General Court provides clarification as to the functioning of the European Network of Competition Authorities

On 21 January 2015, the General Court (“GC”) confirmed that the Commission was justified in law in rejecting the complaint lodged by easyJet Airline Co. Ltd (“easyJet”) against Schiphol airport’s pricing on the basis that the complaint in question had already been dealt with by the Netherlands competition authority (“NMa”). In 2008, easyJet lodged complaints with the NMa against Luchthaven Schiphol NV (“Schiphol”), the operator of Amsterdam-Schiphol airport relating to the passenger and security service charges. In its decisions, the NMa rejected those complaints by relying on the Netherlands law governing aviation and by resorting to its priority policy. On 14 January 2011, easyJet lodged a complaint with the Commission submitting that the charges set by Schiphol were discriminatory and excessive and amounted to an abuse of a dominant position in the internal market. It also maintained that the NMa had not taken any final decision on the merits of easyJet’s complaint under competition law. On 3 May 2013, in accordance with Article 13(2) of Regulation No 1/2003, the Commission rejected the complaint, on the basis that the NMa had already dealt with the complaint. In July 2013, easyJet challenged the Commission’s rejection decision before the GC. In its judgement, the GC stated, first of all, that the Commission has a broad discretion when applying Article 13 of Regulation No 1/2003 and that, consequently, the purpose of judicial review in the circumstances is to verify that the Commission decision is not based on materially inaccurate facts and that the Commission has not erred in law, made a manifest error of assessment or misused its powers in finding that a competition authority of a member state has already dealt with a complaint. In contrast, review of decisions of the competition authorities of member states is a matter for national courts alone. According to the GC, the Commission may reject a complaint which has previously been rejected by a competition authority of a member state on priority grounds. The GC also stated that the Commission may, in order to reject a complaint, rely on the fact that a competition authority of a member state has previously rejected that complaint following a review based on conclusions reached by it in the course of an investigation conducted under separate provisions of national law, on condition that that review was conducted in the light of EU competition law. The GC took the view that the Commission acted correctly in finding that the NMa had dealt with the complaint on the basis of EU competition law. In the view of the GC, the Commission correctly found that the NMa had examined whether the charges were proportionate to the costs, had compared those charges with those of other international airports and had assessed them in the light of the quality of the service received by easyJet. Accordingly, the GC dismissed easyJet’s action in its entirety. Source: General Court Press Release 21/1/2015 

General Court dismisses damages actions by Ziegler SA and Ziegler Relocation SA in relation to international removal services cartel

On 15 January 2015, the General Court (“GC”) handed down its judgement in joined actions brought by Ziegler SA (“Ziegler”) and Ziegler Relocation SA (“Ziegler Relocation”) seeking compensation for non-contractual liability incurred by the Commission in relation to the international removal services cartel. In March 2008, the Commission imposed fines of EUR 32.7 million on several companies for participating in a cartel on the market for international “door-to-door” removals to and from Belgium. Ziegler, which was fined EUR 9 200 000 in the process, brought an action before the General Court (“GC”) which dismissed Ziegler’s appeal. Following the GC’s judgement, Ziegler brought a further action before the Court of Justice of European Union (“CJEU”) but the Commission’s decision was upheld also by this instance. Prior to the CJEU’s judgement, Ziegler brought a separate action for damages before the GC seeking compensation for the damage suffered as a result of the cartel fine imposed by the Commission as well as for the loss of earnings suffered as a result of the Commission’s practice to request cover quotes for removals and Ziegler’s refusal to respond favourably to such requests. Subsequently, Ziegler Relocation joined the action in March 2013. In its judgement, the GC dismissed both actions in their entirety. Firstly, as regards Ziegler’s claim that it had suffered damage as a result of the fine imposed by the Commission, the GC held that such claim was inadmissible as both the GC and the CJEU had upheld the Commission’s decision. Furthermore, the GC also concluded that Ziegler’s and Ziegler Relocation’s claims regarding the loss of earnings were unfounded because the Commission had not acted unlawfully in a way that could give rise to any non-contractual liability for damages. According to the GC, there was no causal link between the alleged damage suffered by Ziegler and Ziegler Relocation and the Commission’s actions or lack of action. In the light of these considerations, the GC dismissed both actions in their entirety, partly as inadmissible and partly as unfounded. Source: Joined cases T-539/12 Ziegler SA v Commission and T-150/13 Ziegler Relocation v Commission, judgment of the General Court, 15 January 2015Commission’s Press Release 11/3/2008Case C-439/11 P Ziegler SA v European Commission, judgement of the Court of Justice of European Union, 11 July 2013Case T-539/12 Ziegler v Commission, OJ C 55/16, 23 February 2013and Case T-150/13 Ziegler Relocation v Commission, OJ C 147/22, 25 May 2013 

Commission opens in-depth investigation into joint venture for online music licensing between collecting societies PRSfM, STIM and GEMA

On 14 January 2015, the Commission announced that it has opened an in-depth investigation into the proposed creation of a joint venture between three collective rights management organizations (“CMOs”), namely PRS for Music Limited (“PRSfM”) of the United Kingdom, Föreningen Svenska Tonsättares Internationella Musikbyrå u.p.a. (“STIM”) of Sweden and Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte (“GEMA”) of Germany. CMOs are organizations managing the copyrights of authors, performers and writers of musical works. They also grant licences on behalf of those parties and redistribute the royalties collected from the exploitation of their copyrights. The Commission’s preliminary investigation indicated that the combination of the music repertoires currently controlled by each of PRSfM, STIM and GEMA could result in higher prices and worsened commercial conditions for digital service providers (“DSPs”) in the European Economic Area (“EEA”). As DSPs are companies providing online services, such as downloading or streaming, to final customers and they need licences delivered by CMOs in order to operate on the market, the Commission has concerns that the transaction could ultimately lead to higher prices and less choice also for European consumers. Secondly, the Commission’s investigation revealed that the transaction may reduce competition in the EEA-wide market for copyright administration services provided to so-called option 3 publishers. The option 3 publishers are the major publishers which, following a Commission recommendation on the cross-border collective management of copyright for online use, have withdrawn the mechanical rights related to their Anglo-American repertoire from the CMO system and have started to license these rights directly, relying on CMOs only for administrative services. According to the Commission, the proposed transaction would essentially reduce the number of companies capable of bidding credibly for option 3 mandates from four to two and this could affect negatively the quality and commercial terms of the services. The opening of an in-depth inquiry does not prejudge the outcome of the investigation. The Commission has now 90 working days, until 29 May 2015, to investigate whether its competition concerns are confirmed and to take a final decision in the matter. Source: Commission Press Release 14/1/2015

Court of Justice of the European Union rules on whether a contested London bus lane policy comes within the concept of state aid 

On 14 January 2015, the Court of Justice of the European Union (“CJEU”) handed down its preliminary ruling on a reference from the Court of Appeal of England and Wales on whether a contested London bus lane policy adopted by Transport for London (“TfL”) comes within the concept of state aid under Article 107(1) of the Treaty on the Functioning of the European Union (“TFEU”). In London, both London taxis (“black cabs”) and private hire vehicles (“minicabs”) are vehicles which carry passengers for consideration. However, only black cabs are permitted to “ply for hire”, i.e. solicit or wait for passengers without any pre-booking. In contrast, minicabs can only pick up people who have pre-booked their services. Further, drivers of black cabs are subject to strict standards in relation to their vehicles, their fares and their knowledge of London, whereas those standards do not apply to minicabs. In addition, the traffic authorities, London Boroughs and TfL, have permitted black cabs to use the bus lanes but have prohibited licensed minicabs from doing so during the hours when bus lane restrictions are operational. The cases in the main proceedings stemmed from the penalty charge notices received by Eventech Ltd. (“Eventech”), the registered keeper of all the minicabs of its parent company Addison Lee plc. (“Addison Lee”). The penalty charge notices were served due to the fact that two drivers of Addison Lee minicabs had used a bus lane in central London. Eventech challenged those notices, claiming inter alia that the bus lanes policy constitutes state aid to the operators of black cabs, which is contrary to EU law. The Court of Appeal of England and Wales, before which an appeal was brought, referred to the CJEU questions for a preliminary ruling in order to determine whether the bus lanes policy constitutes state aid. In its preliminary ruling, the CJEU held that the practice of permitting black cabs to use bus lanes, while prohibiting minicabs from doing so, does not appear to be such as to involve a commitment of state resources. The fact that black cabs are not obliged to pay fines because of their use of bus lanes does not involve additional burdens on the public authorities which might entail a commitment of state resources. Further, the CJEU stated that black cabs, because of their legal status, are in a factual and legal situation which is distinct from that of minicabs, and consequently those two categories of vehicles are not comparable. In that context, the bus lane policy does not confer a selective economic advantage on black cabs. Finally, the CJEU noted that it is conceivable that the effect of the practice of permitting black cabs to use bus lanes while prohibiting minicabs from doing so may be to render less attractive the provision of minicab services in London, with the result that the opportunities for undertakings established in other Member States to penetrate that market are thereby reduced. Source:Court of Justice of the European Union Press Release 14/1/2015.

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 joint acquisition of TAG's offshore wind farm steel foundations assets by Bladt and EEW
  • Commission approves two Japanese electricity joint ventures by Oji Green and Itochu Enex
  • Commission approves acquisition of joint control over Neovia by Rhône Capital and Goldman Sachs