Competition: Intel appeals against General Court’s judgement upholding Commission’s infringement decision and fining Intel for abuse of dominant position

On 24 October 2014, details were published for an appeal brought by Intel Corporation (“Intel”), an American microchip manufacturer, against a judgement of the General Court (“GC”) dismissing Intel’s appeal and upholding the Commission’s decision fining Intel for abuse of a dominant position in breach of Article 102 of the Treaty on the Functioning of the European Union (“TFEU”). In May 2009, the Commission found that Intel, a company holding a market share of roughly 70 % or more, had engaged in illegal anticompetitive practices to exclude competitors from the market for computer chips called x86 central processing units (“CPUs”) and imposed a fine totalling EUR 1.06 billion on Intel. To challenge the Commission’s decision, Intel lodged an appeal before the GC which dismissed Intel’s action in its entirety by its judgement delivered on 12 June 2014. Intel has now brought an action before the Court of Justice of the European Union (“CJEU”) seeking that the GC’s judgement be set aside and the fine imposed be cancelled or substantially reduced. To support its appeal, Intel presents six pleas in law. Firstly, Intel claims that the GC applied the wrong legal standard to assess the legality of its conduct under Article 102 TFEU and Article 54 of the Agreement on the European Economic Area (“EEA Agreement”). Secondly, according to Intel, the GC erred in finding an infringement for the final two years of the alleged period of infringement, given that, the market coverage of the conduct during those years would have affected a mere 3.5 % of the relevant market. Thirdly, Intel submits that the GC erred by classifying its conduct with HP and Lenovo as exclusivity rebates when that conduct concerned only 28% and 42% (or less) of each customer’s total purchases of the relevant product, respectively, falling well short of “all or most” of these customers’ requirements. According to Intel, the GC also violated the principles of effective judicial protection and procedural fairness in relation to a five-hour interview that the Commission had with a key Dell executive on questions bearing an objective link with the substance of the investigation, and during which the key Dell executive provided very detailed explanations. Further, as its fifth plea in law, Intel submits that the GC incorrectly established a Community jurisdiction over Intel’s agreements with Lenovo in 2006 and 2007. Lastly, Intel claims that the GC committed various errors in calculating the fine imposed. Sources: Case C-413/14 P Intel Corporation v European CommissionCommission Press Release 13/5/2009 and General Court Press Release 12/6/2014

Merger control: Commission closes infringement proceedings against Munksjö and Ahlstrom concerning provision of information in the context of merger investigation 

On 29 October 2014, the Commission announced that it has closed proceedings against Ahlstrom Corporation (“Ahlstrom”), Munksjö Oyj, both of Finland, and Munksjö AB (“Munksjö”) of Sweden, for a suspected infringement of the rules concerning the provision of information to the Commission for merger control purposes. In February 2014, the Commission sent a Statement of Objections (“SO”) to Ahlstrom, Munksjö Oyj, and Munksjö where it took the preliminary view that the parties had provided misleading information in the course of the notification under the EU Merger Regulation of a transaction, whereby Ahlstrom and Munksjö transferred their label and processing business to a new company, later renamed Munksjö Oyj. During the merger investigation, the Commission had identified significant discrepancies between the companies' market share estimates for abrasive paper backings and its heavy-weight segment as submitted in the merger notification file of October 2012 and the companies' pre-existing internal documents. Although the Commission had pointed out these discrepancies in the course of the merger review process, the companies did not provide sufficient clarifications at the time. In response to the SO, the companies now demonstrated that they had valid reasons to reassess their internal market estimates shortly before the notification. In particular, the parties provided contemporaneous documents showing that they had carried out a market reconstruction exercise for the purposes of the notification and this exercise led them to reconsider the significance of competitors, including a number of Asian players. For this reason, they had corrected their internal market estimates accordingly. While the parties should have disclosed this information to the Commission at an early stage, in particular by explaining the asymmetries between their internal documents and the merger notification, the Commission concluded that it has now received the necessary information and therefore decided to close the infringement proceedings. Source:Commission Press Release 29/10/2014

EU: European Parliament votes to elect Juncker Commission

On 22 October 2014, the European Parliament (“EP”) gave its strong support to the new Juncker Commission with 423 votes in favour, 209 against and 67 abstentions. Now that the EP’s consent marks the last step in the process leading up to the new Commission, the European Council will formally appoint the Commission in line with Article 17(7) of the Treaty on the European Union (“TEU”). The new Commission can start its term on 1 November 2014. Source: Commission Press Release 12/4/2013

Merger control (Finland): Finnish Competition and Consumer Authority approves egg business acquisition, subject to conditions 

On 21 October 2014, the Finnish Competition and Consumer Authority (“FCCA”) approved the proposed acquisition by DAVA Foods Holding A/S (“DAVA Foods”) of the Finnish company Muna Foods Oy (“Muna Foods”), following an in-depth investigation. Muna Foods is a company to be established, to which Munakunta, the producers’ cooperative owned by approximately 150 Finnish egg producers, plans to transfer its entire business. DAVA Foods is part of the Danish Agro Group (“Danish Agro”) that operates in the agricultural sector and its egg products division includes the Denmark-based Hedegaard Foods A/S and Sweden-based Svenska Lantägg Ab. Furthermore, Hankkija Oy, which produces chicken feed in Finland, is part of the same group and holds a strong position in other agricultural products in Finland. The FCCA had concerns that the acquisition would have significantly impeded effective competition in the egg business in Finland as the Finnish chicken feed markets are highly concentrated and there are currently very few players within the sector. To address the FCCA’s competition concerns, Danish Agro committed to sell its minority holding in the chicken feed manufacturer Rehux to a party independent of the parties to the transaction. According to the FCCA, the commitment ensured that Rehux, almost the only competitor to Danish Agro, maintains its position as an independent alternative in the chicken feed market in Finland. Source: The FCCA’s Press Release in Finnish and The FCCA’s Press Release in English

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 US producer of digital cinema solutions Doremi by rival Dolby
  • Commission approves acquisition of Total's CCP Composite Business by PCCR USA in chemical sector
  • Commission approves joint venture between Irish electricity company ESB and Vodafone Ireland
  • Commission approves acquisition of IT company Imtech by Vinci
  • Commission approves acquisition of ZF Lenksysteme by Bosch