EU & Competition Newsletter, Issue No. 2, 2024

Irish Merger Control

Sector: Commercial Property

Proposed acquisition of car park beside Dublin Airport Authority rejected by the CCPC

The CCPC has determined that the acquisition by Dublin Airport Authority (“DAA”) of a car park located near Dublin Airport cannot be put into effect.

The CCPC decided that the proposed acquisition would substantially lessen competition in car parking spaces serving Dublin Airport, as the DAA would own 90% of the public car parking spaces if the purchase was approved.

Sector: Insurance

Proposed acquisition of NFP by Aon Plc cleared by the CCPC

The CCPC has cleared the acquisition of sole control of NFP Intermediate Holdings A Corp. (“NFP”) by Randolph Acquisition Corp., a wholly owned indirect subsidiary of Aon Plc (“Aon”).

Aon is a global professional services firm that provides a range of risk, health and wealth solutions. In the State, Aon is active in the provision of Commercial Risk Solutions (which includes the brokerage and wholesale distribution of insurance products), Health Solutions, Retirement Solutions, Assessment Solutions and Data & Analytic Services.

NFP is a global insurance broker and consultant active in the provision of specialised property and casualty insurance products and services related to benefits, wealth management and retirement planning.

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

Sector: Healthcare

CCPC clears proposed acquisition of Chanelle Pharma by Exponent Private Equity

The CCPC has cleared the acquisition of the entire issued share capital of Chanelle HoldCo 3 Limited by Exponent Private Equity LLP through its subsidiary Herriot Pharma Bidco Limited.

Chanelle HoldCo 3 Limited is a direct subsidiary of Chanelle Pharma Limited, headquartered in Galway, which specialises in the development, manufacturing, and supply of generic pharmaceutical products.

Exponent Private Equity LLP is an international private equity group based in the UK which makes investments in businesses in Ireland, the UK and across Europe.

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

Proposed acquisition of Beacon Hospital by Macquarie Asset Management cleared by the CCPC

The CCPC has cleared the acquisition of Beacon Medical Group Sandyford Limited (“Beacon”), Okinawa Limited and Beacon Blackthorn Limited (together with its subsidiaries “Beacon Group”) by MEIF 7 Dian Holdings Limited, an indirect wholly owned subsidiary of Macquarie European Infrastructure Fund 7 SCSP (“Macquarie Group”).

The Macquarie Group is a diversified financial services company which provides asset management and finance, banking, advisory and capital solutions across debt, equity and commodities. In the State, Macquarie is primarily active through its portfolio companies, public private partnerships, investments in data centres and windfarm development.

Beacon is the holding company of a group of companies that own and operate the Beacon Hospital in Sandyford, Dublin.

Beacon Group is a private healthcare provider. It provides a wide range of scheduled/elective and unscheduled/emergency medical services to patients commonly referred to as 'private patients'.

Okinawa Limited and Beacon Blackthorn Limited are Irish incorporated private limited companies that own certain auxiliary real estate adjacent to the Beacon Hospital.

The proposed acquisition was approved under the Simplified Merger Notification Procedure.

 

Irish Media Merger

Sector: Media

CCPC clears the proposed acquisition of sole control of Viaplay Group by SSBL Limited

The CCPC has cleared the acquisition of sole control of Viaplay Group Ireland Limited and Viaplay Group UK Sports Limited by SSBL Limited.

SSBL Limited is a holding company within TDL Media Limited group of companies which operates the ‘Premier Sports Ireland’ channels broadcasting in Ireland.

Viaplay Group Ireland Limited and Viaplay Group UK Sports Limited are niche sports broadcasters with 3 TV channels and over-the-top media offering.

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

 

Irish Updates

CCPC launches High Court proceedings against alarm companies

The CCPC has launched High Court proceedings against Phonewatch and its subsidiary Homesecure, which are both owned by the Norwegian company Sector Alarm, as part of an ongoing investigation into potential breaches of competition law.

On 26 February 2024, the CCPC announced that it had carried out a number of dawn raid searches of businesses active in the home alarm industry.

The proceedings are under section 33 of the Competition and Consumer Protection Act 2014 and relate to determining whether information seized by the CCPC is privileged legal material.

 

EU Updates

European Commission fines Apple more than €1.8 billion over ‘abusive’ App Store rules for music streaming providers

The Commission has fined Apple more than €1.8 billion for abusive App Store rules that prevented app developers from informing users about alternative and cheaper music subscription services available outside of the apps. The Commission concluded that these ‘anti-steering provisions’ amount to unfair trading conditions in breach of Article 102(a) of the Treaty on the Functioning of the European Union where they are not necessary and proportionate to protecting Apple’s own commercial interests.

Apple will now have to remove terms that prevent developers informing users of other subscription methods. However, Apple has announced that it will appeal the Commission’s decision. This is the third biggest antitrust penalty imposed by the Commission to date.

The EU General Court dismisses TikTok’s Request for Interim Measures against its Digital Markets Act (“DMA”) Designation Decision

A request by Bytedance, the parent company of TikTok, for an interim order to suspend its designation as a ‘gatekeeper’ under the DMA was rejected by the EU General Court on 9 February 2024.

TikTok’s designation as a gatekeeper under the DMA meant that it had to make significant changes for its EU users, including allowing third-party businesses access to its services and obtaining consent for personalised advertising by the 6 March deadline. The General Court held that Bytedance had not shown a real risk of sharing secret information or that this risk would cause “serious and irreparable harm.”

This interim order is without prejudice to the outcome of the main proceedings and final judgment has not yet been delivered.

Advocate General issues Opinion in Illumina/Grail case

On 21 March, Advocate General Nicholas Emiliou (“AG”) issued his Opinion in the joined cases Illumina and Grail v Commission, stating that the EU General Court had erred in its “extensive” interpretation of Article 22 and, accordingly, member states should not use Article 22 to request the Commission to examine a transaction which does not have an EU dimension, or where the member state has no competence to review such a transaction under national law. The EU General Court having previously ruled that Article 22 allows member states to refer ‘any concentration’ to the Commission for investigation.

The case involves the proposed acquisition of Grail, a US company developing blood tests for detection of cancer, by Illumina, a US pharma company. The Commission opened an investigation into the merger under Article 22 and, following the investigation, ordered the parties to unwind the transaction; and imposed a fine of €432 million and €1000 on the parties. This was upheld in the EU General Court.

Whilst the AG’s Opinion is not binding on the ECJ, should the ECJ follow the Opinion it will potentially curb the Commission’s ability to examine below threshold transactions and/or killer acquisitions.

 

Foreign Subsidies Regulation (“FSR”)

The Commission publishes briefing of first 100 days of FSR

The Commission has published a briefing on the first 100 days of operation of the new concentration notification obligation under the FSR (EU) 2022/2560.

According to the report, the Commission has received 53 cases, 14 of which have been formally notified and 9 fully assessed. Furthermore, 79% of the notifiable transactions were subject to parallel EU merger control procedures and approximately half of the notifiable transactions were also subject to national foreign direct investment (“FDI”) screening procedures in one or more Member States.

The Commission reported that the notified cases have covered a large set of sectors, ranging from basic industries to high technologies. Approximately one third involved an investment fund as a notifying party.

The Commission also published a summary of the public procurement notifications it had received under the Regulation. Currently, the Commission has received over 100 submissions regarding public procurements (which likely cover types of documents, i.e. notifications and declarations which tenderers need to submit if their contributions do not meet notification thresholds).

The Commission opens its first in-depth investigation under the FSR

On 16 February 2024, the Commission launched its first in-depth investigation under the FSR.

The investigation stems from a notification submitted to the Commission by CRRC Qingdao Sifang Locomotive Co. Ltd (“CRRC”), a subsidiary of CRRC Corporation, a Chinese state-owned train manufacturer, in relation to a public procurement procedure launched by the Bulgarian Ministry of Transport and Communications. The tender concerns the provision of 20 electric “push-pull” trains, as well as their maintenance and staff training services, and has an estimated contract value of approximately €610m.

The Commission’s preliminary assessment found “sufficient indications” that the company had been granted a foreign subsidy that distorts the internal market. The Commission was due to assess the alleged foreign subsidies and determine whether they may have allowed the company to submit an unduly advantageous tender.

On 26 March 2024, the Commission announced that CRRC withdrew from the public procurement tender and as a result of the withdrawal, the Commission closed its in-depth investigation.

 

EU State Aid

The European Commission approves €350 million Portuguese State aid scheme to support investments in equipment necessary for transition to net-zero economy

The Commission has approved a €350 million Portuguese scheme to support investments for the production of equipment necessary to foster the transition towards a net-zero economy, in line with the Green Deal Industrial Plan.

The measure will take the form of direct grants and be open to companies producing relevant equipment, namely batteries, solar panels, wind turbines, heat-pumps, electrolyser and equipment for carbon capture usage and storage.

The Commission found that the scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities.

The CJEU rules that the UK Supreme Court violated EU law by enforcing award against Romania

The CJEU has ruled that the UK Supreme Court violated the UK’s then-existing obligations under EU law in its decision in Micula v Romania by ruling that an arbitral award against Romania was enforceable.

In its 2020 judgment, the UK Supreme Court ordered the enforcement of an arbitral award of €178m rendered against Romania in favour of certain Swedish investors under a bilateral investment treaty concluded between Sweden and Romania.

The Commission had previously found that the implementation of the award constituted the grant of unlawful and incompatible State aid by Romania in favour of those investors. However, the UK Supreme Court held that the award should be enforced in the United Kingdom notwithstanding that its enforcement was contrary to Union law.

The CJEU held that, in authorising the enforcement of the arbitral award, the UK Supreme Court had infringed the Treaty of the EU and the Treaty of the Functioning of the EU.

Commission issues call for evidence on State aid block exemption regulation for land transport coordination

The Commission has issued a call for evidence for a new transport block exemption regulation (“TBER”) for State aid land transport coordination.

The initiative seeks to revise State aid rules on sustainable land transport and aims to adopt the revised Railway Guidelines and a new TBER. The TBER will apply to least distortive forms of aid which contributes to a modal shift towards sustainable land transport modes.

The Commission noted that all State aid measures to promote sustainable land transport must, in principle, be notified to the Commission. However, certain categories of cases in rail and other sustainable land transport sectors (such as inland waterways and certain multimodal transport solutions) have routinely led to non-objection decisions without raising problems. Therefore, the Commission, after regular requests from industry stakeholders and member states, is now considering a Block Exemption Regulation for this type of State aid measures to reduce administrative burden on national administration and private stakeholders.

The call for evidence closed on 3 April 2024 and will be followed by an 8-week public consultation with member states and other stakeholders, before the possible adoption of a Block Exemption Regulation. The Commission has indicated that the impact assessment should be completed by Q4 2024 and the potential Block Exemption Regulation should be presented in Q4 2025.

 

Digital Markets Act

European Commission initiates five key investigations for non-compliance under the Digital Markets Act (“DMA”)

The Commission has opened investigations into three designated gatekeepers for allegations of non-compliance with the DMA.

The investigations mark the first use of the DMA, and include allegations of anti-steering, self-preferencing, fee structure that conflicts with the DMA, a closed ecosystem and “pay or consent” data combination.

The Commission aims to conclude these investigations within 12 months. Should the companies be found to have infringed the DMA, they could face substantial fines of up to 10% of their total worldwide turnover for one-off breaches, increasing to 20% for repeat violations.

 

EU Legislation Update

The Commission publishes a white paper on Europe’s digital infrastructure

The Commission has published its long-awaited white paper entitled “How to master Europe’s digital infrastructure needs?”, launching a public consultation on the construction of a European digital infrastructure for the future (the “White Paper”). The White Paper addresses the possible policies and future regulatory framework concerning the following pillars for the development of secure and sustainable digital infrastructures in the EU:

1. Creating the “3C Network – Connected Collaborative Computing”
2. Completing the digital Single Market
3. Secure and resilient digital infrastructures for Europe

In particular, the White Paper considers a more harmonised approach to the authorisation procedures of telecoms operators, more integrated governance at the EU level for spectrum and possible changes in the wholesale access policy.

The consultation will close on 30 June 2024.