September Antitrust Bulletin

September 26, 2012

$500 Million Fine Imposed in Landmark International Cartel Case

On Sept. 20, 2012, a court sentenced AU Optronics, a Taiwanese manufacturer of thin-film transistor liquid crystal display (TFT-LCD) panels, and its U.S. subsidiary to pay a $500 million criminal fine for its participation in a five-year conspiracy to fix the prices of TFT-LCD panels sold worldwide. At trial the U.S. Department of Justice (DOJ) sought a fine above the Sherman Act maximum of $100 million under an alternative fine provision, which allows for imposition of a fine up to “twice the gross gain or twice the gross loss” of the conspiratorial conduct. A jury found that the company derived gains of at least $500 million from the conspiracy, potentially subjecting it to a criminal fine of $1 billion (which was the amount DOJ recommended the court impose). The $500 million fine matches the largest fine ever imposed against a company for violating U.S. antitrust laws. The court also placed the company on probation for three years, and required it to adopt an antitrust compliance program and appoint an independent corporate compliance monitor. In addition, two Taiwanese executives were sentenced to serve three years in prison and pay $200,000 criminal fines. AU Optronics was the only company to challenge the cartel charges resulting from DOJ’s TFT-LCD investigation. Seven other companies pleaded guilty and were sentenced to pay criminal fines totaling more than $890 million.

FTC Issues Final Changes to Agency Procedure

On Sept. 20, 2012, the Federal Trade Commission (FTC) issued final rules for its agency procedures in an effort to expedite how it handles investigations and premerger reviews. Among other changes, the new procedures streamline the process for resolving electronic discovery issues and authorize the FTC’s General Counsel to initiate enforcement proceedings for failure to comply with premerger second requests.

Canadian Competition Bureau Issues Abuse of Dominance Guidelines

On Sept. 20, 2012, the Canadian Competition Bureau issued enforcement guidelines providing a concise overview of the Bureau’s enforcement approach to the abuse of dominance provisions of the Competition Act. Under the new guidelines, the Bureau’s general approach when investigating allegations of abuse of dominance will be that “[a] market share of 50 percent or more will generally prompt further examination.”

$850,000 Civil Penalty Imposed for Violation of Premerger Notification Requirements

On Sept. 25, 2012, DOJ filed a complaint against Biglari Holdings, alleging that the company failed to comply with the antitrust premerger notification requirements of the Hart-Scott-Rodino (HSR) Act before acquiring voting securities of Cracker Barrel Old Country Store, a restaurant and retail chain, in June 2011. Biglari Holdings’ acquisitions were not exempt from the HSR Act because they were not “solely for the purpose of investment,” and the company’s subsequent filing under the HSR Act — which occurred approximately two months later and received early termination — did not provide a safe harbor. Biglari Holdings agreed to pay a civil penalty of $850,000. This case serves as a reminder of the importance of properly complying with premerger notification requirements.

Tying Arrangements Can Raise Concerns Under EU Competition Law

Under EU competition law, a company does not have to be dominant for its tying arrangements to raise concerns given the general ban on anticompetitive agreements — as a matter currently being investigated illustrates. Additional information is available in our September 2012 EU/UK Competition Law Newsletter.

For more information, please contact the lawyers in the Antitrust & Trade Regulation Department at McGuireWoods.