Competition: Court of Justice of the European Union rules on cartel members’ liability for damages resulting from umbrella pricing

On 5 June 2014, the Court of Justice of the European Union (“CJEU”) handed down its judgment on a reference from an Austrian court on the question of whether cartel members can be held liable for damages caused by the fact that companies who were not members of the cartel, charged higher prices than they would have been able to charge, had the cartel not existed (“umbrella pricing”). In 2007, the Commission imposed fines totaling approximately EUR 992 million on Kone, Otis, Schindler and ThyssenKrupp for their participation in cartels involving the installation and maintenance of elevators and escalators in Belgium, Germany, Luxembourg and the Netherlands. Furthermore, in 2008, the Austrian authorities also imposed fines on a number of undertakings (including Kone, Otis and Schindler) for implementing, on the Austrian market, a cartel relating to the goods mentioned above. ÖBB-Infrastruktur AG (“ÖBB”) bought elevators and escalators from undertakings that did not participate in the cartel. It is claiming damages totaling approximately EUR 2 million from the members of the Austrian cartel for loss suffered as a result of ÖBB’s suppliers setting a higher price because of the cartel. In its judgment, the CJEU held that the effectiveness of the prohibition on anti-competitive cartels would be jeopardized if applicants could not seek compensation for loss caused by an infringement of competition rules. In that regard, the CJEU held that a victim of umbrella pricing may obtain compensation for the loss caused by the members of the cartel, even if it did not have contractual links with them, where it is established that the cartel was, in the circumstances of the case and, in particular, the specific aspects of the relevant market, liable to have the effect of umbrella pricing being applied by third parties acting independently, and those circumstances and specific aspects could not be ignored by the members of that cartel. Source: Court of Justice of the European Union Press Release 05/06/2014

Competition: Commission sends Statement of Objections to ICAP for suspected participation in yen interest rate derivatives cartels

The Commission has informed the UK based broker ICAP of its preliminary view that it may have breached EU competition rules by facilitating several cartel infringements in the market for interest rate derivatives denominated in the yen currency. Interest rate derivatives (e.g. forward rate agreements, swaps, futures, options) are financial products which are used by banks or companies for managing the risk of interest rate fluctuations. These products are traded worldwide and play a key role in the global economy. The Commission has concerns that ICAP may have been involved in cartels concerning yen interest rate derivatives as a facilitator in violation of Article 101 of the Treaty on the Functioning of the European Union (“TFEU”). In December 2013, the Commission imposed fines totaling approximately EUR 670 million on five banks and one cash broker for their involvement in cartels in the same sector. These six companies had admitted their involvement in the cartels, which allowed the Commission to settle the case with them. In October 2013, the Commission also opened proceedings against ICAP and the investigation is continuing under the standard (non-settlement) cartel procedure. The sending of a statement of objections does not prejudge the final outcome of the investigation. Source: Commission Press Release 10/06/2014

Public Procurement (Sweden): Increased limits for direct awards of public procurements in Sweden

A new government bill recently passed in the Riksdag will amend the Swedish public procurement acts: the Swedish Public Procurement Act (“SPPA”), the Swedish Act on Procurement within the Water, Energy, Transport and Postal Services Sectors (“SWETPS”) and the Swedish Act on Defense and Sensitive Security Procurement (“SDSS”). Under these acts, public procurements that partly or in whole fall outside the scope of the Public Procurement Directive (2004/18/EC) may be directly awarded, if the value of the contract is equal or less than 15 % of the threshold set out by the Commission. Under the new bill, the limit will be increased significantly from 15 % to 28 % for the SPPA and from 15 % to 26 % for the SWETPS and the SDSS. The bill will furthermore implement a requirement for procuring authorities to adopt a policy for the application of direct awards. If the value of the directly awarded contract is above SEK 100 000, the procuring authority will also be required to motivate the direct award. The changes will enter into force on 1 July 2014. Source: Sveriges Riksdag Documents and Laws

In addition, kindly note the following merger control decisions by the Commission which are published on the website of the Commission’s Directorate-General for Competition:

  • Commission approves acquisition of joint control over MMC Superalloy by Hitachi Metals and Mitsubishi Materials
  • Commission approves acquisition of Fiumaranuova by ING and Allianz
  • La Commission autorise l'acquisition du contrôle conjoint des sociétés Le Havre Vauban et Le Havre Lafayette par Klépierre et ING
  • Commission approves acquisition of control over five European hotels by Katara Hospitality and InterContinental Hotels Group
  • Commission approves acquisition of CABB International GmbH by Kallisto
  • Commission approves acquisition of Cemex West by Holcim in the building materials sector
  • Commission approves acquisition of Ashland's AWT unit by Clayton, Dubilier & Rice
  • LorCommission approves acquisition of a non-life insurance going concern of UnipolSai by Allianz
  • Commission approves acquisition of Ibericar K and the BMW's car dealership business in Barcelona by PAG and Ibericar