On Episode 20 of Covington’s Inside Privacy Audiocast, Dan Cooper, Co-Chair of Covington’s Data Privacy and Cyber Security practice, and Christian Ahlborn, Partner in Covington’s Competition practice, discuss the recently enacted EU Digital Markets Act (DMA) in the first part of our “Competition and Privacy” mini series.
For more information on the DMA
European Union
EU General Court Upholds Tata Steel/thyssenkrupp JV Prohibition
By Johan Ysewyn & Sophie Albrighton on
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
The Council of the EU and the European Parliament agree on the Foreign Subsidies Regulation
By Johan Ysewyn & Carole Maczkovics on
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.
European Commission Adopts Measures Aimed at Mitigating the Effects of COVID-19 in the Agri-Food Sector
By Johan Ysewyn & Rolf Ali on
In response to the ongoing COVID-19 pandemic, the European Commission (“EC”) is taking steps to stabilise the most affected sectors of the economy. As part of its efforts, the EC has announced its support for the agricultural and food sectors which are severely affected by the pandemic. This includes an exceptional derogation from the EU competition rules for certain sub-sectors.
Continue Reading European Commission Adopts Measures Aimed at Mitigating the Effects of COVID-19 in the Agri-Food Sector
EU Court Confirms the Annulment of the European Commission’s Decision Prohibiting the UPS/TNT Transaction
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
The UK Government Issues ‘No-deal’ Competition and Merger Guidance
By Kevin Coates on
The UK Government published its highly-anticipated technical guidance on merger review and anti-competitive activity on 13 September 2018 which will apply in the case of a ‘no-deal’ Brexit (the ‘Guidance’). Although brief, it provides market players with some form of practical advice and insights on what to expect, how cases are likely to be divided between the EU and UK regimes, how UK competition law will develop, and suggests in what ways post-Brexit competition damages actions in the UK Courts may change. This Guidance follows on from the previously released ‘no-deal’ state aid guidance – as was covered in our previous Covington alert – forming part of a larger suite of ‘no-deal’ Brexit guidance papers released by the Government in recent weeks.
The Guidance provides several key pieces of practical advice for businesses regarding different types of competition law processes in the wake of a ‘no-deal’ Brexit.
Continue Reading The UK Government Issues ‘No-deal’ Competition and Merger Guidance
Compliance Plus? Proposed fine reductions for audited, strengthened compliance programs
By Kevin Coates on
Posted in Competition Law, Competition Law in Europe
Compliance, and in particular competition compliance, remains at the top of in-house counsel’s agenda. In particular, compliance is fundamental to reducing competition law infringements – “prevention is better than cure” – but in-house counsel often face difficulties in getting the appropriate level of support and budget for effective competition law compliance.
We have recently published an article which puts forward a policy proposal to the European Commission (“Commission”) that would not only support companies in their competition compliance efforts, but also the Commission in its enforcement of EU cartel rules.
Continue Reading Compliance Plus? Proposed fine reductions for audited, strengthened compliance programs
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”).
Continue Reading The European Parliament publishes a study on financial technology and competition law
Advanced Competition Law Conference – Joint Presentation on Cartel Enforcement with Covington’s Johan Ysewyn and DG Competition’s Maria Jaspers
By Covington Competition on
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
German Federal Supreme Court confirms successor liability for coffee roasters in spite of corporate restructuring
By Covington Competition on
Early this month, the German Federal Supreme Court (BGH) published its judgment in the appeal filed by Melitta Europa GmbH & Co. (Melitta Europa) against the 2014 judgment of the Düsseldorf Higher Regional Court (OLG). The OLG confirmed a 55 million euro fine imposed in 2009 by the German Federal Cartel Office on Melitta Kaffee, finding that, economically, Melitta Europa was Melitta Kaffee’s legal successor and, as such, was liable to pay the fine.