Unilateral Conduct Committee E-Bulletin
Issue 50
February 09, 2007

The Section 2 Committee's monthly E-Bulletin is intended to offer the antitrust community updates and information on the latest developments relating to monopolization law and policy. If you have any comments or suggestions on the E-Bulletin, please e-mail Jay Modrall (jmodrall@cgsh.com), Adam Nyhan (anyhan@constantinecannon.com), Tanya Dunne (tdunne@cgsh.com), and Alee Scott (ascott@constantinecannon.com).

U.S. DECISIONS  

SECOND CIRCUIT AFFIRMS NEW YORK DISTRICT COURT'S DISMISSAL OF FORMER EXCLUSIVE DISTRIBUTOR'S ANTITRUST CLAIMS AGAINST LUMBER COMPANY FOR FAILURE TO ALLEGE HARM TO COMPETITION  

E & L Consulting, Ltd. v. Doman Industries Limited , 2006 WL 3692437 (2d Cir. Dec. 15, 2006). Appellant E&L Consulting, Ltd., a former distributor for appellee Doman Industries Limited (a Canadian company), accused Doman of attempting to monopolize the green hem-fir lumber market through its exclusive distributorship with appellee Sherwood Lumber Corp in violation of Section 2 of the Sherman Act. E&L also claimed that the distribution agreement between Doman and Sherwood violated Section 1 of the Sherman Act, that Doman and Sherwood were engaged in unlawful tying of products, and that they engaged in illegal price discrimination in violation of Section 2 of the Sherman Act. The District Court for the Eastern District of New York granted separate 12(b)(6) motions for Doman and Sherwood. The Second Circuit affirmed, primarily because E&L failed to allege facts that would demonstrate harm to competition.

Green hem-fir lumber is a manufactured combination of different woods. Doman and its subsidiary Eacom Timber Sales Ltd. supply 95% of the green hem-fir lumber sold in New York, New Jersey, Connecticut, Rhode Island, Maryland, Delaware and Pennsylvania. In 1990, E&L entered into an agreement with Doman whereby E&L would take delivery but not ownership of Doman's green hem-fir lumber. E&L would then sell the lumber at prices set by Doman, and Doman would pay E&L monthly payments and commissions for these sales. Doman also had arrangements with two other distributors: one in Rhode Island and one in Delaware. Between 1998 and 2003, Doman severed its relationships with the two other distributors and replaced them with Sherwood. Doman prohibited E&L from selling green hem-fir lumber in the states served by Sherwood. Doman also permitted Sherwood to purchase Doman products outright and to resell them on Sherwood's behalf. Doman rejected a similar request from E&L. Doman also provided Sherwood with substantial discounts or favourable price structures for green hem-fir lumber compared to those required of E&L. As a result, Sherwood was able to sell Doman lumber at substantially lower prices than E&L. After Doman terminated its distribution agreement with E&L on January 30, 2004, Sherwood became Doman's exclusive distributor in the northeast United States. E&L alleged that there were no commercially feasible alternative sources for green hem-fir lumber. Furthermore, E&L alleged that once Sherwood became the exclusive distributor for Doman, Sherwood raised its prices by over 20% and required customers who purchase green hem-fir lumber also to purchase Sherwood finished wood products. E&L is also active in the finished wood products market.

Upon separate motions to dismiss by the defendants, the District Court for the Eastern District of New York held ";that plaintiffs' federal antitrust claims failed because the complaint did not adequately allege a relevant product market or injury cognizable under the antitrust laws." 2006 WL 3692437 at *3.

On appeal by E&L, the Second Circuit affirmed the District Court's decision on all claims. On the Section 1 claim, the Second Circuit held that E&L had failed to state a claim, because E&L did not allege injury to competition, ";an element of a prima facie Section 1 claim." Id. The District Court had dismissed the complaint on the basis that the ";plaintiffs had not alleged antitrust injury because they failed to allege some type of harm to competition market-wide." While the Second Circuit agreed with the District Court that the failure to allege harm to competition is fatal to E&L's antitrust claims, the Second Circuit distinguished between the failure to allege harm to competition and the failure to plead antitrust injury. Citing Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 US 477, 489 (1977), the Second Circuit noted that an antitrust plaintiff must show not only injury-in-fact (i.e., injury to competition), but also injury of the kind that the antitrust laws were intended to prevent (i.e., antitrust injury). The only detriment to competition alleged to result from the exclusive distribution agreement is that end users of lumber and finished wood products have fewer options to purchase these products and are required to pay artificially high prices. The Second Circuit found this allegation insufficient to support a claim of harm to competition, because ";the alleged single source and price increase, even if monopolistic, is something Doman can achieve without the aid of a distributor." 2006 WL 3692437 at *5. The Second Circuit noted that ";exclusive distributorship arrangements are presumptively legal." Id. (citing Elec. Commc'ns. Corp. v. Toshiba Am. Consumer Prods., Inc., 129 F.3d 240, 245 (2d Cir.1997)). The court held that appellant's argument that the exclusivity agreement was an unreasonable restraint of trade failed because the exclusive distributorship provided ";no monopolistic benefit to Doman that it does not already enjoy and would not continue to enjoy if the exclusive distributorship were enjoined." Id. at *4.

As regards the Section 2 monopolization claim, the Second Circuit held that the complaint failed to allege facts that would show that the exclusive distribution agreement between Doman and Sherwood harmed competition. ";A viable claim under Section 2 challenging a distributorship agreement must, like a Section 1 claim, show a harm to competition." 2006 WL 3692437 at *3 (citing Elecs. Commc'ns Corp. v. Toshiba Am. Consumer Prods., Inc. , 129 F.3d 240, 246 (2d Cir. 1997)). E&L also alleged that Doman reserved transportation space for shipping lumber from Canada with the intent to exclude other manufacturers of green hem-fir lumber as part of their monopolization scheme in violation of Section 2 of the Sherman Act. Id. at *6. The court found that the reservation of space itself was not a violation of Section 2 even if the reservation of space ";excludes, and is intended to exclude, producers of lumber of all kinds, including green hem-fir, and suppliers of all other goods for that matter, from using that same shipping space." Id. The court found that the reservation of space is a reasonable means by which Doman can meet its customers' demands ";even when the use of available shipping facilities may make it more difficult for competitors." Id. Furthermore, there were no allegations that Doman did not ship lumber in the reserved space. As a result, the Second Circuit held that the appellants failed to allege facts sufficient to show harm to competition and affirmed the District Court's dismissal.

On the tying claim, the Second Circuit held that the complaint was insufficient on its face. The court found that the tied products - finished wood products - were too broad and that E&L declined to be more specific either in its complaint or at oral argument. The court also found that E&L had made no attempt to define the conduct considered to be unlawful or to identify the relevant customers who would have purchased the product elsewhere but for the unlawful conduct. Id. at *7. On the Robinson-Patman claim, the Second Circuit noted that E&L, as a sales agent, had no standing to assert a claim. Even if E&L did have standing, the court held that E&L failed to assert facts to show the likelihood of competitive injury resulting from the alleged discrimination, and as a result the claim must fail. Id. 

GEORGIA DISTRICT COURT DISMISSES ANTITRUST COUNTERCLAIMS BY COMPETING GENERIC DRUG MAKER

Glades Pharmaceuticals, LLC v. Murphy , 2006 WL 3694625 (N.D. Ga. Dec. 12, 2006). Plaintiff Glades Pharmaceuticals, a manufacturer of generic dermatological products, sued Defendants Murphy (among other things, a former president of Glades) and River's Edge Pharmaceuticals (an LLC founded by Murphy that also manufactures and sells generic dermatological products) for copyright infringement and breach of fiduciary duty. Murphy filed five counterclaims, including federal claims of predatory litigation in violation of the Sherman Act. The court dismissed the counterclaims without prejudice.

Murphy alleged that Glades violated the Sherman Act in two ways. Murphy claimed that Glades ";engaged in predatory litigation practices intended to injure competition and create an unreasonable barrier to market entry…." 2006 WL 3694625 at *2 . Murphy also claimed that Glades was part of an agreement between DUSA and Glades (via Glades' parent company Steifel Laboratories Inc.) to exclude Murphy from participation in the generic dermatological products market. Id. Murphy argued that both of these actions constituted attempts to monopolize.

The District Court noted that Section 2 claims require a showing (1) that the defendant engaged in predatory or anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability of achieving monopoly power. Id. at *4 (citing Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993)). In this case, the court held that defendants did not allege facts to support specific intent to monopolize (no adequately pled relevant market or market power). Rather, defendants argued only that Glades' predatory litigation practices were intended to injure competition and were an unlawful attempt to monopolize. The court noted that even if specific intent could be found, there were no allegations to support a finding of a dangerous probability of achieving monopoly power. The counterclaims provided no indication of the number of competitors or of the probability of Glades achieving a monopoly. This deficiency alone would have been enough to dismiss the Section 2 counterclaim. Id. The court also found that the counterclaim failed to plead sufficient anticompetitive injury as a result of Glade's alleged predatory litigation. Id. at *5.

The Section 1 claims failed, because there was no agreement between two or more businesses (as regards the predatory litigation claim) and, based on Copperweld, a parent company and its wholly owned subsidiary are incapable of conspiring with each other. Id. at *3 (citing Copperweld Corp. v. Independence Tube Corp., 467 US 752, 771 (1984)). Even if Glades did enter into an agreement with DUSA directly, the court found that the defendants did not specify the nature of the agreement or ";connect it to any particular antitrust theory identified in the case law." Id. The court also highlighted that a ";bald assertion of harm to competition" was insufficient to state a claim upon which relief can be granted. Id. Finally, there was no description of the relevant market in which the alleged anticompetitive effects took place. As a result, the court dismissed all counterclaims.

NEW YORK DISTRICT COURT DISMISSES DIGITAL RADIO TECHNOLOGY SUIT  

Kahn v. iBiquity Digital Corp. , 2006 WL 3592366 (S.D.N.Y. Dec. 7, 2006). Pro se plaintiff Kahn and his company Kahn Communications, Inc. alleged that the Federal Communications Commission (FCC) and non-government defendants (iBiquity Digital Corp., Lucent Technologies, Inc., Texas Instruments Inc., and Clear Channel Communications, Inc.) ";conspired to violate the Sherman Act through the FCC's regulation of digital radio technology, and that the non-government defendants engaged in other ‘monopolistic behavior'." 2006 WL 3592366 at *1. Defendants argued that the court lacks jurisdiction to hear the plaintiffs' claims against the FCC and that the plaintiffs failed to assert cognizable antitrust claims against the non-government defendants. The District Court granted the defendants' motion and dismissed the complaint with prejudice.

The plaintiffs object to the FCC's endorsement of a technology developed and licensed by iBiquity called ";in-band, on-channel" (IBOC) technology as the de facto standard for delivering digital radio signals. The plaintiffs have competing digital radio technology, which the FCC has not endorsed.

After the commencement of the FCC rulemaking process in late 1999, the plaintiffs offered numerous criticisms of the IBOC technology. After some investigation, the FCC determined that there should be a reasonable transition period for the switch from the standard AM/FM radio to digital radio in order to permit ";graceful obsolescence" of existing radio receivers. In order to achieve this, the FCC wanted a reasonable transition time and digital radio technologies that would only minimally interfere with the AM/FM channels during the transition period. While the FCC did not endorse a particular technology at the time, it did state that it would give considerable weight to any recommendation by the National Radio Systems Committee (NRSC). In December 2001, the NRSC recommended that the FCC endorse the IBOC technology, which allows for simultaneous broadcast of AM/FM radio and digital radio signals. Following a public comment period, the FCC concluded that the benefits of digital radio outweighed the costs of AM/FM radio interference and that IBOC had indicated a commitment to offer IBOC licenses on fair terms. Following recommendations from the National Association of Broadcasters (NAB), the FCC implemented a trial period using IBOC to monitor any interference, as well as IBOC's licensing practices. The FCC then sought additional public comment and requested further recommendations from NRSC. Plaintiff Kahn was an active participant in the FCC's rulemaking process, filing at least sixteen submissions with the FCC. The FCC has since endorsed the IBOC technology as the de facto standard for digital radio.

Kahn filed suit, alleging two antitrust violations. First, plaintiffs alleged that the defendants engaged in a conspiracy in violation of Section 1 of the Sherman Act, based on the following: (i) the FCC refused to hear dissenting opinions regarding IBOC; (ii) the FCC has given ";unusual support" to the defendants' technologies; (iii) defendants conspired to boycott the plaintiffs' products; and (iv) defendants wrongly interfered with a contract between plaintiffs and a major radio station. Id. at *2. Second, plaintiffs alleged that the defendants engaged in monopolistic conduct in violation of Section 2 of the Sherman Act by (i) lobbying the FCC, NRSC and the NAB to endorse the IBOC technology and (ii) blocking entry into the radio broadcasting market. Id.

The District Court ruled that to the extent that plaintiffs contest the FCC's rulemaking process, the court lacked jurisdiction over the FCC's actions. The court noted that exclusive jurisdiction to review the FCC's regulatory action lies with the court of appeals. Id. at *3. On the antitrust claims, the District Court also ruled that claims against the government and non-government defendants must be dismissed. The court stated that, as the Supreme Court expressly held in United States Postal Service v. Flamingo Industries (USA) Ltd., 540 U.S. 736, 745-46 (2004), Kahn ";cannot sue the FCC for violations of the Sherman Act because the FCC is a government agency [and] the government cannot be sued for antitrust violations." 2006 WL 3592366 at *3. As for the non-government defendants, plaintiffs offered no specific details to support a Section 2 claim beyond allegations barred by the Noerr-Pennington doctrine (which bars antitrust claims based on a defendant's efforts to influence the government). Id. at *5. The court rejected the allegation of a group monopoly. The court also rejected the allegations of an antitrust conspiracy to bar plaintiff's entry or to boycott plaintiffs' products, as there was no factual support for these allegations in the complaint.

CALIFORNIA DISTRICT COURT GRANTS DEFENDANTS' MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN INTERNET DOMAIN NAME SYSTEM CASE  

Coalition for Icann Transparency, Inc. v. VeriSign Inc. , 2006 WL 3545023 (N.D. Cal. Dec. 8, 2006) Plaintiff Coalition for ICANN Transparency, Inc. (CFIT) brought various Unilateral Conduct claims against defendants VeriSign, Inc., and Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit corporation that coordinates the Internet domain name system (DNS) on behalf of the United States Department of Commerce (DOC). 2006 WL 3545023 at *1. Defendants moved to dismiss CFIT's first amended complaint for failure to state a claim. The District Court granted the defendants' motion to dismiss but granted CFIT leave to amend its complaint.

Domain names are created when they are registered with the appropriate registry operator. A registry operator maintains a database that associates the registered domain names with the appropriate IP addresses for the respective domain name servers. Each domain name is unique and therefore can only be registered to one registry operator. Most domain name registrations for commercial purposes use the .com top-level domain.

ICANN operates under a memorandum of understanding (MOU) with the DOC. The MOU's purpose is to promote the management of the DNS ";in a manner that will permit market mechanisms to support competition and consumer choice." Id. Previously, ICANN selected the registry operator for the .com and .net top-level domain names through a bidding process. Once the registry operator is selected, it is the sole operator for the applicable top-level domain until the conclusion of the registry agreement. Defendant VeriSign is the current registry operator for the .com and .net domains pursuant to written agreements between ICANN and VeriSign.

The basis of CFIT's claims is the 2001 agreement between ICANN and VeriSign regarding the .com domain and the subsequent five-year renewal of this agreement in 2006 whereby ICANN bypassed the competitive bidding process to designate VeriSign the sole registry operator of the Internet .com registry. Id. at *3-4. CFIT had similar claims pertaining to the 2001 agreement regarding the .net domain, although this agreement expired in 2005 and was subject to the competitive bidding process prior to its expiration. VeriSign was again selected as the .net registry operator. These agreements contain certain provisions regarding maximum prices to be charged and ICANN's right to seek competitive bids at the conclusion of the agreements.

CFIT alleged the following Unilateral Conduct violations: (i) monopolization and attempted monopolization in the .com and .net registration markets by VeriSign; (ii) monopolization in the expiring names registration services market by VeriSign; and (iii) conspiracy to monopolize in all relevant markets by VeriSign and ICANN. CFIT also alleged violations of the Sherman Act Section 1 and the Cartwright Act for conspiracy in restraint of trade in all relevant markets by VeriSign and ICANN. The defendants moved to dismiss for failure to state a claim.

CFIT claimed that bypassing the competitive bid process for the .com registry was a violation of ICANN's mandate under its MOU and that the agreement between VeriSign and ICANN was a conspiratorial agreement that freed VeriSign from pricing constraints and allowed VeriSign to provide additional registration services that would displace competitive services. Id. at *4-5. Accordingly, CFIT alleged Section 2 claims against VeriSign for monopolization and attempted monopolization of the .com and .net registration markets, Section 2 claims against VeriSign for attempted monopolization of the expiring names registration services market and Section 2 claims against VeriSign and ICANN for conspiracy to monopolize. Id. at *5.

On the issue of antitrust standing and injury, the court analyzed CFIT's two allegations of improper monopoly: (i) the ICANN/ VeriSign agreements had the effect of making VeriSign the permanent operator of the .com and .net registries and shielded VeriSign from competition in the re-bidding process, which was discordant with ICANN's obligation to maintain competition; and (ii) the agreements improperly permitted VeriSign to extend its monopoly control to the downstream markets for back order and other services (used by registrants to improve their chances of obtaining desirable expiring domain names). Id. at *7. CFIT further contended that these agreements constituted a conspiracy to monopolize the .com and .net registries, to restrain trade in the downstream markets and to share in the resulting monopoly profits. Id. The District Court noted that a plaintiff may only pursue an antitrust claim if it can show antitrust injury. The court articulated the four requirements for establishing antitrust injury in the Ninth Circuit: ";(i) unlawful conduct, (ii) causing an injury to the plaintiff; (iii) that flows from that which makes the conduct unlawful, and (iv) that is of the type the antitrust laws were intended to prevent." Id. at *7 (quoting Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of Cal. , 190 F.3d 1051, 1055 (9th Cir. 1999)). The court noted two ways of showing antitrust injury: (i) through direct evidence of the ";injurious exercise of market power" Rebel Oil Co., Inc. v. Atl. Richfield Co., 51 F.3d 1421, 1434 (9th Cir.1995); or (ii) through defining the relevant market, showing that the defendant has a dominant share of that market, and showing that there are significant barriers to entry and expansion. Id. at 1434.

In analyzing CFIT's allegations of monopolization in the expiring names registration services market, the court noted that the plaintiff must allege a relevant product and geographic market to state a claim. 2006 WL 3545023 at *8. The District Court highlighted that the courts in Weber v. Nat'l Football League, 112 F.Supp.2d 667 (N.D.Ohio 2000) and Smith v. Network Solutions, Inc., 135 F.Supp.2d 1159 (N.D.Ala.2001) had previously rejected the market definition of expiring names registration services as a matter of law. 2006 WL 3545023 at *8. The court also accepted VeriSign's argument that CFIT had failed to allege a lack of interchangeability between expired domain names and domain names of different statuses (i.e., never before registered or registered). This led the court to conclude that CFIT had not adequately shown for antitrust injury purposes that that there was a relevant market for expiring domain names registration services, separate from the market for the general registration of domain names. Id. at *9. The court did find that as the sole registry operator of the .com and .net registries, VeriSign necessarily held a monopoly in domain name registration for those registries for the duration of the agreement. Id. at *10.

In analyzing antitrust injury, the court stated that to establish a Section 2 violation for monopolization, the plaintiff must show monopoly power and ";the acquisition or perpetuation of this power by illegitimate ‘predatory' practices." Alaska Airlines, Inc. v. United Airlines, Inc., 948 F.2d 536, 542 (9th Cir.1991). To establish a Section 2 violation for attempted monopolization, the plaintiff had to show ";specific intent to control prices or destroy competition, predatory or anticompetitive conduct directed at accomplishing that purpose, dangerous probability of achieving monopoly power, and causal antitrust injury." McGlinchy v. Shell Chem. Co., 845 F.2d 802, 811 (9th Cir. 1988). To properly allege a conspiracy to monopolize in violation of Section 2 , a plaintiff had to establish: ";(1) the existence of a combination or conspiracy to monopolize; (2) an overt act in furtherance of the conspiracy; (3) the specific intent to monopolize; and (4) causal antitrust injury." Paladin Assocs., Inc. v. Montana Power Co., 328 F.3d 1145, 1158 (9th Cir.2003) (citing United States v. Yellow Cab Co., 332 U.S. 218, 224-225 (1947)) .

CFIT claimed the ICANN/VeriSign agreement gave VeriSign a perpetual monopoly in the .net and .com registries. Id. at *11. The court found this argument unpersuasive, because ICANN retained the power to terminate the agreement, inter alia, in the event of VeriSign's breach of maximum allowable prices and price increases. Id. The court addressed CFIT's concern that there were no price controls on VeriSign after 2007 by citing Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334 (1990) ( ";Antitrust injury does not arise ... until a private party is adversely affected by an anticompetitive aspect of the defendant's conduct; in the context of pricing practices, only predatory pricing has the requisite anticompetitive effect.") Id. at *12. VeriSign argued that increases in prices by a lawful monopolist, without more, are not subject to antitrust scrutiny. Alaska Airlines, Inc., 948 F.2d at 548-49. ICANN argued that the setting of maximum prices is not precluded by antitrust laws and has been found to be pro-competitive in some instances. Atl. Richfield, 495 U.S. at 344 n. 13. Based on this, the court found that CFIT had not alleged facts supporting that the future prices contemplated in the agreements would serve as significant barriers to entry or were otherwise supra-competitive. In sum, the court concluded that CFIT had not adequately alleged predatory conduct or specific intent to monopolize to support its Section 2 claims. Id . at *13. Accordingly, the court granted defendants' motions to dismiss, but allowed the plaintiff 20 days to amend its complaint.

Editors' Note: for more background on this case, see Issue 37 of the E-Bulletin, available here.

INTERNATIONAL ANTITRUST CASES  

SELEX V. COMMISSION -- THE DEFINITION OF AN UNDERTAKING IN ARTICLE 82 PROCEEDINGS

Selex Sistemi Integrati SpA (Selex) operates air traffic management systems. The European Organisation for the Safety of Air Navigation (Eurocontrol) is a regional group established by European states that is tasked with promoting a uniform system of air traffic management.

Selex lodged a complaint with the European Commission on October 28, 1997, contending that Eurocontrol's regime of intellectual property rights governing contracts and its failure to put in place standards to ensure transparency and non-discrimination in the acquisition of prototype systems used to define standards were an abuse of its dominant position in the market for air traffic management systems. On February 12, 2004, the Commission rejected the complaint, stating that the facts criticized in the complaint did not fall within the scope of Article 82.

On April 23, 2004, Selex brought the case to the European Court of First Instance (CFI) to annul the Commission's decision. Selex's allegation of Article 82 infringement centered upon Eurocontrol's: (i) production and adoption of technical standards; (ii) acquisition of prototypes and management of intellectual property rights; and (iii) consultation provided to national administrations in the framework of tendering procedures. In its judgment of December 12, 2006, the CFI rejected Selex's complaint. The Court applied the principles of FENIN v. Commission, reasoning that an entity must conduct economic activity to be considered an undertaking within the meaning of Article 82. It determined that Eurocontrol's first two activities were non-economic. In these capacities, Eurocontrol was not an undertaking. Deviating from the Commission's decision, the CFI found that Eurocontrol acted as an undertaking in assisting national administrations, since private entities could also provide such services. With regard to this activity, however, the Court found that Selex did not provide sufficient evidence of a breach of Article 82 (click here for more information).

COMMERCIAL CONCESSIONS IN AIRPORTS - FAILURE TO OPEN INVESTIGATION

On November 29, the Court of First Instance heard arguments in an appeal before against the European Commission decision of September 17, 2004, notifying the applicant that there was no sufficient Community interest to justify opening a formal investigation into the applicant's complaint regarding alleged abuse of dominant position by Aéroports de Paris on the commercial concessions market in the public airport sector. (Case T-458/04 Au Lys de France v. Commission, report for the hearing available in French.)

INTERNATIONAL ENFORCEMENT AGENCIES

BROADCASTING SERVICES MONOPOLY ( SWEDEN)

In October, the European Commission referred Sweden to the European Court of Justice for failure to comply with Directive 2002/77 on competition in the markets of electronic communications networks and services, requesting it to abolish the monopoly of state-owned company Boxer TV-Access to provide access control services in Sweden's digital terrestrial broadcasting network. (Commission Press Release IP/06/1411, October 17, 2006.)

MALTESE MONOPOLY ON PETROLEUM PRODUCTS

On October 13, the European Commission sent a letter of formal notice to Malta for failure to comply with Article 31 EC by not abolishing the monopoly for the importation, storage, and wholesale of petroleum products. According to the Accession Treaty, Malta had to ensure that petroleum products could be traded through a licensing system by January 1, 2006. From the information available to the Commission, no trading licences had been issued and Enemalta Corporation was the only company authorized to import petroleum for the inland fuel market. (Commission Press Release IP/06/1391, 2006.)

ASTRAZENECA

On November 30, a summary of the European Commission decision of June 15, 2006 in AstraZeneca was published in the Official Journal. The Commission had imposed a €60 million fine on AstraZeneca for abusing its dominant position by misusing the patent system and the procedures for marketing pharmaceuticals to block or delay market entry for generic competitors to its ulcer drug Losec.
(OJ 2006 L 332/24; Opinion of the Advisory Committee: OJ 2006 C 291/2; Final report of the Hearing Officer: OJ 2006 C 291/3.)

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Back issues of the E-Bulletin are available here.

Jay Modrall
Vice-Chair, Unilateral Conduct Committee
Cleary Gottlieb Steen & Hamilton LLP
Rue de la Loi 57
B-1040 Brussels
+32 (0)2 287 2024
jmodrall@cgsh.com

Adam Nyhan
Constantine | Cannon
450 Lexington Avenue
New York, N.Y. 10017
(212) 350-2772
anyhan@constantinecannon.com

Tanya N. Dunne
Cleary Gottlieb Steen & Hamilton LLP
Rue de la Loi 57
B-1040 Brussels
ph.: +32 (0)2 287 2057
fax: +32 (0)2 231 1661
tdunne@cgsh.com

Alee Scott
Constantine | Cannon P.C.
450 Lexington Avenue
New York, N.Y. 10017
(212) 350-2796
ascott@constantinecannon.com