Competition: Commission fines cargo train operators EUR 49 million for cartel

On 15 July 2015, the Commission imposed fines of EUR 49,154,000 on two cargo train operators, Express Interfracht and Schenker, for operating a cartel in the market for so-called cargo "blocktrain" services. The two companies fixed prices and allocated customers for their "Balkantrain" and "Soptrain" services in Europe for nearly eight years. The blocktrains covered by the cartel were jointly operated by all cartel members. Blocktrains refers to a rail shipping system to transport cargo from one hub to another without wagons being split up or stored on the way. In principle, blocktrains are economically more efficient than traditional rail cargo transport, notably for single commodity shipping. 

In order to limit competition between them, the companies employed several restrictive practices, such as allocating existing and new customers and organizing a customer allocation scheme including a "notification system" for new customers; exchanging confidential information on specific customer requests; sharing transport volumes contracted by downstream customers; and coordinating prices directly by providing each other with cover bids for customers protected under their customer allocation scheme and coordinated sales prices offered to downstream customers.

Both Express Interfracht, part of the Austrian railway incumbent Österreichische Bundesbahnen, and Schenker, part of the German railway incumbent Deutsche Bahn, received reductions in their fines for cooperating with the investigation and their fines were further reduced by 10% when they agreed to settle the case. Kühne+Nagel of Switzerland, which is one of the largest transport and logistics companies in Europe, was also a member to the cartel but was not fined because it was granted immunity under the Commission's Leniency Notice for revealing the existence of the cartel.

In setting the fines, the Commission considered the companies' sales generated from rail cargo transport services related to the jointly operated blocktrains, including ancillary transport services, plus the serious nature of the infringement, its geographic scope and its duration. The Commission's decision does not cover the companies' upstream coordination, which created the two blocktrain services, because such coordination is not regarded as anti-competitive. Thus, the decision solely concerns the collusion between the operators of the blocktrains in the marketing of the service.

Source: Commission Press Release 15/7/2015

Competition: Court of Justice of the European Union dismisses InnoLux's appeal, holding that sales of finished products were relevant for calculating cartel fine

On 9 July 2015, the Court of Justice of the European Union ("CJEU") dismissed an appeal by InnoLux Corp. ("InnoLux") against a General Court ("GC") judgment dismissing InnoLux's appeal against the Commission's decision in the liquid crystal display ("LCD") panels cartel. The CJEU did not follow the Advocate General's opinion. Instead, the CJEU concluded that the GC did not err in holding that the Commission was entitled to consider, in setting the fine, the sales of finished products incorporating the cartelized LCD panels, up to the value of those panels.

Even though the finished products were sold on a downstream market from the market for LCD panels, the effects of the cartelized price of the LCD panels on the sales of the finished products was liable to influence competition on the market for those products in the European Economic Area ("EEA"). Therefore, the sales of the finished products were related to the cartel. The CJEU also noted that the GC was correct in stating that vertically integrated companies, such as InnoLux, would gain an unjustified advantage (when selling the cartel goods internally) if the value of the sales of finished products in the EEA were ignored when setting the fine.

The CJEU stated that the Commission had not exceeded its territorial jurisdiction by virtue of the fact that it considered, when calculating the fine, sales of finished products incorporating the LCD panels, which were sold to group production units outside the EEA. The Commission had jurisdiction to apply Article 101 of the TFEU to a worldwide cartel that was implemented in the EEA (through direct sales of LCD panels to third parties). The issue in this appeal related to the sales to be taken into account to ensure that the fine reflected the economic importance of that infringement and the relevant significance of InnoLux in the infringement. Source: Case C‑231/14 P, InnoLux Corp. v Commission, Judgment of the Court of Justice of the European Union, 9/7/2015

Competition: General Court partially upholds appeal against Commission's refusal to grant access to documents in car glass cartel

On 7 July 2015, the General Court ("GC") handed down its judgment in an appeal by AXA Versicherung AG ("AXA") against a decision in which the Commission refused requests for access to certain documents relating to the car glass cartel. According to the GC, the Commission rightly applied the general presumption that disclosure of the documents in the Commission's file would undermine the protection of the purpose of inspections. In the absence of any evidence in the action capable of rebutting this general presumption, AXA could not claim that the Commission should have carried out a specific, individual examination of the documents in question.

However, the GC annulled the part of the Commission's decision that rejected AXA's request for access to references to leniency documents in the table of contents of the car glass cartel file. The Commission's refusal was not justified to the requisite legal standard. The table of contents was not part of the case file and was, therefore, not covered by the general presumption of inaccessibility. The GC did, however, uphold the Commission's refusal to disclose information on the identity of physical persons, the names of third party undertakings and other sensitive commercial information contained in the table of contents. Source: Case T-677/13, Axa Versicherung AG v Commission, judgement of the General Court, 7/7/2015

Competition: Court of Justice of the European Union hands down judgment on appeals by Del Monte and Commission in banana importers cartel case

On 24 June 2015, the Court of Justice of the European Union ("CJEU") handed down its judgment on appeals by Fresh Del Monte Produce Group ("Del Monte") and the Commission against the General Court's ("GC") judgment on Del Monte's challenge to the Commission's decision on the banana importers cartel. The GC had dismissed all of Del Monte's challenges to the Commission's infringement decision. However, it reduced the fine imposed on Del Monte because the Commission, under the Leniency Notice, had not duly considered Del Monte's cooperation when it voluntarily responded to informal information requests.

The CJEU dismissed Del Monte's appeal in its entirety. The CJEU concluded that the GC did not err in holding Del Monte jointly and severally liable for the fine imposed on Weichert. The GC did not err in finding that all the information requested and obtained by Del Monte and the instructions (accompanied by threats and pressure) given by Del Monte to Weichert demonstrated that Del Monte had actually exercised decisive influence over Weichert. The GC had also not erred in finding that Weichert had participated in a single and continuous infringement of Article 101(1) of the TFEU.

The CJEU, however, upholds the Commission's appeal and confirms that responding to an information request does not demonstrate the required "genuine spirit of cooperation". Consequently, the CJEU revoked the 10% reduction granted by the GC and set the fine imposed on Del Monte and Weichert at EUR 9.8 million. Source: Joined Cases C‑293/13 P and C‑294/13 P, Fresh Del Monte Produce Inc. v Commission, Judgment of the Court of Justice of the European Union, 24/6/2015

Competition (Finland): The Finnish Competition and Consumer Authority proposes to penalize the Finnish Bakery Federation for unlawful price recommendations

On 24 June 2015, the Finnish Competition and Consumer Authority ("FCCA") submitted a proposal to the Market Court requesting a EUR 55,000 fine be imposed on the Finnish Bakery Federation for unlawful price recommendations the Federation gave its members in 2007–2010.

The FCCA began to investigate the matter after the Federation issued a press release in August 2010 about the industry's weak profitability and the pressure to raise the prices of bakery products. An investigation revealed that similar recommendations had been made over the years in other bulletins issued by the Federation, in letters to members, and in speeches and editorials in the "Leipuri" bakery trade magazine. A rise in the general level of prices, illustrated with percentage figures, was presented as grounds for price increases. According to the penalty proposal, the objective of the price recommendations was to raise prices, achieve consistency in the level and timing of price increases, and thereby to restrict competition between companies in the bakery sector.

Source: The FCCA Press Release, 24/6/215

Merger Control: Commission approves acquisition of Hospira by Pfizer, subject to conditions

On 4 August 2015, the Commission approved the proposed acquisition of Hospira by Pfizer, subject to conditions. Both companies are US based and active globally in the development and marketing of pharmaceuticals. The Commission focused its investigation on the two product areas where Pfizer and Hospira compete, namely biosimilar drugs and sterile injectable drugs.

The Commission expressed concerns that the merged entity would have faced insufficient competitive pressure from the remaining players in the corresponding markets. This would have created a risk of price increases and discontinuation of the development of Pfizer's infliximab biosimilar drug. In order to address the competition concerns, Pfizer submitted a set of commitments including a commitment to divest fully the development, manufacturing and marketing rights (within the EEA) of Pfizer's infliximab biosimilar drug and to divest the marketing authorizations and associated rights of Pfizer or Hospira in relation to all problematic sterile injectable molecules in the relevant countries.

The Commission is satisfied with the commitments because they remove the overlap between the parties in all the markets in which it identified competition concerns. Consequently, the Commission approved the proposed transaction, as modified by the commitments. Source: Commission Press Release 4/8/2015

Merger Control: Commission approves Nokia's acquisition of Alcatel-Lucent

On 24 July 2015, the Commission announced that it approves the proposed acquisition of Alcatel-Lucent by Nokia. Both companies are global providers of telecommunications equipment and related services. Although the parties overlap in the field of mobile network equipment and have a combined market share around or above 30% for several specific types of equipment, the Commission concluded that they are not close competitors because their activities have a different geographic focus. Nokia has a strong presence in the European Economic Area, where Alcatel-Lucent is a small player, and conversely Alcatel-Lucent has a strong presence in North America, where Nokia's activities are limited.

In addition, strong global competitors remain in the relevant markets. The Commission also ruled out the possibility of coordinated effects because the merger would not significantly change the market structure to make coordination easier, particularly given the importance of technological innovation and a lack of transparency in the markets concerned. Finally, the Commission's investigation did not find that the transaction would make it harder for new or small players to enter and expand in the market. Accordingly, as the merger did not raise any competition concerns, the Commission approved the proposed transaction. Source: Commission Press Release 24/7/2015

Merger Control: Commission approves Cargill's acquisition of ADM's industrial chocolate business, subject to conditions

On 17 July 2015, the Commission approved the proposed acquisition of the industrial chocolate business of Archer Daniels Midland ("ADM") by Cargill, subject to conditions. The parties overlap in the supply of industrial chocolate as well as fat-based coatings and fillings. Industrial chocolate, sold in both liquid and solid form, is used by customers in the food processing industry to produce end-consumer foodstuffs such as biscuits, ice-cream and chocolate confectionery.

The Commission's Phase II investigation found that the merger, as notified, would reduce competition in the already concentrated market for the supply of industrial chocolate. The investigation also revealed that Cargill and ADM are important suppliers of industrial chocolate to customers based around their plants in Germany and that the parties' most important competitor in those areas is Barry Callebaut, although said company has a smaller market share. The Commission stated that the proposed transaction would eliminate an important competitor and reduce the choice of suitable suppliers in already concentrated markets. The remaining smaller competitors would also have a limited presence and would not pose a sufficient competitive constraint on the parties. The Commission thus concluded that this could lead to increased prices, especially for mid-sized customers.

The Commission noted that the market structure is different in the areas around the parties' plants in Belgium, France and the United Kingdom, where the parties' combined market position is more moderate and Barry Callebaut is a much more important competitor. Therefore, the Commission did not identify any competition concerns in those geographical areas.

In addition, the Commission investigated whether the proposed acquisition could have any vertical effects, given Cargill's activities in the production and sale of cocoa products, which are used as a raw  material for industrial chocolate. However, it concluded that Cargill's position in the cocoa markets is not significant enough to make any such effects likely and that there are a sufficient number of alternative suppliers to ensure the supply of cocoa products. Nor did the Commission find competition concerns in the markets for fat-based coatings and fillings or, in particular, for chocolate compounds because in these markets, the parties' combined market position is moderate and there are a number of alternative suppliers.

To address the Commission's concerns, Cargill committed to divest ADM's industrial chocolate plant in Mannheim (Germany) to a suitable purchaser. The Commission noted that the commitment addresses the competition concerns, and accordingly approved the transaction, as modified by the commitments.Source: Commission Press Release 17/7/2015

Merger Control: Commission approves acquisition of Aer Lingus by IAG, subject to conditions

On 14 July 2015, the Commission announced that it granted conditional approval to the acquisition of Aer Lingus by International Consolidated Airlines Group (IAG), the holding company of British Airways, Iberia and Vueling. Both IAG and Aer Lingus provide air transport for passengers, air transport for cargo, airport ground handling services and landside cargo handling services. The Commission found that the proposed acquisition, as initially notified, would lead to high market shares on the Dublin-London, Belfast-London and Dublin-Chicago routes. The investigation also showed that the merged entity would have prevented Aer Lingus from continuing to carry traffic (connecting passengers) to the long-haul flights of competing airlines on several routes. The Commission had also concerns that the merged entity would not face sufficient competitive constraints from the remaining players, which could ultimately lead to higher prices.

In order to address the Commission's competition concerns, IAG committed to release five daily slot pairs at London-Gatwick airport to facilitate the entry of competing airlines on routes from London to both Dublin and Belfast. IAG also committed to enter into agreements with competing airlines which operate long-haul flights out of London Heathrow, London Gatwick, Manchester, Amsterdam, Shannon and Dublin so that Aer Lingus will continue to provide these airlines with connecting passengers. The Commission found that the offered commitments fully address its competition concerns, and consequently approved the transaction, as modified by the commitments.

Source: Commission Press Release 14/7/2015

Merger control (Sweden): The District Court approves Swedish Competition Authority's conditions on the acquisition of Cederroth by Orkla

On 29 July, the Stockholm District Court approved the Swedish Competition Authority's ("SCA") request for conditions to be imposed on the acquisition of Cederroth Intressenter AB ("Cederroth") by Orkla ASA ("Orkla"). Both Orkla and Cederroth are active on the market for sales of weight-loss products, Orkla through the brand Nutrilett and Cederroth through the brand Allévo.

After conducting an in-depth investigation, the SCA initiated proceedings at the Stockholm District Court, requesting the Court to either prohibit the transaction or to approve it only subject to the condition that Cederroth dispose the brand Allévo. To address the SCA's competition concerns, the parties voluntarily submitted a commitment to divest the Allévo brand. The Stockholm District Court approved this commitment and consequently approved the transaction, as modified by the commitment. Source:Swedish Competition Authority Press Release 29/07/2015 and Stockholm District Court Decision 29/07/2015

Merger control (Sweden): Swedish Competition Authority opens in-depth investigation into acquisition of Lagerbergs by Kronfågel

On 24 July, the Swedish Competition Authority ("SCA") opened an in-depth investigation into the proposed acquisition of Lagerberg i Norjeby AB ("Lagerberg") by Kronfågel Holding AB ("Kronfågel"). According to the SCA, Kronfågel is the largest and Lagerberg is the third largest player on the markets for the production and supply of chicken products. Moreover, in the SCA's view there is also a vertical link between the market for production and supply of chicken products and the upstream market for broiler hatching, where a company within the same group as Kronfågel is active.

The SCA held that an in-depth investigation was needed for several reasons. The preliminary conclusion was that frozen chicken and fresh chicken might belong to two separate markets. The SCA also held that further investigation is needed to examine how much competition exists between domestic and imported frozen chicken. Finally, the SCA held that in-depth investigation is needed to examine the increased degree of concentration on the market, to review the many complaints received by the SCA from third parties on the risk of increased prices and to assess the vertical aspects of the transaction.

The SCA has until 23 October 2015 to decide whether to approve the transaction or to initiate proceedings before the Stockholm District Court. Source: Swedish Competition Authority Press Release 24/07/2015 and Swedish Competition Authority Decision 23/07/2015

Competition: General Court annuls partially the Commission’s CISAC decision on concerted practice

On 16 July, the Swedish Competition Authority ("SCA") opened an in-depth investigation into the proposed acquisition of Contiga Holding AS ("Contiga") by HeidelbergCement Sweden AB ("HeidelbergCement"). According to the SCA, The HeidelbergCement group has both horizontal links to Cedelberg, who manufactures and sells precast concrete, through companies within its group selling precast concrete, and vertical links to Cedelberg, through companies within its group selling input products needed for the manufacture of precast concrete.

According to the SCA, the preliminary investigation indicated that the Swedish concrete market is relatively concentrated and that the geographic market for precast concrete might need to be delimited regionally. The SCA noted in its decision that an in-depth investigation was needed because market contacts during the preliminary investigation revealed that competitors are concerned that the combined entity may engage in input foreclosure, basically making it difficult for these competitors to purchase the products needed to manufacture precast concrete.

The SCA has until 15 October 2015 to decide whether to approve the transaction or to initiate proceedings before the Stockholm District Court. Source: Swedish Competition Authority Press Release 15/07/2015 and Swedish Competition Authority Decision 15/07/2015

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 acquisition of Global WorkPlace Solutions by CBRE
  • Commission approves acquisition of joint control over Carneau by InVivo and SCAEL
  • Commission approves acquisition of Picard by Aryzta and Lion Capital
  • Commission approves acquisition of joint control over Spanish shopping and leisure center Puerto Venecia by CPPIB and Intu Holding
  • Commission approves acquisition of Stage Entertainment by investment fund CVC
  • Commission approves acquisition of joint control of General Química and Industrias Negromex by Repsol Química and Grupo Kuo
  • Commission approves acquisition of BP's aviation fuel business by World Fuel Services
  • Commission approves the acquisition of 7S Group by ManpowerGroup
  • Commission approves acquisition of Hamlet Protein by Goldman Sachs and Altor
  • Commission approves acquisition of joint control over TAG Pipelines Sur
  • Commission approves acquisition of Balta Finance by Lone Star
  • Commission approves acquisition of World Duty Free by Dufry
  • Commission approves acquisition of Magna Interiors by Grupo Antolín
  • Commission approves joint venture between hospitality providers NH Hotel Group and HNA Hospitality Group
  • Commission approves acquisition of Douglas Group by private equity firm CVC
  • Commission approves joint venture for insurance software between AXA and CompuGroup Medical
  • Commission approves acquisition of glass packaging business Verallia by private equity firm Apollo
  • Commission approves joint venture between BPI and Constructions Industrielles De La Méditerranée
  • Commission approves acquisition of VSE by RWE
  • Commission approves acquisition of Perrigo by Mylan
  • Commission approves acquisition of Labco by Cinven
  • Commission approves acquisition of Pall by Danaher
  • Commission approves acquisition of joint control over caplanatic by Talanx AMG and by Nord/LB
  • Commission approves acquisition of Helthjem by Schibsted and Amedia
  • Commission approves acquisition of control by CVC Capital Partners over Royal DSM NV’s fibre intermediates and composite resins business
  • Commission approves acquisition of the Duracell Business by Berkshire Hathaway
  • Commission approves proposed acquisition of Sika by Saint-Gobain
  • Commission approves acquisition of joint control over a newly created joint venture by AMF and Ilmarinen
  • Commission approves acquisition of Novartis' influenza vaccines business by CSL
  • Commission partially refers Danish Crown / Tican merger to Denmark's competition authority; approves proposed merger outside Denmark
  • Commission approves acquisition of joint control over EOS Commerce by Coop and Swisscom
  • Commission approves acquisition of Maxeda by Ardian and Goldentree Asset Management
  • Commission approves acquisition of KS by Harng in retail sector
  • Commission approves acquisition of Ursa by KKR
  • Commission approves acquisition of WFS Global Holding by Platinum Equity Group
  • Commission approves acquisition of Schmolz Bickenbach steel distribution business by Jacquet Metal Service
  • ommission approves acquisition of HSE by Aberdeen and Iridium
  • Commission approves acquisition of joint control over the Westin Excelsior Hotel in Rome by Katara Hospitality and Starwood
  • Commission approves acquisition of Kem One Innovative Vinyls by OpenGate Capital Group Europe
  • Commission approves acquisition of Scimitar Topco by CDR Group
  • Commission approves acquisition of Partner in Pet Foods Holdings by Pamplona Capital
  • Commission approves joint acquisition of Swedish provider of industrial packaging solutions by FAM and Fanopi
  • LoremCommission approves acquisition of Morgan Stanley's Global Oil Merchanting Unit by Castleton
  • Commission approves Mitsui's acquisition of a stake in GRI
  • Commission approves acquisition of Pirelli by CNRC
  • Commission approves acquisition of joint control over Elivia by Terrena and Dawn Meats
  • Commission approves acquisition of joint control over Reclamefolder.nl by RTL Nederland and equity fund H2
  • Commission approves acquisition of short-sea shipping company ODPR by CMA CGM
  • Commission approves acquisition of rotating equipment manufacturer Dresser-Rand by Siemens
  • Commission approves acquisition of Nordic Cinema by Bridgepoint