This month, we look at developments across Europe and beyond. In the UK, with continued Brexit uncertainty, the possibility of the UK leaving without a deal, on 12 April 2019, remains (at the point of writing). With no-deal threatening a heavily increased workload for the CMA and having the potential to throw EU merger or antitrust investigations into uncertainty, it is State aid regulation that could potentially see the most change in the event of no-deal..
In Germany and Italy, welcome legal clarification has been provided; in the former, a decision of the German Federal Court has made it clear that courts should not rely on prima facie evidence in private antitrust litigation to assess whether a cartel has caused harm to a claimant. In Italy, a decision of the Italian Competition Authority relating to a long running cartel in the car financing industry has sent a warning to parent companies that they may be found liable – and fined – for the behaviour of their joint ventures even if they are not majority shareholders.
The Italian decision also highlights the importance of having robust compliance procedures, as cartel members who had instigated compliance procedures were able to benefit from a reduction of 10% of the total fine. In France, the FCA has released guidelines on the conditions for implementing a settlement procedure to give more predictability in business, which similarly, is illustrative of a consistent approach by the Commission and national competition authorities to reward co-operation.
Looking to the future in Europe, a new EU regulation which establishes an EU-wide foreign investment screening mechanism framework heralds significant change by marking the first step towards meaningful foreign investment controls. Coming at a time when several national governments have taken independent steps to tighten foreign investment controls in their own countries, protection of strategically important national and EU interests is evidently of increasing concern.
Finally, 2018 was a watershed year for Competition law enforcement in South East Asia and the developments continuing this year. These developments are a reminder that competition law is becoming increasingly sophisticated globally and companies with overseas operations must take note of global developments.
Regulatory Outlook | Competition
As part of Osborne Clarke’s Regulatory Outlook, which is designed to help in-house lawyers, compliance professionals and directors navigate the landscape of business regulation in the UK, we examine the impact that a ‘no deal’ Brexit would have on competition law and how businesses can prepared.
Read the Competition section of the Regulatory outlook here.
Access the full Regulatory outlook here.
How will State aid be regulated in the UK in the event of a no deal Brexit?
In the event of a No Deal Brexit, many political and economic commentators have indicated that one way to mitigate a possible shock to the UK economy would be for the government to “splash the cash” and invest more directly in UK businesses and infrastructure. In this scenario, understanding and applying the new State aid rules will be particularly important for businesses and public sector organisations alike.
Germany | Second thoughts about Prima Facie evidence
The German Federal Court of Appeals has clarified whether claimants can rely on prima facie evidence in private antitrust litigation. While the EU Damages Directive contains a rebuttable presumption that cartels cause harm, the standard of proof was less clear for older cases.
This decision establishes that German courts should not rely on prima facie arguments alone but ought to discuss the specific circumstances of the case. In the court’s assessment of arguments and evidence, a strong presumption of fact will normally indicate that a claimant was affected by the cartel.
Italy | Car sales through financing: ICA sanctions cartel among leading operators, imposing fines of over 670 million euros
The ICA has imposed fines of over 670 million euros on members of a long running cartel in the car financing industry, in a judgement which has important implications for the liability of parent companies of joint ventures, but also serves as a reminder of the benefits for businesses to have robust compliance procedures.
France | FCA introduces guidelines on settlement procedure to give more predictability to businesses
On 27 December 2018, the French Competition Authority (FCA) released guidelines on the conditions for implementing the settlement procedure applicable to businesses that do not dispute a notified breach of competition law (Settlement).
EU institutions take first steps towards EU-wide foreign investment controls
On 14 February 2019, the European Parliament approved a new EU regulation to establish an EU-wide foreign investment screening mechanism framework. Once in force, this will be first time that the EU as a whole has sought to regulate foreign (i.e. non-EU) investments through specific regulations, as opposed to simply applying the rules that apply to all EU companies and investors equally, such as the existing EU merger control rules.
Competition enforcement in South East Asia set to increase in 2019
Following a watershed year for competition law enforcement in South East Asia, the development of the young competition authorities shows no signs of abating.