Jumping the gun: some clarification from the Court of Justice

By Johan Ysewyn, Andrea Zulli and Geoffrey Kalantari on June 11, 2018 Posted in Competition Law, Competition Law in Europe

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.

Advanced Competition Law Conference – Joint Presentation on Cartel Enforcement with Covington’s Johan Ysewyn and DG Competition’s Maria Jaspers

By Siobhan L.M. Kahmann on May 25, 2018 Posted in Competition Law, Competition Law in Europe, Enforcement, Technology

On 15 May 2018, Johan Ysewyn and Maria Jaspers (DG COMP) presented on recent major developments in the area of EU cartel enforcement at the Advanced Competition Law Conference in London.

Their annual dual-presentation covered the traditional three pillars of enforcement, policy and court review. The topics covered in this latest instalment included:

A review of recent investigations and decisions at EU and national level;
The impact of the ECN+ proposals on cartel enforcement;
The Commission’s anonymous whistle-blower tool;
The emergence of algorithms and their potential implications on cartels;
The presumption of innocence after ICAP and the judgment’s impact on staggered hybrids; and
A review of the case-law of the Courts.

Covington Competition blog readers can access the official presentation slides: Advanced Comp Law_EU Cartel Enforcement (May 17- May 18)_final

Higher Fines for Gun Jumping in Mergers – The European Commission’s Continued Emphasis on Procedural Merger Compliance

By Johan Ysewyn, Elaine Whiteford and Siobhan L.M. Kahmann on May 23, 2018 Posted in Competition Law in Europe

Last month’s Commission decision to impose a fine of €124.5 million on Altice for gun jumping is a stark reminder of the need to establish processes to ensure against conduct that can be characterized by the merger control authorities as violating the “hold-separate” obligation of the EU Merger Regulation (“EUMR”). That obligation prohibits parties to transactions that are subject to the EUMR from prematurely coordinating their activities or receiving the benefits of ownership—i.e., “jumping the gun.” (Altice has announced that it will appeal the Commission’s decision).

German-Austrian draft Guidance on transaction value thresholds for pre-merger notification

By Kim-Simone Janutta on May 18, 2018 Posted in Competition Law, Uncategorized

On 14 May 2018, Germany’s and Austria’s competition authorities published a draft guidance paper on the transaction value-based merger control thresholds which had been introduced last year. Under these new thresholds, a transaction has to be notified if the value of the consideration exceeds EUR 400 million in Germany / EUR 200 million in Austria, and the target has a significant domestic activity. The rule was designed to catch mergers that have a substantial impact on competition but do not meet the classic turnover thresholds. It may affect in particular start-ups, the digital sector where undertakings offer free – but highly successful – services to their users, or R&D-related transactions (e.g. a pharmaceutical company acquiring a still small market player with a promising pipeline product).

Covington Artificial Intelligence Update: European Commission Publishes Communication on Artificial Intelligence for Europe

By Laura Corbett and Miranda Cole on May 7, 2018 Posted in Artificial Intelligence (AI), Competition Law, Competition Law in Europe, Digital, Privacy & Data Security

On April 25, 2018, the European Commission (EC) published its “Artificial Intelligence for Europe” communication (the Communication), in which it sets out a roadmap for its AI initiatives. Having acknowledged the crucial need for a boost of AI in the EU, the EC commits to supporting investment, (re)considering legislation and soft law initiatives, and coordinating Member States’ efforts. This blog post highlights some of the EC’s initiatives. Continue Reading

Covington Artificial Intelligence Update: House of Lords Select Committee publishes report on the future of AI in the UK

By Laura Corbett, Franka Felsner and Miranda Cole on May 1, 2018 Posted in Artificial Intelligence (AI), Competition Law, Digital, Privacy & Data Security

Reflecting evidence from 280 witnesses from the government, academia and industry, and nine months of investigation, the UK House of Lords Select Committee on Artificial Intelligence published its report “AI in the UK: ready, willing and able?” on April 16, 2018 (the Report). The Report considers the future of AI in the UK, from perceived opportunities to risks and challenges. In addition to scoping the legal and regulatory landscape, the Report considers the role of AI in a social and economic context, and proposes a set of ethical guidelines. This blog post sets out those ethical guidelines and summarises some of the key features of the Report. Continue Reading

EU Court’s Analysis of “Competitive Disadvantage” in Rare Price Discrimination Case

By Jennifer Boudet, Miranda Cole and Jérôme de Ponsay on April 23, 2018 Posted in Abuse, Competition Law, Discrimination, Dominance

On 19 April 2018, the Court of Justice of the EU (CJEU) issued its judgment in MEO vs Autoridade da Concorrência, providing guidance as to what amounts to “competitive disadvantage”, an important element required to show abusive price discrimination under Article 102 of the Treaty on the Functioning of the EU (TFEU). The CJEU found that there is no need for proof of “actual, quantifiable deterioration in the competitive situation” of the customer, if an analysis of the relevant circumstances demonstrates that discrimination distorts competition.

The UK Government Seeks Views on the Regulation of Digital Markets for a Post-Brexit Great Britain

By Siobhan L.M. Kahmann and Kevin Coates on April 19, 2018 Posted in Artificial Intelligence (AI), Competition Law, Competition Law in Europe, Digital, E-Commerce, Internet of Things (IoT), Retail

The UK Government’s Department for Business, Energy and Industrial Strategy has just released a 75-page Green Paper on Modernising Consumer Markets, setting out the Government’s main priorities for the digital economy in a post-Brexit Britain. The Green Paper reflects on the current state of consumer markets and regulation, and lays down the key challenges and opportunities which will be the focus of the UK’s regulatory and competitive framework going forward. This poses consultation questions to stakeholders on hot topics in digital markets, including questions on: the adequacy of the current competition rules and privacy protections, supporting consumer-friendly innovation, use of and access to big data, whether personalised pricing should be regulated, sufficiently protecting customers without stifling innovation, and alternative dispute resolution solutions.

It also includes various proposals to ensure new technology and data are used to benefit customers, strengthen national enforcement of consumer rights, modernise the approach taken by regulators, and improve consumers’ access to alternative dispute resolution services. In this Covington blog post, we explore some of the key messages and questions posed by the Green Paper.

German Bundeskartellamt’s Decision against Online Sales Restrictions by ASICS Ultimately Confirmed

By Jennifer Boudet and Kim-Simone Janutta on April 18, 2018 Posted in Brand, Competition Law in Europe, Digital, E-Commerce, Retail

In its decision of 12 December 2017, the German Federal Supreme Court (Bundesgerichtshof – BGH) dismissed ASICS’ application to appeal the 2017 judgment of the Düsseldorf Higher Regional Court (OLG) on alleged online sales restrictions. The BGH confirmed that prohibiting the use of price comparison websites by retailers constitutes a hardcore restriction under EU competition law.

In 2015, the Federal Cartel Office (Bundeskartellamt – BKartA) found that ASICS’ selective ‘retail system 1.0’ (the system was launched as “Vertriebssystem 1.0”) contained hardcore restrictions under Article 4(c) of the Vertical Block Exemption Regulation (VBER). By introducing retail system 1.0, ASICS had allegedly requested approximately 2,000 retailers to refrain from advertising ASICS’ products via price comparison websites and prohibited the use of its brand names on third party websites redirecting customers to retailers’ online shops.

Update: EDEKA “Wedding Rebates” – German Federal Supreme Court Answers Key Questions on Abuse of Relative Market Power

By Kim-Simone Janutta and Siobhan L.M. Kahmann on March 19, 2018 Posted in Competition Law, Retail, Supply Chain

Germany’s Federal Supreme Court (Bundesgerichtshof – BGH) has now published its full judgment in EDEKA – wedding rebates (case KVR 3/17) on allegedly anti-competitive requests for preferential rebates and conditions by food retailers.

For background on the preceding decisions of the Federal Cartel Office (Bundeskartellamt – BKartA) and Higher Regional Court of Düsseldorf (OLG Düsseldorf) please see our previous post.

The BGH’s judgment clarifies a number of issues regarding the application of Germany’s rules on abuse of relative market power.

The concept of relative market power does not exist at EU level which covers only abuse of market power by dominant undertakings. In Germany, relative market power exists in vertical relationships (i.e. supplier/customer relationship) if one undertaking is “dependent” upon the other. An undertaking is dependent if it has no possible and practicable alternatives available to switch business partners.