Commission appeals General Court’s decision on Icap case. On 23 April 2018, the Official Journal of the European Union (OJEU) published the European Commission’s (Commission) appeal against the General Court’s decision to partially annul the Commission’s decision to fine Icap for facilitating cartels in relation to the Yen interest rate derivatives. The Commission submits that the General Court incorrectly applied case law on the statement of reasons required when imposing fines. According to the Commission, the General Court’s judgment deviated from a leading case, AC Treuhand v Commission and imposes a stricter obligation on the Commission in providing more detail on the methodology used to calculate fines. The Commission’s appeal is therefore, aimed at correcting this error of law which would be detrimental to the Commission’s ability to determine adequate fines to achieve sufficient deterrence.

International Skating Union appeals against Commission’s decision that their eligibility rules restrict competition. On 23 April 2018, the OJEU published details of the International Skating Union’s (ISU) decision to appeal the Commission decision that their eligibility rules breached Article 101 of the Treaty on the Functioning of the European Union (TFEU). The ISU is also challenging other aspects of the Commission’s decision, including the Commission’s decision not to approve the 2014 Dubai Icederby event. The ISU argues that such event falls outside the scope of Article 101 and that the Commission has exceeded its powers by imposing remedies on the ISU where there is no finding of an infringement.

Commission publishes summary decision on the braking systems cartel. On 24 April 2018, the Commission published its summary decision on the infringement of Article 101 TFEU by several companies producing braking systems. On 21 February 2018, the Commission found that TRW, Bosch, and Continental infringed Article 101 TFEU by exchanging sensitive business information for the purpose of reducing competitive uncertainty in the sale of hydraulic braking system components and electronic braking systems of passenger cars to several car manufacturers in the European Economic Area (EEA). Bosch was fined over €31 million whilst Continental was fined over €44 million. TRW was the immunity applicant in this case and received no fines under the 2006 Leniency Notice.

Commission adopts a package of measures to protect EU whistleblowers. On 23 April 2018, the Commission published a package of measures that will form a proposed Directive of the European Parliament and Council on protecting those who report breaches of European Union law. As part of its legislative proposal, the Commission has invited views from any interested parties. The feedback period will be closed eight weeks after the 23 April 2018 and any feedback submitted can be given anonymously, if preferred. The feedback form can be found here and any feedback submitted will be published directly onto the website. The Commission will present a summary of the feedback received to the Parliament and Council as part of the legislative debate.

EU Mergers 

Commission opens in-depth investigation into Apple’s acquisition of Shazam. On 23 April 2018, the Commission announced that it has opened a Phase 2 investigation against Apple’s proposed acquisition of Shazam. The transaction would combine two significant players in the digital music industry that are active in complementary business areas. Apple currently offers music streaming service through Apple Music, which has become the second largest music streaming service provider in Europe. On the other hand, Shazam offers a leading music recognition app for mobile devices in the EEA and worldwide. The Commission is concerned that following the takeover of Shazam, Apple would gain access to commercially sensitive data about customers of its competitors for the provision of music streaming services in the EEA, placing competing music streaming services at a disadvantage. The Commission has until 4 September 2018 to make a decision.

Commission fines Altice €125 million for breaching EU rules and controlling PT Portugal before obtaining merger approval. On 24 April 2018, the Commission announced that it has imposed on Dutch multinational cable and telecommunications company, Altice a fine of €124.5 million for implementing its acquisition of Portuguese telecommunications operator, PT Portugal before notification or approval by the Commission. In deciding the level of fines, the Commission took into account the nature, gravity and duration of the infringement as well as any mitigating or aggravating circumstances. According to the Commission, Altice breached both its notification and standstill obligations despite being aware of its obligations under the EU Merger Regulations. On this basis, the Commission concluded that the overall fine imposed was proportionate and deterrent. This decision does not alter the validity of the Commission’s 2015 decision, which authorised the transaction under the EU Merger Regulation. 

Commission publishes full decision approving purchaser of divestment business of Teva/Allergan merger. On 24 April 2018, the Commission published its decision approving Intas as the purchaser of the Out-licensing divestment business of the merger between Teva Pharmaceuticals Industries Limited (Teva) and Allergan plc. The Commission found that Intas is independent from Teva and has the financial resources, proven expertise and ability and incentive to maintain the divestment business as a viable and active competition force with Teva and other competitors. This decision only constitutes approval of the proposed purchaser and does not constitute confirmation that Teva has complied with its commitments. 

State Aid

Commission opens in-depth investigation into Italian state loan to Alitalia. On 23 April 2018, the Commission announced that it has opened an investigation to assess whether Italy’s bridge loan of €900 million to Alitalia constitutes state aid and if so, whether it complies with EU rules for aid to companies in difficulty. Alitalia is an Italian airline owned by consortium Compagnia Aerea Italiana. Alitalia has been in financial difficulty for several years and, in May 2017, it was placed under extraordinary administration under Italian bankruptcy law. To ensure the financing of Alitalia during that period, the Italian state granted a €600 million bridge loan to Alitalia, which was later increased by an additional €300 million. This loan was then notified to the Commission as a rescue aid within the meaning of the state aid rules, governed by the Rescue and Restructuring Guidelines. The Commission is now investigating whether the loan satisfied the conditions under the Guidelines. This in-depth investigation will provide all interested parties with an opportunity to comment on the measure implemented by the Italian state

Commission approves public service compensation to Sumburgh airport in the UK. On 25 April 2018, the Commission announced that the public service compensation granted to Highlands and Islands Airport Limited (HIAL) for the operation of Sumburgh airport was in compliance with EU state aid rules. Sumburgh airport is situated in the Shetland Islands and connects a sparsely populated region in Scotland with the UK mainland. The public service compensation which amounts to £6 million annually, will facilitate regional connectivity and assist in the development of the area without unduly distorting competition in the single market. The Commission found that without the airport, the Shetland Islands would be disadvantaged in terms of connectivity and economic development compared to other European regions. 

Commission approves investment plan for Italian motorways. On 27 April 2018, the Commission published its approval of Italy’s plans to prolong two motorway concessions and impose a cap on their tolls. The Commission found that this would enable approximately €8.5 billion of investments to proceed whilst reducing the impact on users and limit the distortion of competition. 

UK Competition

CMA updates timetable in relation to Remicade alleged abusive discount scheme. On 26 April 2018, the Competition and Markets Authority (CMA) published an updated case timetable on its investigation of the suspected breach of Chapter II of the Competition Act 1998 and Article 102 TFEU in relation to discounts offered for the drug, Remicade. A statement of objections was issued to Merck Sharp & Dohme Limited for allegedly operating an anticompetitive discount pricing scheme on 23 May 2017. The CMA is now considering the written and oral representations on the Statement of Objections and any further evidence in preparation for its final decision. The CMA estimates that it will reach a final decision on the case by October 2018. 

UK Mergers

CMA clears merger between Co-op and Nisa Retail Limited. On 23 April 2018, the CMA announced that the merger between the Co-operative Group Limited (Co-op) and Nisa Retail Limited (Nisa) do not give rise to competition concerns. The CMA found that Co-op, as a groceries retailer and Nisa, as a wholesaler, do not compete head-to-head. It also found that Nisa-supplied stores were able to choose from several different wholesalers and switch suppliers if prices or the quality of the service was affected by this merger. 

CMA revokes order made against Tiancheng (Germany) Pharmaceutical/Biotest merger. On 23 April 2018, the CMA issued a revocation order pursuant to section 72(4)(b) of the Enterprise Act 2002, revoking its initial enforcement order in relation to the merger of Tiancheng (Germany) Pharmaceutical Holdings AG and Biotest AG. The CMA will continue to assess the transaction and has not made a decision on whether such transaction will lead to substantial lessening of competition in the market. However, the CMA has considered it appropriate to revoke the initial enforcement order based on the evidence that it has received.

CMA approves merger of Cygnet Healthcare Limited and Cambian Group Limited after conditional sale was made. On 25 April 2018, the CMA announced that it has approved and closed its investigation into the merger between Cygnet Healthcare Limited (Cygnet) and the adult services division of Cambian Group plc. The CMA previously found that the merger would result in a substantial lessening of competition in the East Midlands where both companies were the largest provider of male mental health rehabilitation services. The sale of one of Cygnet’s hospitals, The Limes, to Elysium Healthcare has now been approved and has alleviated the CMA’s competition concerns. 

Speeches & Publications 

Commission publishes speech by Margrethe Vestager on competition and a fair deal for consumers online. On 26 April 2018, the Commission published a speech given by its Commissioner, Margrethe Vestager at the Netherlands Authority for Consumers and Markets Fifth Anniversary Conference in The Hague. The Commissioner spoke about changing digital markets, competition in telecom networks and the need for innovation within a competitive market. She also discussed the Commission’s decision to open a Phase 2 investigation into Apple’s takeover of Shazam, as well as the Altice decision, where the Commission fined the company for implementing a merger before notification to the Commission. Lastly, the Commissioner concluded that there is a need to ensure that the digital markets remain strong and competitive. The Commissioner has set up a panel of independent expert advisers from outside the Commission to assess how the growth of digital technologies affects consumers. 

House of Commons publishes report of pre-appointment hearing with the government’s preferred candidate for Chair of the CMA. On 27 April 2018, the Business, Energy and Industrial Strategy (BEIS) Committee of the House of Commons published a report together with the formal minutes of the pre-appointment hearing with Andrew Tyrie, the preferred candidate for the role of the Chair of the CMA. The pre-appointment hearing was held on 24 April 2018. It addressed Mr Tyrie’s parliamentary background and other experiences and questioned Mr Tyrie on the challenges facing the CMA as it prepares for an increased workload post-Brexit. The BEIS Committee also examined Mr Tyrie’s views on the effectiveness of specific markets and market interventions. On the basis of the hearing and his background, the BEIS Committee is satisfied that Mr Tyrie has the professional competence and personal independence to assume the role as Chair of the CMA.