3 Jan 2022

COMPETITION LAW IN 2021

As 2021 has come to an end, we look back at some of the past year’s developments within competition law and what we can expect for the coming year.

 

EU and the EU Commission

Illumina – Interim measures following gun jumping (Case M.10493)

In recent years, the Commission has increased its enforcement of the EU merger control rules. Following Illumina’s allegedly premature implementation of its acquisition of GRAEL, the EU Commission adopted historic interim measures to prevent any further integration between the two companies until the Commission adopts its final decision.

As part of the interim measures, GRAEL must be run separately from Illumina by an independent management and all interactions between the two companies shall be taken at arm's length and without sharing any confidential business information. The two companies risk substantial fines for implementing the acquisition prematurely and further fines if they breach the interim measures.

The decision underlines the importance of caution when taking any steps to integrate a new acquisition prior to the Commission’s clearance.

https://ec.europa.eu/commission/presscorner/detail/en/ip_21_5661

 

Revised Block Exemption Regulation for Vertical Agreements

From July to September, the Commission held a public consultation on the draft revised Vertical Block Exemption Regulation (VBER) and Vertical Guidelines.

The proposed amendments aim at readjusting the safe-harbour provided by the VBER as regards dual distribution, parity obligations, active sales restrictions, and certain indirect measures restricting online sales as well as to reduce compliance costs for SMEs.

Based on the input received during the consultation, the Commission will finalise the VBER and Vertical Guidelines, with a view to having new rules in place when the current VBER expires on 31 May 2022.

https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3561

 

EU Digital Markets Act

The proposed EU Digital Markets Act (DMA) is progressing towards finalisation and we could see the new regulation enter into force as early as during next year. The DMA will establish criteria for qualifying large online platforms as so-called “gatekeepers” and stipulate “do’s and don’ts” that gatekeepers must comply with in their daily operations.

https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/digital-markets-act-ensuring-fair-and-open-digital-markets_en

 

General Court

Google Shopping – Exclusionary abuse (T-612/17)

In the long awaited judgement in the Google Shopping case, the General Court dismissed Google’s complaints against the Commission decision and confirmed that Google had abused its dominant position by favouring its own shopping services.

Amongst the takeaways is that the General Court concludes that so called “self-preferencing” under certain circumstances might constitute a distinct abuse under Art. 102 TFEU, without there being a need to establish that the platform is indispensable within the meaning of the Bronner case law.

Altice Europe – Gun jumping (Case T-425/18)

While reducing the fine imposed by the Commission, the General Court confirmed that Altice breached EU merger control rules when it acquired PT Portugal in 2015. In the share purchase agreement, Altice imposed rules on how PT Portugal’s business was to be conducted until the deal could be completed upon approval from the Commission. As with the Illuminati decision referred to above, the judgement highlights the importance of being aware of the distinction between legitimate and illegitimate measures before approval has been obtained from the relevant authorities.

 

Court of Justice

Air cargo – Damage actions in national courts (C 819-19)

The preliminary ruling concerned damage actions against members of an international air cargo cartel. The ECJ ruled that national courts have jurisdiction to apply Art. 101 TFEU in private actions for damages brought before them after the entry into force of Regulation 1/2003, even where the infringement was committed during the transitional period when Articles 104 and 105 TFEU were applicable. The practical implication of the decision is that victims of cartel infringements initiated prior to 2004, will be more likely to obtain compensation for the entire duration of such cartels.

Sumal SL – Subsidiaries’ liability for competition infringements (C-882/1)

The ECJ ruled that a victim of an infringement of EU competition law may seek compensation from a subsidiary of the company that committed the infringement, provided that the two companies constituted an economic unit at the time of the infringement.

Printeos – Default interest on reimbursed fines (C 301/19 P)

In Printeos, the ECJ confirmed that companies are entitled to default interest on reimbursed fines that have been paid pursuant to anti-trust decisions that are subsequently annulled.

Slovak Telecom I – On parallel proceedings (Case C 857/19)

In this case, the ECJ ruled that two independent procedures, one by the Slovak competition authority and one by the Commission, were not in breach of the principle of ne bis in idem since the procedures concerned the abuse of a dominant position on two different markets.

Slovak Telekom 2 – Indispensability and refusal to supply (C-165/19 P)

This ECJ decision follows a number of court decisions on the indispensability criterion in refusal to supply-cases. The ECJ confirmed that dominant companies might be obliged to supply an input to a rival only where that input is indispensable to compete in the downstream market. However, a lower standard applies if a dominant company is subject to a regulatory obligation to do so and an “implicit” refusal to supply the input (for example by delaying supply or imposing unreasonable conditions), can constitute an abuse of dominance.

Volvo – Jurisdictional matters (C-30/20)

This preliminary ruling from the ECJ provides useful guidance on where a damage shall be deemed to have occurred for the purposes of determining which Member State has jurisdiction over follow-on cartel damages action. In short, the ECJ held that the courts within the jurisdiction the claimant purchased the goods or, in the case of purchases in multiple jurisdictions, the courts within whose jurisdiction the claimants registered office is situated, has international and territorial jurisdiction.

Kilpailu- ja kuluttajavirasto – Limiation periods (C-450/19)

In this preliminary ruling, the ECJ held that, where a company has participated in a bid-rigging cartel in public tenders, the infringement shall be deemed to have ceased when the contract is concluded between the company and the contracting authority. The decision will have practical implications with respect to the limitation periods of such infringements.

 

Competition law in Sweden

Swedish Competition Authority

Following a phase 2 investigation, the Swedish Competition Authority (SCA) cleared EasyParks acquisition of Inteleon Holding AB (operating as SMS Park) without commitments in March 2021. EasyPark and SMS Park was two of Sweden’s top three providers of solutions for car parking by apps, SMS and phone. Amongst others, the SCA held large purchasing power by parking space operators and low entry barriers as reasons for clearing the deal without commitments.

https://www.konkurrensverket.se/informationsmaterial/nyhetsarkiv/konkurrensverket-godkanner-easyparks-forvarv-av-inteleon/

SCA investigates Covid-19 test centres

In December 2021, the SCA launched an investigation into coronavirus testing providers for allegedly fixing the price of PCR tests. As the pandemic is ongoing and testing is mandatory in certain situations, the investigation will be prioritised by the SCA.

https://www.konkurrensverket.se/informationsmaterial/nyhetsarkiv/konkurrensverket-utreder-misstankt-otillatet-samarbete-om-pcr-tester/

SCA publishes new method for calculating fines

Following the SCA’s newly granted decision-making powers for competition fines in March 2021, a revised method for calculating fines has been published by the authority. The revised method can be found on the link below:

https://www.konkurrensverket.se/konkurrens/vagledning-inom-konkurrens/stallningstaganden/

SCA Report on Digital Platforms in Sweden

The SCA’s report on a sector inquiry into digital platforms in Sweden was published in February 2021. Amongst other conclusions, the SCA suggested that, in addition to legislation at EU level, supplementary rules intended to ensure effective competition should be designed at a Swedish national level.

https://www.konkurrensverket.se/globalassets/dokument/informationsmaterial/rapporter-och-broschyrer/rapportserie/rapport_2021-1.pdf

New act on unfair trading practices in the agricultural and food supply chain

The Swedish legislation implementing the EU UTP Directive entered into force on 1 November 2021. The act prohibits certain trade practices in business-to-business relationships in the agriculture and food supply chain. On 21 December 2021, the SCA issued its first official interpretation of the new rules, stating that tobacco free nicotine pouches do not fall within the scope of the legislation.

Further, the SCA has published a guideline on the new legislation, which can be found on the link below.

https://www.konkurrensverket.se/konkurrens/otillborliga-handelsmetoder/vagledning/

What to expect in 2022

In addition to new legislation in the form of the revised VBER and the DMA, we expect plenty of interesting competition law decisions and case law. In the area of digital markets and platforms, we may get further guidance as the Commission finalises the ongoing investigations against Facebook, Apple and Amazon.

We are confident that 2022 will provide us with interesting developments and important insights on best practices in the competition field.

 

Author:

Johan Löfquist (Associate)

 

Contact persons for Hammarskiölds’ EU & Competition Team:

Malin Albert (Partner)

Claes Langenius (Partner)