Competition law update | March 2017

Published on 28th Mar 2017

February proved to be another active month for competition authorities across Europe. There were a number of high profile deals in the headlines, and the European Commission was once again vocal on some key competition issues, confirming that competition is still high on the EU’s overall agenda for the European economy.

Perhaps no deal was more striking than Tesco’s acquisition of Booker, which saw Britain’s largest supermarket purchase Britain’s largest food wholesaler –  that is, if it gets competition clearance. It seems likely that this will be subject to some serious scrutiny from the competition watchdog.

Margerethe Vestager, the European Commissioner for Competition, confirmed that state aid and tax treatment are still high on the Commission’s agenda, due to the possibilities of abusing the state aid regime through tax decisions which are, on their face, perfectly legal. On the other hand, the Commission also found that an investment by the German Federal Government into electric car charging infrastructure would not breach those same state aid rule – a decision that will lead to €300m being invested in that infrastructure.

Ms Vestager continued her busy month by confirming that the Commission sees a positive role for competition regulation in financial services, stating that through proper competition, Europe can enjoy a strong, stable and growing financial services sector.

In Italy, the highest administrative court (the Council of State) overturned the decision of the Italian Antitrust Authority, holding that there was insufficient evidence to show that two major domestic insurance companies had been rigging bids for public transport insurance contracts.

Germany, France and the UK all implemented the Damages Directive, which seeks to harmonise the rights of cartel victims seeking damages –it seems that most EU  jurisdictions have now brought the new rules into force.

Finally, the French Competition Authority released its intermediary assessment into’s competition commitments with respect to rate parity clauses. Because of a downturn in the French tourism industry, the FCA admitted that there was not as much data available as it would have liked, but from what was available, there was no evidence that allowing price variation of hotel rooms led to any less competition.

Competition as a means of supporting growth in FS sector

A recent speech by European Commissioner for Competition Margrethe Vestager illustrates the Commission’s commitment to ensure a strong and stable banking market. After looking back on the development of competition in the baking market since 2007, she recognised the importance of the FS sector developing through enhanced competition.

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Tesco’s acquisition of Booker could face serious scrutiny from competition watchdog

There are three key issues which could affect Tesco’s acquisition of Booker, relating to: the head-to-head issue, as Booker owns several competitors of Tesco; the vertical supply chain issue, as Booker is an important supplier to grocery stores; and the buyer power issue, as producers may oppose the deal.

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Vestager speech confirms Commission’s approach to State aid and special tax treatment

State aid and tax treatment are high on the European Commission’s agenda. Vestager recognises that tax rulings, despite being in principle perfectly legal, can lead to illegal State aid. Decisions that special tax treatment does constitute illegal State aid can thus help the single market to work more effectively.

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French Competition Authority releases intermediary assessment on parity clauses

On 9 February 2017, the FCA released its awaited intermediary assessment of the commitments submitted in April 2015 by leading online travel agency (OTA) with respect to competition issues caused by parity clauses contained in contracts with hoteliers.

The FCA stated that despite a downturn in the French tourism industry, the exercise was nonetheless useful. In particular, the FCA found no evidence that allowing price variation in relation to hotel prices led to increased pressure on OTAs.

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Electric vehicle infrastructure in Germany boosted by public investment

The European Commission has granted permission, under EU state aid rules, for the roll-out of a network of infrastructure for charging electric vehicles in Germany. This will allow the German federal government to invest €300 million in the project over the next four years.

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Italian Council of State annuls decision of the Italian Antitrust Authority

On 7 March 2017, the Council of State finally overturned the Italian Antitrust Authority’s decision that Generali Italia S.p.A. and UnipolSai S.p.A. had entered into anti-competitive agreements.

The Council of State held that in the absence of compelling external evidence, the IAA had to show that the behaviour of the parties had a significant effect on the market. On the contrary, the parties showed that the characteristics of the market which the IAA alleged were abnormal could be down to a number of other reasons, other than anti-competitive agreements, and so the IAA’s decision was entirely overturned.

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France, Germany and the UK complete the implementation of the Damages Directive

France, Germany and the UK all implemented the EU Damages Directive, following the Netherlands, Italy and Scandinavian members states. The Directive seeks to harmonise the rights of cartel victims in Europe who are seeking damages, but access to those rights was being hampered by slow implementation of the Directive. Despite the fact that all major jurisdictions have now implemented the regime, the Commission has sent formal reminders to those states still dragging their feet, including to Spain, Portugal and Greece (among others).

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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