Australia proposes changes to competition law
By Georgina Foster
The Australian Government has introduced legislation to the Commonwealth Parliament to amend the competition laws and implement many of the recommendations of the 2015 Harper Competition Policy Review. The key changes include:
- Cartel conduct: amendments to simply the prohibitions against cartel conduct and a broadening of the joint venture defence to cartel conduct;
- Resale price maintenance ("RPM"): an exemption for RPM between companies within a corporate group and the introduction of a notification process under which the ACCC can permit RPM where there are sufficient public benefits;
- Third line forcing: will only be prohibited where it has the purpose, effect, or likely effect of substantially lessening competition (it is currently a strict prohibition);
- Mergers: replacing the current formal merger clearance and authorisation processes, with a new single process (the existing informal merger clearance process will remain);
- Class exemptions: the ACCC will have the ability to grant class or block exemptions for certain conduct or types of conduct.
There is also separate legislation before the Parliament to amend the prohibition against misuse of market power in the competition laws. Back to top
China consults on two new sets of competition guidelines
By Wenting Ge and Laura Liu
The Chinese competition authorities have conducted a public consultation on drafts of two new sets of competition law guidelines. The first set, issued by the Antimonopoly Commission (AMC), covers competition issues related to IP rights. It lists restraints in IP related agreements which would infringe the Antimonopoly Law including no-challenge clauses and exclusive grant-backs of IP rights. It also proposes to introduce a “safe harbour” for IP-related agreements: agreements between competitors will be exempt if their combined market share is less than 20 per cent, and agreements between non-competitors will be exempt if both parties’ market shares are less than 30 percent. The second set of draft guidelines covers price-related conduct by trade associations. The draft sets out a list of practices by trade associations which would infringe the Antimonopoly Law, including recommending prices, and coordinating promotions by members. Back to top
Hong Kong consults on new request by container shipping lines for block exemption
By Bill Brown
Following the Competition Commission’s proposed decision on September 2016 to reject in part the container shipping lines’ application for a block exemption order, the lines have submitted a more limited application for block exemption.
The shipping lines had originally requested a block exemption for both vessel-sharing agreements (VSAs), and voluntary discussion agreement (VDAs) under which the parties exchange information on prices (including rates and surcharges). The Commission proposed to approve the application in respect of VSAs (up to a market share level of 40 per cent) but to reject the application in respect of VDAs. In their revised application, the parties are proposing to “carve-out” any Hong Kong-specific pricing information from the VDAs in the hope that this will be acceptable to the Commission. The deadline for public comments expired on 24 March 2017. Click here for further details. Back to top
Japanese Commission warns Deutsche Securities over collusion on European sovereign bonds
By Junya Ae
The Japan Fair Trade Commission (JFTC) issued a warning on March 15, 2017 to Deutsche Securities as the authority found that Deutsche Securities’ trader exchanged customer and price information with the counterparty at Citi Securities since April 2010, and further engaged in a bid rigging for certain transactions of European sovereign bonds since November 2010 – both of which potentially fall under “unreasonable restraint on trade” (Article 2, Paragraph 6 of the Antimonopoly Act, which governs cartel and bid-rigging).
In addition to the fact that this is a rare enforcement in the financial sector, which is regulated and monitored by another financial regulatory entity (Financial Service Agency), this case is notable for the means of investigation employed by the JFTC. As the alleged communication between the traders primarily took place on an online chatting platform, the JFTC reportedly examined the digital records of chats, e-mails, etc. processed by an e-discovery vendor – which may be recognized as an exception to the authority’s current practice of evidence gathering. Unlike the U.S. Department of Justice or the European Commission, the JFTC has been primary collecting evidence by dawn raids and depositions rather than defendants’ production of electronic documents through forensic services. Back to top
Malaysian Commission proposes highest ever total fine of RM213 million on insurance trade association and 22 general insurers
By Lydia Kong
The Malaysian Competition Commission (“MyCC”) has issued a proposed decision against the General Insurance Association of Malaysia (“PIAM”) and 22 insurers for alleged price-fixing of parts trade discount and labour rates for workshops. The investigation was initiated based on a complaint received from the Federation of Automobile Workshop Owners’ Association (“FAWOAM”) that the discounts on parts of certain vehicle makes and labour hourly rates imposed by the insurance companies under the PIAM Approved Repairers Scheme were too low and were standardized amongst all the insurance companies. The MyCC has proposed a total penalty of approximately RM213 million on the general insurers. This represents the highest ever fine proposed by MyCC in a single investigation and strongly emphasizes its enforcement priority against price-fixing cartels in Malaysia.
The MyCC is considering the representations made in response to the proposed decision and will then make a final decision, will then make its final decision after it has fully considered the representations and all the available information and evidence. Click here for further details. Back to top
Myanmar Competition Law Takes Effect
By Rowan Kendall
As predicted in issue one of this newsletter, the Myanmar competition law took effect on 24 February 2017. The law covers anti-competitive agreements, abuse of dominance, mergers, and unfair consumer practices. The implementing rules and guidelines have not yet been issued and the competition authority has not yet been established. Merger control is unlikely to be operational before then, but the Ministry of Commerce is already accepting complaints from aggrieved parties about anti-competitive arrangements and abuse of dominance. Back to top
Philippines Commission targets State-imposed barriers to competition and construction materials industry
By Charles Veloso
The Philippines Competition Commission has announced that it will be reviewing laws and regulations to ensure that they do not create barriers to competition. Consistent with this approach, it is supporting Government initiatives to lift foreign equity restrictions in certain public utility industries such as telecommunications and transport (foreign equity holdings are currently capped at 40 percent).
Taiwan proposing new "dawn raid" powers for competition authority
By Sonya Hsu
The Taiwan Fair Trade Commission is engaged in a public consultation on amendments to the Fair Trade Law which will give the Commission its long sought-after power to conduct “dawn raids”. The deadline for comments is 15 May 2017. Back to top
Thailand strengthens its competition regime
By Narumol Chinawong
On 24 March 2017 Thailand introduced a series of reforms designed to make its competition regime more effective, including higher financial penalties - up to 10 per cent of turnover. Moreover, although the existing Thai competition law includes the power to impose criminal sanctions (including imprisonment), the new law will make it clear that these sanctions will apply to hardcore cartels and abuse of dominance: other infringements will be subject to administrative financial penalties. A new merger control regime will be introduced to replace the current regime, which has effectively been redundant. Mergers that may result in a substantial reduction of competition must be reported within seven days from the date of the merger, and mergers that may result in a monopoly or dominant position must obtain prior approval. The reforms are expected to take effect in August or September 2017.
The Vietnam Competition Commission has issued a decision finding that a local tour company abused its dominant position in the market for tour services to Russian, Ukrainian and other visitors from CIS countries to Vietnamese resorts with popular beaches. The abuses included requiring hotels to increase room prices and imposing exclusive dealing requirements on them. Click here for further details.