EU Competition

EU – Phase I merger notifications published in the Official Journal

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Orange/T-Mobile: Commission clears merger subject to conditions The European Commission (“Commission”) has cleared the proposed merger of Orange UK and T-Mobile UK, respectively France Télécom’s and Deutsche Telekom’s UK subsidiaries. The decision is conditional upon the amendment of an existing network sharing agreement with Hutchison 3G UK, to ensure that there remain sufficient competitors in the market, and the divestiture of a quarter of the combined spectrum of the merging parties in the 1800 MHz band, which is one of three frequency bands currently used for mobile communications in the UK. In light of these commitments, the OFT has withdrawn its request to refer the UK aspects of the proposed merger back to the OFT. Click here for more information.

Google: Commission confirms complaints The Commission has confirmed that it has received three competition complaints against Google which it is examining. The Commission has not yet opened a formal investigation. Google has issued a statement confirming that it has been notified by the Commission that it has received complaints from three companies: a UK price comparison site, Foundem, a French legal search engine called ejustice.fr, and Microsoft’s Ciao! from Bing. Click here for more information.

Commission sends SO to Telekomunikacja Polska The Commission has sent a Statement of Objections (“SO”) to the Polish telecoms incumbent operator - Telekomunikacja Polska S.A. The SO outlines the Commission’s preliminary view that the company has abused its dominant position by refusing to supply remunerated access to its wholesale broadband services. The Commission initiated proceedings on 17 April 2009 following indications that Telekomunikacja Polska was abusing its dominant position in the Polish wholesale broadband services market. Click here for more information.

Automotive electrical sector: Commission confirms cartel investigation The Commission has confirmed that on 24 February 2010 its officials began to carry out unannounced inspections in several Member States at the premises of companies active in the sector of automotive electrical distribution systems and of other components for automotive electronic and electrical distribution systems. The Commission has reason to believe that the companies concerned may have violated Article 101 of the Treaty on the Functioning of the European Union. The Commission’s investigation is being coordinated with several other competition authorities worldwide. Click here for more information.

UK Competition

Reckitt Benckiser: OFT issues Statement of Objections The OFT has issued an SO alleging that Reckitt Benckiser has abused its dominant position in the market for the NHS supply of alginate and antacid heartburn medicines. The OFT alleges that Reckitt Benckiser sought to restrict competition to its Gaviscon brand by withdrawing and de-listing its NHS packs of Gaviscon Original Liquid from the NHS prescription channel. Click here for more information.

National Grid: Court of Appeal rejects liability appeal but halves fine to €15 million The Court of Appeal has ruled that National Grid acted anti-competitively in the domestic gas metering market, endorsing Ofgem’s April 2008 findings and the CAT’s ruling on appeal in April 2009. However, the Court of Appeal has recognised the unusual nature of the case, including Ofgem’s involvement in the development and negotiation of the gas metering contracts, and has halved the fine imposed by Ofgem to £15million. Click here for more information.

Methionine cartel: CAT stays damages action brought against Degussa The Competition Appeal Tribunal (“CAT”) has published an order by which it has stayed a claim for damages brought by three poultry producers against Evonik Degussa GmbH and its UK subsidiary Degussa Limited. The claimants’ action sought damages for losses allegedly resulting from Degussa’s participation in the animal feed (methionine) cartel. The CAT’s order states that the parties had reached agreement that the CAT should be asked to stay the proceedings. No reasons for the parties’ agreement to the stay have been disclosed, however it would seem likely in the circumstances that the parties will be negotiating a settlement. Click here for more information.

CAT refers wholesale line rental appeal to CC The CAT has referred part of an appeal by Carphone Warehouse to the Competition Commission (“CC”). The reference is about the prices that Ofcom permits Openreach, a separate division of BT Group, to charge for wholesale line rental. The CC has until 31 August 2010 to determine the pricing issues. Click here for more information.

Competition EU Member States

Spain: construction companies investigated for bid rigging The Spanish competition authority has opened an investigation against 53 construction companies for bid rigging of public tenders. The investigation was launched following a complaint filed with the authority, which was followed by inspections at the premises of Grupo Campezo Obras y Servicios, Oscal Obras y Servicios, Tebycón, Compañía General de Hormigones y Asfaltos, Excavaciones Saiz, Extraco Construccions e Proxectos, Construcción Integral de Firmes CPA and Pavimentos Asfálticos de Castilla.

State Aid

Commission approves restructuring plan for Dexia Commission has approved under the EU state aid rules aid granted by Belgium, France and Luxembourg for the restructuring of Dexia. The Commission’s approval is subject to Dexia meeting a number of conditions, including predefined liquidity ratios, and implementing the structural and behavioural measures notified to the Commission. Click here for more information.

Commission launches in-depth investigation into €166 million Slovak state loan The Commission has launched an in-depth investigation to ascertain whether the loan granted by the Slovak State to Železnicná spolocnost Cargo Slovakia a.s (ZSSK Cargo) is compatible with the EU State aid rules. At this stage the Commission believes that the loan, which the Slovak rail freight company will use to finance costs linked to the operation of the company, could constitute State aid that is incompatible with the internal market. Click here for more information.

Commission launches in-depth investigation into German tax rules The Commission has opened a formal investigation into a German tax advantage granted to ailing companies when there are significant changes in their shareholding. The German authorities consider that this measure does not fall under the state aid rules. The Commission is concerned that the measure may favour ailing companies in comparison to healthy companies, with regard to their loss carry-forwards. The Commission has doubts on the compatibility of the measures with the EU Guidelines on Rescue and Restructuring aid. Click here for more information.