Short Reads

District Court Rotterdam upheld the ACM's clearance decision in telecoms merger KPN/Reggefiber

District Court Rotterdam upheld the ACM's clearance decision in telecoms merger KPN/Reggefiber

District Court Rotterdam upheld the ACM's clearance decision in telecoms merger KPN/Reggefiber

02.06.2016 NL law

On 12 May 2016, the District Court of Rotterdam ("District Court") upheld the ACM's decision to allow incumbent KPN B.V. ("KPN") to acquire sole control over Reggefiber Groep B.V. ("Reggefiber") without imposing conditions. The appeal was lodged by Vodafone Libertel B.V. ("Vodafone"), one  of Reggefiber's downstream customers of unbundled access to its fixed fiber-optics network.

In essence, the District Court upheld the ACM's conclusion that regulatory obligations imposed on KPN by the national telecommunications regulator would restrict its ability to significantly impede competition, despite acquiring a market share of "close to 100%".

This case has its roots in an earlier decision adopted by the ACM in 2008, following which KPN and Reggeborgh acquired joint control over Reggefiber, subject to strict remedies. Coinciding with the ACM's 2008 decision, the Dutch telecommunications regulator imposed similar conditions on the joint venture because of KPN's pre-existing position as an undertaking with significant market power ("SMP conditions").

In the case at hand, KPN intended to purchase Reggeborgh's remaining shares in Reggefiber. The ACM cleared the acquisition. This time, however, it did not impose any remedies. Vodafone appealed this decision by arguing, amongst other things, that the ACM had erroneously concluded that SMP conditions can sufficiently remedy the structural competition concerns likely to arise following the concentration.

The District Court rejected this line of argument, upholding the ACM's decision insofar as it found that (existing) SMP conditions imposed on KPN would render it unable to significantly impede competition. The District Court also concluded it was sufficient that the ACM could (and would if necessary) impose an unbundling requirement "should regulation prove to be inadequate".

A noteworthy aspect of the judgment is that the District Court agreed with the ACM's conclusion that the remedies imposed in 2008 would become "devoid of purpose" as a result of KPN's acquisition of sole control, since the original concentration "ceased to exist". According to the District Court, the only manner in which these remedies could have remained binding on KPN would be to explicitly re-impose them in any subsequent concentration.

In summary, the two key takeaways from this fact-specific case are: (i) existing merger control remedies are rendered "devoid of purpose" following subsequent concentrations, and (ii) regulatory obligations can play a significant role in the ACM's assessment of concentrations.

This article was published in the Competition Law Newsletter of June 2016. Other articles in this newsletter:

  1. General Court rejects Trioplast's action for annulment of a Commission notice to pay interest
  2. Commission blocked Hutchison's proposed acquisition of Telefónica UK
  3. General Court confirmed that German law on renewable energy amounts to State aid
  4. European Commission publishes guidance on the notion of State aid
  5. Rotterdam District Court considered "franchise agreements" in breach of competition law in launderette cartel case
  6. UK High Court held that territorial limits apply to EU cartel damages claims

Team

Related news

07.10.2021 NL law
Commission’s record fine for gun jumping upheld

Short Reads - Pre-closing covenants protecting the target’s value or commercial integrity pending merger clearance from the European Commission must be drafted carefully. The General Court confirmed the Commission’s record-breaking fines on Altice for violating the EU Merger Regulation’s notification and standstill obligations. According to the General Court, the mere possibility of exercising decisive influence over the target can result in a gun jumping breach.

Read more

07.10.2021 NL law
ACM walks the walk: first-ever vertical price coordination fine

Short Reads - The Dutch Competition Authority (“ACM”) has claimed a first victim in its vertical restraints battle. Samsung Electronics was fined nearly EUR 40 million for having meddled in the online resale prices for televisions at seven retailers. Compared to the European Commission’s fines on four consumer electronics producers for resale price maintenance (“RPM”), the ACM’s summary decision seems to refer to a ‘light’ version of RPM: systematic price coordination without any threats, sanctions or incentives for the retailers to stick to the price.

Read more

07.10.2021 NL law
Commission reveals first piece of antitrust sustainability puzzle

Short Reads - The European Commission has published a Policy Brief setting out its preliminary views on how to fit the European Green Deal’s sustainability goals into the EU competition rules. Companies keen to be green may be left in limbo by a looming clash with more far-reaching proposals from national competition authorities. More pieces of the antitrust sustainability puzzle will fall into place as soon as the ongoing review of the guidelines on horizontal cooperation is finalised.

Read more

13.09.2021 NL law
Adopting the new Standard Contractual Clauses to secure international personal data transfers

Short Reads - Recently, the European Commission issued an implementing decision on standard new contractual clauses (“SCCs”) for the transfer of personal data to countries outside the European Economic Area. Organisations need to use the new SCCs from 27 September 2021 and onwards. Transitional periods apply for existing international data transfer agreements. To meet their obligations under the General Data Protection Regulation, organisations need to make the appropriate changes in time.

Read more

07.10.2021 NL law
Court of Appeal provides guidance for further course of proceedings in prestressing steel litigation

Short Reads - On 27 July 2021, the Court of Appeal of Den Bosch issued an interim judgment in the Dutch prestressing steel litigation, ruling on three issues: (i) the obligation of claimant to furnish facts; (ii) the assignment of claims; and (iii) the liability of the parent companies. In short, the Court of Appeal allowed the claimant Deutsche Bahn another opportunity to supplement the facts needed to substantiate its claims in the next phase of the proceedings.

Read more

09.09.2021 BE law
Digital Law Up(to)date: (1) Parliamentary initiatives about cyber attacks; (2) ‘Zero tariff’ options before the CJEU; and (3) Council of State, GDPR and encryption

Articles - In this blog, we briefly present three interesting news in the field of digital law: (1) Parliamentary initiatives to tackle cyber attacks (2) "Zero tariff" options and open internet access do not mix! (3) Council of State, GDPR and encryption: validation of a decision of the Flemish Authorities

Read more