EU Competition

Swiss competition authority closes probe into hotel pricing contracts by Booking.com, Expedia and HRS. On 6 November 2015, Switzerland’s Competition Commission (COMCO)announced that it has banned certain restrictive pricing clauses in contracts between hotels and online travel agencies Booking.com, Expedia and HRS. The decision to close the investigation into the clauses leaves hotels free to offer lower room rates to other platforms and to customers who book directly. The Swiss decision follows similar moves by competition authorities in Denmark, Greece, Ireland, Norway, Poland, Sweden and the UK. COMCO noted that since the contractual terms were recently modified by Booking.com and Expedia, it reserves the right to open a new investigation. The parties are entitled to appeal COMCO’s decision before the Federal Administrative Court.

EU Mergers

Phase I Mergers

  • M.7752 ACE / CHUBB (9 November 2015)
  • M.7729 WILLIS GROUP / TOWERS WATSON & CO (9 November 2015)
  • M.7763 TCCC / COBEGA / CCEP (9 November 2015)
  • M.7781 MARUBENI-ITOCHU STEEL / SUMITOMO CORPORATION / MITS JV (9 November 2015)
  • M.7775 BTPS / CPPIB / HAYMARKET HOUSE (10 November 2015)

State Aid

Commission orders France to recover incompatible State aid from Mory-Ducros and MoryGlobal. On 6 November 2015, the Commission announced that aid granted by France to Mory-Ducros and MoryGlobal constituted unlawful State aid. MoryGlobal benefited in February 2014 from a public loan totalling €17.5 million which was in addition to the assumption by the State of social measures for redundant employees of Mory-Ducros (a delivery and freight operator). In September 2014, the Commission opened an in-depth investigation to examine whether the aid was granted under the private market investor principle and, if not, whether it had been granted in accordance with the Guidelines on State aid for rescuing and restructuring firms in difficulty. The Commission concluded that these support measures did constitute State aid. The Commission therefore ordered France to recover the aid from MoryGlobal.

Commission orders recovery of incompatible State aid granted to Estonian Air. On 7 November 2015, the Commission announced that, following an in-depth investigation, it has ordered Estonia to recover State aid granted to support the restructuring of Estonian Air. The Commission found that certain support measures do not constitute State aid as they were granted under market conditions. However, support totalling €125.6 million (of which €84.9 million has already been paid out) does amount to State aid, which cannot be approved under the Guidelines on State aid for rescue and/or restructuring of firms in difficulty. In particular, the Commission found that the "one time, last time" principle had been breached and that the restructuring plan for Estonian Air was inadequate.

General Court dismisses appeal by minority shareholders against Commission decision to approve State aid for HSH Nordbank. On 12 November 2015, the General Court dismissed an appeal brought by two minority shareholders, HSH Investment Holdings Coinvest-C and HSH Investment Holdings FSO, of HSH Nordbank AG (HSH Nordbank), against a Commission decision that approved restructuring aid for HSH Nordbank. In September 2011, the Commission adopted a decision finding that State aid measures benefitting HSH Nordbank, Germany’s fifth largest regional bank, were compatible with the internal market, subject to compliance by Germany with certain commitments and conditions. The measures included a €3 billion recapitalisation by issuing shares in HSH Nordbank, a general guarantee of €10 billion and a liquidity guarantee of €17,000 million. The General Court held that the minority shareholders failed to establish that the lump-sum payment, the sole aim of which was to make the State aid compatible with the internal market, constituted a condition which was disproportionate or contrary to the principle of equal treatment.

Public Procurement

General Court dismisses appeal against European Parliament decision to reject tender due to failure to provide proof of authorisation under national legislation. On 10 November 2015, the General Court  dismissed an appeal brought by Gruppo Servizi Associati SpA and Security Guardian’s Institute against decisions of the European Parliament (Parliament) dated 12 June 2015 to reject the bids of the two companies from a tender. The two companies had, as a consortium, submitted a bid to provide fire security and external surveillance services at the Parliament’s buildings in Brussels. The tender specifications required that companies held an authorisation required under Belgian law for the provision of security services. However, only one of the companies had such an authorisation. Therefore, despite submitting the tender with the lowest price, they were not awarded the contract. The General Court held that Parliament had not breached the principle of proportionality in requiring that all tenderers held the Belgian authorisation and was entitled to require the highest standards of security and to rely on the guarantees in this regard provided by the authorisation. In addition, the General Court held that Parliament had not breached the principle of equal treatment or the principle of opening-up public procurement to the widest possible competition in imposing such a requirement.

UK Competition

CMA provisional findings on private healthcare market investigation following remittal.

On 10 November 2015, the Competition and Markets Authority (CMA) published a provisional report on competition in the private healthcare market in central London. In particular, the CMA re-examined its original finding that there were adverse effects on competition in the markets for the provision of hospital services in central London, which led to higher prices being charged by HCA International Limited (HCA) to private medical insurers (PMIs). This is in addition to the adverse effects on competition for self-paying patients in the same region. The CMA has provisionally concluded that HCA’s large market share, combined with high barriers to entry and expansion in central London, result in HCA facing weak competitive constraints. The CMA is consulting on possible remedies to address the adverse effects on competition, including divesture by HCA of hospitals; requiring HCA to give competitors access to one or more of its hospitals; and restrictions on HCA’s further expansion in central London. The CMA invites comments on its provisional findings and proposed remedies by 3 December 2015. A final report will be published in March 2016.

Speeches & Publications

CMA speech on competition enforcement. On 12 November 2015, the CMA published a speech by Michael Grenfell, Executive Director for Enforcement, on the CMA’s approach to competition enforcement. Grenfell noted in his speech the CMA’s objective of increasing the number and pace of competition enforcement cases and discussed the deterrence effects of both large cases and small-scale local cases. He also explained that in conducting its enforcement activity, the CMA is committed to the highest standards of fairness in its dealings with businesses and individuals. Grenfell said that the regulator strives for “fairer and more robust” decisions, as then there is “a lower chance” of successful appeals.