Commission opposes Hutchison acquisition of Telefónica UK. On 11 May 2016, the European Commission (Commission) issued a press release confirming that it has blocked the proposed acquisition of O2 by Hutchison under the EU Merger Regulation. The deal would have combined Telefónica UK’s “O2” and Hutchison 3G UK’s “Three”, creating a new market leader in the UK mobile market, leaving Vodafone and BT’s Everything Everywhere (EE) as the only remaining market competitors. In addition, the Commission found that the remedies proposed by Hutchison failed to adequately address the serious concerns raised by the takeover.
General Court dismisses Trioplast appeal against late payment interest for cartel fine. On 12 May 2016, the General Court handed down its judgment dismissing an appeal made by Trioplast Industrier AB (Trioplast) against the Commission’s decision to charge interest on Trioplast’s late payment for a fine imposed for its involvement in the industrial bags cartel. Trioplast had argued that the European Courts had annulled the original decision due to manifest errors of the Commission, which had the effect of reducing the fine. Although the Commission had sent out a demand for payment based on the adjusted amount, Trioplast challenged the letter in the General Court, arguing that a new Commission decision was required.
Commission refers proposed acquisition of Faiveley Transport by Westinghouse Air Brake Technologies Corporation to phase II investigation. On 12 May 2016, the Commission issued a press release confirming that it had commenced a phase II investigation into Westinghouse Air Brake Technologies Corporation’s proposed acquisition of Faiveley Transport. The Commission has concerns that the proposed takeover may reduce competition for railway equipment systems and subsystems in the European Economic Area (EEA).
Phase I Mergers
General Court dismisses appeal in respect of German 2012 Renewable Energy Act. On 10 May 2016, the General Court handed down its judgment dismissing an appeal brought by the Federal Republic of Germany against the Commission’s decision that the German 2012 Renewable Energy Act constituted aid in excess of State aid rules and resulted in higher prices being paid by customers. The decision was challenged on the basis that the scheme involved payments by private undertakings as Transmission Systems Operators (TSOs), and that the scheme was privately administered without State control. The General Court determined that although funds were not received directly by the parties from the State budget that the scheme nonetheless derived from the implementation of public policy; that the funds were administered by the TSOs on behalf of the State; and that the TSOs remained under the dominant influence of the public authorities.
General Court dismisses State aid appeal in respect of Czech sports facilities. On 12 May 2016, the General Court handed down its judgment in respect of an appeal made by Hamr-Sport a.s., which argued that State aid granted by the Czech Republic to non-profit sport facilities was unlawful, on the basis that, among other things, the Commission had erred in its duty to state reasons in its decision finding the aid to be compatible with the internal market. The General Court determined that a succinct statement of reasons for that decision was sufficient under Article 253 of the Treaty on the Functioning of the European Union (TFEU) as it disclosed in a clear and unequivocal fashion the reasons why the Commission considered that it was not faced with serious difficulties. The question as to whether the reasoning was well founded was considered to be a separate issue.
CMA issues infringement decision in respect of Ultra Finishing’s engagement in RPM in respect of online sales. On 10 May 2016, the Competition and Markets Authority (CMA) announced that it had fined Ultra Finishing Limited (Ultra Finishing) £786,668 for its infringement of UK competition law by engaging in resale price maintenance (RPM) in respect of online sales. The fine imposed reflects a 20% discount applied by the CMA in recognition of efficiencies resulting from Ultra Finishing admitting its infringement under the settlement procedure. A further 5% discount was also applied to reflect Ultra Finishing’s efforts to establish a new compliance programme.
CMA to refer Safetykleen acquisition of Pure Solve to phase II investigation if undertakings in lieu are not offered. On 11 May 2016, the CMA announced that it would be referring the anticipated acquisition by Safetykleen UK Limited (Safetykleen) of Pure Solve UK Limited for an in-depth phase II investigation unless Safetykleen provides acceptable undertakings by 18 May 2016. Both companies supply parts for washing machines and associated services in Great Britain and it is suggested, are each other’s nearest competitors.
CMA to refer acquisition of the Northern Rail franchise by Arriva Rail North to phase II investigation if undertakings in lieu are not offered. On 12 May 2016, the CMA announced that it would be referring the acquisition by Arriva Rail North (Arriva) of the Northern Rail franchise for an in-depth phase II investigation unless Arriva provides acceptable undertakings. Following the phase I investigation, Arriva was found to be running existing train and bus operations in the same area as Northern Rail. As a result of the acquisition, Arriva will now run a number of services and routes where passengers had previously had a choice between competing operators.
Speeches & Publications
CMA publishes guide to competition law redress. On 7 May 2016, the CMA published “A guide to taking action for breaches of competition law”, which sets out the rights of individuals and businesses to bring private actions for breaches of competition law.
Chief Executive of the CMA appointed as new Permanent Secretary for the DECC. On 10 May 2016, the CMA announced that Alex Chisholm, current Chief Executive of the CMA, will be moving to his new role as Permanent Secretary for the Department of Energy and Climate Change on 3 July 2016. Andrea Coscelli, CMA Executive Director of Markets and Mergers, will become acting Chief Executive of the CMA until the position is filled permanently.