EU Mergers

Phase I Mergers

  • M.7764  EDF / AREVA REACTOR BUSINESS (29 May 2017)
  • M.8297 GE / BAKER HUGHES (31 May 2017)
  • M.8450 SHANGHAI SHENDA / IAC ST&A BUSINESS (24 May 2017)
  • M.8471 BC PARTNERS / PSC / SHAWBROOK (1 June 2017) 
  • M.8477 LGP / OMERS / OPE CALIBER HOLDINGS (1 June 2017)

EU Competition

Commission conditionally approves Vivendi’s acquisition of Telecom Italia. On 30 May 2017, the European Commission (Commission) approved the acquisition of de facto control over Telecom Italia by Vivendi, subject to conditions. Telecom Italia provides voice and data services, as well as being active in the market for wholesale access to digital terrestrial networks for TV broadcast through its subsidiary, Persidera. Vivendi controls a group of companies active in the music, TV, cinema, video sharing, and games businesses. Vivendi also has a minority stake in Mediaset, which is active in the market for the wholesale access to digital terrestrial networks for the broadcast of TV channels. The Commission found that due to the significant shares of Persidera and Mediaset in the market for wholesale access to digital terrestrial television networks, Vivendi may have an incentive to raise the prices charged to TV channels. This could be achieved either directly through Persidera or indirectly via the minority shareholding in Mediaset, since other players active in the market do not represent a viable alternative. In order to address the Commission’s concerns, Vivendi has committed to divest Telecom Italia’s stake in Persidera. The Commission concluded that the transaction, as modified by this commitment, would not significantly reduce competition and therefore conditionally approved it.

General Court annuls Chinese tartaric acid tariff imposed on Changmao. On 1 June 2017, the General Court annulled the regulation which imposed a definitive anti-dumping duty on imports of tartaric acid originating in the People’s Republic of China in so far as it applied to Changmao Biochemical Engineering Co. Ltd (Changmao). Tartaric acid is used in the production of wine and other beverages, as a food additive and as a retardant in plaster. In 2004, the Commission received a complaint regarding dumping in the tartaric acid sector and in 2006 definitive anti-dumping duties were imposed on imports of tartaric acid originating in the People’s Republic of China. Changmao challenged the European Council’s (Council) imposition of the tariffs. In its appeal to the General Court, Changmao raised five pleas in law, including an argument that the Council had infringed their rights of defence by refusing to supply meaningful information in relation to how the dumping level was calculated. Although Changmao’s first four pleas were dismissed, the General Court agreed that the Council should have granted Changmao access to the information requested. On this ground, the General Court annulled the anti-dumping duties which had been imposed on Changmao. At the same time however, the General Court concluded that Changmao should still bear half the costs as the action was only upheld in part.

State Aid

Commission approves Swedish investment aid for commercial airport. On 29 May 2017, the Commission approved Swedish plans to grant €29.9 million in investment aid in order to build a commercial airport in Sälen, Sweden.  The plans were approved under EU state aid rules. The Commission found that the airport will improve connections in the Scandinavian mountains region, whilst preserving competition. The airport will be built on an existing airfield site and private investors will fund the remainder of the project.  

UK Competition

CMA announces anticipated acquisition by Capita of Vodafone has been abandoned. On 30 May 2017, the Competition and Markets Authority (CMA) announced that the anticipated acquisition by Capita plc (Capita) of the UK one-way wide-area paging (WAP) services business of Vodafone Ltd (Vodafone) has been abandoned. In its investigation, the CMA found that Capita and Vodafone are the only suppliers of one-way WAP services in the UK. These services allow customers to send or broadcast short messages to pager devices over a wide area and they are used in both the public and private sectors, including by healthcare providers and the emergency services. The parties combined share of supply would be 100% and the CMA found that alternative technologies are not suitable substitutes to one-way WAP services. The CMA therefore concluded that the merger would give rise to a realistic prospect of a substantial lessening of competition and decided to refer the merger to an in-depth Phase 2 investigation, unless undertakings were offered in lieu. Capita and Vodafone have since confirmed that the transaction has been abandoned and, as a result, the CMA will no longer make a reference.      

CAT publishes order following judgment against the Law Society. On 30 May 2017, the Competition Appeal Tribunal (CAT) published an order following its judgment in the damages claim brought by Socrates Training Limited (Socrates) against The Law Society of England and Wales (the Law Society). On 26 May 2017, the CAT found that the Law Society breached Chapter 1 and Chapter 2 of the Competition Act 1998 by requiring Conveyancing Quality Scheme (CQS) members to obtain training in mortgage fraud and anti-money laundering exclusively from the Law Society. The CAT has ordered the Law Society to pay Socrates’ costs of mediation up to £4,000 as well as Socrates’ share of the mediator’s fees. The Law Society will also pay Socrates’ costs for the CAT proceedings up to a maximum of £230,000. These costs will be assessed on a standard basis if they cannot be agreed. The CAT stayed the proceedings for two months in order for the parties to agree damages.     

CMA grants derogation to Co-operative Bank in relation to Retail Banking Market Investigation Order. On 31 May 2017, the CMA granted a derogation to the Co-operative Bank plc (Co-op Bank) in respect of the Retail Banking Market Investigation Order 2017 (the Order). Part 6 of the Order requires qualifying personal current account providers to provide automatic enrolment into overdraft alerts. Such alerts let customers know when they are exceeding their overdraft limits. Under Article 6 of the Order, personal current account providers who do not currently have an alert capacity may apply to the CMA for a temporary derogation from the requirement. The derogation can delay the requirement for up to six months. The Co-op Bank submitted an application for derogation to the CMA and, after reviewing the application, the CMA found that the Co-op Bank does not currently have an alert capacity which could comply with Part 6 of the Order. The CMA therefore granted the derogation meaning that when the provisions come into force, the Co-op Bank will not have to apply them for another five months. 

CMA decides not to make a market investigation reference in relation to the supply of care homes. On 1 June 2017, the CMA published a notice of its decision not to make a reference under section 131 of the Enterprise Act 2002 in relation to the supply of care homes in the UK. Under section 131, the CMA can make a reference to the Commission if it suspects a feature of a certain market in the UK prevents, restricts or distorts competition. In December 2016, the CMA published a notice of its market study into the supply of care homes which seeks to examine how well the market is working, including whether care home providers are treating residents fairly. The CMA invited any persons wishing to make representations on whether the CMA should make a reference under section 131 to do so by 16 January 2017. However, no such representations were made and the CMA consequently did not make a market investigation reference under section 131. 

UK Cartel

CMA issues final infringement decision on estate agent cartel. On 31 May 2017, the CMA announced that it has issued its final infringement decision which found six estate agents breached Chapter 1 of the Competition Act 1998 by participating in an illegal cartel. The CMA imposed fines totalling £370,084 on Abbott and Frost Estate Agents Limited (Abbott and Frost), Gary Berryman Estate Agents Ltd (Garry Berryman), Greenslade Taylor Hunt (GTH), Saxons PS Limited (Saxons), and West Coast Property Services (UK) Limited (West Coast). The sixth estate agent Annagram Estates Limited was not fined as it was the first to confess its participation in the anti-competitive agreement and cooperated with the CMA. On 2 March 2017, Abbott and Frost, Gary Berryman, GTH, and West Coast reached a settlement agreement with the CMA and the fines imposed on them include a discount to reflect their cooperation. The fines for West Coast and GTH were also reduced under the CMA’s leniency policy.