Competition (Finland): Finnish Competition and Consumer Authority’s right of inspection was clarified by an amendment

On 9 February 2015, the Finnish Competition and Consumer Authority (“FCCA”) announced that an amendment to the Competition Act concerning the FCCA’s right to inspection, when the inspected company has outsourced its data administration to another company, had been approved. While monitoring the compliance of the Competition Act, the FCCA has the right to perform an inspection in a company's premises and inspect its business correspondence and other documents and data, when of importance for the monitoring. If the inspected company has outsourced its data administration, the inspector will in the future have the right to acquire the required information directly from the company, to whom the data administration has been outsourced. The amendment refers to the widespread practice to manage information by moving it, for instance, to cloud services. The amendment does not expand the FCCA's competence, but it facilitates and speeds up the monitoring and clarifies the situation from the perspectives of both the inspected company and the company that handles the information. The amendment will enter into force on 1 March 2015.Source: Finnish Competition and Consumer Authority Press Release 9/2/2015 (in Finnish)

Competition (Sweden): The Competition Authority’s investigations in the hotel sector continues

The Swedish Competition Authority (“SCA”) has received approximately 150 comments after having invited hotels and other affected parties to submit comments on the commitment that the company Booking.com submitted in the SCA’s investigation into potential competition problems in the hotel sector. The SCA will now review the comments and thereafter consider whether there are grounds to accept the commitment of Booking.com. The SCA’s investigation in the hotel sector also includes a case concerning the online travel agency Expedia, a competitor to Booking.com. This investigation is also to be continued. The SCA’s investigation is coordinated with other similar investigations in the hotel sector, conducted by the French and Italian competition authorities. The European Commission is also participating in the coordination, but has not commenced an investigation of its own. Source:Swedish Competition Authority Press Release 03/02/2015

Competition (Sweden): Clarification of the dawn-raid rules is welcomed by the Swedish Competition Authority

The Swedish government recently announced a change in the rules on how the Swedish Competition Authority (“SCA”) can handle electronically stored material in connection with so-called dawn raids. The amendments would mean that the SCA has the right to review electronically stored information at the SCA’s premises, if the targeted company explicitly consents to the material being moved from the company’s premises. A bill is scheduled to be presented to the parliament on 17 March. In a statement, the SCA welcomes the proposal and states that if the bill is passed in parliament, the pursuit of illegal cartels can be conducted more efficiently. However, the SCA emphasizes that it must be clear that the consent from the company covers the actual movement of the material. The handling of the material will be carried out in accordance with SCA standard procedures. Source: Swedish Competition Authority Press Release 28/1/2015

State aid: General Court partially annuls the Commission’s decision ordering Ireland to recover the sum of EUR 8 per passenger from the beneficiary airlines

On 5 February 2015, the General Court (“GC”) handed down two separate judgments on appeals by Aer Lingus Ltd (“Aer Lingus”) and Ryanair Ltd (“Ryanair”) against the Commission’s decision that found that Irish air travel tax (“ATT”) constituted incompatible state aid that must be recovered. Since 30 Mach 2009, airlines must pay an ATT in Ireland in respect of every departure of a passenger on an aircraft from an airport situated in Ireland. The ATT is not applicable to transit and transfer passengers. When it was introduced, the ATT was levied at the rate of EUR 2 in the case of a flight from an airport to a destination no more than 300 kilometers from Dublin airport and EUR 10 in all other cases. In July 2009, Ryanair filed a complaint with the Commission, claiming, inter alia, that the non-application of the ATT to transit and transfer passengers constituted unlawful state aid to the advantage of the airlines having a relatively high proportion of passengers and flights in these categories. In addition, Ryanair argued that the lower tax rate favored airlines whose passengers travelled to destinations no more than 300 kilometers from Dublin airport. In July 2012, the Commission found that the application of a lower rate for short-distance flights between 30 March 2009 and 1 March 2011 constituted state aid incompatible with the internal market. The application of the lower rate was liable to unlawfully benefit domestic flights as opposed to cross-border flights. The Commission therefore ordered the recovery of that aid from the beneficiaries, indicating that the amount of the aid corresponded to the difference between the lower rate of the ATT (EUR 2) and the standard rate of the ATT (EUR 10) — that is to say, EUR 8 — levied on each passenger. Aer Lingus and Ryanair were listed among the beneficiaries of that state aid. They brought an action before the GC against the Commission’s decision. As regards their first claim that the Commission erred in finding that the EUR 10 rate of the ATT was the “normal” rate in order to establish the existence of a selective advantage in favor of the airlines subject to the lower rate of EUR 2, the GC found that the Commission did not err in characterizing the higher rate of EUR 10 as the reference rate, and in concluding that the application of the different rates in the present case constituted state aid in favor of airlines whose flights were subject to the lower rate of EUR 2 during the period concerned. As regards their second allegation that the Commission made errors in the recovery decision, the GC found that the Commission erred in quantifying the amount of aid to be recovered at EUR 8 per passenger. Inasmuch as the economic advantage resulting from the application of that reduced rate could have been, even only partially, passed on to the passengers, the Commission was not entitled to consider that the advantage enjoyed by the airlines amounted automatically, in all cases, to EUR 8 per passenger. Accordingly, the GC annulled the Commission’s decision in so far as it ordered the recovery of the aid from the beneficiaries for an amount set at EUR 8 per passenger. Source: General Court Press Release 5/2/2015

State aid: Commission closes preliminary investigation into alleged aid to Alitalia

On 6 February 2015, the Commission announced that it has closed its preliminary investigation to assess whether measures in favor of Alitalia constitute state aid. In October 2013, the Commission opened a preliminary investigation into a guarantee by state-owned Italian postal company Poste Italiane SpA (“Poste Italiene”) to subscribe to up to EUR 75 million of Alitalia's capital increase. The Commission received two formal complaints on the issue. In December 2014, the Commission informed the two complainants that it had come to the preliminary assessment that the measure under investigation does not seem to constitute state aid within the meaning of Article 107(1) of the Treaty on the Functioning of the European Union. According to the Commission, the evidence in the investigation suggested that Poste Italiane carried out an investment under the same terms and conditions as two private operators who were in a comparable situation (a so-called pari passu transaction). Public interventions can be considered free of state aid within the meaning of EU rules when they are made on terms that a private operator would have accepted under market conditions (the market economy operator principle). The Commissions stated that this position was only a preliminary view taken by the services of DG Competition, based on the information available at the time and pending any additional comments the complainants might have wished to make. In the absence of any reaction from the complainants within the set deadline, the complaints were deemed to be withdrawn. The Commission has therefore closed its preliminary investigation. Source: Commission Press Release 6/2/2015

Public procurement (Sweden): The Administrative Court of Appeal in Sweden finds government company, Akademiska Hus, has to comply with public procurement rules

In a recent decision, the Administrative Court of Appeal of Sundsvall held that Akademiska Hus must contrary to its current practice apply the rules on public procurement and imposed a fine of SEK 3 million for Akademiska Hus’ failure to apply such rules in the past. Akademiska Hus, which is wholly owned by the government, was deemed to serve a purpose of general interest and the Court held that Akademiska Hus does not operate under ordinary market conditions and does not have as its principal purpose to generate profit. Therefore, Akademiska Hus could not be exempt from the public procurement rules. Source: Swedish Competition Authority Press Release 23/1/2015

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 CRH's bricks business by Bain Capital