General Court annuls Commission’s air freight cartel decision. On 16 December 2015, the General Court handed down 13, largely identical, judgments in which it annulled the European Commission’s (Commission) November 2010 decision on the air freight cartel in which the Commission found that the airlines had breached Article 101 of the Treaty on the Functioning of the European Union (TFEU) and fined the undertakings €799 million. The court found that there was a contradiction between the grounds for and the operative parts of the Commission’s decision and inconsistencies within the grounds themselves. The court found that an overall reading of the grounds of the decision described a single and continuous infringement, however, the operative parts of the decision identified either four separate infringements or a single infringement. The court stated that internal inconsistencies in the decision could infringe the airlines’ rights of defence, and also prevent the court from exercising its power of review. The Commission has not announced whether or not it intends to appeal the court’s judgment.
General Court upholds Commission’s Orange Polska abuse of dominance decision. On 17 December 2015, the General Court dismissed an appeal by telecommunications company, Orange Polska S.A. (OP) (formerly, Telekommunikacja Polska (TP)), against a June 2011 Commission decision fining TP for abusing its dominant position on Polish broadband markets in breach of Article 102 of the TFEU. OP alleged that the Commission erred in assessing the proportionality of the fine and by not taking into account various claimed mitigating circumstances. The court dismissed OP’s appeal in its entirety and held that the Commission had not erred in its assessment of the gravity of the infringement as a whole, and also had not erred by not establishing the actual impact of the infringement on the market. As regards mitigation, the Commission had been entitled to consider that certain investments TP had made to its network in settlement of a regulatory action brought by the Polish telecoms regulator did not constitute mitigation. In addition, the court also held that the offer by TP of commitments to the Commission did not constitute effective co-operation that justified a reduction of the fine.
Phase I Mergers
- M.7796 LINAMAR / MONTUPET (11 December 2015)
- M.7848 ATP / AXA / CLUB QUARTERS / CLEAVON (11 December 2015)
- M.7826 BERTELSMANN / PRINOVIS (14 December 2015)
- M.7779 TRAFIGURA / NYRSTAR (16 December 2015)
- M.7803 MSI / AMLIN (16 December 2015)
- M.7856 THOMA BRAVO / SILVER LAKE GROUP / SOLARWINDS (16 December 2015)
- M.7748 MAGNA / GETRAG (17 December 2015)
- M.7839 OUTOKUMPU / HERNANDEZ EDELSTAHL (17 December 2015)
- M.7797 MICHELIN / FIVES / JV (17 December 2015)
Commission approves restructuring aid to Hungarian bank MKB. On 16 December 2015, the Commission announced that plans in Hungary to grant State aid for the restructuring of Hungarian bank Magyar Kereskedelmi Bank Zrt (MKB) are in line with EU State aid rules. The Commission found, in particular, that MKB’s restructuring plan will enable the bank to become viable in the long-term, and ensured that the bank’s owners contribute to the cost of restructuring while limiting the distortions of competition brought about by the aid.
General Court annuls Commission Spanish tax lease system aid decision. On 17 December 2015, the General Court annulled the Commission’s July 2013 decision that the Spanish scheme for the purchase of ships, involving leasing and financing through tax relief, constituted unlawful State aid. The court stated that the Commission’s decision was vitiated by a number of errors, and contained an insufficient statement of reasons concerning the classification as State aid. In particular, the court held that the Commission had erred in taking the view that the system had unduly granted a selective economic advantage, which ultimately benefited Spanish shipyards, to the detriment of the shipyards of other Member States.
Commission approves additional aid for Cypriot cooperative banks on the basis of an amended restructuring plan. On 18 December 2015, the Commission approved additional State aid of €175 million in favour of the Cooperative Central Bank Ltd. in Cyprus and its subsidiaries in line with EU State aid rules. The Commission’s investigation revealed that the additional aid must be accompanied by supplementary restructuring measures, in order to ensure that the bank becomes viable without continued State support in the future and that the distortions of competition created by the aid are mitigated.
CMA opens Competition Act investigation into suspected anti-competitive arrangements in residential estate agency sector. On 11 December 2015, the Competition and Markets Authority (CMA) announced that it has opened an investigation into suspected anti-competitive arrangement(s) in the residential estate agency sector which may infringe the Chapter I prohibition of the Competition Act 1998. It is expected that the CMA will investigate the alleged infringement until June 2016, at which point it will decide whether or not to proceed with the investigation. The CMA launched the investigation on the basis of information received after compliance work undertaken following the CMA’s previous investigation into the advertising of fees in the estate and letting agency sector.
CMA updates timetable for investigation into alleged abusive pricing of anti-epilepsy drug. On 14 December 2015, the CMA announced that it has revised the timetable for its investigation into alleged abusive pricing by two companies, Pfizer and Flynn Pharma, in relation to an anti-epilepsy drug (phenytoin sodium capsules). The CMA stated that it has extended the period for both companies to submit written representations to the statement of objections. In August 2015, the CMA sent a statement of objections to the companies alleging that they breached Article 102 of the TFEU and the Chapter II prohibition of the Competition Act 1998 by charging excessive and unfair prices for the drug. Previously, representatives of the CMA stated that the CMA is concerned drug prices were high compared to those previously charged, leading to a significant increase in the total NHS drug bill. The investigation was launched in May 2013.
CMA announces Competition Act investigation in the leisure sector. On 15 December 2015, the CMA announced that it has opened an investigation into suspected anti-competitive arrangements in the leisure sector. The CMA states that it is investigating a suspected breach of the Chapter I prohibition of the Competition Act 1998, but provides no further information about the alleged infringement or the parties involved. The CMA estimates that it will take a decision on whether or not to proceed with the investigation in May/June 2016.
Court of Appeal confirms that damages for breach of procurement rules are not discretionary. On 15 December 2015, the Court of Appeal handed down its judgment on preliminary issues raised in an action by EnergySolutions EU Limited for damages for alleged breach of the public procurement rules by the Nuclear Decommissioning Authority. The Court of Appeal upheld a High Court ruling that an English court has no discretion under the Public Contracts Regulations 2006 as to making an award to a claimant if that claimant had suffered loss as a consequence of breaches of duty by the contracting authority. There is no requirement in English law for a breach of statutory duty to be shown to be “sufficiently serious” before damages must be awarded, and no such obligation should be read in from EU law. The Court of Appeal also held that the fact that the claimant did not bring its claim during the “standstill” period did not break the chain of causation between any breaches of the contracting authority’s obligations and any loss incurred by the claimant as a result.
High Court approves disclosure to Commission of analysis prepared in damages action.On 17 December 2015, the High Court approved the disclosure to the Commission of a detailed analysis of a series of documents prepared by a claimant, Foundem, in a damages action brought against Google for alleged abuse of dominance. There is substantial overlap between the claimant’s allegations and the issues being considered in the Commission’s on-going investigation. Google’s submissions during the proceedings that granting permission for disclosure of the analysis would place Foundem in a different position to the other complainants in the Commission investigation, and give rise to escalating costs for Google (as Google would be compelled to respond to such an analysis), were dismissed. The High Court consented to the disclosure on the basis that there is an interest in the Commission having access to the same evidence as the High Court, particularly as the High Court would be bound by any future infringement decision taken by the Commission.