Competition: Advocate General Wahl recommends upholding Intel's appeal against EUR 1.06 billion fine for abuse of dominant position
On 20 October 2016, Advocate General Wahl ("AG Wahl") gave a non-binding opinion essentially siding with the appellant Intel Corporation Inc. ("Intel") against the General Court's ("GC") ruling.
In June 2014, the GC dismissed Intel's appeal against the Commission's 2009 decision fining Intel EUR 1.06 billion for having abused its dominant market position on the worldwide market for x86 central processing units ("CPUs"). The GC declared that exclusivity rebates granted by a dominant undertaking are by their very nature capable of restricting competition and foreclosing competitors from the market. According to the GC, the Commission thus did not need to show that such rebates are capable of restricting competition on a case-by-case basis in this particular case. According to the Commission, Intel had abused its dominant position from October 2002 to December 2007 by implementing a strategy aimed at foreclosing a competitor, Advanced Micro Devices Inc. ("AMD"), from the market. Further, the abuse involved several measures adopted by Intel vis-à-vis its own customers (computer manufacturers) and the European retailer of microelectronic devices, Media-Saturn-Holding.
AG Wahl criticized the GC's judgement on several accounts. He stated that the GC erred on multiple points and concluded that the GC erred in finding that "exclusivity rebates" constitute a separate and unique category of rebates that require no consideration of all the circumstances in order to establish an abuse of dominant position. In addition, AG Wahl determined that the GC erred in law in its alternative assessment of capability by failing to establish, on the basis of all the circumstances, that Intel's rebates and payments had, in all likelihood, an anti-competitive foreclosure effect. Further, AG Wahl noted that the concept of single and continuous infringement is merely a procedural rule meant to ease the evidentiary burden of competition authorities; for several instances of behavior to constitute a single and continuous instance of infringement, each instance must also constitute an infringement in and of itself. Further, AG Wahl held that the GC erred in concluding that in this case Intel's rebates were conditional upon the customers purchasing "all or most" of their requirements from Intel, since HP and Lenovo could still purchase significant quantities of x86 CPUs from AMD.
In addition, AG Wahl notes that the GC erred in holding that the Commission was not in breach of EU law by failing to organize and record a meeting as required under the applicable rules, and that this could not be remedied by a later note to the file when such a note does not record the substance of the relevant interview. AG Wahl also stated that the GC failed to assess whether the anti-competitive effects stemming from certain agreements between Intel and Lenovo had the capacity to produce any immediate, substantial and foreseeable anti-competitive effect in the EEA and therefore erred in applying the implementation and the qualified effect criterion to dismiss Intel's arguments regarding the Commission's lack of jurisdiction. Finally, regarding the fine, AG Wahl considers that the fact that the fine was record-breaking at the time does not in itself make it disproportionate and Intel has failed to point to any legal error committed by the GC which would permit the Court of Justice of the European Union ("CJEU") to assess the proportionality of the fine.
Consequently, AG Wahl recommends to the CJEU that the judgment of the GC be set aside, and that the case be referred back to the GC for it to examine all the circumstances of the case. Source: Court of Justice of the European Union Press Release 20/10/2016 and Advocate General's Opinion in Case C-413/14 P Intel Corporation Inc. v. Commission
Competition (Finland): Helsinki Court of Appeal reduces damages awarded in asphalt cartel damages case
On 20 October 2016, the Helsinki Court of Appeal rendered 40 judgments in the asphalt cartel damages case. The case is based on a 2009 Supreme Administrative Court ("SAC") decision finding that Lemminkäinen Oyj, VLT-Trading Oy, Skanska Asfaltti Oy, NCC Roads Oy, SA-Capital Oy, Rudus Asfaltti Oy and Super Asfaltti Oy had participated in a national cartel on the Finnish asphalt paving market between 1994 and 2002. The SAC imposed a fine totaling EUR 82.55 million on the companies. Following the SAC’s decision, the Finnish State and 40 municipalities brought actions for damages before the Helsinki District Court. The District Court awarded damages totaling EUR 37.4 million to the municipal claimants, but dismissed the claim of the Finnish State, as it found that representatives of certain State agencies had been aware of the cartel and the agencies had even participated in the cartel for a certain period. All but one of the District Court judgments were appealed to the Helsinki Court of Appeal. The Court of Appeal took a different position than the District Court on many issues and, as a result, reduced the amount of damages awarded by the District Court in respect of most claimants. First, applying the Supreme Court's judgment 2016:11 rendered earlier this year, the Court of Appeal found many claims to be fully or partially time-barred. Further, the Court of Appeal dismissed some of the claims due to lack of evidence on the causation of damage or causal connection and also due to its rejection of the application of economic succession in antitrust damages. In respect of the Finnish State's appeal, the Court of Appeal reversed the District Court judgment, finding that there was not sufficient proof on the State agencies' awareness or participation in the cartel. The Court of Appeal reduced the damages awarded to the municipal claimants to approximately EUR 27 million and awarded damages amounting approximately to EUR 7.5 million to the Finnish state. Source: Helsinki District Court Press Release 20/10/2016
Competition: Commission opens formal investigation into mobile telephone network sharing in Czech Republic
On 25 October 2016, the Commission announced that it has opened an investigation into a network sharing agreement between two Czech operators of mobile telephony, O2 CZ / CETIN and T-Mobile CZ. The Commission will examine whether this cooperation restricts competition and thereby harms innovation in breach of EU antitrust rules.
O2 CZ is a major telecoms operator in the Czech Republic, with more than six million lines, both fixed and mobile. T-Mobile CZ is a mobile communications subsidiary of the Deutsche Telekom group, operating in the Czech Republic since 1996. The Czech mobile communications market is highly concentrated, with only three mobile network operators. O2 CZ and T-Mobile CZ are the two largest operators, with approximately three quarters of subscribers. The network sharing cooperation between O2 CZ/CETIN and T-Mobile CZ started in 2011 and has been increasing in scope. Currently it covers all mobile technologies (i.e., 2G, 3G and 4G) and the entire territory of the Czech Republic with the exception of Prague and Brno.
The Commission will now investigate whether the cooperation between O2 CZ/CETIN and T-Mobile CZ risks slowing down quality improvements in existing infrastructure. Further, the Commission will investigate whether the cooperation risks delaying or hindering the deployment of new technologies, such as 4G/LTE and future technologies as well as new services based on them. The Commission will also investigate the impact of potential efficiencies that could be brought about by the network sharing. Source: Commission Press Release 25/10/2016
Competition: Commission publishes study on passing-on of overcharges
On 25 October 2016, the Commission published a study on the passing-on of overcharges, conducted by RBB Economics LLP and Cuatrecasas, Gonçalves Pereira SLP ("study"). The study provides judges, and other practitioners who are not economic experts, with practical guidance on obtaining and assessing economic evidence in relation to pass-on in the context of competition law infringements. The study details the framework for evaluating the plausibility of claims, for quantifying the effects of pass-on, and for assessing the total extent of the harm suffered by a claimant.
Directive 2014/104 ("the Directive") establishes the new legal framework for pass-on. The Directive states that any person who has suffered harm caused by a competition law infringement may claim full compensation for that harm. This includes the possibility of indirect claims, which arise when those not directly affected by such an infringement are nevertheless harmed as a result of changes in the behavior of directly affected firms as well as, potentially, other intermediate firms. Prior to the Directive, the Court of Justice of the European Union had developed case-law on this topic, principally in the area of reimbursement of taxes or charges unlawfully levied in breach of EU law. This case law stressed the importance of adequate case-by-case economic analysis to prove pass-on. To date, national courts have had limited experience of pass-on matters. Notably, they have relied heavily on certain parameters to assess pass-on and have tended to adopt simple or theoretical approaches to quantification. The study provides an overview of the past case-law and experience, and also examines the key provisions of the Directive. Source: Study on passing-on of the overcharges, Final report
Competition: GEA appeals Commission's re-adoption of decisions in heat stabilizers cartel
On 24 October 2016, the Official Journal published details of an appeal by GEA Group AG ("GEA") against the Commission's decision of 9 June 2016 to re-adopt its decisions to fine GEA for its participation in the heat stabilizers cartel.
In 2009, the Commission announced that it has fined GEA and nine other manufacturers for a cartel in heat stabilizers. The commission found that the companies fixed prices, shared customers, allocated markets, and exchanged sensitive commercial information. In 2010, the Commission partly revised its ruling because of an error related to GEA's fine. In 2015, the General Court ("GC") annulled the 2010 amending decision for GEA because it found that GEA was not able to submit its views before the Commission adopted the amending decision. In June 2016, the Commission re-adopted the amending decision, in which it upheld, without changes, GEA's fine of approximately 3.3 million euros.
GEA has now brought an appeal before the GC seeking to annul the Commission's June 2016 decision; alternatively, GEA seeks a reduction in the amount of the fine and new date for due payment and interest. GEA claims that the Commission adopted the decision after the limitation period had elapsed and failed to give GEA the opportunity to argue its views orally. GEA also claims that the Commission erred in not applying the 10% cap to GEA, because the Commission applied it to another infringer. Further, GEA alleges that the Commission infringed the principle of equal treatment by holding GEA solely liable for conduct for which other infringers were found to be responsible even though GEA's liability is only derivative, and because the Commission distributed the extra burden arising from the other infringer’s reduced liability exclusively to the detriment of GEA. In addition, GEA alleges that the Commission acted ultra vires by retroactively setting a deadline for payment for a date when no valid legal basis for payment existed. Source: Case T-640/16 GEA Group v. Commission, Official Journal C 392/64, 24 October 2016
Competition: Cartel participants appeal General Court judgment on pre-stressing steel cartel
On 22 October 2016, the Official Journal published details of appeals by Moreda-Riviere Trefilerías ("MRT"), Trenzas y Cables de Acero PSC ("Tysca PSC"), Trefilerías Quijano ("TQ") and Global Steel Wire ("GSW") against a General Court ("GC") judgment on their challenge to the Commission's decision on the pre-stressing steel cartel.
In June 2010, the Commission fined 17 pre-stressing steel producers, including MRT, Tysca PSC, TQ and GSW, a total of EUR 518.5 million for participation in a long-running price-fixing and market-sharing cartel. MRT, Tysca PSC, TQ and GSW belong to the Spanish steel group Celsa. The Commission held that MRT, Tysca PSC, TQ and GSW constituted a single economic unit and imposed a fine totaling EUR 54.4 million. MRT, Tysca PSC, TQ and GSW challenged the Commission's decision before the GC. They disputed whether they comprised a single economic unit and whether they were liable, and also challenged their ability to pay the fines imposed. In June 2016, the GC dismissed the appeals in their entirety.
MRT, Tysca PSC, TQ and GSW have now appealed to the Court of Justice of the European Union ("CJEU") seeking the annulment of the GC's decision. Each company has filed two separate appeals (i.e. eight appeals in total).
In four of the appeals (one by each of the appellants), the companies claim that the GC erred in law (i) in declaring inadmissible the plea in law relating to the infringement of the appellant's rights to defense, (ii) by applying an incorrect legal standard when evaluating the second request for inability to pay and, consequently, the admissibility of the action, and (iii) in evaluating the evidence or clearly distorting the evidence, failing to carry out a full review exercising its powers of unlimited jurisdiction, infringing the right to effective judicial protection and failing to state reasons.
In the other four appeals (one by each of the appellants), the companies made other claims mainly related to what they consider an incorrect conclusion by the GC that they constituted a single economic unit. Source: Cases C-454/16 P and C-457/16 P Global Steel Wire v. Commission, C-455/16 P and C-461/16 P Moreda-Riviere Trefilerías v. Commission, C-456/16 P and C-460/16 P Trefilerías Quijano v. Commission, C-458/16 P and C-459/16 P Trenzas y Cables de Acero PSC v. Commission, Official Journal C 392/16-23, 24 October 2016 and General Court Press Release 2/6/2016
Competition: Czech national railway operator appeals Commission decision to conduct another unannounced inspection
On 22 October 2016, details were published in the Official Journal of an appeal by the Czech national railway operator, České dráhy a.s, against a Commission decision to conduct another unannounced inspection at the company's business premises. The company claims, in particular, that the Commission's second inspection decision of 22 June 2016 was adopted based on materials obtained during the first inspection at the company's business premises. According to the company, the Commission conducted the first inspection based on an illegal decision. The company alleges that the Commission could not use the materials thus obtained, not even for the adoption of the decision contested by the present action. Further, the company claims that the Commission adopted the decision without legally available materials, defined the subject of the inspection unacceptably broadly, and exceeded the bounds of its investigative powers. Source: Case T-621/16 České dráhy a.s v. Commission, Official Journal C 392/46, 24 October 2016
Competition: Commission appoints new directors to DG Competition
On 19 October 2016, the Commission announced that it has appointed Mr. Kris Dekeyser and Ms. Maria Velentza as Directors in the Directorate General ("DG") for Competition. Mr. Dekeyser, a Belgian national, will begin as Director in "Policy and Strategy" immediately. He joined the Commission in 1991 and has worked on EU competition policy throughout his career. Ms. Velentza, a Greek national, will be Director for Markets and Cases III: financial services in DG Competition as of 1 November 2016. She first became Head of Unit in 2007. Between 2011 and 2015, she was an Adviser for the Task Force for Greece. She has been Head of Unit for Macroprudential Policy and Relations with the European Systemic Risk Board ("ESRB") at DG Financial Stability, Financial Services and Capital Markets Union ("DG FISMA") since May 2015. Source: Commission Press Release 19/10/2016