Commission fines two power exchanges €5.9 million in cartel settlement. The European Commission has imposed fines on two leading European spot power exchanges, EPEX Spot and Nord Pool Spot. The fines totaled to just over €5.9 million and were in relation to an agreement between the two parties not to compete with one another in the European Economic Area. It was determined that this amounted to a market sharing agreement which allocated certain European territories and markets between the parties. The parties were also held to have breached Article 101 and 53 of the TFEU. The parties agreed to settle the case with the Commission, admitting their participation in the infringement and their liability, which meant that they received a 10 percent reduction in fines. The settlement procedure has assisted the Commission in bringing the investigations to a rapid conclusion. For more information see this page.

Commission fines Romanian Power Exchange OPCOM for discriminating against EU electricity traders. The European Commission has imposed a fine of approximately €1 million on the Romanian Power Exchange OPCOM for having abused its dominant position in the Romanian market for facilitating electricity spot trading. The European Commission alleges that between 2008 and 2013, OPCOM required members of the spot electricity markets to have a Romanian VAT registration, refusing to accept traders that were already registered for VAT in other EU member states. As a result, EU traders could only enter the Romanian wholesale electricity market by setting up a fixed establishment in Romania, which entailed additional costs and organizational disadvantages for EU traders compared to Romanian traders. This discrimination amounted to an abuse of dominance. For more information see this page.

Commission investigates restrictions affecting cross border provision of pay-TV services. The European Commission has launched formal antitrust proceedings in order to investigate licensing agreements between several major US film studios and some of Europe’s largest pay-TV broadcasters with a view to examining whether such agreements prevent broadcasters from providing their services across borders, for example, by refusing subscribers from other member states or by blocking cross-border access to their services. Currently, films are licensed by US film studios to pay-TV broadcasters on an exclusive and territorial basis. The Commission will consider whether such provisions granting territorial protection may constitute an infringement of EU antitrust rules and therefore amount to anti-competitive agreements under Article 101 TFEU. For more information see this page.

Commission accepts commitments from Visa Europe about credit card interbank fees. The European Commission has rendered legally binding the commitments offered by Visa Europe to significantly cut its multilateral interchange fees for credit card payments to a level of 0.3 percent of the value of the transaction (which amounts to reduction of about 40-60 percent) and to reform its rules in order to facilitate cross-border competition. It has to be noted that in July 2012, the Commission sent Visa a supplementary statement of objections informing them that the interbank fees set by Visa and related practices may violate EU antitrust rules since these inter-bank fees are paid by merchants’ banks (acquirers) to cardholders’ banks (issuers) for transactions with Visa’s consumer credit cards. For more information see this page.

Commission proposes extension of liner shipping consortia block exemption. On 27 February 2014, the European Commission invited comments on a proposal to amend the liner shipping consortia block exemption (Regulation 906/2009) as regards its period of application setting a new expiry date of 25 April 2020. All consortia agreements (except those on price-fixing) which involve the joint operation of liner shipping services are exempted from the European Commission Treaty’s ban on restrictive business practices provided they fulfill the conditions set out in the Regulation. The draft regulation is available here

General Court reduces fines in LCD cartel appeals. On 27 February 2014, the General Court of the European Union reduced the fines imposed on Innolux and LG Display relating to a previous decision of the European Commission on December 2010 where it had imposed fines of about €649 million on six Korean and Taiwanese manufacturers of liquid crystal display (LCD) panels. In the original decision, the General Court found that these companies operated a cartel between October 2001 and February 2006 in relation to LCD panels. Innolux and LG Display were handed down the largest fines. Both companies brought actions before the General Court seeking an annulment of the Commission’s decision or a reduction of fines. In its February 2014 judgment, the Court upheld the Commission’s decision, but did reduce the fines. For Innolux, the reduction was made because it had provided incorrect sales data, i.e., it had included sales relating to non-cartellised LCD products. The Court re-calculated the fine to €288 million instead of €300 million. For LG Display, the Commission also made an error in calculating its fine because its calculation had included a month for which LG had been granted partial immunity due to early disclosure of information relating to the cartel. The fine imposed on LG Display was thus recalculated and reduced from €215 million to €210 million. For more information see this page. jcms/upload/docs/application/pdf/2014-02/cp140029en.pdf.

Commission publishes decision on Syniverse/Mach merger. On 27 February 2014, the European Commission approved the proposed acquisition of Mach by Syniverse under the EU Merger Regulation (EC/139/2004).

The approval is conditional upon the divestiture of Mach’s Data Clearing (DC) services and Near Trade Roaming Data Exchange (NRTRDE) services in the European Economic Area. The divestment includes infrastructure which will allow Syniverse to provide not only DC and NRTRDE services but also a comprehensive set of other roaming-related services. Syniverse and Mach are the two largest providers of these services globally. After a preliminary investigation, the Commission had concerns that the original transaction would have allowed Syniverse to raise prices or to decrease the quality of these services, creating a dominant player with virtual monopoly market shares. The Commission’s concerns had centered around the merger creating a concentration and a risk of increased prices of DC and NRTRDE services and with a decrease in the quality of these services. The full decision is available here

Commission refers Ireland to ECJ for failing to fully transpose EU energy rules. The European Commission determined on 20 February 2014 that Ireland had not fully transposed the Electricity Directive (EC/2009/72), which facilitates the proper functioning of the EU energy markets. Although it was acknowledged that Ireland had transposed parts of the Directive, key provisions had yet to be and had still not been transposed into national law. In particular, the Commission felt that Ireland had not transposed provisions relating to unbundling of transmission system operators and transmission systems. As a result, the commission has referred Ireland to the European Court of Justice and requested that a fine be imposed on Ireland of Ireland of €20,358 a day until transposition of the Directive is complete. The substantial fine intends to reflect the severity of the infringement. For more information see this page.

Mergers: Commission sends warning to Munksjö and Ahlstrom for providing misleading information in their merger notification.

The European Commission has sent a Statement of Objections (SO) to Ahlstrom Corporation, Munksjö Oyj, both of Finland, and Munksjö AB of Sweden. In October 2012 Ahlstrom and Munksjö, both producers of speciality papers, had notified the Commission of plans to combine their activities in the production of abrasive paper backings. The Commission takes the preliminary view, that the parties provided misleading information with regard to the market for abrasive paper backings. Such behaviour would be in breach of the companies’ obligation to include their true best estimates of the markets in question in the notification and could result in a fine of up to 1 percent of turnover. It has to be kept in mind that the sending of a Statement of Objections does not prejudge the final outcome of the investigation. For more information see this page.

State aid: Commission adopts new guidelines for state aid to airports and airlines. On 20 February 2014 the European Commission adopted new guidelines relating to how member states can support airports and airlines in compliance with EU state aid rules. The guidelines aim to ensure fair competition in the aviation industry and ensure compliance with Article 107(1) of the Treaty on the Functioning of the European Union. Key features of the guidelines include: state aid being permitted for investment in airport infrastructure where there is a genuine transport need with certain degrees of aid permissible depending on the size of the airport; operating aid to regional airports being permitted for a transitional period of 10 years; and the availability of startup aid to airlines proposing to launch a new air route. The new guidelines are available here m6690_20130529_20600_3519889_EN.pdf.

State aid: Commission opens in-depth investigation into restructuring aid for Cyprus Airways and for Estonian Air. The European Commission has opened an in-depth investigation to verify whether Cyprus’ plans to support the restructuring of Cyprus Airways with €102 million are in line with EU state aid rules. The Commission will investigate in particular whether the restructuring plan is suitable to make Cyprus Airways viable without continued state support and to offset the competition distortions created by the state aid. Similarly, the European Commission has opened an in-depth investigation to verify whether the plans of Estonia to grant €40.7 million state aid for the restructuring of the national flag carrier Estonian Air is in line with EU state aid rules. In this case, the Commission will in particular assess whether the airline’s restructuring plan is suitable to restore the company’s long-term viability and to offset the distortions of competition created by the state support. The opening of an in-depth investigation gives interested third parties an opportunity to comment on the measures under assessment; it does not prejudge the outcome of the investigation. Find out more on this page.

Yasmin Bailey, Michael Marelus, Saiqa Panday