Australia issues enforcement priorities for 2018; prosecutes individuals under cartel provisions for first time
By Anita Thompson, Ann-Maree Harnett and Emma Panhuber
The Australian competition regulator (ACCC) has released its enforcement and compliance priorities for 2018. The key highlights are.
- Cartel prosecutions: The ACCC has five current referrals with the Commonwealth Director of Public Prosecutions (CDPP) and a number of investigations that are at an advanced stage. A number of key cases are expected to be heard this year, including criminal proceedings against a Japanese shipping company and an Australian company, the Country Care Group (see below for further details). The ACCC is also awaiting judgment on its appeal in respect of misuse of market power and exclusive dealing proceedings brought against Pfizer in relation to the supply of atorvastatin to pharmacies.
- Anti-competitive conduct: The ACCC has said that anti-competitive conduct in the construction, financial services, agriculture and energy sectors will be under scrutiny over the coming year.
- Consumer protection: The ACCC announced that it will also focus on consumer issues in the automotive industry (following the release of its new car retailing study and its ongoing investigation into the Takata airbags recall), the provision of broadband services and the use of digital platforms. Ensuring better product safety outcomes for consumers in the online marketplace will also be a priority area.
Please click here for further details Charges have been laid against an Australian corporation, its managing director and a former employee under the Australian criminal cartel provisions. This is the first time individuals have been prosecuted under the criminal cartel provisions in the Australian Competition and Consumer Act 2010 (Cth) (CCA). It is also the first time that an Australian corporation has been prosecuted under these provisions. Following an investigation into alleged cartel conduct by The Country Care Group Pty Ltd involving assistive technology products used in rehabilitation and aged care, the ACCC referred the matter for prosecution. If the Magistrate determines that there is sufficient evidence for the matter to proceed, the matter is likely to be heard in the Federal Court of Australia.
China consolidates three antitrust agencies into one; continues to penalise failure to notify mergers
By Laura Liu and Wenting Ge
China has consolidated the three agencies previously responsible for antitrust enforcement into a single department. The consolidated authority combines the antitrust investigation functions of the National Development and Reform Commission (NDRC) and the State Administration of Industry and Commerce (SAIC) with the merger review functions of Ministry of Commerce of China (MOFCOM). The new authority is called the State Administration for Market Supervision (SAMS). Click here for further details. MOFOM has continued its crackdown on failure to notify mergers, and has published five penalty decisions in total so far this year. In March, the local branch of SAIC for Shandong Province imposed a cumulative penalty of CNY 600,000 (USD 95,430) on six home furnishing companies for engaging in a group boycott. The companies were found to have collectively prevented their in-store vendors from joining any promotional events organised by media outlets, websites and third-party marketing organisations, and threatened to move vendors from their stores in case of non-compliance.
Hong Kong authority warns businesses not to enter “no-poach” agreements regarding employees, or discuss salaries or other benefits
By Stephen Crosswell and Bill Brown
The Hong Kong Competition Commission has issued a so-called Advisory Bulletin, warning businesses that if they discuss or agree on “no-poach” arrangements with other businesss regarding employees, this may contravene the Competition Ordinance. The same applies to discussions or agreements on salaries or other benefits. The commission goes as far as to say that such agreements or discussions may constitute “serious anti-competitive conduct” under the ordinance, meaning that the commission can initiate proceedings directly in the Competition Tribunal, without first giving the businesses an opportunity to terminate the conduct. Click here for further details.
Japan joins international trend to combat anti-competitive employee practices
By Junya Ae and Ryo Yamaguchi
The Japan Fair Trade Commission (JFTC) has commissioned a report on human resources and competition policy from a study group on the grounds that certain human resources practices may give rise to concerns under competition law. This follows guidelines issued by the US Department of Justice on this matter. As noted above, the Hong Kong Competition Commission has also recently issued guidelines in this area. In its report, the study group shows that several concerted practices by multiple employers, such as "no-poach" agreements and wage fixing, and unilateral actions by a single employer, including non-compete obligations and restriction of the use of output produced by an individual, are problematic from a competition perspective It remains to be seen whether the JFTC will apply the findings of the report in its enforcement practice; this seems likely.
Myanmar commences enforcement of new competition law, while implementing regulations are awaited
By Jo Daniels and Rowan Kendall
Myanmar is understood to have started enforcing its new competition law in at least one case, even although the implementing regulations are not yet in place on matters such as merger and dominance thresholds, as well as market definition. Watch this space for further details in due course.
Singapore Competition Authority takes on consumer protection role, launches market studies into the online travel booking sector, and imposes interim measures on Uber and Grab
By Melissa Healy and Christine Xu
Effective from 1 April 2018, Singapore’s competition authority assumes responsibility for consumer protection enforcement activities pursuant to the Consumer Protection (Fair Trading) Act (Chapter 52A). Consumer complaints will continue to be dealt with at first instance by the Consumers Association of Singapore (CASE) and only the more serious and/or persistent claims will warrant further investigation by the CCCS. There should be no change to the regulators' application, and enforcement of, the traditional competition law provisions since both functions will be subject to separate statutory and procedural frameworks. However, there are perceived synergies in wearing this dual competition and consumer protection hat in the context of market studies, where the CCCS can help ensure that the appropriate messages filter through to consumers and thus help avoid any confusion and/or misleading practices. To usher in this era, the regulator has changed its name and will now be known as the Competition and Consumer Commission of Singapore (CCCS). Click here for further details. The CCCS has also indicated that it will conduct two new market studies: one examining commercial practices in the online travel booking sector and the other investigating the overlap between consumer protection, competition and personal data protection issues with a focus on whether a data portability requirement may be necessary. The online travel booking study is the latest phase in a global wave of antitrust scrutiny into perceived competition law concerns in this segment. The CCCS notes that it will examine commercial arrangements between third-party online travel booking platforms and flight/hotel service providers, and we anticipate that this will target in particular the use of Most Favoured Nation (MFN) clauses. Click here for further details. In March, the CCCS initiated an investigation into the (un-notified) Grab/Uber transaction, due to its concerns about Grab and Uber’s significant combined market share. The CCCS imposed interim measures against the parties, including the removal of exclusivity obligations on drivers, prevention of Uber’s operational data from being used by Grab to enhance its market position, preserving pre-transaction pricing and commission levels and ensuring drivers and riders are free to choose their preferred platform. This investigation is still ongoing and the CCCS will seek views from stakeholders and to help it to assess the competition concerns. Click here for further details.
Taiwan authority raids manufacturers of toilet tissue paper
By Sonya Hsu
After media reports appeared in February about price increases of toilet tissue paper, the Taiwan Fair Trade Commission (TFTC) immediately initiated an investigation into suspected collusion between manufacturers, and conducted on-site visits at the manufacturers’ premises on the same day. The TFTC later convened a forum to promote competition and warn against price gouging, which was attended by representatives from three major toilet tissue manufacturers and five leading hypermarket chains. On 14 March 2018, the TFTC decided to fine the RT-Mart hypermarket chain NTD 3.5 million (USD 119,770) for providing misleading information about a planned collective price hike of toilet paper that led to a sudden imbalance of supply and demand in February. RT-Mart said in late February that it was informed by toilet paper makers that product prices would be raised by up to 30 percent in mid-March at the earliest, citing a spike in international pulp prices. The announcement spurred anxious shoppers to stock up on the product, stripping store shelves. However, the TFTC found that no evidence to prove the allegations of a price increase of up to 30 percent. The TFTC’s investigation into suspected concerted price increases by the manufacturers continues.
Vietnam launches formal investigation into Uber/Grab deal
By Melissa Healy and Seck Yee Chung
Vietnam's competition authority is formally investigating whether the acquisition by the ride-hailing company Grab of rival Uber's South East Asian businesses complies with the country's competition law. Watch this space for further details in due course.