Competition (Finland): District Court dismisses action for damages in the car spare part cartel case

On 31 March 2014, the District Court of Helsinki handed down its judgment dismissing the action for damages in the car spare part cartel case. This is the second judgment in a private antitrust enforcement case in Finland. The case is based on a previous cartel investigation by the Finnish Competition and Consumer Authority (“FCCA”) initiated in 2004, which finally ended in a Supreme Administrative Court (“SAC”) ruling in 2012 imposing a fine of EUR 1.03 million on five wholesalers of car spare parts – Oy Arwidson Ab, HL Group Oy, Oy Kaha Ab, Koivunen Oy and Örum Oy Ab – for their participation in an illegal price cartel for varying periods between 2004 and 2005. One of the five companies was not fined, as Oy Arwidson Ab received full immunity from fines for its cooperation with the FCCA under the Finnish leniency program. The SAC held that the five wholesalers had engaged in a concerted practice to collectively boycott a car spare parts retail chain, Osaset Oy, after it announced a new strategic cooperation agreement with Atoy Oy, a competitor of the five wholesalers. According to the SAC, the wholesalers had exchanged confidential information on their future actions in response to the announcement in one meeting and thereafter terminated their marketing agreements concluded with Osaset Oy and reduced discounts granted to Osaset retailers. Atoy, the other party to the cooperation agreement, launched an action for damages claiming that the cartel caused the partial failure of its cooperation with the Osaset retail chain. According to Atoy, several Osaset retailers did not join the cooperation or resigned from the cooperation because of the cartel. This further led to the failure to recruit the planned number of repair shops to the chain. This caused Atoy to lose approximately EUR 56 million in profits. The District Court dismissed Atoy’s action for damages in its entirety. The District Court found that even though the five wholesalers’ actions may have caused some difficulties to Atoy, the competition law infringement was not the ultimate cause of the losses Atoy claims to have suffered. The District Court concluded that any losses suffered by Atoy due to the partial failure of its cooperation with Osaset were primarily caused by Atoy’s unpreparedness to implement the planned cooperation and lack of financial resources needed to implement the plan. As these factors were not in causal connection to the competition law infringement the District Court dismissed the claim. The District Court also ordered Atoy to compensate the respondents’ legal fees by over EUR 2 million. Source: Judgment of the District Court of Helsinki, drno 07/33936, 31/03/2014

Competition (Finland): District Court dismisses actions for damages in the Finnish timber cartel case

On 28 March 2014, the District Court of Helsinki handed down its first thirteen judgments in the actions for damages in the Finnish timber cartel case. The District Court dismissed the thirteen actions for damages on the grounds that the right to compensation had fallen under the statute of limitations. The case is based on the Market Court’s judgment of 2009 in which it imposed fines on Stora Enso Plc and Metsäliitto Cooperative totaling EUR 51 million for illegal price cooperation and information exchange in the market for purchase of timber during 1997–2004. UPM-Kymmene Plc received full immunity from fines for its cooperation with the Finnish Competition Authority (today the Finnish Competition and Consumer Authority “FCCA”) under the Finnish leniency program. After the judgment of the Market Court, corporations and private forest owners brought actions for damages before the District Court of Helsinki against the above mentioned three forestry companies. The actions for damages became pending on 20 December 2011 and 10 May 2012. The District Court dismissed the actions for damages by finding that the cartel victims’ right for compensation had expired. According to the District Court, the statute of limitations period had started on 25 May 2004. This was the date when the FCCA gave its press release on the alleged cartel. The District Court stressed that due to the press release and the related wide publicity, the claimants had had all the information needed to assess whether they had suffered damage from the alleged cartel. As the actions for damages were filed more than five years after that date, the District Court found that the right for damages had expired and therefore dismissed the actions. Source: Helsinki District Court’s Press Release 28/3/2014, L 11/53515

Competition (Sweden): The Swedish Competition Authority confirms dawn raids in the environmental and waste industry

On 26 March 2014, the Swedish Competition Authority (‘’SCA’’) announced that it has launched an investigation into a possible violation of the Swedish Competition Act in the environmental and waste industry. As a part of the investigation, the SCA has made unannounced visits, so called dawn raids. The purpose of the visits has been to collect evidence that may strengthen the SCA’s suspicions of the potential breach of the Swedish Competition Act. The collected material is to be analyzed by the SCA. Source: The Swedish Competition Authority Press Release 26/03/2014

Competition: General Court reduces the fines imposed on the Saint-Gobain group for the car glass cartel from EUR 880 million to EUR 715 million

On 27 March 2014, the General Court (“GC”) handed down its judgment on the appeals brought by Saint-Gobain group (“Saint-Gobain”) and their parent company Compagnie de Saint-Gobain SA (“Compagnie”) against the Commission’s decision on the car glass cartel. In its decision of 12 November 2008, the Commission had found that a number of companies, including the subsidiaries of Saint- Gobain, namely Saint-Gobain Glass France SA, Saint-Gobain Sekurit Deutschland GmbH & Co.KG and Saint-Gobain Sekurit France SAS, and Compagnie had infringed the EU competition rules by participating in the series of anti-competitive agreements and concerted practices and imposed a fine of EUR 880 million jointly and severally on Saint-Gobain and Compagnie. Both companies brought actions before the GC seeking annulment of the Commission’s decision. In their appeals, Saint-Gobain and Compagnie alleged that the Commission had, inter alia, increased the amount of the fine imposed on them jointly and severally by 60 per cent as it considered Saint-Gobain to be guilty of a repeated infringement in so far as the company had already been subject to the previous decisions of the Commission relating to similar infringements in 1984 and 1988. In its judgment, the GC established the repeated infringement only in respect of the 1984 decision and reduced the percentage increase to the fine to 30 per cent, thereby fixing the fine imposed jointly and severally on Saint-Gobain and Compagnie at EUR 715 million. The GC recalled that the 1988 decision concerned a different subsidiary of Compagnie to those in question in the present case. As the decision was not addressed to Compagnie, Saint-Gobain and Compagnie could not be held liable for an infringement for which they had not been penalized and in the establishment of which they had not been given an opportunity to present their arguments with a view to disputing that they formed an economic unit with one or other company to which the earlier decision was addressed. Further, as regards the claim of Saint-Gobain and Compagnie that the period of time elapsed between the previous findings of an infringement and the repetition of unlawful conduct would preclude a finding of a repeated infringement, the GC considered that the Commission had not breached the principle of proportionality when establishing the repeated infringement although nearly 14 years had elapsed between the 1984 decision and the year in which the infringement penalized started (1998), having regard the identical nature of the cluster of the activity concerned and the similarity of the cartels in question. Source: The General Court of the European  Union Press Release 27/03/2014

Competition: Court of Justice of the European Union reduces Ballast Nedam’s cartel fine from EUR 4.65 million to EUR 3.45 million

The Court of Justice of the European Union (“CJEU”) handed down its judgment reducing the fine imposed on Ballast Nedam NV from EUR 4.65 million to EUR 3.45 million for its participation in a cartel involving price-fixing on the road pavement bitumen market in the Netherlands. Since 1995, the Ballast Nedam Group’s road construction activities have been centralized in Ballast Nedam Grond en Wegen BV (‘BNGW’), a wholly owned subsidiary of Ballast Nedam Infra BV (‘BN Infra’), itself wholly owned by Ballast Nedam NV. From 1 October 2000 onwards, the construction activities of the Ballast Nedam Group have been carried out by BN Infra. In 2006, the Commission imposed fines on Ballast Nedam NV and BN Infra for the group’s participation, including activities carried out in BNGW, in a cartel. The General Court (“GC”) dismissed Ballast Nedam NV’s action, but Ballast Nedam NV brought the case before the CJEU alleging, inter alia, that the GC had infringed Ballast Nedam NV’s rights of the defense by concluding, on the basis of the information contained in the statement of objections, that Ballast Nedam NV could not have been unaware that it was likely to be the addressee of a final Commission decision in its capacity as BNGW’s parent company. Ballast Nedam NV claimed that in the statement of objections, the Commission should have identified BNGW as an offender and should have expressly informed Ballast Nedam NV that it risked being held jointly and severally liable for the fine imposed on BNGW. The CJEU noted, in accordance with the GC’s findings, that the Commission did not provide any additional evidence in the statement of objections for the existence of a unitary undertaking between Ballast Nedam NV and BNGW and that the statement of objections could have been clearer in that respect. This was nevertheless not sufficient for the Commission to be held not to have clearly indicated its intention of applying the presumption that Ballast Nedam NV had actually exercised decisive influence over the commercial conduct of BN Infra and BNGW. The CJEU found, however, that the GC erred in law in finding that Ballast Nedam NV’s rights of defense had not been infringed. The CJEU held that the Commission must indicate in the statement of objections in which capacity an undertaking is called upon to answer the allegations. Further, the ambiguity in the wording of the statement of objections was exacerbated by the fact that no statement of objections was sent to BNGW. In those circumstances, the CJEU held that BNGW’s conduct in 1996-2000 could not be imposed on Ballast Nedam NV and BN Infra, and set the fine imposed jointly and severally on Ballast Nedam NV at EUR 3.45 million. Source: Court of Justice of the European Union Press Release 27/03/2014

Merger control: Commission sends Statement of Objections to Marine Harvest for early implementation of its acquisition of Morpol

The Commission has sent a Statement of Objections to salmon farmer and processor Marine Harvest ASA (“Marine Harvest”) for early implementation of its acquisition of competitor Morpol ASA (“Morpol”), both of Norway. In December 2012, Marine Harvest had acquired a 48.5 % stake in Morpol but the transaction was only notified in August 2013 and cleared subject to conditions in September 2013. The Commission considers that by acquiring a 48.5% stake in Morpol in December 2012, Marine Harvest took control over Morpol. The transaction was implemented only four days after it was signed, that is eight months before the notification to the Commission and ten months before the Commission cleared the transaction. The Commission therefore takes the preliminary view that thereby Marine Harvest implemented the acquisition of Morpol prior to its notification and clearance by the Commission, in breach of EU Merger Regulation. The early implementation of a concentration affects the structure of the market and may make it more difficult for the Commission to restore effective competition where necessary. If the infringement is confirmed, the Commission may impose a fine of up to 10% of the company's annual worldwide turnover. The sending of a statement of objections does not prejudge the outcome of the investigation. Source: Commission Press Release 31/03/2014

Public procurement: New rules on public procurement and concession contracts published

On 28 March 2013, new EU rules on public procurement and concessions were published. The legislation will enter into force on 17 April 2014. Member States will then have 24 months to implement the provisions into national law (except for electronic procurement, where they will have an additional 30 months). The directives modernize the existing tools and instruments by making them simpler, more flexible and easier for companies, particularly small and medium sized enterprises (“SMEs”), to bid for public procurement. The rules on concessions establish a clear legal framework to give public authorities the necessary legal certainty performing their duties. They also aim to guarantee effective access to the concessions market for all European businesses, including SMEs, and provide them with possibilities for investment in major public services in the future. These reforms will allow public authorities to optimize their use of public procurement. Public contracts that are covered by the European directives are valued at around EUR 420 billion, making it a key driver of our economy. The legislation is available at: Official Journal of the European Union. Source: Commission Press Release 28/03/2014

In addition, kindly note the following merger control decisions by the Commission which are published on the website of the Commission’s Directorate-General for Competition:

  • Commission approves acquisition of joint control over Hovis by the Gores Group and Premier Foods
  • Commission approves acquisition of joint control over IDBD by Extra Israel and Dolphin
  • Commission approves acquisition of sole control over certain assets of OMV known as "Bayernoil package" by Varo

We would also like to draw your attention to the following seminar in which our team is facilitating an interesting discussion into competition law challenges in the retail sector Kilpailuoikeus ja päivittäistavarakauppa - päivittäistavarakaupan sääntely ja valvonta kilpailulain muutosten valossa