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Competition Law Newsletter

Competition Law Newsletter

Competition Law Newsletter

01.09.2012 NL law

1.  Commission rules out post-joint venture non-compete obligation as ancillary restraint in Siemens/Areva decision 
 
As previously reported in the Stibbe's Competition Law Newsletter of July 2012, on 18 June 2012, the European Commission ("Commission") announced its decision to make legally binding the commitments offered by Siemens AG ("Siemens") and Areva SA ("Areva"). The commitments aimed at reducing the product scope and duration of a non-compete obligation and a confidentiality clause in the market for nuclear technologies. The Commission has now published a non-confidential version of its decision ("Decision"), which further clarifies the Commission's stance on a post-joint venture non-compete obligation ("post-JV NCO").

Siemens and the legal predecessor of Areva had established the joint venture Areva NP SAS ("Areva NP"), in which they combined their activities in relation to nuclear power plants. In this respect, the parties agreed on a post-JV NCO and a confidentiality clause which covered the lifetime of the joint venture and was to continue for eight to eleven years after its termination. After Siemens announced its intention to leave the joint venture, Areva acquired sole control over Areva NP.

The Decision makes clear that according to the Commission, a post-JV NCO cannot be considered an ancillary restriction to the creation of the joint venture. In the Commission's view, the protection against competition from one of the parent companies becomes obsolete upon the acquisition of sole control over the joint venture by one of those parent companies. Nevertheless, in the underlying case, the post-JV NCO can still be considered ancillary to the acquisition of sole control by Areva over Areva NP. This led the Commission to conclude that the post-JV NCO falls outside the scope of article 101 of the Treaty on the Functioning of the European Union ("TFEU"), but only in so far as the post-JV NCO prevents Siemens from being active on a certain number of specified markets, and only for a duration of three years following Areva's acquisition of sole control over Areva NP. For the duration exceeding those three years, the post-JV NCO violates in the Commission's view article 101 of the TFEU. 
 
2.  Dutch Competition Authority turns down complaint from Chipshol: no proof of airport Schiphol abusing its alleged dominant position 
 
On 20 August 2012, the Dutch Competition Authority ("NMa") issued its decision ("Decision") in an ongoing dispute between property developer Chipshol and the Dutch airport Schiphol. Chipshol claimed that Schiphol had abused its dominant position by influencing several governmental decisions and procedures. Chipshol alleged that it was prevented from developing its land in the area of the airport as a result of the abuse. The NMa found no indications that Schiphol's conduct was effectively aimed at excluding Chipshol as a competitor. Therefore, it rejected Chipshol's complaint.

In its Decision, the NMa first of all acknowledged that it had been impossible for Chipshol to develop its property in the Schiphol airport area due to various governmental decisions. However, governmental decisions fall outside the scope of the prohibition on abuse of a dominant position. The NMa's investigation was therefore limited to the question whether Schiphol abused its alleged dominant position by unduly influencing the contents of the relevant governmental decisions.

The NMa assessed Chipshol's complaint on the basis of the criteria that the General Court had laid down in its judgment in ITT/Promedia of 17 July 1998 (Case T-111/96). In this judgment the General Court considered that vexatious litigation could qualify as an abuse of a dominant position if the action (i) could not reasonably be considered as an attempt to establish the rights of the undertaking concerned and could therefore only serve to harass the opposite party and (ii) was conceived in the framework of a plan whose goal is to eliminate competition.

Although according to the NMa Schiphol had influenced the governmental decisions, it did so to pursue and defend its interests regarding aviation safety. Therefore, according to the NMa, Schiphol's conduct did not fulfill the conditions of ITT/Promedia. Since Schiphol's conduct could not qualify as an abuse, the question whether Schiphol has a dominant position in the relevant market could be left unanswered. 
 
3.  Dutch Competition Authority halves fine for non-notification of a merger: further clarity on application of seriousness factor for "other infringements" 
 
On 17 August 2012, the Dutch Competition Authority ("NMa") issued an adjusted fining decision in a case concerning the implementation of a concentration before notification (Case 6905). In the revised decision the NMa adjusted the multiplying factor from 2 to 1 for the seriousness of the infringement, which led to the fine being halved from that originally imposed (decision of 17 December 2010). The NMa's decision to revise its original decision was probably influenced by a recent judgment of the District Court Rotterdam, in which it held that for "other infringements" such as the non-notification of a merger and the breach of a seal, the standard seriousness factor should be 1, save for special circumstances (LJN: BW9126).

The original fining decision was the first case under the 2009 fining policy rules of the Minister of Economic Affairs ("2009 fining policy rules") concerning a non-notification of a merger. Under the previous fining policy (the 2007 fining code of the NMa), the multiplier for the seriousness of an infringement was 3 at a maximum. Back then, the NMa usually applied a factor of 1 in cases concerning non-notification of a merger. The 2009 fining policy rules provide for a multiplier factor for the seriousness of an infringement ranging from 1 to 5. According to the NMa, the rationale of the 2009 fining policy rules was to fine infringements more heavily. Therefore, it applied a seriousness factor of 2.

In the abovementioned judgment that related to the breach of a seal, the District Court Rotterdam held that for "other infringements" the seriousness is in principle already factored in the level of the fining category (see the 2009 fining policy rules, that provide for six fining categories for "other infringements" based on the seriousness of the infringement). Therefore, as a matter of principle the multiplying factor for the seriousness of an infringement should be set at a neutral factor of 1. This is save for special circumstances that could justify a higher or a lower seriousness factor. The Court considered that there were no such special circumstances in the case at hand. 

4.  Publication of European merger control decisions sheds further light on derogation of the standstill obligation 
 
On 8 and 9 August 2012, the European Commission ("Commission") published a series of decisions relating to various requests for derogation from the obligation to suspend the implementation of a concentration before it has been approved by the Commission ("standstill obligation").

The published decisions show that when dealing with an application for a derogation, the Commission takes into account the effects of the suspension on one or more of the undertakings concerned and the threat to competition posed by the concentration. According to the Commission, a derogation is granted only exceptionally, normally in circumstances where the standstill obligation would cause serious damage to the undertakings concerned by a concentration, or to a third party. Furthermore, it has to be unlikely that the proposed concentration poses a threat to competition.

Applications for derogation are not limited to cases in which the target is on the verge of insolvency (Case Comp/M.5721). For example, in the case IPM/ERG Nuove Centrali/ISAB Energy Services (Case Comp/M.4712), the transfer of insurance coverage for certain employees of the target had already been made effective, i.e. before the proposed concentration had been approved by the Commission. As a result, the employees would remain effectively without accident insurance until the transaction could be implemented following approval of the Commission. The parties therefore requested derogation from the standstill obligation. In its decision the Commission acknowledged that the parties would "suffer a serious disadvantage if a derogation were not granted". Furthermore, the Commission found that completion of the transaction prior to approval would not pose any threat to competition. This led the Commission to grant a derogation from the standstill obligation. 
 
5.  Commission publishes frequently asked questions on application of motor vehicle block exemption 
 
On 27 August 2012, the European Commission ("Commisson") issued a set of frequently asked questions ("FAQs") on the application of EU competition rules in the motor vehicle sector. The FAQs aim at helping stakeholders in understanding the Commission's stance on particular issues regarding the motor vehicle markets.

The immediate reason for the FAQs is the new motor vehicle block exemption regulation that was adopted on 27 May 2010, accompanied by the Supplementary Guidelines on vertical restraints in agreements for the sale and repair of motor vehicles and for the distribution of spare parts for motor vehicles. Since then, the Commission's services have received a number of questions concerning the application of the new framework. The answers to these questions, together with explanations, are now used as input in the FAQs. The FAQs deal in depth with the following six topics:

i. the honouring of warranties;
ii. servicing in the context of leasing contracts;
iii. the supply of spare parts;
iv. the use and purchase of electronic diagnostic and repair tools;
v. access to technical information, and
vi. access to authorised repairer networks.

Team

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