SAIC launches anti-monopoly dawn raids against Microsoft
In June 6, upon complaints of the relevant firms, SAIC verified Microsoft’s relevant
issues such as interoperability caused by incomplete disclosure of relevant
information of its Windows operating systems and Office software, tying, and file
verification, and the suspected violation of the Anti-Monopoly Law. SAIC was of the
view that, the preliminary verification cannot eliminate the suspicion that Microsoft’s
above conducts are anti-competitive. Therefore, in accordance with the law, SAIC had
docketed the case and launched investigation into Microsoft’s suspected monopolistic
conducts.
On July 28, 2014, under the organization of SAIC, nearly one hundred law
enforcement officials from 9 provinces, including Beijing, Shanghai, Guangdong,
Sichuan, Fujian, Hubei, Jiangsu, Chongqing and Hebei’s industrial and commercial
bureaus, carried out simultaneous dawn raids on four of Microsoft’s offices in China,
including Microsoft (China) Co., Ltd. in Beijing and its three branches in Shanghai,
Guangzhou, and Chengdu (collectively “Microsoft”). The law enforcement officials
copied some of Microsoft’s contracts and financial statements, collected large amount
of electronic data such as internal communication documents and e-mails from
computers and servers on-site, as well as sealed and seized two computers. Currently,
the investigation is still on going. >>Read More Back
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Xiamen Municipal Price Supervision Bureau orders Express Delivery Industry
Association to cease price agreement
On July 27, National Development and Reform Commission (NDRC) announced on
its official website that Xiamen Municipal Price Supervision Bureau（XMPSB）ordered the Express Industry Delivery Association to cease price agreement on the
express delivery market of Xiamen City (Price Agreement). Price Agreement was
sponsored by Express Delivery Industry Association of Xiamen City and sets the
bottom line price, as well as unifies the behaviors of minimum pricing.
Upon investigation, XMPSB was of the view that, the Price Agreement shall cease
promptly for violating the Price Law and the Anti-Monopoly Law. The Express
Delivery Industry Association of Xiamen City stated the difficult position of express
delivery industry at present, including part of e-commerce players jointly pushing
down and there are indeed mutually destructive competitions among the express
delivery firms. Regarding above questions, XMPSB interpreted the relevant price
policies and regulations for them to solve this problem and pointed out that they could
protect their own benefit by reporting the unfair competition to the price supervision
department. >>Read More Back
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Hubei Province Price Supervision Bureau holds reprimanding conference for the
pricing behaviors of automobile dealers
On August 13, in consideration of major complaints from consumers in the process of
automobile sales, Hubei Province Price Supervision Bureau (HPPSB) held a
reprimanding conference and ordered the companies to abstain from charging PDI
inspection fees in the name of “Service”, and to take the initiative to report price
alliance among the firms, as well as ordered the firms to operate in accordance with
Anti-Monopoly law.
At the conference, HPPSB announced that 4 BMW auto dealers in Wuhan auto
market carried out price monopoly agreement for charging PDI inspection fees, and
briefly explained its decision of administrative punishment, imposing a fine of RMB 937,900, RMB 341,600, RMB 197,200, and RMB 150,000 to Ebao, Wh Summit,
Handebao, Baoze respectively. In addition, HPPSB launched anti-monopoly
investigation against Audi and other automobile production firms. Currently, the case
was in the phase of administrative punishment in accordance with Anti-Monopoly
law. >>Read More Back
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Twelve Japanese firms committing auto parts and bearings price cartel fined
RMB 1.235 billion by NDRC
On August 20, National Development and Reform Commission (NDRC) imposed a
fine of RMB 831,960,000 on eight auto parts suppliers according to Anti-Monopoly
Law, including Sumitomo of Japan, for their price monopolistic conducts, as well as a
fine of RMB 403,344,000 on four bearing suppliers for their price monopolistic
conducts. The total amount of the fine is RMB 1.235 billion.
Upon investigation and verification, from January 2000 to February 2010, in order to
lessen competition and secure auto parts orders from auto makers at the most
favorable prices, eight auto parts suppliers including Hitachi, Denso, Aisan,
Mitsubishi Electric, Mitsuba, Yazaki, Furukawa and Sumitomo, frequently held
bilateral or multilateral meetings in Japan to consult on prices with each other. Then
they reached agreements on order quotation and implemented such agreements many
times. The auto parts concerned in such price consultations were used for over 20
vehicle models of brands such as Honda, Toyota, Nissan, Suzuki, and Ford. By the
end of 2013, most orders in connection with China market under price consultation
among the parties concerned were still being executed.
In addition, NDRC also found that from 2000 to June 2011, four bearing makers
including Nachi, NSK, JTEKT and NTN organized Asian Study Association and held
conferences in Japan, as well as held Export Market Conference in Shanghai
discussing the scheme, timing and range of bearing price increases in Asia and China
markets, and exchanged information on the implementation of price increases. The
parties concerned increased their prices in accordance with the price increase
information agreed or exchanged through Asian Study Association and the Export
Market Conference while selling bearings in China.
The eight auto parts suppliers and four bearing makers were suspected of concluding
and implementing auto parts and bearing price monopoly agreements, and violating
the Anti-Monopoly Law of China to eliminate or restrict market competition, thus
unlawfully affecting the price of China’s auto parts, finished automobiles and
bearings, and harming the legitimate rights and interests of downstream
manufacturers and welfare of Chinese consumers. In both cases, the parties concerned
concluded and implemented price monopoly agreements many times, and their
infringing conducts had lasted for over 10 years constituting severe circumstance.
Therefore, NDRC imposed aggravated sanctions in accordance with the law and
applied mitigated sanction or exempted sanction by virtue of the leniency scheme
under Anti-Monopoly Law on those parties who had voluntarily provided important
evidences.
Fines on auto parts price monopoly case included:
Hitachi, the first subject firm which voluntarily reported relevant information of concluding monopoly agreement to anti-monopoly enforcement authority and provided important evidence, was exempted from sanction.
Denso, the second subject firm which voluntarily reported relevant situations and provided important evidence, was imposed a fine of RMB150.56 million (4% of its revenue of the preceding year).
Yazaki, Furukawa and Sumitomo, who only participated in the collusion of one product were respectively imposed a fine of RMB241.08 million, RMB34.56 million and RMB290.4 million, 6% of their respective revenue of the preceding year.
Aisan, Mitsubishi Electric and Mitsuba, who participated in the collusion of two or more products were respectively imposed a fine of RMB29.76 million, RMB44.88 million and RMB40.72 million, 8% of their respective revenue of the preceding year.
Fines on the bearings price monopoly case included:
Nachi, which voluntarily reported relevant information of concluding monopoly agreement to anti-monopoly enforcement authority and provided important evidence, was exempted from sanction.
NSK, the second subject firm which voluntarily reported relevant situations and all evidences and sales data relevant to China market, was imposed a fine of RMB 174.92 million (4% of its revenue of the preceding year).
NTN who retreated from the Asian Study Association in September 2006 but continued to attend the China Export Market Conference, was imposed a fine of RMB119.16 million (6% of its revenue of the preceding year).
JTEKT who proposed to convene the China Export Market Conference in connection with the China market, was imposed a fine of RMB 109.36 million (8% of its revenue of the preceding year).
Meanwhile, all subject firms had proposed rectification measures as follows:
rectify the sales policy and sales conduct in accordance with Chinese laws immediately;
give anti-monopoly law training to all employees and ensure the compliance of their conducts with the requirements of Chinese laws;
take concrete actions to eliminate the consequences of the previous illegal conducts, and proactively safeguard competition order and benefit consumers. >>Read More Back
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NDRC fines Zhejiang insurance firms RMB 110 million for infringing
Anti-Monopoly Law
On September 2, NDRC announced the administrative punishment decisions on
Zhejiang insurance firms for infringing Anti-Monopoly Law. According to the
complaints of the consumers, Zhejiang Insurance Firms Association used to hold
meetings to consult on price with each other, which were attended by 23 provincial
property insurance firms. The meetings reached the agreement on arranging the
discount factor of new car and unifying commercial insurance agency commission
according to market share. Upon investigation, NDRC was of the view that, Zhejiang
Insurance Firms Association had violated Article 16 of Anti-Monopoly Law, which
provides that, an industry association may not organize the undertakings in such
industry to engage in any monopolistic conduct prohibited by this article. Property
industry firms involved in the case had violated Article 13 of Anti-Monopoly Law,
which provides that, Competing undertakings are prohibited from fixing or
collectively changing product price.
Fines included:
Zhejiang Province Insurance Association which had primary responsibility was imposed a fine of RMB 500,000.
Property industry firms involved in the case that had secondary responsibility was imposed a fine totaling RMB 110 million (1% of auto insurance sales of the preceding year).
The investigations on the 9 firms including Liberty Insurance Zhejiang Branch, Aioinissaydowa Insurance Zhejiang Branch and others were terminated, as they didn’t participate in reaching or enforcing the monopoly agreement.
The penalty for PICC Zhejiang Branch、China Life Insurance (Group)
Company Zhejiang Branch and Ping An Insurance (Group) Company Zhejiang Branch applied mitigated sanction or exempted sanction as they have voluntarily reported the situation and submitted important evidence concerning the monopoly agreement. >>Read More Back
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NDRC fines three cement firms RMB 114 million for committing price
monopolistic conducts
On September 9, NDRC announced on its official website its decision of
administrative punishment against three cement firms suspected of committing price
monopolistic conducts. As authorized by NDRC, Jilin Province Price Supervision
Bureau docketed the case and conducted investigation against three cement firms for
price monopolistic conducts, including Jilin Yatai Group Cement Sales Co., Ltd.
(Yatai Company), Northern Cement Limited (Northern Company) and Jilin Jidong
Cement Co., Ltd. (Jidong Company). The total amount of the fine was RMB 114
million.
Since March 2013, Price Supervision Bureau of NDRC started anti-monopoly
investigation into the price monopolistic conducts in some local cement markets.
Upon investigation, since April 2011, the relevant management from Yatai Company,
Jidong Company and Northern Company used to hold meetings to consult the sales
price of the regional cement and reached price monopoly agreement, as well as
carried out the price agreed at the meeting. Therefore, NDRC was of the view that,
three cement firms had violated the Anti-Monopoly Law, and eliminated or restricted
competition in the market, as well as controlled the sales price of cement and
damaged the interests of downstream industries and consumers.
In consideration of the surplus situation of Chinese cement production, moreover, the
company committing the price monopoly agreement lasted for only a short period and
the impaired competition is limited within certain area. Therefore, Yatai Company and
Jidong Company which did not cooperate with the investigation, were respectively
imposed a fine of 60.04 million and 13.38 million (2% of its annual sales of 2012);
Northern Company which cooperated with the investigation, was imposed a fine of
40.97 million (1% of its annual sales of 2012). >>Read More Back
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NDRC admonishes the People's Government of Hebei Province to correct the
conducts of Department of Transportation and others which infringed the
Anti-Monopoly Law
On September 26, NDRC announced on its official website the decision of
admonishing the People's Government of Hebei Province to correct the infringing
behaviors of Hebei Transportation Department, Price Supervision Bureau, and
Finance Department (the parties) infringed the Anti-Monopoly Law in accordance
with the law. The parties implemented preferential policies for the provincial tolls of
passenger bus, and abused administrative power to eliminate or restrict competition in
the relevant market.
Upon the complaint, NDRC docketed the case and conducted the investigation. Upon
investigation, in October 2013, departments of Hebei province, including Department
of Transportation, Price Supervision Bureau and Department of Finance issued jointly
the Notice on the Unity of the Province Turnpike Tolls Passenger Bus Vehicle
Classification Standard for adjusting the Pay Vehicle Classification of all provincial
road vehicles and implementing preferential policies for the province tolls of
passenger bus. On October 30, 2013, Department of Transportation issued another
notice on the implementation of the related matters of the province's turnpike tolls passenger bus vehicle classification criteria. The Notice further clarifies that policy
"apply only to the approval of the province by road transport by the regulatory
DOJ and the Pennsylvania Office of Attorney General requires divestiture from
Sinclair Broadcast Group in order to proceed with its acquisition of Perpetual
Corp
On July 15, DOJ announced that it would require Sinclair Broadcast Group and
Perpetual Corp. to divest their interests in WHTM-TV, an ABC affiliate in Harrisburg,
Pennsylvania, in order to proceed with Sinclair’s proposed $963 million acquisition of
Perpetual. The department said that, without the required divestiture, prices for
broadcast television spot advertising would likely increase in parts of central
Pennsylvania.
The department’s Anti-Monopoly Division and the Pennsylvania Office of Attorney
General filed a civil anti-monopoly lawsuit in the U.S. District Court for the District
of Columbia to block the proposed acquisition. At the same time, the department filed
a proposed settlement that, if approved by the court, would resolve the competitive
concerns alleged in the lawsuit. >>Read More Back
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DOJ requires divestiture in Landmark Aviation’s Acquisition of Ross Aviation
On July 30, DOJ announced that it would require Landmark Aviation to divest fixed
base operator assets (FBOs) used to provide flight support services to general aviation
customers at Scottsdale Municipal Airport, in Arizona, in order to proceed with its
$330 million acquisition of Ross Aviation. The department said that without the
required divestiture, the transaction would have combined the only two FBOs serving
general aviation customers at Scottsdale Municipal Airport, resulting in higher prices
and lower quality of services.
The Justice Department’s Anti-Monopoly Division filed a civil lawsuit in the U.S.
District Court for the District of Columbia to block the proposed transaction. At the
same time, the department filed a proposed settlement that, if approved by the court,
would resolve the department’s competitive concerns alleged in the lawsuit. >>Read
More Back
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DOJ requires divestiture in Tyson Foods Inc.’s acquisition of the Hillshire Brands
Company
On August 27, DOJ announced that it would require Tyson Foods Inc. to divest
Heinold Hog Markets, its sow purchasing business, in order to proceed with its $8.5
billion acquisition of The Hillshire Brands Company. The department said that,
without the required divestiture, the transaction would have combined companies that
account for more than a third of sow purchases from U.S. farmers, thereby likely
reducing competition for purchases of sows from farmers.
Three state attorneys general – of Illinois, Lowa, and Missouri – joined the
department in the civil lawsuit filed in the U.S. District Court for the District of
Columbia to block the proposed transaction. At the same time, the department filed a
proposed settlement that, if approved by the court, would resolve the competitive
concerns alleged in the department’s lawsuit. >>Read More Back
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FTC puts conditions on Valeant Pharmaceuticals’ proposed acquisition of
Precision Dermatology
On July 3, Valeant Pharmaceuticals International, Inc. and Precision Dermatology, Inc.
agreed to sell or relinquish rights to Precision’s branded single-agent topical tretinoins and generic Retin-A, common acne treatments, to settle FTC charges that Valeant’s
proposed $475 million acquisition of Precision would likely be anticompetitive.
According to the FTC complaint, Valeant and Precision are the only two significant
suppliers of branded single-agent topical tretinoins, and the proposed acquisition
would eliminate current competition between them. The companies are also the two
largest suppliers of generic Retin-A. >>Read More Back
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FTC puts conditions on Akorn, Inc.’s proposed acquisition of Versapharm Inc.
On August 4, pharmaceutical company Akorn, Inc. had agreed to sell its rights to
develop, manufacture, and market the generic injectable tuberculosis drug, rifampin,
in order to settle FTC charges that Akorn’s proposed acquisition of VersaPharm Inc.
and its parent company, VPI Holdings Corp., would likely be anticompetitive.
The FTC’s proposed settlement with Akorn required the company to divest its
Abbreviated New Drug Application for generic injectable rifampin – which was
currently pending before the Food and Drug Administration – to Watson Laboratories,
Inc. Akorn proposes to acquire VersaPharm for approximately $324 million, under an
agreement dated May 9, 2014. >>Read More Back
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FTC puts conditions on proposed acquisition of Insight Pharmaceuticals by
Marketer of Dramamine
On August 28, Pharmaceutical Company Prestige Brands Holdings, Inc., the maker of
Dramamine, agreed to divest assets and marketing rights for the over-the-counter
motion sickness drug Bonine to settle Federal Trade Commission charges that
Prestige’s proposed acquisition of Insight Pharmaceuticals Corporation would likely
be anticompetitive. The FTC’s proposed settlement with Prestige required the
company to divest Bonine to Wellspring Pharmaceuticals within 10 days after the
acquisition takes place.
According to the FTC’s complaint, Prestige’s Dramamine, which is the best-selling
branded product in the market for over-the-counter motion-sickness drugs, and
Insight’s Bonine, are the only two branded products with significant sales. Absent a
remedy, the acquisition would eliminate the close competition between Dramamine
and Bonine, likely leading to higher prices for consumers. >>Read More Back
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European Union
EC sends statement of objections to Bulgarian Energy Holding for suspected
abuse of dominance on Bulgarian wholesale electricity market
On August 12, the European Commission (EC) had informed Bulgarian Energy
Holding (BEH) of its preliminary view that territorial restrictions on resale contained
in BEH's electricity supply contracts with traders on the non-regulated Bulgarian
wholesale electricity market may breach EU anti-monopoly rules. Such restrictions
limit purchasers' freedom to choose where to resell the electricity bought from
BEH. >>Read More Back
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EC fines Servier and five generic companies for curbing entry of cheaper versions
of cardiovascular medicine
On July 9, EC had imposed fines totalling €427.7 million on the French
pharmaceutical company Servier and five producers of generic medicines for
concluding a series of deals all aimed at protecting Servier's bestselling blood pressure medicine, perindopril, from price competition by generics in the EU.
Through a technology acquisition and a series of patent settlements with generic
ACCC institutes proceedings against OmniBlend Australia
On August 14, the Australian Competition and Consumer Commission (ACCC) had
instituted proceedings in the Federal Court against OmniBlend Australia Pty Ltd
(OmniBlend Australia), alleging it attempted to engage in price fixing with a
competitor. It was also alleged that OmniBlend Australia induced a supplier to direct
Omniblend Australia’s key competitor not to discount its prices for blenders.
Omniblend Australia supplies various kitchen blenders through its online store to
businesses and consumers in Australia, New Zealand and the United Kingdom.
OmniBlend Australia and its competitor were the two major distributors of
OmniBlend branded blenders in Australia.
The ACCC alleged that OmniBlend Australia attempted to enter into an agreement
with its competitor to fix prices. The ACCC further alleged that when this attempt
failed, OmniBlend Australia induced the supplier to engage in resale price
maintenance by refusing to supply the competitor unless it stopped discounting the
price of certain blenders. >>Readmore Back
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ACCC takes action against Informed Sources and petrol retailers for price
information sharing
On August 20, ACCC had instituted proceedings in the Federal Court of Australia
against Informed Sources (Australia) Pty Ltd (Informed Sources) and several petrol
retailers alleging in breach of 45 of the Competition and Consumer Act 2010 (the
Act).
ACCC alleged that the information sharing arrangements between Informed Sources
and the petrol retailers, through a service provided by Informed Sources, allowed
those retailers to communicate with each other about their prices, and that these
arrangements had the effect or likely effect of substantially lessening competition in
markets for the sale of petrol in Melbourne. >>Readmore Back
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Korea
KFTC imposes penalty on Caffebene Corporation for violating Franchise
Business Act
On August 4, 2014, South Korea Fair Trade Commission (KFTC) announced on its
official website the decision against Caffebene for its abuse of dominance by forcing
franchisees to bear the cost of promotional activities and accept their (or their
designated firms) conducts providing franchise store decoration services in violation
of Franchise Business Act. KFTC required Caffebene to correct above conducts and
imposed a fine of KRW 1.942 billion. KFTC expected that this punishment can deter
unfair phenomenon in the franchise industry.
On August 29, 2010, Caffebene and KT (Korea’s mobile communications providers)
signed the service and cooperation agreement. The agreement provided that if the
members of KT buy all commodities from Caffebene, they can enjoy 10% discount,
and the relevant cost shall be born respectively by KT and Caffebene at 50% each. On
October 26, 2010, Caffebene notified unilaterally all franchisees regarding the
agreement of cooperation and discount in spite of oppositions of 40% of franchisees,
and notified that franchisees would bear all cost. The conducts of Caffebene had
violated the principles relating to bearing promotional expenses in the franchisee agreement signed between Caffebene and Franchisees, also constituted abuse of
CCI fines 14 car makers for their anti-competitive practices
On August 25, Competition Commission of India (CCI) fined 14 car makers,
including both local car manufacturers and international car manufacturers such as
BMW, Ford, General Motors, Mercedes-Benz, Nissan, Skoda Toyota and Honda. The
penalty imposed totalizes 254.4 crores.
Among those penalized manufacturers, India's Tata Motors Ltd suffered the highest
penalty of 134.6 crores, followed by Maruti Suzuki 47.1 crores, Mahindra &
Mahindra 29.2 crores and General Motors 8.5 crores, accounting for 2% of their
respective turnover. Based on the investigation, CCI found that those involved car
manufacturers refuse to supply genuine spare parts and technological equipment for
providing maintenance and repair services in the open market and in the hands of the
independent repairers, resulting in the restriction of market access of independent
repairers and the choice of the consumers. >>Read More Back
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South Africa
Competition Commission raids Precision, Eldan offices and Vehicle Accident
Assessment Centre
On July 4, the Competition Commission was conducting a dawn raid at the offices of
Precision, Eldan, and Vehicle Accident Assessment Centre (VAAC). The dawn raided
operation forms part of the Competition Commission’s ongoing investigation into
collusive conduct in the market for auto body repairs.
Precision and Eldan are approved auto body repairers to Original Equipment
Manufacturers such as Mercedes Benz, Toyota and Jeep. VAAC is an assessment
centre which renders vehicle assessment services to customers of both Precision and
Eldan. The Competition Commission had reasonable grounds to believe that
information relevant to this investigation was in the premises of the two companies.
The Competition Commission was conducting the operation with due regard to the
rights of the firms and all the affected persons. During the search the Competition
Commission would seize documents and electronic data, which would be analyzed
together with other information gathered to determine whether a contravention of the
Competition Act had taken place. >>Read More Back
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Legislation
China
China (Shanghai) Pilot Free Trade Zone issues the legislations of Anti-Monopoly
enforcement work
Recently, Shanghai Municipal Commission of Commerce, Shanghai Municipal
Development & Reform Commission and Shanghai Administration for Industry &
Commerce issued the legislations regarding the Anti-Monopoly enforcement work of
China (Shanghai) Pilot Free Trade Zone, including the work of Anti-Price monopoly
on China (Shanghai) Pilot Free Trade Zone, the work of Anti-Monopoly review on
China (Shanghai) Pilot Free Trade Zone and the enforcement work of anti-monopoly
agreement, abuse of dominant market and administration monopoly. These
legislations took effect on October 15, 2014.
According to the relevant legislations, in Anti-price monopoly, the Management
Committee of Pilot Free Trade zone shall accept the report and consultation, in addition, shall assist the anti-monopoly investigation of Shanghai Municipal Price
Supervision Department and so on. >>Read More In Merger Review, Management
