Competition: Èditions Odile Jacobs appeals against General Court’s ruling upholding the Commission’s re-approval of divestment purchaser  

On 24 January 2015, details were published of an appeal brought by Éditions Odile Jacobs SAS (“Odile Jacobs”) against the judgement of the General Court (“GC”) upholding the Commission’s re-approval decision regarding a divestment purchaser in connection with the purchase of Vivendi Universal Publishing (“VUP”) by the Lagardère group (“Lagardère”). In September 2002, Vivendi Universal, a company operating on the French-language publishing market, decided to dispose of all the book publishing activities which it carried out in Europe through the intermediary of its subsidiary VUP. Lagardère declared its interest in acquiring those assets. As the acquisition would have led to creating or strengthening dominant positions on several markets resulting in a significant barrier to effective competition, the Commission approved the acquisition subject to certain undertakings and Lagardère agreed to sell a significant part of VUP’s assets. It approached a number of companies likely to purchase those assets including Odile Jacobs which expressed its interest in the transaction. However, Lagardère finally accepted the offer of Wendel Investissement SA (“Wendel”) and Wendel was approved also by the Commission as the acquirer of the divestment business. Following the Commission’s decision, Odile Jacobs brought two separate appeals before the GC challenging the Commission’s conditional approval decision as well as the decision to approve Wendel as the purchaser. The GC dismissed Odile Jacob’s appeal regarding the conditional approval decision but annulled the Commission’s decision approving Wendel as the purchaser. According to the GC, the latter decision had been adopted on the basis of a report drawn up by a trustee who did not satisfy the required condition of independence set by the Commission. Both judgements were subsequently upheld by the Court of Justice of European Union (“CJEU”). Following the GC’s judgement, Lagardère submitted a new request for the approval of Wendel to the Commission and proposed a new trustee, who had been approved by the Commission in early 2011. In May 2011, the Commission once again approved Wendel as the purchaser of the divestment assets, with effect as of 30 July 2004. Subsequently, Odile Jacobs brought a further action with the GC challenging the Commission’s re-approval decision but the GC dismissed Odile Jacob’s appeal. Odile Jacobs has now brought an action with the CJEU seeking that the GC’s ruling be set aside. To support its action, Odile Jacobs relies on three grounds of appeal. Firstly, Odile Jacobs claims that the GC erred in law by failing to find that the Commission had infringed Article 266 of the Treaty on the Functioning of European Union (“TFEU”) and Article 47 of the Charter of Fundamental Rights. Secondly, according to Odile Jacobs, the GC erred in law in finding that the Commission’s conditional approval decision could constitute a legal basis for a new approval decision. Finally, Odile Jacobs submits that the GC disregarded legal criteria for assessing the independence of the transferee of the assets sold in relation to the transferor, that it erred in law and distorted the facts relating to that assessment. Source: Case C-514/14 P Éditions Odile Jacob SAS v European Commission, OJ C 26/14, 26 January 2015 and General Court Press Release 5/9/2014

Competition: Court of Justice of the European Union rules on questions regarding the application of the old exclusive purchasing block exemption and the old vertical agreements block exemption to an agreement relating to the exclusive supply of fuel

On 23 January 2015, the Court of Justice of the European Union (“CJEU”) handed down its preliminary ruling on a reference from the Spanish Supreme Court regarding the application of the old exclusive purchasing block exemption and the old vertical agreements block exemption to an agreement relating to the exclusive supply of fuel to a Spanish service station. The cases in the main proceedings stemmed from agreements between Galp Energía España SAU (“Galp”), a Portuguese company active in the exploration, production, refining and marketing of oil and natural gas products, and Pozuelo 4, a company involved in the selling of gasoline and lubricating oils. Under these agreements Pozuelo 4 granted Galp the right to build a service station on land owned by it. The lease was granted to Galp for a period of 30 years which was later extended by a further 15 years. The agreement also included an agreement to let the service station to Pozuelo 4 for an equivalent period with an obligation on Pozuelo 4 to purchase all fuels to be sold at the service station from Galp, on an exclusive basis. In 2005, Pozuelo 4 brought an action before the Commercial Court in Madrid asking for the agreements with Galp to be annulled on the grounds that they were in breach of Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”) as well as Articles 10 and 12 of Regulation 1984/83 and Articles 4 and 5 of Regulation 2790/1999. The Commercial Court, as well as later on an appeal the Provincial Court of Madrid, dismissed Pozuelo 4’s action on the grounds that Galp did not have a market share exceeding a certain per cent in Spain and therefore the agreements in question could not be seen to restrict competition in a perceptible manner. Pozuelo 4 further appealed to the Spanish Supreme Court, which then referred to the CJEU questions for a preliminary ruling in order to clarify the application of the old exclusive purchasing block exemption and the old vertical agreements block exemption to an agreement relating to the exclusive supply of fuel. In its ruling, the CJEU first recalled that it is settled case law that an agreement is not caught by the prohibition laid down in Article 101 of the TFEU if it affects the market only insignificantly. The CJEU therefore concluded that an agreement under which a supplier of petroleum-based products is granted a right to build a service station and let it back to the owner of the land for a period equivalent to the duration of the right, and which contains an exclusive purchasing obligation for the same period, is likely to be of negligible importance and not caught by the prohibition laid down in Article 101(1) of the TFEU where the supplier’s market share is less than 3 per cent compared to the total market share of about 70 per cent held by three suppliers. Further, the CJEU ruled that Article 12(2) of Regulation 2790/1999 must be interpreted as meaning that a contract in force on 31 May 2000 that includes a non-compete clause and meets the conditions for exemption of the old exclusive purchasing block exemption but not those of Regulation 2790/1999 remains outside the scope of application of Article 101(1), under that Article 12(2) only until the expiry of the transitional period it contains, on 31 December 2001. Source: Case C-384/13 – Estacion de Servicio Pozuelo 4 SL v Galp Energia Espana SAU, Order of 4 December 2014 (in Spanish)

Merger control: Commission continues its investigation of the Orange / Jazztel merger without referral to Spain  

On 26 January 2015, the Commission announced that it decided not to refer the proposed acquisition of Jazztel p.l.c. (“Jazztel”) by Orange S.A. (“Orange”) to be assessed by the Spanish competition authority under Spanish competition law. Orange is a provider of telecommunications services in more than 30 countries and it is present in the Spanish telecommunications market through its wholly-owned subsidiary Orange Espagne, S.A.U. Jazztel, for its part, provides telecommunications services at both retail and wholesale level in Spain through its subsidiary Jazz Telecom, S.A.U. The transaction was originally notified to the Commission in October 2014 and shortly after the notification, the Spanish competition authority submitted a referral request under Article 9(2)(a) of the EU Merger Regulation which allows a Member State to request the Commission to refer all or part of the assessment of a case to it, provided that the competitive effects of a transaction are purely national or local. Given the Commission’s extensive experience in assessing cases in mobile telecommunications sector and to ensure consistency in the application of merger control rules in the fixed and mobile telecommunications sectors across the EEA, the Commission concluded that it is better placed to deal with the transaction. However, the Commission will continue to operate closely with the Spanish competition authority in the assessment of the case. Source: Commission Press Release 26/1/2015

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 UTA by Edenred, Hermes and Eckstein
  • Commission approves acquisition of Songbird Estates by Qatar Investment Authority and Brookfield Property Partners