Competition: Commission fines rechargeable battery producers EUR 166 million in cartel settlement

On 12 December 2016, the Commission fined Sony, Panasonic and Sanyo a total of EUR 166 million for operating a lithium-ion battery cartel. Samsung was not fined because it revealed the existence of the cartel to the Commission. According to the Commission, the parties coordinated prices and exchanged sensitive information on supplies of rechargeable lithium-ion batteries, which are used in laptops and mobile phones. All companies acknowledged their involvement in the cartel and agreed to settle the case.

The Commission's investigation found that Samsung, Sony, Panasonic and Sanyo took part in bilateral, and sometimes multilateral, contacts in order to avoid aggressive competition. They did this by agreeing on temporary price increases in 2004 and 2007 due to temporary hikes in the price of cobalt, a material used in batteries. The companies also exchanged sensitive information on supply and demand forecasts, expected prices and planned bids in tenders organized by device makers. Agreements were primarily active in Asia but occasionally also in Europe, between February 2004 and November 2007.

Sony received a 50% reduction of its fine, while Panasonic and Sanyo were each granted 20% reductions under the Commission's leniency program. All three companies received a further 10% reduction to their penalties for ending proceedings through the settlement procedure.

Source: Commission Press Release 12/12/2016

Competition: General Court annuls Tompla's cartel fine in first settlement appeal

On 13 December 2016, the General Court ("GC") ruled for the first time on an appeal against a Commission settlement decision, annulling a EUR 4.7 million cartel fine imposed on the envelope maker Tompla. In 2014, the Commission fined Bong, GPV, Hamelin, Mayer-Kuvert and Tompla a total of approximately EUR 19.5 million for coordinating prices and allocating customers for certain types of envelope. Tompla’s fine was reduced in total 60% for revealing the cartel and for participation in the settlement agreement.

Tompla claimed that the settlement decision did not provide specific reasons why the different cartelists received different fine reductions even though their involvement in the cartel was comparable. The GC noted that it is not possible from the decision to understand or assess whether Hamelin and the other undertakings concerned were in comparable or different situations or whether the Commission treated them equally or differently. Therefore, the GC agreed with Tompla and concluded that the contested decision was vitiated by failure to state adequate reasons. Consequently, the GC annulled the Commission's decision in as far as it imposed a fine on Tompla.

Source: Case T-95/15 Printeos and Others v Commission, Judgment of the General Court, 13 December 2016 

Competition: Advocate General Wahl recommends annulment of the General Court's judgment and the Commission's decision in concrete reinforcing bars cartel case

On 8 December 2016, Advocate General Wahl ("AG Wahl") gave a non-binding opinion in the concrete reinforcing bars cartel case. In his opinion, AG Wahl recommended annulment of the General Courts' ("GC") ruling and the Commission's decision on grounds concerning the right of defense and the proper conduct of administrative procedure.

In 2002, the Commission fined several companies for their participation in a cartel on the market for concrete reinforcing bars. The Commission found that the companies had breached Article 65(1) of the Treaty establishing the European Coal and Steel Community ("ECSC Treaty"). In 2007, the GC concluded that since the Commission had used article 65(4) and (5) of the ECSC Treaty as legal basis, it had used a legal basis that was no longer in force. Therefore, the GC annulled the Commission's decision. The Commission then informed the companies of its intention to re-adopt a decision using another legal basis. The companies were allowed to submit comments, but no new statement of objections was issued and no new oral hearing was held. In 2009, the Commission adopted a new decision imposing fines on some of the companies. These companies, namely Feralpi Holding SpA, Ferriera Valsabbia Spa, Valsabbia Investimenti SpA, Alfa Acciai SpA, Ferriere Nord SpA and Riva Fire SpA, in liquidation ("the appellants") appealed the Commission's new decision to the GC. In November 2014, the GC in whole or in large parts dismissed the appeals.

In his opinion, AG Wahl concluded that the Commission did not follow the procedure set out in Council Regulation (EC) No 1/2003 ("Regulation No 1/2003") and Regulation (EC) No 773/2004 before it adopted its new decision. The appellants should have been offered a new oral hearing, at which representatives of the Member States’ competition authorities would be present. AG Wahl thus dismissed the Commission's argument that the procedural steps taken under Regulation No 1/2003 and Regulation No 773/2004 were unnecessary since comparable steps had been taken before adopting the first decision. AG Wahl also underlined that the choice of the correct legal basis for an act of the institutions is of constitutional significance. Consequently, AG Wahl recommended that the Court of Justice of the European Union ("CJEU") annuls the GC's judgment and the Commission's decision because the appellants' right of defense were breached.

AG Wahl also assessed a number of other grounds for appeal and dismissed most of them. However, he recommended upholding Ferriere Nord's argument that the General Court erred in law in dismissing its claim that the fine increase based on repeated infringement was illegitimate because the Commission did not expressly refer to that aggravating circumstance in its statement of objections in 2002.

Source: Advocate General's Opinion in Cases C-85/15 P (Feralphi. v. Commission), C-86/15 P (Ferriera Valsabbia and Valsabbia Investimenti v. Commission), C-87/15 P (Alfa Acciai v. Commission), C-88/15 P (Ferriere Nord v. Commission) and C-89/15 P (Riva Fire v. Commission) 

State Aid: Starbucks appeals against Commission decision

On 12 December 2016, the Official Journal published details of an appeal by Starbucks against the Commission's October 2015 decision where the Commission concluded that transfer pricing arrangements accepted by Dutch tax authorities when calculating Starbucks' corporate taxation constitute unlawful state aid.

Starbucks' appeal contains three pleas in law. Firstly, Starbucks claims that the Commission committed a material error of law and a manifest error of assessment when concluding that the tax ruling by the Dutch authorities confers a selective advantage on Starbucks. Secondly, Starbucks claims that the Commission failed to conduct a diligent and impartial examination and to give adequate statements of reason. Thirdly, Starbucks claims that the Commission wrongly quantified the alleged aid.

Source: Case T-636/16 Starbucks and Starbucks Manufacturing Emea v Commission, Official Journal C 462/25, 12 November 2016

Public procurement: Commission requests 15 Member States to implement new EU rules on public procurement and concessions

On 8 December 2016, the European Commission ("Commission") announced that it has sent reasoned opinions to 15 Member States asking them to fully implement one or more of the three new directives on public procurement and concessions into national law (Directive 2014/23 on the award of concession contracts, Directive 2014/24 on public procurement and Directive 2014/25 on procurement by entities operating in the water, energy, transport and postal services sectors (together "the Directives").

The new rules aim to make public procurement in Europe more efficient and transparent, with smarter rules and more electronic procedures. They are also supposed to make it easier and cheaper for SMEs to bid for public contracts, improve transparency and competition and help achieve broader policy objectives, such as environmental and social goals and innovation. All Member States were obliged to implement the Directives into national law by 18 April 2016.

The 15 member states that have failed to fully implement one or all of the Directives are: Austria, Belgium, Croatia, Estonia, Finland, Latvia, Lithuania, Luxembourg, Portugal, Spain and Sweden (all three Directives), Cyprus (two of the Directives) and Bulgaria, Ireland and Slovenia (one Directive each). The Member States concerned now have two months to notify the Commission of measures taken to harmonize national legislation with EU law.

Source: Commission Press Release 08/12/2016