'Oneworld' airline alliance facing rough winds?

The European Commission has raised objections against the 'oneworld' airline alliance (consisting of British Airways, American Airlines and Iberia) proposed cooperation on passenger air transport services on transatlantic routes. The Commission sent a statement of objections which is a formal step in antitrust investigations in which the Commission informs the parties concerned in writing of the objections raised against them.

Rival airlines have complained that the proposal would curb competition in several important routes, with Virgin Atlantic, owned by Richard Branson, terming the proposal as something that would create a 'monster monopoly' with power to collude on prices. The proposal would have resulted in the parties jointly managing schedules, capacity and pricing, as well as sharing revenues on transatlantic routes between North America and Europe.

The Commission is currently investigating similar agreements between Star Alliance (Lufthansa, Continental Airlines, United Airlines and Air Canada among others) and Skyteam (Air France-KLM, Delta Airlines etc.), alliances which have been granted immunity by authorities in the United States on the other side of the Atlantic, but that immunity is unlikely to have any impact on any decision the European Commission might take.
Also read:New York Times Report and European Commission Press Release

Google book deal in violation of anti-trust laws?

The U.S. Department of Justice has argued for a New York Court to reject a settlement between Google and authors and publishers that would allow Google to create a digital library of their work. The DOJ said that its investigation into the settlement agreement was incomplete but it was likely to be in violation of copyright and anti-trust laws. It was felt that the settlement would empower book publishers to restrict price competition and also give Google exclusivity in the distribution of copyrighted works the authors of which are untraceable. The DOJ in its filing has urged the Court to reject the settlement in its present form to encourage the negotiation of a settlement which is more compliant with copyright and antitrust laws.
The proposed settlement is over Google's mammoth project at creating a digital library which will be made available online thereby creating a very high level of access to the works, but has given rise to fears over copyright protection, hence the proposed settlement with authors and publishers, to create a book rights registry and compensate authors and publishers whose work is being digitised. For more on the same, please visit: http://www.reuters.com/article/newsOne/idUSN1825836720090919

ECJ dismisses Akzo Nobel appeal

The European Court of Justice has dismissed an appeal by Akzo Nobel of a 2007 judgement by the Court of First Instance. The fine was originally imposed by the European Commission in 2004 for cartel activities related to the sale of Chlorine Chloride, a feed additive. Subsequently the matter went on appeal to the Court of First Instance and then the European Court of Justice, and both courts have affirmed the findings of the Commission. The case is important since it established that a parent company can be held liable for anti-competitive behaviour of its subsidiaries even if did not itself participate in those activities. For more on the case and a press release by the European Commission welcoming the decision of the ECJ, visit: http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/09/385&format=HTML&aged=0&language=EN&guiLanguage=en

MRTPC to be wound up in two years

The MRTPC will cease to exist two years from now as the government has decided to notify Section 66 of the Competition Act on September 1. The MRTPC will now not take up any new cases. It will have two years to resolve the existing disputes, after which cases dealing with MRTP will be transferred to the CCI and those pertaining to unfair trade practices will be transferred to the consumer courts. With the notification of S.66 which is the sunset clause of the Competition Act, the MRTP Act, 1969 would be repealed though the Commission would get two years to wind up its operations.

Regulators in China to keep a careful watch on financial institutions

Regulators in mainland China have issued new guidelines showing how the country's anti-monopoly applies to financial institutions. Banks, securities companies and insurance companies will now need to take extra care when doing M&A deals.

India yet to implement Section 5 of the Competition Act

India’s new competition regime is nearly operational. In March, the CCI and the Competition Appellate Tribunal were fully constituted and on 20^th May 2009, sections 3 and 4 related to anti competitive agreement and abuse of dominance were notified by the Competition (Amendment) Act, 2007. However, provisions related to combinations i.e. section 5 of the Act has still not been notified. The framework for merger control has been criticised by practitioners. As per the current framework, all mergers or acquisitions of control, shares, voting rights or assets, or acquisitions of control over enterprises where the acquirer controls another enterprise involved with similar goods or services, which result in either the parties to the transaction, or the group to which the target would belong post-acquisition, exceeding specified asset or turnover thresholds, are defined as combinations.

Prior notice must given to the CCI as per the prescribed format which will then determine whether it causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India. The interpretation of this question is left to its subjective determination.

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