United States of America (‘US’) - Federal Trade Commission (‘FTC’)
FTC approves final order preserving competition in the market for Insulated-Gate Bipolar Transistors used in Automotive Ignition Systems. Dated: September 30, 2016
In order to settle FTC charges that its proposed $2.4 billion acquisition of California based Fairchild Semiconductor International Inc. would be anticompetitive, Phoenix based ON Semiconductor Corporation has agreed to sell its Ignition Insulated-Gate Bipolar Transistors (‘Ignition IGBT’) business to Chicago based manufacturer Littelfuse Inc. Ignition IGBTs are semiconductors that function as solid-state electronic switches in the ignition systems of automotive internal combustion engines. Both ON Semiconductor Corporation and Fairchild Semiconductor International Inc. are engaged in the business of developing, manufacturing, and marketing a wide range of semiconductors including Ignition IGBTs. According to the complaint the merged company would have a combined share of over 60 percent in the worldwide market for Ignition IGBT. Therefore without a divestiture the proposed merger was likely to substantially lessen competition in the worldwide market for Ignition IGBT. The final order requires the divestiture to be completed within 10 days of the close of the transaction. The divestiture will include design files and intellectual property that Littelfuse Inc. requires to manufacture ON Semiconductor Corporation’s Ignition IGBTs. In terms of the order, the latter is also required to facilitate the transfer of its customer relationships to Littelfuse Inc. and supply Ignition IGBTs for Littlefuse Inc. to sell to customers while Littelfuse Inc. sets up its manufacturing operations.
FTC approves largest drug divestiture order in an FTC pharmaceutical merger case. Dated: September 7, 2016
FTC has approved the final order settling charges that Teva Pharmaceutical Industries Ltd.’s (‘Teva’) $40.5 billion acquisition of Allergan plc’s (‘Allergan’) generic pharmaceutical business would be anticompetitive. Under the terms of the order, Teva has agreed to divest its rights and assets related to 79 pharmaceutical products to 11 firms. Israel-based Teva, a global manufacturer of generic and branded pharmaceuticals, is the largest generic pharmaceutical producer in the world. Allergan is also a global producer of generic, branded and over-the-counter pharmaceuticals, and the third largest generic producer in the U.S.A. The divested products include anesthetics, antibiotics, weight loss drugs, oral contraceptives, and treatments for a wide variety of diseases and conditions, including ADHD, allergies, arthritis, cancers, diabetes, high blood pressure, high cholesterol, mental illnesses, opioid dependence, pain, Parkinson’s disease, and respiratory, skin and sleep disorders. In terms of the order, the divestiture must be completed within 10 days of the close of the transaction. Teva and Allergan are required to provide technical assistance and other transitional services to ensure that the acquirers can independently manufacture and sell the divested products.
European Union (‘EU’) – European Competition Commission (‘European Commission’) General Court
European Commission fines €6 million for hindering competition on Austrian waste management market.
September 20, 2016.
The Commission has fined Altstoff Recycling Austria (‘ARA’), in breach of EU antitrust rules, €6 million for blocking competitors from entering the Austrian market for management of household packaging waste from 2008 to 2012. The Party has been a dominant provider of collection and recycling services against a fee paid by goods’ producers for household packaging waste in Austria since at least 2008, which is noted to be the beginning of infringement by the Commission. Investigations showed that the nationwide collection infrastructure were partly controlled and partly owned by ARA which could not be duplicated. Competitors who intended to or attempted to enter or expand in the market, were dependent on receiving access to this existing infrastructure, which was refused between March 2008 and April 2012 by ARA and consequently competitors were excluded from the market and competition was eliminated. The Commission noted that such behaviour is in breach of Article 102 of the Treaty on the Functioning of the European Union (‘TFEU’) which prohibits the abuse of a dominant market position. In cooperation with the Commission, ARA acknowledged the infringement and offered to divest a part of its household collection infrastructure it owns and the company will therefore no longer be in a position to exclude competitors from access to that infrastructure. The Commission took note of this cooperation by ARA in calculating the fine, which was reduced by 30%.
Republic of India – Competition Commission of India (‘CCI’)
CCI dismisses complaint against the Power Grid Corporation of India, Case No 41/2016 dated 21 September, 2016
The primary allegations levelled by the Mr. Prem Prakash (i.e., Informant) against the Power Grid Corporation of India (i.e., OP), that the OP has restricted competition amongst accreditation agencies and third party laboratories by mandating that the construction materials used by its contractors are to be tested only in a lab accredited by NABL. The CCI noted that the OP is neither engaged in the business of accrediting laboratories nor offers any service for testing construction materials. By stipulating that its contractors shall test the construction materials in selected third party laboratories, OP is indirectly consuming the services of such laboratories. The CCI observed that the OP being a public sector undertaking, has the responsibility to ensure that the civil works undertaken by its contractors adhere to the quality stipulations and facilitate the development of a robust power transmission infrastructure across India. The testing by third party laboratories is mandated by OP to instil confidence amongst national and international customers. Accordingly, the CCI held that there was no unfairness or arbitrariness in the conduct of the OP. The CCI held that every consumer/procurer must have freedom to exercise their choice freely in the procurement of goods and services and that such choice is sacrosanct in a market economy.
M/s Picasso Animation Private Limited (PAPL) Through its Director Shri Rittesh Beotra Informant v M/s. Picasso Digital Media Pvt. Limited (PDMPL) Dated October 25, 2016.
M/s. Picasso Animation Private Limited, (‘Informant’) has filed the information under Section 19 (1) (a) of the Competition Act, 2002 (‘Act’) against M/s. Picasso Digital Media Private Limited (‘OP’) alleging inter alia contravention of the provisions of Section 4 of the Act and restrictive trade practices. The Informant claims to have obtained copyright registrations from Copyright Office, New Delhi for the title name ‘PICASSO’; ‘PICASSO ANIMATION COLLEGE’ and for its website address ‘WWW.JAIPURPICASSO.COM’. Further, it is alleged by the Informant that OP is using the Informant’s brand name ‘Picasso’ by associating itself with Maharishi Group at corporate level to avoid competition and OP is not associated with the Maharishi Group but seems to give the impression by advertising itself to be the part of Maharishi Group. Both the Informant and OP are engaged in the business of offering various animation related services which includes offering certification and diploma courses in animation. The Commission notes that apart from the OP, there are many other institutions providing online and offline trainings in animation courses. The relevant market is quite competitive with a number of institutions offering animation courses to the students. In the absence of dominance of the OP in the relevant market, there is no requirement to look into the allegations regarding abuse of dominance in contravention of the provisions of Section 4 of the Act.
The Commission therefore, observes that the dispute primarily relates to the usage of the brand name ‘Picasso’ and the Informant is aggrieved by the violation of copyright of its registered title by the OP. As per the information, there are a series of litigations between the parties to claim the ownership of the title ‘Picasso’ at various forums and courts. The Informant has also admitted that in the capacity of the holder of registered brand name/logo namely ‘Picasso’, it has filed necessary applications before respective authorities for taking action against the OP under criminal and civil proceedings. The allegations noted above also do not indicate any competition law breach in any manner.
Based on the above, the Commission holds that no case of contravention of the provisions of either Section 3 or 4 of the Act has been made out against the OP.
CCI initiates investigation against GAIL India Ltd,. Case No. 16-20/2016 dated 03 October, 2016
The allegations pertained to the abuse of dominant position by GAIL (India) Ltd (i.e., Opposite Party) in the market for the ‘supply and distribution of natural gas to industrial customers’. In addition to onerous terms in the Gas Supply Agreement executed between the parties, Omax Autos Limited, Rico Auto Industries Ltd, Rico Castings Ltd (i.e., Informant) has alleged the following:
(a) Suspension of gas supply without notice. (b) Denial of the dispute resolution mechanism. (c) Arbitrarily doing away with the requirement of seven banking days for issuance of notice for suspension of gas provided in the GSA. (d) Forcing the Informants to make arbitrary payments.
The CCI noted that even though the imposition of take or pay liability, encashment of letter of Credit and suspension of gas supplies as per contractual terms may not be per se abusive, the Opposite Party in (a) not replying to the request of the Informants for reducing the contracted quantity; (b) not replying to the proposal of the Informant for amicable settlement of the alleged dispute; (c) doing away with the requirement of prior notice for suspension of gas; and (d) not divulging the reason for suspension of gas despite repeated attempts/requests of the Informant for amicable settlement of the alleged disputes appears to be have prima facie violated Section 4(2)(a)(i) and 4(2)(b)(i) of the Competition Act, 2002 (‘Act’). The Commission has directed the DG to cause investigation into these cases under the provisions of Section 26(1) of the Act. Considering the substantial similarity of allegations in all the five information, the Commission clubs them in terms of the proviso to Section 26(1) of the Act read with Regulation 27 of the Competition Commission of India (General) Regulations, 2009. The Commission states that the DG shall conduct the investigation without being swayed in any manner whatsoever by the observations made in the order.
United States of America (‘US’) - Federal Trade Commission (‘FTC’)
FTC Requires Mylan to Sell Rights to Two Generic Drugs as a condition of acquiring Meda. Dated September 8, 2016
FTC has approved a final order on charges that Mylan Inc.’s $7.2 billion acquisition of Swedish drug maker Meda would likely be anticompetitive. As per the FTC’s order, the companies are required to divest the U.S. rights to two generic drugs, 250 mg generic carisoprodol tablets, which treat muscle spasms and stiffness, and 400 mg and 600 mg generic felbamate tablets, which treat refractory epilepsy. The drug divestments have been sought on the grounds that the acquisition would likely have led consumers to pay higher prices, and that it would also have eliminated competition between Mylan and Meda in the markets for both drugs. Alvogen Pharma US, Inc., a U.S.-based generic pharmaceutical company will acquire all of Mylan’s rights and assets related to 400 mg and 600 mg felbamate tablets; and Indicus Pharma LLC, which owns the product, 250 mg generic carisoprodol tablets will reacquire the rights and be able to enter into an agreement with a new marketing partner.
Republic of India – Competition Commission of India (‘CCI’)
CCI approves acquisition of thermal power plant by JSW Energy Limited, C-2016/08/420 Dated 14 September, 2016
The notice has been filed pursuant to execution of a Securities Purchase Agreement (‘SPA’) on 18.07.2016 between JSW Energy Limited (‘JSWEL’ or ‘Acquirer’), Jaiprakash Power Ventures Limited (‘JPVL’), Bina Power Supply Limited (‘BPSL’) and Jaypee Group Employees Welfare Trust. The proposed combination relates to (a) transfer of a 500 MW operational coal fired thermal power plant at Madhya Pradesh (‘Target Asset’), currently owned by JPVL to BPSL on a going concern basis pursuant to a scheme of arrangement; and (b) subsequent acquisition of 100 per cent stake in the BPSL by JSWEL. The CCI noted that there is horizontal overlap between the Acquirer and JPVL as they are both engaged in generation of power in India. However, the combined market share of the Acquirer and the Target Asset, in terms of installed capacity is insignificant to raise competition concerns. It was also noted that the Acquirer is engaged in the downstream markets of power transmission and power trading. However, considering the fact that the Target Asset operates in power generation only, the proposed combination is not likely to change the extent of vertical integration of the Acquirer and consequently, the competition dynamics of downstream markets of power transmission and power trading are also likely to remain unchanged. The combination was therefore approved under Section 31(1) of the Competition Act, 2002 (‘Act’).
CCI approves acquisition notice jointly given by Broad Street Investments (Singapore) Pte. Ltd. and MBD Bridge Street 2016 Investments (Singapore) Pte. Ltd. (C-2016/09/435)
Dated October 14, 2016
The proposed acquisition has been notified under Section 6(2) of the Competition Act, 2002 (‘Act’) pursuant to a Share Subscription Agreement dated September 20, 2016. The notice has been jointly given by Broad Street Investments (Singapore) Pte. Ltd. (‘BSIPL’) and MBD Bridge Street 2016 Investments (Singapore) Pte. Ltd. (‘MBD’) (collectively ‘Acquirers’) and the Agreement has been entered into between BSIPL, MBD, MBD Bridge Street 2013 Investments (Singapore) Pte. Ltd. (‘MBD 2013’), DEN Networks Limited (‘Den’) and promoters of Den. BSIPL and MBD 2013 together hold around 17.80 % of equity share capital of Den. The proposed combination involves subscription by BSIPL and MBD of further equity shares of Den, as per the terms of the Share Subscription Agreement, leading to increase in Den’s shareholding of Goldman Sachs Group companies, of which the Acquirers and MBD 2013 are a part of, from existing around 17.80 % to around 24.51 %. The Commission, with regards horizontal overlaps arising from the proposed combination, observed that business of one of the GS Group’s portfolio companies, namely, TrendSutra Cayman Holdings operating as ‘Pepperfry’ overlaps with the e-commerce business of Den but on considering the nature of operations and scale of operations of overlapping business, the horizontal overlaps are insignificant and are not likely to raise competition concern. Further, with regard to the vertical overlaps, the Commission observed that they are insignificant and are not likely to raise competition concern. In light of the observations, the Commission approved the combination under Section 31(1) of the Act as the proposed combination is not likely to cause an appreciable adverse effect on competition in India.
CCI approves internal restructuring of Fortis group, C-2016/09/433
Dated 14 October, 2016
The proposed combination is an internal restructuring within the Fortis Group to consolidate the hospitals and diagnostic business of Fortis group under separate verticals The notice has been jointly given by Fortis Healthcare Limited (‘FHL’), Fortis Malar Hospital Limited (‘FMHL’), and SRL Limited (‘SRL’); together referred to as the ‘Parties’, pursuant to the approval of the Board of Directors of the Parties vide respective board resolutions each dated August 19, 2016. The proposed combination contemplates a series of interconnected steps, as follows: (i) FMHL to sell its healthcare business to FHL under slump sale route as a going concern (‘Business Transfer’); (ii) FHL to de-merge its diagnostics business undertaking and its investment/shareholding in SRL to FMHL (‘De-Merger’); and (iii) SRL to be amalgamated into FMHL, consequent to which the name of FMHL would be changed to ‘SRL Limited’ (‘Amalgamation’). The Parties are engaged in the business of providing healthcare and diagnostics services in India. It has been submitted by the Parties that the entities involved in the proposed combination, namely, FHL, FMHL and SRL, are controlled by the Fortis group and that post-combination the control of FHL, FMHL and SRL shall remain with the Fortis group. Considering the facts on record and details provided in the notice given and on assessment of the proposed combination on the basis of factors stated in sub-section (4) of Section 20 of the Competition Act, 2002 (‘Act’), the Commission is of the opinion that the proposed combination is not likely to have appreciable adverse effect on competition in India and therefore, the Commission hereby approves the same under sub-section (1) of Section 31 of the Act.
United Kingdom (‘UK’) – Competition and Market Authority (‘CMA’)
Hon Hai Precision Industry Co. Ltd./SMART Technologies Inc. Merger Inquiry.
Dated August 26, 2016
The CMA inquired into the impending merger of Hon Hai Precision Industry Co. Ltd. (‘Hon Hai’) and SMART Technologies Inc. (‘SMART’) (‘Merger’). Hon Hai and SMART are together referred to as the Parties. Hon Hai is engaged in the business of providing third party electronic manufacturing services (‘EMS’). Whereas SMART is engaged in the business of supplying interactive displays which includes interactive whiteboards, interactive projectors and interactive flat panels. The CMA was of the opinion that at present there is no horizontal overlap between the Parties. However Hon Hai is in the process of acquiring a controlling stake in Sharp Corporation (‘Sharp’) which is engaged in the business of supplying interactive flat panels. Hon Hai provides EMS to some suppliers of interactive displays but not to SMART and Sharp. The CMA considered whether the Merger will result in substantial lessening of competition (‘SLC’) because of loss of a direct competitor in supply of interactive displays (i.e. as a result of horizontal unilateral effects). It also considered whether the merger will lead to SLC by bringing together a supplier of EMS and a customer of EMS. The CMA was of the opinion that the Parties face competition from a large number of alternate providers and are not particularly close competitors. The CMA was therefore of the opinion that the Merger does not give rise to a realistic prospect of SLC as result of horizontal effects. Further the CMA was of the opinion that Hon Hai has a low share of supply of EMS and there are several alternate EMS suppliers available in the market. The CMA was therefore of the opinion that the Merger does not give rise to a realistic prospect of SLC as a result of vertical effects. The Merger was therefore not referred under section 33(1) of the Enterprise Act, 2002.
The CMA is to consider whether undertakings offered by Dover and Wayne remove the need to carry out an in-depth merger investigation. Dated October 24, 2016
The CMA has announced that Dover Corporation’s (‘Dover’) anticipated acquisition of Wayne Fuelling Systems (‘Wayne’) would face an in-depth investigation unless the companies could address concerns over the merger’s effect on competition in the supply of fuel dispensers in the UK. Both parties are global manufacturers and suppliers of industrial equipment and components, including fuel dispensers and automation and payment systems for retail and commercial fuel stations. Dover and Wayne have proposed alternative actions to the CMA: either (i) Dover would release Tokheim SSD from its obligation to only distribute Dover’s fuel dispensers in the UK, and Dover would also take measures to support Tokheim SSD distributing a rival manufacturer’s fuel dispensers in the UK; or (ii) Wayne would sell its UK distribution business to a buyer. These alternative actions have been proposed to the CMA for approval. The CMA believes that these proposals or modified versions of the same shall resolve the raised competition concerns. Incidentally, if the CMA does not accept one of the actions proposed, the merger will be referred for an in-depth investigation.
European Union (‘EU’) – European Competition Commission (‘European Commission’)
Commission approves acquisition of lasers supplier Rofin-Sinar by Coherent, subject to conditions. Dated October 26, 2016
Parties, Rofin-Sinar Technology Inc (‘Rofin-Sinar’) and Coherent Inc (‘Coherent’) are both global suppliers of lasers with broad product portfolios and global sales and service capabilities. The Commission’s concerns were based on the information that both parties are global suppliers of laser and this would lead to high combined market shares in low power CO2 lasers. Investigations showed that no competition concerns were identified in any of the other markets where the activities of Rofin-Sinar and Coherent overlap due to the presence of strong alternative suppliers. Preliminary investigations made it clear that the proposed transaction would combine the two largest suppliers of low power CO2 lasers who were close competitors prior to this transaction. With a market share above 50% in this sector, the combined Rofin-Sinar and Coherent would be the clear market leader. The Commission noted that the remaining considerably smaller alternative suppliers, including Asian manufacturers, would have been unable to maintain sufficient competition to avoid price increases and reduced product choice. To address the Commission’s competition concerns, Coherent offered to sell Rofin-Sinar’s Hull (UK) business manufacturing low power CO2 lasers. The divestment entirely removes the overlap between the activities of the two companies in low power CO2 lasers at the global level. Therefore, the Commission concluded that the transaction, as modified by the commitments, would raise no competition concerns. The Commission’s approval is conditional upon full compliance with the commitments.
Commission clears acquisition of Mitsubishi by Nissan. Dated September 8, 2016
The European Commission has approved under the EU Merger Regulation the acquisition of Mitsubishi Motors Corporation (‘Mitsubishi’) by Nissan Motor (‘Nissan’), both of Japan. Nissan is ultimately controlled by Renault of France which manufactures and sells automobiles. Mitsubishi is a Japanese multinational stock corporation, which manufactures and sells automobiles. Both parties are involved in the sale of automobiles in the European Economic Area (‘EEA’). Investigations showed that the overlap between the Parties activities was limited and the Commission concluded that the proposed acquisition would raise no competition concerns, because of the limited overlap and a number of strong players would remain active in the markets concerned after the merger. The transaction was examined under the normal merger review procedure.
Commission approves the acquisition of Faiveley Transport by Wabtec
Dated October 4, 2016
‘Faiveley Transport’ is a French supplier of various types of train equipment such as brakes, friction materials and pantographs and ‘Wabtec’ (Westinghouse Air Brake Technologies Corporation) is a US-based supplier of various types of train equipment such as brakes, friction materials and pantographs. Wabtec has a number of subsidiaries active in the European Economic Area (‘EEA’), including Becorit and Cofren in the field of train friction materials. The proposed acquisition of Faiveley Transport of France by USA based Wabtec raised certain concerns with the Commission. The Commission had apprehensions about the elimination one of only three strong suppliers of sintered friction materials for train brakes, the transaction as initially notified would have led to reduced competition and price increases for these products. As per the Commission, a single remaining competitor would be insufficient to maintain satisfactory and required competition in the market. To address the Commission’s competition concerns, the parties offered to sell in its entirety Faiveley Transport’s sintered friction material business, Faiveley Transport Gennevilliers. The company specializes in the development and production of sintered friction materials for various purposes, including train brakes. This proposed divestment will remove all overlap between Faiveley and Wabtec in sintered train friction brake materials. The Commission’s decision to approve the transaction is subject to full compliance with the commitments.
The information in this private circulation is not legal advice and should not be treated as such. The information is taken from public domain and is purely for private and non- commercial purposes. We do not represent that the information is correct, accurate, complete or non- misleading.
This disclaimer will be governed by and construed in accordance with laws of India, and any disputes relating to this disclaimer will be subject to the exclusive jurisdiction of the courts of the Republic of India.
If you do not accept the Terms and Conditions of the Disclaimer or do not wish to receive this circulation, please email at email@example.com with the subject line, ‘Do Not Send’.
Doc ID: CL/16/16