Competition: Commission publishes annual competition report

On 15 June 2016, the Commission published its annual competition report, which illustrates how EU competition policy initiatives and enforcement activities have underpinned the Commission's growth and jobs agenda. The report provides examples of how competition policy in 2015 contributed to boosting investment and innovation, as well as to addressing EU challenges in priority areas such as the Digital Single Market, the Energy Union and the Internal Market. Source: Commission Press Release 15/6/2016 and 2015 Annual Competition Report

Competition: Court of Justice of European Union gives judgments relating to Spanish bitumen cartel

On 9 June 2016, the Court of Justice of the European Union ("CJEU") handed down its judgments on three separate appeals by CEPSA, PROAS and Repsol (jointly "appellants") against General Court ("GC") judgments on actions challenging the Commission's decision finding a cartel in the Spanish Bitumen market. In October 2007, the Commission issued a decision finding that 13 companies, within 5 corporate groups, had participated in a complex of market-sharing and price-coordination agreements in the road construction penetration bitumen business in Spain. The Commission imposed total fines of approximately EUR 184 million. CEPSA and its wholly owned subsidiary PROAS were fined approximately EUR 84 million, while Repsol was fined approximately EUR 81 million. As reported earlier, in January 2016 the CJEU reduced the fine imposed on another appellant, Galp, in the same cartel because the GC had exceeded its powers.

All appellants submitted several grounds for appeal. CEPSA claimed that the GC erred in not annulling the Commission's decision due to errors in the language used in the statement of objections, whereas PROAS alleged that the GC erred in its assessment of the fine imposed. Repsol challenged instead the GC's assessment of the commercial independence of a subsidiary company, in addition to challenging the fine imposed. All the appellants also claimed that the duration of the proceedings breached their fundamental rights.

The CJEU noted that the appellants were correct in claiming that the GC had infringed in a sufficiently serious manner its obligation to adjudicate the case within a reasonable timeframe. However, claims for damages in respect of the damage caused by the GC's breach to adjudicate within a reasonable timeframe may not be made directly to the CJEU in the context of an appeal. Such cases should instead be brought before the GC itself. Therefore, this basis for appeal was in essence ineffective and had to be rejected. The CJEU also rejected all the other grounds of appeal submitted by the appellants. Consequently, the CJEU dismissed all three appeals in their entirety. Source: Cases C-608/13 P - CEPSA v Commission, C-616/13 P - PROAS v Commission and C-617/13 P - Repsol v Commission, judgments of 9 June 2016

Competition: Commission publishes study on judges' training needs in field of EU competition law

On 7 June 2016, the Commission published a study on national judges' training needs in the field of EU competition law and rules on State aid. The study was conducted by the Academy of European Law ("ERA") in partnership with the European Judicial Training Network ("EJTN") and Ecorys, a European research and consultancy company.

The research group divided the study into three research areas. The first research area maps national jurisdictions for the application of EU competition law. It includes country profiles detailing the competent jurisdictions in all 28 Member States. The second research area focuses on the training needs of the judges. It analyses the needs and demand for training among judges and proposes six distinct profiles in terms of judges' training needs. As a third research area, the study evaluates DG Competition’s Training of National Judges program and makes concrete recommendations for ensuring that the program meets the needs of judges dealing with EU competition law in the future.

The mapping and training needs analysis revealed that few judges deal with all aspects of EU competition law. Further, it revealed that most judges with experience of EU competition law had dealt with only one type of enforcement action. The key recommendations for the training of judges are to target training for judges dealing with judicial review of national competition authority ("NCA") decisions more on the specific needs of this relatively small group; to provide similarly targeted training for judges in courts specialized in competition-related private actions; and to ensure that the rest of the judges dealing with private actions or state aid have access to on-demand training resources in local languages. The six distinct training profiles proposed by the research team include training for first-instance judges dealing with judicial review of NCAs decisions, training for non-specialized judges dealing with private enforcement and training for judges dealing with State aid-related cases. The key recommendation for the funding of the Training of National Judges program are to continue the program as a main source of funding for judicial training in the field, focusing on jurisdictions that have under-benefitted until now; to target grants to the specific needs of different training profiles; and to develop a more systematic and documented approach to performance indicators, monitoring and reporting. Source: Study on judges' training needs in the field of competition law – Executive summary and Study on judges' training needs in the field of competition law – Final report

Competition (Finland): Finnish Competition and Consumer Authority supports liberalization of passenger and cargo transport

On 10 June 2016, the Finnish Competition and Consumer Authority ("FCCA") published a newsletter in which it comments on the Ministry of Transport and Communications ("MoTC") proposal for a new Transport Code. The new Transport Code will compile legal provisions on transport under one act. It will promote the introduction of new technologies, digitalization and innovative business concepts. In April 2016, the MoTC published a draft government proposal for the Transport Code and invited interest groups to submit their comments by 23 May. The MoTC aims to submit the final government proposal in June 2016.

The FCCA supports the liberalization of passenger and cargo transport, which would enable new service models and transport modes. According to the FCCA, the current provisions regulating passenger transport have restricted the market operation and categorized different transport modes. This has prevented efficient interoperability of the different parts of the transport system. The FCCA notes that the companies would benefit from economies of scale and scope if the barriers for market entry and market expansion were removed. This would also benefit consumers. Concerning the liberalization of taxi transport, the FCCA supports the removal of the maximum number of available licenses and the obligation concerning the area of operation. In addition, the FCCA supports the introduction of a company-specific taxi transport license as well as the lighter requirements for obtaining a license. Concerning public transportation, the FCCA supports the removal of the route transport licenses and demand-responsive transport license requirements. Further, the FCCA supports the introduction of open information interface and interoperable digital ticket and payment systems.

According to the FCCA's director general, the proposal for the Transport Code is a great example of draft legislation that emphasizes the importance of end customers' needs and choices and leaves room for companies to compete. Source: The Finnish Competition and Consumer Authority newsletter 3/2016 (in Finnish) and the Finnish Competition and Consumer Authority statement to the Ministry of Transport and Communications (in Finnish)

Competition (Sweden): Stockholm District Court finds Swedavia's previous badge system for pre-ordered taxis at Arlanda airport's arriving hall does not constitute an abuse of dominance

In 2011, the Swedish Market Court ("SMC") delivered a judgment in which Swedavia AB ("Swedavia"), the owner of Arlanda airport, was found guilty of abuse of dominance for having applied a badge system. The system imposed an additional charge of SEK 25 on customers who pre-ordered a taxi before arrival and where the taxi driver met the customer in the arrivals hall holding a sign with the customer's name. To get access to the arrivals hall, the taxi driver had to wear a special badge collected from the pre-ordering counter. The SMC prohibited Swedavia under penalty of a fine from continuing to apply the system.

Based on the SMC's judgment, the Swedish Competition Authority, ("SCA") sued Swedavia and demanded that the company pay SEK 340 000 in competition fines for the period that the badge system had been operative. On 9 June 2016, the Stockholm District Court ("SDC") delivered its judgment. Similar to the SMC, the SDC found Swedavia to hold a dominant position but, in contrast to the SMC, the SDC did not find the badge system to constitute an abuse of dominance. The SDC stated that the charge implied an additional cost for the customers and that it caused problems for customers that preferred to use the pre-ordering counter. The charge also resulted in additional work for taxi companies. However, the SDC found that the efficiency gains in the form of reduced waiting time neutralized the harmful effects on competition.

According to the SCA, the question of whether a company can be fined for behavior that another court already has prohibited is particularly important. This possibility was confirmed by the SDC.

Source: Swedish Competition Authority Press Release 09/06/2016 (in Swedish), Swedish Market Court Judgment 23/11/2011 (in Swedish) and Stockholm District Court Judgment 09/06/2016

State aid: General Court upheld Italy's appeal on interest rates for unrecovered state aid in penalty payments

On 9 June 2016, the General Court ("GC") handed down a judgement upholding Italy's appeal regarding how to calculate interest rates for unrecovered state aid, in so far as the interest was used in determining the penalty payment for the failure to take necessary measures to recover illegal state aid.

In May 1999 the Commission adopted a decision finding that aid granted by Italy to promote employment was unlawful state aid, and requested Italy to recover the aid from the recipients. In 2004 the Court of Justice of the European Union ("CJEU") found that Italy had failed to fulfil its obligations to take all measures necessary to recover the unlawful state aid. In 2009 the Commission referred Italy to the CJEU for the second time. The CJEU decided in 2011 that Italy should pay a lump sum payment of EUR 30 million and a periodic payment calculated as follows: multiplying EUR 30 million by the percentage of the unlawful aid that had not yet been recovered at the end of the relevant period, compared to the total amount not yet recovered on the date of delivery of the judgment for every six months of delay until the infringement ceased.

In March 2013, the Commission ordered Italy to pay a penalty payment in execution of the CJEU's 2011 judgment. Italy appealed the decision, which appeal was dismissed by the GC in 2014. In the meantime, the Commission adopted a decision ("contested decision") in December 2013 fixing the amount of the penalty Italy owed for the second six-month period following the CJEU's 2011 judgment. The Commission established that the remaining aid to be recovered as of 17 November 2012 represented 20.84% of the outstanding aid, which included accrued compound interest for the amount to be recovered. Therefore the Commission imposed a penalty payment equivalent to 20.84% of the basic amount of EUR 30 million, which equaled EUR 6,252,000. Italy appealed this to the GC in February 2014, arguing that the Commission's decision infringed the applicable legislation.

The GC noted that the Commission's original decision of 1999 was adopted before the Commission Communication on interest rates of 8 May 2003 had entered into force. Consequently, it was for the national law to determine whether to apply a simple or compound interest rate. Pursuant to Italian legislation, the accrued interest does not automatically bear interest. Therefore, the GC decided that the contested decision must be annulled in so far as the Commission, for the purpose of determining the amount of the penalty for the six-month period from 17 May to 17 November 2012, took into account sums relating to amounts of aid to be recovered which included compound interest, contrary to what was stated in the applicable national law. Source: Case T-122/14 – Italy v Commission, judgment of 9 June 2016

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 Dell's IT Services Business by NTT Data International
  • Commission approves acquisition of Continental Bakeries by Goldman Sachs
  • Commission approves joint venture by Air Liquide and OMZ in LNG sector
  • Commission approves acquisition of ZF TRW's Engineered Fasteners & Components business by Illinois Tool Works
  • Commission approves acquisition of parts of INGKA Holding by Inter IKEA Holding
  • Commission approves Sysco's acquisition of Brakes
  • Commission approves acquisition of sole control of INOVYN by INEOS
  • Commission approves proposed acquisition of Banco BPI by CaixaBank
  • Commission approves acquisition of GloHealth and Aviva Health by Irish Life