EU Competition

Appeal by ICAP against Yen interest rate derivatives cartel decision. On 27 July 2015, details were published in the Official Journal of an appeal by UK based broker, ICAP, against a European Commission (Commission) decision fining ICAP for facilitating cartels in relation to  Yen interest rate derivatives. ICAP pleads, in particular, that the Commission erred in fact and law in finding that the facilitation by ICAP of banks’ conduct constituted an infringement of Article 101 of the TFEU, or in setting the duration of ICAP’s alleged involvement in the infringements. ICAP further pleads that the use of a “hybrid” settlement procedure, in which the settlement decision implicated ICAP by extensively describing its role as a facilitator, breached the  principles of the presumption of innocence and good administration. In addition, ICAP claims  that the Commission erred in a number of respects in its calculation of the fine imposed.

EU Mergers

Phase I Mergers

  • M.7330 MITSUBISHI HEAVY INDUSTRIES / SIEMENS / METAL TECHNOLOGIES JV (28/07/2015)
  • M.7408 CARGILL / ADM CHOCOLATE BUSINESS (29/07/2015)
  • M.7566 MONDI / WALKI ASSETS (31/07/2015)
  • M.7631 ROYAL DUTCH SHELL / BG GROUP (31/07/2015)
  • M.7676 GKN / FOKKER (30/07/2015)

State Aid

Commission opens in­depth investigation into restructuring of Portuguese bank. On 24 July 2015, the Commission announced that it has opened an in­depth state aid investigation to assess whether state aid granted by Portugal to Banco Internacional do Funchal S.A (Banif) was compatible with EU state aid rules. The Commission is concerned that the restructuring plan for Banif, submitted following the Commission’s temporary approval, in January 2013, of recapatilisation measures, does not satisfy the conditions of the relevant state aid rules on the restructuring of banks. In particular, the Commission is concerned that the restructuring plan does not ensure the long­term viability of Banif, while also minimising distortions of competition resulting from the state aid.

Commission approves Dutch state aid for charging infrastructure used by electrical vehicles. On 27 July 2015, the Commission announced that it has approved Dutch plans to provide public funding to support the installation and operation of charging stations for electric vehicles under Article 107(3)(c) of the TFEU. The Commission considered that the Dutch scheme would contribute to the objective of promoting sustainable transport and improving air quality, while not unduly distorting competition in the EU.

Commission approves restructuring aid granted to Kem One SAS (Kem One). On 28 July 2015, the Commission announced that it has decided, following an in­depth state aid investigation, to approve the support granted by France to the chlorochemicals and PVC producer Kem One. The Commission considered that the restructuring plan for Kem One will allow the company to become viable again in the long term without needing further state support, and without unduly distorting competition in the EU.

Trade

Declaration by the High Representative on behalf of the EU on the alignment of certain third countries concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol. On 28 July 2015, the European Council of the European Union (the Council) announced that it has adopted Council Decision (CFSP) 2015/959 on 19 June 2015 to extend existing measures in response to the illegal annexation of Crimea and Sevastopol until 23 June 2016. The Council welcomed the commitments from Candidate Countries Montenegro and Albania, and the EFTA countries Iceland, Liechtenstein and Norway, members of the European Economic Area, as well as Ukraine and Georgia to align their national policies to conform to this Council Decision.

Declaration by the High Representative on behalf of the EU on the alignment of certain third countries concerning restrictive measures in view of Russia’s actions to destabilise the Ukraine. On 28 July 2015, the Council announced that it has adopted Council Decision (CFSP) 2015/971 on 22 June 2015 to extend existing measures in response to Russia’s actions to destabilise the Ukraine until 31 January 2016. The Council welcomed the commitments from Candidate Countries Montenegro and Albania and the EFTA countries Iceland, Liechtenstein

and Norway, members of the European Economic Area, as well as the Ukraine, to align their national policies to conform to this Council Decision.

UK Competition

Ofcom sends Statement of Objections to Royal Mail about alleged differential pricing for wholesale access. On 28 July 2015, Ofcom announced that it has sent a Statement of Objections to Royal Mail plc. Ofcom reported that the Statement of Objections sets out allegations that Royal Mail has abused its dominant position, in breach of Article 102 of the TFEU and the Chapter II prohibition of the Competition Act 1998, by engaging in conduct that amounted to unlawful discrimination against competitor postal operators. Specifically, the Statement of Objections alleges that the changes to Royal Mail’s wholesale prices for bulk mail delivery services contained a differential in pricing which meant that, in practice, higher access prices would be charged to access customers that competed with Royal Mail in delivery than to

those access customers that did not.

Ofcom’s Procedural Officer decision on complaint by Royal Mail about conduct of Competition Act investigation into access prices. On 29 July 2015, Ofcom published its Procedural Officer’s decision on a complaint by Royal Mail. Royal Mail’s complaint concerned Ofcom’s refusal to hold a second “state of play” meeting prior to taking its provisional decision (particularly the Statement of Objections). The Procedural Officer’s decision concluded that Royal Mail had been sufficiently informed about the issues for which it is being investigated and that the refusal to offer a second state of play meeting had not compromised Royal Mail’s rights of defence in this investigation.

Speeches & Publications

HM Treasury consults on UK implementation of Interchange Fee Regulation. On 27 July 2015, HM Treasury published a consultation to invite views on meeting the UK’s obligation to implement the regulation on interchange fees for card­based payment transactions ((EU) 2015/751) (Interchange Fee Regulation (IFR) or MIF Regulation). In the consultation, HM Treasury sets out the government’s proposals to assign roles to the FCA, where certain provisions of the IFR overlap with the FCA’s existing remit, and to the relevant Trading Standard bodies for monitoring the obligation created under article 10 of the IFR for merchants to display clearly to their customers which cards they accept.

Ofcom supplementary consultation on review of pay TV wholesale must­offer obligation. On 27 July 2015, Ofcom published a supplementary consultation as part of its review of the pay TV wholesale must­offer obligation imposed on Sky in 2010. Following its review of responses to a consultation issued in December 2014, Ofcom is now seeking further submissions and evidence on whether the insistence by Sky on the reciprocal supply of key content as a condition for supply of Sky Sports is a term of supply that would prejudice fair and effective competition. Ofcom sets out the arguments that it has received from respectively BT and Sky on this issue. It invites responses to this consultation by 21 September 2015.

Competition Policy Brief on improving competition in member states to boost growth. On 27 July 2015, the Commission published a Competition Policy Brief that discusses improving competition in the member states to boost growth. The brief details the competition aspects of the Country Reports produced in February 2015 to support the Commission’s recommendations on economic policy reforms in member states as part of the European Semester 2015. The Commission has identified that many member states require large structural reforms in order to make product and service markets more flexible and competitive.