BUT. Cartel investigation and director disqualification.
In March 2021, three more company directors were disqualified for several years after an investigation of their cartels by the UK Competition and Market Authority (CMA).
CMA investigations into leading lead rolling makers Associated Lead Mills and Royston Sheet Metal (both owned by International Industrial Metals) and HJ Enthoven (owned by Eco-Bat Technologies and traded as BLM British Lead) (BLM) resulted in an infringement ruling and general the amount of 9 million pounds (approximately 10.5 million euros, 12.5 million US dollars). The key finding was that the violations took place at a very high level with the involvement of directors who concealed actions that they knew were in violation of competition law through competition compliance training.
Although the companies completed their investigations, three directors were still disqualified. The two directors who were directly involved in the violations were barred from holding directorships and other positions in the companies for six and a half and four years, respectively. The third director, who was aware of the violation but did not take any action to prevent it, was suspended for three years. These disqualifications reflect CMA’s ongoing policy of addressing director disqualifications in most, if not all cartel cases.
Notable developments in the area of merger control in the UK in March 2021 include:
CMA’s March 25, 2021 announcement that it will direct the completed acquisition of Facebook, Inc. by Giphy, Inc. for an in-depth Phase 2 review unless the parties propose acceptable commitments to address the CMA concern. Giphy is an online database and search engine that allows users to share GIFs and stickers, including through Facebook and competing platforms. CMA’s Phase 1 investigation has raised concerns that the deal will result in less competition in display advertising and vertical foreclosures as Giphy may stop supplying GIFs to competing platforms.
CMA’s preliminary findings, released on March 24, 2021, during its Phase 2 investigation of the expected merger of Crowdcube Limited and Seedrs Limited and the transaction canceled the next day. The parties are the two leading providers of crowdfunding platforms (ECFs) in the UK and the CMA tentatively concluded that the merger could significantly reduce competition in the market for supplying ECF platforms to small or small businesses. medium-sized enterprises (SMEs) and investors in the UK.
On March 29, 2021, proving that not all “technical” deals require careful scrutiny, CMA announced its unconditional Phase 1 decision regarding the pending acquisition by Uber Technologies, Inc. by GPC Computer Software Limited (Autocab). Autocab supplies taxi companies with booking and dispatch software. He also operates a referral network for taxi operators and private landlords.
BUT. European Commission
|one.||The Commission publishes specific guidance on handling under Article 22 of the EU Merger Regulation (EUMR).…|
On March 26, 2021, the Commission published a Notice of Referrals in accordance with Article 22 EUMR, i.e. referrals made at the request of the national competition authorities (or at the invitation of the Commission itself). In line with its previous policy, the Commission discouraged referrals from Member States that did not have jurisdiction to verify a transaction. Thus, the reserve was rarely used if the transaction was not subject to notification in the referring Member State (Sara Lee / P&G case). However, on September 11, 2020, Commissioner Vestager said that in order to extend the merger control rules to such transactions, the Commission will begin accepting recommendations from national antitrust authorities on mergers that merit consideration at the EU level, regardless of whether they are national. the thresholds are met.
According to the Commission’s notification, the categories of cases that are normally eligible for transfers under Article 22 of the EUMR, when the merger is not subject to notification in the referring state (s), consist of transactions in which the turnover of at least one of the undertakings does not reflect its actual or future competitive potential. For example, cases where an enterprise: (1) is a start-up or newcomer with significant competitive potential that has yet to develop or implement a business model that generates significant profits; (2) is an important innovator or conducts potentially important research; (3) is a real or potentially important competitive force; (4) has access to competitive assets (for example, raw materials, infrastructure, data or intellectual property rights); and / or (5) provides products or services that are key resources / components for other industries. In its assessment, the Commission may also consider how the value of the remuneration received by the seller compares to the turnover received.
Although the referral is subject to the deadlines set in Article 22, the fact that the transaction has already been closed does not preclude a Member State from requesting a referral. However, the Commission generally does not consider the referral to be appropriate if more than six months have elapsed since the concentration.
B. State Aid: The CJEU rejects the Commission’s appeal against the General Court’s decision in the Tercas case.
On March 2, 2021, the EU Court of Justice (CJEU) upheld the decision of the General Court of Justice (GC) of March 19, 2019, by which the latter overturned the Commission’s decision, finding that certain measures (financial contribution and guarantees) were provided by the Italian Deposit Guarantee Fund (FITD) Bank Banca Tercas were incompatible with government aid. The CJEU confirmed the decision of the General Court that the measures in question do not qualify as state aid, since they do not entail the use of state resources and are not imputed to the state.
In its decision, the CJEU rejected the Commission’s argument that the GC had set a higher standard of proof to demonstrate that a measure was imputed to the state, where the measure was provided by a private entity such as FITD, a consortium of Italian banks governed by private law. – not a government obligation. On the contrary, the CJEU pointed out that Italian law does not give the government agency, namely the Italian Banking Authority (Banca d’Italia), the power to influence the content of the measures taken by the FITD. Moreover, following the opinion of A.G. Tancheva, CJEU stressed that the elements presented by the Commission do not demonstrate that the measures were imputed to the state, especially in light of the limited role of the Bank of Italy in the context of these measures. Finally, the CJEU rejected the Commission’s argument that the GC did not look at the elements of evidence globally, but rather examined them in an “atomistic” way.
WITH. The CJEU overturns the General Court (GC) ruling in the Fútbol Club Barcelona case.
On July 4, 2016, the Commission found that Spain had provided illegal and incompatible assistance to four football clubs by introducing a tax regime providing a reduced corporate tax rate for clubs operating as non-profit legal entities (as opposed to those operating as non-profit legal entities) … public limited companies). Such a decision was then overturned by the GC, which – in its decision of 26 February 2019 – found that the Commission had not proven, in accordance with the necessary legal standards, the existence of an economic benefit accorded to the beneficiaries of the measure in question.
On March 4, 2021, the CJEU overturned the aforementioned GC decision, finding that the GC had erred in legal error when it found that the Spanish measure should be classified as both individual aid and aid scheme, whereas, in the CJEU’s view, this measure should have qualified solely as help scheme. However, the CJEU found that such an error in law invalidates the GC’s arguments regarding the standard of proof applicable to the Commission’s assessment of advantage.
According to the CJEU, the GC erroneously required the Commission to assess the individual situation of each beneficiary in order to check whether certain deductions available to beneficiaries are capable of offsetting the benefit arising from the preferential tax rate. In view of the above, the CJEU concluded that the aid scheme under consideration should, from its inception, prioritize clubs operating as non-profit organizations over clubs operating as public sports limited companies, thereby giving them an edge.
© 2020 Greenberg Traurig, LLP. All rights reserved. Review of National Legislation, Volume XI, Number 98