Energy, Chemicals & Infrastructure

CMA Activity

In 2019, the CMA devoted considerable resources to preparing for the UK’s exit from the EU. It carried out a consultation and published guidance on the functions of the CMA after a ‘no deal’ exit from the EU. In anticipation of its increased workload, it recruited additional staff at all seniority levels and completed its move to new premises in Canary Wharf. It also increased its focus on digital markets and took a less permissive approach to gun-jumping and failures to provide full responses to formal requests for information.

On December 19, 2019, the FCO published its first report on market power in the electricity generation sector (“Market Power Report”).[1] The report is intended to provide market participants with more legal clarity as to their own position in the market, thereby complementing the recently published FCO/FNA Guidelines on the control of abusive behavior in the electricity generation and wholesale trade sector[2].

On December 27, 2019, the FCO published a summary of its activities in 2019.[1] In 2019, the FCO imposed fines in cartel proceedings totaling approximately €848 million in five cartel proceedings, examined around 1,400 notified mergers, conducted numerous abuse of dominance proceedings (including against Facebook and Amazon), and received 104 applications for review in public procurement cases.

On December 28, 2020, the FCO published its second report on market power for the electricity generation sector (“Market Power Report”)[1] one year earlier than statutorily required, because the FCO considered the imminent phase-out of nuclear and coal energy could affect the position of the market leader RWE.

On December 3, 2019, the Commission approved German battery maker Varta AG (“Varta AG”) as a suitable purchaser of assets divested by US-based rival Energizer in its acquisition of U.S. consumer products company Spectrum Brands’ batteries and portable lighting business.[1] In a separate decision on the same day, the Commission also cleared Varta AG’s acquisition of the divested Varta-branded assets subject to behavioral remedies.[2]

On December 13, 2019 the Commission published an anonymized summary of the contributions submitted by NCAs during the Commission’s ongoing evaluation of the Vertical Block Exemption Regulation (“VBER”) and the accompanying Guidelines on Vertical Restraints (“Guidelines”), which will lapse in 2022.[1] The Commission received 20 contributions from NCAs across the EEA.[2]

On December 3, 2019, the Commission published its decision granting steel company Evraz Group S.A.’s (“Evraz”) request for a partial waiver of commitments it submitted as part of its acquisition of Highveld Steel and Vanadium Corporation Limited (“Highveld”). The Commission cleared the transaction in 2007, subject to divestment and behavioral commitments to address its concerns regarding anticompetitive effects in the markets for the supply of high-purity vanadium pentoxide and vanadium chemicals. The commitments also addressed concerns regarding a potential foreclosure of downstream competitors on the markets for vanadium oxides and finished vanadium products.

On November 29, 2019, the Council of State partially annulled[1] a judgment delivered by the TAR Lazio in 2018[2], which had upheld the ICA’s decision to impose on Holcim Italia S.p.A. (“Holcim”) a fine amounting to €2, 381,252 for participating in a price-fixing cartel concerning the Italian cement market.[3]

On November 28, 2019, the Court of Justice partially granted the appeal brought by ABB and annulled a part of the Commission’s Power Cables decision.[1] In particular, the Court of Justice upheld ABB’s argument that the Commission did not adduce sufficient evidence that the cartel extended to accessories for power cables with voltages between 110 kV and 220 kV. The Court of Justice criticized the General Court for using a wrong evidentiary standard in reviewing the Commission’s decision.