Competition: Commission fines Pometon EUR 6.2 million for participation in steel abrasives cartel

On 25 May 2016, the Commission imposed a fine of approximately EUR 6.2 million on Italian abrasives producer Pometon S.p.A ("Pometon") for its participation in a cartel to coordinate steel abrasive prices in Europe for almost four years. Steel abrasives are loose steel particles used for cleaning or enhancing metal surfaces in the steel, automotive, metallurgy and petrochemical industries. They are also used for cutting hard stones such as granite and marble. Metal scrap, which is the main raw material for steel abrasives, is characterized by sharp price fluctuations as well as significant price differences between the EEA countries.

In June 2010, the Commission started the investigation with unannounced inspections. The Commission's investigation showed that the cartel participants set up together a specific surcharge based on a common formula to compensate for price fluctuations. In addition, the cartelists agreed not to compete against each other on price with respect to individual customers.

In April 2014, the Commission settled with four companies that admitted their involvement in the cartel. The companies that decided to settle were Ervin, Winoa, Metalltechnik Schmidt and Eisenwerk Würth. The Commission imposed fines totaling approximately EUR 30.7 million on these four companies. Pometon chose not to settle and, consequently, the investigation continued under the normal cartel procedure. In December 2014, the Commission sent a statement of objections to Pometon, giving it the opportunity to exercise its rights of defence. In setting the level of fine, the Commission took into account, inter alia, the serious nature of the infringement, its geographic scope and its duration. Consequently, the Commission imposed a fine of EUR 6.2 million on Pometon. Source: Commission Press Release 25/5/2016

Competition (Finland): Finnish government proposes new Act on Antitrust Damages Actions to Finnish Parliament

On 19 May 2016, the Finnish Ministry of Employment and the Economy announced that the Finnish government has proposed a new Act on Antitrust Damages Actions ("government proposal") to the Finnish Parliament. The Act on Antitrust Damages Actions will implement Directive 2014/104/EU on Antitrust Damages Actions, and it applies similarly to claims based on infringements of national and EU competition law.

The government proposal clarifies and facilitates the procedure of bringing private damages actions before the courts and ensures that claimants receive full compensation. Further, it clarifies the relationship between public and private enforcement and ensures that the leniency program remains efficient.

The government proposal contains provisions on presumption of cartel damages, the passing-on defense, and joint and several liability. In addition, it contains provisions on final infringement decisions and their binding effect, interest, burden of proof, statute of limitations, and the impact of settlement procedures. The government proposal is based on the work of a committee named by the Ministry of Employment and the Economy. Initially, the committee also proposed introducing the principle of economic continuity (successor liability) into the new Act on Antitrust Damages Actions. However, this has now been left out of the government proposal. The Ministry of Employment and the Economy announced that the new Act on Antitrust Damages Actions will enter into force on 26 December 2016. Source: Ministry of Employment and the Economy Press Release 19/5/2016 (in Finnish) and Government proposal for new Act on Antitrust Damages Actions (in Finnish)

Merger control: Commission conditionally approves acquisition of SABMiller by AB InBev

On 24 May 2016, the Commission announced that it has conditionally approved the acquisition of SABMiller by AB InBev. The approval is conditional on AB InBev selling practically the entire SABMiller beer business in Europe.

The proposed transaction would bring together AB InBev, the world's largest brewer, with SABMiller, the world's second largest brewer, creating a global market leader. AB Inbev's brands include Corona, Stella Artois and Budweiser. SABMiller owns brands such as Miller, Peroni, Pilsner Urquell and Grolsch. In Europe, where Heineken and Carlsberg are the market leaders, the merger brings together the third and fourth largest brewers by volume.

The Commission had initial concerns that the proposed transaction could have led to higher beer prices in Member States where SABMiller is currently active, because it would have removed an important competitor and made tacit co-ordination between the leading international brewers more likely. To address the Commission's competition concerns, AB InBev offered to divest the whole of SABMiller's business in France, Italy, the Netherlands and the UK. Further, to address the Commission's additional concerns, AB InBev offered to divest SABMiller's business in the Czech Republic, Hungary, Poland, Romania and Slovakia. The Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns. Source: Commission Press Release 24/5/2016

Merger control: Commission publishes competition policy brief on international enforcement cooperation in merger control

On 24 May 2016, the Commission published a competition policy brief on enforcement cooperation in merger control ("competition policy brief"). Competition policy briefs are written by the Competition Directorate-General staff and provide background to policy discussions. This competition policy brief highlights the importance of effective inter-agency cooperation in multi-jurisdictional mergers. According to the Commission, effective inter-agency cooperation may significantly reduce burdens and costs for stakeholders in multi-jurisdictional mergers; it should also reduce the risk of potential inconsistent merger review decisions.

In 2015, the ICN Merger Working Group Practical Guide to International Enforcement Cooperation in Mergers ("practical guide") was adopted at the ICN Annual Conference in Sydney. The practical guide illustrates the principles and practices underlying effective cooperation. The competition policy brief presents key principles of effective cooperation as set out in the practical guide and explains how these principles have applied in recent merger cases reviewed by the Commission. It demonstrates that cooperation must happen in specific cases and that it requires constructive cooperation from the companies involved. Finally, it aims to advise companies on how to facilitate effective inter-agency cooperation. Source: Competition policy brief, Issue 2/2016

Merger control: Commission refers proposed acquisition of Bupa Home Healthcare by McKesson Group to UK Competition and Markets Authority

On 19 May 2016, the Commission published its decision to refer the proposed acquisition of Bupa Home Healthcare by McKesson Group to the UK Competition and Markets Authority ("CMA"). The proposed acquisition concerns the acquisition of sole control of Bupa Home Healthcare by an entity within Celesio AG ("Celesio"), which is ultimately owned by McKesson Group. The proposed transaction concerns the market for the provision of clinical homecare services in the United Kingdom, in particular the Low Tech clinical homecare services segment in which both Bupa Home Healthcare and Celesio are active.

On 1 April 2016, the Commission received a referral request from the parties. The parties requested that the proposed transaction be examined in its entirety by the competent authorities of the UK. Subsequently, the CMA informed the Commission that it agrees with the proposed referral. Concerning the legal requirements for a case referral, the Commission found that the parties' combined market share in the affected market for Low Tech clinical homecare services in the UK is 20-30 percent by number of patients. Further, the Commission found strong indications that the distinct market for the provision of clinical homecare services, which contains significant local elements, is national in scope. Therefore, the Commission concluded that the CMA would be best placed to examine the effects of the proposed transaction. Source: Commission decision 28/4/2016

Merger control (Finland): Finnish Competition and Consumer Authority opens in-depth investigation into proposed acquisition of Kirjavälitys Oy by Otavamedia Oy

On 24 May 2016, the Finnish Competition and Consumer Authority ("FCCA") announced that it has opened an in-depth investigation into the proposed acquisition of Kirjavälitys Oy ("Kirjavälitys") by Otavamedia Oy ("Otavamedia"). Otavamedia belongs to Otava Group, a large media corporation publishing fiction and non-fiction, teaching materials, books for children and periodicals in Finland. Kirjavälitys is a service company owned by Finnish publishers and bookstores providing logistics services, e-services and wholesale services. The FCCA's preliminary investigation revealed that the proposed acquisition could restrict competition in the Finnish book market, because various competitors of Otava Group currently use services offered by Kirjavälitys.

The FCCA now has three months to investigate whether the proposed acquisition impedes effective competition in the Finnish book market or parts thereof and to make a final decision. The FCCA may accept the transaction with or without conditions or propose to the Market Court that the transaction should be prohibited. Source: Finnish Competition and Consumer Authority Press Release 24/5/2016 (in Finnish)

State aid: Commission publishes notice on State aid

On 19 May 2016, the Commission published a notice on State aid ("notice"). The notice concerns the concept of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the European Union ("TFEU"), which both the Commission and national authorities, including national courts, must apply in conjunction with the notification and standstill obligations provided for in Article 108(3) of the TFEU. It does not concern the compatibility of State aid with the internal market pursuant to Article 107(2) and (3) and Article 106(2) of the TFEU, which the Commission must assess.

The purpose of the notice is to help public authorities and companies to identify when public support measures can be granted without needing approval under EU State aid rules. The notice is the last part of the Commission’s State aid modernization initiative that was launched in 2012. As part of the State aid modernization, the Commission has already updated all major State aid guidelines and simplified the rules so that straightforward aid measures can be implemented without prior Commission scrutiny. The overall purpose is to provide legal certainty and cut red tape for public authorities and companies and focus the Commission's resources on enforcing State aid rules in cases with the greatest impact on the Single Market.

The notice provides clear guidance on when public investments do not involve State aid, notably because they do not risk distorting the level playing field in the Single Market or risk crowding out private investment. In addition, the notice gives general guidance on all aspects of the definition of State aid by summarizing the case law of the General Court and the Court of Justice of the European Union as well as the Commission's decision making practice. Source: Commission Press Release 19/5/2016 and Notice on State aid

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 Onninen by Kesko
  • Commission approves joint venture between Investindustrial and Catelli
  • Commission approves acquisition of Açoreana Seguros by Apollo Management