EU Mergers

Phase I Mergers

  • M.8385 PILLARSTONE / FAMAR (3 May 2017)
  • M.8404 VOLKSWAGEN FINANCIAL SERVICES / LOGPAY FINANCIAL SERVICES / LOGPAY TRANSPORT SERVICES (4 May 2017)
  • M.8418 PETER CREMER HOLDING / HAGE / KÖNIG TRANSPORTGESELLSCHAFT (3 May 2017)
  • M.8432 BAIN CAPITAL / MKM BUILDING SUPPLIES (28 April 2017)
  • M.8446 ELO / AP1 / REAL ESTATE PORTFOLIO IN FINLAND (3 May 2017)
  • M.8463 CPPIB / PSPIB / WAIHEKE (3 May 2017)

EU Competition

Court of Justice dismisses RFA International’s appeal over EU dumping tariffs. On 4 May 2017, the European Court of Justice (ECJ) dismissed the appeal of RFA International LP (RFA) relating to their application for a refund of anti-dumping duties paid on imports of ferrosilicon originating in Russia. On 25 February 2017, the European Council (Council) imposed a definitive anti-dumping duty on imports of ferrosilicon originating in the People’s Republic of China, Egypt, Kazakhstan, the former Yugoslav Republic of Macedonia, and Russia and collected the provisional duty imposed. The RFA, who purchases, resells, imports, and warehouses ferrosilicon originating in Russia, later submitted a number of applications to the European Commission (Commission) for a refund of the anti-dumping duties paid during the period from 7 January 2009 until 10 December 2010. In the event, the Commission decided to grant the refund application for part of the relevant time period. RFA appealed to the General Court on 23 October 2012 for a partial annulment of the Commission’s decision, however, the appeal was dismissed. In their appeal to the ECJ, RFA argued that the General Court had misconstrued their argument at first instance, had wrongly put the burden of proof on RFA to prove that the calculated costs were excessive, and had erred in basing its conclusions on findings considered by RFA to be incorrect. The ECJ rejected each of RFA’s grounds of appeal and dismissed the action in its entirety.

Commission accepts commitments from Amazon in relation to e-books. On 4 May 2017, the Commission accepted legally binding commitments offered by Amazon in relation to a number of clauses in Amazon's distribution agreements with e-book publishers in Europe. The Commission opened its investigation in June 2015 due to concerns that certain clauses used by Amazon made it more difficult for other e-book platforms to compete with Amazon. The clauses in question were “most favoured nation” clauses and required publishers to offer the same (or better) terms and conditions to Amazon as they offered competitors and to inform Amazon of any more favourable terms. The Commission believed that these clauses could potentially reduce choice and innovation in e-book distribution and increase costs to customers. Amazon has offered not to enforce these clauses, to allow publishers to terminate any e-book contracts that contain such clauses, and to not include the clauses in any new e-book agreement with publishers. The Commission concluded that these commitments addressed their competition concerns.

State Aid

Commission approves the sale of three Italian bridge banks under state aid rules. On 2 May 2017, the Commission approved the sale of three Italian bridge banks, namely Nuova Banca Marche, Nuova Banca Etruria and Nuova Carichieti, to Unione di Banche Italiane (UBI Banca) under EU state aid rules. The Commission assessed UBI Banca’s plan to return the three loss making banks to viability by fully integrating each of them into UBI Banca. The Commission found that the sale of the three bridge banks was conducted openly and competitively and that the Italian authorities selected the best available bid. In purchasing the three banks, UBI Banca depended on the banks’ remaining non-preforming loans being sold to a third party and the resolution fund injected an additional €810 million into the three bridge banks and granted a set of guarantees for the risks related to this. 

Commission approves support to inland waterway transport in Slovakia. On 3 May 2017, the Commission approved a scheme to support inland waterway transport in Slovakia under EU state aid rules. The scheme will exempt all commercial operators from paying excise duty on inland waterway boat fuel and will cover a period of 10 years. The Commission concluded that the scheme will support a shift from road transport to inland waterway transport and, as inland waterway transport is less polluting than road transport, will have a positive impact on the environment. 

Commission approves French initiatives for renewable energy. On 5 May 2017, the Commission approved three French schemes to support electricity production from onshore wind, solar and sewage gas installations under EU state aid rules. The schemes will produce more than 17 gigawatts in renewable energy and will help France achieve its 2020 target of producing 23% of its energy from renewable sources. The Commission assessed the schemes and concluded that they were in line with the environmental objectives of the EU without unduly distorting competition. 

UK COMPETITION

CMA refers acquisition of Care Aspirations by Cygnet Health Care to a Phase 2 investigation. On 3 May 2017, the Competition and Markets Authority (CMA) referred the completed acquisition of Care Aspirations Developments Limited, Cambian Healthcare Limited, and Cambian Care Services Limited (Cambian) by Cygnet Health Care Limited and Universal Health Services, Inc. (Cygnet) to a Phase 2 investigation. The CMA decided that the merger has resulted in, or may result in, a substantial lessening of competition in the market for the supply of hospital-based inpatient rehabilitation services to local authorities and NHS clinical commission groups in England and to NHS Wales. The CMA had given Cygnet until the 28 April 2017 to offer undertakings in lieu of referring the merger to a Phase 2 investigation, however, Cygnet informed the CMA that it would not be offering such undertakings. The CMA has, therefore, decided to refer the merger to an in-depth Phase 2 investigation under section 22(1) of the Enterprise Act 2002. The CMA has until 17 October 2017 to decide whether the relevant merger situation has been created and if it has resulted in a substantial lessening of competition.   

CMA issues settlement and infringement decision in light fittings investigation. On 3 May 2017, the CMA issued its final settlement and infringement decision against The National Lighting Company Limited and its subsidiaries, Saxby Lighting Limited, Endon Lighting Limited and Poole Lighting Limited. The decision found that The National Lighting Company Limited and its subsidiaries had breached Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Chapter 1 of the Competition Act 1998. On 9 February 2017, the CMA had issued a statement of objections which alleged that The National Lighting Company Limited and its subsidiaries had breached competition law by restricting the freedom of retailers to restrict discounts online. It is alleged that the companies undertook a form of “resale price maintenance” in that they stopped retailers from setting their own prices online and instead forced them to sell at or above a minimum specified price. The companies offered to settle the investigation and the CMA has now issued a fine which includes a discount to reflect how the companies co-operated with the CMA under the settlement agreement.      

CMA grants derogation to the initial enforcement order in respect of Cardtronics’ acquisition of DirectCash Payments. On 5 May 2017, the CMA published a derogation to the initial enforcement order in relation to the completed acquisition by Cardtronics Holdings Limited (Cardtronics) of the entire issued share capital of DirectCash Payments Inc. (DCP). Under the initial enforcement order, Cardtronics are required to hold separate the DCP business and the Cardtronics business and refrain from taking any action which might prejudice a reference to a Phase 2 investigation. However, for the purpose of enabling the parties to consider a potential Phase 1 remedy, the CMA has now consented to certain members of Cardtronics’ finance team receiving financial information relating to DCP’s ATMs, subject to certain conditions, and to specified employees from Cardtronics and DCP receiving aggregated research outputs from the Remedy Financial Analysis Team in order to decide whether to make a remedies offer. 

Brexit

Commission adopts Recommendation for a Council Decision to authorise the Commission to open negotiations. On 3 May 2017, the Commission sent a Recommendation to the Council authorising them to open Article 50 negotiations with the UK. The Annex to the Recommendation sets out negotiating directives covering the status and rights of citizens and their families; a single financial settlement relating to the EU budget and to the termination of the UKs membership; arrangements regarding goods placed on the market and ongoing procedures; other administrative issues; and, the governance of the withdrawal agreement. The Recommendation is expected to be approved by the Council at its meeting on 22 May 2017.