Competition Currents April 2021 | The Netherlands, Poland and Italy
National Competition Authority (NCA)
1. Acquisition of PGB by Global Automotive.
After conducting a detailed market study among manufacturers, competitors, and buyers of tires, ACM established that enough alternatives will remain in the market for tires for retailers. ACM expects that enough competitive pressure will continue to be exerted, and that the new combination will not raise prices or reduce the quality of services. ACM also assessed what the consequences would be for the market for replacement wheels. ACM has established that, in that market too, enough competition will remain. On March 10, 2021, the Netherlands Authority for Consumers and Markets (ACM) cleared the acquisition of PGB by Global Automotive. Global Automotive and PBG are mainly active in the distribution of replacement tires and replacement wheels for cars and vans.
2. Further investigation needed into acquisition of three floriculture-product transport companies by Dutch cooperative Royal Flora Holland.
If the parties decide to continue with their proposed acquisitions and file an application for a license with ACM, ACM will then further investigate the planned acquisition’s consequences, looking at the market for both floriculture-product transport and floriculture-product trading.Royal FloraHolland (RFH), a Dutch cooperative of floriculture growers, seeks to acquire three transport companies – De Winter, Van Marrewijk (Wematrans), and Van Zaal – that specialize in the handling of flowers and plants. The combined activities will be housed in a new company: Floriway. On March 5, 2021, the ACM stated it cannot rule out possible anticompetitive concerns regarding the transport of flowers and plants. Therefore, it said, further investigation into this acquisition is warranted.
3. Europe Container Terminals (ECT) implements the commitments it made to ACM.
On March 22, 2021, the ACM announced that ECT has implemented its 2019 and 2020 commitments to ACM about ECT’s planning criteria for inland-shipping barges that transport containers between ECT’s deep sea terminals in the port of Rotterdam and its hinterland. ECT has made its planning criteria more transparent, and it has also implemented these criteria. As a result of the new planning criteria, barge operators know how the planning is established and what requirements they must meet in order to be given priority.
Implementation of the ECN+ Directive
The Dutch Implementing Act entered into force on Feb. 18, 2021. The Act seeks to safeguard the independence of National Competition Authorities (NCAs) and their ability to effectively enforce competition law. The main amendments are:
more limited use of information obtained from leniency statements and settlements;
judicial authorization required for all for inspections;
obligation to seek the views of market participants before adopting commitments;
reinforced ACM competencies:
(i) to adopt a decision establishing that an infringement occurred in the past without having to impose a fine;
(ii) to impose interim measures on undertakings and associations of undertakings, with or without a periodic penalty payment where the risk of serious and irreparable harm to competition requires urgent measures.
Sanoma – Iddink second phase merger approval annulled by appeals court.
In a rare annulment decision (link in Dutch), the District Court of Rotterdam on March 4, 2021, annulled the merger permit, issued by the ACM on Aug. 29, 2019, after a second phase investigation into the acquisition by Sanoma of Iddink Group. Both companies offer student administration systems (SIS) for vocational education and access to digital learning resources. The court decided, in the appeal lodged by the competing publisher Noordhof, that the ACM failed to adequately reason the absence of incentives to effect bundling, whereas a substantial portion of schools (the primary customer of the products) were looking for bundling to achieve efficiencies.
President of UOKiK to review intended merger of energy sector groups Orlen and PGNiG.
On March 26, 2021, the Polish Competition Authority (UOKiK) announced that it would review the merger between two Polish energy sector groups pertaining to PKN Orlen acquiring direct control over PGNiG (Transaction). PKN Orlen is the Polish leader in the oil and petrochemical industry market, active in extracting and manufacturing natural gas and crude oil, as well as in trading in asphalts and fuels (including aviation fuels). Earlier in 2021, PKN Orlen was granted UOKIK consent to take over Polska Press, one of the biggest press publishers in Poland. PGNiG is a public company engaged in the exploration and production of natural gas and crude oil, as well as in the import, distribution, storage and supply of natural gas, supply of heat, and the generation of electricity and heat.
Due to the community-wide effects of the Transaction, it was originally subject to the jurisdiction of the European Commission. According to EU laws, however, participants in a transaction can request that the transaction be examined by a national competition authority if the transaction may have a significant impact on competition in a given Member State. Based on PKN Orlen’s request, the European Commission referred the case to UOKiK.
The merger proceedings will be initiated once a formal submission is made to UOKiK; according to PKN Orlen’s announcements, this will take place shortly. As reported by UOKiK, this is the first transaction in 2021 where an undertaking requested UOKiK to take over from the European Commission.
Sports gear distributor fined for price fixing.
On March 4, 2021, the President of UOKiK issued a decision against Spokey, a distributor of scooters, rollerblades, and sports mats sold under its own brand, and fined the undertaking over half a million PLN (approx. EUR 120,000) for entering into anticompetitive price fixing agreements with its retail partners. As UOKiK established, Spokey sells its products through its own online store as well as through a network of business partners who sell Spokey sports gear online via various websites, including the Allegro platform. In the course of the proceedings, supported by evidence gathered as a result of a search at Spokey’s premises, the President of UOKiK concluded that Spokey set minimum prices for its products. This practice was in place for eight years (2010-2018), during which time Spokey not only set minimum prices but also developed mechanisms to influence its partners with respect to the prices they used.
Spokey benefitted from the EU leniency program. Due to Spokey’s close cooperation with UOKiK, UOKiK determined the duration of the agreement and the rules under which it was in place, and the company obtained a 50% reduction in its fine. Instead of over PLN 1.1 million, the sanction amounted to PLN 568,679. If Spokey had not withdrawn from the declaration of voluntary submission to the penalty, the fine would have been up to 10% lower.
Italian Competition Authority (ICA)
1. The Italian Competition Authority clears the acquisitions by Intesa Sanpaolo of two insurance companies.
The Italian Competition Authority (ICA) issued a bulletin March 15, 2021, reporting that it cleared the acquisition by one of the main Italian banks, Intesa Sanpaolo, of two insurance companies: Aviva Vita S.p.A (Aviva), which has a EUR 2/3 billion turnover, and Lombarda Vita S.p.A. (Lombarda), which has a EUR 1/2 billion turnover.
Both targets were already partially owned by Intesa Sanpaolo through UBI Banca S.p.A. (UBI), which held 20% of Aviva and 40% of Lombarda. The transactions in question enabled Intesa Sanpaolo to acquire sole control over the two targets, thus increasing its role as a distributor of insurance products. In both cases, the favorable opinion of the was needed. Both transactions were cleared by the Italian Insurance Authority in phase I: they were deemed not to give rise to significant competition concerns, due to the presence of strong competitors in the Italian insurance sector, such as Generali, Unipol, Gruppo Assicurativo Poste Vita and Allianz.
2. The ICA adjusts the turnover thresholds for merger filing purposes.
On March 9, 2021, the ICA adjusted the relevant turnover thresholds for merger filing purposes to reflect the variations of the index of the GDP price deflator. Following this adjustment, a filing obligation in Italy is triggered if the following cumulative thresholds are met:
(i) the aggregate turnover of all participating undertakings exceeds EUR 511 million (whereas the previous threshold was EUR 504 million);
(ii) the turnover of each of at least two of the participating undertakings exceeds Euro 31 million.
3. The ICA proposes that the government amend the Italian Antitrust Law (Law n. 287/1990).
On March 23, 2021, the ICA submitted its annual recommendation to the government setting out its proposals for the so-called Legge Annuale per il Mercato e la Concorrenza (Yearly Law on Markets and Competition). In the recommendation, the ICA, among others, advised the government to introduce the following amendments to the Italian Antitrust Law (L. 287/1990):
Adjust the substantial assessment test to align it to the one currently applied by the European Commission pursuant to the EU Merger Regulation, thereby addressing the “non-collusive oligopolies gap”;
Update the methodology to calculate the turnover of financial institutions in order to align national rules with those set forth at EU level;
In order to prevent certain deals from escaping merger control, confer upon the ICA the power to require the notification of transactions that do not meet the turnover thresholds, provided that (i) either the merging parties meet one of the two turnover thresholds provided by Italian Law or their combined turnover exceeds Euro 5 billion; (ii) the ICA makes the request within six months of the completion of the transaction and (iii) the ICA finds that there is a concrete risk of anti-competitive effects.
Extend the maximum duration of the phase 2 of the merger review (i.e., the in-depth investigation) from 45 to 90 days.
Introduce a rebuttable presumption that undertakings are economically dependent upon digital platforms to the extent that the latter “play a crucial role to reach end-users and/or suppliers, also taking into account network effects and/or data access.”
Confer upon the ICA the power to impose structural or behavioral remedies on undertakings operating in multi-sided markets, such as digital platforms providing intermediation services between undertakings and end-users/suppliers;
Introduce the settlement procedure in antitrust investigations;
Strengthen the ICA’s power to impose sanctions in the event of non-compliance with requests for information, even if such requests are not made in connection with investigations.