Covington Competition

Contact:Email

On 9 December 2021, Advocate General (“AG”) Rantos delivered his Opinion in Servizio Elettrico Nazionale (Case C‑377/20), a request for a preliminary ruling from the Italian Consiglio di Stato. The case concerns the conduct of the ENEL Group (“ENEL”) in the context of the liberalisation of the electricity market in Italy. ENEL, the incumbent, allegedly used customer data obtained before liberalisation to make offers to customers in order to “transfer” them to its operator active on the liberalised market, seeking to prevent the large-scale departure of customers.
Continue Reading Advocate General Rantos Provides Sound Guidance for Non-Pricing Abuse of Dominance Analysis (Case C-377/20)

On 6 October 2021, a preliminary ruling of the Court of Justice of the European Union (“CJEU”) in Sumal confirmed that follow-on damages actions can be brought against subsidiaries of companies found to have infringed EU competition law. This note briefly analyzes the judgment and the implications thereof.
Continue Reading The CJEU’s Sumal Judgment: Parental Liability is “Going Down”

In May 2021, the Court of Justice of the European Union (“CJEU”) published the summary of an appeal filed by the International Skating Union (“ISU”) against a ruling from the General Court (“GC”) which found that ISU rules restricting athletes from taking part in rival events infringed Article 101 TFEU. At the same time, a Spanish judge referred questions to the CJEU for a preliminary ruling concerning the compatibility of UEFA and FIFA regulations with EU competition law, which forced UEFA, the governing body of European football, to suspend disciplinary proceedings against members of the recent European Super League (“ESL”) that have not yet abandoned the project (i.e., Juventus, Barcelona and Real Madrid). This note briefly analyzes how the CJEU’s ruling on the ISU case could frame the response to the reference from the Spanish court.
Continue Reading The potential implications of the CJEU’s ISU judgement on the European Super League: Football “on thin ice”

Introduction

The wide understanding of the notion of “undertaking” affords the European Commission (“Commission”) broad discretion when identifying the entities liable for competition law infringements, enabling it to attribute liability to all companies that constitute a single economic unit, such that a parent company can be liable for the wrongdoings of its subsidiary. The Commission also relies on the principle of economic continuity to establish liability when corporate groups are reconstructed.

With the increase of private competition law enforcement, the question arises whether individuals may rely on these concepts when establishing liability in private lawsuits. The recent Sumal and Skanska cases confirm that EU Courts are in favour of extending the doctrine of “undertaking” to private damages claims. In his opinion of 15 April 2021 in Sumal, Advocate General (“AG”) Pitruzzella  proposes that a national court can order a subsidiary to pay compensation for the harm caused by anticompetitive conduct of its parent company. In March, the CJEU decided, in Skanska, that the principle of economic continuity applies in the context of follow-on damages claims.
Continue Reading EU Courts extend the doctrine of “undertaking” to private claims for damages

On 25 March 2021, the Court of Justice of the European Union (“CJEU”) dismissed the appeals by Lundbeck, Merck KGaA (and Generics UK), Arrow, Alpharma (and Xellia) and Ranbaxy, against the General Court’s (“GC”) judgment upholding the European Commission’s (“Commission”) 2013 pay-for-delay infringement decision.

Background

The case concerns the antidepressant containing the active pharmaceutical ingredient (“API”) citalopram.  Lundbeck’s patents for the API and two processes to produce it were protected in a number of European countries until 2003 (“Lundbeck’s original patents”).  Over time, Lundbeck developed other processes for the production of citalopram, in respect of which it obtained various patents (“Lundbeck’s new process patents”).

In 2002, Lundbeck entered into settlement agreements concerning potential launches of generic versions of citalopram with Generics UK (at the time an indirect wholly-owned subsidiary of Merck KGaA), Alpharma, Arrow and Ranbaxy.  Under the agreements, Lundbeck made payments to these producers of generic citalopram (“Other Providers”) in various forms (e.g., direct payments, purchase of generic citalopram stock for destruction, and guaranteed profits in a distribution agreement).  In exchange, the Other Providers agreed to cease or refrain from selling generic citalopram in the EEA as a whole or in specific Member States.

In 2013, the Commission adopted an infringement Decision against Lundbeck and each of the Other Providers, concluding that the agreements were “by object” restrictions of competition.
Continue Reading The CJEU’s Lundbeck judgment

Competition law appears to be at an inflection point. Over the past year, authorities, policy makers, and commentators across the globe have debated whether current laws and enforcement approaches are appropriately calibrated or whether they should be changed, including to try to protect interests that go well beyond the consumer welfare standard that has been…
Continue Reading 2020 Competition Law Developments – Reviewing a Notable Year and Looking Ahead to 2021

Yesterday, the European Commission published its proposals for the Digital Markets Act (“DMA Proposal”) and Digital Services Act (“DSA Proposal”), proposing new regulation of “intermediary services” and “designated gatekeepers”. The proposals would impose new obligations on providers of digital services and augment enforcement powers.
Continue Reading Digital Markets Act Proposal

Covington’s Brexit Task Force is pleased to offer the next installment in a series of on-demand briefings focused on the impact of Brexit on business.

The CMA after the Brexit Transition Period

In this briefing, James Marshall and Thomas Reilly discuss the impact of Brexit on the future role of the UK CMA and highlight…
Continue Reading Brexit On-Demand Webinar – The CMA after the Brexit Transition Period

Changes Would Create New Exemption for Minority Acquisitions and Increase Filing Obligations for Certain Entities

Agencies Also Seek Public Comments that Could Lead to Additional Changes to the HSR Rules

The Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“DOJ”) (the “Agencies”) announced proposed changes to the premerger notification rules (“Rules”) promulgated under the Hart-Scott-Rodino (“HSR”) Act on September 21, 2020. Although the Agencies’ proposals are extensive, most significantly they would:

  1. create a new exemption for certain acquisitions that result in holding 10% or less of the voting securities of a target, so long as the acquirer and target do not “already have a competitively significant relationship;” and
  2. expand the definition of “person”, creating new filing obligations for certain entities, including many investment entities.

Continue Reading U.S. Antitrust Agencies Announce Proposed Changes to HSR Rules

The Enterprise Act 2002 (“EA02”) affords the CMA broad discretion in asserting jurisdiction over mergers that may affect a UK market. Under the EA02, a relevant merger situation (“RMS”) exists where (i) two or more enterprises cease to be distinct; and (ii) either the UK turnover of the target exceeds £70 million (the “turnover test”) or the parties supply or acquire at least 25% of a particular good or service in the UK (the “share of supply test”).

The first limb of the RMS test can be satisfied by the acquisition of de jure control, of de facto control (where it is able to control another company’s policy without holding a majority of the voting rights) or of material influence (where it can directly or indirectly materially influence policy without having a controlling interest ). The material influence test continues to be subject to significant debate.

The second limb of the RMS test aims to ensure that a transaction has sufficient nexus to the UK. The share of supply test is designed to enable the review of transactions which, while they do not trigger the turnover test, are of competitive significance in the UK. This share of supply test has been central to the CMA’s expansive assertion of jurisdiction in a number of recent cases. In Amazon/Deliveroo the CMA took an expansive approach to the notion of material influence. In Sabre/Farelogix the CMA adopted an expansive interpretation of what constitutes the supply of services in the UK, and it also took an expansive approach to the share of supply test in each of Roche/Spark and Google/Looker.Continue Reading The CMA’s approach to jurisdiction in recent merger cases