EU Antitrust

Appeal by Unichem Laboratories against “pay for delay” decision. On 15 December 2014, details were published of an appeal by Unichem Laboratories Ltd against the European Commission’s decision fining it for entering into “pay for delay” settlement agreements that breached Article 101 of the TFEU. Unichem Laboratories claims that the Commission lacked jurisdiction, erred in law in finding that Lupin had committed an infringement of Article 101 by object or by effect, failed to apply the Technology Transfer Block Exemption, misapplied Article 101(3), failed to state reasons, breached rights of defence and breached the principles of equal treatment and proportionality in setting the fine imposed. (Case T-705/14 - Unichem Laboratories v Commission (OJ 2014 C448/31)).

Commission announces that three national competition authorities are consulting on commitments to remove price parity clauses in online hotel booking contracts. On 15 December 2014, the European Commission announced that the French, Italian and Swedish competition authorities are conducting market tests on commitments offered by Booking.com to remove price parity clauses from its contracts in the online hotel booking sector. The Commission states that it has been co-ordinating these national investigations. The commitments would apply to bookings made by consumers worldwide in respect of hotels located in the EEA. Comments on the proposed commitments should be provided to the relevant national authority by 31 January 2015.

Appeal by Topps Europe against rejection of complaint. On 15 December 2014, details were published in the Official Journal of an appeal by Topps Europe against a decision of the European Commission to reject a complaint. Topps Europe’s complaint alleged that a number of national football governing bodies and players associations and Panini S.p.A have breached Articles 101 and 102 of the TFEU in relation to the licensing of intellectual property rights for football collectibles. Topps Europe claims that, in rejecting its complaint, the Commission breached its rights of defence and committed errors of law (Case T-699/14 - Topps Europe v Commission (OJ 2014 C448/29)).

General Court upholds Commission decision to reject Si.mobil complaint about Mobitel. On 17 December 2014, the General Court handed down its judgment in an appeal lodged by Si.mobil against a decision of the European Commission to reject a complaint that Mobitel had abused its dominant position on Slovenian wholesale and retail mobile telephone markets. The General Court has upheld the rejection of Si.mobil’s complaint. This is the first time that the General Court has interpreted the provisions in Regulation 1/2003 (Recital 18 and Article 13(1)) which provide that cases are dealt with by the most appropriate authorities within the European Competition Network (Case T-201/11 - Si.mobil telekomunikacijske storitve d.d v European Commission, judgment of 17 December 2014).

EU Cartels

General Court dismisses Pilkington’s appeal against the car glass cartel decision. On 17 December 2014, the General Court dismissed in its entirety the appeal brought by Pilkington Group Limited, and various subsidiaries, (Pilkington) to challenge the European Commission’s decision fining Pilkington EUR357 million for its participation in the car glass cartel. The General Court found that the Commission had not erred in its legal characterisation of the facts or in the assessment of the gravity of the infringement. In addition, the Commission had not erred in establishing the duration of Pilkington’s involvement in the cartel. The General Court also dismissed each of Pilkington’s arguments challenging the level of the fine imposed. In particular, the Commission had, given the nature of the cartel, been entitled to derogate from the approach in the 2006 Fining Guidelines to calculate the basic level of the fine. In addition, the General Court concluded that, despite being one of the highest fines imposed, the fine was proportionate (Case T-72/09 - Pilkington Group Ltd and others v European Commission, judgment of 17 December 2014).

Summary of canned mushrooms cartel decision published. On 17 December 2014, a summary of the European Commission’s June 2014 decision finding that canned mushroom producers participated in an illegal cartel in breach of Article 101 of the TFEU was published in the Official Journal (OJ 2014 C453/21). The decision was reached under the Commission’s settlement procedure. One cartel participant received full immunity from fines under the 2006 Leniency Notice. Total fines of EUR32.2 million were imposed on the other two cartel participants, including the 10% settlement discount. The Commission found that the cartel members exchanged confidential information on tenders, set minimum prices, agreed on volume targets and allocated customers. The cartel members also held numerous regular multilateral meetings and occasionally some of the cartel members had additional contacts on bilateral basis. The cartel was implemented by a mechanism to compensate transfers of customers between competitors and so stabilise market shares for private label sales.

Summary of decision in shrimp cartel published. On 17 December 2014, a summary of the European Commission’s November 2013 decision fining four North Sea shrimp traders for breaching Article 101 of the TFEU was published in the Official Journal (OJ 2014 C453/16). The Commission found that the infringement consisted of price-fixing, market-sharing and exchanges of sensitive commercial information between traders of North Sea shrimps between 21 June 2000 and 13 January 2009. The Commission imposed fines totalling EUR28,716,000. One cartel participant received full immunity under the Commission’s 2006 Leniency Notice. The cartel operated by way of bilateral contacts. One of the cartel participants has appealed the Commission’s decision to the General Court.

EU Mergers

Phase I Mergers

  • M.7252 – Holcim / Lafarge (conditional approval) (15/12/2014)
  • M.7387 – BP / Statoil Fuel and Retail Aviation (conditional approval) (15/12/12014) M.7400 – Federal-Mogul Corporation / TRW Engine Components (15/12/2014) M.7413 – Cheung Kong Holdings / Mitsubishi Corporation (joint venture) (15/12/2014)
  • M.7442 – Eurazeo / Groupe Credit Agricole / SCI Lafayette / SCI Stratege (16/12/2014)
  • M.7450 – EQT VI / Siemens Audiologische Technik (15/12/2014)
  • M.7453 – Cutrale / Safra / Chiquita Brands International (16/12/2014)
  • M.7458 – IBM Central Holding GmbH of Germany / International Business Machines Corporation (IBM) of the US / Lufthansa Systems Aktiengesellschaft of Germany / Deutsche Lufthansa Aktiengesellschaft (17/12/2014)
  • M.7460 – Scholz Recycling GmbH / Thyssen Alfa Rohstoffhandel München GmbH (joint venture) (17/12/2014)

Phase II Mergers

Commission opens Phase II investigation into joint venture between DEMB and Mondelēz. On 15 December 2014, the European Commission announced that it has decided under Article 6(1)(c) of the EU Merger Regulation to initiate a Phase II investigation into the proposed joint venture between DEMB and Mondelēz. The proposed joint venture will combine the activities of the international coffee and tea company DEMB with the coffee business of Mondelēz. The Commission is concerned 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. Although the parties offered commitments, the Commission was not satisfied that the commitments would be sufficient to address all its concerns.

State Aid

Commission approves aid to Banka Celje based on restructuring plan and its merger with Abanka. On 16 December 2014, the European Commission announced that it has decided to approve state aid granted by Slovenia to Banka Celje, on the basis of a restructuring plan provided by the Slovenian authorities and its planned merger with Abanka. The Commission has concluded that the restructuring plan ensures the viability of the merged entity in the long term without requiring further state support and also mitigates the distortions of competition brought about by the aid granted to the bank. The state aid has been granted in accordance with the requirements of the Commission’s 2013 Banking Communication.

Commission approves Catalunya Banc’s revised restructuring plan following sale to BBVA. On 17 December 2014, the European Commission announced that it has decided to approve a revised restructuring plan for Catalunya Banc following its sale to BBVA. The Commission has concluded that this sale and the revisions to the restructuring plan will ensure the bank’s long-term viability as part of BBVA. Any distortions to competition as a result of the state aid granted to Catalunya Banc have been mitigated and no additional state aid to Catalunya Banc or BBVA has been granted.

UK Mergers

CMA extends Phase 1 review of acquisition by InterCity Railways Limited (ICRL) of the ICEC Franchise. On 15 December 2014, the Competition and Markets Authority (CMA)

published a notice extending the initial period for its Phase 1 review of the anticipated acquisition by InterCity Railways Limited (ICRL) of the InterCity East Coast (ICEC) Franchise.

CMA to refer acquisition by Pork Farms of the chilled savoury pastry business of Kerry Foods unless undertakings in lieu offered. On 17 December 2014, the CMA announced that it has decided that the completed acquisition by Pork Farms Caspian Limited (Pork Farms) of the chilled savoury pastry (CSP) business of Kerry Foods Limited (Kerry Foods) will be referred for a Phase 2 investigation unless acceptable undertakings in lieu are offered. Pork Farms has until 24 December 2014 to offer undertakings that might be accepted by the CMA. If no undertaking is offered or accepted, then the CMA will refer this merger for a Phase 2 investigation

Completed Mergers

Speeches & Publications

European Commission 2015 Work Programme: competition and regulatory initiatives. On 16 December 2014, the European Commission adopted its Work Programme 2015. The Commission has not identified any new initiatives relating to the modification of any competition legislation. It does refer to a possible review of state aid legislation in applicable areas in the context of removing regulatory barriers to investment. The Commission identifies the completion of a Digital Single Market as a key priority. In this context, it will seek to conclude inter- institutional negotiations on the Commission’s proposed Connected Continent Regulation, as well as other new initiatives. In addition, the Commission intends to adopt a Strategic Framework for the Energy Union. It also intends to withdraw and amend the Commission’s existing proposal on external public procurement.

Commission invites comments on proposed changes to antitrust procedures to reflect Directive on damages actions. On 17 December 2014, the European Commission invited comments on proposed amendments to its procedural rules and notices to reflect the terms of Directive 2014/104 on competition damages actions.

CMA publishes paper on effects of open and closed systems on competition. On 16 December 2014, the CM published a research report, prepared jointly with the French Autorité de la concurrence, on the economics of open and closed systems on competition and the implications of competition between such systems. The report finds that the effects on competition should be assessed case by case, depending on, for example, the degree of competition between systems; the ease with which consumers can switch between systems; the degree of co-ordination required to ensure a system’s viability; and the ability of consumers to assess the overall cost associated with a system before making a choice.