WT/WGTCP/W/228
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Appendix II.G: Documented cases of c ooperation in selected merger reviews
USA EC Australia Canada Mexico UK France Germany Italy
USA - 1, 2, 3, 4, 5, 6, 7, 10, 11,
12, 14, 15, 16, 17, 182, 3, 16 2, 3, 12 2 8, 9, 8, 9, 8, 9, 8, 9,
EC 1, 2, 3, 4, 5, 6, 7,
10, 11, 12, 14, 15,
16, 17, 18- 2, 3, 13, 16 2, 3, 12 2
Australia 2, 3, 16 2, 3, 13, 16 - 2, 3, 2,
Canada 2, 3, 12 2, 3, 12 2, 3, - 2,
Mexico 2, 2, 2, 2, -
UK 8, 9, - 8, 9, 8, 9, 8, 9,
France 8, 9, 8, 9, - 8, 9, 8, 9,
Germany 8, 9, 8, 9, 8, 9, - 8, 9,
Italy 8, 9, 8, 9, 8, 9, 8, 9, -
1. Shell & Montesdison 1994 2. Guiness & Grand Metropolitan 1997
3. DeBeers & Ashton Mining 4. Boeing & McDonnell Douglas 1997
5. Ciba Geigy & Sandoz 1997 6. WorldCom & MCI & Sprint 1998
7. ABB & Elsag-Bailey 1998 8. Federal-Mogul & TNT 1998
9. IMS-Health Inc & Pharmaceutical Marketing Services Inc 1999 10. MCI & WorldCom 1999
11. Air Liquide & BOC 1999 12. Dow Chemical & Union Carbide 1999
13. Metso & Svedala 2000 14. Boeing & Hughes 200015. Time Warner & EMI 2000 16. Alcoa & Reynolds 2000
17. AstraZeneca & Novartis 2000 18. General Electric & Honeywell 2001
Source: Jenny (2002).WT/WGTCP/W/228
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Appendix III.A: Cross-country indicators of competition in national markets and
of the perception of antitrust policy in 2001
Indicator and Question asked in survey for Global Competitiveness Report
2001-2002
Quality of Competition
in Transportation
SectorIntensity of Local
CompetitionEffectiveness of
Antitrust Policy
Non-OECD economy Is competition in your
country's transportation
sector sufficient to ensure
high quality, infrequent
interruptions and low
prices? (1=no, 7=yes,
equal to world's best)In most industries,
competition in the
local market is
(1=limited and price-
cutting is rare,
7=intense and market
leadership changes
over time)Anti-monopoly policy in
your country (1=is lax
and not effective at
promoting competition,
7=effectively promotes
competition)
Argentina 4.6 5.1 3.8
Bangladesh 3.0 4.5 2.9
Bolivia 2.8 4.0 2.8
Brazil 4.7 5.2 4.7
Bulgaria 3.4 4.1 3.3
Chile 5.1 5.9 5.1
China 3.6 5.5 3.7
Colombia 4.0 4.7 3.5
Costa Rica 3.5 5.2 3.7
Dominican Republic 3.9 5.0 3.4
Ecuador 2.7 3.9 2.5
Egypt 3.8 5.4 3.4
El Salvador 3.4 5.0 3.1
Guatemala 3.2 4.2 2.5
Honduras 2.5 3.4 2.1
Hong Kong, China 6.3 5.9 4.5
India 3.8 5.6 4.1
Indonesia 3.7 5.2 3.6
Israel 5.0 5.6 5.7
Jamaica 3.9 4.9 3.9
Jordan 4.9 4.7 3.8
Latvia 4.4 5.1 3.8
Lithuania 4.4 5.0 3.4
Malaysia 4.4 4.6 3.2
Mauritius 4.1 4.6 3.6
Nicaragua 2.1 4.2 3.0
Nigeria 3.1 5.2 3.0
Panama 3.1 5.0 4.0
Paraguay 2.7 3.4 3.1
Peru 3.7 5.2 3.8
Philippines 3.9 4.9 3.8
Romania 3.6 3.3 3.7
Russia 3.3 4.2 3.1
Singapore 5.9 5.4 5.1
Slovenia 4.7 5.0 4.2WT/WGTCP/W/228
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Indicator and Question asked in survey for Global Competitiveness Report
2001-2002
Quality of Competition
in Transportation
SectorIntensity of Local
CompetitionEffectiveness of
Antitrust Policy
Non-OECD economy Is competition in your
country's transportation
sector sufficient to ensure
high quality, infrequent
interruptions and low
prices? (1=no, 7=yes,
equal to world's best)In most industries,
competition in the
local market is
(1=limited and price-
cutting is rare,
7=intense and market
leadership changes
over time)Anti-monopoly policy in
your country (1=is lax
and not effective at
promoting competition,
7=effectively promotes
competition)
South Africa 4.2 5.4 4.8
Sri Lanka 3.3 5.1 3.8
Chinese Taipei 5.3 5.3 5.2
Thailand 4.2 5.0 3.9
Trinidad and Tobago 4.9 5.0 3.2
Ukraine 3.7 4.5 3.3
United Kingdom 5.2 6.1 5.8
Uruguay 4.4 4.9 2.8
Venezuela 4.3 4.3 3.8
Viet Nam 2.7 5.3 2.9
Zimbabwe 4.1 3.9 3.3
Correlation coefficient with
"Effectiveness of Antitrust
Policy"0.741 0.680 1, by definition
Sample mean Non-OECD
economies above3.9 4.8 3.7
Sample mean OECD
economies in sample5.2 5.6 5.1
Sample mean all economies
in survey4.4 5.1 4.2
Source: World Economic Forum (2002)WT/WGTCP/W/228
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Appendix III.A: continued
Indicator and Question asked in survey for Global Competitiveness Report
2001-2002
Quality of Competition
in Transportation
SectorIntensity of Local
CompetitionEffectiveness of
Antitrust Policy
OECD economy Is competition in your
country's transportation
sector sufficient to ensure
high quality, infrequent
interruptions and low
prices? (1=no, 7=yes,
equal to world's best)In most industries,
competition in the
local market is
(1=limited and price-
cutting is rare,
7=intense and market
leadership changes
over time)Anti-monopoly policy in
your country (1=is lax
and not effective at
promoting competition,
7=effectively promotes
competition)
Australia 5.6 5.6 5.7
Austria 5.8 5.8 4.9
Belgium 6.0 6.2 5.8
Canada 5.5 5.7 5.6
Czech Republic 5.1 5.5 3.7
Denmark 5.5 5.3 5.7
Estonia 5.0 5.6 4.2
Finland 6.5 6.1 6.6
France 5.5 6.1 5.8
Germany 6.1 6.3 6.2
Greece 3.7 5.2 4.1
Hungary 4.8 5.3 4.8
Iceland 5.1 5.3 5.6
Ireland 3.6 5.6 5.0
Italy 4.5 5.3 5.2
Japan 5.4 5.4 5.0
Korea 5.0 4.9 4.7
Mexico 3.7 5.0 4.0
Netherlands 6.5 6.2 6.2
New Zealand 5.7 5.8 5.5
Norway 5.4 5.5 5.3
Poland 4.7 5.2 4.6
Portugal 4.9 5.3 4.5
Slovak Republic 4.8 5.2 3.8
Spain 5.4 5.7 5.2
Sweden 6.1 5.8 5.5
Switzerland 5.7 5.4 5.0
Turkey 3.9 5.3 4.1
United States 6.5 6.5 6.0
Correlation coefficient with
"Effectiveness of Antitrust
Policy" indicator0.783 0.777 1, by definition
Sample mean Non-OECD
economies above3.9 4.8 3.7WT/WGTCP/W/228
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Indicator and Question asked in survey for Global Competitiveness Report
2001-2002
Quality of Competition
in Transportation
SectorIntensity of Local
CompetitionEffectiveness of
Antitrust Policy
OECD economy Is competition in your
country's transportation
sector sufficient to ensure
high quality, infrequent
interruptions and low
prices? (1=no, 7=yes,
equal to world's best)In most industries,
competition in the
local market is
(1=limited and price-
cutting is rare,
7=intense and market
leadership changes
over time)Anti-monopoly policy in
your country (1=is lax
and not effective at
promoting competition,
7=effectively promotes
competition)
Sample mean OECD
economies in sample5.2 5.6 5.1
Sample mean all economies
in survey4.4 5.1 4.2
Source: World Economic Forum (2002).WT/WGTCP/W/228
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Appendix III.B:  Descriptions of "significant" enforcement actions brought against
cartels and abuse of a dominant position in Brazil, the Czech Republic, Hungary,
Mexico, Poland, Russia, and Slovak Republic, as reported by these nations to the OECD
in 2000.
Brazil
The text below is taken from the Brazil's year 2000 report to the OECD on its competition
enforcement activities. This report can be downloaded from:
http://www.oecd.org/EN/document/0,,EN- document-768-nodirectorate-no-11-29574-
768,00.html
"1. In Brazil, government action in the antitrust field is conducted by three bodies,
making up the Brazilian Antitrust System. These are the Secretariat of Economic Law (SDE),
of the Ministry of Justice, the Secretariat of Economic Monitoring (SEAE), of the Ministry ofFinance, and the Administrative Council of Economic Defense (CADE), of the Ministry of
Justice. SDE has also responsibility for consumer protection which is concurrent to the states
under the Constitution. The antitrust authority of SDE is conducted with support of its
Economic Defense and Protection Departme nt (DPDE), headed by a Director.
2. SDE has the responsibility of fact finding in cases of economic concentration and in
practices allegedly damaging competition. SEAE issues economic opinions, compulsory in
economic concentration acts and optional in cases allegedly harmful to competition. CADE is
the administrative court that judges the cases brought before it.
…
II.1
Description of significant cases, including those with international implications
Preliminary Investigation nº 08012.000487/00-40Complainant: National Federation of Motor Vehicle Distributors  – FENABRAVE
Defendants: Fiat Automóveis S/A, Volkswagen do Brasil S/A, General Motors do Brasil
Ltda, Ford Motor Company Brasil Ltda. and The National Association of VehicleManufacturers – ANFAVEA.
3. This is a preliminary investigation brought against the vehicle assemblers Fiat
Automóveis S/A, Volkswagen do Brasil Ltda, General Motors do Brasil Ltda, Ford Motor
Company Brasil Ltda and ANFAVEA - Nationa l Association of Vehicle Manufacturers,
based on an accusation by the National Federation of Motor Vehicle Distributors –
FENABRAVE. The accusation alleges possible abuse by the manufacturers who, making use
of their dominant position in relation to the distribution network, were charging abusive pricesin the sale of new vehicles, spare parts, and labor and parts under guarantee. It also challenges
abuse in the compulsory transfer of inventory because of the financing system and the
requirement that concessionaires sell only original  replacement parts, the refusal to enter into
contracts with the concessionaire network and the practice of matched selling, in making the
delivery of a vehicle outside the initial order conditional on the purchase of difficult-to-sellvehicles and/or parts held in excess quantities.
4. SDE's conclusion, as to charging abusive prices for vehicles and parts, was based on
the understanding that there is no relevant antitrust market for each brand of vehicle for thisWT/WGTCP/W/228
Page 136
purpose. There is no sense in the argument that a manufacturer should be considered a
monopolist in relation to its concessionaires. In fact, the competitive dynamics of the market
is inter-brand. In other words, the manufacturers, in setting their prices and strategies, are
looking at the end consumer and not the concessionaires. Hence, it is a contractual matter (a
dispute for profits). With regard to the exclusiv ity in replacement parts, it concluded that there
were no indications of infringement, and recognized that the practice benefits consumers, who
thus have a guarantee of the quality of th e product. Consumers are guaranteed access to
information, since the manufacturer has the right to brand its original parts, and there is a
wide supply of parts sold by independent retailers, who offer products of an equivalent quality
to that of original parts at competitive prices.
5. Hence, no signs of infringement were found in respect of the other allegations
brought. The preliminary investigation was termin ated and the case was referred to CADE for
confirmation.
Administrative Proceeding no. 08000-018277/95-62
Complainant: Secretariat of Economic Law, ex-officio
Defendant: Novo Nordisk Farmacêutica do Brasil Ltda.
6. This is an Administrative Proceeding brought ex-officio  against the company Novo
Nordisk Farmacêutica do Brasil Ltda., for the possible practice of predatory pricing in the
case of human and pig insulin in the Brazilian public purchasing market.
7. After the initial proceedings of the case, SDE recognized that the defendant had
charged below-cost prices in public bidding tenders. It was observed that the essential
requirements for constituting predatory pricing were present. The defendant has the economicpower to withstand losses arising from selling at below cost, after eliminating its Brazilian
competitor, since the market has high entry barriers and inelastic demand, reinforcing the
defendant's power.
8. Believing an infringement to have taken place, the Administrative proceeding was
sent to CADE for judgment, pursuan t to article 39 of Law No. 8,884/94.
Administrative Proceeding no. 08012.009118/98-26
Complainant: Secretariat of Economic Law, ex-officio
Defendants: Estaleiro Ilha S.A. - EISA
Marítima Petróleo and Engenharia Ltda.
9. This is an Administrative Proceeding brought to investigate an agreement between
competitors in a public bidding tender, with  anti-competitive effects. The investigation
undertaken by SDE observed that the EISA and Marítima companies, both taking part in theauction for refurbishment of the Petrobrás P-X oil platform, entered into an agreement under
which the winner of the tender would be obliged pay to the loser a variable amount that could
be as high as US$ 1 million as reimbursement of joint or single investments made.
10. In their defense, the defendants claimed that the agreement was legal from the
competitive standpoint, since the Marítim a company had technical knowledge only of
offshore work, while EISA has technical knowledg e only of ship building. In the view of theWT/WGTCP/W/228
Page 137
defendants, competition was not affected since both took part in the contest, and the
reimbursement stipulated was a legitimate way of paying for services provided.
11. The examination concluded that there had been no fixing of prices and terms for the
provision of the services. However, the stipulated variable indemnification in accordance with
the price obtained in the tender process, constituted the conduct of agreeing to advantages in apublic tendering process (article 21, VIII), also allowing the companies, the only participants
in the process, to limit competition and dominate the relevant market in question (article 20, I
and II). Thus, SDE concluded that this constituted an infringement, and sent the
Administrative Process to CADE, suggesting: (i) a fine; (ii) banning the defendants from
taking part in public tenders for 5 years; (iii) publication of the decision in newspapers; (iv)
dispatch of the proceeding to the Public Prosecutor's office for appropriate criminal action."
Czech Republic
In what follows the term "the Office" refers to the Office for the Protection of Competition,
which enforces the relevant competition statutes of the Czech Republic. The text below is
taken from the Czech Republic's year 2000 report to the OECD on its competition
enforcement activities. This report can be downloaded from:
http://www.oecd.org/EN/document/0,,EN- document-768-nodirectorate-no-11-29574-
768,00.html
"2.2 Agreements distorting competition
[figure in text deleted]
12. The decrease in number of agreements distorting competition was caused by the
decrease of the number of franchise agreements in 2000 in comparison with 1999 from 19administrative procedures to 10 (for illustration – there were 54 franchise agreements in
1998). Approving large number of such agreements, in which there are generally pro-
competitive effects prevailing over restrictions of competition, represented excessive demands
on administration and therefore the Office elaborated and issued general exemption from the
prohibition of agreements distorting competition for specific types of franchise agreements inthe form of decree taking effect on 1 March 2000.
Description of significant cases:
Concerted practice of the producers of corrugated paperboard packages
13. In 2000 the Office investigated alleged cartel agreement among six producers of
corrugated paperboard packages. During the administrative proceedings the Office proved
contacts of the parties to the proceeding and also the intend of all companies involved to
increase the prices of paperboard products by 12 – 15 per cent as of 1 April 2000. As aconsequence of the concerted practice the uncertainty about the further behaviour of the
competitors in relation to the price increases has been eliminated. The Office stated in its first-
instance decision that these producers of corrugated paperboard packages breached the article
3 of the Competition Act by concerted practice during negotiations of the increases of prices
of their products with customers. The concerted practice has been prohibited by the Officeand fines have been imposed in the total amount of 7,800,000 CZK. All the parties to the
proceeding lodged an appeal against the decision.
Agreement on price fixing concerning slaughter pigsWT/WGTCP/W/228
Page 138
14. Board of directors of Agropork co-operative decided on its meeting on declaration of
minimal purchase price, which should have been required for 1 kilogram of meat of live
slaughter pigs weight by members of the co-operative. Overall market share of the co-
operative members represented approximately 30 per cent of nation-wide  market in 1999. As
a result of this behaviour of the party to the proceedings, price policy unification of co-operative's members – pig producers, appeared on major part of domestic territory. Although
meat price increase in forthcoming period could have been presumed, declaration of price by
Agropork co-operative represented an impulse, which unilaterally and with immediate effect
accelerated the process of price increase, eliminating the chance to gain similar effect
gradually by development of market relations  and principally on the basis of independent
entrepreneur's decision of each supplier – a member of the co-operative. The Office assessed
above mentioned behaviour as prohibited decision of entrepreneurs' association, distortingcompetition and imposed a fine on Agropork.
Resale price maintenance in the area of household appliances
15. The Office initiated an administrative proceeding based on the assessment of
documents gained during an inquiry concerned with contract relationships between
distributors and sellers of household appliances (washing machines, dryers, refrigerators,dishwashers, microwaves etc.). The co mpany MIELE breached the Competition Act by
obliging the retailers in the contracts for the years 1999 and 2000 to sell the MIELE
appliances at the set retail prices, which constitutes a prohibited resale price maintenance
agreement. The Office prohibited the performance of these provisions of the contracts and
imposed a fine on the MIELE company amounting to 200,000 CZK. At the same time thecompany was ordered to change the contracts with retailers so that the resale price
maintenance obligation is eliminated.
Agreement among insurers on pursuit of caution insurance for the case of travel agency
bankrupt
16. Nine insurance companies entered into an agreement on provision of insurance for the
case of travel agencies bankrupt (representing new type of insurance, provided for by the Act
No. 159/1999 Coll. on various business conditions on the field of travel), presented a draft of
the agreement to the Office and applied to th e Office for an exemption from invalidity of
agreement distorting competition. The agreement consisted in establishing free association of
insurers with no legal subjectivity – so called pool, established for the purpose of pursuit of
obligatory contractual caution insurance for the case of travel agency bankrupt.
17. The Office granted an exemption by its decision for the period of two years. The
Office has simultaneously stated, that the insurance companies were obliged to adopt such
arrangements, so that after termination of the exemption validity they were able to provide
caution insurance for the case of travel agency bankrupt independently.
2.3. Abuse of dominant position
18. Most decisions in cases of abuse of dominant position concerned the abuse by
administrative and local monopolies  (e.g. four cases in sectors of postal services,
telecommunications, gas industry and electricity sector). A fine of total amount of 16,500,000
CZK was imposed in these four cases, representing a significant increase in amount of fines in
comparison with 9,500,000 CZK in 1999.
19. Most cases referred to enforcement of inadequate conditions or application of unequal
conditions in case of identical or comparable performance against individual market
participants.WT/WGTCP/W/228
Page 139
Description of significant cases:
Refusal to enter into an amendment to the contract on interconnection in telecommunications
sector
20. The Office intervened in the case of the behaviour of a dominant operator of
integrated telecommunication network – ČESKÝ TELECOM, a.s. against its competitor,
DATTEL, a.s., which provided telecommunications services via integrated
telecommunication network in delimited territory of the Capital of Prague.
21. The Office assessed the behaviour of ČESKÝ TELECOM against the second
competitor on the market of integrated telecommunication network operation – DATTEL, as
an abuse of dominant position. ČESKÝ TELECOM refused to enter into an amendment to
existing contract on interconnection with abov e mentioned competitor , which would provide
for the division of fees (eventually even appropriate reduction) for interconnection ofnetworks between both operators as well in case of special lowered tariff (tariff Internet 99)
when using both networks of TELECOM and DATTEL for transmission of information
between customer and provider of access to Internet service. By above mentioned procedure
ČESKÝ TELECOM sought to exclude the compe titor from effective co mpetition in case of
special lowered tariff. As a result of the anti-competitive behaviour of the dominant operator,DATTEL was forced to provide its transmission ne twork for Internet calls with lowered tariff
to its network for free, without receiving any interconnection fees from ČESKÝ TELECOM
in cases of such calls. DATTEL was forced to accept such situation, so that its providers of
Internet services did not cancel co-operation with it. Thus ČESKÝ TELECOM made
DATTEL incapable to compete under equal conditions with similar service in "Internetoperation" for lowered tariff between the networks. For above mentioned behaviour a fine of
2 million CZK was imposed on ČESKÝ TELECOM.
Reduction of brown coal purchases without objectively justifiable reason
22. A dominant electricity producer ČEZ dealt with reduced consumption and intake of
brown coal for electric power production, result ing from decreased consumption of electric
power in the Czech Republic, by gradual reduction of brown coal purchases only from one of
long-term suppliers, Mostecká uhelná spole čnost, a.s. (Most coal company) without
objectively justifiable reason in 1999, while purchases from other brown coal suppliers were
not reduced.  This behaviour was assessed by the Office as an abuse of dominant position on
relevant market of brown coal for electric power production with prejudice to Mostecká
uhelná spole čnost and imposed fine of 7,5 million CZK on ČEZ company.
23. The Office's decision was based on the fact, that in extraordinary circumstances
(significant reduction of electric power consumption) is abuse of dominant position
established by behaviour, by which undertaking with dominant position considerably reduces
its purchases not proportionally in relation to one of the suppliers, in situation, when such a
behaviour may cause to this supplier a serious competitive disadvantage and endanger its
further existence, provided, that the undertaking in dominant position cannot provide anyobjective reasons for its behaviour.
Unlawful fee collection for gas meter installation
24. There was a finding in the case of regional gas distribution company Jihomoravská
plynárenská, a.s. (South Moravian gas company - hereinafter referred to as JMP), that JMP
unlawfully collected fee for gas meter installation from consumers, exceeding so its rights setby the Energy Act. The evidence was acquir ed during the procedure, that JMP unlawfully
transferred expenditures related to installation   (purchase), connection and montage of gasWT/WGTCP/W/228
Page 140
meter to customers by above mentioned behaviour, although such an expenditure should bear
the supplier in accordance with legal provisions in force.
25. The Office during the proceeding also relied on decision of State Energy Inspection,
according to which a gas meter,  measuring device in sense of the Energy Act, does not
represent a distributing device, hence not giving any opportunity to transfer any expendituresrelated to connection, installation  and maintenance of measuring device to consumers. JMP
abused its monopoly position by above described behaviour on the market of gas supplies to
the prejudice of consumers and therefore a fine of 2.5 million CZK was imposed on it. JMP
contested the Office's decision by an action to the High Court, which it dismissed in February
2001 and confirmed thus the Office's decision."
Hungary
The text below is taken from the Hungary's year 2000 report to the OECD on its competition
enforcement activities. This report can be downloaded from:
http://www.oecd.org/EN/document/0,,EN- document-768-nodirectorate-no-11-29574-
768,00.html
"26. In December 2000 Act No. LVII/1996 on the Prohibition of Unfair and Restrictive
Market Practices – the Hungarian Competition Act – was substantially amended by Act NoCXXXVIII/2000. The amendments which entered into force in February 2001 were motivated
by the four-year experiences collected with the enforcement of the 1996 Competition Act,
indicating the necessity for fine-tuning certain provisions of these rules. The incorporation of
some principles established by the law enforcement practice into the Competition Act and the
wording and rewording of some definitions proved to be rational, moreover, the investigativepowers of the Office of Economic Competition (OEC) were also increased.
…
2.2. Abuse of dominant positions
27. The Competition Act prohibits the abusive behaviour of the dominant undertakings.
The rules laid down in the Act are ha rmonised to the EC competition law.
[table deleted]
2.2.1. CableTV sector
28. In 2000 there was an increasing interest by telecommunications companies in the
cableTV business, significant rise in concentration could be observed. CableTV is an area of
fixed telecommunications services, where due to the fact that investments and fixed costs to
create a network are high, the possibility of market entry by competitors is limited and the
network operators have dominant position. It is typical of cableTV services that the operatorcan reach economies of scale only when highly concentrated markets come into existence and
large number of subscribers appear, so where a cableTV operator has been active already, the
market entry is restricted from an economic point of view. Due to the full liberalisation by
2002 of the telecommunications sector, even the legal barriers to entry will disappear with the
termination of exclusivity. By the time of the termination of exclusivity, several undertakingswill be likely to possess the infrastructure n eeded for an entry but considering the local
networks, the concession holders, who formerly had exclusive right, will have to face
competition only from cableTV networks.WT/WGTCP/W/228
Page 141
29. In 2000, the Competition Council found a dominant position in each of its 22
proceedings but proved an abuse of it only in 11 cases. The cableTV service agreements
generally stipulated unilateral rights for the operators to amend prices.
30. Considering unfair pricing, the Competition Council stated that in the absence of the
calculations of an undertaking, the indirect, and direct costs, other cost-factors and the profitreached in the previous year increased by inflation could serve as a basis to determine the fair
price. In the cases where the applied prices showed little difference with this price, the
Competition Council found no infringement. The Competition Council stated that this
difference was not to be determined generally, but all the circumstances have to be taken into
consideration on a case by case basis. The Competition Council found that the market was
characterised by enormous requirements of technological development, which justify the
increase of prices, so no infringements by the application of excessively high prices could beestablished in any of the cases.
2.2.2. Fixed telecommunications services
31. Among the abusive practice cases the practice of Matav Rt was regarded as the most
serious abuse in 2000. Matav (the national telecommunications service provider having
dominant position) provided international fax and telephone voice transmissions on the'Internet Protocol-based network' exclusivel y to service providers who had concessions.
Defining the relevant market the Competition C ouncil stated that the service provided by the
defendant cannot be substituted by any other telecommunications service, in particular by the
public voice telephony. It was also established, that the position of Matav in the field of
public voice telephony made it possible that, by offering more favourable fees in the long run,the undertaking expanded its dominant position to the relating market, obtaining this way
independence to a large extent of its competitors' behaviours.
2.2.3. The Philips case
32. Bearing in mind the interest of the final consumers the Competition Council made its
condemning decision against Philips Magyarország Kft, because the undertaking refused tosupply original Philips spare-parts for service stations others than those within its own service
network.
Refusal by Philips Magyarország Kft to supply components outside the brand service network
(Vj-8/2000)
33. Philips Kft (hereinafter the Kft) is specialised in supplying imported and domestically
produced Philips products. As a supplier, the Kft is obliged by an amended Decree to ensure
the supply of components necessary for the re pair and to supply accessories of imported
products. The Kft set up a service and component-supply network to ensure the fulfilment of
the obligation laid down by the Decree. The Kf t refused to supply components outside the
network since it was not as profitable as its other activities. Therefore consumers had to turn
to the Kft's competitors for Philips component s. These competitors had very small shares on
the market and none of them could provide the full scale of the components.
34. The Competition Council stated that the Kft had a dominant position on the market of
components used for small Philips household  machines and entertainment electronic devices.
The Kft's practice went against the consumers' interest, as their only possibility for repairing
was to turn to the brand services or to buy components from the competitors, whose prices
were significantly higher then those of the Kft. The practice constituted an abuse of thedominant position. The consequence of the decision is that the Kf  may not refuse the serviceWT/WGTCP/W/228
Page 142
in the future but it may determine conditions  for supplying Philips components outside the
network.
2.2.4. Assessment of free services
35. Local governments frequently publish information in "official" newspapers. In 1998
in one of its decisions the Competition Council stated, that these papers were to be regardedas market products and as such they fell under the scope of the Competition Act. Based on a
complaint the presumption was made, that the Mayor's Office of the town of Érd strives to
drive out the only other newspaper having to some extent similar character published in the
town from the market of local newspaper publishing by abusing its dominant position. In the
course of the proceedings it was extremely important to properly define the relevant market of
the free newspaper, in order to establish whether a municipality-published newspaper is
competitor or not for another local newspaper. Having considered that in addition to officialnews of the municipality and information attracting public interest the local government's
newspaper published advertisements, articles, comments, notes, advice on how to grow plants
and flowers, horoscopes, cross-word puzzles, et c. the Competition Council took the view, that
this newspaper may be deemed as competitor of the other local newspaper. The dominance
was stated, since the issued number of copies of the newspaper published by the Mayor'sOffice was far higher than that of the other ne wspaper, and, in addition to this, the subsidy
provided for it from the budget of the local government made possible the avoidance of
insolvency in the long run. The abuse was manifested by the fact, that the free nature of the
newspaper based on the gradually increasing subsidisation of the Mayor's Office and not on
the effectiveness of this newspaper. Consequently, the Competition Council stated theinfringement, prohibited the continuation of the practice and a symbolic fine was imposed.
36. The decision of the Competition Council was fulfilled in a peculiar way. The
municipality maintained the high number of copies issued, as well as the free of charge
character of the newspaper, but it limited the scope of the content to municipality news. In
this way the Mayor's Office left the relevant market and the newspaper became 'officialjournal' of the local government. In its post-investigation the OEC found that the magazine-
type character of the newspaper was terminated, so the free of charge publication of the
newspaper cannot be challenged any more. The decision has not become effective, since the
municipality requested the revision of the decision from the court."
Mexico
The text below is taken from the Mexico's year 2000 report to the OECD on its competition
enforcement activities. This report can be downloaded from:http://www.oecd.org/EN/document/0,,EN- document-768-nodirectorate-no-11-29574-
768,00.html
"1. Action against anticompetitive practices, including agreements and abuses of
dominant positions
…b) Description of significant cases, including those with international implications
i) Anticompetitive practices
Collusion in public auctions
Grupo Sutinmex vs Internacional Farmacéutica and othersWT/WGTCP/W/228
Page 143
37. The Federal Competition Commission (FCC) initiated an investigation regarding
collusion in public auctions of medical equipment. The companies involved were Grupo
Sutinmex, Internacional Farmacéutica, Serral, Le Mare Internacional de México and Matur.
During the investigation the public auctions summoned by The General Hospital of Mexico
and the Institute for Social Security for State Workers were analysed. In both cases, abehaviour pattern among the bidders could be set.
38. One of the most important pieces of evidence considered in the investigation, was the
tight difference among the bids, which differed in all cases only by few pesos. During the
investigation, the companies involved confessed to the existence of collusive practices.
Therefore, the FCC decided to impose a fine to each of the implicated companies and to issue
a warning to refrain from acting contrary to the FLEC in the future.
Price collusion in the beer industry39. The investigation in the beer industry in the state of Quintana Roo involved an
agreement between two beer distributors, Cervecería Cuauhtémoc Moctezuma de Quintana
Roo and Cervezas del Caribe, and several  regional associations involved in alcoholic
beverages commercialisation:  Unión de Comerciantes de Cervezas, Vinos y Licores de
Quintana Roo,  Sección Especializada de Venta de Cervezas, Vinos y Licores de la Canaco
Servytur de Cancún  (liquor commerce chamber) and Sindicato de Propietarios de
Establecimientos Comerciales, Empleados, Transportes y Similares de Quintana Roo .
40. The agreement established minimum sale prices for different beer presentations, a
mechanism for the adjustment of such prices and the commitment not to trespass such limits
when offering discounts.  The FCC resolved th at all the implicated parties were responsible
for collusive practices consisting in price fixing, ordered its immediate suspension and
imposed fines. The beer distributors pleaded guilty and consented to immediately suspend the
practices, thus obtaining reduced sanctions.
ii) Abuse of dominance
Tied sales and other practicesAvantel and Alestra vs Telmex (long distance 800 numbers)
41. Long distance operators, Avantel, S.A. and Alestra S. de R.L., filed complaints
against  Telmex with alleged practices in breach of the [Federal Law of Economic
Competition] FLEC. As a result of the investigation the FCC found Telmex responsible for
anticompetitive practices derived from charging public telephone users $0.50 per minute for
long distance calls when using non geographic 800 numbers and for requiring the use of
Telmex's pre-paid cards (Ladatel) in order to access those numbers.
42. 800 paid numbers are used to render paid telephone services, whereby  the receptor
agent absorbs the cost of the call. Traditionally, commercial firms or social service
institutions offer 800 paid numbers to provide their customers with a free communication in
order to encourage them to use their information services. These numbers may be accessed
from private or public telephones. In the latter case, Telmex applied its competitors' clients a$0.50 per minute access fee, although users calling to 800 numbers offered by Telmex were
not subject to such charge.
43. The investigation covered the following lines:WT/WGTCP/W/228
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44. Tied sales. The FCC found that the charge imposed by Telmex represented an entry
barrier since access to 800 national service through public telephones was only available by
using Telmex's  prepaid Ladatel card.
45. Refusal to deal. In 1997 Avantel requested Telmex to enter into a contract which
would enable it to absorb the $0.50 charge for 800 number calls originated from publictelephones, in order to free its users from this payment. Telmex refused the contract without
justification, although it had already subscribed such agreements with foreign providers of
800 numbers.
46. In 1999, following a decision issued by the Federal Telecommunications Commission
(Cofetel), Telmex signed contracts with six firms setting technical and operation conditions
regarding access to calls originating from public telephones by means of 800 numbers.
47. Discrimination. By denying direct charge to the plaintiffs in the access to its public
network, Telmex created exclusive advantages in its own favour since it did offer itself this
service  to operate its own 800 numbers. Foreign firms offering 800 numbers also operated
under a scheme where the final user is not charged for the use of Telmex's public telephone
network.
48. Thus, uneven sales conditions were established for agents providing equal services
from public telephones.
49. Demand decrease. The object and effect of the behaviour challenged was to offset
competition faced by Telmex through its main competitors, Alestra and Avantel. These
practices resulted in losses derived from useless advertising and because the plaintiffs were
forced to withdraw their prepaid cards from the market, since they would not meet demand
given that their acquisition required unavoidably the purchase of Telmex Ladatel  card too.
50. The FCC's decision included a sanction amounting to the highest applicable fine for
each of the practices incurred in.  On deciding this amount, consideration was taken of the
harm posed on competition the international effect on firms and consumers and of Telmex's
market share.
Boycott
51. Harinera Seis Hermanos  (HSH) filed a complaint charging Cargill de México  and a
civil association of agriculture product suppliers, Asociación de Proveedores de Productos
Agropecuarios  (APPAMEX), with blocking its access to imported wheat supplies.
52. The FCC enquiry provided evidence of a boycott, leaded by Cargill against HSH
which could have the aim or effect of displacing the latter from the market. Following HSH
cancellation of a wheat purchase contract, Cargill required the payment of costs incurred,which HSH refused to reimburse. By prov iding information to APPAMEX's members,
regarding HSH's refusal to pay Cargill's cancellation costs, HSH was placed in disadvantage
before its providers.
53. The relevant market defined was the commercialisation of hard wheat imported from
the US and Canada, including the varieties Hard Red Winter, Hard Red Spring and CanadianWestern Red Spring. These varieties differ from Mexican wheat in their high protein content.
54. Although no evidence was found regardin g APPAMEX members refusal to sell HSH
imported wheat, the FCC considered the intent to displace HSH from the market as an
infringement to the FLEC. Pressure was exerted at the request of Cargill through theWT/WGTCP/W/228
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association, which was found to hold substantial market power, mainly on the basis of its
market share. The FCC therefore concluded that both, Cargill and APPARMEX, were
responsible for implementing a boycott and imposed fines on them. In addition it ordered
APPAMEX to modify its regulations given that they fostered the commission of relative
monopolistic practices.
55. The FCC's decision was challenged through the filing of an appeal for review.
However the final judgement confirmed the original decision in all its terms.
iii) Interstate trade barriers
56. Grupo Industrial Lala  and Lala Guadalajara  filed a complaint charging the
government of the State of Sinaloa with imposing unfair entry restrictions to pasteurised milk.
The defendant argued that the restrictions imposed constituted administrative control
measures having health and statistical goals.
57. However, the FCC found that this administrative control implicated an authorisation
to introduce products into Sinaloa. The enquiry of the legal framework revealed that sanitary
standards regarding milk processing, transportation and storage are jurisdiction of the Health
Secretary. Any additional state restrictions constitute an over-regulation, violate the
Constitution and deter interstate trade.
58. Based on the above elements, the FCC recommended Sinaloa's government to
eliminate the authorisation regime imposed on milk entering the State."
Poland
In what follows the acronym OCCP refers to the Office for Competition and Consumer
Protection, which enforces the relevant competition statutes of the Poland. The text below istaken from the Poland's year 2000 report to the OECD on its competition enforcement
activities. This report can be downloaded from: http://www.oecd.org/EN/document/0,,EN-
document-768-nodirectorate-no-11-29574-768,00.html
"1. Action against anticompetitive practices, including agreements and abuses of
dominant position
…
b) Description of significant cases
Municipal services
59. Anticompetitive practices consisted in:
refusal to make available waste dumps to the companies engaged in waste disposal,
limiting funeral parlours in providing their services by the entities administering the
cemeteries.
Energy sector
60. The majority of the anticompetitive practices of the power utilities included abuses of
dominant position on the local market of energy supply. The power utilities were imposing
onerous contract conditions giving them unjustified profits by way of signing separateWT/WGTCP/W/228
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contracts with every customer regardless of the fact that in most cases few customers were
using one and the same connection. Thus, the power utility was charging several standing
charges for one connection. Another example is charging the fee for energy supply on the
basis of energy measurement taken outside the building and thus, charging customers not for
the actual units used.
Transport
61. Anticompetitive practice consisted in refusal by the local authority - the owner of
local bus stops, to use these bus stops by the intending carriers and thus, preventing them
from obtaining permits to carry economic activity of passenger road transport. The aim of this
refusal was to maintain the monopolistic position of the passenger transport company, in
which this local authority held 100% of shares.
Telecommunications62. The OCCP carried several proceeding relating to imposition by TP S.A. ( telecom)
onerous contractual terms and abuse of its dominant position on the telecommunication
market."
Russia
In the following text the expression "MAP Russia" refers to Russian Ministry for
Antimonopoly Policy, which is responsible for enforcing the competition statutes of the
Russian Federation. The text below is taken from the Russian Federation's year 2000 report to
the OECD on its competition enforcement activi ties. This report can be downloaded from:
http://www.oecd.org/EN/document/0,,EN- document-768-nodirectorate-no-11-29574-
768,00.html
"Actions directed at prevention of anti-competition practices, including abuse of dominant
position and collusions.
Abuse of dominant position is a rather wide-spread infringement in the Russian goods
markets, which is witnessed by annual growth of claims made by economic entities. In 2000
the number of claims on abuse of dominant position by economic entities increased by 19%,and made almost half of all the claims  received by anti-monopoly bodies (in 1999-46%).
Anti-monopoly bodies enhanced their activity on ascertainment and prevention of abuse of
dominant position, the number of proceedings instituted on this kind of infringement
increased more than 35% in 2000. In 2000 MAP Russia and its Regional Offices investigated
about 2500 facts (claims together with the initiative of an anti-monopoly body) on signs of
violation of Article 5 of the Law "On Competition…"(abuse of dominant position in a goods
market by an economic entity). Violations were proved in 1073 cases. 43% of violations wereeliminated voluntarily without bringing actions, 728 cases (57%) were brought to action. One
sixth of decisions of the anti-monopoly bodies was appealed in the court, about a quarter of
all appealed decisions were declared invalid. It should be mentioned that the proving of the
violations related to the abuse of the dominant position is one of the most difficult in the Anti-
monopoly legislation. As a rule in such processe s powerful structures with the strong legal
staff stand against the anti-monopoly bodies.
Most of applications on the abuse of dominant position is related to the electro- and heat
energy markets, gas, railway services, telecommunications services. The number of
applications in this sphere is growing from year to year. Their share in the general amount of
applications on Article 5 made in 2000,1999,1998 is, accordingly, 61%, 60%, 56 %. It servesas the evidence of the non-decreasing level of monopolistic activity of economic entities inWT/WGTCP/W/228
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the Russian goods markets, especially in those of natural monopolies. The most widespread
violations remain the same – imposing of disadvantageous terms of contract, unjustified
refuse to conclude contract, as well as violation of the order of the price-setting prescribed by
the law, monopolistic pricing.
MAP Russia has investigated the actions of a group of affiliated persons, viz "Gasprom" firm,
"Astrachangasprom" firm, "Orengburggasprom" firm and (herein after the Group) towards the
Interregional Association of phosphorus fertilizer producers "Phosagro". The group
unjustifiedly refused "Phosagro" to conclude a contract on delivery of liquid sulphur though
the delivery was possible, thereby hindering the access to the market. MAP Russia
Commission ascertained the domination of the Group in the sphere of transportation services
of liquid sulphur in special tanks (the share of the Group is more than 65% of the general
quantity of tanks in Russia). The group transferred to the rent of the "Ortofert" firm almost thewhole fleet of tanks, so that the possibility to sublease tanks and to conclude contracts on
sulphur transportation was eliminated. This way the Group forced the consumers of liquid
sulphur to conclude contracts on sale of liquid sulphur with the "Ortofert" firm and it outraged
the rights of liquid sulphur consumers. Following the results of the investigation, MAP Russia
Commission issued the prescription to the Group to stop the violation of point 1 Article 5 of
the Law "On Competition…" and demanded the Group to stop its practice of conclusion of
exclusive contracts on liquid sulphur delivery and agreements on the lease of the specialized
tanks for liquid sulphur transportation with certain economic entities, including those of the
Group, and as well as the Group to create no obsta cles in making direct agreements of liquid
sulphur delivery to  the economic entities, which use this raw material for their productionprocess. The further investigation showed that the Group had fulfilled all the prescriptions.
Rostov Regional Office following MAP Russia request examined the application of "The Oil
Company "Rosneft" organization and "Rosneft-Stavropolneftegas" organization on the
actions of the SeveroKavkasskaya Railway (SKRW), which demanded of these companies
payment for transportation of raw oil in the interior communication as for the exporttransportation and stopped in a unilateral order the dispatch of railway tanks. Due to the
actions of the Severokavkasskaya railway, companies suffered material damage about 5 mln.
USD. The investigation performed by Rostov Regional Office showed that the SKRW
outraged interests of economic entities, viol ated anti-monopoly legislation. The Commission
of the Regional Office issued a prescription to the SCRW on the elimination of the violation
within two days after its receipt. The prescription was fulfilled on the date fixed. This
example is typical.
The growth of expenditures on both the hydro-carbon raw material and other expenditures for
the production of liquefied hydro-carbon gases (LHG) led to the decrease of demand for their
delivery to the Russian markets for household needs at state regulated prices as compared
with the delivery of the liquefied gas for production needs and for export, where is free
pricing. Besides, the LHG markets are monopolized. In 2000 MAP Russia together with theRegional Offices examined all the LHG market participants on the subject of observance
regarding the regulations of the antimonopoly legislation. It was ascertained that the "SG-
trans" enterprise was abusing its monopolistic position when delivering the LGH to the
consumers, took both the payment for the rendered services of the liquefied gases
transportation and the railway tax, took from the consumers the additional expenditures(about 250 Rub/t from the organization) for gas delivery that increased the sale price of the
liquefied gas to the population. The administrative proceedings were instituted against "SG-
trans" on the evidences of violation of p.1 Art .5 of the Law "On Competition…" in the part of
fixing monopolistically high prices and violation of the rules of pricing. In the process of the
investigation, the cost of the additional organizing expenditures was reduced to 141Rub. 57kop. Per tonne for transportation of LHG and the administrative proceedings were stopped.WT/WGTCP/W/228
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The practice of ascertainment and of suppression of agreements (concerted practices) of
economic entities, which restrict competition (Article 6 of the Law "On Competition…"), as
compared with 1999 reduced for two thirds. In 2000 45 facts of violation of this article were
examined, in 18 cases violations were proved, through the given facts 12 administrativeproceedings were instituted. The increased quantity of applications on facts of this article
violation is noticeable, though, according to the results of examination, almost two thirds of
application cases were rejected. It should be mentioned that most of the applications, as it was
in 1999, contained complaints on the Anti-competition agreements of economic entities
related to fixing maintaining prices, tariffs, discounts, additional payments, extra-charge in
the sphere of natural monopolies. The complications of substantiation of anti-monopoly
agreements (collusions), ambiguousness of definitions, insufficiently close cooperation withthe law enforcement agencies are the main reasons of low-scale efforts on application of the
provisions of this article.
In May, 1999 the Southern Siberian Regional Office of MAP Russia administrative
proceedings against 76 owners of petrol stations (PS) of Krasnoyarsk by the signs of violation
of article 6 of the Law "On Competition…" on the fact of simultaneous evelling up oil-products prices. The single prices increase in the PS let classify the actions of their owners as
monopolistic collusion aimed at establishing and maintaining single prices bringing excess-
profit…The Commission of the Regional Office stated that the action of 25 economic entities
competing in the market of the oil-products retail trade in Krasnoyarsk and having the joint
share in the market of the retail trade of petrol marks AI-76, 80, AI-92, 93 exceeding 35%,was aimed at establishing and maintaining higher prices for the pointed petrol marks. The fact
of coordination of actions on fixing and maintaining the prices is proved by simultaneity of
the price rise and maintenance of their level in the period under review. The Commission
issued a prescription to transfer the profit received with violation of the Anti-monopoly
legislation into the federal budget by the participants of the agreement. Three economicentities appealed this decision in the Arbitration Court, in two cases the decision of the
Regional Office was declared legally valid. The prescription of the Regional Office was
fulfilled, the profit made thanks to the infringement of the antimonopoly legislation were
transferred to the federal budget.
In 2000 the litigation was instituted in the Court of Appeal on the base of the lawsuit brought
by a number of oil products sellers against the Regional Office (Saint Petersburg and
Leningradskaya Oblast). The Regional Office had issued the prescription on both cessation ofviolation of article 6 of the Law "On Competition…" and transfer of the profit made to the
federal budget, which had been issued in accordance with the case on anti-competitive price
agreement proceeded against the above-mentioned economic entities in 1999. The Court
deemed the actions of the Regional Office lawful. Thus the illegally made profits were
requisitioned and used for the needs of the State budget.
Slovak Republic
In what follows the term "the Office" refers to the Antimonopoly Office of the Slovak
Republic, which enforces the relevant competition statutes of the Slovak Republic. The text
below is taken from the Slovak Republic's year 2000 report to the OECD on its competition
enforcement activities. This report can be downloaded from:http://www.oecd.org/EN/document/0,,EN- document-768-nodirectorate-no-11-29574-
768,00.html
"Description of a significant case - agreements restricting competitionWT/WGTCP/W/228
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MATADOR a. s. Púchov and exclusive dealer GMZ co. s.r.o. Tvrdošín
63. The Office, acting on its own initiative of 11 administrative proceedings in the matter
of contracts restricting competition signed and fulfilled by the entrepreneur Matador a. s.
Púchov (hereafter referred to as "Matador") and 11 „exclusive dealers". These dealers were
included in this group by the entrepreneur Matador on the basis of their fulfilling regulatedcriteria. In light of the fact that these activities are factually connected together and that one of
the participants of the contract restricting competition in each action is the same, i.e. the
entrepreneur Matador, as an example we consider the description of the proceeding in the
matter of a prohibited contract restricting competition between the entrepreneur Matador and
GMZ Pneuservis. s.r.o. Tvrdošín (hereafter referred to as "GMZ Tvrdošín").
64. The basis of the examination of a contract restricting competition was a purchase
contract signed between the entrepreneurs Matador and GMZ Tvrdošín which included theobligation of the seller (Matador) to supply the purchaser (GMZ Tvrdošín) with automobile
tires, tubes pads and retreads according to order, which formed its inseparable part, from the
stores of the Matador sales network, and the obligation of the purchaser to take over the goods
and to pay a contracted price. The subject of the purchase contract was, in its Annex No. 1
(hereafter referred to as „annex") widened by the ordering of all goods (automobile tires,tubes and pads of all brands) which are the subject of further sale, exclusively from the seller
i.e. from the entrepreneur Matador.
65. In the wording of the signed purchase agreement, the entrepreneur GMZ Tvrdošín
appeared on the market as the purchaser and retailer of automobile tires, tubes and pads of all
brands. The second contracting party, the entrepreneur Matador, did not appear on the marketonly as seller of products of its own brand but also as the seller of purchased, possibly
imported, ranges of automobile tires and tubes, which the purchaser could secure from other
sources for more favourable supply and price conditions. The exclusive seller, entrepreneur
GMZ Tvrdošín, accepted the obligation in the form of exclusive purchase from the
entrepreneur Matador of all brands of automobile tires, tubes and pads, from which indirectlyfollows a ban on making business with competing entrepreneurs selling similar or equivalent
ranges of goods. This ban was reinforced by other conditions contained in the annex to the
purchase contract, in which it was established that GMZ Tvrdošín order from the respective
selling entrepreneur a minimum annual order in an amount of SKK 10,000,000 (228 990
EUR) without VAT and, in the case of not fulfilling the agreed conditions of exclusive
purchase, the obligation to pay a contracted penalty in the amount of 50 percent of its
turnover for the preceding three months. Under the stated sanction regulations, the purchaserwas not given the possibility to decide on the purchase of similar products from another seller
at more advantageous conditions.
66. The Office documented that this is a contract restricting competition with negative
results on the market because it does not fulfil the four legally established conditions. The
Office arrived at this conclusion on the basis of the statements of the contract participantsthemselves which directly or indirectly confirmed that the contract deformed the distribution
of automobile tires and tubes on the SR market in light of the inability of the entrepreneur
Matador to secure a larger range of imported brands in the required supply period or for the
promised price conditions. The second participant in the contract, the entrepreneur Matador,
confirmed in discussions its worsened financial situation, which was connected to theinflexibility in providing imported brand goods to the exclusive seller. Therefore, Matador
authorised GMZ Tvrdošín for the purchase of goods which it did not have at its disposition in
its stores from other importers in the Slovak Republic.
67. This subject contract restricting competition was advantageous only for the partners
to the contract. For the entrepreneur Matador it ensured turnover on the required level and forWT/WGTCP/W/228
Page 150
the exclusive seller financial advantages in the form of a 3 percent discount, in which the
consumer did not share, as unequivocally follows from the goal of this contract restricting
competition.
68. The first-degree body evaluated the negative impact of this contract on the
participants in the relevant market on two levels:
1. on consumers
2. negative impact on other distributors and dealers
69. The first-degree body considered the contract and its contents in Annex No. 1 as
a documented restricted competition contract in the sense of the provision of § 3, paragraph 2,
letter e) of the Act on Protection of Competition since it conditioned the signing of the
purchase contract on the acceptance of the additional obligations contained in the Annex to
the purchase contract, which by their nature do not relate in the subject contract even tobusiness customs.
70. The second-degree body, on the basis of a presented remonstrance by the Matador
entrepreneur confirmed the accuracy and fullness shown throughout the proceedings. It
performed only a change to the legal assessment of the case, implemented by a change in the
arbitration part of the decision in the sense that this is a contract on exclusive purchase ofgoods which is, in the sense of  § 3, paragraph 1 of the Act, prohibited and, according to § 3,
paragraph 3 of the Act on Protection of Competition, invalid.
71. For infringement on the ban on signing contracts restricting competition, a fine in the
amount of SKK 700,000 (16 029 EUR) was imposed on the entrepreneur Matador. There was
no fine imposed on the second participant in the contract, GMZ Tvrdošín on account of itswillingness to provide evidence documents to the Office as well as its proven attempts to
change the conditions of the contract restricting competition by oral and written remarks to
the entrepreneur Matador.
72. The entrepreneur Matador, within the legal period, presented an appeal to the
Supreme Court of the SR on examination of the second-degree decision. The Supreme Court
of the SR, after examining the challenged decision came to the conclusion that the challenged
decision is in harmony with the law, and th erefore refused the appeal of the entrepreneur
Matador.
73. In the same way, there were a further 10 contracts restricting competition signed
between the entrepreneur Matador and individual exclusive dealers. The entrepreneur
Matador was, by decisions in these administrative proceedings given a fine in the amount of
SKK 7,200,000 (164 873 EUR), and the exclusive dealers a total sum of SKK 270,000 (6 183EUR).
Description of a significant case - abuse of a dominant position
Stredoslovenské energetické závody š.p. (Cen tral Slovak Energy Plants š. p. Žilina)
74. The Office on 29.3.2000, after receiving a request from the entrepreneur ACER
NOBA co-operative Machulince, began administrative proceedings in the matter of abuse ofdominant position in the relevant market according to 7, paragraph B, letter b) of the Act on
Protection of Competition with regard to the entrepreneur Stredoslovenské energetické
závody š.p. Žilina (hereafter referred to as "SSE š. p. Žilina"), which unlawfully interruptedWT/WGTCP/W/228
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the supply of electric energy to buildings in Nová Ba ňa, operated by the entrepreneur ACER
NOBA co-operative Machulince.
75. To consider the restriction of the relevant market, the Office considered three basic
determining viewpoints – factual, geographic and time. The factual market was stipulated the
electric energy supply market. As regards the geographic consideration, the relevant marketrestricted by the distribution net of the entrepreneur SSE š. p. Žilina was the territory of
central Slovakia. The time-relevant market was set as 1.12.1999, during which the anti-
competitive practice of interrupting the supply of electricity by the entrepreneur SSE š. p.
Žilina was exercised.
76. The entrepreneur SSE š. p. Žilina, RZ Martin interrupted the supply of electricity for
the reason of non-presentation of the agreement of the owner of the real estate by the ACER
NOBA co-operative, which was confirmed in a letter sent to the entrepreneur ACER NOBA,and this despite the fact that a Business Contract was signed on 29.10.1999 between the
entrepreneurial bodies.
77. In the course of the proceedings, the Office discovered and showed that the
entrepreneur SSE š. p. Žilina, in its position of a natural monopoly, made use of its economic
power with regard to the entrepreneur ACER NOBA co-operative Machulince in such a waythat on 1.12.1999 it interrupted the supply of electricity for a period of 45 minutes to the
buildings of the ACER NOBA co-operative despite the fact that on 29.10.1999 there was
signed a valid Business Contract on the Supply of Electricity, whose contractual conditions
were fulfilled on the part of the entrepreneur ACER  NOBA co-operative Machulince. The
actions of the entrepreneur SSE š. p. Žilina, consisting of a restriction of the supply ofelectricity, had a negative impact on business competition for the reason that the entrepreneur
SSE š. p. Gillian had a dominant position on the relevant market since electric energy is
a goods which the entrepreneur ACER NOBA was not able to replace by other corresponding,
interchangeable or comparative goods and therefore was not exposed to substantial
competition and could abuse its dominant market position due to its economic power.
78. The Office ruled according to § 7, paragraph 5, letter b) of the Act on Competition
Protection that the actions of the entrepreneur SSE š. p. Žilina, consisting of an interruption of
the supply of electric energy to the entreprene ur ACER NOBA co-operative Machulince, had
the nature of abuse of its dominant position on the relevant market of electric energy supply,
and imposed a fine in the amount of SKK 200,000 (4 580 EUR) on the entrepreneur SSE š. p.
Žilina."WT/WGTCP/W/228
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Appendix III.C: Further information on six majo r international cartels prosecuted in the 1990s
Product Period of
cartelGlobal sales
and losses to
purchasers
(2000 US
dollars)
Principal
source:
Connor (2001)Effect on developing
country purchasers
(2000 US dollars)
Principal Source:
Levenstein and
Suslow (2001).Number of firms found to be in
the cartel and co untry of originProducers and purchasers industry structure
Graphite
Electrodes1992-97 Global Sales:
US$5-7 billion.
Price increases
from roughly$2000 permetric ton to$3200 - $3500
(60-70%) in
variousmarkets(OECD, 2000,p.13)Imports: US$33.263
billion Overcharge:
US$5544 m illion
(assuming a 20%price increase,Levenstein andSuslow, 2001);
US$ 12474 million
(assuming a 60%price increase, OECD2000)Prosecution by US authorities
involved seven firms, from the US,
Germany, and Japan. Total finesexceeded US$ 314 million.
Canada convicted of price-fixing
the two major suppliers, a US firmand a German firm, inflicting fines
of US$ 23.5 million.
The European Commission fined
eight firms a total of Euro 218.8million.
Korea Fair Trade Commission
fined six firms a total of US$ 8.5
million.This product is sold in a highly concentrated world market.
The two major firms, one US and one German, dominate with
a combined market share of roughly two-thirds. Both firmsmanufacture electrodes in many countries (including suchdeveloping countries as Brazil, Mexico, South Africa, Russiaand Poland) and sell throughout the world. Japaneseproducers hold a considerable world market share, and there
are also a number of smaller producers, mainly in India and
China.
Graphite electrodes are used by electric arc furnaces (EAF),
which are used to manufacture a third of world steelproduction. EAF steel production is spread around the whole
globe.WT/WGTCP/W/228
Page 153Product Period of
cartelGlobal sales
and losses to
purchasers
(2000 US
dollars)
Principal
source:
Connor (2001)Effect on developing
country purchasers
(2000 US dollars)
Principal Source:
Levenstein and
Suslow (2001).Number of firms found to be in
the cartel and co untry of originProducers and purchasers industry structure
Vitamins 1989-99
(varieswith typeofvitamin)Global Sales:
US$ 34.161billion.
Total excess
payments toconsumers,
with a twenty
percentovercharge,equal US$7679millionsGlobal Sales: US$
3652 million.
Average price mark-
ups in the US marketwere between 35%and 75 %, see Connor
(2001, p.330).
Overcharge: US$
1217 millions(assuming a 50%price increase due to
cartelization.)Cartel participants (US, Japanese,
Swiss, German, Dutch, Belgianand French firms) were prosecutedand heavily fined by the USDepartment of Justice, theEuropean Commission, the
Canadian and the Australian
competition authorities. Antitrustofficials in Brazil, Japan andMexico are also reported to beinvestigating.
Total fines: almost US$ 1billion by
the US and Canadian authorities,Euro 855 millions by the EC.Three European  and three Japanese companies, who were the
major cartel members, together controlled about 80% of theglobal vitamin market.
In most cases, major producers have plants both in the US and
Europe, and many have production facilities in Asia as well.
The exact mix of major competitors varies by vitamin type.
Japanese players hold a significant share in the vitamin B6
and vitamin C market.
China has become a significant competitor in recent years in
the vitamin C market, and also produces vitamins B1, B6, andE.
Citric Acid 1991-95 Global Sales:
US$ 3,950millions.
Total losses to
consumers:
US$750million.Connor (2001).Imports: US$ 1691
million.
Overcharge to
purchasers: US$ 283
million (assuming a
20%, price increase,Levenstein andSuslow, 2001, p 28)US authorities found the following
cartel members: three US firms,two Swiss firms, and one Frenchcompany.  Total US fines: US$
114 million.
European Commission authorities
punished the following cartelmembers: two US firms, two Swissfirms, and one Dutch company.Total fines: Euro 135.22 millionsHighly concentrated world markets in the hands of several
major producers located in the US, Europe, and China.Developing countries, such as Czech Republic, Mexico,Turkey, Indonesia, have small market shares.  Chinese
producers currently hold about 15% of US market share.
The industry trend is towards larger firms and greater
concentration.
Large costumers, such as beverage companies, account for the
bulk of citric acid sales.WT/WGTCP/W/228
Page 154Product Period of
cartelGlobal sales
and losses to
purchasers
(2000 US
dollars)
Principal
source:
Connor (2001)Effect on developing
country purchasers
(2000 US dollars)
Principal Source:
Levenstein and
Suslow (2001).Number of firms found to be in
the cartel and co untry of originProducers and purchasers industry structure
Seamless
SteelTubes1990-95 Imports: US$ 1422
million.
Overcharges to
purchasers: US$ 129million (assuming a10% price increase
due to cartelization,
OECD 2000.)The EC convicted four European
and four Japanese producers ofbid-rigging on seamless steel tubesand line pipes between 1990 and1995.
Total fines: Euro 99 millionsThree large alliances dominate world trade. These alliances
include developing country steel producers. The largestalliance is controlled by an Italian-Argentine corporation.
US producers produce mostly for the North American market.
Other leading producers are located in Japan, Germany,France, Italy, Argentina, Mexico, Brazil, and Sweden.
Chinese producers have increased exports in recent years, but
are not yet at a technological level to compete efficiently in
world markets.
Consolidation in distribution is mirrored by consolidation
among consumers. The number of distinct buyers has
decreased and their average size increased over the 1990s due
to exit by many independent oil and gas producers
Lysine 1992-95 Global sales:
US$ 1,660million.
Total losses to
consumers:
US$363
million.Five producers (one US, two
Japanese and two Korean) wereconvicted in the United States andthe European Community of pricefixing. (Connor 2000, p.176)
Total fines: US$ 93.4 million by
the American authorities, and Euro110 million by their Europeancounterparts.The cartel members controlled over 97% of global capacity
during the years the cartel operated. As of 2000 the fiveproducers convicted of having participated in the conspiracy(one US, two Japanese and one Korean) still held 95% ofglobal capacity in the industry. There were some instances of
entry by non-cartel members in the 1990s, essentially
relatively small producers from Hungary, Slovakia, and SouthAfrica. China seems to be the fastest growing location fornew joint ventures in lysine manufacturing. Several jointventures began operating in China as early as 1993, and by2000, the productive capacity of these Chinese operations is
estimated at about 13% of world capacity. Most of the new
entrants began production after the lysine cartel broke up in1995.WT/WGTCP/W/228
Page 155Product Period of
cartelGlobal sales
and losses to
purchasers
(2000 US
dollars)
Principal
source:
Connor (2001)Effect on developing
country purchasers
(2000 US dollars)
Principal Source:
Levenstein and
Suslow (2001).Number of firms found to be in
the cartel and co untry of originProducers and purchasers industry structure
Bromine 1995-98 Imports: US$ 89
million.
Overcharge to
consumers: US$ 15million (assuming a20% price increase,
see  Levenstein and
Suslow, 2001, p.18)American authorities fined one
Israeli firm for price fixing and oneUS firm received amnesty in thecase. The conspiracy is currentlyunder investigation by theEuropean Commission. Total fines
to date: US$ 7 million.Two US and one Israeli companies supply more than 80% of
the $800 million world bromine market. Consumer electronicsproducers make up the largest segment of bromine purchasers.
Notes:
1. Total Losses to Consumers = Consumer Overcharge (transfer of in come from buyers to the sellers, which is equal, in equilibrium,  to the sum of the lost
revenues of direct and indirect buyers and the effective reduct ion in purchasing power by the ultimate consumers (Connor 2001, page 552) + Dead Weight
Loss (indirect consequence of higher prices, equal to the value of lost sales due to quantity restrictions – which in turn is a  consequence of raised prices by the
cartel)
2. * see Connor (2001), table 19.5.
3. For alternative estimates of the trade affected by some of these cartels see World Bank (2003b).WT/WGTCP/W/228
Page 156
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V. ALPHABETICAL INDEX OF ABBREVIATIONS
ABB Asea Brown Boveri Ltd.
ACP The African, Caribbean and Pacific Group of States
AICI American International Contractors IncorporatedANFAVEA National Association of Vehicle Manufacturers, Brazil
APEC Asia Pacific Economic Cooperation
APPAMEX Asociación de Proveedores de Productos Agropecuarios
BOC British Oxygen Corporation
CADE Administrative Council of Economic Defense, Ministry of Justice, Brazil
CIS Commonwealth of Independent States
CUTS Consumer Unity & Trust Society, IndiaCZK Czech koruna
EAF Electric arc furnaces
EC European Community or European Communities
EE Eastern Europe
EEA European Economic AreaEISA Estaleiro Ilha S.A.
EMI EMI Group PLC
EU European Union
EUR Euro
FEABRAVE National Federation of Motor Vehicle Distributors, BrazilFCC Federal Competition Commission, Mexico
FDI Foreign direct investment
FLEC Federal Law of Economic Competition, Mexico
GM General Motors
HSH Harinera Seis HermanosHUF Hungarian forint
IBM International Business Machines Corporation
ICPAC International Competition Policy Advisory Committee
ICN International Competition Network
IMF International Monetary Fund
IPA Information-Technology Promotion Agency, Japan
JECC Japan Electronic Computer Company, Ltd.JMP Jihomoravská plynárenská, a.s.WT/WGTCP/W/228
Page 166
JV Joint venture
Kft Philips Kft
KFTC Korea Fair Trade Commission
KRW Korean won
LHG Liquefied hydro-carbon gasesLSI Large Scale Integration
M&A Mergers and Acquisitions
MAP Russia Ministry for Antitrust Policy, Russia
MCI MCI Corporation
MERCOSUR Common Market of the South
MITI Ministry for International Trade and Industry, Japan
MPT Ministry of Posts and Telecommunications, JapanMXN Mexican peso
NEC NEC Corporation
NHK Japan Broadcasting Corporation
NTT NTT Communications Corporation
OCCP Office for Competition and Consumer Protection, PolandOEC Office of Economic Competition, Hungary
OECD Organisation for Economic Cooperation and Development
OPEC Organization of the Petroleum Exporting Countries
PLN Polish zloty
PVC Polyvinyl chloridePS Petrol stations
R&D Research and development
RUB Russian roubles
S&D Special and Differential
SDE Secretariat of Economic Law, Ministry of Justice, BrazilSEAE Secretariat of Economic Monitoring, Ministry of Finance, Brazil
SKK Slovak crowns
SKRW SeveroKavkasskaya Railway
TNT TNT Holdings BV
TRIPS Agreement on Trade Related Aspects of Intellectual Property Rights
UCAR UCAR International Incorporated
UN United NationsUNCTAD United Nations Conference on Trade and Development
US or USA United States of AmericaWT/WGTCP/W/228
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USAID United States Agency for International Development
USD United States dollars
VCR Videocassette recorder
VLSI Very Large Scale Integration
WGTCP Working Group on the Interaction between Trade and Competition PolicyWTO World Trade Organization
WWII Second World War
¥ Japanese yen
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