EU Regulator Awaits Google Concessions on Charges of Market Abuse
Google has not addressed concerns from EU regulators regarding the company’s alleged abuse of its market dominance. Joaquin Almunia, EU Competition Commissioner, reached out to Google three weeks ago with a chance to settle the EU’s 18-month probe but the company has yet to respond. If Google does not formally offer concessions, it could face formal charges and face a fine that could be as high as ten percent of the company’s global turnover. Almunia believes the investigation indicates Google may have promoted its own search services over those of rivals and that the company’s advertising deals with websites could have blocked its competition and restricted advertisers from moving their campaigns to other search engines. In a statement released shortly after the commissioner’s comments, Google executive chairman Eric Schmidt said, “We disagree that we are in violation, until they are more precise on what area of the law we are in violation of. Give us the precise data, the precise problem.” The EU commission launched the investigation in November 2010 after Google’s rivals accused the company of manipulating search results to promote their own services over others. To date the commission has received 16 complaints.
New York Times: Google Keeps EU Regulator Waiting on Concessions (7 June 2012)
US FTC Settles Competition Lawsuit With Finishing Equipment Company
The United States (US) Federal Trade Commission (FTC) has announced that it has settled with Graco Inc, requiring it “to sell the worldwide liquid finishing business of Illinois Tool Works Inc. and ITW Finishing LLC under a proposed order, as part of a settlement resolving charges that its $650 million acquisition of several ITW businesses would have been anticompetitive and led to higher prices and reduced innovation for the North American manufacturers who rely on this equipment”. According to the FTC, the acquisition by Graco of the businesses would have eliminated its biggest source of competition and would have led to a monopoly by Graco of industrial liquid finishing equipment. The FTC also challenged the proposed acquisition on the basis that “competition lost by the acquisition could not be easily replaced, as smaller liquid finishing equipment manufacturers lack the distribution and brand acceptance to compete with a combined Graco/ITW”. The proposed order requires Graco to sell former ITW liquid finishing equipment businesses and assets worldwide, as well as related business activities, to an FTC-approved buyer within 180 days of the final order.
FTC’s media release (31 May 2012)
Companies Settle FTC Anti-competitive Conduct and Misleading Advertising Charges
The United States (US) Federal Trade Commission (FTC) has announced that it “has approved a final order settling charges that Star Pipe Products, Ltd [Star] engaged in illegal anticompetitive practices to protect its share of the market for ductile iron pipe fittings used in municipal water systems nationwide”. Star has agreed to discontinue such conduct in the future.
In related news, the FTC has announced that it has approved final orders settling charges that Billion Auto, Inc, Frank Myers AutoMaxx, LLC, Key Hyundai, LLC, Hyundai of Milford LLC, and Ramey Motors, Inc “made deceptive claims that they would pay off the remaining balance on consumers’ trade-ins, no matter what they owed”. In fact, these companies “actually rolled the negative equity on the trade-ins into customers’ new car loans”.
FTC’s media release (11 May 2012)
Canadian Regulator Fines Car Part Maker CA$1.5 Million for Price-fixing
The Canadian Competition Bureau (CCB) has announced that North American car parts manufacturer Maxzone Auto Parts Corp. (Maxzone Canada) has pleaded guilty to being part of an international price-fixing cartel “involving the sale of aftermarket replacement automotive lights”, for which the CCB fined it CA$1.5 million. The price-fixing agreement took place in Canada between January 2004 and September 2008.
CCB’s media release (4 May 2012)
UK Airline to Pay £58.5 Million Fine Over Anti-competitive Practices
The United Kingdom (UK) Office of Fair Trading (OFT) has announced that it has imposed a £58.5 million fine on British Airways (BA) for its role in the price-fixing scheme between it and Virgin Atlantic Airways (VAA). VAA escaped a fine as it informed the OFT of the scheme and therefore was protected under the OFT’s leniency policy. According to the OFT, “between August 2004 and January 2006, BA and VAA co-ordinated their surcharge pricing on long-haul flights to and from the UK through the exchange of pricing and other commercially sensitive information”. The fine is less than half of what BA originally resolved to pay in August 2007, which was £121.5 million. The OFT stated that the fine was reassessed due to a number of factors which “included legal developments regarding penalty setting for competition law infringements and the fact that the overall value added to the OFT’s investigation by BA’s co-operation was greater than had been anticipated at the time of the original agreement”.
OFT’s media release (19 April 2012)
Related news item:
Bloomberg: British Airways Fuel-Price Fix Fine Cut to 58.5 Million Pounds (19 April 2012)
(Source: OFT; Bloomberg)