EU Mergers

Phase I Mergers

  • M.8123 TOTAL / LAMPIRIS  (8 September 2016)

EU Competition 

Summary of container shipping commitments decision published. On 6 September 2016, the European Commission (Commission) published in the Official Journal a summary of its decision under Article 9 of Regulation 1/2003 to make legally binding commitments offered by 14 container liner shipping companies to address competition concerns in relation to their publication of future pricing intentions. The binding commitments address the Commission’s concerns that the parties’ practice of publishing future price increases of certain routes on their websites, via the press, or in other ways, allowed competitors to potentially co-ordinate pricing behaviour, leading to high prices across the advertised routes. The Commission considered that this practice might constitute a concerted practice in breach Article 101 of the Treaty on the Functioning of the European Union (TFEU). Under the commitments, the shipping companies have offered to: (i) stop generally publishing and communicating their respective price increases; (ii) make pricing more transparent for customers; and (iii) limit the time window for any price announcements. The agreed commitments will apply for a period of three years, commencing on 7 December 2016.

ECJ dismisses Pilkington’s appeal against car glass cartel calculation of fines. On 7 September 2016, the European Court of Justice (ECJ) dismissed the appeal brought by Pilkington against a General Court judgment that upheld a fine imposed by the European Commission for Pilkington’s involvement in the car glass cartel. The ECJ dismissed Pilkington’s claim that the General Court erred in finding that the Commission could take into account, in calculating the basic level of the fine, sales made during the infringement period on the basis of contracts concluded prior to that period. The ECJ held that the overall plan of the cartel was to allocate all supplies of automotive glass between the cartel participants, with respect to both existing supply contracts and new contracts. As a result, the ECJ found that sales made pursuant to contracts that pre-dated the infringement period and had not been renegotiated during that period had to be regarded as coming within the scope of the cartel and could be taken into account when determining the fine. The ECJ held that the Commission was entitled to use the average exchange rate for the business year prior to the adoption of the decision, rather than at the date of the decision, for the purpose of calculating the 10% cap on the fine. The ECJ also held that the General Court had not erred in rejecting arguments that the fine imposed on Pilkington was unequal or disproportionate due to the fact that Pilkington’s activity was less diversified than the other cartel participants. According to the ECJ, it is not contrary to the principles of proportionality and equal treatment that an undertaking, the activities of which are more focused than others on the sale of goods or services connected to the infringement, may receive a fine that represents a proportion of its overall turnover that is greater than that imposed on the other undertakings. Therefore, the ECJ held that the General Court had not failed to exercise its unlimited jurisdiction to reduce the fine on these grounds.

General Court dismisses Lundbeck “pay for delay” appeals. On 8 September 2016, the General Court handed down judgments dismissing the appeals by Lundbeck and several producers of generic medicines against a Commission decision that found that the companies had breached Article 101(1) of the TFEU by agreeing to prevent the market entry of a generic antidepressant medicine. In its judgments, the Court held that the Commission was correct to find that Lundbeck and the generics companies were potential competitors at the time the agreements were entered into. The Court also found that the Commission was correct in finding that the agreements between the competitors constituted a restriction of competition by object. According to the Court, the Commission had correctly assessed the role of the payments made by Lundbeck to the generics companies, which provided an incentive to those companies not to continue their independent efforts to enter the market. The Court also found that Lundbeck had not demonstrated that the restrictions set out in the agreements were objectively necessary to protect its intellectual property rights. It also rejected arguments relating to the scope of the patent protection, the application of Article 101(3), alleged breaches of rights of defence and alleged errors in imposing and calculating the fines. The Court upheld the fines imposed by the Commission in their entirety.

General Court dismisses appeal by Goldfish and Heiploeg against the Commission regarding North Sea shrimps traders cartel. On 8 September 2016, the General Court handed down its judgment (not yet available in English) dismissing the appeal by Goldfish BV, Heiploeg BV, Heiploeg Beheer BV and Heiploeg Holding BV against the Commission in relation to the North Sea shrimps trader price-fixing cartel. The General Court found that recordings obtained by the Commission during the course of an unannounced investigation were legally acquired and that the Commission had not breached Article 101 of the TFEU by relying on the recordings as evidence for its cartel decision, this being the case even if the recordings were made illegally by a competitor. The General Court also dismissed the appellants’ argument that the Commission failed to take into account their inability to pay the fine imposed by the Commission.

UK Competition

CMA accepts final undertakings in Iron Mountain/Recall merger. On 7 September 2016, the Competition and Markets Authority (CMA) announced that it has accepted final undertakings from Iron Mountain Inc. (Iron Mountain) in relation to its completed acquisition of Recall Holdings Limited (Recall). Following a Phase 2 investigation, the CMA found that the acquisition may be expected to result in a substantial lessening of competition in the Aberdeen and Dundee areas by reducing alternatives for customers of records and information management services, as well as in the supply of specialist services to oil and gas customers in the Aberdeen area. As a result, the CMA decided that Iron Mountain would be required to sell Recall’s existing operations in Aberdeen and Dundee to a buyer to be approved by the CMA. The CMA consulted on its intention to accept the divestment undertakings on 10 August 2016. In its most recent announcement, the CMA states that it received no representations on the draft undertakings on which it consulted. Therefore, the CMA has decided to accept those undertakings as final undertakings in the form consulted.

CMA accepts undertakings in lieu of reference in Tullett Prebon / ICAP merger. On 8 September 2016, the CMA announced that it has accepted undertakings from Tullett Prebon and ICAP plc in lieu of referring the proposed acquisition of ICAP’s voice and hybrid broking and information businesses to a Phase 2 investigation under the Enterprise Act 2002. In its Phase 1 investigation, the CMA found that the merger may be expected to result in a realistic prospect of a substantial lessening of competition in the supply of voice/hybrid broking in relation to oil trading desks. As a result of its Phase 1 findings, the CMA consulted on proposed undertakings in lieu of reference to a Phase 2 investigation in August 2016. The undertakings proposed the divestment of ICAP’s London-based oil desks, together with the key employees. This divestment proposal was subject to the purchaser being approved up-front by the CMA, and the CMA noted that the parties had already entered into an agreement with INTL FCStone Ltd concerning the proposed divestment. In its most recent announcement, the CMA stated that it has received no submissions during the consultation period and that it remains satisfied that the proposed divestment remedy will address the CMA’s competition concerns. The CMA has therefore decided that the proposed transaction will not be referred to a Phase 2 investigation.