EU Mergers

Phase I Mergers

  • M.8046  TUI / TRANSAT FRANCE (20 October 2016)
  • M.8096 INTERNATIONAL PAPER COMPANY / WEYERHAEUSER TARGET BUSINESS (20 October 2016)
  • M.8105 MARMEDSA / UECC / UECC IBERICA (18 October 2016)
  • M.8174 TALANX / ABERDEEN / ESCALA VILA FRANCA / PNH PARQUE (14 October 2016)

EU Competition 

ECJ confirms that EU rules allow for a creation of a multi-sector national regulator. On 19 October 2016, Europe’s highest court, the European Court of Justice (ECJ) responded to a request for a preliminary ruling from Tribunal Supremo in Spain, concerning the correct interpretation of the EU directive on electronic communications network and services. The Spanish Tribunal questioned whether Spain’s reform of its telecoms regulatory authority, and its merger with several other regulatory bodies to form one single national regulatory authority breached the independence requirement that was present in the framework directive. The ECJ held that such rules do not specify which body should serve as a regulator and, therefore, do not prevent the creation of a multi-sector national regulator. The ECJ further established that such authority must be competent, independent, impartial, and transparent; it must also allow for an effective right of appeal. The ECJ also held that any early dismissal of the President and senior members of the board of such authority on the sole grounds of institutional reform would not be allowed under the directive. The ECJ made apparent that it is for the Member State to guarantee that any dismissal of a senior executive before the expiry of their term of office does not risk the “independence and impartiality” of the persons concerned.

Advocate General recommends ECJ should allow appeal of General Court’s judgment on Intel’s abuse of dominance. On 20 October 2016 Advocate General Wahl (AG) published his non-binding opinion on the appeal by Intel Corp. (Intel) against the European Commission’s (Commission) decision to fine Intel for abusing their dominant market position. The AG believes the Commission erred by not considering whether the exclusivity rebates granted by Intel were (i) capable of restricting competition; and (ii) had an anti-competitive foreclosure effect, the General Court had instead applied a presumption of unlawfulness. The AG considers that the General Court should have considered all the circumstances before it concluded that Intel’s conduct amounted to an abuse of a dominant position. The AG also does not agree with the Commission’s finding of a “single and continuous infringement” during 2002 – 2007, as he argues that the finding of an infringement for 2006 and 2007 could be based on the average market coverage across the entire period from 2002 to 2007. Therefore, the AG contends that the General Court wrongly fulfilled the requirement of sufficient market coverage. Last, the AG believes the General Court erred in not recognising that the Commission had breached an essential procedural requirement by not organising and recording formal interviews during its investigation.

Trade

Commission’s Trade Ministers fail to sign off on trade agreement with Canada. On 18 October 2016, the trade ministers from the Commission and Canada met in Luxembourg to negotiate the EU-Canada Comprehensive Economic and Trade Agreement (CETA), with the hope of finalising it. CETA aims to remove most tariffs and enhance trade between Europe and Canada, however Wallonia, a region in Belgium, voted against CETA and urged the Belgian trade minister not to agree to it. Wallonia voiced concerns over the investment protection provisions in CETA, arguing that the provisions empower companies over governments and that governments would be forced to privatise public services.

General Court rules Crown Equipment will continue to face dumping tariffs of 70.8 percent. On 18 October 2016 the General Court rejected Crown Equipment’s appeal on hand pallet truck dumping tariffs. The Commission increased the duty rate on hand pallet trucks to 70.8% in 2013, as a result of Chinese dumping. Crown Equipment, a Chinese maker of hand pallet trucks, together with Germany based Crown Gabelstapler claimed that the Commission wrongly used Brazil as a comparable market when determining the duties, as a single company (Paletrans Equipamentos) dominated the market, holding a share of 54% in 2015. Crown Equipment and Crown Gabelstapler also argued that the 14% import tax imposed on the hand pallet trucks discourages foreign competitors from entering the market and gives Paletrans Equipamentos “an automatic price advantage” over its foreign rivals. The General Court dismissed the appeal, noting that Brazil was “considered an appropriate country” by having at least two producers of hand pallet trucks.

UK Competition 

CMA requires ICE to sell Trayport. On 17 October 2016, the Competition and Markets Authority (CMA) published its final decision ruling that Intercontinental Exchange, Inc. (ICE) has to sell Trayport Inc. as this is the “only effective way to preserve competition” in the energy-trading industry. ICE is the largest operator of derivatives exchanges and clearing houses, and acquired Trayport in December 2015. Trayport supplies software technology to traders, brokers, exchanges and clearing houses, which underpins around 85% of European utilities trading. The CMA found that the traders, brokers, exchanges and clearing houses that compete with ICE “have a high level of dependence on Trayport’s integrated software offering, alternatives are weak and barriers to entry in this market are high”.

CMA accepts final undertakings in Lloyds’ acquisition of Sainsbury’s pharmacies. On 18 October 2016, the CMA announced that is has accepted undertakings from Celesio AG Lloyds Pharmacy Limited (Lloyds) on their proposed acquisition of Sainsbury’s UK pharmacy business. Lloyds has given undertakings to divest a Lloyds pharmacy in each of the 12 local markets the CMA have identified as an area that may suffer a “substantial lessening of competition” as a result of the acquisition of the supermarket’s pharmacy business. Lloyd’s parent company has also given an undertaking that no group company may directly or indirectly acquire any part of the Lloyds pharmacies that will be divested, for a period of 10 years.