Competition: European Ombudsman finds no maladministration by the Commission in handling a complaint of alleged abuse of a dominant position by Google

On 7 November 2016, the European Ombudsman ("Ombudsman") published a decision finding no maladministration by the Commission in its handling of a complaint about alleged abuse of a dominant position by Google.

In November 2010, the Commission opened an investigation into the alleged abuse by Google of its dominant position in "online search", including its "vertical search services" ("the main investigation"). Later, in January 2011, a French IT company made a separate complaint concerning Google. Its complaint mainly concerned the advertising system "AdWords" and the alleged artificial lowering of the "quality score" of search services competing with Google. The Commission informed the French IT company that its complaint did not concern the practices that were subject to the main investigation. In February 2014, the Commissioner for Competition announced that the Commission would move towards a decision on commitments proposed by Google and send pre-rejection letters to the complainants in the main investigation. In parallel, the Commission informed the French IT company several times that it would send it a pre-rejection letter on its complaint. In March 2015, the French IT company submitted a new complaint to the Commission concerning both the main investigation and the Commission's investigation of its complaint. In May 2015 the Commission again informed the company that a pre-rejection letter would be sent to it.

In June 2015, the French IT company had still not received any pre-rejection letter and sent a complaint to the Ombudsman. In October 2015, the Commission sent the pre-rejection letter to the company. In its complaint to the Ombudsman, the company made the following six claims:

1. Both the Commission's main investigation and the investigation of its complaint lacked transparency.
2. The Commission refused to allow it access to Google's observations on its complaint.
3. The Commission refused to consider its view on Google's second set of commitments proposed in the main investigation.
4. The Commission publicly released erroneous information.
5. There were disproportionate and unjustified delays by the Commission in the handling of its complaint and in the sending of a pre-rejection letter.
6. The former Competition Commissioner had been biased in his involvement in the main investigation and in the investigation of its complaint.

In its decision, the Ombudsman found no maladministration concerning claims 1, 3, 4 and 6. Concerning claims 2 and 5, the Ombudsman found that the Commission had dealt with and resolved the claims. However, the Ombudsman expressed criticism concerning the long period of time the Commission took to send the pre-rejection letter to the company. The Ombudsman noted that the company's complaint was complex and that the Commission's sources were focused on the main investigation. Still, the Commission could at least have explained in greater detail why it could not send the pre-rejection letter. Source: European Ombudsman Decision 26/10/2016

Competition: Commission proposes new method for calculating dumping in case of market distortions

On 9 November 2016, the Commission proposed a new method for calculating dumping on certain imports. The proposal concerns imports from countries where there are significant market distortions or where the state has a pervasive influence on the economy. The purpose of the proposal is to ensure that the EU has trade defense instruments that can deal with current realities in the international trading environment, such as overcapacities, while respecting the EU's obligations to the World Trade Organization ("WTO").

Market distortions in third countries that lead to industrial overcapacity and encourage exporters to dump products on the EU market harm industries within the EU. In the long run, job losses and factory closures can result. One recent example of an industry that has suffered damage is the EU steel sector.

According to the current rules on anti-dumping, dumping is calculated by comparing the export price of a product to the EU with the domestic prices and costs of the product in the exporting country. However, there are circumstances in which domestic prices and costs do not provide a reasonable basis for the calculation. The Commission's proposal targets these situations (i.e. market distortions) by providing a new method for calculating dumping. In order to identify such market distortions, different criteria will be used, such as the presence of state-owned companies and of discrimination in favor of domestic companies.

The proposal includes changes in both EU's anti-dumping legislation and in its anti-subsidy legislation. Next, the Parliament and the Council will decide on the proposal, through the ordinary legislative procedure. Source: Commission Press Release 9/11/2016 and Proposal COM(2016) 721 final

Competition (France): French Competition Authority imposes groundbreacking EUR 80 million fine for gun-jumping 

On 8 November 2016, the French Competition Authority ("FCA") fined Altice group and its subsidiary SFR EUR 80 million for the coordination of their commercial behavior prior to the FCA's merger control approval of Altice's acquisition of SFR in 2014. The offer by Altice to purchase SFR was accepted in April 2014 and the share purchase agreement executed in June 2014 with the FCA conditionally approving the proposed merger in October 2014. The FCA found that Altice had interfered in SFR's management and commercial police and that an excessive amount of strategic information was shared during integration planning between April and October. Early implementation of a merger prior to the required competition authority approvals (also known as gun-jumping) is sanctioned under EU Merger Control rules as well as most national merger control rules. The fine imposed by the FCA is the highest fine ever imposed for gun-jumping and was imposed in the context of a settlement agreement. Source: French Competition Authority, Press Release 8/11/2016

Merger control: Commission conditionally approves acquisition of Sanofi's animal health business Merial by Boehringer Ingelheim

On 9 November 2016, the Commission announced that it has conditionally approved Boehringer Ingelheim's acquisition of Sanofi's subsidy Merial.

Boehringer Ingelheim is a German pharmaceutical company active in different business segments, including animal health products. Merial is a French company specialized in animal health which produces pharmaceutical products and vaccines. The companies are key competitors in the development, manufacturing, marketing and sale of animal health products within the European Economic Area.

In its investigation, the Commission identified competition concerns in the areas of biologicals and pharmaceuticals. Boehringer Ingelheim's and Merial's products compete with each other on the markets for different types of porcine and bovine vaccines and non-steroidal anti-inflammatory drugs, both in injectable forms and in tablets for horses. The Commission's investigation revealed that either Boehringer Ingelheim or Merial was a strong player on one or more of these markets, while at the same time, the other company was either already a competitor or in the process of developing a competing product. Additionally, there were a limited number of other players on the markets. Therefore, the Commission found that a merger between the two companies would harm competition for the supply of these products. The Commission also investigated the area of feed supplements, but it found no competition concerns. Further, the Commission found no concerns for pharmaceuticals other than non-steroidal anti-inflammatory drugs.

In order to address the Commission's concerns, the companies offered to divest a number of Merial's vaccines and pharmaceuticals. The purchaser of these divested products will be Ceva Santé Animale. This transaction will also require merger approval from relevant competition authorities.

The Commission found that the commitments addressed the competition concerns and thus approved the acquisition, conditional upon full compliance with the commitments. Source: Commission Press Release 9/11/2016