Appeal by Lupin against “pay for delay” decision. On 8 December 2014, details were published of an appeal by Lupin Ltd against the European Commission’s decision fining it for entering into “pay for delay” settlement agreements that breached Article 101 of the TFEU. Lupin claims that the Commission erred in law in finding that Lupin had committed an infringement of Article 101 by object or by effect. In addition, the fine imposed by the Commission was too high and was unfair (Case T-680/14 - Lupin v Commission (OJ 2014 C439/33)).
General Court upholds ONP infringement decision but reduces fine. On 10 December 2014, the General Court handed down its judgment in the appeal by the Ordre national des pharmaciens (ONP), the Conseil National de L’Ordre des Pharmaciens (CNOP) and the Conseil Central de la Section G de L’Ordre national des Pharmaciens (CCG) against the European Commission’s decision to fine them EUR 5 million for issuing decisions that infringed Article 101 of the TFEU. The General Court rejected ONP’s claim that its actions were those of a public authority to which the competition rules do not apply and that they were justified for the protection of public health. The General Court went on to rule that the Commission analysed correctly the restrictive nature of the various measures adopted by the ONP aimed at preventing groups of laboratories from developing in France. The General Court also upheld the Commission’s finding that the ONP’s conduct had the object of imposing a minimum market price by prohibiting laboratories, from 2005 onwards, from granting discounts above a ceiling of 10%. The documentary evidence relied on by the Commission was sufficient to support the conclusion that there was an infringement by object, consisting of a horizontal price agreement. Although confirming the Commission’s decision, the General Court, nevertheless, reduced the fine imposed on the ONP to EUR 4.75 million, on the grounds that the Commission erred in failing to recognise certain mitigating circumstances (Case T-90/11 - Ordre national des pharmaciens, Conseil national de l’Ordre des pharmaciens and l’Ordre national des pharmaciens v European Commission, judgment of 10 December 2014 (not yet available in English)).
Advocate General’s opinions on appeals in banana importers cartel case. On 11 December 2014, Advocate General Kokott gave opinions on appeals by Fresh Del Monte, Dole and the European Commission against the General Court’s judgments on the actions brought by Dole and Del Monte to challenge the Commission’s decision on the banana importers cartel. The General Court had dismissed all of Dole’s and Del Monte’s challenges to the Commission’s infringement decision. However, it reduced the fine imposed on Del Monte on the basis that the Commission had not taken due account, under the Leniency Notice, of its co-operation by voluntarily responding to informal information requests. The Advocate General considers that the appeals by both Del Monte and Dole should be dismissed in its entirety. She has found that the General Court did not err in holding Del Monte jointly and severally liable for the fine imposed on Weichert. Further, the General Court did not manifestly distort evidence or commit errors in its assessment of the infringement (particularly in finding that there was a single and continuous infringement and that the information exchange was a restriction of competition by object). In addition, the General Court had not, as claimed by Dole, committed procedural errors. However, the Advocate General considers that the Commission’s appeal against the reduction of Del Monte / Weichert’s fine should be upheld. She found that the General Court erred in law in finding that voluntary responses to information requests sent by the Commission constituted co- operation under the Leniency Notice. The Advocate General suggests that the fine be adjusted to EUR 9.8 million (rather than the EUR 8.82 million set by the General Court) (Joined Cases C-293/13 P and C-294/13 P - Fresh Del Monte Produce, Inc. and others v European Commission and others (ECLI:EU:C:2014:2439) and Case C-286/13 P - Dole Food Company, Inc. and Dole Fresh Fruit Europe OHG v European Commission (ECLI:EU:C:2014:2437), Opinions of Advocate General Kokott, 11 December 2014).
Commission fines five envelope producers in cartel settlement. On 11 December 2014, the European Commission announced that it has fined five paper envelope producers a total of EUR 19.4 million in a cartel settlement, for co-ordinating prices, allocating customers, and exchanging commercially sensitive information in a series of meetings. The infringement lasted from October 2003 until April 2008. Four of the companies involved, Tompla, Hamelin, Mayer-Kuvert and GPV, were each granted a reduction in their fines under the Commission’s Leniency Notice. The fifth cartelist, Bong, did not benefit from leniency. However, all five producers gained a reduction of 10% under the cartel settlement procedure. Two of the companies also successfully invoked their inability to pay the fine and were granted a further reduction by the Commission after a detailed assessment of their financial positions.
Advocate General opinion on jurisdiction issues in cartel damages actions. On 11 December 2014, Advocate General Jääskinen gave an opinion on questions referred from a German court on the application of the Brussels I Regulation in the context of a damages action based on a European Commission cartel decision. The Advocate General considers that Article 5(3) (which allows a company to be sued in the member state in which the "harmful event occurred) is inoperative in the case of an action for damages resulting from a long-running EU-wide cartel. The Advocate General considers, however, that Article 6(1) (allowing actions to be brought in the member state of one “anchor” defendant) could apply to an action relating to a single and continuous infringement of EU law. The conduct of the cartel participants could be attributed to each of the co-perpetrators. If the cases against each defendant were heard separately, there would be a risk that the cartel members could be found liable for different amounts of damages. The Advocate General also found that the jurisdiction of a national court under Article 6(1) would continue even if the action against the anchor defendant were withdrawn, as long as this was not done abusively. Finally, the Advocate General concluded that jurisdiction or arbitration clauses could be applied in competition damages actions, provided that this does not damage the effectiveness of EU competition law. However, the victim must consent specifically of those clauses in full knowledge of the illegal cartel and the damage caused by it (Case C-352/13 - CDC Cartel Damage Claims Hydrogen Peroxide SA (ECLI:EU:C:2014:2443), Opinion of Advocate General Jääskinen, 11 December 2014 (not yet available in English)).
Phase I Clearance
- M.7381 – Singapore Airlines Limited / Airbus SAS / Airbus Asia Training Centre (09/12/2014)
- M.7414 – ReAssure (being a subsidiary of Swiss Re Group of Switzerland / HSBC Life (UK) Limited (08/12/2014)
- M.7415 - Värde of the US / Banco Popular of Spain / E-COM of Spain (11/12/2014)
- M.7424 – CCMP Capital Advisors LLC / Ineos / PQ Holdings Inc (10/12/2014)
- M.7437 – Blackstone Group L.P / Koala HoldCo LLC / TPG / Kensington (08/12/2014)
Phase II Mergers
Full text of Cemex / Holcim assets merger decision published. On 10 December 2014, the European Commission published the full, non-confidential, version of its decision under Article 8(1) of the EU Merger Regulation, to approve the acquisition by Cemex of the Spanish operations of Holcim (M.7054; see Cemex / Holcim Spanish assets). Following a Phase II investigation, the Commission concluded that the merger would not significantly impede effective competition due to non-coordinated or coordinated effects in any relevant building material market, particularly that for grey cement. The Commission also assessed the impact of the merger on the markets for aggregates, ready-mix concrete, mortar and clinker.
General Court state aid ruling on Spanish scheme for the early depreciation of assets acquired through financial leasing. On 9 December 2014, the General Court handed down its judgment dismissing the appeal brought by the Netherlands Maritime Technology Association (NMTA) against a Commission decision finding an amended Spanish tax leasing scheme to be compatible with the EU state aid rules. The General Court has concluded that NMTA failed to demonstrate that serious difficulties were encountered by the Commission in its preliminary examination of the notified measure such as to require the Commission to initiate the full investigation procedure under Article 108(2) of the TFEU. The General Court did not accept that the circumstances of the case or the duration of the preliminary examination evidenced serious difficulties. The General Court concluded that the Commission had assessed the notified measure in its context, given sufficient attention to whether it conferred a de facto selective advantage, and had been entitled to find that the conditions imposed by the notified measure were an inherent part of the Spanish tax system, and were justified by the logic of it. As a result, the General Court has refused to annul the Commission’s original decision (T-140/13 Netherlands Maritime Technology Association v Commission, judgment of 9 December 2014 (ECLI:EU:T:2014:1029)).
Commission approves state aid to modernise French airport. On 10 December 2014, the European Commission announced that it has decided to approve state aid granted by the French authorities to support the modernisation of the Roland Garros de la Réunion airport. The Commission approved the state aid in accordance with its 2014 guidelines on state aid in the aviation sector. In particular, it considered that the aid supports a project that contributes to the achievement of an objective of common European interest and that the state aid was necessary and proportionate to achieving that objective.
General Court dismisses appeal against Commission decision on Austrian subsidies for energy- intensive businesses. On 11 December 2014, the General Court handed down its judgment dismissing an appeal by Austria against a European Commission decision that a provision of the revised Austrian Green Electricity Act would result in the imposition of extra costs on undertakings that do not qualify for the relevant exemption, and so constituted unlawful state aid. The General Court upheld the Commission’s finding that the partial exemption constituted state aid, confirming that it involved the use of State resources and was selective in nature. Although the General Court did consider that the Commission erred in considering that the exemption mechanism fell outside the scope of the Guidelines on environmental aid, it, nevertheless, found that the Commission, in continuation of its analysis, correctly held that the exemption mechanism did not fulfil the conditions of the Guidelines so as to be regarded as compatible with the internal market (Case T-251/11 - Austria v Commission, judgment of 11 December 2014 (ECLI:EU:T:2014:1060) (not yet available in English)).
CMA sends statement of objections in property sales, lettings and advertising Competition Act investigation. On 10 December 2014, the Competition and Markets Authority (CMA) announced that it has sent a statement of objections as part of its investigation into suspected breaches of the Chapter I prohibition of the Competition Act 1998 by companies active in property sales and lettings and their advertisement. The statement of objections has been sent to an association of estate and lettings agents (Three Counties Estate Agents Association), three of its members and the publisher of a local newspaper, Trinity Mirror Southern Limited. The CMA alleges that these companies breached the Chapter I prohibition by agreeing to prevent estate and lettings agents from advertising their fees or discounts in the local property newspaper. It also alleges that the membership rules of the Three Counties Estate Agents Association breached the Chapter I prohibition by prohibiting members from advertising their fees or discounts in the local newspaper. The CMA considers that these arrangements reduced the competitive pressure on estate and lettings agents’ fees, made it harder for potential competitors to enter the market, limited consumers’ choice and obstructed consumers’ ability to compare prices and assess value for money.
CMA refers acquisition by Xchanging of certain companies of Agencyport for Phase 2 merger investigation. On 8 December 2014, the CMA announced that it has referred the completed acquisition by Xchanging of certain companies of Agencyport for an in-depth Phase 2 merger investigation. The CMA must publish its final decision by 24 May 2015. The CMA will now investigate further its concerns that the merger may lead to a substantial lessening of competition for the supply of policy administration systems software to Lloyd’s Market managing agents. The merger will reduce the number of major suppliers of such software for these users from four to three. This is the first Phase 2 merger reference made by the CMA in a merger investigation that began after the CMA acquired its powers under the Enterprise and Regulatory Reform Act 2013.
CMA makes initial enforcement order to Crawford & Company. On 8 December 2014, the CMA made an initial enforcement order under section 72 of the Enterprise Act 2002 addressed to Crawford & Company EMEA/A-P Holdings Limited and Crawford & Company Adjusters (UK) Limited in relation to the completed acquisition by Crawford & Company Adjusters (UK) Limited of GAB Robins UK Limited. Section 72 of the Enterprise Act, as amended by the Enterprise and Regulatory Reform Act 2013, allows the CMA to make initial enforcement orders to prevent pre-emptive action in completed (and anticipated) mergers. The order is without prejudice to the CMA’s on-going investigation into this completed merger.
CMA makes initial enforcement order to Ticketmaster Europe. On 10 December 2014, the CMA made an initial enforcement order under section 72 of the Enterprise Act 2002 addressed to Ticketmaster Europe Holdco Limited in relation to its completed acquisition of Seatwave. The order is without prejudice to the CMA’s on-going investigation into this completed merger.
Xchanging Holdings Limited / Total Objects Limited (Clearance Decision) (09/12/2014)
Speeches & Publications
Speech by Alexander Italianer on the “object of effects”. On 10 December 2014, the European Commission published a speech by Alexander Italianer, Director-General for Competition, on the “object of effects”. In it, he discussed the development of the effects based approach in the context of Article 101, Article 102, mergers and state aid. He also summarised the key learning from the General Court ruling in the Intel case and the judgment of the European Court of Justice in Cartes Bancaires.
He explained how, in general, in competition law enforcement, object and effects complement each other and that, in his view, the over-arching lesson to be taken from recent cases is that each approach should be properly applied.
Speech by Alex Chisholm on digital technology. On 10 December 2014, the CMA published a speech by Alex Chisholm, CMA Chief Executive, in which he discussed the impact of developments in digital technology on competition enforcement. In particular, he considered the importance of ensuring that there remains competition between digital platforms. He also discussed the challenges faced by competition authorities in identifying appropriate and timely interventions to prevent “digital giants” dominating markets to the detriment of innovation and competition.