Apple along with CBS Corp.’s Simon & Schuster, News Corp.’s HarperCollins, Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan unit and Lagardere SCA (MMB)’s Hachette Livre have offered to change their pricing models for e-books to alleviate the concerns of the European Union (EU) that the group blocked competition. Under their proposal, the publishers would not limit retailers’ discounts or promotions for two years so long as the total value of a retailer’s discount does not exceed the commission it received from the publishers over a 12 month period. The four publishers will also terminate any restrictive agency deals they have with retailers. Apple has also promised to end its agency agreements with the four publishers and Pearson Plc’s Penguin (Penguin). Penguin continues to be under investigation by the EU and has not offered to settle. The EU has asked competitors and customers to comment on the offer by October 19th. If the EU accepts the proposal, it would end its investigation of the group without imposing fines or finding that the companies violated the competition laws. Earlier this year, the U.S. Department of Justice (DOJ) sued Apple, Macmillan and Penguin for colluding to fix e-book prices; Simon & Shuster, HarperCollins and Hachette reached settlements with the DOJ.
Businessweek: Apple, Four Publishers Bid to End EU Price-Fixing Probe (19 September 2012)
(Source: Bloomberg Businessweek)
The United States (US) Department of Justice (DoJ) has announced that Luther Burbank Savings has agreed to settle allegations of lending discrimination. Between 2006 - 2011, the bank enforced a US$400,000 minimum loan amount policy for its wholesale single-family residential mortgage loan program, which, according to the DoJ, "had a disparate impact on the basis of race and national origin". The bank allegedly offered few single-family residential mortgage loans to African-American or Hispanic borrowers, compared to 31.8% of such loans made to African-American and Hispanic borrowers by other lending institutions.
The New Zealand Commerce Commission (NZCC) has announced that it has reached a settlement with insurance provider IAG New Zealand Limited (IAG), who has agreed to settle charges that it breached the Fair Trading Act. In August 2011, IAG discovered that it had miscalculated claims in relation to the Canterbury earthquake claims of 643 previously paid out total loss insurance claims, which would also affect the renewal of 150,755 current policies.
The United Kingdom Financial Services Authority (FSA) has made available How Conduct regulation will be changing and how the new regulator will seek to get a fair deal for consumers (18 September 2012), a speech delivered by FSA managing director Martin Wheatley at the ABI conference A way ahead for conduct regulation.
The Australian Securities and Investments Commission (ASIC) has announced that it has a reached a settlement with Commonwealth Bank of Australia (CBA) for it to make available up to A$136 million, on top of A$132 million already paid, as compensation for losses suffered on investments made through Storm Financial Limited (now in liquidation), in which it held a 30% stake. The settlement resolves legal action brought by ASIC against CBA in relation to an unregistered managed investment scheme.
ASIC's media release (14 September 2012)
The Australian Competition and Consumer Commission (ACCC) has announced that the Full Federal Court has dismissed appeals by premium mobile service providers Global One Mobile Entertainment Ltd and 6G Pty Ltd, against an earlier court decision that certain advertisements about continuing premium rate mobile phone subscriptions were misleading or likely to mislead consumers. According to the ACCC, both companies represented, through advertisements, that a consumer could purchase mobile premium services including ring tones, games and quizzes at a one-off cost when in fact the consumer was actually requesting access to a continuing premium rate mobile subscription.
ACCC's media release (17 September 2012)
The United States (US) Department of Justice (DoJ) has announced that pesticides producer The Scotts Miracle-Gro Company (Scotts) has been ordered to pay a US$4 million fine, and perform community service, for violating the Federal Insecticide, Fungicide and Rodenticide Act. The company pleaded guilty in February 2012 to "illegally applying insecticides to its wild bird food products that are toxic to birds, falsifying pesticide registration documents, distributing pesticides with misleading and unapproved labels and distributing unregistered pesticides". Scotts agreed to pay more than US$6 million in penalties and spend US$2 million on environmental projects in relation to other civil pesticide violations as per a US Environmental Protection Authority settlement (EPA), which included distributing or selling unregistered, cancelled or misbranded pesticides.
The company also admitted to:
- "submitting false documents to [the EPA] and to state regulatory agencies in an effort to deceive them into believing that numerous pesticides were registered with [the EPA] when in fact they were not"; and
- "having illegally sold the unregistered pesticides and to marketing pesticides bearing labels containing false and misleading claims not approved" by the EPA.
DoJ's media release (7 September 2012)
The New Zealand Commerce Commission (NZCC) has announced that the Auckland District Court has imposed a fine of NZ$960,000 on Vodafone New Zealand Limited (Vodafone) for contravening the Fair Trading Act (FTA), bringing the total fine to $NZ1.6 million, which includes the fines imposed in 2011 for six other FTA charges. The latest rulings are in relation to advertising campaigns run by Vodafone from October 2006 - February 2009 for various broadband and mobile phone promotions. Justice Harvey described the company's conduct as "gross carelessness".
NZCC's media release (10 September 2012)
The New Zealand Commerce Commission (NZCC) has announced that it has warned kiwifruit pollen supplier Kiwi Pollen (NZ) Limited for potentially misleading its customers about the source of its pollen, in breach of the Fair Trading Act. In September and October 2010, Kiwi Pollen sold pollen imported from Chile, while at the same time representing to its customers that all of its kiwifruit pollen was sourced from New Zealand. Although most of its product was sourced from New Zealand during that time, it did not tell its customers when it was also selling them imported pollen. The company's labels, which read "Kiwi Pollen New Zealand", "reinforced the impression that the pollen was from New Zealand, particularly where there were no clear qualifications on its packaging, advertising material or website that some of its pollen was imported".
NZCC's media release (11 September 2012)
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