EU Antitrust

ECJ dismisses Telefónica’s margin squeeze appeal. On 10 July 2014, the ECJ dismissed the appeal by Telefónica against the judgment of the General Court that upheld the European Commission’s 2007 decision that Telefónica had abused its dominant position by imposing an unlawful margin squeeze (Case C-295/12 P). Many of Telefónica’s arguments were found to be inadmissible, in particular due to lack of precision in identifying alleged errors by the General Court. However, the ECJ concluded that the General Court conducted an in-depth review of the Commission’s decision in the light of the pleas in law put forward by Telefónica, and that this satisfied the requirements of a review exercising its powers of unlimited jurisdiction.

Commission fines Servier and generic companies for delaying market entry of cardiovascular medicine. On 9 July 2014, the Commission announced that it has fined Les Laboratoires Servier (Servier) and five generic competitors nearly EUR 427.7 million for practices that delayed generic entry of the cardio-vascular drug perindopril (IP/14/799). The Commission has found that patent settlement agreements concluded between Servier and the generic companies prevented or delayed entry of cheap generic versions of perindopril.

Commission closes investigation into generic pharmaceutical companies in France. On 9 July 2014, the Commission announced that it has closed an antitrust investigation into generic pharmaceutical companies in France (IP/14/798). The investigation had focused on suspected co-ordination between generic pharmaceutical companies when negotiating an initial price with the French pricing authority before launching a new generic product.

Cartels

Appeals against General Court judgments on LCD cartel. On 7 July 2014, details were published in the Official Journal of appeals lodged by LG Display and InnoLux against judgments of the General Court that largely dismissed their actions to challenge the Commission’s decision on the LCD cartel (OJ 2014/ C212/19 and C212/20). LG Display is challenging the inclusion of sales to its parent companies in the turnover used to calculate the fine, and also the application of the Leniency Notice. InnoLux is challenging the inclusion, for the purposes of setting the fine, of turnover relating to intra-group deliveries within InnoLux’s factories in China and Taiwan.

EU Mergers

Phase I Clearance

M.7140 - JSC Segezha Pulp / Paper Mill / LLC Derevoobrabotka-Proekt / Sistema JSF Corporation

M.7241 - Nets Holding / Advent International / Bain Capital

M.7280 - Visma AS / HgCapital / KKR& Co. L.P. / Cinven Limited

M.7287 - Mauser Holding GmbH / CD&R Fund IX

M.7301 - Euro Media Group / PAI Partners

State Aid

Commission adopts new guidelines for rescue and restructuring state aid. On 9 July 2014, the Commission adopted revised guidelines on state aid for rescuing and restructuring non-financial undertakings in difficulty. The new guidelines will enter into force on 1 August 2014.

Commission adopts four decisions on regional investment aid for car manufacturers Porsche, BMW, AUDI, and Ford. On 9 July 2014, the Commission announced its decisions on the compatibility with EU state aid rules of four different projects by Germany, Hungary, and Spain to grant regional aid in favour of the car manufacturers Volkswagen, BMW, and Ford, in order to attract major investment projects (IP/14/792). The Commission has authorised a German aid measure to Volkswagen/Porsche in Leipzig because it furthers regional development without unduly distorting competition in the internal market, in line with the 2005 regional aid guidelines. It has also partially approved German aid for BMW for the production of electric passenger cars, but only to the extent that the planned aid is necessary to carry out the project. In addition, the Commission has opened an in-depth investigation to assess the compatibility of aid by Hungary to Volkswagen/AUDI because it has concerns that, in view of the strong market position of the beneficiary and the difficult market situation, the aid could harm competition. Finally, the Commission has closed a formal investigation into regional aid for Ford in Spain, after Spain reduced the aid to a level that does not require Commission approval.

Commission approves restructuring aid for Greek Alpha Bank. On 9 July 2014, the Commission announced that it has decided under Article 6(1)(b) of the EU Merger Regulation to approve the state aid granted to Alpha Bank in the context of its restructuring (IP/14/790). The Commission concluded that the state aid granted is in line with the state aid rules for the restructuring of banks during the financial crisis. The state aid measures will enable the bank to return to viability, while limiting any resultant distortions of competition.

UK Antitrust

Supreme Court ruling on Ofcom’s use of dispute resolution to control prices. On 9 July 2014, the Supreme Court handed down its judgment on BT’s appeal in a case relating to determinations made by the Office of Communications (Ofcom) finding that BT’s charges for 080 and 0845/0870 calls were not ‘fair and reasonable’. The Court of Appeal had overturned a ruling of the Competition Appeal Tribunal (CAT) and restored Ofcom’s original determinations (which had been set aside by the CAT). The Supreme Court has upheld BT’s appeal and concluded that the Court of Appeal erred in setting aside the CAT’s analysis and judgment.

UK Mergers

CAT order quashing OFT decision in A.C. Nielsen appeal. On 4 June 2014, the CAT published an order quashing the decision of the Office of Fair Trading (OFT) not to refer the completed acquisition by Information Resources Inc (IRi) of Aztec Group to the Competition Commission under the Enterprise Act 2002. The Competition and Markets Authority (CMA) considered that the OFT’s decision contains material errors of fact, which may have affected the OFT’s decision as to whether or not to make a reference to the Competition Commission and sought remittal of the merger. The CAT, therefore, made an order quashing the OFT’s decision and referring the matter back to the CMA with directions that a new decision be taken.

CMA provisionally approves Alliance Medical / IBA Molecular merger. On 10 July 2014, the CMA published its provisional findings report on the completed acquisition by Alliance Medical Limited of manufacturing assets of IBA Molecular UK Limited used to produce Fluorodeoxyglucose 18F (FDG-18). The CMA has found that the acquired business had been loss-making for several years and suffers from various competitive weaknesses. Absent the merger, the business would have been closed. The CMA has provisionally concluded that the competitive situation following the merger is not expected to result in a substantial lessening of competition as compared to the counterfactual situation. The CMA invites comments on its provisional findings by 1 August 2014.

Speeches & Publications

Commission Communication on “Ten Years of Antitrust Enforcement under Regulation 1/2003: Achievements and Future Perspectives”, 9 July 2014. Communication

Commission White Paper “Towards more effective EU merger control”, 9 July 2014. White Paper

Speech by David Currie on “Competition policy in regulated markets”, 7 July 2014. Speech