Commission fines cargo train operators in cartel settlement. On 15 July 2015, the European Commission announced that it has fined two cargo train operators, Express Interfracht and Schenker, a total of EUR49 million in a cartel settlement proceeding. Both Express Interfracht and Schenker received reductions in their fines for cooperating with the investigation and their respective fines were further reduced by a fixed 10% in accordance with the EU settlement process. A third company, Kuhne+Nagel, was not fined as it was granted for revealing the existence of the cartel. The Commission found that the three operators fixed prices and allocated customers for their Balkantrain and Soptrain services in Europe for almost eight years.
General Court judgments in two heat stabilisers cartel appeals. On 15 July 2015, the General Court handed down its judgments on appeals by various Akzo Nobel entities (together, Akzo Nobel) and GEA Group AG (GEA Group) (judgment not yet available in English) against the European Commission’s decision relating to the heat stabilisers cartel. In relation to Akzo Nobel, the General Court partially upheld Akzo Nobel’s appeal. In particular, the General Court found that the limitation period had expired in respect of Akzo GmbH and Akzo BV and ordered that the provisions in the Commission’s decision must be annulled in respect of the fines imposed on Akzo GmbH and Akzo BV for the relevant infringement period. The General Court also found that the total fines imposed on Akzo NV and Akcros should be reduced by 1% because the Commission had infringed the principle of equal treatment in relation to Akzo Nobel. However, the General Court dismissed the remainder of Akzo Nobel’s and dismissed the GEA Group’s appeal in its entirety. In particular, the General Court rejected GEA Group’s arguments that the Commission erred in its assessment of the duration of the cartel and was, therefore, timebarred from imposing fines. On the same day, the General Court upheld two appeals brought by Akzo Nobel and the GEA Group (judgment not yet available in English) against two decisions of the Commission to amend the original decisions sent to the applicants relating to the abovementioned heat stabilisers cartel.
General Court judgments on prestressing steel cartel appeals. On 15 July 2015, the General Court handed down ten judgments on 12 appeals against the European Commission’s decision on the prestressing steel cartel. The General Court dismissed most of the appeals in their entirety, rejecting arguments about alleged errors in the Commission’s attribution of liability for the cartel, the duration of the cartel and the calculation of the fines imposed on a number of companies. However, the General Court found that the Commission erred in its calculation of the fine for which it held Ori Martin jointly and severally liable with SLM. According to the General Court, the Commission incorrectly took account of sales achieved in countries not covered by the cartel. On this basis, the General Court reduced the level of the fine imposed on Ori Martin. In addition, the General Court found that the Commission had incorrectly established the participation of one company, Voestalpine Austria Draht, in essential parts of the cartel, leading to a reduction in the fines imposed on Voestalpine Austria Draht and its parent company Voestalpine. None of the other fines imposed were reduced. In three cases, the General Court identified certain errors in the calculation of the fine but, according to the General Court, this did not affect the fine to be paid by the relevant companies. In another case, the General Court found that the Commission had erred in its assessment of the companies’ inability to pay the fine. However, on its own assessment, the General Court rejected the appellants’ claims about the impact of the fine on their financial position.
General Court judgments in appeals against Commission rejection of confidentiality requests in car glass cartel. On 15 July 2015, the General Court handed down its judgments on the appeals by Pilkington Group Ltd (Pilkington) and AGC Glass Europe SA (AGC) against a decision of the Hearing Officer of the European Commission to afford confidential treatment to certain information to be published in the car glass cartel decision. In relation to Pilkington’s appeal, the General Court partially annulled the Hearing Officer’s decision insofar as it related to disclosure of one recital to the car glass decision because, according to the General Court, the Commission had already accepted that request for confidentiality. However, the General Court dismissed the other arguments brought by Pilkington. In particular, it did not agree that the relevant information was covered by the obligation of professional secrecy, as such information did not constitute an essential element of Pilkington’s commercial position and Pilkington had chosen to renounce any secrecy by communicating it directly to its competitors. In relation to AGC’s appeal, the General Court rejected all of AGC’s arguments. The General Court also did not agree that the Commission’s 2006 and/or 2002 leniency notices created a legitimate expectation that information voluntarily provided to the Commission by a leniency applicant would remain confidential even at the stage of publication of the Commission’s decision.
ECJ preliminary ruling on whether number of people affected impacts the application of Article 101. On 16 July 2015, the ECJ handed down its ruling on a preliminary reference from a Romanian court on whether the number of people potentially affected by an anticompetitive agreement has an impact on whether the agreement infringes Article 101 of the TFEU. The ECJ concluded that Article 101(1) of the TFEU must be interpreted as meaning that agreements to share clients, such as those concluded between the private pensions funds in the main Romanian proceedings, constitute agreements with an anticompetitive object. However, according to the ECJ, the number of clients affected by such an agreement is irrelevant when assessing the restriction of competition within the internal market for the purpose of Article 101 of the TFEU.
Commission opens two formal Article 102 investigations into Qualcomm’s practices. On 16 July 2015, the European Commission announced that it has opened two formal investigations to examine whether chipset supplier, Qualcomm, has abused a dominant market position. The investigations concern baseband chipsets, which are used to process communication functions in smartphones, tablets and other mobile broadband devices. In the first investigation, the Commission is examining whether Qualcomm has granted payments, rebates or other financial incentives to its customers on condition that they purchase all or a significant part of their baseband chipsets requirements from Qualcomm. In the second investigation, the Commission is assessing whether Qualcomm has engaged in predatory pricing by selling certain chipsets at prices below costprice.
Phase I Mergers
- M.7541 IAG / AER LINGUS (14/07/2015)
- M.7657 COOP GENOSSENSCHAFT / SWISSCOM / EOS COMMERCE JV (16/07/2015)
Commission approves fourth prolongation of Portuguese Guarantee Scheme on European Investment Bank lending. On 15 July 2015, the European Commission announced that it has decided to prolong until 31 December 2015 the Portuguese Guarantee Scheme on European Investment Bank (EIB) lending. The scheme, which was originally approved in June 2013 and has been prolonged three times previously, covers state guarantees to banks that guarantee EIB loans for companies in Portugal. According to the Commission, the further prolongation of the scheme is in line with the Commission’s guidelines on state aid to banks during the crisis because the scheme is well targeted, proportionate and limited in time and scope. The prolonged scheme will allow the continuation of funding provided by the EIB to the real economy and prevent the disruption of the credit granted by the EIB through the banks participating in the scheme.
Commission approves aid for nine gas pipelines in Poland. On 17 July 2015, the European Commission announced that it has approved Poland’s plans to grant aid of EUR758 million for nine gas projects in Poland. In particular, the Commission has found that the public funding for the nine projects furthers objectives of common interest, in compliance with EU state aid rules, in particular those objectives set out in the Commission’s 2014 Environmental Protection and Energy State Aid Guidelines. According to the Commission, a number of the proposed projects will increase the diversification of gas supply in Poland and the rest of the projects will contribute to an increase in the overall level of security of supply in Poland by eliminating bottlenecks and providing additional capacity to the existing gas networks.
Commission grants exemption from Utilities Directive for exploration for oil and gas in Greece. On 10 July 2015, the European Commission published a decision finding that Directive 2004/17 (the Utilities Directive) shall not apply to contracts awarded by contracting entities and intended to enable the exploration for oil and natural gas to be carried out in Greece. The Commission found that access to the market is not restricted as Greece has implemented the relevant EU legislation. In addition, exploration for oil and gas in Greece is directly exposed to competition. Greece has a negligible share of oil and natural gas reserves and the global exploration market is not highly concentrated.
CMA announces decision to continue with investigation into anticompetitive practices in commercial catering sector. On 13 July 2015, the Competition and Markets Authority (CMA) updated its administrative timetable in relation to its ongoing investigation into suspected breaches of both the Chapter I prohibition of the Competition Act 1998 and Article 101 of the TFEU in the commercial catering sector. Having undertaken further investigation and analysis, the CMA has decided to continue with the investigation into alleged vertical arrangements between certain suppliers and resellers in the commercial catering sector.
CMA issues statement of objections to Consultant Eye Surgeons Partnership following settlement. On 14 July 2015, the CMA announced that it has sent a statement of objections to Consultant Eye Surgeons Partnership Limited (CESP), which has admitted breaches of the Chapter I prohibition of the Competition Act 1998 and Article 101 of the TFEU. The CESP is a membership organisation for private consultant ophthalmologists. It has admitted to a number of information exchange and pricing infringements, including recommending that its members refuse to accept lower fees offered by an insurer, circulating detailed price lists, and facilitating the sharing of consultants’ future pricing and business intentions. Under the terms of a settlement procedure, the CESP has agreed to pay a fine of £500,000, which will be reduced to £425,000 if the CESP continues to cooperate with the CMA. The CMA also states that the fine may be further reduced in the final decision if the CMA is satisfied that the CESP has implemented a suitable compliance programme. According to the CMA, it intends to issue its infringement decision in August 2015.
UK Supreme Court refuses Ryanair permission to appeal against Court of Appeal judgment upholding final report on acquisition of minority stake in Aer Lingus. On 14 July 2015, the Supreme Court announced that it has refused Ryanair’s application for permission to appeal the Court of Appeal judgment in its challenge to the Competition Commission’s final report on Ryanair’s acquisition of a minority stake in Aer Lingus. The Competition Appeal Tribunal (CAT) dismissed Ryanair’s application for review of the final report in March 2014. On 12 February 2015, the Court of Appeal upheld the CAT’s judgment. Ryanair had applied for permission to appeal to the Supreme Court on legal issues relating to whether the objective of a divestiture remedy is to remove any possibility (as opposed to probability) of a substantial lessening of competition, alleged procedural unfairness and the duty of sincere co operation in Article 4(3) of the TEU. The Supreme Court refused permission on the basis that Ryanair’s application did not raise a point of law of general public importance which ought to be considered by the Supreme Court at this time bearing in mind that the case has already been the subject of judicial decision and reviewed on appeal.
CAT dismisses Ryanair appeal against CMA no material change of circumstance decision. On 15 July 2015, the CAT dismissed an application by Ryanair for a review of the decision of the CMA that found that there were no material changes of circumstances that necessitated revising the divestment remedy in the Competition Commission’s final report on the completed acquisition by Ryanair of a minority stake in Aer Lingus. The CAT found that the CMA had not applied the wrong test in assessing whether there was a material change of circumstances. According to the CAT, the CMA was not, as claimed by Ryanair, required to conduct a new assessment with regards to proportionality in relation to the implementation of remedies that it had found to be proportionate in its final report. The CAT also concluded that the CMA’s decision was not irrational. The CAT found that, in the exercise of the CMA’s discretion, the CMA was entitled to reach the conclusion that the proposed bid and formal offer for Aer Lingus by IAG did not constitute a material change of circumstances.
CAT ruling on costs and permission to appeal in Ryanair appeal against CMA no material change of circumstance decision. On 15 July 2015, the CAT published a ruling on costs and permission to appeal, following its judgment dismissing Ryanair’s application for review of the CMA’s decision that there were no material changes of circumstances requiring revision of the remedies in the Ryanair/Aer Lingus merger. The CAT has refused an application by Aer Lingus (as intervener) for its costs. Whilst the CAT recognised that Aer Lingus had been successful and had incurred significant costs in relation to this intervention, the CAT held that such costs were incurred to protect Aer Lingus’ own position. The CAT also rejected Ryanair’s application for permission to appeal on the basis that such an appeal had no realistic prospect of success.