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Hypothetical – Recap and Report Back

ICN Cartel Workshop, Panama City 2012. Hypothetical – Recap and Report Back. Lindsay Donders Competition Bureau Canada Richard Fleming Australia Competition and Consumer Commission. Hypothetical – the industry. Crop protection chemical market.

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Hypothetical – Recap and Report Back

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  1. ICN Cartel Workshop, Panama City 2012 Hypothetical – Recap and Report Back Lindsay Donders Competition Bureau Canada Richard Fleming Australia Competition and Consumer Commission

  2. Hypothetical – the industry • Crop protection chemical market. • Annual Chemical Association Conference. • Technical Committee responsible for collecting and circulating market intelligence.

  3. Hypothetical – the parties (1) • CropPro • Immunity applicant • US $600 million per year • AgForce • US $900 million per year • Allegedly initiated the agreements • Chair of the Technical Committee • Rural Pro • US $600 million per year

  4. Hypothetical – the parties (2) • Together, CropPro, AgForce, and RuralPro make up 60% of the global crop protection chemical market. • Each company has: • Manufacturing facilities around the world; and, • A sales office in the capital city of all countries with ICN membership.

  5. Hypothetical – the offence (1) • Arrangements to minimize the financial impact of the biggest selling crop protection chemicals coming off patent. • Prevent the emergence of new competitors manufacturing low cost generics. • Each company agreed to manufactured a generic version.

  6. Hypothetical – the offence (2) • Agreed to price differential between generic and branded products – generics sold at 60% of branded price. • Limit the possibility of excess production by scheduled “maintenance” of production facilities. • Discussion and email exchange of pricing information between competitors at local sales offices.

  7. Hypothetical – the information sharing • Marker management. • Coordination of enforcement actions. • Confidentiality. • Waivers.

  8. Hypothetical – the dawn raids • Searches/raids/inspections of the targets in a number of jurisdictions. • Evidence obtained: • E-mails/faxes between competitors; • Know-how agreements; • Annual reports; • Sales data; and, • Monthly bulletins. • Evidence obtained supports CropPro’s information.

  9. Hypothetical – the investigation • Following the raids, AgForce sought leniency in a number of jurisdictions. • Witness interviews. • Document production.

  10. Hypothetical – private enforcement issues • A large customer has sued CropPro for raising prices of crop protection chemicals, which prevented a generic competitor from selling chemicals to the customer.

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