Competition Law Update | July 2017

Written on 17 Jul 2017

With one outstanding exception, this month has, unusually, been a relatively quiet one for Margrethe Vestager and the European Commission on the competition enforcement front. The exception, of course, was the astonishing €2.42 billion fine levied on Google for abusing its dominant position as a search engine by giving an unfair advantage to another Google product.

While the Commission may have been somewhat distracted by Google, there has been plenty of enforcement activity by the national competition authorities across Europe:

  • In the UK, the Law Society (the independent professional body for Solicitors in England and Wales) was found to have abused its dominant position in the legal training market.
  • The Italian Antitrust Authority has continued to indulge its interest in potentially anti-competitive behaviours carried out by digital businesses. In particular, the IAA highlighted concerns with Big Data, privacy and e-commerce, but also acknowledged that Big Data could have a role in tackling anti-competitive behaviours.
  • A series of decisions in France, and in the European Court of Human Rights, involving some large electronics manufacturers has highlighted the importance of involving lawyers early on in the event of a dawn raid.
  • Following the transposition of the EU Damages Directive, Germany and Austria have introduced new merger control thresholds based on transaction value, to avoid situations where large transactions are not examinable by competition authorities because of the low domestic turnover of the parties involved.
  • The final update in our series on the implementation of the Damages Directive has now been published, looking at Spain, Belgium. Austria, Hungary, Poland, Romania and Estonia have also now implemented the Directive, though a significant number of Member States are yet to do so.
  • Recent decisions, policy announcements and external agreements from the Commission have made it clear that State aid rules will continue to be enforced to ensure a level playing field not only within the EU but also beyond.

Google | lessons for doing business in Europe

On 27 June 2017, the European Commission announced that it had fined Google €2.42 billion for unlawful abuse of dominance, contrary to EU antitrust law.

The Commission found that Google had abused its dominance in markets for general internet searching, by leveraging its position to give an illegal advantage to its comparison shopping service over and above competing services.

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UK | Law Society abused its dominant position

At the end of May, the Competition Appeal Tribunal handed down its judgement against the Law Society, in a claim brought by Socrates Training Limited. It found that, from 2015 onwards, the Law Society had abused its dominant position in the legal training market by requiring all firms who wanted to obtain the “Conveyancing Quality Scheme” accreditation provided by the Law Society to purchase their anti-money laundering and mortgage fraud training from them.

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Italy | Italian Antitrust Authority renews interest in digital business

The Italian Antitrust Authority has launched an inquiry into the effect of Big Data in the digital economy, and whether this can have an effect on the fair operation of markets. Giovani Pitruzzella, the head of the IAA has also announced that the authority will examine whether breaches of privacy law can also lead to breaches of competition law. Finally, the IAA has continued to examine the effect of vertical agreements in e-commerce, finding against Cadel Limited due to the restrictions it had placed on its online distributors.

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France | Dawn raids

A number of decisions in France and in the European Court of Human Rights have highlighted the importance of contacting external lawyers as soon as possible after a dawn raid begins. Whether it is to assess the validity of the search order, or to protect the confidentiality or privilege of documents, the cases make it clear that legal advice from the start is key, and that the ability to obtain legal advice is a fundamental right of parties subject to such a raid.

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Germany and Austria | New merger control thresholds

Following the transposition of the EU Damages Directive (for our earlier article on the Directive’s implementation in Germany, see here), Germany and Austria have introduced new merger control thresholds. The new thresholds are based on transaction value, rather than domestic turnover. These are in addition to previous rules, and will therefore broaden the scope of transactions that authorities in Germany and Austria can investigate.

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Damages Directive implementation

The EU Damages Directive has now been implemented in Spain and Belgium. In Spain, despite the late implementation, the Directive will not have retroactive effect. In Belgium, the Directive has introduced a new penalty for parties and their representatives if they fail to comply with enhanced requirements to disclose documents – up to € 10m. Austria, Hungary, Poland, Romania and Estonia have also now implemented the Directive. Bulgaria, Croatia, the Czech Republic, Cyprus, Greece, Latvia, Malta and Portugal are yet to do so.

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European Commission and State aid

The European Commission has continued to crack down on abuses of EU State aid rules. In its recently published report, the Commission discusses the steps it has taken in curbing selective tax advantages (for example, ordering Apple to repay €13 bn of illegal state aid to Ireland). It has also opened up an investigation into the public financing of a Jaguar Land Rover Plant in Slovakia, and announced that the Commission has entered into discussions with China on State aid.

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