European Commission fines Qualcomm EUR 997 million for abuse of dominance

The European Commission has fined Qualcomm EUR 997 million, finding that its exclusivity arrangements with Apple infringed Article 102 TFEU.

The Commission has found that Qualcomm holds a dominant position in the worldwide market for 4G baseband chipsets.  It found that Qualcomm had abused that position for five years by agreeing to make significant payments to Apple, amounting to billions of dollars, on the condition that it would exclusively use Qualcomm chipsets in iPhone and iPad devices.

The Commission concluded that Qualcomm’s practices left rivals with no chance of competing for this significant part of Apple’s business.  It appears that the Commission placed considerable weight on documentary evidence suggesting that Apple would have been willing to switch to rivals absent the arrangements.

The fine represents 4.9% of Qualcomm’s 2017 turnover and is the third largest fine that the Commission has ever imposed on a single company.

European Commission dawn raids in paper sector

European Commission dawn raids in paper sector

The European Commission has confirmed that it has carried out a third dawn raid into the kraft paper and industrial packaging sector.

On 16 January the EU enforcer raided the Brussels office of RISI, a subsidiary of Euromoney Institutional Investor.

The Commission carried out raids in March 2016 and March 2017 as part of its competition investigations into the same sector.  At the time it did not say which companies were raided. Mondi has, however, confirmed a raid of its Austrian premises.

The Commission has not investigated the paper and bags market for over ten years. It appears that the current probe concerns horizontal cartelisation.

The latest raid on a market intelligence provider may suggest that the Commission is focusing on the role of RISI as a platform for exchange of sensitive pricing information.

European Commission probe into cross-border access to pay-TV

European Commission probe into cross-border access to pay-TV

The European Commission has extended its competition investigation into cross-border pay-TV services to a subsidiary of NBCUniversal.

The 12 January 2018 update is the latest development in an investigation where the Commission opened formal proceedings in January 2014 in relation to licensing agreements between some of the major US film studios and the biggest European pay-TV broadcasters (including Sky UK, Canal Plus of France, Sky Italia, Sky Deutschland and DTS).

The Commission is concerned that the agreements may be restricting broadcasters from providing cross-border services such as by preventing subscribers from other member states from accessing the services.

In July 2015, the Commission sent a statement of objections to Sky UK and six US studios (Disney, NBCUniversal, Paramount Pictures, Sony, Twentieth Century Fox and Warner Bros).  Although the Commission has sent a supplementary statement of objections to a subsidiary of NBCUniversal to reflect changes in its corporate structure, the substantive scope of the Commission’s investigation remains unchanged.

The Commission has closed the proceedings opened in January 2014 against Paramount Pictures and accepted binding commitments from Paramount in relation to allegations in the 2015 statement of objections. That decision is subject to appeal (Case T-873/16 - Groupe Canal + v European Commission (OJ 2017 C38/50)).

Cases on the interaction between territorial exclusivity and competition law raise policy issues that are not new, but which have not been addressed head-on or in a co-ordinated way by the Commission.

TV has traditionally been organised on national lines but set against the EU vision of a single market.  Case law has developed in piecemeal fashion.

Rights-holders and satellite broadcasters will need to adapt to the inability to strictly enforce territorial divisions, against a background of uncertainty while important cases remain to be decided. This has a knock-on impact on the commercial value of rights. The implications are not confined to pay-TV, with potential ramifications across the audio-visual sector where packaged rights are sold (sports, film, tv, music).

Banks seek exemption from Hong Kong Competition Ordinance

Fourteen banks – including JP Morgan, Standard Chartered, HSBC, Citigroup and Bank of China – have applied to the Hong Kong Competition Commission to seek confirmation that their Code of Banking Practice is compatible with the Competition Ordinance.

The Competition Ordinance came into effect in December 2015 and prohibits restrictive agreements through its First Conduct Rule.

If the application is successful, the Hong Kong Competition Commission will issue a decision exempting the Code from enforcement.

The Code is voluntary but non-compliance could, in principle, lead to enforcement action from the Hong Kong Monetary Authority.

The banks maintain that the Code has neither the object or effect of harming competition in Hong Kong.  However, it has been acknowledged that there are some elements which could be regarded as giving rise to competition issues to the extent that they could restrict the independence of banks to determine their own charges.

The Competition Commission has invited comments by 15 February 2018.