Competition Law News & Updates

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March 30, 2015
COMPETITION UPDATE
Canada

2 February 2015. The Competition Bureau has revised Canada’s merger notification thresholds in accordance with the provisions of the Competition Act designed at guaranteeing a reflection of the changes in the country’s gross domestic product.

Henceforth, parties are required to notify mergers and concentrations to the Bureau prior to completion where both the following thresholds are met:

-        the parties to the transaction, together with affiliates, have assets or annual gross revenues from sales in, to or from Canada, in excess of C$ 400 million; this threshold remains unchanged from 2014;

-        the value of assets (or gross revenues in or from Canada generated by those assets) exceeds C$ 86 million (as compared to C$ 82 million in 2014).

 

See GCL No 33.26

March 30, 2015
COMPETITION UPDATE
Morocco

4 December 2014. After the new Moroccan Constitution of 2011 enshrined the principle of free competition and the independence of the Competition Council, a long legislative process took place aiming at enhancing the powers of the Competition Council and boosting law enforcement. This led to the adoption of two laws published in the Official Gazette on 7 August 2014: Act No 20-13 relative to the Competition Council and Act No 102-12 relative to freedom of prices and competition, which repeals the former Competition Act (No 06-99). Those two pieces of legislation significantly amended Moroccan competition law but could not come into force as long as an implementing regulation had not been enacted. This was done with Decree No 2-14-652 of 1 December 2014, published in the Official Gazette on 4 December 2014.

The Competition Council (CC). The CC is now an administrative body independent from the executive (Section 1 of Act No 20-13). The CC is entitled to initiate proceedings of its own motion on proposal of its general case handler (Section 4 of Act No 20-13). Undertakings may also directly bring complaints and no longer have to require a professional organization to do so (Section 3 of Act No 20-13). The CC is now in charge of merger control, a prerogative previously held by the Head of Government. It can decide to launch investigations on concentrations or anticompetitive practices and make mandatory requests for information (Section 29 of Act No 104-12) whereas previously undertakings could refuse to cooperate. The CC may also order interim measures (Section 35 of Act No 104-12) and issue cease and desist orders (Section 36 of Act No 104-12). Undertakings may present commitments (Section 36 of Act No 104-12) or decide not to contest the CC’s objections in exchange for a reduced fine (Section 37 of Act No 104-12). A Leniency program has also been instituted at Section 41 of Act No 104-12. Finally, it may also impose fines of up to 10% of the infringing undertakings’ turnover – previously the Head of Government could only impose a fine of up to 5% of their turnover (Section 39 of Act No 104-12).

Merger control. Mergers will have to be notified to the CC not only where the undertakings party to the transaction hold more than a 40% market share but also where their aggregate global turnover is higher than 750 million dirhams [$76 million] exclusive of tax or where the turnover of at least two of the parties in Morocco is higher than 250 million dirhams [25 million] exclusive of tax (Section 12 of Act No 104-12 and Section 8 of Decree No 2-14-652). However, under Section 18 of Act No 104-12, the government retains a “right of evocation” of the cases handled by the CC which allows it either to request a phase two assessment of a merger, or to carry out its own assessment of the transaction on grounds of general interest other than the protection of competition.

Anticompetitive practices. Section 9 of Act No 104-12 introduces a de minimis rule which, like its European counterpart, excludes the control of agreements of minor importance which do not significantly affect competition, in particular agreements concluded between SMEs. However, no threshold has yet been set. The new Act also introduces a specific prohibition of predatory pricing, a practice which does not require the holding of a dominant position. As under French law, the government has the power to settle local micro practices (Section 43 of Act No 104-12). Finally, contrary to what was expected, the amendments maintain the regulation of the prices of specific products and services, as an exception to the general principle of freedom of prices laid down in the first indent of Section 2 of Act No 104-12.

December 1, 2014
COMPETITION UPDATE
Italy

31 October 2014. The Competition Authority has released its first guidelines defining a calculation method for sanctions against violations of laws protecting competition. The document aims at increasing the effectiveness of the Authority’s deterrent sanctioning policy while providing greater transparency in its decision-making process, thus facilitating full and effective judicial review. The guidelines will apply to pending cases provided that the Statement of Objections has not yet been served. As their EU counterpart, they apply a two-stage method consisting first in determining a basic amount, then adjusting it with regard to aggravating or mitigating circumstances, within the 10% ceiling.

The basic amount of the fine consists in a percentage of the value of sales of goods or services of the undertaking in relation with the infringement multiplied by the number of years of its participation in the infringement. The abovementioned percentage may never be higher than 30% and, for serious infringements (price-fixing, market-sharing and output limitation), lower than 15%. For trade associations, the value of sales is replaced by the value of its collected membership fees. In the case of bid-rigging, the basic amount of the fine will be equivalent to the amount of the adjudication.

The guidelines make it clear that none of the mitigating or aggravating factors may on their own have an impact on the amount of the fine of more than 15% nor together have an impact greater than 50%, with three exceptions. Firstly, the repeat of a similar infringement sanctioned within the past five years may lead to an increase of up to 100% of the amount of the fine. Secondly, an undertaking may incur an increase of the amount of the fine of up to 50% where it has achieved a particularly high worldwide turnover compared to the total value of its sales in relation to the infringement in the last fiscal year, or where it belongs to a powerful group. Thirdly, the guidelines institute an ‘Amnesty plus’ scheme whereby an undertaking may qualify for a reduction of the fine of up to 50% if it provides information considered crucial for the finding of a second infringement not covered by the on-going investigation.

Contrary to EU case-law, the Italian guidelines acknowledge that the adoption and implementation of a compliance program in line with national and EU best practices may constitute a mitigating circumstance. However, said program must be effective, i.e. provide, inter alia, for a full commitment and participation by the undertaking’s management; adequate training; sanctions for employees who do not comply with the program and monitoring and audit measures. Conversely, the fine may be increased taking account of the profits derived from the infringement, if they can be measured.

December 1, 2014
COMPETITION UPDATE
Belgium

26 August 2014. The Competition Authority has issued new fining guidelines designed to bring more transparency and legal certainty to undertakings as regards the level of fines incurred for infringements of competition law. The new guidelines in force on 1 November 2014 replace the former guidelines dated 19 December 2011 and express the intention of the Belgian Competition Authority (BCA) to take on the exact same approach as the EU Commission in its own fining guidelines.

As regards the basic amount of the fine, the BCA will take account of the turnover of the undertakings concerned in Belgium, directly or indirectly related to the infringement.

However, if an undertaking has no turnover in Belgium turnover in direct or indirect relation with the infringement, the basic amount of the fine will be calculated based on the following sales:

a) where the infringement is a market-sharing agreement implying the commitment by one or more undertakings not to make sales in Belgium, the fine will be calculated based on the turnover relating to products and services directly or indirectly related to the infringement on the geographical markets in which they offer these products or services,

b) in other cases the basic amount of the fine will be calculated on the basis of the undertakings’ average revenue in Belgium.

For repeat infringements, the guidelines specify that the term “same or similar infringement” used at point 28 of the Commission's Guidelines must be interpreted as referring to the same or a similar infringement committed in a Member State of the Union which has been the subject of a Commission decision or of the national competition authority of a neighboring country or of UK’s national competition authority.

Further, the BCA makes it clear that a group of undertakings will not be held responsible for a repeat infringement where the same or similar infringement at issue has been committed by a subsidiary the control of which was acquired after it put an end to its participation in the infringement.

December 1, 2014
COMPETITION UPDATE
The Netherlands

1 August 2014. The Streamlining Act and the ACM Policy Rules No WJZ/14112617 on the imposition of administrative fines and No WJZ/14112586 on leniency have come into force. The Streamlining Act was adopted in June 2014 to harmonize and simplify the rules applicable to the former bodies merged into the Authority for Consumers and Markets (ACM). It also brings amendments to the Competition Act and is supplemented by two sets of policy rules adopted by the ACM.

Mergers. The Streamlining Act has raised the worldwide turnover notification threshold which had been unaltered since 1998. As of 1 August 2014, a transaction must be notified where the parties have a combined worldwide turnover of more than EUR 150 million (previously EUR 113,450,000) and at least two of those undertakings have achieved at least EUR 30 million each of their turnover in the Netherlands (the latter figure remains unchanged).

Investigations. The ACM is granted extended powers to collect the information necessary for the performance of its tasks. Failure to comply with a request for information will be penalized with a fine of up to EUR 450,000 or 1% of the undertaking’s turnover. Further, information collected during a competition investigation may now be made available to other divisions of the ACM and vice versa, or be used in another legal procedure. The Streamlining Act also goes against recent case law allowing former employees of the undertaking under investigation to claim the right to remain silent. From now on, this right is reserved for current staff members unless former employees are also personally under investigation and liable to be fined. In addition, the legal privilege is extended to any exchange in writing between the undertaking and its lawyers, which should cancel uncertainties as to the exact scope of protection. Finally, the availability of confidential information gathered during dawn raids is made subject to stricter requirements.

Leniency. The ACM’s new Leniency Policy Rule brings two significant changes to the leniency program. Firstly, undertakings or individuals may be exempted from any fine where they are the first to report a cartel, even if the ACM has already detected it. Previously, in such a situation, they would only be rewarded by a reduction of the fine between 60 and 100%. Secondly, the new rules increase the reduction ranges for the following undertakings coming forward with significant added-value information: the second may receive a fine reduction of 30-50%, the third 20-30% and any others up to 20%. Previously, any undertaking after the first to come forward would benefit from a reduction of between 10-40%.

Fines. The Streamlining Act removes the possibility for sanctioned undertakings to delay the payment of their fine until a decision is handed down on appeal. Since 1 August 2014, undertakings must pay the fine within a maximum of 24 weeks, whether or not they have lodged an appeal against the ACM’s decision.

 

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