Dutch suit against “paraffin mafia” cartel moves forward

Posted on by andreasstargard

south_africa

A Dutch district court has set what some believe may be a new landmark precedent in the area of private cartel enforcement in the European Union, including against South African company Sasol.

The case is what appears to be a fairly straight-forward “follow-on” civil action, i.e., a complaint brought in civil court by injured parties (or those who acquired those parties’ rights to sue) that is based entirely on a European Union Commission decision condemning illegal cartel activity within the common EU market.

My neighbors on the Avenue Louise here in Brussels, CDC (Cartel Damages Claims), had bought the rights to sue from various purchasers of paraffin wax and lodged the complaint against the “paraffin mafia” (Shell’s words, quoted by Neelie Kroes – also see here) in September 2011. The 13-year cartel (1992-2005)** may well result in sizeable civil damage awards (Sasol’s reduced EC fine alone was 318 million €) once the procedural and jurisdictional hurdles have been cleared. And this most recent ruling goes a long way in doing so. The key “procedural issues” that had to be resolved first were whether all of the cartel members could be sued in the Netherlands, even though not all of them operated in that country, and whether the pending EU court appeals against the 2008 Commission decision effectively stayed the parallel civil proceedings in the Dutch court.

The court ruled in favour of the plaintiff group on both accounts, holding that all cartelists could be sued together for damages in the jurisdiction in which any one of their fellow co-conspirators has its seat [here, that would notably be Royal Dutch Shell, ironically the cartel’s whistle-blower that escaped the EC ruling with a zero-€ fine] . That is, even though purported ring-leader Sasol or any of the other [non-Dutch] alleged cartelists may not have had any operations in the Netherlands, they can still be subject to a full-blown civil lawsuit there. In effect, the ruling says that the European Union’s antitrust decisions, combined with the civil protections afforded EU companies and citizens, creates a de facto long-arm statute, reaching beyond the traditional geographic jurisdictional boundaries.

In addition, it held that a pending appeal against an EC cartel decision should not result in an automatic stay of any civil proceedings, as this would unduly curtail the fundamental right to seek compensation of injured parties under EU law.

While I don’t read Dutch — and therefore cannot analyse the actual decision of the NL royal court — I trust that CDC summarised its findings accurately, even though the company clearly has a stake in this and thus a likely bias.

** According to Neelie Kroes’s speech, the cartelists initially met at the “Blue Salon” at a Hamburg hotel bar (my home town, coincidentally). I have a feeling it was this place — it’s always fun to visualise cartel activity in the flesh, just like “The Informant” did for moviegoers in 2009…:

Blauer Saal Kempinski Hamburg

Ugandan telecoms merger may test COMESA regime

Posted on by andreasstargard

COMESA old flag colorUganda

The announced merger between Warid Telecom and Airtel in Uganda (a COMESA member state) may become an interesting test case for the COMESA Competition Commission‘s merger-notification regime.  At least we here at AfricanAntitrust.com think so.

Not only does this deal present the opportunity for outsiders to watch whether, and if so, when the parties will notify the transaction to the CCC (the thresholds and conditions to notifiability are almost certainly met, given the pan-African activities of Bharti, Airtel’s Indian parent company) — it also may raise substantive concerns from a competition-law and merger-enforcement perspective, in light of the fact that the reported fusion of the #2 and #3 players in the Ugandan mobile telecoms market would result in a de facto 3-to-2 merger.

It will also show how the Ugandan authorities deal with COMESA’s claim to supranational jurisdiction over transactions such as this.  (Kenya had not taken well to it previously, as we reported on this blog…)  That said, aside from any NCA (since there is none in Uganda…), the Uganda Communications Commission (UCC) has already backed the deal as apparently pro-competitive, as The Independent reports. The reasoning there seems to be that a stronger #2 player will present more competitive challenges to the #1, which is MTN Uganda. Not necessarily orthodox antitrust doctrine, but it also comes from a non-competition body, so there…

Details of $2.9 billion bid-rigging come to light in South African parliament

Posted on by andreasstargard

south_africa

As SAcommercialPropNews reports, the South African Parliament heard testimony from the chairman of the Construction Industry Development Board (CIDB), Mr. Bafana Ndendwa, on the developments and results of the South African Competition Commission’s investigation into the building industry at large.

The investigation into the potential 26 billion Rand collusion had begun when building budgets related to the 2010 FIFA soccer world cup in South Africa were plagued with cost overruns.  Since then, it appears that well over 40 construction companies have been investigated by the Commission.  We had previously reported on antitrust settlements in the S.A. building industry here.

Even with some settlements underway, the building-industry antitrust saga appears far from over, though.  Creating a spectre of double jeopardy, Mr. Ndendwa stated that leniency from the Commission may not yield similar treatment by other investigating bodies.  The cited article also quotes members of the ‘Portfolio Committee’ of the Parliament as pressing for criminal charges to be filed.  This is an interesting development, as the South African competition law (as it is currently in effect) does not [yet] provide for criminal sanctions against individuals.  While the law had been amended to include such a provision, the amendments have not yet been ratified and put into effect.

South Africa: Telkom agrees to penalty

Posted on by oxenhamjmj

south_africa
South Africa’s incumbent telecommunications infrastructure provider, Telkom Limited, has agreed to pay R449 million ($49m) to the South African Competition Commission (the “Commission”) to settle allegations that Telkom had abused its dominant market position. The company statement can be found here.

In August 2012, the Competition Tribunal (the “Tribunal“) levied the R449 million fine against Telkom for abusing its dominant position between 1994 and 2004, after the Commission received complaints from, inter alia, the South African Value Added Networks Services.

Telkom subsequently appealed the Tribunal’s decision to the Competition Appeal Court (“CAC“) which the Commission followed with its own appeal to the CAC seeking to increase the fine to R3 billion ($327m). The settlement agreement will effectively result in the parties withdrawing their appeal and/or cross-appeal and cover their own costs. In terms of the agreement, Telkom will pay 50% of the fine within six months and the balance within 18 months.

What a Valentine’s Day Letter: Kenyan Authorities Question Effect of COMESA’s Regulations

Posted on by andreasstargard

COMESA old flag colorkenya

In an illuminating Valentine’s Day letter to the Head of the COMESA CCC, the Competition Authority of Kenya has stated its view that the CCC’s Competition Regulations may not have become effective yet, due to an allegedly improperly followed publication and public-comment procedure.

Very intriguing.  This provides a helpful factual and analytical backdrop to the other Kenya vs. COMESA-CCC stories we have reported elsewhere here and here.

S.A. mobile operator escapes antitrust investigation

Posted on by andreasstargard

south_africa

South African mobile phone and data provider Cell C has managed to avoid a potential Competition Commission investigation upon having changed its text-message (SMS) pricing scheme.  The industry group that was slated to bring a formal complaint, WASPA (no kidding, that’s their actual acronym), decided not to lodge the complaint in light of the less discriminatory pricing of Cell C’s bulk SMS rates.

Nigerian court rules petro deregulation unconstitutional

Posted on by andreasstargard

Nigeria

Nigeria’s High Court declared the government’s efforts to deregulate the nation’s petroleum industry unconstitutional and therefore illegal.  The government had previously attempted no longer to set the price of petroleum, and to let markets pricing prevail.

More on this case here, at African Manager.

Ironic? S.A. & Russia to “influence” platinum market “without cartel”

Posted on by andreasstargard

Russia south_africa

South Africa and Russia plan to “influence” global platinum market “without cartel” — [it escapes the author how this is possible].

Russia and South Africa, who together hold approximately 80% of worldwide platinum reserves, have signed a provisional agreement to co-ordinate efforts to control the global platinum market. Details of the plan emerged at the fifth summit of emerging economies of Brazil, Russia, India, China and South Africa (“BRICS”), held in Durban, South Africa last week.

South Africa is the world’s largest producer of platinum, controlling approximately 70% market share, whilst Russia is the world’s top palladium producer, accounting for approximately 40% of the palladium market; Russia notably also holds a further 10% of the platinum market. The two countries jointly possess almost complete market dominance over platinum. The only other significant reserve of platinum that has been extracted outside of Russia and South Africa is in Canada’s Yukon territory, accounting for approximately 3% of the worldwide reserves. In recent years, platinum producers have faced rising production costs and a drop in prices, due to poor demand for the metal.

Therefore, as Russian Natural Resources Minister Sergey Donskoy explained the purpose of the provisional agreement, “Our goal is to co-ordinate our actions accordingly to expand the markets. The price depends on the structure of the market, and we will form the structure of the market.”

South African Mining Minister Susan Shabangu confirmed the plan with Russia, saying: “We’re not really controlling the market” and “We want to contribute without creating a cartel, but we want to influence the markets.” The South African Department of Trade and Industry Director-General, Lionel October, said, in support of other comments by Shabangu that “We will give access to minerals and then incentivise companies to add value locally.”

Russia and South Africa’s plans may be derailed due to competition concerns, however.  For example, previous attempts at consolidation within the platinum industry have raised red antitrust flags and were ultimately abandoned. In 1996, Lonmin and Gencor lost an appeal against a European Commission decision blocking the planned merger of their South African platinum mines (Case No. IV/M.619, Commission decision of April 24, 1996). This was the first E.C. decision prohibiting a merger on collective dominance grounds. The Court of First Instance (now called the EU’s General Court) upheld the decision of the Commission, validating its concerns that the merger would result in collective global platinum market dominance (Case T-102/96).

New interim competition chief in Mauritius

Posted on by andreasstargard

mauritius

The Mauritian Competition Commission named Mrs. Kiran Meetarbhan as new officer-in-charge and its acting head in this 25. March press release.

The release provides:

The CCM today announces that after the departure of the former Executive Director, Dr. Sean F. Ennis, Mrs. Kiran N. Meetarbhan has been appointed as Officer – In – Charge of the Competition Commission, for the time being. Since the inception of the CCM, Mrs. Meetarbhan has been the Deputy Executive Director of the Commission and she has also cumulated the function
of Chief Legal Adviser.
 
Mrs. Meetarbhan has extensive experience in Competition Law and Policy and is recognized as an expert in competition law and Policy for small states, by the Small State Network for Economic Development (SSNED).  She has been involved in the drafting of several legislation including, the Competition Commission Rules of Procedure and the CCM Guidelines.
 
Mrs Meetarbhan is a Barrister at Law and holds a Master in Business Administration and qualification in Accounting from the London Chamber of Commerce.
 
She has been the Manager for Legal Affairs of the Mauritius Offshore Business Activities Authority (MOBAA) in 1997. In 2001, following the setting up of the Financial Services Commission, she continued her career as Executive – Legal until 2003 when she was appointed as Head of Surveillance for Insurance and Pensions. In 2007, after having spent one year at the State Law Office, she was appointed Adviser at the Ministry of Finance and Economic Development until 2009.
 
From October 2011 to April 2012, Mrs Meetarbhan has also worked as an 
International Fellow for the United States Federal Trade Commission.

SACC gets 2 new interim deputy commissioners

Posted on by andreasstargard

south_africa

According to a statement released by South African Economic Development minister Patel and other online sources (among them polity.org.za and AllAfrica) the South African Competition Commission has appointed two interim deputy commissioners to serve 6-month terms.

The South African Economic Development Department’s statement identifies the two new deputy commissioners as “advocate Oliver Josie and Trudi Makhaya“.

It is noteworthy that both are being recruited from the existing but recently dwindling ranks of the SACC.  We previously reported about one of Ms. Makhaya’s recent competition-focused articles here.

The official statement continues:

“The interim appointments will ensure an uninterrupted service by the Competition Commission, which has a critical role to play in advancing an inclusive economy, promoting competition, combating abuse of market power and supporting job creation and small business development”.