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Daily EU Competition News 28 October 2014 MERGERS & ACQUISITIONS Official Journal 2014/C 381/02 Non-opposition to a notified concentration (Case M.7397 — CD&R/CHC Group) (1) 2 2014/C 381/03 2014/C 381/10 Non-opposition to a notified concentration (Case M.7351 — Henkel/Spotless Group) (1) Prior notification of a concentration (Case M.7404 — Aviva/BZ WBK/JVs) — Candidate case for simplified procedure (1) 2 2014/C 381/11 Prior notification of a concentration (Case M.7406 — Versalis/Lotte Chemical 17 Corporation/Lotte Versalis Elastomers) — Candidate case for simplified procedure (1) 15 Commission - Merger Cases October 28 oct 2014 M.7433 OTPP / PAMPLONA / CSC (document published) M.7431 MAPFRE / DL GERMANY / DL ITALY (document published) M.7387 BP / STATOIL FUEL AND RETAIL AVIATION (document published) M.7418 BOSCH / ZF LENKSYSTEME (public version of decision published) M.7406 VERSALIS / LOTTE CHEMICAL CORPORATION / LOTTE VERSALIS ELASTOMERS (document published) M.7404 AVIVA / BZ WBK / JVs (document published) 27 oct 2014 M.7423 VINCI / IMTECH ICT (public version of decision published) M.7389 AEGON SPAIN / SANTANDER TOTTA SEGUROS / AEGON SANTANDER VIDA / AEGON SANTANDER NÃO VIDA (Notification) M.7387 BP / STATOIL FUEL AND RETAIL AVIATION (Notification) M.7333 ALITALIA / ETIHAD (Changed deadline - Commitments submitted) M.7292 DEMB / MONDELEZ / CHARGER OPCO (Notification) M.7252 HOLCIM / LAFARGE (Changed deadline - Commitments submitted) M.7252 HOLCIM / LAFARGE (Notification) Commission Mergers: Commission approves acquisition of US producer of digital cinema solutions Doremi by rival Dolby The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Doremi by Dolby, both of the United States. The Commission's investigation confirmed that, despite the overlap between the two companies' activities in the production of digital cinema servers (DCS) worldwide and in the European Economic Area (EEA), the proposed transaction would not lead to any anticompetitive effects because of the presence of alternative suppliers, the fast-moving nature of the market and the ease of switching for customers. The Commission's investigation also confirmed the absence of any anti-competitive conglomerate effects resulting from the combination of the parties' activities in the production of DCS and digital cinema audio processors Mergers: Commission approves acquisition of Total's CCP Composite Business by PCCR USA in chemical sector The European Commission has cleared under the EU Merger Regulation the acquisition of Total's CCP Composite Business of Ireland by PCCR USA, Inc. ('PCCR') of the US. PCCR, a subsidiary of Polynt Group, is a chemical company producing resins for the coating and composite industry in the US and Canada. Total's CCP Composite Business consists of a group of companies active worldwide in the production and the sale of unsaturated polyester resins and gel coats. The proposed transaction creates overlaps only on the market for the production of unsaturated polyester resins (UPR), where both companies are active. The Commission concluded that the proposed acquisition would not raise competition concerns given the moderate presence of both CCP Composite Business and PCCR on the UPR market, as well as the fact that other strong players continue to supply the UPR market and to exercise competitive constraints on the merged entity. The transaction was examined under the normal merger review procedure. More information will be available on the competition website, in the Commission's public case register under the case number M.7359 . Various “Dutch Competition Authority for Consumers and Markets: ACM maintains price commitments given for 2009 hospital merger approval” The Netherlands Authority for Consumers and Markets keeps in place the price ceiling that it imposed in 2009 on treatments performed in the Admiraal De Ruyter Hospital (ADRZ) in the southern Dutch province of Zeeland. In 2009, ACM cleared the merger between several hospitals in Zeeland after the merger hospital ADRZ had promised it would honor a price ceiling. The price ceiling is determined by the average price of treatments of all hospitals in the Netherlands. ACM examined whether the market conditions since 2009 have changed so much that the then identified near-monopoly position of ADRZ has diminished, and that ADRZ is once again stimulated enough to make a competitive offer to health insurers. ACM has come to the conclusion that this is not the case. https://www.acm.nl/en/publications/publication/13452/ACM-keeps-in-place-the-price-ceilingimposed-on-southern-Dutch-hospital/ “Holcim and Lafarge Formally Notify Proposed Merger with the European Commission” Lafarge and Holcim have formally notified the European Commission of their proposed merger in order to obtain regulatory approval. With this notification, Holcim and Lafarge have now completed all necessary notifications with regulatory authorities worldwide. During the constructive pre-notification discussions which Lafarge and Holcim have had with the European Commission, the list of proposed assets for divestment in Europe has been slightly amended. The commission is expected to set an initial deadline of December 1 to decide on the transaction. https://www.euronext.com/content/holcim-and-lafarge-formally-notify-proposed-mergereuropean-commission “Etihad and Alitalia - EU extends deadline” Etihad Airways and Alitalia have offered the EU’s antitrust regulator remedies to offset concerns about their plan to merge. The commitments have pushed the European Commission’s decision deadline back by 10 working days, to November 17 from November 3. The commission’s case file number is M.7333. (As reported in the press) ANTITRUST Various “Latvian competition authority: Latvian court upholds dominance-abuse fine against retailer RIMI Latvia” The Latvian Supreme Court upheld a dominance-abuse fine imposed on retailer RIMI Latvia for illegal rebates granted to dairy producer Valmieras Piens. The court declined to rule on an appeal brought by RIMI. (Press release in its original language on: http://www.kp.gov.lv/lv/aktualitates/347augstaka-tiesa-atstaj-speka-kp-lemumu-sodit-mazumtirgotaju-par-atlaizu-uzspiesanu-razotajam ) “FX Traders’ Facebook chats said to be sought in EU Probe” Foreign-exchange traders’ messages on Facebook Inc. are being sought by European Union antitrust regulators as they expand a probe into alleged collusion between banks beyond work e-mails and instant messages, two people with knowledge of the case said. Banks have been asked to supply all communications between traders, including social media, said three people who didn’t want to be named because the EU’s requests are private. The EU suspects that some e-mails and online messages have been erased to destroy signs that traders were illegally swapping information, one of the people said. “It’s a very important case because the forex markets every day exchange billions and billions of euros,” EU antitrust chief Joaquin Almunia told Bloomberg TV last month. Regulators have got “some contributions from people that warned us of the possibility of collusion,” he said. http://www.businessweek.com/news/2014-10-27/fx-traders-facebook-chats-said-to-besought-in-eu-probe “Provision for antitrust fine takes TNT Express to $60 million loss” TNT Express suffered its first operating loss in five quarters due to a provision for a potential antitrust fine and restructuring costs. There was a net loss of 55 million euros against six million euros profit last time.The company set aside 50 million euros to settle an investigation by French trust busters into alleged anti-competitive behavior that has also targeted rivals including FedEx and the U.K.’s Royal Mail. Reports also say that TNT’s profits were impacted by its decision to abandon plans to acquire UPS early last year, a $6.6 billion deal that was met with significant opposition from the European Commission. http://www.joc.com/air-cargo/express-cargo/provision-anti-trust-fine-takes-tntexpress-60-million-loss_20141027.html Antitrust Letter N°16 The "Antitrust Letter" is a monthly series of articles written in french and english by founding member Thibault Schrepel. Each month’s release will analyze major changes within United States antitrust law and legal precedents, whilst contrasting and occasionally drawing parallels to European antitrust legal issues. . (Read in full text here: https://leconcurrentialiste.files.wordpress.com/2014/10/antitrustletter-16.pdf ) Table of contents: September: the month of pay-for-delay cases — Compliance program ≠ fine reduction — On the application of Chinese antitrust law to foreign companies From Chillin'Competition - On the application of competition law to State measures and on the apparent inapplicability of Art. 101(3). (ECJ’s Judgment in Joined Cases C-184/13 to C-187/13, C-194/13, C-195/13 and C-208/13) Over the weekend I was able to catch up with some readings (notably on two-sided markets in anticipation of this conference), but also on recent case-law that I hadn’t yet had the chance to read. Thanks to this exercise I was able to become aware, among other things, of the content of an ECJ Judgment of 4 September 2014 on which I have read no comment whatsoever. This may be understandable because the case only deals with interesting legal issues, and not with high-stakes matters where the law is seemingly absent, which are lately the only ones grabbing commentators’ attention… The Judgment at issue – Anonima Petroli Italiana (“API”)- is a preliminary ruling responding to questions posed by an Italian Court in relation to an Italian law pursuant to which the price of road haulage services for hire and reward cannot be lower than minimum operating costs, which are in turn fixed by a body composed mainly of representatives of the economic operators concerned. The Italian Court asked, in essence, whether any such legislation was compatible with Article 101 read in conjunction with Article 4(3) TEU as well as with the Treaty provisions on free movement of services. (Read the full story fron: Chillin'Competition ) STATE AID Commission State aid: Commission approves creation of Portuguese development financial institution The European Commission has concluded that Portuguese plans for setting up a financial institution (the Instituição Financeira de Desenvolvimento, IFD), were in line with EU state aid rules. The IFD, funded by the Portuguese state and European Structural and Investment Funds (ESIF), will manage holding or specialised funds and provide SMEs with access to funding on a co-investment basis with private investors. In particular, the Commission found that the measure would address market failures that hamper SMEs access to finance, without unduly distorting competition in the Single Market. European Parliament - Recently published: Answer - Decision on State aid for Hinkley Point C nuclear power station - P-007324/2014 28 October 2014, Commission response - See question(s) : P-007324/2014 VARIOUS UK – “Speech by David Currie on CMA's focus on devolved nations” On 27 October 2014, the Competition and Markets Authority published a speech by David Currie, Chairman of the CMA, on the devolved nations as a key focus for the CMA. He explained that the CMA's Devolved Nations Team will ensure that the CMA is able to gather insight and understanding of the particular circumstances of the devolved nations and to promote and explain its work across the UK. He noted that the CMA is strengthening its capacity to respond effectively to devolution and to establish and build local relations. Mr Currie explained that the CMA currently has a busy workload, including 20 live competition enforcement and consumer cases, 30 merger cases and 2 ongoing phase 2 market investigations. He noted some recent highlights of the CMA's work, including its proposals to increase price comparison between payday lenders. Source: Speech given by CMA Chairman, David Currie, at the CMA board reception in Wales “Former BayernLB CEO gets suspended sentence for bribery” A German court on Monday handed former BayernLB Chief Executive Werner Schmidt a suspended prison sentence of 18 months for bribing an Austrian politician when acquiring Hypo Alpe Adria. The sentence is one of only a few cases where a German bank manager has faced punishment for actions that led to the near-failure of a business during the financial crisis. Schmidt, who stepped down in 2008, has admitted to bribing the now-deceased head of government of Austria's Carinthia state, Joerg Haider, during negotiations to buy the bank. The sponsorship was requested by Jorg Haider, then the governor of Carinthia, an Austrian province that partly owned Hypo Alpe, according to the Local, an Austrian media outlet. Haider had to agree to the bank’s acquisition in order for the deal to be approved. The court dismissed separate allegations of breach of trust against Schmidt. The hit that BayernLB took from the Hypo acquisition is still the subject of discussions in other courtrooms. http://www.reuters.com/article/2014/10/27/bayernlb-hldg-trialidUSL5N0SM2CV20141027 Commission - Commission welcomes improved situation for clients of car rental companies Following constructive dialogue between the European Commission services and three car rental companies (EUROPCAR, HERTZ and AVIS), they have reaffirmed their commitment to respect the principle of non-discrimination in the EU Single Market and provided detailed explanations for their pricing policies. This follows a letter sent to international car rental companies in August, asking them to end practices preventing consumers from accessing best available prices on the basis of their country of residence ( IP/14/917 ). After the press release of 8 August 2014, EUROPCAR, HERTZ and AVIS engaged in detailed and constructive discussions with the European Commission. They stressed their commitment to be fully compliant with the law. The Commission accepted that source market pricing could be justified by local market situations (seasonality, different competition conditions in different countries), provided that consumers were not prevented from making use of the best available rate. Consumers should have the right to start and finish car rental bookings on any national website of the companies within the EU. European Parliament - Recently published: Written question - The impact of the licencing programme of Koninklijke Philip N.V. on competition in the internal market - E-007795/2014 27 October 2014, Question for written answer to the Commission - E-007795/2014 - Rule 130 - Róża Gräfin von Thun und Hohenstein (PPE) New post on Competition Bulletin - Competition law and public services: insights from the OFT report into higher education Recent public sector reforms have relied on choice and competition to increase the quality and quantity of service provision, whilst also controlling cost, through a programme known as Open Public Services. The use of choice and competition gives rise to public service markets, and ensuring that these markets function effectively is one of the Competition and Markets Authority’s declared objectives. Higher education constitutes one of the larger public service markets, and to understand how the market for undergraduate education in England functions, in October 2013, the OFT launched a Call For Information. Amongst other things, the OFT wished to consider whether it was plausible for universities to have arrived at a uniform fee for all their undergraduate courses without colluding, and whether the way prospective undergraduates apply for university places could harm competition between institutions, to the detriment of students. The OFT’s higher education report, published in March 2014, provides useful insights into the role of competition law in public service markets and of the challenges of apply competition law in public service markets. (Read to full story from Competition Bulletin: http://competitionbulletin.com/2014/10/27/competition-law-andpublic-services-insights-from-the-oft-report-into-higher-education/ Today’s events: - antitrustitalia “Antitrust Lunch” – Brussels - Nicholas Banasevic — Head of Unit in unit C3 of DG Competition dealing with Antitrust — will give a presentation in (in English) on: “The interface between competition and IP — when can injunctions based on standard-essential patents be anticompetitive?” http://www.antitrustitalia.it/ - Antitrust in Emerging Markets – Brussels - Competition law consultancy RBB Economics, together with Concurrences Journal and Norton Rose Fulbright, is organising this afternoon conference on Antitrust in Emerging Markets. The panel discussions will focus on merger review, cartels and restrictive agreements and abuse of dominance. https://www.eventbrite.com/e/antitrust-inemerging-markets-tickets-12691345155 Articles recently published from Antitrust & Competition Policy Blog: - Market Competition in Transition Economies: A Literature Review Klaus S. Friesenbichler (WIFO), Michael Boheim (WIFO), Daphne Channa Laster provide Market Competition in Transition Economies: A Literature Review. ABSTRACT: This paper provides a survey of the effects of market competition in the transition economies of Eastern Europe and Central Asia. The pivotal element of the transition was inter-firm competition, which replaced economic planning as the method to identify demand. Pro-competitive policies that facilitated the transition are discussed, including international trade, attracting foreign direct investment and firm entry. Research topics with respect to competition changed as the transition advanced. The focus shifted from churn and macroeconomic shock-management in the initial phases toward firm entry, privatisation and restructuring of incumbents. In the later phases of transition, differentials in aggregate economic performance became obvious, pointing at institutional differences and their interplay with transitions. These are equally reflected by the degree of competition of the business environment. Also the methods changed with the evolution of the research agenda. Early case studies were displaced by large-scale, cross-country econometric studies as survey data became increasingly available. http://www.wifo.ac.at/jart/prj3/wifo/main.jart?contentid=1298017551022&publikation_id=47443&detail-view=yes - Supplier Fixed Costs and Retail Market Monopolization Stephane Caprice, Toulouse School of Economics, Vanessa von Schlippenbach, DIW and Christian Wey, DICE theorize on Supplier Fixed Costs and Retail Market Monopolization. ABSTRACT: Considering a vertical structure with perfectly competitive upstream firms that deliver a homogenous good to a differentiated retail duopoly, we show that upstream fixed costs may help to monopolize the downstream market. We find that downstream prices increase in upstream firms' fixed costs when both intra- and interbrand competition exist. Our findings contradict the common wisdom that fixed costs do not affect market outcomes. http://www.diw.de/documents/publikationen/73/diw_01.c.480930.de/dp1408.pdf FURTHER INFORMATION Carine Gaudry [email protected] If you have any questions/comments or would like to add colleagues to the distribution list, please contact Carine Gaudry ([email protected] or + 32 2 239 25 40). Thank you. All issues are posted on Outlook - Public folders - Brussels office