Antitrust Bites – Newsletter

National competition authorities relieved of their competence and ne bis in idem: Clarifications from the ECJ

With judgment of 25 February 2021, the Court of Justice delivered a preliminary ruling on the request submitted by the Supreme Court of the Slovak Republic concerning the compatibility of two fines imposed by the Slovak Competition Authority and the European Commission on Slovak Telekom for having abused its dominant position through margin squeeze practices with the principles of the European Commission relieving the national competition authorities of their competence (Article 11.6 of Regulation No. 1/2003) and ne bis in idem.

In reply to the first question referred for a preliminary ruling, the Court clarified that the principle according to which competition authorities of the Member States are relieved of their competence to apply the TFEU provisions on competition when the European Commission initiates investigations to ascertain an infringement (art. 11.6 of Regulation No. 1/2003) applies only when the allegedly anti-competitive conducts investigated by the national competition Authorities and the European Commission are identical, took place in the same time period and concern the same product and geographical markets.

Regarding the scope of the ne bis in idem principle, the Court of Justice clarified that it would not apply when the Commission and the national Authorities, separately and autonomously, carry out investigations for infringements of Articles 101 or 102 TFEU concerning different geographical or product markets, or when a national authority is relieved of its competence under Article 11.6 of Regulation No 1/2003

European Commission opens investigation into Greek wholesale electricity market

On 17 March 2021 the European Commission opened an antitrust investigation to assess possible abusive behaviour in the wholesale Greek electricity sector by the largest supplier of retail and wholesale electricity in Greece – Public Power Corporation (PPC).

According to the EC Press Release, PPC – which is majority owned by the Greek state – controls all lignite and hydro as wells as some of the natural gas and renewable power generation plants. PPC is also active in the supply of energy to retail and business consumers where its market share is more than two-thirds of the whole market.

The EC concern is that PPC may have abused its dominant position in the Greek wholesale and retail electricity markets in breach of Article 102 TFEU by implementing an exclusionary practice consisting in predatory bidding strategies hindering the ability of its rivals to compete in the wholesale and related electricity markets. According to the EC, the PPC behaviour under investigation may have distorted competition and slowed down investment into the generation of greener energy.

Pharmaceutical mergers’ control: Leading competition authorities’ Multilateral Working Group

On 16 March, the European Commission informed that it has formed a Multilateral Working Group with some of the leading non-EU competition authorities (the Federal Trade Commission, the Canadian Competition Bureau, the UK’s Competition and Markets Authority, the US Department of Justice and three Offices of Attorneys General) to exchange best practices on merger control in the pharmaceutical sector.

The aim is to share the experience of the authorities to identify concrete, actionable steps to update the analysis of pharmaceutical mergers and to make their control increasingly effective, for the benefit of consumers.

The Commission has observed that the number of pharmaceutical mergers has grown in recent years and there is the need to scrutinise closely the phenomenon to detect those mergers which could lead to higher drug prices, lower innovation or anti-competitive conducts.

Rescue of Banca Tercas: Court of Justice confirms no state aid was granted

With its judgment of 2 March 2021, the Court of Justice of the EU confirmed the judgment of the EU General Court which stated that the measures adopted in 2014 by the Interbank Deposit Protection Fund (FITD), a consortium under private law between mutual banks, in support of Banca Tercas, were not to be qualified as state aid.

The measure, which the Commission had qualified as state aid incompatible with the internal market in a decision of 2015, involved FITD’s coverage, with the authorization of the Bank of Italy, of the capital deficit of Banca Tercas, which was under special administration.

The judgment of the EU General Court appealed by the Commission had upheld the appeal brought by FITD with the support of the Bank of Italy and had annulled the decision, stating that the Commission had not sufficiently demonstrated the fulfilment of the first condition of Article 107.1 TFEU, ie that the aid was granted by the state or through state resources.

In its recent judgment, the Court of Justice acknowledged the correct application by the General Court of the principles laid down in the relevant case-law, according to which the evidence for establishing the imputability of an aid measure necessarily derives from the circumstances of the case and the context in which that measure was implemented: in the present case, where the funds had been granted by a private entity, the Commission was required to present “sufficient evidence” to establish that the aid measure in question had been adopted under the influence or effective control of the public authorities. Contrary to the Commission's view, the General Court did not impose a heavier burden of proof as regards the imputability of an advantage to the state on the sole ground that FITD is a private entity.

EU Court of Justice: Barcelona, Real Madrid, Osasuna and Athletic Bilbao beneficiaries of unlawful state aid

The Court of Justice of the EU, in its judgment of 4 March (Case C-362/19 P), annulled the General Court's decision of 2019 and qualified as state aid, in breach of Article 107 TFEU, the preferential tax regime enjoyed by four Spanish professional football clubs; namely Barcelona, Real Madrid, Osasuna and Athletic Bilbao.

A law of 1990 obliged all Spanish professional sports clubs to transform themselves into public limited companies, with the exception of those with a positive balance sheet result in the financial years preceding the adoption of the law.

The four football clubs, which at the time fell within the scope of the exception, opted to continue operating as non-profit-making legal persons, benefiting from a lower rate of taxation on their income than that applicable to public limited companies.

No other clubs were subsequently allowed to benefit from the preferential treatment.

The Commission, in a 2016 decision, essentially found that the 1990 legislation conferred a prohibited selective “advantage” on football clubs, because although the four clubs were considered non-profit entities, they carried out professional activities for profit in competition with other national and European professional football clubs.

The Court of Justice, overturning the General Court's earlier decision and deciding on issues related to the burden of proof, confirmed the Commission's approach.