EU Mergers

Phase I Mergers

M.8514 EVONIK / DSM / JV (27 October 2017)

M.8627 GETEC / BRIVA / JV (26 October 2017)

M.8635 SOJITZ / KEPCO / LURICAWNE / FIXARRA / EVALAIR / PLUM (26 October 2017)

M.8641 JACOBS ENGINEERING GROUP / CH2M HILL COMPANIES (26 October 2017)

M.8650 LGP / CPA (23 October 2017)

M.8651 BOSCH / HASCO / ASCN (27 October 2017) 

EU Competition

Commission confirms inspections at German car manufacturers. On 23 October 2017, the European Commission (Commission) confirmed that its officials carried out inspections at the premises of certain car manufacturers in Germany following inspections carried out on 16 October 2017. The inspections relate to concerns that German car manufacturers may have violated Article 101 of the Treaty on the Functioning of the European Union (TFEU), which prohibits cartels and restrictive business practices.

General Court dismisses second appeal against rejection of luxury watch spare part complaint. On 23 October 2017, the General Court handed down its judgment in the appeal by Confédération européenne des associations d’horlogers-réparateurs (CEAHR) against the Commission’s second rejection of its complaint against the refusal of several luxury watch manufacturers to supply spare parts to independent retailers. Since its first complaint in July 2004, CEAHR alleges that the manufacturers’ refusal to supply constitutes an agreement or concerted practice to restrict watch repair business and is an abuse of a dominant position. The General Court has now dismissed CEAHR’s second appeal, deciding that the Commission did not err in its consideration of selective distribution and repair systems, nor in its assessment of the justification of such systems as being proportionate. Additionally, the General Court upheld the Commission’s findings that the manufacturers’ practices resulted from independent commercial choices which were unlikely to constitute abuse.

Commission adopts 2018 work programme. On 24 October 2017, the Commission adopted its Work Programme 2018, which sets out its areas of focus, in line with the 10 priorities of the Junker Commission. The document identifies 26 new initiatives, names 66 priority proposals, and suggests the withdrawal of 15 prior proposals.

EU and Japan commence work on second generation competition cooperation agreement. On 24 October 2017, the Commission reported that the EU and Japan held the first round of negotiations to review the 2003 EU-Japan Agreement on cooperation on anticompetitive activities on 19 and 20 October 2017 in Tokyo. The discussions focus on the sharing of information in the course of investigations, which was not permitted under the first generation agreement.

EU Mergers

General Court dismisses Marine Harvest appeal against merger control infringement fine. On 26 October 2017, the General Court handed down a judgment rejecting Marine Harvest ASA’s (Marine Harvest) challenge to the Commission’s fine for effecting its acquisition of Morpol ASA without regard to the EU Merger Regulation. Norwegian-based Marine Harvest is active in international salmon farming and primary fish processing. In 2012, the company entered into a private agreement to purchase 48.5% of competitor Morpol ASA, which in 2013 it followed with a mandatory offer for the remaining 51.5%. As the transaction was implemented prior to notification and clearance pursuant to the EU Merger Regulation, the Commission fined Marine Harvest a total of €20 million. In its judgment, the General Court dismissed Marine Harvest’s arguments, instead deciding that the transactions should not be regarded as a “single concentration” and that they were not covered by the exception in Article 7(2) of the EU Merger Regulation. The decision reinforces companies’ need to observe the “standstill obligation” imposed by the EU Merger Regulation.

General Court annuls Commission approval of the acquisition by Liberty Global of Ziggo. On 26 October 2017, the General Court handed down its judgment in KPN BV’s challenge against the Commission’s conditional approval of the acquisition by Liberty Global plc (Liberty Global) of Ziggo NV (Ziggo). Liberty Global is an international cable operator, and Ziggo owns and operates a broadband cable network in the Netherlands. KPN BV, a Dutch company active in telecommunications, brought an action before the General Court seeking to annul the Commission’s conditional approval of the acquisition granted in October 2014 on the grounds that the Commission had incorrectly assessed the potential vertical effects of the transaction and failed to provide reasons. The General Court agreed, deciding that the Commission’s decision must be annulled due to its lack of reasoning.

State Aid

ECJ hands down order on General Court’s dismissal of challenge against approval of Hinkley Point state aid. On 24 October 2017, a European Court of Justice (ECJ) order in connection with a challenge to state aid granted to the Hinkley Point nuclear power plant was published. The order relates to an appeal by Greenpeace Energy eG (Greenpeace Energy) against a General Court order that dismissed its action challenging a Commission decision to approve state aid for Hinkley Point. On 29 September 2016, the General Court dismissed Greenpeace Energy’s appeal as inadmissible as the applicants were not individually concerned by the state aid. The ECJ has now dismissed Greenpeace Energy’s appeal against this ruling on the basis that it is unfounded in its entirety.

Commission approves continued public funding for La Banque Postale. On 24 October 2017, the Commission announced that it had approved compensation granted to La Banque Postale to ensure French citizens have access to banking services. This means that public funding of €1.83 billion will reach La Banque Postale over the period of six years (from 2015 to 2020). The Commission decided that the public service task that La Banque Postale performs satisfies the general economic interest aspect of the EU’s state aid requirements. Specifically, the funds granted to do not exceed the net cost of discharging these public service obligations and a procedure is in place to ensure any excess payments are returned to the French State.

Commission initiates in-depth investigation into UK tax scheme for multinational companies. On 26 October 2017, the Commission announced that it is probing a UK tax scheme which exempts select transactions by multinational groups from tax avoidance rules. The probe is focusing on the Group Financing Exemption to the UK’s Controlled Foreign Company rules, which exempts from tax avoidance rules reallocation to the UK (and hence UK taxation) financing income received by an offshore subsidiary from another foreign group company. A deeper investigation will commence if it is revealed that the scheme allows multinational companies to pay less tax in breach of EU state aid rules. 

UK Competition

CMA accepts Showmen’s Guild of Great Britain commitments over competition concerns. On 26 October 2017, the Competition and Markets Authority (CMA) published its acceptance of commitments from the Showmen’s Guild of Great Britain (the Guild) to address impediments to competition in its rules. The Guild is comprised of travelling showmen in the UK and its purpose is to guard their interests. However, in June 2016 CMA started an investigation which concluded that certain of the Guild’s rules restricted competition. As a result, the Guild has agreed to propose certain rule changes to its members, including making membership applications easier and reducing barriers to non-members taking part in Guild-run fairs. The Guild’s members will vote on the changes in January 2018.

CAT publishes Ping appeal details and suspends CMA’s directions. On 27 October 2017, the Competition Appeal Tribunal (CAT) published an appeal summary of Ping Europe Limited’s (Ping) challenge to the CMA’s £1.45 million fine for breach of the Chapter I prohibition of the Competition Act 1998 and Article 101 of the TFEU and suspended certain CMA directions. Ping is seeking an annulment of the CMA’s decision or in the alternative a fine reduction on grounds of disproportionality. The decision relates to an online sales ban which was not objectively justified.