CADE Rejects Cartel Settlement
Brazil’s Competition Authority, CADE, has been forced to decline a US$46.2mn settlement from orange juice producers, accused of price-fixing.
On November 22, 2006, under pressure from federal prosecutors, the Authority returned the case to the Justice Ministry, which will now continue investigating the file. Members of the alleged cartel – Cargill, Cutrale, Coinbra, Citrosuco, Citrovita and Montecitrus – denied any wrongdoing but offered to pay a settlement fee to end the dispute, after a judge removed a legal barrier to settlement negotiations between the companies and enforcement agencies.
The cartel members will continue to exert control over the orange industry if the investigation is closed and seized documents returned to the companies.
Brazil is the world’s largest producer of oranges. It supplies 79 percent of the orange juice consumed globally.
(Global Competition Review, 28.09.06)
UNITED STATES OF AMERICA
Mexico Adopts New Regulations to Implement the Law
Mexico’s Competition Law framework has undergone a process of adjustment that includes the issuance of new regulations to implement the law and amendments to the internal regulations of the Federal Competition Commission (FCC).
The amendments to the internal regulations came into effect on November 28, 2006. The main purpose of the amendments was to reorganise the Commission’s internal structure by creating, dividing and reorganising several general operational and administrative directorates.
The amendments also divided the role of the Investigations General Directorate, assigning the investigation of absolute and relative monopolistic practices to two separate bodies. These directorates were coordinated by the newly created Planning, Linkage and International Affairs Unit.
Competition Law into Effect in El Salvador
On January 01, 2006, the Competition Law came into force in El Salvador. The most significant feature of the Law was the creation of a new public entity – the Competition Superintendency – which manages its own resources and exercises independent legal authority.
The Superintendency’s main objective was to promote, protect and guarantee free competition by preventing and eliminating practices which limit or restrict competitive commercial activity or impede an economic agent’s access to the Salvadoran market. Its overall aim was to increase economic efficiency, consumer welfare and commercial stability.
The introduction and effective enforcement of the Law has improved commercial conditions in EI Salvador, by offering greater guarantees for foreign investors and ensuring the benefits of competition.
US Merger Filings Rise
The Federal Trade Commission (FTC) and the Department of Justice (DoJ) released the report showing the details of cases dealt with the 1,695 pre-merger filings received in fiscal year 2005, to Congress on September 08, 2006.
The Commission challenged 14 mergers leading to nine consent orders, four abandoned deals. Meanwhile, the department’s antitrust division challenged four mergers, three of which were resolved consent decrees, and one of which was restructured.
Figures show that merger filings increased by 14 percent since 2004, but that there were still only a third as many filings as there had been in 2000. This is largely due to changes in legislation that took place in 2001.
FTC takes Aim at Doctors
The US Federal Trade Commission (FTC) has accused two medical practice associations and 18 medical practices of price-fixing. This follows investigations in similar areas, such as dentistry.
According to the Commission, the associations and practices refused to deal with healthcare plans, except on collectively agreed terms. The cooperation did not lead to any discernible increase in efficiency.
The Commission filed a complaint and a consent order on August 24, 2006. The proposed consent order would prohibit any further collusion between the practices and their associations on the fees they demand from healthcare plan members. The order also bans the four doctors who orchestrated the price-fixing from negotiating contracts on behalf of any physician or medical practice for the next three years.