News

ITT/ Starwood Lodging

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Starwood Lodging, the largest hotel real estate investment trust (REIT) in the United States, announced the signing of a definitive agreement to acquire ITT Corporation, owner of the Sheraton hotel chain, on 20 October.

Ireland: Competition Authority Guidelines

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The publication of this series of Guidelines is further evidence of the Authority’s intention to use its new enforcement powers in a proactive way. Since it was given these powers in the 1996 Act, it has taken effective action in relation to a number of complaints from a variety of sources. The issues involved have related to matters such as resale price maintenance, collective boycotts and industrywide price-fixing arrangements.

Austria: Merger control turnover rules

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The Austrian Cartel Court’s decision to interpret the turnover calculation rules of Austrian merger control somewhat restrictively is very welcome news for all companies engaging in mergers and acquisitions. The court’s interpretation, albeit as yet unconfirmed by the Austrian Supreme Court, will go some way towards making the inclusion of turnover for the purpose of merger control, which is almost open-ended according to the letter of the law, more manageable. In effect, as long as there are no spillover effects to other partners of a joint venture concerned, the decision would seem to exclude the turnover of joint venture partners (and not of the joint venture as such).

India: Airport development

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The new airport policy allows flexibility in ownership and management at airports and has paved the way for private airports in India.

Spain: Competition law reform

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Although details of the reforms are not yet available, the intention of the government is to introduce far-reaching changes to the Spanish competition law system. In principle, reform is welcome. Firstly, it will introduce a more independent and powerful competition authority by separating the current SDC from the Ministry of Economy and Finance. The new reforms will also align the domestic merger control system with the European trend of moving to compulsory regimes. While the TDC currently examines only two or three concentrations per year, the German or Italian authorities examine several hundred. Finally, the changes to the state aid rules (an area which traditionally has a very low rate of enforcement in Spain) will also be significant, allowing interested third parties to request the intervention of the competition authorities.

Belgium: Conditional clearance

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The previous case law of the Council suggested that it had adopted the EU Commission’s approach that undertakings could be accepted in both stage I and stage II decisions. (The amended EU merger regulation, which comes into effect on 1 March 1998, incorporates a new provision confirming that the EU Commission may make stage I (and stage II) clearance decisions conditional on undertakings.)

Sweden: Posten AB v Competition Authority

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The Swedish court has examined the burden of proof on the Competition Authority in predatory pricing cases. It found that where the alleged infringer had utilised generally accepted accounting principles, answered the Authority’s questions and not concealed information, the burden of proof was on the Authority to prove that the alleged infringer had abused its dominant position.

United Kingdom: Common merger application form

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As an attempt to simplify procedures, the move to a uniformly recognised questionnaire should be welcomed. As a practical matter, however, the benefits of the new system are limited. The new form reflects the difficulties involved in achieving effective simplification.

Finland: Customers illegally tied

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In its decision to increase the fine proposed by the Office of Free Competition from Fmk3 million to Fmk5 million in a case relating to abuse of a dominant market position, the Competition Council mentioned as an aggravating factor the fact that the form of abuse concerned was both generally condemned and also prohibited under EC Competition Law.

European Union: More cooperation

Premium 01 December 1997

It remains to be seen whether a significant caseload is transferred by the Commission to national authorities following the adoption of this Notice. If this does result in a considerable reallocation of cases, there will inevitably be increased pressure on the resources of national competition authorities. Of particular interest in this context is that the UK Competition Bill is due to implement an EU-style competition regime in the UK in 1998. In conjunction with this, the Bill contains specific provisions authorising the Director General of Fair Trading to obtain a warrant to enter premises by force when undertaking an investigation at the request of the European Commission in connection with an Article 85 or 86 investigation which has been commenced at the EU level.