European Commission secures binding commitments from Gazprom

European Commission secures binding commitments from Gazprom

The European Commission has accepted binding commitments from Gazprom to address concerns that Gazprom has abused its dominant position in markets for the wholesale supply of gas in Central and Eastern Europe (CEE).

The Gazprom case reflects a particular theme in the last few years where the Commission’s attention has been on abuse of dominance investigations in the energy sector in the CEE.  It has undertaken high profile investigations against European energy incumbents in Bulgaria, the Czech Republic and Romania, as well as against Russia’s Gazprom.   

Gazprom was among the companies that were subject to a dawn raid in 2011.  The inspections concerned its German (Gazprom Germania) and Czech (Vemex) offices.

On 4 September 2012 the Commission announced that it had opened formal proceedings to investigate whether Gazprom may be abusing a dominant position contrary to Article 102 TFEU. 

An indication of the complex interplay between EU law and political relations with Russia was the presidential decree signed in September 2013 which banned ‘strategic companies’ – mostly state-owned companies such as Gazprom – from disclosing information to foreign countries, companies or regulators without the prior approval of an authorised Russian federal body.  This was widely seen as an attempt to obstruct the Commission’s competition investigation into Gazprom.

The commitments require Gazprom to remove any restrictions placed on customers to re-sell gas across EU borders. Gazprom must enable gas flows to and from parts of the CEE that are isolated from other member states.

Gazprom must put in place a process to ensure competitive gas prices.  It cannot act on any advantages relating to gas infrastructure, which it may have obtained from customers as a result of its position in gas supply.

The commitments must remain in place for eight years.  If Gazprom fails to comply, the Commission can impose a fine up to 10% of its worldwide turnover without having to prove an infringement of EU competition law.

http://europa.eu/rapid/press-release_IP-18-3921_en.htm

Final settlement: Supreme Court allows appeal by CMA in tobacco retail pricing case

The Supreme Court has allowed the CMA’s appeal against a judgment of the Court of Appeal finding that the OFT was wrong to fail to extend to Gallaher and Somerfield the benefit of appeals in favour of other parties arising out of its 2010 tobacco retail pricing investigation.

The OFT repaid the fine imposed on TM Retail on the basis of assurances given in the course of early resolution that it would not be prejudiced by the outcome of appeals brought by other parties.  No such assurances were given to Gallaher and Somerfield who, in common with TM Retail, had also entered into early resolution agreements but who had not appealed against the OFT’s infringement decision in time.

The Court of Appeal had found that the OFT’s failure to repay the fines paid by Gallaher and Somerfield was a breach of the principle of equal treatment and was unfair.

The Supreme Court found that even if the OFT had acted contrary to a legitimate expectation, the differential treatment was objectively justified and not irrational.  It did not provide a basis for reversing the fines that had been paid by Gallaher and Somerfield.

The Supreme Court found that the parties who entered into early resolution knew that there was a possibility that other parties might appeal successfully.  Gallaher and Somerfield took that risk without obtaining any assurances from the OFT as to how they might be affected by any successful appeal.

The problem for Gallaher and Somerfield was that they did not obtain explicit assurances from the OFT or appeal the original infringement decision in time. 

The OFT accepted that it made a mistake in offering the assurances to TM Retail that it did, so the fact pattern in this case is unlikely to be repeated.  Despite its more historical significance, the Supreme Court’s decision underscores the principle of finality of settlement.  It will be a rare case where settling parties can reopen a settlement that they have entered into voluntarily in return for an abbreviated procedure and settlement discount.

Source:  R (on the application of Gallaher Group Ltd and others) (Respondents) v The Competition and Markets Authority [2018] UKSC 25

High Court grants interim injunction against Google

The High Court has granted a software application developer, Unlockd Ltd (Unlockd), an interim injunction to prevent Google from withdrawing or suspending ‘Admob’ services used for the delivery of advertisements on mobile phones.

The High Court considered that if the services were to be withdrawn there was an appreciable risk of harm to existing commercial relationships and that damages would be inadequate.

Unlockd alleges that the decision by Google to withdraw the Admob services constitutes an abuse of Google’s dominant position and the High Court considers that there is a serious issue to be tried.

Unlockd asked for an expedited trial to start in July but due to the unavailability of a suitable competition judge the earliest trial date that could be found is at the end of September.  The trial is expected to last for five to seven days, starting on 24 September.

Unlockd Ltd and Unlockd Media Technology Ltd v Google Ireland Ltd, Google Commerce Ltd and Google LLC (unreported)