EU Competition

Pometon fined EUR 6.2 million for participation in steel abrasives cartel. On 25 May 2016, the European Commission (Commission) announced that that it had fined Italian abrasives producer, Pometon S.p.A., EUR 6,197,000 for participating in a cartel to coordinate steel abrasives prices in Europe for almost four years. In particular, Pometon had bilateral and multilateral contacts with Ervin, Winoa, Metalltechnik Schmidt and Eisenwerk Würth, to coordinate prices of steel abrasives in the whole European Economic Area. Steel abrasives, which are loose steel particles, are used for cleaning or enhancing metal surfaces in the steel, automotive, metallurgy and petrochemical industries, and are also used for cutting hard stones such as granite and marble.

EU Mergers

Phase I Mergers

  • M.7744  HEIDELBERGCEMENT / ITALCEMENTI (26 MAY 2016)
  • M.7881  AB INBEV / SAB MILLER (24 MAY 2016)
  • M.7910  KESKO / ONNINEN  (24 MAY 2016)
  • M.8001  PILLARSTONE / SIRTI (25 MAY 2016)
  • M.8002  APOLLO MANAGEMENT / AÇOREANA SEGUROS (20 MAY 2016)

State Aid

Commission announces State aid decision in respect of Danish transmission system operator’s contract with DONG Energy. On 23 May 2016, the Commission announced that a supply contract between the Danish transmission system operator Energinet.dk and DONG Energy (a Danish energy company) did not involve any State aid. Following its in-depth investigation into the contract, the Commission concluded that the contract (for the provision by DONG Energy of electricity to the network at short notice to ensure the balance and technical stability of the Danish electricity system), did not confer a selective advantage on DONG Energy and found that the price paid by Energinet.dk was competitive.

Commission announces that UK National Broadband Scheme for 2016-2020 complies with State aid rules. On 26 May 2016, the Commission announced that a UK scheme aimed at connecting as many homes and businesses as possible throughout the UK to high speed broadband complies with State aid rules. The Commission’s assessment was aimed at ensuring that public funding does not take the place of private investment. The 2013 Broadband Guidelines, on which its decision is based, also ensures that other service providers can use the publicly funded infrastructure on a non-discriminatory basis.

General Court hands down judgment on appeals against unlimited State guarantee granted by France. On 26 May 2016, the General Court handed down its judgment on the appeals made by France and the Institut Français du Pétrole Énergies Nouvelles (IFP) against the Commission’s decision that an unlimited State guarantee granted by France to the IFP was compatible with the State aid rules. The appeal was made on the grounds that the Commission had incorrectly concluded that the existence of a guarantee would create an advantage in favour of the IFP, and that the Commission misapplied the concept of advantage when it held that any advantage that IFP would obtain from the guarantee would be transferable to its private-law subsidiaries Axens and Prosernat. The General Court found that the Commission had not proved that the guarantee gave IFP a real economic advantage under Article 107 of the TFEU and therefore, annulled the decision in that respect, but dismissed the rest of the appeal.

EU Trade

Commission publishes Report of the 13th TTIP Round of Negotiations. On 24 May 2016, the Commission published a report on its 13th round of negotiations with the United States for a Transatlantic Trade and Investment Partnership (TTIP).  During the talks, the Commission put forward its proposal for cooperation in the pharmaceuticals sector, in addition to advancing a general discussion on providing better access to markets for EU and U.S. firms and simplifying technical regulations.

EU concludes negotiations on agreement with New Zealand on cooperation and mutual administrative assistance in customs matters. On 24 May 2016, the Council of the European Union (Council) published its decision authorising the EU to sign an agreement with New Zealand to establish a legal basis for a cooperation framework which aims to secure the supply chain and facilitate legitimate trade, as well as enable the exchange of information to ensure the proper application of customs legislation and the prevention, investigation and combating of breaches of customs legislation. The Council has also published a copy of the agreement concluded by the parties following their negotiations.

UK Competition

UK court hands down judgment dismissing iiyama’s damages claim following the Commission’s TV-tube cartel decision. On 23 May 2016, the High Court handed down its judgment, dismissing  iiyama’s claim for damages in respect of the Commission’s TV-tube cartel decision, on the grounds that it lacked “sufficient territorial connection with the EU”. Iiyama was found to have not bought any of the cartelized products from the defendants and the illegal conduct was found to have taken place outside of Europe. As such, it was not deemed to be a “follow-on case” from the Commission’s infringement decision.

CMA issues Statement of Objections in relation to anti-competitive conduct in the modelling sector. On 25 May 2016, the Competition and Markets Authority (CMA) announced that it has issued a Statement of Objections alleging that from April 2013 to March 2015, FM Models, Models 1, Premier, Storm and Viva agreed to exchange confidential and competitively sensitive information. The CMA’s Statement of Objections also alleges that these modelling agencies used the Association of Model Agents (whose council comprised of representatives of each agency) to regularly and systematically circulate emails to its members, “encouraging model agencies to reject the fees being offered by specific customers and to negotiate a higher fee”.

CMA issues Statement of Objections in relation to anti-competitive conduct in the galvanised steel tank sector. On 26 May 2016, the CMA announced that it has issued a Statement of Objections to CST Industries (UK) Ltd (CST), Franklin Hodge Industries Ltd, Galglass Ltd, KW Supplies Ltd and Balmoral Tanks Ltd, in relation to their participation in a cartel for the supply of galvanised steel tanks for water storage. CST, who brought the arrangements to the CMA’s attention, will receive immunity from fines under the CMA’s leniency policy, provided that it continues to co-operate with the CMA and complies with the conditions of the leniency policy.

CMA publishes undertakings from Centrica relating to the Rough gas storage facility. On 26 May 2016, the CMA published the varied undertakings that it has accepted from Centrica and Centrica Storage Limited in relation to the Rough gas storage facility. Rough is a gas field in the North Sea used to store gas in the summer and deliver it in the winter when the gas is needed to help meet high demand. The varied undertakings introduce an adjustment mechanism which would allow Ofgem, as energy regulator, to vary the capacity obligations if CSL is able to demonstrate that there is an issue which will have a substantial impact on Rough’s capacity.

Speeches & Publications

CMA publishes letter on competitive impact of Land Registry privatisation. On 19 May 2016, the CMA published its letter to the Department for Business, Innovation and Skills (BIS) in response to BIS’ consultation on moving Land Registry operations to the private sector. Pursuant to its powers under the Small Business Enterprise and Employment Act (2015) to “make recommendations to ministers on the impact of proposals for legislation on competition within any UK market(s) for goods and services”, the CMA has advised BIS that the privatised, vertically-integrated Land Registry currently envisaged by the government, would be unlikely to promote wide access to data at cost-effective prices, in order for it to be used commercially by a broad customer base.

BIS launches consultation options aimed at refining UK competition law. On 25 May 2016, BIS published a consultation document on potential structural, procedural and enforcement changes to the CMA, Competition Appeal Tribunal and Payments Systems Regulator, which also addresses any reforms required in relation to merger control, market investigation and enforcement.

Commission publishes May key infringements decisions. On 26 May 2016, the Commission announced that it had published its monthly package of infringement decisions, in which it sets out the legal action currently being taken against Member States for failing to comply with their obligations under EU law.