EU Competition

Commission publishes full text decision on conditional approval of  IAG’s acquisition of bmi. On 12 July 2016, the European Commission (Commission) published its non-confidential full text decision on the implementation of remedies identified in respect of International Consolidated Airlines Group’s (IAG) acquisition of British Midlands Limited (bmi), in which it sets out its assessment of the viability of applicants and evaluation of their formal bids pursuant to the commitments provided by IAG. In particular, IAG committed to make slots available at London Heathrow airport in order to allow certain prospective entrants to operate or increase their services on routes between London-Aberdeen,  London-Edinburgh, London-Nice, London-Cairo, London-Riyadh, and London-Moscow.

Further challenge brought in respect of General Court decision on freight forwarders’ cartel. On 11 July 2016, details were published in the Official Journal of an appeal brought by Kühne + Nagel International AG (K+N) against the General Court’s decision to uphold the Commission’s findings with respect to its participation in an air freight forwarding services cartel. This appeal follows similar actions brought by other cartel participants, which have also been published in the Official Journal.  Among its grounds for appeal, K+N argues that the General Court has erred in law in assuming that the concerted practices relating to the new export system and advanced manifest system practices infringed Article 101 of the Treaty on the Functioning of the European Union (TFEU) because they were not capable of affecting inter-State trade. It also argues that, unlike the other freight forwarders, it does not operate according to the consolidation model but more as a classic intermediary in over 90% of transactions and, therefore, the fine should only have been calculated  on the basis of the turnovers generated from the respective fees or surcharges.

ECJ rules on whether Italian law regulating the minimum price for haulage services infringes Article 101 TFEU. On 21 June 2016, the ECJ handed down an order, following a preliminary reference from the Italian courts in the matter of Salumificio Murru SpA v Autotrasporti di Marongiu Remigio, finding that Italian law requiring the price of haulage services to be no less than the minimum operating costs fixed by the Italian Ministry of Infrastructure and Transport (MIT) does not  infringe Article 101 TFEU when read in conjunction with Article 4(3) of the Treaty on European Union (TEU). The ruling marks a departure from a previous decision in the matter of API and Others, but the ECJ found this matter could be differentiated on the facts as the MIT had consulted trade associations and haulage representatives prior to setting the minimum costs and the Member State had not divested its own rules of the character of legislation by delegating to private economic operators responsibility for taking decisions affecting the economic sphere.

Google sent two Statements of Objection by the Commission. On 14 July 2016, the Commission announced that it has sent two Statements of Objection to Google in respect of alleged anti-competitive practices infringing Article 102 TFEU, in respect of comparison shopping and online advertising. The first supplements the  Statement of Objections sent to Google in April 2015 and provides further evidence supporting the Commission’s preliminary conclusion that Google has been engaging in anti-competitive practices by favouring its own products on its general search results pages. The second Statement of Objections relates to separate allegations that Google has been restricting third party websites from displaying search advertisements from its competitors.

General Court hands down judgment in marine hose cartel appeal. On 14 July 2016, the General Court handed down its judgment finding that the Commission had not misapplied the principle of economic succession parental liability nor erred in its assessment that ITR Rubber had undertaken a leading role in the cartel. The General Court did however, find that the Commission had erred in law by taking aggravating circumstances into account when calculating the fine to be paid by Parker-Hannifin Corporation, as it did not own ITR Rubber at the time of the aggravating circumstances. The fines imposed were, therefore, reduced accordingly.

EU Mergers

Phase I Mergers

  • M.7860 KH / STRABAG / SPPD (12 July 2016)
  • M.7893 PLASTIC OMNIUM / FAURECIA EXTERIOR AUTOMOTIVE BUSINESS (11 July 2016)
  • M.7946 PAI / NESTLE / FRONERI (14 July 2016)
  • M.7971 GOLDMAN SACHS / DEUTSCHE BANK / NBGI ASSETS (11 July 2016)
  • M.8072 TOTAL / SAFT (12 July 2016)
  • M.8075 PARTNERS GROUP / INFRARED CAPITAL PARTNERS / MERKUR OFFSHORE (8 July 2016)
  • M.8077 BANCOPOPULAR-E / BANCO POPULAR PORTUGAL  (11 July 2016)
  • M.8080 MAXBURG II / VREP / NORAFIN (11 July 2016)
  • M.8085 AEA / SCAN GLOBAL LOGISTICS (8 July 2016)
  • M.8094 BNP PARIBAS FORTIS PRIVATE EQUITY BELGIUM / SOFINDEV IV / DHAM / NOVY INTERNATIONAL (14 July 2016)

State Aid

ECJ rules Commission’s refusal to disclose State aid investigation documents was not illegal. On 14 July 2016, the European Court of Justice (ECJ) upheld the judgment of the General Court, in which it found that the Commission’s refusal to disclose documents relating to its decision that Sea Handling SpA was in receipt of unlawful State aid, did not breach the procedural rules under Regulation 1049/2001 relating to access to documents. In particular, the ECJ found that there had not been a procedural irregularity, although attempted requests for disclosure had to be made prior to access to the documents being granted, as the general presumption of confidentiality was part of the State aid regime.

UK Competition

CMA publishes case timetable for energy market remedies implementation. On 11 July 2016, the Competition and Markets Authority (CMA) published its timetable for implementing the remedies identified in its report on the energy market, following its sector investigation. Notably, the report identified areas in both the retail and wholesale energy markets that it considered to have an adverse effect on competition. With respect to wholesale markets, the CMA identified: (i) the absence of locational pricing for transmission losses; and (ii) the mechanisms for allocating Contracts for Difference, to be of particular concern. In respect of the retail market, the CMA has identified a number of ways in which the current regulatory framework undermines effective and efficient competition, particularly in respect of customers’ limited awareness of, and ability to switch energy supplier. The timetable sets 23 December 2016 as the statutory deadline for implementation of remedial action.

CMA publishes full text decision on Origin’s acquisition of Provantis Amenity. On 13 July 2016, the CMA published its full text decision to approve the acquisition of Provantis Amenity Limited (Provantis) by Origin UK Operations Limited (Origin). The Parties overlap in the distribution of amenity products used for the improvement, maintenance and construction of sports and landscaped turf areas (including grass seeds, fertilisers, plant protection products, and soil and turf improvers). A Provantis subsidiary also purchases conventional compound granular fertilisers from a trading division of Origin. With respect to any horizontal overlap, the CMA found that Provantis and Origin were not each other’s closest competitors and that there were a number of alternative suppliers to service customer requirements. In terms of the vertical relationship between the parties, the CMA found that the merger would not provide the merged entity with the ability to “engage in a foreclosure strategy to the detriment of other distributors of amenity products”. The  CMA also found that the entry or expansion of competitor firms would mitigate any anti-competitive effects of the merger.

CMA announces launch of monitoring project in online hotel booking sector. On 13 July 2016, the CMA announced that it has launched a monitoring project  in partnership with the Commission and the national competition authorities of nine other EU Member States to observe how changes to room pricing terms are affecting the online hotel booking sector. The project follows the conclusion of the CMA’s sector investigation in September 2015, during which online travel agents Expedia and Booking.com “changed their terms and conditions to remove certain ‘rate parity’ or ‘most-favoured nation’ requirements, which prevented hotels from offering cheaper room rates on competing online travel agents’ sites than are offered on Expedia and Booking.com”. The CMA hopes the monitoring project will identify any areas within the sector that require further action.

CMA publishes full text decision to approve Whitby Seafoods’ acquisition of Dawnfresh Seafoods’ business. On 14 July 2016, the CMA published its full text decision to approve Whitby Seafoods’ acquisition of Dawnfresh Seafoods’ scampi processing business. The parties overlap in the wholesale supply of own-label and branded scampi to retail customers, and own-label scampi to food service customers, in the UK. Whitby also sells branded scampi to food service customers. The CMA found there would be significant competitive constraint post-merger from both large scampi suppliers, such as Young's Seafood and Five Star Fish; and smaller suppliers, which would be able to expand in the UK scampi market.

Acadia Healthcare acquisition of Priory Group to be referred to Phase II investigation unless acceptable undertakings offered. On 14 July 2016, the CMA announced that it would be referring Acadia Healthcare Company, Inc.’s (Acadia) acquisition of Priory Group No. 1 Limited (Priory) to a Phase II investigation unless acceptable undertakings are offered. Acadia and Priory overlap in the supply of a number of inpatient and outpatient mental healthcare services to NHS organisations and local authorities in England and Wales. In particular, the CMA has identified 20 local areas where the parties overlap in the supply of acute services, children’s and adolescent mental health services, psychiatric intensive care units, rehabilitation services and secure mental health services. Acadia has until 21 July 2016, to provide any undertakings in lieu of reference.

Speeches/Publications/Consultations/Communications

EU Commissioner for Trade delivers speech on EU-China relationship. On 11 July 2016, Cecilia Malmström, EU Commissioner for Trade, delivered a speech to the University of International Business and Economics, in Beijing, in which she sets out how the EU and China can strengthen their trade relationship.

Deputy head of DG Competition unit delivers speech on EU cartel enforcement in the international context. On 13 July 2016, the Commission published a speech delivered by Maria Luisa Tierno Centella, Deputy Head of Unit G2 in the Cartels Directorate within DG Competition at the 7th Annual Chicago Forum on International Antitrust Issues, in which she notes that combatting cartels is a common objective of competition authorities, internationally. She also sets out how the national competition authorities of Member states work with the Commission and the judiciary to ensure EU antitrust prohibitions are enforced consistently.

Commission publishes State aid report. On 13 July 2016, the Commission published a Special Eurobarometer report titled “Perception and awareness about transparency of state aid”. The report among other observations, sets out the level of awareness about State aid achieved through the media and ease of finding information on State aid. In particular, the report notes that many of the of 27,818 EU citizens surveyed did not, “feel well informed about state aid, and think that information about companies who have received such aid in their country is difficult to find”.