Competition: Commission announces the launch of market tests in investigations in online hotel booking sector by French, Swedish and Italian competition authorities

On 15 December 2014, the Commission announced that it had launched market tests in antitrust investigations by the French, Swedish and Italian competition authorities (“NCAs”) in the online hotel booking sector. The Commission is coordinating the national investigations but has not opened its own investigation. The NCAs have concerns that so-called parity clauses in contracts concluded between online travel agent Booking.com and hotels may have anticompetitive effects in breach of EU and national competition rules. Based on the parity clauses, the hotels are obliged to offer Booking.com the same or better room prices as the hotel makes available on all other online and offline distribution channels. The NCAs consider that these clauses may harm competition, in breach of the respective national competition laws as well as Article 101 and/or Article 102 of the Treaty on the Functioning of the European Union (“TFEU”). According to the NCAs, the parity clauses may in particular restrict competition between Booking.com and other online travel agents (“OTAs”) and hinder new booking platforms from entering the market. To alleviate these concerns, Booking.com has proposed to abandon the parity requirement in respect of prices which the hotel makes available to other OTAs that would enable hotels to offer different room prices to different OTAs. However, the hotel would still have to offer the same or better room prices to Booking.com as are offered on the hotel's own online and offline booking channels. The commitments are intended to apply EEA-wide. If the adequacy of the commitments is confirmed by the market tests, the national competition authorities can make them legally binding on Booking.com. Source: Commission Press Release 15/12/2014

Competition: General Court dismisses several appeals against Commission’s paraffin wax cartel decision but reduces fine imposed on ENI

On 12 December 2014, the General Court (“GC”) handed down five separate judgements on the appeals brought by ENI SpA (“ENI”), Hansen & Rosenthal KG and H & R Wax Company Vertrieb (“Hansen & Rosenthal”), H & R ChemPharm GmbH (“H & R ChemPharm”), Tudapetrol Mineralölerzeugnisse Nils Hansen KG (“Tudapetrol”) and Repsol YPF Lubricantes y especialidades (“Repsol”) against the Commission’s decision in paraffin wax cartel. In October 2008, the Commission adopted a decision finding that 9 corporate groups, ENI, ExxonMobil, Hansen & Rosenthal, Tudapetrol, MOL, Repsol, Sasol, RWE and Total, had participated in a cartel in the market for paraffin wax in the European Economic Area (“EEA”) and imposed fines totalling EUR 676 million on these groups. A number of companies brought actions with the GC challenging the Commission’s decision and the GC handed down its first judgements on certain appeals in September 2013. In its rulings delivered on 12 December 2014, the GC dismissed the appeals brought by Hansen & Rosenthal, Tudapetrol, H & R ChemPharm and Repsol in their entirety. As regards the appeal brought by ENI, the GC rejected the most of ENI’s claims and upheld the Commission’s findings. However, as regards in the increment of 60 % imposed by the Commission on ENI due to ENI’s previous involvements in the PVC and polyproryplene cartels though the companies under its control at the time, the GC concluded that the Commission had breached ENI’s right of defence and fixed the fine accordingly. According to the GC, the Commission is not entitled, when assessing the aggravating circumstances of a case, to hold an undertaking liable for a previous infringement in relation to which it has not been sanctioned by the Commission’s decision, in the establishment of which it has not been an addressee of a statement of objections and, with the result, it has not been given an opportunity to make representations with a view to disputing that it formed an economic unit with certain other undertakings during the Commission’s administrative procedure. The GC noted that this conclusion is supported in particular by the fact that, under the established case law, the Commission is not bound by any limitation period when reaching a finding of a repeated infringement and therefore such a finding may be reached several years after a finding of the underlying infringement, at a time when the undertaking concerned would be incapable of disputing the existence of a single economic unit and the presumption of decisive influence. Therefore, the GC removed the increase of 60 % for recidivism and set the amount of the fine to EUR 18,2 million.Source: Case T-544/08 Hansen & Rosenthal and H & R Wax Company Vertrieb v European Commission, judgement of the General Court on 12 December 2014, Case T-550/08 Tudapetrol Mineralölerzeugnisse Nils Hansen v European Commission, judgement of the General Court on 12 December 2014, Case T-551/08 H & R ChemPharm GmbH v European Commission, judgement of the General Court on 12 December 2014, Case T-558/08 Eni SpA v Commission, judgement of the General Court on 12 December 2014 and Case T-562/08 Repsopl YPF Lubricantes y especialidades & others v European Commission, judgement of the General Court on 12 December 2014

Competition: Advocate General Kokott delivers opinions on appeals in banana importers cartel case

On 11 December 2014, Advocate General (“AG”) Kokott handed down separate opinions on the appeals by Fresh Del Monte Produce Group (“Del Monte”), Dole Food Company (“Dole”) and the Commission against the General Court's (“GC”) judgments on the actions brought by Dole and Del Monte to challenge the Commission's decision on the banana importers cartel. In October 2008, the Commission had fined Dole, Chiquita Brands International, Weichert and Del Monte a total of EUR 60.3 million for operating a cartel for fresh bananas between 2000 and 2002. Del Monte was held jointly and severally liable for the fine imposed on Weichert. Del Monte and Dole lodged appeals against the Commission's decision with the GC. On 14 March 2013, the GC dismissed all of Dole's and Del Monte's challenges to the Commission's infringement decision. However, it reduced the fine imposed on Del Monte on the basis that the Commission had not taken due account, under the Leniency Notice, of its co-operation by voluntarily responding to informal information requests. After the GC’s judgments, Del Monte, Dole and the Commission lodged further appeals with the Court of Justice of the European Union (“CJEU”). In her opinions, the AG considered that the appeals by both Del Monte and Dole should be dismissed in its entirety. As regards Del Monte’s principle grounds of appeal, the AG found that the GC did not err in holding Del Monte jointly and severally liable for the fine imposed on Weichert. Further, according to the AG, the GC did nor err in upholding the Commission’s finding that there was a single and continuous infringement involving, Dole, Chiquita and Del Monte/Weichert. However, the AG considered that the Commission's appeal against the reduction of Del Monte’s and Weichert's fine should be upheld. She found that the GC erred in law in finding that voluntary responses to information requests sent by the Commission constituted co-operation under the Leniency Notice. In accordance with the required spirit of genuine co-operation, to benefit from a leniency reduction, the provision of information should be both voluntary and spontaneous. The AG suggests that the fine be adjusted to EUR 9.8 million instead of the EUR 8.82 million set by the GC. As regards Dole’s grounds of appeal, the AG found that the GC had not committed procedural errors, as claimed by Dole. In addition, the AG found that the GC had not distorted facts or evidence. Accordingly, the AG considered that the appeals by both Del Monte and Dole should be dismissed in its entirety. Source: Joined Cases C-293/13 P and C-294/13 P Fresh Del Monte Produce, Inc. and Others v. European CommissionCase C-286/13 P – Dole Food Company, Inc. and Dole Fresh Fruit Europe OHG v. European Commission and Commission Press Release 15/10/2008 

Competition: Advocate General Jääskinen delivers opinion on jurisdiction issues in cartel damages actions

On 11 December 2014, Advocate General (“AG”) Jääskinen delivered his opinion regarding the preliminary ruling requested by a German court from the Court of Justice of European Union (“CJEU”) on the application of the Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Brussels I Regulation”) in the context of damages actions based on the Commission’s cartel decision. In May 2006, the Commission found that nine companies had participated in cartels in the hydrogen peroxide and perborate markets in breach of Article 101 of the Treaty on the Functioning of the European Union (“TFEU”) and imposed fines totaling EUR 388 million on seven cartel participants. According to the Commission, the cartel covered the whole territory of the EEA over the period from 31 January 1994 to 31 December 2000. Subsequently, a Belgian company, Cartel Damage Claims Hydrogen Peroxide SA (“CDC”), to whom a number of companies have transferred their rights to seek damages for losses caused by the cartel, brought an action for damages before the German court, Landgericht Dortmund, against six of the companies fined by the Commission. During the court proceedings, the defendants of the case, i.e. the cartelists, disputed the jurisdiction of the court to examine the damages actions after which Landgericht Dortmund referred three questions to the CJEU requesting a preliminary ruling concerning the application of Brussels I Regulation to cartel damages actions. Landgericht Dortmund’s first question concerned the application of Article 6(1), according to which a person domiciled in a Member State may also be sued, where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgements resulting from separate proceedings, to cartel damages actions. In his opinion, AG Jääskinen first pointed out that the risk of irreconcilable judgements necessarily arises where the members of a cartel are jointly and severally liable for a single and continuous infringement of competition rules and are spread over a large number of Member States. That being said, AG Jääskinen concluded that in such cases, actions for cartel damages may be brought before the courts in a Member State where one of the cartelists is domiciled even if the claims against such cartelists would be subsequently withdrawn, as long as the damages actions are effectively instituted and the withdrawal is not done abusively. Further, in its second question, Landgericht Dortmund had requested the CJEU’s view on the application of Article 5(3) of the Brussels I Regulation which allows damages actions to be brought against a company in a Member State in which the harmful effect occurred. On this point, AG Jääskinen considered that in a case of a long-standing and wide-spread cartel like the one at hand, the harmful effect of the infringement may not be considered to have occurred and the place of jurisdiction cannot be established in each Member State where one of the defendants is domiciled and/or in the territory of which the cartel agreement has been executed. Accordingly, AG Jääskinen concluded that Article 5(3) is inapplicable in the situations where the place of harmful effect may not be determined due to the long duration and wide coverage of a cartel. Finally, as regards the third question of Landgericht Dortmund on whether the principle of effective enforcement of competition law precludes the application of Article 23 of the Brussels I Regulation concerning jurisdiction and arbitration agreements to competition damages actions, AG Jääskinen considered that jurisdiction and arbitration clauses do not generally violate the principle of effective enforcement of competition law. However, according to AG Jääskinen, this principle prevents the application of such clauses against the cartel victim who has not been aware of the cartel and its illegality at the time when the parties agreed on the contents of such clauses.Source: Opinion of Advocate General Niilo Jääskinen in case C-352/13 CDC Cartel Damage Claims Hydrogen Peroxide SA v Evonik Degussa GmbH, Akzo Nobel NV, Solvay SA, Kemira Oyj, Arkema France SA, FMC Foret SA, Chemoxal SA and Edison SpA, 11 December 2014

Commission fines five envelope producers EUR 19.4 million in cartel settlement

On 11 December 2014, the Commission imposed fines totaling EUR 19.4 million on Bong, of Sweden, GPV and Hamelin, both of France, Mayer-Kuvert, of Germany, and Tompla, of Spain, for coordinating prices and allocating customers of certain types of envelopes in breach of EU antitrust rules. In September 2010, the Commission started an investigation on its own initiative which revealed that the companies had coordinated their responses to tenders launched by major European customers, agreed on price increases and exchanged commercially sensitive information through a series of multilateral and bilateral meetings arranged at a top management level from October 2003 to April 2008. According to the Commission, the overall aim of the cartel was to allocate customers and coordinate prices for the sale of standard/catalogue and printed envelopes. These products were typically bought by stationary distributors and larger companies in Denmark, France, Germany, Norway, Sweden and the United Kingdom. Since all undertakings agreed to settle the case with the Commission, the Commission reduced their fines by 10% each. Furthermore, given their cooperation in the investigation, Tompla, Hamelin and Mayer-Kuvert and GPV (the GPV assets and entities involved in the cartel were acquired by Mayer-Kuvert after the cartel had ended) benefited from fine reductions under the Commission's 2006 Leniency Notice. Tompla received a reduction of 50%, Hamelin a reduction of 25% and Mayer-Kuvert and GPV both received a reduction of 10% for cooperating with the Commission in the investigation. Source: Commission Press Release 11/12/2014

Competition: General Court upholds Commission’s infringement decision regarding French clinical biology analysis market but reduces fine imposed on ONP

On 10 December 2014, the General Court (“GC”) handed down its judgement in the appeal brought by the Ordre national des pharmaciens (“ONP”), the Conseil National de L'Ordre des Pharmaciens (“CNOP”) and the Conseil Central de la Section G de L'Ordre national des Pharmaciens (“CCG”) against the Commission’s decision fining ONP and its governing bodies EUR 5 million for restricting competition on the French clinical biology analysis market. ONP is a French professional body to which the French State has delegated, amongst other tasks, the task of contributing to the promotion of public health and quality of care, including the safety of professional actions. In France, clinical biology is principally carried out by pharmacists, which explains the ONP’s predominant role in that sector. Clinical biology analyses may be carried out only in clinical biology analysis laboratories. Following a complaint received from LABCO, a European group of laboratories operating in France and in several other European countries, the Commission opened an in-depth investigation into ONP’s conduct in 2007 and subsequently adopted a decision finding that ONP’ had hindered the development of groups of laboratories and imposed minimum prices in violation of Article 101 of the Treaty on the Functioning of the European Union (“TFEU”). ONP brought an action before the GC seeking annulment of the Commission’s decision or, alternatively, a reduction of the fine imposed. In its ruling, the GC upheld the Commission’s findings but reduced the fine from EUR 5 million to EUR 4.75 million. Firstly, the GC concluded that, contrary to ONP’s arguments, the conduct of ONP was caught by the EU competition rules. According to the GC, ONP did not have regulatory powers and it brought together pharmacists, at least some of whom carry on an economic activity and may be regarded as undertakings. Therefore, the GC found that ONP could not claim to be acting merely as an extension of the power of the public authorities, nor was it empowered to extend the scope of legal protection with a view to protecting the interests of a group, since the national legislature had set the limits of the protection afforded and made allowance for a certain degree of competition. Secondly, as regards ONP’s restrictive practices, the GC took the view that the Commission had correctly analyzed the restrictive nature of ONP’s various measures. Accordingly, the GC found that ONP attempted to impede, by a variety of means, the participation by groups in the capital of laboratories with the aim of reducing the competitive threat that the development of groups of laboratories posed to the numerous small laboratories active on the market. The GC also confirmed that ONP’s pricing policy had the object of imposing a minimum market price by prohibiting laboratories from granting discounts above a ceiling of 10 % from 2005 onwards. Nevertheless, the GC found that the Commission had failed to recognize a mitigating circumstance when setting the amount of the fine. Namely, a circular, which was in existence at the time, could have led ONP to think that prefectural approval was required in certain cases of structural changes to companies operating laboratories. Therefore, the GC reduced the fine by EUR 250,000. Source:General Court Press Release 10/12/2014

Competition (Sweden): Swedish Competition Authority brings action against the tobacco company Swedish Match for abuse of dominance

The Swedish Competition Authority (“SCA”) has summoned the tobacco company Swedish Match North Europe AB (“Swedish Match”), claiming approximately SEK 38 million in administrative fines for an alleged abuse of dominance. According to the SCA, Swedish Match has abused its dominant position on the Swedish snus market by applying strict rules for shelf labeling in their snus coolers. Swedish Match owns most snus coolers on the Swedish market and the competitors are normally dependent on placing their products in Swedish Match’s coolers. Since June 2012, Swedish Match applied detailed and strict rules for shelf labeling in the coolers. Under the rules, the competitors needed to follow Swedish Match´s strict labeling guidelines or have their shelf labels exchanged for generic grey-and-white ones without any price information. According to the SCA, the labeling system has led to reduced price competition and worse conditions for expansion and entering into the market. Source: Swedish Competition Authority Press Release 10/12/2014

Competition (Sweden): Swedish Competition Authority calls for comments on commitment on price parity clauses in agreements between travel agents and hotels

The Swedish Competition Authority (“SCA”) is currently conducting an investigation into potential competition problems in the hotel sector. The Commission is coordinating the investigations as mentioned in the first news item above. The SCA has preliminary assessed that price parity clauses in agreements between travel agents and hotels, risk leading to a restriction of competition. The price parity clauses regulate the hotels prices in relation to different sales channels. As a response to the concerns raised by the SCA regarding the price parity clauses, the company Booking.com has submitted a commitment to only apply the price parity in relation to the hotels own sales channels, thereby enabling price-differentiation among the online travel agents that the hotels have agreements with. The SCA has now invited hotels and other affected parties to submit comments on the commitment from Booking.com. Source: Swedish Competition Authority Press Release 15/12/2014

Merger control: Commission approves acquisition of aviation fuel supplier Statoil Fuel & Retail Aviation by rival BP, subject to conditions

On 15 December 2014, the Commission announced that it has approved the proposed acquisition of Statoil Fuel & Retail Aviation (“SFRA”), a Norway based aviation fuel supplier, by BP, a UK based integrated gas and oil company, subject to conditions. The decision is conditional upon the divestment of SFRA’s activities at the airports of Stockholm, Malmö, Gothenburg and Copenhagen. The proposed transaction, as originally notified, would have combined two large into-plane suppliers of aviation fuel at these airports and would have reduced the number of suppliers from 3 to 2 at Stockholm, Gothenburg and Malmö and from 4 to 3 in Copenhagen. The Commission had concerns that the few remaining players would have been unable to sufficiently constrain the merged entity to avoid price increases. The Commission's investigation showed that the barriers to entry the market for new players and even for the expansion of already active suppliers are high, due to difficulties in gaining access to the necessary infrastructure and differences in supply chain costs. Moreover, most airlines appear to have insufficient buyer power to counteract the consequences of an increased concentration in the supply of aviation fuel at these airports. The Commission therefore had concerns that the proposed transaction would have led to price increases for airlines. To address the Commission's concerns, BP committed to divest SFRA’s activities at the four airports concerned. These divestments would remove the entire overlap with regard to the supply of aviation fuel. Moreover, the divestments would allow the entry of an additional aviation fuel supplier at these four airports. According to the Commission, the commitments offered by BP address the competition concerns. Therefore, the Commission concluded that the proposed transaction, as modified by the commitments, would not raise competition concerns. Source:Commission Press Release 15/12/2014

Merger control: Commission approves acquisition of Lafarge by Holcim, subject to conditions

On 15 December 2014, the Commission announced it has approved the proposed acquisition of Lafarge of France by Holcim of Switzerland, subject to conditions. Both companies are active worldwide in the manufacture and supply of cement, ready-mix concrete, aggregates and other construction materials.The proposed transaction concerns assets worth several billion euros and will create the world's largest cement producer with operations in 90 countries. The Commission had concerns that the transaction, as originally notified, would have had a detrimental effect on competition in a significant number of markets in the European Economic Area (“EEA”). The Commission's assessment has revealed that the merged entity would have faced insufficient competitive pressure from remaining players in many markets. This would have brought a risk of price rises. To address the Commission’s concerns, the companies committed to divesting most of the operations where their activities overlap. This comprises assets as well as the services necessary for the viability of the assets. The assets to be divested include ready-mix concrete plants, aggregates quarries, integrated cement plants, grinding stations, as well as cement terminals. Services include central functions and alternative fuel resources relating to the use of processed waste as an alternative to conventional fuel to reduce operational costs. The Commission found that these commitments address the identified competition concerns. Therefore, the Commission concluded that the proposed transaction, as modified by the commitments, would not raise competition concerns. Source: Commission Press Release, 15/12/2014

Merger control: Commission opens in-depth investigation into coffee joint venture between DEMB and Mondelēz

On 15 December 2014, the Commission announced it has opened an in-depth investigation to assess whether a proposed joint venture between two of world's leading coffee manufacturers Douwe Egberts Master Blenders 1753 B.V. ("DEMB") and Mondelēz International Inc. ("Mondelēz") was in line with the EU Merger Regulation. The Commission has concerns that the proposed transaction may reduce competition for various coffee formats in Austria, France, Denmark and Latvia and for single-serve systems in multiple Member States. The Commission's investigation revealed that the transaction would bring together a number of very important brands that currently compete against each other in various coffee formats. This would significantly reduce competition for roast and ground coffee in France, Denmark and Latvia, as well as for filter pads in France and Austria. DEMB and Mondelēz are also the leading manufacturers of Nespresso compatible capsules sold by retailers in a number of countries. This concentration of key local brands in the hands of one company increases the likelihood of price increases for retailers and ultimately for consumers. The proposed transaction also reduces the number of key players in single-serve systems bringing together two of the four leading systems in Europe. The Commission has concerns that this would lead to higher prices for customers of machines and consumables and to less innovation. Although DEMB and Mondelēz do not sell coffee machines, they provide price support to purchasers of machines, e.g. by way of cash back and freebies, with the aim of increasing lucrative follow-on sales of pads and capsules. In order to address the competition concerns identified by the Commission, the companies offered commitments. However, having tested these commitments with market players, the Commission concluded that they were insufficient to remove the concerns raised. The Commission will now investigate in-depth the proposed transaction in order to determine whether or not these initial concerns are confirmed. The Commission will in particular examine the competition between single-serve systems. The opening of an in-depth investigation does not prejudge the outcome of the investigation. The Commission now has 90 working days, until 6 May 2015, to take a decision. Source: Commission Press Release, 15/12/2014

Merger control (Sweden): Stockholm District Court prohibits concentration in real estate agent market

Stockholm District Court (“SDC”) has in a ruling prohibited the concentration arising from Swedbank Franschise AB´s (“Swedbank”) acquisition of all shares (“Acquisition”) in Svensk Fastighetsförmedling AB (“SF”). The Acquisition was not notifiable under the Swedish Competition Act, but the SCA used its power to request a notification and a notification was filed on 21 January 2014. SF and Swedbank both operate as real estate agents on the Swedish market. Swedbank, through its subsidiary Swedbank Fastighetsbyrå, is currently the leading brand on the market, with a national market share of approximately 21 per cent and SF is the second largest brand with a national market share of approximately 15 per cent. Furthermore, Swedbank would post-closing control 50 percent of the leading real estate advertisement website Hemnet. The SDC has in the ruling determined that the concentration would strengthen a dominant position on a already concentrated real property ad search engine market and would create a dominant position on approximately 70 local real estate agent markets. Therefore the concentration was, according to the SDC, likely to significantly impede competition and should be prohibited. Source: Swedish Competition Authority Press Release 16/12/2014 and Stockholm District Court Press Release (Swedish) 16/12/2014

Merger control (Sweden): Swedish Competition Authority opens an in-depth investigation into acquisition of Falbygdens Ost by Arla Foods

The Swedish Competition Authority (“SCA”) has opened an in-depth investigation into the proposed acquisition by Arla Foods AB (“Arla”) of the business conducted under the name Falbygdens Ost from Atria Sweden AB. Arla is a food producer, focusing on dairy based products, including cheese. Arla is producing cheese at five facilities in Sweden, importing cheese and selling cheese under own brands to food retailers, the food service sector and to cheese wholesalers (including to Falbygdens Ost). Falbygdens Ost is a cheese wholesaler, purchasing cheese from cheese manufacturers in Sweden and from other countries. According to the SCA, there are both horizontal overlaps and vertical relationships between Arla and Falbygdens ost. In previous SCA decisions, the cheese market has been considered national. But according to the parties to the concentration, the cheese market should instead include the whole EU, since imported cheese is exerting a strong competitive pressure on cheese produced in Sweden. However, according to information reported to the SCA during the preliminary investigation, the so called “Swedish classics” cheese types, constituting a third of all hard cheese sold in Sweden, should be considered its own market. During the SCA’s preliminary investigation, third parties had also raised concerns about the concentration resulting in foreclosure of Swedish and foreign cheese manufacturers that are presently delivering cheese to Falbygdens Ost. The SCA has until 15 march 2015 to decide whether to approve the transaction or initiate proceedings before the District Court.Source: Swedish Competition Authority Press Release 16/12/2014 and Swedish Competition Authority Decision 15/12/2014

In addition, kindly note the following merger control decisions by the Commission which are published on the website of the Commission’s Directorate-General for Competition:

  • Commission approves acquisition of E-COM by Värde and Banco Popular
  • Commission approves acquisition of German jewellery and watch retailer Christ by UK investment company 3i
  • Commission approves acquisition of Johnson Control's automotive interiors business by Yanfeng
  • Commission approves acquisition of TRW Automotive's engine valve component business by Federal Mogul
  • Commission approves joint venture between Cheung Kong Holdings and Mitsubishi
  • Commission approves acquisition of Siemens Audiologische Technik by EQT VI
  • Commission approves acquisition of Chiquita by Cutrale and Safra
  • Commission approves acquisition of certain Lufthansa IT services by IBM
  • Commission approves creation of joint venture by Scholz Metallrecycling and Thyssen Alfa Rohstoffhandel
  • La Commission autorise l'acquisition du contrôle commun de deux Sociétés Civiles Immobilières par ANF et Predica