Competitive Edge: Competition & EU law news - October 2019

EU Foreign Direct Investment Screening: What Investors Need to Know

In the fall of next year, the long anticipated EU Foreign Direct Investment Screening Regulation will apply. The regulation is likely to have a significant impact on FDI within the EU – both within Member States that already have their own screening mechanisms and those which do not. Third country investors take note: the FDIR provides for significant risks, and perhaps also a few opportunities.

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Competition-related takeaways from Vestager's European Parliament Hearing

Margrethe Vestager was grilled about how she will combine her dual function as the European Commission's new Executive Vice President for 'Europe fit for a Digital Age' and her role as EU Competition Chief, during her recent Hearing in the European Parliament. This article provides some specific competition-related takeaways from Vestager's public statements, including the role of 'closing aid' in reshaping regions in transition, state aid approval for regional airports, as well as how she intends to build a competitive-based Industrial Strategy that makes strategic use of public procurement instruments.

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Updates from our network:

EU
The Court confirms the European Commission's competence to review tax rulings under state aid rules
Interim measures, once in a blue moon or here to stay?

Australia
Criminal charges against former general manager for obstruction of ACCC’s cartel investigation

Belgium
The Belgian Competition Authority published a Guide on the "Exchange of Information in the framework of Associations of Undertakings

Czech Republic
Austria Holding XLCEE may take over the company Kika CZ

Denmark
Two Danish companies found not guilty of illegally coordinating prices and other terms during the submission of tenders in a public procurement

Finland
FCCA advocates for higher fines as part of the implementation of the ECN+ Directive

France
Launch of a public consultation on draft revised merger control guidelines

Germany
German Expert Commission “Competition Law 4.0” presents report and recommendations on digital sectors to the German economics minister Peter Altmaier

Hungary
#Advertisement must come first

Italy
The Regional Administrative Court of Lazio (“TAR”) confirms SIAE's abuse of dominant position in the market of services for intellectual property management

Poland
The Polish competition authority intensifying its enforcement in the food sector

Spain
The CNMC investigates possible anticompetitive practices in the chemical and banking sectors

The Netherlands
The Dutch Minister of Economic Affairs & Climate approves the acquisition of rival postal operator Sandd by PostNL despite refusal by ACM to grant a license

Dutch competition authority publishes a sector report on the impact of biosimilars on competition between TNF-alfa inhibitors

UK
UK's competition authority challenges pay-for-delay agreement

EU

The Court confirms the European Commission's competence to review tax rulings under state aid rules

On 24 September 2019, the General Court delivered its first two judgements in the series of appeals against European Commission (EC) decisions on tax rulings ordering Member States to recover millions of euros on the basis of state aid rules. In October 2015, the EC ruled that selective tax benefits were granted to Fiat in Luxembourg and to Starbucks in the Netherlands. On the basis of these decisions both companies were required to refund around EUR 30 million to the respective Member States. Both companies and Member States filed appeals against the EC's decisions.

On appeal, the Court annulled the Starbucks decision and dismissed the appeal against the Fiat decision. Even though one of the EC's decisions was struck down, the judgments are still seen as a victory for the EC. The Court confirmed that the EC is entitled to examine tax rulings' compliance with EU state aid rules and to assess them against an international transfer pricing standard, known as the “arm's length principle.”

The Starbucks annulment illustrates the strict standard of economic evidence that is required from the EC to prove that an advantage was granted. According to the judgment it is not sufficient for the EC to merely show non-compliance with the methodological requirements of the arm's length analysis; it would also have to prove that these errors led to a reduction of the tax burden. This cannot be presumed. The EC is therefore required to compare the position of the recipient as a result of the tax ruling with his position in the absence of such a ruling to show that an advantage has been granted.

On 8 October 2019, in her hearing in the European Parliament committees Commissioner-designate Vestager stated that she would request Member States to hand over information on all of their special tax agreements. This shows her willingness to continue scrutinizing tax planning measures under the state aid rules.

Link to the judgments: Starbucks and Fiat.

Interim measures, once in a blue moon or here to stay?

On 16 October 2019, the European Commission (EC) imposed interim measures on Broadcom. Broadcom is a technology leader in the design, development and supply of a range of semiconductor and infrastructure software solutions, including chipsets for TV set-top boxes and modems. The EC started its investigation in October 2018, and now, one year later, it decided it gathered sufficient evidence of a prima facie infringement that would lead to serious and irreparable harm for competitors, without the imposition of interim measures.

According to the investigation of the EC, Broadcom is at first sight engaged in abusive behaviour on the markets for systems-on-a-chip for TV set-top boxes, fibre modems and xDSL modems. On the basis of the analysis of several supply contracts, Broadcom is found to impose (quasi-) exclusive purchasing obligations coupled with exclusivity rebates. Moreover, irreparable damage is deemed particularly likely, because a large number of tenders are to be launched by broadcasting and telecoms providers in the coming years. Therefore, Broadcom is ordered to (i) suspend the application of the anticompetitive provisions in agreements with six customers and (ii) refrain from including the same provisions or provisions having an equivalent effect in future agreements with these customers. The interim measures will apply for three years or until the adoption of a final decision on the substance of Broadcom's conduct.

This is the first time in eighteen years and the first time since the entry into force of Regulation 1/2003 that the EC imposed interim measures in an abuse of dominance case. However, in the press conference, Commissioner Vestager stated that interim measures are particularly relevant for fast-moving platform- or network driven markets and that she is willing to keep this tool in mind for future cases in these sectors.

Link to the press release here.

Australia

Criminal charges against former general manager for obstruction of ACCC’s cartel investigation

In our August update, we discussed the proceedings that had been commenced by the Australian Competition and Consumer Commission (ACCC) in the Federal Court of Australia against BlueScope Steel Limited (BlueScope) and its former General Manager of Sales and Marketing, Mr Jason Ellis, for alleged cartel conduct. The action commenced by the ACCC concerned attempts by BlueScope and Mr Ellis to induce a number of steel distributors operating in Australia, as well as overseas manufacturers, to enter into agreements which contained a price fixing clause between September 2013 to June 2014. In that update, we noted that the ACCC had referred matters to the Commonwealth Director of Public Prosecutions (DPP), who would determine whether to bring criminal charges against Mr Ellis.

Since then, the DPP has decided not to commence criminal cartel proceedings against either BlueScope or Mr Ellis but it has decided to bring criminal charges against Mr Ellis for allegedly inciting the obstruction of Commonwealth officials in the performance of their functions in relation to the ACCC's cartel conduct investigation. This is an offence under the Criminal Code Act 1995 (Cth) which carries a maximum term of two years' imprisonment per offence - Mr Ellis is charged with two offences.

See the ACCC’s press release here.

Belgium

The Belgian Competition Authority published a Guide on the "Exchange of Information in the framework of Associations of Undertakings"

On 1 October 2019, the Belgian Competition Authority published a Guide on the "Exchange of Information in the framework of Associations of Undertakings". The Guide sets out the main principles of exchanging information between competitors and how they apply to associations of undertakings, and it looks at specific issues arising in the context of associations of undertakings.

Specific issues:

Periodic market overview

• Market overviews based on sufficiently aggregated and historic data are a priori compatible with competition law.
• Associations of undertakings that provide market overviews to their members have to guarantee confidentiality, individual members can only have access to their own data and to the final report (e.g. by outsourcing data collection or by using a so-called black box).

Price comparison websites

• While price comparison websites are encouraged, associations of undertakings setting up such websites have to ensure that objective criteria are used to decide whose prices are stated and in which order.
• Refusing to feature an undertaking on a price comparison website can lead to anti-competitive foreclosure.
• Websites can only show actual prices and are not allowed to provide information on future prices.

Information on expected market developments

• Exchanges of future prices (or intentions) constitute a restriction by object.
• Information on expected market (non-price related) developments could amount to a restriction by effect depending on the specific circumstances (e.g. market characteristics, nature of the information and method of exchange).

Cost-calculation and price-setting models and formulas

• Pricing models based on costs can lead to collusive behaviours because they lead to similar prices, nevertheless in order to increase efficiency an association can provide its members with best practices
• Models which merely list fixed and variable costs together with other factors, which could be taken into account to set the price, are assumed to be permitted as long as each user individually determines whether it takes these costs into account and for which amount. The user should always be allowed to determine its own profit margin.
• The association is in principle not allowed to recommend prices to its members or to incentivise the exchange of individual price information.

Link to the Guide in NL (here) and in FR (here).

Czech Republic

Austria holding XLCEE may take over the company Kika CZ

The Office for the Protection of Competition allows a merger of three competitors – XLCEE-Holding Gmbh and companies Kika Nábytek, s.r.o. (Kika CZ) and Lambda Properties Czechia, s.r.o. (Lambda CZ), provided that structural obligations set out in order to maintain the effective competition are fulfilled.

XLCEE-Holding is part of XXXLutz group, a group mainly active in the field of retail stores and online stores with furniture and home accessories in the Czech Republic under the brands of XXXLutz and Möbelix.

Both Kika CZ and Lambda CZ are part of a business group that is primarily engaged in the operation of retail stores and online stores with furniture and home accessories under the brand “kika”. Kika CZ operates nine retail stores with furniture and home accessories in the Czech Republic and is also active in online selling of furniture and home accessories under the same brand. Lambda CZ operates in the field of rentals of real estate owned by Kika CZ.

Please find the relevant press release here (in Czech only).

Denmark

Two Danish companies found not guilty of illegally coordinating prices and other terms during the submission of tenders in a public procurement

On the 24th of September 2019, two Danish companies Bjerregaard Sikkerhed A/S and Bacher Logistics A/S were acquitted by the Danish Competition Authority (DCCA) of illegally coordinating prices and other terms.

The case stems from an interministerial procurement of five framework agreements concerning the delivery of workwear to a number of state institutions. The two companies in question had in each of their tenders not only listed the same prices but they had also made the exact same mistake, i.e. listing a product priced at DKK 0,00. The national authorities offering the tender therefore contacted the DCCA, as they found the circumstances rather unusual. The DCCA's suspicion was further increased when correspondence between the parties described that the parties should "join forces" in relation to the procurement.
The Danish Competition Authority subsequently filed a police report against the two companies and ultimately the case was tried before the district court of Glostrup.

Throughout the trial both of the companies refused to have entered into a coordination agreement. The court stated that the companies could not be considered to be competitors as the companies were engaged in different types of business. Bacher Logistics was active within logistics while Bjerregaard Sikkerhed was a distributor of footwear. Based on this information, the court inferred that the "join forces" correspondence concerned the potential establishment of a subcontractor relationship between the companies. Therefore, the court stated that the fact that both companies had submitted the exact same prices could be indicative of an agreement between them to coordinate their tenders with the aim of impeding effective competition. Nevertheless, the court ultimately found that the material and evidence presented in the case were not sufficient to substantiate the claim that the two companies had entered into an agreement to coordinate prices and other terms. Consequently, both companies were acquitted.

For more information, please refer to the district court's decision available in Danish here.

Finland

FCCA advocates for higher fines as part of the implementation of the ECN+ Directive

Two recent cartel judgements by the Supreme Administrative Court (SAC) have caused the Finnish Competition and Consumer Authority (FCCA) to advocate for higher fines as part of the implementation of the ECN+ Directive (please find a link to the Directive (EU) 1/2019 here). The SAC upheld findings of anti-competitive agreements or concerted practices in two cases, the Bus Cartel case (KHO:2019:98) and the Finnish Bakery Federation case (KHO 3713/2019) and augmented the fines previously ordered by the Market Court. In the Bus Cartel case, the Market Court had imposed fines totalling 1.1 million euros to seven participants in a market sharing cartel instead of the 38 million euros proposed by the FCCA. The SAC augmented the fines to a total of 8.9 million euros. In the Finnish Bakery Federation case, the Market Court had imposed fines of 15,000 euros to the Finnish Bakery Federation for illegal pricing recommendations instead of approximately 40,000 euros proposed by the FCCA. The SAC augmented the fines to 30,000 euros.

In both cases, the FCCA noted that even though it was pleased that the SAC confirmed the existence of antitrust infringements, the current legislation does not enable a level of fines that would be sufficiently high in proportion to the harmful nature of cartels, or in order to provide sufficient deterrence to cartels. According to the FCCA, Finland should put in place fining guidelines such as those applied by the European Commission, which would bring penalty payments to a sufficiently high level.

The ECN+ Directive aims to ensure that national competition authorities have the appropriate enforcement tools when applying the EU antitrust rules. Relating to the Finnish implementation of the Directive, the Ministry of Economic Affairs and Employment has nominated a working group, which has been tasked with assessing what legislative changes are required by the ECN+ Directive. According to the Ministry, the working group also has authority to assess the need and means to improve predictability of Finnish antitrust fines taking into account e.g. the fining rules and practices of the European Commission. The working group has until 6 March 2020 to propose for required legislative amendments. The ECN+ Directive has to be implemented by 2 February 2021.

You may find the press releases the FCCA published in English regarding the Bus Cartel case here and the Finnish Bakery Federation case here.

France

Launch of a public consultation on draft revised merger control guidelines

The French Competition Authority (FCA) has recently launched a public consultation to gather feedback on its draft revised merger control guidelines. The new guidelines aim at replacing the current merger control guidelines which were adopted back in 2013. The adoption of these new guidelines - which is expected “before the end of 2019” - is part of the FCA’s efforts to simplify and modernise merger control in France since autumn 2017.

On the substance, the guidelines provide in particular further information / clarifications on the simplified procedure (including more eligible cases, expedited assessment, online notification platform, etc.) as well as on the FCA’s assessment of notified transactions (in particular when it comes to gun jumping, remedies, review of commitments).

On the form, significant improvements have been made by the FCA in terms of structure (to make the guidelines easier to navigate) and references to its case law (the document was enriched with case law summaries inserted directly in the body text).

The draft revised guidelines are available here (in French) and the FCA’s press release, in English here.

The consultation is open until 16 November 2019 and contributions can be sent to: [email protected].

Germany

German Expert Commission “Competition Law 4.0” presents report and recommendations on digital sectors to the German economics minister Peter Altmaier

On 9 September 2019 the expert commission “Competition Law 4.0” presented its report and recommendations concerning a new European competition law framework for the digital economy. The Commission of Experts was appointed by the German Federal Minister for Economic Affairs and Energy, Peter Altmaier, in particular, to focus on competition law issues related to digital data economics and platform markets. In this regard, Minister Altmaier directed the Expert Commission to compile recommendations regarding improvements to the European and German competition law framework which was now presented officially.

The Expert Commission’s proposal is expected to be used to prepare the envisaged legislative change of the EU competition law during the German European Council presidency in the second part of 2020. The first step will be an assessment by the German Government. Thus, the proposal should be considered as a long term perspective which will have to undergo the EU legislative implementation processes. The report and the respective recommendations concern, in particular, the new digital economies of data, the legal regulation of digital platforms as well as cross-market digital ecosystems.

The Expert Commission stressed that the collection, combination and analysis of data are essential for digital innovation and are therefore an important part of many digital business models. Advantages in relation to data access might, in particular, result in important competitive advantages. In order to ensure effective competition on digital markets, the Expert Commission held that the sovereignty of consumers related to their data should be strengthened, in particular, by legally granting them portability of their data between different digital service providers, and respectively granting free/unhindered data access to new digital providers. In relation to online platforms, the Expert Commission recommended in particular, the revision of the EU Commission’s Notice on the definition of the relevant market as well as the release of a new Notice on market definition and market power determination in relation to digital platforms. The Expert Commission also recommended the implementation of European regulation regarding digital platforms which would prohibit dominant platforms to favor their own services in relation to third party services. Further, dominant platforms should be obliged to enable users to port their data to competing platforms in real time and in an interoperable format. Furthermore, regarding co-operation between companies in the digital sector, the Expert Commission also recommended enhancing legal certainty, as the current legal situation causes uncertainties deterring companies from entering new forms of co-operation, in particular, with regard to exchanging, sharing and collecting data. Therefore the Expert Commission recommended implementing a voluntary filing process at the European level for co-operation raising antitrust issues and being of high economic importance.

For further information please see the summary of the proposal (available in German and in English) or the full version of the report (only available in German).

Hungary

#Advertisement must come first

Fines are on the horizon for social media influencers not aligning their practice as set out by the Hungarian Competition Authority (GVH), as may be deduced from the GVH’s Rubint decision of 16 September 2019.

The case roots back to 2016, when the GVH started investigating social media marketing practices of certain dominant Hungarian influencers, including fitness celebrity Réka Rubint. Most of these investigations ended with commitments by the influencers. Unlike in the #kaszatibi decision delivered in April, this time the GVH found in its follow-up investigation that the commitments have not been fulfilled and therefore imposed a fine of altogether EUR 15,500 on Alakreform Kft. and Avanzo Trade Kft. (both linked to Réka Rubint).

Particularly, these undertakings failed to comply with the GVH’s guidelines applicable for “paid-for social media posts” that such content must be:

- communicated simply, clearly and unambiguously (the sponsored product and/or company must be clearly indicated in the content),
- in a way that it is emphasised, easily noticeable, and necessarily and conspicuously understood by consumers (the #reklam [in English: #advertisement] hashtag must come first in the content description) that
- the content is not an independent, neutral opinion or offer, but it is (also) paid-for or the result of some other direct economic interest.

See the Rubint decision here (in Hungarian). See a more in-depth analysis by Bird & Bird senior associate Bettina Kövecseshere here. 

Italy

The Regional Administrative Court of Lazio (“TAR”) confirms SIAE's abuse of dominant position in the market of services for intellectual property management

On 26 September 2019, the Regional Administrative Court of Lazio (“TAR”) rejected the appeal lodged by the Italian Authors’ and Publishers’ Association (the “SIAE”) against the decision of the Italian Competition Authority (the “ICA”) taken on 25 September 2018. In this decision, the Authority had ascertained SIAE's abuse of dominant position in markets for to the management of copyrights. Copyright management markets were not covered by the Italian statutory provision under which the SIAE enjoyed a legal monopoly until 2017. These markets included: (i) copyright management services for the authors as well as services related to the protection against unauthorized uses of works; (ii) the issuing of licences to users (such as TV broadcasters, organisers of concerts); (iii) the management of copyright and related rights on behalf of foreign collective associations; and (iv) the granting of multi-territorial licences to certain types of users, such as Spotify or Google.

According to the ICA's decision, SIAE has implemented a complex exclusionary strategy to the detriment of its competitors aimed at extending and maintaining its (former) legal monopoly. In this way, it also limited the freedom of authors and publishers to choose the collecting entity with which to associate or from which to request services, including services which are merely 'ancillary' to copyright intermediation. Taking into account the specificity of SIAE's position, the complexity of the markets concerned and the novelty of the case, ACI imposed only a symbolic fine of €1,000.

The TAR rejected all of the grounds of appeal raised by the SIAE, finding the decision of the ICA was consistently written and motivated. The TAR stated, inter alia, that the antitrust rules founded in Article 102 TFEU, must always be applied except - according to the strict interpretation of the derogating rules - when such application prevents the care of the general interest as entrusted ex lege to an institution. In the case under examination, SIAE conducted an undue extension of its dominant position with the disputed conducts - deriving from the original "reserve" provided by art. 180 of the Italian Law on Copyright (Law no. 633 of 22 April 1941). This position was expanded to extraneous activities not provided for in the reserve and not otherwise covered by regulation. Finally, the TAR considered the amount of the fine imposed by the ICA to be appropriate, since the ICA correctly considered the uncertainty due to the regulatory changes.

For more information please find the Court’s decision in Italian here.

The official press release (in Italian) of the ICA decision can be found here.

Poland

The Polish competition authority intensifying its enforcement in the food sector

The Polish Act on Counteracting the Unfair Use of Contractual Advantage in the Trade in Agricultural and Food Products (the “Act”) applies to all contracts for supply of agricultural and food products (i.e. between supermarkets or retail chains and food producers, as well as food producers and their suppliers) that may have effects in Poland.

The Act prohibits the abuse of contractual advantage in relations between a buyer and a supplier. Contractual advantage is defined as a significant disparity in the economic potential for the benefit of the buyer or the supplier. The abuse of such advantage is unfair if it is contrary to good morals, and threatens to violate, or actually violates, the other party's essential interest.

The abuse can take the form of unjustified contract termination, granting only one contractor the right to terminate the contract (or withdraw from it), making the conclusion of contracts conditional upon obligations not related to the contract (shelf fees), or unjustified extending of payment terms.

Since the Act's entry into force, the Polish Office of Competition and Consumer Protection (UOKiK) has undertaken a number of interventions in the food sector, most of which were finalised with companies voluntarily changing and remedying their practices. However, UOKiK’s enforcement of the Act has recently even intensified with the first fine imposed and new probes in the pipeline.

• On 1 October 2019 UOKiK imposed its first and maximum-possible fine under the Act, i.e. 3% of the company’s annual turnover. The fine of PLN 8.3 million (EUR 1.9 million) was imposed on T.B. Fruit Polska for delaying payments as the average delay amounted to over 100 days.
• On 30 September 2019 UOKiK issued its decision regarding Rauch Polska's practice to impose an unfair pricing mechanism on suppliers and delay payments. The company avoided the fine as it agreed to amend its supply contracts, increase the percentage of products supplied directly from farmers, remedy unpaid amounts or reimburse payment delays, and train suppliers on their rights and obligations specified in the contracts with the company.
• On 25 September 2019 UOKiK informed that as a result of the dawn raid of Jeronimo Martins Polska’s (JMP) premises they have initiated proceedings against the company's alleged abuse of contractual advantage. UOKiK expressed concerns about a rebate that JMP receives from its suppliers and that is not fixed in advance, but is only determined once the supplies are executed. As a result, JMP’s suppliers cannot foresee if they will have to give an additional rebate or how big it will be.

Companies active in the Polish food sector should verify the compliance of their supply contract with the Act. They should also monitor any payment delays, as well as any situations that may lead to suppliers' complaints to UOKiK.

More information is available on UOKiK's website: the recent decisions, the probe of JMP's practices.

Spain

The CNMC investigates possible anti-competitive practices in the chemical and banking sectors

In September, the Spanish Competition Authority (CNMC) has launched two different antitrust investigations, one concerning chemical products and the other concerning the network of automatic cashiers (ATMs).

From 17 to 19 September 2019, the CNMC carried out dawn raids at the premises of several companies active in the chemical sector. The CNMC, in collaboration with regional competition authorities, is investigating alleged anticompetitive practices consisting of agreements and/or concerted practices in relation to the production, marketing and distribution of chemicals.

Particularly, according to the CNMC, the companies under investigation might have allocated quotas and geographical areas to various distributors in the Spanish territory.

Only a week later, the CNMC carried out additional dawn raids over the course of three days in the headquarters of several banks and network administrators operating in the banking market. The anticompetitive practices are reportedly based on a systematic and unjustified denial of access to certain financial entities to its network of ATMs under the same favourable conditions as those offered to other banks.

The opening of the investigation follows the submission of an individual complaint which, as stated by the Spanish press, would have been filed by ING Bank. According to the CNMC, this conduct would have been in effect for several years, aimed at jeopardizing the competitive capacity of certain entities in the market for the provision of payment methods.

For more information, please find the CNMC's official press releases on the investigations conducted on the chemical sector here, and on the banking sector here.

The Netherlands

The Dutch Minister of Economic Affairs & Climate approves the acquisition of rival postal operator Sandd by PostNL despite refusal by ACM to grant a license

In February of this year, PostNL announced its intention to acquire rival operator Sandd. In view of the rapidly declining postal volumes, the two operators consider the combination of their nationwide postal networks necessary to ensure continuity and affordability of postal services. On September 5th 2019, the Dutch Authority for Consumers and Markets (ACM) rejected the request for merger clearance – after in-depth phase 2 investigation - stating that the creation of a network monopoly in the field of postal services will lead to significant price increases and is not justified by economic efficiencies nor necessary for the provision of the universal postal service.

The day following this refusal, PostNL applied for the approval of the Dutch (Deputy) Minister of Economic Affairs and Climate on the basis of Article 47 of the Dutch Competition Act. This provides competence to the Minister to grant a license, de facto over-ruling refusal by the ACM, if there are reasons of general interest outweighing the expected restrictions of competition. On 27 September 2019 the Deputy Minister decided to grant the license for overriding public interests including the continuity and affordability of high quality postal services in the longer term, better protection of postal employees and the financial interests of the Dutch state. This approval was subject to conditions on PostNL ensuring that the postal tariffs are cost-based (capping the return on mail services at 9%), that the costs for integration of Sandd will not be attributed to the basic postal service and obliging PostNL to provide access to its national network for regional postal transport companies.

This is the first time in the Netherlands that a merger has been approved by the Minister overruling the refusal of a merger license by the ACM. Please find the decision (in Dutch only) here.

Dutch competition authority publishes a sector report on the impact of biosimilars on competition between TNF-alfa inhibitors

On 24 September 2019 the Dutch Authority for Consumers and Markets (ACM) published its report on the 2018 initiated market study about the effects the introduction of biosimilars had on competition between TNF alfa inhibitors on the Dutch market.

ACM did not establish violations of competition law during its market study, but the ACM did not rule out the possibility that conditional discounts for originator medicines could be found restrictive of competition. ACM identified a number of risks for the sustainability of competition in the long run and stated it will enforce the competition rules if it were to, in the future, receive market indications of e.g. conditional discounts for originator medicines being implemented with the aim of excluding competition on the Dutch market.

Please find the ACM report (in Dutch only) here and our blog on this report (in English) here. Please contact the authors of the blog at [email protected] or [email protected] if you would like to receive an informal English translation of the ACM report.

UK

UK's competition authority challenges pay-for-delay agreement

On 3 October 2019 the Competition and Markets Authority (CMA) issued a Statement of Objections (the “SO”) to three pharmaceutical companies over pay-for-delay agreements in the market for Addison's disease treatment.

In its SO the CMA sets out its provisional view that, in 2016, pharmaceutical company Aspen unlawfully agreed to pay 2 other firms, Amilco and Tiofarma, to stay out of the UK market for fludrocortisone acetate tablets. This medicine is used to treat adrenal insufficiency, commonly known as Addison's disease. The CMA alleges Tiofarma and Amilco colluded with Aspen by agreeing to stay out of the market so that Aspen could maintain its position as the sole UK supplier of fludrocortisone. In exchange, it is alleged that Tiofarma was made the sole manufacturer of fludrocortisone for direct sale in the UK, and Amilco received a 30% share of the increased prices that Aspen was able to charge.

The SO follows Aspen's admission, in August 2019 (on which we earlier reported in our newsletter here), that it took part in this allegedly anticompetitive arrangement. If the CMA would ultimately conclude that there has been an infringement, Aspen has also agreed under this admission to pay a maximum financial penalty of £2.1 million. Amilco and Tiofarma have made no such admission.

We will follow the developments in the above-mentioned case and make sure to keep you up to date in our upcoming newsletters.

Please find the press announcement by the CMA here and for more information on other CMA investigations in the wider pharmaceutical sector please refer to the dedicated CMA webpage here.

Now live!

Our new report "Blockchains uncut: risks, rewards and regulations" helps to demystify the technology, explore the various legal issues and clarifies the regulation & security around blockchain. Click here to download the report.

For a competition-related angle on blockchain, read a previously published article "Blockchain technology and competition law - issues to be considered" by Morten Nissen and Martin von Haller Groenbaek.

Upcoming speaking engagements at Competition & EU law conferences

• Fourth Annual Conference of the Florence Competition Programme: Hipster Antitrust, the European Way - October 25th in Fiesole, (Florence)

Competition partner Hein Hobbelen will be a panelist on the topic How to tackle concentration in digital markets.

• Knect365 Competition Law & Regulation in the Telecoms & Communications sectors - November 5th in Brussels.

Marjolein Geus, Chair of Bird & Bird’s Global Tech & Comms Group and Head of the international sector regulation and consulting practice of the firm, will be a panelist on the topic Working within New Regulatory Frameworks. Get a 20% discount using VIP code FKW82896EMSPK when registering.

• Knect365 Competition Law & Regulation in the Media, Broadcasting & Digital Sectors - November 6th in Brussels. Partner Roelien Van Neck will speak on the topic Geo-blocking Regulation in Practice. Get a 20% discount using VIP Code FKW82897EMSPK when registering.

• Knect365 Competition Law and Regulation in the Energy Sector Conference - Nov 19th in Brussels. 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 - 25th - 27th 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 - November 28th in Brussels. This free half-day seminar is organised by the European University Institute (EUI) and Bird & Bird in the context of the Florence Competition Programme. Click here to register for the event.