Competition: Commission sends Statement of Objections to Facebook alleging that the company provided incorrect or misleading information
On 20 December 2016, the European Commission ("Commission") sent a Statement of Objections to Facebook alleging the company provided incorrect or misleading information during the Commission's investigation concerning Facebook's proposed acquisition of WhatsApp, which the Commission approved in October 2014. Prior to the approval, Facebook indicated in a reply to a request for information that it would be unable to establish reliable automated matching between the user accounts of Facebook and WhatsApp. However, WhatsApp announced in August 2016 that WhatsApp user phone numbers could be linked with Facebook user identities.
The Commission has now taken the preliminary view that, contrary to Facebook's statements and reply during the merger review in 2014, the technical possibility of automatically matching Facebook users' IDs with WhatsApp users' IDs already existed in 2014. Therefore, the Commission is concerned that Facebook intentionally, or negligently, submitted incorrect or misleading information to the Commission, in breach of its obligations under the EU rules. If this is confirmed, then Facebooks could be fined up to 1% of its annual worldwide turnover. Source: Commission Press Release 20/12/2016
Competition: General Court dismisses appeals by Infenion and Philips against smart card chips cartel decision
On 3 September 2014, the European Commission ("Commission") issued a decision finding that there had been an infringement of the EU competition rules prohibiting cartels. The cartel lasted from 24 September 2003 to 8 September 2005. The companies involved were Infineon Technologies AG ("Infineon"), Koninklijke Philips Electronics NV and its wholly owned subsidiary Philips France SAS, (together "Philips"), Samsung Electronics Co., Ltd, and Samsung Semiconductor Europe GmbH ("Samsung") and Renesas Electronics Corp. (which succeeded Renesas Technology Corp., which had been created by Hitachi Ltd and Mitsubishi Electric Corp) and Renesas Electronics Europe Ltd. The Commission imposed total fines of EUR138 million, of which Infineon was fined EUR 82,784,000 and Philips EUR 20,148,000. Both Infineon and Phillips appealed the infringement decision and the fines imposed to the General Court ("GC").
On 15 December 2016, the GC dismissed the appeals in their entirety. In both appeals, the GC found that the Commission had established that each company had participated in anti-competitive information exchanges, constituting restrictions of competition by object. It confirmed that an information exchange on prices that was meant to slow down price decreases on the smart card chip market was, in light of the economic and legal context, anti-competitive by reason of its object, without further need to analyze the effects of the practices in question on the market.
In each case, the GC also upheld the Commission's finding that there was a single and continuous infringement. In particular, it confirmed the Commission's decision that although Infineon was not liable for the infringement as a whole, it must be held liable for the infringement to the extent that it engaged in unlawful contacts with two other cartel participants.
Philips and Infineon both raised various arguments about the credibility and of the reliability of the evidence submitted by Samsung, particularly in the context of Samsung's leniency application. The GC confirmed that although caution should be exercised in evaluating evidence provided by undertakings applying for leniency, the mere fact of seeking to benefit of leniency does not necessarily create an incentive to submit distorted evidence, nor does it make such evidence less probative than information provided voluntarily.
The GC also dismissed allegations of procedural errors by the Commission and errors in the calculation of the fines imposed. Source: Cases T-758/14 Infineon Technologies AG v Commission, T-762/14 Koninklijke Philips NV and Philips France v Commission 15/12/2016 and General Court of the European Union Press Release 15/12/2016 Back to top
Merger control: Commission conditionally approves acquisition of WhiteWave by Danone
On 16 December 2016, the European Commission ("Commission") announced that it has conditionally approved the proposed acquisition of WhiteWave Foods Company ("WhiteWave") by Danone S.A ("Danone").
Danone is a food-products group of companies headquartered in France. The company is active in the EEA mainly in dairy products but also in early life nutrition products. WhiteWave is a US consumer packaged food and beverage group. In Europe, WhiteWave is present through its subsidiary Alpro, headquartered in Belgium. Alpro manufactures and markets plant-based products such as milk, yoghurts and desserts under the Alpro and Provamel brands. Alpro products include plant-based "growing-up milk" (for children aged one to three years).
In its initial investigation the Commission examined the effects of the proposed transaction in the markets for "growing up milk", yoghurts and desserts. It found that the proposed transaction would leave only one other competitor, Nestlé, on the market for "growing-up milk" in Belgium. The Commission had concerns that the merged entity would not have faced sufficient competitive pressure from the remaining player in this market.
Further, there would be no other competitor in the plant-based "growing-up milk" segment in Belgium, where only Danone and Alpro are active. This would have left Belgian consumers with no alternative to the merged entity in this market.
The Commission found no competition concerns with respect to other products related to the transaction, such as yoghurts and desserts. The transaction is mostly complementary since Danone, with minor exceptions, is active mainly in dairy products, whereas Alpro specializes in the plant-based segment.
In order to address the Commission's competition concerns relating to "growing-up milk" in Belgium, and to prevent an in-depth investigation, Danone offered to divest a large part of its "growing-up milk" business in Belgium. The divestment entirely removes the overlap between the companies in Belgium on the overall "growing-up milk" market, comprising both dairy and plant-based products, as well as on the sub-market for plant-based products.
The Commission is satisfied that these commitments address all of its competition concerns. Therefore, subject to compliance with these commitments, the Commission concluded that the merger would not significantly impede effective competition in the EEA or any substantial part of it. Source: Case M.8150 - Danone / The WhiteWave Foods Company and Commission Press Release 16/12/2016
Competition (Sweden): Swedish Paten and Market Court fines TeliaSonera and GothNet SEK 16 million for bid-rigging
On 21 December 2016, the Swedish Patent and Market Court handed down its judgment finding TeliaSonera Sverige AB ("TeliaSonera") and Göteborg Energi GothNet AB ("GothNet") to have engaged in illegal coordination and bid-rigging, prior to and during a public procurement carried out by Göteborgs Stad (eng. "the City of Gothenburgh). TeliaSonera offers services within tele- and data communication sector, such as mobile, broadband and TV. GothNet is a subsidiary in a group owned by Göteborgs Stad and sells data communication services.
According to the Swedish Competition Authority ("SCA"), the bid-rigging took place in 2009 when Göteborgs Stad procured data communication services. TeliaSonera and GothNet, each other's direct competitors, agreed that TeliaSonera would refrain from submitting a bid. GothNet in turn submitted, and subsequently won the procurement. TeliaSonera in turn was elected as GothNet's exclusive sub-contractor to perform the procured contract.
In 2014, the SCA filed a summons application to the Stockholm District Court in which the SCA required the companies to be fined in total nearly SEK 35 million. In accordance with the new Swedish competition court system that came into force on 1 September 2016, the case was transferred to the newly established Swedish Patent and Market Court which is the first instance of competition procedures. The court ruled in the SCA's favor but lowered the fines to SEK 8 million to be imposed on each company respectively. Source: Swedish Competition Authority Press Release 21/12/2016 and Source: Swedish Competition Authority's Summon Application 17/12/2014