Competition: Commission considers boosting enforcement powers of national competition authorities

On 4 November 2015, the Commission issued an online questionnaire to seek views on whether national competition authorities ("NCAs") should be given additional powers to enforce EU competition rules. The Commission invites the general public and stakeholders to share their experience and provide feedback on potential EU legislative actions to further strengthen the enforcement and sanctioning tools of NCAs.

The consultation follows from the Commission's July 2014 Communication on enforcement under Regulation 1/2003. The communication identified certain areas where national enforcement procedures continue to diverge and where future action might be needed. It appears that NCAs may face difficulties relating to their powers of investigation. According to the communication, some NCAs cannot gather evidence stored on digital devices when inspecting the premises of a suspected cartelist, including laptops and tablets. In addition, it appears that NCAs may face difficulties in imposing effective fines for anticompetitive behavior. For example, some NCAs cannot fine cartelists for the full period of their participation in the cartel.

Responses to the public consultation may be submitted to the Commission until 12 February 2016. The Commission will then consider whether and to what extent it should take further action in this area.

Source: Commission Press Release 4/11/2015. The public consultation is available here

Competition: Commission sends Statement of Objections to suspected participants in electrolytic capacitors cartel

On 4 November 2015, the Commission announced that it has sent a Statement of Objections ("SO") to ten Asian manufacturers of electronic capacitors who are suspected of having participated in a cartel, in breach of Article 101 of the Treaty on the Functioning of the European Union ("TFEU"). Electrolytic capacitors are used to store electrical energy in virtually all electronic products, from televisions to games consoles and mobile phones. For example, they smooth the output of power supplies and activate camera flashes.

The Commission has concerns that from at least 1997 to 2014 the ten Asian manufacturers met in a range of multilateral meetings in Japan to discuss future market trends, prices and specific customer information. These multilateral meetings appear to have been supplemented with additional bi- or tri-lateral discussions between the companies. Some of these additional discussions may have taken place in Europe with the European subsidiary of a Japanese company.

Sending an SO is a formal step in the Commission's investigations into suspected violations of EU competition rules. However, the sending of an SO does not prejudge the outcome of the investigation. The companies in question will now have access to the Commission's file, and they can respond to the objections in writing or request an oral hearing. Source: Commission Press Release 4/11/2015

Competition and public procurement: Commission publishes first detailed report on latest TTIP negotiations

On 6 November 2015, the Commission published a report summarizing discussions on the 11th round of negotiations with the US on the Transatlantic Trade and Investment Partnership ("TTIP"). The negotiations covered the proposed texts concerning competition, state-owned enterprises and subsidies, as well as public procurement. Publishing the report is one part of the Commission's broader commitment to ensuring its TTIP negotiations are the most transparent ever for a trade deal.

In relation to competition, the report notes that the US and EU continued to explore further possibilities to find common ground. They identified several areas of significant progress, including general principles, reference to the EU and US legal frameworks, cooperation, and ongoing review of Chapter implementation. According to the report, further work is still needed in the areas of procedural fairness and how to address any exemptions from the application of competition laws.

In relation to public procurement, the EU continued its efforts in enhancing business opportunities by improving access to government procurement opportunities at all levels of government based on national treatment. There was also consideration of textual proposals relating to procurement procedures. The EU emphasized, in particular, the need to ensure that environmental and social considerations are properly reflected in procurement procedures. Source: Commission Press Release 6/11/2015The first detailed  report on the latest negotiating round is available here

Competition (Finland): Finnish Competition and Consumer Authority confirms that consumers can benefit from network sharing cooperation between DNA and TeliaSonera Finland

On 5 November 2015, the Finnish Competition and Consumer Authority ("FCCA") handed out a commitment decision confirming that commitments offered by TeliaSonera Finland Plc ("TSF") and DNA Ltd ("DNA") are sufficient to remove competition concerns related to the companies' proposed network sharing cooperation. The joint venture established by DNA and TSF would build a mobile network for Eastern and Northern Finland covering 50 percent of Finland in total and 15 percent of Finland's total population. In the future, all 2G, 3G and 4G mobile traffic will be carried out by a common network in the joint venture's operating area.

In April 2015, after receiving a request for action, the FCCA expressed its preliminary concerns that the network sharing cooperation between DNA and TSF would restrict competition in the mobile communications market. According to the FCCA, the network sharing cooperation would have harmonized DNA's and TSF's mobile networks in Eastern and Northern Finland and reduced national network competition between the operators. Moreover, the FCCA expressed concerns that the operators would align their competitive behavior to the detriment of consumers.

To address the FCCA's concerns, DNA and TSF have now committed to offer access to their national networks to virtual and service operators and rent out mast and equipment location sites to other competitors. Further, they have committed to restrict information exchange within the sphere of the joint venture, as well as other links between the joint venture and the two operators. According to the FCCA, these commitments will remove its initial competition concerns. The FCCA has set a conditional penalty payment of 1.3 MEUR on TSF and 0.81 MEUR on DNA to ensure that they abide by the commitments.Source: Finnish Competition and Consumer Authority Press Release 5/11/2015

Competition (Sweden): Swedish Competition Authority closes investigation into joint software project between Postnord Sverige AB and Bring Citymail Sweden AB

On 4 November 2015, the Swedish Competition Authority ("SCA") closed an investigation into a joint software project between Postnord Sverige AB ("Postnord") and Bring Citymail Sweden AB ("Bring"), the two largest companies active on the market for consignment. Consignment is one of the two main submarkets on the Swedish postal market. The investigation concerned software for corporate bulk mail customers that allocates mail between the two companies depending on the destination.

The investigation began in August 2014 after the SCA had received information from 21 Grams AB ("21 Grams"). 21 Grams alleged that the software was offered to customers free of charge, as opposed to competitors' equivalent programmes, and that Morgontidning Distribution KB (MTD), the closest competitor of Postnord and Bring, was excluded from the system. Additionally, 21 Grams alleged that Postnord and Bring shared vital information via the software about their respective customers, the customers' purchasing patterns and discounts.

Following its investigation, the SCA found that Postnord's and Bring's software was used to a limited extent, that the use of the software did not affect the allocation of mail between Postnord and Bring, and that other postal operators may join the software programme. Consequently, the SCA decided close the investigation. Source: Swedish Competition Authority Decision 4/11/2015 (in Swedish) and Swedish Competition Authority Press Release 9/11/2015 (in Swedish)

Competition (Sweden): Swedish Competition Authority closes preliminary investigation into suspicions that Postnord Sverige AB abused its dominant position

On 6 November 2015, the Swedish Competition Authority ("SCA") closed a preliminary investigation into suspicions that Postnord Sverige AB ("Postnord"), a company offering nationwide postal service, had abused its dominant position.

Two providers of postal mail services, Mailworld Office AB ("Mailworld") and 21 Grams AB ("21 Grams"), had complained to the SCA after Postnord announced a change in its system for calculating yearly volume discounts. Both Mailworld and 21 Grams deliver substantial amounts of mails to Postnord on behalf of their clients. According to Mailword and 21 Grams, the change would mean that so-called intermediary companies, such as Mailworld and 21 Grams, may no longer use the volume of their underlying clients to qualify for discounts. Both companies had requested an interim injunction from the SCA staying Postnord's announced change. 

The SCA dismissed the case due to lack of sufficient grounds for further investigations and did not impose any interim injunction. Source: Swedish Competition Authority Decision 6/11/2015 (in Swedish)and Swedish Competition Authority Press Release 9/11/2015 (in Swedish)

State aid: Commission orders Estonia to recover incompatible aid from national air carrier Estonian Air

On 7 November 2015, the Commission ordered Estonia to recover incompatible aid from Estonian Air, which is the flag carrier airline of Estonia. Estonia owns a stake of more than 97 percent in Estonian Air. According to the Commission, rescue and restructuring aid is highly distortive of competition as it can artificially keep a company in the market when it would otherwise have exited. Therefore, aid can only be granted under strict conditions. The Commission states that rescue and restructuring aid can only be granted once in a ten-year period and the receiver must have a credible restructuring plan.

After opening two in-depth investigations into the public support measures in favor of the airline in 2013 and 2014, the Commission concluded that the granted aid measures gave Estonian Air an undue advantage over its competitors, in breach of EU state aid rules. Estonia had granted at least three public subsidy measures between 2010 and 2014, with another capital injection still foreseen. In addition, Estonian Air did not have a credible restructuring plan and the plan did not include sufficient measures to limit the distortions of competition created by the State support.

In order to remedy the distortions to competition, Estonia must now recover the incompatible aid, in the form of repeated public support measures, of 84.9 MEUR with interest. In addition, Estonian Air cannot receive a planned restructuring aid of 40 MEUR. The Commission concludes that the recovery of this aid is necessary to ensure a level-playing field in the internal market. Source: Commission Press Release 7/11/2015

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 Haymarket House by BTPS and CPPIB
  • Commission approves acquisition of Towers Watson by Willis
  • Commission approves acquisition of Chubb by ACE
  • Commission approves joint venture between Marubeni-Itochu, Itochu Corporation and Sumitomo Corporation in steel civil engineering products
  • Commission approves acquisition of joint control over four Coca-Cola bottlers by The Coca-Cola Company and COBEGA