The UK Payment Systems Regulator (PSR) has announced its intention to carry out a market review into the supply to merchants of card-acquiring services by financial services providers. In this Covington Alert, my colleagues Louise Freeman, Charlotte Hill and Elaine Whiteford look at the powers the PSR holds, why the review has been initiated and possible outcomes, as well as commenting on the increasing use of competition powers by sectoral regulators. Access the alert here.
Concurrences Article – Leniency and Competition Law: An Overview of EU and National Case Law
More than 20 years after the adoption of the first European Commission Leniency Notice, the detection and sanctioning of cartels remains a key feature of the enforcement agenda of the European Commission and – the currently still 28 – European Union national competition authorities. Leniency programmes are a crucial tool in uncovering cartels, with a large majority of cartel decisions adopted by European competition authorities based on immunity and leniency applications. But for how long?
Read my colleagues’ – Johan Ysewyn and Jennifer Boudet – full article in this month’s Concurrences Bulletin http://www.concurrences.com/en/bulletin/special-issues/leniency/procedures/leniency-and-competition-law-an-overview-of-eu-and-national-case-law-72355, also attached for our Covington Competition Blog Subscribers here. Johan Ysewyn, Jennifer Boudet, Leniency and competition law: An overview of EU and national case law, 2 August 2018, e-Competitions Bulletin Leniency, Art. N° 72355.
Germany’s first veto against a foreign investment under new FDI rules
[Updated] On 1 August 2018, the German government was set to block a foreign investment in a German company under the new foreign direct investment (FDI) screening rules for the first time. However, the veto was not required as, on the same day, the Chinese investor withdrew from the deal.
Companies involved in M&A activities will be familiar with the process for notifying their transactions to competition authorities across the globe. Increasingly, they also need to be aware that some jurisdictions also have FDI screening mechanisms. Whereas merger control reviews investments from a competition perspective, foreign direct investment screenings are designed to protect the state’s “essential interests”, a considerably more amorphous concept.
Read more… Continue Reading
Parental liability in EU cartel enforcement: has the presumption of decisive control become irrebuttable?
Does the General Court’s recent ruling in Goldman Sachs/European Commission provide new guidance on the parent liability of financial investors in cartel cases? Yes and no. Yes, because it shows what will not suffice to avoid parental liability. No, because it is silent as to whether in fact and if so how a financial investor can be distinguished from an “industrial” shareholder, and what criteria have to be met to escape parent liability. Continue Reading
The European Parliament publishes a study on financial technology and competition law
On 9 July 2018, the Economic Affairs Committee of the European Parliament (the “EP”) published a study identifying potential competition law concerns in the financial technology (“FinTech”) sector (the “Study”).
European Commission – Annual Activity Report – DG Competition 2017
Introduction
On 11 June 2018, the European Commission (“Commission”) published DG Competition’s 2017 Annual Activity Report (“Report”) to provide an overview of its pursuit of its competition policy objectives and enforcement of EU competition rules in 2017. In its Report, the Commission indicates that it has continued to prioritise competition on the merits and that it has focused interventions in the light of priorities outlined in its Political Guidelines, as well as on promoting competition culture and international cooperation. The different enforcement areas mentioned in the Report, certain key figures and the Report’s focus on the Digital Single Market are discussed below.
Is the heat on in the syndicated loans market? Spanish Competition Authority fines banks for price fixing on interest rate derivatives
On 13 February 2018, the Spanish Markets and Competition Commission (“CNMC”) fined four major Spanish banks €91 million for colluding to fix the price of interest-rate derivatives (“IRDs”) attached to syndicated loans above market price. The decision is an additional indication that syndicated loans are increasingly coming under the scrutiny of competition authorities, after the European Commission last year commissioned a study on competition issues in this market that will be completed by the end of the year 2018.
European Commission Launches New Antitrust Investigation into LNG Destination Clauses
On June 21, 2018, the European Commission (“Commission”) started a new investigation to determine whether so-called destination clauses in Qatar Petroleum’s liquefied natural gas (“LNG”) supply contracts with European buyers infringe the European Union (“EU”) antitrust rules.
Jumping the gun: the CMA’s approach to breaches of the standstill obligation
Introduction
Gun-jumping has been in the spotlight this year both at the European level and in the UK. At the EU level, first there was DG Competition’s record fining of Altice of € 124.5m (here) and then the Court of Justice of the EU (“CJEU”) ruled on the scope of the EU law standstill obligation in its EY/KPMG Denmark preliminary ruling (here). Now the Competition and Markets Authority (“CMA”) has fined Electro Rent Corporation (“Electro Rent”) £100,000 for breaching the UK standstill obligation. Although there are particular features of this example which mean that the scenario is far from the norm, it does provide a reminder that standstill obligations can arise even under the UK’s voluntary regime and sends a warning of the additional complexity that may arise post-Brexit.
Jumping the gun: some clarification from the Court of Justice
Introduction
In a recent blog post where we reflected on DG Competition fining Altice a record € 124.5m for gun-jumping, we already anticipated the Ernst & Young P/S v Konkurrenceradet judgment where, for the first time, the Court of Justice of the EU (CJEU) provides guidance on the scope of the standstill obligation under the EU merger control regime. That judgment was handed down on 31 May. According to the CJEU, the “gun-jumping” prohibition only covers actions contributing to a change of control of the target undertaking. Because KPMG DK’s pre-clearance termination of its cooperation agreement with KPMG international did not contribute to Ernst & Young (EY) acquiring control over KPMG DK, EY and KPMG DK did not infringe the gun-jumping prohibition. This marks a welcome line in the sand finally indicating a limitation on the gun-jumping prohibition for merging companies.
