The company also said it's conducting a "thorough investigation" into the matter, including a review of procedures regarding all of its products made in China.

The commission said the toys were made with paints that may contain excessive levels of lead, which could cause "adverse health effects" if consumed.

Wedbush Morgan analyst Sean McGowan maintained his buy rating on the shares and said he doesn't expect the issue to have a long-term impact on investors' view of Mattel.

"Mattel ships literally hundreds of millions of individual items, so a recall of one million units is hardly material to total sales,"

McGowan wrote in a note to clients. "But consumer perception is extremely important and Mattel takes safety issues very seriously ... the company will treat this matter with the highest degree of urgency and will not try to find the cheapest solution."

Archrival Virgin Atlantic Airways blew the whistle on BA last year after individuals at the two carriers discussed proposed changes to fuel surcharges for long flights.

Virgin won immunity in the UK, where the Office of Fair Trading (OFT) fined BA 121.5 million pounds in the OFT's biggest-ever civil penalty.

The U.S. Department of Justice fined BA 300 million dollars (148 million pounds) as part of a wider investigation that also resulted in a fine for Korean Air Lines and notice that Virgin and Germany's Lufthansa would have to pay restitution to customers.

"This resolves the OFT's and the DoJ's (U.S. Department of Justice) investigation of British Airways," BA said in a statement to the London Stock Exchange.

Virgin was not available for immediate comment.

The fines, already the biggest in BA's history, could have been higher if the airline had not admitted wrongdoing.

"Had BA not made admissions and cooperated from the outset, they would have been fined many millions of pounds more ... tens of millions of pounds," OFT director of cartel operations Simon Williams said in a telephone interview with Reuters.

"This is the largest civil fine ever imposed by the OFT," he said, adding that he hoped it would serve as a deterrent and encourage businesses to come forth with information before their rivals do. "Businesses up and down Britain have to ask themselves some very hard questions."

Two senior BA executives quit last October after being linked to the investigation and in May BA set aside 350 million pounds as a provision for possible fines.

BA said it expected that provision to cover the fines and any impact from a separate, widespread probe of the airline industry regarding cargo fuel surcharges which also involve authorities in Europe, Canada, Australia, South Africa and New Zealand.

Analysts said the UK fine was in line with expectations, given the provision already taken, and noted BA could have fared far worse.

"The fine is less than the maximum 10 percent of revenue (850 million pounds) that could have been imposed," said Citigroup analyst Andrew Light in a research note that carried a 580 pence target price for BA and a "Buy/High Risk" investment rating.

"This news is already fully priced in," he said.

The price fixing related to surcharge increases which took place from 2004 until 2006.

Fuel surcharges soared from 5 pounds to 60 pounds per ticket on typical BA or Virgin long return flights during the period, but BA Chief Executive Willie Walsh defended the rises, which came as crude oil prices surged.

"I want to reassure our passengers that they were not overcharged," he said.

BA said both the OFT and the U.S. Department of Justice would continue with criminal investigations into the conduct of individuals involved.

In its landmark decision three years ago, the European Commission found Microsoft violated the EU competition law for abuse of its dominant position and fined the company a record 497 million euros (685 million U.S. dollars).

In addition, the U.S. software giant was also required to provide a new version of Windows operating system without its own media player program, and to disclose complete and accurate interface documentation, allowing its competitors to interoperate with its Windows PCs and servers.

Microsoft then contested the Commission's 2004 ruling at the European Court of First Instance.

The Commission imposed on Microsoft last July another fine totaling 386.5 million U.S. dollars, based on the finding that the company failed to fully respect its 2004 ruling, which Microsoft said it will also appeal.

The list of quality-compromised goods from China got longer Thursday as federal authorities slapped a highly unusual hold on shrimp and certain fish from that country after tests showed contamination from potentially harmful drugs.

The Food and Drug Administration said it would block all shipments from China of farm-raised shrimp, catfish, eel and two other kinds of fish until importers can produce independent test results showing the items to be free of drugs banned in U.S. fish farming.

Agency officials said there was no immediate threat to human health. An industry expert said he didn't expect shortages of shrimp because of the FDA action, because there was more than enough available on the world market.

Thursday's hold came just days after federal transportation officials ordered the recall of as many as 450,000 tires made in China after some lost their treads on the road. Toothpaste from China that was recalled because of contamination with an antifreeze chemical now turns out to have been distributed not just to a few discount stores but to prisons and mental hospitals in Georgia. This year, a pet food manufacturer recalled massive amounts of its products because of contamination from an ingredient imported from China.

"It can be said that the quality of China's exports all are guaranteed," Wang told reporters at a regularly scheduled briefing.

However, the U.S. Food and Drug Administration advised consumers to "avoid using tubes of toothpaste labeled as made in China," according to a statement posted on the agency's Web site.

"Out of an abundance of caution, FDA suggests that consumers throw away toothpaste labeled as made in China," the statement said.

Chinese-made toothpaste has been banned by numerous countries in Asia and the Americas for containing diethylene glycol, or DEG, a chemical often found in antifreeze. It is also a low-cost -- and sometimes deadly -- substitute for glycerin, a sweetener in many drugs.

The New York Times reported Thursday that tainted Chinese toothpaste had been more widely distributed in the United States than had been previously reported. It said about 900,000 tubes have turned up in places including correctional facilities and some hospitals, not just at discount stores.

A spokesman for North Carolina's Department of Correction said this month that Pacific brand toothpaste was distributed to prisoners who could not afford to buy a name brand at prison stores. The tubes were taken away after trace amounts of DEG was found in them.

Officials in Georgia and North Carolina told the Times there had been no illnesses reported, and that the toothpaste in question was being replaced with brands not manufactured in China.

Chinese exports came under scrutiny earlier this year with the deaths of dog and cats in North America blamed on Chinese wheat gluten tainted with the chemical melamine.

Since then, U.S. authorities have turned away or recalled toxic fish, juice containing unsafe color additives and popular toy trains decorated with lead paint.

On Wednesday, three Japanese importers recalled millions of Chinese-made travel toothpaste sets, many sold to inns and hotels, after they were found to contain as much as 6.2 percent of diethylene glycol.

Wang, the Commerce Ministry spokesman, said Chinese experts have already "explained the situation."

He gave no details, although the country's quality watchdog has in past cited tests from 2000 that it said showed toothpaste containing less than 15.6 percent diethylene glycol was harmless to humans.

Also Wednesday, Beijing police raided a village where live pigs were force-fed wastewater to boost their weight before slaughter, state media reported.

Plastic pipes had been forced down the pigs' throats and villagers had pumped each 220-pound pig with 44 pounds of wastewater, the Beijing Morning Post reported Thursday.

Paperwork showed the pigs were headed for one of Beijing's main slaughterhouses and stamps on their ears indicated that they already had been through quarantine and inspection, the paper said. Suspects escaped during the raid and no arrests were made, it said.

The case underscored China's chaotic food safety situation, where manufacturers and distributors often use unapproved additives, falsify expiration dates or find other methods of cutting corners to eke out small profits.

Officials have in recent weeks underscored the need to tighten up inspections, punish violators and increase surveillance.

Wei Chuanzhong, deputy director of the General Administration of Quality Supervision, Inspection and Quarantine, said local governments "should be fully aware of the importance and improve responsibility for imported and exported food safety."

His remarks, made during an inspection tour of the port city of Tianjin, were posted Thursday on the administration's Web site.

Earlier this week, inspectors announced they had closed 180 food factories nationwide in the first half of this year and seized tons of candy, pickles, crackers and seafood tainted with formaldehyde, illegal dyes and industrial wax.

"These are not isolated cases," Han Yi, an official with Wei's quality administration, was quoted as saying in Wednesday's state-run China Daily newspaper.

Han's admission was significant because the agency has said in the past that safety violations were the work of a few rogue operators -- a claim aimed at protecting China's billions of dollars of food exports.

Luxottica Group (LUX), the world's biggest eyewear maker, says it will buy U.S. sunglasses maker Oakley in an all-cash deal worth about $2.1 billion.
Luxottica, an Italian company whose many brands include Ray-Ban, chanel and Prada, said the combination would offer economies of scale and an opportunity to create new eyewear categories.

Luxottica will buy all the outstanding shares of Oakley for $29.30 a share, the companies said in a joint statement.

The offer represents a 16% premium to Oakley's Wednesday close of $25.23 on the New York Stock Exchange.

Luxottica, based in Milan, expects the deal to lead to savings of about 100 million euros ($134 million) over the next three years. It will pay for the deal from operating cash flow, available credit, and credit facilities to be available at the closing.

The deal has been unanimously approved by both boards of directors, and the companies expect the deal to close in the second half.

Oakley, based in Foothill Ranch, Calif., has been scaling back its apparel and footwear lines, while beefing up its optics portfolio. This year it bought Eyewear Safety Systems, a company that supplies protective eyewear to the military, law enforcement and firefighters.

Last year, Oakley bought luxury brand Oliver Peoples and retail chain The Optical Shop of Aspen, while launching a women's optical line.

Jim Jannard, Oakley's chairman and founder, said, "Oakley will continue to be Oakley but with much greater resources and a platform for realizing the true potential of our brand and company."

The Supreme Court ruled 7-2 in the City of New York's favour. Justice Clarence Thomas, giving the opinion of the court, noted that under New York law, property owned by a foreign government is exempt from taxation

if it is "used exclusively" for diplomatic offices or for the quarters of a diplomat "with the rank of ambassador or minister plenipotentiary" to the United Nations.

The PMI building is owned by the government of India. Several floors are used for diplomatic offices, but approximately 20 floors contain residential units for diplomatic employees of the mission and their families. The employees — all of whom are below the rank of Head of Mission or Ambassador — are Indian citizens who receive housing from the mission rent free, the Supreme Court noted.

In April, India and Mongolia filed a joint reply in the case saying, "housing Mission staff on Mission premises because the foreign sovereign has determined that their presence is required to perform their diplomatic and governmental duties does not involve any entry of the foreign sovereign into any marketplace. Rather, the activity at issue in the instant cases is entirely between the Governments of India and Mongolia and their own diplomatic staffs, whose employment relationship is governed wholly by the laws of those two nations."

For several years, the City of New York has levied property taxes against India and Mongolia for the portions of their buildings used to house lower level employees, Justice Thomas noted, adding, the two governments refused to pay the taxes.

By operation of New York law, the unpaid taxes eventually converted into tax liens held by the city against the two properties. The Mongolian ministry owed about $2.1 million in 2003, which has since grown to $4.1 million.

The Bush administration backed India and Mongolia, saying the city's lawsuits have invited retaliation by foreign countries against U.S. property overseas.

New York Mayor Michael R. Bloomberg said the Supreme Court's decision to allow U.S. courts to hear disputes between his city and foreign governments "brings us closer to finally ensuring that countries with missions and consulates in New York pay their fair share in city taxes, just as all New Yorkers do."

On April 2, 2003, the City of New York filed complaints in a state court seeking judgement to establish the validity of the tax liens. Justices John Paul Stevens and Stephen Breyer, giving the dissenting opinion yesterday, said, "This case is not about the validity of the city's title to immovable property, or even the validity of its automatic pre-judgement lien.

Rather, it is a dispute over a foreign sovereign's tax liability. If Congress had intended the statute to waive sovereign immunity in tax litigation, I think it would have said so."

The Permanent Mission of India in New York did not return a call from the Tribune for comment.

Under the Foreign Sovereign Immunities Act, the jurisdiction of U.S. courts generally does not extend to foreign governments. But the Supreme Court cited the exception when "rights in immovable property" are at issue. This, the court said, applied in the New York case.