Competition (Sweden): Swedish Market Court rules on the reuse of dawn raid evidence

On 28 October 2015, the Swedish Market Court ("SMC") handed down a decision regarding the use of materials gathered in the course of a surprise inspection (dawn raid).

In 2013, the SCA suspected that two companies, Assa AB ("Assa") and Copiax AB, both operating in the lock- and security market, possibly abused their dominant position in violation of the Swedish Competition Act. As part of the surprise inspection conducted at the companies' premises the SCA copied digitally stored information. The SCA's review of this information raised additional concerns about further infringements of competition law. The SCA filed an application with the Stockholm District Court, seeking permission to conduct a second review of the already seized information for purposes of investigating these new concerns. The District Court approved the SCA's application. Assa appealed the District Court's decision before the SMC, on the basis that allowing the SCA to proceed in this matter would infringe Assa's right of defense and the principle of proportionality.

The SMC partially upheld Assa's appeal and found that it was disproportionate to allow the SCA to use information gathered in the context of the inspection for the purposes of another investigation. . The SMC also stated that Assa had only authorized the transfer of data to the SCA's premises and its subsequent analysis as regards the scope of the suspected infringement as outlined in the inspection decision authorizing the surprise inspection. The SMC concluded that the principle of legal certainty would be endangered if the scope of a company’s authorization would in such a way be broadened. Consequently, the SMC annulled the Stockholm District Court decision and thus rejected the SCA's application. It should be noted that the SMC's ruling has no effect on the SCA's authority to proceed to investigate the suspected infringement outlined in the inspection decision. Source: Swedish Competition Authority Press Release 28/10/2015 (in Swedish) and Swedish Market Court Decision 28/10/2015 (in Swedish)

Competition (Sweden): General Court dismisses state aid appeal concerning property sale by Swedish municipality

On 28 October 2015, the General Court ("GC") dismissed an appeal by the Swedish Municipality of Vänersborg ("Vänersborg") against a Commission decision that found that the municipality's sale of a property to Hammar Nordic Plugg AB ("Hammar Nordic") involved state aid because the price was below market value and gave the purchaser an undue competitive advantage.

In February 2008 Vänersborg bought a food production facility, formerly Topp Livsmedel, for SEK 17 million (approximately EUR 1.7 million) from Chips, a subsidiary of Orkla ASA. Later, in August 2008 Vänersborg sold the facility for SEK 8 million (approximately EUR 0.8 million) to the real estate company Hammar Nordic, which went on to sell it a few days later to a private investor for SEK 40 million (approximately EUR 4 million). After an in-depth inquiry, the Commission found that Vänersborg had sold the facility below market value and that the difference between the market value and the price paid by Hammar Nordic constituted state aid which was incompatible with the Treaty on the Functioning of the European Union ("TFEU") and ordered the recovery of the state aid. Hammar Nordic appealed the Commission's decision before the GC.

The GC dismissed the appeal in its entirety as unfounded. The GC noted that the Commission was correct in its assessment of the aid and its incompatibility with the TFEU. The GC also noted that the Commission may only revoke a decision where the decision was based on incorrect information, which was a determining factor in the case, provided during the procedure. In this case, however, the arguments by Hammar Nordic that incorrect information had been provided were not supported.

Source: Case T-253/12, Hammar Nordic Plugg AB v European Commission, judgement of the General Court, 28/10/2015 (in Swedish)

Merger control: Commission opens in-depth investigation into Hutchison's proposed acquisition of Telefónica UK

On 30 October 2015, the Commission announced that it will initiate an in-depth investigation to assess whether the proposed acquisition of Telefónica UK by Hutchison would harm competition. The proposed transaction would combine Telefónica UK with Three UK, a subsidiary of Hutchison, which are the second and the fourth largest mobile network operators ("MNO") in the UK, respectively. This would create the largest MNO in the UK.

The Commission is concerned that the proposed acquisition could lead to higher prices, less choice and reduced innovation for customers of mobile telecommunications services in the UK. In addition, the Commission has concerns that the transaction would reduce the number of MNOs that are effectively willing to host mobile virtual network operators.

The Commission has, therefore, decided to investigate the transaction in-depth in order to determine whether its competition concerns are confirmed. The Commission will examine, in particular, the extent to which the parties are close competitors, the market incentives the merged entity would face, and the potential reaction of its competitors. The Commission has 90 working days, until 16 March 2016, to make a decision. Source: Commission Press Release 30/10/2015

Public procurement (Sweden): Swedish Competition Authority gives a consultation response on the possibility to impose employment law related requirements

On 2 November 2015, the Swedish Competition Authority ("SCA") announced that it had given a consultation response to a report by the Swedish Ministry of Finance on procurements and conditions based on collective agreements. The SCA states that it is both possible and reasonable to impose employment law-related requirements on the tenderers in larger public procurements. Such requirements could be equivalent to conditions contained in collective agreements. However, the SCA disagrees with the report's assessment concerning the possibility to impose more stringent requirements on Swedish suppliers compared to suppliers that use foreign contract workers. According to the SCA, the principle of equal treatment prohibits the imposition of such requirements. Source:Swedish Competition Authority Press Release 2/11/2015 (in Swedish) and Swedish Competition Authority Consultation Response 29/10/2015 (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 Genworth LPI by AXA in insurance sector
  • Commission approves acquisition of HellermannTyton Group by Delphi Automotive
  • Commission approves acquisition of Finlays Horticulture by Sun Capital
  • Commission approves acquisition of the South Bank Tower Estate by BTPS and CPPIB
  • Commission approves acquisition of Imtech Nordic by Triton
  • Commission approves acquisition of Qliro by private equity group Kinnevik
  • Commission approves acquisition of Eco Services by CCMP and INEOS