On 2 December 2015, the Commission published its 6th report on the monitoring of patent settlements (“Report”). The Report is based on the Commission’s sixth patent settlement monitoring exercise which was launched in February 2015 and relates to the 76 patent settlements concluded between originator and generic companies in the pharmaceutical sector during the time period from 1 January 2014 to 31 December 2014. According to the Report, the number of settlements during this period is far below the high numbers of the two previous years (183 in 2012 and 146 in 2013), and is closer to the levels at the beginning of the monitoring period. However, the number of patent settlements in 2014 is still much higher than the annual average of 24 during the period between 2000 and 2008. The number of settlements that might attract competition law scrutiny has stabilized at a low level. According to the Report, this shows the industry's continued ability to effectively settle patent disputes in ways that raise no antitrust concerns. Source: Commission Press Release 2/12/2015 and Source: 6th Report on the Monitoring of Patent Settlements (period: January-December 2014), published on 2 December 2015
On 1 December 2015, the Commission published the latest version (Issue 3/2015) of its Competition Merger Brief. Competition Merger Briefs are written by the staff of the Directorate-General ("DG") Competition and provide background to policy discussions. In the third issue, the staff of the DG Competition analyzes four important recent merger cases.
The first article analyzes the conditional approval of the acquisition of Jazztel by Orange, which took place in a market that tipped toward fixed-mobile multiple play offers. The second article discusses the conditional approval of Zimmer's acquisition of Biomet. According to the Competition Merger Brief, this particular acquisition is an interesting example of a merger where geographic markets are national because of procurement characteristics and national registries, but where manufacturing requires scale that goes beyond individual countries. The third article analyzes the conditional approval of the acquisition of Sigma-Aldrich by Merck concerning laboratory chemicals. The last article discusses the conditional approval of the acquisition of Archer Daniels Midland ("ADM") by Cargill, a merger between two of the top three producers of industrial chocolate in Europe. Source: Competition Merger Brief, Issue 3/2015
On 30 November, details were published of an appeal by HIT Groep BV ("HIT Groep") against a General Court ("GC") judgment on its challenge to the Commission's decision on the pre-stressing steel cartel.
In June 2010, the Commission fined 17 pre-stressing steel producers a total of EUR 518.5 million for participation in a long-running price-fixing and market-sharing cartel. HIV Groep appealed to the GC challenging the Commission's decision, wherein the Commission imposed a fine of approximately EUR 7 million. In July 2015, the GC dismissed HIT Groep's appeal in its entirety and concluded that the Commission had not erred in finding HIT Groep liable for the infringement committed by its wholly-owned subsidiary Nedri Spanstall. In particular, the GC rejected the argument that because HIT Groep was a private equity company it had no decisive influence over Nedri Spanstall. The GC also rejected arguments relating to the calculation of the fine and to the allegedly excessive duration of the proceedings.
HIT Groep has now appealed to the Court of Justice of the European Union ("CJEU") to annul the GC's decision. HIT Groep claims that the GC erred in finding that in applying the fine ceiling, the Commission was entitled to consider the company's turnover for 2003 rather than for 2009, which was the business year prior to the cartel decision. In addition, HIT Groep claims that the GC wrongly failed to assess the proportionality of the fine imposed on HIT Groep. Source: Case C-514/15 P, HIT Groep BV v Commission, Official Journal of the European Union, C 398/24, 30/11/2015
On 30 November 2015, details were published of an appeal by AGC Glass Europe SA and its group companies ("AGC") against a General Court ("GC") judgment that dismissed AGC's action to challenge the Commission's refusal to grant confidential treatment to parts of the car glass cartel decision. In that decision, the Commission had fined four companies a total of EUR 1.384 billion for participation in an illegal market-sharing cartel in the car glass sector.
The Commission adopted a non-confidential version of the infringement decision but did not accept the requests by Pilkington Group Ltd ("Pilkington") or AGC to redact certain information in the decision. Pilkington and AGC referred the matter to the Hearing Officer.
On 6 August 2012, the Hearing Officer rejected Pilkington's request for confidential treatment except for certain recitals. He also accepted that confidential treatment should be afforded to some of the information identified by AGC but refused the application concerning the rest. AGC and Pilkington appealed to the GC on 19 October 2012.
On 15 July 2015, the GC handed down its judgments. The GC dismissed AGC's appeal in its entirety, rejecting AGC's claims for confidential treatment of a number of types of information, including customer names, pricing information and purely administrative information consisting of references to documents in the file.
The GC rejected arguments based on alleged breaches of the rules relating to the protection of professional secrecy. In doing so the GC held that there had been no breach of the principles of the protection of legitimate expectations, the principle of equal treatment, or the obligation to state reasons. In particular, the GC held that the Commission's 2002 and 2006 Leniency Notices did not create a legitimate expectation that information voluntarily provided would remain confidential even when the Commission’s decision was published.
AGC lodged a further appeal with the Court of Justice of the European Union ("CJEU") claiming that the CJEU should set aside the GC's judgment and annul the Commission's decision. AGC claims that the GC erred in not finding that there was a breach of the principles of legitimate expectations and equal treatment, in particular by not granting confidential treatment to self-incriminatory information provided to the Commission in a leniency application. Source: Case C-517/15 P, AGC Glass Europe and others v Commission, Official Journal of the European Union, C 398/25, 30/11/2015
On 26 November 2015, the Court of Justice of the European Union ruled on a reference for a preliminary ruling by the Latvian Supreme Court ("LSC") (Augstākā tiesa) that an agreement between a commercial lessor and a retailer, which granted the retailer the right to oppose lettings of neighboring premises to any potential competitors, could not be considered to have the object of preventing, restricting or distorting competition within the meaning of Article 101 of the Treaty on the Functioning of the European Union.
In 2012 the Latvian Competition Council (Konkurences padome) fined Maxima Latvija approximately EUR 35 770 for making certain commercial lease agreements with shopping centers in Latvia that contained clauses granting Maxima Latvija the right, as the "anchor tenant", to approve potential third parties as renters of the lessor's premises not rented to Maxima Latvija. The Competition Council and the Latvian Regional Administrative Court held those agreements to have as their "object" the infringement of competition rules. Maxima Latvija appealed to the LSC, which requested a preliminary ruling from the CJEU.
The CJEU noted that the concept of restriction of competition "by object" must be interpreted restrictively. The essential legal criterion for ascertaining whether an agreement involves a restriction of competition "by object" is the finding that such an agreement reveals in itself a sufficient degree of harm to competition for it to be considered inappropriate to assess its effects. The CJEU noted further that in this case Maxima Latvija is not in a competitive situation with the shopping centers and that the relevant agreements cannot be considered, by their very nature, to be harmful to the proper functioning of competition.
The CJEU ruled that even though such commercial lease agreements do not have as their object the restriction of competition, they can be considered to have the effect of preventing, restricting or distorting competition. This is the case when the court finds, after a thorough analysis of the economic and legal context in which the agreements occur and the specificities of the relevant market, that the agreements make an appreciable contribution to closing off that market. In addition, the CJEU noted that the extent of each agreement's contribution to that closing-off effect depends in particular on the position of the contracting parties and the duration of the agreements. Source: Case C-345/14, Sia "Maxima Latvija" v Konkurences padome, judgement of the Court of Justice of the European Union, 26/11/2015
On 26 November 2015, Advocate General ("AG") Wathelet gave a single opinion on five appeals against the judgments of the General Court ("GC") concerning the bathroom fixtures and fittings cartel. In June 2010, the Commission imposed fines totaling EUR 662 million on 17 companies for their participation in a price-fixing cartel on the market for bathroom fittings and fixtures in breach of Article 101 of the Treaty on the Functioning of the European Union ("TFEU"). Several companies appealed against the Commission's decision to the GC. In September 2013, the GC dismissed most of the appeals in their entirety but reduced the fines imposed on the Wabco group, the Keramag group and the Sanitec group and the Roca Sanitario group because the Commission erred in its assessment of the participation of these groups in the cartel and the calculation of fines. Subsequently, Duravit AG, Duravit SA and Duravit BeLux SPRL/BVBA ("Duravit"), Villeroy & Boch AG and Villeroy & Boch SAS ("Villeroy & Boch"), Roca Sanitario SA ("Roca Sanitario") and the Commission appealed to the Court of Justice of the European Union ("CJEU"), seeking to annul the GC's judgments.
The CJEU asked the AG to give his opinion on the two main pleas of law that are central to all five appeals. The first plea concerned the inconsistencies between the GC's judgments in certain of the parallel appeals. The AG found that there was a fundamental contradiction between the GC's judgment relating to the Keramag group ("Keramag judgment") and its judgments relating to Villeroy & Boch ("Villeroy & Boch judgment"), Duravit ("Duravit judgment") and Roca Sanitario ("Roca Sanitario judgment"). According to the AG, in the Keramag judgment the GC did not examine the statement that Roca France had made in the context of its leniency application and refused to accept that the statement had any probative value in corroborating a statement of another leniency applicant, American Standard Inc. As a result, the GC concluded that the Commission could not rely on Roca France's statements and annulled the Commission's decision in so far as it found that two companies within the Keramag group had participated in the infringement in 2004. However, in the other three judgments the GC relied on these two leniency statements, which corroborated each other, in establishing the infringement and reduced the fine imposed on Roca France due to the significant added value it provided by the information in its leniency application. AG Wathelet concluded that the GC failed to consider the probative value of Roca France's statement in the Keramag judgment and erred in law in finding that one leniency statement cannot corroborate another. Accordingly, AG Wathelet found that the CJEU should annul the Keramag judgment and rule, in accordance with the three other judgments, that the infringement had been sufficiently established based on corroborating evidence in two leniency statements.
The second plea of law concerned the exercise of the GC's unlimited jurisdiction in relation to fines. AG Wathelet noted that the Commission had originally calculated the fines in the same way for all cartel participants, despite having acknowledged the lesser gravity of Roca Sanitario's conduct compared to that of other companies forming the hard core of the cartel. AG Wathelet concluded that the GC had failed to address this in the Roca Sanitario judgment. The GC should have, in the exercise of its unlimited jurisdiction, adjusted downwards the multipliers that were applied to Roca Sanitario's case to ensure observance of the principle of equal treatment and the principle that penalties must be tailored to the individual. Accordingly, the AG found that the CJEU should partially set aside the Roca Sanitario judgment and refer the case back to the GC to rule on the fine. Source: Cases C-613/13 P, C-609/13 P, C-625/13 O, C-636/13 P and C-644/13 P – European Commission v Keramag Keramische Werke GmbH and Others, Duravit AG and Others v European Commission, Villeroy & Boch AG v European Commission, Roca Sanitario v European Commission and Villeroy & Boch SAS v European Commission, Opinion of Advocate General Wathelet, 26 November 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 creation of DES by BMW and Viessmann
- Commission approves acquisition of Truck-Lite by Koch Industries and BDT
- Commission approves acquisition of Grupo Konectanet and KAI by Banco Santander and PAI
- Commission approves acquisition of Hotel Atrium by Griffin, Skanska and Starwood
- Commission approves acquisition of DEA UK by INEOS