Overview of EU competition law developments

Transcription

1 Overview of EU competition law developments European Commission investigations and sanctions on the rise during 2012 Dirk Arts Partner, Brussels Tel dirk.arts@allenovery.com David Gabathuler Senior Associate, Brussels Tel david.gabathuler@allenovery.com

2 The European Commission (the Commission) maintained its active enforcement of the EU competition rules in 2012, adopting high-profile prohibition decisions in the areas of mergers and cartels. It also continued to prioritise antitrust investigations involving intellectual property rights, most notably in relation to disputes over the possible infringement of standards essential patents (SEPs) in the smartphone industry as well as potentially anti-competitive pay-for-delay arrangements in the pharmaceutical sector. The Commission is also reported to be seeking a settlement with technology giant Google to address possible concerns that the company is using its dominance in online search to foreclose rival specialised search engines and search advertisers. The increasing globalisation of antitrust enforcement has also been a prominent feature of 2012, with ever greater coordination between the Commission and other major antitrust authorities. In light of the continuing economic crisis, the number of merger notifications was again lower than during the peak years, although the Commission reviewed a number of important transactions, including the high-profile merger between Deutsche Börse and NYSE Euronext, which it ultimately prohibited. This is only the third prohibition decision since It also opened in-depth investigations into a number of prominent industry mergers, including the proposed mergers between UPS and TNT Express and between Aer Lingus and Ryanair. The Commission also considered in detail in a first phase review, Google's acquisition of Motorola Mobility. In the area of cartel enforcement, the Commission ended the year by imposing its highest ever fine in a cartel case. Producers of TV and computer monitor tubes, including LG Electronics, Philips and Samsung SDI were fined 1.47bn for participating in two decadelong cartels in the cathode-ray tubes sector. The investigation followed an immunity application by one of the cartel participants, highlighting the continued success of the Commission's Leniency programme. The Commission is, however, aware of the risks that court-based discovery in civil action for damages cases poses to its Leniency programme, especially following the Court of Justice of the EU's landmark Pfleiderer judgment 1. Competition Commissioner Almunia has, therefore, indicated that the Commission will propose legislation aimed at striking a better balance between the effectiveness of cartel enforcement and the victims' right to fair compensation 2. The Commission has maintained its strong sector-focused antitrust scrutiny by pursuing major investigations in the technology, pharmaceutical and financial services sectors. Investigations into the alleged abuse of dominance by smartphone manufacturers seeking injunctions for infringement of their SEPs and potentially anti-competitive pay-fordelay arrangements by pharmaceutical companies have been fast-tracked. The Commission has also been investigating Google's potentially abusive conduct in the online search market on the grounds that it has foreclosed rival specialised search engines and search advertisers. In the financial services sector, the Commission has continued to commit significant resources to its Libor and Euribor cartel investigations. It has also carried on with its investigation into potentially anti-competitive arrangements in the Credit Default Swaps (CDS) sector. Global cooperation and coordination between competition authorities is growing as a greater number of authorities are well resourced and technically proficient and anti-competitive arrangements increasingly require coordinated global enforcement. Cooperation between the Commission and the U.S. antitrust agencies (Antitrust Division of the Department of Justice (the DOJ) and the Federal Trade Commission (the FTC)) remains the benchmark for best practice, but cooperation agreements are being entered into with newly strengthened authorities. The Memorandum of 1 2 C-360/09 Pfleiderer AG v Bundeskartellamt, judgment of 14 June Speech by Commissioner Almunia, Antitrust enforcement: Challenges old and new, 19th International Competition Law Forum, St. Gallen, 8 June 2012.

3 Understanding 3 (signed in September 2012) between the European Union and China is one such example; it is aimed at increasing the Commission's ability to investigate Chinese companies operating in the EU for antitrust offences and signals an expected uplift in antitrust enforcement in China. As far as the State aid rules are concerned, the Commission published a new State Aid Framework as part of a renewed effort to simplify the existing procedures and promote greater efficiency and quality 4. It also published a key Communication on State Aid Modernisation setting out an ambitious reform package to update the State Aid Rules in The Commission is also continuing to take decisions and carry out ongoing in-depth State aid investigations in the context of the financial crisis 5. Mergers The Commission continues to receive a significantly lower number of merger notifications than prior to the financial crisis (it received 283 merger notifications in 2012 compared to 402 in 2007), although in 2012 it reviewed a number of important transactions that potentially raised significant competition concerns. In particular, the proposed high-profile merger between Deutsche Börse and NYSE Euronext, which it ultimately prohibited. The proposed merger between Deutsche Börse and NYSE Euronext, two of the largest exchanges for European financial derivatives, was prohibited by the Commission despite strong lobbying by the parties' representatives in February on the grounds that it would have created a quasimonopoly in European financial derivatives traded globally on exchanges 6. The DOJ, in contrast, approved a settlement between the parties which resolved concerns about the merger's effects on equities trading in the U.S. The Commission has stressed that the different outcomes resulted from differences in the respective jurisdictions' market structures and did not reflect any divergence in the authorities' approach to antitrust enforcement. In a speech in early February, Commissioner Almunia explained that "[t]he merger would have led to the worsening of conditions for companies trying to access financial instruments and would have harmed the European economy as a whole" 7. There were important mergers in the music industry, which again necessitated global cooperation at the enforcement level. The Commission gave its approval to Universal Music Group's acquisition of EMI's recording music business on the condition that EMI divest its Parlophone label and other worldwide assets. The Commission had been concerned that Universal Music, the world's largest music content company, could have imposed higher prices and more onerous licensing terms on digital music providers which could have prevented innovative providers from expanding or launching new digital music offerings. The case involved close cooperation between competition authorities globally. The merger was finally approved in all jurisdictions, but each authority imposed different commitments (or no commitments at all in the FTC's case). Earlier in the year, the Commission had cleared the acquisition of the EMI Music Publishing business by a consortium led by Sony and Mubadala 8. The approval was subject to a commitment by Sony to sell various music catalogues and assets. Again, a number of authorities scrutinised the merger, including the FTC, which cleared the transaction without conditions. The clearance of these mergers in a sector which has always seen careful scrutiny of past attempts at major consolidation is explained by the rise of new and successful online digital music business models. Early in the year, the Commission reviewed Google's acquisition of Motorola Mobility, a developer of smartphones and tablets 9. Google had Memorandum of Understanding on Cooperation between Competition Directorate-General of the European Commission and the Chinese National Development and Reform Commission (NDRC) and the Chinese State Administration of Industry and Commerce (SAIC), 20 September State aid developments will not be addressed in this article. For an Overview of decisions and ongoing in-depth investigations in the context of the financial crisis, see Commission Memo/12/1018 of 20 December State Aid Modernisation Speech/12/657. COMP/M.6166 Deutsche Börse/NYSE Euronext, decision of 1 December EU blocks NYSE Euronext merger with Deutsche Börse, the Telegraph, 1 December COMP/M.6459 Sony/Mubadala Development/EMI Music Publishing, decision of 19 April COMP/M.6381 Google/Motorola Mobility, decision of 13 February 2012.

4 stated that it was also seeking to acquire Motorola Mobility to gain access to the company's leading patent portfolio, thereby allowing the company to strengthen its position in patent licensing negotiations and to help it to protect the Android ecosystem. The Commission considered, amongst other issues, whether Google was likely to prevent Motorola Mobility's competitors from using the Android operating system. It also examined whether Google's access to Motorola Mobility's portfolio of SEPs could lead it, post merger, to extract onerous licensing terms or to foreclose the market to rivals. During the investigation, Google publicly pledged that it would continue to honour Motorola Mobility's Fair Reasonable and Non-discriminatory (FRAND) commitment if the deal were to succeed. The Commission cleared the transaction without conditions finding that it would not significantly modify the market situation in respect of operating systems and patents. But Almunia noted that it would "continue to keep a close eye on the behaviour of all market players in the sector, particularly the increasingly strategic use of patents" 10. The acquisition of Orange Austria the third largest Mobile Network Operator in Austria by its rival Hutchison 3G (H3G) allowed the Commission to further consider the extent to which consolidation was permissible in a concentrated mobile telecommunications market 11. The in-depth investigation involved a new level of jurisdictional interaction and overlapping reviews as it required both EU and national merger control approvals as well as two separate regulatory approvals. The transaction, which will eliminate one of four mobile network operators in Austria, was approved by the Commission on the condition that H3G commit to divest radio spectrum and related rights and to provide wholesale access to its network to up to 16 virtual operators without a full network of their own over the next ten years. In addition, HG3 committed not to complete the acquisition before it had entered into a wholesale access agreement with one virtual operator approved by the Commission. During the year, the Commission also considered in detail a mobile commerce joint venture between the three largest mobile telecoms operators in the UK. Telefonica UK, Vodafone UK and Everything Everywhere mobile wallet platform was approved without remedies following a Phase II investigation as the Commission found that many competitors were planning to enter the nascent market of mobile payment applications and that none of the parties involved had the ability or the incentive to foreclose the market to competition 12. The Commission had closely scrutinised the transaction as it believed that the parties would have had the technical and commercial capabilities to block future competitors from offering their own mobile wallet services. However, the investigation revealed that several alternatives already existed which did not rely on storing the information on SIM cards and it was, therefore, unlikely the parties could block these alternative routes to market. An ongoing Phase II investigation which has received considerable press attention is the proposed acquisition of Aer Lingus by Ryanair 13. This is the third time Ryanair has notified an acquisition of Irish national carrier, Aer Lingus. The first transaction was prohibited by the Commission in 2007, and in 2009 Ryanair withdrew its second notification. On a large number of European routes, mainly out of Ireland, the two airlines are each other's closest competitors and many of the routes are currently only served by the two airlines. The Commission has expressed concerns that the takeover could lead to the elimination of competition on a large number of these routes. Ryanair is reported to have submitted significant remedies, but it is yet to be seen whether these will allay the Commission's concerns. In another prominent Phase II investigation, the Commission has been considering the proposed acquisition of TNT Express of the Netherlands by the American company United Parcel Service (UPS) 14. The Commission has indicated that the proposed merger gives rise to potential competition Press release, Mergers: Commission approves acquisition of Motorola Mobility by Google, 13 February 2012 (IP/12/129). COMP/M.6497 Hutchison 3G Austria / Orange Austria, decision of 12 December COMP/M.6314 Telefonica UK / Vodafone UK / Everything Everywhere, decision of 4 September COMP/M.6663 Ryanair/Aer Lingus III. COMP/M.6570 UPS/TNT Express.

5 concerns in the markets for small parcel delivery services, in particular international express services, in numerous Member States since the parties would have very high combined market shares post merger. UPS has put forward a series of remedies to try to address the Commission's concerns. [The transaction was abandoned in January 2013]. Cartels The level of Commission cartel fines in 2012 was looking to be the lowest in more than a decade until the adoption of the TV and computer monitor tubes decision in December. The fine the highest ever imposed by the Commission in a cartel case allowed the Commission to finish the year with four cartel decisions and a total of 1.88bn in fines 15. Total cartel fines imposed by the Commission in the period 2008 in Amount in million 3,500 3,000 2,500 2,000 1,500 1, ,264 1,541 2, , The Commission adopted the TV and computer monitor tubes decision 17 after a five-year investigation. Seven international companies, including LG Electronics, Philips, Panasonic and Samsung SDI were fined a total of 1.47bn for participating in one or both of two cartels that lasted almost ten years in the cathode-ray tubes (CRT) sector. The Commission found that the companies fixed prices, shared markets, allocated customers and restricted their output worldwide and in the EEA between 1996 and Taiwanese producer, Chunghwa received full immunity from fines and other companies received fines reductions under the Leniency programme. One company saw its fine substantially reduced due to the inability to pay the high fine 18. According to the Commission, the two CRT cartels were amongst the most organised cartels that the authority has investigated arranged through a series of multilateral and bilateral meetings held in Asia and in Europe. In the Freight forwarding decision 19, the Commission fined 14 international groups 169m for illegally coordinating their pricing behaviour in the provision of international freight forwarding services with respect to four different surcharges/charging mechanisms 20 on goods concerning important trade routes, in particular the Europe-USA and the China/Hong Kong-Europe lanes. The four distinct cartels were entered into in the period 2002 to In one of the cartels ("new export system" cartel), the participants organised their contacts in a so-called "Gardening Club" and code names based on names of vegetables were used when talking about fixing prices. In another, a specific yahoo account was set up to facilitate exchanges between the cartel participants. Deutsche Post AG (including DHL and Excel) received full immunity from fines following its successful leniency application. In the Mountings for windows 21 market, the Commission fined nine producers a total of 85.88m for fixing prices between November 1999 and July The companies had agreed on common price increases on the mechanical metal parts necessary to open and close windows and window-doors, the most common of which is the "turn-and-tilt" mounting which allows windows to be either fully opened or tilted inwards using only one handle. The Commission reduced the fines on three companies following their cooperation with the Commission's investigation under the Leniency programme. Another company had its fine reduced This includes the 1.74bn fine reimposed on Mitsubishi and Toshiba in the gas switchgear cartel (IP/12/705). Source European Commission, Cartel Statistics. Fines are not adjusted for European Court of Justice judgments. Last updated by the Commission on 5 December Case TV and computer monitor tubes, decision of 5 December Under point 35 of the 2006 Guidelines on fines, the Commission can assess an application on a company's inability to pay on the basis of its financial statements for recent years, projections for the current and coming years, ratios measuring the financial strength, profitability, solvency, liquidity, and relations with outside financial partners and with shareholders. As a result of this assessment, the Commission may grant a reduction of the fine. Case Freight forwarding, decision of 28 March The four different surcharges/charging mechanisms were new export system (NES), advanced manifest system (AMS), currency adjustment factor (CAF) and peak season surcharge (PSS). Case Mounting for windows, decision of 28 March 2012.

6 by 45% on grounds of inability to pay. In 2012, the Commission also fined two producers of Water management products 22, used in heating, cooling and sanitation systems a total of 13.66m for operating a cartel on the German market from June 2006 until May In addition, in autumn 2006, one of the companies and the immunity applicant had expanded their anti-competitive behaviour to 13 other EU Member States for a limited period of three months. This was the sixth cartel settlement decision since such system was introduced in 2008 and the Commission granted the companies a reduction of 10% on the level of the fines for admitting their liability early on in the procedure. The Global auto parts cartel is possibly the largest cross-border cartel investigation in history. It involves the Commission, the DOJ and a number of other leading competition authorities, including the Canadian Competition Bureau and the Japanese FTC. Dozens of automotive parts' suppliers are reported to have participated in a cartel to fix prices for different automotive parts sold to car manufacturers. The Commission has sent Statements of Objections to suppliers of automotive electrical and electronic components 23, thermal systems 24 and battery (lead) recyclers 25. The Commission is expected to issue further Statement of Objections in this far-reaching ongoing investigation. The Commission has also continued its investigation into the actions of a number of banks for possible concerted manipulation of various financial reference rates such as Libor and Euribor (see antitrust section below). In most of its cartel cases, the Commission has continued to rely heavily on its Leniency programme for the initiation of its cartel investigations, especially as the programme has increased the accuracy and efficiency of the Commission's investigations. The Leniency programme is, however, potentially at risk should courts take an expansive approach when granting access to leniency documents in civil actions for damages. Commissioner Almunia has recently indicated that he intends to adopt a legislative proposal on antitrust damages actions which, following the Pfleiderer judgment, will give more legal certainty on a number of issues, in particular access to the evidence related to leniency requests. This project follows the European Competition Network's (ECN) joint resolution on the protection of leniency material in the context of civil damages actions 26. In addition, in order to streamline the procedure for making requests to several different national competition authorities, the ECN has updated the Model Leniency Programme (MLP) adopted in The revised MLP introduces the notion of a "summary application marker", whereby all leniency applicants applying to the Commission in cases concerning more than three Member States will be able to submit a summary application to national competition authorities which will protect the applicant's position under the respective national programmes. The MLP does not change the national leniency programmes, but it has some potential to align them, now that competition authorities in the EU must act in a coordinated way. Antitrust The Commission maintained its active sectorfocused enforcement of the EU antitrust rules in It has been particularly vigilant to intervene in the digital and technology sphere, where fastmoving markets require competition authorities to learn to be nimble and move at a much faster pace 28. In particular Commissioner Almunia has shown a willingness to settle cases in fast-moving, Case Water management products, decision of 27 June Press release, Commission opens proceedings against suspected participants in several cartels for the supply of automotive wire harnesses, 9 August 2012 (IP/12/894). Commission confirms unannounced inspections in the sector of thermal systems for cars, 13 July 2012 (Memo/12/563). Commission confirms inspections in lead recycling sector, 29 September 2012 (Memo/12/722). Protection of leniency material in the context of civil damages actions, Resolution of the Meeting Heads of the European Competition Authorities of 23 May Competition: European Competition Network refines its Model Leniency Programme, 22 November 2012.

7 innovative markets to avoid protracted investigations. The Commission has also pursued high-profile antitrust investigations in the pharmaceutical and financial services sector as well as in other industries, such as energy and telecoms. The digital economy The digital economy is an important driver of growth in the EU and the Commission has reported that it is "growing at seven times the rate of the rest of the economy" 29. The Commission, therefore, pays close attention to any harmful actions that might impair competition in the digital economy. Following on from its successes in the Microsoft cases 30, the Commission has continued to pursue major investigations in the technology sector. Two of the most notable investigations in 2012 were the e-books settlement and the Google search engines case. Apple and a number of major international publishing groups were investigated for suspected collusion aimed at raising retail prices for e-books in breach of the EU antitrust rules. The Commission was concerned that jointly switching the sale of e-books from a wholesale model to an agency model (where the retail price is determined by the publishers themselves) in conjunction with the inclusion of a "most-favoured customer" (MFC) clause was designed to limit price competition. In December 2012, after positive results of a market test, the Commission accepted commitments by Apple and four publishing groups, in particular the commitment: (i) to terminate the current agency agreements; (ii) not to conclude agreements for e-books with retail price MFC clauses for five years; and (iii) to give retailers the freedom to set their own prices for e-books and to discount e-books during a two-year period (subject to certain conditions). The Commission has made these commitments binding, settling the case. The Commission worked closely with the DOJ to obtain a global solution 31. The investigation against Google for possible abuse of dominance in the online search engine market started in November 2010 and is said to be close to completion provided Google gives binding commitments to the Commission to deal with four specific concerns. 32 Search service providers accused Google of lowering the ranking of unpaid search results of competing services which are specialised in providing users with specific categories of online content such as price comparisons (so-called vertical search services) and by according preferential placement to the results of its own vertical search services to exclude competing services. The FTC decided at the beginning of January 2013 not to take any action in respect of, amongst other things, allegations that Google had discriminated in its treatment of search results to disadvantage certain vertical search services. Instead, the U.S. agency settled its own case against Google following the latter's agreement to change certain business practices 33. A Commission spokesman has, however, indicated that this decision will have "no direct implications" on the outcome of the EU investigation. The Commission had previously indicated that it expected Google to come forward with a detailed commitment text in January Intellectual property (use of standards essential patents) The much publicised patent disputes between households names such as Apple, Google, HTC, 28 See Commissioner Almunia, Competition enforcement in the knowledge economy, Fordham University, 20 September Press release, Digital "to-do" list: new digital priorities for , IP/12/ More recently, the Commission has sent Microsoft a Statement of Objections in October 2012 for failing to follow the commitments it had provided to the Commission three years ago giving customers a choice other than its own Internet Explorer browser to access the internet between February 2009 and July Press release, Commission accepts legally binding commitments from Simon & Schuster, Harper Collins, Hachette, Holtzbrinck and Apple for sale of e- books, 13 December 2012 (IP/12/1367). 32 The Commission's concerns relate to (i) the way in which Google's vertical search services are displayed within general search results as compared to services of competitors: (ii) the way Google may use and display third party content on its vertical search services; (iii) exclusivity agreements for the delivery of Google search advertisements on other websites; and (iv) restrictions on the portability of AdWords advertising campaigns. See Statement by Vice President Almunia on the Google investigation, 18 December 2012 (Speech/12/967). 33 Under a settlement reached with the FTC, Google will meet its prior commitments to allow competitors access on fair, reasonable, and nondiscriminatory terms to patents on critical standardized technologies needed to make popular devices such as smart phones, laptop and tablet computers, and gaming consoles. In a separate letter of commitment to the Commission, Google has agreed to give online advertisers more flexibility to simultaneously manage ad campaigns on Google s AdWords platform and on rival ad platforms; and to refrain from misappropriating online content from so-called vertical websites that focus on specific categories such as shopping or travel for use in its own vertical offerings. See FTC press release, 3 January 2013.

8 Microsoft, Samsung Electronics and others have brought to the fore the interplay between intellectual property rights and antitrust, in particular in respect of the controversy over the availability of injunctions in disputes involving the possible infringement of SEPs. Commissioner Almunia has closely followed the issue and stated in March that "[t]he holders of these [SEPs] have considerable market power and can effectively hold-up the entire industry with the threat of banning competitors' products from the market through injunctions for patent infringements" 34. The Statement of Objections issued to Samsung Electronics (SEC) at the end of December 35 is indicative of an apparent desire on the part of the Commissioner to pursue a novel approach. In the accompanying press release, the Commission states that its preliminary view is that, given SEC's commitment to license SEPs on Fair Reasonable and non-discriminatory (FRAND) terms, recourse to injunctions can harm competition in a situation where Apple is reported by the Commission to have shown itself willing to negotiate a FRAND licence for the SEPs. The Commission is also investigating a number of other cases relating to SEPs, in particular following complaints by Apple and Microsoft, concerning Motorola Mobility's 36 (owned by Google) behaviour in seeking and enforcing injunctions against the two companies' products on the basis of its SEPs. Pay-for-delay in the pharmaceutical sector Another area which the Commission has been focusing on is pay-for-delay (or reverse payment) agreements. This is a practice whereby pharmaceutical companies pay for delaying the release of competing generic drugs on the market typically in the context of a patent settlement. One of the key findings of the Commission's inquiry into the pharmaceutical sector in 2008/2009 was that this practice led to delays in the entry of new and cheaper generic medicines, which distorted competition and harmed consumers. While the general justification is that those settlements are a way for pharmaceutical companies to shield themselves from litigation relating to patents, in specific circumstances they potentially raise significant antitrust concerns. Competition authorities consider that they can constitute hardcore restrictions of competition in circumstances where they unfairly prevent lower priced generic products from entering the market. Typically, pharmaceutical products are protected by a whole cluster of patents. When a core patent expires in spite of others remaining in place, this may lead to disputes over whether the secondary patents are still valid to protect the drug. Settlements are usually an efficient way to end this type of dispute. However, when a settlement takes place, judicial review becomes unavailable and private enforcement is limited, thereby impairing consumer choice in the matter. Following its Sector Inquiry, the Commission has been monitoring closely patent settlements between originator companies and generic companies. A significant number of investigations have been opened and the Commission issued a number of Statements of Objections in 2012 that address payfor-delay issues. In July 2012, the Commission sent Statements of Objections to more than 14 companies in two major cases. In the Citalopram case 37, the Commission set out its preliminary view that the agreements entered into by Danish company Lundbeck with four generic competitors concerning a blockbuster antidepressant drug were aimed at preventing the market entry of cheaper generic medicines. The agreements included direct payments to the generic competitors and other value transfers. In the Perindopril case 38, the Commission has issued a Statement of Objections against Les Laboratoires Servier and several generic competitors for entering into agreements Competition policy for innovation and growth: Keeping markets open and efficient, European Competition and Consumer Day Copenhagen, 8 March 2012 Press release, Commission sends Statement of Objections to Samsung on potential misuse of mobile phone standard-essential patents, 21 December 2012 (IP/12/1448) Press release, Commission opens proceedings against Motorola, 3 April 2012, (IP/12/345). Case Lundbeck.

9 which, according to the authority, may have hindered the entry of generic Perindopril into markets in the EU. The Commission also reports that Servier may have implemented a comprehensive strategy aimed at preventing market entry of cheaper generic versions of Perindopril. In addition to the Lundbeck and Servier cases, the Commission has opened proceedings against amongst others Cephalon and Teva 39 for possible violations of EU competition rules, including alleged anticompetitive practices involving generic companies. Financial Services The Commission has increased the number of investigations in the financial sector following the onset of the economic crisis. These high-profile investigations have often been targeted at areas of the financial services sector that have been viewed in some European political circles as lacking appropriate regulatory oversight and transparency 40. In Thomson Reuters 41, the Commission investigated whether the company was abusing its dominant position by imposing certain restrictions on the use of Reuters Instrument Codes 42 (RICs) thereby preventing customers or competitors from translating these codes to alternative identification codes of other datafeed suppliers. It is reported by the Commission that, without the possibility of such mapping, customers were potentially locked into working with Thomson Reuters because the procedure to replace the codes by reconfiguring or by rewriting software applications was long and costly. At the end of December, the Commission adopted a decision that renders legally binding commitments offered by Thomson Reuters to create a new licence (ERL) allowing customers, for a monthly fee, to use RICs for data sourced from Thomson Reuters' competitors. An independent trustee will monitor Thomson Reuters' compliance with the commitments. The Commission is also carrying out investigations into the credit default swaps (CDS) sector 43. The Commission has reported that it is examining whether sixteen investment banks and Markit (a provider of financial information in the CDS sector) have been foreclosing access to raw data to other information service providers. It has also reported that it is separately investigating nine of the sixteen banks in relation to the tariffs granted by ICE Clear Europe (a clearing house for CDS) that allegedly create an incentive for the banks to use only ICE, thereby preventing entry by other clearing houses. 44 The Commission is also investigating the manipulation of benchmark rates for various currencies such as Libor, Euribor and Tibor. It commenced the Euribor investigation with a series of high-profile on-site inspections 45. The Commission has reported that it is investigating the collusive aspects of the arrangements for possible breaches of the cartel rules and that its actions are separate from those taken by the other authorities examining the matter under the criminal or the prudential rules. In June 2012, both the U.S. and UK authorities fined Barclays Bank a total of 290 million after the bank admitted manipulating Libor interest rates between 2005 and Unlike some of the investigations by other authorities, the Commission's proceedings are multiparty, which requires the matter to be resolved in one go rather than one company at a time. Therefore, it is, uncertain whether the Commission will be able to similarly arrive at a (cartel) settlement even if some of the parties appear to be settling with other regulatory authorities. Finally, it is also worth noting that the General Court of the EU (GCEU) 47, upheld in May 2012, the Commission's decision prohibiting Case Perindopril (Servier). Case COMP/39686 Cephalon. Press release, Commission opens investigation against pharmaceutical companies Cephalon and Teva, 28 April See, e.g., EU to Deal Severely with CDS; Leaders Seek Ban, Reuters, May 17, Case COMP/39654, Reuters Instrument Codes. See Commission renders legally binding commitments from Thomson Reuters, 20 December 2012 (IP/12/1433). RICs are codes that identify securities used by financial institutions to retrieve data from Thomson Reuters' real-time datafeeds. Case COMP/39745 CDS Information market and Case COMP/39730 CDS Clearing. For further background on the case, see Press Release Commission Probes Credit Default Swaps Market, 29 April 2011 (IP/11/509). This part of the investigation appears to be on hold. See Mlex Comment, 27 September Press Release, Commission Confirms Inspections in Suspected Cartel in the Sector of Euro Interest Rate Derivatives, 19 October 2011 (Memo/11/711). See UK FSA Final Notice, 27 June 2012 and DOJ Barclays Statement of Facts, 26 June 2012.

10 Mastercard's multilateral exchange fees (MIFs) - a charge levied on each payment at retail outlets when the payment is processed for cross-border credit and debit transactions in the EEA. Since the GCEU's judgment, the Commission has again set its sights on VISA and has sent the company a Supplementary Statement of Objections relating to possible violations concerning the MIFs set by VISA for transactions with consumer credit cards in the EEA 48. Further enforcement actions at the national level relating to interchange fees are also expected to be pursued. Other sectors In the energy sector, the Commission has opened formal proceedings against Gazprom, a Russian producer and supplier of natural gas, to ascertain whether Gazprom may be abusing its dominant market position. It is investigating whether the Russian energy giant may have restricted the free flow of gas across Member States, preventing the "diversification" of supply, and imposing unfair gas prices 49. In the telecoms sector, the Commission has ongoing investigations against Telefónica and Portugal Telecom 50, respectively the Spanish and Portuguese incumbent telecoms operators, regarding their reported arrangement not to compete on the Iberian telecommunications markets; and against Slovak Telekom (and its parent company, Deutsche Telekom AG) in relation to behaviour on several wholesale broadband markets in Slovakia 51. The Commission believes that Slovak Telekom may have refused to supply unbundled access to its local loops and wholesale services to competitors, and may have imposed a margin squeeze on alternative operators by charging unfair wholesale prices Case T-111/08 MarsterCard v Commission, judgment of 24 May Press release, Commission sends supplementary statement of objections to Visa, 31 July (IP/12/871). Press release, Commission opens proceedings against Gazprom, Brussels, 4 September 2012 (IP/12/937). Commission sends Telefonica and Portugal Telecom statement of objections regarding non-compete agreement, Brussels 25 October 2011 (IP/11/1241). At time of publication the Commission had fined both companies 79m for their illegal non-compete clause, 23 January 2013 (IP/13/39). Commission sends statement of objections to Slovak Telekom and Deutsche Telekom, Brussels 8 May 2012 (IP/12/462).