May 2021 Competition Currents: Netherlands, Poland and Italy
Sumal, S.L. vs Mercedes Benz Trucks España, S.L., Case No. C 882/19
On April 15, 2021, Advocate General Pitruzzella (AG) concluded in his opinion that holding a subsidiary liable for the infringing conduct of its parent company is compatible with Article 101 of the Treaty on the Function of the European Union (TFEU) when certain strict conditions are met. These conditions are that i) the two entities have operated on the relevant market as a single economic unit and ii) the subsidiary has substantially contributed to the achievement of the objective and the realization of the effects of the parent company’s conduct. Subsidiary liability may encourage forum shopping by claimants when initiating damages proceedings.
Dutch Authority for Consumers and Markets (ACM) joins France’s suit to block Illumina’s acquisition of GRAIL.
The European Commission will investigate the acquisition of U.S. pharmaceutical company GRAIL by U.S. biotechnology company Illumina. Various European countries, including the Netherlands, support France’s request to the European Commission to investigate this acquisition. Illumina and GRAIL manufacture, among other things, products for tests for detecting cancer at an early stage. The ACM has concerns that this acquisition may be harmful to competition, and may lead to higher prices, reduced quality, or less innovation in the Netherlands and the European Union, where GRAIL has promising technologies and products for early detection of cancer.
GRAIL and Illumina had asked a Dutch provisional-relief judge to prohibit the Netherlands from joining France’s request to the European Commission. The court turned down the U.S. companies’ request.
Highest Dutch Competition Court attributes anti-competitive behavior by an employee of one entity to the entity which is active on the market.
On April 6, 2021, the Dutch Administrative Hight Court for Trade and Industry (CBb) found (link in Dutch) that the infringing behavior of an employee of an unaffiliated entity could be attributed to the sanctioned entity. The CBb found that the employee in fact acted on behalf of the sanctioned entity, both as a proxy holder and materially. Furthermore, the sanctioned entity had knowledge of the third-party employee’s conduct.
The Polish Ombudsman appeals against the Polish Competition Authority’s merger clearance of the PKN Orlen/Polska Press deal
In the March 2021 edition of Competition Currents, we reported that UOKiK had approved the acquisition of Polska Press by PKN Orlen. Polska Press is one of the biggest press publishers in Poland and the leader in regional and local media markets. The merger was cleared unconditionally, even though competitors and organizations, such as the Polish Ombudsman, gave a negative opinion on the transaction, noting it would lead to a significant part of the press market ultimately being controlled by the State.
Following the issuance of UOKiK’s decision, the Ombudsman exercised his right to appeal against the decision and at the same time filed a motion to suspend execution of the decision by PKN Orlen. According to the Ombudsman, UOKiK did not examine whether the transaction would result in an unacceptable restriction on the freedom of the press, and UOKiK should take into account all circumstances affecting consumer welfare.
On April 8, 2021, the Court of Competition and Consumer Protection decided to suspend the execution of UOKiK’s decision, in accordance with the Ombudsman’s motion. This is an interim decision by the Court, and it does not forejudge the Court’s final decision regarding the transaction. However, the Court indicated that the transaction should be suspended, as its implementation before the final judgment may prevent execution of the final judgment. Neither UOKiK nor PKN Orlen agree with the Court’s interim decision; however, the decision itself is final. The proceedings on the merits should be launched soon, and it is difficult to predict the final verdict at this stage.
UOKiK investigates Polish basketball clubs
UOKiK launched antitrust proceedings against the Polish Basketball League (PLK) and 16 basketball clubs competing in the PLK. UOKiK is investigating whether the PLK and basketball clubs coordinated their behavior with respect to their cooperation with basketball players. The case began in March 2020, when basketball games in Poland were cancelled due to the COVID-19 pandemic. The clubs announced that due to the premature end to the season, they would not pay their players full salaries and would terminate certain players’ contracts. The clubs claimed that such behavior was justified, as the obligations of the parties (clubs and players) expired due to the pandemic.
UOKiK indicated that any actions regarding cooperation with players have to be taken by clubs autonomously and cannot be coordinated. According to UOKiK, any cost-cutting measures taken by sports clubs should result from the individual economic situation of a given club. This is not the first such case in the Central and Eastern Europe region. As UOKiK stated, it consulted its actions with the Lithuanian competition authority, which is investigating similar potentially anticompetitive behavior.
The Italian Administrative Supreme Court makes a further reference for a preliminary ruling in the Novartis/ Hoffmann-La Roche case
Two years after the decision of the Italian Administrative Supreme Court (Council of State) confirmed fines imposed by the Italian Competition Authority (ICA) on Novartis and Hoffmann-La Roche, the Council of State made a second request for a preliminary ruling in the same case.
In 2014, the ICA found the existence of an anticompetitive agreement between Novartis and Hoffmann-La Roche aimed at obtaining an artificial “differentiation” between the drugs Avastin (a drug for the treatment of cancer) and Lucentis (a drug for the treatment of ophthalmic diseases). The decision was first confirmed by the Italian Administrative first-instance Court and then upheld in 2019 by the Council of State. The judgment of the Council of State was subsequently challenged by the two undertakings, arguing for its revocation based on the alleged erroneous application of the principles established by the Court of Justice.
In response to this complaint, the Council of State made a preliminary reference, inviting the Court of Justice to rule on (i) the possibility of a court of last instance to review the Council of State’s preliminary ruling; (ii) whether the Council of State misapplied the principles established by the Court of Justice in the first preliminary ruling; and (iii) the possibility of using the revocation procedure established by the Italian Administrative Code. In substance, the Court of Justice will be called upon to clarify the distinction between the notions of “interpretation” and “application” of EU competition law.
ICA clears the acquisition by ION of Cerved Group
On April 12, 2021, ICA approved the acquisition of Cerved Group S.p.a. by Castor S.r.l., a subsidiary of the British investment holding company ION Investment Group Limited. The target, a company listed on the Milan Stock Exchange, is the leading Italian provider of corporate, commercial, and financial information and credit assessment services.
The merger, which will be carried out by means of a full takeover bid, concerns the markets for the provision of business information, for the management and debt collection services for third parties and, marginally, for information technology services. With regard to the first two markets, the transaction merely substitutes one market operator with another. As for the provision of information technology services, both ION and Cerved Group do not have significant market shares. Therefore, ICA did not find any competition concerns and approved the concentration at the end of “phase one” without the need for a formal investigation.