News

Antarctica/ Brahma

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Brazil’s largest brewers, Cervejaria Brahma SA and Cia Antárctica SA, are to merge to form the world’s third-largest brewery and fifth-largest beverage company.

France: Conseil’s 1998 annual report reveals record number of cases

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The recently-published annual report of the Conseil de la Concurrence shows that competition law is increasingly used by companies, not only as a means of defence against their competitors’ behaviour, but also proactively, for instance in challenging, in sectors being liberalised, former monopolists. The Conseil now takes its place as a major player on the French legal scene, with significantly increased legitimacy and powers. This is of particular importance given the European Commission’s proposal to reform Council Regulation 17, under which Article 81(3) EC Treaty will be directly applicable by the French competition authority.

Rhodia/ Albright & Wilson

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The acquisition by Rhodia SA of UK-based international chemicals company Albright & Wilson plc has recently received clearance from the European Commission under the EC Merger Regulation.

Italy: Regulation on dominant positions highlights risk of duplication

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Special rules in sectors previously controlled by state monopolies were prompted by the EU and have by and large been successfully transposed into Member States’ legislation. Generally, these rules have made a beneficial contribution to the liberalisation of the markets in most EU countries. However, in markets which already operate on the basis of broadly competitive conditions, sectorial market rules may in the long term be counterproductive and risk resulting in the duplication of regulation. In this case, for example, the Law, which was undoubtedly passed with the intention of clarifying the position on the pay-TV market, is probably an unnecessary duplication of antitrust rules and has created a situation of legal uncertainty for market operators in the pay-TV sector.

Netherlands: End in sight for Dutch book cartel

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General conditions laying down fixed prices for foreign books have been judged to be in breach of the Dutch Competition Act. The importers who unsuccessfully defended the fixed prices made reference to an exemption under the old competition regulation in which the fixed prices for domestic books were upheld. The negative decision of the Dutch Competition Authority on fixed prices for foreign books makes clear that fixed prices for domestic books could also be jeopardised in the future, which would mean the end of the socalled Dutch book cartel.

Germany: 1997/98 Federal Cartel Office report on competition

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The FCO’s competition report shows the increasing relevance of the German merger control regime despite the extension of the scope of European merger control by the introduction of an alternative threshold test as of March 1998. This reflects global concentration trends, with an increasing number of notifications to both the European Commission and national competition authorities. Moreover, under the sixth amendment of the ARC, which entered into force on January 1 1999, the threshold for pre-merger notifications was lowered to aggregate sales of the parties concerned of more than Dm1 billion. As a consequence, there will be even more pre-merger notifications in Germany in the future. However, the abolition of the post-merger notification requirement will reduce the workload of the FCO.

Undersea cable investigation

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The US government has launched an investigation into anti-competitive practices in the undersea cable business.

United States: Supreme Court’s opinion in horizontal restraints case muddies the waters

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The Supreme Court’s CDA opinion generated immediate controversy in the antitrust bar, not least because of the fact that the vigorous dissent in the case was authored by Justice Stephen Breyer, one of the Court’s recognized antitrust scholars. A former general counsel of the FTC commented on this aspect of the case as follows: 'It is an unusually disappointing opinion. Simply as a matter of judicial craftsmanship, it is not of the quality for which we look to the Court. Any objective observer would have to conclude that Justice Breyer’s opinion was far and away the better of the two, whether measured in terms of analytical power, understanding of antitrust, or quality of writing.'

Belgium: Electricity market opening

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Although an important step has been taken with the early adoption of the new electricity Law, Belgium still has many issues to resolve before successfully achieving the liberalisation of its high voltage grid. Various Royal implementation Decrees are still required to ensure the proper functioning of the framework set up by the Law (for example, an access fee must be established by the TSO in compliance with a general framework to be adopted by Royal Decree). In addition, the government must organise the transfer to the TSO of the highly complex ownership structure of the current electricity high voltage grid.

Coca-Cola/ Orangina: Correction and update

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In the last issue of GCR we reported on the proposed acquisition of Orangina brands and businesses by Coca-Cola.