EU Antitrust

General Court dismisses appeals against decisions refusing confidential treatment for leniency information in cartel decision. On 28 January 2015, the General Court dismissed appeals by Akzo Nobel and Evonik Degussa against decisions of the European Commission that rejected requests for confidential treatment of certain information in the decision on the  bleaching chemicals cartel. The General Court held that information does not automatically benefit from protection from disclosure, on the basis of the obligation of professional secrecy, simply because it was voluntarily submitted to the Commission by an undertaking to benefit from the leniency programme. It drew a distinction between disclosure to third parties of leniency documents and statements in the Commission’s file and the publication of information in the Commission’s infringement decision of information from leniency applications. The General  Court also held that, in deciding on publication, it is for the Commission to balance the public interest in knowing as fully as possible the reasons for any Commission action, the interest of economic operators in knowing the sort of behaviour for which they are liable to be penalised, and the interest of the Commission in safeguarding the effectiveness of its leniency programme. The General Court concluded that the Commission had not breached the legitimate expectations of the applicants in proceeding as it had (Case T­341/12 – Evonik Degussa GmbH v European Commission (ECLI:EU:T:2015:51) (not yet available in English) and Case T­345/12 Akzo Nobel NV and others v European Commission (ECLI:EU:T:2015:50), judgments of 27 January 2015).

Commission publishes decisions on paper envelopes cartel and canned mushrooms cartel. The European Commission has published a non­confidential version of its December 2014 decision on the paper envelopes cartel. The Commission fined five envelope producers a total of EUR 19.4 million for their participation in a cartel to co­ordinate prices and allocate customers for certain types of envelope. The decision was reached under the Commission’s settlement procedure. A summary of the decision has also been published on the DG Competition website. The Commission has also published a non­confidential version of its June 2014 decision, imposing fines totalling EUR 32.2 million, on participants of a cartel in the canned mushrooms sector, involving market­sharing and information exchange. The summary of this decision, which was also reached using the settlement procedure, has already been published in the Official Journal.

EU Mergers

Phase I Mergers

  • M.7379 – Myaln / Abbott EPD­DM (28/01/2015)
  • M.7417 – Sime Darby / New Britain Palm Oil (26/01/2015)
  • M.7427 – Macquarie Infrastructure Partners III, L.P. / NYK Group Americas Inc. / NYK Ports LCC of Japan (27/01/2015)
  • M.7465 – Arkema S.A / adhesives and sealants business of Total S.A. (Bostik) (28/01/2015)
  • M.7469 – Hitachi Group / Itochu Corporation / PT Hitachi Construction Machinery Finance Indonesia (Joint Venture) (27/01/2015)
  • M.7475 – EdenRed / Hermes / Eckstein / UTA (23/01/2015)
  • M.7486 – Ingram Micro / ANOV Expansion SAS of France (29/01/2015)

Phase II Mergers

Commission rejects referral of acquisition by Orange of Jazztel to Spain. On 26 January 2015, the European Commission announced that it has decided to reject a request by the Spanish competition authority under Article 9(2)(a) of the EU Merger Regulation in relation to the review of the proposed acquisition by Orange of Jazztel. The Commission initiated a Phase II investigation into this proposed merger on 4 December 2014. The Commission has concluded that there are no compelling reasons to refer the deal because it does not consider that the Spanish authority is better placed to examine the transaction.

State Aid

Commission approves prolongation of Polish bank guarantee and credit union resolution schemes. On 27 January 2015, the European Commission announced that it has decided, under the state aid rules, to approve the prolongation until 30 June 2015 of a Polish bank guarantee scheme and a credit union resolution scheme. The guarantee scheme, which covers guarantees and other liquidity support measures in favour of different types of solvent credit institutions in Poland, was initially approved in September 2009, the pricing conditions were modified in 2012 and the scheme has been extended several times already. The credit union scheme was initially approved in February 2014. The Commission found the prolongation of the schemes is in line with its guidelines on state aid to banks during the financial crisis.

Commission grants state aid approval to UK flood reinsurance scheme. On 29 January 2015, the European Commission announced that it has decided to approve, under the EU state aid rules, a UK reinsurance scheme (Flood Re) that will ensure the availability of domestic insurance at affordable prices for flood­related damage. The Flood Re scheme will be funded partially by an industry­wide levy. This could constitute state aid as it may confer an economic advantage to the pool over its competitors. However, the Commission found that insurance cover might not otherwise be sufficiently available on the private market. According to the Commission, the scheme remedies a market failure without unduly distorting competition.

UK Mergers

CMA refers acquisition by Sonoco Products of Weidenhammer Packaging for Phase 2 investigation. On 27 January 2015, the Competition and Markets Authority (CMA) announced that it has referred the completed acquisition by Sonoco Products Company of Weidenhammer Packaging Group GmbH for an in­depth Phase 2 investigation. The merged entity will be the largest manufacturer and supplier of composite cans for food products in the UK. The CMA is concerned that the merged entity will not face sufficient competitive constraints and that the merger may result in higher prices or a reduction in choice or quality for customers.

CMA reference decision on acquisition by Reckitt Benckiser of the K­Y brand from Johnson & Johnson. On 29 January 2015, the CMA published its decision to refer for a Phase 2 investigation the anticipated acquisition by Reckitt Benckiser of the K­Y brand from Johnson & Johnson, unless acceptable undertakings in lieu were offered. The CMA has found that Reckitt Benckiser’s Durex brand and the K­Y brand are each other’s closest competitors. Alternative suppliers, buyer power and new entry do not appear to be sufficient to constrain the merged entity. The CMA believes that there is a realistic prospect of the merger giving rise to a substantial lessening of competition regarding the supply of personal lubricants to grocery retailers and national pharmacy chains in the UK. The CMA considered whether to exercise its “de minimis” discretion. Although the UK turnover of personal lubricant products is below £10 million, with regard to the strength of its concerns, the magnitude of competition lost, the durability of the merger’s impact and the potential replicability of the merger, the CMA concluded that, on balance, it was not appropriate to exercise its “de minimis” discretion in this case.

UK Competition

High Court dismisses action for repayment of Somerfield and Gallaher tobacco fines. On 26 January 2015, the High Court dismissed claims brought by Gallaher Group Ltd (Gallaher) and Somerfield Stores Limited (Somerfield) for repayment of the fines they paid following the Office of Fair Trading’s (OFT) tobacco retail pricing decision. Gallaher and Somerfield asserted that the OFT had breached the requirements of fairness and equal treatment by giving assurances to one party (TM Retail) that it would be able to take advantage of any successful third party appeal to secure repayment of the fine paid under its early resolution agreement (ERA).

CMA further update on criminal cartel charges in relation to supply of galvanised steel tanks for water storage. On 26 January 2015, the CMA provided an update on the status of the criminal charges brought against two individuals, under the Enterprise Act 2002, in relation to suspected cartel activity in the supply of galvanised steel tanks for water storage. At a hearing at Southwark Crown Court on 26 January 2015, Clive Geoffrey Dean and Nicholas Simon Stringer, who were charged on 30 June 2014 with dishonestly agreeing with others to divide customers, fix prices and rig bids between 2004 and 2012 in respect of the supply in the UK of galvanised steel tanks for water storage, both entered a plea of not guilty. The case has been adjourned until the trial, which has been listed for 1 June 2015 at Southwark Crown Court.

Speeches & Publications

CMA appoints new Director of Remedies, Business and Financial Analysis. On 29 January 2015, the CMA announced the appointment of Gavin Knott as a Director of Remedies, Business and Financial Analysis. The CMA’s Remedies, Business and Financial Analysis team is led by Senior Director Adam Land and reports jointly to Executive Director of Mergers and Markets, Andrea Coscelli and Chief Executive Alex Chisholm.