European Commission settles three cartel cases in vehicles sector

On 21 February, the European Commission announced three separate cartel settlements.  These are the first cartel decisions announced by the Commission so far this year.  What is particularly striking about these cases is their connection with a key European industry sector: cars and trucks.

The first case concerns the market for deep sea transport of cars, trucks and large vehicles on routes between Europe and other regions.  The Commission imposed fines totalling EUR 395 million on CSAV, "K" Line, NYK, and WWL-EUKOR.  MOL received immunity from fines.

The second case involves suppliers of spark plugs in the EEA. The Commission imposed fines totalling EUR76 million on Bosch and NGK.  Denso received full immunity from fines.

A third case concerns braking systems in two separate cartels.   The Commission imposed a total fine of EUR75 million.  TRW received immunity in relation to the hydraulic braking systems cartel and Continental received immunity in relation to the electronic braking systems cartel.

Sources:  Cases AT.40009 (maritime car carriers), AT.40113 (spark plugs) and AT.39920 (braking systems).

Court of Appeal allows Iijama LCD and CRT litigation to go ahead

The Court of Appeal has allowed appeals in two cartel damages actions brought by Iijama group arising out of the European Commission’s decisions in the liquid crystal display (LCD) and cathode ray tube (CRT) cartels. 

The defendants had applied to the High Court to have the actions struck out on the basis of lack of jurisdiction. The applications were granted in the CRT case but not in the LCD case.  The Court of Appeal considered the appeals together.

The main issue in the appeals was whether the claimants had a real prospect of success in their claim for infringement of Article 101 TFEU and the harm they suffered as a result of the increase in purchase prices in the downward supply chain.  In the circumstances, the products had first been supplied outside the EEA and then to a claimant company outside the EEA and which then supplied them to a claimant group company in the EEA for onward sale and distribution in the EEA. 

The Court of Appeal ruled that the question of jurisdiction could not be determined adversely against the claimants on a summary application and should proceed to full trial.  The Court of Appeal held that it was reasonably arguable that the claims are subject to EU law and that the actions should be heard in England and Wales.

The Court of Appeal’s ruling is a welcome boost to claimants alleging that they have suffered loss as a result of a cartel with global dimensions and who seek to bring their claims in England and Wales. The Court of Appeal did not dismiss too readily the arguments of the claimants that liability arises under Article 101 TFEU even where the harm they have suffered is at several stages of remove from the first direct sales taking place outside the EEA.

The LCD Appeals [2018] EWCA Civ 220

Indian Competition Commission fines Google for abuse of dominance

The Competition Commission of India (CCI) has fined Google 1.36 billion rupees (€17.2 million) for abusing its dominant position in India’s online search markets.  The penalty follows a six-year investigation.

The CCI started its investigation in 2012 following a complaint from Indian matchmaking site Matrimony.com and the consumer group Consumer Unity
& Trust Society (CUTS).

The penalty represents 5 per cent of Google’s Indian revenues in 2013, 2014 and 2015.

The CCI however dismissed allegations of abuse in relation to some of Google’s specialised search design (OneBoxes), AdWords, online intermediation and distribution arrangements.

The CCI’s 8 February order finds that Google gave preferential treatment to its own products in the first and other search result positions, apparently regardless of relevance.  It has ordered Google to cease from relevance-neutral approaches to search result prioritisation that promote its own products. 

The CCI has also found that Google blocked competitor search engines from entering and expanding on the Indian market through restrictive provisions in its contracts with publishers.

It should be noted that there were two dissenting views in this majority (4-2) decision and which call into question whether Google’s practices were abusive.

Court of Justice to rule on Damages Directive

The European Court of Justice is being asked whether the Damages Directive (2014/104/EU) can be applied to a competition law action that was brought prior to the 27 December 2016 implementation date.

The Lisbon Commercial Court has asked the Court to make a preliminary ruling in an action launched in February 2015.  Canadian cable company Cogeco brought in the Lisbon Commercial Court a claim for €11.5 million in damages from Sport TV, Portugal’s main pay-TV sports channel.  More than a year after the due date for implementation, Portugal has not yet implemented the directive.

The Portuguese Civil Code has a three year limitation period for seeking non-contractual damages and the conduct at issue occurred before the Commission’s vote on the directive in November 2014.

The reference highlights that notwithstanding the enactment of the damages directive and its goals to harmonise procedural rights across the EU in competition cases, there will remain scope for satellite litigation on how to interpret rights under EU law. 

It may be that the Court does not provide particularly detailed guidance on the scope of the directive and will instead focus on the effectiveness of national law in giving effect to EU law rights.

Request for a preliminary ruling from the Tribunal Judicial da Comarca de Lisboa (Portugal) lodged on 15 November 2017 — Cogeco Communications Inc v Sport TV Portugal and Others (Case C-637/17)

 

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).