EU Competition

Summary of Johnson & Johnson and Novartis pay for delay decision published. On 29 April 2015, a summary of the decision of the European Commission (‘the Commission’) fining Johnson & Johnson and Novartis AG for agreeing to delay the entry into the Dutch market of a generic version of the drug fentanyl in breach of Article 101 of the TFEU was published in the Official Journal (OJ 2015 C142/21). The Commission found that the Dutch subsidiaries of Johnson & Johnson and Novartis (Janssen­Cilag and Sandoz BV) entered into a co­promotion agreement which provided Sandoz with financial incentives not to launch a generic product on the Dutch market. According to the Commission, the co­promotion agreement delayed the entry of a cheaper generic version of fentanyl for 17 months and kept prices for fentanyl artificially high in the Netherlands during that time. The Commission concluded that this agreement had an anti­competitive object, noting that the co­promotion agreement was not about marketing, but about sharing monopoly profits.

General Court upholds appeal by Total SA (‘Total’) and Elf Aquitaine SA (‘Elf Aquitaine’) against payment of overdue interest relating to acrylic glass cartel. On 29 April 2015, the General Court handed down its judgment on an appeal by Total and Elf Aquitaine against letters from the Commission claiming payment of overdue interest for the fine imposed for participation in the acrylic glass (methacrylates) cartel. In June 2011, the General Court upheld Total and Elf Aquataine’s joint and several liability for a fine imposed for the anti­competitive activities of their subsidiary company. On 24 June and 8 July 2011, the Commission sent letters to Total and Elf Aquitaine demanding payment of the fines imposed, as well as late payment interest. The General Court concluded that the letters should be annulled because it was clear that Total and Elf Aquitaine had paid the fines that the Commission imposed on them, within the time limits set down by the Commission. There had never been any delays in payments of the fines imposed.

EU Cartels

Advocate General finds error in inclusion of non­EEA sales in calculation of InnoLux’s fine in liquid crystal display (‘LCD’) panel cartel. On 30 April 2015, Advocate General

Wathelet gave his Opinion on the appeal by InnoLux against a General Court judgment on its challenge to the European Commission’s decision on the LCD panels cartel. The Advocate General agreed with InnoLux’s argument that the General Court erred in finding that the Commission could take into account, in setting the fine, turnover derived from the sale in the European Economic Area (‘the EEA’) of the cartel products as incorporated into "transformed products". These transformed products (televisions and computer monitors) incorporated LCD panels that InnoLux had sold to group companies outside the EEA.

EU Mergers

Phase I Mergers

  • M.7000 – LIBERTY GLOBAL / ZIGGO (29/04/2015)
  • M.7172 – APOLLO / FITZWILLIAM / WITTINGTON / ARNOTTS (29/04/2015)
  • M.7476 – HOLTZBRINCK PUBLISHING GROUP / SPRINGER SCIENCE+BUSINESS MEDIA GP ACQUISITION SCA / JV (29/04/2015)
  • M.7568 – M1 FASHION / LVMH / PEPE JEANS GROUP (27/04/2015)
  • M.7590 – BERKSHIRE HATHAWAY / DETLEV LOUIS MOTORRAD VERTRIEBSGESELLSCHAFT (28/04/2015)

State Aid

Commission launches state aid sector inquiry into capacity mechanisms to ensure electricity supplies. On 29 April 2015, the Commission announced that it has launched a state aid sector inquiry under Article 20a of the state aid Procedural Regulation (Regulation 659/1999 as amended) into national measures to ensure that adequate capacity to produce electricity is available at all times to avoid black­outs. The sector inquiry, the first under EU state aid rules, will examine in particular whether capacity mechanisms ensure sufficient electricity supply without distorting competition or trade in the EU single market. The inquiry also aims to improve member states’ compliance with EU state aid rules when designing and introducing capacity mechanisms. Commission refers Italy to the European Court of Justice (‘the ECJ’) for failure to recover illegal aid granted to hotel industry in Sardinia. On 29 April 2015, the Commission announced that it has decided to refer Italy to the ECJ for failure to implement a previous ruling by the ECJ that Italy had failed to fulfil its obligations to take the measures necessary to ensure the recovery of illegal state aid granted to Sardinian hotels. The ECJ’s ruling confirmed a Commission decision from 2008 that aid granted by Italy to support investment projects in the Sardinian hotel industry had been granted unlawfully.

Commission refers Italy to the European Court of Justice (‘the ECJ’) for failure to recover illegal aid granted to hotel industry in Sardinia. On 29 April 2015, the Commission announced that it has decided to refer Italy to the ECJ for failure to implement a previous ruling by the ECJ that Italy had failed to fulfil its obligations to take the measures necessary to ensure the recovery of illegal state aid granted to Sardinian hotels. The ECJ’s ruling confirmed a Commission decision from 2008 that aid granted by Italy to support investment projects in the Sardinian hotel industry had been granted unlawfully.

Commission decisions give guidance on local public support measures that can be granted without prior Commission approval. On 29 April 2015, the Commission announced its decisions that seven measures proposed by the Czech Republic, Germany, the Netherlands and the UK for the grant of public support to purely local operations do not involve state aid within the meaning of EU rules, because they are unlikely to have a significant effect on trade between member states. The decisions also provide guidance on determining which cases do not need to be cleared by the Commission under EU state aid rules, complementing the revised General Block Exemption Regulation.

EU Trade

General Court dismisses SolarWorld AG and Solsonica SpA’s action to seek an order that EU national customs authorities apply provisional duties on solar modules and key components. On 14 April 2015, the General Court dismissed the action by SolarWorld AG and Solsonica SpA, producers of crystalline silicon photovoltaic modules (‘CSPM’), seeking an order for custom authorities to apply anti­dumping duties on imports of CSPM originating in or consigned from the People’s Republic of China and an amendment to Regulation (EU) No 182/2013 to make these imports subject to registration. The General Court has said there was no need to rule on the application for annulment of the duties and claimed damages resulting from their imposition, because final duties had meanwhile been applied.

UK Competition

High Court refuses to strike out Tesco damages action against MasterCard. On 24 April 2015, the High Court refused an application by MasterCard for summary judgment/strike out of

a damages claim brought by Tesco Stores Limited and other Tesco companies (‘Tesco Stores’). Tesco Stores’ claims are based on alleged infringements of Article 101 of the TFEU and the Chapter I prohibition of the Competition Act 1998 by virtue of the multilateral interchange fees  set by MasterCard in the EEA, including in the UK. MasterCard applied for summary judgment/strike out on the basis that Tesco Stores have no reasonable grounds for bringing the claims and that the claims have no real prospect of success as a result of the English law principle of ex turpi causa (a claimant cannot recover damages for the consequences of its own wrongful acts). MasterCard claims that ex turpi causa applies as Tesco Bank is/was party to the alleged infringements and that Tesco Stores are part of the same economic entity as Tesco Bank for competition law purposes. The High Court held that the issues relating to whether Tesco Stores and Tesco Bank form the same economic unit are complex and require full consideration of all facts and evidence at trial.

The Competition and Markets Authority (‘CMA’) decides to continue Competition Act investigation into conduct in the healthcare sector. On 30 April 2015, the CMA announced on its website that the decision has been taken to continue with its investigation into a suspected breach of competition law in the healthcare sector. The CMA opened this case in July 2014 and has been gathering evidence. It has not yet reached a view as to whether there is sufficient evidence of an infringement of the Chapter I prohibition and/or Article 101 of the TFEU to issue a statement of objections. It aims to provide a further update by June 2015.

High Court refuses summary judgment on whether offered standard­essential patent licences meet FRAND requirements. On 24 April 2015, the High Court refused an application by the defendants for summary judgment on issues relating to whether offers of worldwide portfolio licences, made by the patentee claimant in relation to patents relating to mobile telephony which had been declared to the European Telecommunications Standards Institute (‘ETSI’) as essential to several standards, were compliant with the FRAND requirement of ETSI’s intellectual property rights policy. The action has been divided into five technical trials to decide on validity and infringement of the asserted patents, and a non­technical trial to decide contract and competition law issues.

Speeches & Publications

Speech by Alexander Italianer on competition law enforcement and standard essential patents. On 21 April 2015, the Commission published a speech given by Alexander Italianer, Director­General for Competition, on competition law enforcement and standard essential patents. Mr Italianer explained that the Commission has sought, through its enforcement work in this area, to find a balance between the interests of patent holders and licensees.