Antitrust

Commission sends statement of objections to Bulgarian Energy Holding alleging abuse of dominance on wholesale electricity market. On 12 August 2014, the European Commission announced that it has sent a statement of objections to Bulgarian Energy Holding (BEH), alleging that it has abused its dominant position on the Bulgarian wholesale electricity market (IP/14/922). The Commission holds the preliminary view that territorial restrictions on resale contained in BEH’s electricity supply contracts with traders on the non-regulated Bulgarian wholesale electricity market may breach Article 102 of the Treaty on the Functioning of the European Union (TFEU). The Commission is concerned that such territorial restrictions have the effect of distorting the allocation of electricity within the single market, affecting liquidity and efficiency of electricity markets and raising artificial barriers to trade between Bulgaria and other member states.

Cartels

Appeal by Pirelli against power cables cartel decision. On 11 August 2014, details were published in the Official Journal of an appeal by Pirelli against the Commission’s decision on the power cables cartel (OJ 2014 C-261/68). Pirelli is challenging the attribution to it of joint and several liability for part of the fine imposed on Prysmian. Pirelli claims that the Commission erred in law, failed to state reasons, breached general principles of law and breached Pirelli’s fundamental rights in applying the “parental liability presumption” of decisive influence.

EU Mergers

Summary of decision on Hutchison 3G Ireland/ Telefonica Ireland merger published. On 13 August 2014, a summary was published in the Official Journal (OJ 2014 C-264/6) of the Commission’s decision, under Article 8(2) of the EU Merger Regulation, to grant conditional approval to the acquisition of Telefónica Ireland (O2) by Hutchison 3G Ireland (Three). The Commission concluded that, although not strengthening a dominant position, the merger was likely to result in a significant impediment to effective competition in the Irish retail mobile telecommunications services market (an oligopolistic market) by removing an important competitive force (O2). The merger would reduce the number of mobile operators from four to three, remove competition between the parties and reduce Three’s incentives to compete post- merger.

State Aid

Commission approves restructuring plan for Abanka. On 13 August 2014, the Commission announced that it has decided, under the state aid rules, to approve the restructuring plan for the Slovenian bank Abanka Vipa (IP/14/926). The Commission is satisfied that the state aid granted to the bank in the context of its restructuring meets the conditions of the rules on state aid for the restructuring of banks during the financial crisis. In particular, the restructuring plan will enable Abanka to become viable in the long term without continued state support, while mitigating the distortions of competition resulting from the state aid.

Commission publishes overview of decisions and on-going investigations in the context of the financial crisis. On 13 August 2014, the Commission published its latest overview of the decisions on national state aid measures taken in the context of the financial crisis (MEMO/14/507). This updates the previous version published in February 2014. It contains a table summarising each of the decisions taken by the Commission since 2008 to approve aid granted by each member state to support the financial sector under Article 107(3)(b) of the TFEU.

The European Commission has enjoined Romania from complying with an ICSID award that it believes may be incompatible with EU law on state aid. The Commission’s directorate-general for competition issued an injunction on 26 May to prevent Romania from honouring a US$250 million award rendered last year under the Sweden-Romania bilateral investment treaty (BIT) (SA.38517). The injunction has not been published. On 7 August 2014, despite the injunction, an ICSID (International Centre for Settlement of Investment Disputes) ad hoc committee threatened to lift a stay of enforcement of the award within 30 days unless Romania issues an unconditional undertaking to comply with the award in the event of losing its annulment application. An ICSID tribunal issued the award in December 2013 in favour of Swedish brothers Ioan and Viorel Micula (and three food production companies in which they had interests) after finding that Romania had breached the BIT’s fair and equitable treatment standard by withdrawing economic incentives in 2005 that had encouraged investment in disadvantaged regions of the country.

UK Antitrust

Former energy regulators comment on energy market investigation. On 11 August 2014, the Competition and Markets Authority (CMA) published a letter from five former senior GB energy regulators, which comments on the energy market investigation into the supply and acquisition of energy and the CMA’s issues statement. This letter suggests, in particular, that the CMA should examine a comparatively recent change in Ofgem’s (the UK energy regulator) approach to regulating the retail market, leading to interventions that are significantly greater in detail, scope and severity, and the impact of this on retail competition. It also asks the CMA to clarify Ofgem’s locus to determine “fair prices”, where to do so may affect the extent or nature of retail competition. Significantly, the letter also warns that the CMA must be, and must be seen to be, independent from Ofgem in conducting its investigation.

FIPO withdraws intervention in AXA appeal against private healthcare market investigation final report. On 11 August 2014, the Competition Appeal Tribunal (CAT) made an order consenting to the withdrawal of Federation of Independent Practitioner Organisation’s (FIPO) intervention in AXA PPP’s application for a review of the final report on the private healthcare market investigation. FIPO’s own application for review (in relation to the CMA’s findings of insufficient competition on fees between private consultants and its remedy to address this) is unaffected. It is scheduled to be heard together with the applications by AXA PPP and HCA International on 19 January 2015.

UK Mergers

CMA makes initial enforcement order to Enterprise Rent-A-Car. On 11 August 2014, the CMA announced that it has made an initial enforcement order under section 72 of the Enterprise Act 2002 addressed to Enterprise Rent-A-Car UK Limited and Enterprise Rent-A-Car European Holdings Limited in relation to the completed acquisition by Enterprise Rent-A-Car UK Limited of Burnt Tree Holdings Limited. Section 72 of the Enterprise Act, as amended by the Enterprise and Regulatory Reform Act 2013, allows the CMA to make initial enforcement orders to prevent pre- emptive action in completed (and anticipated) mergers. The order is without prejudice to the on- going investigation into this completed merger.

CMA makes initial enforcement order to Marston. On 13 August 2014, the CMA announced that it has made an initial enforcement order under section 72 of the Enterprise Act 2002 addressed to Marston Topco Limited and Marston Holdings Limited in relation to the completed acquisition by Marston Holdings Ltd of Collectica Limited. The order is without prejudice to the CMA’s on-going investigation into this completed merger.