EU Competition

Belgian lottery fined €1.2 million for abusing market power on sports betting. On 23 September 2015, the Belgian Competition Authority (Authority) imposed a fine of €1.19 million (including a 10% reduction in fine due to co-operation and acknowledgement) on Loterie Nationale, the Belgian national lottery operator, for abusing its dominant position. Loterie Nationale holds a legal monopoly with regard to the organisation of public lotteries in Belgium, and, in 2013, the Authority stated that Loterie Nationale used individual contact details acquired in the context of its lottery operations to send an email announcing the launch of its separate sports betting product, Scooore! Additionally, Loterie Nationale further infringed competition laws in 2011 and 2013 by requesting and receiving commercially-sensitive information about competing providers of sports betting from some distributors of Scooore!

Commission Consumer Scoreboard highlights problems with e-commerce. On 21 September 2015, the European Commission (Commission) published the 2015 edition of the Consumer Scoreboard (Scoreboard). Each year, the Commission publishes a Consumer Scoreboard which shows how the single market is performing for EU consumers and serves to highlight potential problems in markets. Largely based on retailer and consumer surveys, this year’s Scoreboard focused on the Digital Single Market and consumer experience in cross-border e-commerce. The Scoreboard found that while online business-to-consumer commerce is increasing, consumers continue to face problems relating to delivery and product conformity as well as restrictions and price discrimination when buying across borders – consumers feel considerably more confident buying online from within their own country than from other EU countries. The Commission recognises that increased awareness regarding key consumer rights guaranteed by EU legislation is required.

Summary of Slovak Telekom abuse of dominance decision published. The Commission has formally published a summary of its October 2014 decision to impose a fine of €38.8 million on Slovak Telekom and its parent company, Deutsche Telekom, for infringing Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the EEA Agreement and refusing to grant access to competitors and squeezing prices for alternative operators on the broadband market. Deutsche Telekom was further ordered to pay €31 million as it had already previously broken antitrust laws in 2003 in Germany. The heavy fine reflects the value of sales in the relevant market and the nature and duration over which the infringement continued. Both parties have lodged actions with the General Court to challenge the Commission’s decision.

Tobacco companies’ commitments accepted by Greek antitrust regulator. On 24 September 2015, proposals from leading tobacco manufacturers to amend or delete specific contractual terms in their new distribution agreements were accepted by the Hellenic Competition Commission (HCC). Such amendments are expected to assuage competition concerns that the contracts excessively restricted sales made by distributors and facilitated access of manufacturers to sensitive business information of their competitors. The HCC initiated the investigation following complaints by former distributors and trade associations, alleging that the tobacco producers co-ordinated to alter their distribution networks simultaneously and refused illegally to supply them with tobacco products. The HCC rejected all other complaints relating to abuse of dominance, price fixing and resale price maintenance.

EU Mergers

Phase I Mergers

  • M.7741 Apollo Management / Stemcor (18 September 2015)
  • M.7671 KKR / FIBA / WMF (18 September 2015)
  • M.7541 IAG / AER Lingus (18 September 2015)
  • M.7732 JBS / Moy Park (22 September 2015)
  • M.7717 Equistone Partners Europe / Tristyle Mode (22 September 2015)
  • M.7719 Barloworld Handling / Baywa / JV (23 September 2015)
  • M.7728 Amcor / Sidel / JV (23 September 2015)

State Aid

General Court rules on interpretation of operative part of judgment annulling previous state aid decision. On 18 September 2015, the General Court handed down judgment on an application by the Republic of Poland on the interpretation of the operative part of an earlier judgment handed down by the General Court which annulled a Commission decision finding that state aid granted to a Polish steel company, the Technologie Buczek group, was incompatible with EU state aid rules and unlawful. As such, Poland asked whether the General Court had annulled Article 1 on the incompatibility and unlawfulness of state aid of the Commission’s decision in its entirety with “erga omnes” effect such that it applied in relation to everyone and not just an “inter partes” effect such that it was limited only to the benefit of the original applicant, Buczek Automotive. The General Court ruled that Poland’s application for interpretation was admissible and that the annulment of the relevant part of the Commission’s decision had an “erga omnes” effect and not an “inter partes” effect.

Commission approves latest prolongation of Danish bank support schemes. On 18 September 2015, the Commission announced that it has decided to approve, under EU rules on state aid, the prolongation until 31 December 2015 of several Danish measures aimed at stabilising banks. These include a compensation scheme and two measures to facilitate the sale of failing banks, within the framework of the EU Directive for Bank Resolution and Restructuring as implemented in Danish law. The Commission has also approved the prolongation of a winding-up scheme for Danish branches of financial institutions established in Greenland and the Faroe Islands. The Commission’s rationale was that such measures are targeted, proportionate and limited in time and scope.

Aid approved for Finland’s first LNG terminal. On 22 September 2015, the Commission announced its decision to approve €23 million in state aid to construct a small-scale LNG terminal at Pori on Finland’s west coast. The reasons the Commission gave for approval included the fact that the project will encourage the use of LNG as fuel for ships in place of fuel oils and liquefied petroleum gases; contribute to environmental protection; contribute to security of gas supply in Finland; and end energy isolation of the Baltic Sea Region, integrating the region fully into EU energy markets.

Public Procurement

General Court annuls Council decision to reject tender for lack of reasoning. On 17 September 2015, the General Court annulled a decision of the Council of the European Union not to award a contract for the purchase or hire of black and white multifunction printers and associated maintenance services in the buildings occupied by the General Secretariat of the Council to Ricoh Belgium NV (Ricoh), but to another undertaking. Ricoh alleged infringement of the principle of transparency, breach of the duty to state reasons and breach of the duty to award the contract to the most economically advantageous tenderer. The General Court found that the Council had not provided sufficient reasons for its decision – it had not explained how or why it had applied a coefficient of 1.2 to the minimum technical requirements announced in the tender specifications, meaning that Ricoh’s technical evaluation score was lower than was first announced. Therefore, the General Court ruled that the Council’s decision was flawed due to inadequate reasoning and must be annulled.

UK Competition

CMA publishes consultation on release of seven structural merger undertakings under the Fair Trading Act 1973. On 23 September 2015, the Competition and Markets Authority (CMA) published a consultation on its provisional advice to the Secretary of State to release structural merger undertakings accepted in seven cases under the Fair Trading Act 1973. The CMA’s rationale is that changes in the market and/or to the companies involved, as well as, the elapse of time eliminated the need for the undertakings. The CMA invites responses to the consultation by 6 October 2015.

CMA consults on provisional decision to release/revoke two monopoly remedies. On 23 September 2015, the CMA published for consultation its provisional decision following its view of the tin cans undertakings given in February 1972 by Metal Box plc (such undertakings were later amended in 1980 and 1992) as part of the CMA’s work in reviewing monopoly remedies put in place prior to 1 January 2005. The CMA formed the opinion that significant developments in the supply of tin cans and metal packaging (which affect the products referred to in the undertakings) mean that the undertakings are no longer necessary to prevent Metal Box plc (and successor companies) from taking certain actions that might harm competition. More specifically, these undertakings as they stand today, include, among others, CMB Foodcan plc (CMB) (the successor to Metal Box plc) not signing certain exclusive agreements or offering particular loyalty discounts to certain customers, and impose a duty on CMB to provide information about its business as the CMA may from time-to-time require. Such undertakings are now attached to Crown Packaging UK plc (the successor to Metal Box plc and CMB). The developments in the overall market since 1972 include the growing number of companies with substantial operations in the markets for the products referred to in the undertakings. In relation to food cans, such developments include the fact that Crown is operating in a declining market in which excess capacity frequently exists and for which there are a growing number of alternatives to metal food cans; the fact that Crown’s food can customers are typically large and sophisticated to a greater degree than they were in late 1960s and today are in a stronger bargaining position; and that some customers are able to self-supply. There have also been considerable changes in the beverage and aerosol can sectors since the undertakings were given. Ultimately, the CMA has reached the provisional view that the specific concerns which the undertakings were designed to remedy are no longer present and Crown should be released from them. The CMA invites responses to the consultation by 6 October 2015 and the final decision is expected to be published later in 2015.

Speeches & Publications

Speech by Johannes Laitenberger on the Digital Single Market, consumers and EU competition policy. On 22 September 2015, the European Commission published a speech by Johannes Laitenberger, Director-General for Competition, on the Digital Single Market, consumers and EU competition policy. Mr Laitenberger opened the speech by stating that a genuine EU-wide Digital Single Market could add over €400 billion to the GDP of the EU. He then went on to focus on the contribution that competition policy can make to the eventual success of the Digital Single Market policy drive, in particular through its large-scale e-commerce sector inquiry which was launched on 6 May 2015. The sector inquiry will help gather information on barriers (namely, contractual barriers) to trade across national borders set up by companies supplying good and services online, and assess them in light of EU antitrust rules. Mr Laitenberger considered that the sector inquiry will give the Commission the evidence it needs to determine its enforcement priorities against anti-competitive agreements that risk fragmenting the Digital Single Market, with a view to giving specific guidance to online businesses on compliance with EU competition law.