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Kyriakos Fountoukakos, Partner, Herbert Smith Freehills, Brussels Sydney, 28 April 2015 CHALLENGES IN DESIGNING AND IMPLEMENTING CROSS- BORDER REMEDIES:

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Presentation on theme: "Kyriakos Fountoukakos, Partner, Herbert Smith Freehills, Brussels Sydney, 28 April 2015 CHALLENGES IN DESIGNING AND IMPLEMENTING CROSS- BORDER REMEDIES:"— Presentation transcript:

1 Kyriakos Fountoukakos, Partner, Herbert Smith Freehills, Brussels Sydney, 28 April 2015 CHALLENGES IN DESIGNING AND IMPLEMENTING CROSS- BORDER REMEDIES: LESSONS LEARNED ICN ANNUAL CONFERENCE BREAK-OUT SESSION ON MERGER REMEDIES

2 2 GLOBAL PROLIFERATION OF MERGER CONTROL REGIMES The last decade has seen a worldwide “boom” in the adoption of (largely mandatory and suspensory) merger control regimes < Albania Egypt Jordan Morocco Namibia Ukraine Vietnam * Significant changes to existing law rather than introduction of merger control regime 2006 Russia* 2007 Gambia Pakistan Singapore Uruguay 2008 China Saudi Arabia Qatar Colombia* Indonesia Kuwait Mauritius 2011 India Kenya 2012 Brazil* Bangladesh Ecuador COMESA Georgia Paraguay UAE COUNTRIES WITH MERGER CONTROL REGIMES

3 3 COMPETITION AUTHORITIES COOPERATE The EU has 10 competition cooperation agreements in place 60% of complex EU merger cases required close cooperation, including on remedies (Margrethe Vestager) EU-Canada (1999) EU-Bosnia H. (2008) EU-Switzerland (2014) EU-USA (1995,1998 & 2011) EU-Brazil (2009) EU-Russia (2011) EU-China (2012) EU-Japan (2003) EU-India (2013) EU-Korea (2009)

4 4 ISSUES IN DESIGNING INTERNATIONAL MERGER REMEDIES Time is of the essence – But merger control review process may be at very different stages in each relevant jurisdiction Need to coordinate, but may prove difficult in practice Practical to have one remedies template for all jurisdictions – Tempting to opt for the lowest thresholds – Does it work in practice? International remedies and local remedies – Risk of conflict

5 5 INTERNATIONAL MERGER REMEDIES: PRACTICAL EXAMPLES Panasonic/Sanyo (2009) – Competition concerns on the markets for different types of batteries – Different remedies required by the JFTC, the EU Commission, the FTC and MOFCOM JFTC: divestiture of Sanyo’s manufacturing facilities in Japan to a third party battery manufacturer FTC: upfront buyer for Sanyo’s portable rechargeable NiMH business. Main asset was a plant in Japan EU Commission and MOFCOM: either Panasonic or Sanyo divests one of its relevant businesses. Assets were in China and Japan – Divestitures required outside the authorities’ respective jurisdictions – Despite cooperation, each authority followed its own approach – Timing: decisions issued close to one another (between September and November 2009)

6 6 INTERNATIONAL MERGER REMEDIES: PRACTICAL EXAMPLES Microsoft/Nokia (2013/2014) – Reviewed in 16 jurisdictions – Concern raised by competitors and licensees regarding the conduct of the entity post-transaction as Nokia would retain ownership of its patents (including SEPs) – Cleared unconditionally in the EU (concern remedies would be outside the scope of the EUMR), the US and in 13 other jurisdictions – MOFCOM opened a Phase II investigation and imposed behavioural remedies Both Microsoft and Nokia made commitments regarding their SEPs and non-SEPs Aim: prevent Nokia from using its patents against Chinese smartphone manufacturers – Significant impact on timing: MOFCOM’s Phase II review lasted 7 months Transaction prevented from closing internationally despite clearance in 15 jurisdictions

7 7 INTERNATIONAL MERGER REMEDIES: PRACTICAL EXAMPLES Oracle/Sun Microsystems (January 2010) v Cisco/Tandberg (April 2010) – Oracle/Sun Microsystems: Transaction cleared unconditionally by the DoJ EU Commission opened a Phase II investigation. No formal remedies but “pledges” were taken into account Independence of approach followed by the EU Commission, criticised by the DoJ – Cisco/Tandberg: EU clearance conditional on the divestiture by Cisco of a protocol for its video call solutions Aim: ensure interoperability with competitors’ products US unconditional clearance, inter alia thanks to the remedy imposed by the EU Commission – Cisco/Tandberg described as “model international cooperation” by the DoJ

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