EU/Competition: Transport and Shipping

Newsletter 12/2020

The Norwegian Competition Authority (NCA) published a statement 13.11.20 on unannounced inspections in the market for sea freight. The NCA stated that they have “…concerns that companies in the market for sea freight may have exchanged competitively sensitive information between themselves. The Authority has therefore carried out inspections in this sector with the view to establish whether or not any breaches of the Competition Act have been committed”. No companies have provided public information that they have been subject to these dawn raids.

The EFTA Surveillance Authority (ESA) approved 25.11.20 amendments making it easier for eligible bus and boat service operators to access funding. ESA approved 20.07.20 a scheme to compensate companies offering commercial, year-round, long-distance bus and boat services for losses incurred on specific routes as a result of the COVID-19 outbreak. The original scheme stated that an operator receiving compensation for public services would not be eligible to receive funding. Since very few long-distance routes in Norway are fully commercialised (not receiving any public funding), the original wording of the scheme blocked funding to most operators. The amendment aims to make a clearer distinction between routes eligible for aid, and those routes established by and operated on behalf of public authorities, which will not be eligible for aid. The 25.11.20 decision, which approves the scheme notified by the Norwegian government on 23.11.20, also extends the application deadline to 15.12.20. Visit the decision here.

ESA approved 24.11.20 an amendment and prolongation of the existing guarantee scheme for airline operators facing acute liquidity shortages until 30.06.21. ESA approved 30.03.20 a guarantee scheme to support Norway-based airline operators. The scheme sought to remedy serious disturbances in the industry by providing state guarantees to aviation operators facing liquidity shortages owing to a significant drop in air travel. The notified amendment pursues the same objective in light of the extended adverse effects. The maximum guarantee period has now been extended from two years to three years in order to ensure that more airlines, many of which face severe liquidity strain, have access to financing. ESA approved amendments to the scheme 10.07.20, and on 15.10.20, a prolongation of the scheme until the end of the year was approved. The 24.11.20 decision further extends the duration of the scheme until 30.06.21. Visit the decision here.

As most air transport markets globally, the domestic markets in Norway have plummeted during the pandemic. In a letter dated 27.11.20 the Norwegian government instructed the Norwegian Competition Authority to apply particular watchfulness when analyzing the national air transport markets when the activities are to resurface in the wake of the pandemic. Read the letter (in Norwegian) here.

In a 25.11.20 decision the Norwegian Competition Authority concluded that Verisure and Sector Alarm, by far the two largest players in the market, have engaged in illegal market sharing practices in the period from 2011 until 2017. According to the NCA Verisure and Sector Alarm agreed not to sell alarm services to each other’s customers through door-to-door selling. During the period in question, there was a substantial number of direct contacts between the two companies, according to the NCA, including: (i) Physical meetings, telephone conversations and e-mail correspondence. (ii) The two companies provided each other with detailed information about market strategies. (iii) They encouraged each other to comply with the agreed practices, and threatened each other with retaliatory measures when detecting deviations. The NCA carried out unannounced inspections 20.06.17 at the premises of Verisure and Sector Alarm. During the inspections, the NCA seized documents and electronically stored material. After the inspections, a substantial amount of evidence was systemised and examined, based on which the NCA conducted interviews with employees from both companies in the period February 2018 until September 2020. The decision followed a 17.06.19 Statement of Objections. The 25.11.20 decision imposes a NOK 766 million fine on Verisure. Sector Alarm accepted the SO and was fined NOK 467.3 million in a separate decision of 04.07.19. This is the highest fines in a cartel case in Norway to date.

The EFTA Surveillance Authority (ESA) approved 12.11.20 amendments to a guarantee scheme in Norway that ensures access to liquidity for companies, including a prolongation of the scheme. ESA approved 26.03.20 a guarantee scheme ensuring access to liquidity for small and medium-sized enterprises (SMEs) facing dwindling revenues due to the on-going COVID-19 pandemic. The approved scheme was aligned with the State Aid Temporary Framework to support the economy in the context of the COVID-19 outbreak adopted by the Commission. The Framework has now been amended to allow for guarantee schemes to remain in force until 30 June 2021. On 02.04.20 the scheme was amended to also include large enterprises; on 25.05.20 the scheme was prolonged until 31.12.20; and, on 31.07.20, the scheme was amended to include aid to micro enterprises in difficulty. COVID-19 measures continue to affect business operations, ESA has approved Norway’s proposal to extend the scheme so as to allow for guaranteed loans to be granted until 30.06.21. ESA has also approved that the loans can have maximum six years guarantee, rather than three. This will make repayment plans more manageable for businesses and can lower default risk. The scheme has a total budget of NOK 50 billion (EUR 4.66 billion). Visit the decision here.

The Commission published 25.11.20 its new Action Plan on Intellectual Property, which sets out five key areas for development over the coming years. The Action Plan proposes to upgrade a series of existing IP tools and make them fit for the digital age, including improving the supplementary protection certificates (SPC) for patented medicinal and plant protection products and modernising EU design protection. It aims at strengthening the protection of agricultural geographical indications (GIs) while considering the feasibility of a GI protection system for non-agricultural products at EU level. The Commission also launches an industry dialogue to address the impact of new technologies (such as AI and block chain) on the IP system. To ensure that companies have access to fast, effective and affordable protection tools and reduce the persisting fragmentation and complexity in the current system, the Action Plan calls for a rapid rollout of the unitary patent system to create a one-stop-shop for patent protection and enforcement across the EU. Visit the action plan here.

The EDPB adopted 10.11.20 recommendations on measures that supplement transfer tools to ensure compliance with the EEA level of protection of personal data, as well as recommendations on the European Essential Guarantees for surveillance measures. Both documents were adopted as a follow-up to the CJEU’s ‘Schrems II’ ruling. As a result of Schrems II, controllers relying on Standard Contractual Clauses (SCCs) are required to verify, on a case-by-case basis and, where appropriate, in collaboration with the recipient of the data in the third country, if the law of the third country ensures a level of protection of the personal data transferred that is essentially equivalent to that guaranteed in the EEA. The CJEU allowed exporters to add measures that are supplementary to the SCCs to ensure effective compliance with that level of protection where the safeguards contained in SCCs are not sufficient. The recommendations on the supplementary measures will be submitted to public consultation until 21.12.20. They will be applicable immediately following their publication. The consultation on Recommendations 01/2020 on measures that supplement transfer tools to ensure compliance with the EU level of protection of personal data can be visited here. The (final) Recommendations 02/2020 on the European Essential Guarantees for surveillance measures can be visited here.