EU Competition

Investigation into online travel agency Expedia closed. On 5 October 2015, the Swedish Competition Authority (SCA) announced that it has closed its investigation into Expedia as the company voluntarily changed the application of certain conditions in its contract with hotels as of 1 August 2015, in a similar way to Booking.com, a competitor of Expedia. In relation to Booking.com, among other things, the company undertook to no longer demand that the prices offered by hotels on the company’s website must be the same as, or lower, than the prices they offer via its competitors. The SCA accepted commitments from Booking.com to change its conditions earlier in the year.

European Commission opens formal investigation into eligibility rules of the International Skating Union. On 5 October 2015, the European Commission (Commission) announced its decision to investigate whether the eligibility rules of the International Skating Union (ISU), the sole body recognised by the International Olympic Committee to administer the sports of figure skating and speed skating on ice, infringe Article 101 and/or Article 102 of the Treaty on the Functioning of the European Union (TFEU). The rules provide that if skaters wish to participate in events not approved by the ISU, they may be permanently banned from participating in competitions such as the Winter Olympics and the ISU World and European Championships. The Commission is investigating, in particular, whether the rules are unduly preventing athletes from exercising their profession by putting disproportionate and unjustified obstacles in the way of companies not linked to the ISU that want to organise ice-skating events. According to the Commission, this may prevent alternative event organisers from entering the market or drive them out of business.

Uralita loses bid to overturn cartel fine to EU court. On 6 October 2015, the General Court handed down its judgment not to overturn a fine of €4.2 million imposed by the Commission on Spanish building-materials company, Uralita, for price-fixing. The cartel operated from 1994 to early 2000 and involved four groups of companies fixing prices on sodium chlorate, a chemical used in the paper industry for bleaching pulp. Uralita argued before the General Court that the Commission’s €4.2 million fine was a “new fine” imposed on it after expiry of a limitation period and that the Commission was not entitled to keep the interest on an initially larger fine paid by Uralita in 2008 (the €4.2 million fine imposed in 2012 represents a reduction to the original fine imposed in 2008). The Commission argued that it had not imposed a “new” fine on Uralita in its 2012 decision and that it had merely “drawn the consequences” of the previous court ruling and amended the original fine. The General Court upheld the penalty, stating that the Commission had made the decision to impose the penalty within time.

General Court orders OHIM to pay European Dynamics compensation due to errors in procurement procedure. On 7 October 2015, the General Court upheld an appeal by European Dynamics Luxembourg SA, European Dynamics Belgium SA and Evropaïki Dynamiki (together, European Dynamics) against a decision by the Office for Harmonisation in the Internal Market (OHIM) in relation to the award of a framework contract in which European Dynamics was ranked third of the three successful bidders. The General Court found that the OHIM had made substantive errors in its assessment of the bids and had breached the principles of equal treatment and transparency by applying weighting to certain award sub-criterion that had not been disclosed. It had also breached its duty to state reasons for its decision. The substantive unlawful conduct of the OHIM as part of its individual and comparative assessments of the bids was likely to have affected European Dynamics’ opportunity to be awarded the framework contract as the contractor ranked first. The General Court held that European Dynamics was entitled to compensation, but ordered the parties to attempt to reach an agreement on the compensation payable within three months, highlighting the various issues to be taken into account.

EU Mergers

Phase I Mergers

  • M.7705 Benson Elliot / Walton Street / Starwood / Hotel Portfolio (5 October 2015)
  • M.7768 Exor / PartnerRe (8 October 2015)
  • M.7773 KKR / SoftwareONE (8 October 2015)
  • M.7727 Colony / AXA / Groupe Data 4 (8 October 2015)

State Aid

ECJ partially sets aside General Court ruling on state aid in Danish railway public service contracts. On 6 October 2015, the ECJ handed down judgment on an appeal against a General Court ruling that annulled a Commission decision approving state aid paid to the incumbent railway company, Danske Statsbaner SV (Danske Statsbaner), under two public service contracts. The General Court held that the Commission had erred in law by applying Regulation 1370/2007 for the purposes of assessing aid on public passenger transport services by rail and road, rather than its predecessor Regulation 1191/69. The applicable substantive legislation was, in the General Court’s view, that which was in force at the time when the aid was paid and not at the time of the Commission’s decision. The ECJ, however, ruled that, in fact, the General Court had erred in law in ruling that the compatibility with the internal market of all the aid at issue should have been assessed under Regulation 1191/69. Accordingly, it set aside the General Court’s judgment in so far as, as regards aid paid from 3 December 2009 (date of entry into force of Regulation 1370/2007) under a second public transport service contract, the General Court had annulled the Commission’s decision. The ECJ referred the case back to the General Court for consideration of the pleas that it did not examine at first instance. The ECJ also dismissed cross-appeals by Danske Statsbaner and the Kingdom of Denmark.

UK Competition

UK CMA asks Commission to refer Hutchison’s O2 acquisition for national review. On 2 October 2015, the Competition & Markets Authority (CMA) made a request to the Commission to refer the proposed acquisition by CK Hutchison Holdings Ltd (Hutchison) of Telefónica Europe to the CMA for investigation. The merger was formally notified to the Commission on 11 September 2015. The CMA believes it is appropriate for the case to be referred to the CMA for investigation as any impact on competition resulting from the merger will likely be limited to UK consumers, and since the CMA has experience in investigating telecoms mergers which are similar to the present case. The Commission must decide, by 30 October 2015, whether or not to refer the case.

CMA decides to proceed with civil investigation into suspected galvanised steel water tanks cartel. On 5 October 2015, the CMA announced its decision to proceed with a cartel investigation into the supply of galvanised steel tanks for water storage. This follows the conclusion of the related criminal cartel investigation in which two individuals were acquitted of the Enterprise Act 2002 cartel offence in June 2015 and another individual was sentenced, having pleaded guilty and cooperated with the CMA, in September 2015. The CMA intends to provide a further update on the progress of this investigation by the end of January 2016.

Speeches & Publications

CMA consults on undertakings in lieu offered by the Original Bowling Company. On 7 October 2015, the CMA, issued a consultation on the proposed undertakings in lieu offered by The Original Bowling Company Ltd (TOBC) in relation to its anticipated acquisition of Bowlplex Ltd. The TOBC has offered to divest a bowling alley in each of the six local areas where the CMA identified competition concerns and has proposed Essenden Limited (Essenden), owner of Tenpin Limited, as a potential purchaser. The CMA has invited comments from interested parties by 22 October 2015.