European Commission probes Qatari LNG supply agreements

The European Commission has opened an antitrust investigation into supply arrangements between Qatar Petroleum and EEA importers of liquefied natural gas (LNG).

The Commission is investigating whether Qatar Petroleum’s long-term supply agreements, for the supply of LNG in the EEA contain direct or indirect restrictions on the ability of the buyers to sell the LNG in the EEA. Some of these arrangements are of 20 or 25 years’ duration.

The Commission suspects that such practices, if proven, violate Article 101 and 102 of the TFEU.

The Commission has pointed to its previous decisional practice citing precedents such as its investigations into GDF/ENI and GDF/ENEL where territorial restrictions were treated as restrictions ‘by-object’.  Those cases were decided over 15 years ago and although the Commission has identified a potential theory of harm in the current investigation it is less clear whether it will focus on Article 101 or 102 in this case.  Qatar Petroleum is the largest gas exporter in the world and apparently accounts for close to 40% of the EU’s gas imports and more in some member states.

Case AT.40416 - Qatar Petroleum. Commission press release IP/18/4239

Have I got news for you? Media ownership regulation and the future of Sky News

As part of a series of lectures and launch of a Competition Law Summer School, on Wednesday 20 June 2018 Suzanne Rab will be presenting and leading a discussion on media ownership regulation. The session promises to be highly topical against the backdrop of rival bids for Sky News and the aftermath of an extensive public interest review by the Competition and Markets Authority. The talk begins in Chambers at 18:00 followed by drinks at 19:15. This invitation is open to professionals with an interest in this sector and we would be very pleased if you could join us. Please email rsvp@serlecourt.co.uk to confirm your place.

https://www.linkedin.com/feed/update/urn:li:activity:6413364054101880833

Comcast offers USD65 billion for Fox

Comcast offers USD65 billion for Fox

Comcast’s offer is the latest in a series of rival bids to acquire the film, TV and international assets of Fox.

The offer adds a further twist to Fox’s own ongoing attempts to acquire the interests in Sky News that it does not already own.  That transaction is itself subject to Fox satisfying the UK government that there are suitable commitments in place to avert public interest concerns and safeguard the independence of Sky News.

Comcast’s own proposal is not straightforward in terms of regulatory issues, although the focus of attention has been more on traditional antitrust issues through the merger of content production and distribution.

The Comcast proposal is not unexpected and takes place against increasing vertical integration across the media production and supply chain.  It seems that the recent failure by the US administration to block AT&T from buying Time Warner might well fuel appetite for similar combinations.

Dixons Carphone and data protection litigation post-GDPR

The announcement that 5.9 million Dixons Carphone customers’ personal records have been accessed without authorisation has put a renewed focus on the prospects of group litigation based on data protection claims.

The incident happened before the new data protection rules under the GDPR came into force on 25 May 2018, which has brought with it tougher penalties of up to 4% of global turnover or 20 million euro, whichever is greater.

In the new regime we can certainly expect a growing dispute climate, not least because the GDPR has focused the minds of data subjects on their rights.

Article 79 of the GDPR gives a right to an effective judicial remedy for data subjects against any unlawful processing of their personal data by a data controller or data processor.  Article 82 gives any person suffering damage as a result of a breach of the GDPR with the right to compensation.

Perhaps one of the main more immediate practical impacts of the GDPR is that we will see data protection claims bolted onto other causes of action including breach of confidence and infringement of privacy, rather than as standalone claims.

The UK has no direct equivalent to opt-out class actions outside the specific framework of the Consumer Rights Act 2015 relating to competition law.  However, the Civil Procedure Rules do provide a basis for group claims to be made in a data protection context.

Have I got news for you: What does the future hold for Sky?

The bidding lines are drawn as the Government has cleared the way for rival bids for Sky.
The Culture Secretary has approved Comcast’s bid for Sky and said that Fox’s bid for Sky can proceed if Sky News is divested in a way that safeguards the public interest. 
The UK currently has one of the more complex regulatory frameworks for review of media mergers.  Exceptionally, this is a sector where in some situations the decision on whether to approve a merger rests with the Government on media public interest grounds.
Fox is seeking to acquire the 61% interest in Sky that it does not already own.  
Meanwhile, Disney has entered a deal to acquire Fox’s interests in Sky and Tata Sky, among other assets. 
Today’s announcement follows an independent review of the Fox-Sky transaction by the Competition and Markets Authority.  As to plurality, the theories of harm identified by the CMA were a reduction in the range of viewpoints available to and consumed by the public; and an increase in the influence of the Murdoch Family Trust on public opinion and the political agenda.  In relation to broadcasting standards, the CMA identified a theory of harm that there will not be a genuine commitment to broadcasting standards after the transaction but largely dismissed such concerns.
Regulators tend to operate on the basis of what is known or reasonably likely and not on what may happen at some future date.  It remains to be seen whether Fox can offer suitable undertakings to avert public interest concerns, but the door is open

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