Competition: General Court dismisses the appeal by Odile Jacob in connection with the purchase of Vivendi Universal Publishing by Lagardère

On 5 September 2014, the General Court (“GC”) handed down its judgment dismissing Éditions Odile Jacob’s (“Odile Jacob”) appeal against the Commission’s decision to approve the acquisition of Vivendi Universal Publishing (“VUP”) by the Lagardère group. In 2004, the Commission conditionally approved the acquisition subject to certain conditions on Lagardère. Thus, Lagardère agreed to sell a significant part of VUP’s assets. Odile Jacob expressed interest in acquiring the assets. However, Lagardère accepted the offer of another company, Wendel Investissement SA (“Wendel”). The Commission approved Wendel as the purchaser. Odile Jacob lodged an appeal against the Commission’s decision to conditionally approve the transaction and Wendel as the purchaser. In its judgment of 13 September 2010, the GC confirmed the decision authorizing the concentration but annulled the decision approving the purchaser, on the ground that the latter decision had been adopted on the basis of a report drawn up by a trustee who did not satisfy the required condition of independence set by the Commission. The judgments of the GC were confirmed by the Court of Justice of the European Union (“CJEU”) in 2012. Following the GC’s judgments, Lagardère submitted a new request for approval of Wendel as the purchaser to the Commission, proposing a new trustee, who had been approved by the Commission in early 2011. In 2011, the Commission once again approved Wendel as the purchaser after which Odile Jacob lodged yet another appeal before the GC against the Commission’s decision. In its judgment, the GC held, inter alia, that the Commission was not required, in order to give full effect to the judgments of 13 September 2010, to revoke the decision to approve the concentration. Furthermore, the Commission was not required to revoke its decision, since the appointment of an independent trustee was a responsibility but not a condition. As regards the alleged unlawful retroactivity of the decision of 13 May 2011, the GC held that the Commission could adopt retroactive decisions where this is required by the intended aim and the principle of protection of the legitimate expectations of the parties concerned. Furthermore, the GC held that the Commission did not err in law in the assessment of Wendel’s bid. According to the GC, it is apparent from the file that Wendel was a viable operator capable of maintaining and developing effective competition on the market. Source: Judgment of the General Court, Case T-471/11, Èditions Odile Jacob SAS v Commission, 05/09/2014

Competition: Court of Justice of the European Union concludes that national rules for minimum road haulage prices infringe EU competition law

On 4 September 2014, the Court of Justice of the European Union (“CJEU”) handed down its judgment on a reference from an Italian court on the question whether Italian legislation infringes EU law by providing that charges payable by customers may not be lower than minimum operating costs. Minimum costs include the average cost of fuel per kilometer and the operating costs of the haulage company and they are determined by sectoral agreements concluded between haulage associations and associations of customers of transport services. At the material time, minimum costs were determined by the Osservatorio sulle attività di autotrasporto (“Osservatorio”), a body composed of representatives of the state, haulage associations and associations of customers of transport services, in case no agreement was concluded between the two above mentioned associations. The cases in the main proceedings stemmed from applications brought before the administrative court of Lazio for annulment of the acts by which the Osservatorio established the minimum costs. In its judgment, the CJEU first recalled that the member states are subject to a duty of cooperation with the European Union, so that they may not adopt measures which may render the rules of the Treaty on the Functioning of the European Union (“TFEU”) ineffective. With respect to the legislation at issue in the main proceedings, the CJEU held that the Osservatorio must be regarded as an association of undertakings within the meaning of Article 101 TFEU when it adopts decisions fixing minimum operating costs for road transport. Thus, according to the CJEU, by limiting market operators’ freedom to determine the price of haulage services, the Italian legislation is capable of restricting competition in the internal market. Furthermore, the CJEU found that fixing of minimum operating costs was not appropriate for ensuring the legitimate objective invoked, namely road safety. Moreover, the contested measure went beyond what was necessary for the improvement of road safety. Accordingly, the CJEU ruled that the Italian legislation at issue is not compatible with EU law and that the application of such a minimum price is capable of restricting competition in the internal market. Source: Court of Justice of the European Union Press Release, 04/09/2014

Competition: Court of Justice of the European Union rules on the fasteners cartel

On 4 September 2014, the Court of Justice of the European Union (“CJEU”) handed down its judgment on an appeal brought by YKK Corporation, YKK Holding Europe BV and YKK Stocko Fasteners GmbH (“YKK Stocko Fasteners”) (together as “the YKK group”) against the General Court’s (“GC”) judgment dismissing the YKK group’s appeal against the Commission’s decision in the fasteners cartel. In September 2007, the Commission imposed fines totaling approximately EUR 329 million on seven groups of companies for their participation in four separate cartels in which the participants fixed prices, allocated customers and markets and exchanged commercially sensitive information in the markets for zip fasteners, other fasteners and their attaching machines in violation of Article 101(1) of the Treaty on the Functioning of the European Union (“TFEU”). The Commission found that the YKK group had participated in three of the four infringements and imposed a fine totaling approximately EUR 150 million on the YKK group. The YKK group lodged an appeal before the GC against the Commission’s decision. The GC dismissed the appeal in its entirety. In its judgment, the CJEU concluded that the GC had erred in its interpretation of Article 23(2) of Regulation 1/2003 in relation to the fine imposed for one cartel infringement. Furthermore, the Commission had found that YKK Stocko Fasteners was solely liable for the infringement and for the fine imposed, for the period prior to its acquisition by the YKK group. Its new parent companies were found to be jointly and severally liable for the infringement and fine after the acquisition. However, the CJEU held that in determining the 10% of turnover upper limit of the fine imposed solely on YKK Stocko Fasteners GmbH, the Commission had erroneously used the turnover of the whole YKK group. Therefore, the CJEU annulled the Commission’s decision in so far it concerned the calculation of the fine for which YKK Stocko Fasteners was held solely liable and ordered the fine imposed solely on YKK Stocko Fasteners to be reduced. However, the CJEU held that the GC had not erred in concluding that the Commission had been entitled to impose a multiplier for deterrence based on the economic strength of the entire YKK group. Source: Judgment of the Court of Justice of the European Union, Case C-408/12P – YKK Corp, YKK Holding Europe BV and YKK Stocko Fasteners GmbH v European Commission, 04/09/2014

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 Marathon by Det Norske
  • Commission approves acquisition of Channel 5 Broadcasting by Viacom
  • Commission approves acquisition of several of Rockwood's chemical businesses by Huntsman, subject to conditions
  • Commission approves acquisition of Morgan Stanley's Global Oil Merchanting Unit by Rosneft
  • Commission approves acquisition of Aviapartner by H.I.G. European Capital Partners
  • Commission approves joint venture between Versalis and Novamont
  • Commission approves acquisition of Bellsystem 24 Holdings by Bain Capital and Itochu Corporation
  • Commission approves acquisition of joint control over the Zagreb Airport manager by Aéroports de Paris, Bouygues Bâtiment, International Finance Corporation, Marguerite Fund and TAV
  • Commission approves acquisition of Holcim assets by Cemex in the building materials sector