Cartel Digest


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Bayer/Monsanto: European Commission Continues Its Trend of More Aggressive Divestments to Address Innovation Concerns

The European Commission has routinely considered potential harm to innovation as part of its merger assessments, particularly in R&D driven sectors such as pharmaceuticals and technology. In recent years, however, the Commission’s traditional innovation concerns have developed into broader, more far-reaching concerns, requiring divestments of assets and R&D related to early stage pipeline products as well as of entire R&D capabilities. Such an approach has been applied most recently in the Commission’s conditional approval of Bayer/Monsanto.

The Future of Libor: Implications for the Loan Market

The London Interbank Offered Rate (ICE LIBOR, often referred to colloquially as Libor) is an important interest rate benchmark. It is currently set with reference to the rate at which certain large and financially sound Libor “panel” banks indicate that they can borrow short-term wholesale funds from one another on an unsecured basis in the interbank market. The benchmark is now administered by ICE Benchmark Administration Limited (IBA)[1], which is a regulated benchmark administrator, based in the U.K. Libor was previously administered by the British Bankers’ Association. Various scandals concerning alleged manipulation of the benchmark led to regulation of the activity of its administration and to IBA, an independent subsidiary of Intercontinental Exchange, Inc. (ICE) (a global operator of exchanges and clearing houses and a global data and listings provider) taking on the administrator role.

FTC Increases HSR Thresholds for 2018

On January 26, 2018, the U.S. Federal Trade Commission (FTC) announced the annual changes to the thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). The new size of transaction threshold is $84.4 million.  This change and the other related increases are expected to go into effect in late February/early March 2018, 30 days after publication in the Federal Register, and will apply to all transactions closing on or after the effective date.

Gabriella Griggs Co-Authors Article on Cross-Border Access to Pay-TV

Associate Gabriella Griggs (London-Antitrust) has co-authored an article titled “Case AT.40023 Cross-Border Access to Pay-TV: Paramount's Commitments—The Bigger Picture” that was published in the Journal of European Competition Law & Practice (Jeclap) (November 2017).

Coty Case: Luxury Brands Can Restrict Online Sale via Marketplaces Such as Amazon

On December 6, 2017, the European Court of Justice (“the Court”) handed down its preliminary ruling in the Coty case confirming that a manufacturer operating a selective distribution system of luxury goods is allowed to prohibit online sales via third-party platforms such as Amazon under certain conditions. The judgment was delivered in the context of a dispute between Coty Germany GmbH, a supplier of luxury cosmetics established in Germany, and Parfümerie Akzente GmbH, an authorized distributor of those goods, concerning the prohibition, under a selective distribution contract between Coty Germany and its authorized distributors, of the use by the latter, in a discernible manner, of third-party undertakings for internet sales of the contract goods. Coty brought an action before the German courts, which on appeal referred the question to the Court.

Icap v. Commission: General Court Upholds Cartel Liability of Facilitators, but Attempts to Rein in Commission’s Approach in Settlements

On 10 November 2017, the European Union General Court (GC) handed down its judgment in Icap v Commission. The judgment serves as a reminder of the Commission’s ability to impose liability for cartel infringements on “facilitators” as well as on the cartel’s main participants, but equally draws the Commission’s attention to its procedural obligations when it comes to settlement procedures, particularly in hybrid cases. The judgment also restates case law on the establishment of a “by object” infringement of Article 101(1) Treaty on the Functioning of the European Union (TFEU).

Shearman & Sterling Lawyers Author Chapters for International Comparative Legal Guide to: Cartels & Leniency 2018

Partners Matthew Readings (London-Antitrust), Geert Goeteyn (Brussels-Antitrust) and Elvira Aliende (Brussels-Antitrust); counsel Paolisa Nebbia (Rome/Brussels-Antitrust) and Mathias Stöcker (Frankfurt-Antitrust); and associate Shirin Lim (London-Antitrust) have authored various chapters of the International Comparative Legal Guide to: Cartels & Leniency 2018.

The FTC’s Challenge of Red Ventures–Bankrate: Antitrust Risks in Deals Backed by Private Equity Minority Shareholders

On November 3, 2017, the Federal Trade Commission filed a complaint challenging Red Ventures’ proposed acquisition of Bankrate. The FTC alleged that the deal likely would have lessened competition in the market for third-party paid referral services for senior living facilities—even though Red Ventures was not itself present in that market—since two of Red Ventures’ large private equity shareholders jointly own the closest competitor to Bankrate’s To remedy the FTC’s concerns, Red Ventures agreed to divest This is a cautionary reminder that (1) private-equity-backed merging parties must consider the portfolio companies of their shareholders when assessing the antitrust risks of a merger, and (2) the U.S. antitrust agencies can and will examine competition concerns stemming from minority shareholdings.

Paolisa Nebbia Authors Article on How Changes in Internet Consumption Habits Shape EU Policies

Counsel Paolisa Nebbia (Rome/Milan/Brussels-Antitrust) discusses in The In-House Lawyer how legislative initiative and enforcement action by the European Commission, aimed to widen online access to content “anywhere” within the EU, may only partially level the conditions for consumer access, opening different opportunities for, or imposing different obligations on, the market players depending on the technology and the service. Touching upon the recently adopted Portability Regulation and current proposal for a Copyright Regulation as well as the pay-TV case, Paolisa notes the interaction generates great complexity for licensing parties, which will only ease with the adoption of a final decision in the case. Licensing practices in the EU are likely to change dramatically in the next few years.

New Transaction Value-Based Merger Reporting Threshold in Germany: Much Ado About Little?

Germany this summer introduced a new transaction value-based set of reporting thresholds. Austria introduced a similar provision which will enter into force on November 1. On the European level, the Commission is contemplating to introduce a transaction value-based reporting threshold as well. The new German thresholds are subsidiary to the primary purely turnover based thresholds, i.e., they become relevant if the primary thresholds are not met. First experiences with the new thresholds unsurprisingly show that the criterion of the target being active in Germany “at a significant scale” raises questions in practical application since the text of the law does not give any guidance. Moreover, there is no consensus among commentators how to interpret the new criterion, and there is so far no guidance from the Federal Cartel Office available.

Antitrust Team Co-Authors Cartels Chapter for Antitrust Review of the Americas 2018

Members of Shearman & Sterling’s Antitrust team co-authored a chapter titled “United States: Cartels” for Global Competition Review’s Antitrust Review of the Americas 2018. The chapter reviews enforcement data, recent policy developments and recent case developments. The authors included partners John Cove (San Francisco-Antitrust), Jessica Delbaum (New York-Antitrust), David Higbee and Djordje Petkoski (both Washington, DC-Antitrust); and associate Aleksandra Petkovic (New York-Antitrust).

Ikeda’s Interview in Yomiuri Shimbun on Japanese Companies’ Compliance System

Partner Masahisa Ikeda’s (Tokyo-Capital Markets) interview on Japanese companies’ compliance system was included in the Yomiuri Shimbun article titled “Antitrust Law in Transition” dated September 25, 2017. The article discusses the difference between the U.S./Europe and Japan regarding the adoption of antitrust law, as well as Japanese companies’ current status on compliance.

Ikeda’s Comments in Yomiuri Shimbun on Japanese Companies’ Cartel Activities

Partner Masahisa Ikeda’s (Tokyo-Capital Markets) interview on U.S. antitrust law concerning Japanese companies’ business customs was included in the Yomiuri Shimbun article titled “Antitrust Law in Transition” dated September 14, 2017. The article discusses U.S./Europe authorities’ investigation of Japanese companies’ cartel activities. 

Italy Aims to Change Merger Notification Thresholds

After 894 days of discussion, the Italian Parliament has approved, on 2 August 2017, what should be the “annual” competition act — a series of measures that should be adopted on a yearly basis to promote competition.