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Press releases and law firm thought leadership

This page is dedicated to keeping readers informed of the latest news and thought leadership articles from law firms across the globe.

If your firm wishes to publish press releases or articles, please contact Shehab Khurshid on +44 (0) 207 396 5689 or shehab.khurshid@legalease.co.uk

 

Legal Developments Worldwide

Articles contributed by Berwin Leighton Paisner LLP

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New Commission

February 2010 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On Friday 27 November 2009 the new European Commission, which will begin its mandate early in 2010, was announced by Commission President José Barroso. This announcement followed a week after the appointment of Herman Van Rompuy and Catherine Ashton as the President of the European Council and the High Representative of the Union for Foreign Affairs and Security Policy respectively, the two new roles created by the Lisbon Treaty, which entered into force on 1 December 2009.

Ombudsman’s decision: Intel

February 2010 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Ombudsman, Nikiforos Diamandouros, has published a decision upholding a complaint against the European Commission by Intel Corporation (Intel). The complaint relates to the Commission’s handling of its investigation into Intel’s business activities and, in particular, its record of a meeting with a senior executive from Dell Inc (Dell), one of Intel’s biggest customers. The Ombudsman has found that the Commission was guilty of maladministration in its handling of the investigation.

Background

As previously reported in IHL172 (pp16-17), on 13 May 2009 the Commission fined Intel €1.06bn for abusing its dominant position in the computer chip market under article 102 of the Treaty on the Functioning of the European Union (TFEU) (previously article 82 EC Treaty), and imposed a cease and desist order to prevent any further infringement.

Commission turns up the heat on cartels

February 2010 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 11 November 2009, the European Commission imposed fines totalling over €173m on companies involved in a cartel in the market for heat stabilisers (Commission decision of 11 November 2009 in case 38.589). This brings the total value of fines imposed by the Commission in 2009 for cartel activity to over €1.6bn. The Commission found that 24 companies from ten corporate groups had been involved in price fixing, allocation of markets and customers, and the exchange of commercially sensitive information.

Under review: current consultations and market studies

January 2010 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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THE EU and UK competition authorities are carrying out several consultations on revised legislation and guidance, as well as a number of market studies.

OGC publishes guidance on public procurement rules and development agreements

January 2010 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 16th October 2009, the Office of Government Commerce (OGC) released its guidance note on the application of the public procurement rules to development agreements. The guidance has been keenly anticipated and is welcomed after the decision of the European Court of Justice (ECJ) in Auroux & ors (law relating to undertakings) [2007] caused a great deal of concern in the regeneration sector.

Lisbon Treaty: update

January 2010 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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After much deliberation and delay, the ratification of the Lisbon Treaty appears to be back on track and could enter into force this month. Ireland, the only country to hold a referendum on the Treaty, ratified it on 2 October 2009, with Poland following closely behind by signing on 10 October 2009.

Anti-cartel enforcement across the EU

November 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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While the Office of Fair Trading (OFT)’s fines imposed on construction companies (discussed above) have grabbed headlines in the UK, competition authorities across the European Union (EU) have been actively pursuing an anti-cartel agenda by conducting unannounced inspections, opening investigations and issuing fines.

Constructive criticism from the OFT

November 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 22 September 2009 the UK Office of Fair Trading (OFT) imposed fines totalling £129.5m on 103 construction companies in England that were found to have colluded on contracts for a variety of schools, universities, hospitals and private construction projects. The inquiry was triggered by a specific complaint about a hospital tender process in Nottingham in 2004.

ECJ overturnspart of Schneider’s compensation award

October 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Court of Justice (ECJ) has recently overturned in part a judgment by the Court of First Instance (CFI) involving the French company, Schneider (Commission v Schneider Electric (Competition) [2009]).

End of the road for the Land Agreements Exclusion Order?

October 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 30 April 2008 the Competition Commission (CC) published its final report into the groceries market, nearly two years after its investigation began. The CC found that certain grocery retailers were using restrictions in land contracts to reduce competition in the sector. Currently, such restrictions are not regarded asanti-competitive as they benefit from an exemption from the application of the Competition Act (CA) 1998 contained in the Land Agreements Exclusion and Revocation Order 2004 (SI 2004/1260) (the order). To prevent anti-competitive land contracts, the CC recommended that the UK government should amend the order. In July 2009 the Department for Business Innovation & Skills (BIS) issued a consultation document giving its initial view that the order should be revoked. Such a decision would be significant for any business that is party to several land agreements.

OFT suggests tougher stance on directors of cartelised companies

October 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 18 August 2009 the Office of Fair Trading (OFT) published for consultation proposed changes to its guidance on director disqualification orders. These changes would broaden the scope for the OFT to issue Competition Disqualification Orders (CDOs) against the directors of companies involved in anti-competitive activity, including cartels.

The regulatory landscape under a Conservative government

October 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The Conservative party has indicated that, if elected at the next general election, it intends to make several reforms that will dramatically affect the current competition regulatory landscape. Leader of the Conservative party David Cameron has said that, under a Conservative party, quasi non-governmental organisations (quangos) will have substantially less power.

Moving the goalposts in supply and distribution agreements

October 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Commission (the Commission) has launched its public consultation on the review of the existing competition rules relating to supply and distribution agreements.

Are you being served? An overview of the European Services Directive

October 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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Free movement of services, as well as people and goods, is enshrined in the EC Treaty. However, in practice, member states impose a large number of barriers to providing services across borders, which can hinder productivity and growth, reduce consumer choice and value for money, and block export and growth opportunities for the service sector. Services currently account for only 20% of cross-border trade in the EU, despite accounting for 70% of GDP.

Energy and pharmaceuticals under the European Commission’s spotlight

October 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Commission (the Commission) is making increased use of sector-wide inquiries as a means of informing its enforcement activities. This is demonstrated by its recent investigations into anti-competitive practices in the energy and pharmaceutical sectors.

Commission report fuels action in the energy sector

The Commission conducted an inquiry into the energy sector in 2007.1 This concluded that, despite the liberalisation of energy markets, barriers to competition persisted. The Commission pledged to bring enforcement action, under EC competition law, against any infringing companies.

European Commission fines Intel €1.06bn for Article 82 violations

July 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 13 May 2009 the European Commission announced that it had fined Intel Corporation (Intel) €1.06bn for violating Article 82 of the EC Treaty (Article 82).1 The Commission found that Intel abused its dominant position by offering loyalty rebates and direct payments both to computer manufacturers and to a major European retailer to exclude its only significant rival, Advanced Micro Devices (AMD), from the market.

State aid: simplified procedure and best practices code

July 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Commission has recently introduced a new simplified procedure for notifying state aid cases, together with a best practices code that sets out the Commission’s approach to dealing with investigations.

State aid exists where an undertaking receives a selective benefit from state resources and where that benefit could potentially distort competition or have an effect on trade within the EU.

No foul: French appeal court approves France Telecom’s internet and football channel bundle

July 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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France Telecom’s (FT) mobile and internet arm, Orange, has been sued by its competitors, Free and Neuf Cegetel (part of SFR), in the Paris Commercial Court for breaching the French Consumer Code due to its tying arrangements.

When an ‘aura of luxury’ prevents sales to unlicensed distributors

June 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 23 April 2009 the European Court of Justice (ECJ), in Copad SA v Christian Dior & ors [2009], held that a trade mark owner can prevent third-party sales of its luxury goods where those goods had been obtained in breach of a condition in a selective distribution licence, designed to maintain the repute and prestige of the trade mark.

Competition law and retail financial services

June 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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In the current financial climate, with regulatory intervention at the centre of public attention, the competition authorities have continued to focus on financial services. Significant developments have occurred in the UK and EU, in relation to credit and debit cards, the unsecured credit market, payment protection insurance and financial services generally.

Challenging public procurement decisions

June 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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While the award of contracts has long been subject to public procurement law, challenges to contract award decisions by public and utility procurers have only recently become more frequent in the UK. In several recent cases, unsuccessful parties have used public procurement law to challenge the decision by a public sector body to award a contract.

Competition authorities order breakup of BAA

May 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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Three years after a consortium led by Spanish construction company Ferrovial bought BAA Airports Ltd (formerly the British Airports Authority), and nearly two years after the Office of Fair Trading (OFT) referred the matter to the Competition Commission (CC), the CC announced on 19 March 2009 that BAA must sell three of its seven UK airports within two years.


Review of the NAO report on the OFT

May 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 5 March the National Audit Office (NAO) published a report on the OFT’s competition enforcement work. This report evaluates the OFT’s progress in responding to the recommendations of the Committee of Public Accounts (PAC) in 2006, which themselves drew on a 2005 NAO report.


The rising prominence of the European Ombudsman in competition cases


March 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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Corporate entities are increasingly turning to the European Ombudsman to resolve issues relating to alleged maladministration by EU institutions and bodies, and in particular in relation to competition cases. Any citizen or company residing or registered in an EU member state may bring a complaint before the Ombudsman, and corporate giants, such as O2 and Ryanair, are taking advantage of this relatively swift and inexpensive alternative means of redress.

UK competition regulator finalises its leniency guidance

March 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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In December 2008 the UK’s Office of Fair Trading issued a finalised guidance note – ‘Leniency and no-action’ – on its handling of cartel leniency applications (see ‘Reference point’, p77). Under this policy, the OFT may grant full immunity from fines and criminal sanctions for cartel behaviour to first-in ‘whistleblowers’ or a reduction in fines to companies that provide it with information assisting an investigation. 


European Commission issues highest-ever cartel fines

March 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Commission demonstrated its ongoing dedication to prosecute and deter cartel activity by imposing its highest-ever fines – a staggering €1.3bn in total – on 12 November 2008 for breach of the EC competition rules.

Caution needed in reducing overcapacity

March 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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In Competition Authority v Beef Industry Development Society Ltd & anor [2008], Europe’s highest court held that a 25% capacity reduction was anti-competitive by object.

Spotlight on pharmaceuticals: the EU sector inquiry

March 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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In an example of the power of sector inquiries, the European Commission has found that branded pharmaceutical makers (originators) have deployed a ‘tool box’ of tactics to delay the entry of generic drugs onto European markets. The Commission’s preliminary report, published in November 2008, illustrates the tension between intellectual property and competition law, with the potential for major structural changes (see ‘Reference point’, below). While the inquiry results may give rise to future risks for originators, including that of enforcement action, the Commission’s actions may offer generic firms the chance to challenge the status quo and increase their business across Europe.

Commission releases revised guidelines on merger remedies

January 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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ON 22 OCTOBER THE EUROPEAN COMMISSION (Commission) published its revised guidelines on remedies in merger control (Remedies Notice). The new guidelines came into force on 23 October and replace the 2001 Notice.1 Parties to a proposed merger can offer remedies to eliminate competition concerns and thereby obtain approval for an otherwise problematic merger. Highlights of the revised Remedies Notice and amended Merger Implementing Regulation ((EC) No 802/2004) include a form for submitting information on remedies, clarification on divestiture and access remedies, and further information on the role of the trustee. These revisions are the product of the Commission’s consideration of the revised Merger Regulation (EC) No 139/2004,2 increased experience in handling merger cases, the Commission Mergers Remedies Study,3 recent European court judgments, and public comments on a draft Notice gathered in 2007.4 The new guidelines reflect the Commission’s evolving experience with accepting and implementing remedies and are designed with a view toward providing clarification to companies involved in merger cases on how best to address competition concerns.

Court of Appeal confirms limits on restitutionary awards

January 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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In the latest twist in Devenish Nutrition Ltd and ors v Sanofi-Aventis SA (France) and ors [2008], the Court of Appeal has confirmed that the normal basis for competition law damages claims should be compensation for losses caused by the cartel, rather than extending to recovery of profits made from the wrong. As noted in an earlier briefing (see IHL156, p74), this case arose from a 2001 decision by the European Commission that 13 vitamin manufacturers, including the defendants in this case (Roche, Aventis and BASF), had participated in a worldwide cartel in relation to the supply of various vitamins, contrary to Article 81 of the EC Treaty. The decision indicated that the cartel was serious and widespread and, as a result, the Commission imposed record fines, totalling E855.22m.

OFT issues findings on newspaper and magazine distribution

January 2009 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 22 October the Office of fair trading (OFT) issued its long-awaited findings on newspaper and magazine distribution in the form of:

The ‘failing firm’ defence in merger control

November 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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In the current economic climate, distressed companies may be acquired by competitors (eg Lloyds TSB/HBOS), especially as other buyers are finding funding difficult to obtain. Acquisitions by competitors often raise merger control issues. One potential argument in these circumstances is the ‘failing firm’ defence – ie that the target is going out of business and the only way to save it is for the buyer to take it on. However, the UK and European competition authorities apply this defence very narrowly, as purchases by competitors can concentrate markets into fewer hands, leading to greater market power, higher prices for consumers and less consumer choice. Both the UK authorities and the European Commission have provided extensive guidance, showing just how narrowly they apply the ‘failing firm’ defence. 


Caution needed in reacting to parallel trade

November 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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In Sot Lelos kai Sia EE & ors v GlaxoSmithKline AEVE [2008] Europe’s highest court held that when pharmaceutical manufacturers review their order books with a view to limiting parallel trade, they must consider whether:


New Chinese competition law comes into force

October 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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CHINA'S NEW ANTI-MONOPOLY LAW (AML) WAS OVER a decade in the making and came into force on 1 August 2008, introducing a comprehensive antitrust regime into China for the first time. In creating the AML, the Chinese government consulted widely with established agencies from around the world, including the European Commission, EU member state agencies, the US Department of Justice and the Federal Trade Commission. The new legislation is broadly similar in many respects to most modern competition regimes, including those in the US and the EU.

Commission offers new format for small companies

October 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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ON 25 JUNE 2008 THE EUROPEAN COMMISSION unveiled the Small Business Act for Europe, a package of measures designed to make it easier for small and medium-sized enterprises (SMEs) to do business in Europe. The centrepiece of the package was a proposal for a Statute for a European Private Company, which will allow the creation of a new form of company, known as a ‘Societas Privata Europaea’ (SPE). The SPE is primarily designed for SMEs but may be used by companies of any size.

Senior BA executives to face ground-breaking criminal prosecution

October 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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THE US DEPARTMENT OF JUSTICE (DoJ) HAS BEEN on a mission to export the criminalisation of cartel behaviour around the world. The UK government was a willing importer of US-style cartel criminalisation and now British Airways (BA) has become one of the first British corporate targets of that policy, with four senior executives facing individual charges under the UK’s Enterprise Act (EA) 2002. The maximum penalty under UK law for individuals is up to five years in jail and unlimited fines.

Sony BMG: ECJ sets the record straight

October 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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THE EUROPEAN COMMISSION SUFFERED A MAJOR setback in July 2006 when, for the first time ever, the Court of First Instance (CFI) annulled one of the Commission’s merger clearance decisions. In July 2008 the Commission was redeemed when the European Court of Justice (ECJ) overruled the CFI and issued a key decision in the area of European merger control.

SFO generics case collapses, while Norris faces renewed threat of extradition

September 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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THE SERIOUS FRAUD OFFICE (SFO) SUFFERED A BLOW in July, when its criminal prosecution of five companies and nine executives for price-fixing collapsed. The SFO’s case, that the companies’ conspiracy to fix the prices of the blood-thinner warfarin and penicillin-based antibiotics amounted to a criminal conspiracy to defraud, was fatally undermined by the House of Lords’ finding in the separate Norris v Government of the United States of America & ors [2008] case, that a straightforward price-fixing agreement did not necessarily constitute a criminal conspiracy to defraud.

Enforcers target consumer goods sector

September 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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AS COMPETITION AUTHORITIES ARE INCREASINGLY being required to justify their existence by reference to the concrete benefits that they deliver for consumers, consumer goods markets have become an obvious target for enforcement activity. In parallel, investigations in this area are leading to increased scrutiny of the potential for (typically benign) ‘vertical’ supply agreements between manufacturers and retailers to lead to or support (generally prohibited) ‘horizontal’ price-fixing. These developments are demonstrated by a number of ongoing cases across the EU.

Commission takes action against collecting societies

September 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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A RECENT INFRINGEMENT DECISION BY THE European Commission has significant implications for the collective management of intellectual property rights in Europe. Collecting societies are entrusted by rights owners with the tasks of granting licences to users, enforcing copyright and collecting and distributing royalties. Traditionally, collecting societies have been run on purely national lines, with international rights exploitation being facilitated by networks of reciprocal agreements between societies. Although such arrangements contained territorial restrictions that would have been illegal in other sectors, collecting societies have until now benefited from a rather lenient approach on the part of the Commission. This is due, perhaps, to the specifically national nature of the rights concerned and the particular importance placed in certain countries on ‘cultural’ products. The arrival of the internet made a system based on country-by-country licensing increasingly untenable, however, resulting in complaints from users of music and, ultimately, the Commission’s decision of 16 July 2008 in the CISAC case.

OFT refers cinema merger to the Competition Commission

July 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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ON 17 MARCH 2008 THE OFFICE OF FAIR TRADING (OFT) made a decision to refer the proposed acquisition of a cinema by CineWorld Group Plc (CineWorld) to the Competition Commission (CC) (see OFT press release 37/08). The cinema in question was operated (although not owned) by Hoyts and was located in the London Borough of Haringey. The closest competitor to the Hoyts cinema was a nearby establishment run by CineWorld. The OFT acted after receiving unsolicited complaints from consumers about the merger. The acquisition has since been abandoned, but the OFT’s approach may have wider implications.

CAT refuses permission for private damages actions

July 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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THE RECENT CASE OF EMERSON ELECTRIC CO & ors v Morgan Crucible Company plc & ors [2007] in the Competition Appeal Tribunal (CAT) may serve as a deterrent to ‘follow-on’ damages actions in the CAT when the defendants have appeals pending in European or national courts. Emerson concerns damages claims against members of a carbon and graphite products cartel, which in 2003 were found by the European Commission to have infringed Article 81 of the EC Treaty by price-fixing and market-sharing. One company, Morgan Crucible, was granted full leniency. The other five companies, including Schunk, SGL Carbon and Le Carbone Lorraine, were fined a total of €101.4m. The latter three companies all appealed separately to the European Court of First Instance (CFI), seeking annulment of the Commission’s decision or reductions of the fines imposed.

First UK jail terms for cartel activities

July 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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FIVE YEARS AFTER THE INTRODUCTION OF THE Enterprise Act (EA) 2002, the Office of Fair Trading (OFT) has now secured the first UK convictions for cartel offences, as on 11 June 2008 three businessmen were sentenced to imprisonment for between two and a half and three years. This landmark ruling marks a major step forward for antitrust enforcement and serves as a warning to any individuals participating in cartel activities that they risk a similar fate.

Northern Rock review highlights need for state aid compliance

June 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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ON 2 APRIL 2008, THE EUROPEAN COMMISSION announced that it was to launch an in-depth investigation into the UK government’s restructuring package for Northern Rock to assess the compatibility of the measures with the EU state aid rules. This high-profile case has brought state aid back to the front pages and highlights the need to ensure compliance with the state aid rules in any transaction involving public resources.

OFT accuses 112 construction companies of cover pricing

June 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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ON 17 APRIL 2008, THE OFFICE OF FAIR TRADING (OFT) published a press release confirming that it had issued a Statement of Objections (SO) against 112 construction companies. The contracts involved in the investigation include projects for schools, hospitals and other public- and private-sector buildings, the majority of which are located in the Midlands, Yorkshire and Humberside. This is the OFT’s largest ever Competition Act investigation. Construction has been one of the OFT’s priority areas for several years.

'Margin squeezes' and the regulation of dominant companie

June 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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THE LAW PREVENTING DOMINANT COMPANIES FROM abusing their market position took yet another step in its development when, on 10 April 2008, the European Court of First Instance (CFI) – the EU’s second-highest court – gave the European Commission a welcome boost in its case against Deutsche Telekom (Deutsche Telekom AG v Commission of the European Communities [2008]).

Dominant companies, and anyone trading with such companies, can take the following important points away from the CFI’s judgment:

‘Mere’ price-fixing does not amount to conspiracy to defraud

May 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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ON 12 MARCH 2008, THE HOUSE OF LORDS unanimously allowed an appeal by Mr Ian Norris, former executive of the Morgan Crucible engineering group, against a High Court decision that had held that ‘mere’ price-fixing (ie, fixing prices in the absence of aggravating features) was a criminal offence in the UK prior to June 2003. The House of Lords quashed the lower court’s judgment that the making and implementation of such a price-fixing agreement is capable of amounting to the English common law offence of conspiracy to defraud. Accordingly, such conduct could not constitute an ‘extradition offence’ under which Mr Norris could be extradited to the US.

State aid: Commission consults on new draft general block exemption

May 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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ON 28 FEBRUARY 2008, THE EUROPEAN COMMISSION published the third draft of its proposed new General Block Exemption Regulation (GBER) for state aid. The new draft follows previous versions of the document published in April and September 2007.

Assessing non-competes and exclusivity clauses in agency agreements

May 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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NON-COMPETES AND EXCLUSIVITY CLAUSES ARE often crucial in commercial agency agreements and can present a real challenge from a competition law perspective. The opinion of one of the Advocates General of the European Court of Justice (ECJ) has recently provided guidance on how to assess such provisions. If followed – which seems likely – the approach will require careful navigation by companies and their legal counsel to ensure that their agency agreements comply with the competition rules.

European Commission takes tough action in the hi-tech sector

May 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 14 January 2008, the European Commission demonstrated its continued commitment to close scrutiny of Microsoft in a decision to initiate two further antitrust investigations under Article 82 of the EC Treaty, which prohibits the abuse of a dominant market position. The first case (Microsoft (ECIS complaint)) relates to a complaint by the European Committee for Interoperable Systems, alleging that Microsoft illegally refused to disclose interoperability information across a broad range of products, including Microsoft Office and the .NET framework. The second follows a complaint by Opera (Microsoft (Tying)), which sells competing browsers, alleging that Microsoft has illegally tied its Internet Explorer product to the Windows operating system.

Both these cases rely on the principles of interoperability and non-bundling confirmed by the Court of First Instance (CFI) in its judgment of 17 September 2007. This essentially upheld the Commission’s March 2004 decision to impose a fine in excess of €497m on Microsoft for refusing to supply interoperability information and illegally tying Windows Media Player to the Windows operating system.

OFT offers financial rewards for cartel information

May 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 29 February 2008, the OFT announced a new policy under which individuals could receive financial incentives of up to £100,000 in return for providing information about cartels. Such rewards will be granted only where the information provided to the OFT is accurate, verifiable and proves to be of use to the OFT in its anti-cartel enforcement work.

Application of the UK’s revised de minimis threshold for merger review

May 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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In November 2007, the OFT issued revised guidance regarding situations in which it will view the markets affected by a merger as not of sufficient importance to justify a referral to the Competition Commission (CC) (see IHL157, p63). The revised measures increased the de minimis threshold from markets worth £400,000 to those worth a minimum of £10m.

Class-action settlements reached by Virgin and BA

May 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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It was reported on 15 February 2008 that both British Airways (BA) and Virgin Atlantic had agreed settlement terms in relation to class action suits regarding the price-fixing of fuel surcharges.

€38m fine for breach of a Commission seal

May 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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€38m fine for breach of a Commission seal

On 30 January 2008, German energy firm E.ON Energie AG was fined €38m for breaching a European Commission seal affixed in E.ON’s premises during an unannounced inspection. This is the first time that the Commission has imposed a fine in separate proceedings regarding interference with an investigation.

The heat is on: Scottish Court allows Article 81 defence to contract breach

May 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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In January 2008, the Outer House of the Court of Session in Scotland held, in Calor Gas Ltd v Express Fuels (Scotland) Ltd & anor [2008], that a substantiated breach of contract claim could not succeed because the terms at issue infringed Article 81(1) of the EC Treaty, which prohibits certain restrictive agreements. The case is significant because it involves a national court undertaking a serious analysis of Article 81(1) and allowing a ‘competition defence’. However, its value has been limited somewhat as the Court did not have to undertake an analysis of Article 81(3), which provides an exemption to the prohibitive effect of Article 81(1).

Marine hose cartel three appear before Magistrates’ Court

March 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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Three UK British oil executives originally arrested in the US on suspicion of involvement in criminal cartel activity, and subsequently returned to the UK as part of a plea-bargaining arrangement between UK and US competition authorities, appeared briefly before the City of London Magistrates’ Court on 29 January 2008.

Open for business? Commission unveils single market package

March 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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At the end of November 2007, the European Commission unveiled a package of initiatives aimed at modernising the EU’s single market. The single market underpins most EU laws and policy and aims to make trade within Europe as simple as possible. However, despite the Commission’s best intentions, problems still exist and Europe’s productivity in certain areas still falls behind other major economies, such as the US. As a result, the Commission has launched a review of the single market.

Commission begins pharmaceutical sector inquiry with unannounced inspections

March 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 16 January 2008, the European Commission took the unprecedented step of using unannounced inspections (often referred to as ‘dawn raids’) to kick-start a potentially wide-ranging inquiry into the pharmaceutical industry. Such inspections, which involve officials from the Commission and national competition authorities searching companies’ premises, are a common feature of cartel cases but have never before been used for a sector inquiry.

Settlement of first UK representative damages claim

March 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 9 January 2008, comsumer association Which? announced that it had reached a settlement agreement with sportswear chain JJB Sports in respect of the representative competition law damages action it had brought on behalf of a number of consumers. Although this marks the first time that UK consumers have received direct redress for an infringement of domestic competition law, the outcome has garnered mixed reactions.

The new procurement remedies Directive: a double-edged sword

March 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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A new directive to improve the rights of bidders participating in public and utility sector tender processes, Directive 2007/66/EC , came into force in January 2008. As a result, procuring entities now face tougher sanctions for breach of the procurement rules, including the possibility that concluded contracts could be rendered ineffective.

OFT raises de minimis threshold for merger review

February 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 15 November 2007, the OFT issued revised guidance regarding situations in which it will view the markets affected by a merger as not of sufficient importance to justify a reference to the Competition Commission (CC) under the Enterprise Act 2002 (EA). (See the OFT press releases 'OFT publishes revised guidance in merger cases affecting small markets' 15 November 07, and the guidance ‘Revision to mergers – substantive assessment guidance: Exception to the duty to refer: markets of insufficient importance,’ OFT516b, November 2007.)

Commission raids merging parties

February 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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Under the European Merger Regulation (ECMR) the Commission can use its enforcement powers to ensure that all relevant mergers are notified and only implemented once approved. Such powers include the right to conduct ‘dawn raids’, ie unannounced inspections on company premises, to uncover evidence of non-compliance. On 12 and 13 December 2007, the Commission carried out such raids at the UK premises of the chemicals group INEOS and Norway’s Norsk Hydro to collect information concerning the planned acquisition by INEOS of Norsk Hydro’s polymers business, Kerling ASA.

Cartels update: 2007's heavy fines for price fixing

February 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The end of 2007 saw a flurry of competition law enforcement on both sides of the Atlantic. In the UK, the most significant development was the announcement by the Office of Fair Trading (OFT) on 19 December that it had for the first time used its criminal cartel powers – to bring charges against three individuals.

Commission consultation on new settlement procedure for cartel cases

January 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 26 October 2007 the European Commission launched a public consultation on a draft legislative package designed to introduce a new formal settlement procedure for cartel cases.

Final report in the business insurance sector inquiry

January 2008 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 25 September 2007 the European Commission adopted the final report of its competition inquiry into the business insurance sector.

Cutting the cost of EU red tape

December 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The EU has launched an initiative aiming to cut red tape by 25% by 2012, as part of its general programme to reduce administrative burdens on companies. A year-long online consultation has been opened to collect companies’ views, to allow EU businesses to voice their concerns directly to the European Commission.

Competition law damages actions – two steps back?

December 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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As competition authorities focus their resources on investigating a smaller number of high-impact cases, the extent to which individuals or companies are able to go to court to recover compensation for financial losses suffered as a result of anti-competitive activities has become a key issue. Indeed, both the European Commission (the Commission) and the UK government are seeking to encourage such proceedings1 as a further means of deterring competition law infringements at minimal cost to the public purse. However, recent judgments in two ongoing cases (Devenish Nutrition Ltd and others v Sanofi-Aventis SA (France) and others and Emerson Electric Co and others v Morgan Crucible Company plc and others) may serve to dampen the enthusiasm of claimants and their lawyers.

CFI provides judicial confirmation of Commission’s nine-year battle with Microsoft

November 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Commission received a welcome boost in enforcing the competition rules in the hi-tech sector when, on 17 September 2007, the European Court of First Instance (CFI) handed it a decisive victory in its case against Microsoft.

CFI confirms legal professional privilege does not apply to in-house lawyers in EU competition cases

November 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Court of First Instance (CFI) has upheld prior case law finding that, in European Commission antitrust investigations, legal professional privilege does not apply to internal communications with in-house lawyers. The CFI’s decision also provides some guidance on how the Commission must treat documents that are discovered during a dawn raid and may be privileged.

In-house privilege and Microsoft: double delight for Commission

October 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Commission had cause for a double celebration on 17 September 2007 following two rulings from the European Court of First Instance (the CFI).

Tackling the issues: European Commission adopts White Paper on sport

October 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 11 July 2007 the European Commission published a White Paper discussing the role of sport in the EU and its strategic importance.1 This followed on from a review into sport launched in 2005 under the British presidency of the EU. A possible motivation for this move may have been the intense lobbying by sporting bodies, such as the UK's football Premier League, against the Commission's enforcement of competition law in the sporting area.

OFT Annual Plan 2007/08 and recent activity

October 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 28 March 2007 the OFT published its Annual Plan for 2007/08. The OFT's stated mission remains to ‘make markets work well for consumers'. It views this goal as requiring competitive, efficient and innovative markets; cared-for and empowered consumers with freedom of choice; and law-abiding businesses not overburdened by regulations or at the mercy of market abuse.

Recent activity in EU and UK competition law enforcement

October 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The commitment of the European Commission to uncovering and punishing breaches of the competition rules continues. Fines imposed by the Commission in cartel cases in the first four months of 2007 exceeded the total fines imposed in 2006. The E750m fine imposed in January 2007 on producers of gas-insulated switchgear was swiftly overshadowed by a record-breaking E992m fine imposed on companies involved in a cartel concerning lifts and escalators (see IHL149, p70) in February. In April 2007 the Commission fined four firms a total of E273m for price-fixing in the beer market in the Netherlands.1

The new EU Treaty

September 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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Putting the EU on a 'renewed common basis before the European Parliament elections in 2009'

At the European Summit held in Brussels on 21 and 22 June, EU leaders agreed on the outlines of a new EU Treaty to replace the EU Constitution. The German EU presidency brokered a political agreement for a detailed mandate to launch an Intergovernmental Conference (IGC), which will finalise the text of this new Treaty. German Chancellor Angela Merkel stated that she was ‘very, very satisfied with what we have been able to conclude’.

Cashback – Commission ordered to compensate Schneider

September 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 11 July 2007 the European Court of First Instance (CFI) ordered the European Commission to partially compensate Schneider Electric for errors it made in blocking Schneider’s takeover of French rival Legrand (Schneider Electric SA v Commission of the European Communities).

Commission blocks Ryanair/Aer Lingus merger

September 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Commission and Ryanair have had an icy relationship over the past few years, with Ryanair CEO Michael O’Leary at one point calling the Commission an ‘evil empire’ and the Commissioners ‘morons’. In a move that is unlikely to soften such ill feelings, on 27 June 2007 the Commission blocked Ryanair’s attempt to acquire Aer Lingus under the EC Merger Regulation (ECMR). At a recent press conference, O’Leary described the prohibition as ‘unprecedented, unlawful… bizarre, illogical, manifestly inaccurate and untenable’. From a legal standpoint, the decision stands out because the Commission infrequently resorts to imposing a complete block, instead preferring to accept structural remedies such as divestment. In fact, the Commission had only blocked one merger since 2001 and historically has blocked less than 1% of all mergers.

Marine hose cartel investigation - first home search by OFT

August 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 3 May 2007 the OFT announced that it had launched a criminal investigation into alleged international bid-rigging, price-fixing and market allocation in the market for marine hoses used to transfer oil.

Competition woes for British Airways

August 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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British Airways has attracted significant press coverage recently, in connection with a range of competition matters. Its latest results were dominated by the figure of £350m, the sum that the airline has set aside pending the results of investigations and class actions into price-fixing claims.

Europe's energy policy: climate change, competition and security of supply

August 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 20 April 2007 the European Commission published a comparative study on the structure and performance of the wholesale electricity markets in various member states. This follows on from the Commission's 18-month investigation and report into the energy sector in the EU, published in January 2007. The energy sector inquiry entailed an in-depth analysis of the way the gas and electricity markets function in the EU. The aim was to assist the Commission in identifying areas where it needs to focus competition enforcement and to improve the effectiveness of remedies in competition cases.

OFT consults on private damages actions in competition law

May 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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Following the European Commission's public consultation last year on its green paper on damages actions for breach of EU competition rules, the OFT has launched an informal consultation on how to facilitate effective redress for consumers and businesses.

State aid rules under review

May 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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Under the State aid rules of the EC Treaty, member states are generally prohibited from giving subsidies to businesses, in order to avoid the risk of distorting competition and intra-community trade. The rules have been criticised as being unnecessarily complicated, with lengthy and cumbersome procedures, as well as lacking a solid basis in market economics. The continued expansion of the EU is increasing the volume of aid notified to the Commission for approval, which is likely to exasperate the delays in obtaining consent.

Free movement of goods - Commission proposes new rules on mutual recognition

May 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Commission has published a draft regulation (COM (2007) 36 final) aimed at facilitating the free movement of goods in the EU. The proposal seeks to implement the principle of ‘mutual recognition' which, despite having been established by the European Court of Justice (ECJ) as long ago as 1979 (in the famous ‘Cassis de Dijon' case), is still not applied consistently in all EU member states and all product sectors. Under the ‘mutual recognition' principle, a product that is lawfully marketed in one member state should not be the subject of restrictions in another member state unless there are overriding reasons of public importance (such as health or environmental protection).

Sector inquiries: business insurance interim report and retail banking final report

May 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 1 February 2007 the European Commission issued its final report on retail banking, and on 24 January 2007 an interim report on business insurance as part of its sector inquiry into competition in financial services.1 The Commission considers that ‘the financial services sector is key to the competitiveness of the European Single Market'2, and has urged retail banks to cut charges and remove national barriers.

Going up: huge fine for lift companies as European Commission continues crackdown on cartels

April 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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'Cartels strike a killer blow at the heart of healthy economic activity,' according to the European Commissioner for Competition Policy, Neelie Kroes.1 Following a record €1.84bn in fines imposed in cartel cases in 2006, the Commissioner seems intent on proving that she can 'walk the walk as well as talk the talk'2 by continuing the European Commission's crackdown on cartels in 2007.

Court of Appeal rules on discriminatory and excessive pricing by a dominant business

April 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The Court of Appeal's recent judgment in Attheraces Ltd and another v The British Horseracing Board Ltd and another has provided an important judicial statement of the law on excessive and discriminatory pricing by a dominant business.

Market for payment protection insurance referred to the Competition Commission

April 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 7 February 2007 the OFT referred the market for payment protection insurance (PPI) to the Competition Commission for an in-depth investigation. PPI is a distinct category of insurance cover which is commonly sold together with consumer credit products, such as mortgages and credit cards. It is designed to protect consumers in the event that they are unable to repay the loan, typically due to accident, sickness or unemployment.

Replica football kit - consumer watchdog flexes its new powers

April 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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On 8 February 2007 the consumer watchdog Which? (formerly the Consumers' Association) announced its intention to bring an action for damages against JJB Sports plc (JJB) on behalf of consumers who had been unlawfully overcharged for replica football kits purchased between April 2000 and August 2001.

Making sense of the WEEE Directive

March 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The UK's implementation of Directive 2002/96/EC on Waste Electrical and Electronic Equipment (the WEEE Directive) at the end of 2006 is likely to result in many lawyers reaching for their EU law textbooks. With a glut of problems having arisen in other EU member states where the Directive has already been implemented, and with divergences in the implementation of key provisions, two questions may well spring to mind - how exactly should you interpret EU law and how can you resolve problems caused by the implementation of a Directive?

Recent developments in EC competition law

March 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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This briefing highlights a number of recent and proposed changes to the European Commission’s guidance on EC competition law of which practitioners should be aware.

CAT puts the squeeze on an abusive drugs supplier

February 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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A UK court has awarded damages for the abuse of a dominant position for the first time. The abuse concerned pricing policies for a drug that treats Gaucher disease, an inherited genetic disorder whose symptoms can include bone pain, bleeding or bruising, unexplained fractures, an enlarged spleen or liver, frequent nosebleeds and anaemia. Those providing homecare services to Gaucher patients had an altogether different problem to contend with - a margin squeeze.

EU Services Directive: not quite the great leap forward

February 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The European Parliament and EU Council of Ministers have finally adopted the Services Directive. Despite being watered down from the European Commission's 2004 proposal, the EU institutions have claimed that the Directive will improve the ability of service providers to operate throughout the European Union. However, it remains to be seen to what extent this Directive will make a practical difference for the service industry.

All change at the OFT: what difference will it make for business?

February 2007 - EU & competition. Legal Developments by Berwin Leighton Paisner LLP.

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The Office of Fair Trading (OFT) is the primary competition authority in Britain, with powers to investigate and punish infringements of competition law, plus various other statutory powers, particularly concerning consumer protection. It has recently announced a number of important organisational and policy reforms.