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Spain: New mega-merger bid in the electricity sector

Premium - 01 December 2001

The Endesa/Iberdrola merger, if it comes to fruition, would result in a major restructuring of the Spanish electricity market. If the proposal to exchange assets with other European utilities were accepted, it would open the Spanish market to European competitors while allowing Endesa/Iberdrola to gain access to other European markets. Repsol- YPF/Gas Natural’s possible takeover bid could raise different competition concerns (ie vertical as opposed to horizontal) as Gas Natural is the leading supplier of gas to electricity companies.

Steenbergen and Herbert join Allen & Overy

Premium - 01 December 2001

A majority of Belgium law firm Loeff Claeys Verbeke have announced that they will be joining Allen & Overy Earlier this year the firm split into three parts. The international arm (including the entire Luxembourg office) merged with Allen & Overy, a number of Dutch lawyers joined Loyens & Volkmars, while the Belgian arm of the firm continued to trade under the Loeff Claeys Verbeke name.

Japan: NTT Group finally faces competition pressure

Premium - 01 December 2001

Some of Japan’s telecommunications companies continue to be sheltered from real competition. However, this situation is unlikely to continue indefinitely, and the official recommendation by the Information Technology Special Committee that the NTT Group be broken up is an indication of the changing climate.

Bilateralism is no longer enough

Premium - 01 December 2001

After 27 years, Fordham’s annual conference on International Antitrust Law & Policy continues to draw more delegates year on year and offers an ideal opportunity to find out what regulators either of the Atlantic are doing and thinking. Sebastian O’Meara and Zelda Fazaeli listened in.

Ignacio de Leon resigns from ProCompetencia

Premium - 01 December 2001

On October 11 Ignacio de León resigned as head of the Superintendency for the Promotion of Free Competition (ProCompetencia), the Venezuelan antitrust agency. He had not completed his four-year term.

Switzerland: ‘Portfolio power’ theory finds its way to Switzerland

Premium - 01 December 2001

The merger between Unilever NV/plc and Bestfoods USA allowed the Swiss Competition Commission to apply the ‘portfolio power’ theory in Switzerland. It relied on the European precedent Guinness/Grand Metropolitan and held that companies holding key brands in markets where brands play an important role may, under certain circumstances, exercise strong market power. This market power could be exercised by gaining significant additional economic discretion in (i) fixing prices and launching promotions and granting discounts, (ii) tying different brands or (iii) threatening to cease supplying customers.

Coudert recruits two senior French competition specialists

Premium - 01 December 2001

Meanwhile, Dominique Brault and Philippe Corruble have joined Coudert Frères’ competition department. Corruble will replace de la Laurencie as head of the Paris competition department.

Canada: Temporary cease and desist order issued against Air Canada

Premium - 01 December 2001

Air Canada is ordered by the Competition Bureau to cease offering discount airfares in eastern Canada in response to new entry. Elsewhere, the Competition Bureau announced that it will not challenge the acquisition by CanWest Global of a number of media assets from Hollinger.

Euro steelmakers' B2B e-commerce platforms

Premium - 01 December 2001

Four major European steel manufacturers - Arbed, Corus, ThyssenKrupp and Usinor - have announced that they are to establish two ecommerce B2B platforms, ‘Steel 24/7’ for the sale of various steel products and ‘Buy for Metals’ for the procurement needs of the metals industry.

Franchising: International franchising makes a rare appearance in court

Premium - 01 December 2001

What lessons can we learn from this battle? First, franchisees are bound by the written language of their franchise agreements. If the franchise agreement prohibits oral modifications, any changes must be in writing (except in very limited circumstances). Second, if a franchisee has to sign the franchisor’s then-current franchise agreement at the time of renewal, it can expect that there may be terms that are significantly different from the current agreement. A franchisee might be faced with the choice of staying with the franchisor under new, more restrictive terms or going it alone; and even if it has the right thereafter to engage in a similar business, it will, at a minimum, lose the value of the many years of association with the franchisor’s brand. Third, and perhaps of greatest interest to international franchisors, the case raised the question of whether the competitive conditions in a foreign market may be sufficiently different from those in the home market as to justify different provisions (eg in terms of the covenant not to compete). The settlement of the case left this last question unresolved, but it will surely be raised in other cases in the future.