Investigation

Commission seeks feedback on commitments offered by container liner shipping companies

The Commission has concerns that container liner shipping companies’ practice of publishing their future price increase intentions may harm competition and customers by raising prices for their services to and from Europe.

These price announcements do not indicate the fixed final price for the services concerned, but only the amount of the increase in US dollars per transported container unit, the affected trade route and the planned date of implementation. They generally concern sizable increases of several hundred US dollars per transported container unit. These price announcements are made typically three to five weeks before their intended implementation date, and during that time some or all of the other carriers announce similar intended rate increases for the same or similar route and same or similar implementation date.

In order to address the Commission’s concerns, the carriers offered a number of commitments including offering to stop publishing and communicating these price announcements. Interested parties have one month to submit comments to the Commisison (from 16 February 2016).

Decisions

Commission fines car parts producers over €137 million in cartel settlement

The Commission has imposed fines of over €137 million on Melco (Mitsubishi Electric) and Hitachi for participating in a cartel for alternators and starters with another firm, Denso, in breach of EU antitrust rules.

Denso was not fined as it revealed the existence of the cartel to the Commission. All companies acknowledged their involvement and agreed to settle the case.

For more than five years, the three Japanese car parts manufacturers coordinated prices and allocated customers or projects with regards to alternators and starters. Although contacts associated with forming and running the cartel took place outside the EEA, the cartel affected European customers as alternators and starters were sold directly to car manufacturers in the EEA. Between September 2004 and February 2010 the companies met at each other’s offices and in restaurants and were in contact over the phone on a regular basis, in order to limit competition between them. In particular, the three companies:

  • coordinated their responses to certain calls for tenders issued by car manufacturers
  • shared out certain vehicle manufacturers and projects between them
  • exchanged commercially sensitive information.

ECJ enforces strict compliance in shared platforms

Several tour operators brought an action for annulment against a decision of the Lithuanian competition authority to fine them for concerted practices related to a common online travel reservation system. The platform operator had sent the travel agents participating in the scheme an electronic message capping the rebates that could be granted for products sold via the system and had technically adapted the system so as to implement this cap.

The ECJ held that travel agents who knew the content of the message could be presumed to have participated in a concerted practice, unless they had distanced themselves from the message, challenged its imposition or adduced other evidence to rebut the presumption, such as systematically granting higher rebates that those set under the cap.

EU Policies and Guidance

Lower fines for companies that cooperate

Competition Commissioner, Margaret Vestager recently said that companies who admit to breaking the law, especially when they come up with remedies to make the markets more competitive or companies that provide evidence voluntarily, could face lower fines in a bid to speed up anti-competitive investigations.

Ms. Vestager stated that the Commisison guidelines allow them to reduce fines for companies that cooperate, but it has been more than a decade since the Commission last used that possibility outside cartels.

News (Ireland)

ABP bid for Slaney Foods referred to Brussels

It has been reported in the Irish press that the planned acquisition by ABP of a 50% stake in Slaney Foods is likely to be referred to the European Commission, as the matter crosses two jurisdictions.

Concerns have been raised by farming groups who fear competition issues will arise. The press report notes that the deal means ABP’s processing of beef kill will rise from 22% to 28% as well as 50% of rendering in Ireland. Slaney also processes 40% of sheep kill.

CCPC accepts failing firm defence

The CCPC recently approved the acquisition of Fannin Compounding by Baxter Healthcare.

The CCPC initially considered that the proposed transaction would lead to a substantial lessening of competition in the relevant market. However, the CCPC concluded that Fannin Compounding satisfied each condition of the failing firm test.

The CCPC accepted that the most likely outcome that could reasonably be predicted in the absence of the proposed transaction was that Fannin Compounding would close and its assets would exit the relevant market. The CCPC considered that the competitive structure in the relevant market was likely to deteriorate to an even greater extent in the absence of the proposed transaction. The CCPC also considered that in the absence of the proposed transaction, there would be a relatively significant reduction in supply capacity in the State for compounding medicines, which was likely to lead to an increase in prices.

Practice Note

What is consortium bidding? Consortium bidding or joint bidding is when two or more parties come together to submit a joint bid in a public procurement competition. A consortium bid may involve actual or potential competitors coming together to discuss the terms of a joint bid and potentially sharing commercially sensitive information relevant to the bid.

According to the CCPC, a consortium bid will not breach competition law if:

  • none of the consortium members could satisfy the requirements of the tender competition / contract by itself
  • no subgroup of the consortium members could satisfy the requirements of the tender competition / contract
  • only the minimum amount of information needed for the joint bid and the carrying out of the contract is shared between the consortium members and is limited to relevant staff on a ‘need to know’ basis
  • the consortium members ensure they compete vigorously as usual in all other contexts.