Cartel Digest

Publications

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Publications

Publications

Update — Antitrust and COVID-19

The ongoing COVID-19 outbreak has, at least temporarily, reshaped the way that many companies do business. Nevertheless, companies must continue to be vigilant about compliance with the antitrust laws and understand that the U.S. antitrust agencies will continue to scrutinize their behavior during this period (although EU competition authorities have taken an arguably more permissive approach, while maintaining that overt cartels at the expense of consumers will not be tolerated).

COVID-19: State Aid Support to Business

Member States of the EU and the U.K. are announcing massive support packages for companies affected by the coronavirus crisis. These interventions are on a vast scale. Unlike the 2008 financial crisis, the measures we are seeing this week are predominantly fiscal rather than monetary policy responses. The British Government announced today it will do “whatever it takes” to get businesses through the crisis, including an initial package of £330bn of government-back loans and guarantees to all businesses, as well as cash grants of £25,000 to hospitality sector businesses which don’t have insurance for pandemics such as coronavirus. Additionally, all businesses in the hospitality sector will pay no business rates for 12 months.

James Webber Authors ‘All Change? UK State Aid after Brexit What Law? Whose Courts’

Partner James Webber (London-Antitrust) authored a paper entitled “All Change? UK State Aid after Brexit What Law? Whose Courts.” The paper outlines how the EU regards State aid control as critically important – not just to control subsidization but as one of the few executive powers available to the Commission. James outlines how a new solution is needed that  respects the sovereignty of the United Kingdom and the autonomy of the Union while being properly focused on prevent[ing] undue distortion of trade and competition as agreed in the Political Declaration.  James explains that the coming dispute over State aid rules can be resolved.

A Brief on the New Saudi Competition Law and its Implementing Regulations

The new Competition Law (the “Competition Law”) of the Kingdom of Saudi Arabia (the “Kingdom”) was enacted by Royal Decree M/75 on 29/06/1440 Hijri (corresponding to 6 March 2019) and came into force on 24/01/1441 Hijri (corresponding to 23 September 2019). The Implementing Regulations of the Competition Law (the “Implementing Regulations”) were issued by the Board of Directors (the “GAC Board”) of the General Authority for Competition (“GAC”) and came into force on 25/01/1441 Hijri (corresponding to 24 September 2019). The Competition Law replaced the previous Competition Law enacted by Royal Decree M/25 dated 4/05/1425 Hijri (corresponding to 22 June 2004). This article provides a brief overview of some of the key provisions of the Competition Law and the Implementing Regulations.

FTC Increases HSR Thresholds Effective February 27, 2020

On January 28, 2020, the U.S. Federal Trade Commission (FTC) announced the annual changes to the thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). The new size of transaction threshold is $94 million. The new HSR Act thresholds will go into effect on February 27, 2020 and will apply to all transactions closing on or after that date.

The HSR Act requires parties with transactions exceeding certain thresholds to file premerger notification reports to the FTC and the Antitrust Division of the U.S. Department of Justice (unless an exemption applies) and then observe statutorily prescribed waiting periods (usually 30 days) prior to closing the transaction.

Five Key Aspects of the Long-Awaited Revised Draft US Vertical Merger Guidelines

On Friday, the Federal Trade Commission (“FTC”) and the Antitrust Division of the U.S. Department of Justice (“DOJ”) released joint draft Vertical Merger Guidelines (“Guidelines”) for public comment. This much anticipated revision to the Guidelines, which had not been updated in more than 35 years, outlines how the FTC and DOJ evaluate whether vertical mergers violate the federal antitrust laws. The Guidelines are notable both because they strike a more aggressive stance towards vertical mergers than prior guidance, and in that the two Democratic FTC Commissioners abstained from voting on the Guidelines, which they did not think were aggressive enough. The release of these Guidelines reinforce that vertical merger enforcement will continue to be a priority for both the FTC and DOJ.

GDR Insight Handbook 2020

Partner Ben Gris (Washington, D.C.-Antitrust) and counsel Sara Ashall (Brussels-Antitrust) have authored the chapter “European Union and United States: Antitrust and Data” in the GDR Insight Handbook 2020. The chapter provides an overview of the current activities of the EU and U.S. regulators in cases at the intersection of competition law and data issues.

European Antitrust Team Authors Chapters for ICLG: Cartels & Leniency 2020

Partners Matthew Readings (London-Antitrust) and Elvira Aliende Rodriguez (Brussels-Antitrust); counsel Mathias Stöcker (Frankfurt-Antitrust); and associates Agostino Bignardi (Brussels-Antitrust) and Simon Thexton (London-Antitrust) authored various chapters of the International Comparative Legal Guide to: Cartels & Leniency 2020. As well as authoring various chapters, Matthew and Elvira were also contributing editors for the 2020 edition.

Delbaum, Higbee and Ruegilin Author Chapter For Global Competition Review

Partners Jessica Delbaum (New York-Antitrust), David Higbee (Washington, D.C.-Antitrust) and associate Stacy Ruegilin (Washington, D.C.-Antitrust) have authored the chapter “IP & Antitrust Know-How 2019” published by Global Competition Review on October 21, 2019.

USA: Competition Litigation 2020

Laws and regulations on competition litigation vary across jurisdictions. In a chapter titled “USA: Competition Litigation 2020,” for the International Comparative Legal Guide to: Competition Litigation 2020, Shearman & Sterling partner Todd Stenerson and associate Rachel Mossman detail how competition rules are enforced in the United States. 

Getting The Deal - Through Market Intelligence - Cartels

Partner John F. Cove (San Francisco-Antitrust) authored the article “Parental Liability for Cartel Infringements in the EU and US,” published in August 2019 in Getting The Deal Through - Market Intelligence - Cartels. This article discusses the differing approaches to parental liability across the EU and U.S., before noting the practical considerations for companies to bear in mind when faced with international antitrust investigations.

HSBC v. Commission: Just Give Them a Reason

On 24 September 2019, the EU General Court (GC) handed down its judgment in HSBC v. Commission. Consistent with recent precedent, the GC reaffirmed the European Commission (“Commission”)’s duty to provide sufficient reasons when explaining fine calculations in cartel cases and annulled the fine imposed on HSBC in full as a result of the Commission’s insufficient reasoning.

EU Antitrust Litigation: An Update

As of mid-2018, the Damages Directive (Directive) has been incorporated across all European Union (EU) Member States. The European Commission (EC) has closed its previous probes against Member States for failing to implement the Directive by the original December 27, 2016 deadline, but is continuing to assess whether certain transposing national laws are sufficient. In the meantime, a multitude of claims have been and continue to be brought across the EU. The extent to which this trend will continue or whether the landscape of EU antitrust litigation will change is yet to be seen.

Google and Compliance with the Google Shopping Decision

With three cases recently closed, Google has been in the crosshairs of European Union Competition Commissioner Vestager and her team for the last few years. Google’s fines so far amount to more than €8.2 billion in total.

The Increasing Link Drawn by Regulators Between State Aid & Taxation Systems

In 2018, the European Commission (EC) concluded two more investigations into whether the tax ruling practices of Member States breached European Union (EU) State aid rules: the first, a finding of unlawful State aid resulting from tax rulings by Luxembourg in favor of Engie; the second, a rare finding of no aid in respect of the treatment by Luxembourg of McDonald’s under the Luxembourg-U.S. double taxation treaty. These decisions are discussed below.

Germany: Modernizing the Law on Abuse of Market Power for the Digital Economy

In recent years, Germany, like other European Union Member States, has seen various initiatives to address challenges to competition law by the digital economy. The Bundeskartellamt (BKartA) conducted administrative procedures against online hotel portals and against Facebook. In 2017, a number of amendments to the German Act against Restraints of Competition (GWB) came into force. Further amendments can be expected. In 2018, an expert report on “Modernizing the law on abuse of market power” for the German Ministry for Economic Affairs was submitted. The article briefly summarizes the main recommendations of the export report for legislative action.

Parental Liability for EU Antitrust Infringements: New and Broad Frontiers

The European Union (EU) antitrust law concepts of ‘undertaking’ and ‘single economic entity’ allow fines to be imposed on parent entities of subsidiaries involved in cartel conduct, even where the parent was not itself involved or aware of the cartel. Recent case law developments in the cartels sphere have materially extended the circumstances in which such fines can be imposed on parents.

Conglomerate Effects: An EU Resurgence?

The European Commission (EC) is increasingly invoking conglomerate theories of harm in its merger reviews. The complexity of these theories is resulting in more in-depth Phase 2 reviews and behavioral access commitments are relatively common for conglomerate mergers in the high-tech space.

In re vitamin C Antitrust Litigation

In January 2018, the U.S. Supreme Court granted certiorari in In re vitamin C Antitrust Litigation, the first lawsuit in U.S. history where the Chinese government has intervened to take a position in a case. The request for Supreme Court review followed a September 2016 decision by the Second Circuit that set aside a US$147 million treble damages verdict for the U.S.-purchaser plaintiffs. In setting aside the verdict, the Second Circuit held that the district court had failed to follow the reasoning in a submission by the Chinese Ministry of Commerce about the meaning and effect of Chinese competition law.