Korea's Fair Trade Commission has imposed fines on five marine hose manufacturers—Bridgestone, Dunlop Oil and Marine, Trelleborg, Parker ITR and Manuli—for their role in an international cartel that operated in Korea between 1999 and 2006. Yokohama received no penalty fine because it notified the KFTC of the cartel under the agency’s leniency program. Other competition authorities, including the EC, US DoJ and UK OFT, have previously taken action against the cartel and numerous executives for their role in the conduct.
In May 2009 the European Commission (EC) released its final report on airline ticket selling websites after an 18–month European Union (EU) wide process to crackdown on misleading advertising and unfair practices in the industry.
The report noted that 115 out of the 137 airline websites initially investigated have been corrected through various enforcement measures. The report also provided the results of a 'health check' process that involved independent mystery shopping in March 2009, during which 67 major airline websites were checked against a 14-point checklist.
Fifty-two airlines have either been given a clean bill of health or immediately responded to the EC's consultation with undertakings to remedy outstanding issues. The EC is now working with the airline industry to put in place an industry-wide agreement to uphold standards for the online selling of air tickets.
The EC has imposed a fine of AUD$1.9 billion on Intel, the world’s largest computer chip-maker, for abusing its dominant market position. This is the largest fine levied by the EC for anti-competitive behaviour. The EC found Intel had engaged in two illegal practices:
providing rebates to manufacturers on the condition that they purchased all or almost all of their supplies from Intel
making direct payments to manufacturers to halt or delay the launch of specific products containing competitor chips and limiting the sales channels available to these products.
Intel has announced that it will challenge the decision. The US Fair Trading Commision is also investigating similar allegations against Intel.
The European Parliament has blocked a Bill set to introduce sweeping changes to the way the European telecoms industry is regulated. The decision puts the parliament at odds with the Council of EU Ministers. The Bill was blocked after the rejection of an earlier compromise with member states over the protection of internet users' rights.
The proposed Bill would have established a new EU telecoms authority, introduced functional separation to spur competition, reviewed radio spectrum and introduced a range of consumer protection provisions. In June the Telecoms Council will discuss whether agreement on the package is still possible or whether the discussion will have to start again with the new European Parliament in September 2009.
The United Kingdom Office of Fair Trading (OFT) has released commissioned research to examine why UK consumers fall victim to scams. It is estimated that 3.2 million adults in Britain fall victim to mass-marketed scams each year, collectively losing over AUD$7 billion. The research provides information about the psychological techniques used by scammers, knowledge of which may assist in developing more effective consumer education about scams.
Additional key findings of the research show:
previous victims of a scam are consistently more likely to show interest in responding again
a good background knowledge of the subject of a scam offer may actually increase the risk of becoming a victim through 'over-confidence'
victims are not generally poor decision-makers, tend to be unduly open to persuasion by others and less able to control their emotions
victims often keep their decision to respond to a scam offer private and avoid speaking about it with family or friends.
Former Morgan Crucible executive to be extradited to US
On 15 May 2009 the UK High Court ruled that the former chief executive of Morgan Crucible, Ian Norris, should be extradited to the US within 28 days to face trial on charges of obstructing justice. In 2002 the UK Engineering firm Morgan Crucible agreed to pay fines and to settle price-fixing charges for its role in the international carbon graphite cartel; however, Mr Norris was not covered by that agreement because price fixing was not a crime in the UK at the time of the alleged conduct. An appeal to the European Court of Human Rights is the only remaining avenue of appeal for Mr Norris to avoid extradition to the US.
In a speech to the United States Chamber of Commerce on 12 May 2009, the head of the Department of Justice’s (DOJ) antitrust division, Christine A Varney, reversed the Bush Administration's enforcement approach to market dominance. That approach developed a hands-off approach strongly favouring defendants against antitrust claims. The Obama Administration will now pursue a more aggressive approach against corporations that use their market dominance against competitors.
During her speech Ms Varney withdrew the ‘monopolisation report’ of September 2008 because it no longer represented DOJ policy. Ms Varney contended that the report's conclusions created an impediment to the government’s ability to fight anti-competitive conduct by dominant companies. The announcement and withdrawal of the report was aimed at ensuring that no court or parties to lawsuits could cite Bush Administration policy as the current government’s official view in any pending cases.
The main basis for this shift in policy is to meet the challenges of the financial crisis, which has provided increased opportunity to engage in predatory behaviour to the detriment of consumer welfare. In regard to its new enforcement policy, the DOJ has announced its intention to rigorously pursue large technology firms, energy companies, healthcare firms, pharmaceutical industries and banks as well as to closely monitor mergers deals where companies acquire suppliers as well as competitors.
