EU Competition

Commission closes proceedings against 13 investment banks in credit default swaps case. On 4 December 2015, the European Commission (Commission) announced its decision to close antitrust proceedings against all 13 investment banks involved in its investigation into the credit default swaps market. On 1 July 2013, the Commission adopted a Statement of Objections against Markit, the International Swaps and Derivatives Association (ISDA) and 13 investment banks. The Statement of Objections raised preliminary concerns that all parties had coordinated to foreclose from the credit default swaps market, Deutsche Börse in 2007 and Chicago Mercantile Exchange in 2008. The Commission notes that the closure does not prejudge the outcome of its on-going investigation regarding Markit and ISDA. The Commission will also continue monitoring the practices of investment banks in financial markets, including in the credit default swaps sector.

Commission opens formal Article 101 investigation into suspected manipulation of ethanol benchmarks. On 7 December 2015, the Commission announced that it has opened a formal investigation into whether three ethanol producers; Abengoa S.A., Alcogroup SA, and Lantmännen ek för, have breached Article 101 of the Treaty on the Functioning of the European Union (TFEU) by manipulating ethanol benchmarks published by the price reporting agency, Platts. The Commission’s investigation relates to concerns that the companies may have agreed to submit or support bids with a view to influencing benchmarks upwards. The Commission announced that it will conduct the investigation as a matter of priority. The investigation started with unannounced inspections carried out in May 2013.

Commission sends two Statements of Objections to Qualcomm for alleged breaches of Article 102 TFEU. On 8 December 2015, the Commission announced that it has sent two separate Statements of Objections to chipset company, Qualcomm, alleging that it may have breached Article 102 of the TFEU by abusing its dominant position in the worldwide markets for 3G (UMTS) and 4G (LTE) baseband chipsets. The Commission has informed Qualcomm of its preliminary conclusions that it illegally paid a major customer for exclusively using Qualcomm chipsets, and sold chipsets below cost with the aim of forcing its competitor, Icera, out of the market, in potential breach of EU antitrust rules. Qualcomm now has the opportunity to respond to the Commission’s allegations outlined in the Statements of Objections within three months, as regards the exclusivity payment objections, and four months as regards the predatory pricing objections, and to ask for an oral hearing in each case. Baseband chipsets process communication functions in smartphones, tablets and other mobile broadband devices and are used both for voice and data transmission.

EU Mergers

Phase I Mergers

  • M.7784 CF INDUSTRIES HOLDINGS / OCI BUSINESS (7 December 2015)
  • M.7810 VISTA / SOLERA (7 December 2015)
  • M.7816 EGP / F2I / JV (8 December 2015)
  • M.7847 EQT SERVICES / TOP-TOY (9 December 2015)
  • M.7759 OMERS / AIMCO / ERM (9 December 2015)
  • M.7778 VATTENFALL / ENGIE / GASAG (9 December 2015)

State Aid

Commission approves state financing for Poste Italiane’s universal service obligation.On 4 December 2015, the Commission announced that it has decided to approve, under EU State aid rules, the Italian state funding of Poste Italiane to enable it to fulfil its universal service obligations in the periods 2012 - 2015 and 2016 - 2019. Under a contract concluded between Italy and Poste Italiane, Poste Italiane will receive a maximum of €1.05 billion for the years 2016-2019 (€262 million per year). The Commission is, in particular, satisfied that the methodologies applied for calculating the State aid will ensure that Poste Italiane will not be over-compensated for performing its public service mission. The services provided by Poste Italiane include basic postal services delivered throughout the country at affordable prices and at certain minimum quality requirements.

Public Procurement

Commission refers Austria to ECJ for directly awarding contract for security of printing services. On 10 December 2015, the Commission announced that it has decided to refer Austria to the European Court of Justice (ECJ) for alleged breach of Directive 2004/18 resulting from the direct award of contracts for security printing services. Since 2000, Austrian federal authorities have been obliged to award contracts for printing certain official documents, including passports, driving licenses and identity cards, directly to the Austrian State Printing House (Österreichische Staatsdruckerei GmbH), a private undertaking listed on the Vienna Stock Exchange. In July 2014, the Commission sent a reasoned opinion to Austria setting out its view that the award of these contracts, without initiating a public tender, breached Directive 2004/18 on the award of public sector contracts. The Commission states that as Austria has not taken any measures to put an end to the violation of EU law, the Commission has decided to refer Austria to the ECJ.

UK Competition

Damages action by Deutsche Bahn and others against MasterCard lodged in CAT. On 4 December 2015, the Competition Appeal Tribunal (CAT) published details of a damages action brought, under section 47A of the Competition Act 1998, by several hundred companies within the Deutsche Bahn, Inditex, ASOS, Metro, AE and Hertz groups against MasterCard. This is a follow-on damages action based on the Commission’s December 2007 decision that MasterCard’s EEA interchange fees breached Article 101 of the TFEU. The CAT follow on action has been brought on a precautionary basis in case any of the claimants’ claims in the Chancery Division of the High Court (where litigation has already commenced) are found to be time barred under any applicable law of limitation. The CAT has also published an order consenting on service out of jurisdiction on two US based MasterCard defendants.

CMA announces Competition Act investigation into online sales of discretionary consumer products. On 4 December 2015, the CMA announced that it has opened an investigation into suspected anti-competitive arrangements relating to online sales of licensed sport and entertainment merchandise and other consumer products in the UK, which may infringe Chapter I prohibition of the Competition Act 1998, and/or Article 101 of the TFEU. The CMA states that, as part of this investigation, it conducted searches on 1 December 2015 at the headquarters of a UK company, Trod Limited, as well as the domestic premises of one of its officers. The CMA notes that it intends to take a decision on whether to proceed with the investigation or close it in April 2016.

CMA exercises new powers for first time to make recommendations on competition issues raised by Energy Bill. On 4 December 2015, the CMA published recommendations that it has made to the Secretary of State for Energy and Climate Change on competition issues raised by the Energy Bill. The recommendations are primarily concerned with ensuring that in discharging its responsibilities, the Oil and Gas Authority, as independent regulator, takes due account of risks to competition (particularly in the context of possible exchange of information and encouraging collaboration between industry players), and the impacts of its regulatory actions on competition.

Speeches & Publications

Speech on competition and innovation. On 9 December 2015, the Commission published a speech by Johannes Laitenberger, Director-General for Competition, on competition and innovation. He explained how the legal framework for EU competition policy allows the Commission to take innovation benefits into account in assessing antitrust, merger and State aid cases. Mr Laitenberger concluded that the Commission’s approach to competition and innovation aims to strike the right balance between protecting the process of innovation, keeping markets open and contestable for innovators, and allowing for an adequate return on investment in innovation.