Simmons & Simmons plans to grow in Portugal
January 17
Simmons & Simmons has formed a three-office practice in Portugal under the name Simmons & Simmons Rebelo de Sousa, thereby integrating Grupo Legal Portugues, the joint venture it founded 10 years ago with Rebelo de Sousa & Associados.
Rebelo de Sousa’s competition practice goes back to the early 1990s, when it was involved the privatisation of the national telecoms monopoly. In addition to technology, media and telecoms work, the firm has handled competition briefs for clients such as Credit Suisse First Boston, Warner Bros and St Karl, Europe’s largest chain of hairdressers.
The new firm will be one of only a handful in Portugal with a dedicated competition practice, and at seven competition specialists its group will be the second largest in the country. The formalised link means that Simmons & Simmons will have offices in Lisbon, Porto and Madeira. However, the new group has plans to grow further, explains managing partner Pedro Rebelo de Sousa. "We are keen to develop our practice across our core areas of mergers, state aid and public procurement, and particularly to expand into competition litigation. For this purpose we intend to increase our group to 10 practitioners."
Kilpatrick Stockton adds Washington partner
January 17
Peter Boyle is to join Kilpatrick Stockton, giving the US firm its second antitrust partner in Washington. Boyle, 36, arrives from Morgan Lewis Bockius, where he has worked for nine years. He became a partner there in 2000.
Boyle has spent the last five years focusing on antitrust, especially on cases in connected with intellectual property, trade associations and the healthcare industry. Notable cases he has worked on include acting for Pharmacia in Pfizer/Pharmacia.
Boyle says the strength of the Kilpatrick client base, especially in intellectual property, will be a big asset. "Morgan Lewis has a very mature practice and I was one of about 20 partners. At Kilpatrick Stockton I have much more control over my direction, with a lot of room for growth."

Senate committee will evaluate US antitrust laws
January 17
US Senate minority leader Thomas Daschle has chosen Jonathan Jacobson, antitrust partner at Akin Gump Strauss Hauer in New York, and Jonathan Yarowsky, partner at Patton Boggs in Washington, to sit on the new 12-member commission appointed to look into the effectiveness of antitrust laws in the US.
The full panel, which was proposed in the 2002 Department of Justice authorisation bill, was to have been announced by 2 January. However, Jacobson and Yarowsky are the only two definites so far. Two other well-known Washington-based figures with Democratic credentials, O’Melveny & Myers partner Debra Valentine and John Shenefield of Morgan Lewis Bockius, are believed to have been approached, though neither was willing to comment at this stage. Further appointments are expected to be confirmed in the next few weeks.
For a while it was unclear whether any one would make it onto the panel at all. Reports suggested that the Democrats had rejected the proposed commission on the grounds that it would allow Republicans to recommend wholesale changes to the antitrust laws.
House Judiciary Committee chairman James Sensenbrenner, who proposed the panel in the first place, sought to allay minority concerns by proposing first of all that four Democrats be nominated to the panel, and that in addition two of the President’s four selections be made conditional on Democratic support.
The commission will need around US$4 million in funding, which will be included in the 2003 fiscal year budget bills to be allocated in February.
One of the items the Commission will be looking at is the sensitive and technical Robinson-Patman Act, which amends Section 2 of the Clayton Act dealing with price discrimination. Some argue that the Act is anti-competitive and needs to be reviewed.
Before joining Akin Gump, Jacobson was a partner at Coudert Brothers. He is co-chair of the firm’s national antitrust practice.
Jarowsky has been with Patton Boggs since 1998, joining after three years as special associate counsel to President Clinton. During his final year at the White House, Yarowsky supervised the selection and confirmation of nominees to the federal judiciary.

Kaye Scholer makes new partner
January 17
Claudia Higgins, an ex- assistant director at the FTC, has been made partner at Kaye Scholer’s New York office.
Higgins joined Kaye Scholer in 2001 after serving for 20 years at the Federal Trade Commission. The last position she held there was that of assistant director of the Bureau of Competition. During her career at the FTC she was responsible for merger enforcement actions in a wide range of industries including pharmacies, medical devices, defence products and consumer goods.
Said Higgins: "Over the years I led many of the Federal Trade Commission’s important efforts to preserve innovative research and emerging technologies and established the Commission’s antitrust principles involving innovative markets." Her work at the FTC involved many of today’s most prominent pharmaceutical research and development companies, such as the merger that formed Novartis (Ciba Geigy and Sandoz), and the mergers of Upjohn with Pharmacia (now merging with Pfizer); Glaxo and Wellcome; American Home Products with American Cyanamid (now known as Wyeth); and Hoechst with Marian Merrell Dow and Merieux with Connaught (now part of Aventis).
The FTC formally acknowledged Ms Higgins’ achievements, bestowing on her the Distinguished Service Award for "years of significant contributions to the mission of the Bureau of Competition and the Commission".
She has been singled out for recognition a number of times, in particular winning the Paul Rand Dixon Award "for Major Contributions to the Agency’s Competition Enforcement Program".

45 under 45 includes four antitrust lawyers
January 17
Four antitrust lawyers were among those making this year’s ‘American Lawyer 45 under 45’ list, the occasional survey which tries to identify the profession’s rising stars.
The four antitrusters are partners John Desmarais from Kirkland & Ellis in New York, Michael Lacovara in Sullivan & Cromwell’s New York office, Steven Zager from Brobeck Phleger & Harrison in Texas, and Cleary Gottlieb Steen & Hamilton’s David Gelfand, who is based in the firm’s Brussels office.
Lacovara, an antitrust litigator, joined Sullivan & Cromwell in 1989. His work is concentrated on representing high technology financial service companies and biotechnology companies in investigations and enforcement cases. Lacovora caught many people’s attention for the first time in the Microsoft courtroom, where he was responsible for several of the defence side’s best moments.
Lacovara says: "I was very pleased to be selected and gratified to be recognised by the magazine. I think the fact that four of us do substantial work in competition areas is consistent with the continuing importance of competition issues to major companies and, in my case, reflects the interesting questions that arise when regulators or competitors seek to apply competition statutes and principles to emerging, dynamic industries."
Desmarais, a partner at Kirkland & Ellis, has worked on behalf of Verizon Wireless and many other mobile service providers. He successfully represented Infineon in its well-publicised case against Rambus last year.
Gelfand has been with Cleary Gottlieb Steen & Hamilton since 1991. He was made partner in 1997 and is based at the firm’s Washington office.
Zager is managing partner at Brobeck Phleger & Harrison’s Austin office.

RBB economist advises OPTA on recruiting chief economist
January 10
OPTA, the Dutch telecoms regulator, has announced it will create a position of chief economist. The economist will operate in OPTA’s strategy & coordination department.
Theon van Dijk, an economist at RBBEconomics in Brussels, who is on secondment to the Hague until February, will assist in finding a suitable candidate for the position. He will spend two days a week at the Hague in this role and his duties will include proposing an agenda of topics for the chief economist to address and assisting at interviews.
Van Dijk said, "The chief economist will carry out economic analysis to support OPTA policy measures, exploring and anticipating policy issues in the telecoms and postal sectors in the Netherlands in the short to medium term and helping to develop OPTA’s position on those issues."
The economist will not have his or her own unit of staff.
The position will require its holder to work with the NMa.
OPTA will be looking for a person with a strong academic background, knowledge of recent economic theory in the area of industrial organisation and regulation and with broad experience of a competition issues in network sectors.
Van Dijk says he expects to appoint a high calibre economist. The position is in principle a permanent full-time position but OPTA has indicated that it will also consider part-time applications from academics that want to combine the job of chief economist and their university positions.

Weil Gotshal opens in Paris
January 10
Weil Gotshal & Manges has expanded its European presence through a merger with French corporate firm Serra Leavy & Cazals. The new firm, which will operate under the Weil Gotshal & Manges name, opened for business on January 1^s.
The deal formalises a history of collaboration between the two firms that stretches back 10 years. They have worked on a variety of matters, most notably on Vivendi’s sale of its publishing arm to a rival in September 2002, as well as numerous acquisitions by GE Capital. Thomas Roberts, Weil Gotshal’s corporate chairman explains that complex international deals are the firm’s forte in the US and its existing European offices, "The addition of the Serra Leavy & Cazals team … is perfect for our global strategy."
The merger will bring 20 corporate lawyers into the Weil Gotshal fold, including the nine existing partners, among whom are two competition specialists. The first of these, Lucien Rapp, specialises in telecoms, utilities, state aid and M&A work, as well as teaching at the university of Toulouse, while the second, David Chijner, has experience of merger notifications. They will be supplemented by New York partner Joe Tortorici and partner Eric Ordway, who is already based in Paris.
Weil Gotshal opened in London in 1995 and in Frankfurt in 2002.

Charles River hires Perry Quick
January 10
Financial and antitrust consultant Perry Quick is to leave Ernst & Young’s consulting and quantitative analysis unit to join Charles River Associates as a vice president. Quick, whose consulting experience stretches back to 1968, will be part of the firm’s Washington DC practice.
Quick brings his diverse experience in government, private practice and independent policy research. His career includes a year as economic consultant to the Federal Energy Administration and five years as the Senior Economist and Head of Current Analysis Unit to the Federal Reserve System, in which capacity he assisted the reforms of banking regulation and legislation. Between 1982 and 1984 he was first vice president of the Roosevelt Center for American Policy Studies and then a visiting fellow of the DC-based economics think-tank the Urban Institute. Quick joined Ernst & Young in 1990 after it bought Quick, Finan & Associates, a consultancy he founded that provided economic support and expert witness testimony for trade, antitrust and other litigation. Describing the appointment, Charles River Associates’ president James Burrows says "His contributions … will be a welcome addition to CRA, particularly in the current evolving regulatory climate."

Arquit leaves Clifford Chance
December 20
Kevin Arquit, the highest-paid antitrust lawyer in the US, is leaving Clifford Chance for Simpson Thacher & Bartlett, in New York.
The New York Times broke the news earlier this week. Arquit’s photo appeared against a story on page two of the business section. The story gave limited details, leaning its report towards Clifford Chance’s recent travails with US associates.
Arquit has been joint global head of Clifford Chance’s antitrust group and leader of the US practice since he founded it with Steve Newborn in the early 1990s. He enjoys a reported salary of $3.5 million. A source describes him as "the most phenomenally successful antitrust lawyer of the last 20 years".
The decision has prompted considerable interest within the US antitrust community. Sources GCR has contacted think that Arquit’s unusual remuneration status within the firm will have made him uncomfortable within the firm. Arquit is one of a select group of US partners who are assessed outside of the partnership’s ‘lockstep’. "Kevin has felt enormous pressure at Clifford Chance to bring in business," says a source close to events. The off-book salary arrangement included no sunset clause. Furthermore, it required occasional partner approval.
Arquit joined Rogers & Wells straight from the Federal Trade Commission, where he was first general counsel and subsequently director of the bureau of competition. His salary derives from a classic mix of deal and other agency-related work and not as is the case for some other high earners from extensive contingency-fee litigation.
The hiring is seen as a coup for Simpson Thacher & Bartlett.
"Hiring Arquit adds real credibility to Simpson Thacher," says Mark Schechter of Howrey Simon Arnold & White’s DC office. He and others suggest that Arquit will restore a balance to a practice that has become tilted towards behavioural and contentious work. "Simpson Thacher & Bartlett needs to gain Kevin Arquit more than Clifford Chance needs to keep him," says a contact.
Kenneth Logan of Simpson Thacher & Bartlett confirms there is a strategic motive to the hiring. "This kind of lateral hire is very rare for our firm. It is above all a long-term strategic step. Kevin is younger than Chuck Koob or I, and will be around for years to come."
Clifford Chance wishes its former colleague well.
John Carroll, head of its regulatory group, notes that the 173-lawyer group that Arquit forged remains intact. One Clifford Chance partner is following Arquit: Aimee Goldstein, 36.
Meanwhile Arquit’s friend and co-founder Steve Newborn in DC office wishes his compadre well.
"We started this group together and made it spectacular. Now Kevin is going off to new challenges. We are sorry to see him go. We remain a very deep group with a tonne of business. We'll be fine without him," he says.
Newborn himself is not expected to move. Says a source: "He's a Washingtonian through and through. He'll be disappointed to see his good friend go. But he won’t ever work in New York."
Simpson Thacher has no immediate plans to open in DC. Says Logan "It has not been part of our thinking in this appointment."

Howrey Simon and Freshfields vie for top spot
December 20
Howrey Simon Arnold & White has the biggest competition group in the world - according to new research by Global Competition Review. The research is to be published as part of the GCR 100, an independent survey of the leading practice competition groups.
However, the Howrey Simon group — at 241 specialists- is only biggest if one includes economists. If one excludes economists then the largest group in the world is Freshfields, at 218 lawyers.
At 154 pages, this year’s GCR 100 is far longer than ever before. It will be available in full only to subscribers to Global Competition Review. It is being published as an edition of the journal, rather than a special report, for the first time.
In the introduction, editor David Samuels writes that the remit is "to identify 100 firms that merit the description ‘leading’." 118 practices were selected. Thise year, economics firms have been included - for the first time
Howrey Simon Arnold & White has now been the biggest group three years running.
Rounding out the top four are Baker & McKenzie and Clifford Chance. Baker & McKenzie has 174 competition lawyers in its group that work 60 per cent or more on competition work. Clifford Chance comes a close third with 173.
The GCR 100 also reports that the deep slump in merger activity in 2002 has had less effect on the group’s bottom line than might have been expected. 35 firms canvassed ‘off the record’ reported that they expected to match 2001’s financial performance — or do a little better. The general consensus is that the downturn has not affected competition groups in the top law firms.
The bulk of this year’s expanded GCR 100 consists of texts outlining the pedigree of the firms chosen. These texts include a ‘route to competition’ segment, a list of key partners, work undertaken in the last 12 months and news.
To order a copy of the GCR100 contact Katie Rowen at katie.rowen@lbresearch.com

Stanbrook Hooper appoints ex-OECD counsel as partner
December 20
Mark Warner is leaving Hughes Hubbard & Reed for Stanbrook & Hooper. Warner, a former counsel to the OECD Trade Directorate, will start as a partner in the Brussels office from January 2003.
The appointment is designed to strengthen the firm’s trade and competition practices.
Warner says of his new appointment: "Given the European Commission’s interest in establishing stronger economic analysis in its merger review, it is an opportune time for me to join Stanbrook & Hooper." Warner is qualified in both economics and law. The move is due to family and personal reasons as well as professional development.
Warner spent two years as counsel at the firm of Hughes Hubbard in New York. His practice there emphasized emerging markets work, abuse of dominance cases involving fidelity rebates and advising pharmaceutical companies in distribution and licensing matters and design program for distribution of HIV/AIDS drugs. Merck Inc and Bristol-Myers Squibb are among Hughes Hubbard & Reed’s clients.
At the OECD, Warner played a key role in developing the framework for competition policy adopted in Doha and WTO. He also had wide-ranging responsibility for policy development and advising members on multi-jurisdictional merger review and international cartel enforcement.
He advised governments in South America, Asia and Africa on designing and implementing competition laws during his four years at the OECD in Paris.
Clive Stanbrook, head of Stanbrook & Hooper’s Competition and Trade practices says, "Mark’s breadth and experience both in private practice and in the OECD makes him a very welcome and valued addition to our team."

Sher moves to Latham & Watkins
December 20
Senior associate Brian Sher is leaving Linklaters to join Latham & Watkins’ London office as Of Counsel. Sher specialises in Competition and EU law. Before joining Linklaters he worked for McKinsey management consultants. His recruitment is part of a significant growth in their global competition team over the past 18 months, says London Managing Partner, David Miles. Sher says the move as "a great opportunity to be part of building a competition practice, especially one with such a lot of energy and enthusiasm". Sher has undertaken secondments at DG Transport and British Airways. He was involved in one of the largest ever state aid notifications to the Commission, namely the UK government’s support package for Network Rail. Alec Burnside, who has been a partner at Linklaters throughout Sher’s time there, said: "Brian is a fine lawyer who has gone to a fine firm. I’m sure it will make a happy marriage."

McDermott Will snares Koberstein from FTC
December 20
Nicholas Koberstein has left the Federal Trade Commission to join the Washington DC office of McDermott Will & Emery. Koberstein, a veteran of eight years at the commission, served as assistant to Molly Boast when she was Director of the Bureau of Competition. He will start as a partner in the firm’s antitrust practice group.
McDermott Will & Emery’s antitrust group has one of the largest complements of ex-agency lawyers of any firm in DC with 30 ex-agency members.
Koberstein’s practice will focus particularly on defence and pharmaceuticals work. He was part of the Mergers 1 Division at the FTC that handles mergers in the health care products, pharmaceuticals and medical devices sectors. He also served on the team that investigated and ultimately passed the 1997 merger between Boeing and McDonnell Douglas. He acted as the Bureau of Competition's liaison to the Department of Defense, during merger investigations. He was one of the investigators of Lockheed Martin/Loral.
McDermott Will & Emery’s clients in the defence sector include Lockheed Martin and Alliant Techsystems. Says Ray Jacobsen, the head of McDermott Will & Emery’s regulation and government affairs department: "Recruiting Nicholas will further enhance our competitive advantage."

Leaks undermine announcement on merger reform
December 13
A series of gaffes by DG Comp put a dampener on Mario Monti’s big moment in the spotlight this week. On Wednesday Europe’s Competition Commissioner unveiled a package of merger reforms amid fanfare — but events earlier in the week had already robbed the announcement of much of its force.
First a story was leaked that DG Comp may be planning to downgrade the Merger Task Force. Indeed, according to a report in the Financial Times, a group within DG Comp has recommended (among other more or less radical proposals) dividing responsibility for controversial merger cases between two case teams one of them drawn from outside the MTF, with the changeover occurring between Phase I and Phase II. Such a step would be highly popular if adopted, GCR’s research suggests.
Then, just before Monti unveiled details of the new horizontal merger Notice, a second press report appeared to leak key details, including the proposal that mergers that create a 50 per cent market share be automatically blocked.
Sources say that such leaks created confusion at a sensitive time. Says one lawyer: "I am disappointed with the way the Commission has handled this. It has confused things at a stage when transparency is very important."
On top of that, key texts relating to the December 11 announcement failed to appear on the Commission website for many hours after Monti had finished speaking, and until the late afternoon information spread by word of mouth.
In the event these distractions served to spice up an otherwise unexciting day. The two documents Monti unveiled contained few surprises, having been well-trailed at a number of events during the autumn, including the European Commission’s merger control conference.
Key measures proposed in the package include an automatic extra 10 working days in Phase I and 15 working days in Phase II if remedies are all present, the opportunity for parties to request an optional extension of 20 working days in complex Phase II cases, and a new attitude to efficiency-based arguments, which will be accepted "provided it is to consumers’ advantage and does not form an obstacle to competition".
As for the 50 per cent market share story, it appears to have been exaggerated. In fact the draft Notice on the appraisal of horizontal mergers uses the following formula: "Very large market shares in excess of 50 per cent may be in themselves, save in exceptional circumstances, evidence of the existence of a dominant market position". Commented Conor Maguire of Simmons & Simmons’ Brussels office: "That certainly doesn’t mean all mergers to 50 per cent will be blocked."
Details of the best practice guidelines introducing a number of improved ‘checks and balances’ were not announced, nor did Monti give a date by which the Chief Economist will be appointed.

FTC reins in second requests
December 13
The US Federal Trade Commission is at long last to pare the size of second requests.
Guidelines published this week could see the size of FTC second requests — one of the most burdensome requests any merger faces — shrink substantially. Among other things, the changes will make it harder for FTC staff to punish parties who question the size of a request.

Other steps include:

1. publishing the general counsel’s ruling on "request modifications" in all second requests - thereby creating a body of precedent;
2. preventing FTC staff from "retaliating" against parties who have appealed to the FTC’s management tier (though how has not been specified);
3. allowing witnesses to see the transcript of their FTC deposition far earlier in the process; and
4. limiting ‘second sweep’ requests.

The agency says it will now conduct an internal audit to see how practices differ between divisions.

In return the agency says it would like merger parties to make their business people and information technology employees more available to the agency to discuss what information exists within a company’s systems.
Full details of the changes can be read in the newly published Guidelines for Merger Investigations here. The guidelines were developed at public workshops, in which practitioners were invited to air complaints.
The burdensome size of the FTC’s second requests plus the intractableness of some of its staff featured as a point of complaint in GCR’s Rating the Enforcers survey, published earlier this year. A source then said the FTC’s management needed "to get down to the engine room a bit more" suggesting that staff were taking liberties.
Early reaction to the guidelines has been favourable.
"The guidelines if fully implemented could reduce the costs and burdens associated with FTC merger review" says Janet McDavid of Hogan & Hartson LLP in Washington. McDavid and her team represented Carnival on Carnival/P&OPrincess during its second request. That request stretched to 1200 boxes and more than 35 gigabytes of electronic data.

Steel Hector recruits ex-US ambassador for Latin role
December 13
US and Latin American law firm Steel Hector & Davis has hired Manuel Rocha, the former US ambassador to Bolivia. Rocha will become senior counsellor to the firm’s international trade and government affairs practice.
Rocha’s long career in the US foreign service featured spells in Honduras, Italy, Mexico, the Dominican Republic and Cuba, as well as three years as chargé d’affaires in Argentina and, most recently, a stint as ambassador to Bolivia. During the Clinton administration he was director for Inter-American Affairs at the White House’s National Security Council, and has held other posts at the State Department. The combination of Washington and Latin American experience fits neatly with the firm’s aim of developing its trade consultancy practice, particularly in the run-up to the ratification of the agreement on the Free Trade Area of the Americas, expected in 2005. Rocha is likely to be involved in advising clients currently engaged in negotiations connected with the agreement, as well as subsequently when it comes into force.
The agreement is expected to transform business in South Florida and Miami, where Rocha will be based. "Manuel is a true heavyweight when it comes to government-to-government negotiations," says Shanker Singham, chairman of Steel Hector’s international trade and competition practice.
The appointment is seen as particularly significant in light of the expected thaw in relations between Cuba and the US when Fidel Castro finally goes. Trade between the two countries is currently constrained by a US embargo that dates back to the Cuban missile crisis of 1962 and was subsequently reinforced by the Torricelli Act in 1992 and the Helms-Burton Act of 1996. These pieces of legislation are intended to deter both Americans and citizens of third countries from doing business with Cuba or even trading in Cuban property formerly belonging to US owners. However, if the current level of illicit trade is anything to go by, the commercial possibilities waiting if regime change does occur in Havana are considerable.

Pitofsky honoured with lifetime achievement award
December 13
Robert Pitofsky has been given the Miles W Kirkpatrick Award for Lifetime Federal Trade Commission Achievement. The award was announced in Washington on December 4.
Pitofsky, 72, has held three posts at the FTC: chairman (1995-2001); commissioner (1978-1981); and director of the Bureau of Consumer Protection (1970-73). He now combines working as of counsel at Arnold & Porter in Washington DC with teaching at Georgetown University Law Center.
The Kirkpatrick Award was established in 2001 to honour those who, throughout their public and private careers, have made a significant contribution to the FTC. Pitofsky has invested his energies in the FTC for 33 years, starting with a 1969 ABA report on the Commission that recommended sweeping reform of the agency. Current FTC Chairman Timothy J Muris hailed Pitofsky as "one of the founding fathers of the modern FTC".
Among his achievements, Pitofsky is credited with putting litigation back on the agenda of an FTC which had seemed to be making law by consent decree in cases such as Toys ‘R’ Us, California Dentists, and Mylan. Pitofsky led the Commission at a time of unprecedented merger activity which saw such important cases as Exxon/Mobil and AOL/Time Warner.
Comments Tad Lipsky of Latham & Watkins: "This is a natural and appropriate award for someone who has been identified with the success of the FTC." Debra Valentine of O’Melveny & Myers, who was general counsel at the FTC under Pitofsky, says: "He is a real inspiration."

RBB and Economists Inc announce link
December 6
Competition economics firms RBB Economics and Economists Incorporated have announced the signing of a transatlantic alliance, to take effect immediately. The affiliation will be directed at complex trans-national merger work and other antitrust matters.
Senior figures at the two firms have rubbed shoulders regularly in the course of their work while never representing the same clients. Most recently, Derek Ridyard led an RBB team advising P&O Princess on the European side of the cruise liners mergers, while Economists Inc played a key role for Carnival on the matter in the US. Economists Inc’ credits also include MCI WorldCom/Sprint, Alcoa/Reynolds and Ciba Geigy/Sandoz.
Under the terms of the alliance, the firms will offer integrated advice on both sides of the Atlantic without being tied to an exclusive arrangement. The primary focus will be competition work, though as Economists Inc has experience in other areas such as utilities and trade regulation there may be tangential benefits to the UK-based firm. Explains Ridyard: "Although the aim is to expand our competition practice, one benefit we anticipate is the opportunity to work in other areas of applied microeconomics."
RBB is actively considering further alliances in Europe in the coming months, though the exact jurisdictions have not yet been decided.
The firms will be bringing together individuals with similar backgrounds. Both Ridyard and Simon Baker, one of the other co-founders of RBB, have worked in government, Baker at the UK Office of Fair Trading and Ridyard at both the OFT and the Department of Trade and Industry. Seven of the nine principals at Economists Inc have worked either at the DoJ or the FTC. Notably, Barry Harris, William Hall and Joseph McAnneny have all served as senior economists at the DoJ.

Morris clarifies ‘profitability’ criterion
December 6
Derek Morris, the chairman of the UK Competition Commission, has clarified a recent statement to the effect that ‘profitability’ would become a central plank in UK merger review. Addressing the thirteenth annual Linklaters/DTI competition law seminar, Morris said that a newspaper had misrepresented comments made on the subject during an interview and defined competition as a state of "continuous rivalry", a rivalry which can be enhanced by efficiency gains.
He acknowledged that one factor the Competition Commission will examine in merger review is performance in a market over time, and the Financial Times recently reported this as "Profitablility to be considered in merger rulings". Morris told the seminar: "Market performance, price levels and profitability are … important indicators: not more than that, but not less. Sometimes … people are concerned that somehow we should not be looking at the outcome of the process, but we think it is an important indicator." The Competition Commission will release guidelines on the UK’s new merger regime next year.
Morris further said that procedural innovations would include the publication of provisional findings, which should not be too far short of a final report or the conclusion chapter of an inquiry. As the Commission will now be determining cases rather than making recommendations to government ministers, hefty tomes will be replaced by slim reports and public hearings will be restricted to one per inquiry, to safeguard commercially-sensitive information. The aims of the new competition regime, emphasised Morris, were "certainty of outcome and transparency of process".

Swiss Competition Commission appoints vice-chair
December 6
Yves Flückiger, a professor at Geneva University, has been elected as the new vice-president of the Swiss Competition Commission. Flückiger, who teaches economics, has been a member of the Commission since 1996. His promotion was announced on November 29 2002, as part of the series of staff announcements.
Flückiger will take over the chamber for product markets from Walter Stoffel, who is becoming President of the Commission.
It means that two law and one economics professors will form the top tier at the Commission. The Swiss Commission scored poorly on its economic work during Rating the Enforcers earlier this year. Says Patrick Ducrey (Deputy Director, Infrastructure, Swiss Competition Commission Secretariat): "It will make the balance a little more equal".

In other announcements:

• Dr. Olivier Schaller, of the Money Laundering Surveillance Authority, has been appointed as the new Deputy Director of the Secretariat (Services). He replaces Philippe Gugler, who has returned to academia. Schaler, a lawyer, was a staff member at the Commission's Secretariat from 1996 to 2001.
• Anne Petitpierre, professor for commercial law at Geneva University, is to join the commission. She is not believed to have a background in competition law.

Response to these other appointments has been positive. Philipp Zurkinden of Prager Dreifuss says the appointment of Schaller is especially welcome: "He is a brilliant guy who knows the Secretariat and its workings very well". Flückiger has hitherto not been in the public eye. Roland von Bueren, the current President of the Commission, resigned in September.
Stoffel is to take office on January 1 2003, when all the new appointments come into effect. Professor Zäch remains head of the Chamber for Services.

Moquet Borde adds to Paris competition team
December 6
Béatrice Honorat is joining Moquet Borde & Associés in Paris as a partner. Honorat has just spent three years at Sidley Austin Brown & Wood in Washington DC.
Honorat, who worked for Moquet Borde & Associés in 1991 after graduating from the College of Europe in Bruges, says she is delighted to be working again with Pierre Kirch, now head of the firm’s EU and competition practice.
Kirch for his part is "very pleased" to welcome Honorat back as a partner, saying that her return "reinforces our integrated Paris/Brussels competition team, and shows our firm’s commitment to becoming a leader among French firms in our discipline".
France introduced merger control law in May 2002. The addition of the new form of work has inspired many firms to add strength in Paris.
Kirch says that Honorat’s arrival will allow other members of the team to concentrate to a greater degree on particular specialisations. Honorat’s practice has emphasized distribution law. She says her time in the US has given her "the opportunity to get into contact with new concepts, such as B2B". She re-joined Moquet Borde & Associés officially on October 28, 2002.

King & Spalding puts trade team into London
December 6
King & Spalding has announced that two trade lawyers will be among the start up team at its new London office. The office will open in January 2003.
Stephen Ovara is an experienced WTO and trade remedies attorney who worked for a period at King & Spalding’s international trade group in Washington DC. He joins from Baker & McKenzie in London. Susan Ols, an international trade consultant who has worked at Van Bael & Bellis, is the other partner.
The office will be King & Spalding’s first international office, with eight full-time lawyers resident there. An additional five lawyers will split their time between London and US offices, including Joe Dorn, a senior partner featured in ‘The International Who’s Who of Trade and Customs Lawyers’. Dorn will be the main liaison between the London and Washington trade practices, the firm says.

News feature
Tied up in the timetable - the EC's merger reform
Mario Monti's new checks and balances face a built-in obstacle, says Mathew Heim
The whole question of the EU’s merger review process has generated considerable debate, much of it focusing on claims that the European Commission is ‘prosecutor, judge and jury’ accompanied by a significant lack of accountability. Following a yearlong consultation, the European Commission has provided a glimpse of the EC Merger Regulation’s proposed reforms. Many commentators, including a UK House of Lords Select Committee, believe that "the top priority for reform should be to ensure objectivity and fairness in the ECMR process". The question of adequate checks and balances is the focus of this article.
Two caveats are necessary at this stage. The first is that, at the time of writing, the formal proposals have not been unveiled; these are due on December 11 2002. The reforms detailed below are therefore gleaned from various pronouncements from European Commission officials. Even at this early stage, these reforms deserve some consideration, as it is the ability to understand and use procedure inventively that can save the parties time, cost and ultimately a transaction.
The second caveat is that the issue of effective judicial review will not be dealt with here. Suffice it to say that, while the European Court of First Instance is doing its utmost to expedite matters, and while the appeals process may be able to affect Commission merger review policy, it can rarely revive a prohibited transaction. Internal process reforms should therefore provide sufficient legal and commercial certainty for parties not to feel the need to go to court.
It is noteworthy that the European Commission’s original Green Paper on the Review of the Merger Control Regulation did not contain any suggestion that the existing ‘checks and balances’ needed reform. However, the vast majority of reactions to the Green Paper expressed grave concern at the failure of these checks and balances to provide effective accountability. It is laudable, therefore, that the outline of the reforms provided so far propose considerable changes in this field.

The key reforms

i) A scrutiny office and peer review panel
The creation of a Scrutiny Office and Peer Review Panel is one of the key Commission proposals. It allows an independent body to scrutinise the merger case team’s conclusions with a ‘fresh pair of eyes’, thus seeking to establish an internal check to the claims that ‘wayward’ case teams may lose their objectivity. The new Scrutiny Office will be responsible for following each in-depth merger review (Phase II case) and for co-ordinating the activities of the Peer Review Panels.
The Office, probably a freestanding unit, will be answerable to the Director General and made up of DG Competition officials and officials as well as others drawn from relevant Directorates General. In other words, officials could come from DG Competition Directorates with policy or sectoral expertise, as well as other Directorates General with industrial expertise. Composition could therefore include officials of other Commission services already involved in the Commission’s inter-service consultation on merger cases, but this would presumably not be a duplication of inter-service discussions (see below).
A Panel will be made available in all Phase II cases. As with the Office, the Panel would also be answerable to the Director General and would probably be made up of senior DG Competition officials (although other services could be ‘invited to contribute’). The Panel will not necessarily include members of the Scrutiny Office. These Panel members would presumably be called upon on an ad hoc basis, and would act in a personal capacity. They would therefore not represent the views of their services. In this context an interesting question of independence was raised by the Irish Competition Authorities to the Green Paper, which stated that "it is extremely difficult for a hearing officer, or for a devil’s advocate, to be fully effective and independent if that person’s career development and reporting structure lies within DG Competition". This is clearly an issue that needs to be born in mind.
There does not yet seem to be any firm view on the actual operation of the Panel. It appears that a Panel would be convened in each Phase II case with the task of scrutinising the case team’s conclusions at key points in the process (e.g. the Statement of Objections or Final Decision). There are indications that Panels could only be activated on an ad hoc basis throughout a case, as and when ‘scrutiny’ is needed. Any flexibility in the operation of the Panel raises the vexing question of who would be responsible for the decision to ‘activate’ a Panel. One could well imagine that other interests, within DG Competition and elsewhere, would wish to be involved in such a crucial decision.
The role of the Panel will be to pick holes in the case team’s thinking and, as such, it will act as a devils advocate panel. The effect of the Panel’s findings will probably not be to force a change in the case team’s thinking, nor supersede its assessment, but to point out any weaknesses and recommend where the case team needs to tighten its thinking. The Panel will therefore not be a strict formalisation of the more spectacular panels already used by the Commission in a limited number of cases. The new Panels will be less adversarial and more an attempt to ensure that Commission decisions come up to the very high standard of proof to which the Court of First Instance now holds the Commission. The Panel will therefore not come up with any internal conclusions; certainly none that could be publicised or impugned before the courts.
Naturally, the rights of the parties need to be clearly set out. However, it should not be forgotten that a Panel of this nature is an internal Commission process and is, in this sense, not for the direct benefit of the parties. While the parties may have access to the Office, they may presumably not have access to the Panel members, so that providing the Panel members with express independence will be key in establishing the credibility of this mechanism.

ii) A chief economist and office
The appointment of a Chief Economist is a significant step, although a number of issues remain to be resolved. No indication is yet available as to how the Chief Economist would fulfil his tasks, for example functioning like an ‘economic’ Hearing Officer. It appears that the Chief Economist will have the authority to question Merger Task Force decisions, which is a welcome development. Whether this mirrors the Panel’s authority in testing the case team’s thinking is not yet clear, nor is the relationship between the Chief Economist and the Panel, nor the weight which the Panel must give to the opinion of the Chief Economist.
Clearly the independence of the Chief Economist is key. In order to appear independent, the Office will be linked to that of the Director General, although the use of such an affiliation has been queried and there are arguments for placing this office outside DG Competition. The same argument was raised regarding the Hearing Officers, and suggestions to reinforce their authority have ranged from placing them in the Cabinet of the Commission’s President, to the Legal Service and even to placing them within the European Court of Justice.
Pending the Chief Economist’s appointment, outside consultants will be used. Care should be taken regarding the uncertainty this could cause, as DG Competition’s economic policy approach is not clearly set out and the authority of economic arguments (notably regarding efficiencies) is not yet established. The Commission’s guidelines touching on these issues will be eagerly awaited.
A further issue to bear in mind is that, up to this point economic analysis was provided by economists within the Merger Task Force and Directorate General for Economic and Financial Affairs. It will be interesting to see how DG Economic and Financial Affairs will interact with the Chief Economist especially regarding industrial policy considerations.

iii) Hearing officers
Under the outlined proposals, the Hearing Officers will be given A-Grade officials to support their tasks, presumably allowing them to go into greater depth and provide more forceful opinions. It will also increase their standing within the process. Clearly, if the other reforms regarding the rights of defence are successful, the value of the Oral Hearing may increase, with a corresponding increase in effectiveness of the role of the Hearing Officer.
However, the reform of the Hearing Officers is less substantive than was initially hoped for. Those reactions to the European Commission’s Green Paper that dealt with the Hearing Officers tended to come to the conclusion that the Hearing Officers were not an effective counter-balance to a determined case team. It appears that none of the Green Paper comments which suggested reforms (including increased independence and widening competence to substantive issues or brokering remedies) were taken up.

iv) Member States’ advisory committee
In the Green Paper, the Commission stated that ‘the Member States provide a most important element of external control’ to the Commission’s activities. The current proposals suggest that the Rapporteur of the Member States’ Advisory Committee on Mergers could be involved earlier on in the process. However, most of the comments on the Advisory Committee (notably from Member States themselves) raised serious concerns about the ability of the Advisory Committee to challenge the Commission. This is on the basis that the Advisory Committee is not able to fulfil its task effectively due to the tight timeframe in which it operates and due to the fact that the Committee’s mandate is of limited influence in any event.
It may well be that involving the Rapporteur earlier will allow the Advisory Committee to be better informed and therefore make more persuasive comments. However, the vast majority of concerns focus not merely on the fact that the Committee is not able to function to its full potential, but that the Committee is currently of little use to the parties. It is to be expected that submissions seeks to build on existing structures to increase checks and balances, yet the Advisory Committee may not be the most appropriate one to fulfil this task, as its mandate to represent the interests of the Member States may affects its objectivity.

v) Other reforms
There are two other key reforms of particular relevance to the checks and balances question. The first is the strengthening of the rights of defence, which allow the notifying parties to hold more ‘state of play’ meetings with the case team at ‘decisive’ points in the proceedings and to view and confront third parties’ observations at an early stage. The second is a possibility to request the extension of the deadline for a Phase II decision, to allow for remedies to be considered. There is no doubt that increased dialogue between the parties and the case team, opportunities to challenge third party observations as they arise and a more flexible time frame will allow for greater understanding of transactions and sectors and lessen the likelihood of conflict.

The existing checks and balances
In its Green Paper, the Commission outlined all the existing checks and balances namely, the Hearing Officers, the Advisory Committee, the other European Commission Directorates General, the European Commission’s Legal Service and the other European Commissioners. Yet it is curious that in the outlined proposals the Commission largely ignores reforms of the existing checks and balances.
A consensus emerges from the comments to the Green Paper that the existing checks and balances do not function properly and it is arguable that their mandates would not actually allow them to ensure objectivity or fairness.

• The Green Paper states that other Directorates General bring ‘technical, economic and industrial exercise into the analysis that is made by the case team’. There is, however, a feeling that despite their best efforts these services cannot impose a view on a strong case team, no matter what their expertise may be. If there is no deferral to expertise and understanding of a sector, and if the services are not given sufficient time or materials to submit effective analysis, inter-service consultation cannot operate as a true check.
• Evidence given to the House of Lords states that, due to time constraints, the Legal Service is prevented from being effectively consulted on the legality of a certain action, so that the Legal Service does not act as an adequate safeguard to the system.
• In Phase II cases, the full College of European Commissioners vote on the final Decision. The College is the only body actually capably of preventing an erroneous decision from being taken. Yet, despite collegiate responsibility, oversight by the Commissioners and their staff is known to be effectively limited to policy points, partly due to time and to the deference shown to the delegated competence of the relevant Commissioner.

Instead of ensuring that the existing system functions effectively, a whole new ‘system’ is being set up. The reason for re-inventing the wheel may well reside in the fact that the existing system possibly would not form an appropriate system of checks and balances, even if it did function properly. Most of these groups provide expertise and advice to DG Competition and their roles flow from the collegiate nature of the European Commission and its relations with the Member States.

The crux
The hope is that the new Scrutiny Office and Peer Review Panel, along with the Chief Economist, will ultimately ensure objectivity and fairness in the process. However, these key changes remain internal to DG Competition, so that the external verifiability of the merger review system may remain a concern. Furthermore, from the brief review above it is clear that both the ‘old’ and the ‘new’ systems are not geared to the strict policing of the Merger Task Force that many would wish. It is only where the parties feel that the system is ineffective, that they seek to appeal to the wider groups involved in merger review.
A brief review of the comments submitted to the Green Paper shows that one of the main reasons for the inability of the old system to function effectively is the question of time. But it could well be that yet another series of checks and balances will make matters worse as the preponderance of players creates greater pressure on the strict timetable. If this is the case, it is all the more important that the interplay between the ‘old’ and ‘new’ systems is explained and any anomalies reconciled.
The Green Paper itself acknowledges that procedure must allow for organisational constraint, but there is no sign that the reforms seek to address the likely increase in the administrative burden if the old and system process work efficiently. Calls for the Commission to stick to stricter internal deadlines have not been taken up. Surely the increase in new procedural steps raises further questions about whether the system can function effectively in difficult cases.
The benefit of the EU system is the restricted timetable. Yet a world-class merger review system, which has the benefit of a strict timetable, must have effective checks and balances. This benefit is squandered if the limited timeframe actually prevents procedures ensuring fairness to work. To ignore these checks and balances in favour of speed places excessive strain on the system and this crucial issue appears not to be addressed in the reform proposals.

Mathew Heim is a director of public affairs specialists Gavin Anderson & Company in Brussels

New EU merger regulation before Christmas
December 2
The European Union has set December 11 as the date for adoption a new horizontal merger regulation. The news filtered out from speeches and announcements by individual members of DG Comp on November 27. DG Comp has also rejected the idea of switching to a substantial lessening of competition test.
Adoption will bring to the end a year-long process of re-evaluating the EU’s merger control regime, which began in January with a Green Paper and culminated in a special conference on November 6 and 7.
At the conference, Competition Commissioner Mario Monti said the EU would retain an administrative procedure despite a series of losses on appeal that were highly critical of the Merger Task Force’s output. He promised a plethora of "internal checks and balances" to improve the quality of MTF decisions. He also raised the possibility of a special chamber at the Court of First Instance — an idea the Court has since given its backing.
The bulk of the changes in merger procedure will take the form of revised ‘best practice’ notices. Consultation on these measures will continue.
As well as announcing the date for the new merger guidelines, the Commission has made a key statement concerning ‘modernisation’. It has said that a guideline on modernisation (under which Member State authorities will assume many of the EC’s current enforcement functions) will "reach political consensus" this week, having been discussed by Member States on November 26. However, the announcement on this subject contained little on exactly how cases would be allocated within the network.
The Commission also predicted a starting date for modernisation of May 1 2004.
Elsewhere in DG Comp releases, it was revealed that the EC would be take complex steps to ensure that ‘leniency confessions’ are not discoverable to US courts (a written confession is required from all EU leniency applicants in cartel cases). The Commission has also revealed it will undertake a study on patent pools and multi-party licensing systems in an effort to decide whether they are best dealt with through guidelines or a block exemption. The statement hinted, nevertheless, that the current preference is for guidelines. Expect public consultations in the latter half of 2003.
Next year will also see a flurry of Notices on the details of modernisation. Subjects to be covered include ‘The concept of effect on trade between the EU countries’, ‘The operation of the European Competition Network’, ‘How and when the Commission is prepared to give informal guidance in specific cases’, ‘Certain procedural aspects of complaints’, ‘Cooperation with national courts and national competition authorities’ and ‘The application of Article 81(3) EC Treaty’.
Says Conor Maguire, partner at Simmons & Simmons in Brussels: "The EC has achieved a quiet revolution."

Microsoft bags Jean-Yves Art
December 2
Coudert Frères competition partner Jean-Yves Art has joined Microsoft as its senior European antitrust lawyer.
The Redmond, California based software giant has created a new post especially for Art: ‘Director of Competition Law’. He will have responsibility for all competition matters in Europe, Africa and the Middle East.
Art will advise day-to-day on contracts and litigation, manage external legal advisors and educate European staff about competition.
Art has been a key member of Coudert’s Brussels competition group, which has considerable experience of the IT sector. Hitherto, however, Microsoft and Coudert had only ever collaborated on work in China.
Art’s experience encompasses both merger and cartel work. His credits include MCI/WorldCom and the subsequent proposed merger between MCI-WorldCom and Sprint. Coudert competition partner Jacques Buhart says of the appointment: "Although we are sorry to lose a lawyer of Jean-Yves’s calibre, it’s an exciting new challenge for him, and I am sure he will prove himself very capable."
Meanwhile, Microsoft has announced the three members of the compliance committee it has been required to set up in the US. The committee is a facet of its recently approved settlement with the US government. James Cash, a professor at Harvard Business School, will be the chair, with Microsoft board members Raymond Gilmartin and Ann McLaughlin Korologos occupying the other two slots. Before joining the Harvard faculty Cash worked as a data processor, systems analyst and programmer. He was appointed to the Microsoft board in June 2001. Gilmartin is chairman and CEO of Merck & Co Inc and has extensive experience in US healthcare. Korologos served as US secretary of labour from 1987 to 1989 and is currently a senior advisor at Benedetto, Garland & Co. She joined the Microsoft board in January, 2000.

Gibson Dunn adds a competition partner in Texas
December 2
Jon Shepherd is to be made partner in Gibson Dunn & Crutcher’s Dallas antitrust group. The appointment will beef up the existing group in the southwest, where John Crews was until now the sole partner.
Shepherd’s appointment will be effective as of January 1 2003.
Having been a member of the Order of the Coif at the University of Michigan and graduated magna cum laude, Shepherd has hitherto focused on antitrust litigation. Notable cases in which he has been involved include defending American Airlines in a predatory pricing suit brought by Continental and Northwest Airlines and acting on behalf of Daiichi Pharmaceuticals, which was fined US$25 million for its part in the vitamins cartel. Says Crews: "Having two partners illustrates the growth of our Dallas practice, and also the firm’s ability to complement its national practice at the local level."

Dutch enforcer to merge with telecoms regulator
December 2
NMa, the Dutch competition enforcer, is to amalgamate with the post and telecommunications regulator OPTA, it has been announced. The two bodies, which already cooperate in a number of areas, could combine as early as July 2003 when the Dutch regulatory framework is revamped.
The move has been welcomed by competition specialists in Holland, who regard OPTA as something of a loose cannon and are hoping that the NMa will introduce more balanced and predictable enforcement into the telecoms sector — "joined-up enforcement", in the words of Allen & Overy competition partner Pepijn van Ginneken.
Under the proposed merger, OPTA would become a chamber of the NMa with responsibility for telecommunications and postal services, and would cooperate with other parts of the agency. Enforcement instruments would be used in a way that produces "tailor-made, effective regulation", the NMa said.
However, the results of a recently published survey suggest that criticisms of OPTA’s style may be somewhat overstated. In the survey, Jones Day Reavis & Pogue rates the performance of nine European agencies against various criteria including efficiency, transparency, independence and dispute resolution. OPTA receives the equal third highest rating at —1 point, with only the UK and German regimes doing better with +15 and +2 points respectively. All the agencies are predicted to improve between now and 2004, says the survey. For further information, see www.jonesday.com.
GCR will itself be publishing a survey on telecommunications regulators — ‘Rating the telecoms enforcers’ - early in 2003.

OFT appoints new directors of competition
December 2
Becket McGrath and Christiane Kent are to be the new directors of competition enforcement at the UK Office of Fair Trading. McGrath’s brief covers investigations in the media, sport and information technology sectors, while Kent will be responsible for the consumer goods industries.
Both appointees joined the OFT relatively recently from private practice; Kent was with Linklaters and McGrath with Freshfields Bruckhaus Deringer in Brussels.
The OFT introduced a policy of hiring more people from the private sector last year.