CMA intends to accept Amazon's commitments
The UK's Competition and Markets Authority ("CMA") is considering accepting the commitments provided by Amazon to allay concerns regarding its treatment of third parties on its Amazon Marketplace platform, which enables third-party sellers to sell their products alongside Amazon's products. The CMA launched an investigation into Amazon's potential abuse of its dominant position in the online retail market in July 2022. The investigation is focused on allegations that Amazon gives preferential treatment to its own retail business over third-party sellers on its platform and those who use its delivery services instead of rival logistics companies. Amazon has offered several commitments to address concerns that this behaviour gives it an unfair advantage in the market. Accordingly, Amazon (i) will not use rival sellers' data in Amazon Marketplace, which would confer it an unfair advantage over other sellers; (ii) ensure that Amazon treats all product offers equally when determining which offers will be featured in the “Buy Box” ;1 and (iii) enable third-party companies that use the Amazon Marketplace to negotiate their rates directly with independent providers of Prime delivery services.
Microsoft before the European Commission for the first time in 14 years
The European Commission (“Commission”) has initiated a formal investigation into Microsoft upon a complaint filed by Slack Technologies to determine if the company violated EU competition regulations by tying its communication and collaboration product Teams to Office 365 and Microsoft 365. The investigation will assess if Microsoft's actions result in an abuse of dominance in the productivity software sector. The company's distribution practices, such as giving customers the choice on whether or not to include access to Teams when they subscribe to Office software and limitations on interoperability are under scrutiny, but the investigation's outcome remains uncertain.
Record gun-jumping fine for Illumina
The Commission has decided to fine Illumina, a US-based biotechnology company, approximately EUR 432 million for closing its EUR 5.9 billion acquisition of its rival Grail before obtaining the approval of the Commission. The Commission stated that its investigation confirmed the companies had intentionally breached the standstill obligation under EU merger rules that require businesses not to complete a merger until receiving approval. The Commission asserted that Illumina assessed the possibility of incurring a penalty for gun-jumping against the risk of paying a substantial termination fee in case the transaction could not be successfully concluded. The fine is a record for being the highest ever imposed by the Commission under the EU Merger Regulation.
Vaccine companies fined for bid rigging
The Korea Fair Trade Commission ("KFTC") has fined 32 vaccine companies, including GlaxoSmithKline, a total of EUR 28.6 million for colluding in 170 vaccine tenders for more than six years. KFTC stated that the companies rigged the bids to secure contracts for 24 different types of vaccines, which includes immunization against a range of diseases including influenza, hepatitis, tuberculosis and cervical cancer. The companies involved in the cartel were ordered to cease their collusive practices by KFTC in addition to the fine.
Draft update of US merger guidelines published
The two competition authorities in the US—the Federal Trade Commission and the Department of Justice—have released a draft update to the Merger Guidelines in an effort to strengthen the regulatory scrutiny over mergers and acquisitions. The new rules reportedly indicate a tougher stance on Big Tech by the current administration, with one of the updated principles of the Guidelines focusing on mergers involving "platform" companies. The Guidelines provide an overview of the thirteen principles that the antitrust agencies may apply in determining whether a transaction is unlawfully restrictive of competition under US antitrust laws. There are significant deviations from the previous versions of the guidelines, including (i) a new market test to detect unlawful mergers, (ii) lower thresholds, and (iii) a looser approach when determining the market and market shares of competitors. The Merger Guidelines was last amended in 2010.
Tobacco cartel challenge fails
British American Tobacco, Japanese Tobacco International Company Netherlands, Philip Morris Benelux and Van Nelle Tabak Nederland have failed to challenge an EUR 82 million fine imposed by the Dutch Competition Authority (“ACM”) for their involvement in the exchange of future cigarette prices with wholesalers between 2008 and 2011. The court ruled in favour of the ACM, stating that the fine was justified because this indirect exchange of information violated the Dutch Competition Act. The evidence demonstrated the companies' active efforts to obtain price lists from their competitors, despite the companies' claims of no cartel infringement and lack of foreseeability of their actions being deemed anticompetitive. On this point, the court emphasised that the lack of previous sanctions for such indirect information exchange does not undermine the violation. It declared that any exchange of information aimed at reducing price uncertainty is harmful to fair competition.
Footnote
1. The “Buy Box” is featured on Amazon's product pages and provides customers with one-click options to “Buy Now” or “Add to Basket” in relation to items from a specific seller.
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