Further appeals against “pay for delay” decision. On 1 December 2014, details were published of appeals by Mylan Laboratories and Mylan, Krka and Niche Generics against the European Commission’s decision fining them for entering into “pay for delay” settlement agreements with Servier that breached Article 101 of the TFEU. The applicants claim, in particular, that the Commission erred in characterising the agreement as a restriction by object, and also failed to establish that the agreement had restrictive effects. Further, it failed adequately to consider the application of Article 101(3) of the TFEU. In addition, they claim that the Commission breached their rights of defence and committed other procedural errors. Mylan and Niche Generics also argue that the Commission erred in its calculation of the fine. In addition, Niche Generics claims that the Commission breached the principle of equal treatment by not applying the Technology Transfer Block Exemption Regulation Guidelines to its settlement with Servier (Case T-682/14 - Mylan Laboratories and Mylan v Commission (OJ 2014 C431/31), Case T-684/14 – Krka v Commission (OJ 2014 C431/34) and Case T-701/14 – Niche Generics v Commission (OJ 2014 C431/38)).
Aalberts Industries brings damages action for excessively long court proceedings. On 1 December 2014, details were published in the Official Journal of an action brought by Aalberts Industries NV (Aalberts) to claim damages for harm suffered as a result of delays by the European Courts in adjudicating its appeal against the copper fittings cartel decision. Aalberts asserts that the General Court failed to adjudicate its appeal within a reasonable time. Aalberts seeks both material and non-material damages and costs (Case T-725/14 – Aalberts Industries v Commission and Court of Justice of the European Union (OJ 2014 C431/51)).
ECJ ruling on application of Article 101 to collective labour agreements for self-employed service providers. On 4 December 2014, the European Court of Justice (ECJ) handed down a ruling on a reference from a Dutch court on whether Article 101(1) of the TFEU applies to provisions of collective agreements which regulate the minimum fees to be paid to self-employed service providers. The ECJ held that a provision of a collective labour agreement, in so far as it was concluded by an employees’ organisation in the name, and on behalf, of the self-employed services providers who are its members, does not constitute the result of a collective negotiation between employers and employees, and so cannot be excluded, by reason of its nature, from the scope of Article 101(1) of the TFEU. The self-employed are “undertakings” and the employees organisation is acting as an “association of undertakings” for the purposes of Article 101. However, it must be established that the “self-employed” service providers are not in fact “false self-employed” such that they are actually in a situation comparable to employees. This will depend on factors such as whether they act under the same direction of the employer as regards their freedom to choose the time, place and content of their work; whether they share the employer’s commercial risks; and whether, for the duration of the relationship, they form an integral part of the employer’s undertaking. If the service providers are, in fact, “false self-employed” then a collective labour agreement, in so far as it sets minimum fees, cannot, by reason of its nature and purpose, be subject to the application of Article 101(1) (Case C-413/13 – FNV Kunsten Informatie en Media v Staat der Nederlanden, judgment of 4 December 2014)
Commission sends statement of objections to Pometon for suspected participation in steel abrasives cartel. On 4 December 2014, the European Commission announced that it has sent a statement of objections to Pometon S.p.A. in relation to its suspected participation in a price-fixing cartel for steel. The statement of objections sets out the Commission’s allegations that Pometon may have co-ordinated with competitors on a key price component of steel abrasives, the “scrap surcharge”, and that this co-ordination affected the whole EEA market. It also sets out the Commission’s preliminary view that Pometon may have agreed with other cartel participants not to compete on price with respect to individual customers. In April 2014, the Commission decided that four steel abrasives producers had breached Article 101 of the TFEU by participating in a price-fixing cartel and imposed fines totalling EUR 30 million. The four companies (Ervin, Winoa, Metalltechnik Schmidt and Eisenwerk Würth) had engaged with the Commission in the settlement procedure. However, Pometon did not reach a settlement with the Commission and the Commission’s investigation has, therefore, continued under the standard (non-settlement) investigation procedure. Pometon now has the right to examine the documents in the Commission’s investigation file, reply in writing to the statement of objections and request an oral hearing.
Phase I Clearance
- M.7369 – Santander Consumer Finance, S.A., (SCF) of Spain / Banque PSA Finance S.A. (Banque PSA) of France (03/12/2014)
- M.7396 – Saudi Aramco of Saudi Arabia / S-Oil of South Korea (03/12/2014)
- M.7399 – Anglo American of the UK / BHP Billiton of the UK and Australia / Samancor of South Africa, Australia and Switzerland (04/12/2014)
- M.7425 – Robert Bosch GmbH / BSH Bosch und Siemens Hausgeräte GmbH (BSH) (04/12/2014)
Phase II Mergers
Commission opens in-depth Phase II investigation into proposed acquisition by Orange of Jazztel. On 4 December 2014, the European Commission announced that it has decided under Article 6(1)(c) of the EU Merger Regulation to initiate a Phase II investigation into the acquisition by Orange S.A. of France (Orange) of Jazztel p.l.c. (Jazztel). The Commission has identified competition concerns in telecommunications markets in Spain. The Commission concluded that commitments offered by Orange were not sufficient to address all its competition concerns. In particular, the Commission considers that the loss of Jazztel may lead to a significant loss of competitive pressure for fixed internet access services and fixed-mobile multiple play offers, leading to price increases in Spain. In addition, the transaction might change the merged entity’s incentive to exert significant competitive pressure on the only two remaining nationwide competitors. The Commission is particularly concerned about the effect on fixed-mobile triple-play offers (comprising fixed voice, fixed internet and mobile telecommunications services); specifically that only integrated providers with fixed and mobile networks may be able to compete for these.
General Court refuses interim measures in actions against Commission decision to open in- depth state aid investigation. The President of the General Court has published two orders in appeals by SEA and Airport Handling SpA against a decision of the European Commission to open an in-depth state aid investigation into the establishment of Airport Handling as a ground handling subsidiary of SEA and a capital injection into it. The General Court has rejected requests for interim measures, finding that the requests are inadmissible on the grounds that, on a preliminary view, the main action is itself inadmissible. A decision to initiate a formal investigation procedure in respect of an aid measure which is no longer in the course of implementation, as in these cases, does not produce binding legal effects and is not a challengeable act for the purposes of Article 263 of the TFEU. In any case, the General Court found that the applicants had both failed to meet the requirement of urgency (Case T- 674/14 – SEA v Commission and Case T-688/14 – Airport Handling v Commission, Orders of the President of the General Court, 27 and 28 November 2014 (not yet available in English)).
General Court rules that, where the Commission assesses an aid measure that does not pursue an environmental objective, it is not required to take into account EU rules on the protection of the environment. On 3 December 2014, the General Court dismissed an appeal by Castelnou Energía SL against a European Commission decision approving a Spanish measure by which certain electricity generating power plants are required to source indigenous coal, and produce certain volumes of electricity from that coal, at the same time benefitting from a preferential dispatch mechanism due to the high prices of indigenous coal. The Commission decided that the requirements imposed by the Spanish measure were in keeping with a service of general economic interest seeking to ensure a secure supply of electricity. The General Court first confirmed that Castelnou had standing to bring an action, being directly and individually concerned by the Commission’s decision. It also ruled that the Commission was justified in reaching its decision without opening the formal investigation procedure under Article 108(2) of the TFEU. The General Court went on to reject Castelnou’s arguments that the Commission had committed a manifest error of assessment in recognising the justified nature of that service and the proportionate nature of the measure, having regard to the objective pursued by that service, namely the security of electricity supply in Spain. It also stated that, although the form which aid takes is inextricably linked to the objective of that aid, the Commission must assess its compatibility with provisions other than those relating to state aid. However, where it assesses an aid measure that does not pursue an environmental objective, the Commission is not required to take account of EU rules on protection of the environment in its examination of the aid and of the forms of that aid which are inextricably linked to it. The General Court limits the verification of compliance with the rules, other than those relating to state aid, to those rules capable of having a negative impact on the internal market, defined as an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured. The General Court also rejected claims that the Commission infringed Regulation 1407/2002 on state aid to the coal industry (Case T-57/11 – Castelnou Energía v Commission, judgment of 3 December 2014 (not yet available in English)).
Ofcom update on investigation into complaint about Royal Mail’s access terms. On 2 December 2014, the Office of Communications (Ofcom) published an update on its ongoing Competition Act 1998 investigation into a complaint by TNT Post UK Limited about certain of Royal Mail’s access terms. Ofcom is investigating whether certain prices, terms and conditions offered by Royal Mail for access to certain letter delivery services (D + 2 access) constitute an abuse of a dominant position held by Royal Mail, in breach of the Chapter II prohibition of the Competition Act 1998 and/or Article 102 of the TFEU. Ofcom has announced that a State of Play meeting with Royal Mail has been arranged for 15 December 2014, following which it shall provide an update on the investigation. This coincides with the publication by Ofcom of a consultation on proposals to amend the regulatory obligation that requires Royal Mail to offer D2 access due to concerns that Royal Mail’s approach to access charges may be discouraging entry by competitors.
CMA publishes OFT decision in care home medicine cartel case. On 3 December 2014, the Competition and Markets Authority (CMA) published the full text of the Office of Fair Trading’s (OFT) March 2014 decision finding that Hamsard 3149 Limited, and its subsidiaries Quantum and Tomms, and Celesio AG, and its subsidiary Lloyds Pharmacy, had infringed the Chapter I prohibition of the Competition Act 1998. The OFT found that Lloyds, Quantum and Quantum’s subsidiary Tomms participated in a market-sharing agreement and/or concerted practice that had as its object the appreciable prevention, restriction or distortion of competition in relation to the supply of prescription medicines to care homes. The OFT fined Hamsard £370,226, but Celesio / Lloyds benefited from immunity under the OFT’s leniency policy. The final decision, which was reached after a settlement agreement, provides background to the market and the investigation, sets out the legal analysis applied by the OFT, the evidence relied on and its findings of infringement. It also explains how the OFT calculated the fine imposed on Hamsard.
- Prostraken Group PLC / Archimedes Pharma Limited (Clearance Decision) (01/12/2014)
- Xchanging Holdings Limited / Xchanging, Inc. / Agencyport Software Group (Reference to Phase II) (02/12/2014)
- Enterprise Reent-A-Car Limited / Vulcan Holdco Limited (Clearance Decision) (03/12/12014)
- IGas Energy Plc / Dart Energy Limited (Clearance Decision) (04/12/2014)
- Lhoist UK Ltd / Steetley Dolomite Ltd (Clearance Decision) (04/12/2013)
- Coopervision (UK) Holdings Limited / Sauflon Pharmaceuticals Limited (Clearance Decision) (04/12/2014)
Speeches & Publications
Cooperation Agreement with Switzerland published in Official Journal. On 3 December 2014, the Council Decision approving the conclusion of an Agreement between the European Union and the Swiss Confederation concerning cooperation on the application of their competition laws and the Agreement itself were published in the Official Journal (OJ 2014 L347/1 and 3). The Agreement entered into force on 1 December 2014.
CMA publishes Board authorisation of staff to carry out CMA functions. On 3 December 2014, the Competition and Markets Authority (CMA) published the authorisation of the CMA Board for staff, the CMA Panel Chair and Deputy Chairs to exercise the functions of the CMA. The authorisation was made by the CMA Chair in accordance with paragraph 29 of Schedule 4 of the Enterprise and Regulatory Reform Act 2013. It has had effect since 1 April 2014. This provides that the Chief Executive and Executive Directors are each authorised individually, and the Executive Committee of the CMA is authorised collectively, to do anything authorised or required to be done by the CMA by or under any enactment. All other staff and committees of the CMA are authorised to the extent specified in the authorisation document. The document sets out the authorisations of the General Counsel and Deputy General Counsel, Senior Director, Directors and other staff members of the CMA to perform the CMA’s functions generally. These are subject to certain specified expectations reflecting the decision- making powers applicable to the different seniority of staff. It then sets out the specific authorisations (and exceptions) that apply to Directors and Deputy Directors in relation to merger functions and market functions, and to legally qualified Senior Directors, Directors, Deputy Directors and Assistant Directors in relation to cartel or criminal enforcement projects.
Speech by David Currie on work and achievements of the CMA. On 4 December 2014, the CMA published a speech by David Currie, CMA Chairman, in which he discussed the work and achievements of the CMA since its establishment. He discussed, in particular, the CMA’s success in ensuring a seamless transition of case work and the steps taken to ensure that the CMA is a high performance and efficient organisation. He also noted the CMA’s ambitions in relation to improving competition compliance, greater engagement with business and ensuring that government policies do not impede competition.
Antitrust damages directive published in the Offical Journal. On 5 December 2014, Directive 2014/104 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the member states and the EU was published in the Official Journal (OJ 20145 L349/1). This update summarises the rules set out in the final text of the Directive relating to disclosure of evidence, the effect of national decisions, limitation periods, joint and several liability, the passing-on of overcharges, quantification of damages and consensual dispute resolution. Member states must implement the Directive by 27 December 2016.