EU Competition

ECJ hands down judgments in appeals made by calcium and magnesium reagents cartel members. On 16 June 2016, the European Court of Justice (ECJ) handed down its judgment on appeals made by SKW Stahl-Metallurgie GmbH, SKW Stahl-Metallurgie Holding AG, Evonik Degussa GmbH (Evonik Degussa) and AlzChem AG (AlzChem) against the judgments handed down by the General Court in respect of their involvement in the calcium and magnesium reagents cartel. The ECJ dismissed the appeals on a number of grounds. In particular, Evonik Degussa and AlzChem claimed that liability had been attributed to them for SKW Stahl-Technik GmbH & Co. KG’s (SKW ST) participation in the cartel (prior to SKW ST being sold to a third party), even though they had expressly instructed SKW ST against it, therefore rebutting the presumption of decisive influence. The ECJ however, found that while a subsidiary’s refusal to comply with the express instructions of its parent was relevant information, by itself, it was not enough to rebut the presumption of decisive influence, unless it could be shown that the subsidiary’s refusal to comply with its parent’s instructions was customary in their relationship. On the facts, the ECJ therefore, could not find that the evidence had been distorted by the European Commission (Commission) when making its decision.

ECJ requested to provide a preliminary ruling on off-label use of the drug Avastin. On 20 June 2016, the Official Journal published a request for a preliminary ruling in respect of licensing agreements and market definitions for off-label drugs, by an Italian court overseeing proceedings brought by F. Hoffmann-La Roche AG, La Roche SpA, Novartis AG and Novartis Farma SpA. In particular, the court asked whether “on a proper construction of Article 101 TFEU, can the parties to a licensing agreement be regarded as competitors if the licensee company operates on the relevant market concerned solely by virtue of that agreement?” and also whether Article 101 allows the national competition authority “to define the relevant market autonomously vis-à-vis the content of marketing authorisations for medicinal products granted by the competent pharmaceutical regulatory authorities”.

EU Mergers

Phase I Mergers

  • M.8000 DCC / DANSK FUELS (20 June 2016)
  • M.8023 HON HAI PRECISION / SHARP (20 June 2016)
  • M.8030 THE CARLYLE GROUP / CRESTVIEW ADVISORS / NEP GROUP (20 June 2016)
  • M.8037 INCJ / SUMITOMO / SEKISUI / JV (16 June 2016)
  • M.8039 FREUDENBERG / VIBRACOUSTIC (22 June 2016)
  • M.8041 M&G / ANCHORAGE / PHS GROUP INVESTMENT (23 June 2016)
  • M.8045 BOSKALIS / VOLKER WESSELS OFFSHORE BUSINESS (16 June 2016)
  • M.8048 ARDAGH / BALL REXAM DIVESTMENT BUSINESS (17 June 2016)
  • M.8049 TPG CAPITAL / PARTNERS GROUP / TH REAL ESTATE PORTFOLIO (23 June 2016)
  • M.8052 SEGRO / PSPIB / SELP / TORINO DC1 (15 June 2016)
  • M.8057 CINVEN / CPPIB / HOTELBEDS GROUP (21 June 2016)
  • M.8064 BAIN CAPITAL / VISTA / VERTAFORE (20 June 2016)
  • M.8066 RANDSTAD / OBIETTIVO LAVORO (15 June 2016)

State Aid

Commission publishes notice on State aid reference rates from 1 July 2016. On 17 June 2016, the Commission published its notice setting out the State aid recovery rates and reference/discount rates applicable as of 1 July 2016. The rates have been reduced for Bulgaria, Hungary, Romania, and Sweden, while all other Eurozone member States’ rates remain the same.

Commission approves extension of Irish credit union resolution scheme. On 21 June 2016, the Commission announced that it had approved a further extension of time for the Irish credit union resolution scheme, which permits Ireland to provide aid when a credit union becomes unable to meet regulatory requirements. It allows the aid to be used for the transferring of the assets and liabilities of a failing credit union, so that a buyer is unable to gain a financial advantage by purchasing the assets at an undervalue.

Estonian short-term export-credit scheme approved. On 20 June 2016, the Commission announced that it had found an Estonian short-term export-credit scheme to be in line with EU State aid rules, on the basis that “the kind of insurance cover provided by the scheme to exporters established in Estonia is currently unavailable in the private market” as small and medium-sized companies are not currently receiving the benefit of any insurance cover for the risk of non-payment by foreign buyers.

Whirlpool and Electrolux appeals dismissed by General Court. On 22 June 2016, the General Court handed down its judgment dismissing appeals by Whirlpool Europe BV (Whirlpool) and Electrolux AB (Electrolux) against the Commission’s decision to approve restructuring aid provided to FagorBrandt. The General Court dismissed the appeals, holding that the action was inadmissible as Whirlpool and Electrolux were not directly and individually concerned by the decision, because the “information does not show that, on account of the measure at issue, there is a significant effect” on their market position.

UK Competition

CAT dismisses fast-track application for damages in polyurethane foam cartel follow-on claim. On 17 June 2016, the Competition and Appeals Tribunal (CAT) published its judgment on an application made by Beasley Pillows Limited and others seeking a fast-track application for damages from Vita Cellular Foams (UK) Limited and Vita Industrial (UK) Ltd, pursuant to section 47A of the Competition Act 1998. The action, which follows on from the Commission's polyurethane foam cartel decision, was dismissed as given the passing of time, it was not considered urgent.

CMA approves Reckitt Benckiser licence of K-Y brand to Thornton & Ross pursuant to Reckitt Benckiser and Johnson & Johnson merger. On 20 June 2016, the CMA announced that it had approved Reckitt Benckiser Group plc’s (RB) licensing of its K-Y brand to Thornton & Ross for eight years. This decision follows RB’s acquisition of the business from Johnson & Johnson in March 2014, of which a condition to approval was that RB enter into an agreement to license the K-Y brand, rights and intellectual property rights in the UK.

CMA considering undertakings provided by GTCR Canyon in respect of its acquisition of PR Newswire. On 21 June 2016, the CMA announced that it would be considering undertakings offered by GTCR Canyon Holdings in respect of its acquisition of the PR Newswire business from UBM, in lieu of a Phase II investigation. The CMA will decide by 30 August 2016 whether to accept the undertakings offered. The CMA has also published the full text of its decision to refer the acquisition to a Phase II investigation unless acceptable undertakings in lieu are offered.

First class action brought in the CAT by National Pensioners Convention in respect of OFT mobility scooters decision.  On 21 June 2016, the CAT published a Notice of an Application to commence collective proceedings under section 47B of the Competition Act 1998 by Ms. Dorothy Gibson as Class Representative against Pride Mobility Products Limited (Mobility). The action combines a number of follow-on claims for damages arising from the Office of Fair Trading’s decision which found that Mobility and eight other retailers had entered into agreements and concerted practices  prohibiting the online advertising of prices for certain models of Pride mobility scooters below Pride’s recommended retail prices.

Speeches & Publications

CMA structure chart published. On 16 June 2016, the CMA published a structure chart, setting out among other information, its Board, Panel, enforcement directors and markets & mergers  directors as of June 2016.

CMA publishes open letter to procurement professionals regarding bid-rigging. On 20 June 2016, the CMA published  an open letter setting out what procurement and supply professionals need to know about where and how bid-rigging can occur during a tender process.

CMA publishes open letter to retailers and suppliers regarding retail price maintenance.On 21 June 2016, the CMA published an open letter setting out the different kinds of practices adopted by retailers and suppliers that can amount to illegal resale price maintenance (RPM), which includes the use of ‘minimum advertised price’ or MAP policies. The letter follows the CMA’s investigations into the supply of commercial catering  equipment and bathroom fittings in which it found two businesses had engaged in RPM.

Council extends sanctions against illegal annexation of Crimea and Sevastopol. On 17 June 2016, the Council of the European Union (EU Council) published its decision to extend restrictive measures in response to the illegal annexation of Crimea and Sevastopol, so that they will now expire on 23 June 2017.

Council terminates restrictive measures against Liberia. On 20 June 2016, the EU Council published its decision to terminate, with immediate effect, the arms embargo with regard to the situation in Liberia.