EU

Fine for obstruction of a dawn raid

On 24 May 2011, the European Commission imposed a fine of €8 million on Suez Environnement and its subsidiary Lyonnaise des Eaux for breaching a seal that had been placed by Commission officials during a dawn raid. The companies did not deny that the seal had been breached, but claimed that this was unintentional.

Draft guidance on quantifying harm in Article 101/102 damages actions

On 17 June 2011, the European Commission published for consultation a draft guidance paper on quantifying harm in actions for damages based on breaches of Article 101 or 102 TFEU. The aim of this draft guidance paper is to offer nonbinding assistance to courts and parties involved in antitrust damages actions. It provides insights into the harm caused by the infringement of the competition rules (in particular in the form of price increases and market exclusion) and provides guidance on the main methods and techniques that are available to quantify such harm. The deadline for comments is 30 September 2011.

Third party access to leniency documents

On 14 June 2011, the Court of Justice in the Pfleiderer case handed down a judgment on a reference from a German court regarding third party access to documents submitted under a national leniency programme. The Court held that the relevant provisions of Regulation 1/2003 must not be interpreted as precluding a person who has been adversely affected by a breach of EU competition law from being granted access to documents relating to a leniency application by the perpetrator of the breach. According to the judgment, it is for the courts and tribunals of member states to determine, on the basis of their national law, the conditions under which third party access to documents provided as part of a leniency application should be allowed or refused.

France

Commitments in the multi-brand gift cards sector

On 27 April 2011, the French Competition Authority accepted commitments proposed by Accentiv’Kadéos, a leading operator in the multi-brand gift card sector, in relation to exclusivity agreements in the multi-brand gift cards sector. The Authority considered that the exclusive affiliation of brands was likely to create entry barriers, notably as a result of the scope of the exclusivity agreements and of their duration. The commitments aimed at enabling new players to enter the market quickly in a business sector which is expanding rapidly. The total value of the gift vouchers and cards issued in France was around €2.2 billion in 2009.

Germany

Cartel members liable for damages to indirect purchasers

On 28 June 2011, the Federal Supreme Court (BGH, KZR 75/10 – Selbstdurchschreibepapier) ruled that not only direct customers of members of a cartel but also their respective customers further down the distribution chain can claim damages as victims of the cartel. The court emphasized that the detrimental effects of illegal agreements do not always hit the direct customers of the cartel members but often - since those customers can pass on any price increases - their customers on a downstream market. The purpose of private compensation for antitrust violation would justify that those customers are also entitled to compensation. However, the court also ruled that defendants can argue that the party seeking damages actually passed on the price increases to its own customers and therefore does not have any damage anymore (passing-on defence).

Oligopoly in the petrol station markets

On 26 May 2011, the Bundeskartellamt published its “Final Report on the Fuel Sector Inquiry” presenting the view that the five largest petrol station operators in Germany, BP, ConcoPhilips, ExxonMobil, Shell and Total have formed a dominant oligopoly. The analysis based on objective data shows that the oligopolistic market structure enables the large oil companies to set prices more or less uniformly at their petrol stations. After finding evidence of precise price-setting patterns and monitoring systems, the Bundeskartellamt has said it is committed to prevent further concentration on the market and recommended regulatory interventions.

It aly

Fines in international freight shipping sector

On 16 June 2011, the Italian Competition Authority (“ICA”) fined nineteen companies and one trade association a total of €76 million for fixing the price of international freight shipping rates. The ICA held that the companies had met frequently through the industry association, Fedespedi to discuss price increases and exchange commercially sensitive information. This is the third case in which the ICA has used its leniency procedure, which came into force in 2007.

Commitments accepted from the national gambling operator

On 13 April 2011, the ICA issued a decision terminating an investigation into SISAL, an Italian gambling operator, concerning an alleged abuse of its dominant position on the market for national games. The ICA accepted and made binding the commitments offered by SISAL (which include an obligation to provide links on its website to the websites of other operators authorised to sell tickets and collect bets for SISAL’s lotteries) in order to solve the competition concerns raised during the investigation. SISAL, which manages several popular national lotteries in Italy on an exclusive basis, had been accused by one of its competitors, Giochi 24, of abusive conduct in the downstream market for the on-line collection of bets for lottery games. In particular, the competitor claimed that SISAL had exploited its dominant position in the market for operating the lotteries in order to attract potential players and to induce them to purchase lottery tickets online through the website of its subsidiary, Match Point.

Poland

Record fine imposed on Polish entity for infringement of competition rules

On 22 June 2011, the European Commission imposed a fine of €127 million on Telekomunikacja Polska S.A (“TP”) for abuse of dominant position. This fine represented 3.24% of TP’s turnover in 2010), and is the highest fine ever imposed on a Polish company for an infringement of the competition rules. It is also the first fine imposed by the European Commission on a Polish company for abuse of dominance. According to the European Commission’s findings, TP which in Poland is the exclusive supplier of wholesale broadband access products (wholesale broadband access and local loop unbundling) deliberately abused its dominant position by raising numerous difficulties for alterative operators who wanted to acquire TP’s broadband wholesale services. For instance, TP proposed unreasonable conditions, delayed the negotiation processes, rejected orders on unreasonable grounds, and refused to provide reliable and accurate information on TP’s network which was indispensable to allow alternative operators to make business decisions. The European Commission emphasized that TP’s practices led to the limitation of consumer access to broadband and therefore to the Internet, which is a core element for digital economy.

Spain

SCC fines the National Canned Food Association (“NCFA ”)

On 31 March 2011, the Council of the Spanish Competition Commission (“SCC”) imposed a fine of €100,000 on NCFA for implementing a collective recommendation which had as its object the coordination of the canned food producers’ behaviour in the market, and in particular the passing on to consumers of the increase of the price of tinplate.

Early resolution agreement with Galp

On 6 April 2011, the SCC accepted an agreement for the early resolution of the proceedings against Galp initiated in July 2009 as a consequence of a claim from the Spanish Confederation of Service Stations concerning alleged restrictions in Galp’s petrol distribution contracts.

The SCC considered that the contracts could raise competition concerns due to their excessive duration, the inclusion of sales objectives linked to penalisation clauses in their contracts (extending the duration of the agreement or paying an agreed amount) in case the objectives were not met, as well as the inclusion of exclusive supply clauses exceeding 5 years. The commitments offered by Galp to its distributors regarding the possibility of an early termination of the contracts and the establishment of economic compensation for the petrol station when the sales objectives are not met (commitments in line with other precedent decisions in the sector) have been considered appropriate to solve the initial SCC’ concerns.

SCC fines five major electricity companies

On 13 May 2011, the SCC imposed a fine of €61 million on five major electricity companies for hindering the switching of supply by consumers to independent providers as well as for fixing the prices charged to industrial clients in the context of the liberalisation of the electricity sector in Spain. The companies fined were Endesa (ENEL Group), E.On, Gas Natural Fenosa, Hidroeléctrica del Cantábrico, Iberdrola and the trade association UNESA (Spanish Association for the Electricity Industry).

UK

First decision of Procedural Adjudicator

On 19 May 2011, the OFT published the Procedural Adjudicator’s first decision. Jackie Holland, the Procedural Adjudicator, rejected an application by Sports Direct International plc (SDI) in relation to procedural issues (involving an application for early access to a formal information request issued to a third party) raised during an ongoing investigation undertaken by the OFT in relation to cartel activity in the sports retail market.

Equity underwriting market to Competition Commission

On 17 May 2011, the OFT published its decision not to refer the equity underwriting and associated services market to the Competition Commission under section 131 of the Enterprise Act 2002. The OFT considers that, although it has found that there are features in the market that provide reasonable grounds for suspecting that competition for equity underwriting services is prevented, restricted or distorted in the UK, those features can be most effectively tackled by companies and institutional shareholders taking action themselves. The OFT also concluded that, although the features it identified apply across the whole of the market, it was questionable whether such features will persist as the market comes through an exceptional period and adjusts to more typical conditions.

Abuse of dominance

On 13 April 2011, the OFT issued a decision finding that Reckitt Benckiser has infringed Article 102 TFEU and the Chapter II prohibition of the Competition Act 1998, and imposed a fine of £10.2 million. The OFT found that Reckitt Benckiser abused its dominant position by withdrawing and de-listing Gaviscon Original Liquid from the NHS prescription channel in 2005, following expiry of its patent but before the publication of the generic name for it. This meant that NHS prescriptions were issued for the patent protected Gaviscon Advance Liquid rather than for generic alternatives. The company’s actions had the object of limiting pharmacy choice and hindering competition from generic medicines. Reckitt Benckiser admitted the infringement and agreed to pay the fine (reduced from £12 million) as part of an early resolution agreement with the OFT.