Apple may be facing an antitrust probe in India due to a consumer complaint urging India’s Competition Commission to investigate whether Apple violated competition laws by partnering with two of India’s largest mobile phone operators to sell the iPhone 4.  

Apple chose two of India’s major carriers – Bharti Airtel and Aircel – as partners to sell Apple’s most recent iPhone model, the iPhone 4, which was unveiled in India on May 27, 2011.  Previously, Apple partnered with Bharti Airtel and Vodafone Essar Ltd. for earlier iPhone models, the iPhone 3G and 3GS.  No consumer complaints were filed in connection with the partnerships for the earlier models.

The iPhone 4 partnerships essentially block rival carriers from selling the iPhone 4 and theoretically may encourage Bharti Airtel and Aircel to artificially increase prices if they face no competition from rival carriers.  India’s antitrust laws bar agreements that are “likely to cause an appreciable adverse effect on competition within India.”

Apple’s practice of partnering with one or two carriers is common in other markets, including other Asian markets. Apple typically partners with only one carrier in other Asian markets and two carriers in the U.S.  In the U.S., Apple initially partnered with AT&T for all iPhone products, adding Verizon as a partner in February 2011 (while maintaining its partnership with AT&T). 

In June, Apple began selling an “unlocked” version of the iPhone 4 in the U.S., meaning that consumers could purchase the iPhone directly from Apple – at list price – and use the phone with other GSM-compatible carriers, such as T-Mobile.

Apple claims that the iPhone 4s sold in India are similarly “unlocked,” allowing consumers to choose among a variety of GSM-compatible carriers or switch carriers at any time. 

As of yet, the Competition Commission has not committed to investigating Apple, saying only that the agency “may examine the complaint to see if [Apple] is violating any law.”

The U.S. Federal Trade Commission (“FTC”) and Department of Justice (“DOJ”) plan to sign a memorandum of understanding with China’s three antitrust enforcement agencies, signaling the first formal pact of cooperation between U.S. and Chinese regulators. 

This deal comes on the heels of China’s sweeping antitrust reform, a policy it developed with advice from foreign agencies like the FTC.  The growing number of countries with antitrust laws and agencies, combined with the increasingly global profile of corporations, has made international cooperation extremely important.  Moreover, multi-jurisdiction, transnational antitrust investigations are now common, meaning that different agencies often have overlapping authority. 

A formal memorandum of understanding facilitates agencies’ ability to share information, especially confidential documents.  The FTC hopes this deal will bring international antitrust policy one step closer to a convergent set of global standards with consistent enforcement. 

The U.S. shares similar agreements with a handful of other countries (Russia, Japan, Israel, and the E.U.) and intends to actively pursue new deals, especially with developing countries like India.

A justice of the British Columbia Supreme Court has ruled that an alleged worldwide diamond cartel led by rough diamond seller De Beers had sufficient anticompetitive impact on Canadian consumers to enable a price-fixing class action to survive a motion to dismiss at the pleading stage.

The plaintiff alleges that De Beers and the other defendants sought to eliminate competition in the sale of gem grade diamonds in British Columbia, Canada, and elsewhere, by fixing the price of gem grade diamonds and allocating the market for gem grade diamonds.

De Beers had argued that the court lacked jurisdiction of the claims in Fairhurst v. Anglo American PLC because only one of the defendants did any business in British Columbia.  And all defendants traded only in rough diamonds, not the gem grade diamonds purchased by consumers like the plaintiff.  De Beers argued that the defendants were far higher in the “diamond pipeline.”  In the words of its expert, “any connection between the Defendant’s sales of rough diamonds on the one hand and the Plaintiff, other Proposed Class Members and any diamond jewelry purchases made in British Columbia on the other hand, is remote in the extreme.”

Madam Justice B.J. Brown, however, concluded that De Beers was not only higher in the “diamond pipeline”– it more or less owned the pipeline.  The court noted that De Beers was long the largest producer of rough diamonds in the world, acted historically as the “diamond industry custodian,” and “possessed a degree of monopoly power in the rough diamond market for over a century.”

Drawing upon jurisdictional authority to hold foreign manufacturers liable for knowingly sending hazardous products into the stream of commerce in Canada, the court ruled that a “tortious conspiracy” such as the alleged worldwide diamond cartel is said to occur wherever damage from the conspiracy is suffered:  “The defendants do not suggest that ‘their’ diamonds were not sold in British Columbia.  The diamonds arrived in British Columbia in the ordinary course of De Beers’ business, and the defendants knew or ought to have known that the product would be sold in British Columbia.”

The court deemed allegations of a diamond cartel whose aim was to “creat[e] an overcharge” that would necessarily harm consumers was sufficient to give the court jurisdiction at this stage in the litigation.

MasterCard is discovering that Dutch competition authorities may be serious in their goal to increase competition in the payments market by encouraging banks not to go “steady” with MasterCard.

MasterCard is reporting in its 10-Q report that the Netherlands Competition Authority is challenging its co-branding and co-residency rules, which restrain banks from expanding their relationships with other payment systems.

According to MasterCard, the co-branding rules at issue can prohibit “financial institutions licensed by MasterCard from placing other payment systems’ brands on MasterCard cards.”  The challenged co-residency rules can prohibit “financial institutions from encoding other payment systems’ applications on the electronic ‘chip’ in MasterCard cards.”  A hearing on the matter was held on April 14, 2011.

This challenge comes after the Netherlands Competition Authority released its Vision Document on the Payments Market in December 2010.  In that statement, the Dutch authorities expressed the view that they would “like to see banks conclude contracts with payment systems other than MasterCard.”

Britain’s Office of Fair Trading (“OFT”) will announce this month whether it is investigating market dominance of the “Big Four” accounting firms – Deloitte LLP, Ernst & Young LLP, PricewaterhouseCoopers LLP and KPMG LLP.

The investigation would follow a House of Lords Economic Affairs Committee report entitled “Auditors: Market concentration and their role,” released in late March criticizing the big four auditors for their lack of oversight and their failure to warn regulators before the financial crash.

In that report, the Committee calls for a competition probe of the large auditors and dominance in the market.  According to the Committee, 99 out of the FTSE 100 companies (and 240 of the FTSE 250 companies) were audited by the Big Four.  The Committee noted concerns about “competition, choice, quality and conflict of interest.”

The OFT previously made submissions to the Committee and to the European Commission regarding competition in the audit market.  An OFT probe would likely include bank loan covenants that require borrowers to use the big four auditors.