Modifications Visa has proposed include:

• A reduction in the fee on different types of consumer cards. For debit card transactions, Visa will introduce a flat-rate interchange fee of Euro 0.28 immediately. The ‘weighted average’ fee rate will be brought down in stages, to a level of 0.7 per cent in 2007 for Visa’s deferred debit card and credit card payments.
• A cap on the fee equal to cost-price for certain services provided by the issuing bank, such as transaction processing and the free funding-period (the time before the cardholder either pays the card bill or ‘rolls over’ the balance to an extended credit facility)). A cost study will be conducted in-house at Visa with independent auditors to establish objective benchmarks.
• Increased transparency. Visa will allow member banks to share information about the fees that they pay.

Reactions to the exemption are mixed.
Eurocommerce, the group that filed the initial complaint with the Commission in 1997, says it may appeal against the decision.
Lawyers representing Eurocommerce, competition partner Pierre Bos and associate Morten Nissen from Dorsey & Whitney, however, acknowledge that the proposals tabled raise the possibility of deep change in the fee system. They retain their doubts about the practicality of some of the measures proposed. On the introduction of 'objective benchmarks', Bos says: "Calculating cost is very subjective. There are serious reductions on paper, but seeing is believing."
Mastercard, a rival of Visa's which also charges interchange fees, has welcomed the decision. Christoph Baert Mastercard’s in-house counsel says: "Interchange fees are beneficial. The system is an efficient and transparent mechanism for balancing card issuers’ costs and enabling retailers to receive the benefits of card acceptance."
Visa's in-house counsel Carol Walshe, retained the services of Freshfields Bruckhaus Deringer in Brussels on the matter. Competition partners Cornelis Canenbly, based in Düsseldorf, and Vanessa Turner, in Brussels, have led the team.
Eurocommerce has been represented by Dorsey & Whitney in Brussels, where competition partner Pierre Bos was assisted by associates Morten Nissen and Robin Struijlaart.
Mario Monti, in a press statement on the decision said that any national-level investigation of interchange fees that should reach conclusions consistent with the EC's, since the purpose and effect of the interchange fee is the same whatever the market.
Mastercard has a notification filed with the UK's Office of Fair Trading for a scheme that it operates in the UK.

Carnival Corp thanks Herbert Smith
July 26
Carnival Corporation has said thank you in a public fashion to Herbert Smith for steering Carnival Corporation/P&O Princess past the European Commission. The deal received clearance from the Commission late-July, after a phase two investigation.
Following the clearance the vice president of corporate development at Carnival Ken Dubbin gave the firm this this testimonial: "Merger clearance is always a nerve-racking process, but Herbert Smith’s advice was spot on. Having told us that we should get cleared without concessions, they stuck to that line and skilfully guided us through the investigation."
Brussels partners Stephen Kinsella and Craig Pouncey in lead the Carnival work. They were supported by senior associate Adrian Brown.
The clearance was seen as a surprise in some quarters because earlier indications from the Commission were that some concessions would be required.
At a press conference to announce the clearance, Commissioner Monti took extra care to explain the apparent shift in stance, according to observers. He said that the establishment of an 'inter-services panel', which had examined fresh evidence gathered during the replies to the Statement of Objections, was a key step. He added that this piece of innovation showed the Commission had "taken on board" comments about inadequate checks and balances in its procedure. Monti said the panel had facilitated the Commission's changing of its collective-mind. The 'inter-services panel had brought together representatives of the Legal Service and other relevant departments.
Monti denied there had been a "U-turn" during the case.

CSN joins in with Corus
July 26
Anglo-Dutch steel manufacturer Corus has announced a deal with Brazilian company Companhia Siderúrgica Nacional (CSN) which is reportedly worth US$4.8 billion.
The transaction, announced on July 17, is still being negotiated. Definitive documentation will be signed at the end of this year, with completion expected during the first quarter of 2003.
The deal will see Corus own 62.4 per cent in a new US$5-billion company to be formed next year. CSN will own the remaining 37.6 per cent.
The new company is expected to be the fifth biggest steelmaker in the world - up from Corus’s current eighth position. The deal should see Corus’s steel output rise by 28 per cent.
The key competition concern will be a vertical overlap between the two firms. Merger filings are expected to be made in the UK and in Brazil, and possibly in the US and some European jurisdictions.
The deal will probably also be the first-ever steel industry deal to go to a national enforcer, rather than the EC, as the European Coal and Steel Treaty, which bestowed jurisdiction over coal and steel transactions to the European Commission, expires shortly - the end of July.
Corus’s in-house counsel Ian Fowler has retained a team from Slaughter and May for both corporate and competition advice. Associate Shaun Goodman is doing the UK competition work. In Brazil, Pinheiro Neto Advogados partner Marcelo Viveiros de Moura and associates Marcelo Vieira Rechtman and Maria Izabel Lima Cardozo will perform the merger filings. In the US Shearman & Sterling associate Chuck Webb is handling the Hart-Scott-Rodino filing in Washington DC.
CSN’s in-house lawyer Claudia de Azeredo Santos has retained Machado Meyer Sendacz e Opice. Competition partner Eugenio Costa and Associate Tito Andrade there are doing the competition work, while Ari Solon of Magalhães e Ferraz made the appropriate merger filings.
CSN has retained Clifford Chance to advice on English legal issues. Partner Oliver Bretz is dealing with the competition aspects of the proposed transaction, with associate Monika Novotna also working on the deal. Associate John Sipple in Washington DC is overseeing its part of the Hart-Scott-Rodino filing.

Analysts predict more mergers will follow Pfizer/Pharmacia
July 19
The pharmaceutical industry could be in for a wave of consolidation in the wake of this week’s announcement that Pfizer, the world’s third-largest drug company by sales, will take over rival Pharmacia Corp in an all-stock offer valued at US$54 billion. It is now up to the companies’ competition lawyers to prove that product lines are complementary rather than overlapping. The combined company will have an overall drug market share of about 11 per cent.
While observers are excpecting no hitches in the clearance process, sources say that there could be some overlap between Pfizer and Pharmacia drugs for emphysema and urinary-incontinence treatments. The chairman of the US Senate antitrust subcommittee, Herb Kohl, issued a statement after the deal was announced saying the deal would be closely scrutinised to ensure consumers were protected. Filings will be made at the FTC and "in a full swing of other jurisdictions," according to one source, who would not elaborate.
Pfizer has retained Arnold & Porter for antitrust work in the US; in Washington DC, partners Michael Sohn, William Baer, Cathy Hoffman and Jonathan Gleklen are preparing antitrust advice. Pfizer’s long-standing competition advisor in Europe, Clifford Chance, has Brussels partner Marleen van Kerckhove working on the file with associates Tony Reeves, Ninette Dodoo and Jim Back. The Pfizer in-house team is led by general counsel Jeffrey Kindler and senior legal advisor David Reid; Kent Bernard and Marc Brotman are also working in-house. Clifford Chance will coordinate filings in other European jurisdictions as necessary. Pfizer is using Cadwalader Wickersham & Taft on corporate issues.
Sullivan & Cromwell is working for Pharmacia on both sides of the Atlantic, handling corporate and competition work. In New York, partner Stuart Meilkejohn and special counsel Michael B Miller are preparing Federal Trade Commission filings. In London, European counsel Juan Rodriguez will work with associates Michele Nascimbene and Catherine Rosato on the filings to the European Commission. Filings may be made in other jurisdictions, but according to Sullivan it was too early to say which. Pharmacia’s in-house team consists of Rick Collier (senior vice president and general counsel), Todd W Kingma (vice president and associate general counsel) and François Garnier (European general counsel).
The development of new drugs has slowed dramatically in recent years. Many analysts are now hypothesising about further acquisitions in the pharmaceuticals sector as companies buy blockbusters rather than develop them. The Wall Street Journal reports that a Merck move on Schering-Plough is one likely consolidation. Novartis (of Switzerland) and Aventis (of France) are thought to be looking for acquisitions according to reports.
Pfizer itself has not developed a blockbuster drug since Viagra, launched over four years ago. Its top selling drug, Lipitor, was licensed from competitor Warner-Lambert before Pfizer bought the whole company in 2000. Pfizer and Pharmacia have marketed Celebrex (Pharmacia’s arthritis medication) together since 1998. This deal gives Pfizer Pharmacia’s portfolio of cancer treatments. Pfizer has been trying to deliver a lucrative cancer product of its own for 10 years.

Amgen/Immunex cleared by FTC
July 19
Amgen, the world’s largest biotechnology company, has this week been given clearance by the Federal Trade Commission for its acquisition of Immunex, the Seattle-based biotechnology company.
Amgen and Immunex announced the deal last December.
The Commission cleared the deal, priced at US$17.7 billion, on the condition that the companies divest certain assets and license certain intellectual property rights in three biopharmaceutical markets. The FTC opted for an‘upfront buyer’ remedy.
In its original complaint, the FTC alleged that the deal as it was structured would violate the Clayton Act and the Federal Trade Commission Act in the markets for neutrophil (white blood cell) regeneration factors, tumour necrosis factor (TFN) inhibitors and Interleukin-1inhibitors.
The companies will have to sell all of Immunex’s assets related to Leukine — a neutrophil regeneration factor — to Schering AG.
The companies will also have to grant a licence for certain intellectual property rights over TNF inhibitors to Serono SA and over intellectual property rights related to IL-1 inhibitors to Regeneron Pharmaceuticals Inc.
The merger required notification only in the US and Germany as Immunex licensed the European distributions rights to its main product, Enbrel, to another company.
Both corporate and competition work on the deal has been carried out by Latham & Watkins. In the US, competition partners Daniel Wall, Thomas Rosch, Karen Silverman, Gabriel Gregg, Joshua Hollan, Deborah Briones and Adrian Davis advised from the San Francisco office. In EC filings, partner Alain Georges and associate Petra Senkovich in Paris have been the advisors. Partner Andreas Weitbrecht from the Brussels office and associate Marco Nunez Mueller in Hamburg led on the German filing.
Amgen retained economists Tom Campbell from Law and Economics Consulting Group and Daniel Rubinfeld and Walter Vandaele from LECG.
At Immunex, senior vice president Barry Pea, assistant general counsel John Kliewer and senior counsel Demarst Allen turned to Skadden Arps Meagher and Flom for antitrust advice. New York partner William Pelster and Washington DC partner John Nannes led the team, assisted by Joseph Nisa, Shiek Pal and Jed Goldfarb.

Telia/Sonera granted a conditional clearance in Europe
July 19
The European Commission has given conditional clearance to the proposed acquisition by Swedish telecoms firm Telia AB and Finnish telecoms group Sonera Corporation after an extended six-week phase 1 investigation. Both companies provide a wide range of communication services. Sonera in is the leading provider of mobile and data communication services in Finland. Telia provides international carrier and domestic wholesale services in the Nordic and Baltic regions.
Both companies are part state-owned and this is the first deal between two incumbent telecoms companies in Europe.
According to the Commission there were direct overlaps in the companies’ activities in Finland in the areas of mobile communication services to retail customers, wholesale international roaming and wireless local network services. To address this, the companies have offered to divest Telia’s Finnish mobile communications with WLAN business.
To prevent foreclosure, from strong vertical integration, the companies have also offered to create a legal separation between their fixed and mobile networks and their service businesses in Finland and Sweden. They will grant non-discriminatory access to their networks. The Commission was concerned that the loss of Telia as a competitor on telecoms services in Finland would have strengthened Sonera’s dominant position in Finland.
Finally, the parties have offered to divest Telia’s nationwide cable TV business in Sweden. Cable TV networks are seen as the most credible substitute for the infrastructure of incumbent telecoms firms as they can be used, if sufficiently upgraded, to provide broadband Internet services, data transmission and voice telephony.
White & Case in Brussels provided advice to Sonera and the Finnish government. The competition team consisted of partner Mark Powell and associates Cormac Little, Jacob Borum and James Killick.
The Stockholm office of Linklaters advised Telia and the Swedish government. Competition associates Erik Söderlind and Jonas Kopenen advised.

Easyjet buys rival
July 19
Easyjet and Go, Europe’s two rival low-cost airlines, are to merge.
The takeover by Easyjet of British Airway’s former ‘little brother’, Go, will create the largest low-cost airline in Europe, knocking Ryanair off the top spot.
Easyjet will pay £374million for the entire share capital of Go and certain loans and obligations. According to reports the deal is likely to create 20 overnight millionaires among Go senior executives and managers, who participated in the £110-million management buyout from British Airways last year.
The ‘Go’ brand will disappear once the two airlines have merged. Easyjet will have a significant presence at three London airports, Luton, Gatwick and now Stanstead, where it will go head-to-head with Ryanair.
The networks of Easyjet and Go largely complement each other. The only direct competition is on routes from Edinburgh and Glasgow to Belfast, where the two airlines have, in the past, been in fierce competition.
Easyjet is also in talks to acquire BA’s loss-making subsidiary Deutsche BA. An agreement has been reached that will give Easyjet an option to buy Deutsche BA at any time up to the end of March 2003. As Easyjet chief executive Ray Webster is quick to point out, Germany is the biggest domestic air market in Europe.
Rival Ryanair is said to have welcomed Easyjet’s acquisition of Go and Deutsche BA, "The enlarged Easyjet group, means that there are two large low fair airlines…both will provide strong competition to the high rip-off airlines,"said Michael O’Leary of Ryanair.
Deutsche BA flies seven routes in Germany, serving the major cities of Düsseldorf,Cologne/Bonn, Munich and Stuttgart.
Representing Easyjet on the competition aspects of the deal is a team from Denton Wilde Sapte in London. The head of Denton’s aviation regulatory and commercial group, Hugh O’ Donovan (who is also a member of the EU and competition group), is leading the competition team. He is joined by assistant solicitors Rebecca Owen, Martin Smith and Rona Barr-Issac. O’Donovan is a long-standing advisor to Stellios Haji-Ioannou of Easyjet. Norton Rose acted on the corporate side of matters.
Merger filings have been made by Easyjet in the UK, Spain, Portugal and the Czech Republic.
Go has retained the services of Matthew Hughes, director of economcs in the competition and trade practice at Ashursts Morris Crisp in London, for economic analysis. He is being assisted by competition solicitor Craig Arnott.
Few competition obstacles are expected, according to reports.

Panamanian authority rejects appeal by Bavaria
July 12th
Panama’s Competition Commission, the Comisión de Libre Competencia y Asuntos del Consumidor (‘Clicac’) has rejected an appeal by a Colombian drinks maker, Bavaria, that is attempting to buy Baru-Panama, the Peruvian brewer.
The Commission blocked the deal in May after deciding it would stifle competition in Panama’s brewing industry.
In a statement, Clicac said that Bavaria, which is Latin America’s fourth-largest brewer, had failed to show cost savings made from the transaction would be "transferred to the consumer, or that there would be enough competition in the market." It estimated that the takeover would cost consumers in Panama US$23 million a year in higher beer prices.
Bavaria owns the only other Panamanian brewer, Cervecería Nacional, and had hoped to merge the two entities on completion of the deal, thus achieving a monopoly position in Panama’s beer market. Clicac said the deal went against the spirit of trade and would damage Panama’s US$10-billion-a-year economy.
The decision by the Commission’s appeal body is final, and Bavaria’s efforts to buy Baru-Panama from Coca-Cola de Panama Cía Embotelladora SA are therefore now ended. Bavaria made an offer to Coca-Cola of US$53 million in November. Bavaria will now have look to other Latin American markets for its expansion plans. As it already has a substantial presence in Ecuador — it supplies roughly 90 per cent of beer there — countries such as Puerto Rico and the Dominican Republic are likely to be targeted.
Bavaria was represented in the appeal by Morgan & Morgan’s Carlos Ernesto González Ramírez (partner) and María Eugenia Brenes Tovar (associate) For economic advice, Bavaria used the Panama offices of Arden & Price and Indesa, with the support of New York firm Violy, Byorum & Partners Holding LLC Bavaria’s in-house lawyers, Víctor Machado and Marcela Hoyos oversaw matters.
Coca-Cola de Panama Cía Embotelladora SA was advised by lawyers from Arias, Fábrega & Fábrega. The team consisted of partner Francisco Arias G and associate Estif Aparicio, and Coca-Cola de Panama Cía Embotelladora’s own director, Alvaro Arias, who happens to be a partner at the law firm of Arias, Alemán & Mora.

Exxon Mobil sells Chilean copper interests to Anglo-American
July 12th
Exxon Mobil Corp has sold its Chilean copper mining business, Compañía Minera Disputada Limitada, to Anglo-American Plc. The price paid was US$1.3 billion. Compañía Minera Disputada de las Condes Limitada’s assets include the Los Bronces and El Soldado copper mines and the Chagres smelter in central Chile.
Tony Trahar, chief executive of Anglo-American, a UK-based mining company, says: "The acquisition of a proven long-life, low-cost, copper business [such as this] constitutes a major strategic strengthening of our base metals portfolio."
Anglo recently sold its Zambian operations, the Nampundwe, Konkola and Nchanga mines, which produce about half the copper and cobalt metals mined in Zambia. The company also sells forest products, coal and other minerals, as well as owning a 45 per cent stake in the De Beers diamond consortium.
Competition filings are being made in the US, Brazil, EU and Ireland.
Anglo-American’s in-house counsel Ben Keisler is coordinating the filings. A team of antitrust advisors has been retained that includes antitrust partner Steven Sunshine and associates Julia Kupfer, Gabriela Vallejo and Charles Webb from Shearman & Sterling in New York; competition partner Tony Morris and associate Nicole Ada from Linklaters in London, who are in charge of European Union filings; and competition partner Vincent Power and assistant solicitor Dorit McCann from A&L Goodbody in Ireland.
In Brazil, Machado, Meyer, Senacz e Opice is advising on antitrust filings for both seller and buyer. Antitrust partner Eugenio da Costa e Silva is being assisted by associates Adrianna Giannini and Gustavo Lage Noman.
Exxon-Mobil has retained Covington & Burling in New York to advise on antitrust.

Kingfisher buys Castorama to create DIY superpower
July 12th
The UK retailer Kingfisher has had its Euro5.1billion bid for the rest of Castorama, the French DIY group, accepted by shareholders.
It follows a decision that the bid was "fair" by an independent bank assessor, Rothchilds. Kingfisher may now purchase the 44.5 per cent share of Castorama Dubois Investissements that it doesn’t already own. According to reports, competition hurdles will be cleared soon. The deal is being looked at by the European Commission.
Kingfisher is the third-largest home improvement retailer in the world. It operates 580 home improvement stores in 11 countries and is the market leader in the UK, France and Taiwan. If cleared, the deal will create the largest European DIY retailing group. The founding Dubois family and six senior partners in Castorama will receive at least Euro600 million and possibly more than Euro1 billion from selling their equity holdings, according to reports.
Freshfields Bruckhaus Deringer in Brussels is representing Kingfisher in its competition filings to the European Commission. Competition partner Andrew Renshaw is being assisted by associates Rainer Becker and Soledad Gomez.

Netherlands Authority fines Texaco Euro1 million
July 12^th
The Netherlands Competition Authority (NMa) has fined Texaco Nederland Euro1 million for fixing prices illegally in a local filling station market. The owners of four stations also received fines between Euro25,000 and Euro48,500.
In a statement, NMa says that after "coordinated consultation" Texaco and the filling stations lowered their prices in concert, as a response to the entry of another petrol distribution company, Tango, to that business area. Tango operates un-staffed stations at which customers pay by credit card and passes on its cost savings in lower prices - usually something in the order of 15 cents.
According to the agency, Texaco and the four filling stations undercut their original price by as much as 30 cents, a discount that the NMa says was borne by Texaco, initially in full and later partially.
The NMa investigation followed a complaint by Tango. It included 'dawn raids' on Texaco's officess. The NMa is now investigating the petrol market as a whole, having unearthed it believes the agreements between oil companies and filling station operators that remove the incentive to compete. It has also announced that it will declare the European block exemption for vertical agreements "to be inoperative in this case".
Texaco says it "strongly [rebuts] the NMa's allegations" adding that the NMa has "[disregarded] the arguments made by Texaco that Tango's claim is unsubstantiated and that there are no agreements between Texaco and its retailers to lower the price".
De Brauw Blackstone Westbroek is conducting NMa’s legal work. Partner Martijn Snoep and associates Elsje Lorritsma and Bas Braeken will file an appeal against the decision, specifically against the evidence, the interpretation and application of competition law, and also against the size of the fines.
Monique van Oars, the head of the NMa’s competition unit, led the team for the agency. It is NMa policy not to name individual case handlers who work on matters.

German Minster waves through E.On/Ruhrgas
July 8
The German Federal Cartel Office (FCO) was dealt a blow last Friday when the Economics Ministry overturned its decision in E.On/Ruhrgas.
In a long-awaited ruling, the Government approved the deal, which will give E.On (Germany’s largest energy company) and Ruhrgas (Germany’s largest gas supplier) a dominant position in the German natural-gas and electricity distribution market.
The FCO blocked the deal in January. Ulf Böge, president of the FCO, said: "The combination of E.On and Ruhrgas in a time of emerging liberalisation in the gas markets would cement Ruhrgas’s dominant position. This would considerably diminish the likelihood of any effective competition from other grid gas companies."
The German Monopolies Commission, which advises the Government, supported the FCO position and said in a strong statement that the deal would strengthen E.On’s dominant position.
Following rejection by the competition watchdog, E.On asked the Economics Ministry in March to approve the deal, using a rarely-used provision that allows the Government to overrule the FCO. The Government had not rejected the position of the FCO since 1989.
The economics minister, Werner Muller, a former power-industry executive, passed the decision to his deputy, Alfred Tacke. Sources say that Chancellor Gerard Schröder was sympathetic to building a national energy champion.
Germany imports around 90 per cent of its gas. E.On will now have access to Ruhgras’s gas production sources in Norway, Russia, the Netherlands and Great Britain.

The Economics Ministry approved the deal subject to a number of conditions:

• E.On and Ruhrgas will sell their joint stake in Verbundnetz Gas AG, an eastern German natural-gas buisness;
• E.On and Ruhrgas will auction 75 billion kilowatt hours of gas to rivals in the next three years;
• E.On will sell its stake in utilities EWE and Gelsenwasser AG;
• E.On will sell its stake Bayerngas, a Bavarian gas firm.

The companies have also been told to split Ruhrgas’s network operations and gas trading activities and to make it easier for third parties to access the Ruhrgas network. However, the Government has not required E.On to sell its Munich-based natural gas unit Thuega — a key demand of rivals. Sources suggest this would have been a deal-killer.
The conditions that the Economics Ministry imposed on the deal are different to those the parties put to the FCO (which one source says were "a slap in the face of the Bundeskartellamt"). When the deal was blocked in January, Böge said that "the concessions the companies offered were of little significance in competition terms and thus not appropriate to prevent the strengthening of the dominant positions in the gas and electricity markets". If the conditions put to the Ministry had been raised with the FCO, it is possible that the FCO result would have been different.
The approval means that E.On can proceed with a swap announced with RAG, a coal and chemicals firm. E.On has said it will sell RAG just over half of a chemical subsidiary, Degussa, and take on a further 18.4 per cent of Ruhrgas.
Reports suggest that E.On may have its eyes on acquisitions in the US next. E.On purchased Powergen, the UK's second largest power generator, last year, which opened the door to the US energy market through various Powergen holdings, including LG&E Energy of Kentucky.
E.On was represented by Gerhard Wiedemann, competition partner in Freshfields Bruckhaus Deringer’s Düsseldorf office.

FTC loses first fast-track procedure
July 8
In the first ‘complex’ case to be tried under the US Federal Trade Commission's ‘rocket docket’ 12-month procedure, administrative law judge Michael Chappell has thrown out a complaint brought by the FTC against pharmaceuticals manufacturers Schering-Plough Corporation and Upsher Smith Laboratories.
The FTC had accused the companies of engaging in unfair competition by concluding an agreement designed to delay the entry of generic drugs on the US market.
The judge also dismissed charges against Schering relating to a similar agreement between Schering and ESI Lederle, a division of American Home Products Corporation.
The FTC now has 30 days to appeal against the decision.
In its complaint, the FTC alleged that Schering, the maker of K-Dur 20, a potassium chloride supplement, illegally paid Upsher US$60 million and American Home Products US$15 million to delay launching generic versions of the drug. The delay in the introduction of the generic drug, the FTC alleged, resulted in consumers paying over US$100 million more than they should.
The companies said the payments were made in settlement of previous litigation.
Dismissing the charges, the judge said that the FTC did not "properly define" the relevant product and that Schering did not have monopoly power in the relevant product market as properly, and more broadly, defined.
In addition, the judge held that the FTC had not proved "that the payments were not to settle the infringement cases and for drugs licensed to Schering." He also questioned whether the agreements had in fact served to delay the entry of generic competition.
The decision is a blow to the FTC, which has singled out practices in the pharmaceutical industries as an area of particular concern.
Representing Upsher-Smith before the Federal Trade Commission was a team from White & Case. Antitrust partners Mark Gidley, Robert Paul and Christopher Curran were assisted by associates Rajeev Malik, Peter Carney, Jaime Crowe, Gustav Chiarello, Jeff Talbert and Carmellis Noriega.
The case was the first complex case tried under the FTC’s ‘rocket docket’ 12-month procedure: trial began in January 2002 and ended in March despite there being thousands of exhibits, scores of live witnesses sworn and nearly 8700 pages of trial transcript. Says Mark Gidley, the successful defence attorney: "This sends a clear message that there is a path through the thicket of antitrust charges when branded and generic firms settle patient infringement claims."
The significance of the decision in Schering is that it is the first trial challenging an agreement between a generic and a branded drug firm to settle an infringement case, judge Chappel ruling that the agreement was reasonable. "This outcome will begin to lift some of the enormous antitrust uncertainty from patent settlements," said Gidley.

Franchisees challenge McDonald’s in Brazil
July 8
In Brazil the Secretariat of Economic Law (SDE) has filed a proceeding against McDonald’s corporation following accusations by 28 Brazilain franchisees that the US fast-food giant is abusing its dominant position.
Members of AFIM (the Association of Independent Franchisees of McDonald’s) accuse McDonald’s of including abusive, anticompetitive clauses in its contracts, concluding illegal subleases and abusing its economic power. The president of AFIM, Jacques Riegler, reportedly described McDonalds as "cannibalising" its franchisees.
Franchisees claim McDonald’s is violating the spirit of its contracts by opening its own restaurants close to franchisees, which are consequently faced with direct competition from McDonald’s outlets.
The high rents charged by McDonald’s — as much as 24 per cent of gross sales — are another cause of dissatisfaction among franchisees. In addition, nearly all the premises in which restaurants are located are rented directly from McDonald’s. The corporation undertakes property development itself so it can ensure standardised interior and exterior layouts and choose the locations it wants.
Representing AFIM is a large team from two Brazilian law firms. At Escritório de Advocacia Sergio Bermudes, competition partners Marcelo Ferro, Raphael Miranda, Maria Salgado and Simone Barros are advising, along with Advocacia Jose Del Chiaro’s Jose Del Chiaro, Maria Augusta Fidalgo, Tatiana Lins Cruz and Fernanda Arbex. AFIM has also hired economist Jorge Fagundes of Possas & Associados.
McDonald’s has retained the services of Franceschini e Miranda; Jose Inacio Franceschini is leading the team there. Franceschini is reported as saying that the franchises suing McDonald’s are having difficulty meeting the terms of their contracts with McDonald’s — and that this is a private contractual matter. He also said that the cases should not have been referred to the SDE or the Commission for Economic Affairs (CADE) in the first place.
The case has led to moves in the Brazilian Congress to change the law and has been submitted to CADE in the Senate, where amendments to the Franchise Law are now under discussion.
Marcelo Ferro, for AFIM, said he expects the case to continue for another year.

FTC attacks Rambus over ‘submarine patents’
July 1
The US Federal Trade Commission voted 5-0 to file a complaint that Rambus, the California-based technology company, engaged in "a pattern of anticompetitive acts … that … [deceived] an industry-wide standard-setting organization, resulting in adverse effects on competition and consumers."
The complaint alleges that Rambus participated in the Joint Electron Device Engineering Council (JEDEC) — an organisation that issues technical standards for computer memory — for over four years, during which time the company concealed from the other participants the fact that it either possessed or was applying for patents that were ultimately adopted in standards. The FTC says the firm acted in bad faith and engaged in deceptive conduct to persuade JEDEC that it had no relevant intellectual property.
In the ‘litigation update’ section of its website, Rambus says that the complaint will be proved to be ill-founded. Says general counsel John Danforth: "We believe we have established that Rambus fully complied with JEDEC’s disclosure policy. We are somewhat surprised to see this complaint."
The issues raised by the FTC’s complaint have been previously addressed in a Virginia court case between Rambus and German technology company Infineon, which until 1999 was Siemens Semiconductors. A source familiar with the first case said the main issue was the construction of two Rambus patents, DDR and SDRAM. The case is on appeal to the Federal Circuit Court of Appeals, where briefings and arguments were made on June 3, as neither company is satisfied with the outcome, a split decision.
The FTC has assembled a team under Bureau of Competition Director Joseph Simons and Deputy Director Sean Royall to prosecute this matter. Geoff Oliver, a deputy at the anticompetitive practices division, is supervising a team of staff attorneys from that division that includes Malcolm Catt, Robert Davis, Michael Zito and Cary Zuk. Additional lawyers are expected to join the team once it moves to handle the litigation.
Rambus has retained a team from Wilmer Cutler & Pickering’s Washington, DC office for the antitrust side of the case. Although the line-up has not been finalised, the team will include antitrust partners Douglas Melamed and Robert Bell. They will be assisted by associates Kenneth Bamberger and Jacqueline Haberer.
The litigation in California will be handled by Munger, Tolles & Olson, where litigation partner Gregory Stone and associate Sean Gates will be among those on the team. Others will be added in time.
Remedies sought by the FTC include an order preventing Rambus from enforcing the relevant patents.

Deutsche Post ordered to repay state aid
July 1
The European Commission has ordered Deutsche Post, the German postal services operator, to repay Euro572 million in state aid plus interest because it used monopoly profits to subsidise its commercial activities, notably its parcel service.
This decision complements the Commission's earlier ruling that Deutsche Post abused a dominant position by granting loyal customer discounts and selling at a loss on the commercial parcels delivery services market which resulted in a Euro24 million fine. Both decisions, according to Anton van der Lande, vice president public affairs international for competitor firm United Parcel Service, highlight the need for a clear separation between the commercial and non-commercial activities of national postal services.
Said Van der Lande: "Today’s courageous decision also sets a clear precedent for other postal operators who have embarked on a strategy of international acquisitions." It remains to be seen how the EC will restructure repayment.
The original state aid complaint that led to today’s decision was based on Deutsche Post's commercial practices in the domestic German parcel market. However, the principles underlying the ruling could also apply to Deutsche Post’s international commercial activities and to its recently-acquired express and logistics subsidiaries, including DHL, said UPS.
A team from Freshfields Bruckhaus Deringer led by competition partner Jochim Sedemund from the firm’s Berlin office is representing Deutsche Post. Sedemund says that "the Commission’s decision is totally inconsistent with the Ferring jurisprudence of the European Court of Justice and the recent decisions of the Commission with respect to the Italian and the Irish postal services. Deutsche Post will challenge the decision in the ECJ."

P&O/Royal Caribbean cleared in UK
July 1
The UK’s Competition Commission has cleared the proposed merger of cruise operators P&O Princess Cruises Plc and Royal Caribbean.
The Commission concluded that the merger could not be expected to operate against the public interest.
A number of possible product markets were examined; applying a range of market definitions from narrow to broad, and the Commission did find that the proposed merger might give rise to concerns in some markets. However, it also identified factors that could offset or mitigate their effects.
P&O Princess Cruises sells around 23 per cent of all cruises taken by UK customers.
The conclusion the Commission drew from its analysis was that the market for UK cruise customers was characterised by growth, variety and new entry and that this pattern could be expected to continue. The number of UK passengers carried more than tripled between 1990 and 2000, when around a third of berths were provided by operators that did not enter the business until 1995 or later. Between a third and a quarter of UK passengers chose cruises predominantly targeting North American or continental European customers rather than those aimed at the domestic market.
P&O Princess Cruises was advised by Freshfields Bruckhaus Deringer regarding UK clearance. Freshfields is also advising P&O Princess Cruises on the pending European Commission Merger Regulation investigation relating to Carnival’s bid for P&O Princess Cruises. The team at Freshfields is led by partner Rachel Brandenburger and includes partner Alan Ryan and associates Rafique Bachour, Alasdair Balfour, Jason Campbell, Dean Hunt, Michael Bo Jaspers and Emily Smith.
Sullivan & Cromwell is advising P&O in the US. Partner Richard Urowsky, corporate partner Duncan McCurrach and two associates, Auda Cohen and Michael Schwartz, are working on the case.
Slaughter and May represented Royal Caribbean before the UK Competition Commission. Competition partner Malcolm Nicholson at Slaughter was assisted by Shaun Goodman.
According to some reports, Carnival’s rival bid, which the European Commission is looking at because of its potential impact in the UK and German markets, may be helped by the outcome. The European Commission will also be aware that it was criticised in the Airtours case for failing to look at a relevant UK Monopolies and Mergers Commission report.
In Brussels, competition partners Stephen Kinsella and Craig Pouncey of Herbert Smith are representing Carnival, assisted by associate Adrian Brown.
Royal Caribbean also presented views on the Carnival transaction in Brussels. Slaughter and May’s partner Phillipe Chappatte led a team consisting of partner Anne Clayton, Steve Smith and Sylvia Zarpellon. Additional help came from Latham & Watkins, where partner John Colahan advised.
In the US, antitrust partner Paul Bartel from Davis Polk & Wardwell is advising Royal Caribbean.
Hogan & Hartson is advising Carnival in the US. Antitrust partner Janet McDavid there is being assisted by associates Lynda Marshall, Tracey Elizabeth Clay and Craig Cronheim.

Commission clears Barilla’s acquisition of German baker
July 1
The European Commission has cleared the proposed acquisition of German bakery products maker Kamps AG by Italian companies Fin.Ba SpA (holding company of the Barilla group) and Banca Popolare di Lodi scarl (holding company of the BPL group). The deal, worth around Euro1 billion, is subject to certain commitments regarding Kamps’s crisp bread business.
Barilla and BPL announced their intention to launch a public takeover for all of Kamps’s listed shares in April. Obtaining clearance from the European Commission was made a condition precedent in the offer. This meant it was essential to obtain clearance before June 28.
The Commission assessed the likely effect of the proposed concentration on several markets and specifically on the bread substitutes market.
Only Barilla’s in-house counsel, Franco Guariglia, was involved in the antitrust aspects of the transaction. He retained two firms for competition advice: Gianni Origoni, Gruppo & Partners in Rome and Freshfields Bruckhaus Deringer in Brussels. Competition partner Denis Fosselard and associate Andrea Zulli from Origoni were retained, while partner Marc Reysen from Freshfields advised on a German notification.
Kamps’s in-house counsel Anna Jeannee went to Baker & McKenzie in Frankfurt for competition advice. Partner Thomas Lampert there was assisted by associate Dominique Wegener.
The acquisition has also been notified in Poland.

Amcor/Schmalbach team seeks clearance in eight jurisdictions
June 24th
Australian packaging company, Amcor has acquired the PET (polyethelene terephithalate) container and white-cap closure assets of Schmalbach-Lubeca for $2.875 billion.
Amcor Limited based in Melbourne is the largest packaging group in Australia and is being advised by Canadian firm Davies Ward Philips Vineberg. At Davies Ward Philips Vineberg in Toronto, Mark Katz and Julie Soloway are the lawyers in charge. The Davies Ward Philips Vineberg has teamed with Hogan & Hartson to organise the work; Hogan & Hartson partners Jeff Blattner, Jolanta Stenbenz and Corey Roush from are the core team. In Europe, the Amcor team includes Linklaters's Brussels office - competition partner Gavin Robert is being assisted by associates Peter Citron, Eve Jordan and Helen Crossley.
Filings are to be made in eight jurisdictions: in the US, the European Union, Brazil, Mexico, Poland, Turkey, Ukraine and one more as yet unnamed jurisdiction.
Schmalbach-Lubeca's in-house counsel Babette Harnisch has retained McDermott Will & Emery. The team is led by London-based antitrust partner Scott McGregian who is coordinating all work. Associates Chris Ondeck and Steve Sullivan from the firm's Washington office are assisting him with US matters; associate Davina Garood is assisting him on the EU side. East European filings are being covered by partners Dan Rabinovitz, from the London office, and Ellen Tennenbaum, from the firm's Washington officee. For Brazillian work McDermot Will & Emery is teaming with local firm Demarest & Almeida Advogados; partner Mario Roberto Villanova Legueira is the key lawyer on the competition side. For Mexican work, Casteneda y Asociados is assisting McDermott Will & Emery; competition partner Ricardo Hernandez is leading the team there. In the remaining jurisdictions - Poland, Turkey and the Ukraine - both Amcor and Schmalbach-Lubeca are sharing local counsel.
In Poland partner Lech Anjbauer of Hogan & Hartson's affliated office is assisting; in Turkey, local firm Derman Ortak Avkat Burosu in Istanbul is assisting on Turkish competition law - partners Ece Gursoy and Deniz Ladirli are advising. In the Ukraine partners Oleg Alyoshin and Oksana Voynarovsk from Vasil Kisil & Partners are advising the merger parties.
The closing is scheduled for July 1 and the combined Amcor-Schmalbach business will operate 51 plants in 20 countries, including in Europe, North America, Latin America, Australasia and Asia.
Amcor has spent about $700 million buying flexible packaging-related operations in the past year, mainly in Europe, but the Schmalbach deal gives it unrivalled scale in Europe's PET business.
In North America Amcor operates the Twinpak PET business in the US and CNC Containers and PET Pack in Canada, while in Asia it has plants in China, Indonesia, Malaysia, Singapore and Thailand. Food and beverage makers such as Coca-Cola, Danone and PepsiCo, primarily for bottled water, juices and softdrinks use PET containers.

Commission clears Publicis/Bcom3
June 24th
The European Commission has cleared the proposed acquisition of American advertising and marketing company Bcom3, by France's Publicis Groupe SA.
Publicis is an international advertising group, which operates in 76 countries. It owns three advertising networks (Publicis Worldwide, Saatchi & Saatchi and Nelson Communications Worldwide), a network active in media planning and buying services (Zenith Optimedia Group) and an advertising production network specialised in the sale of advertising space (Medias & Regies Medias). It also owns an advertising agency active in the United States called Fallon.
Bcom3 is also an international advertising and marketing communications services group with operations in over 90 countries. It brings together Leo Burnett Worldwide, D'arcy Masius Benton & Bowlles, Bartle Bogle & Hegarty (a 49 per cent owned subsidiary), Starcom MediaVest Group, Medicus Group International and Manning Selvage & Lee.
The Commission assessed the impact of the proposed concentration on the markets for media buying services and marketing communications services in Europe.
It concluded that the transaction's main impact will be in France, but even there Publicis will be only the third largest player behind Omnicom and Havas advertising.
Publicis has been advised by Darrois Villey Mailot Brochier in European filings. Partner Didier Theophile and associate Natalie Lobel provided advice.
Representing Bcom3 has been a team from Bredin Prat in Paris. Partners Robert St Esteban, Hugues Calvet and associate Olivier Billard are advising.

Commission fines "Lombard Club" cartel
June 24^th
The European Commission has fined eight Austrian banks Eur124.26 million for participation in a price-fixing scheme.
The group that called themselves the "Lombard Club" comprised the chief executives of Erste Bank Derosterreichischen Sparkassen (Erste), Bank Austria Aktiengesellschaft (BA), Raffeisen Zentralbank Osterreich (RZB), Bank fur Arbeit und Wirtschaft Aktiengellschaft ((BAWAG), Osterreichische Postparkasse Aktiengesellachaft (PSK), Osterreichische Volksbanken (OVAG), NO Landesbank-Hyopthenbank AG (NO Hypo) and Raifeisenlandesbank Niederosterreich-Wien Gen mbH (RLB).
The "club", which reached throughout the Austria "down to the smallest village" reports say, was coordinated deposit, lending and other rates to the detriment of businesses and consumers in Austria. The club met every month (except August) at one of Austria's better known hotels. Following press reports on its activity in the Austrian press, the Commission, conducted a number of simultaneous dawn raids on some of the banks involved in June 1998 accompanied by officials from the Austrian Ministry for Economic Affairs,
The final Commission file extended to more than 100,000 pages of documents including minutes of meetings, memoranda, records of telephone conversations and correspondence, revealing a network of sub-committees on every aspect of banking products and services.
Welcoming members to a meeting in February 1995, the 'host' said: "The exchange of experience between banks … has repeatedly proved to be a useful means of avoiding uncontrolled price competition. In this vein, today's meeting should likewise ensure a focused and reasonable approach of all banks with regard to pricing."
He went on: "The way in which interest rates are currently being set shows very clearly that it is again necessary for us to sit down together and counteract problematic price developments…"
What often triggered a committee meeting to be called was a change in the key lending rates by the Austrian Cantral Bank, whereupon the banks promptly met.
Even though the cartel started before Austria joined the EU in 1995, the Commission can only impose fines for the period during which Austria has been a Member State and the cartel was operational - it halted in June 1998.
The banks were represented by teams from law firms across Europe. PSK (which was fined Eur7.59 million) and ERSTE (fined Eur37.69 million) were represented by two teams from Freshfields Bruckhaus Deringer. Competition partners Martin Klusman in Dusseldorf and Axel Reidlinger in Vienna advised PSK. Competition partner Frank Montag and associate Guenter Bauer in Brussels represented ERSTE.
Schoenherr represented RZB, which was fined Eur30.38million. Lead counsel at the firm was competition partner Hanno Wollman. Competition partner Rainer Roniger and associate Astrid Ablasser represented NO Hypo (fined Eur1.52million) and OVAG (fined Eur7.59 million) from Haarmann Hemmelrath Huegel in Vienna.
BAWAG was fined Eur7.59 million. Competition partner Hans-Joerg Niemeyer, from Hengeler Mueller led the team that represented RLB, who was fined Eur 1.52 million. RZB was represented by partners who now work for Latham & Watkins in Brussels; it received a fine of Eur30.38 million. From Morgan Lewis & Bockius in Frankfurt, managing partner Christian Zschocke and associate Juergen Beninca were on board to advise Bank Austria. It was fined Eur30.38 million.

Platinum Equity acquires Alcatel’s European distribution network
June 24th
Platinum Equity LLC, a US based, privately held company that specializes in acquiring and managing technology companies, has obtained unconditional clearance for an acquisition of Alcatel’s European enterprise distribution network. The financial terms of the deal have not been announced, but the annual turnover of the acquired business, which has 400,000 customers spread across 17 European countries, was 1.5 billion EUROS last year.
Baker & McKenzie was retained by Platinum’s General Counsel Eva Kalawski to do the competition work. Partner Samantha Mobley coordinated the European competition work as well as leading a team in London, where senior associate Julian Miezitis and associate Francisco Todorov assisted her. Baker & McKenzie obtained clearance in seven countries besides the UK.
In Germany, partner Thomas Lampert and associate Susanne Goetting did the competition work, while in Italy partner Andrea Cicala and associate Valeria Racanelli. In their Warsaw office, associates Marta Sendrowicz and Urszula Kondracka handled the competition work.
Abreu Cardigos & Associados’ partner Armando Ferreira and associate Goncalo Godinho were employed in Portugal, and likewise competition partner John Gaffney of William Fry Solicitors was retained for the work in Ireland. In Austria, Kordula Fleiss of Hauser Rechtsanwalte was responsible for obtaining merger clearance, while in Slovakia it was Lubomir Marek and Peter Mikletic of Marek Ondrejka & Partners.
Alcatel in-house counsel Alan Hoffman did not use a law firm, and declined to explain why. The distribution business provides voice and data telecommunications services to business in Europe. It is expected to complement NextiraOne, a US-based firm owned by Platinum that provides network services and converged technology solutions to business.

New leniency notice faces multiple appeals
June 17^th
A series of appeals by members of the "carbonless paper" cartel against record European fines are now under way.
The Commission imposed its second highest fine ever on a group of 10 companies involved in collusion in the carbonless paper market back in December last year. The companies are Arjo Wiggins Appleton, Carrs Paper Ltd (all of the UK), Bollore SA (France), Distribuidora Vizcaina de Papeles, Torraspapel SA, Paperiera Guipuz (all of Spain), Sappi Ltd (South Africa), Zanders Feinpapiere AG, Mitsubishi HiTech Paper Bielefeld GmbH and Papierfabrik August Koerhler (all of Germany).
The most recent appeal has been filed by Carrs Paper Ltd. Eversheds is representing it. The appeal was lodged at the beginning of May against a fine of 1.57million Euro. Partners John Grayston from the London office and Richard Prowse from the Birmingham office are handling the case, with associates Andre Bywater and Matt Woodward assisting them. Barrister Nicholas Khan from Blackstone Chambers is also advising.
Carrs is seeking both a reduction in the level of the fine imposed and also a reduction in the level of interest to be paid on the fine. Its appeal will be argued on the basis that the Commission's decision was inadequately reasoned and that the fine is disproportionate to the extent of Carr's infringement. It will also argue that the Commission should have granted it a more significant reduction in a fine under the Leniency Notice.
Arjo Wiggins Appleton Limited, which was identified as the instigator of the cartel, received a fine of 184.27 million Euro and filed an appeal earlier this year. It has since been bought by French company Worms & Co. Arjo was represented during the investigation by a team from Lovells led by partner Nick Bromfield. An in-house team is handling its appeal. The company declined to identify its individual lawyers.
Mitsubishi HiTech Paper Bielefeld GmbH has also filed an appeal. It was represented in the investigation phase by Freshfields Bruckhaus Deringer and Van Bael & Bellis. However Van Bael & Bellis alone is advising in the appeal before the Court of First Instance, with partners Andrzej Kmiecik and Ivo Van Bael handling the work. In Mitsubishi's appeal, the company is objecting to the period for which it has been fined, saying that the Commission failed to establish its participation in the infringement before January 1993. It also argues that the fine levied is disproportionate to the turnover in the relevant product market. It also says that the Commission's application of the Leniency Notice violated principles of legitimate expectation and equal treatment.
Papeteries Mougeot SA in Paris has also appealed. It is represented by the firm Barsi Doumith et Associes with partner Guy Barsi and associate Julian Baumgartner leading the team. The company declined to outline its appeal claims.
Iberpapel Gestion of Spain is also appealing. Cuatrecasas in Brussels is representing it, with competition partner Cani Fernandez leading the team; other members of the team include Inigo Quintana Aguirre and Mercedes Oleaga Gonzalez from the firm's Bilbao office.
Papelera Guipuzcoana de Zicunaga, one of the other Spanish companies which was fined 33.07 million Euro is believed to have appealed as well. It is not Cuatrecasas in its appeal but an unconfirmed local Spanish firm.
Freshfields Bruckhaus Deringer also represented Sappi Ltd during the original investigations (Competition partner Paul Lomas assisted by associates Oliver Meech and Patrick Dons.) Sappi received full leniency - ie a 100 per cent reduction - at the original proceedings.
In addition, Freshfields represented Torraspapel SA with a team led by competition partner Onno Brouwer in Amsterdam and Paco Cantos and Paul Lomas in London. Associates Juan Martinez, Alvaro Iza, Kees Schillemans and Sylvia Van Es are assisting. Torraspapel did not want to comment on what grounds the company lodged its appeal.
Hengeler Mueller Weitzel Wirtz in Dusseldorf represents Zanders Feinpapiere AG in Germany which was fined Eur29.76million. In-house counsel at Zanders, Robert Winkels and Jutta Treckmann-Braun retained competition partner Jochen Burrichter. Markus Wirtz is also advising.
Although competition partner Hans- Joachim Hellmann of Shearman & Sterling in Germany handled the initial case for Koehler, Gleiss Lutz Hootz Hirsch is handling the company's appeal. The company was originally fined Eur 33.07 million. Competition partner Ingo Brinker from the firm's Munich office is leading the appeal with partner Simon Hirsbrunner from Brussels. Koehler's grounds for appeal are based on the Commission's decision concerning the duration of the cartel and under the principle of discrimination. The Commission fine calculations were "quite strange" according to Brinker. The ringleader of the cartel, Arjo Wiggins Appleton, received a fine of 184.27 million Euro, the highest one imposed by the Commission on the cartel. This only reflected 2.5 percent of that company's worldwide turnover, whereas Koehler's EUR 33.07 million fine represented 7 per cent of the company's turnover.
During the initial proceedings before the Commission, competition partners Andrzej Kmiecik and Tim Kasten of Van Bael & Bellis sucessfully represented Stora Enso Oyj, which was not fined.

Inquiry into toy "price fixing"
June 17th
The UK Office of Fair Trading has said that it is investigating US toys and games maker Hasbro of colluding with UK retailers Littlewoods and Argos to fix toy prices.
Hasbro, which makes Monopoly, Scrabble, Action Man and Harry Potter merchandise and many other games and toys, has an 18 per cent share of the £1.7 billion toy market.
In reports, Hasbro is treating the allegations very seriously. "We are concerned by the points that OFT has raised", said a spokeseman. "Price fixing is against our code of conduct and we strive to ensure our staff know exactly what we cannot do."
The OFT has been investigating the company since May 2001 amid claims that its British arm has tried to use its financial muscle to fix the price at which products are sold on the high street.
Retailer Argos (owned by GUS) and privately held Littlewoods are being investigated for alleged colluding in the price fixing, along with other distributors, the OFT said.
Littlewoods believes it has not infringed UK competition law according to reports and conducted its own internal investigation which failed to uncover any evidence of price fixing by its employees.
The OFT has written to the parties involved setting out why it proposes to find the companies entered into a number of agreements to fix prices. And they will have an opportunity to make oral and written representations in response to the OFT's proposed decision. These will be taken into account before a final decision is made.
A spokesman for Argos is reported as saying; " We will be vigorously defending our position."
Hasbro is being represented by a team from Denton Wilde Sapte in London. Competition partners Polly Weitzman and Jonathan Tatton are leading the team. Associates Simon Carmel, Martin Smith and Rona Barr-Isaac are assisting them.
Littlewoods is being represented by a team from Dibb Lupton Alsop led by partner Martin Rees and associate Jenny Chong. Barrister, Chris Swift is also assisting. Argos has retained Pinsent Curtis Biddle in Leeds to represent it before the OFT. Andrij Jurkiw, head of competition at the Leeds office, is leading the team. He is being assisted by associate Louise Haworth.
A final decision will be made in three to four weeks. If the companies are found to be in breach of the Competition Act, they could be fined up to 10 per cent of turnover for up to three years.

South African Breweries to acquire Miller
June 10
South African Breweries plc has announced it is buying the Miller Brewing Company from Philip Morris Companies. In the deal, announced on May 29, South African will pay US$5.6 billion for the US’s leading brewer.
The new company, to be called SABMiller plc, will be the second biggest brewer in the world, ahead of Interbrew, Heineken and Carlsberg and second only to Anheuser-Busch. In addition to existing South African Brewing brands such as Castle Lager, Pilsner Urquell and Carling Black Label, SABMiller will also control Miller Lite, Miller Genuine Draft and Foster’s (import).
To arrange the deal, London-based South African Breweries director Gary Whitley used Lovells, a firm that it has gone to for advice several times since 1998.
Lovells partner Susan Bright led the European competition work, assisted by associates Peter Andrews and Simon Barnes. She also coordinated an international team of competition advisers. South African Breweries was advised on US antitrust law aspects by Cleary Gottlieb Steen & Hamilton where partner Andrew Nelson and associate Andrew Corey worked on the file.
Philip Morris took competition advice from two firms it has used before: Wachtell Lipton Rosen & Katz (with head of antitrust Michael Byowitz and associate Michael Jahnke) and Clifford Chance (with Brussels partner Marleen van Kerckhove and associates Ninette Dodoo and Kaarli Eichhorn working on the case, and providing a pan-European service).
Merger filings have been made in a number of jurisdictions, including the US, but not with the European Commission; the companies decline to say which jurisdictions.
No competition economists were consulted; the companies said that such a step seemed unecessary given that there were hardly any markets where both had large shares (one US lawyer working on the deal described the combined market share as "Miller plus zero").

OFT cries foul over football kit pricing
June 5th
As the football World Cup gets under way in Japan and Korea, GCR can confirm that several soccer clubs — possibly including Manchester United — and the English Football Association are among those implicated in the UK’s Office of Fair Trade investigation into the price of replica soccer kits.
The Football Association has confirmed the existence of the investigation, stating: "A number of weeks ago, the FA publicly acknowledged breaches and made it clear it had been assisting the OFT for several months."
The other companies involved are believed to be kit manufacturer Umbro and retailers JJB Sports, Debenhams, JD Sports, Sports Soccer Ltd, AllSports, Black Leisure Group, Florence Clothiers and Sports Etail. The OFT’s concerns relate to the fixed price of £39.99 for replica football shirts.
Manchester United, whose name is alleged in some quarters to have cropped up during the course of the investigation, says that it has not been directly contacted by the OFT but will be happy to cooperate fully if asked.
Umbro, sponsors of England, the Republic of Ireland, Chile, Norway, the UAE, Manchester United, Chelsea, Celtic, Celta Vigo, Olympiakos and St Etienne, declined to make any comment.
Representing the Football Association is Freshfields in London, where competition partner David Aitman is leading a team with the assistance of associate Salim Gunney.
The OFT has issued its statement of objections and each company will have several weeks to respond.
'SportEtail' is responsible for running the official e-commerce sites of both the Football Association and the English Cricket Board (englandcricketstore.com)
Dibb Lupton Alsop is representing JBB Sports, JD Sports and Manchester United. The large team working on the case includes partners Rob Murray (the firm’s head of competition) alongside Martin Rees of the London office, partner Richard Smith of the Manchester office and associate Stephen Likrish. Chris Swift QC is also providing advice. Comments Murray: "There are no conflicts in representing three clients; rather it gives us the opportunity to work cooperatively. That said, particular partners will take the lead for each client."
This is not the first time the Football Association has been the subject of an investigation by the OFT. In 1999, the agency conducted a similar probe after complaints were lodged by retailers. During that investigation, says the OFT, it found evidence that clubs were encouraging manufacturers to withhold supplies from retailers who were selling at a discount.
Debenhams’ general counsel Guy Johnson is coordinating the 11’s response to the investigation.
Umbro is being represented by a team from Lovells, according to sources close to the case, under the overall direction of competition partner John Pheasant.

Merger mania seizes Latin American brewers
June 5th
Companhia de Bebidas das Americas (AmBev), the largest brewer in Latin America and the fifth-largest worldwide, has announced it is to integrate its operations in the ‘Southern Cone’ with QUINSA (Quilmes Industrial SA), the largest brewer in Argentina, Bolivia, Paraguay and Uruguay. QUINSA is a subsidiary of Beverage Associates Corp (BAC).
Under the deal AmBev will exchange its assets (worth US$250 million) in Argentina, Bolivia, Paraguay and Uruguay to QUINSA for 26.4 million new Class B shares that QUINSA is due to issue. AmBev will subsequently buy nearly 231 million Class A QUINSA shares from BAC for over US$346 million cash. The deal also includes the option to fully integrate the two companies at a later date.
Paulo Cezar Aragão, a partner at Barbosa, Müssnich & Aragão Advogados, is AmBev’s Brazilian counsel. He says the transaction "will allow AmBev and QUINSA to develop into one of the most efficient companies in the region. It will strengthen the financial position of both companies and help the combined company to compete more efficiently with other international competitors."
However, the arrangement requires the blessing of the Argentine antitrust authority, the Comisión Nacional de Defensa de la Competencia.
Fernando C Aranovich, partner of Marval, O’Farrell & Mairal in Argentina, is overseeing the competition aspects for AmBev. Though nothing should be taken for granted, he warns, he is "personally comfortable" that approval can be secured. He adds that despite the market share of both companies being high in Argentina, the deal will in practice mean they have reduced shares in markets for individual beverages such as water, beer, juices, soft drinks and wine. Aranovich also points out that there are bottling plants "not working to full capacity and empty premises ready to be rented or purchased, and new facilities may also be built at a reasonable cost" — all of which reduce the barriers to entry for would-be competitors.
"The long-term vision of these two companies is really encouraging," Aranovich says. "They’re joining forces to create the third-largest beverage company in the world, ready to compete with giants like Coca-Cola, Budweiser, Danone, Nestlé and other large multinational companies."
The Marval, O’Farrell & Mairal team led by Aranovich included Pablo Artagaveytia and Alejandro D’Onofrio. AmBev’s US adviser was Cravath, Swaine & Moore.
In Brazil, AmBev used Barbosa, Müssnich & Aragão Advogados. Working with Paulo Cezar Aragão there was fellow partner Fabiana Peixoto de Mello.
QUINSA was advised by Davis Polk & Wardwell and Brazil’s Pinheiro Neto Advogados. Diane Kerr led the Davis Polk & Wardwell team, while partner Henrique Sa Silva Gordo Lang headed the Pinheiro Neto team. The in-house counsel of the two companies, Ricardo U Siri (QUINSA) and Eduardo Muzzi (AmBev), took lead roles in all the work.
Meanwhile, the Colombian brewer Bavaria has suffered a setback in its attempt to acquire Panamanian brewer Baru-Panama.
CLICAC, the Panamanian competition authority, has blocked the takeover on the grounds that Bavaria would have a total monopoly of Panama’s beer market if the deal went through. Bavaria already owns Panamanian brewer Cervecería Nacional.
Partners Jorge Torrado and Juan Pablo Pinzón of Torrado Angarita & Pinzón Abogados are advising Bavaria on all aspects of the deal.
GCR will keep readers posted on the progress of any appeal by Bavaria.