British Airways and Korean Airlines fined record AUD$993 million for global fuel cartel
The United States Department of Justice and the United Kingdom's Office of Fair Trading have successfully prosecuted or received fines through plea agreements for a global cartel of major airlines for price fixing fuel surcharges for long haul flights and cargo. British Airways and Korean Airlines have currently been fined AUD$993 million. The airlines face further investigations related to the price fixing, as well as civil litigation in the US, Australia and Canada. The DoJ is in the process of commencing criminal investigations into a number of senior staff from British Airways who participated in price fixing of long-haul fuel surcharges in combination with Korean Airlines and Virgin Atlantic.
China
Product safety
Many Chinese-made products—from children’s toys to toothpaste—have been recalled from market shelves in numerous countries, including Australia. At a national conference held on 23 August 2007 in Beijing, the Chinese Government announced a nationwide effort to monitor eight categories of products, including pork, farm produce, processed food, pharmaceuticals and toys.
The Chinese Government is currently acknowledging some 'deep-rooted' problems regarding food and product quality, particularly in a large number of small factories with substandard equipment and poor management. The US and China have agreed to cooperate more closely on consumer products and safety.
China passes anti-monopoly law
After 13 years of deliberation, China’s anti-monopoly law was passed by the Standing Committee of the National People’s Congress on 31 August 2007. The law will come into effect from 1 August 2008. It is envisaged that a special anti-monopoly commission will be set up under the State Council to deal with anti-monopoly issues.
United Kingdom
Competition Commission unearths 12 million emails in supermarket inquiry
Following allegations that supermarket giants Tesco and Asda bullied their suppliers to discount prices prior to the recent AUD$860 million-price war, the United Kingdom Competition Commission has requested them to provide all emails, written correspondence and telephone calls between themselves and their suppliers during a five-week period in June and July 2007. The Competition Commission’s inquiry into abuse of dominance in the UK grocery market focuses on the leading four companies—Tesco, Asda, J Sainsbury and Morrisons—and is not expected to conclude until May 2008. However, the committee's preliminary findings are expected by mid-September 2007, following analysis of the emails and other material obtained under the s. 106 order.
United States
Court allows Whole Foods Inc. acquisition of Wild Oats Markets Inc.
A US Federal Appeals Court allowed Whole Foods Market Inc. to buy rival organic grocer Wild Oats Markets Inc., denying an emergency request from the US Federal Trade Commission to block the sale pending the outcome of an appeal. The US FTC brought the challenge claiming that the merger would most likely result in higher prices and reduced choices for consumers who shop at premium natural and organic supermarkets. Whole Foods responded by arguing that the organic foods market operated within a much larger separate market and that the proposed merger would benefit consumers by preventing price wars between the two companies.
FTC approves News Corp/Dow Jones merger
The US Federal Trade Commission has cleared News Corp’s AUD$6.8 billion acquisition of Dow Jones and Co. Industry analysts suggest that the quick clearance was based upon distinctions in market definition—that is, that News Corp’s interests were spread across generalised media markets with popular appeal, while Dow Jones specialised in business and financial reporting such as in Newswires, MarketWatch and the Wall Street Journal.
