Category: European Union

EC Dawn Raids: A human Rights Violation ?

I recently read an old 2008 article titled “EC Dawn Raids: A Human Rights Violation?” by Imran Aslam and Michael Ramsden.

The Paper examines whether the ‘Dawn Raid’ procedure provided in E.C. Regulation 1/2003 is consistent with two rights protected by the European Convention on Human Rights and Fundamental Freedoms: the privilege against self-incrimination (Article 6 E.C.H.R.) and the right to privacy (Article 8 E.C.H.R.). The paper argues that the protection provided by the European Court of Justice falls far short of protection necessary to undertakings. On this basis, it analyses what available source(s) of judicial remedy an undertaking has in order to avail itself of E.C.H.R. rights.

While the article is old, it does hold special relevance for India in light of the expansive powers which are proposed to be given to the C.C.I. in the still pending Competition Amendment Bill which proposes to amend Section 41 of the Act, conferring the authority on the Commission to grant powers of search and seizure to the Director General’s office as and when required.

Lundbeck et. al. (COMP/39226) – European Commission

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If Ranbaxy’s trouble with the F.D.A. in the U.S.A. and in India wearnt enough, it has now beeen slapped with the fine of  10.3 million Euros by the European Commission for anti-competitive practices  in delaying the entry of the  generic drug Citalopram into the markets European Economic Area (E.E.A.).

According to the Press Release by the Commission,

 

“The European Commission has imposed a fine of € 93,8 million on Danish pharmaceutical company Lundbeck and fines totalling € 52,2 million on several producers of generic medicines. In 2002, Lundbeck agreed with each of these companies to delay the market entry of cheaper generic versions of Lundbeck’s branded citalopram, a blockbuster antidepressant. These agreements violated EU antitrust rules that prohibit anticompetitive agreements (Article 101 of the Treaty on the Functioning of the European Union – TFEU). These generic companies were notably Alpharma (now part of Zoetis), Merck KGaA/Generics UK (Generics UK is now part of Mylan), Arrow (now part of Actavis), and Ranbaxy. (Emphasis added)

….

Citalopram is a blockbuster antidepressant medicine and was Lundbeck’s best-selling product at the time. After Lundbeck’s basic patent for the citalopram molecule had expired, it only held a number of related process patents which provided a more limited protection. Producers of cheaper, generic versions of citalopram therefore had the possibility to enter the market. Indeed, one of them had actually started selling its own generic version of citalopram and several other producers had made serious preparations to do so.

….

 

But instead of competing, the generic producers agreed with Lundbeck in 2002 not to enter the market in return for substantial payments and other inducements from Lundbeck amounting to tens of millions of euros….”

 

Ranbaxy plans to appeal against the decision and fine.

 

P.S.: Not sure if this is the correct citation for unreported Commission Orders. Please do correct me if am wrong.

 

Competition World (By Norton Rose)

I recently came across a Newsletter/Bulletin published by Norton Rose in May 2013 titled “Competition World: A Global Survey of recent Competition and Antitrust Law Developments with Practice Relevance.” I haven’t had the chance to read the full document, but a quick glance made it out to be an excellent summary on all the key competition law developments around the world. Though the Bulletin primarily focuses on the E.U., it also notes developments in Africa, Asia, America and Australia.

P.S.: For the record, this is not a sponsored post.

Why the CCI Google Investigation faces Difficulty.

A recent Economic Times Article states that the “probe by Indian authorities to examine if Google abused its dominant position in the Internet search engine market is progressing at a sluggish pace, mainly due to a lack of understanding on Internet-related issues.” Furthermore, it also stated that “India (presumably through the C.C.I.) has sought the FTC’s help in this matter.”

While the reason stated above is probably true, I feel another important reason the investigation faces difficulty is becaue of the direction the D. G. Office seems to be taking to reach its goal. This is evident from the second line quoted above, where the article states that the C.C.I. is looking for aid from the F.T.C. There is no harm in asking for aid from others, but in this case, the Commission may be asking for aid from the wrong people. One needs to understand that the F.T.C. and the European Commission have SETTLED their cases with Google on the basis of certain commitments they received from the company. (See here for the F.T.C. commitments and here for the E.U. commitments). It is more than evident from their respective press release and the commitments received from Google that both the competition authorities never approached the investigation with an intention to prosecute. Their primary intention was merely to ensure competitiveness without disrupting the market (being the internet search engine market and online advertisement market) to the best possible extent. The merits of such an approach are of course debatable, but are presently outside the scope of this post. What is important is that settlements require a mediative approach (far different from an adjudicatory approach) and this is not the approach the C.C.I. wishes to follow. Even if it wishes to, it as of now can’t, as explained in a previous post.

It is better if the Commission looks eastwards to the Australian Competition and Consumer Commission (A.C.C.C.) for help. The judgement of the Federal Court of Australia is the only case which Google has lost on allegations against its Adwords programme, which is the primary subject of investigation even in India.Google-confused

Status And Effect of Cooperative Joint Ventures under Indian Competition Law

My article titled “Status And Effect of Cooperative Joint Ventures under Indian Competition Law” has recently been published in the Competition Law Reports (January, 2013 Edition)

In the article, I elaborate in detail the competition law regarding cooperative joint ventures and present the measures and methods which may be adopted by the Commission when it is finally called upon to handle such issues. Part I being the introduction, Part II elaborates upon the concept of cooperative/contractual joint ventures and provides a definition for the phrase and elaborates as to what exactly would constitute a cooperative joint venture.  Part III elaborates in detail the EU law regarding cooperative joint ventures, including the important Orders and Judgements in EU competition law on the same. Part IV focuses on the competition law (or anti-trust law) in the United States of America (U.S.A.) regarding such agreements. Part V deals with the problem of cooperative joint ventures under the Competition Act, 2002 and suggests the preferred method of analysis which may help the Commission best analyze such ventures or agreements.

Click here for a copy of the article and please do leave your comments and feedback on the same.

Case No COMP/M.6281 – MICROSOFT/ SKYPE

This time, during my “competition surfing sessions”,  I was fortunate enough to come across the original order of the European Commission Regulation on the approval of the Microsoft-Skype Merger. While there is nothing controversial about the Order itself, it is an interesting read, especially on the classification and sub-classification of the relevant market by the EC.

The merger garnered much attention after CISCO challenged the Merger in the EU after it received the approval of the European Commission.

The link to download the document can be found here.

Google and its Anti-Trust Woes (An Update on the EC Investigation)

Joaquín Almunia, Vice President of the European Commission responsible for Competition Policy on 21st May released a statement on the Google investigation. (Agree this is a rather late update. Unfortunately, missed it due to examinations).

In it, he has highlighted four concerns against Google which are as follows

First, in its general search results on the web, Google displays links to its own vertical search services. Also, Google displays links to its own vertical search services differently than it does for links to competitors.The Concerns of the EC are that this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence.

Second, concerns related to the way Google copies content from competing vertical search services and uses it in its own offerings. Google may be copying original material from the websites of its competitors such as user reviews and using that material on its own sites without their prior authorisation. In this way they are appropriating the benefits of the investments of competitors.

Third concern relates to agreements between Google and partners on the websites of which Google delivers search advertisements.

The fourth concern relates to restrictions that Google puts to the portability of online search advertising campaigns from its platform AdWords to the platforms of competitors.  The concern is that Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising.

On a related note, notice that the statement is conciliatory in nature, which Joaquín Almunia himself stating, and to quote

“I offer Google the possibility to come up in a matter of weeks with first proposals of remedies to address each of these points.”

This is not a new phenomenon in competition investigations and it it is one which the CCI itself should begin to adopt. It saves time and prevents unnecessary and lengthy litigation. The logic in this case (though it may differ on the circumstances of each case) is that despite their their potential anti-competitiveness, it must be universally accepted that Google products are in general extremely beneficial to its users, and thus any changes forced upon Google, while they may or may not ensure a competitive marlet, shall in all probability harm consumer welfare till a certain extent. (This is one of the issues underlined by  Robert Bork in his competition law classic The Antitrust Paradox: A Policy at War with Itself. A must read for all those with a special focus of interest in competition law.)

The Domination of Sport

Two of the complaints presently before the Commission are those filed against Hockey India by several Hockey Olympians as well as a group of chess players who have separately approached the Competition Commission of India (CCI) over the abuse of dominant positions by the respective authorities overlooking their sports in India.

Hockey India, which holds the sole mandate to govern and conduct all activities for hockey in India warned players that if they participated in the World Series Hockey (WSH) proposed by the Indian Hockey Federation, they would lose their position in the national team.

Interestingly, there is little to go by precedent on this specific issue, i.e., whether a sports regulatory body abuses its dominant position by imposing certain restrictive conditions upon the players affiliated to it, and therefore the Commission could end up conducting some pioneering research and analysis in this field. while there have been cases on the legality of exclusivity arrangements in the sports sectors regarding sports equipment and sportswear ( See American needle v. NFL), the closest dispute to the present issue arose in the EU in the withdrawn preliminary reference in the Oulmers Case,  which involved issues relating to the right of clubs to be compensated by national federations for the release of their players for international games and tournaments. It was initiated by a complaint lodged by ASOBAL (the Spanish Handball League) before the European Commission in March 2009. The complainant argued that by precluding the payment of a compensation to clubs the regulations governing the release of players restricted competition were contrary to both articles 101 and 102 TFEU. The European Commission took an interest in the case and started a preliminary investigation which was only put to an end pursuant to an agreement between ASOBAL and the European Handball Federation.

It will be interesting to see how the Commission handles this complaint.