TNAG-2760-FCO40-3977-Hong-Kong-United-States-anti-trust-notification-1993 — Page 17

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RECE! DIN EGISTRY

1.

Mr Whitney

NFA for w.

2. PA with previous paper plze

(6

AAB

16/7

Mr K A Salkeld

Trade and Industry Branch Government Secretariat

Hong Kong Government

Hong Kong

Misy

REGISTRY

Lower Albert Road

BY FAX (010 852 840 1621)

this

INDE

outstanding subject

071 215 5329

bcc

Direct line

Mr Green

NL 4/07

Our ref

Ms Turner

(6) in TIB L/M 58/93

Your ref

Mr Sack

14 July 1993

Date

Mr Whitney

Dear Mr Salkeld

نع

Mr Whitehorn Mr Hosker

20 JUL 1993

PA

Sols D5 CP2b CP1

this

Action Taken

Department of Trade

and Industry

Kingsgate House

66-74 Victoria Street London SW1E 6SW

Enquiries

071-215 5000

Telex 8813148 DIHQ G

Fax 071-931 0397

HKD, FCO CP5, OFT

British Embassy, Washington

BY FAX

US ANTI-TRUST NOTIFICATION: PROPOSED ACQUISITION OF MAJORITY SHARE IN G.M. PFAFF.AG (GERMANY) BY SEMI-TECH (GLOBAL) CO. LTD. (HONG KONG)

Thank you for your letter of 1 June on the above.

In my letter of 14 May to Mr Siu, I noted that we had asked the US authorities for clarification on a number of points in relation to the investigation of this acquisition. During a recent trip to North America I met an official from the US Federal Trade Commission (FTC), and took the opportunity to discuss the case with him. He confirmed that the FTC had decided not to pursue this matter.

You may nonetheless be interested in the background information provided by the FTC as to their thinking in this case. The FTC justified its investigation by reference to the "effects doctrine"

under US anti-trust laws, for the US

US to claim jurisdiction, it is only necessary that the parties under investigation be deemed to be doing something in the US which might have an effect on the US market. In this instance, the connection with the US was the selling of sewing machines.

While the FTC had not been certain that the acquisition would lead to a concentration of market power in the hands of the merged company, it had felt that such an outcome was sufficiently likely to justify an investigation. This had taken the form of contacting customers and competitors of the companies, seeking information on a voluntary basis. While the FTC had not in the event talked to anyone in Hong Kong, it indicated that this might have been a possibility.

dti

the department for Enterprise

Bomycled Paper