Competition: Court of Justice of European Union dismisses LG Display's appeal in LCD panel cartel

On 23 April 2015, the Court of Justice of the European Union (“CJEU”) handed down its judgment dismissing the appeal brought by LG Display Co Ltd and LG Display Taiwan Co Ltd (together “LG Display”) against the General Court (“GC”) judgment on the liquid crystal display (“LCD”) panels cartel. In 2010, the Commission imposed fines totaling approximately EUR 649 million on six Korean and Taiwanese manufacturers of LCD panels, including LG Display, for their participation in a cartel from October 2001 to February 2006. LCD panels are the main component of flat screens used in televisions and computers. As LG Display was the first to provide information to establish the continuation of the infringement in 2006, LG Display benefitted from partial immunity from a fine for that year.

Subsequently, LG Display brought an action before the GC. In February 2014, the GC essentially upheld the Commission’s decision but reduced slightly the fine the Commission had imposed on LG Display. LG Display then brought an action with the CJEU seeking a greater reduction of the fine and annulment of the GC judgment. To support its action, LG Display claimed that the GC had erred in law by concluding that the Commission was entitled, for the purposes of calculating the fine, to take into account LG Display’s internal sales to its parent companies LG Electronics and Philips, although those sales were not affected by the cartel and were made at a preferential price based on the joint venture agreement linking LG Display to LG Electronics and Philips.

In its judgment, the CJEU dismissed the appeal in its entirety. Firstly, the CJEU held that the sales of LCD panels made by LCD Display to its parent companies were properly included in order to calculate the amount of the fine. According to the CJEU, those sales were regarded as external sales made to independent third parties and not as internal sales because LG Display did not form a single undertaking with its parent companies. Furthermore, the CJEU concluded that the amount of the fine is solely determined according to the sales that were made on the market affected by the infringement, irrespective of whether the prices of those sales were or were not influenced by the cartel. Secondly, the CJEU held that the GC had not erred in law in finding that LG Display was not entitled to partial immunity from the fine for the year 2005. According to the CJEU, such immunity could not be granted, because the information provided by LG Display related to the facts which were not previously unknown to the Commission because another undertaking, Samsung, had earlier provided information on that subject. Source: Court of Justice of European Union Press release 23/04/2015 and Case C-227/14 P LG Display Co. Ltd and LG Display Taiwan Co. Ltd. v European Commission, judgement of the Court of Justice of European Union, 23/04/2015

Competition: Commission sends Statement of Objections to Gazprom for alleged abuse of dominance on Central and Eastern European gas supply markets

On 22 April 2015, the Commission announced that it has sent a Statement of Objections (“SO”) to Gazprom alleging that certain business practices used by Gazprom in Central and Eastern European gas markets constitute an abuse of its dominant market position in breach of EU antitrust rules. Gazprom is the dominant gas supplier in all Central and Eastern European countries, having market shares over 50%, and in some countries up to 100%. Gazprom is also the largest extractor of gas in the world, and the Russian Federation is its largest shareholder.

The Commission has preliminary concerns that Gazprom is abusing its dominant position in the gas supply markets in eight EU Member States by pursuing an overall strategy to partition gas markets in Central and Eastern Europe. The Commission suspects that Gazprom is hindering cross-border gas sales by imposing territorial restrictions, such as export bans, destination clauses and other measures, in its supply agreements. The Commission is also investigating whether the territorial restrictions have resulted in higher gas prices and thus allowed Gazprom to pursue an unfair pricing policy in five Member States. Finally, the Commission is concerned that Gazprom may have leveraged its market dominance in two Member States by making gas supplies conditional upon obtaining certain infrastructure-related commitments from wholesalers.

The sending of an SO is a formal step in the Commission’s investigation into suspected violations of EU antitrust rules and it does not prejudge the outcome of the investigation. Gazprom now has 12 weeks to reply to the SO and can also request an oral hearing to present its arguments. Thereafter, the Commission will make its final decision. Source: Commission Press Release 22/04/2015

Competition (Sweden): Swedish Competition Authority approves commitments offered by  Booking.com

On 21 April 2015, the Swedish Competition Authority ("SCA") announced that it has approved the commitments offered by Booking.com during the SCA's investigation into the hotel sector. The SCA conducted the investigation in the online travel agency sector, where online travel agencies operate internet platforms on which consumers can search for, compare and book hotel rooms. The investigation concerned so-called parity clauses in the agreements between Booking.com and hotels on the Swedish market which oblige hotels to offer Booking.com the same or better room price as the hotel makes available on all other online and offline distribution channels. The SCA had concerns that these clauses may harm competition by restricting competition between Booking.com and other online travel agents and hinder new booking platforms from entering the market.

To address these concerns, Booking.com offered to change the clause in its agreements. The commitments primarily mean that Booking.com may not require that the room prices that hotels offer on Booking.com be the same as or lower than the prices they offer via Booking.com's competitors. According to the SCA, the commitments restore competition between online travel agencies.  Similar investigations have also been conducted by the French and Italian competition authorities. These authorities have approved corresponding commitments offered by Booking.com. The Commission assisted the three national competition authorities in coordinating the investigations.Source: Swedish Competition Authority Press Release 21/4/2015 and Commission Daily News 21/04/2015

Merger control: Commission approves acquisition of certain Lafarge and Holcim assets by CRH  

On 24 April 2015, the Commission announced that it has approved the proposed acquisition of several assets of Lafarge and Holcim by CRH Plc (“CRH”). Lafarge, of France, and Holcim, of Switzerland, are active on the markets for building construction materials, offering their products globally. CRH, of Ireland, is an international group that manufactures and supplies a wide range of building materials, such as cement, asphalt, ready-mixed concrete and building products.

The proposed merger concerns assets that Holcim and Lafarge committed to divest in order to obtain the Commission’s approval for their merger in December 2014. These assets are located in a number of Member States and include production facilities of grey and white cement, aggregates, RMX, asphalt and other construction materials. As CRH’s business overlaps with the divested businesses in several areas, the Commission investigated whether the proposed transaction would raise competition concerns regarding the manufacturing of grey cement in the United Kingdom, in the cross border regions between Poland and Slovakia, and between France and Belgium. The Commission’s investigation also concerned the competition aspects regarding ready-mix concrete, cementitious materials, aggregates and asphalt in various regions of the European Economic Area (“EEA”).

The Commission’s investigation showed that in the United Kingdom the merged entity will continue to face sufficiently strong competition from major integrated players on the market. The Commission also concluded that the increases in the merged entity’s market shares in Poland, Slovakia, France and Belgium are not significant, and thus competition would not be hindered in those areas. Finally, the Commission concluded that the proposed transaction would not lead to less competition regarding the production of RMX, cementitious materials, aggregates and asphalt in the EEA, due the presence of alternative suppliers. The Commission therefore concluded that the transaction would not raise competition concerns on any of the markets in question. Source: Commission Press Release 24/4/2015

Merger control (Sweden): Swedish Competition Authority's Director-General recommends voluntary notification in cases where thresholds are not met

Dan Sjöblom, Director-General of the Swedish Competition Authority ("SCA"), speaking at a competition law event in Stockholm on 22 April 2015, urged parties to a concentration to notify to the SCA even in cases where the turnover thresholds are not met. The reasoning for this is that parties should take advantage of the possibility to get judicial review of the proposed concentration before implementing it which would help the parties avoid ending up in the situation that the SCA requests a notification and/or objects to the proposed concentration only after it has been implemented (the situation Swedbank found itself in regarding its acquisition of Svensk Fastighetsförmedling). Sjöblom underlined that the SCA will not hesitate to use all means at its disposal to prevent harmful concentrations. Source:Swedish Competition Authority Press Release 22/4/2015

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 acquisition of six hotels by Starwood Capital Group and Melia Hotels International
  • Commission approves acquisition of InterContinental Paris Le Grand Hotel by Constellation and InterContinental Hotels
  • Commission approves acquisition of Pepe Jeans by M1 Fashion and LVMH
  • Commission approves acquisition of Detlev Louis Motorradvertriebs by Berkshire Hathaway