EU/Competiton: Industry and Consumer goods

Newsletter 10/2020

The Norwegian Competition Authority issued 24.09.20 pursuant to which they consider imposing a fine of NOK 3.89 million on Bokbasen, a fine of NOK 151.9 million on Cappelen Damm, a fine of NOK 93.4 million on Forlagshuset Vigmostad & Bjørke, a fine of NOK 202.4 million on Gyldendal and a fine of NOK 50.8 million on Aschehoug. The NCA also intends to hold the publishers’ respective parent companies jointly and severally liable for the infringement. The collusion at issue related to exchange of information allegedly taken place via a database operated by Bokbasen. The publishers have subscribed to a service provided by Bokbasen, which has given them access to information about the other publishers’ book releases. The four publishers all have an ownership interest in Bokbasen and are represented in its Board of Directors. According to the NCA, the publishers have had an insight into and influence over the operations of Bokbasen, including the services offered and the information that could be exchanged via the database. The NCA’s preliminary assessment is that Bokbasen has participated in the infringement by facilitating the information exchange. The NCA considers that the illegal conduct has been ongoing for several years. The NCA’s view is that the practices in question have restricted competition by object in breach of the prohibition against anti-competitive agreements and concerted practices in Section 10 of the Competition Act and Article 53 EEA.

In a reasoned statement of objections of 21.08.20, the Norwegian Competition Authority raised its preliminary concerns against the (horizontal) Gresvig / Sport 1 merger in the Norwegian sports retail sector, notified 21.04.20. Gresvig and Sport 1 is the two of the three largest sports retails chains in Norway. In several minor cities in Norway, the merger may lead to only one sports retail chain being present post closing. Two key arguments of the parties are (i) the competitive pressure from e-commerce, and (ii) the general restructuring of the sports retail business in Norway also seeing a shift from general chains to wholly-owned stores (i.e. high-end brands approaching end-customers via wholly-owned stores or selective distribution including e-commerce rather than the traditional ‘brick-and-mortar’ sports outlet model). After having analyzed the parties’ comments to the SO the NCA approved 22.09.20 the concentration with no remedies.

In a reasoned statement of objections of 30.09.20, the Norwegian Competition Authority raised its concerns against the (horizontal) Schibsted (Finn.no) / Nettbil merger in the sector for internet ads for used cars. The Schibsted-owned Finn.no is the by far largest service in the market and Nettbil is a new participant in the market.

The Commission opened 21.09.20 an in-depth investigation to assess the proposed acquisition of Eaton’s hydraulics business (“Eaton Hydraulics”) by Danfoss. The Commission is concerned that the proposed acquisition may reduce competition in the supply of certain hydraulic components for mobile machinery. Visit the case dossier here.

The Commission published 08.09.20 a Staff Working Document that summarises the findings of the evaluation of the Vertical Block Exemption Regulation (“VBER”), together with the Vertical Guidelines. The evaluation show that the market has changed significantly since the adoption of the VBER and the Vertical Guidelines, in particular due to the growth of online sales and of new market players such as online platforms. These developments have led to a number of changes in distribution models, such as increased direct sales by suppliers and a greater use of selective distribution systems, which allow suppliers a tighter control over resale conditions. Similarly, new types of vertical restrictions, such as restrictions regarding sales through online marketplaces and restrictions on online advertising, as well as retail parity clauses, have become more widespread. Against this backdrop, the evaluation has identified a number of issues with regard to the functioning of the rules. These include the following: (i) Some provisions lack clarity, such as the rules defining agency agreements. (ii) Other provisions are difficult to apply or are no longer adapted to the current business environment, notably when it comes to applying the existing rules to new market players that do not fit into traditional supply and distribution concepts and to new online sales restrictions. (iii) Some gaps are identified in the rules, such as a lack of guidance on how to assess retail parity clauses or restrictions on the use of price comparison websites, and areas that do not refer to case law issued since the adoption of the rules (e.g. the EUCJ’s Coty judgment C-230/16). (iv) There remains significant scope for diverging interpretations of the rules by national competition authorities and national courts, which is an important issue of concern for stakeholders, as it reduces the benefit of the rules. (v) While the evidence suggests that the lists of hardcore restrictions and excluded restrictions are generally appropriate, there may still be scope to further reduce the burden for businesses associated with self-assessing the compatibility of their agreements with Article 101 TFEU / Article 53 EEA. This could be achieved by exempting, in some specific areas of the rules, additional vertical agreements for which stakeholders have indicated that they would normally satisfy the conditions of Article 101(3) TFEU / Article 53 (3) EEA. There is also room for simplification and further cost reduction, notably by reducing the complexity of the rules. Visit DG COMPs dedicated VBER review website here.

In the EUCJ Schrems II judgment (C-311/18) the court indicated that companies relying on SCCs are responsible for determining whether the recipient country’s law concerning government access to data provides privacy protections meeting EEA legal standards. The EUCJ in Schrems II also invalidated Commission Decision 2016/1250 underlying the EU-U.S. Privacy Shield. The Court found that the Commission’s record underlying Decision 2016/1250 did not establish that privacy protections in U.S. law relating to intelligence agencies’ access to data meet EEA legal standards. Notwithstanding this finding, companies transferring data to the United States under SCCs today are responsible for undertaking their own independent analyses of all relevant and current U.S. law relating to intelligence agencies’ access to data, as well as the facts and circumstances of data transfers and any applicable safeguards, in assessing whether the transfers satisfy EEA law. The United States government has prepared a White Paper, focusing in particular on the issues that appear to have concerned the EUCJ in Schrems II, for consideration by companies transferring personal data from the EEA to the United States. The White Paper provides an up-to-date and contextualized discussion of this complex area of U.S. law and practice, as well as citations to source documents providing additional relevant information. It also provides some initial observations concerning the relevance of this area of U.S. law and practice that may bear on many companies’ analyses. The White Paper is not intended to provide companies guidance about EU law or what positions to take before European courts or regulators. Visit the white paper here.