June 2021 Competition Currents| The Netherlands, Poland and Italy
Dutch NCA Decisions
The Netherlands Authority for Consumers and Markets (ACM) has launched a study in order to determine whether the market for cloud services is functioning well for people and businesses in the Netherlands. The objective of the first study phase is the collection of information. For example, ACM will look into the design of cloud services and their impact on services that function on the basis of cloud services. In addition, ACM will assess whether there are any market imperfections such as market power, lock-in effects and information asymmetry. ACM expects this first phase to be completed by September. ACM will then decide whether a more in-depth study should be carried out. The objective of this market study is to expand ACM’s knowledge about cloud services. Cloud services are on the list of core-platform services in the draft version of the Digital Markets Act (DMA) of the European Commission. That means that it is possible that, at some point, cloud services operated by businesses that have been designated as gatekeepers may fall under the scope of this act.
The ACM decided that transmission tower operator Cellnex may acquire Telekom Infra (which is currently still part of Deutsche Telekom). Cellnex and Telekom Infra both have an extensive network of antenna locations, which include large telecom towers and transmission towers on the ground or on roofs. The ACM concludes that, after the acquisition, sufficient competition in the relevant market will remain, as there are several other providers of antenna locations and telecom companies can choose these sites of different providers almost everywhere. In addition, telecom companies themselves can apply for a license to install transmission towers. This is one of the opportunities for telecom companies to influence competition in the market.
The ACM approves telecom company KPN’s joint venture with pension administrator APG to lay fiber. KPN and APG have no overlapping activities. According to the ACM, the joint venture will not reduce competition in the laying and management of fiber optic networks in the Netherlands. The joint venture will lay fiber networks to households and businesses in areas where KPN does not yet have a fiber network. KPN will be the main user of these networks, but other telecom providers will also have access. The ACM assumes that equivalent and competitive conditions apply, which results in as much choice as possible for consumers and businesses. The ACM is also investigating whether regulation of telecom networks is necessary and desirable to safeguard competition, as several competitors expressed their concerns about competition problems in the construction and access to fiberglass.
SIDN, the only administrator of ".nl" domains, has refused to provide a list of all domain names to Dataprovider B.V. SIDN sells information to trademark owners about possible infringements of their trademark rights. Dataprovider B.V. also provides online trademark protection services. The ACM found in an initial substantive investigation that the requested list is not necessary for Dataprovider B.V. to be active in the field of online trademark protection services and that the present refusal to supply results does not eliminate all competition in the market in which Dataprovider offers its online trademark protection service. Therefore, the ACM does not consider it plausible that the refusal to supply constitutes an abuse of an economic dominant position (art. 24 Mededingingswet and/or art. 102 TFEU). Moreover, the fact that SIDN has exclusive possession of the “.nl” zone files does not appear to provide such an advantage as to prevent the significant number of competing providers from operating in this market.
On May 12, 2021, the Amsterdam District Court rendered a further interlocutory judgment in cartel damages cases concerning trucks, providing various substantive decisions on the claims for damages brought against multiple truck manufacturers, following a settlement decision adopted by the European Commission in 2016 on, in short, collusion by truck manufactures on truck pricing and on passing on the costs of compliance with stricter emission rules. According to the settlement decision, those practices constituted an infringement of EU competition law (Article 101 TFEU).
The Amsterdam District Court ruled that it is generally accepted that a cartel can have a lingering effect covering a longer period than the sanctioned infringement. However, in these particular damages cases it is currently not possible to establish whether there have been any lingering effects giving rise to claims for compensation, since it has not been established whether in these cases the infringement has had any effects at all and further analysis is required. In addition, the Court ruled – with reference to the ECJ's Otis-judgment and article 16 (1) of Regulation 1/2003 – that it shall consider the entirety of the settlement decision as binding. However, it does not consider itself bound to the very brief description of the specific, factual conduct provided in the settlement decision. The court has not yet assessed whether every individual claimant indeed suffered harm as a result of unlawful acts of the truck manufacturers. Every individual claimant will now have to make plausible that it has (potentially) suffered harm. A further hearing has been scheduled for May 27, 2021, to discuss the next steps of the proceedings.
A. Obstructing a Search at an Entrepreneur’s Premises heavily fined by UOKiK
The President of the Office of Competition and Consumer Protection (UOKiK, President of UOKiK) issued two decisions imposing fines for obstructing a search at Platinium Wellness’s premises, a fitness chain based in Kraków.
In its recent decision dated May 13, 2021, the President of UOKiK concluded that the President of the Management Board of Platinium Wellness had obstructed a search conducted by UOKiK by altering the password to the mailbox used in conducting its business. This change led to an interruption in the downloading process which, in turn, prevented the officials from securing the content of the said mailbox for the purposes of its further review. UOKiK claims that the President of the Management Board of Platinium Wellness not only established a new password but also refused to provide it to officials upon their request. For the actions described above, an individual fine in the amount of PLN 150,000 (i.e. approx. EUR 33,000) was imposed on Mr. Gibala, the Management Board President. The above-mentioned fine imposed on a managerial person is in addition to a fine totaling PLN 500,000 (i.e., approx. EUR 109,000) which was imposed on the company earlier this year for obstructing the search procedure. At the time of writing, the full text of the decisions has not yet been published.
B. Further Decisions with Respect to Payment Gridlock, and More to Follow
In May 2021, UOKik issued two decisions imposing fines, two decisions not imposing fines, and ordered the discontinuance of two proceedings. As reported in the March edition of Competition Currents, the President of UOKiK received new regulatory authority enabling him to instigate and lead proceedings on excessive delays in monetary payments, as well as to impose fines on entities for accumulating delays in payments to their suppliers in an amount exceeding PLN 5 million for a period of three consecutive months.
The President of UOKiK is not slowing down actions in the sphere of payment gridlock, however. As announced on its website, eight other proceedings have been initiated against other companies.
C. UOKiK’s Report: Certain Types of Discounts Applied by Retail Chains may be Considered Unfair Trade Practices
At the end of April 2021, the President of UOKiK published a report on trade discounts applied in relation to large trade networks and suppliers of agricultural or food products operating in Poland (Report). The Report was created as a result of verifying the activities of 19 of the largest retail chains and questionnaires sent to 20 suppliers of agri-food products (i.e., meat producers, fruit and vegetable growers, dairies, fish producers, spice producers, and grain milling processors).
As part of the explanatory proceedings, UOKiK verified the types of discounts applied in trade with suppliers of agri-food products as well as the method and date of granting them. The analysis conducted by UOKiK identified several types of practices that may be considered a sign of unfair use of contractual advantage by retail chains:
Introduction of new discounts after the completion of transactions. UOKiK explained that its reservations stem primarily from the unilateral nature of the solutions employed and from the fact that granting a discount means that the supplier does not receive the revenue anticipated. This practice resulted in UOKiK’s decision against Jeronimo Martins, in which it imposed a PLN 724 million fine, as detailed in the January edition of Competition Currents.
Defining the terms of relationships with suppliers, including with respect to discounts, for a given period after the period has already started, when the supplier has already committed its resources to making deliveries. In UOKiK’s opinion, this could lead to a considerable cost burden for the supplier and cause a significant reduction in contract profitability.
simultaneous application of multiple discounts (e.g., monthly, quarterly, and annual).
excessive contractual penalties related to settlement of discounts granted by suppliers.
chains unilaterally lowering the sales threshold that constitutes the basis for granting a particular discount.
As a result of the Report, the President of UOKiK initiated investigations against Kaufland Polska Markety, Eurocash and SCA PR Polska. Furthermore, UOKiK proposed an amendment to the Act, consisting of an absolute prohibition on the practice of unjustified reduction of payments for the supply of agricultural or food products after delivery, particularly if there is a buyers demand for a discount.
A. ICA Launches an Investigation on a Possible Collusion Concerning Insurance Companies and Price Comparison Service Providers for Motor Civil Liability Insurance
On May 11, 2021, the Italian Competition Authority (ICA) initiated an investigation concerning the main insurance companies providing motor vehicle liability policies and the main operators offering the related price comparison services. These entities would have exchanged sensitive information in the market for the direct sale of motor civil liability (RCA) policies throughout Italy. On May 20, 2021, ICA carried out inspections at the premises of some of the companies involved.
According to ICA, since 2012 the above-mentioned companies coordinated their commercial strategies in the direct sale of RCA policies, offering smaller discounts to final consumers by reason of the mutual knowledge of the sales conditions offered on the comparison portals. The exchange of strategic information would have taken place, on a constant and periodic basis, through the sharing of reports prepared and distributed by the price comparison companies, concerning, among other things, the positioning of the competitors on the comparison portals, the difference with the premium quoted by the competitors, the price quotations and consumers’ data.
If confirmed, the conduct described by ICA would constitute a breach of article 101 of the Treaty on the Functioning of the European Union (TFEU). The investigation shall be over by October 31, 2022.
B. ICA Opens an Investigation Concerning Unfair Commercial Practices and Social Media
On May 31, 2021, ICA opened an investigation concerning the company BAT Italia S.p.A. and three Italian influencers. ICA is investigating the dissemination of posts made by influencers with a commercial relationship with BAT Italia S.p.A., containing an invitation to followers to publish content with tags and hashtags linked to the advertising campaign for the product Glo Hyper, a heated tobacco device produced and marketed by the above-mentioned company. The advertising effect obtained by the influencers - and deriving from the tags to the brand and hashtags - is not, however, recognizable in its commercial nature because there are no graphic or textual warnings that allow consumers to identify the promotional purpose.
The investigation is in line with several previous decisions where ICA ruled that an influencer is required to make the public aware of the fact that he or she is providing a professional service. One of the main ways to make public that relationship is through the use of various hashtags or links to the brand’s website and tags to the brand’s page on social networks. Such investigation is part of a line of investigation that, following the evolution of marketing techniques adopted on social media, aims to hit the apparently neutral and disinterested communications that are, in reality, instrumental to promote products and, as such, able to influence consumer choices.
C. ICA Clears the Acquisition by Intesa Sanpaolo of Cargeas Assicurazioni
On May 3, 2021, ICA’s bulletin published the news that it had cleared the acquisition by Intesa Sanpaolo (ISP), one of the leading Italian banking operators, of Cargeas Assicurazioni S.p.A. (Cargeas), a company active in the insurance sector wholly owned by Cardif, a French company belonging to the BNP Paribas Group. The transaction comprises the acquisition of the entire share capital of Cargeas by ISP, through its subsidiary Intesa Sanpaolo Vita S.p.A.
The agreement between the parties also contains a commitment to amend the distribution agreement signed between Cargeas and the banking operator BNL, concerning the marketing of certain types of Cargeas’ insurance policies through BNL. The amendment will be aimed at ensuring to BNL a continuity in the supply of insurance products. In view of the limited market shares held by Cargeas in all the markets concerned, ICA considered that the transaction will not lead to an appreciable increase in Intesa Sanpaolo’s market shares.
Edoardo Gambardo, Pamela J. Marple, Yuji Ogiwara, Stephen M. Pepper, Gillian Sproul, Filip Drgas, Marta Kownacka, Pietro Missanelli, Massimiliano Pizzonia, Anna Rajcert, Jose Abel Rivera-Pedroza, Ippei Suzuki and Rebecca Tracy Rotem also contributed to this update.