Antitrust Update for In-House Counsel

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Antitrust Update for In-House Counsel

• 2006 - The Year in Review
• John CliffordMartin LowOmar Wakil

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Outline

• Cartels Martin Low
• Mergers Omar Wakil
• Monopolization / Dominance John Clifford

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Cartels
4
Year in ReviewCartel Enforcement

• Policy Development
• Notable Enforcement Activities
• Private Litigation

5
Cartel Policy DevelopmentCanada

• Immunity Program
• FAQs (Fall, 2005)
• Consultation Document 2006
• Immunity Bulletin Revisions March 2007?

6
Cartel Policy DevelopmentCanada

• 2. S.45 Review
• External consultees on s.45 amendments
• Policy objective appears to be
• Per se offence
• Higher maximum fines
• Facilitate burden of proof
• Prospects of substantive change prior to election?

7
Cartel Policy DevelopmentEU

• Fines Notice Revision
• Leniency Notice Revision 2 Stages
• Oral Procedure threshold evidentiary burdens
  clarified/intensified
• Marker Procedure sparingly used/diminished
  convergence
• ECN one-stop shop very limited step
• Pending Initiatives
• Settlement Procedures (plea bargaining?)
• Private remedies for cartel victims

8
Notable Enforcement ActivitiesCanada

• Home Grown Conspiracies Priority
• St. Johns Taxi Prosecution
• LED Traffic Lights Charges laid
• Quebec Travel Agents Group Boycott
• Carbonless Paper 100 of V.O.C. maximum fines
  imposed
• Wind-Up
• Sothebys Settlement
• Huge W.I.P. build up
• DRAM
• Air Cargo
• LCD Flat Screens
• Rubber Chemicals
• Hydrogen Peroxide/Perborates
• Copper fittings

9
Notable Enforcement Measures EU

• Synthetic Rubber
• 519M 2nd highest fines
• Deterrent penalty for recidivists
• 4 years of investigation

10
Notable Enforcement MeasuresEU

• Penalty Calculation
• - Continuing CFI setbacks on fines
• CFI reduces Vitamins fines on BASF and Daiichi
  Commission errors of proof of leadership and
  assessment of cooperation
• - ECJ ADM
• Commission need not consider fines imposed by
  other jurisdictions
• Proceedings elsewhere are not double punishment.

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Cartel Policy DevelopmentU.S.

• Revised Principles of Federal Prosecution of
  Business Organization aka The Thompson
  Memorandum
• Cooperation required
• waiver of privilege/work product protection
• withholding payment of legal fees from corporate
  employees, officers, directors
• A significant climb down
• Important in white collar context, but the
  Antitrust Division did not conform to the
  Thompson Memorandum in any event

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Notable Enforcement Activities U.S.

• Outputs
• 2nd best year ever
• 473M in fines
• 5383 jail days
• 33 cases filed
• Most fines are the result of DRAM settlements
• Stolt Nielsen indicted after failing to set
  aside the revocation decision. Revocation will
  almost certainly be tested at trial. Concerns
  remain.
• Insistence on Principle
• ABA fined 185K for breach of consent decree on
  law school accreditation
• Rolex penalized 750K for breach of 1960
  consent decree. Department than asks for
  termination of the decree due to structural
  change over 45 years

13
Private LitigationCanada/U.S.

• DRAM
• Parallel litigation in U.S. and Canada
• Certification of U.S. direct purchasers case
• Indirect purchasers certification pending
• First litigated certification motion in combined
  Direct/Indirect class action in Canada
• Watch this Space

14
Private LitigationU.S.

• Twombly
• A key pleading/procedure issue.
• Is it enough for a plaintiff to allege facts
  consistent with conscious parallelism?
• Or must there be a plus factor to survive a
  motion to dismiss.
• The Supreme Courts answer might restore some
  balance to the burdens imposed on corporate
  defendants.

15
Private LitigationEU

• Courage v. Creghan ECJ decides that States
  Members may (should?) establish judicial
  authority and procedure to provide redress for
  victims of anti-competitive conduct
• Commission increasingly committed to authorizing
  private redress N Kroes speeches

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Mergers
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Merger developments

• US enforcement policy post-Oracle
• Emerging protectionism?
• A hands-off approach to international mergers in
  Canada
• International process reform

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Has the Antitrust Division Lost Its Nerve?

• Whirlpool/Maytag cleared with 70 shares but
• Neutral or positive customer reactions
• Rapidly changing marketplace
• Effective competition (imports)
• Efficiencies (in US, not Canada)

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National security, or national champion?

• Multi-jurisdictional deals gave rise to
  foreign-investment concerns
• US Dubai Ports/PO
• Europe Arcelor/Mittal others
• Canada Inco/Falconbridge/Xstrata
• Changes to the Investment Canada Act

20
North of the border

• Canada formalised a hands-off approach to
  remedies international mergers
• Remedies Bulletin (limited circumstances)
• GE/Instrumentarium PG/Gillette and Boston
  Scientific/Guidant
• No remedy does not mean no review

21
ICN, AMC and merger streamlining

• ICN worked towards implementation of its RPs
• Private sector support
• AMC issued Tentative Recommendations
• US process reform
• International convergence
• FTC and DOJ second request process initiatives
• Annual US threshold increase (59.8 million)

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Monopolization / Dominance
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Contextual Framework

• Monopolization/dominance laws least convergent
  of three pillars of antitrust
• Economics remain in flux
• Laws influenced by local factors/context
• jurisdictional spillover rare
• Courts play significant interpretive role
• Agencies have substantial discretion
• Remedies vary greatly

24
US Notable Developments

• Cases
• Rambus standard setting activities
• Weyerhaeuser predatory bidding/purchasing
• Schor/Abbott monopoly leveraging
• Policy Developments
• DOJ/FTC hearings into single-firm conduct
• Antitrust Modernization Commission

25
Canada Notable Developments

• Cases
• Canada Pipe protection of competition and
  competitors
• Policy Developments
• Enforcement Guidelines specific to telecom
  industries
• Fines/penalties potential remedy

26
EU Notable Developments

• Cases
• Microsoft - the EU battle continues
• Apple - concerns at national level
• Policy Developments
• Article 82 reform consultation
• Discussion Paper (December 2005)
• Hearings (2006)
• Outcome (2007)

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John F. Clifford

• John is a partner in the Competition Law and
  Corporate Transaction Groups at McMillan Binch
  Mendelsohn. He has advised clients on the
  Competition Act implications of hundreds of
  merger transactions and regularly assists clients
  to respond to Competition Bureau investigations
  into matters such as alleged unlawful
  conspiracies and abuse of dominance. He also
  regularly provides advice on strategic alliances
  and other joint ventures, grey marketing, pricing
  and distribution practices, advertising issues
  and compliance programs.
• Johns corporate/commercial experience is
  diverse. He has extensive experience on domestic
  and cross-border negotiated acquisition and
  divestiture transactions (on both the buy and
  sell side), debt financings and corporate
  re-organizations. He also works closely with
  in-house counsel and senior executives to provide
  advice and guidance on the management of legal
  issues that arise as part of the day-to-day
  operation of business, including
  review/preparation of contracts, corporate
  governance, privacy and legal compliance,
  responding to litigation threats, contract
  terminations and employment issues

[phone]john.clifford_at_mcmbm.com
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D. Martin Low, QC

• Martin Low is a partner in the Competition Group
  of McMillan Binch Mendelsohn. His practice
  includes the full range of competition and
  Canadian business regulation, litigation and
  advisory work, with a particular focus on
  Canadian and international cartel, merger,
  marketing and distribution and abuse of dominance
  matters.
• Prior to joining McMillan Binch Mendelsohn,
  Martin held senior management positions in the
  Canadian Department of Justice and conducted
  numerous cases in the Supreme Court of Canada and
  other appellate Courts. His practice with the
  Department concentrated on constitutional legal
  advice, litigation, and competition and
  international trade law.

[phone]martin.low_at_mcmbm.com
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Omar Wakil

• Omar Wakil is a partner in the Competition and
  Foreign Investment Groups of McMillan Binch
  Mendelsohn. He advises domestic and international
  clients on all aspects of antitrust law,
  including merger transactions, cartel and
  monopolization cases, and other pricing and
  distribution matters. As part of his practice he
  also coordinates worldwide antitrust and foreign
  investment clearances on multi-jurisdictional
  transactions. In 2003/4 he was seconded to the
  Brussels office of an international law firm,
  where he worked on the European Microsoft case.

[phone]omar.wakil_at_mcmbm.com
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