Competition law highlights – H2 2022
This newsletter gives an overview of highlights in the field of competition law from the second half of 2022, both in Norway and at the European level.
The competition authorities have kept up their activity so far during the second half of 2022, although fewer decisions have been made by the Norwegian Competition Authority (“NCA”) save for one decision imposing fines in total of 545 MNOK to Norway’s largest publishing houses and a database for allegedly illegal exchange of information.
The Norwegian government has taken further measures to improve competition in the grocery sector, including adopting a proposition for a regulation that prohibits price discrimination at the supplier level. The NCA has given feedback on the public hearing concerning the implementation of the Whistleblower Directive in Norway and undertaken to apply the Commission’s Guidelines on collective agreements to those who are solo self-employed.
The Norwegian Competition Appeals Tribunal (“CAT”) has reviewed the NCA’s disclosure requirements imposed on two companies in the grocery sector. At the beginning of 2023, the Supreme Court will assess a merger case for the first time (Schibsted/Nettbil). Further, the Supreme Court is also scheduled to assess the legality of a third party-financed class action complaint.
Looking abroad, the EU Commission has launched a public consultation on the draft revised Market Definition Notice. The current notice has not been changed since 1997 and the updated draft is intended to provide more guidance on the assessment of digital markets. The Commission has withdrawn the Antitrust COVID Temporary Framework that allowed the Commission to provide companies with comfort letters, and adopted an antitrust Informal Guidance Notice. The notice is envisaged to provide companies with more guidance concerning the application of EU competition law to novel cases and questions. The Commission has also launched a draft consultation paper of its evaluation of the competition rules for the assessment of Technology and Transfer Agreements (“TTBER”).
Included below are also the highlights of the General Court’s decision regarding Google’s challenge of the Commission’s infringement decision from 2011 and the ruling concerning the Commission’s jurisdiction to review the acquisition of GRAIL by Illumina. Furthermore, Advocate General Kokott has delivered her opinion in the Towercast case. The merger raise highly relevant issues regarding how a concentration which fell below the merger thresholds can constitute a breach of the prohibition against abuse of a dominant position.
Amongst the mergers the Commission has approved this fall is the merger between the mobile payment companies MobilePay and Vipps. The Commission’s decision includes a thorough assessment of the relevant markets, including the market definition for mobile payment services, e-Commerce checkout solutions, retail banking, card issuing, merchant acquiring and payments systems and the merger’s potential horizontal and non-horizontal effects in these markets.
The Commission has also approved another Norwegian linked transaction; the salmon producer SalMar’s acquisition of NTS, conditional on commitments where NTS undertook to divest one of its subsidiaries, active in the market for the production of Icelandic farmed salmon.
Please find some selected highlights below.
COMPETITION LAW IN NORWAY
Norwegian laws and regulation
On the 25 of October the Ministry of Trade, Industry and Fisheries published a consultation paper proposing to adopt a regulation that prohibits suppliers to impose discriminating purchasing conditions towards customers in the grocery industry in Norway.
It is currently envisaged that the regulation will only apply to the largest market players at supplier level that hold significant market power. The current draft outlines a presumption that undertakings holding a market share of over 40 % will be presumed to hold significant market power, while undertakings holding a market share between 30 to 40 % will have to be assessed on a case by case basis. In order to rule out smaller market players, it is proposed that the market share is combined with a turnover threshold. An alternative and more flexible approach includes an assessment of the power balance between the supplier and their trading partners, taking into consideration e.g. the trading partners’ dependency on the products offered by the supplier.
The first alternative proposed in the consultation paper is a regulation that prohibits objectively unjustified discrimination. The prohibition will entail that it will not be necessary to demonstrate an anti-competitive effect on the market. Justifiable reasons for different prices can be savings in distribution cost due to economies of scale, while exclusivity terms and loyalty promoting discounts will not qualify.
The second alternative proposal is a regulation that prohibits anti-competitive price discrimination. Companies will be required to assess the potential cumulative effects of multiple supplier agreements together and cannot assess the effects of each agreement individually.
As the current proposed regulations could have a more significant impact on competition than intended and necessary, the Ministry of Trade, Industry and Fisheries propose a “safe harbour” exemption for smaller market players. In addition, it is proposed that instead of imposing fines for infringements, the Norwegian Competition Authority will issue prohibition orders to bring infringements to an end.
The consultation paper also presents a possibility of giving the NCA a ‘market investigation tool’ that would allow the NCA to address competition concerns in different markets, such as the grocery market, without any finding of an infringement of competition rules. However, this ‘tool’ will according to the authorities be further dealt with in a separate consultation paper during the winter of 2023.
The deadline for all interested parties to submit a reply was 16 December 2022. This also includes initial comments on the ‘market investigation tool’.
The consultation paper can be found here.
In recent years, the strengthening of competition in the grocery sector in Norway has been high on the political agenda. The following initiatives have either been carried out or mentioned in Q3/Q4 2022 to improve competition among market players:
- Greater resources have been allocated to the Grocery Supervisory Authority (‘Dagligvaretilsynet’) – an Authority established in January 2021 to enforce the Act on Good Trading Practices – in the National Budget 2023.
The press release can be found here.
- The Ministry of Trade, Industry and Fisheries published a consultation paper proposing to adopt a regulation that prohibits suppliers to impose discriminating purchasing conditions towards customers in the grocery industry in Norway. Please find further details about this proposal in the article above.
- It is stated in a press release of 25 October 2022 that the government will evaluate the effects of vertical integration and the grocery chains’ own brands (‘EMV’) on the competition, selection and price levels in the grocery sector. The Norwegian Ministry of Trade, Industry and Fisheries has started the evaluation, and according to the press release in October, an external assignment will be announced shortly.
The press release can be found here.
- The government is reviewing several measures to ease access to attractive grocery locations in the grocery sector. One of the initiatives is the proposal of a regulation to reduce the use of restrictive covenants and exclusivity agreements for lease agreements that may limit the competition in the grocery sector. The public hearing on the draft consultation paper was completed on 5 October 2022.
The NCA has in its response to the consultation paper taken a positive view towards the proposed regulation but has also pointed out that the competitive challenges in the market can be solved through the adoption of the proposed market tool and that a regulation therefore might not prove necessary.
The entire response of the NCA can be found here. Further information on the timeline for the proposal is not currently available.
The public hearing on the implementation of the Whistleblowing Directive in Norway, i.e. Directive (EU) 2019/1937 was completed on 16 September 2022. The directive aims to provide minimum standards of protection across the EU to whistleblowers raising concerns about possible breaches of certain Union law to their employer. An effective whistleblower mechanism and protection may better ensure compliance with laws and regulations, and thereby contribute to ensuring that competition takes place on equal terms. The consultation paper suggests implementation of the directive in a new act on whistleblowing in the EEA, supplemented with regulations on specific topics.
It follows from the NCA’s reply of 30 September 2022 that the Authority would prefer one single aggregated whistleblowing Act, which also includes the Directive 2019/1937, instead of the suggestion to distinguish between whistleblowing on EEA regulations on the one hand and other harmful practices on the other. According to the NCA, this will contribute to a clear, distinct and accessible set of rules on whistleblowing, similar to the Swedish approach.
The NCA further suggests separating reported breaches of internal conditions related to the ‘inner life’ of the workspace and external conditions, i.e. where the firm’s business practice may be unlawful, such as infringements of competition rules. Whistleblowing related to internal and external conditions are, according to the NCA’s reply both important – but will require different handling, routines and notification mechanisms.
To ensure that the reported practice is followed up and later improved, the NCA suggests the implementation of a national whistleblower representative. Such a representative could also assist in forwarding the reported breach to the correct regulatory authority where necessary.
The NCA also underlines the importance of compensating whistleblowers who suffer significant losses as a result of reporting illegal practice. It further suggests a strengthening of companies’ incentives to self-report breaches of law.
More information about the consultation process and the NCA’s reply can be found here.
In a press release published on the NCA’s website on 19 of October, the NCA stated that it will adopt its future assessments of collective bargains by self-employed persons according to the Commissions newly published Guidelines on collective agreements by the solo self-employed. The background for the statement and guidelines is that certain self-employed persons need to be able to bargain collectively for their salary and working conditions without risking that cooperation during negotiations violates the prohibition set out in Article 101 TFEU and similar national competition legislation.
The new guidelines will only apply for persons who are solo self-employed working completely on their own, do not employ others and are in a situation comparable to workers. This includes solo self-employed persons who are economically dependent on one counterparty for a majority of their work income, work side-by-side with workers that work for the same counterparty and provide their commercial services through a digital labour platform e.g. Foodora and Uber.
The guidelines clarify that the Commission will refrain from enforcing EU competition rules against collective agreements falling within the scope of the guidelines. It is only collective negotiations and agreements concerning the working conditions of the solo self-employed that are covered, and other agreements e.g. those concerning prices imposed on consumers are not covered by the guidelines.
The press release from the NCA can be found here and more information about the guidelines can be found here.
Norwegian case law
In order to survey and control structural changes in specific markets, the NCA may impose disclosure requirements on individual firms with regard to mergers and acquisitions falling below the general notification thresholds. This allows the NCA to assess whether to request a notification of the transaction. Such disclosure requirements have inter alia been imposed on the Norwegian grocery store chains and were in March 2022 extended to a group level. In practice, this means that all companies within the group will have to inform the NCA about a number of transactions which the NCA believes could have an impact on the competition in the grocery market.
Coop and Joh Johannson Invest AS (an investment company owned by the largest shareholder in Norgesgruppen) filed complaints to the Competition Appeals Tribunal regarding the extended disclosure requirements and claimed, among other things, that the requirements are disproportionate and go beyond what is necessary.
However, in June 2022 the complaints proved unsuccessful. The CAT stated that its competence is limited to a review of legality, including an assessment of whether the extended disclosure requirements are (i) tainted with procedural errors, (ii) based on correct facts, and (iii) in conflict with the general doctrine of abuse of authority, including whether the order is manifestly unreasonable. According to the CAT, there had been no procedural errors. Further, the disclosure requirement could not be characterized as obviously unreasonable for the firms. Overall, the decision from the CAT confirms that the NCA has a wide discretion to assess the necessity of disclosure requirements.
In 2021, a class action by “Alarmkundeforeningen”, an association representing Norwegian alarm customers, was brought against the two largest players in the Norwegian home alarm market after a decision from the NCA where the alarm companies were fined for anticompetitive behaviour. The case is funded by Therium Nordic – a global litigation funding firm, and is organized as a class action that does not require registration of class members under the Dispute Act section 35-7.
On 25 November, the Supreme Court’s Appeals Selection Committee decided that the Supreme Court will assess whether to approve the investor-financed damage claim under the current terms, where Therium Nordic will finance the class action in exchange for a cut of the class action participants’ compensation if the court rules in favour of the association. The Supreme Court will also assess whether the claimants can request pre-approval of the potential compensation from the court as legal costs.
The decision from the Supreme Court’s Appeals Selection Committee can be found here.
Recent practice from the Norwegian Competition Authority
The NCA has been investigating an industry association since 2020. The investigation was initiated due to suspicion of a possible infringement of section 10 of the Competition Act on anticompetitive agreements and concerns about a possible exchange of competitively sensitive information. According to a press release, the NCA decided to close the case after an overall assessment of the available information gathered during the investigation.
The press release can be found here.
On 29 November 2022 the NCA announced that it had adopted an infringement decision on the publishing companies Gyldendal, Cappelen Damm, Vigmostad & Bjørke and Aschehoug. The decision also imposes a fine upon Bokbasen, which sells and distributes digital products such as subscriptions on books and audio books. The four competitors have allegedly exchanged future prices on books and other competitively sensitive information via a subscription from Bokbasen named “Mentor Forlag”.
The NCA carried out a dawn raid at the five companies’ facilities in January 2018 and afterwards reviewed an extensive amount of physical and digital material.
In its press release, the NCA states that the companies operate in a highly concentrated market and account for around 90 % of the turnover. Through its investigation, the NCA states it has found convincing evidence that the companies have shared competitively sensitive information through a digital database and thereby given each other full overview of each other’s market behaviour. It is the NCA’s view that this practice can have led to higher prices and a reduced choice for the consumers.
The entire decision of the NCA is not yet public, but the NCA’s press release can be found here.
COMPETITION LAW IN EUROPE
EU laws, regulations and guidelines
Following the 2020 evaluation of the current Market Definition Notice (adopted in 1997), the Commission published a draft revised Market Definition Notice (the “Notice”) on 8 November 2022. The main objective of the evaluation has been to offer undertakings more guidance and legal certainty for several key market definition issues that can arise during a merger procedure or an antitrust case.
With regard to the general definition of the relevant market, the Notice states that the parameters it might consider in addition to price could include innovation, quality and availability. If the case calls for a forward-looking assessment of the market, the Commission may take into consideration expected transition in the structure of the market, e.g. due to market entry by potential competitors. This approach may lead to deviating market definitions over time and on a case by case basis.
The Notice is also envisaged to provide more guidance on the assessment of digital markets, such as multi-sided platforms.
The Commission emphasized that the proposed changes are supposed to provide additional guidance on the principles of market definition, quantitative techniques, sources of evidence and the conditions to define geographic markets.
All interested parties are invited to submit their comments by 13 January 2023.
The Commission’s press release with further reference to the draft revised Market Definition Notice can be found here.
The EU Digital Markets Act (DMA) entered into force 1 November 2022. The Regulation introduces rules for platforms that act as “gatekeepers” in the digital sector. The DMA applies to platforms that have a significant impact on the internal market, serve as an important gateway for business users to reach their end users, and which enjoy or could foreseeably enjoy, an entrenched and durable position. The conditions are cumulative, and the first condition is met where the company achieves an annual Union turnover equal to or above 7.5 billion EUR in each of the last three financial years, or where the company’s average market capitalisation or equivalent fair market value amounted to at least 75 billion EUR in the last financial year. Non-compliance will be met with fines up to 10 percent of the company’s total worldwide annual turnover, or up to 20 percent in the event of repeated infringements. Please revert to our previous newsletter to read more about the Act.
The DMA’s relevance in the EEA Agreement is still under consideration, but is likely to be incorporated. Norway will not be required to adopt the Regulation before any incorporation into the EEA Agreement has been decided.
The Digital Markets Act is available here.
On 3 October 2022, the EU Commission withdrew the Antitrust Covid Temporary Framework. This was adopted during the Covid pandemic, and allowed the Commission to assess business cooperation projects in response to situations of urgency stemming from the coronavirus outbreak. Furthermore, it allowed the Commission to provide companies with written comfort (“comfort letters”) on specific and well-defined cooperation projects falling within the scope of urgency stemming from the pandemic. Due to the changed situation, the Commission no longer finds the Framework necessary.
However, on 3 October 2022, the EU Commission adopted a more flexible antitrust Informal Guidance Notice which allows businesses to seek informal guidance on the application of EU competition rules to novel or unresolved questions. Businesses can therefore seek guidance on the legality of their actions under EU competition rules. Whilst the 2004 Informal Guidance Notice provided for strict criteria, the updated notice allows the Commission to provide informal guidance to businesses on issues previously not covered, such as situations of crisis or emergencies. Hence, the updated notice increases the Commission’s flexibility to address a wider range of issues in guidance letters, and broadens the definition of “novel” issues where there is no clarification in the EU legal framework.
The press release can be found here.
On 25 November 2022, the Commission launched a Call for Evidence, seeking feedback on the scope and content of its evaluation of the Technology Transfer Block Exemption Regulation (“TTBER”) and the related guidelines, which are set to expire on 30 April 2026. The TTBER exempts certain categories of technology transfer agreements from the prohibition on anticompetitive agreements laid down in Article 101 (1) of the Treaty on the Functioning of the European Union. Its aim is to strengthen the incentives for research and development, facilitate the diffusion of technologies and promote competition.
The purpose of the evaluation is to gather evidence on how the TTBER has been applied by companies active in the EU and other interested parties. Based on submitted views, the Commission will decide whether to renew the current TTBER, revise it or let it expire.
More information about the Commission’s Call for Evidence can be found here.
The Council of the European Union and the European Parliament formally adopted the Regulation on foreign subsidies distorting the internal market on 28 November 2022. The background for the new regulation is the potentially non-level playing field created by the fact that strict rules apply to EEA companies on state aid, while companies outside the EEA are free to receive state aid (only subject to the WTO rules) and compete on the EEA market.
The Regulation will give the Commission the power to investigate financial contributions granted by non-EU governments to companies active in the EU. If the Commission finds that such financial contributions constitute distortive subsidies, it can impose measures to redress their distortive effects.
The Regulation introduces three tools:
- A notification-based tool that allows the Commission to investigate a financial contribution by a non-EU government where the acquired company, one of the merging parties or the joint venture generate an aggregate EU-wide turnover of at least €500 million and the transaction is subject to a foreign financial contribution by a non-EU government exceeding €50 million in the prior three years. If the thresholds are met, the Regulation impose a mandatory ex ante filing and standstill obligation for companies involved.
- A notification-based tool to investigate public procurements where companies participating have received a foreign financial contribution from a non-EU government. A mandatory ex ante filing and obligation apply for companies in public procurements where the tender has an estimated contract value of at least €250 and the bidder(s) has received a foreign financial contribution of at least €4 million per third country.
- Grants the Commission with a power to ex officio investigate and review all other market situations involving a potentially distortive foreign subsidy or request an ad-hoc notification for smaller concentrations and public procurement procedures.
The Commission can impose fines on companies that breach this obligation, which may reach up to 10 % of their aggregated turnover. Finally, the Commission can prohibit a subsidised concentration or the award of a public procurement contract to the subsidised bidder.
Companies often involved in mergers and acquisitions, should prepare for the new legislation by identifying any financial contributions received from non-EEA governments in the last three years. The next step is to assess if they are considered subsidies under this regulation, and if they are, possible arguments as to why they are either not distortive of the EU internal market or any distortions are outweighed by possible benefits.
The Regulation will enter into force 20 days after publication in the Official Journal, which is expected in January 2023. The Regulation will become directly applicable across the EU six months after its entry into force. The notification obligations will start to apply nine months after. An implementing regulation is expected to be adopted before summer 2023 (after a public consultation, which will take place in the coming months).
More information about the Regulation can be found here.
EU Comission, General Court and Court of Justice – notable decisions
In an opinion delivered on 13 October 2022, Advocate General Kokott concluded that although the assessment of potential anti-competitive effects of a concentration is attributed primarily to merger control law this does not exclude the ex-post control of the conduct of a dominant undertaking in connection with such a concentration.
The French company TDF Infrastructure Holding, the former incumbent, acquired control over one of the two remaining market players, Itas. Although TDF held the larger market share of the three parties, the merger did not meet the requisite merger turnover thresholds according to the EU Merger Regulation (EUMR) or under the French national rules.
Towercast, the third player in the market, argued that the acquisition was an abuse of a dominant position due to a strengthening of TDF’s already dominant position on the upstream and downstream wholesale markets for digital broadcasting. The complaint was rejected both by the French Autorité de la concurrence and on appeal to the Court of Appeal in Paris. The latter referred the following question to the Court of Justice: can a competition authority subject a concentration (where one party has a dominant position) to an ex-post investigation for abuse of a dominant position where national and EU merger thresholds are not met and consequently no ex-ante assessment had been made.
Advocate General Kokott concluded that an ex-post investigation can take place under these circumstances and points out a gap in protection, which has emerged in recent years in the coverage and control of innovative start-ups for example in internet services or medical technology. The turnover of targets at this early stage of development is often small and the deal falls below merger thresholds. These new companies are then acquired by large established powerful undertakings who may be able to eliminate them as competitors to maintain or strengthen their own market position. Article 102 is considered in the opinion to step in and act as a second sweep to capture and control these types of concentrations.
This opinion is not binding on the General Court and judgement will be given at a later date.
The full opinion can be found here.
On 14 September 2022, the General Court partially upheld Google’s challenge to the Commission’s former infringement decision of 18 July 2018, where it fined Google for an abuse of its dominant position by imposing anticompetitive contractual restrictions on manufacturers of mobile devices and on mobile network operators, in several cases dating back to 2011.
The Court, whose reasoning differed in certain aspects from the Commission, considered it appropriate, in order to better reflect the gravity and duration of the infringement, to impose a fine of €4.125 billion on Google instead of the initial fine of almost €4.343 billion. The Court, along with the Commission, took into account the intentional nature of the implementation of the unlawful practices and of the value of relevant sales made by Google in the last year of its full participation in the infringement.
The Court upheld the Commission’s decision in relation to the definition of the relevant markets and in the subsequent assessment of Google’s dominant position on some of those markets. However, it did not agree with the finding that the restrictions at issue were abusive and held that the Commission’s analysis in relation to examination of the coverage of the contested practice and the results of the ‘as efficient competitor’ test were based on errors of reasoning and a lack of evidence.
It also upheld Google’s plea alleging that its rights of access to the file were infringed and that its right to be heard had not been respected. The Court held that the Commission had infringed Google’s rights of defence and thus deprived the company of the opportunity to develop its arguments via a hearing, which should have taken place.
The full decision can be found here.
On 1 August 2022, following a national reference from Germany, the Court of Justice held that the products concerned by the Commission’s Article 101 infringement decision of 2016 against Daimler, MAN SE and Iveco Magirus AG, were to be determined by reference to the agreements and activities covered by that particular cartel.
It noted that the members of the cartel themselves voluntarily concentrate their anti-competitive actions on the products covered. Therefore, in order to determine whether specialised trucks, in particular household refuse collection trucks, fell within the scope of products covered, reference had to be made to both the operative part and the statement of reasons. The definitions of the concepts of “truck” and of “special purpose vehicle” in various acts of EU secondary legislation were not relevant.
In that regard, the Court found that the decision related to the sale of all medium and heavy trucks, both rigid trucks as well as tractor trucks, save for military vehicles. The sole factor for determining whether a truck fell within that decision was its weight. That fact that a different definition was included in the Commission’s request for information to the Parties did not alter this conclusion. The Court held that the sole purpose of the information request was to enable the Commission to obtain the information necessary to verify the existence and scope of a specific factual and legal situation, not to define or stipulate the products covered by the anticompetitive conduct.
The Court also noted that in the context of a settlement procedure initiated pursuant to Article 11(6) of Regulation No 1/2003 that the Commission may reward the cooperation of the undertakings involved in the procedure, but not negotiate either the question of the existence of an infringement of the EU competition rules or the appropriate sanction.
Finally, the Court observed that, while the Commission enjoys a broad discretion as regards the methodology for calculation of fines for breaches of EU competition rules, that discretion is limited, by established criteria in Article 23 (2) of Regulation No 1/2003 and any rules of conduct the Commission has stipulated in its own notices and guidelines.
The full decision can be found here.
MERGER CONTROL
EU Commision, General Court and Court of Justice – notable decisions
On 13 July 2022 the General Court upheld the Commission’s jurisdiction to review the acquisition of Grail, a U.S. biotech company, by Illumina, a U.S. company specialising in next generation sequencing systems for genetic and genomic analysis including the development of cancer screening tests. Following a complaint from an anonymous third party, the Commission invited several of the EU Member States to refer the transaction under Article 22 of the Merger Regulation, which they did, and it accepted, even though merger control thresholds were not met under the EUMR nor in any Member State.
The decision confirms the Commission’s expanded referral policy that encourages Member States to refer “any concentration” to the Commission where the parties’ competitive importance is not wholly represented by their turnover. The underlying rationale is to prevent so-called “killer acquisitions” where for example, established technology companies acquire small but innovative start-ups that nonetheless have significant competitive potential.
The Court acknowledged, in principle, that the Commission could be competent in such a situation and gave clarification on the time limits, noting that referral requests must be made within 15 working days of concentrations being ‘made known’ to the Member State concerned. In that regard, the Court found, that ‘made known’ should be understood as the active transmission of information which is appropriate for the Member State to be able to assess, on a preliminary basis, whether the necessary conditions for the purposes of a referral have been satisfied.
Merging parties will need to factor in referral risk when considering deal timing and in particular consider an extended longstop date where such a risk could conceivably arise. The Article 22 standstill obligation applies only after the parties have been informed of a referral request. Parties will therefore need to review whether to close and begin integration given the risk of a late referral.
Illumina has announced its intention to appeal the Court’s judgment. It is not known yet whether the Court of Justice will share the Commission’s interpretation of Article 22 EUMR. The Commission blocked the merger in September 2022 and sent a statement of objections to the parties.
The full decision can be found here.
In a press release on 31 October 2022, the Commission reported that it had approved SalMar’s, one of the world’s largest producers of farmed salmon, proposed acquisition of NTS, another leading farmer of Icelandic salmon.
The process of farming salmon comprises the growing of smolt on land to harvesting full-grown salmon in seawater. While SalMar has farming operations in Iceland and along the coast of Norway and Scotland, NTS has farming operations in Iceland and in North Norway.
In its decision, the Commission concluded that there is at separate market for farmed salmon and wild salmon. In addition, the Commission found that farming and primary processing of salmon constitute a separate product market from secondary processing of salmon. The Commission’s market investigation showed that the farming and primary processing of Icelandic and Norwegian farmed salmon constitute two separate markets. This was partly based on the different external factors such as water temperature and risk of disease, but also the quality of the salmon, shipping costs and indications that customers preferred to purchase salmon with a specific geographical origin. For the relevant decision, the Commission found that the geographical market for both Norwegian and Icelandic salmon was EEA wide in scope.
In its competitive assessment, the Commission raised concerns that the acquisition could reduce competition in the market for the supply of Icelandic farmed salmon since the transaction would have reduced the number of active farmers of Icelandic salmon from three to two. Following the Commissions’ concerns, SalMar offered to divest Arctic Fish, a subsidiary to NTS active in the market for farming of Icelandic salmon. The divestment entailed that the entire Icelandic farming business of NTS was carved out from the transaction, leading to no overlap between the two parties in the market for farmed Icelandic salmon.
With regard to the market for Norwegian farmed salmon, the Commission investigated potential coordinated effects resulting from the transaction. The Commission concluded that the parties’ moderate market share along with the current competition from numerous other suppliers meant that the transaction would not give rise to serious competition concerns.
The Commission approved the proposed transaction conditional on this structural commitment offered by the parties.
The press release from the Commission can be found here.
On 21 October, the Commission approved the merger of MobilePay, a Danish mobile payment company, and Vipps, a Norwegian mobile payment company.
The transaction concerns the market for payment services. The Merging Parties are active within different types of payments, hereunder payments between individuals (P2P payments), payments made in physical store (POS payments) and online payments (e-Commerce payments).
In its decision, the Commission also considered the effects of the transaction in the market of the owner banks (i.e. Danske Bank, DNB, Balder, Eika, and SB1), more specifically in the market for retail banking services, card issuing, merchant acquiring and payment systems, as the proposed transaction is structured as a joint venture.
Market definition of the relevant activities of the parties of the transaction
The Commission made a thorough assessment of potential relevant markets. The merging parties offer several payment solutions. The Commission therefore assessed potential segmentation of payment services by payment situations, which has only implicitly been considered in past decisions. The Commission found that the relevant market for mobile payment services depended on the type of payment situation and that each of P2P payments, POS payments, e-Commerce payments and Invoice payments might form separate product markets.
Further, the Commission left open whether a separate market for invoice services to end-users via mobile wallets exists, or if the market was wider including other channels, as it would not change the outcome of the case.
In addition, the Commission assessed and found that separate markets existed for e-Commerce checkout solutions, retail banking, card issuing, merchant acquiring and payments systems. For retail banking, card issuing, merchant acquiring and payment systems, the Commission left open whether the plausible market could be narrower segmented.
Competitive assessment
The Commission found that the transaction was unlikely to raise any horizontal concerns, either between the merging parties or in the relationship between the merging parties and the parent companies.
The Commission also assessed potential non-horizontal effects of the merger and thoroughly reviewed all relevant vertical links following the transaction. The Commission concluded that no negative non-horizontal effects resulted from the merger; namely none of the vertical links created by the transactions resulted in the likelihood of input or customer foreclosure that could restrict competition.
Lastly, the Commission assessed whether the transaction was likely to lead to any anti-competitive coordinated effects between the parent companies in Norway. The Commission concluded that the transaction would not raise serious doubts in relation to potential coordinated effects of the joint venture.
The decision of the Commission has not yet been published.
Also contributing to this newsletter: Ida Hestetun Dokken, Kristina Cavanna, Sigrid Terøy Finnes and Kari Myklebust Ferstad
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