Competition law highlights – H2 2023

In recent years, the strengthening of competition in the grocery sector in Norway has been high on the political agenda. (See our previous summary of the status in Competition law highlights H2 2022, which can be found here.) In January 2023, the government introduced a 10-point plan where they initiated a series of measures to improve competition in the grocery sector and to contribute to a better selection and lower prices for consumers. The Minister of Trade, Industry and Fisheries invited participants to a grocery seminar on 15 December, where he presented a status of their ongoing work, along with inter alia the NCA.

An overview of selected initiatives that have been carried out or are still ongoing are listed below.

• The much debated proposal for a market investigation tool for the NCA was put forward for consultation earlier this year, with responses due by 30 June (see our Competition law highlights H1 2023 for further descriptions of the proposal, available here.) The Ministry appears committed to implementing the new tool and is currently working on the further implementation of the proposal, with a stated aim to provide an update in the first half of 2024.
• The Ministry has been concerned with price discrimination in the grocery industry for some time. In the fall of 2022, the government presented two alternative proposals for consultation, aiming to prohibit unjustified price discrimination. The deadline for responses was set for 16 December 2022, and preliminary feedback was provided to the Parliament on 21 December 2022. The consultation yielded mixed responses, and there was uncertainty about the proposals’ impact and their compliance with the EEA Agreement. On 15 December 2023, the government issued a new proposal for a regulation on price discrimination for consultation. The proposal aims to prohibit suppliers and wholesalers with relative market power from imposing different purchasing conditions for comparable services if such conditions reduce or is likely to reduce competition. The concept of “relative market power” pertains to the relationship between two negotiating parties. When a wholesaler or supplier has a significantly stronger bargaining position than a smaller player who is also dependent on the supply, there should be no opportunity to exploit this imbalance to set prices that harm competition. The threshold is seemingly different and lower than that of a dominant position pursuant to Section 11 of the Norwegian Competition Act (which mirrors Article 54 of the EEA Agreement and Article 102 TFEU). The proposal is meant to facilitate the entry and competitiveness of smaller and potentially new players in the grocery industry, and thereby boost competition. The deadline for responses is set for 9 February 2024. Further information on the call for consultation is available here. The government’s press release is available here.
• Typically, the grocery chains’ purchase prices have been adjusted twice a year, on February 1 and July 1, in what is known as “price adjustment windows”. The NCA’s investigation has revealed that this price adjustment system in the grocery sector is unique. There are no parallels to this system in other countries or markets within Norway. In its report to the Ministry, the NCA concludes that this practice has likely restricted competition. Therefore, it views the apparent discontinuation of this practice as a positive development for competition. The NCA’s report (including an economic analysis) was delivered to the ministry on 15 December 2023 and can be found here.
• Following an initiative from the Ministry, the government has adopted a new regulation prohibiting companies engaged in the sale of groceries from establishing restrictive covenants in the grocery sector and thereby preventing the use of others’ property for grocery business. The regulation is set to take effect on 1 January 2024. The prohibition stems from the Ministry’s view that there are numerous instances where grocery chains have created obstacles to prevent competitors from opening new stores in suitable locations by stipulating that certain premises cannot be used for (competing) grocery business when selling or leasing properties. According to the Ministry, such a practice could be a disadvantage to consumers by limiting their choice of stores and making it more difficult for potential newcomers to establish themselves. The new regulation has a narrower scope than the original proposal, which aimed at prohibiting restrictive covenants as well as exclusive lease agreements. During the Ministry’s grocery seminar on 15 December, the minister indicated that the NCA would review the status of existing restrictive covenants in six months’ time. It was suggested that if the existing restrictive covenants are not voluntarily removed by then, it might be necessary to implement measures directed at restrictive covenants established before 1 January 2024. The regulation further stipulates that any restrictive covenants established from 1 January 2024 and onwards which violate the prohibition, may be ordered deleted from the land register. If a request for deletion has not been sent within two months after the order has been given, the NCA can impose a continuous coercive fine until such a request is sent.
• The NCA is currently conducting a study on profitability and margins for actors at the supplier, wholesale and retail levels in the food and grocery value chain. The study will be conducted in two distinct parts: an investigation of profitability at the business level and an examination of margins at the product level. The NCA will also further review how the costs of individual products have evolved over the past few years, particularly during the pandemic and the Ukraine conflict. An additional six million NOK has been proposed in the 2024 state budget to support the NCA’s work related to this study, as well as other initiatives in the grocery sector, as we understand.
• The Ministry has commissioned a report that provides an overview of the use of private labels as well as proposing a definition for private labels. The report also analysis the effects of private label on competition in the grocery market. The report puts forth two measures, both of which the government plans to implement: 1) continue to monitor the development of private labels and other brand categories, and 2) considering amending the Fair Trading Practices Act (No. lov om god handelsskikk) with new and clear provisions regarding the requirements that parties can impose on each other during negotiations. The Ministry has also received a detailed mapping of the extent of vertical integration and its effects on competition in the grocery industry. The government intends to continue tracking and monitoring changes in ownership and corporate structures within the grocery industry. All the abovementioned reports are available here.

A complete list and the status of the initiatives that have been carried out or that are still in process can be found here.

The Norwegian Competition Authority (the “NCA”) blocked Schibsted’s acquisition of Nettbil in October 2020. That decision was subsequently appealed to the CAT, which upheld the NCA’s decision. Schibsted appealed the CAT’s decision to the courts, which overturned the NCA’s and CAT’s decisions (see a further description of the case in our Competition law highlights H1 2023 available here).

Under Norwegian administrative law, companies and individuals may claim compensation for legal fees necessary to overturn an administrative body’s decision ((incl. the NCA’s decisions). Schibsted was therefore entitled to claim expenses for legal fees accrued during the CAT procedure (the legal fees accrued during the court proceedings were dealt with in the judgments as a claim under Norwegian procedural law). The compensation claim was sent to the CAT on 3 March 2023, and the CAT decided the claim on 1 November 2023.

The CAT concluded that Schibsted was entitled to claim damages but reduced the compensation by almost 50%. This reduction was based on the CAT’s subjective opinion that not all the legal fees were necessary to handle the CAT procedure. The conclusion was seemingly partly based on the fact that the CAT had not received the specified time sheets, which there are no specific requirements to include. Even more surprisingly, the CAT reduced the compensation for fees to economic experts since the fees “seemed excessive”.

Schibsted has appealed the CAT’s decision to the Ministry of Trade, Industry and Fisheries, which will make a new decision in due course.

The CAT’s decision can be found here.

The NCA had in its decision alleged that the four publishers Gyldendal, Cappelen Damm, Vigmostad & Bjørke and Aschehoug, along with their joint venture Bokbasen, exchanged competitively sensitive information, including on future prices, through a subscription service offering publishers access to the online book database. The NCA imposed fines of NOK 545 million in total, claiming that the parties had breached the prohibition against anti-competitive agreements in Section 10 of the Norwegian Competition Act, corresponding to Article 53 of the EEA Agreement and Article 101 of the TFEU. However, on 24 November 2023, the CAT concluded that there was neither factual nor legal basis for imposing a fine. The CAT unanimously overturned the decision of the NCA. The NCA is unable to appeal this decision, and the fines initially imposed on the parties have accordingly been effectively annulled. As mentioned in our newsletter earlier this year (Competition law highlights H1 2023), the NCA will have competence to bring actions concerning the enforcement of Section 10 of the Norwegian Competition Act in before national courts for its future decisions.

The CAT’s decision offers important clarifications on when information exchange between competitors can be considered a “by object” restriction. According to the CAT, the information exchange must lead to a significant reduction of uncertainty regarding competitors’ future behaviour. The CAT reiterates that this particularly refers to information on future prices, volumes and strategies. The CAT further confirms that “by object” restrictions should be interpreted in a restrictive manner, and that solid and reliable experience must indicate that such conduct is anticompetitive by its very nature. Both the nature of the information as well as the manner in which the information was exchanged are fundamental when assessing whether the information exchange constitutes a “by object” restriction.

The CAT highlights to two key aspects in the assessment of whether information exchange reduces or removes uncertainty, and whether it constitutes a “by object” restriction.

• First, the assessment depends on whether the information exchanged pertains to future In the assessment of whether a price is future, it was held that the legal obligations and the commercial realities were decisive, including whether deviations from the price in question would result in significant negative commercial consequences for the party communicating the price. The CAT disagreed with the NCA that the prices shared must be definitely binding for the publisher in order for the price not to be future. The CAT conducted a thorough assessment of the legal and factual aspects of the case and concluded that the publishers had exchanged actual prices.
• Secondly, a prominent aspect is the manner in which the information is exchanged. In this respect, the CAT noted that the exchange of competitively sensitive information in private channels normally restricts competition “by object”. In the case at hand, the CAT held that the information was exchanged through a non-private channel openly available to all market players in the industry, including customers. The CAT nevertheless emphasized that information exchange through a non-private channel may still constitute a “by object” restriction. In these scenarios, “by object” restrictions require mutual announcements of future, non-binding prices. Further, the CAT held that information exchange through non-private channels may constitute a “by object” restriction if it concerns future and non-binding prices, which has little or no benefit for customers and consumers. If, however, there is doubt about the usefulness of the information for customers or the degree of benefit the information provides to customers and consumers, it is not sufficiently clear that the behaviour would have anti-competitive effects qualifying as a “by object” restriction, and an effect analysis must be conducted.

The CAT found that the parties in the case at hand had exchanged actual prices through the online book database which were known to customers and other competitors, and were binding for customers pre-ordering books, and thus added value for the customers. The CAT therefore concluded that the use of the online book database did not constitute an object restriction in violation of Section 10 of the Norwegian Competition Act.

The decision can be found here.

The NCA has been investigating operators in the market for construction services since 2022, prompted by suspicions of potential bid collusion and concerns about exchange of competitively sensitive information.

As part of their investigation, the NCA collected evidence during inspections of operators in the market in February and November 2022 as well as through statements from persons central to the case. Based on the results of the evidence gathered, the NCA found that there was no reason to proceed with the case, and closed the investigation. The NCA noted that the market for construction services is a large and important market in Norway, in which potential illegal practices is given serious consideration.

The press release can be found here.

On 11 August 2023, the NCA was notified of Norwegian’s contemplated acquisition of Widerøe. After opening a phase II investigation, the NCA issued a SO on 17 November 2023 due to concerns that competition in the market for air travel could be impaired if Norwegian was permitted to acquire Widerøe.

Norwegian and Widerøe are complementary players in the Norwegian aviation market with a limited competitive overlap. While Norwegian is a low-cost carrier operating routes with a high passenger base exclusively with large jet aircrafts, Widerøe primarily flies on regional routes to small and medium sized airports with smaller propeller aircraft and a few smaller jet aircraft.

The NCA initially expressed concerns that the contemplated acquisition might have weakened competition in three different ways:

• A reduction from three to two market players could have made it easier for the market players to coordinate prices on domestic flights
• Competition could have been impeded on routes where the parties are competitors prior to the transaction. In this regard, the NCA primarily referred to the direct routes between Bergen and Stavanger/Trondheim in addition to certain indirect routes where both parties offer services with a stop-over in Oslo and Bergen respectively
• A risk that competing airlines would face higher prices for ground handling services on the airports in Evenes, Alta and Kirkenes

The parties submitted their comments to the SO on 8 December 2023, arguing that the contemplated transaction would lead to a strengthening of competition, not a reduction. Due to their complementarity, the parties argued that the transaction would likely enhance their competitive strength, particularly against SAS and foreign low-cost carriers, which would have a positive impact in both the domestic and international markets, ultimately benefitting customers.

Following the parties’ comments, the NCA conducted further analysis and concluded that there are not sufficient grounds to prohibit the acquisition. On 21 December 2023, the NCA announced its approval of the transaction.

The NCA’s press release can be found here

On 3 October 2023, the NCA was notified of Nordea’s contemplated acquisition of parts of Danske Bank, including Danske Bank’s private banking portfolio. Following an initial review, the NCA informed the parties on 7 November 2023 that it opened a phase II investigation to further review the transaction’s impact on competition.

The NCA’s initial assessment raised concerns that the proposed acquisition could potentially reduce competition in the market for bank services. A significant concern was the potential impact on the mortgage market. The NCA feared that the acquisition could pose a substantial impediment to effective competition in the market for mortgages, both generally and specifically  for the part of the market that caters to members of organizations, such as union members. There were also concerns that the acquisition could make it easier for the banks to coordinate their behaviour in the market for mortgages.

After a thorough assessment, including further analysis of information from the involved parties, competitors and other market operators in the mortgage sector, the NCA found that the acquisition will not significantly impede effective competition in the market for mortgages or otherwise. The NCA consequently approved the acquisition on 15 December 2023.

The press release can be found here.

In August 2023, The European Commission accepted the request submitted by three EU Member States, and Norway, to assess the proposed acquisition of Nasdaq’s European power trading and clearing business by European Energy Exchange AG (EEX) under the EU Merger Regulation (EUMR).

The proposed acquisition does not reach the notification thresholds set out in the EUMR, neither was it notifiable in any Member States or in Norway. Denmark and Finland submitted initial referral requests to the Commission pursuant to Article 22 (1) EUMR. The provision allows Member States to request the Commission to examine a merger that affects trade within the single market and threatens to significantly affect competition within the territory of the Member States making the request. The Competition Authorities in Sweden and Norway joined the initial referral request.

Under the terms of the EEA Agreement Protocol 24, the NCA has the authority to join requests made by Member States for referrals to the Commission. The categories of cases that will normally be appropriate for a referral under Article 22, is where the turnover of at least one of the undertakings concerned does not reflect its actual or future competitive potential. This would typically include cases where the undertaking is a start-up or a recent entrant with significant competitive potential that has yet to materialized.

It may be noted that the NCA has the authority to call in transactions below the mandatory merger filing thresholds, (Section 18 (3) of the Competition Act). However, and largely in line with the NCA’s previous practice, the NCA decided to not pursue this case on its own, but rather joined the referral request to the Commission.

The proposed acquisition of Nasdaq Power by EEX is the third transaction referred to the Commission under Article 22 (Illumina/GRAIL (2021) and Qualcomm/Autotalks (2023)).

The Commission’s press release can be found here.

On 10 October 2023 the EU Commission announced that it has decided not to extend the Consortia Block Exemption Regulation (CBER) and it will therefore expire on 25 April 2024. Since 2009, CBER has exempted certain categories of agreements, decisions and concerted practices between liner shipping companies from the prohibition stipulated in Article 101 (1) TFEU. CBER allows, under certain conditions, liner shipping operators to cooperate in the provision of joint services (“consortia”). Hence, the exemption aims to improve services that would otherwise be offered individually.

According to the Commission, the market developments and the competitive structure in the liner shipping sector has changed since 2009 and proves that CBER is no longer fit for purpose. Moreover, as only a small number of consortia fall within the scope of the CBER, the CBER brings limited compliance cost savings to carriers and plays a subordinate role in carriers’ decisions on whether or not to cooperate. Finally, the Commission emphasises that the CBER no longer enables smaller carriers to cooperate among each other and offer alternative services in competition with larger carriers.

It should be noted that the expiry of the CBER does not mean that consortia within liner shipping companies as such will be prohibited under EU competition law. Rather, liner shipping companies that contemplate engaging in a consortium must conduct a self-assessment of whether the consortia are in line with article 101 TFEU. The self-assessment should be carried out by using the extensive guidance provided in the Horizontal Guidelines and the Specialisation Block Exemption Regulation.

The Commission’s announcement can be found here

The Court of Justice’s judgement in EDP concerns a preliminary reference from the Court of Appeal, Lisbon, seeking clarification on the interpretation of Article 101 TFEU related to a partnership agreement between an electricity provider and a food retailer.

The case concerned a partnership agreement between MCH and EDP Comercial, two Portuguese companies operating in different sectors. The agreement, concluded in 2012, provided discounts on electricity prices for customers holding a specific loyalty card issued by MCH and contained an exclusivity clause that prevented MCH from engaging in the supply of electricity and gas in Portugal until 31 December 2013. The Portuguese Competition Authority alleged that the parties had entered into a market-sharing agreement by way of the non-compete clause, which the authority characterised as an infringement by object. The authority held that the implementation of the agreement in the midst of the liberalization of the market for the supply of electricity in Portugal strengthened the anticompetitive nature of the agreement.

The referring court considered it necessary to inter alia seek the below clarifications from the Court of Justice as to the interpretation of Article 101 TFEU:

• The concept of “potential competition”, and the relevant criteria for determining whether two undertakings present in separate product markets could be deemed potential competitors, and
• the classification of a non-compete clause as a restriction of competition “by object” or “by effect”

The Court found that Article 101 TFEU in this context should be interpreted as follows:

• The Court referred to settled case law and stated that whether an undertaking not present in a market is a potential competitor of one or more other undertakings that are already present in that market, must be determined by whether there are real and concrete possibilities of the former joining that market and competing with one or more of the latter. Although subjective evidence is not sufficient in itself, subjective evidence may nevertheless be taken into account in order to support consistent objective evidence and thereby to strengthen the demonstration that there are real and concrete possibilities of entering the market concerned. In that regard, the Court held that the conclusion of an agreement with a non-compete clause is a strong indication that there is potential competition. If the parties to a non-compete agreement did not perceive themselves as potential competitors, they would, in principle, have no reason to conclude such an agreement. An indication of that type may therefore usefully substantiate objective evidence seeking to demonstrate the real and concrete possibilities for the undertaking which is not present on the market to enter it.
• The concept of restriction of competition by object must be interpreted restrictively. The concept only applies to certain types of coordination between undertakings which reveal a sufficient degree of harm to competition for it to be found that there is no need to examine their effects. Both market-sharing agreements and market-exclusion agreements have as their object to eliminate and prevent competition by keeping a potential competitor outside of the market concerned. The Court held that a non-compete clause consisting in prohibiting one of the parties to that agreement from entering the national market for the supply of electricity on which the other party to the agreement is a major player, constitutes an agreement which has as its object the prevention, restriction or distortion of competition. This holds true even if consumers derive benefits from the agreement and that the non-compete clause is limited in time, in so far as it is apparent from an analysis of the clause and its economic and legal context that the clause displays a sufficient degree of harm to competition so that it is not necessary to assess its effects.

The judgement can be found here.

On 25 October 2023, the General Court annulled the Commission’s decision according to which the BEH Group abused its dominant position, both on substantive and procedural grounds.

Following an initial complaint by Overgas, the Commission issued in 2018 a decision finding an infringement of Article 102 TFEU and imposing a €77 million fine to the BEH Group, a company wholly owned by the Bulgarian State, for abusing their dominant position by blocking their competitors access to key gas supply infrastructure in Bulgaria.

For many years, Bulgaria relied almost entirely on imports of Russian gas, transported primarily though the Romanian Pipeline 1. Bulgargaz, one of the subsidiaries in the BEH group, was granted exclusive use of this pipeline until 2016. The Commission found that BHE Group abused their dominant position, as they refused to grant third parties access to the Pipeline, the gas transmission network and the gas storage facility. This effectively prevented Bulgargaz’s competitors from expanding their offerings in Bulgaria.

According to the General Court, the Romanian Pipeline 1 was an essential facility for the transportation of Russian gas to Bulgaria due to the lack of any other alternative. Bulgargaz did not own the Pipeline, but had exclusive use of it, which led to Bulgargaz having a dominant position in the market.

Although the General Court upheld some of the Commission’s findings of anticompetitive conduct, it considered that the Commission had not adduced firm, precise and consistent evidence, to establish the requisite legal standard that the conduct alleged against Bulgargaz concerning access to the Romanian Pipeline 1 constituted a refusal of access capable of falling within the scope of Article 102 TFEU.

The General Court emphasized that an exclusionary capability cannot be purely hypothetical. Rather, the Commission must first demonstrate that the market player making the access request had at least a sufficiently tangible project to enter the relevant market, so that effective competition on those markets would be threatened if it were refused access. Secondly, the Commission must prove that the access request reflected such a project in a sufficiently precise manner for the dominant undertaking to be able to assess whether it was required to respond to it, so as not to run the risk of an abusive refusal of access.

Also worth noting is the General Court’s statement that even if Bulgargaz adopted an anticompetitive modus operandi that hindered competitors’ access to the transmission network and storage facilities and failed to comply with its regulatory obligations during a certain period, this was incapable of restricting competition. This was because competitors lacked access to the only pipeline available to transport gas from Russia into those facilities “for reasons which are not attributable to proven abusive conduct“. The General Court therefore held that the Commission had not established that the conduct was capable, and not merely hypothetically, of restricting competition, and in particular of having exclusionary effects.

The General Court also discussed the Bronner criteria, and confirmed that the conditions are the proper framework, in principle, to infrastructures or to services that are often described as an “essential facility”. The General Court also assessed whether the Bronner criteria are applicable even though the Commission’s decision was not addressed to the owner of the infrastructure (the pipeline), but the holder of an exclusive right. The General Court affirmed, and held that legal ownership is not required and that a dominant undertaking holding an exclusive right that “took the form of a situation of control” over essential facility could be obliged to grant access. The General Court also noted that the fact that Bulgargaz did not own, and thereby had not invested in the essential facility in the traditional sense did not preclude the Bronner criteria’s applicability since Bulgargaz paid a fixed annual fee for the use, which in the General Court’s opinion constituted an investment in relation to the exclusive right granted to Bulgargaz.

This is the first time that the General Court has annulled all elements of a Commission Article 102 decision primarily on the substance and in particular on grounds that there was no abuse and that the Commission wrongly assessed the facts. The judgement confirms that the Commission must support allegations of anticompetitive foreclosure with clear and consistent evidence. If the judgment becomes final, the case will set an important precedent for the application of competition law in the energy sector, EU procedural rules and abuse of dominance generally. At the time of writing, the appeal period has not yet expired.

The judgement can be found here.

The Court of Justice’s judgement in Meta concerns a preliminary reference from the Higher Regional Court, Düsseldorf, seeking clarification on whether national competition authorities have competence to review violations of the GDPR in the context of the examination of an abuse of dominant position within the meaning of Article 102 TFEU. In addition, the local court referred questions about the interpretation and the application of certain provisions of the GDPR to the processing of data by the operator of an online social network. From a competition law perspective, the judgement provides important clarifications on the cooperation between competition authorities and data protection supervisory authorities.

The Court states that, in the context of the examination of an abuse of a dominant position by an undertaking under Article 102 TFEU, it may be necessary for the competition authority to examine whether that undertaking’s conduct complies with rules other than those relating to competition law, such as the rules laid down by the GDPR. The Court also seems to (indirectly) confirm that a violation of the GDPR could, in principle, amount to an abuse of dominant position under applicable competition rules.

If the national competition authorities identify an infringement of the GDPR, the Court stressed that it does not replace the supervisory authorities established by that regulation. It is still for the supervisory authorities to monitor and enforce the application of the GDPR. National competition authorities are required to consult and have a “duty of sincere cooperation” with the supervisory authorities to ensure consistent application of the GDPR regulation. The Court specified further guidance for the cooperation between the two sets of authorities, clarifying inter alia that national competition authorities cannot depart from any prior decision by the supervisory authority pertaining to the conduct in question.

The judgement serves as a good reminder that undertakings with a dominant position should carefully review their data processing policies from a competition law point of view, given that the competition authorities have the ability to examine and consider GDPR compliance in their assessment under applicable competition law.

The judgement can be found here.

In the preliminary ruling based on a request from the Commercial Court, Madrid, delivered on 21 December 2023, the Court of Justice sitting as a Grand Chamber, states that the conditions in which the rules in place by FIFA and UEFA concerning (i) prior approval of international interclub football competitions, including the participation of football clubs and players therein as well as sanctions provided to accompany those rules, and (ii) the exploitation of the various rights related to those competitions, may amount to an abuse of dominant position contrary to Article 102 TFEU as well as an anticompetitive agreement under Article 101 TFEU.

According to the Court, FIFA and UEFA hold a dominant position in the market for organisation and marketing of international interclub football competitors, and the exploitation of the various rights related to those competitions. Twelve European top football clubs, acting through the Spanish company European Superleague Company, wished to set up a new football competition project – the Super League. FIFA and UEFA objected to the project, and threatened to impose sanctions on clubs and players who might decide to participate.

The Court held that where dominant undertakings have the power to determine the conditions in which potentially competing undertakings may access the market, that power must be subject to criteria which are suitable for ensuring that they are transparent, objective, non-discriminatory and proportionate. The powers of FIFA and UEFA were, however, not found to be subject to any such criteria. The Court accordingly found that FIFA and UEFA are abusing a dominant position.

As regards the application of Article 101 TFEU to those FIFA and UEFA rules, the Court observed that they confer on FIFA and UEFA the power to authorise, control and set the conditions of access to the market for any potentially competing undertaking. They could therefore determine the degree of competition that may exist and the conditions in which that potential competition may be exercised. Since there are no framework providing for substantive criteria (ensuring that they are transparent, objective, precise, non-discriminatory and proportionate) or detailed procedural rules, the Court held that the rules by their very nature reveal a sufficient degree of harm to competition and must be held to have as their object the prevention of competition contrary to the prohibition in Article 101 (1) TFEU.

It will, however, be for the referring court to assess whether it can be proven that the rules are justified and thereby escape the prohibitions, inter alia due to achievement of efficiency gains and the profit reserved for users. Moreover, the Court did not rule on the existence or characteristics of the Super League project itself. Hence, the future of the Super League is yet to be determined.

The judgement can be found here.

On 27 July 2023, the Commission opened a formal investigation to assess whether Microsoft has breached Article 102 TFEU, by tying or bundling its communication and collaboration product Teams to Office 365 and Microsoft 365. The investigation was a result of Clack Technologies’ complaint alleging that Microsoft illegally tied Teams to its dominant productivity suites for business customers (Office 365 and Microsoft 365).

The Commission is concerned that Microsoft may be abusing and defending its market position in productivity software by restricting competition in the EEA for communication and collaboration products. Hereunder by granting Teams a distribution advantage by not giving customers the choice of whether or not to include access to that product when they subscribe to their productivity suites. The Commission is also concerned that the practice may have limited the interoperability between Microsoft’s productivity suits and competing offerings.

There is no legal deadline for bringing the investigation to an end, and the duration of the investigation depends on the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.

The press release can be found here.

On 12 October 2023, the Commission released a statement announcing that it has imposed restorative measures under the EU Merger Regulation (EUMR) requiring Illumina to unwind its acquisition of GRAIL. The acquisition was completed before the Commission had reached a decision (see our previous Competition law highlights H2 2022 and H1 2023, which can be found here and here, for a summary of this case and the Commission’s prohibition).

Illumina and GRAIL are ordered to dissolve the transaction and restore the situation prevailing before the completion of the acquisition. They are also expected to comply with transitional measures until the dissolution of the transaction is completed. The dissolution of the transaction must restore GRAIL’s independence to the same level enjoyed by GRAIL prior to the acquisition. GRAIL must be as viable and competitive after the divestment as it was before Illumina’s acquisition, and the divestment must be executable within strict deadlines and with sufficient certainty. Illumina has to submit a concrete divestment plan for the disposal of GRAIL, which then must be approved by the Commission.

In case of non-compliance with the restorative measures, the Commission can impose periodic penalty payments of up to 5 % of the average daily aggregate turnover of the company under Article 15 EUMR. Moreover, companies failing to comply with the restorative measures can be fined up to 10 % of their annual worldwide turnover under Article 14 EUMR. Illumina is being given 12 months to complete its unwinding of GRAIL, with the possibility of a three-month extension.

Illumina maintains that the Commission does not have jurisdiction over this acquisition and points out that the transaction was announced before the new guidelines for Article 22 were published. In 2022, the General Court concluded that the Commission did have the right to assess the acquisition (see Judgment of the General Court of 13.7.2022, T-227/21, Illumina inc. v. European Commission).

The appeal of the judgement of the General Court was heard before the Court of Justice on 12 December 2023. Not surprisingly, the NCA has expressed their support to the Commission’s claimed jurisdiction under Article 22 as recently as on 11 December 2023, emphasizing the importance of international cooperation in enforcing competition rules. The NCA also supported France’s initial referral to the Commission.

Hopefully, the Court of Justice’s verdict will clarify the scope of Article 22 and provide clear guidance on when the Commission has the authority to enforce Article 22.

The Commission’s press release can be found here.

On 25 September 2023 the European Commission prohibited the proposed acquisition of the Swedish undertaking Flugo Group Holdings AB (“eTraveli”) by Booking Holdings (“Booking”). The Commission concluded that the transaction would strengthen Booking’s dominant position on the market for hotel online travel agencies (OTA) in the EEA, leading to higher costs for hotels and, possibly consumers.

The decision illustrates the Commission’s broad approach to network companies in its analysis of potential theories of harm, taking into account the expansion of an ecosystem. The Commission has seemingly also taken a broad approach in the recently issued SO against Amazon’s proposed acquisition of iRobot. Although the latter to a large extent pertains to “classic” vertical theories of harm, the Commission has also expressed concern for a strengthening of Amazon’s position in the market for online marketplace services and/or other data-related markets by acquiring a manufacturer of robot vacuum cleaners.

The merger between Booking and eTraveli was notified to the Commission on 10 October 2022, and the Commission opened an in-depth investigation on 16 November 2022. The investigation revealed that Booking in the Commission’s opinion is a dominant player on the EEA market of hotel OTA services, with a market share above 60%. Moreover, Booking benefits from network effects, due to the fact that it has developed a significant scale in its hotel offering. Further, eTraveli is also operating in the overall market for OTA services, constituting a leading provider of flight OTA services in Europe. Thus, the Commission found that the transaction raised several concerns.

In short, the Commission expressed that the transaction would allow Booking to acquire a main customer acquisition channel. The acquisition of eTraveli would likely generate a significant amount of traffic to Booking’s OTA platforms, as flight OTA services is the closest complement to the hotel OTA business. According to the Commission, this new customer acquisition channel would have allowed Booking to expand its travel services ecosystem, which allegedly would have increased traffic and sales to Booking’s platforms. Pursuant to the Commission, the transaction would therefore have reinforced Booking’s network effects and increased barriers to entry and expansion, making it more difficult for competitors to challenge Booking’s position. Lastly, the transaction would have strengthen Booking’s bargaining position towards hotels, leading to higher cost for hotels, and possibly consumers.

Booking offered remedial measures. However, the Commission concluded that the remedies were not sufficient to address the Commission’s competition concerns.

The Commission’s press release can be found here.

In 2020, the DOJ filed a case against Google claiming they illegally orchestrated its business dealings, ensuring that Google is the first search engine people see when they turn on their phones and web browsers. The trial started on September 12^th, 2023, and lasted for 10 weeks. The last antitrust case of this magnitude took place in 1998, when the Department of Justice initiated and won the lawsuit against Microsoft.

The DOJ, along with several state attorneys-general, accuse Google of illegal use of its leading industry position in the markets for general search services, search advertising, and general search text advertising in the United States through anticompetitive and exclusionary practices. The DOJ’s primary concern is Google’s practice of paying billions of dollars each year for exclusive agreements with phone manufacturers, such as Apple and Samsung, and web browsers, like Mozilla, which runs Firefox. These agreements enable Google to be the default search engine on most devices. Being the default search engine gives Google access to more data than its competitors, allowing it to improve its algorithms and result, thereby making it even harder for competitors to attract users. By securing this position, the DOJ argues that Google has been able to box out smaller competitors.

The DOJ must first prove that Google has established and maintained a monopoly in the relevant market. Although the company processes more than 90% of the worlds search queries, Alphabet, Goggle’s parent company, argues that its competition extends beyond just browsers: Amazon, TikTok and ChatGPT are all in the business of search. Secondly, the DOJ must prove that Google is abusing the monopolistic position. To this, Alphabet argues that users have a lot of choices and choose Google because it offers a superior product.

The verdict is expected to be announced next year. The result of the trial will probably have a saying in the other DOJ lawsuit against Google over its ad-tech business. The outcome may also influence on the EU Commission’s ongoing effort against the largest tech companies such as Google in various cases, lastly by the Commission’s SO to Google in June this year over potential abusive practices in online advertising technology (further information on the SO is available in our Competition law highlights H1 2023 Newsletter).

On 18 December 2023, the Justice Department (DOJ) and the Federal Trade Commission (FTC) released updated Merger Guidelines. The Guidelines are meant to replace the DOJ and FTC’s prior guidance on merger enforcement, including the Horizontal Merger Guidelines from 2010 and the Vertical Merger Guidelines from 2020.

The Guidelines represent a rewrite of prior guidance on merger enforcement, in both structure and substance, and seek to better reflect the modern economy and ensure compliance with federal antitrust laws. Moreover, the Guidelines aim to provide a clearer understanding of how the DOJ and the FTC review mergers and acquisitions. The issued Guidelines has modified the draft merger guidelines released in July somewhat, to address some of the more than 30,000 comments received. The Guidelines may nevertheless seemingly lower the threshold for when the agencies express that they presume a merger is substantially likely to lessen competition and draws upon older rather than newer case-law. The Guidelines lack force of law but may indicate how the agencies will approach mergers going forward.

At the outset, the Guidelines stipulate 11 so-called guidelines that the DOJ and the FTC may use when determining whether a merger is contrary to antitrust laws. The guidelines are not mutually exclusive, and a merger may implicate multiple guidelines. The new Guidelines elaborates on the analytic frameworks and tools that may be used for a detailed analysis of a merger with respect to each guideline.

Certain key changes in the Guidelines can be summarised as follows:

• Consolidate the previous Guidelines: Since many of the same principles are applicable to both vertical and horizontal transactions, the DOJ and the FTC have opted for a consolidation of the current Horizontal and Vertical Guidelines.
• Vertical mergers: The draft merger guidelines included a separate guideline (Guideline 6) that asserts that a vertical merger involving a firm with a 50 % or higher market share is presumed to raise competition concern. While Guideline 6 of the draft has been deleted in the final version of the Merger Guidelines, the substance of it seems to have survived in footnote 30 of the Guidelines. The footnote stipulates that the agencies will generally infer, in the absence of countervailing evidence, that the merging firm has or is approaching monopoly power if it has a share greater than 50 %. Which again indicates the merged firm’s ability to limit access to the related market.
• Introduce the notion of a dominant firm: The Guidelines seems to heighten the scrutiny of mergers involving “dominant” firms. Pursuant to the (final) Guideline 6, mergers that entrench or extend an already dominant position may substantially lessen competition or tend to create a monopoly in violation of the Clayton Act. While the draft guidelines defined dominant firms as firms with at least 30 percent market share, the reference to a 30 % market share is removed from the final guidelines, leaving more ambiguity as to how the concept shall be understood under applicable US law.
• Significantly lowers the threshold for when markets may be deemed highly concentrated: The threshold for defining a “highly concentrated” market has been reduced from an Herfindahl-Hirschman Index (HHI) of 2,500 points to 1,800 points, meaning that there is a “structural presumption” that mergers above 1,800 with a change in HHI greater than 100 points may substantially lessen competition. Pursuant to the Guidelines, a merger that creates a firm with a share over 30 percent is also presumed to substantially lessen competition or tend to create a monopoly if it also involves an increase in HHI of more than 100 points.
• When a merger involves a multi-sided platform, the agencies examine competition between platforms, on a platform, or to displace a platform. The Guidelines include a separate guideline discussing platform competition. The Guidelines expressly states that mergers involving platforms can threaten competition even if a platform merges with a firm that is neither a direct competitor nor in a traditional vertical relationship with the platform. The agencies will include in their analysis how a merger affects competition between platforms (including access to platform participants), competition on a platform (and among competing participants), competition to displace the platform, denial of access to critical inputs and potential conflicts of interest that give a platform incentive to favour its own products or services relative to rivals.

The Guidelines are available here