Category: Competition law

The cross border operations Directive: wider scope but more restrictions

By Segismundo Alvarez

In an increasingly changing and global business environment, companies need to be able to reorganise, also internationally, through cross border, mergers, divisions and conversions. At the same time, these operations pose a risk to stakeholders’ rights, and international reorganisations are increasingly seen by the public, NGOs and EU institutions as a means to avoid social and tax legislation, especially for transnational companies. This tension has been obvious in the preparation of the Directive on cross-border mobility (hereinafter: the new Directive)approved by the European Parliament on April 18th –see the final text here , subject only to the corrigendum procedure– that amends Directive 2017/1132 relating to certain aspects of Company Law (hereinafter: the 2017 Directive).

The key novelty is that the scope of regulated cross border transactions is broadened, as the new Directive adds cross-border divisions and conversions to the already harmonised regulation of cross-border mergers. The EU Court of Justice (hereinafter: ECJ) had declared that companies should be allowed to carry out cross-border transactions as a consequence of their right to freedom of establishment (cases SEVIC, Cartesio, VALE Építési and POLBUD) but the lack of regulation implied practical difficulties. Continue reading

The first preliminary ruling on Directive 2014/104/EU: Case 637/17 Cogeco

By Guilherme Oliveira e Costa

Introduction

With two major decisions, March 2019 was an interesting month with regard to the Court of Justice’s (also ‘ECJ’) case-law on private enforcement of competition law: Skanska (C-724/17) and Cogeco (C-637/17). This post will comment on the judgment in Cogeco, whereas a previous post analysed the Skanska ruling.

Cogeco is, in fact, an unsurprising judgment, particularly regarding its conclusions. But the decision itself contains a lot of interesting points, and was preceded by a noteworthy Opinion of AG Kokott. Additionally, its importance must not be underestimated since it is the first preliminary ruling on Directive 2014/104/EU (‘Damages Directive’) and, as pointed out by AG Kokott, there are still several questions connected with this Directive which need clarification. Moreover, this ruling also shows a very clear example on how unsuitably some national legal systems (the Portuguese one in the case at hand) treated private enforcement before the harmonisation implemented by the Damages Directive. Continue reading

The principle of economic continuity’s application on private enforcement: Case 724/17 Skanska

By Guilherme Oliveira e Costa

Introduction

With two major decisions, March 2019 was an interesting month with regard to the ECJ’s case-law on the private enforcement of competition law: Skanska (C-724/17) and Cogeco (C-637/17).  This post will comment on the judgment in Skanska, whereas a later post will analyse Cogeco.

Skanska is a challenging judgement that confirms that the competition enforcement system must be viewed as a coherent system where both public and private enforcement play a crucial and complementary role, which is demonstrated by the application of the principle of economic continuity to private enforcement. Moreover, it addresses one of the several issues that has not yet been harmonised regarding private enforcement: the responsibility for damages in private enforcement legal procedures. As such, Skanska may be a leading case in a private enforcement’s possible second stage of development in the aftermath of Directive 2014/104/EU. Continue reading

Neues aus dem Elfenbeinturm: February 2019

Radboud Economic Law Conference “New Directions in Competition Law Enforcement”

Radboud University, 24 May 2019. Deadline for abstract submissions: 22 February 2019.

Doctoral Workshop “Bilateralism versus Multilateralism”

University of Geneva, 19-20 September 2019. Deadline for abstract submissions: 15 March 2019.

Summer School “Human Rights in Theory and Practice”

University of Leipzig, 1-7 September 2019. Deadline for early bird registration: 31 March 2019.

American Society of Comparative Law Annual Meeting “Comparative Law and International Dispute Resolution Processes”

University of Missouri, 17-19 October 2019. Deadline for abstract submissions: 20 May 2019.

Neues aus dem Elfenbeinturm: December 2018

Conference “Harmonisation in Environmental and Energy Law”

University of Hasselt, 28-29 March 2019. (Prolonged) deadline for abstract submissions: 23 December 2018.

Michigan Law School Fifth Annual Junior Scholars Conference

University of Michigan, 26-27 April 2019. Deadline for submissions:  12 January 2019.

Seventh Applied Legal Storytelling Conference

University of Colorado Law School, 9-11 July 2019. Deadline for proposal submissions: 21 January 2019 (extended deadline 11 March 2019).

Workshop “The ‘Acceptable’ Cartel? Horizontal Agreements under Competition Law and Beyond”

London School of Economics, 22 March 2019. Deadline for abstract submissions: 31 January 2019.

Conference: “Judges in Utopia: Civil Courts as European Courts”

University of Amsterdam, 7-8 November 2019. Deadline for abstract submissions: 15 February 2019.

Symposium “New Directions in Competition Law Enforcement”

Radboud University Nijmegen, 24 May 2019. Deadline for abstract submissions: 22 February 2019.

C-525/16 MEO: CJEU on Price Discrimination under Article 102 TFEU

By Lorenzo Gugliotta

On April 19, 2018 the Court of Justice made an important clarification to the understanding of Article 102 TFEU with a judgment in case C-525/16 MEO – Serviços de Comunicações e Multimédia SA v Autoridade da Concorrência. This judgment, in which the CJEU followed the detailed Opinion of Advocate General Wahl, is important for at least three reasons: first, it clarifies the substantive scope of point (c) of Article 102 TFEU, which prohibits dominant firms from “applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage” (my emphasis); second, building on previous case law such as Post Danmark II and Intel, it provides guidance on the law of abuse of dominance in general; third, its conclusions could be significant for a particular kind of undertakings, namely holders of standard-essential patents (SEPs). Continue reading

ART. 101(1) TFEU: A Bitter Pill for Hoffmann-La Roche

By Martin Herz and Justin Lindeboom

On 23 January 2018, the Court (Grand Chamber) gave a preliminary ruling on five questions asked by the Italian Consiglio di Stato, with regard to an anti-competitive arrangement in Italy, between two distributors of medical products, Hoffmann-La Roche (“HLR”) and the Novartis Group (“Novartis”). HLR, whose name must be familiar in the eyes of competition lawyers, was yet again plagued with an unfavourable ruling. In it, the Court further clarified its case law on one of the foundations of competition law: the market definition. Generally, in antitrust cases, before being able to measure most effects of certain conduct, markets will be defined. Since the United Brands ‘bananas’ case from 1978, this has been standing case law.

Market definitions consist of a two-pronged approach, namely, a product market, and a geographical market definition. Both depend on the characteristics and intended use of the product, and of course, whether there is demand and supply of the products in question to begin with. Subsequently, products that consumers (or producers) find interchangeable to a high extent, will fall within the same market.

An example might clarify this. An element that watches, timepieces, wall clocks, and alarm clocks have in common is that they are all time-keeping instruments. However, they are unlikely to fall within the same product market. For different reasons, people want watches, timepieces aut cetera. Production costs (and thus, prices) might differ highly as well. For instance, the clock of the Big Ben is not comparable to a wrist watch. Hence, different product markets for time-keeping instruments will exist.

Continue reading

Neues aus dem Elfenbeinturm: September 2017

PhD Seminar “The EU Area of Freedom, Security and Justice”

University of Basel, 16-17 November 2017. Deadline for abstract submissions: 30 September 2017.

Conference “ Cross-border Mergers Directive: EU perspectives and national experiences”

University of Cyprus, 7 October 2017.

Conference “The Legitimacy of Unseen Actors in International Adjudication”

The Hague/University of Leiden, 26-27 October 2017. Registration required.

Symposium “External Challenges to the Common Fisheries Policy”

University of Edinburgh, 18 May 2018. Deadline for abstract submissions: 30 November 2018.

AG Saugmandsgaard Øe in C-329/15: Towards a novel approach to the state resources criterion?

By Gian Marco Galletti

Introduction

In his Opinion issued in case C-329/15 ENEA SA w Poznaniu v Prezes Urzędu Regulacji Energetyki on 22 March 2017, AG Saugmandsgaard ØE held that the quota-based system designed by Poland in order to support the production of energy from cogeneration (‘Combined Heat and Power electricity’ or ‘CHP electricity’) should be sheltered from the application of State aid rules as it does not fulfil all the conditions enshrined in Article 107(1) TFEU (‘Article 107(1)’). In particular, the missing piece of the ‘aid jigsaw’ is, according to AG Saugmandsgaard ØE, that the national measure in question does not entail the use of ‘State resources’.

The interpretation of the State resources criterion is a classic battleground between the effectiveness of EU rules and the protection of national regulatory autonomy. On the one hand, a broad reading of the State resources criterion is justified by the fact that Member States may feel tempted to assume a ‘private form’ to evade the application of State aid rules; on the other hand, a narrow reading averts the risk of enabling the Commission to conduct ‘an inquiry on the basis of the Treaty alone into the entire social and economic life of Member States’, as famously summarized by AG Jacobs in Viscido. The EU case law has, after some fluctuations, opted for a broad approach leaving only limited room for a finding of no State resources and therefore no aid (PreussenElektra). This was particularly evident when the Court was called to examine energy production-supporting measures taken by the Member States: the Netherlands (Essent Netwerk), Austria (Austria v Commission), France (Association Vent de Colère) and Germany (Germany v Commission) all unsuccessfully attempted to persuade the European judges that their feed-in tariff schemes did not engage public resources.

From a policy perspective, if this Opinion were to be upheld by the Court this would be the first (post-PreussenElektra) happy ending for the Member States in their struggle to design State aid-compliant legal mechanisms for funding the switch towards environmentally friendlier energy mixes and production processes.

From a strictly legal perspective, the reasoning of the AG in the present case deserves special attention in that it appears to point to a narrower, and arguably more accurate, interpretation of both layers of the State resources criterion. Continue reading

Neues aus dem Elfenbeinturm: March 2017

Doctoral Workshop “The EU as a Global Actor in …”

University of Geneva, 6-7 July 2017. Deadline for abstract submissions: 27 March 2017.

Conference “Article 7 TEU, the EU Rule of Law Framework and EU Values: Powers, Procedures, Implications”

University of Warsaw, 13-15 September 2017. Deadline for abstract submissions: 30 April 2017.

Conference “Economic Evidence in Competition Law and the Future of the ‘More Economic Approach’”

University College London, 12 May 2017. Deadline for registration: 10 May 2017.

Call for Papers “Comparative Constitutional Law and Administrative  Law Quarterly”

Deadline for submissions: 10 May 2017.

Summer School on EU Immigration and Asylum Law and Policy

Brussels, 3-14 July 2017. Deadline for applications: 10 June 2017.

Summer School “People on the Move in an Evolving Europe – EU Law and Policy on Mobility, Migration and Asylum”

University of Fribourg, 21-25 August 2017. Deadline for applications: 15 April.

Neues aus dem Elfenbeinturm: February 2017

Workshop Series “Current Issues in EU External Relations”

University of Luxembourg, 31 March/19 May/29 May 2017. Deadline for proposal submissions: 6 March 2017.

Conference “Comparative Public Law in Europe – Opportunities and Challenges”

University of Essex, 14 March 2017. Deadline for (free) registration: 10 March 2017.

Radboud Economic Law International Conference “Digital Markets in the EU”

Radboud University, 9 June 2017. Deadline for abstract submissions: 24 March 2017.

Summer Schools “Venice Academy of Human Rights – Economic, Social and Cultural Rights as an Answer to Rising Inequalities” and  “Venice School of Human Rights – Human Rights as Our Responsibility”

EIUC Venice, 3-12 July and 9-17 June 2017, respectively. Deadline for applications: 19/27 April 2017.

Lundbeck: Remedying IP Overprotection through Competition Law Enforcement in the Pharma Sector

By Konstantinos Sidiropoulos

Introduction

On 8 September 2016, the General Court (‘GC’) handed down a seminal judgment for the pharmaceutical sector in the Lundbeck case. The judgment is of particular importance, because it is the very first ruling of the EU Courts affirming that pharma pay-for-delay agreements (or reverse payment settlement agreements) may be subject to competition law scrutiny. Pay-for-delay (‘PFD’) agreements are agreements that are intended to delay the market entry of generic manufacturers with generic drugs in exchange for payments made by original pharmaceutical producers (i.e., holders of patents for an original branded drug). The GC, upholding the European Commission’s (‘Commission’) decision of 19 June 2013, held that Lundbeck and four generic producers had infringed EU competition law by entering into such agreements.

The Commission has lately been particularly active in this area. Indeed, PFD agreements were first regarded as potential targets for scrutiny under competition law in the EU as a result of the Commission’s Pharmaceutical Sector Inquiry, leading to the publication of its Pharmaceutical Sector Inquiry Final Report in July 2009. Since then, the Commission has been continuously monitoring patent settlements between originator and generic companies, publishing six reports on this matter – the latest of those being published in December 2015. Continue reading

The Spanish Tax Lease case: identifying the beneficiary under the selectivity test in fiscal aid schemes

By Sébastien Thomas

In its judgment of 17 December 2015, Spain a.o./Commission, the General Court once again annulled a Commission decision dealing with a fiscal State aid scheme on the grounds that the Commission did not sufficiently establish that the scheme in question conferred a selective advantage to its beneficiaries.

Strikingly, the General Court’s judgment was very much inspired by two of its previous judgments – albeit in another composition – in the cases Autogrill España  and Banco Santander . In those cases, the General Court found that for the condition of selectivity to be satisfied, a category of undertakings which are exclusively favoured by the measure at issue must be identified in all cases and found that “the mere finding that a derogation from the common or ‘normal’ tax regime has been provided for cannot give rise to selectivity” [1]. This is especially the case when the measure at issue does not exclude, a priori, any category of undertakings from taking advantage of it. [2]

Without entering into the merits of these two judgments, against which the Commission has brought separate appeals, the General Court’s judgment in the Spanish Tax Lease (STL) case deserves special attention, for it contains also interesting developments on the links between the separate notions of advantage and selectivity, and the need for the Commission and for the EU courts to pay special attention to the identification of the correct beneficiary when dealing with State aid schemes involving multiple layers of actors. Continue reading

Pernicious Effect of Similar Medicinal Product’s Orphan Exclusivity: CJEU Dismisses Teva’s Appeal (C-138/15 P)

By Mayank Dixit

In a significant, yet unusual judgment the Court of Justice of the European Union (CJEU) upheld the General Court’s decision (T-140/12; Teva Pharma v. EMA) that had affirmed the European Medicines Agency’s (EMA) rejection of Teva’s generic drug application for Glivec® (active substance-imatinib), not due to the reference product’s own orphan drug exclusivity but in view of orphan drug exclusivity of a similar medicinal product – Tasigna® (active substance-nilotinib).

The judgment is bizarre not only because it interprets the underlying orphan drug regulation in a manner incongruous with the spirit and substance of the legislation, but also for its potential to provide an unfair leg-up to the brand drug companies for extending their market monopolies indefinitely. It simply fails to fathom the underlying welfare rationale of the Regulation, which is meant to ensure the same quality of treatment for patients of rare conditions as those suffering from other diseases. The Court’s decision provides a skewed playing field where the interest of patients and generic pharmaceutical companies will be impacted by the unjustified extension of monopoly periods of brand drug products thus ensuring exploitative pricing of life-saving drugs. Continue reading

Neues aus dem Elfenbeinturm: March 2016

Jean Monnet Doctoral Workshop “Interactions Between European Union and International Law”

City University London, 23 June 2016. Deadline for abstract submission: 25 March 2016.

Conference “Boosting the Enforcement of EU Competition Law at Domestic Level”

Radboud University Nijmegen, 3 June 2016. Deadline for abstract submissions: 31 March 2016.

Workshop “The Disintegration of Europe”

Hertie School of Governance, Berlin, 30-31 May 2016. Deadline for abstract submissions: 1 April 2016.

Seminar “Transnational Solidarity: Setting the Boundaries”

Center for Transnational Legal Studies, London, 1 April 2016. (Free) registration needed.

Conference “Environmental Rights in Europe and Beyond”

Lund, 21-22 April 2016. (Free) registration needed.

Conference “Existe-t-il encore un seul non bis in idem aujourd’hui?”

University of Nancy, 28 April 2016. Registration needed.

Vienna Journal on International Constitutional Law Conference 2016

Vienna University of Economics and Business, 23 September 2016. Deadline for abstract submissions: 15 May 2016. Continue reading

Neues aus dem Elfenbeinturm: January 2016

Seminar „Rethinking EU Competences“

Inter-University Center, Dubrovnik, 17-23 April 2016. Deadline for abstract submissions: 31 January 2016.

Conference „Europe’s crisis: What future for immigration and asylum law and policy“

Queen Mary University of London, 27-28 June 2016. Deadline for abstract submissions: 15 February 2016.

LCII Conference „Regulating Patent ‘Hold-up’“

Brussels, 29 February 2016. Deadline for (paid) registration: 25 February 2016.

ASIL Interest Group Meeting „Regional Approaches to International Adjudication“

Washington, 30 March-2 April 2016 (exact date TBD). Deadline for abstract submissions: 1 February 2016.

Post Danmark II: A Clarification of the Law on Rebates under Article 102 TFEU

By Konstantinos Sidiropoulos

Post Danmark II constitutes the latest signal as to the view of the CJEU with regard to the assessment of rebates granted by dominant firms. As this was the first preliminary reference in a rebates case ever, there were high expectations with regard to the judgment (see e.g. here). It was seen as a golden opportunity for the Court to provide meaningful guidance, unconstrained by the limitations of judicial review in a truly fascinating and heavily disputed field of EU competition law. Indeed, this is the area where the European Commission made the most significant efforts to alter the current state of the law (see paras 37-45 of the Commission’s Enforcement Priorities Paper), albeit unsuccessfully (see judgments in Intel and Tomra). Hence, the key issue was whether the CJEU would ultimately yield to the increasing pressure to move to a more economically inspired approach to rebates under Article 102 TFEU. Overall, the ruling is valuable in that it clarifies the standard applicable to rebates granted by dominant undertakings. Continue reading

The Shortest Competition Judgment Ever: AC-Treuhand II

By Rick Busscher, Martin Herz, and Hans Vedder

Competition law judgments are notorious for their length. An extreme example is the 5134 paragraph judgment in Cement. In most cases the appeal judgment is significantly shorter, as with the 391 paragraphs in the appeal in Cement. AC-Treuhand is no exception to that rule, but it takes it to the extreme by reducing the Court’s reasoning to a single paragraph. This single paragraph supports the finding that cartel facilitators are also liable under Article 101 TFEU. The issue whether a company that is not active on the affected market should also be brought under the scope of article 101, is a difficult matter. However, the Court finds it ‘surprisingly’ easy to solve this matter, which raises practical points as well as some fundamental questions. We will discuss and comment on this one paragraph below, as well as on some of the fluff that surrounds it, but we will start with the facts. Continue reading

Neues aus dem Elfenbeinturm: October 2015

Conference “Central European Judges under the EU Influence: The Transformative Power of the EU Revisited“

Hungarian Academy of Sciences, 2 November 2015.

Conference “Between the State and Competition in the Single Market“

Hungarian Academy of Sciences, 6 November 2015. (Free) registration required.

Workshop “Framing the Subjects and Objects of Contemporary EU law”

City University London, 6 November 2015. (Free) registration required.

ESIL Research Forum Call for Papers on the Making of International Law

Koç University Law School and the Center for Global Public Law, Istanbul, 21-22 April 2016. Deadline for abstract submissions: 1 November 2015.

ESIL 12th Annual Conference Call for Papers “How International Law Works in Times of Crisis”

Riga Graduate School of Law, 8-10 September 2016. Deadline for abstract submissions: 31 January 2016.

Call for Submissions for Special Issue on Trade and Public Health

Trade Law and Development. Deadline for submissions: 15 March 2016.

Are Remedies for Breaching Standard Essential Patents Prohibited by Article 102 TFEU?

By Sam Abboud

In Case C-170/13 Huawei Technologies Co. Ltd v ZTE Corp & ZTE Deutschland GmbH, (Judgment of the 5th Chamber, CJEU, 16 July 2015)the CJEU was asked to rule for the first time on whether seeking an injunction and other associated remedies by the owner of a Standard Essential Patent (SEP) against a company in breach of the patent (but one willing to become a licensee) can amount to an abuse of a dominant position in breach of EU competition law (Article 102 TFEU). It concluded that an injunction or an action to recall products can amount to an abuse of dominance in certain circumstances.

 In this post, I first provide a primer on Standards and Standard Essential Patents (‘SEPs’) before summarizing the Court’s reasoning and setting out some initial observations on the judgment’s significance.

Continue reading