On 22 June 2022, the EU’s General Court (“GC”) fully dismissed thyssenkrupp’s appeal against the European Commission’s (“Commission”) decision to block its proposed joint venture (“JV”) with Tata Steel in 2019.

This is the first time that the GC has considered the prohibition of a “gap” case under the EU Merger Regulation (“EUMR”) since it annulled the Commission’s prohibition of CK Hutchison’s proposed acquisition of Telefónica UK (O2) in 2020 (“CK Hutchison”) (see our previous blog post here). A “gap” case is a merger in an oligopolistic market that does not result in the creation or strengthening of an individual or collective dominant position. Rather, it risks causing a “significant impediment to effective competition”.

This result may indicate a return to a more traditional approach by the GC as regards “gap” cases than that demonstrated in the CK Hutchison judgment. The judgment also provides helpful guidance on the interpretation of the EUMR and other legal instruments (such as the Market Definition Notice and the Notice on Remedies). The key findings are:

  • Standard of proof: In order to block a “gap” merger, the Commission must show with a sufficient degree of probability that the transaction significantly impedes effective competition in the internal market or in a substantial part of it.
  • SSNIP test: The Commission is not required to apply the SSNIP (small but significant and non-transitory increase in price) test when assessing substitutability between products — it is only one of the methods available to the Commission when defining the market.
  • Remedies: When assessing remedies, it is not necessary to demonstrate that the remedies remove the entire overlap between the merging parties or re-create fully the pre-merger structure in affected markets.
  • Requests for Information (“RFI”): There is no procedural error where the Commission fails to take additional steps (beyond sending systematic reminders) to ensure that recipients respond to an RFI.


Continue Reading EU General Court Upholds Tata Steel/thyssenkrupp JV Prohibition

On 30 June 2022, the Council of the EU (the “Council”) and the European Parliament (the “Parliament”) reached a much awaited agreement on the proposal of the European Commission (the “Commission”) for the Regulation on foreign subsidies distorting the internal market (the “FSR”) (see our alert on the proposal). This political agreement swiftly concludes the trilogue discussions initiated in the beginning of May this year, after the Council (see our blog post) and the Parliament (see our blog post) each adopted their own positions. The agreement has been approved by the Permanent Representatives Committee (“COREPER”) of the Council on 13 July and the Committee on International Trade of the European Parliament on 14 July.

The FSR grants substantial new powers to the Commission and “will help close the regulatory gap whereby subsidies granted by non-EU governments currently go largely unchecked”, according to remarks from Executive Vice-President of the Commission, Margrethe Vestager. It will be deeply transformative for M&A and public procurement in the EU.

The agreement on the FSR did not lead to any major changes in the proposal made by the Commission. The most notable points of discussion between the Parliament and Council and the outcome of this agreement are:

  • The thresholds above which companies are obliged to inform the Commission about their foreign subsidies remain unchanged compared to the Commission’s proposal;
  • The time period in which the Commission has to investigate foreign subsidies in large public procurement has been reduced. In the same way, the retroactive application of the FSR has been limited to foreign subsidies granted in the five years prior to the application of the regulation;
  • The Commission will issue guidelines on the existence of a distortion, the balancing test and its power to request notification of non-notifiable transactions, at the latest three years after the entry into force of the FSR; and
  • A commitment to a multilateral approach to foreign subsidies above the FSR and the possibility for the Commission to engage in a dialogue with third countries has been included.


Continue Reading The Council of the EU and the European Parliament agree on the Foreign Subsidies Regulation

On 30 May 2022, the European Union (“EU”) adopted the revised Regulation on guidelines for trans-European energy infrastructure (No. 2022/869) (the “TEN-E Regulation 2022”), which replaces the previous rules laid down in Regulation No. 347/2013 (the “TEN-E Regulation 2013”) that aimed to improve security of supply, market integration, competition and sustainability in the energy sector. The TEN-E Regulation 2022 seeks to better support the modernisation of Europe’s cross-border energy infrastructures and the EU Green Deal objectives.

The three most important things you need to know about the TEN-E Regulation 2022:

  • Projects may qualify as Projects of Common Interest (“PCI”) and be selected on an EU list if (i) they fall within the identified priority corridors and (ii) help achieve EU’s overall energy and climate policy objectives in terms of security of supply and decarbonisation. The TEN-E Regulation 2022 updates its priority corridors to address the EU Green Deal objectives, while extending their scope to include projects connecting the EU with third countries, namely Projects of Mutual Interest (“PMI”).
  • PCIs and PMIs on the EU list must be given priority status to ensure rapid administrative and judicial treatment.
  • PCIs and PMIs will be eligible for EU financial assistance. Member States will also be able to grant financial support subject to State aid rules.


Continue Reading The European Union adopted new rules for the Trans-European Networks for Energy

On 17 February 2021, the General Court of the European Union (“General Court”) in Cases T-259/20 and T-238/20 dismissed Ryanair’s challenges to pandemic aid packages introduced in France and Sweden in order to support the domestic airline sector. The judgments are the first ones where the General Court has decided on the legality of the State aid schemes adopted in response to the COVID-19 pandemic.
Continue Reading EU General Court dismisses first two challenges to State aid awarded to national airlines in response to the COVID-19 pandemic

On 17 June 2020, the European Commission (‘Commission’) published a White Paper “on levelling the playing field as regards foreign subsidies” which outlines a proposal for a series of new investigatory and enforcement tools, intended to identify and counteract the possible distortions of competition in the EU single market due to foreign subsidies. A public consultation ran until 23 September 2020, inviting stakeholders to provide their views on the options set out in the White Paper.
Continue Reading The European Commission Adopts a White Paper on Foreign Subsidies to Protect the EU Single Market

On 17 June 2020 the European Commission (“Commission”) published a White Paper on new enforcement powers regarding foreign subsidies. This initiative pursues two objectives, first it sets out a general policy approach for foreign subsidies, and second, it provides a number of proposals to address a perceived regulatory gap. More specifically, the White Paper suggests new tools to manage what the Commission regards as unfair competition and other distortions of competition within the internal market caused by foreign subsidies.

The White Paper proposes these new review powers of the Commission and/or other competent authorities in addition to already existing tools such as antitrust and merger control, State aid and FDI screening. As such, the Commission outlines a complementary toolbox aimed to facilitate transparency regarding foreign subsidies and maintain a level playing field within the EU internal market.
Continue Reading European Commission publishes White Paper on the Review of Foreign Subsidies – [New/More] Intervention Powers ahead?

The FDI space in Europe remains dynamic. Less than five months from the entering into force of the EU FDI Regulation, and just two months since the European Commission asked the Member States to both strengthen and “vigorously” implement the tools available to them and, where appropriate, introduce new FDI screening mechanisms –on which we reported in our previous alert –the past week manifested a number of legislative activities across Europe.

In this blog, we consider the changes proposed or made to laws in Germany, Hungary, Poland and Austria. Overall, we observe a further tightening of the legislative field, lowering the intervention thresholds / filing requirements, while increasing the sectors covered.

Besides the jurisdictions covered in the following, a new FDI law was also proposed in the Czech Republic in April and will be discussed and debated in the Czech Parliament in the coming weeks – watch this space for further updates.
Continue Reading Regulation of Foreign Direct Investment (“FDI”) gathers Pace across Europe – A Week of Change.

The European Commission has added to its call to Member States to act on foreign direct investment (“FDI”) by announcing that it is ready to support EU-level cooperation on FDI now. Spurred on by the COVID-19 crisis and the perceived vulnerability of key EU assets, the informal cooperation announced by the Commission will bring into effect early certain elements of the EU-level screening mechanism under the EU FDI Regulation that would otherwise have come into force in October 2020.

We consider what this announcement means and share some additional insights into the current approach of the Commission and Directorate-General Trade (“DG Trade”) to the subject of FDI based on a recent forum including senior officials.
Continue Reading European Commission Goes “Live” on FDI Coordination Six Months Early, Proposing Cooperation on an Informal and Voluntary Basis

In two recent webinars covering antitrust, mergers and state aid, DG COMP senior officials shared their views on how DG COMP is operating under the current COVID-19 crisis.

Antitrust: More Flexible Enforcement

Maria Jaspers, head of unit for antitrust case support and policy, gave the following key messages:

  • The absence of legal deadlines creates certain flexibility with regard to time-tables in pending investigations;
  • The crisis may have an influence on pending policy reviews (including the vertical and horizontal block exemption regulations);
  • Several actions have been put into place: these measures include the European Competition Network’s (the “ECN”) joint statement of 23 March 2020, indicating that the Commission (and the competition authorities of the Member States) will not actively intervene against necessary and temporary measures between businesses aimed to avoid a shortage of supply;
  • She pointed to the information on DG COMP’s website titled “Antitrust Rules and Coronavirus” providing dedicated guidance to businesses. Additionally, DG COMP has set up a dedicated mailbox that can be used to seek informal guidance on specific initiatives;
  • She recalled that, on 8 April 2020, the Commission published a “Temporary Framework for assessing antitrust issues related to business cooperation in response to situations of urgency stemming from the current COVID-19 outbreak” (the “Temporary Framework”). Read more on the Temporary Framework in this blogpost. Rainer Becker, head of unit in antitrust for pharma and health services added that DG COMP is vigilantly monitoring the markets to ensure that there are no breaches on the back of the crisis and that DG COMP will continue to progress opened proceedings, including by assessing complaints and market information. However, he indicated that competition rules may in certain circumstances be applied in a more flexible manner (read more on the flexible application of competition law rules here).


Continue Reading Competition Enforcement Under the COVID-19 Crisis: DG COMP Staff’s Views

On 16 January 2019, the European Court of Justice (“ECJ”) rejected the European Commission’s (“Commission”) appeal in Commission v. UPS. The judgment followed Advocate General Kokott’s Opinion of July 2018, and upholds the 2017 judgment of the General Court (“GC”) annulling on procedural grounds the Commission’s decision prohibiting the acquisition of TNT by UPS.

Continue Reading EU Court Confirms the Annulment of the European Commission’s Decision Prohibiting the UPS/TNT Transaction