EU Competition & Regulatory

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1 EU Competition & Regulatory 29 JULY 4 AUGUST 2016 ISSUE 31 Legal and policy developments at the EU level QUICK LINKS: ARTICLE European Competition Network Brief - Issue 2/2016 The latest issue of the European Competition Network brief ( ECN Brief ) covers the period from February 2016 to July The European Competition Network ( ECN ) is the organisation through which the European Commission and the EU s National Competition Authorities cooperate. The table below summarises the major developments in the application of competition law at national level covered by the ECN Brief. For further information on any EU or UK Competition related matter, please contact the Competition Group or your usual Slaughter and May contact. Square de Meeûs Brussels Belgium T: +32 (0) One Bunhill Row London EC1Y 8YY United Kingdom T: +44 (0) Jurisdiction Enforcement Action Legislation and Policy Developments Bulgaria Regulation that limits the co-payment of patients for medicines found to restrict competition. The Commission on Protection of Competition ( CPC ) has found a provision which limits the co-payment of patients for partly reimbursed medicines to 60% of the price of the cheapest medicine in the group restricts competition. The provision was found to restrict competition because, among other things, it would lead to a withdrawal of medicines from both the reimbursed market and the market for free sale if it exceeded the state-regulated price ( ).

2 Croatia Denmark Decision issued in the case of alleged abuse in the postal sector. In December 2015 the Croatian Competition Agency ( CCA ) issued a no issues decision in the case of alleged abuse of dominant position by Croatian Post, which was allegedly involved in predatory pricing. The CCA found that there was no evidence that Croatian Post was engaged in predatory conduct with the objective of excluding the existing competitors from the market and deterring new entrants. Therefore Croatian Post did not distort competition in the provision of letter post services in Croatia ( ). Agreements limiting the ability of cinemas to grant discounts on ticket prices found to be anticompetitive. In May, the Danish Competition Council ( DCC ) found that the Association of Danish Film Distributors ( FAFID ) and the Association of Danish Cinemas ( Danske Biografer ) had restricted competition by entering into anticompetitive agreements restricting the circumstances where cinemas could sell discounted cinema tickets. The DCC has ordered FAFID and DB to end the infringements immediately and to refrain in the future from any action having the same or similar object or effect ( ). 02

3 DCC decision that consortia agreement between two road-contractors was illegal is upheld. On 11 April 2016, the Danish Competition Appeals Tribunal ( DCAT ) upheld a decision by the DCC that submitting a joint bid via a consortium restricted competition as there was no objective reasoning for this format and each party could have individually submitted a bid. The DCAT found that the consortium had as its object to restrict competition since the parties had submitted only one bid and thereby coordinated prices and divided the market between them, that the two parties were actual competitors, and that the parties had not shown the consortia agreement qualified under an exemption ( ). Finland Fines proposed for coach company cartel. The Finnish Competition and Consumer Authority ( FCCA ) has proposed a EUR 38 million penalty for anticompetitive conduct concerning seven major bus companies, the Finnish Bus and Coach Association and Matkahuolto (a travel and parcel services company). The bus companies were found to have formed a cartel in 2008 to prevent the markets from opening up and to stop new competitors from entering. The cartel was found to have resulted in consumers being unable to find competitive routes within Matkahuolto s timetables and competitors were denied access to parcel services ( ). 03

4 France Fines imposed on the parcel services industry for concerted practices. On 15 December 2015, the Autorité de la concurrence (the Autorité ) issued a EUR 672 million fine against the main firms and several regional or local players active in parcel delivery services and express delivery service sectors, as well as a professional trade organisation. The parties were found to have shared sensitive business information relating to annual price increases during trade organisation meetings. Certain parcel delivery providers and the trade organisation were also found guilty of cooperating to pass on diesel price increases to customers through an agreed surcharge ( ). Results of sector inquiry into standardisation and certification published. In 2014 the Autorité launched a sector inquiry into the standardisation and certification processes in France. It published its findings on 17 November It found the adoption of standards has a positive effect on competition by facilitating comparability and interoperability, however if standards are misused they may then restrict competition. The Autorité recommends reducing and streamlining the number of standardisation bodies and strengthening the role of the overseeing body, AFNOR. It also calls for greater transparency ( ). 04

5 Germany Bundeskartellamt approves marketing model for award of Bundesliga rights from 2017/18 football season onwards. The German League Association and the German Football League have offered commitments to the Bundeskartellamt for the award of media rights to football league games from the 2017/18 season onwards. In particular they will observe the no single buyer rule so that in future no single bidder will be able to acquire the rights to broadcast all the Bundesliga games live. The Bundeskartellamt was concerned that having only one holder of access rights could restrict competition. The commitments are now legally binding ( ). Proceedings concluded against manufacturers of railway sleepers. The Bundeskartellamt has concluded an investigation against manufacturers of concrete and wooden railway sleepers and imposed a fine on one manufacturer of concrete railway sleepers. The proceedings were initiated in 2012 after the so-called rail cartel case had revealed indications of anticompetitive agreements relating to agreed price ranges for awarded contracts. The proceeding against the wooden sleeper manufacturers was discontinued due to lack of evidence ( ). Proceedings initiated against Facebook on suspicion of abusing market power by infringing data protection rules. The Bundeskartellamt has initiated proceedings against Facebook Inc., its Irish subsidiary and Facebook Germany GmbH. The authority is investigating suspicions that Facebook may have abused a dominant position in the market for social networks by prescribing certain terms on the use of user data in violation of data protection provisions. If proven, this would constitute a restriction of competition within the meaning of Section 19(1) and (2) of the German Competition Act (GWB) and of Art. 102 TFEU ( ). 05

6 Greece Hungary Commitments accepted to address concerns about the supply of electricity to large consumers in Greece. The Hellenic Competition Commission ( HCC ) accepted commitments proposed by the Public Power Corporation S.A., the incumbent producer and supplier of electricity in Greece, to address competition concerns with regard to the supply of electricity to Aluminium of Greece S.A. ( Aluminium ). Aluminium produces aluminium and is the biggest high voltage electricity consumer in Greece. The HCC s investigation in the markets for the production and trade of electricity was initiated following a complaint by Aluminium and its parent group Mytilineos Holdings for alleged abuse of dominance ( ). Fine imposed on broadcast suppliers cartel. The Hungarian Competition Authority ( GVH ) imposed a total fine of HUF 82 million (approx. EUR 262,000) on multiple Hungarian broadcasters for carrying out concerted practices with the object of restricting competition in two public procurements run by the Media Service Support and Asset Management Fund ( ). First gun-jumping fine imposed in Hungary. The merger parties were fined a total of HUF 1 million (approx. EUR 3,200) for implementing a notifiable merger without obtaining clearance from the GVH. The GVH established that registering ownership rights of shares and exercising management rights before merger approval has been obtained violates the standstill obligation ( ). Settlement procedure for cartels introduced. The new settlement procedure concerns cases where undertakings or associations of undertakings make a clear and unequivocal acknowledgement of participation and liability in relation to their participation in horizontal agreements (cartels) and the subsequent breach of competition law ( 1 of the Greek Competition Act and/ or 101 TFEU). Applicants must waive their right to full access to the file or an oral hearing. In return, applicants fines may be reduced by up to 15% ( ). System used for the prioritisation of cases updated. The Point System is used for the prioritisation of pending cases by the Directorate-General for Competition. It has been updated to specify further and streamline the procedure for handling pending cases to ensure a more coherent and consistent application of national and EU competition networks ( ). Market analysis on the film distribution industry concluded. The GVH has concluded that the behaviour of one dominant player (Cinema City) may indirectly affect competition and lead to a market failure. It has suggested that a number of industry stakeholders modify their behaviour to remedy this failure. The investigation into the market commenced in 2014 and has recently concluded. ( ). 06

7 Latvia Poland Latvian Parliament passes amendments to competition law regime. Among other things the amendments affect cartel enforcement and merger control. The Competition Council (CC) of Latvia will now have the power to conduct dawn raids and to compel companies to hand over electronic data. Merger fines have been introduced and there are now fines of up to 3% of turnover for failure to file a notifiable merger ( ). New fining guidelines published. On 1st January 2016 new fining guidelines of the Office of Competition and Consumer Protection (UOKiK) entered into force. The guidelines address UOKiK s new power to tie managers who intentionally direct the company to engage in anticompetitive conduct. The guidelines outline the type of infringements which will most likely result in fines, as well as the factors which are decisive in establishing the level of the fine (market and product specificity, effects and duration of the infringement) ( ). Spain Fines imposed on eight manufacturers of adult nappies, their business association and four executives for forming a cartel. The Spanish Competition Authority ( CNMC ) has found evidence of infringement of 1 of the Defence of Competition Act, 15/2007, of 3 July, and 101 of the Treaty on the Functioning of the European Union and has imposed a EUR 129 million fine for forming a pricefixing cartel. This is the first time that the CNMC has fined business executives and a sector association ( ). 07

8 Sweden Three healthcare providers fined for collusion in a procurement process. In December 2015 the Stockholm District Court fined the healthcare providers Aleris, Capio and Hjärtkärlgruppen a total of SEK 29 million, after an application by the Swedish Competition Authority ( SCA ). The court agreed that the agreements between the healthcare providers constituted a restriction by object and that they had ruled that the companies had unlawfully colluded in a procurement of clinical physiology services by Stockholm County Council in The parties have appealed the judgment ( ). Investigation into OnlinePizza closed after it voluntarily changed its contractual terms. The SCA received a complaint from a competitor concerning alleged exclusivity requirements set by OnlinePizza vis-à-vis its affiliated restaurants and opened an investigation. Under its standard terms OnlinePizza was able to terminate its relationship with restaurants immediately if any signed up to competing platforms. OnlinePizza voluntarily modified the relevant clause during the SCA s investigation and clarified that contract would only be terminated where there were objectively justified reasons. The SCA has since closed its investigation ( ). 08

9 NOTIFICATIONS 1. CVC/AR Packaging (M.8107, ). 2. Simplified procedure cases PSP/OTPP/Cubico/Renewable Energy Power Generation Companies (M.8092, ). Goldman Sachs/Altor/Navico/C-Map (M.8160, ). Kion/Dematic (M.8140, ). Carlyle/Logoplaste (M.8133, ). Alpiq/Getec Energie/JV (M.8154, ). PHASE I CLEARANCES 3. Clearance with undertakings Vodafone/Liberty Global/Dutch JV On 3 August 2016 the Commission cleared the proposed creation of a JV in the Netherlands between Vodafone and Liberty Global, conditional on Vodafone divesting its retail consumer fixed line business in the Netherlands. The divestment offered by Vodafone addresses the Commission s concerns that the creation of the JV would reduce competition on the markets for fixed and fixed-mobile multiple play services in the Netherlands. The Commission also rejected a referral request from the Dutch competition authority. (M.7978, ). 4. Unconditional clearances Sony Corporation of America/Sony-ATV Music Publishing (M.8018, ). 5. Unconditional clearances: simplified procedure Partners Group/Foncia Holding and its subsidiaries (M.8115, ). Volvo Car Corporation/Volverk/Volvofinans Bank(M.8127, ). Bridgestone/Pneuhage/JV (M.7984, ). EQT/Bilfinger Real Estate Solutions and Bilfinger Efficiency (M.8093, ). Ferrari Financial Services/FCA Bank/FFS JV (M.8095, ). Gerdau/Sumitomo/JV (M.7973, ). Triton/Voith Industrial Services (M.8081, ). 09

10 ECJ dismisses pre-stressing steel cartel appeal On 2 August 2016 the Court of Justice (ECJ) published its July 2016 order dismissing HIT Groep BV s appeal against a General Court judgment regarding the Commission s fine for participating in the pre-stressing steel cartel. In its 2015 judgment, the General Court found that in calculating the ceiling on the fine to be imposed on HIT Groep the Commission was entitled to use the company s 2003 turnover rather than the turnover for the most recent business year at the time of the cartel decision. The ECJ concluded that the General Court had not erred in reaching its decision, agreeing with the General Court that where the last business year did not represent a full period of normal economic activity the Commission could instead use the most recent year that does represent a full year of normal economic activity (Case C-514/15 P HIT Groep v Commission, order of (not yet available in English)). London T +44 (0) F +44 (0) Brussels T +32 (0) F +32 (0) Hong Kong T F Beijing T F Published to provide general information and not as legal advice. Slaughter and May, For further information, please speak to your usual Slaughter and May contact. OSM _v02