News

Zurich/ BAT

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London-based BAT Industries plc announced its proposed merger with Zurich Investment Company in October last year to form Zurich Financial Services group (ZF group). With assets totalling around $40 billion, the deal is set to create one of the world’s largest financial services companies.

Shell/ BASF

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This joint polyethelene venture between Shell and BASF was timely in the run-up to the European Commission’s new merger guidelines, which replace the concentrative/ cooperative distinction with ‘full-function’ joint ventures.

SmithKline Beecham/ Glaxo Wellcome

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SmithKline Beecham suddenly dropped plans at the end of January to team up with American Home Products when it announced a merger with world number two pharmaceutical company Glaxo Wellcome.

Belgium: Competition Law reform

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In principle, reform is welcome (although it remains to be seen whether the parliament will enact the reform in its current shape). However, it is unlikely that the proposed changes will enable the authorities to dedicate more time to restrictive practices as the new single concentration control threshold based on turnover may well result in more concentrations being notified. Also, some of the proposed reforms have not yet been fully thought through and their usefulness to the regulatory bodies, the markets and practitioners is therefore doubtful.

Brazil: CADE asserts itself

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CADE’s hands-on approach has ruffled a few corporate feathers, not least among Brazil’s growing number of multinational players and joint venture partners. Only time will tell whether it is able to strike the right balance between traditional Brazil-first protectionism and the continuing need to attract inward investment. The streamlined notification procedures should certainly help.

Canada: No jurisdiction over IP

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The Competition Tribunal has determined that it has no jurisdiction to compel the licensing of intellectual property rights under the refusal to deal provision in the Competition Act.

European Union: Guidelines on setting fines

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The publication of guidelines in this area is welcome in that companies may now have a clearer idea of the possible financial impact of the risks they take. The guidelines also complement the Commission’s formal Notice of July 1996, commonly referred to as the ‘whistle blower’s notice’. Whether the guidelines will have any deterrent effect on anti-competitive behaviour is, however, less certain.

Germany: Marketing of football rights

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The case has caused some political debate. Concerns were raised that the BGH could apply the same principle to marketing broadcasting rights for the German national football league (Bundesliga) which are also collectively marketed by the DFB.

Japan: Bid-rigging conspiracy

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Since making a commitment in 1990 to the criminal prosecution of bid-rigging (dango), price cartels and other conspiracies, Japan’s Fair Trade Commission have referred a total of four companies, and the individual company employees suspected of organising the conspiracy, to the prosecuting authorities . The most recent case, decided by the Tokyo High Court in December 1997, confirms that prison sentences of approximately six month to a year for individuals found guilty are typical.

Norway: Telecoms: liberalisation, but not at any price

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Both in terms of implementing the EU telecoms liberalisation Directives and technical development, Norway is among the front runners within the EAA. Former monopoly service providers are under an obligation to conclude agreements with other operators making it possible for them to compete within its network. In the present case, however, we have an example of a competing mobile telephone operator, NetCom, trying to enhance its own competitive position vis-àvis the former monopoly provider by benefiting from Telenor’s obligation to enter into agreement with other operators and being forced to charge only cost-related prices for its services, while at the same time maintaining its (NetCom’s) own relatively high prices for terminating. In rejecting NetCom’s application, the court has established that liberalisation is a two-way process which also imposes obligations on competing operators.