EU/Competiton: Industry and Consumer goods
In July, ESA adopted two major decision on aid to carbon capture in Norway. In a decision of 17.07.20, ESA approved Norwegian Full-Scale Carbon Capture and Storage: up to EUR 2.1bn in aid to meet climate goals. The CCS Full-Scale project is a central part of Norway’s efforts to reduce its carbon footprint and meet the European goal of climate-neutrality by 2050. It is the largest single state aid award ever approved ESA. By supporting the project, the Norwegian government aims to facilitate further scaling up of CCS globally, by sharing knowledge and experience. The project will establish infrastructure for capture, transport and storage of CO2 emissions that can pave the way for future investments, innovation and technology in CCS as a climate-change mitigation tool. The approved project would allow for the establishment of carbon capture facilities at Norcem, a cement factory in Brevik, and Fortum Oslo Varme, a Waste-to-Energy plant. The captured CO2 is then to be transported and stored deep below the seabed in the North Sea. This part of the process is to be carried out by a joint venture between Shell, Total and Equinor, known as Northern Lights. The Full-Scale CCS Project promises to become the first of its kind to go live in Europe. It has a budget of up to EUR 2.57 billion (NOK 27.6 billion), which will cover construction and 10 years of operation. The Norwegian government would cover around 80% of the project’s estimated budget. Shortly thereafter, in a decision of 30.07.20, ESA approved a prolongation of Norway’s financing for the flagship carbon capture testing facility established in Mongstad (the TCM). The TCM will receive financing for a further three years and four months. The aid measure supports the TCM in making CCS technology a sustainable industry with widespread cost-effective deployment possible at scale. The total operating budget of the TCM is estimated at NOK 752 million, of which approximately NOK 578 million (EUR 54 million) is granted as aid over the prolongation period. In 2017, ESA approved NOK 652 million financing of the Mongstad project. Non-confidential versions of ESA’s decision has yet to be made public.
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 European Investment Bank (EIB) signed 29.07.20 a USD 350 million loan agreement to support the financing of Europe’s first home-grown gigafactory for lithium-ion battery cells, Northvolt Ett, in Sweden. The financing is supported by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe. In 2018, the EIB also supported the establishment of the demonstration line Northvolt Labs, which produced its first battery cells in late 2019. The new factory is currently under construction in Skellefteå in northern Sweden. Noting the region’s clean power base, building the factory in northern Sweden will enable Northvolt to utilise 100% renewable energy within its production processes. The project is a key competitor to similar Norwegian projects, e.g. Freyr AS. Read more here.
By a market testing decision of 15.07.20, the Commission invites comments on commitments submitted by Aspen to address the Commission’s concerns over excessive pricing as regards six off-patent cancer medicines. Aspen proposes to reduce its prices in Europe for these medicines by 73% on average. In addition, Aspen proposes to ensure the continued supply of the medicines for a significant period. The commitments proposed by Aspen cover all medicines and all EEA countries. The proposed commitments aim at bringing to an end Aspen’s suspected excessive pricing conduct with respect to its six off-patent cancer medicines, which the Commission suspects to constitute an abuse of a dominant position. The commitments would achieve this by introducing quick, tangible and lasting changes in the markets for each of the six products and in each country where the medicines are sold. They would (i) immediately apply price reductions to Aspen’s net prices, (ii) impose a ten-year price-ceiling, and (iii) guarantee supply. Comments can be sent within two months from the publication of the commitments in the Official Journal. The Commission will then take a final view as to whether the commitments sufficiently address competition concerns. Visit the case dossier 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.