NEWSLETTER COMPETITION I 1 st Quarter 2015 I National Highlights 2 II European Highlights 4 III Mozambique 6 NEWSLETTER I COMPETITION WWW.CUATRECASAS.COM NEWSLETTER I COMPETITION 2/7 NEWSLETTER COMPETITION I NATIONAL HIGHLITHS Lisbon Court of Appeal Court of Appeal of Lisbon confirms fining decision against Sport TV for abuse of dominant position On 11 March 2015, the Court of Appeal of Lisbon (“Court of Appeal”) upheld the fining decision the Portuguese Competition Authority (“PCA”) had levied against Sport TV for abusing its dominant position in the market of conditional-access premium sports TV channels. In 2013, the PCA considered that Sport TV applied, from 1 January 2005 to 31 March 2011, a discriminatory remuneration system in the distribution agreements for Sport TV television channels, entered into between this company and the operators of subscription-based television services, imposing a fine of € 3.7 million to Sport TV. On 4 June 2014, the Competition, Regulation and Supervision Court (“Competition Court”) had already confirmed the abuse of dominant position, although reducing the fine to € 2.7 million. The Court of Appeal entirely dismissed Sport TV’s appeal, confirming that the company abused its dominant position in the market by applying discriminatory conditions to subscription-based television operators. Competition Court Competition Court rules in favour of the PCA’s action brought by Controlinveste, Zon and PT regarding the control of Sport TV's share capital On 28 January 2015, the Competition Court upheld the PCA’s decision to prohibit the operation which consisted in the acquisition by Controlinveste Media - SGPS, S.A., by ZON Optimus, SGPS, S.A. and by Portugal Telecom, SGPS, S.A., of joint control of the companies Sport TV Portugal, S.A., Sportinveste Multimédia, SGPS, S.A. and P.P.TV – Publicidade de Portugal e Televisão, S.A.. On 31 July 2014, the PCA prohibited the operation in question, taking the view that the referred operation might create significant barriers to competition in the premium sports contents broadcasting rights markets, in the premium sports contents pay-television market and in the downstream markets. The notifying parties appealed to the Competition Court, requesting the annulment of the PCA’s decision to initiate the in-depth investigation based on the argument that the approval of the operation had occurred by tacit consent. WWW.CUATRECASAS.COM NEWSLETTER I COMPETITION 3/7 The Competition Court has now entirely dismissed the action brought by those three companies. Competition Authority PCA converts into mandatory conditions the commitments presented by Peugeot regarding motor vehicle warranties On March 23, 2015, the PCA converted into mandatory conditions the commitments presented by Peugeot Portugal Automóveis (“Peugeot”) in the context of an infringement proceedings regarding the existence, on Peugeot’s extended warranty contract, of a clause that prevented consumers from having repair and maintenance work carried out by independent repairers, in order not to lose the right to the manufacturer’s warranty. The commitments offered – under the PCA’s monitoring – consisted in (i) the modification of all contracts which included the clause that prevented consumers from having repair and maintenance work carried out by independent repairers, if not to lose the right to the manufacturer’s warranty, which (ii) Peugeot will have to communicate to its official dealer and repair networks. According to the PCA, these commitments are adequate to eliminate the potential harmful effects on competition and on consumer welfare. Competition Authority PCA sends a statement of objections for suspected abuse of dominant position in the market intelligence sector On 24 March 2015, the PCA sent a statement of objections to four market intelligence companies, for suspected abuse of a dominant position in the form of a margin squeeze. The defendants are now given the opportunity to exercise their rights of defence in relation to the imputed infringement and sanctions. Competition Authority The PCA issues a statement of objections for providing false, inaccurate or incomplete information against an undertaking in transports sector On 25 March 2015, the PCA announced it had issued a statement of objections, in the context of an infringement proceedings against a company in the transports sector for providing false, inaccurate or incomplete information, in a reply of a request for information by the PCA. This is the second case in the last semester opened for provision of false, inaccurate or incomplete information, both cases in the transports sector. WWW.CUATRECASAS.COM NEWSLETTER I COMPETITION 4/7 The provision of information that is false, inaccurate or incomplete may be fined by up 1% of the undertaking’s turnover of the year immediately preceding the final decision issued by the PCA. II EUROPEAN HIGHLIGHTS European Commission Competition Authority sent a referral request to the Commission in relation to the Altice / PT merger On 25 February 2015, Altice notified the acquisition of the Portuguese and Hungarian assets of PT Portugal SGPS to the European Commission (“Commission”). On 5 March 2015, the Competition Authority sent a referral request, under article 9 of the EU Merger Regulation, as it considered being the best placed authority to analyze the merger. The Commission – which at the present date had not yet disclosed a decision on the referral – does not, as a rule, refer back to the national competition authorities mergers in the electronic communications industry, a referral of the case to Portugal being therefore less likely. According to the information in the Commission’s website, the deadline for the Commission’s assessment of the case is 20 April 2015. European Commission Commission sends statement of objections to Bulgarian energy incumbent company for suspected abuse of dominant position in the natural gas market in Bulgaria The European Commission sent a statement of objections to Bulgarian Energy Holding (“BEH”), the incumbent state-owned energy company in Bulgaria, and to BEH’s gas supply subsidiary (Bulgargaz) and to its gas infrastructure subsidiary (Bulgartranz), for suspected abuse of dominant position on the Bulgarian natural gas market. The Commission has concerns that BEH and its subsidiaries may be preventing competitors from gaining access to essential gas infrastructures, as well as reserved capacity they do not need on the gas import pipeline. European Commission Commission announces proposal to launch inquiry in the e-commerce sector The European Commissioner in charge of competition policy, Margrethe Vestager, announced the forthcoming proposal to launch a competition inquiry in the e-commerce sector. WWW.CUATRECASAS.COM NEWSLETTER I COMPETITION 5/7 Although more and more goods and services are traded over the internet in Europe, cross-border online sales within the EU are only growing slowly and some companies may be taking measures to restrict cross-border e-commerce. The aim of the competition inquiry is to identify the cross-barriers to e-commerce still exist within the EU, in order to contribute to the objective of achieving a Digital Single Market. Court of Justice of the European Union Judgment of the Court of Justice, of 19 march 2015 (C-286/13P) Dole Food v. European Commission Exchange of sensitive information between competitors On 19 March 2015, the Court of Justice of the European Union (“CJEU”) rejected the appeal of the bananas importer Dole against the 2013 judgment of the General Court of the European Union (“General Court”), thus upholding in its entirety the Commission’s decision in the bananas cartel case for exchange of sensitive information. This judgment clarifies the concept of exchange of sensitive information within the meaning of article 101 of the Treaty on the Functioning of the European Union (“TFEU”). In 2008, the Commission fined several bananas producers for their participation in a concerted practice in which they concerted the reference prices for bananas. The General Court rejected the appeal against the Commission’s decision, having the bananas importer Dole appealed to the CJEU. Dole claimed, among other reasons, that the exchange of information which took place could not be regarded as capable of removing uncertainty as to the intended conduct of the participating undertakings as regards the setting of factual prices. After restating that the exchange of information between competitors may be regarded as pursuing an anticompetitive object if it reduces or removes the degree of uncertainty as to the operation of the market in question, the CJEU clarified that the exchange of information between competitors which have a direct effect on the prices paid by end users are not the only practices to be considered concerted practices with an anticompetitive object and, therefore, prohibited. According to the CJEU, as they made it possible to reduce uncertainty for each of the participants as to the foreseeable conduct of competitors, the pre-fixing communications gave rise to a concerted practice having as its object the restriction of competition within the meaning of article 101 of TFEU. Court of Justice of the European Union Judgment of the Court of Justice, of 5 march 2015 (C-93/13 P e C-123/13 P) Joined cases Commission v Versalies SpA and Eni SpA and Versalies SpA and Eni SpA v Commission Economic succession and recidivism WWW.CUATRECASAS.COM NEWSLETTER I COMPETITION 6/7 On 5 March 2015, the CJEU dismissed the appeals lodged by two companies fined by the Commission in the context of the chloroprene rubber cartel. This judgment clarifies the concepts of economic succession and recidivism. As to the economic succession, the General Court concluded that there was economic continuity between the transferor company involved in the cartel and the transferee company, which continued to exist. The CJEU stated that the cases of liability of a transferee company are not limited to the situations where a transferor company, which committed the infringement, has ceased to exist in law or economically. Therefore, where two entities constitute one economic entity, the fact that the entity that committed the infringement still exists does not as such preclude imposing a penalty on the entity to which its economic activities were transferred. In particular, applying penalties in this way is permissible where those entities have been subject to control by the same person and have therefore, given the close economic and organizational links between them, carried out, in all material respects, the same commercial instructions. As to the determination of the aggravating circumstance of repeated infringement on the part of the parent company, it is not necessary for that company to have been the subject of previous legal proceedings giving rise to a statement of objections and a decision. For that purpose, what matters is an earlier finding of a first infringement resulting from the conduct of a subsidiary with which the parent company involved in the second infringement formed, already at the time of the first infringement, a single undertaking for the purpose of Article 101 TFUE. In order to guarantee the rights of the defence of the legal person against which an allegation of repeated infringement has been made, such legal person must be able to defend itself at the time when the repeated infringement is alleged against it. The statement of objections addressed to that parent company must demonstrate that that legal person formed, at the time of the first infringement, a single undertaking with the company found to have committed the first infringement. In that regard, it is for the Commission to prove that the legal person concerned by the second infringement already exercised, at the time of the first infringement, a decisive influence over the subsidiary involved in the first infringement. In the present case, the CJEU rejected the aggravating circumstance in relation to Eni as it considered that the statements made in the decision at issue did not enable it to be understood in what capacity and to what extent Eni, which was not an addressee of the Commission’s decisions, was involved in the infringements found by those decisions. III MOZAMBIQUE Adoption of the first competition regime in Mozambique finalized Following the publication of Mozambique Competition Act (Law nr. 10/2013, of 11 April, please refer to this link) and of the Statute of the Regulatory Competition Authority (Decree nr 37/2013, of 1 August), Mozambique published the Decree nr. 97/2014, of 31 WWW.CUATRECASAS.COM NEWSLETTER I COMPETITION 7/7 December (“Decree nr. 97/2014”), which completes the set of Mozambique’s competition rules. Decree nr. 97/2014 defines the merger control notification thresholds which, as the ones included in the Portuguese Competition Act, are based in the market shares (acquisition, creation or reinforcement of a market share exceeding 50% in the Mozambican market or in a substantial part of it) and in the turnover of the parties (the parties’ aggregate Mozambican turnover exceeds 900 million Meticais), as well in a mixed criterion (acquisition, creation or reinforcement of a national market share exceeding 30% but lower than 50% and the Mozambican individual turnover of at least two parties exceeds 100 million Meticais). A leniency program is also created (which will have to be concretized in a later piece of legislation) as well as the possibility of justifying some competition restrictive practices that may create efficiency gains. The Mozambican legislator also clarified some important competition law concepts, such as dominant position, abuse and economic dependence. 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