Competition: Commission settles RBS-JPMorgan cartel in derivatives based on Swiss franc LIBOR and imposes EUR 61.6 million fine on JPMorgan

On 21 October 2014, the Commission found that two international banks, namely RBS and JPMorgan, participated in an illegal bilateral cartel aimed at influencing the Swiss franc Libor benchmark interest rate, in breach of EU antitrust rules. Interest rate derivatives (e.g. forward rate agreements, swaps, futures, options) are financial products used for managing the risk of interest rate fluctuations. According to the Commission, RBS and JP Morgan tried to distort the normal course of the pricing of interest rate derivatives denominated in Swiss franc between March 2008 and July 2009 by discussing the future Swiss Franc Libor rate submissions of one of the banks and at times exchanged information concerning trading positions and intended prices. The infringement covered the whole of the European Economic Area (“EEA”). As RBS and JPMorgan agreed to settle the case with the Commission under a simplified procedure, RBC received immunity from fines for revealing the existence of the cartel to the Commission and JPMorgan was fined EUR 61.6 million after benefitting from a reduction of its fine for its cooperation with the investigation under the Commission's 2006 Leniency Notice, as well as a 10% reduction for agreeing to settle the case with the Commission.Source: Commission Press Release 21/10/2014

Competition: Commission sends Statement of Objections to Honeywell and DuPont regarding cooperation on new refrigerant used in car air conditioning systems

On 21 October 2014, the Commission informed Honeywell International Inc. (“Honeywell”) and E.I. du Pont de Nemours and Company (“DuPont”) of its preliminary view that the cooperation they entered into in 2010, based on several agreements on the production of a new refrigerant for use in car air-conditioning systems (R-1234yf), may have limited its availability and technical development, in breach of EU antitrust rules. In 2006, the EU adopted Directive 2006/40/EC imposing new standards on air conditioning systems in motor vehicles with the aim of reducing harmful emissions and combating global warming (“MAC Directive”). R-1234yf is currently the only commercially available refrigerant with a sufficiently low global warming potential (“GWP”) to comply with the requirements of the MAC Directive and Honeywell and DuPont are the only two suppliers of R-1234yf to carmakers. The Commission's provisional finding is that the cooperation between Honeywell and DuPont on production of R-1234yf has reduced their decision-making independence and resulted in restrictive effects on competition which include a limitation of the available quantities of the new refrigerant that would have otherwise been brought to the market, as well as a limitation of related technical development. According to the Commission, in the specific circumstances of the case this behaviour may infringe Article 101 of the Treaty on the Functioning of the European Union (“TFEU”) and Article 53 of the European Economic Area (“EEA”) Agreement that prohibit anticompetitive agreements. A statement of objections is a formal step in the Commission’s investigations into suspected violations of EU antitrust rules and does not prejudge the final outcome of the investigation. Source: Commission Press Release 21/10/2014

Competition: Commission seeks feedback on commitments from Skyteam airline alliance members Air France/KLM, Alitalia and Delta concerning transatlantic cooperation

The Commission has invited interested third parties to comment on commitments proposed by Air France/KLM, Alitalia and Delta to address concerns that their transatlantic cooperation may harm competition for premium passengers on the Paris-New York route and for all passengers on the Amsterdam-New York and Rome-New York routes, in breach of EU antitrust rules. In January 2012, the Commission opened a formal investigation into the cooperation of Skyteam members Air France/KLM, Alitalia and Delta on passenger transport on routes between Europe and North America. The Commission has concerns that the extensive cooperation between the said airlines in the framework of the Skyteam alliance, involving profit-sharing and the joint management of schedules, pricing and capacity, may result in higher prices on the routes Paris-New York (for premium passengers), Amsterdam-New York and Rome-New York (for premium and non-premium passengers). The airlines have now jointly offered a set of commitments to alleviate the Commission's concerns. Firstly, the airlines offered to make available landing and take-off slots at Amsterdam, Rome and/or New York John F. Kennedy and Newark Liberty airports on the Amsterdam-New York and Rome-New York routes in order to facilitate the market entry of competitors. Furthermore, the airlines are also prepared to enter into agreements which would enable competitors to offer tickets on their flights and facilitate access to connecting traffic, as well as to provide access to their frequent flyer programmes on all three routes. If the market test confirms that the proposed commitments remedy the competition concerns, the Commission may make them legally binding on the airlines. Source: Commission Press Release 21/10/2014

Competition: Commission publishes a summary of its decision fining air cargo carriers for operating a worldwide cartel

On 18 October 2014, the Commission published in the Official Journal (“OJ”) a summary of its November 2010 decision fining eleven air cargo carriers a total of EUR 799.445 million for operating a worldwide cartel which affected cargo services within the EEA. The Commission decision adopted on 9 November 2010 relates to a single and continuous infringement of Article 101 of the Treaty on the Functioning of the European Union (“TFEU”), Article 53 of the EEA Agreement and Article 8 of the Swiss Agreement, covering the EEA territory and Switzerland by which the addressees coordinated their pricing behavior in the provision of airfreight services from, to, and, in the case of some carriers, within the EEA with respect to various surcharges and the payment of commission on surcharges. The Commission found that the carriers co-ordinated surcharges for fuel and security over a six year period from December 1999 until February 2006. Pricing contacts between airlines providing airfreight services (“carriers”) initially started in respect of the introduction of a fuel surcharge (“FSC”). Carriers then contacted each other regarding the application of the FSC mechanism, the introduction of new trigger points raising the level of FSC and regarding anticipated increases or decreases in FSC levels. Carriers extended their cooperation to refusing to pay commission to their customers, freight forwarders, on surcharges. By refusing to pay commission the carriers ensured that surcharges did not become subject to competition through the negotiation of discounts with customers. The case was opened on the basis of an immunity application on behalf of Deutsche Lufthansa AG and its controlled subsidiaries Lufthansa Cargo AG and Swiss on 7 December 2005. Source: OJ C 317/11, 18/10/2014 and Commission Press Release 09/11/2010

Competition (Sweden): Swedish Competition Authority confirms investigation of the Swedish Banking Association

The Swedish Competition Authority (“SCA”) has confirmed that it is currently investigating the Swedish Banking Association (‘’SBA’’). The SCA is investigating whether the SBA, through the issuance of amortization recommendations, has violated Chapter 2, Section 1 of the Swedish Competition Act regarding restrictive agreements. The investigation has been initiated by the SCA on its own initiative. According to the SCA, trade associations are always of interest to the SCA since they provide a forum for where competing companies meet. There is thus always a risk that the meeting companies can coordinate their behavior. The SCA has stressed that the investigation is currently at an early stage and it is not yet able to assess whether the amortization recommendations violate the Swedish Competition Act. Source: Swedish Competition Authority Press Release 18/10/2014 (in Swedish)

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 CHC Group by Clayton, Dubilier & Rice
  • Commission approves joint venture between Mitsubishi Heavy Industries and Siemens
  • Commission approves acquisition of Noordgastransport by GDF SUEZ, PensionDanmark and Macif
  • Commission approves acquisition of Shire by AbbVie in pharmaceutical sector
  • Commission approves acquisition of a real estate portfolio by AXA and Hammerson