On Feb. 25, 2015, the European Commission set out its strategy to achieve a European Energy Union with a forward looking climate change policy (“Framework Strategy”). Reforming and reorganizing Europe’s energy policy into a single energy market was outlined as a top priority by Jean-Claude Juncker, President of the Commission, in his political guidelines. The project is based on the three objectives of EU energy policy:  (i) competitiveness; (ii) security of supply; and (iii) sustainability of infrastructure. The EU is the largest energy importer in the world, importing 53% of its energy, at an annual cost of around €400 billion.

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On Feb. 12, 2015, the Court of Appeal to England and Wales dismissed Ryanair’s appeal against a judgment of the UK’s Competition Appeal Tribunal (“CAT”).^[1]  The CAT had, on May 7, 2014, rejected Ryanair’s application for review of the findings of the Competition Commission (“CC”) in connection with Ryanair’s acquisition of a minority shareholding in Aer Lingus.^[2]  In its final report, dated Aug. 28, 2013, the CC found that Ryanair and Aer Lingus had ceased to be distinct as a result of Ryanair’s minority shareholding (29.82%) that gave it the ability to exercise material influence over the policy of Aer Lingus. The CC reached its view by having regard to Ryanair’s ability to block special resolutions and the sale of slots at London Heathrow Airport. The CC then concluded that the minority stake resulted in a substantial lessening of competition because, in particular, Ryanair’s incentives as a competitor were likely to outweigh its incentives as a shareholder. The CC decided that a reduction of Ryanair’s holding to 5% would be an effective remedy.

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The European Union’s Commissioner for Competition, Margrethe Vestager, who began her five-year mandate on Nov. 1, 2014, has indicated that there is more work to be done on the Commission’s initiative to close an enforcement gap related to minority shareholdings. The proposal—which would reform the EU Merger Regulation in order to give the Commission the power to scrutinise the acquisition of non-controlling minority interests—was one of the issues put out for consultation in the Commission’s White Paper, published July 2014. In a speech delivered Mar. 12, 2015, Vestager stated that the replies to the consultation had indicated that the proposal had not struck the right balance between the issues raised and the proposal’s procedural burden. The modalities of the system would now be discussed again within the Commission as well as Member States and other stakeholders. The White Paper had proposed a targeted transparency system that would enable parties to self-assess whether a transaction creates a competitively significant link and, if so, submit an information notice to the Commission. In the event that an information notice is submitted, the Commission would then decide whether to investigate the transaction.

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On Feb. 17, 2015, the Court of Justice of the European Union (“CJEU”) brought an appeal before the Court of Justice against an order of the General Court that had found that the CJEU was the correct representative of the EU in an action for damages. The action for damages—that seeks to engage the non-contractual liability of the EU—arises as a result of a General Court failure to deliver a judgment within a reasonable time.^[1]  As the latest development in a tussle that began in February 2006, the CJEU is contesting its liability for a breach committed by one of its own courts.^[2]  The General Court’s responsibility for the excessively long proceedings (approximately five years and nine months) has already been confirmed.

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On Mar. 9, 2015, the General Court confirmed the European Commission’s decision prohibiting the proposed merger between Deutsche Börse and NYSE Euronext. The merger—which would have brought together the two largest exchanges in the world for European financial derivatives— was blocked by the Commission in February 2012. The Commission’s investigation had found that the merger would lead to a significant impediment to effective competition by creating a near-monopoly position. In particular, the transaction would have led to a single vertical structure, trading and clearing more than 90% of the global market of European exchange-traded derivatives.

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On Mar. 26, 2015, the Consumer Rights Act received Royal Assent. Schedule 8 of the Act, which amends the UK’s Competition Act, gives the UK Competition Appeal Tribunal (“CAT”) the power to hear stand-alone private damages actions as well as actions arising from an infringement decision with respect to a finding of a cartel or an abuse of dominance. Infringement decisions by both the UK Competition and Markets Authority (“CMA”) and the European Commission will be relevant for the purposes of a private damages action before the CAT. The Act permits collective proceedings to be brought before the CAT, either as opt-in or opt-out proceedings, and the CAT will also have the power to approve the settlement of claims in collective proceedings. Furthermore, the Act makes it possible for redress schemes to be approved by the CMA.

The measures are expected to come into force on Oct. 1, 2015.

Following a request for leniency from seven wallpaper producers for engaging in anticompetitive conduct, the French Competition Authority (FCA) recently sanctioned them in the amount of 5.27 million euros (US$6.6 million).

The anticompetitive information exchange took place between wallpaper suppliers when they were asked by a wholesaler to create a common wallpaper catalog, according to the FCA. The competing suppliers met several times, either formally or via telephone conferences, to discuss commercially sensitive information. The type of information disclosed not only concerned commercial terms of the catalog, but also future market behavior such as foreseeable tariff trends and prospective data to fix prices. The FCA regarded these practices as restrictions of competition by object, but noted that it was occasional and unsophisticated, which had a mitigating effect on the outcome. READ MORE →

On Dec. 11, 2014, Advocate General Niilo Jääkinsen advised that a German court could retain jurisdiction over a cartel damages claim even after the only German defendant company has reached a settlement.

In May 2006, the European Commission fined the members of a hydrogen peroxide cartel. Several companies that claimed to have suffered damages as a result of this cartel assigned their rights to any damages from actions against the cartel members to a Belgian company called Cartel Damages Claims Hydrogen Peroxide SA (CDC). CDC brought a claim before a German regional court against six of the cartel members, one of which was a German company. READ MORE →

On Dec. 4, 2014, the Court of Justice of the European Union heard Deutsche Bahn’s appeal against a September 2013 judgment by the General Court that 2011 inspections of its premises were legal.

Deutsche Bahn argued that EU inspection procedures were subject to insufficient oversight by the courts. The company stated that raids should be authorised by a judge prior to taking place, and argued that because opposition to an inspection could lead to substantial fines, there was no real right to oppose. Deutsche Bahn stated that any challenges to the legality and process of the raids would not repair the damage that they had suffered as a result of an unlawful raid, as officials would already have viewed any potentially incriminating evidence. READ MORE →

The European Commission cleared the merger of cement companies Holcim and Lafarge by a Phase I decision on Dec. 15, 2015, despite their positions as the first and second-largest such companies in the European Union. The merger will create the largest cement manufacturer in the world, and the new company, LafargeHolcim, will be active in over 90 countries.

The EC decision on the Lafarge-Holcim merger followed a lengthy period of pre-notification discussions between the companies and the Commission, during which the Commission expressed its concerns that the merger would have a detrimental effect on competition. READ MORE →

On Jan. 6, 2015, the French Supreme Court dismissed an appeal by Orange against the decision of the Paris Court of Appeal of July 2013, which confirmed the decision of the French Competition Authority (FCA) to fine telecoms operator Orange 60 million euros (US$68.8 million). The fine resulted from Orange’s abuse of a dominant position in French overseas territories French Guiana, Martinique and Guadeloupe. The original decision by the FCA had found that between 2000 and 2005, Orange’s wholly owned subsidiary, Orange Caraïbe, had attempted to prevent competitors from entering the market and to limit the growth of other operators. Orange Caraïbe’s anticompetitive behaviour was found to include signing exclusivity agreements with suppliers and using loyalty programs to encourage customers to sign longer-term contracts. Orange Caraïbe’s market share in these overseas territories is estimated to have been around 75 percent. READ MORE →

On Jan. 13, 2015, the European Commission published a competition policy brief on Commission Directive 2014/14. Competition policy briefs are occasionally issued by the Competition Directorate-General of the European Commission to explain and discuss key cases and policy issues. This brief is designed to explain the background of the Directive and to explain the reasons for the changes that it has made.

The policy brief can be viewed here. For further newsletter reporting on the Directive, see here and here.

On Nov. 10, 2014, the Council of the European Union formally adopted a Directive on antitrust damages actions. The Directive, proposed by the European Commission, sets out rules designed to ensure that citizens and businesses, in the EU, who have suffered harm caused by an infringement of Article 101 or 102 TFEU, or equivalent provisions of national competition law, can effectively claim damages against the infringing party. The Directive, which was formally signed on Nov. 26, 2014, will enter into force late December 2014. Member States will then have two years to implement it at national level. For further reporting on the Directive, see here and here.