Competition Flashback Q2 2024 – EU and Dutch competition law developments
This is the Competition Flashback Q2 2024 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 2024
Merger control, FSR and FDI
Overview highlights merger cases
On 26 June 2024, the European Commission (“Commission”) has conditionally approved the acquisition by Cooper of Viatris’ over-the-counter medicine business. These are medicines that can for example be bought at pharmacies and drugstores without a prescription. The Commission concluded that the acquisition would reduce competition in the markets for laxative enemas for infants in Portugal and earwax removal products in Germany. To address these concerns, the parties proposed to divest Cooper’s rights, title and interests in its laxative medicine Bebegel in Portugal. In addition, Cooper is divesting its rights, title and interests in its earwax removal product Otowaxol in Germany. Subject to these commitments, the Commission concluded that the transaction would no longer raise competition concerns.
ACM intensifies merger supervision: three new in-depth investigations in three weeks
Authority for Consumers and Markets, decisions of 29 April, 8 May and 16 May 2024
In the second quarter of 2024, the Dutch competition authority (Autoriteit Consument & Markt, “ACM”) decided to open in-depth investigations in three different mergers. On 29 April 2024, the ACM decided that further investigation is needed into Foresco’s takeover of pallet suppliers Vierhouten Pallets and De With Pallets.* The ACM is concerned that the acquisition may have adverse effects on buyers of new wooden pallets in the Netherlands, as it further strengthens Foresco’s position on the market. According to the ACM, the acquisition of Vierhouten and De With Pallets is part of a bigger strategy on the part of Foresco to remove competitors from the market through small(er) acquisitions that the ACM is not able to review given that they often fall below the turnover thresholds. This is the first time that the ACM is investigating the theory of harm involving so-called ‘roll up acquisitions’. In an earlier blog, board chairman Martijn Snoep already pointed out the potential competition problems arising from small acquisitions like ‘stringing together beads’.
Less than a week and a half later, on 8 May 2024, the ACM decided that a licence is required for the acquisition of Klaas de Boer by FincoEnergies. Both parties operate as suppliers of bunker marine fuels (especially gasoil) and lubricants to business end-users. Based on its initial investigation, the ACM sees indications of the existence of separate markets for the supply of gas oil to ‘port-bound buyers’ such as fishermen, marine towing services, passenger/ferry services and off-shore activities. The ACM comes to the preliminary conclusion that the parties have a high combined market share in the ports of Harlingen, Lauwersoog, Eemshaven-Delfzijl, Amsterdam-IJmuiden and Den Helder (in Lauwersoog even rising up to 90-100%) and that customers in these ports have no or few fall-back possibilities. In the licensing phase, the ACM will further investigate the need to differentiate by customer type, and whether there are possible substitutes for customers and possible buying organisations, for example by diverting to other ports or delivery by trucks instead of bunker boats.
Finally, the ACM decided on 16 May 2024 to not yet approve DPG’s takeover of RTL. Earlier, the ACM already prohibited the acquisition of Talpa by RTL because it would lead to higher prices for television ads and the distribution of television channels through telecom companies, to the detriment of consumers. With the acquisition of RTL by DPG, the ACM again fears the creation of an overly powerful company in the Dutch media landscape. More specifically, the ACM foresees a possible reduction of the quantity, quality, and pluralism of the general-news landscape for consumers. It also foresees possible negative consequences for advertisers, journalists and specifically for news agency ANP and the media companies that purchase from it. The ACM will investigate this further in a possible licensing phase.
* bureau Brandeis is involved in the second-phase investigation of this proposed acquisition.
Rotterdam court suspends order to notify 2021 transaction to the BTI under Vifo Act
Rotterdam District Court, judgment of 25 April 2024
On 25 April 2024 the Rotterdam District Court suspended the decision of the Minister of Economic Affairs and Climate (“Minister”) based on which Anteryon was required to file a notification with the Investment Screening Bureau (“BTI”) under the Act on security screening of investments, mergers and acquisitions (“Vifo Act”) with retrospective effect.
In 2019, Chinese Jingfang Optoelectronics (“Jingfang”) acquired 70% of the shares in Eindhoven-based Anteryon, a company specialising in (micro)optical components for semiconductors. Despite its minority stake (33%), China Wafer already held all voting rights in Jingfang at that time. In 2021, China Wafer acquired the remaining 66% in Jingfang. By decision of 15 June 2023, the Minister ordered Anteryon to file a notification with the BTI under Article 58 Vifo Act. According to that provision, an acquisition activity that took place between 8 September 2020 and 1 June 2023 must still be notified at the Minister’s request if there is a reasonable suspicion that it leads to a risk to national security. Anteryon lodged an appeal against this decision and requested the interim relief judge to suspend the decision until the appeal was decided. According to China Wafer, there was no acquisition activity within the meaning of the Vifo Act because it had already held all voting rights since 2019.
The preliminary relief judge ruled that the reasonable presumption of Article 58 Vifo Act does not refer to the existence of an acquisition activity, but to the risk to national security. Before imposing the obligation to notify, the Minister should thus first have determined whether there was an acquisition activity within the meaning of the Vifo Act. According to the preliminary relief judge this was evidently not the case, as no voting rights were transferred in the 2021 transaction. The decision is therefore suspended until it is decided on appeal.
Another relevant aspect as regards the Vifo Act is the new policy rule published on 18 June 2024 clarifying and explaining the definition of a ‘manager of a corporate campus’ as referred to in Article 1 Vifo Act (read more about the Vifo Act in our earlier newsletter and blog).
Excessive request for communications in gun-jumping investigation possibly unlawful after all
Vice-President of the Court of Justice, order of 11 April 2024
The Vice-President of the Court of Justice recently set aside the decision of the General Court to reject Vivendi’s request for interim measures in light of the Commission’s extensive request for information (“RFI”) in the course of its investigation into the early implementation of the acquisition of Lagardère. This acquisition was notified to the Commission on 24 October 2022 and approved subject to conditions on 9 June 2023. A month later, the Commission announced the initiation of a formal investigation into potential violation of the standstill-obligation and subsequently requested a broad set of information and communications from Vivendi. This included all exchanges of information via, for example, email, SMS and instant messaging between some of Vivendi’s employees and company agents over a period of several years, including private email boxes where they were used at least once for professional communications. In November 2023, Vivendi submitted an application for interim measures to the General Court seeking to suspend the decision. It argued that the disclosure of all requested information would result in a large-scale breach of the right to privacy (in violation of the right to private life), which would also be incompatible with the rules of French civil and criminal law.
The General Court essentially ruled that the Commission had taken procedural safeguards in relation to sensitive personal data within the meaning of the General Data Protection Regulation, and had therefore taken sufficient steps to prevent the risks pleaded by Vivendi from occurring. As the Commission is furthermore bound by strict obligations of professional secrecy, the General Court found that Vivendi’s application lacked a sense of urgency and rejected its application.
On appeal, the VP first held that the General Court interpreted Vivendi’s arguments regarding the nature of the data at issue too narrowly, and thereby already concluded that the General Court’s order should be set aside. Given the very broad scope of the request – both material and temporal – the VP considers it “highly likely” that the Commission would be provided with information about the private life of the persons concerned. For example, the request also covered private email boxes and the Commission asked for all emails and documents in the same ‘chain’ as the email that surfaced based on keywords of a somewhat general nature. According to the VP, this potentially leads to a breach of privacy and a criminal offence under French law so that the urgency to the request is given. The fact that the Commission is bound by strict rules of professional secrecy (towards third parties) does not alter this conclusion and the potential criminal responsibility, as this personal data still ends up with agents of the Commission.
The VP then notes that, in the context of the need to conduct an efficient and effective investigation, it may be necessary (and thus: lawful) for the Commission to review certain (personal) data. Contrary to the Commission’s submission, however, this point is not relevant in the context of urgency, but only in the substantive assessment of the request in which the prima facie legality of the decision is examined. As this assessment was not made at first instance, the VP refers the case back to the General Court to rule on the condition relating to the establishment of a prima facie case.
Commission takes action with FSR; first dawn raids at Chinese companies and a trio of in-depth investigations in the solar panel and telecoms sectors
European Commission, press releases of 23 April and 10 June 2024
In the previous quarter, the Commission opened four investigations under the Foreign Subsidies Regulation (“FSR”) in which it examines whether companies received subsidies from non-European governments (“foreign subsidies”) in the context of a takeover or tender that distort the internal market.
On 3 April 2024, the Commission opened in-depth investigations into two consortia active in the solar panel sector. One of the consortia consists of subsidiaries of Shanghai Electric Group Co. Ltd, a state-owned enterprise of China. The other consortium, LONGi Green Energy Technology Co., Ltd, listed on the Hong Kong Stock Exchange, is involved through a German subsidiary. The investigations focus on the potentially market-distorting role of foreign subsidies given to bidders in a Romanian public procurement procedure for a photovoltaic park. The Commission will assess whether the companies concerned received unfair advantages to win tender procedures in the European Union (“EU”).
The Commission subsequently announced that it had conducted unannounced dawn raids at premises of a company active in the manufacture and sale of security equipment. It soon became clear that the target of the raid was Nuctech, a Chinese company based in the Netherlands and Poland and active in the manufacture and sale of inspection equipment for (air)ports. The Commission cooperated with the national competition authorities of the Netherlands (ACM) and Poland (UOKiK) for the execution of the unannounced inspections. The Commission has not yet announced whether it will open an in-depth investigation following the dawn raid.
Finally, on 10 June 2024, the Commission opened an in-depth investigation into the proposed acquisition of PPF Telecom (active in Bulgaria, Hungary, the Czech Republic, Serbia and Slovakia) by telecoms company e& (based in the United Arab Emirates, “UAE”). According to the Commission, there are indications that e& has received foreign subsidies that distort the internal market. These include an unlimited UAE guarantee and a loan from UAE-controlled banks facilitating the transaction. e& is the first non-Chinese company to be the subject of an FSR investigation by the Commission. Moreover, this is the Commission’s first in-depth investigation into a (proposed) merger: all previous in-depth investigations concerned tenders. For more on the FSR, see our earlier blog.
Commission designates Booking.com and Apple’s iPadOS as core platform services under the DMA
European Commission, press releases of 29 April and 13 May 2024
On 29 April, the Commission designated Apple as a gatekeeper under the Digital Markets Act (“DMA”) with regard to the operating system for its iPads, iPadOS. Although Apple does not meet the quantitative thresholds for this core platform service (“CPS”) it qualifies as a gatekeeper based on the qualitative criteria of Article 3(1) DMA. In particular, the Commission mentions that end users are locked-in to the “Apple ecosystem”, which is used by Apple to discourage end users from switching to other tablet operating systems.
Furthermore, on 13 May, the Commission designated Booking.com as a gatekeeper with respect to its online intermediary service for holiday accommodations. Booking.com reported itself to the Commission as it exceeds the end-user and business user thresholds in the DMA to qualify as a gatekeeper. Two other companies also reported themselves to the Commission as (potential) gatekeepers, namely X (for X Ads) and TikTok (for TikTok Ads). However, the Commission decided that they do not qualify as gatekeepers with regard to these CPSs because they do not qualify as important gateways between business users and consumers. However, the Commission is further investigating the possible designation of X’s online social networking service as a CPS.
Apple and Booking.com have six months to comply with the obligations now resting on their CPSs. For more information on the adjustments the other gatekeepers have already made to comply with the DMA, see our earlier blog.
Commission opens first DMA non-compliance investigations into Alphabet, Apple and Meta
European Commission, press release of 25 March
On 25 March 2024, the Commission opened multiple investigations into the possible non-compliance with the DMA by Alphabet, Apple and Meta. The investigations focus on the adjustments the three gatekeepers have made to their CPSs to comply with obligations under the DMA.
In the case of Meta, the Commission is looking into the “pay or consent” model, under which consumers must either consent to Meta’s use of their data or pay for Meta’s services. Alphabet is subject to two Commission investigations. The first investigation concerns whether or not Alphabet treats its own services on Google Search more favourably than similar third-party services. The second investigation concerns the ability of app developers to offer alternative payment methods to consumers.
Apple is also under investigation for its rules on alternative payment methods in its Apple App Store. On 24 June 2024, the Commission published its preliminary findings, concluding that Apple does not give app developers enough leeway to inform consumers about alternative payment methods. For instance, app developers are only allowed to direct consumers to alternative payment methods via a link to a website outside the app. In addition, according to the Commission, the fees Apple charges for payments outside its App Store go beyond what is strictly necessary. At the same time, the Commission announced that it has also launched an investigation into Apple’s contractual terms for app developers to access new features Apple was required to implement under the DMA, such as the possibility of offering alternative app stores.
CJEU clarifies scope and limitation period of Cartel Damages Directive
Court of Justice of the European Union, judgment of 18 April 2024
On 18 April 2024, the Court of Justice of the European Union (“CJEU”) shed more light on the temporal scope of the Cartel Damages Directive (“CDD”) and the question of when a claim for damages for an infringement of competition law is time-barred under the CDD. The trigger for this ruling was a Czech case concerning the abuse of dominance by Google and Alphabet regarding Google Shopping.
On 27 June 2017, the Commission found that Google abused its dominant position in the (national) markets for online search services by positioning and displaying its own product comparison service, Google Shopping, more favourably in search results compared to competing product comparison services. The summary decision was published in the Official Journal of the European Union on 12 January 2018. Subsequently, Heureka, a Czech price comparison website, filed a damages claim against Google on 26 June 2020. On 27 May 2014, Heureka already stated in a press release that it considered the commitments proposed by Google in 2013 to be insufficient. For this reason, according to Google, Heureka’s claim is time-barred; Heureka already had knowledge of the damages it suffered and Google’s identity in 2014, the limitation period had already started to run at that time.
The CJEU first recalls that the limitation period does not begin to run until the infringement has ceased and the injured party is aware of the existence, extent and duration of the infringement, as well as the extent of the harm caused by the infringement and the causal link between that harm and that infringement. According to the CJEU, this coincides, in principle, with the date of publication of the (summary) decision in the Official Journal. However, it cannot be ruled out that, prior to such publication, a person may have knowledge of the necessary elements to bring a claim for damages, which is for the defendant to prove.
Since the infringement had not ended when the decision was adopted, the limitation period for Heureka’s claims began to run at the earliest on 27 June 2017. Therefore, the limitation period had not expired at the time of filing the claim for damages.
CJEU upholds illegality of ‘pay-for-delay’ agreements in pharmaceutical markets
Court of Justice of the European Union, judgments of 27 June 2024
On 27 June 2024, the CJEU handed down a number of judgments in which it addressed the legality of so-called pay-for-delay agreements in the pharmaceutical sector. French pharmaceutical company Servier developed and marketed a drug for the treatment of certain heart diseases (perindopril). It filed a (process) patent for this drug in 2004, which was subsequently challenged by a number of generic manufacturers. Servier entered into settlement agreements with some of those generic manufacturers, such as Niche/Unichem, Matrix (now Viatris), Teva, Lupin and Krka. Under those agreements, the generic manufacturers would refrain from challenging the patent and entering the market for perindopril in exchange for compensation from Servier.
The Commission ruled in 2014 that two types of competition law infringements had taken place. First, the settlement agreements restricted competition as the parties agreed to keep (potential) entrants, i.e. the generic manufacturers, out of the market (violation of Article 101 TFEU). Second, Servier abused its dominant position by pursuing an exclusionary strategy in entering into the agreements (violation of Article 102 TFEU). The Commission imposed a fine on Servier of €330 million and a fine totalling about €97 million on the generic manufacturers, which was appealed by the pharmaceutical companies.
The General Court partially upheld the Commission’s decisions. As regards the infringements of Article 101 TFEU, the General Court annulled only the part relating to the agreements between Servier and Krka. In addition, the General Court annulled in its entirety the Commission’s finding that Servier had infringed Article 102 TFEU. According to the General Court, the Commission had not sufficiently established that the market comprises only of the drug perindopril, which meant that it was not established that Servier was actually dominant. Nine separate appeals were brought against the judgment of the General Court by Servier, Krka, the other generic manufacturers and the Commission.
Regarding Servier’s abuse of dominance, the CJEU held that the General Court was wrong to rule that the relevant market as defined by the Commission was inadequate. Contrary to the General Court’s finding, the absence of price elasticity is indeed a relevant indicator for establishing a separate market for perindopril. As regards the settlement agreements between Servier and Krka, the CJEU held that the General Court incorrectly assessed whether the agreements had the object or effect of restricting competition. Therefore, the CJEU annulled the General Court’s judgment and referred the case back to the General Court for further assessment.
The appeals of the other generic manufacturers were dismissed in their entirety by the CJEU. The judgments of the General Court in relation to those parties were thus fully upheld by the CJEU.
Court Den Bosch confirms that centralisation of prize management in cycling by UCI/CPA does not violate competition law
Gerechtshof ‘s-Hertogenbosch, judgment of 19 March 2024 (published 12 April 2024)
In the first Dutch civil sports case after the CJEU’s ISU and Super League judgments of 21 December 2023 (see Competition Flashback, Q4 2023), the Den Bosch Court of Appeal upheld the judgment of the District Court of Zeeland-West Brabant in a dispute between Dutch Cycling Service against the International Cycling Union (“UCI”) and its affiliated Association for Professional Cyclists (“CPA”).
Cycling Service is a provider of agency services relating to the payment of prize money in cycling. Cycling Service argued that the centralisation of prize management in men’s cycling (through the CPM platform), as mandated by the 2019 UCI Regulations, violates competition law. The District Court ruled that, although UCI and CPA should be considered an association of undertakings and undertaking respectively, their behaviour does not qualify as an object restriction. Moreover, insufficient evidence has been adduced by Cycling Service to assess whether there is a restriction by effect or an abuse of a dominant position.
The Den Bosch Court of Appeal examined whether (i) UCI’s decision on the mandatory use of the CPM platform has the object or effect of restricting competition, and whether (ii) CPA abuses a dominant position since it entered the market in which Cycling Service was already active. In its judgment, the Court attaches great importance to the fact that the CPM platform leaves space for competing agents – such as Cycling Service, which continued to be active in the market – as well as the fact that a tender was held to determine which company would set-up and manage the CPM platform, in which Cycling Service participated. On this basis, the Court considered that there is no object restriction. Again, it was ruled that insufficient evidence was put forward to assess the existence of a restriction by effect.
The Court of Appeal did (also) not assess a possible dominant position, as (also on appeal) not enough had been stated by Cycling Service to define the market. The Court only briefly addressed Cycling Service’s grievance concerning the impact of the CPM platform on Cycling Service’s profitability. According to the Court, the fact that it would have to drop 50% in price to compete with the CPM platform is insufficient to substantiate the existence of predatory pricing. Moreover, Cycling Service did not provide any insight into revenue losses, for example through annual reports.
The question arises whether the strict test as applied by the Court is in line with European case-law in this area. Recently, in his opinion in relation to preliminary questions on FIFA’s Transfer Rules, Advocate-General Szpunar stated that market-wide anti-competitive arrangements, by their nature, must be assumed to negatively affect competition and should be regarded relatively quickly as object restrictions.
Commission fines Mondelēz €337.5 million for impeding cross-border trade in chocolate, biscuits and coffee products
European Commission, press release of 23 May 2024
On 23 May 2024, the European Commission fined food conglomerate Mondelēz International, Inc. (“Mondelēz”) €337.5 million for (i) entering into 22 anti-competitive agreements or concerted practices aimed at restricting the cross-border trade of its products, and (ii) abusing its dominant position in the German and Dutch markets by refusing to supply its products. Mondelēz’s portfolio includes the brands Côte d’Or, Milka, Oreo and Toblerone.
Between 2012 and 2019, Mondelēz restricted the territory within and the customers to which wholesale distributors were allowed to sell Mondelēz’s products. In addition, between 2006 and 2020, Mondelēz prohibited ten exclusive distributors from responding without prior authorisation to sales requests from customers based in another Member State, in violation of the cartel prohibition.
According to the Commission, Mondelēz also abused its dominant position in two occasions between 2015 and 2019. First, Mondelēz refused to supply a German intermediary dealer to prevent its chocolate bars from being resold in Austria, Belgium, Bulgaria and Romania. In addition, Mondelēz stopped supplying its chocolate bars in the Netherlands to prevent them from being exported to Belgium where Mondelēz charged higher prices for its products.
IFF fined €15.9 million for deleting WhatsApp messages during Commission raid
European Commission, press release of 25 March 2024
On 24 June 2024, International Flavors and Fragrances (“IFF”) was fined by the Commission for deleting WhatsApp messages during a dawn raid. The unannounced inspection, which took place in March 2023, is part of a wider Commission investigation into the fragrance industry. The current state of that investigation is unknown at the moment.
The Commission is authorised to search cabinets, desks as well as mobile phones during unannounced inspections. In this case, the Commission reviewed mobile phones of some of IFF’s employees when it found out that an employee had deleted messages he had exchanged with a competitor via WhatsApp. The messages contained business information and had been deleted after the employee was informed about the unannounced visit. IFF immediately cooperated with the investigation and helped restore the data. Thanks to the full admission of its guilt and its immediate cooperation, IFF was granted a 50% reduction in the fine, which ultimately amounted to 0.15% of IFF’s total annual turnover, i.e. € 15.9 million. This is the first time the Commission has issued a fine for deleting messages exchanged through social media on a mobile phone.
ACM dismisses enforcement requests DHL and GLS over exclusive PostNL service points
Authority for Consumers and Markets, decisions of 5 April 2024
In its decisions of 5 April 2024, the ACM rejected DHL and GLS’ requests for enforcement action against PostNL. Both parties complained to the ACM about PostNL’s exclusivity provisions with certain parcel service points. These exclusivity arrangements prevent a retailer acting as a PostNL service point from handling parcels from other providers. According to the parcel carriers, the exclusivity arrangements make it impossible for them to access certain key retail points at so-called A-locations, thereby foreclosing competing parcel carriers from the market in violation of Article 6 and/or Article 24 of the Dutch Competition Act.
Following these enforcement requests, the ACM commissioned research bureau Panteia to conduct a study into the relevant factors on how consumers and online shops choose a parcel carrier and the importance of service points in particular. The research shows that having a good (nationwide) service point network is very important for online shops, especially in the B2C segment. Especially the short distance to a parcel point is relevant, not so much the ‘quality’ of the location itself. The ACM therefore does not follow DHL’s suggested distinction between parcel points at A-locations and other locations, and thus looks at a broad market for (the procurement of) parcel service points.
In this market, the ACM notes that the four largest parcel carriers (PostNL, DHL, GLS and DPD) each have a successful nationwide network of service points. DHL, like PostNL, has a share of around 30-35% in this market. As the largest parcel carriers have all grown in number of service points in recent years (in most cases relatively more than PostNL), the ACM considers it unlikely that PostNL has a dominant position on the market for (the procurement of) service points.
Whether PostNL holds a position of economic dominance in the (downstream) parcel delivery market(s) is ultimately left open by the ACM. With the rise of DHL’s position at the expense of PostNL in recent years (both in a general sense and on the B2C- and C2X-segment), there is no evidence that the exclusivity applied by PostNL actually leads to market foreclosure (and thus no abuse of dominance). Given these developments, the ACM also believes that there is no violation of the cartel prohibition. The ACM moreover states that the parcel service point contracts in which exclusivity is applied can be terminated annually, and that the entry barriers for retailers to act as a parcel service point are low. As a result, there are sufficient alternatives for other parcel carriers, the ACM concludes.
State aid for European billion-dollar projects relating to hydrogen and pharmaceuticals
European Commission, decisions of 28 May 2024
The Commission has approved two Important Projects of Common European Interest (IPCEI) under EU state aid rules. The Commission has concluded that the projects are in line with state aid law because they contribute to EU objectives, aim to develop technologies beyond what the market currently offers and are necessary to generate private investment.
One of the IPCEIs concerns a joint support plan of six Member States (Belgium, France, Hungary, Italy, Slovakia and Spain) called Med4Cure and aims to support research, the first industrial application of health products and innovative manufacturing processes of pharmaceutical products. Med4Cure aims to accelerate drug discovery as well as develop innovative and more sustainable manufacturing processes for pharmaceutical products. This contributes to the goals of the European Health Union and the Green Deal. Member States are providing up to €1 billion in support. This is expected to then generate nearly €6 billion in private investment. Pharmaceutical and biotech companies such as Sanofi, Biotalentum and Sylentis are participating in Med4Cure.
The second IPCEI, called Hy2Move, concerns the hydrogen value chain and follows three previous IPCEIs in favour of hydrogen technology. In 2022, it already approved two projects: Hy2Tech, aimed at developing hydrogen technologies for end users, and Hy2Use, focused on hydrogen applications in the industrial sector. In February 2024, Hy2Infra was approved, which concerns infrastructure investments in favour of hydrogen. This fourth IPCEI, Hy2Move, concentrates exclusively on the application of hydrogen technology in mobility and transport applications. Seven Member States, including the Netherlands, are investing up to about €1.4 billion, which is expected to attract a further €3.3 billion in private investment.
State aid decision for Condor quashed once again
General Court of the European Union, judgment of 8 May 2024
On 8 May 2024, the Commission’s approval of state aid to airline Condor was annulled by the General Court. Thereby, Ryanair has once again successfully challenged a state aid measure in the aviation sector (see also our earlier blog on state aid in the aviation sector).
The aid measure covered by the approval decision concerns the partial write-off of debt resulting from loans granted by the German government under (previous) aid measures relating to the COVID-19 pandemic. However, this write-off constituted restructuring aid relating to the bankruptcy of Thomas Cook. The General Court annulled the contested decision because the Commission had not examined whether the German authorities had sufficiently ensured that they would receive a reasonable share of future gains in Condor’s value, as required under the Rescue and Restructuring Guidelines. This means that in reconsidering the aid, the Commission may further investigate the aid measure in question. In such a procedure, Ryanair and other interested parties have the opportunity to submit their views. At the end of this investigation, the Commission may then still conclude that the State aid to Condor is lawful.
General Court annuls Commission state aid decision due to partiality
General Court of the European Union, judgment of 10 April 2024
The General Court ruled on 10 April 2024 that the Commission’s decision that a Danish measure did not constitute state aid was void because the Commission had violated its objective impartiality. The case concerned a 2013 complaint by Danske Slagtermestre, a trade association for, among others, small Danish butchers and slaughterhouses, against state aid granted by the Danish government to large slaughterhouses in the form of reduction of purification levies for wastewater. In 2018, the Commission decided that no state aid was involved because it did not confer any particular advantage on certain companies. After Danske Slagtermestre was first declared inadmissible by the General Court, the CJEU set aside the judgment and referred the case back to the General Court for further assessment.
Danske Slagtermestre argued that the Commission violated Article 41 of the Charter by failing to ensure an impartial hearing of its case. The reason for this was that the Commissioner who ruled on the complaint and the subsequent decision had previously been the Danish Minister for Economic and Internal Affairs and Deputy Prime Minister of Denmark which was responsible for the introduction of the system of levies in question. In addition, the Commissioner in question had publicly and explicitly taken a position at national level in favour of the reduction of the purification levies opposed by Danske Slagtermestre. This Commissioner was also the sole signatory of the contested decision.
In view of this, the General Court held that the Commissioner in question had an interest in ensuring that the unlawfulness of the purification levy was not called into question. The Court continued that the organisation of the administrative procedure within the Commission did not provide sufficient guarantees to exclude that interest from affecting the administrative procedure. Lastly, the General Court concluded that the Commission misapplied the private operator principle. As a result, the Commission also infringed Article 107 TFEU by concluding that it did not confer an advantage on the treatment levy. For these reasons, the decision was annulled.
ACM fines Epic for unfair commercial practices targeting children in Fortnite
Authority for Consumers and Markets, decision of 18 December 2023 (published 14 May 2024)
In its decision of 18 December 2023, the ACM fined game developer Epic Games International (“Epic”) €1,125,000 and imposed on it a binding instruction. Epic pleaded guilty to three unfair commercial practices targeting children in the game Fortnite. When assessing whether commercial practices are unfair, a fictitious ‘average consumer’ is taken as the benchmark. In the case of Fortnite, that average consumer is a person up to the age of 18. According to the ACM, children are more vulnerable to certain commercial practices due to their age, in part because they are more susceptible to impulse purchases.
First, Fortnite contained deceptive suggestions of scarcity in the sense of Article 6:193g(g) of the Dutch Civil Code (“DCC”). Fortnite’s webshop contained a 24-hour countdown timer that reset each day, while some of the offers promoted in the webshop were actually available for longer than 24 hours. According to the ACM, it is plausible that a child playing Fortnite would expect such a timer to indicate the actual time within which those products could be purchased. Secondly, Fortnite directly encouraged children to make purchases, including with texts such as ‘Get it now’ or ‘Buy now’, in violation of Article 6:193i(e) DCC. Last, according to the ACM, the entirety of these practices taken together violated the requirements of professional diligence under Article 6:193b DCC.
Epic received fines for the first two offences while the ACM is imposing a binding instruction on Epic for the last offense. Epic must bring its digital offer in Fortnite’s online store into compliance with Article 6:193b DCC by 10 June 2024.
For all your questions regarding (EU) competition law, bureau Brandeis would be happy to assist.
Bas Braeken – Jade Versteeg – Lara Elzas – Timo Hieselaar – Demi van den Berg – Coen Vermeij – Joost van Belois