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| Issue 1 May 2010 |
| Welcome to the first edition of "Competition Digest", published by the Asian Competition Law and Economics Centre (ACLEC) at The Hong Kong Polytechnic University. |
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Hong Kong
Cathay Pacific Airways reports on 24 April 2010 that it has been granted immunity by the UK Office of Fair Trading by virtue of the leniency programme. The investigation was related to alleged price-fixing with Virgin Atlantic on the London to Hong Kong route. The UK Office of Fair Trading is investigating whether contacts between the rival airlines between September 2002 and July 2006 had the object of co-ordinating their pricing strategies.
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Mainland China
The Ministry of Commerce stated on 15 April 2010 that its Anti-Monopoly Bureau was considering whether new pricing models announced by the world's top three iron ore suppliers, Vale, Rio Tinto and BHP Billiton might infringe the Anti-Monopoly Law. Under that law, China can investigate whether the conduct of foreign companies has restrained or negatively impacted competition in Chinese markets, wherever the suspected conduct took place.
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Thailand
Thailand's Trade Competition Committee ruled on 30 March 2010 that AP Honda would face charges of abuse of market dominance, in relation to the company's alleged policy of barring motorcycle dealers from selling competing brands. Following the Committee's meeting, Commerce permanent secretary Yanyong Phuangrach said that the case will be passed to the public prosecutor.
Meanwhile, Thailand's Trade Competition Act is facing an overhaul. The proposed reforms include increasing transparency in administering and enforcing the law and strengthening the penalties imposed on business operators who violate the law. A business operator in breach of the law may currently be imprisoned for up to three years and fined up to THB 6 million.
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Malaysia
On 22 April 2010, the Malaysia Parliament approved the Competition Bill 2010 and Competition Commission Bill 2010. The Commission will comprise a Chairman, four government representatives and at least three other members with relevant experience and knowledge in business, industry and consumer protection. The Competition Bill will provide the Commission with both investigative and penal powers. Large enterprises are prohibited from abusing their dominant position and anti-competitive arrangements are prohibited, whether vertical or horizontal. Merger provisions are notably excluded and consequently there is no notification requirement.
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Indonesia
The Business Competition Supervisory Commission (KPPU) has imposed substantial fines in two separate cases in the first week of May. Twenty cooking oil producers were fined a total amount equivalent to USD 32million for alleged fixing of cooking oil prices between April and December 2008. Garuda Indonesia and nine other carriers were fined the equivalent of USD 63million for allegedly fixing fuel surcharges. Parties have two weeks to file their appeals.
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UK
The Office of Fair Trading's case against British Airways collapsed as the four BA executives on trial for alleged price-fixing were found not guilty by the Southwark Crown Court on 10 May 2010. Amongst an estimated 70,000 new documents received by the OFT from Virgin just last week, an exculpatory email had emerged which suggested that Virgin had unilaterally decided to raise fuel surcharge before discussing with BA, so undermining the prosecution case. The OFT has issued a warning to Virgin Atlantic on its role in withholding evidence, suggesting potential consequences for Virgin's immunity.
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European Union
The European Commission has published drafts of revised Horizontal Guidelines for comment, together with draft Regulations on the application of Article 101 (formerly Article 81) to the most common types of horizontal co-operation agreements such as research and development agreements. The draft Horizontal Guidelines include new guidance on information exchange between companies and the scope of application of the new guidelines. For example, a parent company and its subsidiaries are not considered 'competitors', and a joint venture agreement between such undertakings are outside the scope of Article 101. Comments may be submitted until 25 June 2010 (see
http://ec.europa.eu/competition/consultations/2010_horizontals/
index.html). |
USA
The Federal Trade Commission is currently consulting on a proposed revision of the Horizontal Merger Guidelines. The Guidelines were last updated in 1992. The proposals include updated concentration thresholds, an updated explanation of the "hypothetical monopolist" test, expanded discussion of coordinated and unilateral effects, and a new section discussing the sources and categories of helpful evidence. Comments will be accepted until 20 May 2010 (see: http://www.ftc.gov/opa/2010/
04/hmg.shtm).
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Copyright © 2010 Asian Competition Law and Economics Centre (ACLEC), The Hong Kong Polytechnic University
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