EU Antitrust

Details published of Intel’s appeal against General Court judgment. Details have been published of an appeal brought before the European Court of Justice (ECJ) by Intel Corporation to challenge a General Court judgment that upheld the European Commission’s decision fining Intel for breach of Article 102 of the TFEU. Intel claims that the General Court erred in the legal standard that it applied in assessing the alleged abusive conduct. It also erred in its examination of aspects of Intel’s conduct, breached procedural fairness, incorrectly established that the Commission had jurisdiction to examine Intel’s agreements with one customer, and also erred in its assessment of the fine Case C-413/14 P: Intel Corporation v European Commission.

Cartels

Summary of Commission decision in air cargo price-fixing cartel. On 18 October 2014, the European Commission published in the Official Journal a summary of its November 2010 decision fining 11 air cargo carriers a total of EUR 799 million for participation in a price-fixing cartel. The Commission found that the carriers co-ordinated surcharges for fuel and security over a six year period from December 1999 until February 2006. Lufthansa received full immunity from fines under the Commission’s leniency policy. The Opinion of the Advisory Committee and the Final Report of the Hearing Officer have also been published. Appeals have been lodged with the General Court against the Commission’s decision.

Commission fines banks in two cartel settlements related to Swiss franc interest rate derivatives. On 21 October 2014, the European Commission announced that, using the cartel settlement procedure, it has imposed fines of almost EUR 94 million on four international banks for their participation in two separate cartels. In the first settlement, the Commission fined JP Morgan EUR 61.6 million for its involvement in a cartel aimed at influencing the Swiss franc Libor benchmark interest rate. In the second settlement, the Commission fined three banks (UBS, JP Morgan and Credit Suisse) EUR 32.3 million for operating a separate cartel on bid-ask spreads charged on Swiss franc interest rate derivatives. In both cases, UBS, received full immunity from fines under the Commission’s 2006 Leniency Notice for revealing the existence of the cartel to the Commission.

EU Mergers

Commission closes investigation into alleged provision of misleading information in merger notification by Munksjö and Ahlstrom. On 29 October 2014, the European Commission announced that it has decided to close proceedings brought against Munksjö and Ahlstrom in relation to the alleged provision of misleading information in the notification of their merger. The Commission had been concerned about discrepancies between market share estimates provided in the merger notification and information in the parties’ internal documents. However, in response to a statement of objections, the parties provided contemporaneous evidence explaining these discrepancies and showing valid reasons for their reassessment of market shares. The Commission has closed the infringement proceedings on the basis that it has now received the necessary information. However, it warns that any discrepancies between the information provided in the merger notification and that contained in the merging parties’ internal documents should always be justified by the parties in a timely manner.

Phase I Mergers

  • M.7297 – Dolby Laboratories, Inc. / Doremi Technologies (27/10/2014)
  • M.7307 – Electricity Supply Board of Ireland / Vodafone Ireland JV (27/10/2014)
  • M.7330 – Mitsubishi Heavy Industries Ltd / Siemens AG JV (21/10/2014)
  • M.7359 – PCCR USA, Inc. / CCP Composites business of the Total group (28/10/2014)
  • M.7390 – GDF Suez S.A. / PensionDanmark Holding / InfraVia European Fund II / Noordgastransport B.V. (20/10/2014)
  • M.7397 – Clayton, Dubilier & Rice / CHC Group Ltd (22/10/2014)
  • M.7418 – Robert Bosch GmbH / ZF Lenksysteme GmbH (24/10/2014)
  • M.7423 – Vinci Energies S.A. / Imtech ICT Group (24/10/2014)

State Aid

General Court judgment on penalty payment in Italian state aid case. On 21 October 2014, the General Court dismissed in its entirety an action brought by Italy against a European Commission decision executing an ECJ judgment imposing a penalty payment on Italy for its failure to take necessary measures for the recovery of illegal state aid granted to promote employment. In November 2011, the ECJ found that Italy had failed its obligation to recover the illegal aid and decided that Italy should pay both a lump sum payment of EUR 30 million and a periodic payment. The General Court rejected Italy’s claim that, in its decision executing the ECJ’s judgment, the Commission should have deducted from the aid remaining due the debts registered by undertakings subject to related insolvency proceedings. Case T-268/13 - Italy v Commission, judgment of 21 October 2014 (not yet available in English).

ECJ dismisses state aid appeal brought by BT and the BT Pension Scheme. On 22 October 2014, the ECJ handed down its judgment in an appeal brought by British Telecommunications plc (BT plc) and BT Pensions Scheme Trustees Ltd (BT Pension Scheme) (together BT) against a General Court ruling that upheld a European Commission decision finding that an exemption granted to BT from contributing to the UK’s Pension Protection Fund (PPF) (in respect of employees in their posts before privatisation of BT) was unlawful state aid. The ECJ has dismissed the appeal in its entirety. The ECJ found that the General Court had not, as alleged, substituted its own grounds but had responded to the specific arguments contesting the merits of the Commission’s decision. Nor had the General Court erred in law in its assessment of the selective nature of the advantage conferred on BT, or in its examination of the Commission’s decision. Case C-620/13P, British Telecommunications plc v European Commission, judgment of the European Court of Justice dated 22 October 2014.

Commission approves creation of Portuguese development financial institution. On 28 October 2014, the European Commission announced that it has decided, under the state aid rules, to approve the creation of a Portuguese financial institution, the Instituição Financeira de Desenvolvimento, to be funded by the Portuguese state and European Structural and Investment Funds. It will manage holding or specialised funds and provide SMEs with access to funding on a co-investment basis with private investors. The Commission concluded that this measure would address market failures that hamper SMEs’ access to finance, without unduly distorting competition. It approved the measure under Article 107(3)(c) of the TFEU.

UK Antitrust

CMA sends supplementary statement of objections to pharmaceutical companies in relation to delaying generic entry. On 21 October 2014, the Competition and Markets Authority (CMA) announced that it has sent a supplementary statement of objections to pharmaceutical companies in relation to alleged breaches of Articles 101 of the TFEU and the Chapter I prohibition of the Competition Act 1998. Previously, in April 2013, the Office of Fair Trading (OFT) sent a statement of objections to GlaxoSmithKline (GSK) and Alpharma Limited, Generics (UK) Limited and Norton Healthcare Limited (the generic companies), alleging that agreements between GSK and each of the three generic companies breached Chapter I prohibition of the Competition Act 1998 and Article 101 of the TFEU. These agreements were entered into to settle patent infringement actions. The OFT’s provisional view was that, under these agreements, the generic companies agreed, in return for substantial payments, to delay the launch of their generic versions of the drug paroxetine in competition with GSK’s branded drug. The OFT also alleged that GSK has abused its dominant position in the market for the supply of paroxetine in the UK, in breach of Chapter II prohibition, by acting to delay generic market entry. The CMA states that the supplementary statement of objections, which was sent to all parties to the investigation, only relates to certain, limited aspects of the case. The parties now have the opportunity to make written and oral representations in response to the case set out by the CMA in the supplementary statement of objections. The CMA does not publish its statement of objections. A final decision is expected in late spring 2015.

High Court judgments on disclosure and strike-out applications in damages action against British Airways arising from air freight cartel. On 28 October 2014, the High Court handed down two judgments in an action brought against British Airways for damages allegedly resulting from a cartel in the air freight sector. In the first judgment, the High Court ruled that an unredacted version of the European Commission’s decision on the air cargo cartel (minus leniency and legally privileged material) should be disclosed into a confidentiality ring. The Commission has not yet made available a non-confidential version of the decision and an attempt, following a previous High Court order, to produce a usable redacted version had been unsuccessful. The High Court concluded that a confidentiality ring would provide sufficient protection even without the redaction of the identity of airlines that were not addressees of the decision but were mentioned in it. The claimants will also be barred from using the disclosed decision to bring any further proceedings.

In the second judgment, the High Court concluded that it would be premature to rule on the issues raised in applications for summary judgment. It has adjourned an application by British Airways for strike out of claims based on conspiracy and unlawful interference until after disclosure. It also adjourned an application by the claimants for two aspects of British Airways’ defence (relating to whether breaches of foreign law can constitute unlawful means for the purpose of the tort of unlawful means conspiracy) to be struck out until trial. (Emerald Supplies Ltd and Others v British Airways Plc [2014] EWHC 3513 (Ch) and [2014] EWHC 3514 (Ch)).

CMA re-opens hotel online booking investigation. On 28 October 2014, the CMAannounced that it has re-opened its investigation into the hotel online booking sector. In January 2014, the OFT accepted binding commitments from Booking.com, Expedia and InterContinental Hotels Group to address competition concerns in relation to restrictions on the ability of online travel agencies to offer discounts for room only hotel accommodation bookings. In September 2014, on appeal by Skyscanner, which operates a price comparison website, the Competition Appeal Tribunal (CAT) annulled the OFT’s decision on the basis that the OFT had failed properly to consider or conscientiously to take into account Skyscanner’s objections to the commitments. The CMA has now re-opened the investigation into suspected breaches of the Chapter 1 prohibition of the Competition Act 1998 and Article 101 of the TFEU in the hotel online booking sector. The CMA is considering next steps in the investigation in light of the CAT judgment and market developments.

UK Mergers

CMA consults on release of certain ITV merger undertakings. On 21 October 2014, the CMA announced that it is consulting on proposals to release certain undertakings given by Carlton Communications plc and Granada plc (forming ITV) to the Secretary of State in 2003 as a condition of their merger (the “Undertakings”). ITV requested the review of two provisions of the Undertakings, concerning the networking arrangements between regional Channel 3 licensees (ITV, STV and UTV), claiming that there has been a change of circumstances as a result of the agreement of new networking agreements. The CMA considers that there has been a change of circumstances affecting the two provisions in paragraph 2 of the Undertakings. It has, therefore, issued a provisional decision to this effect and a notice of its intention that the two provisions should be released. The CMA invites comments by 11 November 2014.

Speeches & Publications

FCA speech on competition in the interests of consumers. The Financial Conduct Authority (FCA) has published a speech by Martin Wheatley, Chief Executive, on competition in the interests of consumers. Mr Wheatley examines how the FCA has been influenced by the extension of its remit into competition, in particular, how competition thinking, as it relates to the FCA’s objectives and remit, must be brought into every decision, rule, and action that it takes.

Speech by Joaquin Almunia on the way ahead for antitrust litigation. On 23 October 2014, the European Commission published a speech by Joaquin Almunia, Vice President of the European Commission responsible for Competition Policy, on the private enforcement of competition rules. In his last speech as Competition Commissioner, he examines the history of antitrust damages actions in the EU and the likely impact of the Directive on antitrust damages actions, due to be adopted shortly, on consumers and businesses.

ECJ ruling on application of Brussels Regulation to enforcement of interim judgment in competition damages actions. On 23 October 2014, the ECJ gave a ruling on questions referred from a Latvian court about the application of Regulation 44/2001 (the Brussels Regulation) to damages actions for breach of EU competition law. The questions arose in the context of a challenge to the enforcement in Latvia of a preventative measures judgment issued in Lithuania in the context of a damages action. The ECJ confirmed that an action to seek legal redress for damages resulting from alleged breach of EU competition law falls within the concept of a “civil and commercial” matter and so falls within the scope of Regulation 44/2001. This was the case even though the defendants are state owned and the alleged competition law breaches arise from airport charges that are subject to national legal provisions. The ECJ also held that competition damages actions, such as that at issue in this case, do not constitute proceedings having as their object the validity of the decisions of organs of companies within the meaning of Article 22(2) of Regulation 44/2001 (which gives certain courts exclusive jurisdiction over certain matters). Finally, the ECJ held that there were no public policy reasons that would enable the Latvian court to refuse to recognise and enforce the Lithuanian judgment, under Article 34(1) of Regulation 44/2001 (Case C - 302/13 - flyLAL-Lithuanian Airlines AS v Starptautiskã lidosta Rïga VAS and Air Baltic Corporation AS, judgment of 23 October 2014).