Competition Law News & Updates

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April 1, 2015
COMPETITION UPDATE
United Kingdom

26 March 2014. The Consumer Rights Bill received Royal Assent and will enter into force on 1 October 2015. Apart from its major overhaul of consumer protection law in the UK, the Consumer Rights Act 2015 contains important provisions relative to competition law private actions at Schedule 8.

Section 47A of the Competition Act 1998 is amended to enable persons who have suffered loss or damage in respect of an infringement of competition rules to make a claim for damages before the Competition Appeal Tribunal. Under Section 47B as amended, collective proceedings may be brought before the Tribunal combining two or more claims to which section 47A applies.

Collective proceedings may be continued only if the Tribunal makes a collective proceedings order. This requires, inter alia, that the concerned claims raise the same, similar or related issues of fact or law and are suitable to be brought in collective proceedings. The collective proceedings order must, inter alia, include a description of a class of persons whose claims are eligible for inclusion in the proceedings, and specify whether the proceedings are opt-in collective proceedings or opt-out collective proceedings. According to this section, opt-out proceedings are only available to UK residents and non-UK claimants will only be able to join opt-in proceedings.

According to the new rules, where the Tribunal gives a judgment or makes an order in collective proceedings, the judgment or order is binding on all represented persons, except as otherwise specified. However, the right to make a claim in collective proceedings does not affect the right to bring any other proceedings in respect of the claim.

Under new Section 47C the Tribunal may not award exemplary damages in collective proceedings. Damages may be awarded without assessing the amount recoverable in respect of the claim of each represented person. In the case of opt-out proceedings, any damages not claimed by the represented persons within a specified period will be paid to a charity.

Under new Section 49A, the Tribunal may make an order approving a proposed collective settlement where a collective proceedings order has been made in respect of the claims, the Tribunal has specified that the proceedings are opt-out collective proceedings and the Tribunal is satisfied that its terms are just and reasonable. A collective settlement approved by the Tribunal is binding on all persons falling within the class of persons described in the collective proceedings order who were domiciled in the United Kingdom at the time specified for the purposes of determining domicile in relation to the collective proceedings and did not opt out of those proceedings, or opted in to the collective proceedings.

Finally, Section 58 A specifies that the Tribunal examining claims brought under Sections 47A and 47B is bound by any final infringement decision. 

April 1, 2015
COMPETITION LAW
Brazil

3 January 2015. CADE’s Resolution No 10/2014 has entered into force.

The resolution, which clarifies the rules laid down in Section 90 of Act No 12.529 of 2011, defines associative agreements as agreements concluded for more than two years which give rise either to a horizontal overlap equal or higher than 20% on the affected markets, or a vertical overlap with a least one of the parties holding a market share of at least 30% and one of the following conditions being met : a) the agreement contains a sharing of profits or losses between the parties, or b) the contract creates an relationship of exclusivity between the parties. Such agreements must be notified to the CADE where they reach the thresholds laid down in Section 88 of Act No 12.529.

This means that associative agreements must be submitted to the CADE's prior approval where, cumulatively: i) at least one of the parties has achieved in Brazil a gross annual turnover equal of higher than R$750 million (US$ 318,500,000) in the previous fiscal year and ii) at least one of the other parties has achieved in Brazil a gross annual turnover equal of higher than R$75 million (US$ 31,800,000) in the previous fiscal year.

The Resolution specifies however that agreements lasting less than two years may fall within the ambit of the notification obligation where the duration of two years is reached or exceeded upon renewal. 

April 1, 2015
COMPETITION UPDATE
China (People’s Republic of)

5 January 2015. MOFCOM’s Regulation on Restrictive Conditions imposed on the Concentration of Undertakings of 4 December 2014 has entered into force, replacing the 2010 Divestiture Regulation and codifying the authority’s current practice.

According to the procedure set by the new regulation, where MOFCOM has identified competition issues arising from the proposed mergers, the parties must submit remedies at least 20 days before the end of the in-depth review. The submission of remedies may also be made before MOFCOM delivers its assessment of the transaction. Remedies may be either structural – which was the only available remedy under the 2010 Regulation - behavioral, or hybrid. Failure to submit any remedies for a transaction likely to harm competition will automatically lead to its prohibition. Where MOFCOM finds that the remedies proposed are insufficient to deal with its competition concerns, it may require the submission of alternative remedies.

Implementation of the remedies takes place in two stages. First, the parties may be allowed to search for an appropriate buyer, monitored by a trustee. If they fail to do so, the trustee must find an appropriate buyer. The regulation sets the conditions to be fulfilled by the trustee and the buyer and in particular, prohibits the latter from making the acquisition by resorting to loans. Furthermore, if the acquisition of the divested assets or entities triggers the AML’s notification thresholds, the transaction must be reported to MOFCOM for review. This can lead to significant delays where MOFCOM requires the divestiture to be made before completion of the merger (upfront buyer requirement).

The new regulation also provides for the right of the parties to apply for an alteration or a waiver of the imposed remedies. MOFCOM may also alter remedies of its own motion. In any case, alteration or waiver of the imposed remedies requires significant changes in the structure of the merging parties or of the market, or that the remedies prove to be unnecessary or impossible to implement.

March 30, 2015
COMPETITION UPDATE
Italy

16 March 2015. Like every year, the Italian Competition Authority has updated the thresholds triggering notification of mergers. The new thresholds, which are applicable from 16 March 2015, and must both be met, are the following:

-        the domestic turnover of the parties involved must exceed EUR 492 million (EUR 489 million in 2014); and

-        the total domestic turnover of the target party must exceed EUR 49 million (unchanged from 2014).

See GCL No 16.18

March 30, 2015
COMPETITION UPDATE
USA

20 February 2015.  The thresholds triggering notification of mergers to the Federal Trade Commission under the Hart Scott Rodino Antitrust Improvements Act 1976 (HSR ACT) were revised on 15 January 2015. The new HSR thresholds will apply to all transactions that closed on or after 20 February 2015.

As a result, both acquiring and acquired persons are required to file notifications if the following conditions are met: (i) as a result of the transaction, the acquiring person will hold an aggregate amount of voting securities, non-corporate interests and/or assets of the acquired person valued in excess of $305.1 million ($303.4 million in 2014), regardless of the sales or assets of the acquiring and acquired persons; or (ii) as a result of the transaction, the acquiring person will hold an aggregate amount of voting securities, non-corporate interests and/or assets of the acquired person valued in excess of $76.3 million ($75.9 million in 2014) but less than $305.1 million ($303.4 million in 2014) or less; and (iii) one person has sales or assets of at least $152.5 million ($151.7 million in 2014); and (iv) the other person has sales or assets of at least $15.3 million ($15.2 million in 2014).

See GCL No 53.46

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