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Competition law as a guardian of public health (Overview of competition events for January 2024)

Competition law as a guardian of public health (Overview of competition events for January 2024)

We are pleased to present the forty-fourth edition of our newsletter on events in the world of competition law in January 2024. Once again, we present a purely subjective selection of events that we found interesting.

The beginning of 2024 has been very eventful in terms of competition events. We have therefore chosen something from each topic. We look at (non-pricing) cartels, abuse of dominance in network industries, premature merger implementation, new merger trends in general and procedural issues in competition enforcement.

You can't hide from the competition authorities abroad

Today's competition world is so interconnected that there is nowhere in Europe to hide from competition authorities. This was confirmed by the Slovak  Antimonopoly Office, which in January conducted a several-day (!) on-site nspection on behalf of the Hungarian Competition Authority at the premises of an undertaking based in Slovakia. The reason is suspected anti-competitive behaviour on Hungarian territory. Anyone who thinks they can avoid sanctions by not having a registered office, branch or other assets in the country where the anti-competitive behaviour takes place is mistaken.

It is not possible to hide from an on-site inspection, but neither is it possible to hide from a request for information and documents. The British competition authority (CMA) sent requests for information and documents to the German-based parent companies of BMW and Volkswagen. The companies refused the requests on the grounds that CMA did not have jurisdiction because of their registered office. CMA fined them for non-cooperation. The UK Court of Appeal has now confirmed that CMA has the power to send the requests to the German parent companies. To do otherwise, it said, would create a "a perverse incentive for conspirators to move offshore to organise cartels directed at harming the United Kingdom market."

Cartel undermining food safety

The French competition authority fined canned food manufacturers, including Andros, Bonduelle, General Mills and Unilever, EUR 19.6 million for agreements restricting competition between them. The producers agreed not to market bisphenol-free cans until the legal ban on bisphenol in food packaging comes into force in two years' time. The Competition Authority considers this to be a very serious infringement, as consumers did not have a choice of bisphenol-free products at a time when bisphenol was already considered to be a health hazard.

Employee-related agreements

The campaign of the Czech Competition Authority against employers' agreements not to take over employees/workers continues in 2024. So far, all the cases (concerning professional associations) have been closed outside the administrative procedure under the competition advocacy. We therefore have to wait for a decision on sanctions, which would clarify the position of the Czech Antimonopoly Office.

In January, it dealt with the codes of ethics of the Direct Selling Association and the Association of Personnel Service Providers. Of interest was a provision in the former's code of ethics prohibiting the solicitation of direct sellers, and a provision in the latter's code prohibiting the offering of job placements to jobseekers who had already been placed. In both cases, the associations removed the provisions in question from their codes of ethics and the Czech Competition Authority closed the investigation without initiating administrative proceedings.

However, administrative proceedings in this area can be expected. Indeed, the Czech Competition Authority has made these agreements one of its priorities. In addition, a recent study by the UK Competition Authority, published in January, shows that 2-5% of employers have some form of no-poach arrangement in place.

Access to networks

In January, the European Commission (EC) accepted commitments from the Spanish rail operator Renfe to address concerns that it had abused its dominant position in the online ticketing market. Renfe was alleged to have done so by denying competing online ticketing platforms access to information. Specifically, this concerned (i) the full content of Renfe's ticket offer, discounts and features, and (ii) real-time data (pre-journey, on-journey or post-journey) relating to rail passenger services. In the proceedings, Renfe committed to provide access to this data to competing platforms, with the proviso that it could only temporarily restrict access if this would adversely affect its sales systems or directly restrict the sale of its tickets in general. The commitments include a non-circumvention clause under which Renfe undertakes not to take any unfair, unreasonable or discriminatory technical or commercial measures that would effectively restrict access to the information. It should be recalled that access to updated timetable data has also been addressed by the Czech Competition Authority in previous years.

Prohibited self-preferencing is not only the domain of digital platforms, as one might think (see, for example, the Advocate General's opinion in the Google Shopping case in January). It also occurs in the physical network sectors. The cases dealt with by the Spanish competition authority are a case in point. It has already imposed a fine on Enel Green in 2022. The latter, as the manager of renewable energy access to the electricity transmission system, prioritised its own access requests, despite the fact that the capacity of the nodes was limited (we wrote about it here in Czech). In January, it also fined Luminora Solar Doce EUR 384,672 for the same offence.

Premature implementation of a merger

It is well known that competition law prohibits the implementation of a merger before it has been approved. However, what can be considered a concentration can sometimes be surprising. As the decision of the Austrian Cartel Court shows, a merger can also consist of taking over a long-term lease of retail space from another competitor (in this case a supermarket), provided that both meet the turnover criteria. Although REWE notified the lease after the competition authority's investigation, it now faces a fine.

However, the economic situation of merging competitors does not always allow them to wait for the merger to be cleared by the competition authorities. In such a situation, it is possible to apply to the competition authority for an exemption from the provisional prohibition of implementing the merger. This was the case when the French competition authority assessed the acquisition of 61 Casino retail stores by another retail chain, Intermarché. In view of Casino's long-standing financial problems, the authority authorised the takeover of the stores (and their opening under the Intermarché name) three months before the merger was cleared. The exception was three stores where there were concerns about the strengthening of Intermarché's market position in the area. These stores must also be divested by Intermarché in accordance with the January decision of the competition authority.

Ecosystem mergers

In January, the third proposed acquisition by a major technology company in recent months ended in failure. In September 2023, the EC banned the merger (we wrote about it here). In December 2023, Adobe dropped its acquisition of Figma as a result of the EC's negative stance. Finally, there was the proposed Amazon/iRobot merger. This is neither a merger between competitors, nor a merger between a buyer and a supplier - the types of mergers that are traditionally seen as potentially raising competition concerns. The EC's concern was different: the strengthening of the digital platform ecosystem in the case of a conglomerate merger.

In the case of the Amazon/iRobot acquisition, the EC was concerned that Amazon would then favour its own iRobot products (self-preference) over other manufacturers' robot vacuum cleaners on its marketplace. The acquisition of iRobot could thus strengthen Amazon's position as a leader in the development of smart home solutions and lock users into its ecosystem. Amazon refused to offer commitments to address the EC's concerns, arguing that these concerns were already addressed by the Digital Markets Act (DMA). With the EC's assessment of the acquisition pointing towards a prohibition, Amazon decided to withdraw from the transaction itself in January.

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