Competition Flashback Q2 2023: EU and Dutch competition law developments
This is the Competition Flashback Q2 2023 by bureau Brandeis, featuring a selection of the key EU and Dutch competition law developments of the past quarter (see the original version here).
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Overview Q2 2023
- ACM bans acquisition of waste processor AEB by AVR
- Conditional approval for acquisition of Landal by Roompot
- Rotterdam court overturns two merger prohibition decisions in healthcare sector in short order
- Overview highlights merger cases European Commission
Cartels, vertical restraints and abuse of a dominant position
- Fining decision on egg purchasing cartel may be published
- CJEU clarifies qualification of resale price maintenance as by-object restriction
- Parallel proceedings in Italy and rest of EEA tot Amazon Buy Box permissible according to CJEU
Follow-on competition damages claims
- CJEU clarifies burden of proof and confirms principle of partial nullity for competition law infringements
- Amsterdam court assumes jurisdiction over damages claims against Google based on anchor defendant rule
- Supreme Court refers preliminary questions on parent company liability for cartel damages in AB and Heineken/MTB
- Amsterdam Court of Appeal asks CJEU to clarify anchor defendant rule in power cable and cardboard cartel cases
- Gran Petro claims foundation abuses procedural rights by commencing proceedings in the Netherlands
- SCC and Equilib foundations only partially meet burden of proof: part of underlying parties drops out in air cargo cartel damages action
Investigation and enforcement powers
- ACM may expand research objective after reviewing incriminating documents during dawn raid
- ECtHR narrowly approves Dutch system of transferring intercepted information between regulatory authorities
- ACM’s prioritisation policy clarified: sustainability, privacy, security and other public interests may be taken into account
- CJEU stresses wide discretion of Commission to request information during investigation
State aid and regulated markets
- German aid approval to Lufthansa of € 6 billion undercut at General Court
- Verbal agreement with NS does not suffice: ProRail must grant third party access to railway sidings
ACM bans acquisition of waste processor AEB by AVR
ACM, decision of 13 June 2023
In its decision of 13 June 2023, the Dutch Authority for Consumers and Markets (“ACM”) prohibited the acquisition of waste processor AEB by competitor AVR. In 2021, the municipality of Amsterdam decided to privatise municipal waste processor AEB. After several bids, Rotterdam competitor AVR emerged as the buyer. The ACM concluded that the merged entity would become by far the largest waste generation company in the Netherlands, with twice as much processing capacity as the second largest party. This would lead to price increases for municipalities in the provinces of North Holland, South Holland and Utrecht, which would in turn pass these price increases on to their residents. Prices would also rise for customers in the market for lightly contaminated hazardous waste treatment, such as commercial waste collectors. The parties tried to address the ACM’s concerns by offering remedies, but these appeared insufficient to fully address the ACM’s competition concerns.
Conditional approval for acquisition of Landal by Roompot
ACM, decision of 12 April 2023
Following the first phase decision (see our Competition Flashback Q4 2021), the ACM granted a conditional licence for Roompot’s acquisition of Landal after a (lengthy) second phase investigation. The two providers of accommodation on holiday parks, which are also each other’s closest competitors, will together become by far the largest provider in the Netherlands post-transaction. According to the ACM’s investigation, this is likely to increase rental prices of holiday homes. Apart from the market for the provision of holiday park accommodation, the ACM also found anti-competitive effects on the market for the provision of rental intermediary and marketing services to owners of (accommodation on) holiday parks. According to the ACM, these competition concerns are sufficiently removed by the divestment of 30 holiday parks to Dormio Group. Subject to this divestment package, the transaction got the green light from the ACM.
Rotterdam court overturns two merger prohibition decisions in healthcare sector in short order
District Court of Rotterdam, judgments of 24 March 2023 and 12 May 2023
The District Court of Rotterdam overturned two merger prohibition decisions by the ACM in the healthcare sector in two months’ time. After the court annulled the ACM’s decision not to license Mediq‘s acquisition of Eurocept Homecare on 24 March, it has on 12 May 2023 also annulled the ACM’s decision to ban the acquisition of Mauritskliniek by Bergman Clinics. In both cases, the court ruled that the ACM did not provide decisive evidence to prohibit the mergers based on the qualitative studies it had conducted.
In Bergman Clinics/Mauritskliniek, the ACM blocked the merger because it would further strengthen Bergman Clinics’ bargaining position. According to the ACM, Bergman Clinics would thereby become an indispensable contracting partner for health insurers. The ACM based this on its market research among major health insurers and a price survey. In doing so, the ACM pointed to research that showed that prices at Bergman Clinics increased relatively more than at comparable healthcare providers after its merger with NL Healthcare Clinics in 2018. In view of the ACM, this is predictive of a comparable outcome for the acquisition of Mauritskliniek.
The court first looked at the evidence presented by the ACM regarding the indispensability of Bergman Clinics as a healthcare provider. According to the court, the surveys showed that, although the full or partial transfer of care to other providers was generally considered difficult by health insurers, it was not impossible. Moreover, the court did not consider selective contracting to be unrealistic, especially now that Bergman Clinics itself had indicated that it was open to this. As the indispensability of Bergman Clinics had not been demonstrated, the ACM’s decision could not be upheld. According to the court, the price study was insufficient to establish that there was a significant restriction of competition.
Overview highlights merger cases European Commission
Following a Phase II-investigation, the European Commission (“Commission”) has conditionally approved Microsoft’s acquisition of game developer Activision Blizzard. Activision Blizzard develops, among others, the PC game World of Warcraft and cross-platform games such as Call of Duty. In addition to the concerns identified in the first phase investigation (see also Competition Flashback Q4 2022), the Commission is concerned that the acquisition restricts the development of and access to the market for cloud gaming (as a distribution channel). For example, as a result of the acquisition, Microsoft could choose to offer Activision Blizzard’s games solely via its own cloud ‘Game Pass Ultimate‘. To address these concerns, Microsoft has agreed to allow consumers in the European Economic Area (“EEA”) to stream all current and future Activision Blizzard’s PC and console games via any cloud gaming streaming service for ten years. Vice versa, cloud gaming streaming service providers will be given a licence to offer Activision Blizzard’s PC and console games in their cloud. In addition, Microsoft has pledged to allow Activision’s games to continue to function on operating systems other than Microsoft. Earlier this year, these commitments proved insufficient for the Competition and Markets Authority (“CMA”), which banned the acquisition in the UK.
On 25 May 2023, the Commission approved the acquisition of UK-based Inmarsat by its US rival Viasat. The approval follows a Commission investigation into the two undertakings that provide in-flight connectivity services (see also Competition Flashback Q1 2023). As the in-flight internet connectivity market is developing, new market entrants are expected to exert significant competitive pressure on the newly merged entity. According to the Commission, other markets do not overlap enough to raise competition concerns.
The Commission has conditionally approved Vivendi’s acquisition of Lagardère. The concentration between the two major French multimedia groups could restrict competition in the markets for the purchasing of authors’ rights and for the distribution, marketing and sales of French-language books. Due to the existence of strong vertical links and a limited number of competitors, the concentration would also have led to higher prices for French press magazines, according to the Commission’s investigation. As a remedy, Vivendi will divest its press magazine Gala and its entire publishing business. The Commission is currently assessing the suitability of potential buyers that Vivendi has put forward.
A week after the approval, it emerged that the Commission is also investigating whether Vivendi completed the acquisition prematurely, before the Commission gave its approval. So-called ‘gun-jumping’ can lead to fines of up to 10% of turnover under the Merger Regulation (read more here).
The Commission has decided to approve the takeover of Polish producer of aluminium foundry alloys for the automotive industry Alumetal by Norwegian aluminium giant Norsk Hydro. According to the Commission’s second phase investigation, there will be sufficient alternative suppliers post-transaction, including parties that, like Alumetal, work with recycled materials. The Commission found that Alumetal and Norsk Hydro are not close competitors, and possible vertical links between Alumetal as a producer and Hydro as a purchaser of aluminium foundry alloys do not raise competition concerns.
On 3 April 2023, the Commission opened an in-depth investigation into the proposed joint venture of mobile network operators Orange and MasMovil. Orange and MasMovil are the second and fourth largest mobile operators in Spain. The Commission examined the proposed merger and concluded that the number of network operators would be reduced, and that the parties would have both the ability and incentive to deny other mobile providers access to their networks. These concerns could lead to higher prices for consumers in Spain, especially considering the parties are close competitors, and MasMovil has proven to be an effective and innovative challenger to market leader Orange in recent years. The Commission sent the parties its formal statement of objections on 27 June 2023.
Fining decision on egg purchasing cartel may be published
District Court of Rotterdam, judgment of 8 May 2023
The District Court of Rotterdam ruled that the ACM may (to a large extent) publish its infringement decision regarding the industrial egg cartel. On 22 December 2022, the ACM imposed fines on Interovo, Wulro and Global for their participation in the ‘egg cartel’. The three companies purchase industrial eggs and process these into liquid and powdered egg products to be sold to food processing industries such as sauce manufacturers and patisseries. Between April 2015 and August 2016, Wulro and Interovo entered into market-sharing agreements (largely via WhatsApp) and deliberately kept purchase prices at farmers low. Wulro and Global had similar arrangements in the period March 2016 to August 2019. According to the ACM, these constituted continuous infringements that aimed to restrict competition in the Netherlands, Belgium and North West Germany.
Wulro and Global sought to prevent the disclosure of the fining decision. To this end, they argued that the ACM acted in violation of the presumption of innocence and the requirement of segregation of duties. After the Directorate of Competition (“DM”) published its investigation report, the Directorate of Legal Affairs (“DJZ”) informed DM that the market definition was deficient and gave DM the opportunity to supplement its market investigation. This also meant that the statutory decision period of 13 weeks was not met. Previously, the Rotterdam District Court already ruled in this case that this deadline (Article 5:51 Awb) is a period of order, and exceeding it does not deprive the ACM of its possibility to impose a fine. The court now adds that there is no provision that prevents the ACM from conducting a supplementary investigation. The fact that DJZ gave DM the opportunity to issue a second report does not mean that there is a violation of the presumption of innocence, the principle of separation of duties, and/or Article 6 of the European Convention on Human Rights (“ECHR”), according to the court.
The substantive contentions of the producers were also unsuccessful, for example as regards the wrongful definition of the relevant market, the position of the producers thereon, and the absence of a restriction of competition by object. The court does also not follow the argument that the (prolonged) interruption in the contact moments affected the existence of a single and continuous infringement, nor did it establish that the agreement was exempted under Article 7 of the Dutch Competition Act (in Dutch: bagatel).
However, the court does have doubts as to the calculation of the turnover and the fines. For instance, the ACM imposed two fines on Wulro, without reflecting the two different yet related infringements into the total amount of the fine. According to the court, it is also unclear whether the relationship between the producers is adequately reflected in the fine calculation. The court therefore rules that the amount of the fines may not be disclosed for the time being.
CJEU clarifies qualification of resale price maintenance as by-object restriction
Court of Justice of the European Union, judgment of 29 June 2023
In its judgment of 29 June 2023, the Court of Justice of the European Union (“CJEU”) elaborated upon the question whether imposing minimum selling prices on distributors qualifies as a restriction of competition by object. Super Bock, a Portuguese beer and water manufacturer, sent minimum price lists to its on-trade distributors between 2006 and 2017. Through a monitoring system and mandatory price reports from the distributors, it kept an eye on the compliance with the price agreements. If the distributors deviated from the minimum selling prices, discounts or stocks were withheld. Super Bock was fined by the Portuguese competition authority for this behaviour. On appeal, the Portuguese court wonders whether such a (factual) vertical price-fixing agreement (automatically) constitutes a restriction of competition by object, and whether it constitutes an agreement within the meaning of Article 101(1) TFEU.
The CJEU considers that, according to settled case-law, a by-object restriction must have a sufficiently serious effect on competition, which must be assessed in the light of its wording, objectives, as well as its economic and legal context. The fact that minimum selling prices constitute a ‘hardcore restriction’ within the meaning of the Vertical Block Exemption Regulation does not eliminate the need of such assessment. The Court emphasises that a hardcore restriction is not equivalent to a by-object restriction.
Furthermore, according to the CJEU, an agreement exists if there is a concurrence of wills between the parties, regardless of its form. While the sending of minimum price lists, monitoring and retaliatory measures indicate unilateral conduct, compliance with those price lists (despite complaints about the prices) by catering distributors may indicate (tacit) consent and hence, a concurrence of wills.
Parallel proceedings in Italy and rest of EEA to Amazon Buy Box permissible according to CJEU
Court of Justice of the European Union, judgment of 20 April 2023
On appeal against the judgment of the General Court of the European Union (“General Court”) of 14 October 2021, Amazon is again seeking to discard the administrative proceedings surrounding abuse of dominance in Italy. In April 2019, the Italian competition authority launched an investigation into Amazon’s strategy to preference its own retail offers and those of third-party sellers using Amazon’s logistics and delivery services (via the so-called Buy Box). On 10 November 2020, the Commission initiated a similar investigation with regard to the rest of the EEA (excluding Italy). According to Amazon, the Commission’s decision to exclude Italy from the scope of its investigation, and thereby allow the Italian competition authority to continue its investigation, was contrary to Article 11(6) of Regulation 1/2003. Amazon submits to the CJEU that the General Court erred in law by finding that this provision of Regulation 1/2003 does not protect undertakings from being subject to parallel investigations.
The CJEU clarifies that the purpose of Regulation 1/2003 is to ensure an efficient allocation of the competences of competition authorities when applying EU competition rules. To the extent that Article 11(6) seeks to prevent parallel investigations, this protection extends only to investigations involving the same undertakings, in respect of the same alleged anti-competitive conduct, during the same period and in relation to the same product and geographic market. As the Commission did exclude Italy from the scope of its investigation, the protection against parallel investigations does not apply. Moreover, the Commission enjoys a wide discretion in determining the scope of its investigation and has no obligation to include Member States in which an investigation is already ongoing, the CJEU ruled.
CJEU clarifies burden of proof and confirms principle of partial nullity for competition law infringements
Court of Justice of the European Union, judgment of 20 April 2023
In its answer to preliminary questions from the District Court of Madrid, the CJEU clarifies that the irrebuttable presumption regarding the existence of an infringement of competition law following a final decision of a competition authority does not automatically apply in a national action for annulment. In Spanish proceedings between oil company Repsol and heirs of petrol station operator KN, the question arises whether the exclusive purchasing agreements concluded between those parties are automatically void on the basis of previous infringement decisions by the Spanish competition authority in respect of similar exclusive purchasing agreements between Repsol and other parties.
The CJEU considers that, since Article 9 of the Cartel Damage Directive refers only to actions for damages, the irrebuttable presumption of illegality of an infringement following a decision of a (national) competition authority does not apply in a national action for annulment. In light of Article 2 of Regulation 1/2003, it is in principle up to the applicant to prove the existence of an infringement. The CJEU rules, however, that a previously established infringement in respect of similar agreements can have probative value in the context of an action for annulment. In that case, the infringement should be presumed to have been proved by the applicant, subject to proof to the contrary. This is conditional upon the finding that the scope of the alleged infringement and the infringement established in that decision coincide. Subject to the principles of equivalence and effectiveness, it is up to the national court to assess whether such is the case.
Next, the CJEU underlines that the nullity described in Article 101(2) TFEU extends only to the parts of the agreement that are prohibited under the first paragraph. The entire agreement is void only if those parts are not severable from the agreement itself. With this premise, the CJEU seems to go a step further than the Dutch Supreme Court, which previously held in BP v Benschop that only the prohibited provision is struck with nullity if a meaningful arrangement remains for both parties. Partial nullity is nevertheless always the starting point, the CJEU states.
Amsterdam court assumes jurisdiction over damages claims against Google based on anchor defendant rule
District Court of Amsterdam, judgment of 31 May 2023
In its ruling of 31 May 2023, the District Court of Amsterdam assumed jurisdiction to rule on Wolfson Capital Limited’s (“Wolfson”) claims for damages against Google. In these proceedings, Wolfson claims damages from Google as a result of the latter’s abuse of dominance where Google favoured its own comparison shopping service, Google Shopping, over competitors for years. Wolfson claims these damages from both Google and Alphabet (addressees of the Commission’s decision) as well as Google Netherlands: the Netherlands-based subsidiary of Google and (ultimately) Alphabet which itself was not directly involved in the infringement. According to Wolfson, Google Netherlands can be used as an anchor defendant because it is part of the same undertaking as Google and Alphabet, and is therefore jointly and severally liable for the infringement. This would satisfy the required close connection between the claims against the defendants.
The court agrees with Wolfson. It holds that a subsidiary can be held liable if (i) there are economic, organisational and legal links between that subsidiary and its parent company and (ii) there is a concrete link between the economic activity of the subsidiary and the object of the infringement for which the parent company is held liable (see our blog). The first criterion was not disputed by Google and Alphabet. Regarding the second point, the court ruled that it is not required that the subsidiary itself commits or is involved in the infringement: what matters is the object of the infringement. Although Google Netherlands was not involved in the favouring of Google Shopping (the infringement), it was involved in selling the Google Shopping ads by providing support services (the object of the infringement). Thus, the requirement of a concrete link is also met, meaning that Google Netherlands, Google and Alphabet form one economic entity for the purpose of these proceedings. This triggers the joint and several liability of Google Netherlands for the infringement, fulfilling the required nexus between the claims.
Supreme Court refers preliminary questions on parent company liability for cartel damages in AB and Heineken/MTB
Supreme Court, judgment of 23 June 2023
On 23 June 2023, the Dutch Supreme Court referred preliminary questions to the CJEU in the case of Macedonian Thrace Brewery (“MTB”) against Greek Athenian Brewery (“AB”) and its Dutch parent company Heineken. In 2014, AB was fined by the Greek competition authority for abusing its dominant position on the Greek beer market. The proceedings currently solely concern the question whether the Dutch court has jurisdiction to rule on MTB’s claim for damages against AB and Heineken.
Article 8(1) of Brussels I-bis provides that in the case of multiple defendants, a defendant (here: AB) may also be sued in the courts of the domicile of a co-defendant (the anchor defendant, here: Heineken), as long as there is a ‘close connection’ between the claims against them. It is important in that regard that, according to MTB, Heineken and AB constitute one undertaking, given that Heineken holds almost the entire share capital of AB, which entails a presumption of ‘decisive influence’ of Heineken over AB. That undertaking as such is liable for the infringing conduct.
The Supreme Court is unsure whether and, if so, to what extent this rebuttable presumption of decisive influence – which is relevant to Heineken’s liability for AB’s infringing conduct – should already be taken into account in the jurisdictional assessment, where substantive (liability) issues are in principle not (yet) to be addressed. The Supreme Court decided to stay proceedings until the CJEU has delivered its judgment on this matter.
Amsterdam Court of Appeal asks CJEU to clarify anchor defendant rule in power cable and cardboard cartel cases
Court of Appeal of Amsterdam, judgment of 25 April 2023
The Amsterdam Court of Appeal has expressed its intention to refer almost identical preliminary questions to the CJEU in two cartel damages cases. In the first case, a number of utility companies based in the Gulf States claim damages following a cartel regarding power cables as established by the Commission. In the second case, Unilever seeks damages following a decision by the Italian competition authority regarding cartels in the Italian cardboard market. The plaintiffs in both cases argue that the Dutch court should assume jurisdiction because the existence of a close link is given (as required by Article 8(1) Brussels I-bis), since – in line with the European law concept of undertaking – the sued Dutch anchor defendants are liable for the damages resulting from the respective cartels as they form an undertaking with their parent companies: the respective cartel participants. In both cases, the court questions whether the Dutch subsidiaries, which were not directly involved in the anticompetitive conduct, can be held liable for the conduct of the foreign parent companies and to what extent this should feed into the jurisdictional assessment.
The Amsterdam Court of Appeal decides to refer a total of five questions. These concern (i) the existence of a close link between the claims against the addressees of the infringement decisions and the anchor defendant(s) who did not actually participate in the cartel, (ii) the foreseeability of the claim for damages for the defendants, (iii) the relevance of the assignability of the claims against the anchor defendant (iv) the right to damages for legal entities domiciled outside the EEA, (v) the possibility of the existence of multiple anchor defendants, and finally (vi) the possibility of internal referral to another competent court within a Member State under Article 8(1) of Brussels I-bis. The parties to these proceedings may now comment on the proposed questions.
Gran Petro claims foundation abuses procedural rights by commencing proceedings in the Netherlands
District Court of The Hague, judgment of 17 May 2023
The District Court of The Hague has declined jurisdiction to rule on the claims brought by the foundation Stichting Claim Gran Petro (the “Foundation”) against Brazilian company Raízen and its Dutch parent companies Shell Brazil Holding B.V. (“Shell Brazil”) and Royal Dutch Shell plc (“Shell”, still domiciled in the Netherlands at the time the claims were brought). The Foundation claimed damages as a result of a violation of Brazilian competition law by Raízen.
The court first stated that it strongly appears as if the Foundation does not want to litigate in Brazil – as this can take very long – and therefore seeks refuge in the Netherlands, using the seat of the Dutch co-defendants as a justification for the jurisdiction of the Dutch court. The court ruled that the Foundation failed to (sufficiently) substantiate that the Dutch co-defendants were also themselves involved in the infringement of (Brazilian) competition law. The Foundation’s argument that Shell and Shell Brazil are jointly liable with Raízen, the infringer, because they belong to the same undertaking, cannot be maintained. Such joint and several liability cannot be inferred from Brazilian competition law; moreover, the legal basis for liability in Brazilian private law on which the Foundation relies, only applies in relation to infringers who have themselves acted unlawfully. Thus, according to the court, the Foundation brought its claims before the Dutch courts solely to keep Raízen away from the courts of Brazil, which constitutes an abuse of process.
SCC and Equilib foundations only partially meet burden of proof: part of underlying parties drops out in air cargo cartel damages action
District Court of Amsterdam, judgment of 24 May 2023
In a follow-on cartel damages case involving the airfreight cartel, the District Court of Amsterdam set out and applied the framework around the obligation to furnish facts. Foundations SCC and Equilib had to substantiate for each underlying party that it had purchased at least one air cargo transport service in the relevant (cartel) period. The court indicated such a purchase is only demonstrated when it is clear that the underlying party paid for the airfreight service itself, even if the service was purchased indirectly, for example through a freight forwarder. Otherwise, no damage is suffered by the underlying party and it should be dismissed for the remainder of the proceedings.
In light of the clandestine nature of the cartel and the time that had already passed between the cartel and these proceedings, the court held that the foundations did not have to provide evidence from a direct source – such as invoices or airway bills – for each underlying party, but they did have to give tangible substance to their claims. Of particular importance here is the ‘duty of guidance’: the foundations have to lead the way and show the damage from the relevant documents. Referring to documents/dates without indicating which (passages in those) documents/dates exactly are concerned is insufficient. In almost all cases, the failure to comply with this duty to guide was the (main) reason why the obligation to furnish facts was not met and the underlying parties had to be dismissed. The court concluded in its judgment with regard to several underlying parties that the foundations did in fact bring a sizeable amount of documents/data into the proceedings, but failed to point out which (passages in those) documents/which data were relevant. In many cases, the court considers this not only insufficient, but also incomprehensible at this (already advanced) stage of the proceedings and especially in light of the specific instruction to prove that at least (only) one air cargo transport service was purchased. The court emphasises that it is not up to the court (or the defendants) to search through the relevant documents for actual transactions and to piece together the necessary data.
ACM may expand research objective after reviewing incriminating documents during dawn raid
Court of Appeal of The Hague, judgment of 24 January 2023 (publication: 19 May 2023)
Earlier this year, the Court of Appeal of The Hague upheld the District Court’s ruling that the ACM did not act unlawfully by expanding the objective of the investigation after reviewing incriminating documents during unannounced inspections. Upon signals from the market, the ACM conducted three dawn raids in 2019. The purpose of the inspection was related to a possible violation of the cartel prohibition, consisting of fixing purchase prices. Following the inspection of various emails and WhatsApp-messages, the ACM expanded the investigation to also include the coordination of selling prices. According to the undertakings concerned, the ACM thereby acts in violation of its Procedure for the inspection of digital data by conducting investigations into the seized material beyond the purpose of investigation. In doing so, the ACM acts unlawfully, the appellants claimed.
After an extensive analysis of the specific messages and emails that led to the expansion of the investigation purpose, the Court of Appeal concluded in summary proceedings that it had not become plausible that the ACM had stepped out of line in doing so. The Court of Appeal considers that the ACM has sufficiently explained and substantiated that it was reasonably entitled to take the messages it found as indicative of a sales cartel by a cursory perusal. It did not consider it plausible that the ACM searched the chats again after exporting them. The extension of the infringement period and the involvement of other appellants is also not unlawful (on a prima facie basis), the Court of Appeal ruled.
ECtHR narrowly approves Dutch system of transferring intercepted information between regulatory authorities
European Court of Human Rights, judgments of 16 May 2023
The European Court of Human Rights (“ECtHR”) has, by a narrow majority, ruled in favour of the Dutch State in a trio of cases concerning the exchange of intercepted information between different regulatory bodies. In 2010 and 2011, collectors of shipping waste in the port of Rotterdam were fined by the then-called Dutch Competition Authority (“NMa”) for entering into illegal price agreements. However, the evidence for this had been obtained through (approved) interceptions by the investigation service of the Ministry of Housing, Spatial Planning and the Environment for suspected illegal wastewater discharges, and was subsequently forwarded to the competition authority. The collectors complained before the ECtHR that the forwarding of information from the Ministry to the NMa violated Article 8 of the European Convention on Human Rights (“ECHR”) which includes the right to respect for private and family life.
The ECtHR applied the standards it has developed regarding secret surveillance measures (see also this Dutch blog). This means, among other things, that the intercepted parties did not have to be informed of the transfer. The ECtHR concludes that the Ministry was allowed to transmit the information to the NMa without informing the complaining parties. According to the ECtHR, the legal basis for sharing investigation data in the Netherlands is clear and predictable and backed by sufficient safeguards. Adequate (civil) legal protection is in place, and the transfer had a legitimate purpose, namely the protection of the economy.
In a dissenting opinion, three of the seven ECtHR judges argue that the Dutch legal system possesses serious shortcomings and Article 8 ECHR is not adequately safeguarded, as the NMa itself does not have the authority to tap and the cartel infringement proceedings were too far removed from the original environmental case in which the wiretapping practices were approved.
ACM’s prioritisation policy clarified; sustainability, privacy, security and other public interests may be taken into account
ACM, Policy on enforcement prioritisation of 25 May 2023
The ACM recently revised its policy for prioritising enforcement requests. For quite some time, the ACM has used three prioritisation criteria to determine whether or not it will further investigate complaints, namely (i) the harmfulness of the conduct, (ii) the public interests involved, and (iii) the possibility of effective and efficient enforcement.
With its new prioritisation policy, the ACM clarifies that it looks at harm in a broad sense when considering the criterion of “harmfulness”. Not only financial damage, but also damage to quality and innovation, long-term damage and indirect damage, e.g. the effect that the conduct may have on consumers’ and companies’ confidence in markets can be relevant. Another aspect that may weigh in is whether the conduct affects vulnerable groups of consumers or businesses. In the context of ‘public interest’, the ACM states that it looks at various public interests, not just interests that the legislator has attributed to the ACM. Examples include sustainability, economic resilience, quality of healthcare, privacy and safety. The ACM shall also take into account whether the conduct falls within one of the strategic objectives on the ACM Agenda.
Furthermore, the ACM states in its policy that the criterion ‘effective and efficient enforcement’ includes possible synergy with already ongoing investigations and a balanced allocation of enforcement capacity across different topics. With its amended policy, the ACM is trying to improve its external communication and accountability on policy choices.
CJEU stresses wide discretion of Commission to request information during investigation
General Court of the European Union, judgment of 24 May 2023
Meta Platforms lost the appeal against the Commission’s request to produce internal documents in the context of an ongoing investigation. The Court found that the Commission has sufficiently substantiated the purpose of the request, also in light of the suspected infringements the Commission is investigating. The fact that the investigation covers numerous activities and has a wide geographical scope does not mean that the Commission has breached its duty to state reasons.
The Court also ruled that the Commission did not infringe the principle of necessity. The Commission’s broad powers of investigation imply that it has wide discretion to assess whether certain information requests, in particular specific terms to search through internal documents, are necessary. For similar reasons, Meta Platforms’ defence rights were also not infringed, the General Court ruled.
German aid approval to Lufthansa of € 6 billion undercut at General Court
General Court of the European Union, judgment of 10 May 2023
The General Court recently ruled that the Commission committed several errors in approving Germany’s aid measure to German airline Lufthansa. Due to the effects of the COVID-19 crisis on the aviation sector, Germany notified a proposed aid package to the Commission pursuant to which Lufthansa would receive a total of € 6 billion in recapitalisation aid. The Commission approved the aid measure with reference to its Temporary Framework for state aid around the COVID-19 crisis. Competitors Ryanair and Condor appealed against this approval decision before the General Court.
The court found that the Commission did not examine whether Lufthansa could also have obtained the relevant financing – or at least a significant part of it – on the private market. It is in that regard irrelevant that Lufthansa would probably not have been able to cover the full amount of aid on the private market. Second, the Commission erred by failing to impose any or no effective incentive mechanisms on the basis of which Lufthansa would repay or buy out the German State more quickly. Thirdly, the Commission failed to recognise that Lufthansa enjoys significant market power on the airports of Düsseldorf and Vienna, thereby also failing to include in the aid measure adequate safeguards to maintain competition in those markets. The General Court therefore annuls the Commission’s decision. If these errors cannot be remedied by adopting a new approval decision, Germany will have to recover (part of) the aid.
Verbal agreement with NS does not suffice: ProRail must grant third party access to railway sidings
ACM, decision of 18 April 2023
In its decision of 18 April 2023, the ACM determined that ProRail had made non-transparent agreements with NS regarding the allocation of tracks at the Westhaven yard, a service facility on which passenger sidings are being developed. Under the relevant railway legislation, the operator – in the Netherlands: ProRail– is obliged to grant railway undertakings non-discriminatory access to such sidings. Train Charter Services (“TCS”) submitted a request for access to track 45 of the site, but this request was rejected by ProRail. ProRail pointed to an alleged verbal agreement with NS regarding track allocation.
TCS subsequently filed a complaint with the ACM, which concluded that track 45 was never explicitly allocated to NS, as ProRail did not submit any evidence regarding the existence of the alleged verbal agreement. This agreement is therefore not transparent. According to the ACM, ProRail should not have refused TCS’s application and should grant it in accordance with the ACM’s decision.
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