Competition law highlights – H1 2024

On 31 May 2024, the Ministry of Trade, Industry, and Fisheries published a consultation paper proposing to adopt a regulation that provides rules on the government’s obligation to pay interest of the paid fine if the infringement decision is fully or partially repealed, companies’ obligation to pay interest on fines that are not paid within the due date, and the interest rate.

This proposal follows up on the regulation on interest on fines in Section 29 (5) of the Competition Act, which became effective from January 2023. According to Section 29 (5) of the Norwegian Competition Act, companies that have been imposed a fine and fail to pay by the due date are required to pay interest. However, under the current regulation, there is no mutual obligation for the government to pay interest to the company if the fine is required to be fully or partially refunded as a result of the decision being overturned by the Competition Authority, the Competition Appeals Board, or the court.

The proposed regulation aims to establish a more balanced set of rights and obligations between the government and the companies regarding the payment of interest on fines. It also seeks to harmonise the rules on interest on fines under the Competition Act with EU/EEA competition rules, where there is a mutual obligation for repayment of interests. The objective of this regulation is to foster equal rights and obligations between the government and companies that are imposed fines by the NCA, and to enhance the effectiveness of the Competition Act by incentivising companies to pay by the due date.

The deadline for all interested parties to submit a reply is 16 August 2024.

The consultation paper can be found here.

Nordic competition authorities released the “Joint Nordic Report 2024” in January, a comprehensive study on competition and labour markets. The report delves into the issue of anticompetitive agreements in the labour market, underscoring that agreements between competitors to fix wages or refrain from hiring each other’s employees could constitute serious competition law infringements.

The report also presents evidence suggesting that it is not uncommon for companies across various industries to enter into agreements not to hire each other’s employees. In a survey commissioned by the Ministry of Labour and Social Inclusion in Norway, 12 % of the respondents acknowledged that their companies had entered into no-poach agreements in 2023, which is a significant increase up from 4 % in a survey undertaken in 2016.

While such agreements may constitute infringements of competition law, the competition legislation in the Nordic countries do provide exemptions for agreements related to collective bargaining agreements negotiated by organised social partners, such as trade unions and employers’ organisations.

Moreover, the report notes that a relatively high proportion of employees and employers in the Nordic countries are members of trade unions and employers’ organisations. Wages and working conditions are often regulated in collective bargaining agreements, which may help mitigate the negative effects on employees from agreements between firms that affect labour markets.

The report advocates for a more proactive enforcement of competition law in labour markets, a stance that aligns with the approach taken by other European competition authorities.

Competition and labour markets has also garnered significant attention from the Commission in 2024. In May, the Commission released a policy brief on labour markets, expressing its stance that agreements to fix wages and prevent employee poaching inherently pose a risk to competition. Consequently, such agreements are, according to the Commission, likely to be categorised as “by object” restrictions. The brief also casts doubt on any potential justification or exemptions under EU competition law. Demonstrating its commitment to addressing these issues, the Commission has been proactive in investigating such cases, including conducting unannounced inspections in the online food and grocery delivery sector, among others, in relation to a suspected no-poach agreement. While the policy brief suggests that the majority of enforcement will likely persist at the national level, it also signals the Commission’s readiness to leverage its powers to combat anti-competitive practices in the labour market.

The report from the Nordic competition authorities can be found here and the European Commission’s policy brief can be found here.

In a recent decision from March, Hordaland District Court concluded that the exemption of in-house lawyer correspondence (LPP) from seizure under Norwegian law in circumstances where the NCA enforces the competition rules in the EEA Agreement, does not violate EEA law. This landmark case is anticipated to be of significance to the entire legal profession in Norway.

The dispute arose from a dawn raid conducted by the NCA in 2022. As per standard procedure and Norwegian law, in-house lawyer correspondence was separated from the rest of the seizure, but a dispute later arose over whether certain documents contained actual legal advice. The NCA claimed in general in its request before the district court that prohibition of the seizure of in-house lawyer correspondence does not apply when the NCA is enforcing the EEA Competition rules (Articles 53 and 54), asserting that such a prohibition would be in conflict with EEA law.

In accordance with the legal framework of EU and EEA law, in-house lawyer correspondence is not covered by the legal professional privilege when the EU Commission or the EFTA Surveillance Authority (ESA) carry out dawn raids to enforce TFEU Articles 101 and 102, and the EEA Agreement Articles 53 and 54. The question at hand was whether the same principle applies when the NCA (on its own initiative) enforces the EEA competition rules (alongside Norwegian competition rules).

The district court found that it does not follow from EEA law that national authorities must have the right to seize in-house lawyer correspondence when enforcing the competition rules in the EEA Agreement. The court emphasised that an effective and uniform enforcement of the competition rules does not require that the procedural rules applicable during the investigations are fully or approximately the same at the national level as when the EU Commission or ESA enforce the rules. The district court further concluded that there is no doubt that the prohibition of seizure of legal professional privileged information in Norwegian law covers in-house lawyer correspondence, to the extent that the document is a result of work of such a nature that it must be considered “actual legal advice”, and that this also applies when the NCA enforces EEA competition law.

The NCA has appealed the decision to the Court of Appeal.

The decision from Hordaland District Court can be read here.

On 25 April 2024, the NCA sent a Statement of Objections to two Norwegian moving companies, informing the companies of the Authority’s preliminary view of anti-competitive collaboration between them. The Statement of Objections was sent two and a half years after the Authority carried out unannounced inspections at the companies’ premises in September 2021.

The Authority’s initial findings suggest that the moving companies have had extensive contact about future and specific moving assignments. The companies have allegedly shared customer inquiries, divided assignments, and coordinated prices. The suspected infringements occurred between May 2019 and September 2021.

One theory seems to be that the companies have engaged in bid rigging, by submitting fake bids in tender competitions. It is the NCA’s preliminary assessment that “customers have been misled into believing that they have received competing offers, while offers have in fact been false”.

The Authority is considering imposing fines of NOK 4,070,000 and NOK 840,000, respectively, on the two companies.

The NCA’s press release is available here.

In 2021, the NCA issued a Statement of Objections to the three largest grocery retailers in Norway with an advanced notice of a combined fine of approx. NOK 21 billion (approx. EUR 2.1 billion). If it had been adopted, it would have been the second-highest fine issued in the EU for breach of the competition rules.

In April 2024, the NCA issued an updated Statement of Objections, reducing the suggested fine substantially to approx. NOK 4.9 billion in total.  In essence, the NCA has concluded that the infringement was less serious than stated in the original Statement of Objections partly due to the fact that the NCA in January decided to close the part of the case that related to a possible by object restriction. The NCA has not discussed publicly its changed approach, but its decision to reduce the fine was likely affected by the Competition Appeals Board’s decision in Bokbasen from November 2023.

The NCA’s press release is available here.

On the 27 June, the Court of Justice (“ECJ”) gave its final word in the Servier-case. The decisions include interesting remarks on the assessment of potential competition and the relevance of the actual effects in the effect analysis.

The case concerns the patent dispute settlement agreements between Servier and generic manufacturers from the early 2000s regarding the development of Perindopril, a medication used to treat high blood pressure, heart failure and other cardiovascular diseases. In exchange for payment, the generic companies agreed to refrain from market entry and disputing Servier’s patent on Perindopril. The Commission found these agreements to be anti-competitive and issued a fine of a total of EUR 427 million back in 2014. Both Servier and the generic companies brought the case before the General Court and the final vote has finally been cast by the ECJ.

The decisions from the ECJ contain many interesting remarks. First, the ECJ reaffirms that an infringement within the meaning of Article 101(1) TFEU can only be established if there exist competition to restrict in the first place. It follows from the ECJ’s remarks that in the specific context of the opening of a market for a medicinal product to the manufacturers of generic medicines, it is necessary to determine if the former is a potential competitor to the manufacturer of originator medicines already present in the market. This necessitates an assessment of whether there are “real and concrete” possibilities of the former joining the market and competing with the latter. If the answer is negative, there is no competition for the agreements to restrict.

Further, the ECJ reaffirmed that the fact that agreements who pursue an objective which more abstractly may be legitimate, cannot exclude those agreements from the application of Article 101 TFEU if it is established that those agreements also have the aim of sharing markets or restricting competition in other ways. Even though settlement agreements generally have no anti-competitive object, they must be assessed in the light of their specific content and economic context, and in particular in the light of the market concerned.

The ECJ also stated that pro-competitive effects of an agreement are not relevant to take into consideration when assessing whether the conduct entail an infringement of Article 101 (1) TFEU.

Hence, the rulings provide useful clarifications on different assessments of the restriction analysis in Article 101 TFEU and a long-awaited conclusion in the Servier-case. The decisions from the ECJ can be found here and here.

On 1 February 2024, the ECJ dismissed Scania’s appeal, upholding the European Commission’s fine from 2017 of EUR 880.5 million for Scania’s involvement in an anti-competitive pricing practice.

The Commission’s decision against Scania was issued after the other truck manufacturers (Daimler, MAN, DAF, Iveco and Volvo/Renault), who were under investigation together with Scania, entered into a settlement procedure with the Commission and were fined for their violation of Article 101 TFEU. The illegal conduct consisted of collusive arrangements on pricing and gross price increases in the EEA for medium and heavy trucks, and the timing and the passing on of costs for the introduction of emission technologies for medium and heavy trucks required by EURO 3 to 6 standards. The infringement covered the entire EEA and lasted from 17 January 1997 until 18 January 2011.

Scania’s main argument was that the Commission had exhibited bias, given that the same team that had reached a settlement agreement with other participants involved in the illegal conduct also handled Scania’s case and subsequently imposed the penalty decision on Scania. However, the ECJ ruled that the Commission’s organisational setup did not directly raise issues concerning its impartiality and Scania’s right to the presumption of innocence.

The ECJ further clarified that the Commission does not need to prove that every disputed act is an infringement in itself in order to establish a single and continuous infringement, and thus dismissed Scania’s argument that the Commission unjustly included legitimate conduct to prove the ‘single and continuous infringement’. This is in line with the ECJ’s earlier case law on the concept of a single and continuous infringement, which reaffirms the Commission’s considerable room for manoeuvre in establishing this type of infringement.

Scania’s claim, that it did not intend to participate in an infringement beyond Germany, was also dismissed by the ECJ. The court held that Scania’s participation in meetings where information related to the EEA was discussed was sufficient to establish its participation in the broader infringement.

The ECJ’s judgment reinforces the European Commission’s practice and discretion in conducting hybrid settlement cases, while revisiting the legal standards and safeguards that apply. The Scania decision is an addition to the growing body of case law on hybrid case, addressing the potentially complex procedural and substantive issues which may arise in these types of cases.

The ECJ’s decision can be found here.

On 17 October 2022, the Cour d’appel de Mons (Belgium) requested a preliminary ruling regarding the dispute about whether the Fédération Internationale de Football Association (FIFA) and the Union Royale Belge des Sociétés de Football Association (URBSFA), are obliged to indemnify a professional footballer, BZ, to the extent of the loss of earnings that he claims to have suffered by reason of the application of certain provisions of the FIFA Regulations on the Status and Transfer of Players (RSTP) (Case C-650/22). FIFA is an association responsible for organising football competitions all over the world.

On 30 April 2024, Advocate General (AG) Szpunar delivered his opinion where he clarified whether Articles 45 and 101 TFEU preclude the application of the RSTP. The RSTP governs contractual relations between players and clubs, including situations where a dispute arises over the termination of a contract without just cause. In such instances, the new club wishing to hire the player shares joint responsibility with the player for any compensation due to the player’s former club. The RSTP also stipulates that the former club can withhold an International Transfer Certificate (ITC) from the association where the new club is registered as long as the dispute with the former club remains unsolved.

In this case (C-650/22), the player alleges that the search for a new club was challenging due to the RSTP stipulations, which hold the player and the new club jointly responsible for any compensation due to the player’s former club. The player asserts that a potential agreement with a new club fell through as a result of these RSTP rules. As a consequence, the player filed a lawsuit against FIFA and the URBSFA (the governing body for Belgian football) in a Belgian court, seeking damages and loss of earnings amounting to €6 million.

In his opinion, AG Szpunar recommended that the Court of Justice find that FIFA’s rules governing contractual relations between players and clubs may contradict EU competition rules and the freedom of movement of persons. AG Szpunar considered that the rules of the RSTP limit the possibility for players to switch clubs, and conversely, for clubs to hire new players, in a situation where the player has a terminated contract without just cause.

The opinion has received reactions from different sources which claim that AG Szpunar blurs the line between the assessment of restriction of competition by object and the effect by inferring an anticompetitive object from the effects of the rules. Furthermore, it is claimed that AG Szpunar did not take into account the relevant economic and legal context.

It remains to see whether the Court of Justice will adopt AG Szpunar’s proposed interpretation, or if the Court will distinguish explicitly between the assessment of restriction of competition by object, and the restriction of competition by effect.

AG Szpunar’s opinion is available here.

The Commission has imposed a EUR 1.8 billion fine on Apple for abusing its dominant position in the market for distributing music streaming apps via its App Store. Apple unfairly prevented music streaming app developers, such as Spotify, from informing iPhone users about alternative music subscription services available outside the Apple App Store. Moreover, developers were prohibited from including links within their apps that would direct users to the developer’s webpage, where alternative subscriptions could be purchased. The terms and conditions imposed by Apple also prohibited them from contacting users about alternative pricing options after an account had been established.

The Commission’s decision came after a formal investigation was launched in June 2020, following complaints filed by Spotify and an unidentified e-book and audiobook distributor. By March 2024, the Commission had reached its decision, declaring that the above-mentioned so-called “anti-steering provisions” represented unfair trading conditions, violating Article 102(a) of the Treaty of the Functioning of the European Union. The Commission argued that these provisions were neither necessary nor proportionate for safeguarding Apple’s commercial interests and adversely impacted iOS users by preventing their ability to make informed decision about where and how to purchase music streaming subscriptions.

The EUR 1.8 billion fine is significant as it ranks as the third-largest antitrust fine ever imposed by the Commission. Notably, the fine was increased from an initial amount of EUR 40 million, underscoring the Commission’s dedication to ensuring deterrence for Apple and other potential infringers of similar scale from committing similar infringements in the future.

The timing of the fine is also noteworthy, as it was announced just days before the EU Digital Markets Act entered into force in March 2024, which explicitly prohibits the type of conduct Apple was found to have engaged in.

Apple appealed the decision on 16 May 2024.

The press release can be found here.

On June 24, the Commission announced its preliminary view that Apple’s App Store rules are in breach of the DMA. This follows the Commission’s classification of Apple as a gatekeeper for its operating system iOS on 6 September 2023 (as referred to above). After this designation, Apple was given a six-month period to ensure iOS compliance with the DMA. However, the Commission asserts that Apple has not met this requirement, as its rules continue to restrict app developers from directing consumers to alternative channels for offers and content.

The Commission’s preliminary findings suggest that none of Apple’s three business terms, governing the relationship with app developers allow developers to freely steer their customers to alternative distribution channels. Second, under most of the business terms, Apple permits app developers to steer users via “link-outs”, which are links provided by app developers within their apps that lead to a web page to conclude a contract. However, the link-outs nonetheless restricts developers from freely communicating, promoting offers, and concluding contract via their preferred distribution channels. Third, whilst Apple is entitled to a fee for helping developers acquire new customers via App Store, the fee levied by Apple exceeds what is strictly necessary.

If the Commission’s preliminary views are confirmed, none of Apple’s three business terms will comply with Article 5(4) of the DMA, which stipulates that a gatekeeper allows app developers to direct consumers to offers outside the gatekeepers’ core platform service without any charges. In such a scenario, the Commission would issue a non-compliance decision within 12 months from the commencement of proceedings on 25 March 2024.

Simultaneously, the Commission initiated a new non non-compliance procedure against Apple due to concerns that its new contract terms for third party developers and app stores, including Apple’s “Core Technology Fee”, do not ensure DMA compliance. The Commission will investigate whether these terms, which grant access to DMA-enabled features, comply with Article 6(4) of the DMA. This article stipulates that a gatekeeper can apply strictly necessary and proportionate measures to ensure end-user security. The Commission will specifically investigate Apple’s “Core Technology Fee”, the multi-step user journey to download and install alternative app stores or apps on iPhones, and the eligbility requirements for developers to offer alternative app stores or directly distribute apps form the web on iPhones.

The Commission’s press release is available here.

In November 2019, the Commission carried out unannounced inspections at the premises of Mondelēz in Austria, Belgium and Germany. Subsequently, on 23 May 2024, the Commission fined Mondelēz International, INC EUR 337.5 million (after granting a 15 percent fine reduction for cooperation and acknowledge of liability) for breaching both Articles 101 and 102 TFEU by reducing competition in the market of chocolate, biscuits and coffee products between Member States.

Mondelēz is one of the world’s largest producers of chocolate and biscuit products. After the Commission’s investigation of the company, it found that Mondelēz had engaged in (i) anticompetitive agreements or concerted practice aimed at restricting cross-border trade of various chocolate, biscuit and coffee products, in breach of Article 101 TFEU and (ii) abusing its dominant position in certain national markets for the sale of chocolate tablets, in breach of Article 102 of the TFEU.

The violation of Article 101 TFEU occurred between 2006 and 2020 and covered all the relevant EU markets. The Commission found that Mondelēz engaged in twenty-two anticompetitive agreements or concerted practices, by (a) limiting the territories or customers to which seven wholesale customers could resell Mondelēz’ products, thereby isolating national markets within the EU from outside competition, and (b) preventing ten exclusive distributors from replying to sale requests from customers without a priori permission from Mondelēz.

The violation of Article 102 TFEU occurred between 2015 and 2019. The Commission found that Mondelēz abused its dominant position by (a) refusing to supply a broker in Germany to prevent the resale of chocolate tablet products in Austria, Belgium, Bulgaria and Romania where prices were higher, and (b) ceasing the supply of chocolate tablet products in the Netherlands to prevent them from being imported to Belgium, where Mondelēz was selling at higher prices.

According to the Commission, this behaviour harmed consumers, who ended up paying more for chocolate, biscuits and coffee throughout the infringement period. The case’s main concern pertains to grocery prices and forms part of the Commission’s broader initiative to enforce competition rules within the food retail industry. Ensuring access to lower prices in this industry is particularly crucial during periods marked by high inflation and a pervasive cost-of-living crisis. The Commission is also investigating several cases in the food delivery service sector and the energy drinks market.

The Commission’s press release is available here.

In January, the Commission accepted commitments offered by Renfe addressing the Commission’s concerns regarding the online ticketing market in Spain. The Commission opened a formal investigation due to concern that the company may have abused its dominant position ccontrary to Article 102 TFEU last spring. The Spanish company is a state-owned rail operator which is active in the market for sales of online tickets to customers through apps and websites in Spain.

The Commission expressed concerns that Renfe’s refusual to provide comprehensive, real-time data to third parties could hinder competitors from competing with Renfe via their own ticketing platforms. To address these concerns, Renfe proposed a set of commitments to the Commission last summer. However, these failed to pass the Commission’s market test. Consequently, it was Renfe’s revised commitments that the Commission eventually accepted. These include providing all current and future content and real-time data, and a non-circumvention clause whereby Renfe commits to not employ any unfair, unreasonable or discriminatory technical or commercial measure against third-party ticketing platforms. Furthermore, Renfe has committed to enforcing a minimum Look-to-Book ratio on third-party ticketing platforms to sustain system efficiency and competitiveness, and to limit the Error Rate and Unavailability Rate to ensure high-quality IT services for these platforms. The commitments will be in force for an indefinite period.

More information about the case can be found here.

On 25 June 2024, the Commission informed Microsoft after one year of investigation of its preliminary view that the company breached Article 102 TFEU by distorting the competition in the market for communication and collaboration products.

The Commission has preliminary found that Microsoft is dominant in the worldwide market for SaaS (‘software as a service’) productivity applications for professional use. By tying Teams (Microsoft’s’ cloud-based communication and collaboration product) to the Office 365 and Microsoft 365 suits, the Commission is concerned that Microsoft’s conduct has provided Teams with a distribution advantage. When subscribing to these suits, customers have not been given the choice of whether or not to include Teams. Additionally, it appears that interoperability limitations between Teams’ competitors and Microsoft’s offerings may have exacerbated the distribution advantage further and prevented essential competition and innovation from Teams’ rivals.

Although Microsoft changed the way it distributed Teams when the Commission opened the investigation in June 2023 by offering suits that is not tied to Teams, the Commission finds these insufficient and that further changes to Microsoft’s conduct are necessary to restore competition.

The Commission’s press release is available here.

In March this year, the European Commission issued a Statement of Objections (SO) against Kingspan, a leading producer and distributor of mineral fibre sandwich panels, alleging that the company provided incorrect, incomplete and misleading information under the EU Merger Regulation (EUMR) during its investigation of Kingspan’s proposed acquisition of Trimo in 2021, even though the transaction was abandoned earlier in the process.

In March 2022, as part of the merger review, the Commission issued an SO, expressing its concerns about the potential negative impact of the merger on competition in specific building materials markets. These concerns included the possibility of increased prices, reduced quality and reduced options for customers. In April 2022, both parties decided to call off the transaction.

The Commission nevertheless opened an investigation in November 2022 to ascertain whether Kingspan had either intentionally or negligently submitted incorrect or misleading information during the merger investigation. The preliminary view in the SO suggests that this was the situation, and that Kingspan misrepresented information about its internal organisation as well as basic facts for the assessment of

• the scope of the relevant product and geographic market;
• the existence of entry and expansion barriers;
• the importance of innovation, and
• the intensity of competition between the parties and their competitors.

If the Commission determines that Kingspan negligently or intentionally provided incomplete, incorrect or misleading information, it has the authority to impose a fine of up to 1% of Kingspan’s annual global turnover for each instance.

This case highlights the Commission’s readiness to probe into potentially erroneous information submissions, even in instances where the involved parties have withdrawn from the transaction.

The Commission’s press release can be found here.

On 24 June 2024, International Flavors & Fragrances Inc. and International Flavors and Fragrances IFF France SAS (together “IFF”) were fined EUR 15.9 million for obstructing the Commission inspection. This is the first time the Commission has imposed a fine for the deletion of messages exchanged via social media apps during an antitrust inspection.

The inspection was carried out at IFF’s premises in March 2023. After the Commission informed the employees about the inspection and asked to review some of the employees’ mobile telephones, a senior employee intentionally deleted WhatsApp messages exchanged with a competitor containing business-related information. The deletion was detected by the inspectors themselves, after the employee’s phone was submitted for review.

Under Article 20 (4) of Regulation No 01/2003, companies are obliged to cooperate and provide all information relevant to the investigation. Violation of this obligation allows the Commission to impose a fine up to 1 percent of the total turnover of a company. Given the severity of tampering with evidence, the Commission considered a fine of 0.3 percent of IFF’s total turnover to be proportionate and deterrent.

However, due to IFF’s proactive cooperation during and after the inspection, which inter alia helped the Commission to recover the deleted messages, the Commission decided to reduce the fine with 50 percent. IFF was therefore imposed a fine of EUR 15.9 million, representing 0.15 percent of IFF’s total turnover.

The Commission’s press release is available here.

The Commission’s investigation into the fragrance industry (AT.40826) is still ongoing and unrelated to this decision.

In February 2024, the Commission approved the acquisition of Bolloré Logistics SE (“Bolloré“) by CMA CGM S.A.’s (“CMA CGM”). However, the clearance is contingent upon certain stipulated commitments proposed by the parties.

Bolloré and CMA CGM are both international transport and logistics companies, of which the former offers freight forwarding and contract logistics services, and the latter provides container liner shipping and port terminal services.

The Commission indicated that the acquisition, notified to the Commission on 5 January 2024, would have reduced competition in the markets for the provision of sea freight forwarding services in the French regions of Martinique, Guadeloupe and French Guiana. Notably, the Commission found that the transaction would have created significant vertical links between CMA CGM’s upstream container lining shipping activities on routes connecting Europe with Martinique, Guadeloupe and French Guiana, and between Bolloré’s downstream sea freight forwarding activities in the same regions. Hence, the Commission determined that CMA CGM, given its high market shares on these overseas routes and the competitive structures in these regions, could potentially have both the ability and incentive to favour Bolloré over competing freight forwarders.

To address the Commission’s competition concerns, the parties proposed commitments, involving the divesture of i) all Bolloré’s activities in Martinique, Guadeloupe, French Guiana and Saint Martin, and ii) a number of assets in metropolitan France linked to these activities. Executive Vice-President in charge of competition policy, Margrethe Vestager, stated that these commitments ensured that “the local sea freight forwarding markets remain competitive and that, ultimately, local customers do not end up paying higher prices for products imported from mainland Europe”. Given that these commitments comprehensively addressed the Commission’s competition concerns, the transaction would no longer have a negative impact on competition.

The Commission’s press release is available here.

The Commission has recently been quite busy with no less than three in-depth investigations into mergers related to the aviation market. While the Commission approved the acquisition of Asiana by Korean Air subject to conditions in February and ITA Airways by Lufthansa early July, the proposed acquisition of Air Europa by IAG is still under review.

Just a few weeks into 2024, the Commission announced on 23 January that it was opening an in-depth investigation into the proposed acquisition of joint control in ITA Airways by Lufthansa and the Italian Ministry of Economy and Finance. The transaction was submitted to the Commission in late November 2023. Both the ITA Airways and Lufthansa are full-service carriers with domestic and international operations in passenger and cargo air transport. While ITA Airways is headquartered in Italy, and was created by the Italian State in 2020, Lufthansa is headquartered in Germany and controls a large number of European airlines. In its SO sent on 25 March, the Commission expressed its concern that the transaction could reduce competition on a certain number of short-haul routes from Italy to countries in Central Europe and reduce competition on certain long-haul routes from Italy to North America and Japan, as the parties or joint venture partners compete head-to-head on these routes and the transaction would therefore remove an important competitive pressure. In addition, the Commission expressed its concern that the transaction could create or strengthen ITA’s dominant position at an airport in Milan.

Shortly after, on 24 January, the Commission announced that it had opened an in-depth investigation into the proposed acquisition of Air Europa by IAG. The notification was submitted in mid-December 2023. While IAG is a multinational holding company controlling other Spanish air-carriers, Air Europa is controlled by Globalia, a Spanish tourism group. Both companies have headquarters in Spain. The Commission’s preliminary concerns are that the transaction may reduce competition on several domestic routes in Spain where there are no high-speed trains to provide an alternative, reduce competition on certain short-haul routes from Spain to destinations in Europe and the Middle East, and reduce competition on certain long-haul routes from Spain, including some to North and South America. On these routes, the parties or joint venture partners today compete head-to-head, entailing that the transaction would remove important competitive pressure. The Commission has until mid-July to make a final decision.

Only weeks later, on 13 February and over a year after the notification was submitted and three years after the initial announcement of the deal, the Commission cleared Korean Air’s acquisition of Asiana conditional upon the remedies offered by Korean Air. The transaction was notified to the Commission on 13 January 2023. The Commission later opened an in-depth investigation and issued a SO to Korean Air in May 2023. Both companies are full-service carriers with domestic and international operations in passenger and cargo air transport and are both headquartered in South Korea. In its SO, the Commission expressed concerns that the merger would have negative impact on the competition in the market for services of air cargo transport between Europe and South Korea as well as passenger air transport on the routes between Seoul and the European destinations of Barcelona, Paris, Frankfurt, and Rome. The merger would have led to Korean Air becoming the largest carrier on the relevant routes and it would have removed an important competitive pressure.

Korean Air offered remedies including Korean Air’s divestment of Asiana’s global cargo freighter business and that Korean Air make available to rival airline T’Way the necessary assets to start operating the four overlap routes to Barcelona, Paris, Frankfurt, and Rome. Korean Air also committed to await the completion of the merger until T’Way has started operating the relevant routes. These commitments were deemed sufficient by the Commission to address its concerns of distortions in the markets.

On the brink of summer, the Commission also announced early July that it had approved the acquisition of  ITA Airways by Lufthansa and the Italian Ministry of Economy and Finance subject to remedies offered by the parties to address the Commission’s concerns regarding certain short-haul routes, long-haul routes and the airline’s dominant position at Milan Linate airport. The remedies include commitments to provide necessary assets and slots to enable rivals to operate non-stop and one-stop flights between key Italian cities and Central Europe. Additionally, they will facilitate agreements to improve rivals’ competitiveness on long-haul routes, including interlining agreements or slot swaps.

Overall, while the transactions and their timing could be coincidental, the Commission’s in-depth investigation of these three cases might also suggest a heightened scepticism towards large consolidations in the airline market, compared to what we’ve observed in its past merger control practices.

The Commission’s press releases can be found here, here and here.

On 20 February 2024, the Commission conditionally approved the joint venture between two mobile network operators in Spain: Orange and MásMovil. Orange has been a full mobile network operator on the national Spanish market, while MásMóvil was a regional hybrid mobile network operator.

The transaction was notified to the Commission on 13 February 2023, and on 3 April 2023 an in-depth investigation was opened by the Commission. The Commission was initially concerned that the creation of a joint venture by Orange and MásMóvil would restrict competition in the retail markets for the supply of mobile and fixed internet services in Spain. Before the transaction, there were four active mobile network operators (MNOs) in Spain, whereas Orange and MásMóvil were the second and fourth largest operators, respectively. Telefónica and Vodafone are the two other players. The Commission’s primary concern was therefore that (i) the transaction would create the largest operator by customer numbers in Spain, (ii) the transaction would eliminate a close and important competitor, and (iii) the transaction could potentially lead to price increases for Spanish consumers.

To address the Commission’s concerns, the parties have committed to a package of remedies which will inter alia strengthen the existing player Digi Communications (“Digi”). Today, Digi is the largest mobile virtual network operator (MVNO) in Spain. However, the parties have committed to selling certain spectrum held by MásMóvil to Digi, which will enable Digi to build its own mobile network and enter the market as an MNO. Moreover, Digi is ensured an opportunity to enter a national roaming agreement with the joint venture in the future, to complement Digi’s network. Taking these commitments into consideration, the Commission concluded that the transaction would no longer pose a risk of anti-competitive effects.

The Commission’s approval prompts the question of whether we are observing a shift in the telecom sector towards a more lenient approach to mobile mergers. Over the past decade, both national authorities and the Commission have generally been hesitant about consolidation in the telecom market, including 4-3 mobile mergers. However, operators have been advocating for change, highlighting the need for regulations that facilitate resource consolidation to stimulate infrastructure investments. They have emphasized that consolidation is crucial for the development of 5G networks. Therefore, the approved merger between Orange and MásMóvil could signal a shift towards a more accommodating merger control framework.

However, it must be noted that Orange and MásMóvil have committed to sell spectrum to make way for Digi as a new, fourth MNO. This seems to align with the previous approach of national authorities’ and the Commission from 2015 and 2016, where the creation of a fourth operator via structural divestments was a condition for the approval of several mobile mergers. As Commissioner Vestager explicitly stated in relation to the proposed merger between Hutchison and Telefónica in the UK in 2016, “an effective remedy would, for example, have been the creation of a fourth mobile network operator” (available here). However, the merger was blocked as no such remedy was agreed. Hence, considering that the merger between Orange and MásMóvil is approved subject to commitments of spectrum divestiture, it remains unclear whether competition authorities have heard the companies call for a change, or whether the authorities will continue to apply the same restrained approach.

The Commission’s press release is available here.

On 12 April 2024, the Commission released a statement announcing that it has approved Illumina’s plan to divest GRAIL following the restorative measures requiring Illumina to unwind its completed acquisition of GRAIL.

As part of the restorative measures adopted by the Commission in October 2023, Illumina submitted a divestment plan for the disposal of GRAIL under the EU Merger Regulation (‘EUMR’) (see our previous Competition law highlights H2 2022, H1 2023 and H2 2023, which can be found here, here and here, for a summary of this case and the Commission’s prohibition). The Commission has approved the divestment plan as it found that the plan met all the conditions set out in its decision imposing restorative measures on Illumina and GRAIL.

The Commission’s press release can be found here.

As Illumina appealed the judgement of the General Court, where the General Court upheld the Commission’s jurisdiction to review the acquisition of Grail by Illumina, the question of whether the Commission had jurisdiction over this acquisition awaits the verdict of the Court of Justice.

On 21 March 2024, Advocate General Emiliou issued his opinion, proposing that the Court of Justice should set aside the General Court’s judgment and annul the Commission decision accepting the referral and the requests to join it, and the Commission’s information letter. According to the AG’s Opinion, the General Court erred in its interpretation and application of Article 22 of the Merger Regulation by accepting the French Competition Authority’s referral request to review the proposed merger, despite the referring Member State authority not having the competence to review it. He argues that the General Court interpreted Article 22 of the Merger Regulation too broadly without adequate support in general rules of interpretation, undermining fundamental principles of EU law. The interpretation significantly extends the scope of the Merger Regulation and of the Commission’s jurisdiction.

While the Advocate General’s Opinion is not binding on the Court of Justice, case law indicates that these opinions play a significant role in the Court’s decision-making process. Statistically, the opinion considerably boosts the likelihood of the Court of Justice overturning the General Court’s judgment and annulling the Commission’s decision on the referral request. It will be intriguing to see whether the Court of Justice upholds the General Court’s judgment or aligns with Advocate General Emiliou’s opinion on this matter.

The Commission’s press release can be found here.

On 21 March 2024, the U.S. Department of Justice, along with 16 other state and district attorneys general, filed a civil antitrust lawsuit against Apple, accusing the company of monopolising or attempting to monopolise the smartphone markets, in violation of Section 2 of the Sherman Act.

The lawsuit, filed in the U.S. District Court for the District of New Jersey, involves the claim that Apple unlawfully maintains a monopoly over smartphones by selectively imposing contractual restrictions on developers and withholding crucial access points from them. Apple is accused of undermining apps, products, and services that could potentially reduce users’ reliance on the iPhone, promote interoperability, and decrease costs for consumers and developers. According to the claim, Apple uses its monopoly power to extract more money from various stakeholders, including consumers, developers, content creators, artists, publishers, small businesses, and merchants.

Apple’s alleged anticompetitive conduct involves several elements: Apple is charged with obstructing the growth of innovative super apps, which have broad functionality and could make it easier for consumers to switch between competing smartphone platforms. The company is also accused of suppressing the development of mobile cloud streaming services, which would allow consumers to enjoy high-quality video games and other cloud-based applications without the need for expensive smartphone hardware. Additionally, Apple is alleged to have degraded the quality of cross-platform messaging, making it less innovative and less secure for users, thereby forcing its customers to continue buying iPhones. The tech giant is also accused of limiting the functionality of third-party smartwatches, leading to significant out-of-pocket costs for users who purchase the Apple Watch but stop buying iPhones. Lastly, Apple is accused of preventing third-party apps from offering tap-to-pay functionality, thereby inhibiting the creation of cross-platform third-party digital wallets.

In addition to these examples, the lawsuit alleges that Apple’s conduct affects various sectors such as web browsers, video communication, news subscriptions, entertainment, automotive services, advertising, and location services. In response, on 21 May 2024, Apple requested a pre-motion conference before filing a motion to dismiss the lawsuit. Apple argues that the lawsuit is outside the scope of antitrust law and fails to adequately allege monopoly power in a relevant market, anticompetitive conduct, and anticompetitive effects. However, the claimant countered Apple’s request with a letter on 30 May 2024, arguing that Apple’s conduct is unlawful under straightforward antitrust principles. They are urging the court to reject Apple’s motion.

The case against Apple is part of a broader trend of increased scrutiny of tech giants’ business practices, reflecting a surge in investigations and enforcement actions by public authorities in the U.S and Europe. These actions are primarily focused on allegations of abuse of dominant position by large tech companies.

The DoJ’s lawsuit has overlapping elements with the EU Commission’s ongoing cases against Apple, including the Commission’s ongoing investigation into whether Apple has abused its dominant position in the markets of mobile wallets on iOS devices by limiting access to “Near-Field Communication” (NFC), or “tap and go” technology.

The legal proceedings in the U.S and the EU highlight the international attention Apple’s business practices are attracting. The outcome of the U.S lawsuit, in particular, could set significant precedents for how antitrust laws are applied to technology companies globally.

This spring, the Danish Parliament has adopted significant changes to the Danish Competition Act. One of these changes includes the introduction of a merger “call-in” option, giving the Danish Competition and Consumer Authority (“DCCA”) the power to impose notification of certain mergers even though the turnover thresholds are not met. Hence, effective from 1 July 2024, the DCCA is given a similar competence as the Norwegian Competition Authority.

Currently, the parties to a concentration are obliged to notify the DCCA of a merger if (a) the undertakings concerned have a combined annual turnover in Denmark that exceeds DKK 900 million (around EUR 120.6 million) and at least two involved undertakings each have an annual Danish turnover of more than DKK 100 million (around EUR 13.4 million) or (b) one of the involved undertakings has a Danish turnover of at least DKK 3.8 billion (around EUR 509.2) and at least one of the other undertakings has a global turnover exceeding DKK 3.8 billion (around EUR 509.2 million).

Pursuant to the amendment, transactions below these thresholds are at risk of being “called in” for notification if two cumulative conditions are met:

1. The combined annual turnover in Denmark of the participating undertakings amount to at least DKK 50 million (about EU 6.7 million), and
2. the DCCA considers there to be a risk of significant impediment of effective competition if the transaction is concluded.

The DCCA must adhere to certain deadlines to require notification of a merger below the turnover thresholds. The DCCA must impose notification within 15 business days after the Authority became aware of the merger. Generally, the DCCA cannot exercise its “call-in” option later than three months after the earliest of the following dates: (i) the signing of a merger agreement, (ii) the publication of a takeover bid, or (iii) the acquisition of a controlling interest. However, in the event of special circumstances, such as attempts to hide the merger from the DCCA to avoid notification, the deadline may be extended by up to six months after completion of the transaction.

As mentioned, the amendment is effective from 1 July 2024, and the “call-in” option will not apply retroactively. Hence, (i) a transaction already agreed (signed), (ii) a takeover bid that has been published, or (iii) controlling interests that have been acquired, are not subject to the new regulation.

In addition to the introduction of a “call-in” option, the amendments to the Danish Competition Act also include a new market investigation tool. This allows the DCCA to investigate market structures and impose behavioural or structural remedies, irrespective of any competition law infringement. Denmark has therefore already adopted a tool similar to the one proposed in Norway, as discussed in Competition law highlights – H1 2023.  Sweden is also considering a new tool to address structural market problems. Thus, it appears that we are witnessing a trend in Nordic competition law, in which Denmark is the first to empower the Competition Authority to conduct market investigations.