EU/Competition: Transport and Shipping

Newsletter 8/2020

In a decision of 08.07.20, the EFTA Surveillance Authority (ESA) discontinued an investigation regarding suspected breaches of the competition rules in the EEA Agreement. In 2016, ESA opened a formal investigation into whether Widerøe’s Flyveselskap AS (Widerøe) may have abused a dominant position. Several regional airports in Norway are equipped with an approach system called “SCAT-1”. The approach system is used to guide planes safely to the runway by communicating with SCAT-1 equipment on board the approaching plane. Widerøe, which operates in Norway, was the only airline owning on-board SCAT-1 equipment, since the manufacturer had ceased to produce it. ESA’s investigation focused on whether Widerøe had restricted competition by refusing to sell or lease its spare on-board equipment to other operators, so that those operators could not put in a successful bid for publicly-financed service routes involving airports using SCAT-1. During 2016–17, shortly after ESA opened formal proceedings, the Norwegian government approved alternative guidance solutions, based on different technology, for the airports in question. That meant that the SCAT-1 system was no longer required for market access. Meanwhile, ESA continued the investigation as to whether Widerøe had abused its dominant position. ESA conducted an analysis of the relevant evidence, including evidence from Widerøe following ESA’s statement of objections and at an oral hearing on 6 December 2018. ESA concluded that the evidence so far collected is not sufficient for it to prioritise resources to further investigate its preliminary concerns.

Alstom, based in France, is active worldwide in the rail transport industry, offering a wide range of transport solutions (from high-speed trains to metros, trams and e-buses) and related services (maintenance and modernisation), as well as products dedicated to signalling solutions, passengers and infrastructure, rail electrification systems and digital mobility. Bombardier Transportation is the global rail solutions division of Bombardier, a diversified industrial group based in Canada with activities in the construction, property, telecoms and media sector. Bombardier Transportation, headquartered in Germany, offers a wide range of rail solutions, ranging from trains to sub-systems and signalling, to complete turnkey transport systems, and services. The Commission’s investigation found that the transaction, as initially notified, would have raised serious competition concerns in the following areas: (i) Very high-speed rolling stock where the merged entity would have become the undisputed market leader with a  significant market position; (ii) Mainline rolling stock where the merged entity would have strengthened the Parties’ already large combined position in particular in France and Germany, and; (iii) Mainline signalling where the merged entity would have had the ability and  the incentive to make it more difficult for other suppliers of ETCS OBUs to interface with its many already installed signalling systems (legacy OBUs) and its already operating fleet of trains (the largest in the EEA). To address the Commission’s concerns, Alstom offered a set of commitments and the merger was approved in a decision of 31.07.20. Visit the case dossier here.

The revised rules, adopted 08.07.20, for posting of drivers, drivers’ driving times and rest periods and better enforcement of cabotage rules (i.e. transport of goods carried out by non-resident hauliers on a temporary basis in a host state) aim to put an end to distortion of competition in the road transport sector and provide better rest conditions for drivers. The new rules will help to ensure better rest conditions and allow drivers to spend more time at home. Companies will have to organise their timetables so that drivers in international freight transport are able to return home at regular intervals (every three or four weeks depending on the work schedule). The mandatory regular weekly rest cannot be taken in the truck cab. If this rest period is taken away from home, the company must pay for accommodation costs. Vehicle tachographs will be used to register border-crossings in order to tackle fraud. To prevent systematic cabotage, there will be a cooling-off period of four days before more cabotage operations can be carried out within the same country with the same vehicle. To fight the use of letterbox companies, road haulage businesses would need to be able to demonstrate that they are substantially active in the member state in which they are registered. The new rules will also require trucks to return to the company’s operational centre every eight weeks. Using light commercial vehicles of over 2.5 tonnes will also be subject to EU rules for transport operators, including equipping the vans with a tachograph. The new rules will give a clear legal framework to prevent differing national approaches and ensure fair remuneration for drivers. Posting rules will apply to cabotage and international transport operations, excluding transit, bilateral operations and bilateral operations with two extra loading or unloading. Read more here.

On 16th July 2020, the CJEU delivered 16.07.20 its judgment in the Schrems II case (C-311/18).  Most organisations rely on data transfer agreements – SCC/Standard Contractual Clauses – to transfer personal data to countries outside the EEA.  Organisations which transfer personal data to the US can also often rely on the EU-US Privacy Shield. The CJEU was asked to consider if law and practice in the US relating to access to personal data by the intelligence services should mean that either, or both – of these mechanisms should be invalidated. The decision concludes that the Privacy Shield is invalid. SCCs remain valid. However, the CJEU sets out a heavy burden on data exporters which wish to use SCCs; the data exporter must consider the law and practice of the country to which data will be transferred, especially if public authorities may have access to the data. Additional safeguards, beyond the SCCs, may be required. The Commission has also been working on modernizing the SCCs, which date back to 2010 and do not reflect the GDPR requirements. The result was postponed until the Schrems II case was resolved, but we should now expect updated clauses, although the exact timing for the new SCCs is unclear. Companies and organizations will also need to adapt to the successor SCCs in a second phase. The European Data Protection Board (EDPB) published 24.07.20 a set of FAQs on the judgment. The key takeaways are: (i) The CJEU’s assessment of U.S. law must be taken into account for any transfers of personal data to the U.S., irrespective of the transfer mechanism used. (ii) There is no grace period for companies that relied on the EU-U.S. Privacy Shield framework. (iii) Companies can rely on the derogations set forth under Article 49 of the GDPR, provided that the conditions as interpreted by the EDPB in its guidance on Article 49 of the GDPR are met. When transferring personal data based on individuals’ consent, such consent should be explicit, specific to the particular data transfer(s) and informed, particularly regarding the risks of the transfer(s). (iv) Companies should verify whether the processors they use (and their respective sub-processors) transfer data to the U.S. If that is the case and such transfers are not considered adequate (because supplementary measures cannot be provided or because no derogations under Article 49 of the GDPR apply), companies must re-negotiate their contracts to forbid transfers to the US. Visit the EDPB FAQs here. Visit the judgment here.

The Commission adopted 20.07.20 a communication on the protection of confidential information by national courts in proceedings for the private enforcement of EEA competition law. In this regard, national courts are likely to receive requests for disclosure of evidence containing confidential information. The Commission sees it as very important that national courts strike the right balance between the claimants’ right to access relevant information and the right of a party to protect confidential information. To support national courts in this task, the Commission has adopted a Communication seeking to provide practical guidance to national courts in selecting effective protective measures, considering among others the specific circumstances of the case, the type of information requested, the extent of the disclosure, the parties and relationships concerned as well as any administrative burdens and cost implications. The Communication presents a number of measures (e.g. redactions, confidentiality rings, use of experts, closed hearings) national courts may, depending on their procedural framework, order to protect confidential information in the context of disclosure requests throughout and after the closing of the proceedings, and it describes how and when such measures could be effective. The Communication is not binding for national courts and does not modify or bring about changes to the procedural rules applicable to civil proceedings in the different EEA countries. Visit the guidance paper here.

The Commission launched 23.07.20 a public consultation inviting interested parties to comment on draft revised EEA guidelines on regional State aid (the “Regional Aid Guidelines”). The guidelines are key for the assessment of many Norwegian financial mechanisms for regional policies. Stakeholders can respond to the consultation until 30.09.20. Visit the consultation here.

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, published 15.07.20 its final Guidelines on disclosure requirements under the Prospectus Regulation. The Guidelines provide guidance to financial market participants regarding the disclosure of financial and non-financial information in the prospectus. The Guidelines cover a variety of financial and non-financial topics, including: Pro Forma information; Working capital statements; Capitalisation and indebtedness; Profit forecasts and estimates; Historical financial information; Operating and financial review; Options agreements; and Collective investment undertakings. Visit the guidelines here.