On April 3, the European Commission ("EC") announced that it sent a Statement of Objections to a number of major record companies and Apple, alleging that the agreements between each record company and Apple restrict music sales (via iTunes on-line stores), and infringe Article 81 of the EC Treaty by imposing territorial restrictions which prevent consumers from buying music downloads from the iTunes on-line store in their country of residence. The EC alleges that this restriction is imposed by verification by iTunes of a customer's country of residence from consumers' credit card details. The EC further alleges that the territorial sales restrictions in the agreements between Apple and the major record companies restrict consumers' choice as to where to buy music, what music is available and at what price. The EC has given the undertakings involved two months to respond to the Statement of Objections in writing. The undertakings will be given access to the EC's file, other than business secrets, other confidential information and internal documents of the EC or member state competition authorities. The undertakings can also request an oral hearing at which to present their defense. The Statement of Objections does not allege that Apple is in a dominant market position, and does not concern Apple's use of its proprietary Digital Rights Management (DRM) to control usage rights for downloads from the iTunes on-line store.
On April 17, the French Conseil de la Concurrence issued a revised notice concerning its handling of leniency applications, making it the first national competition agency in Europe to follow the EC in updating its leniency program. The new notice is aimed at providing greater certainty to companies by making more explicit the conditions for immunity and reduction of fines. It also introduces a marker system comparable to that operated by the European Commission.
On April 25, it was reported that Schneider Electric, the French electrical equipment maker, filed a €1.6 billion damages suit against the EC to recoup the losses it suffered as a result of a failed attempt to take over rival Legrand. The €5.4 billion deal was blocked by the Brussels regulator in October 2001, but the following year the European Court of First Instance found that the EC's economic reasoning was flawed, and annulled the ruling. Schneider alleges that the EC's investigation of the merger was so riddled with errors that the eventual ruling “manifestly and seriously” exceeded the limits of the EC's regulatory discretion. The majority of the damages claimed by the French group is linked to the fact that it was forced to unwind the already completed takeover of Legrand, and sell the shares at a loss. A judgment is expected in the coming months.
On April 18, the UK's Office of Fair Trading published for consultation a discussion paper on how private actions for breaches of competition law can be made more effective. The purpose of the paper is to inform ongoing debate on this issue. It sets out the principles that the OFT believes should inform improvements to the current framework in the UK in order to ensure that it allows for effective redress and enhanced compliance. The OFT also makes certain suggestions in relation to issues such as representative actions, funding and costs, evidential issues and settlements. The OFT intends to use this document, and the comments received, as the basis for recommendations to the UK Government as to possible changes to domestic law to improve the effectiveness of private actions. It will also form the basis of the OFT's response to the anticipated EC White Paper on damages actions for breach of EU competition rules.
On April 23, the EC announced that it sent a Statement of Objections to a number of companies that it suspects have infringed Article 81(1) of the EC Treaty by their participation in an alleged price-fixing and market-sharing cartel in the car glass sector. Car glass is a type of safety glass which does not shatter into sharp pieces on impact, and can be produced in different shapes, degrees of thickness and colors. There are a number of car glass products, including windscreens, sidelights, backlights, quarter lights and sunroofs. On February 24, 2005, the EC announced that its officials had carried out unannounced inspections at the premises of a number of manufacturers of flat and car glass in Belgium, France, Germany, the United Kingdom, Sweden and Italy. As a result of information uncovered during these inspections (and, further ones in March 2005), and information provided by certain companies as part of their applications under the EC's 2002 Leniency Notice, the EC alleges that a number of undertakings in the car glass sector allocated customers and agreed on supply quotas and prices for most of the motor vehicle manufacturers in Europe, so restricting competition in the EEA market in breach of Article 81(1) of the EC Treaty.
On April 23, the European Union Committee of the UK's House of Lords published a report on whether the creation of a specialist European Competition Court would be a way to resolve the problem of delays associated with appeals against European Commission merger decisions, currently heard by the Court of First Instance (CFI). The Committee concluded that, at the present time, the creation of a Competition Court would not be desirable. It held that it would unlikely to achieve significant time savings and any such Court would be faced with the same litigation complexities as the CFI. Further, the Committee held that the establishment of a Competition Court would increase the number of levels of appeal. The Committee considered, instead, that there is scope for reducing delay by improving the procedures of the CFI, reducing the CFI's work load (by transferring trademark cases to a judicial panel), and reducing the number of appeals against fines in cartel cases (by the use of settlements by the EC).
On April 18, the EC fined the Dutch brewers Heineken, Grolsch and Bavaria a total of €274 million for allegedly operating a cartel on the beer market in The Netherlands, in violation of EC Treaty rules that outlaw restrictive business practices. The EC's decision named the Heineken group, Grolsch and Bavaria, together with the InBev group which also allegedly participated in the cartel. The EC alleged that, the four brewers held numerous unofficial meetings between at least 1996 and 1999, during which they coordinated prices and price increases of beer in The Netherlands. The EC announced that InBev received no fines as it had provided decisive information about the alleged cartel under the EC's leniency program. EC Competition Commissioner, Neelie Kroes, said: "It is unacceptable that the major beer suppliers colluded to hike up prices and carve up the market between themselves. The highest management of these companies knew very well that their behavior was illegal, but they went ahead anyway, and tried to cover their tracks".
On April 25, it was reported that India's cabinet discussed the introduction of a revised amendment bill to the country's competition law. The bill, which draws on the proposed competition law changes that the government had previously submitted to the Supreme Court, is intended to male the Competition Commission of India fully functional, and give it powers to deal with mergers and acquisitions. India's Finance Minster, Mr. Chidambaram highlighted the urgency of amending the country's competition law, indicating that some industries, such the cement industry are allegedly suffering from cartelization.
On April 11, the EC confirmed sending Statement of Objections to a number of undertakings regarding their alleged role in cartel arrangements for shipping liquids in bulk on deep sea routes. The Statement of Objections alleges that the undertakings concerned were involved in customer allocation, bid-rigging, price-fixing, and the exchange of confidential market information concerning the maritime transport of bulk liquids on deep sea routes, thereby restricting competition in the EU market in violation of EC Treaty rules outlawing restrictive business practices. The EC's preliminary conclusions outlined in the Statement of Objections were based on information gathered during unannounced inspections by the EC carried out on February 19 and 20, 2003, and information supplied both subsequently under the Commission's Leniency Notice, and resulting from the EC's subsequent investigation.