – cleared

State Aid

  • European Commission consultation on the revision of its 2009 guidelines for the application of the State aid rules in relation to rapid deployment of broadband networks. Click here.

Speeches

  • Joaquín Almunia: Staying ahead of the curve in EU competition policy. Click here.
  • Joaquín Almunia: Cartels: the priority in competition enforcement. Click here.

UK

Competition Appeal Tribunal

  • The CAT has published an order striking out the damages claims brought against Mersen UK Portslade Ltd. In March 2011 the CAT had ruled that since the European Commission's cartel decision was solely addressed to its parent company, Le Carbone Lorraine SA, there was no infringement decision within the meaning of subsection 47A(6)(d) of the Competition Act 1998 against Mersen UK. Click here.
  • The CAT has published an order on the future procedural timetable for the tobacco retail pricing appeal. Click here. It has also published the transcript of a case management conference held on 8 April 2011 with the appellants against the OFT's tobacco retail pricing decision. Click here.

OFT

  • The OFT has published the full text of its reference decision on the completed acquisition by Sector Treasury Services Limited of ICAP plc's treasury management consultancy services business (Butlers). The OFT found that the parties overlap in the supply of treasury consultancy services by way of a retainer contract and that the merger created a combined market share of 70-80% in 2010, reducing the number of suppliers from four to three. Click here.
  • The OFT has published the full text of its clearance decision on the anticipated acquisition by Kingspan Group plc of CRH Insulation Europe. Click here.
  • The OFT has published the full text of its clearance decision on the anticipated acquisition by BH Acquisitions Limited of Northern Foods plc. Click here.
  • Merger invitations to comment: European Aeronautic Defence and Space Company N.V. (EADS)/ Vector Aerospace Corporation. Click here.
  • The OFT has launched a short market study into extended warranties for domestic electrical goods such as televisions, washing machines and computers. The market study will consider concerns that competition in the supply of extended warranties is limited by retailers' advantages in being able to sell warranties at the same time as they sell the electrical goods, and general concerns that warranties are not good value for money. Click here.

Ofcom

  • Ofcom has included British Sky Broadcasting Limited (Sky) as a party to the dispute between Opal Telecom and Openreach about charges for local loop unbundling services. Click here.
  • Ofcom has published an amended version of its consultation on its proposals for new charge controls for Local Loop Unbundling and Wholesale Line Rental services, originally published on 31 March 2011. Click here.

Speeches

  • John Fingleton: The importance of a competition agency providing guidance: the UK experience. Click here.

Miscellaneous

  • The Department for Culture Media and Sport has published the government's response to the consultation on implementing the revised EU electronic communications framework. Click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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