Competition: Court of Justice of the European Union reduces fine imposed on Total SA and Total Marketing Services SA

On 17 September 2015, the Court of Justice of the European Union ("CJEU") handed down two separate judgments on appeals by Total SA ("Total") and its subsidiary, Total Marketing Services SA ("TMS", previously "Total France"), against the judgements of the General Court ("GC") relating to the paraffin wax cartel. In 2008, the Commission imposed fines on nine corporate groups for participating in a price-fixing and market-sharing cartel on the market for paraffin wax between 1992 and 2005. The Commission considered that Total exercised decisive influence over its wholly owned subsidiary Total France (now TMS) and imposed the fine jointly and severally on both entities. Subsequently, both Total and TMS asked the GC to annul the Commission's decision. The GC rejected the appeal by Total in its entirety. Regarding the appeal by TMS, the GC reduced the fine by some EUR 3 million to EUR 125 million to reflect the true duration of TMS's participation in the cartel. In late 2013, Total and TMS appealed the GC’s judgments to the CJEU.

In its judgments, the CJEU dismissed TMS's appeal in its entirety but partly upheld the appeal by Total. The CJEU noted that where the liability of a parent company is derived exclusively from that of its subsidiary, and where such parent company and its subsidiary have brought parallel actions with the same object, the outcome of the subsidiary's appeal should be taken into account vis-à-vis the parent company. The parent company must also benefit from any reduction in the liability imputed to the subsidiary. Accordingly, the CJEU concluded that the GC had erred in law because it had not taken the outcome of TMS's appeal into account in its judgement concerning Total. The CJEU set aside the GC's judgement in so far as it did not align the fine imposed on Total with the fine imposed on TMS and reduced the fine imposed on Total jointly and severally with TMS to EUR 125 million. 

Regarding TMS's appeal, the CJEU found that the GC had erred in law in considering that the only way to prove that an undertaking had ceased to participate in a cartel was to publicly distance itself, even in the case where that company has not participated in anti-competitive meetings. However, the CJEU concluded that this error did not justify the annulment of the GC's judgment, because there was other objective and consistent evidence showing that the company's participation in the cartel had continued and was not interrupted. Source: Court of Justice of the European Union Press Release 17/9/2015

Competition: Commission publishes revised explanatory note on Commission inspections

On 11 September 2015, the Commission published a revised version of its explanatory note on Commission inspections pursuant to Article 20(4) of Regulation 1/2003. In the revised explanatory note, the Commission provides further guidance in particular on the searches of business's IT environments and the retention of data still to be searched at the end of an on-site inspection. The Commission also clarifies the treatment of so-called final data selected by inspectors during on-site inspections and the application of EU data protection rules to inspections. 

According to the revised explanatory note, the Commission's inspectors are entitled to search a company's IT environment, including servers and storage area, such as external hard disks, backup tapes and cloud services. This also applies to private devices and media that are used for professional services when they are found on the premises. If the investigation is not finished during an on-site inspection, the Commission can copy the data set, secure it in a sealed envelope and invite company representatives to be present when the sealed envelope is later opened at the Commission's premises. Alternatively, the Commission may decide to return the sealed envelope to the company for safekeeping until further notice.

The Commission also clarifies that, as regards the final data selected by the inspectors during an on-site inspection, a company will receive a data carrier on which all these data are stored and it will be requested to sign the printed lists of data items selected. Finally, the Commission notes that personal data of individuals are not targets of Commission investigations or inspections as such, although such data may be contained in business documents/data related to such investigations and may therefore become part of the Commission's file. In such cases, all personal data on Commission anti-trust files may only be used for the purpose of which they were collected and will be processed in compliance with EU data protection rules. SourceCommission's explanatory note on Commission inspections pursuant to Article 20(4) of Council Regulation No 1/2003, 11/9/2015

Merger control: Commission approves NXP’s acquisition of Freescale, subject to conditions

On 17 September 2015, the Commission approved the acquisition of Freescale Semiconductor Ltd. ("Freescale") by NXP Semiconductors N.V. ("NXP"), subject to conditions. Both companies manufacture semiconductors at a global level. Semiconductors control the conduction of electricity and are used in various electronic components of products ranging from cars to smartphones. The two companies’ semiconductor product portfolios are mostly complementary, except for radio frequency (“RF”) power transistors. RF technology uses radio waves to transfer information through space. RF power transistors make RF signals more powerful and are predominantly used in base stations for mobile telecommunications (3G, 4G, LTE), as well as in radio and television broadcasting, microwave ovens, mobile radios and air traffic control equipment. 

The Commission found that NXP and Freescale are the two largest competitors in the RF power transistors market, in particular those used in base stations for mobile telecommunications. The Commission had concerns that the remaining companies on the market would have been unable to exercise sufficient competitive pressure on the merged entity. This could have raised prices and reduced choice for customers after the merger. To address these concerns, NXP committed to divest its RF power business, except the assets necessary for the so-called “front-end” manufacturing of these products. NXP also offered to make a manufacturing agreement with a third party foundry to perform front-end manufacturing services for the divested business and to provide the RF power business with the transitional manufacturing and services agreements required to guarantee business continuity. According to the Commission, these commitments will allow the purchaser of the divested business to replicate NXP's previous role in the RF power transistors market and maintain effective competition. Source: Commission Press Release 17/9/2015

Merger control (Sweden): Swedish Competition Authority approves acquisition of Contiga Holding AS by HeidelbergCement Sweden AB

On 16 September 2015, following an in-depth investigation the Swedish Competition Authority ("SCA") approved the acquisition of Contiga Holding AS ("Contiga") by HeidelbergCement Sweden AB ("HeidelbergCement"). HeidelbergCement is active on the markets for gray cement and the market for concrete products in Sweden through its subsidiaries Cementa AB ("Cementa") and Abetong AB ("Abetong"). Contiga's activities in Sweden include planning, manufacturing and installations of steel constructions and concrete elements for industrial buildings and apartment buildings. 

Cementa is the only producer of gray cement in Sweden and has only one competitor that imports gray cement. Gray cement is one of the raw materials for the production of concrete products. Contiga and Abetong AB are both active on the downstream market for concrete products, where they have an aggregated market share of 20 per cent. The SCA assessed both the horizontal and vertical effects of the proposed transaction and focused its investigation on the effects of the transaction on the concrete products market in particular. Source: Swedish Competition Authority Press Release 22/9/2015 and Swedish Competition Authority decision 16/9/2015

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 joint venture between Amcor and Sidel
  • Commission approves Zambian agricultural mechanisation joint venture between Barloworld and BayWa
  • Commission approves acquisition of Moy Park by JBS
  • Commission approves acquisition of TriStyle by investment firm Equistone
  • Commission approves acquisition of Stemcor by Apollo in steel sector
  • Commission approves acquisition of joint control over WMF by KKR and FIBA
  • Commission approves acquisition of joint control over ICBPI by Advent International and Bain Capital in banking sector