EU Competition

General Court partially upholds appeal against Commission’s refusal to grant access to documents in car glass cartel. On 7 July 2015, the General Court handed down its judgment (not yet available in English) in an appeal by AXA Versicherung AG against a decision of the European Commission to refuse requests for access to certain documents relating to the car glass cartel. The General Court considered that the Commission could legitimately conclude that the documents contained in the Commission’s file were covered by the general presumption that their disclosure would, in principle, undermine the protection of the purpose of inspections under Article 4(2) of Regulation 1049/2001. In the absence of any evidence in the action capable of rebutting the general presumption, AXA could not claim that the Commission ought to have carried out a specific, individual examination of the documents at issue. However, the General Court annulled the part of the Commission’s decision rejecting AXA’s request for access to references to leniency documents in the table of contents of the car glass cartel file. According to the General Court, the Commission had failed to justify its refusal to the requisite legal standard.

Commission sends statement of objections to MasterCard on cross­border rules and inter­regional interchange fees. On 9 July 2015, the European Commission announced that it has sent a statement of objections to MasterCard in relation to alleged breaches of Article 101 of the TFEU relating to its cross­border rules and inter­regional interchange fees. The statement of objections alleges that MasterCard’s rules on cross­border acquiring prevent banks from offering lower interchange fees to retailers based in another EEA member state where interchange fees may be higher. The Commission is concerned that this restricts cross­border competition between banks and results in higher charges for retailers, and so higher prices for consumers. In addition, the Commission alleges that MasterCard’s interchange fees for transactions in the EU using MasterCard cards issued elsewhere set an artificially high minimum price for processing these transactions, also increasing charges for retailers and prices for consumers. Such inter­regional interchange fees are not covered by the recently adopted Regulation 2015/751 on interchange fees for card­based payment transactions.

ECJ dismisses InnoLux appeal holding that sales of finished products were relevant for calculating cartel fine. On 9 July 2015, the European Court of Justice (ECJ) dismissed an appeal by InnoLux against a General Court judgment on its challenge to the European Commission’s decision on the liquid crystal display (LCD) panels cartel. The ECJ concluded that the General Court did not err in holding that the Commission was entitled to take into account, in setting the fine, the sales of finished products incorporating the cartelised LCD panels, up to the value of those panels. According to the ECJ, even though the sales of the finished products were on a downstream market from the market for LCD panels, the effects of the cartelised  price of the LCD panels on the sales of the finished products were liable to affect competition on the market for those products in the EEA. Therefore, the ECJ found that the sales of the finished products were related to the cartel. The ECJ did not consider that the Commission’s territorial jurisdiction was exceeded by virtue of the fact that the Commission took into account, when calculating the fine, sales of finished products incorporating the LCD panels, which were sold to group production units outside the EEA. According to the ECJ, the Commission has jurisdiction  to apply Article 101 of the TFEU to a worldwide cartel that was implemented in the EEA (through direct sales of LCD panels to third parties). The issue in this appeal related to the sales to be taken into account to ensure that the fine reflected the economic importance of that infringement and the relevant weight of InnoLux in the infringement.

EU Mergers

Phase I Mergers

  • M.7620 FAM / FANOPI / NEFAB (7 July 2015)
  • M.7634 MITSUI / GESTAMP / GRI (6 July 2015)
  • M.7656 CD&R GROUP / SCIMITAR TOPCO LIMITED (7 July 2015)
  • M.7690 CVC / DOUGLAS GROUP (7 July 2015)
  • M.7696 LONE STAR / BALTA (7 July 2015)

State Aid

General Court annuls Commission decision on “psychological” state aid given to France Telecom. On 2 July 2015, the General Court annulled a Commission decision finding that  France had granted France Télécom illegal “psychological” state aid via the combination of  public statements of support and the offer of a shareholder loan at a time when the company  was in financial trouble. The General Court annulled the Commission’s decision on the ground that the Commission incorrectly applied the test of the prudent private investor.

Commission approves amended restructuring plan of Austrian bank OVAG. On 2 July 2015, the European Commission announced that it has approved the amended restructuring plan of Österreichische Volksbank (ÖVAG) and Volksbanken­Verbund (Verbund) to be in line with EU state aid rules. The Commission stated that the amendments were necessary because an assessment by the European Central Bank/Single Supervisory Mechanism in October 2014 revealed a capital shortfall of EUR65 million for the Volksbanken sector. ÖVAG and the primary banks that form the Volksbanken sector decided to overcome the capital shortfall through a structural transformation, as a result of which ÖVAG will be wound down and the entire Verbund (a system of joint financial liability and liquidity transfer) will become the beneficiary of the state aid granted in 2012 to ÖVAG, as its economic successor.

Commission approves third prolongation of Polish credit union resolution scheme. On 6 July 2015, the Commission announced that it has decided, under the EU state aid rules, to approve the third prolongation of the Polish credit union resolution scheme, until 31 December 2015. The Commission first approved the scheme in February 2014. The Commission has decided that the prolongation of the scheme is in line with the rules on state aid to banks during the financial crisis. In particular, the Commission stated that the prolonged measures are well targeted, proportionate and limited in time and scope.

Public Procurement

Commission suspends deadline in Flughafen Wien request for exemption from Utilities Directive for provision of airports or other terminal facilities. On 2 July 2015, the Commission published a notice in the Official Journal concerning a Flughafen Wien’s request under Article 35 of Directive 2014/25 on procurement by utility companies (the new Utilities Directive) in relation to the provision of airports or other terminal facilities to air carriers in Austria. The Commission has asked Flughafen Wien and the Austrian authorities each to provide additional information. Under Annex IV, point 2, second phrase of Directive 2014/25 in case of late or incomplete answers to the Commission’s request for clarification or for the additional information, the period of 130 days shall be suspended for the period between the expiry of the time limit set in the request for information and the receipt of the complete and correct information. The Commission announced that the final deadline to consider this request will expire 90 working days after the receipt of complete and correct information.

General Court dismisses appeal by European Dynamics against ranking of bids for computer services contracts. On 8 July 2015, the General Court dismissed an appeal by European Dynamics Luxembourg SA, European Dynamics Belgium SA and Europaii Dynamiki (together European Dynamics) against decisions of the Publications Office of the European Union (PO) in relation to the ranking bids for contracts for the provision of computing services. The General Court concluded that the PO did not make any manifest errors in the assessment of European Dynamics’ tenders, or those of the more successful tenderers. Further, the General Court held that the PO had given sufficient reasons for its decisions and had not erred in its interpretation or application of award criteria.

UK Mergers

CMA makes initial enforcement order to Scimitar and Motor Fuel. On 8 July 2015, the Competition and Markets Authority (CMA) announced that it has made an initial enforcement order under section 72(2) of the Enterprise Act 2002 addressed to Scimitar Top Co Limited, Motor Fuel Group Limited and Motor Fuel Limited in relation to the acquisition by Motor Fuel Limited of 90 petrol stations from Shell Service Station Properties Limited, Shell U.K. Limited and GOGB 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 pre­emptive action in both completed and anticipated mergers.

CMA refers acquisition by Joseph Ash of W Corbett for Phase 2 investigation. On 9 July 2015, the Competition and Markets Authority (CMA) announced that it has referred the anticipated acquisition by Joseph Ash Limited (a subsidiary of Hill & Smith Holdings PLC) of W Corbett (Galvanizing) Limited for an in­depth Phase 2 merger investigation under the Enterprise Act 2002. This is the eighth Phase 2 reference made by the CMA in 2015.

Speeches & Publications

Commission publishes guidelines for the examination of state aid to the fisheries and aquaculture sector. On 2 July 2015, the Commission published new guidelines for the examination of aid to the fisheries and aquaculture sector under the EU state aid rules in the Treaty on the Functioning of the European Union. The Guidelines set out the principles that the Commission will apply when assessing whether such aid can be considered compatible with the internal market under Article 107(2) or Article 107(3) of the TFEU, along with guidance on procedural issues.

CMA report on relationship between productivity and competition. On 9 July 2015, the CMA published a report titled, “Productivity and competition: a summary of the evidence”. The report discusses the relationship between competition and productivity and how this should affect the CMA’s work. The report summarises the theoretical and empirical evidence on the relationship between competition and productivity. It looks both at whether stronger competition between firms leads to higher levels of productivity and whether competition policy and enforcement lead to stronger competition, and therefore higher productivity.