EU Mergers

Phase I Mergers

  • M.7982 ABBOTT LABORATORIES / ALERE (24 January 2017)
  • M.8074 SCHNEIDER ELECTRIC / DB ENERGIE / INNO2GRID JV (19 January 2017)
  • M.8271 HITACHI CHEMICAL COMPANY / FIAMM / JV (23 January 2017)
  • M.8279 NN GROUP / CBRE / PV / REAL ESTATE PORTFOLIO IN GERMANY  (25 January 2017)
  • M.8307 EP INVESTMENT / EP INVESTMENT II / EPH (23 January 2017)
  • M.8311 ALTOR FUND IV / TRANSCOM WORLDWIDE AB (24 January 2017)
  • M.8316 ADVENT / BRAMMER (20 January 2017)
  • M.8327 FAIRFAX / SAGARD HOLDINGS / PSG (24 January 2017)
  • M.8328 THE CERBERUS GROUP / STAPLES EUROPE (25 January 2017)
  • M.8338 APAX PARTNERS / UNILABS (25 January 2017)
  • M.8339 MACQUARIE / PREDICA / PISTO (24 January 2017)
  • M.8340 RIVERSTONE / AMCI / FITZROY (23 January 2017)

EU Competition

ECJ upholds majority of fines in bathroom-fittings cartel. On 26 January 2017, the European Court of Justice (ECJ) handed down 14 judgments on appeals against the General Court’s judgments on actions to challenge the decision and fines imposed by the European Commission (Commission) in a bathroom-fittings cartel. In its 23 June 2010 decision, the Commission imposed fines totalling more than €622 million on 17 bathroom equipment manufacturers for their participation in a single and continuous infringement in the bathroom fixtures and fittings sector. The manufacturers were found to have regularly taken part in anticompetitive meetings in which annual price increases were coordinated and pricing elements and other sensitive business information was disclosed and exchanged over various periods between 16 October 1992 and 9 November 2004 in multiple Member States. The Commission found the infringement involved taps and fittings, shower enclosures and accessories, and ceramic ware. The ECJ has upheld the majority of the fines imposed by the Commission, dismissing only the fines levied on Allia and Produits Céramiques de Touraine and the ECJ has reduced the fines of Roca Sanitario and Roca. The ECJ has dismissed 12 of the appeals in their entirety. The ECJ upheld the Commission's appeal against the General Court's judgment that partly annulled the Commission's findings of infringement by companies within the Sanitec/ Keramag Keramische group, finding that the General Court made various errors in assessing the probative value of various documents, including statements made in leniency applications. In particular, the ECJ found that the General Court erred in holding that one leniency statement cannot corroborate another. The ECJ further found the General Court to have also erred in holding that certain evidence should establish the existence of the infringement, without taking account of the other evidence and additional explanations, notably those contained in another company's leniency application. The ECJ also upheld an appeal by Laufen Austria, finding that the General Court erred in finding that the turnover of the Roca Group could be taken into account for the purpose of applying the 10% of turnover limitation of the fine in the period for which Laufen Austria was held solely responsible for the infringement, as a parent company cannot be held responsible for an infringement committed by its subsidiary prior to the acquisition of that subsidiary. It was held that where a distinction is drawn between an initial period, in respect of which the subsidiary is held to be solely responsible for the infringement, and a second period, in respect of which the parent company is held jointly and severally liable with its subsidiary for the infringement, the Commission must determine whether the part of the fine, for whose payment the parent company is not held to be jointly and severally liable, is below the ceiling of 10% of the subsidiary’s own turnover. In these two cases, the ECJ has set aside the General Court's judgments and referred the cases back to the General Court.

Trade

EU Parliament approves mineral trading rules. On 24 January 2017, the European Parliament committee members voted in favour of new rules obliging importers to audit their supplies of minerals such as tin, tantalum, tungsten, and gold (minerals). These minerals are used to make electronics, such as smartphones, and also to make jewellery and appliances. The vote, in which 39 voted in favour and none against, with two abstentions, is one of the final steps before the rules can become law. The agreement, which follows the political understanding on the core elements of the Regulation, aims to stop the financing of armed groups in developing countries through the trade of minerals such as tin, tantalum, tungsten, and gold (minerals). Trade Commissioner Cecilia Malmström previously commented: “The rules we [have] agreed upon are a huge step forward in our efforts to stop human rights abuses and armed conflict financed by trade in minerals. I'm convinced that it will have real impact on the ground, for the people suffering from such conflicts. I sincerely hope that the EU model will now set an example for other countries to follow.” Member States have agreed that due diligence provisions will apply for the trade of more than 95% of all European imports of minerals from 1 January 2021, in order to ensure the traded minerals are sourced responsibly. Support will also be provided to EU importers who are affected by this agreement, especially small and medium sized enterprises, in the form of development aid and foreign policy actions. Once the European Parliament approves the text, EU governments will have to rubber-stamp it.

CETA clears hurdle in EU Parliament. On 24 January 2017, the European Parliament committee voted in support of the Comprehensive Economic and Trade Agreement (CETA), signed between the EU and Canada on 30 October 2016, to come into force. The trade committee voted 25 in favour and 15 against, with one abstention. CETA aims to remove most tariffs and enhance trade between Europe and Canada, and also ease administrative burden on businesses. The EU’s main exports to Canada include machinery, transport equipment, and chemicals, and the EU’s main imports from Canada include machinery, mining products, agricultural products, and manufactured goods. “By approving CETA today we take a significant step forward. Ratifying this agreement with Canada will enable trade to continue to bring wealth to both shores of our transatlantic friendship. The duty of our governments is to ensure that each and every one of us benefits from this wealth,” said Artis Pabriks, rapporteur for the CETA agreement, who was the MEP responsible for steering it through the European Parliament. The full parliament must vote in favour of the text before its provisional application can enter into force. This vote is expected to occur on 15 February 2017.

UK Competition

CMA clears mergers. On 20 January 2017, the Competition and Markets Authority (CMA) announced that it has decided not to refer the following mergers to a Phase 2 investigation under the Enterprise Act 2002: the anticipated acquisition by ACCO Europe Limited of Esselte Group Holdings AB and the anticipated acquisition by Chargemaster plc of Elektromotive Limited. On 23 January 2017, the CMA also cleared the anticipated acquisition by Shearwell Data Limited of the entire issued share capital of Ketchum Manufacturing Limited and the completed acquisition by East Coast Buses Limited of the east coast operations of First Scotland East Limited. The full texts of these decisions are yet to be released.

CAT refuses Flynn’s interim relief application. On 20 January 2017, the Competition Appeal Tribunal (CAT) dismissed an application for interim relief brought by Flynn Pharma Limited and Flynn Pharma (Holdings) Limited (Flynn) in relation to the CMA’s December 2016 decision which found Flynn and its competitor Pfizer breached UK and EU antitrust laws by charging unfairly high prices for phenytoin sodium capsules, an anti-epilepsy drug. In its decision, in addition to fining Flynn and Pfizer, the CMA gave directions concerning the future pricing of phenytoin sodium capsules (the Directions). In the application for interim relief, Flynn had requested suspension of the Directions insofar as they apply to Flynn, pending the final determination of its intended appeal against the CMA's decision. The CAT accepted that Flynn would have a prima facie case, that its application was urgent, and that it could suffer significant, largely financial, harm that would not be recoverable if the Directions were not suspended. However, the CAT also found that if the Directions were suspended, the adverse effect of the higher prices that will continue to be charged by Flynn to the NHS is likely to be substantial. The CAT concluded that the “the harm to the public from allowing the continuation of higher prices for this product outweighs the harm to Flynn” that the refusal of the interim application may cause Flynn.

CMA issues statement of objections to cleanroom laundry service suppliers. On 20 January 2017, the CMA issued a statement of objections which alleges a breach of the Chapter I prohibition of the Competition Act 1998, to two suppliers of cleanroom laundry services and associated products and services. The CMA alleges that Micronclean Limited (formerly Fenland Laundries Limited) and Berendsen Cleanroom Services Limited (formerly known as Micronclean (Newbury) Limited) engaged in a “market-sharing agreement under which they divided up customers by geographical territory and/or customer type.” The two companies operated a joint venture for the supply of cleanroom laundry services under the Micronclean brand. Cleanroom laundry services are supplied to customers with operations in sterile environments, who wear specialist garments which need to be laundered in a way that prevents particulates contaminating their working environment. The CMA states that the alleged market-sharing arrangement came to its attention in the context of its review of two merger cases involving the companies. It alleges that the alleged market-sharing agreement arose from trademark licence agreements which operated from 30 May 2012 until they were terminated (when the related joint venture was disbanded) on 3 February 2016. The CMA has provisionally concluded that the arrangement restricted competition between the two suppliers.

CMA accepts undertakings in lieu in Co-operative Group / My Local grocery stores merger. On 23 January 2017, the CMA announced its acceptance of final undertakings offered by the Co-operative Group Limited (CGL) in lieu of referring to a Phase 2 investigation the acquisition by Co-operative Foodstores Limited of eight My Local grocery stores from ML Convenience Limited and MLCG Limited. The CMA announced on 19 October 2016 that the acquisition gave rise to competition concerns in Widnes, Cheshire, where Co-op already owned three convenience stores in close proximity to each other, and that it would refer the transaction to an in-depth Phase 2 investigation unless acceptable undertakings in lieu were offered. The CMA states that it is satisfied that CGL's undertakings to sell the two convenience stores to an approved buyer or buyers fully resolves its competition concerns. Under the undertakings, CGL must now sell the two stores within a maximum of three months to a buyer that the CMA will approve.

CMA announces it will not investigate BMW for restricting dealer use of new car websites after BMW changed its policy. On 24 January 2017, the CMA announced that it will not start an antitrust probe against carmaker BMW, as BMW informed the CMA that it has changed its UK policy. In 2016, the new car portal Carwow had informed the CMA that BMW UK was stopping its dealers from listing BMW and MINI cars on the portal, and asked the CMA to investigate whether this breached competition law. Following an initial assessment, BMW UK informed the CMA of its decision to change its policy to allow its dealers to work with Carwow and similar new car portal sites. Ann Pope, CMA Senior Director of Antitrust, said: “Online comparison tools can promote competition in many markets and help consumers make informed choices. The CMA therefore welcomes BMW UK’s change of policy.” In light of this change, and the CMA's principles of prioritisation, the CMA has decided against initiating a formal investigation into BMW UK at this time.

CMA publishes full text of its decision on acquisition of Wilhelmsen Maritime Services by Survitec Group. On 25 January 2017, the CMA published the full text of its decision applying the de minimis exception on the acquisition of the marine safety business of Wilhelmsen Maritime Services by Survitec Group. Survitec manufactures marine evacuation systems, life rafts, life jackets, immersion suits, and inflatable boats, and the marine safety business of Wilhelmsen Maritime Services A/S (Wilhelmsen) provides commercial life rafts for rental and exchange and safety equipment such as firefighting equipment and inert gas systems. The parties overlap in the supply of a number of products and services, including the distribution of commercial life rafts, immersion suits, life jackets, rescue equipment, and firefighting equipment. The CMA noted that the merger could lead to “a substantial lessening of competition” in the supply of leased commercial life rafts, with only one other “significant supplier” offering these products in the UK. However, the CMA has decided to exercise its discretion not to refer the merger for a Phase 2 investigation under the Enterprise Act 2002 due to “the market concerned being of insufficient size to warrant the costs of such an investigation.”

CMA issues statement of objections to UK furniture product suppliers. On 25 January 2017, the CMA announced that it has sent two statements of objections alleging breach of the Chapter I prohibition of the Competition Act 1998 by UK furniture products suppliers. Both statement of objections concern pricing coordination, bid rigging, and the exchange of confidential competitively sensitive information. The CMA stated that one statement of objections is in relation to the UK supply of drawer wraps between 2006 and 2008, and the second statement of objections relates to the UK supply of drawer fronts between 2006 and 2008 and in 2011. These statement of objections follow the £2.8 million settlement agreed between the CMA and two other furniture suppliers, Thomas Armstrong (Timber) Ltd and Hoffman Thornwood Ltd, who have admitted that they broke competition law by agreeing not to compete on price and sharing out which customers they would supply – reducing customer choice and giving the appearance of competition where there was none.