1. Complainants’ Access to File
Some Differences Between the US and The EC and Some Consequences of the Differences -- GE/Honeywell as an example
John DeQuedville Briggs, Managing Partner for Strategy and Planning, Howrey, LLP, Washington, DC
27 September 2008 LIDC Conference
Hamburg, Germany

2. Access to Files: When?
Before proceedings against the target have commenced
During the agency/commission/government proceedings against the target.
In the event of separate private proceedings by the complainant against the target

3. Access to Files: What Files?
Work product of the agency/commission/government
Documents provided to the agency/commission/government by the target
Documents provided to the agency/commission/government by third parties

4. Access to Files: Why?
To assist the agency/commission/government to strengthen its case against the target
To enable the complainant to make a stronger case against the target before the agency of a different government
To enable the complainant to bring it own private case

5. Access to Staff: When, Who, Why
Same issues as just mentioned

6. Extent and nature of Access Can Matter
Nature and extent of complainant access and participation can make a big difference in --
Why it chooses to act
What the agency chooses to do
The remedy it seeks
The results on appeal

7. General Features of US Law/Procedure
Complainants generally have no rights of access unless they bring their own complaint in court against the target
Secrecy of Grand Jury materials is sacrosanct
Complainants have a [weak] privilege of secrecy so that their identity and what they said may not be available even when the agency pursues the target
Once litigation is commenced, whether by the government or a private party, all court filings are generally public and available to all

8. General Features of EC Law/Procedure
Complainants can gain access to staff at an early date and access to parts of the file when they intervene to become participants
Complainants who have become participants at the EC can appeal a decision by the Commission to take no action
Court and agency filings, even when not confidential, are not generally available to the public and so there is limited transparency

9. Rockwell Collins, Inc.
CASE No. COMP/M.2220 GENERAL ELECTRIC/HONEYWELL

10. HONEYWELL IS THE LEADER IN AVIONICS (1)
Honeywell’s market shares show leadership in a number of large commercial aircraft markets: CMU/ACARS (50-60%); ACAS (40-50%); EGPWS/GPWS/TAWS (approx 99%); IRS/AHARS (80-90%); FMS (60-70%); ADIRS (80-90%); Air data (90-100%)
In addition to markets mentioned in SO, Honeywell has 100% shares in two additional markets: AIMS and Weight and Balance

11. HONEYWELL THE LEADER IN AVIONICS (2)
Honeywell’s market shares also show leadership in a number of business and regional jet markets: weather radar (50-60%); satcomm (60-70%); CMU/ACARS (50-60%); ACAS/TCAS (50-60%); EGPWS/GPWS/TAWS (100%); IRS/AHRS (80-90%); displays(50-60%); ADIRS/ADIRU (50-60%); flight info (80-90%)
Honeywell also has strong positions in four markets in addition to those referred to in the SO: AFIS (100%); Autothrottle (98%); Engine indications (67%) and Utilities (100%)

12. HONEYWELL IS THE LEADER IN AVIONICS (3)
Collins is present only in 8 out of 15 large commercial aircraft and 10 out of 16 business and regional jet markets in which Honeywell is present and referred to in the SO
In addition, Honeywell captured 50.5% of all avionics spending on large commercial aircraft platforms since 1995 vs 30.8% for Collins and 18.7% for Thales
Honeywell is the dominant force in avionics

13. HONEYWELL EXERCISES MARKET POWER
Examples show that OEMs and airlines have little buyer power – they cannot always “purchase best of breed” and they cannot prevent technical bundling
United Airlines weather radar: Honeywell provided display integration of a weather radar with an EGPWS (where it has a 100% share) to exclude Collins weather radar from United
AIMS cabinet on the B777: despite Boeing’s original intention to create an open system to use software developed by several suppliers, Honeywell used proprietary interfaces to render other suppliers’ solutions unusable thus excluding, e.g., the Collins CMU which United desired and had previously invested in

14. THE TRANSACTION FUNDAMENTALLY ALTERS THE COMPETITIVE LANDSCAPE
The combination of GECAS and GE’s engines with Honeywell’s avionics will present the merged entity with commercial opportunities of a kind and scale which have not existed before
The transaction creates a fundamentally changed marketplace
The foreclosure effects will be substantial

15. GECAS: THE REPLICATION IN AVIONICS OF ITS ROLE IN ENGINE PURCHASES
GECAS owns an enormous fleet of aircraft – more than any other company
GECAS is one of the largest purchasers of avionics in the world
GECAS purchases aircraft with GE engines whenever a GE engine is available. To do otherwise would invite negative publicity
Collins’ business assumption is that GECAS will purchase Honeywell avionics wherever possible
GECAS will be able to foreclose Collins from downstream airlines and end-users

16. GE / Honeywell Airframers GE Capital / GECAS Airlines / End-Users
-Engines
-APU’s
-Avionics
-Utilities
-Risk-Sharing $$$
-Engines
-Avionics
-APU’s
-Other Products
-Aftermarket Services
Airframers
-Major customer
-Major financier
GE Capital / GECAS
-Financing
-Leasing
Airlines / End-Users

17. BUNDLING OF AVIONICS, ENGINES AND NON-AVIONICS PRODUCTS (3)
The merger will increase the opportunities for GE to bundle avionics with engines
As a result, Collins will be more cautious in spending its limited bid and proposal money
Each project must be reasonably likely to generate sufficient revenue to justify the investment costs
Rationally, Collins will have no choice but to redeploy those resources so as to compete where it has a realistic chance of winning and to withdraw from those markets where it does not

18. Collins’ Response to the Transaction
SFE
New Aircraft
Existing Aircraft
No Current Competition
Collins Cannot Compete Effectively
-- WITHDRAW
BFE
Airline’s Additional Purchases of Platform
Airline’s Initial Purchase of Platform
No GE Engine Available (e.g. B757)
GE or Other Engine Available (e.g. A320)
Only GE Engine Available (e.g. B737)
Collins Cannot Compete Effectively
-- WITHDRAW
Collins Cannot Compete Effectively
-- REDUCE
Competition Continues
Non-GE Engine Incumbent (e.g. British Midland A320)
GE Engine Incumbent (e.g. Air France A320)
Collins Incumbent
Honeywell Incumbent
Collins Cannot Compete Effectively
- WITHDRAW
- WITHDRAW
Collins Cannot Compete Effectively
- WITHDRAW
- WITHDRAW
Collins Incumbent
Honeywell Incumbent
Competition Continues
Competition Continues

19. Access to Staff and Files ----
Provided a window into the thinking of both he Commission and the merging parties
Made a large difference in shaping the arguments to be advanced by the complainants by (a) helping them decide what not to argue and conversely providing insight into what arguments might be most effective.
Helped to shape the appeal papers to the CFI