Competition: New report on the criminalization of cartels

EK On 27 May 2014, the Finnish Competition and Consumer Authority (“FCCA”) and the Ministry of Employment and the Economy (“MEE”) organized a seminar presenting a new report, as required by the government program, on the possible extension of individual criminal liability to cartel infringements (“Report”). The Report is based on a study initiated in June 2013 with regard to legislative development needs and the evaluation of the appropriateness, feasibility and impact of such reforms. Specifically, the Report assesses the prerequisites and viability, as well as the pros and cons of the criminalization of cartels, taking into account both national and international perspectives. Although numerous benefits of criminalization have been identified on an international level, with criminal sanctions increasingly being extended to cartels in various European countries, existing Finnish competition legislation does not recognize individual criminal liability. The criminalization of cartels also poses challenges, for instance as regards ensuring the continued functionality of the leniency system. Accordingly, the Report did not recommend the criminalization of cartels in Finland. It was noted however that some jurisdictions have instead of criminalization opted for other types of punitive sanctions, in addition to the administrative sanctions for the imposition of fines. For instance, in Sweden individuals found to have taken part in cartel activities may also face a ban on business activities. Accordingly, in preparation of the next government programme, the MEE will request an evaluation of the feasibility of safeguarding the leniency system and the scope of applicability of a ban on business activities from the Ministry of Justice. The Report will continue to provide future guidance in assessing the need for the criminalization of cartels as well as its compatibility with Finnish competition and criminal laws. Source: Finnish Competition and Consumer Authority Press Release 28/5/2014

Merger control: Commission conditionally approves acquisition of Telefónica Ireland by Hutchison 3G

The Commission has conditionally approved the proposed acquisition of Telefónica Ireland’s mobile telecommunications business (“O2 Ireland”) by Hutchison 3G (“H3G”). H3G Ireland is a wholly-owned indirect subsidiary of Hutchison, the holding company of a conglomerate headquartered in Hong Kong. Telefónica Ireland is Ireland's second largest mobile network operator (“MNO”) and sells its services under the brand name "O2" and the sub-brand "48". According to the Commission, the proposed acquisition, as originally notified, would have removed an important competitive force from the Irish mobile telecommunications market to the detriment of consumers. Furthermore, the Commission’s investigation also revealed that the mobile telecommunications market is characterized by high entry barriers for new competitors and no countervailing buyer power from end-consumers. To address the Commission’s concerns, H3G offered a package aimed at ensuring the short-term entry of two mobile virtual network operators (“MVNOs”), with an option for one of them to become a full MNO by acquiring spectrum at a later stage. MVNOs offer mobile telecoms services to consumers through access to the network of MNOs. H3G committed to sell up to 30 per cent of the proposed company's network capacity to two MVNOs in Ireland at fixed payments. Furthermore, the Commission was also concerned that after the proposed transaction, Three, the subsidiary of H3G could frustrate or terminate the network sharing agreement that Eircom, the third and smallest network competitor after the proposed acquisition, currently has with O2 Ireland. Therefore, H3G offered a package aimed at ensuring that Eircom stays a competitive MNO in Ireland by offering Eircom to continue the network sharing agreement on improved terms. Therefore, the Commission concluded that the proposed acquisition would not significantly impede effective competition in the EEA or in any substantial part thereof.Source: Commission Press Release 28/05/2014

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 the Neuhauser group by the Soufflet group
  • Commission approves acquisition of Sokolów by Danish Crown in food sector
  • Commission approves acquisition of Skandia Inc. by Cinven in insurance sector
  • Commission approves joint venture between SPC and Cargill in biotechnology sector