Short Reads

Recent enforcement action emphasizes the importance of compliance with procedural EU merger rules

Recent enforcement action emphasizes the importance of compliance wit

Recent enforcement action emphasizes the importance of compliance with procedural EU merger rules

01.06.2017 NL law

On 18 May 2017, the EU Competition Commissioner Margrethe Vestager stressed the importance for companies involved in mergers of complying with the EU merger rules. By imposing a fine on Facebook for providing misleading information during the WhatsApp takeover and sending a Statement of Objections to Altice for implementing a deal prior to obtaining its approval, the European Commission shows that it will be very attentive to any violations of its procedural rules.

Facebook/WhatsApp

On 18 May 2017, the European Commission imposed a fine of EUR 110 million on Facebook for providing misleading information during its WhatsApp acquisition. Under the EU Merger Regulation, the Commission may impose fines up to 1% of the aggregate turnover of companies that, intentionally or negligently, supply incorrect or misleading information in a notification process. Interestingly, this is the first case where the Commission has imposed a fine for submission of misleading information since the 2004 EU Merger Regulation came into effect.

In December 2016, the Commission sent a Statement of Objections to Facebook alleging that it had provided misleading information in relation to the possibility of automatically matching user accounts on both platforms. Facebook indicated both in its merger notification and in a reply to a request for information that it would be unable to establish a reliable automated matching between the two companies' user accounts. However, two years after the notification, WhatsApp announced an update to its terms of service and privacy policy, including the option of linking WhatsApp users' numbers with Facebook users' identities. The Commission considered that contrary to Facebook's statements, the technical possibility of automatically matching Facebook's and WhatsApp's users ID already existed in 2014, which was known by Facebook's staff.

In calculating the fine, the Commission took into account that Facebook had committed two separate infringements (by providing misleading information in both its notification and in a reply to a request for information). According to the Commission, these infringements were serious because it was prevented from having all relevant information to assess the acquisition. In addition, the Commission found that Facebook staff was aware of the user matching option and that it was relevant for the Commission's assessment. Therefore, Facebook's breach of the procedural rules was at least negligent. Finally, mitigating circumstances were taken into account because Facebook cooperated with the Commission during the infringement proceedings. The Commission decision has no impact on the 2014 decision to authorise the acquisition.

Altice/PT Portugal

On 18 May 2017, the European Commission sent a Statement of Objections to Altice, alleging that it had violated the EU Merger Regulation by implementing its acquisition of telecommunications operator PT Portugal before the notification or approval by the Commission (gun jumping). Under the EU Merger Regulation, a merger or an acquisition should be notified to the Commission and should not be implemented unless it has been cleared by the Commission.

On 25 February 2015, Altice notified the Commission of its intention to purchase PT Portugal and on 20 April 2015, the Commission cleared the transaction subject to conditions. In the Statement of Objections, the Commission expressed the preliminary view that Altice had jumped the gun and implemented the transaction before the Commission's clearance decision and in some instances before even the notification to the Commission. More specifically, the Commission considered that the purchase agreement signed by the two companies enabled Altice to exercise decisive influence over PT before the notification or clearance of the transaction and that in some cases Altice actually did so.

If the Commission concludes that there was a violation, it could impose a fine of up to 10% of Altice's annual worldwide turnover. Altice, through its subsidiary Numericable, has been previously found guilty by the French Competition Authority for jumping the gun. On 8 November 2016, the French Competition Authority imposed a record fine of EUR 80 million on Altice and its subsidiary.

This article was published in the Competition Law Newsletter of June 2017. Other articles in this newsletter:

  1. European Commission accepts Amazon's commitments in e-book probe
  2. European Commission publishes final report on e-commerce sector inquiry 
  3. European Commission issues new rules for State aid to ports, airports, culture and the outermost regions
  4. District Court of Amsterdam rules on the validity of the assignments and prescription of CDC's claims for damage in sodium chlorate cartel
  5. Belgian Competition Authority fines undertakings for bid-rigging in railway tender

Team

Related news

03.10.2019 NL law
It's in the details: HSBC fine quashed for insufficient reasoning

Short Reads - The General Court annulled the EUR 33.6 million fine imposed on banking group HSBC for its participation in the euro interest rates derivatives cartel. Full annulment was granted based on the Commission's failure to provide sufficiently detailed reasoning for the first step of the fine calculation, establishing the value of sales. As the value of sales could not be established in a straightforward way, the Commission used a proxy. When doing so, the Commission needs to properly explain its reasoning to allow the companies fined to understand how it arrived at the proxy. 

Read more

03.10.2019 NL law
The postman will no longer ring twice: Minister unblocks postal merger

Short Reads - The Dutch Authority for Consumers and Markets (ACM) recently blocked postal operator PostNL's acquisition of its only national competitor, Sandd, because this would create "a monopolist on the postal delivery market". However, the Dutch Minister of Economic Affairs and Climate Policy has overruled the ACM's decision on grounds of public interest. Invoking industrial policy or public interest reasons for merger clearance seems to be catching on.

Read more

03.10.2019 NL law
The ACM has to pay: moral damages awarded to real estate traders

Short Reads - The Dutch Authority for Consumers and Markets (ACM) needs to cough up a total of EUR 120,000 in moral damages to three real estate traders. The Dutch Trade and Industry Appeal Tribunal (CBb) agreed with the real estate traders that the annulment of the ACM's cartel decisions against them was insufficient compensation for the harm they suffered as a result of the length of the procedure and the press coverage of their cases.

Read more

02.10.2019 NL law
Politie aansprakelijk voor schietpartij Alphen aan den Rijn

Short Reads - De politie is aansprakelijk voor de schietpartij in een winkelcentrum Alphen aan den Rijn in 2011. Dat oordeelt de Hoge Raad in zijn arrest van 20 september 2019 (ECLI:NL:HR:2019:1409). Bij deze schietpartij vonden zes mensen de dood en raakten zestien mensen gewond. De dader doodde ook zichzelf. Nabestaanden van dodelijke slachtoffers, slachtoffers die gewond raakten en winkeliers spreken de politie aan tot schadevergoeding. Zij voeren aan dat de politie de vergunning voor de wapens die de man gebruikte, niet had mogen verlenen.

Read more

03.10.2019 NL law
Margrethe Vestager to play matchmaker between enforcement and regulation

Short Reads - Current Competition Commissioner Margrethe Vestager may face even greater challenges in the next European Commission. President-elect Ursula von der Leyen has not only nominated Vestager for a second term as Commissioner for Competition, but has also asked her to coordinate the European Commission's digital agenda. As a result, Vestager may soon be tackling digital issues through competition enforcement whilst also proposing additional regulation to deal with these (and related) issues pre-emptively.

Read more

02.10.2019 NL law
Dutch national police service liable for unlawful granting of firearms permit

Short Reads - In a recent decision (ECLI:NL:HR:2019:1409), the Supreme Court has decided that the Dutch national police force is liable for damage suffered by victims of a shooting which took place in a shopping centre in 2011; an event that shocked the Netherlands. The Supreme Court held that the police had unlawfully granted a permit for the firearms used in the shooting.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring