An Acuris Company

The inside track on competition law and regulatory change

2018 Global Trends Monitor

PaRR-Global.com An Acuris Company

Table of Contents

Edited by

Sylwester Gumienny Raymond Barrett Research Editor & Managing Editor

Introduction 01 USA 37 APAC 04 2017 Year in Review Most Active Jurisdictions, Sectors & Fines PaRR Statistics: M&A China 07 Sectors 2017 Year in Review 2018 Outlook PaRR Statistics: M&A Americas (excluding USA) 41 Sectors & Fines Sectors & fines Most active regional enforcers 2018 Outlook 2018 Outlook EMEA 44 APAC 22 Most Active Jurisdictions, Sectors & Fines APAC 2017 Year in Review EU & NCAs PaRR Statistics: M&A in India 2017 Year in Review Sectors PaRR Statistics: M&A Americas 32 PaRR Statistics: Abuse of Dominance Most Active Jurisdictions, Sectors & Fines 2018 Outlook – EU NCAs Sectors 2018 Outlook

PaRR-Global.com PaRR Global Trends Monitor 2018 Introduction 3

Introduction

Raymond Barrett, Managing Editor PaRR

Further information If 2017 was a year of surprises, 2018 promises While the US is still debating the merits of Another spectre looming on the horizon Get in touch or read more to be the year when a “new normal” takes “hipster antitrust”, the rest of the world has is protectionism. In Washington, Brussels, shape. Billion-dollar antitrust fines no longer moved ahead and grasped the nettle. The Berlin and Canberra there are moves afoot to have the same shock value as before. Vertical European Commission’s Margrethe Vestager reassess how foreign investment is screened, Raymond Barrett deals that in the past would have received oversaw a EUR 2.42bn fine against Google to account for more opaque concerns a cursory review are being challenged. Tech for abusing its dominance in online search, such as national security. Elsewhere, cries Cross navigation content giants with cutting–edge patent portfolios have while a probe of its Android operating system of discriminatory enforcement are heard, requires an internet connection. seen their entire business model questioned. is also expected to yield a hefty fine this year. whereby nation states stand accused of using Amidst this climate of change, impartial and Meanwhile, China, South Korea and Taiwan competition law as a tool of industrial policy. actionable insight from the regulatory capitals have all looked at Qualcomm’s patent licensing The idea that the antitrust and merger control of the globe has never been more valuable. in recent years—they did not like what they saw. worlds are somehow immune from these forces is wishful thinking. Therefore, it is my pleasure to share with you Numerous jurisdictions across the globe once again this year’s edition of PaRR’s Global have recently passed competition laws and We hope you find our report useful and, as Trends Monitor. Our global team has dissected are in the process of setting up enforcement always, your feedback is most welcome. the major developments and data points of agencies and a doctrine of active intervention the past twelve months while flagging many appears to be the ascendant philosophy. of the most pressing issues in the year ahead. Companies accustomed to relatively The digital economy is by far the dominant restrained enforcement must be conscious concern of antitrust enforcers around the that these new agencies will be keen to globe. From binge watching TV shows online to follow the lead of their more established the role of data in a merger review, the growth counterparts. Inaction is unlikely. of e-commerce and related industries has left antitrust enforcers with more questions than answers. Advocates of change insist that the old ways of looking at markets and competition are outmoded and need revision.

PaRR-Global.com PaRR Global Trends Monitor 2018 APAC 4 Most Active Jurisdictions

APAC - Most Active Jurisdictions*

Y/Y Change

0 0 0 0 -2 1 1 -1 -5 2

1. China 2. India 3. Australia 4. South Korea 5. Hong Kong 6. Japan 7. Indonesia 8. Philippines 9. Taiwan 10. Malaysia

* Competition rules are enforced in a variety of different ways Y/Y Change across the globe, and the level of fines imposed or number of 0 0 3 -1 2 -2 1 -1 2 0 investigations opened in a given jurisdiction is often used as a benchmark measure to indicate the strength of enforcement. Our ranking of enforcers considers other factors too: settlements, commitments, market studies and investigations as well—to a certain extent— as private actions, which are supposed to complement public enforcement, particularly in Europe. As fines are important, 11. New 12. Singapore 13. Pakistan 14. Thailand 15. Vietnam 16. Cambodia 17. Myanmar 18. Bangladesh 19. Sri Lanka 20. Nepal we present these separately. Zealand Together with the other factors they map out antitrust risk across the world.

PaRR-Global.com PaRR Global Trends Monitor 2018 APAC 5 Sectors in Focus in 2017

APAC -Sectors in Focus in 2017*

Top 10 Sectors in Focus

Telecomm- Computer Telecomm- Consumer: Consumer: Construction Automotive Transportation unications Semi- unications Medical Media Foods Retail Hardware Conductor Carriers

* Graph represents 2017 antitrust enforcement (excluding merger control) by industry.

PaRR-Global.com PaRR Global Trends Monitor 2018 APAC 6 Fines

Fines

Fines for 2017 Fines Since 2014 Australia, Singapore, China, Japan & Taiwan

Japan $1,000 China $66,380,000 $92,500,000

$800 Taiwan $777,800,000

$600 Millions

$400

$200

Australia $26,900,000

0 2014 2015 2016 2017

*2017 does not include fines imposed in Singapore

PaRR-Global.com PaRR Global Trends Monitor 2018 China 7 2017 Year in Review

China 2017 Year in Review

Further information In January, the Ministry of Commerce (MOFCOM) fined Canon Get in touch or read more for failing to notify its acquisition of Toshiba Medical Systems. In February, the government Apple’s local unit sued Qualcomm the same month, accusing Yuxuan Li the chipmaker of abusing its dominance and unfair patent announced new heads for MOFCOM licensing practices. and the National Development and Cross navigation content In February, the government announced new heads for requires an internet connection. MOFCOM and the National Development and Reform Reform Commission (NDRC). Commission (NDRC). The NDRC said in March that 11 shipping firms had reduced In July, the Auto Sales Management Measures were enforced. their terminal handling charges. A Lanzhou court reportedly found Nestle’s employees in In April, MOFCOM announced penalties against Cummins’ local the province of Gansu guilty of illicitly obtaining personal unit and its Chinese joint venture partner for failure to notify. information from hospital staff. The agency also green-lighted ChemChina’s USD 43bn JD.com and VIP.com criticized Alibaba’s Tmall for allegedly acquisition of Switzerland-based Syngenta. abusing its dominance. MOFCOM fined Meinian Onehealth Healthcare for failing to The NDRC fined two drugmakers for abuse of dominance in the notify its acquisition of Ciming Health Checkup. market for isoniazid active pharmaceutical ingredients (APIs). In May, MOFCOM conditionally approved Dow and DuPont’s The regulator of Luoyang city fined a pharmaceutical company USD 130bn merger of equals. for bribing a public hospital. In June, the Cybersecurity Law took effect. Meanwhile, government agencies published a catalog of key network devices and special security products that require inspection. The Beijing municipal unit fined the local property management association and its members for implementing price monopoly agreements.

PaRR-Global.com PaRR Global Trends Monitor 2018 China 8 2017 Year in Review

The NDRC released industry association pricing guidance to MOFCOM cleared with conditions, in two separate orders, the help plug the gaps in the Anti-monopoly Law and Price Law. combination of Agrium and PotashCorp, and Danish shipping giant Maersk Line’s takeover of Hamburg Süd. The Zhejiang Provincial Price Bureau fined 17 paper manufacturers for colluding to hike the prices of whiteboard Meanwhile, several local ports committed to rectifying their sheet rolls. anticompetitive practices following an investigation by the NDRC. In August, the NDRC penalized 23 Shanxi power generators and the industry group for anticompetitive conduct. Also in November, the agency proposed to ‘comprehensively’ deepen price reforms in monopolistic industries, and published The Guangdong high court upheld a ruling against the price guidance on APIs and drugs prone to shortages. local education department, bringing to an end China’s first administrative monopoly case. MOFCOM conditionally approved Advanced Semiconductor Engineering’s acquisition of Siliconware Precision Industries. MOFCOM cleared with conditions Broadcom’s takeover of Brocade Communications Systems. In December, MOFCOM cleared Becton Dickinson’s USD 24bn takeover of C.R. Bard subject to conditions. In September, the NDRC fined 18 PVC manufacturers USD 69m for entering into agreements to hike product prices. The Hainan price bureau won a review appeal against a ruling in an RPM penalty case against Hainan Yutai Scientific Feed. The Beijing cyberspace administrator imposed penalties on Sina Weibo and Baidu for not fulfilling their obligations in regard to user content. Separately, its Guangdong counterpart fined Tencent over similar breaches. The NDRC published rules for the government’s pricing In September, the NDRC fined 18 PVC activities. manufacturers USD 69m for entering In October, MOFCOM conditionally approved HP’s USD 1.05bn acquisition of Samsung Electronics’ printing division. into agreements to hike product prices. Meanwhile, the central government issued guidelines on implementing the Fair Competition Review System. In November, MOFCOM said it had submitted a draft of the Law on Foreign Investment to the State Council for review. Later that month, the Standing Committee of the National People’s Congress passed an amendment to the Anti-unfair Competition Law.

PaRR-Global.com PaRR Global Trends Monitor 2018 China 9 PaRR Statistics

PaRR Statistics: Complex global mergers with remedies see MOFCOM filing before EC, but approval later

Further information Complex global mergers with remedies see Total Days Spent in China and EU after Deal Announced Get in touch or read more MOFCOM filing before EC, but approval later • China slower in review than EU Yuxuan Li • Dow/DuPont was longest in both 191 jurisdictions Brocade/Broadcom 293 Luuk de Klein • Two deals cleared with only behavioural remedies by both agencies Dow/DuPont 472 Cross navigation content Global mergers requiring remedies in China 505 requires an internet connection. and in the EU are generally filed with Beijing’s 209 Ministry of Commerce (MOFCOM) before St. Jude Medical/Abbott being notified to the European Commission 246 (EC), PaRR Statistics show. SABMiller/AB InBev 195 However, an analysis of nine deals facing 261 conditional approval in both jurisdictions dating 199 back to 2013 shows that the transactions Freescale/NXP were cleared in Europe earlier than in China. 268 Following the announcement of a deal the Life/Thermo 225 parties waited a median of 43 calendar days 274 to notify MOFCOM whereas in the EU it took a median of 151 calendar days—almost half a year. Gambro/Baxter International 230 247 289 Xstrata/Glencore 434

0 100 200 300 400 500 600

EC Clearance

MOFCOM Clearance

PaRR-Global.com PaRR Global Trends Monitor 2018 China 10 PaRR Statistics

The two authorities’ processes differ, with Remedy types MOFCOM taking time to pick a case up for review after the initial filing, while the EC Behavioural Structural begins its investigation immediately after Deal MOFCOM MOFCOM Behavioural EC Structural EC notification. But, in all cases except Hamburg Xstrata/Glencore Sud/Maersk Line, agreed in March 2017, 3 3 3 3 MOFCOM took the deals up for review before Gambro/Baxter International 3 3 the EC process kicked off. For the China/EU deals analysed in this Life/Thermo 3 3 3 study, Dow/DuPont took the longest in both Freescale/NXP jurisdictions. The deal was announced on 11 3 3 3 December 2015, but it was filed to MOFCOM SABMiller/AB InBev 3 3 on 21 March 2016 and to the EC on 22 June 2016. It was taken up for review by MOFCOM St. Jude Medical Abbott 3 3 on 6 May 2016. Dow/DuPont 3 3 3 However, even though the companies filed93 days earlier in China, MOFCOM’s conditional Brocade/Broadcom 3 3 approval came one month after the EC’s final decision on the deal. The companies waited Hamburg Sud/Maersk Line 3 3 a total of 404 calendar days to get the final approval from MOFCOM, which imposed a series of complicated conditions on the transaction. Six of the nine deals in this analysis saw In the three other mergers, MOFCOM wanted In the EU, approval took 188 calendar days, complex types of commitments. both structural and behavioural remedies in which was also the longest of all EC deals taken two cases - Life/Thermo and Dow/DuPont For one deal, Xstrata/Glencore, both authorities into account. That merger was also the only one -whereas the EC only required divestitures. wanted structural and behavioural remedies. that saw a Phase II probe and a second set of For Freescale/NXP, the roles were reversed. remedies proposed to gain clearance. In the two most recently approved deals Three other deals saw the EC and MOFCOM - Brocade/Broadcom and Hamburg Sud/ But while the majority of tie-ups were allow the companies to merge on the condition Maersk Line - only behavioural remedies were approved following a short investigation in of structural changes to their operations. submitted to satisfy the agencies. Europe, seven of them went to Phase 3 in China, with four of those having to refile before MOFCOM gave its green light.

PaRR-Global.com PaRR Global Trends Monitor 2018 China 11 PaRR Statistics

Differing approaches As one analyses the data, it is important to MOFCOM note that MOFCOM and the EC have different merger review timelines. Clearance Remedies In China, a review can be divided into three Clearance Prohibition Remedies phases: Phase I — up to 30 calendar days; Clearance Further Extended Review Prohibition Phase II — up to 90 calendar days following Further Review Withdrawal and Re-filing Withdrawal and Re-filing Phase I; and Phase III — up to 60 calendar days following Phase II. Deals that fail to be cleared in Preliminary Extended Fur ther Extended Calendar days Phase III have to be refiled to MOFCOM. Review Phase Phase The EC has Phase I and Phase II (or in- depth) reviews, with the former subject to a 25-working-day deadline starting the day after notification. That deadline is extended by ten 30 CD 90 CD 60 CD working days if commitments are filed. If the Brussels agency finds competition concerns that require further investigation, it can refer to deal to a Phase II review, which lasts 90 working days. This can be extended by an additional 15 working days if remedies are EC offered after the 55th working day of the case. The EC can grant extensions of up to 20 working days, if the parties agree or request Clearance Clearance one, while the clock can also be stopped if Remedies Remedies Phase II information is missing. Notification Prohibition

Pre- Working days notification Phase I Phase II

At least 2 weeks 25 - 35 WD 90 - 125 WD

PaRR-Global.com PaRR Global Trends Monitor 2018 China 12 PaRR Statistics

What about the other deals? Our analysis shows that MOFCOM acts quickly MOFCOM officials have cleared a total of 19 once it receives remedy proposals from deals subject to remedies since 2013, which the parties. A decision was issued five days took a median of 175 calendar days. All involved after Dow/DuPont brought their final remedy requests for additional information, with the proposal to MOFCOM. Beijing agency only starting the review process The median length of time from filing the after it received the additional information. remedy plan to securing approval was eight It took a median of 49 calendar days for calendar days. MOFCOM to start their review process after Out of the 94 EC conditional clearance the parties notified the ministry. Including this decisions, ten saw a second set of additional time, the mean duration from filing commitments offered; two deals were only to approval amounted to 264 calendar days cleared after a third remedy package was while the median for the whole process is 220 proposed. calendar days. Parties offered commitments a median of 20 In contrast, a total of 1,639 mergers have working days following notification, while in six been notified to the EC since 2013, of which cases, the filing form was accompanied by a 94 required commitments before being remedy submission. The median number of approved. Of those deals, 22 went to a Phase working days from decision to notification for II investigation before clearance. EC reviews was 35. Almost half (9) of the MOFCOM deals resulted in the parties being asked to refile and start the process all over again after Phase 3 of the merger review process expired. Ultimately, five deals had to wait to until the third phase of their second filing, a process which took over a year.

PaRR-Global.com PaRR Global Trends Monitor 2018 China 13 MOFCOM simple case reviews faster in 1H17

MOFCOM simple case reviews faster in 1H17

Further information China’s Ministry of Commerce (MOFCOM) The Mead Johnson/Reckitt Benckiser deal Of the 131 clearances: Get in touch or read more took an average of 23 days to review simple was initially filed with the regulator as a simple • 121 (92%) were approved in Phase I cases in the first half of this year compared to case on 30 March, but the deal needed to be 25 days in the previous year, data compiled by refiled under the normal procedure in early • 10 (8%) were approved in Phase II Yan Li this news service shows. April after MOFCOM received complaints that • No simple cases were sent to Phase III the large market share of Reckitt Benckiser’s Distribution of Review Phases* Durex business in China could give the The table below shows the percentage of Yuxuan Li In 1H17, MOFCOM’s Anti-Monopoly Bureau combined entity an unfair edge over rivals. The clearances in different phases, review duration, assessed 124 mergers under its simplified deal was approved on 12 June after a 74-day and a comparison of corresponding data from Cross navigation content review procedure. Of them, 123 were approved. review. 1H17 AND 1H16 requires an internet connection. The review outcome of UBE In the first half of 2016, 131 simple cases were Industries’ proposed acquisition of a battery approved. firm remained unknown as at the end of the third quarter. The deal was filed as a simple Average Median Phase I Phase II case in January. Review Review Review review Of the 123 clearances: Year Phase I Phase II Days Days Days Days 1H16 92% 8% 25 26 24 45 • 116 (94%) were approved in Phase I (up to 30 calendar days) 1H17 94% 6% 23 22 22 43 • 6 (6%) were green-lighted in Phase II (up to 90 calendar days following Phase I) • No simple cases were sent to Phase III (up to 60 calendar days following Phase II) • One simple case was refiled under the normal procedure

PaRR-Global.com PaRR Global Trends Monitor 2018 China 14 MOFCOM imposes USD 0.61m in gun-jumping fines since 2014

MOFCOM imposes USD 0.61m in gun-jumping fines since 2014

Further information • Fines imposed on 20 companies related to The fines ranged from CNY 150,000 to CNY Non-filers that reported to the merger Get in touch or read more 15 deals 400,000. Under China’s merger control rules, authority voluntarily received the smallest fine the maximum penalty for failure to notify is of CNY 150,000. • Penalties range from CNY 150,000 to CNY CNY 500,000. A breakdown of the penalties Yan Li 400,000 The ‘Interim Measures on Investigation is as follows: and Punishment of Failure to Duly Notify • Highest fine on Bombardier Transportation • 2014: One case with a fine of CNY 0.3m Concentrations of Undertakings’, effective 1 Cross navigation content Sweden for recidivism February 2012, have authorized MOFCOM to requires an internet connection. • 2015: Four cases with total fines of CNY China’s merger authority has imposed issue orders to unwind deals. 1.05m CNY 4.25m (approximately USD 615,940) in However, the regulator did not exercise this cumulative fines since 2014 on companies • 2016: Six cases with total fines of CNY 2m power in any of the 15 deals, having concluded failing to notify merger and joint venture deals, • 2017: Four cases with total fines of 0.9m that they were unlikely to eliminate or restrict according to penalty decisions posted on the competition. agency’s website. MOFCOM announced its first ever gun-jumping penalty on 2 December Parties suspected of gun-jumping are required The decisions against 20 companies were 2014, imposing a fine of CNY 300,000 to submit documents within 30 days of based on investigations the Ministry of on Tsinghua Unigroup for failing to notify its MOFCOM beginning an inquiry. If the regulator Commerce (MOFCOM) conducted either of acquisition of RDA Microelectronics. decides that a detailed probe is required, its own accord, tip-offs from third parties, or it asks the parties to submit additional voluntary reporting by companies that failed A CNY 400,000 penalty handed down documents within 30 days of receiving the to notify before deal completion. to Bombardier Transportation Sweden last notice of further investigation. April in connection with its joint venture Of the 15 deals, MOFCOM probed eight of deal with United Group is the largest its own accord, four based on third-party fine imposed by the agency on a non-filer. complaints, and three upon voluntary reporting. Taking note of the fact that the company had been penalized in September 2015 for a similar violation, MOFCOM said the second transgression was deliberate.

PaRR-Global.com PaRR Global Trends Monitor 2018 China 15 Sectors in focus in 2017

China - Sectors in Focus in 2017*

Top 10 Sectors in Focus

Computer: Computer Internet Computer Financial Consumer: Automotive Agriculture Energy Semi-con Medical Software ecommerce Hardware Services Other ductors

* Graph represents 2017 antitrust enforcement (excluding merger control) by industry.

PaRR-Global.com PaRR Global Trends Monitor 2018 China 16 Fines

China - Fines

Antitrust fines in China 2016 & 2017

2016 2017 $148,500,000 $92,500,000

PaRR-Global.com PaRR Global Trends Monitor 2018 China 17 China’s Jiangsu tops regional AIC enforcement list

China’s Jiangsu tops regional AIC enforcement list

Further information China’s Jiangsu tops regional AIC The fine on Tetra Pak accounts for 85.5% of • In 2017, the agency imposed a fine of Get in touch or read more enforcement list the total CNY 781.08m fines. CNY 21.4m on a water supply company in The antitrust enforcer in China’s Jiangsu Wujiang city and a record CNY 25m on a gas Of all the 31 provincial AICs, 18, or 58%, province has been the most active among its company in Suqian city. Both companies Yan Li launched antitrust investigations with 17 regional peers since 2013, according to penalty were accused of abuse of dominance. of them (excluding Ningxia) imposing CNY decisions posted by the State Administration 113.36m in fines. Of these, 11 imposed CNY The second most active agency in terms for Industry and Commerce (SAIC). Yuxuan Li 45.84m in disgorgement. of overall fines was the Liaoning AIC, which In the period between 2013 — when the SAIC imposed fines of CNY 20.7m (18% of the total The Jiangsu AIC launched antitrust inquiries in Cross navigation content began publishing penalty decisions on its fines imposed by the provincial regulators) in four of the five years under review, and handed requires an internet connection. new online case platform — and the end of 2013 and 2015. The Shandong AIC was the down CNY 50.77m in fines, accounting for 45% August 2017, the regulator and 17 of the 31 third most active with fines of CNY 8.8m (8% of of the fines issued by the 17 regional AICs. It provincial AICs under it have imposed fines the total) in 2015. also imposed CNY 3.8m in disgorgement. totaling CNY 781.08m (USD 119.25m) on 201 While the Liaoning regulator did not impose entities, according to data compiled by this The details of these fines are as follows: any disgorgement, its Shandong peer imposed news service. • In 2013, it fined a five-member Lianyungang CNY 52,308 in disgorgement. A yearly breakdown of fines imposed by the city cement cartel facilitated by an industry Fines issued by these three provincial AICs SAIC and its regional units are as follows: association CNY 0.73m. total CNY 80.27m or 71% of the fines issued by • CNY 23,221,874 in 2013 • In 2014, it imposed fines of CNY 1.72m on a regional AICs in the period under review. • CNY 14,541,631 in 2014 tobacco company from Xuzhou city for abuse • CNY 7,461,215 in 2015 At the bottom of the list is the Ningxia AIC. of dominance. • CNY 687,570,707 in 2016 The agency began investigating state-run • CNY 48,284,963 as of August 2017 • In 2016, the agency fined a water supply telcos China Tie Tong Telecommunications, firm CNY 1.83m for abusing its dominance China Unicom, and China Telecom in 2015, but The SAIC directly investigated two companies in Suqian city. The same year, it dropped terminated the inquiries in 2017. — Shankai Sports and Tetra Pak — for abuse an investigation into a power distribution of dominance. While the investigation into company in Hai’an county because the Shankai Sports was terminated in 2015 after company fulfilled its rectification commitments the company followed through its rectification for abuse of dominance in 2016. measures, Tetra Pak was handed down a penalty of CNY 667.72m in 2016.

PaRR-Global.com PaRR Global Trends Monitor 2018 China 18 2018 Outlook

China 2018 Outlook

Further information China 2018 Outlook The regulation will set a China benchmark for such as pharma and medical device Get in touch or read more After enforcing the Antimonopoly Law for intellectual property rights (IPRs) in the realm manufacturers, with similarly structured nearly a decade, China’s antitrust authorities of antitrust and influence the practices of SEP distribution networks. are now advancing their own antitrust model, holders in China. Lisha Zhou The AMC has also received draft antitrust which they hope to introduce by 2020. Another expected legislative event related guidelines for a leniency program and for In response to Chinese President Xi Jinping’s to IPR is the introduction of antitrust IPR commitments. The antitrust guidelines on Qianwen Lu call to actively participate in the rule-making guidelines, which will be published by the exemptions have been released for public aspect of international economics and trade, Antimonopoly Commission (AMC) of the comment by the NDRC and will eventually Cross navigation content the country’s antitrust authorities are keen to State Council soon. The draft guidelines, be submitted to the AMC. The guidance requires an internet connection. add China’s experience and solutions to global an integration of four drafts submitted by on illegal gains and fine calculation may be economic governance to the international the NDRC, the State Administration for dropped for the time being. The release of order. The plan, which will be realized over Industry and Commerce (SAIC), the Ministry the guidelines on leniency and commitments the next two years, was set out in January of Commerce (MOFCOM) and the State this year is highly anticipated but by no at the China Competition Policy and Law Intellectual Property Office (SIPO), have been means certain. Conference. internally discussed and also released for RPM stance public consultation. Whether this will bring about a major The NDRC is also drafting antitrust guidelines change in the manner in which China goes It is expected that the AMC will set aside on price-related vertical restraints. Its about antitrust investigations and merger controversial articles and only publish those approach towards resale price maintenance reviews remains to be seen. China’s antitrust that have been all agreed by four agencies. (RPM) is most likely to follow the per se agencies have, however, already begun approach rather than the rule of reason test as Auto guidelines building an antitrust law system with “Chinese the agency interprets the Article 14 of China’s The AMC is also expected to publish characteristics.” Antimonopoly Law as “block plus exemption.” guidelines involving auto industry this year. IPR guidelines The long-awaited auto guidelines, together Whether the SAIC will follow suit and draft The National Development and Reform with MOFCOM’s Auto Sales Management guidelines on non-price related vertical Commission (NDRC) has finalized draft Measures which took effect from July 2017, restraints is uncertain, though the agency regulations on the pricing of standard essential will constitute a compliance system for the has been expected to do so for years. If patents (SEPs) for public consultation. The auto and auto parts industry. As such, they are both agencies come up with guidelines on regulations will set out what SEP holders are expected to place new compliance demands vertical restraints, China may establish its permitted and prohibited to do when setting on manufacturers. The auto guidelines will also own competition policy on vertical restraints, licensing fees. serve as a guide for other industries, similar to the European Commission.

PaRR-Global.com PaRR Global Trends Monitor 2018 China 19 2018 Outlook

Since the Shanghai High People’s Court ruled and compensate victims. The different rules through large-scale official training against Johnson & Johnson in a landmark goals allow different approaches toward in 2018. The agency will also promote the second instance ruling in an RPM suit filed by RPM between administrative agencies and implementation of a work plan, announced in Ruibang, Chinese courts have applied the rule courts. While China’s legal system is not December 2017, to remove anticompetitive of reason approach to RPM cases. Meanwhile based on case law, the decision by Hainan elements from existing policies this year. the NDRC has been emphasizing its “block High People’s Court will nevertheless impact Furthermore, the NDRC will draft and publish plus exemption” stance on RPM publicly companies in that an RPM agreement will rules on exemptions to the FCRS as well as and implementing it in its enforcement result in an administrative penalty regardless guidelines on third-party assessment bodies, actions. The different approaches to RPM by of whether it has been implemented. which will assess policies and offer expert administrative agencies and courts in China China’s FCRS and AML revision opinion to policymakers during fair competition have existed for a long time and continue to Since the second half of last year, antitrust reviews. The NDRC has already started create uncertainty for practitioners. agencies as well as the AMC have been exploring the establishment of a third-party The NDRC’s stance on RPM was recently actively looking at revising the AML after assessment mechanism with universities in affirmed by the Hainan High People’s Court in nearly a decade of enforcement. Some areas Beijing, Shanghai, Hebei, Jiangsu and Hunan. its second-instance ruling at the end of 2017. require clarification, such as Article 55 on Peking University has also been mandated by The court ruled in favor of the Hainan Price whether a patent holder exercising patent the NDRC to undertake a research project, Supervision and Antimonopoly Bureau (Hainan rights in compliance with IP laws can still be which involves monitoring rules for e-hailing Price Bureau) in reviewing a first instance ruling found in violation of the AML. Other areas of services released by provincial governments by the Haikou Intermediate People’s Court, the AML that may be amended include the and quantitatively assessing e-hailing rules which dismissed the Hainan Price Bureau’s addition of a fair competition review system in three cities. It will be instructive to see if penalty decision against Hainan Yutai Scientific (FCRS), a definition of “control” position, and the quantitative assessments are rolled out in Feed for entering, but not implementing, an an increase in penalties for violations related other cities as well. RPM agreement with its distributors. to merger review. In addition to self-examinations by The Hainan High People’s Court ruled that The FCRS, established nationally in the past government agencies regarding new and since Article 46 of China’s Antimonopoly year, was initiated to prevent government existing policies, and inspections to examine Law (AML) gives enforcers the right to agencies from making anticompetitive policies. implementation of FCRS by local government impose fines on an undertaking that has yet It is also a cornerstone of what China sees as agencies, the year will also likely see lawsuits to implement a monopolistic agreement, an its unique antitrust model. regarding the FCRS. Currently, the Nanchang administrative enforcer’s penalty decision Railway Transportation Court has officially The year 2018 will be a critical year for the on an RPM agreement is therefore not accepted an administrative lawsuit filed by FCRS to successfully address ingrained conditional to proving that the agreement app developer Shenzhen Thsware Hi-Tech, practices in the country. The NDRC has set up has eliminated or restricted competition. against the Jiangxi Provincial Department a special division within its Price Supervision The court further emphasized that an of Housing and Urban-Rural Development. and Antimonopoly Bureau (PSAB) to lead administrative enforcement aims to prevent The provincial housing and development the establishment of the FCRS and plans and stop a monopolistic behavior while a agency is accused of failing to conduct to expedite implementation of detailed private litigation aims to determine damages a FCRS and creating barriers to market

PaRR-Global.com PaRR Global Trends Monitor 2018 China 20 2018 Outlook

entry. It is expected to be the country’s Merger landscape MOFCOM has been pushing the draft and first administrative lawsuit in which an MOFCOM was thrust into the spotlight at release of the new Measures since the administrative agency is sued for failing to the start of the New Year. The biggest deal second half of 2016. The measures are fulfil its obligation under the FCRS. in the tech sector -- Broadcom’s hostile expected to offer more clear guidance on the bid to acquire Qualcomm -- is posing notification threshold and procedural issues NDRC enforcement unprecedented challenges for MOFCOM, during review. Cross-border monopolies and the rapid rise which is pondering the extent to which it of the internet economy will be the focus of The measures are expected to be released should intervene in the deal. enforcement by the NDRC in 2018. early this year. Although a latecomer to the global antitrust The NDRC is presently probing DowDuPont. Empowering AICs community, MOFCOM has no intention of The agency also met with Samsung The SAIC, overseeing non-price related simply following the actions of more established representatives regarding a surge in the price monopolistic behavior, opened 18 antitrust agencies. For many cross-border deals, of dynamic random access memory (DRAM) investigations in 2017, with decisions pending MOFCOM has demonstrated its own distinct chips. Meanwhile, the agency received in 13 of the cases. The agency and local approach and imposed remedies that reflect complaints about the price of toluene AICs overall launched fewer antitrust cases this. China has indicated it wants to establish its diisocyanate (TDI), a chemical used to make compared to the NDRC, especially on the own antitrust model by 2020 and MOFCOM will polyurethane coating. Trade associations local level. play an important role in that process. called for the NDRC to probe TDI price hikes. Compared to central and local DRC operations, Whether the NDRC launches formal antitrust Potential deals this year that will have a high the AICs are constrained on enforcement – a investigations into the price hikes in the impact in China include NXP/Qualcomm, result of a top-down approval hierarchy. The DRAM and TDI industries remains to be seen. Qualcomm/Broadcom, Toshiba Memory sale SAIC is believed to be considering revising the In 2017, the agency’s investigation of a PVC to Bain Capital Consortium, Cavium/Marvell system to delegate greater investigative power cartel, which resulted in fines of CNY 457m and Monsanto/Bayer, among others. to local branches. Looking ahead, enforcement imposed on 18 players, was triggered by similar Gun-jumping among Chinese companies is actions by local AICs will become more robust. complaints. still common and awareness of complying There are early signs that some regional AICs Whether the upcoming IPR and auto industry with the Antimonopoly Law still needs to be have taken the initiative. For example, PaRR guidelines will trigger more enforcement cultivated by strong enforcement, MOFCOM reported that the Shanghai AIC established an actions is worthy of consideration. The AMB’s director general Wu Zhenguo has said. ad hoc team last year to investigate antitrust guidelines on vertical restraints may also Investigations into failure to notify will be conduct. The branch raided the offices of US prompt more RPM cases. intensified rather than relaxed. chemical giant Eastman last year in a probe of Big Data and the internet economy will The most pressing of MOFCOM’s 2018 alleged anticompetitive conduct. undoubtedly draw the attention of China’s legislative items is shaping up to be its new Sectors on the radar of the AICs include antitrust agencies. With more and more Measures on Merger Review of Business healthcare, computer software, tobacco and e-commerce giants emerging in China, Concentrations, which will replace two gasoline, among others. the authorities will face the challenge of separate measures on notification and review. determining what constitutes anticompetitive behavior in the digital economy.

PaRR-Global.com PaRR Global Trends Monitor 2018 Section title 21 Section sub-title

Last year, the SAIC received complaints from A decision is also expected in another refusal- Guangdong Pisen Electronics against Apple to-deal case between Hitachi Metals and four for alleged monopolistic conduct tied to Ningbo-based rare earth producers. Filed in its MFi licensing practices. It is still unclear 2014, the Ningbo Intermediate People’s Court whether the SAIC will launched a formal has been reviewing the case for more than investigation into Apple. three years. The lawsuit could mark a first for China in patent-related antitrust litigation if Meanwhile, the SAIC has been investigating the court decides that a non SEP can still be allegations of abuse of dominance by deemed an “essential facility.” Microsoft since June 2014. The investigation, which is reportedly progressing steadily, was Other high profile cases include Apple’s supposed to last for two years. antitrust action against Qualcomm and Qualcomm’s countersuits against Apple. The Implementation of the Fair Competition Review patent war between Huawei and Samsung may System (FCRS) has been an enforcement also be resolved. priority for the SAIC and is expected to maintain momentum this year. It is closely linked to the effort to go after administrative monopolies. Private litigation China has been experiencing an increase in antitrust litigation and the trend is expected to continue, with developments in several high- profile antitrust cases likely this year. The refusal-to-deal case between Yunnan Yingding Bio-energy and Sinopec Sales Co. is also being carefully watched. The plaintiff Yingding, which became the first private firm to win against an SOE in a refusal-to-deal case in a first instance court, subsequently saw the decision overturned in a second-instance ruling. Yingding filed an application for re- examination of the ruling with the Supreme People’s Court.

PaRR-Global.com PaRR Global Trends Monitor 2018 Asia Pacific 22 2017 Year in Review

Asia Pacific 2017 Year in Review

Further information Australia Antitrust fines in Australia since 2014 Get in touch or read more The federal government launched a Critical Infrastructure Centre in January to manage security risks around foreign investment. Sonu Mohanty In April, former spy chief David Irvine was appointed to head up the Foreign Investment Review Board for a five-year $28 Cross navigation content term starting 16 April. requires an internet connection. The following month, the government announced a reforms package to overhaul competition and accountability in the financial sector. In the first successful prosecution under the Australian $21 competition law’s criminal cartel provisions, the Federal Court convicted in August Japan’s NYK and ordered it to pay a fine of USD 20m. The senate passed the government’s long-stymied bill changing media ownership and regulation in September. $14 Millions The Turnbull Administration’s competition law reforms, expected to provide greater protection to small businesses, commenced in November. The antitrust agency announced in December that it would not seek a judicial review of the competition tribunal’s decision to $7 approve the merger of wagering giants Tabcorp and Tatts. The same month, the regulator also announced its decision to oppose the proposed acquisition of Woolworths’ network of retail service station sites by BP. $0 2014 2015 2016 2017

PaRR-Global.com PaRR Global Trends Monitor 2018 Asia Pacific 23 2017 Year in Review

In December, the federal government formally directed the competition authority to launch an inquiry into digital platform The competition commission providers, such as Facebook and Google. The government also established a royal commission into issued the country’s first-ever RPM alleged misconduct in the domestic banking, superannuation, and financial services industry. order, in June, fining South Korea’s Hong Kong Hyundai Motor USD 14m. In the first case brought to the city’s competition tribunal, in March, the antitrust regulator accused five information technology companies of rigging a tender to supply services to The same month, the Ministry of Corporate Affairs exempted the Young Women’s Christian Association. merging entities from having to notify the antitrust regulator The government announced in June the appointment of Brent within 30 days of the relevant trigger event. Snyder as the new CEO of the competition commission for a In July, a turf war broke out between the telecoms and three-year term from 4 September. competition regulators over predatory pricing. Former leader Donald Tsang’s bribery trial was dismissed in The Bombay High Court set aside in September the November as the jury was unable to reach a majority verdict. competition commission’s majority decision to probe telcos India Airtel, Vodafone, and Idea Cellular for collusive conduct. The competition commission began the year by setting a precedent in its cartel enforcement regime with the first leniency order, issued in January. The same month, the regulator also slapped USD 30m in fines on seven cement makers for cartel conduct. In February, New Delhi approved the dismantling of the Foreign Investment Promotion Board. The government also replaced, effective May, the Competition Appellate Tribunal with the National Company Law Appellate Tribunal through an amendment to the antitrust law. The competition commission issued the country’s first-ever RPM order, in June, fining South Korea’s Hyundai Motor USD 14m.

PaRR-Global.com PaRR Global Trends Monitor 2018 Asia Pacific 24 2017 Year in Review

PaRR Statistics: India seeks refiling of 6 global deals over USD 200m since 2011

Further information The Competition Commission of India (CCI) has sought the The other four deals were initially filed under Form II, and the Get in touch or read more refiling of six global deals with an implied equity value of over concerned parties were requested to file again using the USD 200m since 2011, an analysis of 54 M&A transactions same form. racked by PaRR shows. Derek Li French company Essilor’s refiling, at the CCI’s behest in The analysis involves listed companies and does not reflect May, regarding its proposed acquisition of Italian eyewear the total number of combinations reviewed by the CCI during manufacturer Luxottica Group was approved on 12 July. Vivian Wong that time period. The competition Commission of India (CCI) On 25 March, the antitrust enforcer requested Monsanto and reviewed and made decisions on over 340 mergers and Bayer to refile their planned combination. The competition agency Cross navigation content acquisitions globally since March 2011. is scrutinizing transactions in the chemical industry, particularly requires an internet connection. Dell’s acquisition of EMC as well as ChemChina’s takeover agrochemicals involving the seeds sector, very closely. of Syngenta were initially filed under the simple form (Form I), It took the CCI more than nine months after a refiling to but the CCI later required that the deal be refiled under Form II. approve the Syngenta-ChemChina deal in contrast to the four 6 deals where CCI required refiling: months it took to reach decisions on the merger of EMC and Dell and St. Jude’s acquisition by Abbott Laboratories. • EMC/Dell The regulator has been reviewing three other chemical • St. Jude Medical/Abbott Laboratories sector mega-mergers for more than six months. It • Syngenta/ChemChina accepted Agrium and Potash’s filing in October 2016, and it wasn’t until October 2017 when the deal was finally cleared • Dow Chemical/DuPont with remedies. • Luxottica/Essilor In addition, Dow Chemical and DuPont filed afresh in May 2016, • Monsanto/Bayer after their initial filing in January 2016, and had to wait for the CCI’s decision until 13 June 2017. The CCI recommends the use of Form II when the merging parties have horizontal overlaps and a combined share of more Apart from the deals requiring refiling, the remaining 48 than 15% in the relevant product or geographic market/s, or combinations took an average of 118 days from the date of deal vertical overlaps and a combined share of more than 25% in announcement to receive CCI clearance. the relevant market/s.

PaRR-Global.com PaRR Global Trends Monitor 2018 Asia Pacific 25 2017 Year in Review

Indonesia Antitrust fines in Japan since 2014 The competition authority announced in February steep fines against Yamaha Indonesia Motor Manufacturing and Astra Honda Motor for price-fixing. In June, competition chief Syarkawi Rauf called for granting the regulator the power to take on foreign companies violating $300 domestic antitrust rules. Meanwhile, the government continues to deliberate upon proposed amendments to the competition law. In November, a district court overturned the antitrust agency’s penalty decision from 2016 against a poultry cartel.

The regulator fined Tirta Investama and its distributor Balina $225 Agung USD 1.5m in December for anticompetitive conduct in the domestic bottled water sector. Japan The Fair Trade Commission (FTC) fined four ambulance radio system makers USD 56.25m in February for cartel conduct. $150 The regulator concluded that destination clauses in liquefied Millions natural gas contracts have an “anticompetitive effect”, it told PaRR in June. Separately, it also released the findings from a five month-long study on how big data affects market competitiveness. $75 The FTC continued its tough stance on the ongoing consolidation of regional lenders warning them in November about seeking to benefit from monopolies created through M&A.

In December, the Supreme Court ruled that the antitrust $8,600,000 regulator could penalize foreign cartels if they affected $0 competition in the domestic market. 2014 2015 2016 2017

PaRR-Global.com Malaysia Philippines South Korea In February, the competition agency proposed The Philippine Competition Act took full effect In April, prosecutors charged former president USD 48m in penalties against the general from 9 August. Park Geun-hye with bribery in a case involving insurers’ body and its members for colluding the country’s wealthiest chaebols. The privacy enforcement agency said with auto repair workshops on the price of in November that it was working with The health ministry fined Novartis USD 50m after-market car parts. counterparts in Australia and the US on data in May for offering kickbacks to medical The central bank decried the move. breaches related to Uber. professionals. US authorities took legal action in June The competition commission asked the President Moon Jae-in bypassed lawmakers to recover about USD 540m in assets Supreme Court in December to dismiss a to confirm in June Kim Sang-jo’s appointment allegedly pilfered from sovereign wealth 1MDB. ruling which compelled the regulator to clear as the new chief of the Fair Trade Commission the PLDT/Globe Telecom-San Miguel merger (FTC). In December, the competition tribunal upheld without review. Meanwhile, Manila is gearing up a regulatory fine imposed on MyEG Services In August, the antitrust enforcer imposed USD to facilitate the entry of a third telco. for abusing its dominance in the provision and 38m in penalties on nine global auto shipping management of online foreign worker permit companies for collusive conduct. Singapore renewals. In August, the Competition Appeal Board The Seoul Central District Court sentenced in announced its dismissal of a plea filed by IPP the same month Samsung scion Lee Jae- Myanmar Financial Advisers to reduce an antitrust penalty. yong to five years in prison for bribery and The government said in December that embezzlement. the new Companies Act, paving the way The competition commission fined in for more foreign investment, would be November several companies for colluding to In November, the FTC announced USD 33m in implemented from August 2018. rig tenders called for the Formula 1 Grand Prix fines against Denso, Delphi, and Hyundam for and for an international school. bid-rigging. In December, the competition commission The same month, the regulator said the launched a consultation on proposed changes top court had turned down US chipmaker to the antitrust law. Qualcomm’s request to suspend the implementation of its USD 956m penalty decision. In December, the FTC said it would tighten the rules on circular ownership – a move that will force would Samsung SDI to sell C&T shares worth close to USD 487m.

PaRR-Global.com PaRR Global Trends Monitor 2018 Asia Pacific 27 2017 Year in Review

Taiwan In May, the National Communication Antitrust fines in Taiwan since 2014 Commission blocked Taiwan Optical Platform’s proposed purchase of a 65% stake in Eastern Broadcasting. The Fair Trade Commission (FTC) terminated in July an investigation of Google, after $800 determining that the removal of an app from the company’s Google Play digital distribution service was not anticompetitive. In October, the regulator fined Qualcomm a record USD 773.4m for monopolistic $600 conduct. The Ministry of Economic Affairs expressed concern that the decision could impact investment in Taiwan. The FTC made a ‘no-penalty’ decision in November in its most favored nation investigation against Yahoo. $400 Millions In December, the Investment Commission waved through Google’s proposed acquisition of HTC’s mobile certification business and certain assets.

Meanwhile, the antitrust authority continues to $200 press for search and seizure powers as a tool for cartel investigations, although the chances of the relevant legislation being introduced anytime soon are bleak.

Vietnam $600,000 $2,420,000 $0 In October, Vietnam’s trade and transport 2014 2015 2016 2017 ministries found that ride-hailing apps Uber and Grab have an unfair advantage over conventional taxi services.

PaRR-Global.com PaRR Global Trends Monitor 2018 Asia Pacific 28 Sectors (excluding China)*

APAC – Sectors (excluding China)*

Top 10 Sectors in Focus

Telecom- Computer Internet / Financial Consumer: Consumer: Energy Agriculture Construction Transportation munications: Software ecommerce Services Foods Retail Hardware

* Graph represents 2017 antitrust enforcement (excluding merger control) by industry.

PaRR-Global.com PaRR Global Trends Monitor 2018 Asia Pacific 29 2018 Outlook

Asia Pacific 2018 Outlook

Further information Australia impact on consumers, media companies scheduled sometime this year. For Hong Kong Get in touch or read more Now that Australia has cut its teeth and the advertising sector. The study comes residents, it is no surprise that real estate, pursuing criminal cartels cases—against as traditional media sources had voiced construction and property management have Japanese shipping companies Nippon concerns about the ever-increasing impact of topped the list of complaints received by the Freny Patel Yusen Kabushiki Kaisha (NYK) and Kawasaki digital platforms. newly enhanced agency. Kisen Kaisha (K-Line)—2018 should see New media merger guidelines issued towards The failure to give Hong Kong’s liner shipping the Australian Competition and Consumer the end of last year, while not heralding industry a blanket block exemption showed the David Lore Commission (ACCC) pursue up to four significant change, highlighted the government’s commission does not intend to simply roll over domestic cartel cases. Although the criminal commitment to more qualitative concepts when confronted by the island city’s powerful penalties had been in place since 2009, it Cross navigation content such as diversity and quality. Foreign buyers business community. A public consultation on took almost a decade for the commission to requires an internet connection. should be comforted by reports that changes an exemption granted to the banking sector finally pull the trigger. Given that the “roll-on/ to Australia’s Foreign Investment Review will see how the commission fairs when pitted roll-off” sector has been targeted in the US, Board, including the introduction of the Critical against another of Hong Kong’s key industries. Japan, South Africa, China, and Canada, it Infrastructure Centre, has sped up the review is safe to assume that the ACCC benefitted The appointment of former senior enforcer process. However, dealmaker in this space from cooperation with other enforcers. The from the US Department of Justice as the should take heed of recent government question that now remains is how effective commission’s chief executive officer has also restrictions on electricity transmission and the commission will be in pursuing domestic fueled speculation that Hong Kong may turn its distribution and reports that it is considering collusion, when the onus falls on it alone to attention to bigger fish in the future and tackle adding natural gas to the register of critical provide the evidence. some cross-border cartels. In the interim, a assets that includes ports, electricity and water. new set of commissioners should be brought Like in other parts of the world, the evolving Hong Kong onboard after the incumbents finish their terms digital landscape is also forcing the ACCC There is no doubt that 2018 is going to in March, while the Competition Ordinance to look with fresh eyes on age-old antitrust be a seminal year for the Competition is also up for review. Potential agenda questions, such as how to define market Commission in Hong Kong as the agency items include looking at the exemptions power and what constitutes a relevant market. gears up bring its first case in June—a granted to over 500 statutory bodies and This year will see the agency move ahead number of IT companies face allegations of the introduction of a comprehensive merger with an inquiry into digital platforms such bid-rigging. A second case focusing on public control regime. as Facebook and Google to assess their housing renovation contracts should also be

PaRR-Global.com PaRR Global Trends Monitor 2018 Asia Pacific 30 2018 Outlook

India Indonesia Japan The e-economy is likely to create some Indonesia is set to have a busy year as both It is no secret that antitrust penalties in headlines this year in India with the antitrust operational and regulatory changes are Japan are modest compared to the size of regulator believed to be looking into the role in the pipeline. The first thing to keep an the economy. For the 2016-2017 fiscal year, of artificial intelligence and algorithms in the eye on is the whether the Commission for the Japan Fair Trade Commission (JFTC) digital space. The Competition Commission of the Supervision of Business Competition imposed JPY 9.8bn (USD 87.7m) in monetary India’s verdict on Google’s search practices– (KPPU) will get a host of new commissioners. penalties on 33 businesses. To put this in expected to be challenged -- has just come Nine members of the commission see their perspective, neighboring South Korea fined a through and is in line with other developed terms expire this year but the House of single company, Novartis, USD 50m for offering antitrust agencies. The commission has also Representatives has not yet deemed that the kickbacks to medical professionals. And when begun advising state governments on which replacements shortlisted by President Joko you look at the nearly billion-dollar fines sectors to watch when it comes to bid rigging Widodo are “fit and proper” for the posts. levelled against Qualcomm in South Korea, in the public procurement process. Bid rigging Extensions to existing mandates could serve as Taiwan and China, the question for 2018 and has become an area of even greater risk as the a stop-gap. beyond is this: when will the JFTC stop using CCI may treat subsidiaries of the same parent carrots to enforce its antitrust agenda and A number of proposed amendments to company as separate legal businesses that bring out a big stick? While publically stated the Competition Act would definitely give can or should compete with each other. priorities include an e-commerce study, PaRR the KPPU more teeth. An extraterritoriality reported that the JFTC hopes to discuss As competition enforcement increases in provision would allow it go after Singapore- the Korea Fair Trade Commission’s (KFTC) India, the country’s Supreme Court is proving based freight forwarders while the introduction USD 921m dollar fine on Qualcomm during to be an important player in the shaping its of leniency policy should see an increase in upcoming bilateral talks. Could this be the year evolution. Precedent settings decisions such the number of cases brought by the agency. Japan joins the antitrust Major League? a May 2017 decision that antitrust penalties Other proposed changes include removing a should be based on relevant turnover rather ceiling on administrative fines, presently set Japan is targeting new enforcement areas than overall revenue highlight the important at IDR 25bn (USD 1.87m), and the adoption of and moving away from traditional areas like role the court can play. It remains to be seen if a pre-merger notification system. Three key construction bid rigging. The digital economy— the court will weigh in on other issues this year, priorities for the KPPU for 2018 are expected including the Internet of Things, artificial but the possibility of intervention should not to include government procurement, the digital intelligence and Big Data—will be a focus via be discounted. economy and the food sector. In the long run, a joint market study into e-commerce with a proposal to upgrade the KPPU to a fully- the Ministry of Economy, Trade & Industry. fledged government body enjoying ministerial Insights will be sought from investigations status would give the commission the clout to being conducted in the EU. Along with looking take on bigger cases. into the implications of competition law in human resources practices, such as collusion

PaRR-Global.com PaRR Global Trends Monitor 2018 Asia Pacific 31 2018 Outlook

in wages and non-compete clauses, the JFTC South Korea the changes required to facilitate effective is also looking at new penalty calculations which Cracking down on institutionalized graft and enforcement. Cambodia, which has yet to would allow for more flexibility and discretion collusion was very much the dominant story enact a competition law, may see one brought in setting fines when companies cooperate. in South Korea last year with high-profile forward as early as this year. Once in place, Currently there is no pecuniary incentive for casualties including former president Park the focus will likely be on cartels and abuse companies to cooperate under the existing law. Geun-hye and Samsung scion and heir Lee of dominance. An e-commerce law is also Jae-yong. Samsung should continue to being drafted. Laos has yet to establish a Philippines dominate the headlines this year as rules on competition agency and is therefore not The Philippines is very much the “one-to- circular ownership may force chaebols such prepared to accept cases. Meanwhile, watch this year as its competition law came as Samsung to divest assets. Meanwhile, Korea Malaysia recently concluded market studies into full effect last August after a two-year Fair Trade Commission’s USD 956m penalty of the pharmaceuticals and building materials grace period to allow companies to amend against Qualcomm may also be revisited in sectors. The Malaysian antitrust regulator has any potentially anticompetitive practices. light of the news that Samsung and the US asked government agencies to help it uncover The Philippine Competition Commission chipmaker have entered into an agreement cases of bid rigging in public procurement will conduct market studies of 10 priority over 5-G licensing. tenders, as such conduct accounts for the areas this year including food, transport, lion’s share of complaints. Myanmar has yet to pharmaceuticals, agro-business, digital Taiwan establish a competition agency to enforce its commerce, telecommunications, retailers and Qualcomm has never been far away from the competition statute, which came into effect segments of the manufacturing industry. headlines this year but Taiwan presents a last year. Competition rules were published unique situation—two branches of government Singapore recently, however, and the government is forcefully advocating different solutions to an The most arresting proposal on the agenda in process of appointing commissioners. antitrust investigation. Qualcomm is currently for Singapore this year are proposed changes Thailand’s competition law came into effect paying the Taiwan Fair Trade Commission’s to the Competition Act that would make in October 2017 and includes a combination USD 773.4m fine in 13m installments as it commitments legally binding; empower the of administrative and criminal sanctions as pursues an appeal. Perhaps it is hoping the authority to conduct general interviews well as limited exemptions for state-owned Ministry of Economic Affairs—which sprang during inspections and searches; and provide entities. In Vietnam, a new competition law will to its defense saying the fine and remedies confidential advice on potential mergers. come before the National Assembly in May are not in Taiwan’s national interest—has more A bill could be passed in parliament by this year. It is expected to come into force in “guanxi” than the antitrust regulator. the middle of the year. The Competition January 2019. The bill introduces a merger Commission of Singapore will focus on ASEAN control regime, extraterritoriality and a leniency transportation, logistics, hospitality, wholesale A number of ASEAN countries are in the program. Also, it consolidates the country’s retail/trade and data portability, the latter a process of establishing competition regimes Competition Council and Competition joint study with the data protection regulator, and are likely to face resistance from more Administration Department into a single while also looking at the interface between entrenched sector regulators. Agencies and National Competition Agency. consumer protection and competition law. officials are nevertheless pressing ahead with

PaRR-Global.com PaRR Global Trends Monitor 2018 Americas 32 Most active jurisdictions*

Americas - Most Active Jurisdictions*

Y/Y Change

0 0 -1 -2 2 1

1. USA 2. Brazil 3. Mexico 4. Peru 5. Canada 6. Chile

Y/Y Change

-2 1 1 -1 -1 2

* Competition rules are enforced in a variety of different ways across the globe, and the level of fines imposed or number of investigations opened in a given jurisdiction is often used as a benchmark measure to indicate the strength of enforcement. Our ranking of enforcers considers other factors too: settlements, commitments, market studies and investigations as well—to a certain extent—as private actions, which are supposed to complement public 7. Ecuador 8. Columbia 9. Argentina 10. Venezuela 11. Dominic 12. Puerto Rico enforcement, particularly in Europe. As fines are Republic important, we present these separately. Together with the other factors they map out antitrust risk across the world.

PaRR-Global.com PaRR Global Trends Monitor 2018 Americas 33 Sectors in focus in 2017

Americas - Sectors in Focus in 2017*

Top 10 Sectors in Focus

Medical: Consumer: Consumer: Financial Transporta- Construction Energy Pharmaceu- Agriculture Medical Automotive Foods Retail Services tion ticals

* Graph represents 2017 antitrust enforcement (excluding merger control) by industry.

PaRR-Global.com PaRR Global Trends Monitor 2018 Americas 34 Fines

Fines

Fines for 2017 Brazil, Canada, Mexico & USA combined fines

$3,000 $12,079,192

$2,681,500,000

$2,000 Millions

$1,000

$305,798,265

$0 2014 2015 2016 2017

*US data for 2017 includes only top 10 DoJ fines **2017 does not include fines imposed in Mexico

PaRR-Global.com PaRR Global Trends Monitor 2018 US 35 US 2017 Year in Review

US 2017 Year in Review

Further information In January, the Federal Trade Commission with the US Supreme Court (SCOTUS) over Also in September, the Senate confirmed the Get in touch or read more (FTC) filed a complaint charging Qualcomm an appellate court’s affirmation of a DC district nomination of Makan Delrahim to serve as with monopolizing a key semiconductor court’s decision to enjoin the merger on assistant attorney general leading the DoJ’s device used in cell phones and other antitrust grounds. Antitrust Division. Antonia Nguyen consumer products. However, three former The DoJ said in June that it would not file a In October, SCOTUS granted a petition for FTC officials said that the agency under petition for writ of certiorari with SCOTUS in a writ of certiorari filed by a group of states in Cross navigation content President Donald Trump might drop the case, case over American Express’ anti-steering rules. a case over American Express’ anti-steering requires an internet connection. as signaled by Republican Commissioner rules, despite an amicus brief filed by DoJ Maureen Ohlhausen’s dissent from the lawsuit. Later that month, Barclays, UBS, and HSBC advocating for the petition’s denial. Meanwhile, the company was also hit by a settled with bondholder plaintiffs for a total of consumer suit alleging it monopolized the USD 36.1m in a case alleging they conspired to In November, the DoJ filed a civil antitrust modem chipset market. manipulate the Libor. lawsuit to block AT&T/DirecTV’s proposed acquisition of Time Warner. Officials said the After a district court granted the Department Also in June, a California judge declined to merger is “more harmful than” the precedent of Justice’s (DoJ) request to enjoin their tie- accept a plea agreement reached between merger of NBC Universal and Comcast. up, Aetna and Humana mutually ended their the DoJ and Elna, a Japanese company named merger agreement in February. as a defendant in ongoing criminal and civil That month, Delrahim signaled a significant litigation for alleged price-fixing of capacitor shift in thinking about the role of antitrust in Later in March, a spokesperson for AP Moller- electronic components. the enforcement of intellectual property rights, Maersk confirmed that the DoJ is taking particularly standard essential patents. another look at the ocean container shipping Rite Aid and Walgreens Boots Alliance (WBA) industry and issued subpoenas to almost two terminated their merger agreement in June In December, Bayer and Monsanto announced dozen shippers. and entered into an agreement whereby WBA that CFIUS completed its review and would acquire 2,186 Rite Aid stores, related concluded that there were no unresolved In April, the Judicial Panel on Multidistrict distribution assets, and inventory from Rite Aid national security concerns with respect to the Litigation (JPML) consolidated cases in the for USD 5.175bn. proposed transaction. Northern District of California alleging Qualcomm monopolized the modem chipset market. Lattice’s proposed sale to Canyon Bridge was Later that month, District Judge Richard J. blocked by President Trump in September Leon set a 19 March 2018 trial date for the After a Delaware court denied Anthem’s after the parties failed to receive approval DoJ’s challenge to AT&T’s proposed takeover motion to enjoin Cigna from terminating for the transaction from the Committee on of Time Warner. the companies’ merger agreement, Anthem Foreign Investment in the US (CFIUS). terminated the deal in May. Anthem also said it would withdraw its petition for writ of certiorari

PaRR-Global.com PaRR Global Trends Monitor 2018 US 36 PaRR Statistics

PaRR Statistics: DoJ & FTC challenge to non-reportable mergers average 2.3 years post-consummation

Further information The US Department of Justice (DoJ) and The transactions challenged the longest duration The merger challenged in the shortest amount Get in touch or read more Federal Trade Commission (FTC) sue merging of time after consummation were both made by of time post-consummation was the May 2011 parties in non-reportable transactions on an Graco. Graco’s USD 65m purchase of Gusmer acquisition of Tyson Foods’ Harrisonburg, average of almost two and a half years after a in February 2005 was challenged by the FTC Virginia, chicken processing complex by Linda Szabados deal is consummated. eight years and two months later, in April 2013. George’s. That deal was challenged three days The FTC also challenged Graco’s acquisition after it was completed. According to a PaRR analysis of public records, Cross navigation content of GlasCraft for USD 35m. The deal was the average time between the closing of a requires an internet connection. consummated in February 2008 and challenged merger and the filing of an antitrust complaint five years and two months later, in April 2013. by the agencies between 2010 and 2017 was 2.28 years, or 832 days. PaRR reviewed DoJ and FTC public documents filed between those years’ that specified the Year Time lapsed transaction Transaction from completion companies had not been required to report completed Companies Agency Value to challenge their transactions under the Hart-Scott-Rodino The Dun & Bradstreet Corporation’s acquisition 2010 FTC USD 29m 1 year, 3 months (HSR) Antitrust Improvements Act of 1976. Only of Quality Education Data (QED) the deals, as noted in the table below, were Election Systems & Software/Premier Election 2010 DoJ USD 5m 6 months included in the analysis. Solutions merger Dean Foods Company’s acquisition of assets Eleven mergers fell into this category in the 2010 DoJ USD 35m 9 months from Foremost Farms USA Cooperative seven years. Based on the review of public George’s Inc.’s acquisition of Tyson Foods’ records, the agencies did not file complaints 2011 DoJ Unknown 3 days Harrisonburg, VA, chicken processing complex against non-reportable mergers in 2015 or 2016. Joint venture formed by Coach USA Inc. and 2012 DoJ Unknown 3 years, 9 months According to the findings, of the mergers in City Sights LLC Bazaarvoice, Inc.’s acquisition of PowerReviews, which the cash value was given, the deals 2013 DoJ USD 168.2m 7 months averaged USD 52.25m in value. The cash value Inc. Charlotte Pipe and Foundry’s acquisition of of two of the 11 deals reviewed for the findings 2013 FTC USD 19m 2 years, 9 months Star Pipe’s cast iron soil pipe business were not given. 2013 Graco’s acquisition of Gusmer Corp. FTC USD 65m 8 years, 2 months The largest merger challenged was 2013 Graco’s acquisition of GlasCraft Inc. FTC USD 35m 5 years, 2 months Bazaarvoice’s acquisition of PowerReviews, Heraeus Electro-Nite LLC acquisition of assets 2014 DoJ USD 42m 1 year, 4 months valued at USD 168.2m. The merger closed in from Midwest Instrument Company Inc. (Minco) June 2012 and was challenged by the DoJ TransDigm Group acquisition of Takata 2017 DoJ USD 72m 10 months seven months later, in January 2013. Protection Systems,

PaRR-Global.com PaRR Global Trends Monitor 2018 USA 37 Sectors in focus in 2017

USA – Sectors in focus in 2017*

Top 10 Sectors in Focus

Computer: Consumer: Financial Computer: Consumer: Computer Pharmaceuticals Agriculture Automotive Medical Semi- Retail Services Hardware Other software conductors

* Graph represents 2017 antitrust enforcement (excluding merger control) by industry.

PaRR-Global.com PaRR Global Trends Monitor 2018 US 38 2018 Outlook

US 2018 Outlook

Further information The Department of Justice second requests for high profile transactions. expressing concerns over media consolidation Get in touch or read more At the Department of Justice’s (DoJ), Many of these are expected to be resolved at on the campaign trail, President Trump called Antitrust Division, 2018 will be the first full some point in 2018 and most will be analyzed and congratulated Fox head Rupert Murdoch year under Assistant Attorney General Makan through the lens of the pending lawsuit as on reaching the deal with Disney. A favorable Joseph Tipograph Delrahim, who stepped into the post in the observers aim to better understand the disposition of the Disney merger may therefore fall of 2017. Delrahim quickly made waves in administration’s policy and views on media add further speculation from those questioning Cross navigation content antitrust circles through a series of speeches consolidation. Many believe the Time Warner/ the administration’s influence on the DoJ. requires an internet connection. raising concerns about vertical mergers AT&T challenge was encouraged by President Two other deals currently under DoJ review that and the problems with using conduct or Donald Trump’s disdain for Time Warner may reveal additional insight into the agency’s behavioral remedies to cure the competitive subsidiary CNN, as he promised to block the views on the current state of media competition issues. These speeches preceded the DoJ’s merger while running for office in 2016. are the mergers of broadcaster affiliates Tribune decision to challenge a vertical merger that From a policy perspective, the most notable and Sinclair, as well as that of cable networks many expected the agency to settle with a transaction under DoJ review at the outset Scripps and Discovery. behavioral consent that the parties proposed. of the year may be the acquisition of national One of the largest cross-border deals on Merger Enforcement health insurer Aetna by retail pharmacy chain the DoJ’s docket is the agrochemical tie-up Last November, the DoJ challenged telecom CVS. In 2017, two health insurance mergers between Monsanto and Bayer. The parties have and satellite cable distributor AT&T’s proposed were abandoned and a retail pharmacy deal already agreed to divest selected crop science USD 85bn acquisition of video content was restructured in response to concerns over businesses to rival BASF to address some provider Time Warner. Barring settlement high levels of concentration in both segments. concerns, but it appears that further divestitures prior to the 19 March trial date, the lawsuit The vertical integration of top competitors in will be required as the parties continue to would be the first vertical merger that the each segment is therefore expected by many to explore how to resolve the outstanding issues DoJ has litigated in over four decades. The test the DoJ’s application of its vertical merger with agencies around the globe. DoJ had a perfect merger litigation record enforcement policy, as shaped by the Time under the Obama administration, which some Warner/AT&T challenge. Non-Merger Enforcement commentators suggest is a reflection that The DoJ has several ongoing non-merger Several other media mergers being reviewed they were not bringing enough difficult cases litigation matters currently on the docket. by the DoJ after receiving a second request to court. This merger challenge, the most The agency continues to prosecute several are expected to receive more attention on noteworthy antitrust enforcement matter in individuals for their participation in real estate the heels of the Time Warner/AT&T lawsuit. In year one of the Trump administration, certainly foreclosure auction bid-rigging with up-coming particular, the broadcast network combination projects to be a difficult case. sentencing hearings in San Francisco. These between Twenty First Century Fox and Disney cases sprung from the Obama administration’s In addition to litigating the Time Warner/AT&T is expected to involve a close look into vertical Financial Fraud Enforcement Task Force that was merger, the DoJ has several outstanding issues surrounding video streaming. After created in response to the 2008 financial crisis.

PaRR-Global.com PaRR Global Trends Monitor 2018 US 39 2018 Outlook

Also moving forward are conspiracy cases holders regarding antitrust issues arising in The Luxottica/Essilor tie-up involves the world’s involving electrolytic capacitors, packaged the standard-setting context. Both of these largest eyeglass lens manufacturer acquiring seafood, aluminum sulfate and customized developments were welcomed news to tech the largest eyeglasses frame maker and retailer promotional products. Making the capacitors giant Qualcomm, which has been racking up in the US. Senate Democrats have flagged litigation particularly noteworthy, Judge James heavy fines and seeing undesired licensing this deal as problematic. If the FTC agrees, it Donato of the Northern District of California requirements imposed by antitrust agencies may provide an opportunity to learn whether rejected several plea agreements that the DoJ around the world. The Obama administration the agency shares the DoJ’s views on whether struck with defendants on the grounds that DoJ advanced a standard-setting policy seen behavioral remedies are effective tools for they seemed too lenient and did not afford him by many as unfavorable to patent holders. addressing the harms from vertical integrations the discretion to modify the sentencing terms. across concentrated industries. The Federal Trade Commission This news service has also reported that the After enduring almost all of 2017 with only two The FTC recently issued a second request DoJ is collecting information from competitors commissioners on the panel and the agency’s on Broadcom’s attempted hostile bid for in the container shipping industry and further leadership operating in an “Acting” capacity, Qualcomm, its leading rival for various cutting action may be on its way in the coming year. the Federal Trade Commission (FTC) is starting edge connectivity technology products to take shape. Reportedly, Joseph Simons of and services. There may be challenges with Policy Developments Paul Weiss is on track to serve as Chair, joined spinning off assets, as many of the potential The Time Warner/AT&T merger has revived by Republicans Christine Wilson and Noah buyers are located abroad and will need to be discussions around vertical merger and Phillips, and Democrats Rohit Chopra and screened for national security concerns. The behavioral remedy policies, both of which may Rebecca Slaughter as Commissioners. fact that both firms are already in the agency’s be the subject of further study and policy crosshairs for other reasons adds more fuel to guidance in the coming year. Merger Enforcement the fire. Qualcomm has been litigating against The FTC kicks off 2018 with two administrative The DoJ is also exploring its role in the Trump the FTC in federal court, while Broadcom is the merger trials on the calendar, scheduled administration’s efforts to eliminate regulations subject of a conduct investigation. nearly back-to-back. On 18 May, the FTC’s viewed as burdensome on industries. Recent Administrative Law Judge (ALJ) D. Michael A third major cross-border transaction in front policy remarks prepared by Delrahim highlight Chappell is set to preside over the agency’s of the agency is industrial gasses combination new provisions that the DoJ is including case against the Cristal/Tronox titanium between Linde and Praxair. This industry has in consents geared towards improving the dioxide merger. Two weeks later, on 1 June, seen significant consolidation of late, and the agency’s ability to police consent violations. In ALJ Chappell is scheduled to hear the FTC’s merger parties are two of very few large players the same speech, the Antitrust Division’s head case against the consummated merger of remaining in the space. expressed an interest in further studying issues microprocessor prosthetic knee manufacturers around deregulation in the near future. Health care continues to be a priority for Otto Bock and Freedom Innovations. the FTC, as it scrutinizes two deals involving Other priorities flagged by Delrahim include Meanwhile, the FTC is reviewing a number subsidiaries of German health care company taking a tougher stance with foreign agencies of mergers on second request, many in Fresenius SE. Fresenius Medical Care’s who deviated from international enforcement conjunction with other antitrust regulators proposed acquisition of NxStage is being standards when policing US companies and around the globe. examined for its effects on kidney dialysis adopting polices more favorable to patent treatments, particularly in the at-home

PaRR-Global.com PaRR Global Trends Monitor 2018 US 40 2018 Outlook

segment. Simultaneously, Fresenius Kabi is asserting state action immunity as a defense FTC’s administrative process often comes seeking to consummate its bid to buy generic in seeking to halt the proceedings until the under scrutiny, as the ALJ is generally seen as pharmaceutical company Akorn, a rival with commission decides the motion to dismiss. deferential to the staff and view the commission business overlaps in injectable drugs focused In a recent filing, the defendant flagged that that voted to issue the complaint is rarely on anesthesia and anti-inflammation. a group of 24 states have filed briefs amicus viewed as an impartial appellate tribunal. While curiae with the Supreme Court seeking a right the change in leadership may bring some hope The FTC is also reviewing Northrop Grumman’s of interlocutory appeal and stay of discovery to the table for 1-800-Contacts, the complaint acquisition of fellow defense contractor pending a final determination on state was issued by a unanimous decision, so this Orbital ATK. Orbital is a key supplier of to both action immunity. does not appear to be a matter where partisan Northrop and Boeing who are competing for a interests diverge. USD 60-90 bn missile defense contract with The state action doctrine has been a growing the Department of Defense (DoD). The DoD point of contention between the states and Policy Developments is working closely with the FTC in the review the FTC. Following the federal government’s The agency’s policy agenda will largely remain of the transaction. In recent years, the DoD victory in the FTC v. North Carolina Dental an unknown until the new commission is in has asked the FTC to refrain from enforcing Board case, many states believe that an place, although the Senate confirmation the antitrust laws against the defense unreasonable burden has been placed on hearings may give some indications as to where mergers deemed anticompetitive, citing them and the licensing boards that help them each nominee stands on issues of interest. national security concerns as necessitating regulate professions. Along with decisions about the legitimacy of unconditional approval. Qualcomm’s licensing model, many are looking Pay-for-delay is still top of mind at the FTC, to see the stance these commissioners plan to Non-Merger Enforcement as its reverse payments case against Impax take with the ubiquitous tech platforms Google, As the new panel steps in to its role, it will Laboratories is headed to closing arguments Amazon, Facebook and Apple. weigh whether it plans to continue the FTC’s before the ALJ. In a related matter, the FTC is litigation against Qualcomm for the tech giant’s awaiting a Delaware district court decision in Until that time, Acting Chairman Ohlhaussen licensing practices. The litigation was initiated its lawsuit against Shire ViroPharma, in which is expected to continue pursuing a policy of by a 2-1 vote in January of last year, with lone the FTC alleges that Shire abused government regulatory humility and economic freedom, Republican Commissioner Maureen Ohlhaussen processes to delay generic competition to a which relates to the FTC’s conquests against casting the dissenting vote against bringing the branded prescription drug. Specifically, the FTC the application of state action immunity. Acting matter. If the Republican majority, once in place, accuses the defendant of waging “a campaign Bureau of Competition Director Bruce Hoffman is on the same page as Ohlhaussen, the agency of serial, repetitive, and unsupported” filings recently gave a speech supporting the DoJ’s could decide to settle or dismiss the action that with the US Food and Drug Administration and reluctance to use behavioral remedies to cure is currently in the discovery phase before the courts to delay the generic’s approval. concerns from vertical mergers. Northern District of California federal court. As its first administrative conduct matter, the The FTC continues to pursue state licensing new commission may see an appeal of an ALJ authorities with its case against the Louisiana initial decision finding 1-800-Contacts violated Real Estate Appraisers Board for imposing federal antitrust law by reaching agreements regulations that effectively create a price floor with rivals to refrain from bidding on search for appraisal fees. The defendant board is engine results derived from its trademark. The

PaRR-Global.com PaRR Global Trends Monitor 2018 Americas (excluding USA) 41 Sectors

Sectors – Americas (excluding USA)*

Top 10 Sectors in Focus

Consumer: Consumer: Financial Services Chemicals Construction Energy Transportation Medical Automotive & Foods Retail Services (other) Materials

* Graph represents 2017 antitrust enforcement (excluding merger control) by industry.

PaRR-Global.com PaRR Global Trends Monitor 2018 Americas (excluding USA) 42 Antitrust enforcements

Americas (excluding USA) - Antitrust enforcement

Antitrust fines in Brazil Antitrust fines in Canada Antitrust fines in Mexico

$1,200 $15 $15

$1,000

$12 $12

$800

$9 $9

$600 Millions Millions Millions

$6 $6

$400

$3 $3 $200

$0 $0 $0 2014 2015 2016 2017 2014 2015 2016 2017-n/a 2014 2015 2016 2017-n/a

PaRR-Global.com PaRR Global Trends Monitor 2018 Americas (excluding USA) 43

Chile minority interest in their competitors’ business efficiencies, companies with declining financial Chile’s competition authority, the National exceeding 10% ownership must notify the performance, foreclosure, countervailing Economic Prosecutor’s Office (FNE), reformed FNE and interlocking directorates between buyer power, ancillary restraints and two their Competition law in 2016 to focus on competing corporations are prohibited. The operational diagrams mapping out the analytic mergers, cartels and market studies. The FNE is also in the process of implementing a framework for vertical and horizontal mergers. merger control reforms came into effect leniency program to aid in investigations into The ultimate question in the review process is in 2017, beginning with an obligatory pre- cartels. Individuals who participate in cartels can whether the transaction will negatively affect merger notification to the FNE for transactions be subject to imprisonment for 3 to 10 years. the general economic conditions in Argentina. exceeding the statutory thresholds. Previously Argentina Mexico a voluntary procedure, merging companies The Merger Guidelines under the Competition Mexico’s competition authority, the Federal would notify the Chilean Competition Court Law in Argentina were drafted and approved Economic Competition Commission (COFECE), (TLDC), a process that could take anywhere by the Ministry of Competition, Deregulation will be introducing its Strategic Plan 2018-2021 from six to 18 months. From 1 June 2017 to and Consumer Defense in 2001. Argentina’s this year. After a period of public consultation, 31 January 2018, the FNE was notified of competition authority, Comision Nacional it is currently undergoing final revision. The 31 mergers: 17 of the investigations closed de Defensa de la Competencia (CNDC), plan identifies six economic sectors that will without remedies, 4 were conditionally embarked on a reform project and submitted be made a priority in the 2018-2021 period: approved, and the remaining 10 were under revisions for the guidelines in July 2017. financial, agri-food, energy, transportation, review as of 1 February. Currently undergoing review by the healthcare and public procurement. The Mirroring their European counterparts, Argentine Congress, the project to reform commission has imposed around USD 200m the new merger control under FNE now the competition law has been approved by in fines over the past four years and COFECE implements two review phases and a the House of Representatives and is awaiting President Alejandra Palacios has stated that a judicial stage. Phase I is a 30 business day approval by the Senate. Among other things, key objective of the agency is to be seen as review. For transactions requiring in-depth the reform creates an independent body, credible enforcer of antitrust law by companies review, Phase II can last 90 business days. namely the National Competition Authority in Mexico. If the FNE decides to block the transaction (NAC), which can impose more rigorous Having already intervened in the airline, cargo during Phase II, the parties submit an appeal sanctions including an amnesty program; and and railway transportation sectors, things to to the TDLC and the review enters the judicial a pre-merger notification process. The NAC watch in 2018 include an investigation that has stage, which cannot exceed 120 business will be established within the year following been opened into possible relative monopolistic days. If the TDLC approves the transaction congressional approval. practices in the country’s e-commerce and subject to remedies that were not submitted Argentina’s review process aims to be a related services market. On the policy front, or offered by the parties, a special appeal can combination of what is used in the US, EU and COFECE has shown a willingness to try and be submitted before the Supreme Court that other jurisdictions, looking at market definition influence government policy by issuing a report could take up to an additional six months. by geographic versus product markets, and proposing that presidential candidates identify Additional updates to the standards include framing the transaction’s market power though and eliminate restrictions to competition a minority shareholding notification, a using the HHI test. The proposed modifications created by federal regulations. reinforcement of cartel enforcement and will include new sections evaluating unilateral the leniency policy. Companies that have a and coordinated effects of a merger,

PaRR-Global.com PaRR Global Trends Monitor 2018 EMEA 44 Most Active Jurisdictions

EMEA - Most Active Jurisdictions*

Y/Y Change

0 1 1 -2 0 0 5 -1 -1 4

1. United 2. Germany 3. Russia 4. Italy 5. Spain 6. France 7. South Africa 8. Netherlands 9. Turkey 10. Romania Kingdom

* Competition rules are enforced in a variety of different ways Y/Y Change across the globe, and the level of fines imposed or number of -1 -3 -2 4 0 3 4 -1 4 0 investigations opened in a given jurisdiction is often used as a benchmark measure to indicate the strength of enforcement. Our ranking of enforcers considers other factors too: settlements, commitments, market studies and investigations as well—to a certain extent— as private actions, which are supposed to complement public enforcement, particularly in 11. Czech 12. Hungary 13. Poland 14. Sweden 15. Switzerland 16. Ireland 17. Austria 18. Denmark 19. Lithuania 20. Portugal Europe. As fines are important, Republic (Republic) we present these separately. Together with the other factors they map out antitrust risk across the world.

PaRR-Global.com PaRR Global Trends Monitor 2018 EMEA 45 Most Active Jurisdictions

Y/Y Change

-8 2 -7 6 3 0 9 7 -2

21. Ukraine 22. Slovakia 23. Norway 24. Serbia 25. Finland 26. Israel 27. Moldova 28. Channel 29. Greece Islands

Y/Y Change

-5 -2 0 0 -12 -4 -2 0

30. Latvia 31. Croatia 32. Cyprus 33. Malta 34. Bulgaria 35. Iceland 36. Estonia 37. Slovenia

PaRR-Global.com 201 ines ountr b ountr Belgium € 7,268,000

United ingdom (U) € 7,174,012

Ukraine € 5,706,696

Norway € 5,170,215

Bulgaria € 4,554,424

Sweden € 3,870,948

Slovakia € 3,562,999

Romania € 1,819,044

Austria € 1,125,200

Serbia € 794,730

Denmark € 624,379

Hungary € 537,298

Iceland € 367,615

Finland € 200,000

Ireland € 17,500

Croatia € 6,591

PaRR Global Trends Monitor 2018 EMEA 46 Fines

EMEA Fines

We have omitted Russia from the overall Fines for 2017 rankings for 2017 since we do not yet have the full Russian dataset. However, based on the level of past fines—€105m in 2014, €95m in 2015 and €61m in 2016—Russia would appear among the top ten enforcers in Europe. € 367,615 € 3,870,948

€ 200,000

€ 5,170,215

€ 58,423,000 € 10,148,544 € 624,379 € 7,268,000 € 14,394,371

€ 17,500 € 3,562,999 € 7,174,012 € 32,661,002 € 51,900,000

€ 21,864,447 € 5,706,696

€ 1,125,200 € 497,803,200 € 537,298 € 27,350,000* €397,291,417 € 794,730 € 4,554,424 € 27,766,886 € 137,952,776 € 38,313,777 € 44,335,304 € 6,591

€ 112,178,450 € 27,766,886 € 51,500,444

€ 21,341,921 South Africa

PaRR-Global.com *updated on 14 May 18; previously stated amount €1,819,044 reflected the total amount of fines confirmed by the Romanian courts PaRR Global Trends Monitor 2018 Europe 47 Fines

Antitrust fines EC & Europe Antitrust fines in EC & Europe (combined)

€5,000 €8,000

€7,000

€4,000

€6,000

€3,000 €5,000 Millions

€4,000 Millions €2,000

€3,000

€1,000 €2,000

€1,000

€0 2014 2015 2016 2017

EC €0 2014 2015 2016 2017 Europe

PaRR-Global.com PaRR Global Trends Monitor 2018 Europe 48 Sectors

Sectors*

Top 10 Sectors in Focus - Whole of Europe

Financial Internet / Consumer: Services Consumer: Computer Energy Automotive Construction Transportation Services ecommerce Retail (other) Other software

EC

Medical: Internet / Computer: Computer Financial Consumer: Pharmaceu- Automotive Energy Transportation Agriculture Other ecommerce Hardware software Services ticals

Whole of Europe (without EC)

Medical: Financial Consumer: Services Internet / Consumer: Construction Transportation Energy Automotive Pharmaceu- Services Retail (other) ecommerce Other ticals

* Graph represents 2017 antitrust enforcement (excluding merger control) by industry.

PaRR-Global.com PaRR Global Trends Monitor 2018 Europe 49 EU: 2017 Year in review

EU 2017 Year in Review

Further information In January the EC warned the majority of EU In a final report following its e-commerce sector In September, the European Court of Justice Get in touch or read more member states over their failure to implement inquiry, in May the EC agency flagged the (ECJ) overturned a General Court (GC) Intel the EU Damages Directive by the 27 December danger of price-tracking software facilitating ruling that upheld a EUR 1.06bn abuse of 2016 deadline. resale price maintenance and collusion. dominance fine imposed on the chipmaker, Jeremy Fleming-Jones and sent the case back to the lower court In February the agency confirmed it was Following a EUR 5m Italian abuse of for a review of the effects of the company’s market-testing commitments offered by dominance fine, the EC opened a probe into Cross navigation content allegedly abusive rebate system. Gazprom to remove restraints on cross-border Aspen Pharma’s pricing behaviour relating to requires an internet connection. resale of natural gas. some cancer drugs, and slapped Facebook In October the EU proposed a new framework with a EUR 110m fine for providing misleading to ensure foreign direct investment does not This month also saw six air conditioning information during the agency’s review of its compromise the bloc’s strategic interests. suppliers fined EUR 155m. acquisition of WhatsApp in 2014. A new investigation involving suspected The EC also launched a tool allowing collusion between German carmakers was also In June the EC fined Google EUR 2.42bn individuals to anonymously report cartels. exposed that month. The leniency information for abusing its dominant position in the reportedly dated back three years, but the EC March saw the agency’s conditional general online search market by favouring confirmed inspections at the premises of the clearance of Dow and DuPont’s proposed its comparison shopping service over rivals. whistleblower Daimler, along with Volkswagen, tie-up, but later also witnessed Competition The agency ordered Google to change its Audi and BMW. Commissioner Margrethe Vestager blocking practices, which it did by launching an auction Deutsche Boerse’s takeover of the London remedy three months after the decision. The In a classic EU Single Market case, November Stock Exchange. US internet giant challenged the EC’s findings saw the EC accuse brewer AB InBev of before the court. abusing its dominance on the Belgian beer In April, ChemChina’s takeover by Syngenta market by hindering cheaper imports of its was approved—with conditions—after an in- In July the Brussels-based agency accused beers from the Netherlands and France by depth review which saw the EC examining a drugmaker Teva of having implemented a changing labels. whopping 450 markets. pay-for-delay agreement to halt its generic competition for a sleep disorder drug from Much buzz surrounded the EC’s Meanwhile, Polish gas firm PGNiG filed a new rival-turned-subsidiary Cephalon. communication on the licensing of standard complaint against the Russian energy giant essential patents at the end of November, Gazprom in April, this one relating to the gas The EC progressed an historic case in August, which followed struggles between different giant’s pricing policy. sending a supplementary statement of directorates of the Brussels agency. objections (SO) to Visa over its interchange fees. In December Monsanto’s acquisition by Bayer finally reached a statement of objections (SO) having undergone in-depth scrutiny in August.

PaRR-Global.com PaRR Global Trends Monitor 2018 Europe 50 EU: 2017 Year in review

The EC ordered Luxembourg to recover Antitrust officials from the Autorité belge de The Irish competition authority’s chief Isolde around EUR 250m in illegal tax benefits from la concurrence raided tobacco factories and Goggin revealed in October that the agency Amazon and opened an in-depth probe warehouses in May, investigating a potential was in the midst of investigating a cartel in the into Dutch tax arrangements for IKEA, whilst cartel, following a trend started by the Spanish public transport sector. referring Ireland to the European Court of competition agency, which had conducted The French Autorité de la concurrence Justice for failing to recover aid granted in the similar raids in March. launched a wide-ranging pharma sector inquiry form of tax breaks from Apple. By June, Spain’s competition agency in November, following on from a sector probe Meanwhile the agency found that the had moved on to a spate of raids in the four years ago which revealed an imbalance International Skating Union’s restrictions on its construction sector. The Comisión Nacional de in the relationship between pharmaceutical members were in breach of competition law, los Mercados y la Competencia is investigating companies and distribution intermediaries. but did not deem a financial penalty necessary. suspected agreements to allocate markets and In December the German authority announced anticompetitive exchanges of information. European National Competition Authorities its assessment that Facebook abused its The Portuguese agency kicked the year A UK parliamentary committee launched dominant position on the German market for into gear in January by raiding the country’s an inquiry into the impact of Brexit on social networks by obliging users to allow it to association of driving schools, with officials at competition enforcement in July, a move collect data from third parties. the Autoridade da Concorrência suspecting swiftly followed by recommendations issued price fixing. by competition law experts in the Brexit Competition Law Working Group that the In February, Russia’s Federal Antimonopoly interests of the UK economy, businesses Service found seven companies rigged bids and consumers will be “best served” by a in more than 700 tenders for the supply continuity of competition law in the country of drugs and medical goods to state and “so far as is possible” following Brexit. municipal bodies. Italy’s senate adopted a statute amending March saw Lithuania’s competition council competition law in August, giving rise to introduce a settlement procedure under which alterations to Italian merger thresholds. firms or public bodies could receive a 15% reduction to their fines in antitrust probes in In September the Nordic competition return for admissions. authorities–Sweden, Finland, Norway, Denmark, Iceland and Greenland–signed a new In April, Austria’s competition authority started cooperation agreement giving power to notify an inquiry into the healthcare sector, with one another when an investigation could be Bundeswettbewerbsbehörde officials looking expected to affect the interests of another into issues concerning the establishment and authority, and allowing for the exchange operation of pharmacies and drug confidential information. distribution systems.

PaRR-Global.com PaRR Global Trends Monitor 2018 Europe 51 PaRR Statistics

PaRR Statistics: EC merger remedies cases double in Vestager’s first three years

Further information • Conditional clearance for 6.8% of notified Phase I conditional clearances and nine Phase 2016, targeted Facebook which was fined EUR Get in touch or read more deals since November 2014 II, according to data from the EC’s merger 110m for giving misleading information during database. The EC granted unconditional Phase the review of its takeover of WhatsApp. • Intensified activity on misleading information II approval in five cases between 2010 and Luuk de Klein and gun-jumping This year in May, the agency issued an SO 2013, but only twice since November 2014. alleging Altice jumped the gun in its 2015 • Vestager-Almunia Phase II referral rate similar During Almunia’s last two years–or rather the takeover of PT Portugal, followed in July by Cross navigation content in three-year comparison 21 months to 31 October 2014–the Brussels chargesheets to Merck and General Electric requires an internet connection. Conditional merger clearances doubled during agency did not increase the number of Phase I for providing incorrect or misleading info and Margrethe Vestager’s first three years in office clearances, passing 17 over that period. accusing Canon of jumping the gun. as EU competition chief, compared to the The number of statements of objections (SOs) Almunia only issued one gun-jumping decision same period in her predecessor’s mandate, issued in Phase II merger reviews under the following an SO, fining Marine Harvest EUR PaRR Statistics show. Spanish commissioner totalled 26, with 16 20m for taking control of rival Morpol without Since the start of Vestager’s tenure on 1 adopted during his first three years. Vestager’s obtaining prior regulatory approval. That November 2014, the European Commission team has only issued SOs in seven reviews so decision was confirmedby the General Court (EC) cleared a total of 70 deals subject to far. As a percentage, Almunia formally spelt out last month. commitments, whereas between 9 February concerns in 1.8% of mergers reviewed in his Accusing paper firms Ahlstrom and Munksjo 2010 and 8 February 2013–Joaquin Almunia’s first three years, as against 0.7% of those in February 2014 of providing misleading first three years–34 deals were approved dealt with under the Danish commissioner. information when notifying their tie-up in conditionally. In proportion to merger Gun-jumping 2012, the EC closed its probe in October notifications, which increased from 866 Action to sanction gun-jumping and providing 2014 after the companies provided evidence between 2010-2012 to 1021 in 2015-October misleading information in merger review has explaining discrepancies between their filing 2017, Vestager sought remedies in 6.8% of increased during Vestager’s term. The Danish and internal documents. cases while Almunia only required them in 3.9%. commissioner has sent five SOs to companies In 2014-2017, 55 conditional clearances were accused of providing misleading information granted in Phase I, while 15 were Phase II or jumping the gun, under Article 14 of the cases. Between 2010 and 2013 there were 25 EU Merger Regulation. The first, in December

PaRR-Global.com PaRR Global Trends Monitor 2018 Europe 52 PaRR Statistics

Prohibitions This trend had already started under Almunia, Vestager and Almunia blocked the same with 60% of mergers notified in 2013 and 68% number of deals in their first three years in 2014 cleared after a simple review. As noted as commissioners. Almunia vetoed Aegean before, the use of the system increased by Airlines’ acquisition of Olympic Airlines, the 23% between 2012 and 2016 and the time EC Deutsche Boerse/NYSE tie-up as well as UPS’ officials needed to clear the deals sped up takeover of TNT. Vestager prohibited the O2/ from an average of 21 working days in 2012 to Hutchison 3G UK deal in 2016 and blocked 18 working days in 2016. The EC reformed and Deutsche Boerse’s takeover of the London expanded its simplified merger review as of Stock Exchange, as well as the acquisition January 2014. of Cemex Croatiaby a joint venture between HeidelbergCement and Schwenk within a week Almunia Almunia Vestager of each other earlier this year. 2010 - 2013 2013 - 2014 2014 - 2017 Almunia only blocked one deal during his last Phase I conditional 25 17 55 two years, Ryanair’s third attempt to buy Aer Lingus. Phase II unconditional 5 4 2 Over the last three years, a few more Phase Phase II conditional 9 7 15 II probes were opened (27) than between February 2010 and February 2013 (22), while Mergers blocked 3 1 3 as a percentage of mergers notified the tally is at 2.6% and 2.5% respectively. From the latter Merger SOs 16 10 7 month to October 2014, the EC referred 11 deals to an in-depth review. But while there were more ‘complex’ decisions under Vestager, the portion of mergers routed through the simplified procedure was also higher in recent years. From 2010 to 2012, 58% of the 866 tie-ups notified was cleared following a simplified review, whereas from 2015 to October 2017, 68% of deals were dealt with under the simplified system.

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PaRR Statistics: EC abuse of dominance probes average three years seven months

Further information • Prohibition decisions take almost five years Sectors Get in touch or read more • Google shopping probe 82% longer than median

• Over a quarter of decisions in energy sector Zsuzsi Toth European Commission (EC) abuse of dominance investigations 5% 5% took a median of three years and seven months (1,308 calendar Cross navigation content days) from the start to reaching a decision since 2001, PaRR 27% requires an internet connection. Statistics show. 5% Of the 41 cases reviewed, 17 ended with fines against 22 being brought to an end with remedies. Decisions concerning 5% Microsoft and Google included both a fine and commitments, and have been counted as prohibition decisions. The case concerning Google took 82% longer than the 5% median duration, with almost seven years from the opening in November 2010 to last summer’s EUR 2.42bn fining decision. However the case did not exceed the duration of an investigation into Coca-Cola. In that case, the EC investigated suspected abuse of dominance in the market for carbonated soft drinks by imposing exclusivity agreements on its customers and by bundling and tying other products with its cola stock keeping units. 21% The case started with a complaint in 1996 and was not closed 27% until June 2005, when the EC accepted commitments from the company. At the other end of the scale, a probe concerning E.ON’s behaviour on the German market for long-term capacity bookings on its gas transmission system took only a little Telecoms Automotive Pharmaceuticals over four months before being closed with commitments in Transportation Energy Waste Management May 2010. Technology Industrials

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Following the adoption of an SO the EC needed a median of almost 19 months to issue a fine, the data shows. When a chargesheet led to a commitments decision, officials required a similar median time to finalise the case. However, if looking at all commitments cases–including those where a preliminary assessment was sent instead of an SO–the median period until a decision was issued was a little over a year. The EC currently has 9 ongoing abuse of dominance proceedings, covering two investigations into Google and one into Qualcomm in the tech sector, three in the energy sector, and one each in the leisure, consumer and pharmaceutical sectors. Seven of the cases were opened since July 2015, so the median length of ongoing investigations stands at a little over two years. An investigation into Gazprom’s behaviour in central and eastern European natural gas markets has been in progress for more than six years, with the EC assessing commitments offered by the Russian gas giant since March of 2017.

PaRR-Global.com PaRR Global Trends Monitor 2018 Europe 55 2018: The year ahead Europe

2018 The year ahead Europe

Further information EC a hefty sanction, alongside an investigation and Dutch banking associations on suspicions Get in touch or read more Margrethe Vestager kicked off her fourth year into the internet giant’s facilitation of of access restrictions for fintech firms. An as EU competition commissioner with clear advertising on other web sites. Both cases are upcoming study—expected to conclude signals she wants a fresh mandate when her anticipated to conclude this year. in the second half of the year—into the Jeremy Fleming-Jones current tenure ends in 2019. It is a mark of her syndicated loans sector is likely to focus on Having already hit Qualcomm in January with high profile that rumours now tout the Danish loan origination and arrangement as a potential a EUR 997m abuse of dominance fine for Cross navigation content politician as a contender for one of the EU’s source of anticompetitive issues, and could be exclusively sourcing LTE baseband chipsets requires an internet connection. top presidential positions in charge of the a precursor to a full sector inquiry. from Apple—the company immediately commission itself, the European Council or announced it is appealing the case to the The EC probe into suspected collusion the Parliament. General Court—a separate investigation into between German carmakers—whistleblower One hypothesis is that France’s mercurial alleged predatory pricing by Qualcomm is still Daimler is involved alongside Volkswagen, Audi president Emmanuel Macron could ‘sponsor’ ongoing. Chipmakers are also under scrutiny and BMW—has been marked out as a priority a bid by Vestager for such a position. The elsewhere. Following a complaint lodged by for the agency. The coming year could see commissioner is nominally allied to a relatively US electronic chip maker GlobalFoundries last developments in another purchasing cartel weak bloc of liberal MEPs, and the European year, the EC has been gleaning information case, after the EC inspected the premises of Parliament (EP) groups decide the arithmetic from Taiwan Semiconductor Manufacturing on companies in the ethylene purchasing sector. on such positions. This could become irrelevant, its semiconductor sales. An investigation into the fixing of ethanol goes the theory, if Macron throws the weight of benchmarks is another cartel probe to watch Financial services sectors remain a key focus his neutral political movement behind a centrist out for, alongside the ongoing talks between of investigation for 2018. A possible settlement coalition including the liberals. the EC and Gazprom on terms for commitments decision with international banks is on the to resolve a long-standing abuse case. Vestager and the EU competition authority cards for suspected foreign exchange rate she leads will come under the glare of political rigging, and may result in penalties of more The coming year will see a raft of policy scrutiny this year as heavy manoeuvring begins than EUR 2bn, meaning 2018 could see total concerns under the spotlight too. Vestager has in preparation for next year’s elections to the levies even exceed those of the record- indicated she is looking to set up an external European parliament. breaking preceding two years. The agency expert panel to advise on how “enormous will continue to mull over a British Financial changes” to markets arising from big data Meantime she has a raft of unfinished antitrust Conduct Authority investigation it has taken on affect consumers, and how competition business to deal with. into aviation insurance brokers over exchanges enforcers can best react. On the tech front Officials are still working on their abuse of of commercially sensitive information. Officials the commissioner is also likely to offer clear dominance case concerning Google’s Android will also pick over the results of searches support for new EU proposals set to be mobile operating system, which could also see conducted last year at the offices of Polish launched this spring to tax the digital economy.

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Debate will continue and likely intensify on Alstom, Tata Steel/ThyssenKrupp and offence in some jurisdictions, over the algorithms and artificial intelligence. Vestager Qualcomm/Broadcom. coming year. warned last year that companies using This year may also bring some interesting Pierluigi Sabbatini, head of the economic algorithms to facilitate collusion need to watch hearings, opinions and rulings from evaluation committee at the Italian competition out, although the agency’s chief economist, Luxembourg, with national courts having authority, said that bid-rigging will be a “high Tommaso Valletti, appears less convinced by referred questions on the interplay between priority”, with his authority currently having the idea that computers can collude through competition and public procurement rules, the three cases under investigation. algorithms. The new expert panel’s opinion on application of the ne bis in idem principle to the issue will be keenly anticipated. In Portugal the Autoridade de Concorrencia antitrust cases, as well as on private damages (AdC) has been granted access to a national The legislative proposal tabled last year actions and jurisdiction, the application of the electronic database this year to assist in designed to boost national competition EU Damages Directive, and a stand-alone claim investigations against bid-rigging in public authorities’ powers will continue to weave against Apple. procurement. The AdC president, Margarida through the EP and the European Council. In responding to these, as with the ongoing Matos Rosa, will also set up an intelligence The intention is to have the directive adopted mergers and antitrust cases, expect Vestager team and is currently working on developing before the end of 2019, but it is hoped that to deftly evade the political vortex gathering statistical tools and screening techniques to formal negotiations between the European place in Brussels before next year’s European apply to the database now it has access to Council, Commission and Parliament on the elections, and the end of this Commission’s it. Meanwhile Antti Norkela, head of research measure will be well under way during the term. for cartels at the Finnish Competition and Austrian EU presidency, which takes place in Consumer Authority (FCCA) told PaRR the second half of the year. She is likely to hammer home the theme that the agency has a number of active of ‘fairness’ in antitrust she has taken pains A proposed EC framework for the screening investigations pending. along with her senior officials to emphasise of foreign direct investments (FDI) also has over the past year. Regardless of whether she In the UK Brexit will continue to dominate an ambitious timeline with internal Bulgarian continues beyond 2019 in the commissioner policy discussions, with attempts to design a presidency documents seen by PaRR role, she seems already to have fixed on that tailored competition regime already flagged indicating the intention to finalise a position by for her epitaph. this year by the House of Lords’ EU Internal June this year. The proposal will be scrutinised Market subcommittee. There are heady for any likely dragging effects on deals. European National Competition Authorities hopes that the UK will be free to take a European national competition authorities Attempting to make life easier for merging more innovative approach to tackling global (NCAs) are set to prioritise scrutiny of bid- parties DG Comp’s Director General Johannes competition enforcement challenges, such as rigging in public procurement contracts during Laitenberger has promised more debate this digital markets and online platforms, according 2018, targeting a range of new detection year on the scope of RFIs, to avoid parties to the committee, which is pushing for a formal techniques and boosted resources at the being overburdened by requests. The year cooperation agreement to be negotiated problem. Antitrust officials from authorities in is off to a busy start for merger control, with to enable a consistent approach between Finland, Italy, Portugal, Denmark, Spain, and deals across a variety of industries already in the divorcing parties over investigations and Sweden have told PaRR they will be cracking the notification pipeline, including Siemens/ enforcement going forward. There is also a down on the violation, which is a criminal

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pressing need for transitional arrangements In an affiliate market BKartA has this year Claimants with known actions in the pipeline to clarify jurisdiction in cases which are ‘live’ launched a sector inquiry reviewing market include French waste management firms at the point of Brexit as well as cases where conditions in the online advertising sector. Suez and Veolia, the UK’s Royal Mail, German the conduct in question pre-dates the UK’s Officials will send out questionnaires to market truckers’ association Camion Pro, and departure. The problem, as with all things participants this spring which will be watched Deutsche Bahn. With a range of actions Brexit, remains the political uncertainty against for signs indicating which direction the agency headed for the UK, German, French and which the broader talks are taking place. is heading. Dutch courts, using a variety of claims With UK Prime Minister Theresa May not yet vehicles and procedures, these cases will be A similar sector inquiry launched in 2016 by revealing her hand on the nature of the deal watched as a comparative litmus test on the the French competition authority on data she is seeking, the debate on competition will different jursidictions. and online advertisements is anticipated to continue to take a back seat. conclude this year. Autorité de la concurrence Another theme to track in the national courts In Germany, tech issues will be to the fore this chief Isabelle de Silva has indicated that she this year is that of claims following in the wake year in the wake of the Bundeskartellamt’s wants to build a new team in 2018 to study the of the Coty judgment—in which the ECJ said preliminary conclusion announced just before way in which competition could be affected by an online marketplace ban for luxury goods Christmas that Facebook has abused its artificial intelligence and the use of algorithms. could be justified under conditions—the dominant position on the German market for consumer goods sector will be seeking a clear With the last straggling EU countries finally social networks by obliging users to allow it definition of “luxury” in how national courts transposing the EC damages directive into to collect data from third parties. The German view the treatment of non-luxury goods. national law–Bulgaria as recently as January agency said in conjunction that breaches of this year–the stage is now set to see how its data protection rules could be considered the system works in practice. In that context exploitative business terms constituting follow on damages actions in the truck sector an abuse of dominance under article 19 across a number of countries are set to take of the German Act against Restraints of centre stage. Competition. BKartA president Andreas Mundt is marking the case as a watershed and said Claimants against truck manufacturers Volvo/ in the context of the inquiry that companies Renault, Daimler, Iveco and DAF—participants with considerable clout such as Google or in a 14-year price-fixing cartel—are seeking Facebook have “in the view of some market damages for losses allegedly sustained as a players, been able to set up closed systems, result of higher truck prices and increased so-called ‘walled gardens’”. fuel costs across a number of countries. MAN escaped a EUR 1.2bn fine for blowing the whistle on the cartel; Scania did not settle and was subsequently fined EUR 880m for its participation. The Swedish manufacturer filed an appeal with the General Court last month.

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PaRR delivers global intelligence, analysis and data on competition law, EMEA Americas Asia anticorruption enforcement, intellectual property, and sector-specific regulatory 10 Queen Street Place 330 Hudson St. Suite 16/F change. We are the only news service to cover the competition landscape from a London 4th Floor Grand Millennium Plaza truly cross-border perspective. From an enforcement action in China that signals EC4R 1BE New York, NY 10013 181 Queen’s Road Central the US and the EU will follow suit, to how a merger can flounder due to unforeseen United Kingdom USA Hong Kong opposition from a competition agency in Asia, PaRR connects the dots. Craig Kelly Sean Lanzner Jay Chu +44 20 3741 1054 +1 646 412 5322 +852 2158 9758 [email protected] [email protected] [email protected]

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