On 29 February 2016, the General Court ("GC") handed down its judgment in the appeals by EGL, Kühne + Nagel, UTi Worldwide, Schenker, Deutsche Bahn and Panalpina Welttransport (jointly "appellants") against the Commission's decision finding that the companies participated in one or more of four separate cartels aimed at fixing prices and other trading conditions in international air freight forwarding services.
In 2012 the Commission fined 14 international groups of companies a total of EUR 169 million for participation in one or more of the following cartels: the new export system ("NES") cartel; the advanced manifest system ("AMS") cartel; the currency adjustment factor ("CAF") cartel and the peak season surcharge ("PSS") cartel. The cartels were active between 2002 and 2007. Deutsche Post and its subsidiaries DHL and Exel were granted immunity for all four cartels because Deutsche Post was the first company to reveal the existence of the cartels.
The appellants alleged various errors in law by the Commission in its assessment of the alleged infringement, including, as regards the scope and duration of the infringement, the calculation of the fines, and the Commission's refusal to enter into settlement discussions. In addition, the applicants raised the arguments that trade between member states was not appreciably affected (by the NES cartel) and that the NES cartel was exempted from the scope of competition law rules because of Article 1 of Regulation 141/62.
Apart from UTi Worldwide, the GC dismissed all the arguments and allegations brought before it and upheld the fines imposed on the other applicants.
As regards UTi Worldwide, the GC noted that the method for calculating the amount of the fine had been favorable to the subsidiaries of UTi Worldwide, to the extent that the infringement periods attributed to the subsidiaries were subject to rounding down, but that the Commission had not granted a similar reduction in liability to UTi Worldwide. According to the GC, this was an incorrect application of the law, because the parent company whose liability is entirely derived from that of its subsidiaries must benefit from the same reduction in liability as that enjoyed by its subsidiaries. Consequently, the GC reduced the fine on UTi Worldwide from approximately EUR 3.07 million to approximately EUR 2.97 million. Source: General Court of the European Union Press Release 29/02/2016
On 24 February, the opinion of the European Economic and Social Committee ("EESC") on the Commission's Report on Competition Policy 2014 ("Report") was published in the Official Journal. The Report itself was published in June 2015 and provides an overview of the Commission's main competition policy developments and enforcement actions in 2014.
In its opinion the EESC highlights the Commission's activities in the financial sector, energy markets and digital markets, and believes that there should be a strong focus on the energy market in particular. In addition, the EESC notes the importance of international cooperation, especially among national competition authorities and with international organizations. Further, the EESC notes that more attention is required to promote small and medium-sized enterprises ("SME"). The EESC also recommends that leniency programs, which have proved their worth in the fight against cartels, should be rolled out across all member states. Finally, the EESC states that regretfully the Commission has yet again failed to adopt a genuine legal mechanism for collective actions that would provide effective enforcement of the right to damages for those affected by anti-competitive practices.
On 29 February 2016, the Finnish Supreme Court ("Supreme Court") ruled on the interpretation of the statute of limitation under the Act on Restraints of Competition (repealed by the Competition Act in 2011) and the Act on Statute of Limitations. The Supreme Court also considered the question whether a specific cartel victims' right to compensation had in fact expired.
In September 2009, the Market Court imposed fines totaling EUR 51 million on Metsäliitto Cooperative ("Metsäliitto") and Stora Enso Plc ("Stora Enso") for illegal price cooperation and information exchange in the market for purchase of timber during 1997–2004. UPM-Kymmene Plc ("UPM-Kymmene") received full immunity from fines for its cooperation with the Finnish Competition Authority (today the Finnish Competition and Consumer Authority, “FCCA”) under the leniency program.
Subsequently, 656 companies and private forest owners (the "claimants") sought damages before the Helsinki District Court ("District Court") from Metsäliitto, Stora Enso and UPM-Kymmene. In March 2014, the District Court dismissed the actions for damages by finding that the cartel victims’ right to compensation had expired. According to the District Court, the statute of limitation period started on 25 May 2004 when the FCCA published its first press release relating to its investigation of the alleged cartel.
The claimants appealed the judgment of the District Court to the Helsinki Court of Appeal ("Court of Appeal"). In November 2014, the Court of Appeal found, contrary to the District Court’s view that the statute of limitation periods of five years under the Act on Restraints of Competition and of three years under the Act on Statute of Limitations did not start on 25 May 2004 but rather on 4 January 2010 when the Market Court’s judgement became legally binding. As regards the statute of limitation of ten years under the Act on Statute of Limitations, the Court of Appeal concluded that such period had started in the spring of 2004 when the cartel had ceased its operations following UPM-Kymmene's leniency application.
Metsäliitto, Stora Enso and UPM-Kymmene were granted leave to appeal the Court of Appeal's judgement to the Supreme Court. In its ruling, the Supreme Court found that both the statute of limitation period (of five years) under the Act on Restraints of Competition and the statute of limitation period (of three years) under the Act on Statute of Limitations started on 21 December 2006 when the FCCA issued its decision, submitted the fine proposal to the Market Court and published its press release. Moreover, the Supreme Court found that the Act on Restraints of Competition applied only to damages which had occurred after the entry into force of that Act (i.e. 1.10.1998). Damages occurring before the entry into force of the Act on Restraints of Competition are to be dealt with under the Act on Statute of Limitations. Accordingly, the individual cartel victims' right to compensation which was in dispute had not expired in as far as the claim was to be dealt with under the Act on Restraints of Competition but had expired in as far as the claim had to be dealt with under the Act on Statute of Limitations. As regards the ten-year statute of limitation under the Act on Statute of Limitations, the Supreme Court stated that the Act on Restraints of Competition and its limitation period overrides the general ten-year limitation as lex specialis. Therefore, the ten-year statute of limitation did not apply. Accordingly, the Supreme Court referred the case back to the District Court. Source: Supreme Court judgment of 29 February 2016 (in Finnish)
On 29 February 2016, the Finnish Market Court ("Market Court") imposed a fine of EUR 15,000 on the Finnish Bakery Federation for unlawful price recommendations. The Finnish Bakery Federation is an association of Finnish bakery employers, representing their professional and economic interests. The member companies of the Finnish Bakery Federation are mainly bakery proprietors. In June 2015, the Finnish Competition and Consumer Authority ("FCCA") submitted a proposal to the Market Court requesting that a EUR 55,000 fine be imposed on the Finnish Bakery Federation for unlawful price recommendations. According to the FCCA, the Finnish Bakery Federation had published unlawful price recommendations in its press releases, letters to members and editorials in the "Leipuri" bakery trade magazine.
In its decision, the Market Court first confirmed that the Finnish Bakery Federation is an association of undertakings and its price recommendations thus constituted a decision of an association of undertakings within the meaning of the Act on Restraints of Competition (repealed by the Competition Act in 2011). In addition, the Market Court confirmed the FCCA's findings and ruled that the Finnish Bakery Federation had published unlawful price recommendations in its press releases, letters to members and editorials in the "Leipuri" bakery trade magazine during 2007-2010. According to the Market Court, these price recommendations by their very nature had the potential to restrict competition, i.e., they constituted a restriction of competition by object. Concerning the amount of the fine, the Market Court found that, taking into account the nature, extent and duration of the infringement, a fine of EUR 15,000 should be imposed on the Finnish Bakery Federation. The FCCA announced that it is considering whether to appeal the decision, and in particular the amount of the fine, to the Supreme Administrative Court. Sources: Market Court judgment of 29 February 2016 (in Finnish) and Finnish Competition and Consumer Authority Press Release 29/02/2016 (in Finnish)
On 25 February 2016, the Finnish Competition and Consumer Authority ("FCCA") announced that it has conducted inspections at the premises of certain driving schools. The FCCA is investigating whether economic operators in the driving school market have restricted competition. The FCCA has a right to carry out inspections at company premises under the Competition Act in order to investigate competition law infringements. The fact that the FCCA carries out such inspections does not prejudge the outcome of the investigation. Source: Finnish Competition and Consumer Authority Press Release 25/02/2016
On 26 February 2016, the Swedish Competition Authority ("SCA") announced that it has closed an investigation into the construction services company Geomatikk Sverige AB ("Geomatikk") after the company committed to making certain amendments to its supply agreements. Geomatikk provides a number of services to road construction companies, such as mapping information on the presence of buried cables.
In April last year, the SCA received an anonymous complaint alleging that Geomatikk applied an anti-competitive non-competition provision in its subcontracting agreements. According to the complaint, the provision gave Geomatikk the right to terminate the agreements provided a subcontractor entered into an agreement with a third party in competition with Geomatikk. Subsequently, the SCA launched an investigation. In February 2016, Geomatikk announced that it had removed the provision from its subcontracting agreements and that it no longer applies the provision. Consequently, the SCA decided to close its investigation.
On 29 February 2016, the Swedish Broadcasting Authority ("SBA") submitted a report to the Swedish Ministry of Culture concerning a proposal for a list of televised events that should be available for the Swedish population via free-to-air ("FTA") TV. The Swedish government had in November 2015 requested the SBA to propose which television content should be available to at least 80 per cent of Swedish viewers.
On 17 February 2016, the Swedish Competition Authority ("SCA") issued its opinion on the SBA's proposal, advising against it. The SCA states that the introduction of such an event list may result in the restriction of competition on the Swedish broadcasting market. The SCA questioned the need for such a list in the first place stressing in particular the increased competitive pressure imposed on FTA services by pay-TV and on-demand services. Further, the SCA underlined the need for the SBA to closely follow market developments in the media sector. According to the SCA there may arise situations in which governmental action needs to be taken for the purposes of protecting consumers e.g. if broadcasting companies only offer access to popular events via long-term subscriptions. The SCA concludes that if an event list were introduced, it should be technology-neutral. A too-narrow definition of the term FTA excludes channels on other platforms and represents a key competitive advantage for incumbent terrestrial broadcasters. Therefore, any regulation that is introduced should include moving pictures via the Internet and other platforms. Sources: Swedish Broadcasting Authority Press Release 29/02/2016 (in Swedish) and Swedish Competition Authority Opinion 17/02/2016 (in Swedish)
On 26 February 2016, the Commission opened an in-depth investigation to assess whether an acquisition of ArianeSpace SA ("Arianespace") by Airbus Safran Launchers ("ASL") restricts competition. Arianespace offers satellite launch services to private and institutional operators. The company is the global leader for launches of commercial satellites to geostationary transfer orbits. It also has a de facto monopoly in the European markets for institutional launches. For its services, Arianespace uses launchers produced by three different companies, including the Ariane launcher manufactured by ASL. ASL is a 50/50 joint venture controlled by Safran and Airbus, one of the leading satellite manufacturers worldwide. Both ASL and its parent company Airbus manufacture payload adapters and dispensers. These are components sourced and used by launch service providers, such as Arianespace.
The Commission has concerns that the transaction might result in higher prices and less customer choice and innovation in the satellite, launcher, launcher equipment and launch services markets. In particular, the Commission is concerned that the merged entity might be able to discriminate against satellite manufacturers that compete with Airbus on price or other terms concerning their access to Arianespace's launch services, thereby reducing the incentives of these rivals to invest and innovate in satellite manufacturing. Aligning the incentives of ASL, Airbus and Arianespace through the transaction might also lead to sharing of critical information on satellites or launch service competitors between Arianespace and Airbus. Further, the Commission has concerns that the merged entity would give priority to launch services connected to ASL's Ariane launchers. This would be detrimental in particular to the competing launcher Vega, which is manufactured by ELV, a joint venture between Avio and the Italian Space Agency. Currently, the Vega launcher can only be commercialized by Arianespace. Finally, the Commission is concerned that the merged entity would procure payload adapters and dispensers exclusively from Airbus and ASL following the transaction, regardless of the price and quality offered by competitors.
The opening of an in-depth investigation does not prejudge the outcome of the investigation. The Commission now has 90 working days, until 12 July 2016, to investigate whether its competition concerns are confirmed and to take a final decision. Source: Commission Press Release 26/02/2016
On 25 February 2016, the Commission approved an acquisition of a dental equipment supplier Sirona Dental Systems Inc. ("Sirona") by Dentsply International ("Dentsply"), subject to conditions. Sirona is a global dental equipment manufacturer focusing on developing, manufacturing and marketing innovative solutions for dentists. Dentsply designs, develops, manufactures and markets a broad range of consumable dental products for the professional dental market. It also manufactures and markets other consumable medical devices. The Commission focused its investigation on the main product areas where both Dentsply and Sirona are active, namely so-called computer-aided design ("CAD") and computer-aided manufacturing ("CAM") materials, small dental equipment, dental imaging systems and dental implant systems. CAD/CAM systems are used by dentists to manufacture dental prosthetics, such as crowns, bridges, veneers and inlays, out of CAD/CAM blocks.
The Commission's investigation revealed that the transaction, as initially notified, would have given the merged entity the ability and incentive to exclude competitors from the market by closing Sirona's chairside CAD/CAM systems to competing providers of CAD/CAM blocks in order to favor its own blocks. Sirona is the leading supplier of chairside CAD/CAM systems with a very strong position in several EU Member States, as well as in the European Economic Area ("EEA"). Although Dentsply's offering in chairside CAD/CAM blocks is currently limited, the Commission's investigation showed that it could be expanded in the near future to replace competing CAD/CAM suppliers. According to the Commission, this could lead to higher prices for CAD/CAM blocks and ultimately result in higher costs for patients needing dental restoration work. To address these concerns, the companies offered to extend Sirona's existing license agreements with competing CAD/CAM block suppliers by 10 years. The companies also committed to provide the necessary know-how to these suppliers for the duration of the licensing agreements, protect confidential commercial and technical information and refrain from taking measures that could limit the usability of the suppliers' CAD/CAM blocks. Finally, the companies offered to use a fast track arbitration procedure for dispute settlement.
The Commission found that the commitments addressed its competition concerns. Therefore, it concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. Source: Commission Press Release 25/02/2016
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 Webhelp by KKR
- Commission approves acquisition of the L Companies by Catterton
- Commission approves acquisition of sole control over Roth Agrarhandel by Hauptgenossenschaft Nord
- Commission approves acquisition of EMC by Dell
- Commission approves acquisition of joint control of Tafisa by Arauco and Sonae
- Commission approves acquisition of Tican by Tönnies
- Commission approves acquisition of Austrian meat producer Huber by Swiss rival Bell
- Commission approves acquisition of Logos Australia and Logos China by Macquarie and Ivanhoe