Competition Law Update: Winter 2015/2016

Published on 4th Feb 2016

Welcome to the latest edition of the Osborne Clarke Competition Law Newsletter, covering legal and regulatory developments over the last three months.

While the newsletter is not intended to be comprehensive, we have now split the content by sector, reflecting the range of material covered. Along with the normal plethora of pricing cases, there are interesting developments on the European Commission’s Digital Single Market initiative, as well as a spotlight on what’s been happening in Germany over the last year.

Retail

Latest ruling on Booking.com’s “best price” clauses: Is Narrow the new Wide?

Just before Christmas 2015, the German competition authority (Bundeskartellamt) prohibited Booking.com from continuing to apply, in all circumstances, its “best price” clauses – also called “price parity” or most favoured nation (MFN) clauses. We discuss the possible consequences for both ‘wide’ and ‘narrow’ MFNs here.

Record fines imposed in Austria for fixing resale prices

The grocery retailer SPAR Österreichische Warenhandels AG has been heavily penalised for fixing resale prices by means of a combination of direct price fixing and “most favoured nation” clauses. Pricing agreements are currently facing particular scrutiny from the competition authorities and this case is a timely reminder of the competition law risks as we discuss here.

German court ruling on resellers contradicts Bundeskartellamt

Manufacturers can impose restrictions on distributors to prevent them reselling their products on third-party retail websites such as Amazon Marketplace, without falling foul of competition law, a court in Germany has said. Read more here. [Link to external site].

Digital

Sharing Economy and the DSM

The Sharing Economy has continued to be at the heart of the European Commission’s Digital Single Market strategy, with the European Parliament recently raising concerns about “the differing national approaches taken so far by EU member states to regulating the internet and the “sharing economy”, which offers new business models for selling goods and services online” (read more here).

So what is the European Commission’s stance, where are the risks to your business – and how can you influence the direction of regulation? We discuss these questions here.

Cross-border portability of online content: European Commission values competition over copyrights

In its quest for a true “Digital Single Market”, with better online access for consumers and businesses across borders between Member States, the European Commission is using many of its legislative tools to tackle the barriers in its way. In December 2015, it announced proposed changes to copyright law, to achieve ‘portability’ of digital content. We discuss whether the Commission will ultimately prohibit territorial licensing in favour of EU competition law here.

Since these proposed changes in December the Commission has also published a roadmap detailing its proposals to address “unjustified” geo-blocking of digital content (other than content protected by licence or copyright) and other related discrimination linked to a consumer’s place of residence or nationality.

In addition, just last week, the Commission also released its preliminary geo-blocking consultation results which showed that – unsurprisingly – the majority of consumers favoured the removal of barriers that prevent them from purchasing goods and services cross-border. A full report on the consultations will be published in late March or early April 2016.

The Digital Single Market: promoting e-commerce

A key focus of the European Commission’s Digital Single Market initiative is to eliminate discrimination between EU consumers on the basis of their location. One of the main issues in this area is geo-blocking, but the Commission is also looking at a range of means to promote cross-border e-commerce. Read more here.

Big Data – threat or benefit to competition? Competition Authorities arming themselves to deal with big data companies.

Competition authorities in France and Germany have announced that they plan to conduct a joint study on the role of big data and competition law. The study will provide further guidance on how to legally construct a business built on big data. We explain recent developments and what can be expected from the report here.

Payments

Creating a single EU market for card payments: what you need to know

The Interchange Fee Regulation (IFR), which came into force on 8 June 2015, is aimed at creating a single EU market for card payments and increasing competition in this area. In particular, the IFR seeks to drive effective competition by the separation of payment card schemes and processing entities. Read more here.

Telecoms

BT/EE merger gets final competition approval: is there still room for further consolidation in the UK telecoms market?

BT plc’s acquisition of EE was finally approved by the UK Competition & Markets Authority (CMA), on 15 January 2016. The decision does not come as much of a surprise to those following the case as it had already been approved on a provisional basis by the CMA at the end of October 2015; but what does the decision signal for further (4-3) consolidation in the UK telecoms market, and in other European telecoms markets? Read more here.

Rail

On-Rail Competition in the UK: where now? what next?

The CMA published in July 2015 the findings of its ‘policy project’ examining the state of competition in the passenger rail market in Great Britain. The rail industry has had half a year to digest the CMA’s findings; so too has the Office of Rail and Road (ORR), the sectoral competition authority for rail, which commissioned joint research by Arup and Oxera to support its own response. This was published on 31 December 2015, and the CMA consultation on ORR’s response closed on 25 January 2016, with final recommendations expected in March.

In this article, we discuss the state of play in the rail market, the options proposed by the CMA last year and consider ORR’s recent evaluation of them.

Energy and Utilities

The (strike) price is right for EU State aid approval of new biomass plant supported by UK government

In December 2015, the European Commission approved, under EU State aid rules, the UK government’s support for the conversion of the Lynemouth coal power plant in Northumberland to operate on biomass (wood pellets).

This decision follows the Commission’s recent approval of the CfD/strike price arrangements for Hinkley Point C in Somerset. Although this is a fact-specific area of law, these decisions indicate that national governments will continue to be given the benefit of the doubt in making future projections about energy demand, provided that they are supporting projects that are aligned with the EU’s wider objectives of increasing renewable/clean energy sources and enhancing the EU’s energy self-sufficiency, particularly given the uncertain geo-political climate. Read more here.

The European Commission

Margrethe Vestager one year on: a proactive force and a stickler for procedure

1 November 2015 marked the first anniversary of Margrethe Vestager taking up the post of European Commissioner for Competition. Just over one year on, we reflect back on the actions and steps she has taken in the early days of her post here.

Damages

EU Cartel Damages Claims: are worldwide damages on your shopping list?

Shopping for the most suitable court is standard practice for any party, whether claimant or defendant, to a cartel damages claim. One important consideration when deciding where to bring legal proceedings is the scope of the damages that can be recovered, and this is especially true for claimants who will want to maximise their recovery of damages. We consider the subject of forum shopping in cartel claims more here.

Spotlight on Germany

2015 was an active year for antitrust law in Germany; we focus on a number of developments the year bought with it in the articles below:

German competition law in 2015: a year in review

After hitting an all-time high with cartel fines totalling more than EUR 1 billion in 2014, the focus of German competition developments in 2015 was rather on merger control in the food retail sector and vertical restraints in the digital economy. Our retrospective summarizes the key developments for international companies active in the German market. Read more here.

IP and antitrust in Germany

Protecting investments in innovation requires an IP strategy that takes account of the competition regime. Our article describes the fundamentals of intellectual property law in the German market, and the impact of the antitrust rules in innovative industries.