EU & Competition Newsletter, Issue No. 3, 2024

Irish Merger Control

Sector: Wholesale Supplies

Acquisition of Bellew Electrical Wholesale Limited by Project Finn Bidco Limited cleared by CCPC

The acquisition of sole control of Bellew Electrical Wholesale Limited and BEW Electrical Ltd (“Bellew”) by Project Finn Bidco Limited has been cleared by the Competition and Consumer Protection Authority (“CCPC”).

Project Finn Bidco Limited forms part of a group of companies that is ultimately owned by Waterland Private Equity Investments B.V. which is regulated by the Netherlands Authority for Financial Markets.

Bellew is active in the wholesale of electrical goods and heating supplies to professionals such as electrical contractors and operates in the Republic of Ireland and Northern Ireland. The CCPC determined that the proposed transaction would not substantially lessen competition in any market for goods or services in the State.

Sector: Veterinary Care Services

Acquisition of Tullamore Pet Hospital by Independent Vetcare Ireland Limited cleared by the CCPC

The CCPC has cleared the acquisition of sole control of Tullamore Pet Hospital by Independent Vetcare Ireland Limited, a wholly owned subsidiary of the IVC Evidensia group of companies.

IVC Evidensia is a global provider of veterinary care and related ancillary services which focuses on investing in local veterinary practices. Tullamore Pet Hospital is an independent veterinary practice located in Tullamore, County Offaly which provides a range of local veterinary services.

The CCPC formed the view that the proposed transaction will not substantially lessen competition in any market for goods or services in the State.

Sector: Information & Communications

Acquisition by Viatel Technology Group Limited of MJ Flood Technology Limited cleared by the CCPC

The CCPC has cleared the proposed acquisition by Viatel Technology Group Limited (“Viatel”) of sole control of MJ Flood Technology Limited (“MJ Flood”).

Viatel is a telecoms and technology company headquartered in Dublin which provides IT products and services to businesses.

MJ Flood provides Information and Communication Technology solutions that offers full-service products to medium and large sized corporates, educational and government departments.

The CCPC held the proposed transaction would not substantially lessen competition in any market for goods or services in the State.

Sector: Financial / Investment Advisory Services (to Private Equity Funds)

Acquisition by Apax Partners LLP through its special purpose vehicle, Zorro Bidco Limited of sole control of Zellis Topco Limited cleared by CCPC

The CCPC has cleared the proposed acquisition whereby Apax Partners LLP through its special purpose vehicle, Zorro Bidco Limited, would acquire sole control of Zellis Topco Limited.

Apax Partners LLP is a UK limited liability partnership and the parent of a number of entities which provide investment advisory services to private equity funds investing in a range of industry sectors.

Zellis Topco Limited is the holding company of a group of software companies which provide payroll, HR, benefits management services and related IT services.

The CCPC formed the view that the proposed transaction would not substantially lessen competition in any market for goods or services in the State.

Sector: Insurance

The CCPC has cleared the proposed acquisition of Probitas Holdings (Bermuda) Limited by Aviva Insurance Limited

The proposed acquisition of sole control of Probitas Holdings (Bermuda) Limited (“Probitas”) by Aviva Insurance Limited, a wholly owned subsidiary of Aviva Plc (“Aviva”), has been cleared by the CCPC.

Probitas is a fully integrated Lloyds of London platform which owns 100% of the tenancy rights to Syndicate 1942.

Aviva is a UK-listed insurance company which serves approximately 18.7 million customers across the UK, Ireland, Canada and a number of smaller jurisdictions.

The CCPC held that the proposed transaction would not substantially lessen competition in any market for goods or services in the State.

Sector: Dental consumables and dental equipment

The CCPC approves Phey Topco Limited’s acquisition of Dental Medical Ireland but requires sale of dental supplies subsidiary

The CCPC has cleared Phey Topco Limited’s purchase of Trasmore Limited, trading as Dental Medical Ireland, subject to a number of legally binding commitments involving the sale of Phey Topco’s subsidiary BF Mulholland.

During the initial Phase 1 investigation, the CCPC raised concerns about how the acquisition could affect levels of competition between companies that supply dental consumables and dental equipment.

To address the CCPC’s concerns, Phey Topco Limited made a number of commitments, including the sale of Phey Topco Limited’s subsidiary, BF Mulholland. Phey Topco also agreed not to do anything which could negatively impact BF Mulholland before it was sold and not to buy BF Mulholland back for a period of time following its sale.

The CCPC accepted the commitments and approved the proposed acquisition. An independent monitoring trustee is to be appointed to make sure that Phey Topco complies with these commitments.

EU Updates

Commission fines Mondelēz €337.5 million for cross-border trade restrictions

The European Commission has fined Mondelēz International, Inc. (“Mondelēz”) €337.5 million for hindering the cross-border trade of chocolate, biscuits and coffee products between Member States in breach of EU competition rules. Mondelēz, headquartered in the US, is one of the world's largest producers of chocolate and biscuit products.

The Commission's investigation found that Mondelēz breached EU competition rules: (i) by engaging in anti-competitive agreements or concerted practices aimed at restricting cross-border trade of various chocolate, biscuit and coffee products; and (ii) by abusing its dominant position in certain national markets. The Commission concluded that Mondelēz's illegal practices prevented retailers from being able to freely source products in Member States with lower prices and artificially partitioned the internal market.

Merger Control

The European Commission has approved the acquisition of KKR & Co. Inc of NetCo

The European Commission (“EU Commission”) has approved unconditionally KKR & Co. Inc’s €22 billion acquisition of NetCo, which comprises the primary fixed-line network business of Telecom Italia S.p.A (“TIM”) as well as FiberCop, a joint venture between TIM and KKR.

The acquisition is notable as it marks the first time a former telecom monopoly in a major European economy has divested its fixed network.

The deal is expected to complete in July 2024 and, once completed, NetCo will provide wholesale fixed access services in both its copper and fibre networks in Italy.

Cartels

The EU Commission carries out further unannounced antitrust inspections in tyre sector cartel investigation

The EU Commission announced on 18 June 2024 that it had carried out further unannounced antitrust inspections at the premises of a consultancy firm in two member States over concerns that the company may have facilitated or instigated the suspected price coordination amongst tyre manufacturers operating in an alleged cartel.

The inspections were conducted in the context of an investigation carried out by the EU Commission in January 2024 whereby Pirelli, Continental, Michelin, Bridgestone and Nokian Tyres were raided by the EU Commission.

The EU Commission sends Statement of Objections to Alchem over first pharmaceutical cartel case in the EU

On 13 June 2024, the EU Commission announced that it had informed Alchem International Pvt. Ltd. and its subsidiary Alchem International (H.K.) Limited ( “Alchem”) of its preliminary view that they had breached EU antitrust rules by participating in a long-lasting cartel concerning the pharmaceutical ingredient N-Butylbromide Scopolamine/Hyoscine (“SNBB”). SNBB is an important input material to produce abdominal antipasmodic drug, Buscopan and its generic versions.

The preliminary view of the EU Commission comes as a result of its concerns that Alchem may have coordinated and agreed with other market participants to fix the minimum sales price of SNBB to customers (i.e., distributors and generic drug manufacturers) and allocate quotas. In addition, the EU Commission suspects that Alchem may have exchanged commercially sensitive information with competitors.

If the Commission's preliminary view is confirmed, such behaviour would constitute a violation of Article 101 TFEU and Article 53 of the EEA Agreement which prohibits anti-competitive business practices.

EU Foreign Subsidies Regulation

The EU Commission opens two in-depth investigations under the Foreign Subsidies Regulation in the solar photovoltaic sector

The EU Commission has launched two in-depth investigations into tenders by Chinese solar photovoltaic suppliers under the EU Foreign Subsidies Regulation (“FSR”). The investigations relate to a public procurement procedure launched in September 2023 by a Romanian contracting authority for the design, construction and operation of a photovoltaic park.

Following its preliminary review of all the submissions, the EU Commission considered it justified to open an in-depth investigation for two bidders, as there were sufficient indications that both have been granted foreign subsidies that distort the internal market.

The EU Commission will assess whether the economic operators concerned did benefit from an unfair advantage to win public contracts in the EU and may: (i) accept commitments if they fully and effectively remedy the distortion; (ii) prohibit the award of the contract; or (iii) issue a no-objection decision.

The EU Commission closes its first investigation under the FSR in Bulgaria

On 16 February 2024, the EU Commission opened its first investigation under the FSR in relation to a public procurement procedure initiated by Bulgaria’s Ministry of Transport and Communications for the tender of electric trains as well as related maintenance and staff training services. The investigation followed a notification submitted to the EU Commission by a Chinese state-owned train manufacturer.

Following the EU Commission’s announcement of the investigation, the Chinese company voluntarily withdrew from the public procurement tender and, as a result of the withdrawal, the EU announced that it was closing its in-depth investigation.

The EU Commission initiates first ex-officio investigation under the FSR in the wind turbines sector

On 9 April 2024, the EU Commission launched its first ex-officio investigation under the FSR, targeting wind turbines manufactured by Chinese companies in Spain, Greece, France, Romania and Bulgaria.

The investigation will seek to determine if Chinese wind turbine manufacturers and suppliers have benefitted from foreign subsidies and thus provided them with an unfair competitive advantage over European competitors.

Concentrations (M&A) Tool

The EU Commission launches its first in-depth investigation into an M&A transaction under the EU Foreign Subsidies Regulation concentrations tool

On 10 June 2024, the EU Commission launched its first ever in-depth investigation of an M&A transaction under the FSR. The transaction in question concerned the proposed acqusition of sole control of the Czech telecom operator PPF Telecom Group B.V. (“PPF”) by the Emirates Telecommunications Group Company PJSC (“ETG”), a state-controlled telecommunications operator based in the UAE.

The EU Commission identified preliminary concerns that ETG may have been granted foreign subsidies that could distort the EU internal market, notably in the form of an unlimited guarantee from the UAE and a loan from UAE-controlled banks directly facilitating the transaction. According to the FSR, such subsidies are classified as the most likely to distort the internal market.

The EU Commission has 90 working days, until 15 October 2024, to make a final decision. If a distortion is found, the EU Commission may: (1) accept commitments if the commitments fully and effectively remedy the distortion; (2) prohibit the transaction; or (3) issue a no-objection decision.

EU State Aid

The EU Commission launches public consultation on new draft rules facilitating State aid for land and multimodal transport

The EU Commission has launched a public consultation in relation to its draft rules for land and multimodal transport replacing the Guidelines on State aid for railway undertakings (“Railway Guidelines”) as well as on its new Transport Block-Exemption Regulation (“TBER”).

The rules laid down in the TBER will be complementary to those set out in the new Land and Multimodal Transport Guidelines which will replace the Railway Guidelines.

The EU Commission opens in-depth State aid investigation into German measures to support local bus transport operator WestVerkehr

The EU Commission has opened an in-depth investigation to assess whether certain support measures to German local public transport company WestVerkehr GmbH (“WestVerkehr”) are in line with EU State aid rules.

The EU Commission's assessment began on the basis of a complaint raised by a competitor of WestVerkehr alleging that WestVerkehr had benefitted from State aid incompatible with the EU internal market. WestVerkehr has been entrusted with the performance of a public service obligation in the district of Heinsberg since 2007.

The alleged aid measures are: (i) a direct award of a public service contract by the district of Heinsberg to WestVerkehr; (ii) a profit and loss transfer agreement between WestVerkehr and its majority shareholder; (iii) a payment into WestVerkehr's capital reserve by its minority shareholder; and (iv) a current account agreement between WestVerkehr and its minority shareholder. Both the majority shareholder and minority shareholder are companies in which the district of Heinsberg holds shares.

The EU Commission has taken the preliminary view that the support measures constitute State aid under Article 107(1) TFEU, however, the investigation will determine whether the compensations received by WestVerkehr may give it an undue advantage over its competitors in breach of State aid rules.

Digital Markets Act

The EU Commission designates Booking.com as a gatekeeper under the Digital Markets Act (“DMA”)

The EU Commission has designated Booking.com as a gatekeeper for its online intermediation service Booking.com.

Following its designation, Booking.com now has 6 months to comply with the relevant obligations under the DMA, offering more choice and freedom to end users and fair access of business users to the gatekeeper services.

However, some of the DMA's obligations start applying with immediate effect, for example, the obligation to inform the EU Commission of any intended concentration in the digital sector.

The EU Commission opens market investigation into ”X”

The EU Commission has opened a market investigation to further assess the rebuttal submitted in relation to the online social networking service, X.

This rebuttal argues that, even if X is deemed to meet the thresholds under the DMA, X does not qualify as an important gateway between businesses and consumers. The investigation should be completed within five months.

Another rebuttal was submitted concerning the online advertising service “X Ads”. The EU Commission concluded that, although X Ads meets the quantitative designation thresholds under the DMA, this core platform service does not qualify as an important gateway. Therefore, the EU Commission decided not to designate X Ads as a gatekeeper under the DMA.