EU/Competiton: Industry and Consumer goods

Newsletter 7/2020

Sector specific updates
Norway - abuse: NCA closes investigation against Ringnes, subject to commitments

The Norwegian Competition Authority (NCA) has concluded its investigation related to alleged abuse of dominance of Ringnes following commitments proposed by the company. The NCA has investigated Ringnes since 2017. The Authority was concerned that Ringnes’ agreements had tied pubs and restaurants to Ringnes and forced these customers to buy beer exclusively from the company. Such agreements may hinder other breweries and suppliers access to the market, and amount to an infringement of the Competition Act’s prohibition against abuses of a dominant position (Section 11 of the Competition Act). Ringnes has committed not to conclude agreements that give the company exclusive rights to deliver beer to pubs and restaurants. Moreover, it must follow clearly from Ringnes’ agreements that the pubs and restaurants concerned are free to accept deliveries of beer from other breweries and suppliers. The commitments make it possible for other breweries and suppliers to compete effectively with Ringnes on price, as Ringnes has undertaken not to grant discounts that tie pubs and restaurants to Ringnes, or to reward customers that source all their requirements from Ringnes. A trustee will ensure that Ringnes complies with the commitments. If Ringnes should not act in accordance with the submitted commitments, the NCA may reopen the investigation and could possibly impose a fine for non-compliance under the Competition Act. It is the first time the NCA concludes an investigation by adopting a commitment decision, making commitments proposed by the company under investigation legally binding. Read more here.

Norway: Report on competition in the groceries sector

The Norwegian government published 19.06.20 a report on competition in the groceries sector. The report – as previous reports – identifies that there are few participants in the market and that competition is on a sub-optimal level. It does not however – again as previous reports – identify clear solutions to the problems identified. The key problem is, of course, the high barriers to entry to the market due to import restrictions on foodstuffs. In such a market, the main grocery chains will quite easily be in a position to retain market share and market power. The report can be visited here.

Mergers: Phase II in the proposed merger of Peugeot and Fiat Chrysler

The Commission has opened an in-depth investigation to assess the proposed merger of automotive companies Fiat Chrysler Automobiles N.V. (“FCA”) and Peugeot S.A. (“PSA”). The Commission is concerned that the proposed transaction may reduce competition with respect to light commercial vehicles (vans) below 3.5 tonnes in the EEA.

Mergers: Commission approves acquisition of Bayer's animal health division by Elanco, subject to conditions

The Commission approved 08.06.20 the proposed acquisition of Bayer AG’s animal health division by Elanco Animal Health Inc. The decision is conditional on the divestment of otitis products and several types of parasiticides in the EEA, the UK and globally. The transaction would lead to the creation of the second largest animal health company globally. Both Elanco and Bayer’s animal health division (“BAH”) develop and supply pharmaceuticals for pets and livestock worldwide. To address these concerns, Elanco and BAH offered to divest to one or more suitable purchasers, Elanco or BAH’s products and/or pipelines in relation to otitis, anticoccidials, parasiticides for pets in the EEA/UK, including all the necessary assets such as applicable licenses, contracts, and brands, as well as relevant studies and data. Visit the case dossier here.

Consultation: Pharmaceutical Strategy

The Commission launched 16.06.20 an online public consultation on the Pharmaceutical Strategy for Europe. Coming in the wake of the COVID-19 pandemic, the strategy, which will also inform the newly proposed EU4Health Programme and align with Horizon Europe for research and innovation, has the aim to ensure Europe’s supply of safe and affordable medicines to meet patients’ needs and support the European pharmaceutical industry to remain an innovator. The consultation will last three months and consists of questions, which will focus on key themes: strategic autonomy and manufacturing of medicines, access to affordable medicines, innovation, and environmental sustainability and health challenges. Visit the consultation here.

Consultation: Market definition notice

The Commission published 26.06.20 a public consultation on the Market Definition Notice used in EU competition law. The current Market Definition Notice dates from 1997, and the Commission now states – unsurprisingly – that the notice may not “address all pertinent questions arising today when defining the relevant product and geographic market”. The Commission has also gained a lot of experience in market definition all these years, techniques have evolved and the EU courts have provided additional guidance. The best practices that can be distilled from these developments may need to be reflected in a revised Market Definition Notice, and the Commission is seeking stakeholders’ feedback on this. The information collected through the public consultation will provide part of the evidence to be used in the evaluation. Stakeholders can submit their views and respond to the consultation until 09.10.20. Visit the consultation here.

Consultation - Norway: New state aid act

The Norwegian government launched 24.06.20 a consultation on a new state aid act for Norway. The new act – as the current act – is mainly focused on implementing all procedural provisions, i.e. the provisions of the act do not include substantive provisions. It proposes clarifications in relation to the stand-still provision and recovery; otherwise it is mostly a technical modernization of the implementation of existing procedural rules and EEA obligations. The deadline for comments is 01.10.20. Visit the consultation here.

ESA fines Telenor EUR 112 million for abuse of dominance

The Norwegian mobile communications sector consist of quite concentrated markets, with only two complete networks and Telenor as the incumbent provider. In a decision of 30.06.20 ESA found that Telenor abused its market dominance by a pricing strategy that resulted in rivals making a loss when selling residential mobile broadband services on tablets and laptops. In the view of ESA, during a critical growth phase in mobile data in Norway, Telenor’s wholesale prices for access to its network were higher than the retail prices it charged its own residential users for accessing mobile broadband services on large-screen devices, such as tablets and laptops. The decision rests on the view that, despite an acceleration in consumer demand for mobile data, Telenor’s pricing practices made it impossible for rivals that were dependent on buying wholesale access from Telenor to offer large-screen mobile broadband services to residential users without incurring a loss. According to ESA, these “margin squeeze” practices prevented rival companies from competing viably from 2008 to the end of 2012 in what was an evolving and fast-growing market at the time. ESA found this to be an illegal abuse of dominance pursuant to Article 54 EEA. Telenor has already stated that the decision will be tried at the EFTA Court. A public version of the decision has yet to be published. Visit ESA’s fact sheet on the decision here.

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