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

08.06.2021 NL law
De Europese Klimaatwet uitgelicht

Short Reads - Op 21 april 2021 is een voorlopig akkoord bereikt over de Europese Klimaatwet. Deze Klimaatwet kan worden gezien als de kern van de Europese Green Deal, die in december 2019 werd gepubliceerd door de Europese Commissie. Het overstijgende doel van deze instrumenten is om een klimaatneutraal Europa te bewerkstelligen in 2050. De Europese Klimaatwet zorgt ervoor dat deze klimaatneutraliteitsdoelstelling in een Europese verordening wordt vastgelegd. Dit blogbericht gaat nader in op de Europese Klimaatwet en legt uit wat dit met zich brengt.

Read more

03.06.2021 NL law
First material judgment in Dutch damages proceedings in trucks infringement

Short Reads - In its judgment of 12 May 2021, the Amsterdam District Court ruled that it has not been established that it is definitively excluded that the trucks infringement led to damage to the claimants. However, this does not alter the fact that it must still be assessed for each claimant whether the threshold for referral to the damages assessment procedure has been met. For this to be the case, it must be plausible that a claimant may have suffered damage as a result of the unlawful actions of the truck manufacturers. The Amsterdam District Court has not yet ruled on this issue.

Read more

08.06.2021 NL law
Actualiteiten milieustraftrecht: zorgelijke ontwikkelingen

Short Reads - Afgelopen vrijdag 28 mei jl. hadden wij een inspirerend webinar over actualiteiten op het gebied van milieustrafrecht. Wij spraken gedurende 90 minuten onder meer over aansprakelijkheden van bestuurders, de zorgplichten, incidentenrapportages vanuit strafrechtelijk- en bestuursrechtelijk perspectief.

Read more

03.06.2021 NL law
Highest Dutch Court: ACM has not proved dominance of Dutch railway operator NS

Short Reads - A high market share is not always proof of a dominant position. The Trade and Industry Appeals Tribunal (CBb) upheld the annulment of the ACM’s fine of nearly EUR 41 million on Dutch railway operator NS for alleged abuse of dominance. According to the CBb, NS did not abuse its dominant position as the ACM failed to prove beyond reasonable doubt that NS holds a dominant position on the market for the exercise of the right to exploit the main rail network concession.

Read more