Merger control: Commission conditionally approves acquisition of Alere by Abbot Laboratories
On 25 January 2017, the Commission announced that it had conditionally approved the proposed acquisition of Alere Inc. ("Alere") by Abbott Laboratories ("Abbott"). Alere is a US-based company that supplies professional diagnostic solutions for infectious diseases, cardiometabolic diseases, and toxicology, with a focus on near-patient, point-of-care testing. Abbott, also based in the US, is a global health care company that supplies a diversified range of health care products, including diagnostic products. Both companies are active in in vitro diagnostics ("IVD") systems which perform clinical tests outside the body using blood, urine or other samples. According to the Commission, IVD systems may be divided into two broad categories, of which laboratory systems are used in hospitals and laboratories, while point-of-care systems are used in emergency rooms, hospital wards, ambulances and other near-patient settings.
In its initial investigation, the Commission examined the effects of the proposed transaction in the markets for IVD systems. Although the companies' activities are largely complementary, as Abbott had a broader portfolio of laboratory systems and Alere a focus on point of care, the Commission found certain overlaps, especially for point-of-care analyzers used in the testing of blood gases and cardiac markers. The Commission noted that since Abbot (iSTAT) and Alere (Epoc) are the only producers of handheld point-of-care systems for blood gases, the proposed transaction would have led to a monopoly on this market. Concerning cardiac markers, which are biomarkers measured to evaluate heart functions, the Commission noted that Abbott's iSTAT system and Alere's Triage system compete closely both in functionality and in use within hospitals. Moreover, the Commission found that the proposed transaction would risk affecting a third supplier's, namely Danaher's, ability to compete for laboratory systems running B-type natriuretic peptide ("BNP") tests, because Danaher was relying on Alere for the manufacturing and sale of the BNP test used in its laboratory machines. According to the Commission, there was a risk that, following the proposed transaction, Alere would stop selling BNP tests for Danaher's machines since Abbott competed with Danaher.
In order to address the Commission's competition concerns, Abbott offered to fully divest Alere's global Epoc and Triage businesses, the latter also manufacturing essential inputs for the production of BNP reagents for Danaher laboratory devices, which were included in the divestment, as well as the Alere BNP reagents business that commercializes a BNP test with Danaher. The Commission considers that these commitments address all of its competition concerns and therefore approved the transaction, as modified by the commitments.
Competition: Court of Justice dismisses the majority of appeals in bathroom fittings cartel case
On 26 January 2017, the Court of Justice of the European Union ("CJEU") rendered 14 judgments on appeals against the General Court's ("GC") judgments on actions to challenge the Commission's bathroom fixtures and fittings cartel decision.
In June 2010, the Commission imposed fines totaling EUR 662 million on 17 undertakings for their participation in a price-fixing cartel on the market for bathroom fittings and fixtures. The Commission found that the undertakings had regularly held anticompetitive meetings between 16 October 1992 and 9 November 2004 in several Member States. The Commission concluded that the coordination of annual price increases and other pricing elements and the disclosure and exchange of sensitive business information amounted to a cartel that covered taps, fittings, shower enclosures and accessories, and ceramic ware. In 2013, the GC partly annulled the Commission's decision for certain undertakings and, in some cases, also reduced their fines and dismissed the actions brought by the other undertakings. Several undertakings as well as the Commission appealed to set aside the GC judgements.
The CJEU dismissed 12 of these appeals in their entirety, rejecting arguments claiming that the GC erred in its assessment of the evidence and the fines. However, the CJEU upheld the Commission's appeal concerning the infringement of undertakings within the Sanitec / Keramag Keramische group. The CJEU found that the GC made errors in assessing the probative value of several documents, such as statements made in the leniency applications. According to the CJEU, the GC also erred in holding that one leniency statement cannot corroborate another. Further, the GC erred in holding that certain evidence should establish the existence of the infringement, without considering other evidence and additional explanations, notably those contained in another undertaking's leniency application.
In addition, the ECJ upheld an appeal by Laufen Austria, concluding that the GC erred in finding that the turnover of the Roca Group could be considered for the purpose of applying the 10% ceiling in the period for which Laufen Austria was held solely responsible for the infringement. Because a parent undertaking cannot be held responsible for an infringement committed by its subsidiary prior to the acquisition of that subsidiary, the Commission must, for the purpose of calculating the 10% ceiling, consider the subsidiary’s own turnover in the business year preceding the year in which the penalty for infringement was adopted. In these cases, the CJEU decided to refer the cases back to the GC.
Competition: Appeals brought against the General Court's finding in the Lundbeck case
On 30 January 2017, the Official Journal published a number of appeals of the General Court's ("GC") decision to uphold the Commission's decision in the Lundbeck case.
In June 2013, the Commission fined Lundbeck and the generic companies Alpharma (now part of Zoetis), Merck KGaA/Generics UK (Generics UK is now part of Mylan), Arrow (now part of Actavis) and Ranbaxy for agreeing to delay the market entry of cheaper generic versions of Lundbeck's drug citalopram (a blockbuster antidepressant).
The companies appealed the Commission's decision to the GC. In September 2016, the GC upheld the Commission's decision, ruling that the agreements restricted competition by object. The companies have now appealed the GC's judgement challenging mainly the findings that the agreements restricted competition by object and that the generic companies were potential competitors to Lundbeck.
Source: Cases C-591/16 P Lundbeck v Commission, Official Journal C 30/25, 30 January 2017, C-614/16 P Merck v Commission, Official Journal C 30/40, 30 January 2017, C-601/16 P Arrow Group and Arrow Generics v Commission, Official Journal C 30/29, 30 January 2017, C-611/16 P Xellia Pharmaceuticals and Alpharma v Commission, Official Journal C 30/39, 30 January 2017, C-588/16 P Generics (UK) v Commission, Official Journal C 30/23, 30 January 2017 and C-586/16 P, Pharmaceuticals Industries and Ranbaxy (UK) v Commission, Official Journal C 30/22, 30 January 2017
Merger control (Sweden): Swedish Competition Authority approves NIBE's acquisition of Enertech
On 27 January 2017, the Swedish Competition Authority ("SCA") published a decision approving NIBE Industrier AB's ("NIBE") acquisition of Enertech Group Limited ("Enertech"). As reported previously, the SCA decided to open an in-depth investigation of the proposed merger, which primarily concerns the market for heat pumps.
In its decision, the SCA concluded that the merger would result in high market shares for the combined undertaking in certain segments of the market for primary heating systems for smaller buildings. Moreover, NIBE and Enertech are close competitors. However, a number of circumstances, such as the possibilities for customers to change suppliers, for competitors to increase their supply and for new market players to enter certain markets, counteract the risk of negative effects on competition, such as price increases. Therefore, the SCA found that the merger did not impede the existence or the development of effective competition within Sweden as a whole or a substantial part thereof and thus approved the acquisition.
Competition (Sweden): New acting director-general for the Swedish Competition Authority
On 27 January 2017, Karin Lunning was appointed as acting director-general for the Swedish Competition Authority ("SCA"). Before the appointment, Karin Lunning was head of department at the SCA. She has held a number of senior positions at the SCA and has worked internationally and within the Swedish judiciary. The present director-general at the SCA, Dan Sjöblom, will become the new director-general at the Swedish Post and Telecom Authority.