Competition (Sweden): Swedish Competition Authority closes investigation into suspected anti-competitive cooperation by trade association

On 19 February 2015, the Swedish Competition Authority (“SCA”) closed its investigation into a suspected anti-competitive cooperation by the trade association Svenska Åkeriföretag and its calculation support programs, “Så Calc Excel” and “Så Calc Webb”. These programs were used as support for calculation of costs in the road haulage industry and had information pre-entered, such as cost values for vehicles, interest, service, taxes etc. When the programs were launched, spreadsheets in Så Calc Webb were available for its users to share with other users of the program. The SCA stated in its decision to close the investigation that there is no general prohibition for trade associations to provide calculation support to its members or other operators. However, the SCA noted that a program that includes specific values that the companies can control has in established practice been considered as a price recommendation that may have anti-competitive effects on the market. The SCA also found that there were significant risks of competition infringements when a trade association is making it possible for its member companies to exchange strategic information with each other. Sveriges Åkeriföretag stated in a letter to the SCA that it will present only fictional values in the spreadsheet templates and inform that these values are fictitious. Furthermore, users of Så Calc Webb will no longer be able to share spreadsheets and Sveriges Åkeriföretag will inform its members of competition law aspects of information sharing. Based on its investigation and the official letter from Sveriges Åkeriföretag, the SCA decided that there were no grounds to investigate the matter further.Source: Swedish Competition Authority Decision 18/2/2015

Merger control: Commission approves Liberty Global’s acquisition of controlling stake in De Vijver Media, subject to conditions

On 24 February 2015, the Commission announced that it has approved the proposed acquisition of a stake in De Vijver Media NV (“De Vijver”) by Liberty Global, subject to conditions. De Vijver, of Belgium, broadcasts channels Vier and Vijf. Vier is a generalist channel, while Vijf is a channel specifically aimed at female viewers. Both channels target Belgium’s Dutch-speaking population. Liberty Global is an international cable operator that has a controlling stake in Telenet, which owns and operates a cable network in Flanders and parts of Brussels. The transaction will give Liberty Global joint control over De Vijver and therefore over its two TV channels Vier and Vijf. The other two controlling shareholders of De Vijver will be Waterman & Waterman and Corelio Publishing. The Commission had concerns that after the transaction De Vijver would refuse to license its channels to TV distributors that compete with Telenet. The Commission found that TV distributors in Flanders and Brussels must have Vier and Vijf in their offer to compete on equal footing with Telenet. According to the Commission, competitors would find it harder to attract and retain customers without Vier and Vijf, while new players would not be able to enter the market at all. The result would be less competition in the TV distribution market and ultimately higher prices and less innovation for consumers. During the investigation, De Vijver and Telenet had already entered into several agreements with other market participants in order to remove some of the Commission’s competition concerns. To address the Commission’s remaining concerns the parties committed to license De Vijver’s channels Vier and Vijf, and any other similar channel it may launch, to TV distributors in Belgium under fair, reasonable and non-discriminatory terms. The commitments will be in place for seven years. The Commission therefore concluded that, in light of the proposed commitments, the transaction would no longer raise competition concerns. Source:Commission Press Release 24/2/2015

Merger control: Commission opens in-depth investigation into General Electric's proposed acquisition of Alstom's energy businesses

On 23 February 2015, the Commission announced that it has opened an in-depth investigation to assess whether General Electric's (“GE”) proposed acquisition of the Thermal Power, Renewable Power & Grid businesses of Alstom is in line with the EU Merger Regulation. GE is a US multinational conglomerate company operating through different business departments, which include, inter alia, energy management, aviation, healthcare, transportation, and capital. Alstom is a French multinational company active in electricity generation and rail transport markets. The Commission’s preliminary investigation revealed concerns in relation to the sale and servicing of heavy-duty gas turbines (“HDGT”s), which are mainly used in gas-fired power plants. Due to its high technological and financial barriers to entry, there are only four globally active competitors on HDGT market, namely GE, Alstom, Siemens and Mitsubishi Hitachi Power Systems (“MHPS”). The HDGT markets worldwide are divided into two frequency regions, i.e. those operating at 50 Hz and those at 60 Hz. All the countries of the European Economic Area (“EEA”) operate at 50 Hz frequency. As MHPS is less active in the EEA, the proposed transaction would bring together the activities of two of the three main competitors in the EEA. The Commission has concerns that in the market for the sale of new 50 Hz frequency HDGTs, the merged entity would reach high market shares in the range of around 50 %, both in the EEA and at worldwide level excluding China. According to the Commission, this could lead to an increase in prices. Furthermore, the Commission is also concerned that the proposed transaction might significantly reduce research and development and customer choice in the HDGT industry. The Commission will now further investigate the proposed acquisition in-depth to determine whether its initial concerns are justified. The Commission now has 90 working days, until 8 July 2015, to take a final decision. Given the worldwide scope of the parties' activities, the Commission is cooperating closely with the Department of Justice in the US. Source: Commission Press Release 23/2/2015

Merger control: Commission opens in-depth investigation into Cargill and ADM’s proposed industrial chocolate merger

On 23 February 2015, the Commission announced that it has opened an in-depth investigation to assess whether the proposed acquisition of the industrial chocolate business of Archer Daniels Midland ("ADM") by Cargill is in line with the EU Merger Regulation. ADM is a US company which processes, sells and distributes industrial chocolate and fat-based coatings and fillings globally. Cargill is a US-based privately held company active in the international production and marketing of food, agricultural and risk management products and services. Both companies supply industrial chocolate and fat-based coatings and fillings that are used by customers in the food processing industry to produce end-customer products, such as biscuits, ice creams and chocolate confectionery. The Commission’s preliminary investigation revealed potential competition concerns in the supply of industrial chocolate to customers in Germany and the UK. In its preliminary investigation, the Commission found that Cargill, ADM and Barry Callebut are the main suppliers of industrial chocolate to customers in these markets. The Commission also found that several smaller competitors for the supply of industrial chocolate have a more limited presence and do not pose a sufficient competitive constraint on the parties. Thus, the proposed transaction could eliminate an important competitor and reduce the choice of suitable suppliers in already concentrated markets, which could lead to price increases. The proposed transaction does not include the activities of ADM in semi-finished chocolate products such as cocoa liquor, cocoa butter and cocoa powder. The Commission now has 90 working days, until 8 July 2015, to investigate the proposed acquisition in-depth and determine whether these initial concerns are correct.Source: Commission Press Release 23/2/2015

State aid: Commission opens in-depth investigation into UK public measures in favor of Lynemouth power plant

On 19 February 2015, the Commission announced that it has opened an in-depth investigation to assess whether UK plans to support the conversion of the Lynemouth coal power plant to operate entirely on biomass were in line with EU state aid rules. The Commission will investigate further to make sure that the public funds used to support the project are limited to what is necessary and do not result in overcompensation. The Commission’s preliminary analysis revealed that the parties' financial calculations and estimates regarding key cost parameters may be too conservative. Moreover, the Commission will also further investigate whether the positive effects of the project in achieving EU energy and environmental objectives outweigh potential competition distortions in the market for biomass. The opening of an in-depth investigation gives the UK and interested third parties an opportunity to submit comments and it does not prejudge the outcome of the investigation. Source:Commission Press Release 19/2/2015

State aid (Finland): Commission investigates whether a loan offered to a bus company constitutes unjustified state aid

On 23 February 2015, it was widely reported in the Finnish media that the Commission has initiated a formal investigation to assess whether a loan offered by the city of Helsinki to its fully owned bus company called Helsingin Bussiliikenne (“HelB”) constitutes unjustified state aid. Between 2005 and 2012 the city of Helsinki offered subordinated loans to HelB amounting to EUR 30 million in total. As reported in the Finnish media, the Commission’s preliminary analysis revealed that the loans granted to HelB were below the market price and were offered on cheap terms. Therefore, the Commission has concerns that the loan could constitute unjustified aid. The Commission will now further investigate whether these initial concerns are correct. Source: SA.33846 Helsingin Bussiliikenne Oy - Finland

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 Daimler and Kamaz joint venture in the Russian and Belarussian automotive sector
  • Commission approves acquisition of S&B Group by Imerys in industrial minerals sector