News

Belgium: Conflicts between liberalisation and competition laws

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This case has two interesting aspects. Firstly, it illustrates the difficulties encountered when implementing liberalisation laws, which in theory aim at opening markets to competition but nevertheless may force an undertaking to adopt an anticompetitive behaviour.

British Airways/ KLM

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According to reports, British Airways and Royal Dutch Airlines (KLM) are planning to file for a full merger with European competition authorities by the first week in August. However, KLM officials have been reported as warning that an important prerequisite for the deal is some form of agreement between the UK and US governments on future ‘open skies’ agreements.

Germany: Planned merger between RWE/VEW looks set to get green light

Premium 01 August 2000

The investigation into this merger illustrates clearly the FCO’s attempt to accelerate the liberalisation process in the gas and energy sectors, as well as in waste disposal, with the help of merger control provisions. These previously closed markets are progressively being opened up to competition on an entirely new scale, as a result in part of the imposition of divestiture requirements in cases such as this.

Goldfields/ Franco Nevada

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Goldfields and Franco Nevada are set to merge in a US$1.8 billion deal that will produce one of the world’s largest gold companies. Franco Nevada’s chairman has been reported as saying that the merger would give his company greater leverage over the price of gold. He was also cited by the Wall Street Journal as speculating that the deal would represent a first step in future industry consolidation.

US: Justice Department continues robust enforcement policy

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Shortly after the Justice Department filed suit to block the combination of WorldCom and Sprint, the parties announced that they had abandoned their plans for the merger. Assistant Attorney General Klein issued a statement welcoming the parties’ decision and stressing again that the deal 'would have led to higher prices, lower service quality, and less innovation for millions of American consumers and businesses'.

Unilever/ Bestfoods

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Unilever, the Anglo-Dutch consumer products group, is set to acquire the US food group Bestfoods in a US$20.3 billion deal.

Franchising: European Union issues vertical restraint guidelines

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In general, the new Guidelines provide much added insight as to the appropriate analysis for determining whether a franchise agreement or master franchise agreement for Europe will be lawful or suspect and, if suspect, what needs to be changed to bring it within the scope of the VRBE. For most franchisors, the VRBE will contain both advantages and disadvantages compared to the old FBE. Regardless, franchisors now have all the information that will be made available in order to analyse whether their new European agreements need to be modified and existing European agreements need to be renegotiated. Especially with the VRBE’s many details, and exceptions on exceptions, this is a necessary - but not an easy - analysis.

France: The application of competition rules to trade unions

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Notwithstanding the reversal on appeal, the decision of the Paris Court of Appeal has established an important precedent that competition law may apply to a trade union if it is pursuing an economic activity,which can be distinguished from its traditional function of safeguarding the interests of its members.

Finland: Dairy mega-deal accepted by Authority with conditions

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The Finnish Competition Authority has cleared a concentration strengthening the dominant position of the largest Finnish dairy company, Valio Oy, in several market segments. The clearance is subject to significant conditions by which in particular the availability of raw milk to the competitors of Valio Oy is safeguarded. According to the Finnish Competition Authority, the conditions are sufficient to maintain competition in the milk product markets even though Valio Oy’s market share will rise to 60 to 70 per cent in certain product segments.

Canada: Update on Competition Act amendments

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The Competition Act amendments process moves into the consultative stage, with an independent research organisation reviewing submissions from stakeholders and organising cross-country roundtable discussions.