Competitive Edge: Competition & EU law news - November 2019
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Keeping you up to date on Competition & EU Law developments in Europe and beyond
Five years of the Competition Damages Directive: first rulings from the European Court of Justice
November 2019 marks the 5th anniversary of the adoption of the EU Competition Damages Directive on 26 November 2014. After many years of negotiation, the Directive introduced harmonised rules on numerous issues arising in competition damages claims, including limitation periods, liability, the presumption of harm, the value as evidence of a finding of infringement by a competition authority, loss, the relationship between direct and indirect purchasers from infringers, and disclosure of evidence. This article analyses the two judgments of the European Court of Justice to date that address the Directive.
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Updates from our network:
EU
EU Class-action proposal – ready to pass the finish line in 2019?
Finland
Damages ordered for predatory pricing, the amount of harm estimated by the court due to insufficient economic evidence
France
Damages Actions - Where do we stand?
Germany
German Supreme Court aggravates evidential standard in private damages actions
Hungary
Truck cartel claims – may there be more?
Italy
Liberalisation of electricity sale: Italian court reviews the fines imposed on Enel for abusive and exclusionary conducts
Poland
The Polish Supreme Court on the lack of the requirement to identify all parties to anti-competitive vertical agreements
Spain
Damages claims in Spain - at a crossroad?
The Netherlands
Dutch elevators damages actions advance against Kone and ThyssenKrupp
UK
Court of Appeal reduces BritNed's cartel damages award in first UK follow-on damages judgment on the merits
Australia
Australian competition and consumer regulator takes Google to court over collection and use of location data
Belgium
Pharmaceutical industry remains in the eye of the storm
Czech Republic
A trading company MAKRO pays a penalty for unlawful agreements with the suppliers
Denmark
Danish Maritime and Commercial Court finds illegal customer-sharing agreement between media agencies
EU
EU Class-action proposal – ready to pass the finish line in 2019?
On 4 and 5 November 2019, the European Council's Working Group on Consumer Protection and Information discussed the latest compromise proposal, as circulated by the Finnish Presidency of the Council, on representative actions for the protection of collective interests of consumers. The Finnish Presidency hopes to get the Directive adopted by the end of its term in December 2019.
The proposed Directive is part of the New Deal for Consumers Package, which also included the Damages Directive. The Group Claim Directive may complement the Damages Directive, because, besides companies that suffered damages from a cartel, also consumers will be increasingly aware of their right to claim compensation.
The main open issue in the proposal is related to cross-border claims. The latest draft version grants national judges the possibility to reject certain cross-border cases. Some Member States are pushing to maintain this option, as they are concerned about cases brought by consumer entities founded by a third party aiming at an economic gain and forum shopping. Some smaller Member States, on the other hand, seek reassurances that their national consumers, even if not supported by large consumer associations – as it is the case in the larger Member States - will actually have a way to support their claims in front of the judiciary.
According to unofficial sources, national delegates found a compromise and the Directive is now expected to be tabled in the Competitiveness Council, scheduled on 28 and 29 November, where it will likely receive the final sign-off by national ministers. Once formally adopted, Member States will have 18 months to transpose it into national law.
The Commission's class-action proposal is available here.
Finland
Damages ordered for predatory pricing, the amount of harm estimated by the court due to insufficient economic evidence
In June 2019, the District Court of Helsinki handed down two judgments regarding compensation of harm resulting from predatory pricing. The claims for damages were brought before the court by two milk producers' cooperatives, Maitomaa and Maitokolmio, with respect to a predatory pricing case in the Finnish milk market. In the antitrust enforcement limb of the case the Supreme Administrative Court of Finland had held in 2016 that a Finnish milk producers' cooperative and manufacturer of milk products, Valio Oy ("Valio"), had been setting its milk prices below average variable costs in order to exclude competitors from the market as of 1 March 2010 until 20 December 2012. The practice was regarded as an abuse of a dominant position infringing EU and national competition rules. Valio was fined EUR 70 million.
The infringement had taken place prior to transposing the Damages Directive into national legislation in Finland. Therefore, regarding the cases at hand, the obligation to pay compensation for harm required a finding of negligence from the infringer side. The District Court ruled that the principle of effectiveness of EU legislation required that the infringement decision of the Supreme Administrative Court be taken as the basis of the damages cases. Therefore, according to the District Court, negligence had been established by the Supreme Administrative Court finding of infringement alone. However, the District Court also assessed negligence based on the evidence provided to it and found that Valio had acted negligently.
Additionally, the District Court assessed whether the cooperatives had suffered harm and the amount thereof. In this respect, the burden of proof lied with the plaintiffs. The evidence provided by the plaintiffs was mainly based on economic expert statements. Also, Valio submitted economic expert reports in its defence. Maitomaa had estimated that it had suffered losses of over EUR 17 million. The equivalent amount for Maitokolmio was over EUR 10 million. The District Court held that the economic evidence proved that the predatory pricing practice had caused harm to the cooperatives. However, the Court found that the economic evidence of the plaintiffs was based on erroneous presumptions and the amount of harm was overestimated. Therefore and as the plaintiffs had failed to fulfil their burden of proof, the District Court estimated the harm in accordance with the principle of precaution.
The public versions of the judgments show that the plaintiffs had provided, among other things, before-during-after price comparisons based on regression analyses which the defendant had criticized. The District Court found that both the plaintiffs' and the defendant's analyses were unconvincing and either over- or underestimated the amount of harm caused by the predatory behaviour. The District Court stated that it was unaware of any competition law damages having been ordered primarily based on economic expert evidence provided by the parties as they tend to lead to opposite results. The District Court found that as a general starting point, economic evidence emanating from the parties was unlikely to render objective results. The District Court analysed the plaintiffs' financial statements during the infringement period and estimated the amount of harm according to the principle of precaution to be EUR 4.5 million for Maitomaa and to EUR 3.5 million for Maitokolmio, i.e. significantly lower than the amounts claimed for.
France
Damages Actions - Where do we stand?
Awaited application of the newly introduced provisions - The Damages Directive was transposed into French law in 2017 and resulted in the creation of a comprehensive set of rules specifically dealing with anticompetitive practices’ damages actions. However, for now, most private enforcement actions remain subject to the ordinary French regime. Indeed, most of these newly introduced provisions are only applicable to private enforcement actions relating to competition law infringements arising after 10 March 2017. Some courts have nonetheless started to apply some of the Damages Directive’s presumptions to ensure compliance with the principle of EU law effectiveness.
Recent case law - The transposition of the Damages Directive has undoubtedly participated in raising the awareness of the possibility for companies who suffered harm caused by an infringement of competition law to claim and obtain full compensation for that harm. While some may object that it has not yet led to a significant increase in private enforcement actions in France, it is worth noting that French courts have recently ruled on a number of cases and provided clarifications/confirmations, in particular with regard to:
Limitation period for private enforcement actions: French courts have ruled that the limitation period should start from the date of the French Competition Authority’s (the “FCA” ) decision and cannot run from the date the case was disclosed by the press, from an FCA’s interim measures decision or from the date the victim was interviewed by the FCA (e.g.: Nantes Administrative Court of Appeal, 16 March 2018 n°17NT01526; Paris Court of Appeal, 6 March 2019 n°17/21261; Paris Commercial Court, 23 September 2019 n°2017013944).
Follow on litigation: French courts have ruled that the FCA’s or Commission’s findings of a competition law infringement by a company constitutes a civil wrongdoing for which such company must be held liable, without having to apply the new provisions resulting from the transposition of the Damages Directive which sets up an irrefutable presumption in this respect (e.g.: Paris Court of Appeal, 12 September 2018 n°18/04914; Paris Court of Appeal, 6 March 2019 n°17/21261; Paris Administrative Court of Appeal, 13 June 2019 n°14PA02419; Paris Commercial Court, 23 September 2019 n°2017013944; Rennes Regional Court, 7 October 2019 n°13/00136).
Indemnification – causal link: several courts have adopted low standard of proof when it comes to assessing the causal link between the alleged harm and the wrongdoing resulting from an anticompetitive practice: e.g. the absence of a contract and its supporting documents (including invoices from more than 10 years) does not prevent the court from establishing an infringer’s liability (e.g.: Paris Administrative Court of Appeal, 13 June 2019 n°14PA02419).
Germany
German Supreme Court aggravates evidential standard in private damages actions
Much has been said (and written) since the German Federal Supreme Court (“FSC”) issued its landmark “Schienenkartell”-decision in November 2018 (Bundesgerichtshof, KZR 26/17). While some commentators have gone so far to see a major shift in the German court’s future approach to private damages actions, others have claimed no considerable changes at all. As is so often, the truth probably lies somewhere in the middle. In any event, however, the Schienenkartell-decision has aggravated the evidential standard claimants must fulfill in order to (successfully) bring a cartel damages claim to court – and limited, vice versa, the leeway for courts to “help” overcome the evidential difficulties that claimants typically face in demonstrating that their purchases were cartelized as well and that this has led to a damage.
The Schienenkartell-decision must be seen against the background of recent Regional Court practice. Until then, there had been a tendency amongst Regional Courts to avoid lengthy hearings of evidence in favor of a (much quicker) basic judgment. Legally, this modus operandi was based on the assumption that a (e.g. nationwide) cartel would have typically covered also the products/projects at issue and that, prima facie, this would have caused damage on the side of the claimant (German: “Anscheinsbeweis”).
In the Schienenkartell-decision the FSC rejects this prima facie standard of proof, arguing the very strict preconditions for this legal test are not met in cartel cases. A prima facie evidence can be referred to if empirical values exist that demonstrate the relationship between cause and effect (such as e.g. skid marks on concrete and bumps in a car accident). In cartel cases, however, things are much more complex (or better: less typecasted). In particular, cause and effect may vary, depending e.g. on the number of market players, the number of cartelists, the possibility of information exchange, the market coverage of the cartel and the level of cartel discipline etc. The FSC therefore concluded that claimants (and courts) could no longer invoke a prima facie evidence that the purchases/projects at issue were indeed cartelized and that this has led to damages on the side of the claimant. Instead, there would only be a factual presumption (“tatsächliche Vermutung”) to this end – a test that some argue is just old wine in new bottles.
Whether this will substantially diminish the likelihood of success of future damages actions in Germany remains to be seen. In the one year since FSC Schienenkartell, the decision does not (yet?) seem to have had a material effect on daily court practice.
Hungary
Truck cartel claims – may there be more?
The most prominent recent cartel damages claims in Hungary have been connected to the truck cartel case where the European Commission found that fifteen international truck manufacturers followed collusive arrangements on pricing and gross price increases in the European Economic Area (the “EEA”) (see Decision AT.39824).
Hungarian companies that have suffered damages as a result of the truck cartel are involved in several court procedures across the EEA and procedures have also been initiated before the Hungarian courts.
In one case, the Hungarian court referred a related question of jurisdiction to preliminary ruling to the Court of Justice of the European Union ("CJEU"), which, in its decision found that the jurisdiction of the Hungarian courts held even though there were no direct contractual relationship between the victim and the member of the cartel: “‘the place where the harmful event occurred’ covers, in a situation such as that at issue in the main proceedings, the place where the market which is affected by that infringement is located, that is to say, the place where the market prices were distorted and in which the victim claims to have suffered that damage, even where the action is directed against a participant in the cartel at issue with whom that victim had not established contractual relations.”
Another related claim had been rejected due to formal errors in the submission (BDT 2019. 3971.), and, according to news reports, more than a hundred Hungarian contractors are claiming nearly 2.5 billion forints from the truck cartel.
Cartel damages claims at courts in Hungary had been scarce since the transposition of the the Damages Directive into the Hungarian Competition Act as of 15 January 2017. With the active role the GVH takes in cartel cases (see most recently the online cash register cartel) and the gradually raising general awareness of the possibility to claim damages in case of a cartel may give rise to more claims making it to the court. So keep an eye on cartels cases of the GVH that might have affected your business!
Poland
The Polish Supreme Court on the lack of the requirement to identify all parties to anti-competitive vertical agreements
Earlier this year the Polish Supreme Court rendered two judgments, in which it addressed the way in which the Polish Office of Competition and Consumer Protection (''UOKiK'') handles cases concerning anti-competitive vertical agreements.
The judgments confirmed UOKiK’s decision, in which PHU Jubiler and Anyro&Co, two wholesale distributors belonging to the same corporate group, were fined for setting minimum resale prices of branded watches, by determining a maximum discount that could be applied by their trading partners. The UOKiK also found that these companies had controlled the way in which trading partners organised their marketing campaigns and rounded their retail prices off. The fines imposed amounted to PLN 819,496 (approx. EUR 190,580) and PLN 331,819 (approx. EUR 77,170), respectively.
The Court confirmed that to fine the company that is the instigator of a restrictive agreement, establishing the identity of all participants to that agreement and investigating all possible behaviours is not required. A detailed assessment of the behaviour of the instigator of the agreement is sufficient. According to the Court, such interpretation complies with the public interest principle as its application results in terminating the behaviour of the instigator of an anti-competitive practice.
The Court noted that if UOKiK conducts antitrust proceedings against the instigator of a restrictive agreement, neither the operative part of the UOKiK decision nor its justification must specify all participants in the anticompetitive agreement, and this neither restricts the fined company's defence rights nor constitutes a defect in the decision.
The Court confirmed that UOKiK can use evidence obtained from a leniency application even if such application was returned to the company (applicant) as not meeting formal requirements. The Court pointed out the authority's return of the application cannot result in the inability to use evidence obtained from the applicant. The Court stressed that submitting a leniency application is voluntary, recalled that all companies are obliged to provide information at UOKiK’s request, and therefore did not oppose UOKiK’s practice of requesting further information, even though UOKiK must have known that the application would be returned.
Even though agreements setting minimum resale prices restrict competition by object, the standards set by the legislator for the legal assessment of such agreements must be observed. Nevertheless, the Court confirmed that UOKiK does not need to precisely define the relevant market in such cases as the de minimis rule from the Polish Act on Competition and Consumer Protection is not applicable to such agreements.
These judgments are very helpful for all companies that are being investigated by UOKiK or that plan to appeal UOKiK’s decisions regarding anti-competitive vertical agreements.
The Polish Supreme Court judgments can be found at the following links:
I NSK 10/18 and I NSK 11/18.
Italy
Liberalisation of electricity sale: Italian court reviews the fines imposed on Enel for abusive and exclusionary conducts
On 17 September 2019, the Regional Administrative Court of Lazio (“TAR”) issued its judgment on the appeal lodged by Enel Group against the decision of the Italian Competition Authority (the “ICA”) issued on 20 December 2018. The ICA had fined the company over EUR 93 million for abusing its dominant position by leveraging on assets held as a vertically integrated operator (i.e., active in both the distribution and the retail supply of electricity) between January 2012 and May 2017.
According to the ICA, Enel had taken conduct to exclude competitors active in the deregulated market, with a view to unlawfully favoring its subsidiary Enel Energia, through which Enel is also active in the retail supply of electricity at market prices. The ultimate objective of this conduct was to induce its customers - beneficiaries of an enhanced protection service provided through its subsidiary Servizio Elettrico Nazionale ("SEN") and regulated by a special regime, under which electricity is supplied at a tariff set by the sector regulator - to switch to Enel’s own supply contracts at market prices. This practice also aimed at avoiding the loss of these customers to competitors when the market would be fully liberalized (the deadline for this was recently postponed to 2020).
In particular, the ICA found that Enel sought and obtained the consent of customers served in the protected market to be contacted for commercial purposes and then used these "consent" lists to formulate targeted offers to the same protected customers so as to have them sign a contract on the free market. The Authority considered that this conduct constituted an abuse of a dominant position since such an operation would not have been replicable by competitors in areas in which service under the protected regime is exclusively provided by the two Enel groups.
The TAR rejected the appeal filed by Enel (Decision No. 11957) and upheld the appeals filed by Enel Energia (Decision No. 11954) and the SEN (Decision No. 11958), limited to claims relating to the quantification of the fine.
The TAR principally found that the reasons put forward by the companies of the Enel Group regarding procedural defects were unfounded, including those related to the illegitimate composition of the board of arbitrators, the failure to postpone the final hearing, the violation of the rights of defence due to the lack of members of the CRI and the violation of the principle of impartiality due to the fact that the proceedings were entrusted to an official with prior experience working for Enel.
With regard to the substantive aspects, the TAR found that the various claims invoked by the companies of the Enel Group challenging the definition of the relevant markets, the assessment of the dominant position of the companies, the demonstration of the abuse and existence of a "group strategy" were not well-founded, instead holding that the decision was not vitiated by the alleged flaws. The TAR held that there was a strategy within the Enel Group to exploit its dominant position in the market for the retail sale of electricity in order to alter the competitive dynamics of the same.
Finally, the TAR upheld the appeal by which Enel and its subsidiary SEN contested the assessment of the duration of the infringement considering that, as noted by the applicants, the beginning of the abusive conduct should be dated back to September 2015, instead of 2012. It also upheld the appeal by which the SEN contested the quantification of the sanction on the basis of turnover in 2017 instead of 2016, the last full year of participation in the infringement, ordering the Authority to recalculate the sanction.
For more information please find the Court’s decision in Italian here and the official press release (in Italian) of the ICA decision can be found here.
Spain
Damages claims in Spain - at a crossroad?
Since the transposition of the Damages Directive into Spanish Law in May 2017, private enforcement of competition law has substantially increased. In particular, companies have become more exposed to claims for damages and face claimants with a strengthened litigation position.
During the last year, Spanish courts have been particularly focused on actions for damages against companies sanctioned by the European Commission for their participation in the Trucks cartel. To this effect, the first relevant rulings on key procedural matters for damages claims have already been issued which, in some cases, lead to contradictory conclusions:
The dies a quo of the damages actions: Spanish courts are giving contradictory solutions to determine the dies a quo of the damages actions. The alternatives discussed are:
a) The day of the publication of the summary of the Commission's decision (e.g. Commercial Court No. 3 of Madrid of 2 July 2019, Case 792/2019);
b) The day of the publication of the non-confidential version of the decision (e.g. Commercial Court No. 3 of Valencia of 15 May 2019, Case 510/2019); and
c) The moment in which the offended party knew about the infringement (on a case-by-case basis). This could be any day after the publication of the decision, for example, when the decision had widespread media repercussion (e.g. Commercial Court No. 1 of Bilbao of 3 April 2019, Case 547/2019).
Criteria to impute the conduct of a parent company to its Spanish subsidiary: in certain cases the truck producer's parent company has been sanctioned by the Commission but its Spanish subsidiary is not explicitly mentioned in the decision. On the one hand, some courts ruled against imputing the conduct of the parent company to its subsidiary, stating that the lack of mention demonstrates that their activity is not an intrinsic part of the sanctioned conduct (e.g. Judgment of the Commercial Court No. 3 of Valencia of 15 May 2019, Case 510/2019). On the other hand, other rulings hold that this is possible on the basis of the territorial scope of the infringement, as the infringement covered the entire EEA, and to guarantee the effectiveness of follow-on actions (e.g. Commercial Court No. 3 of Valencia of 15 May 2019, Case 510/2019).
Use of the passing-on defence depending on the similarity of the market of the purchaser: the Commercial Court of Valencia has generated significant debate by interpreting the passing-on defense in a restrictive manner, arguing that it was not available in relation to the market of transportation services because this market was not similar to the cartelized market, i.e. sale of trucks (e.g. Commercial Court No. 3 of Valencia of 17 December 2018, Case 309/2018).
In all these cases, the estimated overcharges ranged from 5% to 15% of the purchaser price, even if the facts considered were remarkably similar. Therefore, it is clear that the methodology used by the courts to estimate the damages sustained by the claimant is still unpredictable.
In addition, there are not yet solid criteria on whether the victims of an anticompetitive infringement should be granted access to administrative proceedings as an interested party.
On balance, the conclusion that can be drawn is that these judgements have generated a situation of legal uncertainty concerning damages claims, being necessary to adopt a unified approach to all the issues raised.
The Netherlands
Dutch elevators damages actions advance against Kone and ThyssenKrupp
On 23 October 2019, the District Court of Rotterdam ("District Court") rendered an interim judgement on a private enforcement cartel claim against Kone and ThyssenKrupp. The private enforcement claim follows fines imposed by the European Commission back in 2007 for a lifts and escalators-cartel between 1995 and 2004 in Belgium, Germany, Luxembourg and the Netherlands. The claim vehicle (the "Stichting Elevator Cartel Claim") in which parties such as Schiphol, C&A and H&M are united, claims damages on behalf of these parties for the Dutch part of the cartel on the grounds of Dutch tort law. This specific interim judgement deals with multiple aspects, such as the arbitration clause in the agreements, the limitation period and the burden of proof.
The District Court rules that the arbitration clauses in the general terms and conditions – which exclude the District Court – are only applicable to disputes which were reasonably foreseeable at the moment of entering into the agreement. Since this was clearly not the case for the cartel infringement, the District Court declares itself to have jurisdiction in the matter. The District Court also dismisses the argumentation regarding the limitation period by the cartelists and rules that the limitation period begins from the moment it was publicly known that the cartelists were fined by the European Commission, and not – as the cartelists claimed – from the moment the dawn raid was publicly known. The District Court also orders the claim vehicle to provide proof (such as contracts) of the alleged damages of every single party claiming such damages.
There will be a new hearing in the case on 29 January 2020. Please find the judgement of the District Court here (in Dutch only).
UK
Court of Appeal reduces BritNed's cartel damages award in first UK follow-on damages judgment on the merits
On 31 October 2019, the Court of Appeal of England and Wales ("Court") handed down a significant judgment in relation to BritNed's follow-on damages claim against a power cable cartel member, ABB. The Court allowed ABB's cross-appeal in relation to cartel savings, finding that the High Court of England and Wales made an error of law and that BritNed's damages award should be reduced. The Court emphasised that damages should be based on BritNed’s actual loss suffered from paying an inflated price, rather than on ABB's general cartel savings, which had no effect on the price paid by BritNed. The Court dismissed BritNed's appeal on all seven grounds and has refused BritNed permission to appeal to the Supreme Court.
The case is significant as it is the first time the English courts have considered a cartel follow-on damages claim on its merits. The decision sets out in detail the correct approach for the assessment of cartel damages and usefully refers to relevant EU and UK jurisprudence underpinning principles of competition damages claims. It will no doubt be an important guide for future claims in the English courts. Some key conclusions flowing from the decision include, among others, that damages should be compensatory in nature, not punitive; that no lower standard or reversed burden of proof should apply in follow-on damages claims; and that a "broad brush" approach, involving elements of estimation and assumption, should be used when assessing quantum.
Please find the judgment by the Court of Appeal here.
Australia
Australian competition and consumer regulator takes Google to court over collection and use of location data
In October 2019, the Australian Competition and Consumer Commission (“ACCC") decided to take action against Google LLC and Google Australia Pty Ltd (collectively, "Google") in the Federal Court of Australia for allegedly engaging in misleading conduct and making false or misleading representations to customers in relation to Google's collection and use of personal location data.
The ACCC's case against Google concerns certain on-screen representations which were made by Google to users of Android mobile phones and tablets during the Google Account set-up process (or the later access of those Google Accounts). In particular, the ACCC alleges that Google engaged in breaches of the Australian Consumer Law by:
(a) failing to properly disclose to customers that both Google Account settings (one labelled 'Location History', and another labelled 'Web & App Activity') had to be switched off in order for consumers to block Google from collecting, keeping and using their location data; and
(b) making representations to customers about Google's use of customers' location data, including that the data could be used by Google for a number of other purposes which were not related to the customer's use of Google's services (e.g. advertising), which were misleading.
This case is the first of its kind globally – i.e. it is the first time that a regulator has taken action against Google in relation to representations made by Google concerning its collection, storage and use of customers' location data.
The ACCC's decision to institute proceedings against Google stems from a number of findings that were made by the ACCC during its Digital Platforms Inquiry (“DPI”), which considered the impact of digital platforms, such as Google and Facebook, on competition in the media and advertising services markets. The DPI's final report was released in July 2019.
Belgium
Pharmaceutical industry remains in the eye of the storm
On 15 October 2019, the Belgian Competition Authority ("BCA") imposed a fine of EUR 225,000 on the national Order of Pharmacists for adopting, maintaining and implementing provisions of its Deontological Code that limit the ability of pharmacists to advertise para-pharmaceutical products, in particular online, via paid referencing, and for limiting the interest of pharmacists to apply rebates on these products. The fine is part of a settlement, which includes certain binding commitments for the Order. It agreed to review its Deontological Code by including an explicit approval of specific advertising and commercial practices. It will also adopt interpretative guidelines on these practices for its disciplinary bodies, and commits to regularly update these guidelines in order to reflect the latest evolutions in the market.
In the July edition of our Competitive Edge newsletter we already reported on a fine of EUR 1 million imposed by the BCA on the national Order of Pharmacists for the use of anticompetitive practices aimed at excluding Medi-Market Group, an association of (para-) pharmacies, from the market in Belgium.
Also in the pharmaceutical sector, on 8 October 2019, the BCA conducted dawn raids in pharmaceutical companies and hospitals, in an investigation of potential anti-competitive agreements and practices designed to restrict, delay or prevent market entry or expansion of biosimilar products.
These investigations and decisions show that the BCA is clearly focused on the pharmaceutical industry. The sector was already listed in the BCA's priorities for 2019, and it is seems like it is to remain a priority in 2020.
For more information, please find the decision of the BCA against the Order of Pharmacists in French here and press release of the BCA regarding the dawn raids here.
Czech Republic
A trading company MAKRO pays a penalty for unlawful agreements with the suppliers
The Office for the Protection of Competition imposed a fine in amount of CZK 46,560,000 on trading chain MAKRO Cash & Carry ČR s.r.o. ("MAKRO") for violating the Act on Significant Market Power in the Sale of Agricultural and Food Products and Abuse thereof ("Act on Significant Market Power"). The decision is final, as MAKRO has used the settlement procedure and has not filed an appeal.
MAKRO violated the Act on Significant Market Power by concluding agreements with some of the food suppliers during the period 2016-2018 which included a monetary performance in their favour in exchange for use of logistics services and marketing service offered by MAKRO. The total amount of such monetary performance exceeded the statutory allowance of 3% of annual turnovers of individual suppliers. In addition, the terms of some logistic services were not sufficiently specified in the agreements.
MAKRO was also obliged, within 9 months of the decision becoming final, to amend the agreements. In particular, the provisions relating to logistic services shall be amended in a way to allow the suppliers to identify not only the subject and method of calculation of any payment for the services but also to identify their scope, method and time of performance. Please find the relevant press release here (in Czech only).
Denmark
Danish Maritime and Commercial Court finds illegal customer-sharing agreement between media agencies
On 21 October 2019, the Danish Maritime and Commercial Court found two Danish companies, Mediacenter Danmark and MPE Distribution, guilty of having entered into an anticompetitive agreement to share customers on the market for the purchase and sale of the distribution of unaddressed mail.
It appeared that the two parties had entered into an agreement back in 2013 whereby Mediacenter Danmark was supposed to manage all purchases of unaddressed mail as well as negotiate and enter into agreements with distributors on behalf of both parties. Furthermore, the agreement included a clause whereby MPE Distribution was not allowed to target Mediacenter Danmark's existing customers.
These customers would typically be either retail stores or chains, and the agreement would ultimately lead to the customers having fewer suppliers to choose from. In consequence there has been less competition on the market, which might have led to higher prices and/or lower quality.
Thus, the Danish Maritime and Commercial Court concluded that the agreement had as its object the restriction of competition. The decision therefore follows in line with the previous decisions from respectively the Danish Competition Council and the Danish Competition Appeals Tribunal.
For more information, please refer to the decision from the Danish Maritime and Commercial Court available in Danish here.
Upcoming speaking engagements at Competition & EU law conferences
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Knect365 Competition Law and Regulation in the Energy Sector Conference - 19 November in Brussels.
Competition partner Peter Willis will be speaking on recent developments in REMIT. Click to receive a 20% discount when registering for the conference.
- Advanced EU Competition Law Conference - 25 - 27 November in Brussels.
Partner Hein Hobbelen will present on the topic The Demise of Leniency. Click to receive a 30% discount when registering for this conference.
- EU State Aid Policy: the forecast for the next Five Years - 28 November in Brussels.
This free half-day seminar, jointly organised by the European University Institute (EUI) and Bird & Bird in the context of the Florence Competition Programme, will bring together academics, practitioners, officials from national governments and EU institutions, along with industry representatives, to debate the incoming Commission's expected competition policy developments for the next five years, with particular focus on State Aid. Click here to register for the event.
- Bird & Bird annual Regulatory & Public Affairs seminar - 3 December in Brussels
This seminar aims to gather representatives of the European institutions, industry leaders and other stakeholders to debate highly topical issues around the future legislative framework for online platforms and communications networks in Europe. Click here to register for the event.
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