UK Announces Competition Regime Reforms
On March 15, 2012, the UK government announced its plan to merge the country's two competition authorities, the Competition Commission and the Office of Fair Trading, to create a single enforcement agency, the Competition and Markets Authority (CMA). Among other duties, the CMA will be responsible for merger review, market investigations and cartel enforcement. The plan also includes a proposal to lower the bar for criminal enforcement of cartel conduct by eliminating the dishonesty element of the cartel offense. Under the current standard, the government must show that the defendant knew or should have known that the conduct was illegal. Elimination of the dishonesty element is expected to increase cartel enforcement and enhance deterrence. The announcement follows an extensive consultation during which the UK government considered a number of options to modernize and streamline its competition regime.
Jury Convicts Company and Two Executives for Price-Fixing Conspiracy
On March 13, 2012, following an eight-week trial in United States v. AU Optronics Corp., a criminal jury found the company and two of its executives guilty of conspiring with other electronics manufacturers to fix the prices of thin-film transistor-liquid crystal display (TFT-LCD) panels, but acquitted two other executives and was unable to reach a verdict regarding another executive. This is the first time DOJ's Antitrust Division has convicted a foreign national at trial for a Sherman Act offense. The convicted executives face a maximum penalty of 10 years in prison and a $1 million fine. Because the Antitrust Division was able to prove beyond a reasonable doubt at trial that the combined gross gains derived from the conspiracy by all the cartel participants was at least $500 million, AU Optronics faces a maximum criminal fine of $1 billion. In addition, in the civil class actions brought by direct and indirect purchasers of TFT-LCD panels, the company could face treble damages of $1.5 billion. The company likely will appeal the verdict.
EU/UK Competition
On February 2, 2012, the EU's General Court - relying on the principle that a parent and subsidiary corporation are considered to be one entity when a parent corporation holds "decisive influence" over the subsidiary - confirmed that two parent companies in a 50/50 joint venture can be held liable for cartel activity carried out by the joint venture in the EU. Additional information is available in our February/March 2012 EU/UK Competition Law Newsletter.
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