Competition: Commission sends Statement of Objections to Google regarding comparison shopping service and opens separate formal investigation on Android

On 15 April 2015, the Commission sent a Statement of Objections ("SO") to Google informing it of the Commission's preliminary view that Google may have abused its dominant position on the markets for general internet search services in the European Economic Area ("EEA") in breach of Article 102 of the Treaty on the Functioning of the European Union ("TFEU") by systematically favoring its own comparison shopping product in its general search results pages. Comparison shopping products allow consumers to search for products on online shopping websites and compare prices between different vendors. Sending the SO to Google is part of the Commission's ongoing formal investigation into Google's various practices in relation to online search and search advertising.

The Commission has concerns that Google gives favorable treatment to its comparison shopping product ("Google Shopping") in its general search results pages e.g. by showing Google Shopping more prominently on the screen. According to the Commission, such conduct might artificially divert traffic from rival comparison shopping services and hinder the ability of these services to compete on the market. The Commission is also concerned that the users do not necessarily see the most relevant results in response to their queries. Furthermore, the Commission considers that Google's previous commitment proposals were insufficient to address these competition concerns and, to remedy the conduct, Google should commit to treat its own comparison shopping service and those of rivals in a non-discriminatory manner. 

The Commission has also formally opened a separate antitrust investigation into Google's conduct regarding the mobile operating system Android. Android is an open-source system which can be freely used and developed by anyone. The majority of smartphone and tablet manufacturers use the Android operating system in combination with a range of Google's proprietary applications and services and, for the purposes of obtaining the right to install Google's applications on their Android devices, these manufacturers enter into agreements with Google. According to the Commission, the investigation will focus on whether Google has entered into anti-competitive agreements or abused its possible dominant position by hindering the development and market access of rival mobile operating systems, applications and services to the detriment of consumers and developers of innovative services and products. Source: Commission Press Release 15/04/2015

Competition: European Court of Human Rights upholds claims regarding right to fair trial and right to private and family life in dawn raids  

On 2 April 2015, the European Court of Human Rights ("EtCHR") handed down its judgment upholding the applications by Vinci Construction France ("Vinci") and GTM Génie Civil et Services ("GTM GCS") claiming that their right to a fair trial under Article 6 and to private and family life under Article 8 of the European Convention of Human Rights ("ECHR") had been violated in an unannounced inspection ("dawn raid") by the French competition authority. In October 2007, the Department for Competition, Consumer Affairs and Fraud Prevention ("DFCCRF") had been granted authorization by a Parisian court to carry out inspections and seizures at the companies' premises as part of its investigation into illegal concerted practices. The inspections occurred on 23 October 2007 and numerous documents and computer files, as well as the entire contents of certain employees' email accounts, were seized.

Vinci and GTM GCS brought actions claiming that the seizures had been widespread and indiscriminate. These appeals were dismissed in their entirety by the same court which had granted the authorization for the inspections. Vinci and GTM GCS appealed to the ECtHR, claiming that they had been unable to bring a full action against the decision authorizing the inspections and seizures and that they could only challenge the conduct of those operations before the judge who had authorized them but who did not meet the requisite conditions of impartiality. The companies also argued that the inspections were a disproportionate interference with their rights of defence and in breach of their right to respect for home, private life and correspondence, particularly as regards the documents protected by legal privilege.

In its judgment, the ECtHR concluded that Vinci's and GTM GCS's right to a fair trial under Article 6 of the ECHR had been violated due to French procedural law not providing effective judicial review for the purposes of challenging the lawfulness and merits of the inspection decision. Regarding the right to private and family life, the ECtHR held that the safeguards provided by French law had not been applied in a practical and effective manner, particularly because it was known that some of the documents seized during the inspection contained correspondence protected by legal privilege. According to the ECtHR, where a national judge is called upon to examine reasoned allegations that documents unrelated to the inspection or documents protected by legal privilege had been seized, the judge authorizing the inspection is required to examine the documents in detail and to order them to be returned, where appropriate. Accordingly, the ECtHR concluded that the inspections and seizures were disproportionate and that they breached Article 8 of the ECHR. Source: European Court of Human Rights Press Release 02/04/2015

Merger control: Commission opens in-depth investigation into proposed merger of TeliaSonera and Telenor's Danish telecommunications activities  

On 8 April 2015, the Commission announced that it had opened an in-depth investigation into the proposed joint venture between TeliaSonera AB ("TeliaSonera") and Telenor ASA ("Telenor"). TeliaSonera is a telecommunications operator based in Sweden which provides fixed and mobile telecommunications services, plus broadband and television services in Denmark, Estonia, Finland, Lithuania and Sweden. Furthermore, it provides mobile telecommunications services in Latvia, Norway and Spain. Telenor, of Norway, provides mobile and fixed telecommunications services, plus broadband and television services in Norway, Sweden and Denmark, and mobile telecommunications services in Hungary and Bulgaria. Both groups also provide telecommunication services in a number of countries outside the EEA. 

The Commission has concerns that the transaction could reduce the incentives of the merged entity and its competitors to compete on the Danish retail mobile telecommunications market, thereby leading to higher prices, loss of innovative offers and lower quality. According to the Commission, the transaction would also reduce the number of Mobile Network Operators ("MNOs") able to offer wholesale services from four to three and would create the largest player both in terms of revenue and number of subscribers, followed by a similar-sized TDC and smaller player Hi3G. This could further reduce the choice of alternative host networks and weaken the negotiating position of wholesale customers, i.e., other companies providing mobile telecommunications services without owning their own network. Finally, the Commission has concerns that the proposed merger would result in a highly concentrated market structure with two large and symmetric operators at the retail and wholesale levels of the Danish market, thus leading to coordination between the remaining operators.  The opening of an in-depth investigation does not prejudge the outcome of the investigation. The Commission now has 90 working days, until 19 August 2015, to take a final decision. Source:Commission Press Release 08/04/2015

Merger control (Finland): Finnish Competition and Consumer Authority approves Elisa Oyj’s acquisition of controlling stake in Anvia Oyj, subject to conditions 

On 8 April 2015, the Finnish Consumer and Competition Authority (”FCCA”) announced that it has approved the proposed acquisition of Anvia Oyj (”Anvia”) by Elisa Oyj (”Elisa”), subject to conditions. Both parties are active on the tele- and data communications market in Finland, with their core business consisting of services provided in landline and mobile networks.

The FCCA investigated the effects of the transaction on broadband services to consumers in landline and mobile networks in several Finnish municipalities. The FCCA had concerns that the transaction, as originally notified, could have resulted in price increases in broadband services to consumers in the landline network located in the area of the municipalities of Vaasa, Mustasaari and Laihia. As regards other Ostrobothnian municipalities where Anvia has traditionally operated, no competition concerns were likely to arise because Elisa had consumer customers only in the aforementioned municipalities and it had ceased to provide landline broadband services in other municipalities in 2008. To address the FCCA's concerns, Elisa committed to divest, in the form of a business acquisition, the parties' overlapping network and the related consumer customers' broadband service agreements in Vaasa, Mustasaari and Laihia.

The FCCA also assessed the competitive situation on the mobile broadband service, corporate communication service and backbone network service markets and phone mast markets. However, according to the FCCA the proposed merger would not impede effective competition on those markets because the merged entity will face sufficient competitive constraint from the remaining players. Consequently, the FCCA concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. Source: Finnish Competition and Consumer Authority Press Release 8/4/2015

Merger control (Finland): Finnish Competition and Consumer Authority approves application to lift conditions set on the merger of TV4 and C More

On 6 February 2015 the Finnish Competition and Consumer Authority (“FCCA”) announced that it has approved MTV Oy’s (“MTV”) application to lift the conditions set for the implementation of the merger between TV4 Ab (“TV4”) and C More Group Ab (“C More”), in accordance with Section 30 of the Finnish Competition Act. MTV is a Finnish television broadcasting company, which provides TV audiences with both pay and free channels. MTV, as well as TV4, are owned by the Swedish Bonnier media group. C More offers pay television channels under the Canal+ brand. On 27 November 2008, the FCCA conditionally approved the acquisition of a controlling stake in C More by TV4.

Originally, the FCCA had concerns relating to the pay television services market. In 2008 the parties were considered to be the two biggest market actors in Finland and each other’s main competitors, owning most of the key broadcasting rights to pay television. The conditions imposed on the acquisition in 2008 were intended to ensure that other companies in the market would be able to establish a competitive constraint on the concentration. The conditions imposed on MTV involved, inter alia, removing the restrictions on the separate sales of certain MTV channels and selling the concentration’s share of the Finnish National Hockey League’s pay TV broadcasting rights to its competitors.

The FCCA concluded in its decision of 5 February 2015 that the Finnish pay television market has changed markedly since 2008, and the conditions imposed on MTV at the time of the merger are no longer needed to ensure competition. The FCCA nevertheless considered it reasonable to maintain condition 1D, which stipulates that the MTV Max Formula channel must be sold separately. Condition 1D will remain in force for a transition period ending on 31 December 2015. Source: Finnish Competition and Consumer Authority Press Release 6/2/2015 

Merger control (Sweden): Swedish Competition Authority opens an in-depth investigation into acquisition of Cederroth by Orkla

The Swedish Competition Authority ("SCA") has opened an in-depth investigation into the proposed acquisition of Cederroth Intressenter AB ("Cederroth") by Orkla ASA ("Orkla"). Both Orkla and Cederroth are, according to the SCA, active in Sweden on the markets for food- and dietary supplements and weight control products.

According to the SCA the parties' sales represent a significant portion of the total sales of dietary supplements to grocery stores in Sweden and the parties have high market shares of sales of omega-3 products to grocery stores, health shops and pharmacies. Further, according to the SCA, Orkla and Cederroth are two of the three largest players on the market for weight control and meal replacement products in the form of bars, ready-made drinks and powders. Moreover, during the SCA's preliminary investigation, it received comments from other market participants stating that the proposed acquisition could lead to higher prices in omega-3 products and meal replacements and that the combined undertaking could gain increased bargaining power towards grocery stores. The SCA has three months to decide whether to approve the transaction or initiate proceedings before the District Court. Source:Swedish Competition Authority Press Release 9/4/2015

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 L-3 Communications' marine systems business by Wärtsilä
  • Commission approves creation of joint venture by Bilfinger and G.L. Swarovski
  • Commission approves acquisition of Duferco Trading by Hebei Iron & Steel and Duferco Participations
  • Commission approves joint venture between Riverstone and Barclays in energy sector
  • Commission approves acquisition of office real estate properties by Eurazeo and Groupe Crédit Agricole
  • Commission approves acquisition of Eversholt by Cheung Kong (Holdings) Limited
  • Commission approves acquisition of Talisman by Repsol
  • Commission approves acquisition of joint control in Porterbrook by Allianz, AIMCo and UTA