Investigation

Commission sends Statement of Objections to Google on Android operating system and applications

The Commission has informed Google of its preliminary view that the company has abused its dominant position by imposing restrictions on Android device manufacturers and mobile network operators.

The Commission’s preliminary view is that Google has implemented a strategy on mobile devices to preserve and strengthen its dominance in general internet search.

In the Statement of Objectives, the Commission alleges that Google has breached EU anti-trust rules by:

  • requiring manufacturers to pre-install Google Search and Google’s Chrome browser and requiring them to set Google Search as the default search service on their devices, as a condition to licence certain Google proprietary apps
  • preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code
  • giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices

Decisions

Successful market opening allows early termination of commitments in Deutsche Bahn case

The Commission has relieved Deutsche Bahn ahead of schedule from commitments made binding in December 2013, as several competitors have now entered the German railway traction current market, thereby addressing the Commission’s competition concerns. Traction current is the electricity used for powering locomotives.

In December 2013, the Commission accepted commitments offered by the German railway incumbent Deutsche Bahn to: (1) grant electricity providers access to its network for supplying traction current; and (2) amend its pricing system.

Prior to the commitments entering into force, a Deutsche Bahn subsidiary was the only supplier of traction current in Germany. Within 18 months of the entry into force of the commitments, several energy providers had entered the traction current market. The commitments were originally due to apply for five years.

However, the Commission decision provided that they could end earlier if in one calendar year over 25% of the total traction current demand of non-Deutsche Bahn railway undertakings would be supplied by alternative energy providers. As this threshold was reached in 2015, the Commission has reached a decision that ends the legal obligation of Deutsche Bahn to respect the commitments.

Commission fines Riberebro €5.2 million for participating in canned mushrooms cartel

The Commission has found that Spanish canned and fresh vegetables company Riberebro participated in a cartel to coordinate prices and allocate customers of canned mushrooms in Europe for more than a year.

The Commission adopted a settlement decision in June 2014 concerning the participation in this same cartel of Bonduelle, Lutèce and Prochamp. Riberebro chose not to settle and consequently the investigation continued under normal cartel procedure.

The cartel concerned canned mushrooms in tins and jars for private label sales in the EEA. The overall aim of the cartelists was to stabilise their market shares and stop a decline in prices. To achieve this, the cartel members exchanged confidential information on tenders, set minimum prices, agreed on volume targets and allocated customers among themselves.

News (Ireland)

Judgment limits dawn raid seizure powers of CCPC

Judgment has been delivered in the High Court action taken by CRH plc (“CRH”) against the CCPC.

The judgment relates to the seizure of certain electronic documents by the CCPC during a dawn raid at the premises of CRH’s subsidiary, Irish Cement Limited (“Irish Cement”), in May 2015. During the dawn raid, the CCPC seized a number of electronic documents including the mailboxes of a number of current and former employees of Irish Cement. CRH successfully argued that certain emails in the mailbox of one such employee were unrelated to the business of Irish Cement and were therefore not entitled to be seized.

Notwithstanding this judgment, the CCPC’s investigation into alleged anti-competitive practices by Irish Cement in the supply of bagged cement continues.

CCPC calls for access to the full range of criminal and civil sanctions

Ms Isolde Goggin, Chairperson of the CCPC, has called for competition authorities to be provided with access to the full range of criminal and civil sanctions to enforce competition law. Ms Goggin was speaking at a public hearing at the European Commission on the topic of “Empowering the national competition authorities to be more effective enforcers of EU competition rules”.

Unlike other European countries, Irish civil courts cannot impose fines on individuals or businesses and this has an impact on the CCPC’s ability to prosecute civil breaches of competition law. The most the CCPC can achieve, by taking cases through the civil courts is a declaration that the conduct is illegal, and an injunction to prevent the undertaking(s) from continuing it.

CCPC drops Kerry/Breeo Supreme Court appeal

The CCPC announced the conclusion of a challenge taken by the former Competition Authority (the “Authority”) in 2008 against the acquisition of Breeo Foods Limited and Breeo Brands Limited by Rye Investments Limited, an indirect, wholly-owned subsidiary of Kerry Group plc. The CCPC has decided not to proceed with its appeal to the Supreme Court.

In 2008, the Authority prohibited the implementation of this merger. Rye Investments Limited appealed to the High Court and in March 2009 the Authority’s prohibition decision was annulled. In April 2009 the Authority appealed to the Supreme Court against the High Court judgment. The case was due to be heard by the Supreme Court at the end of April 2016.

Disqualification from acting as a director of an Irish company

The Companies Act 2014 (Section 839) Regulations 2016 has prescribed the offences under Section 6 and 7 of the Competition Act 2002 for the purposes of Section 839(1)(a) of the Companies Act 2014.

This means that any person who is convicted of being party to an anti-competitive agreement (Section 6) or involved in abusing a dominant position (Section 7) may be disqualified from being a director in the circumstances outlined in Section 839 of the Companies Act 2014.

Practice note

What is State aid?

Competition law in general is opposed to State aid as it interferes with the market by giving competitive advantages. There is no closed list as to what constitutes “aid”. However, the primary test is whether a private investor in a market economy would not have provided the financing in similar circumstances.

To be State aid, the following four tests have to be met:

  • there has been an intervention by the State and through State resources, which can take a variety of forms (eg grants, interest and tax reliefs, guarantees, government holdings of all or part of a company, or providing goods and services on preferential terms, etc)
  • competition has been or may be distorted
  • the intervention gives the recipient an advantage on a selective basis, for example to specific companies or industry sectors, or to companies located in specific regions
  • the intervention is likely to affect trade between Member States