EU Antitrust

Commission consults on the functioning and future of the Insurance Block Exemption Regulation. On 5 August 2014, the Commission announced that it had issued a questionnaire to seek views on the functioning and future of the Insurance Block Exemption Regulation (IP/14/905). The current block exemption expires on 31 March 2017. The Commission must report to the Council and European Parliament by March 2016. The Commission invites views, information, and evidence on relevant market developments; the extent of use of the block exemption; and the impact of the block exemption. In particular, the Commission seeks views on the policy options of renewing, partially renewing or not renewing, the current block exemption. Responses are invited by 4 November 2014.

Cartels

Kendrion brings damages action for excessively long court proceedings. On 4 August 2014, details were published of an action brought by Kendrion N.V. to claim damages for harm suffered as a result of delay by the European Courts in adjudicating its appeal against the industrial bags cartel (OJ-2014 C253/63). In a judgment in November 2013, dismissing Kendrion’s appeal against the cartel decision, the European Court of Justice ruled that the General Court had failed to adjudicate within a reasonable time in this case. Kendrion is seeking damages as a result of this failure.

EU Mergers

Summary of prohibition decision in Deutsche Börse / NYSE Euronext merger published. On 5 August 2014, a summary of the Commission’s 2012 decision under Article 8(3) of the EU Merger Regulation to prohibit the proposed merger between Deutsche Börse and NYSE Euronext (COMP/M.6166) was published in the Official Journal (OJ-2014 C254/8). The Commission found that the transaction would have given rise to the creation of the biggest stock exchange in the world in terms of revenue, combining the current numbers two and three in size, and implied a merger to monopoly in a number of markets for trading and clearing services. The parties already had predominant positions in trading of single equity derivatives and equity index derivatives.

Phase I Clearance

M.7284 – Rolls-Royce / Siemens (04.08.2014)

M.7285 – Visteon Corporation / Cerberus Group (05.08.2014)

M.7305 – Delek Europe B.V. / TDR Capital LLP (05.08.2014)

M.7309 – Edmond de Rothschild Capital Partners / Bridgepoint Advisers Group Limited (04.08.2014)

M.7315 – CWT B.V. / Carlson, Inc. (06.08.2014)

M.7320 – Domusvi Dolcea Participations SAS / PAI Partners SAS (04.08.2014)

M.7324 – CLECE, S.A. / ACS Actividades de Construcción y Servicios, S.A. (04.08.2014)

State Aid

Commission approves Greek financing of ELTA until 2015 but opens in-depth investigation for period to 2020. On 1 August 2014, the Commission announced that it has decided to approve Greek financing for the operation of the universal postal service by ELTA for the period 2013 to 2015 (IP/14/899). The Commission is satisfied that the compensation paid during this period will only cover ELTA’s costs in carrying out its public service obligations. However, the Commission has opened an in-depth investigation in relation to a compensation mechanism that will apply from 2016 to 2020. It is concerned about the levels of compensation that ELTA’s competitors will be required to pay under this mechanism. The Commission intends to investigate whether this may distort competition in the Greek postal market by giving ELTA an undue advantage.

Commission approves resolution aid for Banco Espirito Santo. On 4 August 2014, the Commission announced that it has decided, under the state aid rules, to approve aid granted by Portugal to support the resolution of Banco Espírito Santo (BES) (IP/14/901). Under the resolution plan, bad assets and debt will remain within BES, which will be wound down. A Bridge Bank will be created to which BES’s sound business activities will be transferred. The Commission concluded that the capitalisation of the Bridge Bank in the context of the resolution plan is in line with its 2013 Banking Communication on the grant of state aid to banks in the context of the financial crisis.

UK Antitrust

CAT judgment on appeals against Ofcom Ethernet dispute determinations. On 1 August 2014, the Competition Appeal Tribunal (CAT) handed down its ruling on appeals by BT, Cable & Wireless Worldwide, Virgin Media and Verizon, and Sky and TalkTalk to challenge the determination by the Office of Communications (Ofcom) of disputes relating to BT’s charges for wholesale Ethernet services. The CAT has allowed BT’s appeal, in so far as it claimed, that Ofcom should have adjusted BT’s rental costs in respect of the exclusion of excess construction costs. It has also allowed the appeals by the other communications providers in so far as they claimed that Ofcom should have ordered that BT pay interest on the amount overcharged. However, the CAT has dismissed all other grounds of appeal.

Final Emerson damages claim settled. On 5 August 2014, the CAT published an order consenting to the withdrawal of the damages claim brought by Emerson Electric Co and Valeo SA against Morgan Advanced Materials plc (formerly Morgan Crucible Company plc). The claimants were seeking damages resulting from the carbon and graphite cartel. The CAT states that the claimants and Morgan have agreed upon a confidential settlement.

Ofcom to resolve dispute between Cloud9 and Vodafone about charges under Roaming Regulation. On 4 August 2014, Ofcom announced that it was to resolve a dispute between Cloud9 and Vodafone about whether it is permissible for Vodafone to require Cloud9 to pay certain connection and on-going charges in order to become an Alternative Roaming Provider. Ofcom intends to resolve this dispute under Regulation 10(2) of The Mobile Roaming (European Communities) Regulations 2007.

UK Mergers

CMA announces cancellation of reference of Pure Gym / The Gym merger. On 1 August 2014, the Competition and Markets Authority (CMA) announced that the Phase 2 merger reference in relation to the anticipated merger of Pure Gym Limited and The Gym Limited. The Phase 2 merger reference was made on 26 June 2014. Under the new powers introduced by the Enterprise and Regulatory Reform Act 2013 (section 39(8A), Enterprise Act 2002, the parties requested that the reference period be suspended as there was a possibility of the arrangements being abandoned. The CMA granted this request. The CMA has received assurances from Pure Gym and The Gym that the proposed merger has been abandoned.

Monitor publishes guidance notes on merger benefits and transactions. On 4 August 2014, Monitor announced that it had published (1) guidance on its approach to assessing merger benefits and (2) guidance in relation to mergers involving NHS foundation trusts that are caught by the Enterprise Act 2002. Monitor emphasises the importance of early engagement by the parties so that Monitor can help providers make sure that any transaction proposal works well for patients from both good governance and competition perspectives.