Selected Global Antitrust and Competition Law Developments
— U.S. Antitrust Authorities Sign Memorandum of Understanding with Chinese Antitrust Agencies
The Department of Justice and the Federal Trade Commission announced that they have entered into a memorandum of understanding (MOU) with China’s three antitrust agencies that is intended to “promote communication and cooperation among the agencies in the two countries.” According to the MOU, the agencies will share information regarding competition law and policy, cooperate with respect to agency training programs, share comments on proposed laws and regulations, and, when appropriate, cooperate on specific investigations.
— Dominance of “Big Four” Accounting Firms to be Investigated by U.K. Competition Commission
The U.K. Office of Fair Trading (OFT) announced that it “has provisionally decided to refer the market for statutory audit services to large companies in the UK to the Competition Commission for a market investigation.” The OFT has expressed concern that the market is dominated by the “Big Four” accounting firms (PricewaterhouseCoopers, KPMG, Deloitte and Ernst & Young), that smaller firms face substantial barriers to entry, and that customer switching costs are high. The OFT will make a final decision about whether to refer the matter to the Competition Commission after a six-week consultation period during which interested parties may submit comments for consideration.
— U.K. Competition Appeal Tribunal Confirms that OFT Investigation of Ryanair-Aer Lingus Transaction is Timely
The U.K. Competition Appeal Tribunal (the Tribunal) held that the Office of Fair Trading (OFT) was not time-barred from considering referring to the Competition Commission Ryanair Holdings plc’s 2006 acquisition of a minority stake in Aer Lingus Group plc. Shortly after Ryanair acquired its minority stake in Aer Lingus, it launched a bid to acquire Aer Lingus in full. The European Commission blocked the merger but held that it did not have the authority to require Ryanair to divest its minority stake. Ryanair appealed the decision blocking the full acquisition and Aer Lingus appealed the decision not to require divestiture of the minority stake. The appeals were rejected and the deadline for further appeal expired in September 2010.
In October 2010, the OFT launched an investigation into the minority acquisition. Ryanair challenged the investigation, arguing that the OFT’s investigation was untimely because the OFT is required to investigate and decide whether to refer any acquisition within four months of the transaction date. The Tribunal disagreed, explaining that a reference to the Competition Commission could not have been made until after resolution of the EU proceedings, as the OFT has a duty of “sincere cooperation” with the European Union and must avoid the risk of “impermissible conflicts” between EU and U.K. merger decisions. Accordingly, the Tribunal held that the time period for the OFT to investigate and, if appropriate, refer the minority acquisition in this case was tolled during the pendency of the EU proceedings.
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