France's Competition Council has imposed fines of AUD$1.2 billion on 11 companies accused of operating a steel trading cartel. The companies, including three subsidiaries of Arcelor Mittal, had set prices, divided contracts between themselves and blocked market entry to rivals between 1999 and 2004.
Airline consolidation continues in Europe
Following recent merger announcements by British Airways, Qantas, Aer Lingus and Ryanair, Germany’s Lufthansa has announced that it is buying Austrian Airlines. The AUD$659 million deal requires regulatory clearance from the European Community and, if approved, will see Lufthansa become Europe’s largest airline. Meanwhile, Lufthansa and Air France-KLM are reportedly considering an alliance with Alitalia and the EC has conditionally approved Iberia's acquisition of two Spanish low-cost airlines, Vueling and Clickair (of which Iberia holds an 80 per cent stake). The EC approval requires the airlines to release certain airport slots to address competition concerns on several Spanish and other European routes.
Russia imposes largest ever fine on oil companies for abuse of dominance
Russia's Federal Antimonopoly Service has fined two oil companies AUD$73.8 million, the largest penalty it has ever imposed. Lukoil and Rosneft Oil Company were fined for abusing their dominant position in the wholesale oil product market by fixing the price of petrol, diesel and aviation fuel in early 2008. The FAS also imposed fines on Gazprom and TNK-BP in November 2008 for abusing their dominant position in the same market.
Competition lacking in European energy market
The European Regulators Group for Electricity and Gas has released its 2008 status review, which shows that despite the market opening, competition in retail gas and electricity markets is almost non-existent.
Asia-Pacific
Korea fines paper manufacturing cartel
Korea's Fair Trade Commission has fined four Asian paper manufacturers over AUD$4 million for fixing the price of copy paper. Following a leniency application, the KFTC found that paper manufacturers from Indonesia, Singapore, Thailand and China had formed the so-called ‘Triple A club’ agreeing on prices and markets between 2001 and 2004. Triple A is the first international cartel the KFTC has sanctioned in five years and the first since it created its dedicated international cartel division in March 2008.
New Zealand imposes fine on international cartel
The New Zealand Commerce Commission has fined French company Schneider Electric almost AUD$1 million for its role in a price-fixing and bid-rigging cartel in the gas insulated switchgear industry. The international cartel operated between 1998 and 2004, with the European Commission fining Schneider and other cartel participants over AUD$7 billion in 2007 for their role in the cartel in Europe.
United States of America
Airlines fined for participating in air cargo cartel
Three airlines—LAN Cargo, Aerolinhas Brasileiras and El Al Israel Airlines—have agreed to pay a total of AUD$186 million in fines relating to the United States Department of Justice’s ongoing investigation into the air cargo cartel. The companies were part of a global price-fixing cartel in the air cargo market that operated between 2003 and 2006 and has to date resulted in 12 airlines and three executives pleading guilty to their involvement.
US and Japan take action against liquid crystal display cartel
Executives from one South Korean and three Taiwanese companies producing liquid crystal display panels have received prison sentences for participating in a global price-fixing cartel. The executives pleaded guilty to the US Department of Justice charges and face gaol terms of up to nine months and fines up to AUD$76 000. This is the first time that Taiwanese nationals will be imprisoned in the US for anti-trust crimes. In November 2008 the DoJ also fined LG, Chunghwa and Sharp AUD$903 million for participating in the cartel. Meanwhile, the Japanese Fair Trade Commission’s investigation of the international cartel has resulted in Sharp and Hitachi being fined for fixing prices of display modules for Nintendo’s popular portable game machine series DS and DS Lite in 2006.
Update on global marine hose cartel
Plaintiffs in a class action suit against companies implicated in the alleged international marine hose cartel have asked a US court to approve a AUD$30.4 million settlement with five corporate defendants. The alleged cartel participants include Manuli Rubber, Bridgestone, Trelleborg Industrie, Parker Hannifin, Yokohama Rubber and Dunlop Oil and Marine. Dunlop and Manuli have already pleaded guilty to participating in the cartel as part of the US DoJ investigation. Meanwhile, the European Commission has fined five companies a total of AUD$265 million for participating in the cartel.
Africa
South Africa’s Foodcorp fined for operating bread cartel
Following allegations of price fixing and market allocation in 2006 by Premier Foods, Tiger Brands and Pioneer Foods, the Competition Commission’s investigation into the food industry has resulted in Foodcorp being fined AUD$6.5 million for its role in a bread cartel. The food producer, marketer and distributor agreed to implement a compliance program as part of the settlement. Premier Foods received conditional immunity and Tiger reached a settlement that included conditional leniency for its cooperation.
