EU Competition

Unannounced inspections conducted in Romanian natural gas sector. On 7 June 2016, the European Commission (Commission) announced that officials had conducted unannounced inspections of the premises of several companies active in the supply and transportation of natural gas in Romania, pursuant to Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). In particular, the Commission’s investigation is focused on potential anticompetitive behaviour restricting natural gas exports from Romania to other Member States.

ECJ hands down decision on Spanish bitumen cartel appeals. On 9 June 2016, the European Court of Justice (ECJ) handed down its judgments against appeals made by Compañía Española de Petróleos (CEPSA), Productos Asfálticos (PROAS) and Repsol Lubricantes y Especialidades (Repsol),  against the General Court’s judgments dismissing their appeals against the Commission’s Spanish bitumen cartel decision. CEPSA argued that the General Court erred in not annulling the Commission’s decision on the basis that the Statement of Objections had been provided in English (rather than Spanish); PROAS argued that the General Court had erred in its calculation of its fine; and Repsol argued that the General Court had erred in assessing the commercial autonomy of a subsidiary company in addition to its calculation of its fine. The ECJ dismissed all of the appeals in their entirety.

EU Mergers

Phase I Mergers

  • M.7570 CAIXABANK / BPI (4 May 2016)
  • M.7983 DANISH CROWN / SPF-DANMARK (7 June 2016)
  • M.7986 SYSCO / BRAKES (9 June 2016)
  • M.7999 HEARST CORPORATION / ADVANCE PUBLICATIONS / JV (7 June 2016)
  • M.8003 INEOS / INOVYN (8 June 2016)
  • M.8010 IRISH LIFE / AVIVA HEALTH / GLOHEALTH (8 June 2016)
  • M.8013 PITPOINT / PRIMAGAZ / PITPOINT.LNG JV (7 June 2016)
  • M.8022  KKR / AIRBUS DEFENCE ELECTRONICS (3 June 2016)
  • M.8029  KNB / MITSUI / DVHP / DAVITA (6 June 2016)
  • M.8038  APAX PARTNERS / ACCENTURE / DUCK CREEK (3 June 2016)

State Aid

Commission publishes non-confidential version of McDonald’s State aid decision. On 6 June 2016, the Commission published the non-confidential version of its decision to open a State aid investigation into the preferential tax treatment received by McDonald’s Corporation (McDonald’s) from the Luxembourg tax authorities. In particular, the Commission’s preliminary view is that the tax ruling issued by the Luxembourg tax administration on 17 September 2009 in favour of McDonald’s Europe Franchising S.à.r.l. (McDonald’s Europe), grants State aid to McDonald’s Europe and to McDonald’s within the meaning of Article 107(1) TFEU, by virtue of its interpretation of McDonald’s Europe’s “taxable status” in Luxembourg under the country’s tax laws and its double tax treaty with the United States.

EU Member States agree to Guidelines on airport/airline State aid. On 7 June 2016, the Commission published an announcement in the Official Journal confirming that all Member States had unconditionally agreed to the “Guidelines on State aid to airports and airlines” (Guidelines) which propose appropriate State aid measures pursuant to Article 108(1) TFEU by all Member States. The Guidelines are part of the Commission’s State Aid Modernisation  strategy, which aims at fostering growth in the Single Market by encouraging more effective aid measures and focusing the Commission’s scrutiny on cases with the biggest impact on competition. The Guidelines focus on (i) State aid for investment in airport infrastructure; (ii) Operating aid to regional airports; and (iii) Start-up aid to airlines.

Commission publishes non-confidential version of Fiat State aid decision.  On 9 June 2016, the Commission published a non-confidential version of its decision finding preferential tax treatment received by Fiat Finance and Trade Limited (FFTL) and the Fiat Group as a whole, was unlawfully granted State aid in breach of Article 108(3) TFEU. Luxembourg is now required to recover the State aid from FFTL. In the event that it is not paid by FFTL, the outstanding amount is to be recovered from Fiat Chrysler Automobiles N.V.

EU Trade

European Parliament approves WTO Agreement to end customs duties on 201 high-demand IT products. On 8 June 2016, the European Parliament issued a press release confirming that Members of the European Parliament had approved a World Trade Organisation (WTO) Information Technology Agreement (ITA) signed by the EU and 24 countries, including Japan, China, and the USA, to stop charging custom duties on trade in 201 different high-demand information technology products. The WTO ITA will gradually eliminate customs duties on 201 listed information technology products, such as videogame consoles, GPS navigation systems, magnetic resonance imaging machines, telecommunications satellites, touch screens, and video cameras, by 1 July 2019, with tariffs being reduced as soon as 1 July 2016.

Public Procurement

ECJ hands down judgment on possibility of relying on the capacities of other undertakings in order to satisfy tender criteria. On 2 June 2016, the ECJ handed down its judgment  following a request for a preliminary ruling from the Council of Administrative Justice for the Region of Sicily, Italy, on the interpretation of Articles 47 and 48 of Directive 2004/18/EC. The ruling concerned CRGT Srl (CRGT), which had signed with RIAL Srl (RIAL) a contract of reliance upon RIAL’s capacities in order to submit a tender to the Port Authority of Messina, Italy, for the award of a public service contract for the management of waste and cargo residues on board ships. CRGT was subsequently excluded from the tendering procedure and brought an action seeking an annulment of the decision. The successful tenderer brought a counter action arguing that RIAL had been correctly excluded as RIAL had sought to rely on the economic and financial standing of a third-party undertaking. The ECJ ruled that Articles 27 and 48 of the Directive do not preclude national legislation allowing economic operators to rely on the capabilities of third parties to satisfy minimum selection criteria in a public procurement process where they are only partly satisfied by that operator.

UK Competition

CMA to refer Tullett Prebon acquisition of ICAP business to Phase II investigation unless undertakings offered.  On 7 June 2016, the Competition and Markets Authority (CMA) announced that it would be referring  the anticipated acquisition by Tullett Prebon plc of ICAP plc’s voice and hybrid broking and information businesses for a Phase II investigation unless acceptable undertakings are offered. Following its Phase I investigation, the CMA has concluded that the merger gives rise to a realistic prospect of a substantial lessening of competition for the voice/hybrid broking of oil products, where competition from other brokers is more limited and where there is a lesser constraint from electronic platforms and exchanges.

CMA publishes decision on acquisition of Orchard House Foods by Hain Frozen Foods.On 8 June 2016, the CMA published the full text of its decision in relation to Hain Frozen Foods UK Limited’s (Hain) acquisition of Orchard House Foods Limited (Orchard House). The CMA’s investigation found that the merger, “had resulted or could at least be expected to result in a substantial lessening of competition due to horizontal unilateral effects in relation to the wholesale supply of own-label freshly squeezed fruit juice to retail and food service customers in the UK, taken both separately and together”. The CMA is now in the process of considering the undertakings offered by Hain in lieu of a Phase II investigation.

CMA issues Statement of Objections to Ping following investigation into the sports equipment sector. On 9 June 2016, the CMA announced that it had sent a Statement of Objections to Ping Europe Limited (Ping) following its investigation into anti-competitive practices in the sports equipment sector in contravention of Chapter I of the Competition Act 1998 and Article 101 TFEU. The CMA’s Statement of Objections relates to a ban imposed by Ping which prevents retailers selling its golf clubs online. The CMA’s findings are provisional and no final conclusions have yet been reached in relation to any alleged breach.

Speeches & Publications

Competition Commissioner gives speech on State aid modernisation. On 3 June 2016, the Commission published a speech by Competition Commissioner,  Margrethe Vestager, on how to strengthen the relationship between the Commission and national governments to increase transparency and successfully implement State aid rules. In her speech she identified non-payment of tax as one of the biggest threats to fair competition, and noted that the Commission has  reviewed over a thousand tax rulings to identify any special treatment that companies have received.

Commission publishes “Study on judges’ training needs in the field of European competition law”. The Commission has published a study focusing on the application of EU competition law by Member States;  judges’ needs in terms of training and networking; and the DG Competition’s “Training of National Judges” programme. In particular, the study identifies the number of judges in the competent courts of Member States for public enforcement (judicial review and criminal sanctions), private enforcement and State aid cases (separating the figures across the courts of first, intermediate and final instance).