On June 2, 2020, the Commission published two inception impact assessments[1] and two public consultations which address two new policy initiatives: (1) a new market investigation tool (“new competition tool”);[2] and (2) a regulatory instrument that would ex ante govern large online platforms that act as gatekeepers with significant network effects in the European Union’s internal market.[3]
The Commission Launches its Public Consultation on the Review of the Vertical Block Exemption Regulation and Publishes a Roadmap for its Future Review of the Motor Vehicle Block Exemption Regulation
On June 2, 2020, the Commission published two inception impact assessments[1] and two public consultations which address two new policy initiatives: (1) a new market investigation tool (“new competition tool”);[2] and (2) a regulatory instrument that would ex ante govern large online platforms that act as gatekeepers with significant network effects in the European Union’s internal market.[3] These initiatives are part of the Commission’s wider efforts to modernize EU competition law in an era of digitalization. Stakeholders are invited to submit their comments up until September 8, 2020[4] and the impact assessments are expected to be submitted to the Regulatory Scrutiny Board of the Commission and be finalized in the fourth quarter of 2020.
Implications of the Three/O2 Judgment for EU Merger Control
On May 28, 2020 the General Court overturned Commissioner Vestager’s first prohibition decision, blocking a 4-to-3 merger in the UK
The Commission Waives Merger Commitments in Takeda/Shire and Nidec/Whirlpool
The Commission’s Notice on remedies states that waivers “will very rarely be relevant for divestiture commitments” and since divestiture commitments are required to be implemented in a short time after the decision, it is “very unlikely” that sufficient changes in market circumstances will have occurred for the Commission to accept any modifications of the commitments.[1] In May 2020, the Commission waived commitments given to secure merger control approval in two cases.
The Commission Publishes Support Studies for the Evaluation of the Vertical Block Exemption Regulation
Following the Commission’s roadmap and launch of the public consultation process,[1] on May 26, 2020, the Commission published the final report[2] with support studies for the evaluation of the Vertical Block Exemption Regulation (the “VBER”).[3] The report is part of the Commission’s evaluation of the VBER, which is set to expire on May 31, 2022.
FCJ Provides Useful Guidance on Umbrella Damages and the Passing on Defense in Cartels Follow-on Damages Cases
On May 19, 2020, the Federal Court of Justice (“FCJ”) overturned a judgment of the Munich Court of Appeal in one of the numerous cartel follow-on damages actions brought against members of the so-called Rail Cartel (“Schienenkartell”), this time by the Munich Transportation Authority.[1] The FCJ once more confirmed its decisional practice in the case of quota and customer protection cartels, according to which there can be no prima facie evidence that damages were incurred and/or whether individual purchase orders were affected by the cartel.[2] The decision had to be reversed, for the Munich Court of Appeal had based its decision on such prima facie evidence. Of particular interest is the FCJ’s reasoning on two other issues:
Advocate General Pitruzzella’s Opinion in Groupe Canal+: A Trailer for the First Annulment of Commitments by the Court of Justice?
On May 7, 2020, Advocate General (“AG”) Pitruzzella delivered his opinion on Canal+’s appeal against a 2016 Commission commitment decision in the context of its investigation into the cross-border provision of pay-TV services.[1] AG Pitruzzella concluded that by accepting Paramount’s commitments, the Commission breached the principle of proportionality because they ignored contractual rights of third parties. Should the Court of Justice (the “CJEU”) follow this opinion, the case may lead to the first annulment by the EU’s highest court of a Commission commitment decision since the adoption of Regulation No. 1/2003.
FCJ Rules on FRAND Defense
On May 5, 2020, the Federal Court of Justice (“FCJ”)[1] granted Sisvel International S.A (“Sisvel”) an injunction against the Chinese mobile phone manufacturer Haier Group Corporation (“Haier”) to stop infringing one of Sisvel’s standard essential patents (“SEP”). In its first application of the Court of Justice of the European Union (“CJEU”) Huawei/ZTE judgment,[2] the FCJ clarified the requirement of the patent user’s willingness to license.
Aurubis’ Acquisition of Metallo Unconditionally Approved Despite Initial Buyer Power Objections
On May 4, 2020, the Commission unconditionally approved Aurubis’ proposed acquisition of Metallo, having issued formal objections just a few months earlier, in February 2020.[1] The Aurubis/Metallo decision is noteworthy for two reasons. First, in the last five years, since Margrethe Vestager became Commissioner for Competition, only one other transaction has been unconditionally cleared after the Commission had sent a Statement of Objections to the companies involved, namely Tele2 NL/T-Mobile NL in 2018.[2] Second, in Aurubis/ Metallo, the Commission’s concerns were based on buyer power, a theory of harm that has been rarely applied in the Commission’s merger review practice.
DG COMP Responds To The COVID-19 Outbreak (May 2020)
The COVID-19 pandemic has caused significant economic disruption, including supply shortages, cost increases, and liquidity constraints resulting from a prolonged shutdown. As EU Member States and businesses respond to these challenges, their actions could raise potential issues under competition law.