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Complainants’ Access to File

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Presentation on theme: "Complainants’ Access to File"— Presentation transcript:

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


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