Competition: General Court hands down judgments on appeals in the cathode ray tubes cartel

On 9 September 2015, the General Court ("GC") handed down separate judgments on five appeals challenging the Commission's decision in the cathode ray tubes cartel. In December 2012, the Commission found that eight producers of cathode ray tubes ("CRTs") had breached Article 101(1) of the Treaty on the Functioning of the European Union ("TFEU") by participating in one or both of the two separate infringements, each constituting a single and continuous infringement. The infringements related to a cartel in the market for color display tubes for computer monitors ("CDTs") and a cartel in the market for color picture tubes for television sets ("CPTs"). Both cartels operated on a worldwide basis between 1996 and 2006. The Commission imposed fines totaling EUR 1.47 billion on seven of the undertakings. Chunghwa received full immunity from the fines because it provided information to the Commission that led to the opening of the investigation.

Five of the addressees of the Commission's decision brought actions before the GC seeking to annul the Commission's decision or, alternatively, to reduce the fines imposed. The GC dismissed Samsung SDI's, LG Electronics' and Philips' appeals in their entirety. However, the GC upheld certain pleas by Panasonic, Toshiba and MTPD, which was Panasonic's and Toshiba's common subsidiary at the relevant time. According to the GC, the Commission had not established to the requisite legal standard that Toshiba was aware of the existence of the overall cartel. The Commission had also not shown that Toshiba intended to contribute by its own conduct to the common objectives of the cartel. Furthermore, the Commission had not established that Toshiba could have reasonably foreseen those objectives and was prepared to take the risk. Accordingly, the GC annulled the Commission's decision imposing a fine of EUR 28 million individually on Toshiba for its direct participation in the infringement. The GC also concluded that the Commission had erred in not using the most accurate data available (provided by Panasonic) in relation to the value of sales. According to the GC, the Commission had thus departed without justification from the Fining Guidelines. Therefore, the GC recalculated the fines using the more accurate value of sales figures. This reduced the fine imposed on Panasonic, the fine imposed jointly and severally on Panasonic and MTPD and the fine jointly and severally borne by Panasonic, Toshiba and MTPD. Source: General Court Press Release 9/9/2015 and Commission Press Release 9/9/2015

Competition: Advocate General Wathelet gives opinion on relationship between leniency applications

On 10 September 2015, Advocate General Wathelet gave his opinion on a reference from an Italian court regarding the relationship between leniency applications made under the Commission's leniency notice and summary applications made to national competition authorities ("NCAs") in relation to the same cartel. In 2007, DHL Express (Italy) Srl and DHL Global Forwarding (Italy) Srl (together "DHL") applied to the Commission for immunity in respect of their participation in the international freight forwarding cartel concerning air, maritime and road freight forwarding. The Commission granted DHL full immunity from fines. In parallel, DHL submitted a summary application to the Italian competition authority regarding the road freight cartel. The Italian competition authority considered that DHL's summary application did not contain full information, because the application only included evidence about the air and maritime markets. In the meantime, Deutsche Bahn AG (the parent company of Schenker) submitted its leniency application to the Italian competition authority. Thus, the Italian competition authority granted Schenker immunity from fines, whereas DHL was granted a 50% reduction. DHL brought an action before the Italian Council of State, which referred a number of questions to the Court of Justice of the European Union ("CJEU") concerning the relationship between leniency applications made to the Commission and summary applications made to NCAs, as well as the legal status of the Model Leniency Notice of the European Competition Network ("ECN").

Advocate General Wathelet found that the ECN is not a legislative body, and therefore it cannot adopt acts which are binding on NCAs. According to Advocate General Wathelet, this also applies to the ECN's Model Leniency Programme, although when adopting a leniency programme, Member States and NCAs must respect the fundamental rights of the EU and ensure that national leniency programmes do not hinder the application of Articles 101 and 102 of the Treaty on the Functioning of the European Union ("TFEU"). Advocate General Wathelet also found that there is no legal link between a leniency application made to the Commission and a summary application made to a NCA for the same cartel. Because these are two independent applications, the NCA is not obligated to assess the summary application in light of the main application, even if the NCA has information from other leniency applicants relating to the same cartel. Furthermore, the NCA is not obligated to contact the Commission or the applicant in these circumstances, because such an obligation would run against the principles of autonomy and the independence of leniency programmes and could reduce the applicant's duty to cooperate. Finally, Advocate General Wathelet concluded that NCAs are not obliged to establish leniency programmes. However, if such programmes are established, they must comply with general principles of non-discrimination, proportionality, legal certainty, and the protection of legitimate expectations and good administration, as well as EU competition rules. Provided that national leniency programmes respect EU law, they may grant more favorable treatment to leniency applicants than that offered under the ECN model leniency programme. Source: Case C-428/14 DHL Express (Italy) Srl and DHL Global Forwarding (Italy) Srl v Autorità Garante della Concorrenza e del Mercato, Advocate General's opinion of 10 September 2015.

Competition: Slovenská Pošta appeals General Court judgment on re-monopolization of Slovakian postal services

On 14 September 2015, the Official Journal published details of an appeal by Slovenská Pošta against a General Court ("GC") judgment that upheld the Commission's 2008 decision finding that amendments to Slovakia's postal law breached Article 106 of the Treaty on the Functioning of the European Union ("TFEU"), in conjunction with Article 102 TFEU.

Slovenská Pošta claims that the GC erred in law, applied an erroneous standard of proof and misallocated the burden of proof in finding that the Slovak Republic infringed article 106(1) TFEU read in conjunction with Article 102 TFEU. In addition, Slovenská Pošta claims that the GC erred in law, applied an insufficient standard of review and distorted evidence in accepting the Commission's definition of the relevant market. Source: Case C-293/15 P, Slovenská pošta a.s. v Commission, Official Journal 2015 C 302/21, 14/9/2015

Competition (Sweden): Swedish Competition Authority welcomes proposal for digital single market strategy for Europe

On 15 September 2015, the Swedish Competition Authority ("SCA") announced that it welcomes the Commission's recent proposal for a digital single market strategy for Europe. The SCA states that increased e-commerce could lead to increased competition and price pressure on goods and services within the internal market. However, the SCA notes that the proposal is only at a general level, and therefore the proposal needs to be further specified before a final assessment can be made. Source:Swedish Competition Authority Press Release 15/09/2015 and Swedish Competition Authority Opinion 11/09/2015

Merger control: KPN appeals against Commission decision in Liberty Global/Ziggo merger 

On 14 September 2015, the Official Journal published details of an appeal by KPN BV ("KPN") before the General Court ("GC") against the Commission's decision to approve the acquisition by Liberty Global plc ("Liberty Global") of Ziggo NV ("Ziggo"), subject to conditions. Initially, the Commission had concerns that the merger would remove two close competitors and important competitive forces in the Dutch market for the wholesale of premium pay-TV film channels and would allow the merged entity to increase prices and withhold key content to rivals. To address these concerns, Liberty Global agreed to sell Film1, its premium pay-TV film channel, and to continue to carry this channel on its pay TV network for three years. Liberty Global also agreed to terminate clauses in channel carriage agreements that limit broadcasters' ability to offer their channels and content over the internet. Finally, Liberty Global agreed not to include such clauses in future channel carriage agreements for eight years. Accordingly, the Commission approved the merger subject to these conditions.

KPN brought an action before the GC seeking to annul the Commission's decision. According to KPN, the Commission committed manifest errors in the assessment of the vertical effects of the merger on the market for premium pay-TV sports channels and failed to state reasons for its assessment. KPN also claims that the Commission did not correctly consider the impact of the role and influence of the largest shareholder in Liberty Global in other media companies. Source: Case T-394/15 KPN v Commission, Official Journal 2015/C 302/83, 14/9/2015

Merger control: Telenor and TeliaSonera withdraw from proposed merger in Denmark

On 11 September 2015, the Commission published a statement concerning Telenor's and TeliaSonera's announcement that they are withdrawing from the proposed merger of their respective business units in Denmark. Both companies provide telecommunications services in several European countries. In April 2015, the Commission opened an in-depth investigation into the transaction because it had concerns that the merged entity would have faced insufficient competitive constraint from the only two remaining players on the Danish mobile telecommunications markets. 

According to the Commission, discussions with the parties did not fully address the Commission's competition concerns. The commitments offered by the parties were not sufficient to avoid significant harm to competition on the Danish mobile markets, which would have required an equally significant remedy, such as the creation of a fourth mobile network player. Source: Commission Press Release 11/9/2015

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 BHF-KB by Fosun
  • Commission approves acquisition of Vossloh by Knorr-Bremse
  • Commission approves acquisition of Invermik by the Bright Food Group
  • Commission approves acquisition of GPG by KIA and GNF in energy sector
  • Commission approves acquisition of joint control over Mitsubishi Agricultural Machinery by Mitsubishi Heavy Industries and Mahindra & Mahindra
  • Commission approves acquisition of Sitel by Acticall
  • Commission approves Dutch biodiesel joint venture by Wilmar and Fox Petrolifera
  • Commission approves acquisition of Synlab by Cinven
  • Commission approves acquisition of HCC Insurance by Tokio Marine
  • Commission approves acquisition of PKP Energetyka by CVC
  • Commission approves acquisition of GSK's meningococcal ACWY vaccines business by Pfizer
  • Commission approves acquisition of joint control over DEFTA Group by Naxicap and Fonds Avenir Automobile
  • Commission approves acquisition of joint control over Delion France by Bpifrance and Springwater Capital