This is the Competition Flashback Q4 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 Q4 2023

Merger control & FDI

• Commission orders Illumina to unwind acquisition of GRAIL
• CJEU largely upholds fine for Altice for gun-jumping
• Overview highlights merger cases
• BTI publishes new guidelines for application of Vifo Act

Cartels & vertical restraints

• Rotterdam court upholds fine for resale price maintenance by Samsung
• CJEU paves the way for qualifying cross-market non-competes as object restrictions
• General Court upholds fine for participation in purchasing cartel imposed on Clariant in settlement proceedings
• General Court upholds fine on Cephalon and Teva for pay-for-delay agreement
• Rabobank fined for participating in cartel in (government) bond trading
• ACM allows sustainability agreements between waste collectors to promote recycling
• Commission hands out first price-fixing fine in the pharma industry

Abuse of a dominant position

• General Court annuls entire fine for Bulgarian gas company for lack of evidence and procedural flaws
• Apple objections to App Store decision rejected by ACM

Sport & competition

• CJEU upholds infringement by ISU and criticises exclusive CAS arbitration
• Groundbreaking CJEU rulings redefine limits to UEFA and FIFA powers

Damages claims for competition law infringements

• Amsterdam Court refers preliminary questions to Supreme Court about applicable law on damages claims in truck cartel
• Court of Appeal confirms that non-compete and no-poach agreements lose effect after their expiry

Railway & competition

• ACM rejects NS and Ministry’s requests in battle over main rail network
• ProRail withdraws request for approval of calculation method for infrastructure charge

State aid

• General Court orders Commission to re-examine possible state aid resulting from exclusive licences of Dutch gambling companies
• General Court overturns state aid approval decision to Air France/KLM

Commission orders Illumina to unwind illegal acquisition of GRAIL

European Commission, press release of 12 October 2023

The European Commission (“Commission”) has imposed restorative measures on biotech company Illumina in order to fully unwind its completed acquisition of GRAIL. This marks a new chapter in the saga in which Illumina prematurely and unlawfully implemented the acquisition of GRAIL. The saga began with an Article 22 referral by several Member States, after which the Commission decided to prohibit the acquisition. In July 2023, the Commission imposed on Illumina a record fine of € 432 million for implementing the acquisition despite the prohibition decision. In October 2021 and October 2022, the Commission already imposed interim measures, which are now being replaced by these restorative measures. For a full overview, see our Competition Flashback (“CF”) Q3 2022 and Q3 2023.

The restorative measures include both divestment measures and certain transitional measures. For the divestment of GRAIL, Illumina must propose to the Commission a concrete plan to restore GRAIL’s independence from Illumina within strictly defined deadlines, with the aim of making GRAIL as economically viable and competitive as it was before the acquisition. Until the transaction is dissolved, the transitional measures imposed by the Commission will apply. These measures prohibit any further integration of GRAIL into Illumina. At the same time, the measures require Illumina to continue funding GRAIL so that the latter can continue the development of its early cancer detection test. Taken together, the divestment and transitional measures aim to restore the situation prevailing before the implementation of the transaction.

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CJEU largely upholds fine for Altice for gun-jumping

On 9 November 2023, the Court of Justice of the European Union (“CJEU”) largely upheld the Commission’s gun-jumping fine for the multinational cable and telecommunications company Altice Group Lux Sàrl (“Altice”). In its decision of 24 April 2018, the Commission imposed on Altice two separate fines of € 62.25 million each; one for implementing its acquisition of PT Portugal before it had been cleared, in violation of Article 7(1) of the EU Merger Regulation (“EUMR”), and one for implementing the acquisition before it had been notified, in violation of Article 4(1) EUMR. On 5 July 2018, Altice appealed the Commission’s decision before the General Court of the European Union (“General Court”). The General Court largely upheld the Commission’s decision, but reduced the fine imposed for the breach of Article 4(1) EUMR to € 56 million. Altice brought an appeal against the General Court’s judgment.

First, Altice argued that Articles 4(1) and 7(1) EUMR are redundant as they pursue a single legal interest, and are therefore unlawful. The CJEU rejects this argument and holds that, while there is some overlap between the provisions, they pursue autonomous objectives, impose separate obligations, and result in infringements of a different nature. The imposition of two separate fines does also not violate the principle of proportionality and the principle of the prohibition of double punishment (ne bis in idem). Secondly, Altice opposed the General Court’s finding that the pre-closing covenants, including agreements on veto powers over strategic business decisions and pricing policy, constituted an implementation of the merger within the meaning of Articles 4(1) and 7(1) EUMR. The CJEU disagrees. According to the CJEU, an acquisition can be (partially) implemented if the acquiring party, for example as a result of signing a share purchase agreement, already has the possibility to take certain measures leading to a lasting change in control. It is not required that each of those measures are individually necessary to bring about a lasting change in control. Even if measures are of a temporary or preparatory nature, they can already contribute to the lasting change in control, the CJEU rules.

Finally, Altice argued that the General Court erred in finding that the Commission did not infringe its obligation to state reasons under Article 296 of the Treaty on the Functioning of the European Union (“TFEU”) when imposing the two fines. According to Article 14(3) EUMR, the Commission must, in setting the amount of the fine, take into account the nature, gravity and duration of the infringement. The CJEU agrees with Altice and finds that the Commission did not adequately justify the fine imposed for the breach of Article 4(1) EUMR. The CJEU annuls this part of the decision, and imposes a fine of € 53 million instead. The fine of € 62.25 million for the breach of Article 7(1) EUMR remains unchanged.

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Overview highlights merger cases

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BTI publishes new guidelines for the application of the Vifo Act

On 13 December 2023, the Investment Screening Bureau (in Dutch: Bureau Toetsing Investeringen, “BTI”) published three guidelines (only available in Dutch) providing guidance on the application of the Act on Security Screening of Investments, Mergers and Acquisitions (in Dutch: Wet Veiligheidstoets investeringen, fusies en overnames, “Vifo Act”). The Vifo Act introduces a notification system for the acquisition of Dutch-based vital providers, managers of corporate campuses and providers of sensitive technology for the purpose of protecting national security (read more about the Vifo Act in our previous blog). Each guideline clarifies a specific criterion from the Vifo Act.

In the ‘Guideline on Assets’, the BTI elaborates on the application of the Vifo Act when acquiring only part of a company or certain assets. It clarifies that the Vifo Act only applies to the acquisition of assets if those acquired assets enable the company to function as a vital provider or a provider of sensitive technology. Such assets can include knowledge and know-how, intellectual property rights, essential personnel, trade secrets, equipment, raw materials, or even a portfolio of supplier and/or customer contracts.

In its ‘Guideline on Internal Restructuring’, the BTI provides further guidance on when an internal restructuring qualifies as an acquisition activity under the Vifo Act. Due to a restructuring, control in a holding company, in which shares are owned by the capital providers, may shift to another holding company in another jurisdiction. If restructuring involves a change of control or an acquisition of significant influence by a shareholder, the internal restructuring will qualify as an acquisition activity under the Vifo Act.

In the third and last Guideline, the BTI clarifies what ‘being active in’ the field of (highly) sensitive technology entails. The BTI clarifies that a supplier is not in itself active in the field of sensitive technology if its products, know-how or services do not independently qualify as sensitive technology under Article 8 of the Vifo Act. According to the BTI, this is different for suppliers of highly sensitive technology, since parties with such products are usually very closely involved in the production process. Finally, intermediaries, end-users, wholesalers and retailers are in principle not caught by the Vifo Act, as they usually do not have the production facilities, expertise or necessary legal rights to improve or change the relevant sensitive technology.

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Rotterdam court uoholds fine for resale price maintenance by Samsung

On 13 November 2023, the Rotterdam District Court dismissed Samsung’s appeal against the fine imposed by the Authority for Consumers and Markets (in Dutch: Autoriteit Consument en Markt, “ACM”). In 2021, the ACM fined Samsung as it found that Samsung coordinated the retail prices of Samsung televisions with various retailers, to be in violation of Article 101(1) TFEU. Samsung’s modus operandi involved setting recommended prices and closely monitoring whether retailers adhered to those prices to ensure compliance. Samsung did this by using so-called ‘spider-software’, price comparison websites, and tips of retailers. If Samsung found retailers pricing below the recommended level, it contacted the retailers, urging them to adjust their retail prices. The ACM argued that Samsung’s tactics distorted competition at the retail level, resulting in higher prices for consumers. Read more about the ACM’s decision in our CF Q3 2023.

Upon appeal, Samsung contested the existence of a concerted practice, asserting that there was no concurrence of wills between Samsung and the retailers. According to Samsung, it is a common market practice for retailers to constantly engage in negotiations over retail prices, and to stay up to date on retail prices of competitors in order to improve their own position in the market. This provides a legitimate reason to regularly remind retailers of the recommended retail price, Samsung said. The court rejected this argument. It held that there was in fact a concurrence of wills, considering the communications of the competing retailers, the persistent pressure applied by Samsung to lower retail prices,  and the retailers’ willingness to lower their prices.

Samsung also challenged the characterisation of the conduct as a restriction of competition by object, arguing that its price recommendations were non-binding and lacked coercion or financial incentives. The court also dismissed these claims. The absence of contractual coercion, sanctions or financial incentives does not prevent the ACM from establishing an infringement under Article 101 TFEU. The court noted that retail price maintenance is explicitly prohibited in that provision, and that it qualifies as a hardcore restriction in the Vertical Agreements Block Exemption and Guidelines on Vertical Agreements. The court then found that it follows from the Super Bock judgment that, even in the case of a hardcore restriction, it must be assessed whether the agreement is sufficiently harmful to competition. The court considers this to be the case, since this specific agreement affected the freedom of retailers to set their own retail prices. The decisive factor for this judgment was that the reciprocal requests and the follow-ups created an agreement or concerted practice whereby the retailers no longer set their own resale prices.

Samsung’s arguments relating to the absence of a single and continuous infringement and the amount of the fine were also rejected by the court. The court therefore completely dismissed Samsung’s appeal and upheld the ACM”s fine of nearly € 40 million.

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CJEU paves the way for qualifying cross-market non-competes as object restrictions

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General Court upholds fine for participation in purchasing cartel imposed on Clariant in settlement proceedings

In its recent judgment, the General Court has declared Clariant’s appeal against the Commission’s infringement decision unfounded. In 2020, the Commission fined Clariant and two other undertakings for exchanging sensitive commercial and pricing-related information related to the purchases of ethylene. After the cartel was uncovered in 2017 by a fourth cartel participant, Clariant applied for a fine reduction under the Commission’s Leniency Notice. Several settlement discussions between Clariant and the Commission followed, based on the Commission’s Notice on the conduct of settlement procedures.

Although the Commission reduced the fine by 30% based on its leniency policy, and by 10% due to Clariant’s cooperation during the settlement procedure, it in turn increased the fine based on other grounds. For example, the Commission decided to increase the fine by 50% because Clariant had already been fined for a similar cartel in 2005 (see also point 28 of the Commission’s Fining Guidelines). Moreover, the Commission applied a further increase of 10% to the fine in order to create a deterrent effect.

On appeal, Clariant argued that the Commission wrongly increased the basic amount of the fine under point 28 (recidivism) and point 37 (deterrence) of the Fining Guidelines. According to Clariant, the increases were not proportionate and were not properly justified. In response, the Commission requested the General Court to revoke Clariant’s 10% fine reduction that it received for its cooperation during the settlement procedure. The Commission argued that, by contesting the amount of the fine before the General Court, Clariant disputed an essential part of the settlement.

The General Court rejects both arguments and holds that the Commission correctly applied the Fining Guidelines. At the same time, it does not revoke the 10% reduction in the fine for cooperation during the settlement procedure. The General Court stresses that final decisions adopted after a settlement procedure are subject to judicial review under Article 263 TFEU. As a settlement procedure is essentially (only) an admission of liability and a commitment to settle, the amount of the fine, the method of calculation of the fine and the Commission’s reasoning can still be appealed, the General Court ruled.

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On 18 October 2023, the General Court upheld the fines imposed by the Commission on pharmaceutical companies Cephalon and Teva of € 30 million and € 30.5 million respectively for entering into a so-called pay-for-delay agreement. The infringement comprised of a set of agreements to compensate Teva for not entering the market for sleep disorder treatment (“modafinil market”) with its own drug. The Court upheld the Commission’s finding that the agreement had as its object the restriction of competition.

In 2005, Teva agreed with Cephalon not to enter the modafinil market independently and not to launch its own, competing modafinil product until 2012. According to the Commission, and confirmed by the General Court, several commercial transactions occurred between Cephalon and Teva to compensate for this delay. For instance, Cephalon bought Teva’s intellectual property rights (“IPR”) in relation to modafinil for € 92.9 million. According to the Commission, Cephalon had no real need for or interest in buying the IPR for that amount (prior to the negotiations). Likewise, the General Court ruled that the amount of almost € 93 million could only be explained by the fact that it served as a quid pro quo for Teva not entering the market. Moreover, Cephalon entered into a supply agreement with Teva for a period of five years, giving Teva a stable source of revenue.

In order to determine whether an agreement qualifies as an object restriction, the General Court stated it is sufficient to show that the agreement reveals, by its very nature, a sufficient degree of harm to the proper functioning of normal competition. To demonstrate this, it is necessary to analyse the content of the agreement, its objectives and the economic and legal context in which it was concluded. The General Court established that, prior to the conclusion of the agreement, Teva was Cephalon’s biggest potential competitor on the modafinil market. The General Court also found that the agreement delayed Teva’s entry by almost seven years, and guaranteed that Cephalon would not face any competition from Teva during that period. The General Court considers this to be a pay-for-delay agreement that restricts competition by object, and dismisses Cephalon and Teva’s appeal.

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In November 2023, the Commission imposed a € 26.6 million cartel fine on Rabobank for participating in a cartel with Deutsche Bank concerning the trade of certain Euro-denominated bonds between 2006 and 2016. During the cartel period, several traders from the two banks, operating from Frankfurt and London, interacted with each other through online chatrooms and emails on the Bloomberg platform. In their interactions, the banks exchanged commercially sensitive information and coordinated their trading and pricing strategies. This included the prices and volumes of current and future trading positions as well as the identity of counterparties. Rabobank and Deutsche Bank also gave mutual warnings when the indicative prices of one of them were considered too high or too low.

Deutsche Bank escaped a € 156 million fine by revealing the existence of the cartel to the Commission. Although Rabobank cooperated in a settlement procedure, the settlement negotiations between the bank and the Commission were unsuccessful. Subsequently, the Commission decided to follow the standard procedure and fine Rabobank.

This fine followed a series of previous cartel fines relating to bonds. For instance, in April 2021, Crédit Agricole, Bank of America Merill Lynch and Credit Suisse were already fined a total of over € 28 million for their participation in a cartel concerning the trading of Dollar-denominated bonds. In May 2021, Unicredit, RBS (now NatWest) and UBS, among others, were fined € 371 million for a similar cartel regarding Euro-denominated bonds.

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In a press release dated 4 October 2023, the ACM announced that collectors of commercial waste are allowed to collaborate to promote waste-recycling. In its assessment, the ACM applied its new Policy Rule on Oversight on Sustainability Agreements (in Dutch: Beleidsregel Toezicht ACM op duurzaamheidsafspraken, “Policy Rule”) for the first time. The Policy Rule provides guidance on the types of agreements undertakings may conclude to promote sustainability without violating Dutch competition law.

The Dutch Waste Management Association (“DWMA”) had requested the ACM for an informal assessment of the proposed agreements. The ACM informed the DWMA – via a published letter – that it will not take action against the recycling initiative since the purpose of the agreements is solely to encourage compliance with a legal sustainability standard. If a company is uncertain whether an agreement is permissible under Dutch competition law, it can similarly request the ACM to provide informal guidance.

Sustainability agreements have received increasing attention on a European level as well. On 1 July 2023, the new Horizontal Block Exemption Regulations and the accompanying Horizontal Guidelines entered into force. Chapter 9 of the new Horizontal Guidelines is specifically dedicated to sustainability agreements. It states that agreements which have as their purpose to comply with legally binding (international) agreements, fall outside the scope of Article 101 TFEU, provided that the agreements are not already fully implemented or enforced by the Member State itself. This includes agreements by which companies aim to comply with their due diligence obligations on sustainability under national or EU law. The ACM follows the Commission’s standard in its new Policy Rule.

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The Commission has recently imposed a total fine of € 13.4 million on pharmaceutical companies Alkaloids of Australia, Alkaloids Corporation, Boehringer, Linnea and Transo-Pharm for participating in a cartel around pharmaceutical ingredient N-Butylbromide Scopolamine/ Hyoscine (“SNNB”). SNBB is an important input material to produce the abdominal antispasmodic drug Buscopan and its generic versions. The cartel participants agreed to set minimum prices for sales of SNNB to distributors and manufacturers of generic drugs, and exchanged commercially sensitive information.

The cartel existed continuously from 2005 to 2019 and was revealed by a sixth cartel participant, C2 PHARMA, which applied for leniency in 2019 and enjoyed full immunity. As Transo-Pharm and Linnea were the second and third parties to apply for leniency, their fines were reduced by 50% and 30% respectively. The Commission reduced the fine by 10% for all cartel participants for the acknowledgment of their participation in the cartel and of their liability in that respect, in line with the Commission’s 2008 Settlement Notice. In determining the amount of the fine, the Commission in particular took into account the nature of the infringement, its multifaceted features, its geographic scope and its duration.

This is the first time the Commission has imposed a fine for coordinating prices for an active pharmaceutical ingredient. In its press release, the Commission stresses that healthy competition is essential to provide access to affordable medicines.

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General Court annuls entire fine for Bulgarian gas company for lack of evidence and procedural flaws

General Court, judgment of 25 October 2023

In its judgment of 25 October, the General Court has annulled the € 77 million fine imposed on state-owned gas company Bulgarian Energy Holding (“BEH”). In 2018, the Commission decided that, between 2010 and 2015, BEH abused its dominant position by denying third parties access to (i) the gas transmission network, (ii) the gas storage facility in Chiren (Bulgaria), and (iii) a key transit pipeline for transporting Russian gas to Bulgaria, which BEH operates under an exclusive agreement with Romanian Transgaz (also: the Romanian Transit Pipeline). According to the Commission, the pipeline constitutes an essential facility, and the refusal to grant access to third parties amounted to an abusive refusal to supply within the meaning of Article 102 TFEU.

With respect to the pipeline, BEH argues before the General Court that it cannot be held accountable as it is not BEH, but Transgaz that owns the infrastructure. The General Court does not follow this reasoning. Although BEH is not the owner, it (de facto) controlled third-party access to the pipeline on the basis of the exclusive agreement with Transgaz. At the same time, it rules that this exclusivity is, in itself, not sufficient to constitute an abuse of dominance. Instead, the Commission has to show that the specific requirements of the essential facilities doctrine are met, including that the exclusionary effects are not merely hypothetical, but that BEH’s conduct actually resulted in a restriction of competition.

In light thereof, the General Court concludes that the Commission has not sufficiently substantiated that other parties were effectively prevented from entering the Bulgarian gas supply market. For instance, the file does not show that Transgaz itself intended to (re)use the pipeline and compete with BEH. Referring to Generics and Lundbeck, the General Court emphasises that Transgaz should have taken sufficient preparatory steps to enter the market in order to qualify as a potential competitor. Any preliminary requests or purely exploratory steps are insufficient in that regard. Moreover, it appeared from the file that Transgaz unilaterally rejected Overgas’ requests and did not inform BEH of the existence of any third party requests during the alleged infringement period.

Since there were no concrete intentions to enter the market (known to BEH), the General Court held that it could not be established that, without BEH’s refusal, there would have been (more) competition on the market (counterfactual). The Commission did therefore not sufficiently demonstrate that BEH’s conduct actually restricted competition on the Bulgarian gas market. The same goes for the transmission network and the storage facility, where, after a detailed analysis of the negotiations between BEH and third parties, the General Court characterises BEH’s conduct not as abusive, but rather as ‘constructive’ towards third parties.

In addition, the General Court found that the Commission wrongfully failed to document certain interviews it held with Overgas and wrongly denied BEH access to potentially exculpatory evidence (which later proved essential to BEH’s defence). The Commission thereby infringed BEH’s rights of defence. The General Court decided to annul the Commission’s fine in its entirety.

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Apple objections to App Store decision rejected by the ACM

On 2 October 2023, the ACM announced in its press release that it has rejected Apple’s objections against the order subject to periodic penalty payments. In its decision of 24 August 2021, the ACM held that Apple abused its dominant position by imposing unreasonable conditions on dating app providers for access to its App Store. The ACM determined that Apple’s conditions restricted dating app providers’ freedom of choice by requiring them to use Apple’s in-app purchase system (“IAP-obligation”) and by prohibiting reference to other payment methods outside the App Store (“anti-steering condition”). The ACM considered these conditions to be unreasonable, and imposed an order subject to a penalty payment (read more about this in our CF Q4 2021). Apple eventually paid a total of  € 50 million in penalty payments for failing to comply with the order in time.

Apple’s objections included several points. The ACM rejects almost all arguments and supplements its reasoning with this decision on objection. First, Apple complains about the ACM’s market definition. Contrary to Apple’s arguments, the ACM sees no reason to expand the market to include other ways of offering apps (such as with ‘Progressive Web Apps’), other operating systems (such as Android), or other apps than dating apps. The ACM stresses that the relevant market involves the market for app store services on the iOS operating system. Second, Apple argues that it does not enjoy a dominant position on that relevant market. The ACM does not follow this argument either, as data app providers depend on Apple’s App Store to reach iOS users and there are thus no alternative routes. In addition, the ACM considers that Apple’s market power is not weakened by, for example, the threat of future competition or consumer power. Third, the ACM also rejects Apple’s arguments that its conditions are unreasonable, noting that the IAP-obligation and anti-steering condition limit app providers’ ability to provide customer service and carry out anti-fraud activities. Finally, Apple argues to no avail that the order was not an appropriate measure for ending Apple’s abuse, and that the order had been complied with in time. Although fully rejecting Apple’s objections, the ACM does see reason to suspend the compliance deadline of the order regarding a third – currently confidential – condition, should Apple file an appeal on this subject.

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CJEU upholds infringement by ISU and criticises exclusive CAS arbitration*

On 21 December 2023, the CJEU delivered its landmark judgment concerning the cartel practices by the International Skating Union (“ISU”). The case dates back to 2017 when the Commission found a pre-authorisation system for third parties that organise speed skating events (“prior authorisation rules”), and eligibility rules that penalise speed skaters for participating in unauthorised speed skating events (“eligibility rules”), to constitute a restriction of competition by object. Following the confirmative ruling of the General Court, the CJEU now rejects ISU’s appeal.

The CJEU’s judgment sets clear boundaries for international sports federations in their regulation of sporting events organised by third parties. The CJEU stated that, in principle, the organisation of such events and the rules regarding the participation of (semi-)professional athletes in those events qualify as economic activities. Additionally, it clarifies that the Meca Medina-doctrine – which excludes restrictions that are necessary and proportionate to achieve legitimate sporting objectives from the cartel prohibition – does not extend to object restrictions. It thereby deviates from AG Rantos’ conclusion, who suggested that the pursuit of sports objectives as such excludes the behaviour of a sports federation from qualifying as an object restriction.

Moreover, the CJEU emphasised that an international sports federation that is able to regulate market access, without being subject to restrictions, obligations and judicial review by definition violates Article 102 and 106 TFEU. On top of that, the CJEU stated that such powers may, by their very nature, restrict competition within the meaning of Article 101 TFEU.

The CJEU stressed that the prior authorisation and eligibility rules must be transparent, clear, and precise. These rules must be applied in a non-discriminatory manner, and clearly set out in an accessible form prior to any implementation of the rules. Any sanctions that may be imposed must be objective and proportionate, i.e. correspond to the nature, duration and severity of the infringement found. Procedures must be transparent and provide effective judicial review of decisions. Lack of restrictions or oversight on the powers of international sports federations renders pre-authorisation and eligibility rules as unjustifiable restrictions by object. The CJEU upholds the judgment of the General Court, and thereby, the Commission’s decision.

In the cross-appeal issued by the complainants, the CJEU found that the issue of exclusive arbitration before the Court of Arbitration for Sport (“CAS”) is an aggravating circumstance. While the General Court previously annulled this aspect of the Commission’s decision, the CJEU overturned this ruling. It emphasised that EU law disputes within EU territory demand access to effective judicial protection within the EU legal order, which is not sufficiently guaranteed by exclusive arbitration at CAS. Arbitral awards of the CAS can only be appealed at the Swiss Federal Court, which is located outside the EU legal order. The CJEU thereby confirms the entire Commission decision, and ISU must still adjust its arbitration rules.

* Bas Braeken, Jade Versteeg, Timo Hieselaar and Demi van den Berg represented skaters Mark Tuitert, Niels Kerstholt, and the European Elite Athletes Association in these proceedings.

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Groundbreaking CJEU rulings redefine limits to UEFA and FIFA powers

Simultaneously with the ISU judgment, the CJEU handed down a preliminary judgment in answer to questions of the Spanish court on measures taken by FIFA and UEFA against the intention of the European Super League Company (“ESLC”) to set up its own football league: the Super League. The questions revolve around the (in)compatibility of certain authorisation and marketing rules employed by FIFA and UEFA on football players and clubs, with competition law (Articles 101 and 102 TFEU) and the provisions on free movement (Articles 45, 49, 56 and 63 TFEU).

The CJEU first notes that sports matters are not exempted from the application of primary EU law, despite the fact that Article 165 TFEU requires sport policy to be promoted within the EU. The CJEU further confirms that FIFA and UEFA are undertakings insofar as they engage in the organisation of interclub football competitions and the exploitation of related rights. Despite the different purposes pursued by Articles 101 and 102 TFEU, they can apply simultaneously to the conduct of FIFA and UEFA.

As regards abuse of dominance, the CJEU ruled that the (exclusive) powers of dominant undertakings such as FIFA and UEFA to regulate market access create conflicts of interest. Such a practice contrasts with a sporting culture based on ‘sporting merit’.  The CJEU emphasised the necessity for a level playing field among undertakings to ensure undistorted competition. Regulatory powers of organisations such as FIFA and UEFA must by definition be restricted to prevent an abuse under Article 102 TFEU. While an authorisation system as such can be legitimate in the context of professional football, the rules must be subject to a framework of substantive criteria and detailed procedural rules that ensure that they are transparent, objective, non-discriminatory and proportionate. If not, such rules are abusive per se.

Regarding the cartel prohibitions, the CJEU similarly finds that FIFA’s and UEFA’s current authorisation rules qualify as an object restriction. Moreover, the relevant participation rules and associated sanctions reinforce the anti-competitive object of FIFA’s and UEFA’s pre-authorisation systems. These could only be exempted from the cartel prohibition under Article 101(3) TFEU. In that context, it is for the referring court to assess whether the rules of FIFA and UEFA actually lead to quantifiable efficiencies and allow for sufficient residual competition. Finally, the CJEU finds that the FIFA and UEFA rules create an obstacle to the free movement of services as laid down in Article 56 TFEU, and cannot be justified on the basis of a public interest.

In the Home-grown Talent judgment, also delivered on 21 December 2023, the CJEU addressed preliminary questions regarding the (in)compatibility of rules of UEFA and the Belgian Football Association. These rules required professional football clubs in Belgium to include a number of players that have been trained at Belgian clubs – so called home-grown players. The CJEU found the home-grown talent rules to infringe Article 45 TFEU on the free movement of workers as they create a clear distinction among players based on ‘national’ affiliation. It is for the referring court to decide whether such rules are necessary, suitable and proportionate to the legitimate aim of attracting and training young players.

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Amsterdam Court refers preliminary questions to Supreme Court about applicable law on damages claims in truck cartel 

On 8 November 2023, the Amsterdam District Court referred several preliminary questions to the Dutch Supreme Court in a civil damages case arising from the truck cartel. The cartel took place from 1997 to 2011 and constituted a single and continuous infringement (“SCI”) of Article 101 TFEU, according to the Commission. The questions of the court revolve around whether the infringement should be qualified as unlawful conduct under Dutch law, giving rise to separate claims for damages at the moment the damage is incurred, or whether it results in one single damages claim per injured party. In that context, the court also requests the Supreme Court for some guidance as to the decisive moment for determining the applicable rules in cartel damages.

In a previous ruling, the Amsterdam Court of Appeal held that, given the direct effect of EU law, a SCI of Article 101 TFEU constitutes one single damages claim per individual claimant. Considering there exists only one claim for the entire cartel period of 1997 to 2011, it must be determined which regime of law applies: either the old regime of the Act on the Conflict of Tort Law (“WCOD”) or the Rome II Regulation (“Rome II”), which entered into force in 2009. To determine which regime applies, the claimants argue that the crucial factor should be the date at which the infringement was terminated, leading to the applicability of Rome II.

Article 6(3)(b) Rome II contains a special regime for liability as a result of competition law infringements. This article allows an aggrieved party, under certain conditions, to base its claim on one legal system, even if the cartel extended across multiple markets in several Member States. The court nevertheless questions this interpretation, and therefore submits a number of preliminary questions to the Supreme Court to clarify these issues.

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Court of Appeal confirms that non-compete and no-poach agreements lose effect after their expiry

On 13 June 2023, the Amsterdam Court of Appeal upheld the ruling of the interim relief judge of the District Court of Amsterdam. In essence, it held that companies are allowed to compete again and recruit staff members after the expiry of a non-compete clause and/or no-poach agreement.

The case involved the sale of Twinlock to Tesa in 2018, which included a three-year non-compete and no-poach clause stipulated in the purchase agreement. After these three years, Twinlock started a competing business and hired some of Tesa’s employees. Tesa argued that the seller breached the non-compete clause(s) and engaged in unlawful competition. The Court of Appeal disagreed. Since the non-compete clause had already expired when Twinlock started the new business, there was no breach of contract. Moreover, Twinlock did not violate the no-poach clause, as the hiring of Tesa’s employees occurred after the agreed-upon period. The fact that Twinlock had regular interactions prior to the expiration of the contractual clauses, does not alter this conclusion, according to the court. For more insights into no-poach agreements and other possible restrictions of competition in the labour market, please find our earlier blog.

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ACM rejects NS and Ministry’s requests in battle over main rail network

In its decision of 7 November 2023, the ACM declared the applications of the Dutch Railways (in Dutch: Nederlandse Spoorwegen, “NS”) and the Ministry of Infrastructure and Water Management (“Ministry”) for an economic equilibrium test (in Dutch: toets economisch evenwicht, “EET”) to be inadmissible. This is another mark in the opening up of the Dutch Main Rail Network (in Dutch: Hoofdrailnet, “HRN”). Through an EET, the ACM assesses whether the economic balance of an existing concession will be maintained when competing railway operators would introduce train services that fall within the area for which the concession is granted. Railway operators Qbuzz and Arriva submitted notifications to the ACM in September and October 2023 for several new train services, so-called “open access services”. Railway operators are required by law to notify the ACM of new passenger services, after which the ACM conducts the EET. The EET can be requested by, inter alia, concession holders and providers.

Until 2025, open access is prohibited on the HRN, as the NS still has an exclusive concession. After the concession expires in 2025, Qbuzz and Arriva intend to offer new train services on a number of rail routes on the HRN. Following the notifications of the railway operators, the NS and the Ministry requested the ACM to conduct an EET test.

The ACM finds the NS and Ministry have no cause of action in this case, as they request an EET for a concession that has yet to be granted (2025-2033). Under European regulations, the ACM can only conduct an EET if the concession in question has already been granted at the time of the notification. This is not the first time the ACM has declared the NS and Ministry inadmissible in such cases. For an overview on the developments in railway liberalisation, read our previous blog.

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ProRail withdraws request for approval of calculation method for infrastructure charge

In its draft decision of 20 May 2023, the ACM decided not to grant approval for Dutch network infrastructure manager ProRail’s draft method for the calculation of the infrastructure charge to railway operators (in Dutch: methode extra heffing, “Method”). On 1 March 2023, ProRail applied for approval of its Method for the period 2025 – 2029. Via this commonly used Method, ProRail can charge railway operators a usage fee to recover (part of) its fixed costs. Different usage fees apply to each market segment, for which ProRail drafts up a specific Method, subject to the ACM’s approval. In its request, ProRail proposed a method by which market segments with low price sensitivity would have to pay a relatively high additional charge, and vice versa. The ACM declined ProRail’s proposal, as it found the price elasticity for the freight transportation market segment included in the Method to be unreliable. The ACM stated that it could not establish that the calculation accurately reflect the relative capacity of the different market segments. After consultation with the ACM, ProRail withdrew the application on 13 December 2023. ProRail has indicated its intention to submit a new Method for the period 2026 – 2029 in 2024.

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General Court orders Commission to re-examine possible state aid resulting from exclusive licences of Dutch gambling companies

The General Court has annulled a Commission decision following an appeal by the European Gaming and Betting Association (“EGBA”). The case revolved around the extension of gambling licences in the Netherlands as regards Lotto and the Staatsloterij. The Commission decided that the extension of these licences did not qualify as state aid since the acquirers were only granted licences if the revenues from their gambling activities were paid to organisations acting in the public interest (“charity organisations”). EGBA appealed against this decision.

In its complaint, the EGBA essentially argued that the previous policy rules of the Dutch government for the granting and extension of gambling licences qualify as unlawful state aid. It claimed that the gambling licences were renewed on an exclusive basis without the Dutch government requesting payment of remuneration at market rate. Furthermore, it argued there was no open, transparent and non-discriminatory procedure for the award of the licences. EGBA also argued the licences provided charity organisations with an indirect advantage, since the companies that were awarded the gambling licences, including Lotto and Staatsloterij, donate their revenue from gambling activities to these charity organisations. The Commission objects that EGBA did not bring forward this last argument in its initial complaint before the Commission. The Commission argues it is not required to seek, on its own initiative and in the absence of any evidence to that effect, all information which might be connected with the case before it, even where such information was in the public domain.

The General Court disagreed with the Commission on two critical grounds. First, the Commission’s decision (which denied to qualify the granting of licences as state aid) was based partly on the fact that the licence holders had to channel their profits to charity organisations. This indicated the Commission’s awareness of the scheme. Secondly, the General Court cited the Commission’s own State Aid Notice (paragraph 115), which states that an advantage under State aid law can extend to entities beyond those directly receiving state resources. Therefore, the General Court ruled that the Commission should have examined whether the charity organisations qualified as undertakings within the scope of state aid law. According to the General Court, the Commission should also have assessed whether the previously applicable policy rules indirectly conferred an advantage upon these organisations. The General Court therefore annulled the Commission’s decision.

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General Court overturns state aid approval decision to Air France/KLM

On 20 December 2023, the General Court annulled the Commission’s decision in which it approved the state aid of France to Air France/KLM. On 4 May 2020, the Commission approved France’s € 7 billion aid measure to Air France under the Temporary Framework for State aid measures. The Commission identified Air France and the subsidiaries it controlled as the sole beneficiaries of the aid measure. It excluded the holding company, Air France-KLM and its other subsidiaries, including KLM, from the scope of the beneficiaries.

The General Court, however, found that the Commission erred by limiting the beneficiaries of the measures to Air France and its subsidiaries, overlooking the potential beneficiaries of the holding company Air France-KLM, including KLM. The General Court holds that, where there are grounds to fear the effects on competition of an accumulation of State aid within the same group, the Commission must carefully examine the links between the various companies belonging to that group. It must examine the capital, organisational, functional and economic links between the undertakings, the contractual framework on the basis of which the different aid measures were granted, the type of aid granted and the context in which it was granted. Read more about state aid in the aviation sector here.

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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 – Gayle Lutchman