EU & Competition Update - September 2009
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Introduction
As summer draws to an end and the regulators and courts start to go back to business, we are pleased to bring you our second issue of Competition Update.
Since our last issue the ECJ has handed down its judgment in the France Telecom/Wanadoo predatory pricing case. This judgment is not restricted in its applicability to the telecoms industry, and will be of interest to all undertakings which may be dominant in their respective markets (and indeed their competitors). One of the interesting features of the judgment is the extent to which it has departed from the Advocate General's Opinion on the "meeting competition" defence, the scope for which appears to be somewhat narrowed.
The message currently being sent by Europe emphasises the need for scrupulous compliance with all aspects of European competition law. The Commission has exacted a very heavy price on Electrabel (€20 million) for its failure to notify a concentration with a Community dimension - a stark reminder of the importance of compliance with merger control procedures, but also of the increasingly activist attitude of the Commission towards enforcement across the board.
Similarly, the ECJ has also handed down a significant judgment in the Netherlands mobile operator case, in which it has confirmed that a single meeting in which competitors exchange confidential information can result in an infringement of Article 81 EC.
In the UK, the British Airways air freight damages case illustrates the difficulty of establishing the class of claimants in a class action damages claim for competition law infringement, and the Competition Appeal Tribunal has issued a rare costs award against the regulator in respect of an appeal against one of its decisions.
As ever, please do contact me or any of my colleagues listed at the back of this edition if this issue raises any questions which you would like to discuss.
Howard Cartlidge
howard.cartlidge@olswang.com
ECJ upholds the €10.35 million fine on France Telecom/Wanadoo for predatory pricing
The ECJ dismissed France Télécom's appeal against a CFI judgment upholding the Commission's decision to fine its subsidiary Wanadoo for predatory pricing on the French internet access market. The ECJ confirmed two important legal points: (1) that the Commission did not have to prove the possibility of Wanadoo recouping its losses; and (2) that a dominant firm does not have an absolute right to "meet competition" by aligning its prices to those of its competitors.
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European Commission fines Electrabel €20 million for acquiring control of CNR without prior Commission approval
The Commission has imposed the largest ever fine for failure to notify a concentration with a Community dimension, even though the concentration itself raised no competition issues. The Commission held that Electrabel acquired de facto control of CNR some years before the full acquisition which it notified to the Commission, despite a non-majority shareholding.
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ECJ rules that a concerted practice arising from a single meeting between competitors can have an anti-competitive object
The ECJ has ruled that an exchange of information between competitors has an anti-competitive object if it is capable of removing uncertainty concerning the competitors' intended conduct. A causal connection between the exchange and the competitors' market conduct is presumed, and competitors are presumed to take account of the information exchanged, even if it took place on a single occasion.
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UK High Court strikes out part of cartel damages claim against British Airways
On 8 April 2009 the High Court gave judgment in a damages claim against British Airways for the airline's alleged involvement in an air freight cartel. The case is significant as it deals with the scope of "representative" damages claims on behalf of a class of claimants in alleged cartel cases.
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Competition Appeal Tribunal makes a rare costs award against Ofcom
Following the CAT's finding against Ofcom in last year's appeal against its termination rates dispute determination, the CAT has now also made a costs award against that regulator. It is very rare for the CAT to make such an award, and sheds important light on the circumstances in which it will do so, particularly the relevant standard of the regulator's decision-making.
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The CAT upholds Tesco's challenge to the Competition Commission's groceries market investigation
The CAT has upheld an application for appeal brought by Tesco challenging part of the Competition Commission's final report into the supply of groceries in the UK, specifically the CC's recommendation for a "competition test" to be implemented within the planning system, aimed at preventing the market dominance of large retailers. The CAT quashed the CC's decision to recommend the competition test and directed the CC to retake it.
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The information contained in this update is intended as a general review of the subjects featured and detailed specialist advice should always be taken before taking or refraining from taking any action.
