EU Competition

Summary of Biomet / Zimmer commitments decision published. On 26 February 2016, the European Commission (the Commission) published a summary of its decision to approve the acquisition of Biomet by Zimmer. Both companies are designers and manufacturers of orthopaedic implants. As a condition to Commission approval, Zimmer agreed to divest certain assets in a number of member states to address competition concerns in respect of certain implants.

Commission approves joint venture between Verily and Aventis. On 24 February 2016, the Commission issued a press release confirming that it had approved a joint venture between Verily Life Sciences LLC, a subsidiary of Alphabet Inc. (the holding company of Google Inc.), and Aventis Inc., a subsidiary of Sanofi S.A., under the EU Merger Regulation. The joint venture will offer services for the management and treatment of diabetes and is expected to commercialise certain products, such as specialised continuous glucose monitoring devices, insulin pumps, and insulin.

Appeal against freight forwarders cartel decision dismissed. On 29 February 2016, the General Court handed down its judgment in appeals made by several freight companies against the Commission’s decision finding that they participated in four or more cartels with the objective of price fixing and imposing other trading conditions on international air freight forwarding. The General Court dismissed the appeals in their entirety and upheld the fines imposed by the Commission.

Commission publishes updated statistics on cartel cases. On 1 March 2016, the European Commission published a document setting out statistics about cartel decisions, including the fines imposed.

EU Mergers

Phase I Mergers

  • M.7813 SANOFI / GOOGLE / DMI JV(24 February 2016)
  • M.7822 DENTSPLY / SIRONA (25 February 2016)
  • M.7861 DELL / EMC (29 February 2016)
  • M.7868 TÖNNIES / TICAN (26 February 2016)
  • M.7886 POSTFINANCE / SIX GROUP / SIX PAYNET (19 February 2016)
  • M.7898 ARAUCO / SONAE INDUSTRIA / TAFISA (26 February 2016)
  • M.7912 FLUOR / STORK (24 February 2016)
  • M.7913 ALLIANZ / SPAR / FISCHAPARK (19 February 2016)
  • M.7914 KKR & CO / WEBHELP SAS (1 March 2016)
  • M.7915 AMERICAN SECURITIES / BLOUNT INTERNATIONAL (24 February 2016)
  • M.7916 MACQUARIE CAPITAL / IVANHOE / LOGOS AUSTRALIA / LOGOS CHINA (25 February 2016)
  • M.7924 BELL AG / COOP GROUP / HL VERWALTUNGS-GMBH (26 February 2016)
  • M.7931 PAI PARTNERS / B&B HOTELS (23 February 2016)
  • M.7934 BLACKSTONE / NORSKE SKOG (22 February 2016)
  • M.7938 CATTERTON / L COMPANIES (1 March 2016)
  • M.7939 HDI ASSICURAZIONI / CBA VITA / SELLA LIFE (19 February 2016)
  • M.7939 HDI ASSICURAZIONI / CBA VITA / SELLA LIFE (22 February 2016)
  • M.7940 NETTO / GROCERY STORE AT ARMITAGE AVENUE LITTLE HULTON (26 February 2016)
  • M.7948 HAUPTGENOSSENSCHAFT NORD / ROTH AGRARHANDEL (1 March 2016)

State Aid

Finland approves laws governing investment aid in the renewable energy sector. On 25 February 2016, the Finnish government issued a press release confirming that it had approved the Government Decree on General Terms of Granting Investment Aid for Renewable Energy and New Energy Technology. This approval will enable the country to achieve its national and EU targets by 2030, including halving its use of imported oil for domestic purposes. The Government intends to allocate EUR 80 million during the course of 2017–2018 and is inviting applications for aid over EUR 5 million, in respect of new energy technology and advanced transport biofuel projects, to be submitted by 18 March 2016.

General Court dismissed appeal against Italian state aid granted to ACC Compressors SpA. The General Court has dismissed an appeal brought by Secop GmbH against a Commission decision that found Italian refinancing aid provided to ACC Compressors SpA (in special administration) to be compatible with EU state aid rules. Despite the Commission Guidelines stating that "rescue aid is a one-off operation primarily designed to keep a company in business for a limited period," the General Court found that the Commission had not made a manifest error in failing to find that the grant of further aid would merely “prolong the inevitable.”

New state aid recovery interest and reference rates effective as of 1 March 2016. On 20 February 2016, the Commission published a European Commission notice on state aid recovery interest rates and reference/discount rates for all EU member states. Rates have been reduced for all 19 Eurozone member states but all others remain unchanged.

EU Trade

Commission report confirms EU has met trade policy objectives for global development set in 2012. The Commission published a report on 25 February 2016 in which it confirms that the EU has met 33 of the objectives set out in the 2012 “Trade, Growth and Development” policy. According to the report, the EU has improved its one-way trade preferences, delivered on its Aid for Trade financial commitments, reinforced the sustainable development dimension in its trade policy instruments, and progressed on development-oriented trade agreements. A record €11.7 billion contribution to aid for trade in 2013 accounted for a third of the world-wide donors' spending.

MEPs back emergency plans to allow more duty-free olive oil imports to help Tunisia, subject to safeguarding the effects on the EU market. The European Parliament issued a press release on 25 February 2016 confirming that emergency measures have been approved to allow an additional 70,000 tonnes of virgin olive oil to be imported duty free into the EU from Tunisia over the course of 2016–2017. The measures have been introduced in order to help Tunisia strengthen its economy following the 2015 terrorist attacks. The Commission will conduct a mid-term assessment of the effects of the measures to ensure they do not harm EU olive oil producers.

Public Procurement

AG opinion: The automatic extension of concessions on state land infringes EU law. On 25 February 2016, Advocate General Szpunar delivered his opinion on whether the Italian Government’s automatic extension of exclusive rights for the commercial exploitation of state-owned land (amounting to “concessions” under national law) breached EU Directives regulating tendering processes. In particular, the state was extending the authorisations, and effectively deferring the tendering procedure on the grounds of “public interest”. As a result, Advocate General Szpunar considered that while Member States may take into account the public interest when establishing their selection procedure, they are not permitted to cite public interest considerations as grounds for refraining from establishing the procedure.

Procurement rules for European Central Bank Published. On 20 February 2016, the Commission published its decision setting out procurement rules for the European Central Bank (ECB). The decision effectively reasserts the existing rules on the award of supply and services contracts following several amendments made by certain Directives.

UK Competition

CMA memorandum of understanding on competition concurrency with sector regulators.On 24 February 2016, the Competition and Markets Authority (CMA) published a series of memoranda of understandings (MoU) with each of the Office of Communications (Ofcom), the Water Services Regulation Authority (Ofwat), the Gas and Electricity Markets Authority (Ofgem), the Office of Rail and Road (ORR), the Civil Aviation Authority (CAA), and the Northern Ireland Authority for Utility Regulation (NIAUR). In December 2015, the CMA also entered into MoUs with the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR). The MoUs help to promote cooperation and coordination, facilitate the efficient and effective handling of cases, ensure sufficient expertise in handling competition cases, and the effective allocation of resources.

CMA consults on draft Cement Market Data Order and undertakings following aggregates, cement and ready-mix concrete market investigation. On 25 February 2016, the CMA published for consultation a draft of the Cement Market Data Order 2016 and undertakings which result from the Competition Commission’s (CC) investigation into the supply or acquisition of aggregates, cement and ready-mix concrete in GB. These are designed to address the CC’s concerns that there were structural and conduct features of the GB cement markets which gave rise to an adverse effect on competition through co-ordination by cement producers in such markets. In particular, the draft Order prohibits cement producers from publishing historic data on the production volumes or sales of cement in GB relating to a single cement producer.

High Court judgment on disclosure in damages action against Servier. On 26 February 2016, the High Court in England handed down its judgment in relation to a number of disputed issues on disclosure by Servier to the English, Welsh, Scottish and Northern Irish health authorities in their action for damages for an alleged breach of Article 101 and 102 of the TFEU. The Commission had previously fined Servier and five generic competitors nearly EUR 428 million for concerted practices which delayed generic entry of perindopril. The court had originally ordered for standard disclosure limited in the first instance to documents on the Commission’s file that were within Servier’s control. Following this judgment, Servier is now ordered to provide standard disclosure by list in respect of among other things, the claimants’ claims for breach of Article 102 TFEU and issues of causation and quantum, as although a considerable number of the documents on the Commission’s file would be relevant, disclosure of such documents alone would be partial and incomplete. The Court considered the fact that proceedings had been brought in the public interest by UK health authorities rather than a competitor. The court however, ruled against enhanced disclosure at the current stage, as in its view, this would be premature as the material already provided in the Commission’s files had not yet been carefully considered, and some of this material was in itself significant in supporting the claimants’ case.

CMA publishes Phase 2 customer research survey for Celesio/Sainsbury’s pharmacy business merger. On 1 March 2016, the CMA published a customer research survey commissioned for the purposes of examining Celesio’s acquisition of Sainsbury’s UK pharmacy business. The survey found that customers mainly visited both pharmacies to pick up or drop off prescriptions; Lloyd’s customers were more likely to collect urgent and separate medicines; and Sainsbury’s customers were more likely to make other purchases in addition to their prescription products. It was reported that almost three quarters of customers would have still visited Sainsbury’s even if the pharmacy was closed.

Speeches & Publications

Belarus Sanctions. On 25 February 2016, the European Council announced that it had delisted 170 people and three companies previously subject to restrictive measures. The decision was taken in response to the release of all Belarusian political prisoners on 22 August 2015, and in a context of improved EU-Belarus relations.