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.

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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.

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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.

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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.

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

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

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).

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German-Austrian draft Guidance on transaction value thresholds for pre-merger notification

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).

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

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

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

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.

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