EU Mergers

Phase I Mergers

  • M.8124 MICROSOFT / LINKEDIN (6 December 2016)
  • M.8137 HNA GROUP / SERVAIR (8 December 2016)
  • M.8148 BRISA / AREAS / BRISAREAS (5 December 2016)
  • M.8230 NORDEA BANK / DNB / RELACOM MANAGEMENT (7 December 2016)
  • M.8260 DCNS / SPI / DCNS ENERGIES (5 December 2016)
  • M.8289 ENGIE / OMNES CAPITAL / PREDICA / MAIA EOLIS (6 December 2016)
  • M.8295 AXA / ATP / TARGET (5 December 2016)

EU Competition

Commission fines euro interest rate derivatives cartel. On 7 December 2016, the European Commission (Commission) fined Crédit Agricole, HSBC and JPMorgan Chase a total of €485 million for participating in a cartel in Euro interest rate derivatives. Barclays Bank, Deutsche Bank, Royal Bank of Scotland and Société Générale previously admitted their involvement in the cartel, enabling the Commission to settle the case with them and impose reduced fines in December 2013. Barclays Bank gained full immunity from fines because it blew the whistle on the seven banks “colluding instead of competing with each other on the Euro derivatives market”, which covered the entire EEA. However, Crédit Agricole, HSBC and JP Morgan did not settle; therefore, the Commission’s investigation into their involvement continued under the standard (non-settlement) cartel procedure. The Commission found that the banks participated (for varying periods of time) in a cartel that operated between September 2005 and May 2008, involving Euro interest rate derivatives linked to the EURIBOR and/or the Euro Over-Nigh Index Average. The Commission’s investigation revealed that the cartel aimed to distort the normal course of pricing components for these derivatives, and that traders of different banks discussed their bank’s submissions for the calculation of the EURIBOR as well as their trading and pricing strategies via corporate chat rooms or instant messaging services. The Commission has now imposed the following fines, on the basis of its 2006 Guidelines on fines: Crédit Agricole (which was found to have participated in the cartel for five months) was fined a total of €114,654,000; HSBC (which was found to have participated in the cartel for one month) was fined a total of €33,606,000; and JPMorgan Chase (which was found to have participated in the cartel for five months) was fined a total of €337,196,000. In setting the level of fines, the Commission took into account the individual bank’s value of sales for the products concerned within the EEA, the very serious nature of the infringement, its geographic scope and its duration.

State Aid

Commission approves Belgian State aid for electricity generation from offshore renewable energy. On 8 December 2016, the Commission approved Belgian plans to finance electricity generation from offshore renewable energy, holding the plans in line the Commission’s 2014 Guidelines on State Aid for Environmental Protection and Energy. In addition, the Commission approved two Belgian wind farm projects, noting that the scheme and the projects together will “increase the proportion of green electricity and reduce pollution” and “will help Belgium to meet its 2020 target of producing 13% of its energy needs from renewable sources”. The Belgian offshore electricity generation scheme is financed by a surcharge that is ultimately paid by electricity consumers. Belgium has also committed to partially opening up the scheme to foreign producers of electricity from renewable resources in order to alleviate any discrimination resulting from the financing mechanism. Under the scheme, operators will receive resalable certificates for offshore energy produced from renewable energy sources from the federal energy regulator (CREG). These certificates can then be sold to the transmission system operator Elia at a premium on top of the price they receive for electricity sold on the market. The wind farm projects will also use the above resalable certificates; however, the projects will be partly financed by the European Investment Bank under the European Fund for Strategic Investments.

UK Competition Procedure

CMA issues infringement decision to Pfizer and Flynn Pharma for abusive pricing. On 7 December 2016, the Competition and Markets Authority (CMA) announced that it has found that the pharmaceutical manufacturer Pfizer Limited and its distributor Flynn Pharma Limited each abused their respective dominant positions by imposing unfair prices for phenytoin sodium capsules, an anti-epilepsy drug, in the UK, in breach of the Chapter II prohibition of the Competition Act 1998 and Article 102 of the TFEU. In 2012, the CMA launched an investigation into the price of phenytoin, which is used by approximately 48,000 patients in the UK. As a result of the price increases, the CMA found that the expenditure of the NHS on phenytoin sodium capsules increased from about £2 million a year in 2012 to about £50 million in 2013. The prices of the drug in the UK have also been higher than Pfizer’s prices for the same drug in any other European country. The CMA has imposed a record fine of £84.2 million on Pfizer, jointly and severally with its parent company, and £5.2 million on Flynn (which was capped at 10% of Flynn’s worldwide turnover, which is the statutory maximum), also jointly and severally with its parent company, for abusing their dominant positions in their respective markets for the manufacture and supply of phenytoin sodium capsules. Both companies have between 30 working days and four months to reduce their respective phenytoin prices. The companies will continue to be able to charge prices that are profitable, “but their prices must not be excessive and unfair”.