Competition: Commission fines Slovak Telekom and its parent company Deutsche Telekom for abusive conduct in Slovak broadband market

On 15 October 2014, the Commission imposed a fine totalling EUR 38.838 million on Slovak Telekom a.s. (“Slovak Telekom”) and its parent company, Deutsche Telekom AG (“Deutsche Telekom”), for having pursued during more than five years an abusive strategy to shut out competitors from the Slovak market for broadband services in breach of EU antitrust rules. Slovak Telekom is the incumbent telecom operator in Slovakia offering, among other things, fixed broadband services over its legacy metallic telephone networks and over fibre networks. In June 2005, the Slovak telecommunications regulator (TUSR) obliged Slovak Telekom to give access to the local loops within its legacy telephone network. In April 2009, the Commission decided to open an in-depth investigation against Slovak Telekom regarding a possible refusal to give access to infrastructure and a possible margin squeeze. In its decision, the Commission concluded that, first, Slovak Telekom had refused to supply unbundled access to its local loops to competitors, thereby delaying or preventing the entry of alternative operators into the retail broadband services market in Slovakia. Secondly, Slovak Telekom had imposed a margin squeeze on alternative operators by setting the prices for access to its local loops and its retail prices at levels which would force competitors to incur losses if they wanted to sell broadband services to retail customers at retail prices matching those offered by Slovak Telekom. According to the Commission, both of these types of behavior constituted abuses of Slovak Telekom’s dominant position prohibited by Article 102 of the Treaty on the Functioning of the European Union (“TFEU”). Furthermore, the Commission found Deutsche Telekom, the parent company holding 51 % of Slovak Telekom’s shares and having a number of special rights, to be jointly and severally liable for the conduct of its subsidiary. The Commission's investigations namely revealed that Deutsche Telekom did indeed exercise decisive influence over Slovak Telekom notably through overlaps in senior management personnel and by influencing the decision-making process. As Deutsche Telekom had already been fined for a margin squeeze in  broadband markets in Germany in 2003, it also received an additional fine of EUR 31.070 million to ensure sufficient deterrence as well as to sanction its repeated abusive behavior. Source:Commission Press Release 15/10/2014 and MEMO/09/203

Competition: General Court annuls fine imposed on Soliver for car glass cartel

On 10 October 2014, the General Court (“GC”) handed down its judgement on an appeal brought by Soliver NV (“Soliver”) against the Commission’s decision on the car glass cartel. In November 2008, the Commission announced that it had imposed fines totaling EUR 1.3 billion on four companies for participating in an illegal market-sharing cartel in the car glass sector during the period between March 1998 and March 2003. Soliver, a small glass manufacturer active in, amongst other, the automobile sector, lodged an appeal with the GC seeking the annulment of the Commission’s decision in so far as it related to it as well as of the fine of EUR 4.396 million imposed. In its judgement, the GC concluded that the Commission had not established that Soliver had participated in the single and continuous infringement of Article 101 of the Treaty on the Functioning of the European Union (“TFEU”). Although there was evidence of anti-competitive bilateral discussions between Soliver and two of the cartelists, the GC concluded that those collusive practices might have been decided in specific cases with a view to the allocation of certain supply contracts, and thereby without involving an overall objective of maintaining the market share of the participants in such practices on the car glass market in the EEA. Therefore, according to the GC, the Commission had failed to prove that Soliver was aware or could reasonably be expected to be aware of the fact that the contacts were intended to contribute to achieving the cartel’s overall plan and were part of a wider cartel. Accordingly, the GC annulled the Commission’s decision in so far as it found that Solivier had participated in the cartel and the fine that was imposed on it. Source: Case T-68/09 Soliver NV v European Commission, judgement of the General Court 10/10/2014 and Commission Press Release 12/11/2008

Competition: Commission confirms unannounced inspections in biofuel sector

On 9 October 2014, the Commission confirmed that Commission officials, accompanied by their counterparts from relevant national competition authorities, carried out unannounced inspections at the premises of companies active in the production, distribution and trading of ethanol, a biofuel. The inspections took place in two Member States on 7 October 2014 and they followed the inspections that the Commission and the EFTA Surveillance Authority undertook in May 2013 in the crude oil, refined oil product and biofuel sectors. The Commission has concerns that price benchmarks may have been distorted through anti-competitive behavior, including through possible collusion when submitting price information to a Price Reporting Agency. If established, such behavior may amount to violations of Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”) as well as Articles 53 and 54 of the EEA Agreement. The prices assessed and published by Price Reporting Agencies serve as benchmarks for trade in the physical markets and the financial derivative markets for a number of commodity products in Europe and globally. The importance of these benchmarks and the absence of regulation may leave room for anti-competitive behavior leading to price distortions. Even small distortions may have a significant impact on prices, potentially harming consumers. Source:Commission Press Release 09/10/2014

Competition (Finland): Finnish Competition and Consumer Authority issues a statement on competition aspects of draft law on arrangement of social and healthcare services

On 8 October 2014, the Finnish Competition and Consumer Authority (“FCCA”) issued a statement on the request of the Ministry of Social Affairs and Health regarding the competition aspects of the draft law on arrangement of social and healthcare services (“Draft Law”). The FCCA concluded in its statement that the model presented by the Draft Law for arranging, producing, administering, planning, financing and supervising social and healthcare services does not enable using competition and the freedom of choice between several service producers as a basis for development of such services. In addition, the model does not take into account developing the customers’ freedom of choice. Source: The Finnish Competition and Consumer Authority Press Release 09/10/2014

Merger control: Commission approves acquisition of Dutch cable TV operator Ziggo by Liberty Global, subject to conditions

On 10 October 2014, the Commission approved the proposed acquisition of Dutch cable TV operator Ziggo by Liberty Global following an in-depth investigation. The approval is conditional upon the implementation of a commitments package. The Commission had concerns that the merger, as initially notified, would have hindered competition by removing two close competitors and important competitive forces in the Dutch market for the wholesale of premium Pay TV film channels, and by increasing Liberty Global's buyer power vis-à-vis TV channel broadcasters, allowing it to hinder innovation in the delivery of audio visual content over the Internet. To address the Commission’s competition concerns, Liberty Global committed to divest its Film1 channel to a third party purchaser. In addition, Liberty Global committed to terminate clauses in channel carriage agreements that limit broadcasters' ability to offer their channels and content over the Internet, and not to include such clauses in future channel carriage agreements for eight years. Therefore, the Commission concluded that the proposed merger would not significantly impede effective competition in the EEA or in any substantial part thereof.Source: Commission Press Release 10/10/2014

Merger control (Finland): Finnish Competition and Consumer Authority approves the proposed tie-up between Vacon and Danfoss

On 10 October 2014, the Finnish Competition and Consumer Authority (“FCCA”) approved the proposed tie-up between Vacon Oyj (“Vacon”) and Danfoss A/S (“Danfoss”). On 12 September 2014, the Danish industrial company Danfoss announced a EUR 34 per share recommended cash offer for Finnish AC drives maker Vacon, valuing the target at EUR 1.04 billion. Source: The Finnish Competition and Consumer Authority Press Release 10/10/2014

Telecommunications: Commission to cut number of regulated markets in Europe

On 9 October 2014, the Commission adopted a revised recommendation on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC (“Recommendation”). Under the EU telecommunications rules, the Commission adopts and regularly reviews the Recommendation and identifies markets which are susceptible to ex ante regulation. Based on the revised Recommendation, two telecom markets in Europe, namely the retail market for fixed telephony and the wholesale market for fixed call origination, are liberated from regulation and thereby the number of relevant products and service markets within the electronic communications sector in relation to which ex ante regulation may be warranted and which should therefore be subject to market reviews by national regulatory authorities is reduced from seven to four. Furthermore, two broadband markets are redefined in order to reflect market and technology developments and to limit regulatory burdens to what is strictly necessary for competitive broadband access and investment. According to the Commission, the fixed telecommunications markets were liberated as there has been a decrease in volume of fixed calls as customers have turned to alternative solutions, such as voice-over-IP (VoIP) and mobile calls, and also to alternative providers, like over-the-top (OTT) players. Further, those customers who still use fixed telephony are now able to purchase fixed access from a number of different platforms. The new Recommendation took immediate effect. Source: Commission Press Release, 09/10/2014 and MEMO/14/573

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 Corialis group by Advent International
  • Commission approves acquisition of joint control over Acvil by EQT Infrastructure and Inmomutua
  • Commission approves joint venture between 21st Century Fox and Apollo
  • Commission approves acquisition of Stella by dnata
  • Commission approves acquisition of Milford Haven refinery by Klesch Refining
  • Commission approves acquisition of Italian domestic appliances producer Indesit by Whirlpool