EU Competition

General Court rules that Commission erred in rejecting tender due to alleged conflict of interests. On 13 October 2015, the General Court handed down its judgment on an action by Intrasoft International SA (Intrasoft) to challenge a decision to reject its bid in a public tender. In a letter, the contracting authority, the Commission, informed Intrasoft that the contract could not be awarded to the consortium of which Intrasoft was a part, as Intrasoft had privileged access to a certain number of documents constituting an integral part of the tendering procedure. Such privileged access was linked to Intrasoft’s participation in drafting numerous documents under an earlier tendering procedure; therefore, the contracting authority considered there to be a conflict of interests. The General Court concluded, in favour of Intrasoft, that the risk of a conflict of interests had not been objectively established. Additionally, it was not shown that Intrasoft was in possession of more information than the other tenderers, which would have amounted to a breach of the principles of equal treatment and of transparency. Furthermore, the contracting authority had not conducted a specific assessment of Intrasoft’s tender to determine whether exclusion on the grounds of an alleged conflict of interests was justified.

Advocate General Opinion on cement companies’ information request appeals. On 15 October 2015, Advocate General Wahl gave his Opinion on appeals brought by four cement companies before the European Court of Justice (ECJ) against General Court judgments that dismissed their actions to challenge a decision of the Commission to request information as part of an Article 101 investigation. In general, the grounds of appeal related to whether the General Court correctly interpreted the Commission’s powers to request information. The Advocate General concluded that the appeals should be allowed and the General Court’s judgments be set aside. If the Opinion is followed, this could have an impact on the extent to which the Commission asks undertakings to provide information in a particular format; the way in which the Commission drafts information requests; and the recipient to whom it addresses the information requests.

EU Mergers

Phase I Mergers

  • M.7770 VITOL / VTTI (9 October 2015)
  • M.7765 CARLYLE / VERITAS (13 October 2015)
  • M.7688 INTEL / ALTERA (14 October 2015)
  • M.7651 BAIN CAPITAL / DAVIGEL GROUP (15 October 2015)

State Aid

Commission approves UK pricing methodology for nuclear waste transfer contracts. On 9 October 2015, the Commission announced that the pricing methodology for waste transfer contracts to be concluded between the UK government and operators of new nuclear power plants is compatible with EU State aid rules. The UK pricing methodology ensures that operators of new nuclear plants in the UK will bear the cost of the underground disposal of their spent fuel and intermediate level waste, and not the UK government. Therefore, the Commission announced that the pricing methodology does not involve any State aid. As the waste transfer price will not be determined at this stage (and is not expected to be clear for approximately 30 years after the start of electricity generation by the nuclear power operator), the UK government considered it necessary to set a price cap in order to provide some visibility of future liabilities to secure investors and financing. Since the Commission concluded that the actual disposal costs are very unlikely to exceed the cap level (since the cap was based on conservative projections for the maximum costs of waste disposal), any potential State aid and distortions of competition due to the cap, would remain very limited.

ECJ preliminary ruling that certain Spanish national law provisions are compatible with EU State aid rules. On 15 October 2015, the ECJ handed down a preliminary ruling on questions from a Spanish court regarding the interpretation of a 2012 Commission decision relating to State aid granted by the Spanish authorities to the Spanish bank Banco Financiero y de Ahorro SA and its subsidiary Bankia SA (the BFA Group). In November 2012, the Commission adopted a decision which found that a restructuring plan for the BFA Group constituted aid under Article 107(1) of the TFEU, but that the restructuring plan could be considered compatible with the internal market under Article 107(3)(b) of the TFEU on the basis of commitments offered by Spain. The commitments provided that the BFA Group would comply with applicable legislation in all salary and compensation matters, especially regulation related to remuneration limits applicable to credit institutions, as well as those restrictions that may arise from being an entity or group controlled by the government. The ECJ concluded that the Commission’s decision on the BFA Group restructuring and Articles 107 and 108 of the TFEU, which form the basis for that decision, do not preclude the application of national legislation under which compensation payments to an employee whose dismissal is held to be unfair is set at an amount higher than the legal minimum.

UK Competition

Court of Appeal upholds appeals against High Court rulings on disclosure and strike out in air freight cartel damages action. On 14 October 2015, the Court of Appeal handed down its judgment upholding appeals against a High Court judgment, relating to disclosure and strike-out, in the Emerald Supplies v British Airways competition damages action. 565 claimants (of which Emerald Supplies was a claimant) brought three claims against British Airways plc (BA) in respect of losses they allegedly incurred arising out of an alleged unlawful cartel relating to air cargo said to have operated worldwide between 1999 and 2007. The claimants claimed breach of statutory duties owed to the claimants under Article 101 of the TFEU and/or Article 53 of the EEA Agreement; a claim that BA committed the tort of unlawful interference with the claimants’ businesses by unlawful means; and a claim that BA committed the tort of conspiracy to injure the claimants by unlawful means. The first appeal brought by both addressee airlines and non-addressee airlines of the cartel decision was against an order of a High Court judge requiring that an unredacted version of the Commission’s decision on the air cargo cartel should be disclosed to select professionals part of a confidentiality ring. The appellants sought redaction of certain materials in the decision on the basis that these were protected under the presumption of innocence, as applied by the General Court in Pergan v Commission. The Court of Appeal decided that the High Court’s redaction decision was wrong and must be set aside. In a separate appeal brought by BA and certain addressee and non-addressee airlines, the Court of Appeal held that the High Court judge in the order had been wrong not to strike-out or summarily dismiss claims based on the economic torts of conspiracy and unlawful interference. It was clear that the elements of these claims requiring that the defendant had an intention to injure the claimants had not been established as a matter of law. The Court of Appeal, therefore, upheld the appeal and ordered that the torts of unlawful conspiracy and interfering with business by unlawful means must be struck out.

CMA writes to schools and suppliers advising of parent complaints on uniform pricing. On 15 October 2015, the Competition and Markets Authority (CMA) announced that it has written an open letter to school head teachers, governing boards and uniform suppliers regarding the pricing and quality of school uniforms. The CMA in the letter points out that where schools appoint uniform suppliers or retailers, they, and their uniform suppliers or retailers must be aware that their arrangements or conduct may be scrutinised under competition law. The CMA highlighted that problematic arrangements may include long-term exclusive arrangements between schools and uniform suppliers or retailers, or, arrangements which provide uniform suppliers or retailers with a local monopoly which may be abused, for instance, by charging excessive prices.

Speeches & Publications

Speech by Commissioner on how competition policy can support transition towards decarbonised economy. On 12 October 2015, the Commission published a speech by Margrethe Vestager, Competition Commissioner, on how competition policy can support the transition towards Europe’s decarbonised economy. In the context of energy markets, Vestager discussed the Commission’s aim of ensuring that business practices and government subsidies do not tilt the playing field in Europe’s Single Market and addressed capacity mechanisms and power exchanges in depth. Vestager added that any company with operations in the EU can turn to the Commission if they suspect competitors do not play by the rules or are themselves engaged in anti-competitive behaviour and want to come forward.