antitrust update for in-house counsel 2006 - the year in review john clifford martin low omar wakil
TRANSCRIPT
Antitrust Update for In-House Counsel
2006 - The Year in ReviewJohn Clifford
Martin LowOmar Wakil
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Outline
• Cartels – Martin Low• Mergers – Omar Wakil• Monopolization / Dominance – John
Clifford
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Cartels
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Year in ReviewCartel Enforcement1. Policy Development2. Notable Enforcement Activities3. Private Litigation
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Cartel Policy Development:Canada1. Immunity Program
FAQ’s (Fall, 2005) Consultation Document – 2006 Immunity Bulletin Revisions:
March 2007?
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Cartel Policy Development:Canada2. S.45 Review
• External consultees on s.45 amendments
• Policy objective: appears to be Per se offence Higher maximum fines Facilitate burden of proof
• Prospects of substantive change prior to election?
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Cartel Policy Development:EU• Fines Notice – Revision• Leniency Notice Revision: 2 Stages
Oral Procedure: threshold evidentiary burdens clarified/intensified
Marker Procedure: sparingly used/diminished convergence
ECN “one-stop shop”: very limited step• Pending Initiatives
Settlement Procedures (plea bargaining?)
Private remedies for cartel victims
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Notable Enforcement Activities:Canada• Home Grown Conspiracies Priority
St. John’s Taxi Prosecution: LED Traffic Lights: Charges laid Quebec Travel Agents: Group Boycott Carbonless Paper: 100% of V.O.C.; maximum fines imposed
• Wind-Up Sotheby’s Settlement
• Huge W.I.P. build up DRAM Air Cargo LCD Flat Screens Rubber Chemicals Hydrogen Peroxide/Perborates Copper fittings
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Notable Enforcement Measures: EU• Synthetic Rubber:
€519M: 2nd highest fines Deterrent penalty for recidivists 4 years of investigation
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Notable Enforcement Measures:EU2. Penalty Calculation
a) - Continuing CFI setbacks on fines- CFI reduces Vitamins fines on BASF and
Daiichi: Commission errors of proof of leadership and assessment of cooperation
b) - ECJ: ADM(i) Commission need not consider fines
imposed by other jurisdictions; (ii) Proceedings elsewhere are not double
punishment.
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Cartel Policy Development:U.S.• Revised “Principles of Federal Prosecution of
Business Organization” aka The Thompson Memorandum
• “Cooperation” required waiver of privilege/work product
protection withholding payment of legal fees from
corporate employees, officers, directors• A significant climb down• Important in white collar context, but the
Antitrust Division did not conform to the Thompson Memorandum in any event
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Notable Enforcement Activities: U.S.Outputs1. 2nd best year ever:
$473M in fines5383 jail days33 cases filed
Most fines are the result of DRAM settlements2. Stolt Nielsen: indicted after failing to set aside the
revocation decision. Revocation will almost certainly be tested at trial. Concerns remain.
3. Insistence on PrincipleABA: fined $185K for breach of consent decree on law school accreditationRolex: penalized $750K for breach of 1960 consent decree. Department than asks for termination of the decree due to structural change over 45 years
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Private Litigation:Canada/U.S.• DRAM
Parallel litigation in U.S. and Canada Certification of U.S. direct purchasers
case Indirect purchasers certification
pending First litigated certification motion in
combined Direct/Indirect class action in Canada
Watch this Space
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Private Litigation:U.S.• Twombly
A key pleading/procedure issue. Is it enough for a plaintiff to allege
facts consistent with conscious parallelism?
Or must there be a “plus factor” to survive a motion to dismiss.
The Supreme Court’s answer might restore some balance to the burdens imposed on corporate defendants.
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Private Litigation:EU
– Courage v. Creghan: ECJ decides that States Members may (should?) establish judicial authority and procedure to provide redress for victims of anti-competitive conduct
– Commission increasingly committed to authorizing private redress: N Kroes speeches
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Mergers
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Merger developments
• US enforcement policy post-Oracle• Emerging protectionism?• A hands-off approach to international
mergers in Canada• International process reform
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“Has the Antitrust Division Lost Its Nerve?”• Whirlpool/Maytag cleared with 70%+
shares but: Neutral or positive customer
reactions Rapidly changing marketplace Effective competition (imports) Efficiencies (in US, not Canada)
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National security, or national champion?• Multi-jurisdictional deals gave rise to
foreign-investment concerns: US Dubai Ports/P&O Europe Arcelor/Mittal + others Canada Inco/Falconbridge/Xstrata
- Changes to the Investment Canada Act
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North of the border
• Canada formalised a “hands-off” approach to remedies international mergers:
Remedies Bulletin (limited circumstances)
GE/Instrumentarium; P&G/Gillette and Boston Scientific/Guidant
• No remedy does not mean no review
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ICN, AMC and merger streamlining• ICN worked towards implementation of its
RPs Private sector support
• AMC issued Tentative Recommendations US process reform International convergence
• FTC and DOJ second request process initiatives
• Annual US threshold increase ($59.8 million)
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Monopolization / Dominance
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Contextual Framework
• Monopolization/dominance laws “least convergent” of three pillars of antitrust
Economics remain in flux Laws influenced by local
factors/context- jurisdictional spillover rare
Courts play significant interpretive role Agencies have substantial discretion Remedies vary greatly
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US – Notable Developments
• Cases Rambus – standard setting activities Weyerhaeuser – predatory
bidding/purchasing Schor/Abbott – monopoly leveraging
• Policy Developments DOJ/FTC hearings into single-firm
conduct Antitrust Modernization Commission
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Canada – Notable Developments• Cases
Canada Pipe – protection of competition … and competitors
• Policy Developments Enforcement Guidelines specific
to telecom industries Fines/penalties potential remedy
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EU – Notable Developments
• Cases Microsoft - the EU battle continues Apple - concerns at national level
• Policy Developments Article 82 reform consultation
- Discussion Paper (December 2005)- Hearings (2006)- Outcome (2007)
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John F. Clifford• John is a partner in the Competition Law and Corporate
Transaction Groups at McMillan Binch Mendelsohn. He has advised clients on the Competition Act implications of hundreds of merger transactions and regularly assists clients to respond to Competition Bureau investigations into matters such as alleged unlawful conspiracies and abuse of dominance. He also regularly provides advice on strategic alliances and other joint ventures, grey marketing, pricing and distribution practices, advertising issues and compliance programs.
• John’s corporate/commercial experience is diverse. He has extensive experience on domestic and cross-border negotiated acquisition and divestiture transactions (on both the buy and sell side), debt financings and corporate re-organizations. He also works closely with in-house counsel and senior executives to provide advice and guidance on the management of legal issues that arise as part of the day-to-day operation of business, including review/preparation of contracts, corporate governance, privacy and legal compliance, responding to litigation threats, contract terminations and employment issues
(416) [email protected]
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D. Martin Low, QC
• Martin Low is a partner in the Competition Group of McMillan Binch Mendelsohn. His practice includes the full range of competition and Canadian business regulation, litigation and advisory work, with a particular focus on Canadian and international cartel, merger, marketing and distribution and abuse of dominance matters.
• Prior to joining McMillan Binch Mendelsohn, Martin held senior management positions in the Canadian Department of Justice and conducted numerous cases in the Supreme Court of Canada and other appellate Courts. His practice with the Department concentrated on constitutional legal advice, litigation, and competition and international trade law.
(416) [email protected]
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Omar Wakil
• Omar Wakil is a partner in the Competition and Foreign Investment Groups of McMillan Binch Mendelsohn. He advises domestic and international clients on all aspects of antitrust law, including merger transactions, cartel and monopolization cases, and other pricing and distribution matters. As part of his practice he also coordinates worldwide antitrust and foreign investment clearances on multi-jurisdictional transactions. In 2003/4 he was seconded to the Brussels office of an international law firm, where he worked on the European Microsoft case.
(416) [email protected]
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