Investigations

Dawn raids in the natural gas sector

On 6 June 2016, the Commission carried out dawn raids at the premises of several companies active in the supply and transport of natural gas in Romania. The Commission has concerns that the companies involved may have violated EU anti-trust rules that prohibit cartels and restrictive business practices and/or the abuse of a dominant market position. The Commission is investigating potential anti-competitive practices, in particular relating to suspected anti-competitive behaviour aimed at hindering natural gas exports from Romania to other Member States.

McDonald’s tax arrangements

An EU investigation into McDonald’s tax arrangements with Luxembourg opened in December 2015 and is looking into allegations that McDonald’s ended up avoiding tax in both the US and Luxembourg since 2009. On the basis of two tax rulings given by the Luxembourg authorities, McDonald’s Europe Franchising has paid no corporate tax in Luxembourg since 2009, despite recording profits of more than €250 million in 2013. It is still unclear whether “tax settlements” could also involve illegal State aid.

Decision

Intel files appeal with the Commission

In May 2009, the Commission adopted a decision finding that Intel Corporation abused its dominant position on the x86 central processing units (“CPUs”) market. The decision imposed a fine of €1.06 billion and provides that Intel broke EU anti-trust law by engaging in two types of practices. First, Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel. Second, Intel made direct payments to computer manufacturers to stop or delay the launch of specific products containing a competitor’s x86 CPUs and to limit the sales channels available to these products.

Intel has filed an appeal with the Commission to get the fine overturned or at least get the amount reduced.

EU Policies and Guidance

Commission clarifies scope of EU State aid rules

The Commission has published guidance on when public spending falls within, and outside, the scope of EU State aid control. This guidance will help public authorities and companies to identify when public support measures can be granted without needing approval under EU State aid rules.

The Notion of Aid Notice includes key clarifications on the following:

  • public investment for the construction or upgrade of infrastructure is free of State aid, if it does not directly compete with other infrastructure of the same kind
  • even if infrastructure is built with the help of State aid, there is no aid to its operator and users if they pay a market price
  • EU State aid control focuses on public investments that have effect cross-border
  • public financing of certain cultural activities which are not commercial but provided for free or for a minimal fee, will not be covered by State aid rules
  • if public authorities buy goods or services through tenders, which respect EU rules on public procurement, this is in principle sufficient to ensure that the transaction is free of State aid

News (Ireland)

Directive on anti-trust damages actions

The Department of Jobs, Enterprise and Innovation has recently published a list of EU Directives which are currently being transposed. Drafting of a Statutory Instrument has commenced in relation to Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of the competition law provisions of Member States and of the European Union.

CCPC carrying out a full investigation of PandaGreen’s acquisition of Greenstar

The CCPC has decided to carry out a Phase 2 investigation in relation to the proposed transaction whereby PandaGreen Limited, a wholly-owned subsidiary of Sretaw, would acquire Greenstar.

Practice Note

What are the financial thresholds for mandatory notification to the CCPC?

There are two threshold tests, both of which must be met in order for a mandatory notification to the CCPC to be required. The thresholds are:

  • In the most recent financial year, the aggregate turnover in the State of the undertakings involved is not less than €50 million. The “undertakings involved”, in the case of the Purchaser, means the entire group of undertakings to which the Purchaser belongs. The “undertakings involved” in the case of the Seller means the target company or business being acquired.
  • In the most recent financial year, the turnover in the State of 2 or more of the undertakings involved is not less than €3 million.

If both of these tests are met a mandatory notification must be made to the CCPC.

Merger Determination

Frank Keane (Holdings) / MSL Grange Motors, MSL Ballsbridge Motors and MSL Service Centre (South Dublin) - Volkswagen

This proposed transaction involved the Frank Keane group acquiring sole control of the authorised Volkswagen motor vehicle dealership for South Dublin, which trades as MSL Grange Motors, MSL Ballsbridge Motors and MSL Service Centre (South Dublin) (the “Target”).

The CCPC noted that the two areas of horizontal overlap in the activities of the parties within the State were:

  • The sale of new and demonstration Volkswagen passenger cars and LCVs, including finance services through Volkswagen Bank, aftersales and repair services and the sales of parts and accessories for Volkswagen branded motor vehicles (the “Volkswagen Overlap”).
  • The sale of pre-owned motor vehicles.

The CCPC considered that it was not necessary to define precise relevant markets in this case since the CCPC’s review of the competitive effects of the proposed transaction would be the same regardless of the precise product or geographic market definition adopted. However, in order to examine the competitive impact of the proposed transaction, the CCPC analysed its impact by reference to the two potential product markets outlined above.

The CCPC also examined the competitive impact of the proposed transaction by reference to the geographic areas in which the parties’ respective dealerships are located using the methodology described in previous merger determinations involving Volkswagen dealerships, namely a catchment area with a radius of approximately 90 kilometres or an hour’s journey time.

In relation to the Volkswagen Overlap, within an hour’s journey time from the Target there were 10 other Volkswagen dealerships selling passenger cars, 4 other Volkswagen dealerships selling LCVs and 8 other Volkswagen dealerships offering aftersales services and selling parts and accessories for Volkswagen motor vehicles. Therefore, the CCPC considered that there was a sufficient number of competing Volkswagen dealerships that acted as a competitive constraint.

In relation to the sale of pre-owned motor vehicles, the CCPC noted that most, if not all, motor dealerships in the State sell pre-owned motor vehicles and that other dealerships will act as a competitive constraint on the merger entity. The CCPC therefore considered that there was a sufficient number of competing dealerships selling pre-owned motor vehicles that acted as a competitive constraint.

Brexit

Following the UK Referendum held on the 23 June last, the UK voted to exit the EU.