EU Competition

European Commission (Commission) opens formal Article 101/102 proceedings to investigate Amazon’s e­book distribution arrangements. On 11 June 2015, the Commission announced that it has opened formal proceedings to investigate whether business practices by Amazon in the distribution of e­books infringe Article 101 and/or Article 102 of the TFEU. It is investigating clauses included in Amazon’s contracts with publishers that require publishers to inform Amazon about more favourable or alternative terms offered to Amazon’s competitors and/or offer Amazon similar terms and conditions than to its competitors, or through other means ensure that Amazon is offered terms at least as good as those for its competitors. Initially, the Commission’s investigation will focus on e­books in English and German.

EU Cartels

General Court judgment on appeal against Southern Europe bananas cartel decision. On 16 June 2015, the General Court handed down its judgment on an appeal by Pacific Fruit Company Italy SpA (and its parent companies) against the Commission’s decision finding an illegal price­fixing cartel for bananas sold in Greece, Italy and Portugal. The General Court dismissed arguments that the Commission had breached essential procedural requirements by relying on documents that it was given by the Italian tax authority (obtained during a national investigation) and evidence that it obtained during another cartel investigation. Further, the Commission had not misused its powers by exerting undue influence over the other cartel participant, Chiquita, as a result of its status as immunity applicant.

Commission fines parking heater producer in cartel settlement. On 17 June 2015, the Commission announced that it has found that two German producers of automotive parts have breached Article 101 of the TFEU. The Commission found that the two companies, the only EEA producers of fuel­operated parking heaters and auxiliary heaters used in cars and trucks, colluded for a period of 10 years to co­ordinate prices and allocate customers. Both companies agreed to settle the case with the Commission.

ECJ partially allows appeal by Deutsche Bahn against dawn raid decisions. On 18 June 2015, the European Court of Justice (ECJ) handed down its judgment in an appeal by Deutsche Bahn and held that General Court had been correct to find that Article 8 of the European Convention on Human Rights (ECHR) does not require prior judicial authorisation of inspections of business premises by the Commission. Further, the ECJ held that the General Court had correctly held that the EU Courts’ judicial review of Commission inspection decisions ensures effective judicial protection, as required by Article 6(1) of the ECHR. The ECJ held, however, that the General Court had erred in finding that the Commission had not breached Deutsche Bahn’s rights of defence by telling its agents, prior to a first inspection, about additional suspicions of anti­competitive activity which were not covered by the decision authorising that first inspection. The first inspection was therefore vitiated by irregularity as the Commission’s agents, being in possession of information unrelated to the subject­matter of that inspection, proceeded to seize documents falling outside the scope of that inspection. This affected the legality of the second and third inspection decisions. Therefore, the ECJ upheld Deutsche Bahn’s appeal in so far as it set aside the Commission’s second and third inspection decisions on grounds of infringement of the rights of defence.

EU Mergers

Phase I Mergers

  • M.6800 PRSfM / STIM / GEMA / JV (18 June 2015)
  • M.7353 AIRBUS / SAFRAN / JV (18 June 2015)
  • M.7586 FLEXTRONICS / CERTAIN ASSETS BELONGING TO ALCATEL­LUCENT ITALIA (17 June 2015)
  • M.7598 DR OETKER / COPPENRATH & WIESE (18 June 2015)
  • M.7629 PSP / OTTP / TONOPAH SOLAR INVESTMENTS / TONOPAH SOLAR ENERGY (18 June 2015)
  • M.7640 LBO FRANCE / IKKS (18 June 2015)

EU State Aid

Commission finds that electricity contracts between state­owned Romanian electricity generator Hidroelectrica and customers did not involve state aid. On 12 June 2015, the Commission announced that, following an in­depth state investigation launched in April 2012, it has decided that electricity supply contracts signed by the state­owned Romanian electricity generator Hidroelectrica with certain electricity traders and industrial customers did not involve state aid. The Commission found that the contracts were either concluded on market terms or, where tariffs were below market level, the Romanian State could not be held responsible for the tariffs granted.

Commission approves German aid scheme to support high speed internet roll­out. On 15 June 2015, the Commission announced that it has approved under the state aid rules a German scheme to support the roll­out of next generation access, high­speed, broadband networks. The Commission found that the overall scheme meets the conditions of the Broadband Guidelines. It will further the objectives of the EU Digital Strategy whilst maintaining competition in the single market.

Public Procurement

Advocate General gives Opinion on location requirement in procurement procedure. On 11 June 2015, Advocate General Szpunar gave an Opinion on a preliminary reference ruling from a Basque court regarding a location requirement in a call for tenders for public health services. The Advocate General considered that the requirements in the tender specifications limited the number of economic operators who would be able to bid in breach of Articles 2 and 23 of Directive 2004/18. The Advocate General considered that such requirements could not be justified in this case, although this was a matter for the referring court to decide based on the facts of the case.

Commission requests Spanish Ministry of Defence to respect procurement rules. On 18 June 2015, the European Commission announced that it has sent a reasoned opinion to Spain asking it to comply with Directive 2004/18 (the Public Sector Procurement Directive) in relation to contracts procured by the Spanish Ministry of Defence. In its reasoned opinion, the Commission has found that, while procuring clothing, including uniforms, for the Army for an estimated value of EUR190 million, the Spanish Ministry of Defence favoured certain companies by providing them with key information to prepare their tenders well before such information was published. In addition, the Ministry adopted an internal administrative order that allowed certain items, such as clothes, to be procured without the need to apply Directive 2004/18. Spain now has two months to take action to address the issues raised in the Commission’s reasoned opinion and to comply with Directive 2004/14. If it fails to do so, the Commission may decide to refer Spain to the European Court of Justice for breach of its EU law obligations.

UK Competition

High Court ruling on whether contribution claim can be resisted by arguing that settled cartel damages action was time barred. On 16 June 2015, the High Court handed down a ruling on whether a company, from whom contribution is being sought towards damages paid in settlement of a follow­on competition damages action, can resist a contribution claim by arguing that the claimant’s action was time barred. In the main action (now settled), the defendant had argued that the claim had been brought out of time (six years after the end of the cartel as established by the European Commission). The claimant, in response, argued that as the cartel had been concealed the limitation period had been extended.

Speeches & Publications

Commission guidance on public versions of antitrust and merger decisions. The European Commission has published guidance on the preparation of non­confidential versions of Commission antitrust, cartel and merger decisions. The guidelines describe what kind of information companies can request to be redacted as business secrets and other confidential information. They also provide practical guidance on how such claims need to be submitted. The guidance also explains what kind of information the Commission redacts on its own initiative and the procedure for settling confidentiality claims in this respect.

Speech by Margrethe Vestager on state of competition policy in 2015­16. On 15 June 2015, Margrethe Vestager, Competition Commissioner, gave a keynote speech at a conference in which she reflected on the state of competition policy. In particular, she discussed the role of competition policy (particularly state aid and merger control) in encouraging investment and innovation. She also noted the recently announced investigation into Amazon’s contracts with e­ book publishers. Finally, she commented on the need for competition authorities to work together in considering the challenges posed when considering competition issues in relation to new technologies and new markets.