Competition: Commission fines three producers of canned mushrooms EUR 32 million in cartel settlement

The Commission imposed fines totaling approximately EUR 32 million on three producers of canned mushrooms - Lutèce, Prochamp and Bonduelle – for participating in a cartel to coordinate prices and allocate customers of canned mushrooms in Europe during more than a year from September 2010 to December 2011. The cartel covered the sales of private label canned mushrooms via tender procedures to retailers and food wholesalers such as cash and carry companies and professional customers such as catering companies in the European Economic Area (“EEA”). The overall aim of the cartelists was to stabilize the market shares of the companies involved and stop the decline of prices. To achieve this aim the cartel members exchanged confidential information on tenders, set minimum prices, agreed on volume targets and allocated customers. Lutèce was not fined as it benefited from immunity under the Commission's 2006 Leniency Notice for revealing the existence of the cartel to the Commission. Prochamp benefitted from fine reductions. Since all three undertakings agreed to settle the case with the Commission, their fines were further reduced by 10%. In the context of the same investigation, proceedings were opened against Riberebro and the investigation will continue under the standard (non-settlement) cartel procedure. Source: Commission Press Release 25/06/2014

Competition: Commission adopts revised safe harbor rules for minor agreements (“De Minimis Notice”)

The Commission has issued revised rules ("De Minimis Notice") for assessing when minor agreements between companies are not caught by the general prohibition of anticompetitive practices under EU competition law. The De Minimis Notice facilitates the assessment of compliance with EU competition rules for companies, especially small and medium-sized enterprises (“SMEs”). At the same time, it allows the Commission to concentrate its resources on agreements with a higher risk of distorting competition in the Single Market. The revised De Minimis Notice, in line with its predecessor, defines what the Commission considers not to be an appreciable restriction of competition by reference to market share thresholds. It creates a "safe harbor" for companies whose market shares do not exceed 10% for agreements between competitors or 15% for agreements between non-competitors. These are unchanged from the previous De Minimis Notice. The main change in the revised De Minimis Notice is that it clarifies that agreements aimed at restricting competition, so-called restrictions "by object", cannot be considered minor and always constitute an appreciable restriction of competition, in violation of Article 101(1) of the Treaty on the Functioning of the European Union (“TFEU”). These agreements can never benefit from this safe harbor. To assist companies, the De Minimis Notice is accompanied by a regularly updated Staff Working Document setting out restrictions of competition that have been considered restrictions by object. Source: Commission Press Release 25/06/2014

Competition: Commission extends validity of special competition regime for liner shipping consortia until April 2020

The Commission has extended by another five years until April 2020 the validity of the existing legal framework exempting, if certain conditions are met, liner shipping consortia from EU competition rules. After a public consultation, the Commission has concluded that the exemption has worked well, providing legal certainty to agreements which bring benefits to customers and do not unduly distort competition, and that current market circumstances warrant a prolongation. The maritime consortia block exemption regulation allows shipping lines with a combined market share of below 30% to enter into cooperation agreements to provide joint cargo transport services (so-called "consortia"). Such agreements usually allow liner shipping carriers to rationalize their activities and achieve economies of scale. If consortia face sufficient competition and are not used to fix prices or share the market, users of services provided by consortia are usually able to benefit from improvements in productivity and service quality. The Commission has therefore exempted such agreements from the prohibition of anticompetitive agreements in Article 101 of the Treaty on the Functioning of the European Union (“TFEU”). Source: Commission Press Release 24/06/2014

Competition: Court of Justice of the European Union dismisses FLS Plast’s appeal in its entirety in the industrial bags cartel case

  On 19 June 2014, the Court of Justice of the European Union (“CJEU”) handed down its judgment on an appeal lodged by FLS Plast A/S (“FLS Plast”) against the General Court’s (“GC”) judgment concerning its participation in the industrial bags cartel. In November 2005, the Commission imposed a fine of EUR 290.7 million on 16 companies for operating an illegal cartel in the market for plastic industrial bags for over 20 years in violation of Article 101(1) of the Treaty on the Functioning of the European Union (“TFEU”). FLS Plast, a subsidiary of FLSmidth & Co. A/S (“FLSmidth”), was an addressee of the decision in its capacity as the former parent company of Trioplast Wittenheim SA (“TW”). The Commission imposed a fine of EUR 17.9 million on TW, of which FLS Plast and FLSmidth were held to be jointly and severally liable for EUR 15.3 million. FLS Plast and FLSmidth appealed to the GC against the Commission’s decision. The GC reduced the fine from EUR 15.3 million to EUR 14.5 million finding that the Commission had failed to establish that FLS Plast and FLSmidth had decisive influence over TW during 1991 but dismissed all the other pleas. In October 2012, FLS Plast brought the case before the CJEU. In its judgment, the CJEU dismissed FLS Plast’s argument that the Commission applied an incorrect legal test for the purpose of establishing a parent company’s liability and ruled that the GC was right to conclude that the Commission could presume that, during the relevant period, FLS Plast had exercised decisive influence over the conduct of TW, given its 100% stake that it held in TW over that period. The CJEU also dismissed FLS Plast’s claim that the Commission had infringed the principle of legitimate expectations when it applied the Leniency Notice affirming the GC’s recognition that the Commission has a broad discretion in granting reductions in fines for co-operation. Furthermore, the CJEU rejected FLS Plast’s argument that it should have been granted the same fine reduction as the successor parent company of TW. FLS Plast had neither contributed to the detection of the infringement in question nor exercised decisive influence over the subsidiary at the time of its co-operation with the Commission. The CJEU disagreed that the fine was akin to the type of security provided by a parent company to guarantee payment of a fine imposed on its subsidiary. The parent could, therefore, be ordered to pay a fine higher than the fine imposed on the subsidiary. The CJEU reaffirmed that the fine imposed on FLS Plast was appropriate. Finally, the CJEU agreed that the GC’s procedure had infringed Article 47 of the Charter of Fundamental Rights of the European Union by failing to adjudicate within a reasonable time. However, this entitled FLS Plast to bring an action for damages before the GC, not to have its fine reduced. Accordingly, the CJEU dismissed FLS Plast’s appeal in its entirety. Source: Judgment of the Court of Justice of the European Union C-243/12 P – FLS Plast A/S v European Commission, 19/06/2014

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 joint venture between Fresenius and Sistema
  • Commission approves acquisition of joint control over CST by Carlyle and PAI
  • Commission approves acquisition of joint control over American Express' global business travel unit by American Express and Qatar Holding
  • Commission approves change from joint to sole control over Ocidental Seguros and Médis by Ageas in insurance sector
  • Commission approves acquisition of the Enterprise Solutions Business of Alcatel-Lucent by China Huaxin