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Competition, EU and Regulatory newsletter

  • Ireland
  • General

09-05-2018

Decisions

Altice fined €125 million for gun-jumping

The European Commission has imposed a €124.5 million fine on Altice, the multinational cable and telecommunications company based in the Netherlands, for implementing its acquisition of the Portuguese telecommunications operator PT Portugal without competition clearance.

In February 2015, Altice notified the Commission of its plans to acquire PT Portugal. The transaction was conditionally cleared by the Commission in April 2015.

In May 2017, the Commission addressed a Statement of Objections to Altice detailing its concerns that Altice implemented its acquisition of PT Portugal before obtaining the Commission’s clearance, and in some instances, even before its notification of the merger.

The Commission has concluded that:

––certain provisions of the purchase agreement resulted in Altice acquiring the right to exercise decisive influence over PT Portugal, for example by granting Altice veto rights over decisions concerning PT Portugal’s ordinary business; and

––in certain cases, Altice actually exercised decisive influence over aspects of PT Portugal’s business, for example by giving PT Portugal instructions on how to carry out a marketing campaign and by seeking and receiving detailed commercially sensitive information about PT Portugal outside the framework of any confidentiality agreement.

State Aid

Ireland’s sugar sweetened drinks tax

The Commission has concluded that Ireland’s sugar sweetened drinks tax does not involve State Aid.

State Aid was being considered because while Ireland is entitled to decide on the objective of different taxes, in order to comply with State Aid rules, it must design taxes in a non-discriminatory manner.

The Commission found that the measure’s scope and design are consistent with the health objectives pursued by Ireland, namely tackling obesity and
other sugar related diseases.

The Irish tax will apply to soft drinks, i.e. water-and juice-based beverages containing added sugar with a sugar content of 5 grams or more.

The Commission found that soft drinks can be treated differently to other sugary products in view of health objectives.

Commission approves compensation granted by France to the French post office for its territorial coverage

The Commission has concluded that tax relief granted to the French post office (La Poste) to maintain the high-density coverage of postal services in France over the period 2018 – 2022 involves no State Aid.

La Poste’s ‘territorial coverage’ mission is designed to ensure high-density postal coverage, over and above the universal service obligation, particularly in rural areas.

La Poste will receive local tax relief worth a maximum of around €900 million over this period.

The Commission examined the measure under EU State Aid rules on public-service compensation, according to which companies can be compensated for the extra cost of providing a public service, subject to certain criteria.


News (Ireland)

CCPC clears proposed acquisition of the Irish Examiner

The CCPC has cleared the proposed transaction whereby the Irish Times would acquire the Irish Examiner.

This investigation analysed the likely competitive impact in the State of the proposed transaction in the following three potential markets: (i) the publication and sale of daily national newspapers; (ii) the sale of daily national newspaper advertising; and (iii) the sale of online advertising.

The CCPC found no evidence that the Irish Times and the Irish Examiner were each other’s closest competitor in the publication and sale of daily national newspapers or in the sale of advertising (whether in daily national newspapers or online) in the State.

The CCPC also found that, while sales of the Irish Times are predominantly made in Leinster, the vast majority of sales of the Irish Examiner are made in Munster.

In addition, post-transaction, both publications would continue to face competition from a number of newspaper publishers in all three potential markets.

As this transaction is a ‘media merger’, approval from the Minister for Communications, Climate Action and Environment is also required before the proposed transaction can be completed.

Merger Determination

Armalou - Spirit Ford / Lillis O’Donnell

This transaction involved the acquisition by Armalou Holdings Limited, through its subsidiary Spirit Ford Limited, of Lillis-O’Donnell Motor Company Limited.

In August 2017, the CCPC became aware that this transaction was put into effect prior to CCPC clearance.

The CCPC conducted, to the extent possible, a twostage competitive assessment of the transaction, i.e. in light of the market conditions operating at the time of the implementation of the transaction and in light of market conditions operating at the time of notification to the CCPC.

There were two potential horizontal overlaps between the activities of the parties in the State:

(i) the sale of new and demonstration Ford-branded passenger cars and Ford-branded light commercial vehicles, including the supply of intermediary financial services, aftersales services, repair services and the sale of parts and accessories for Ford-branded vehicles; and

(ii) the sale of pre-owned passenger cars and light commercial vehicles.


The CCPC assessed the likely impact of the transaction with respect to the State and the Greater Dublin Area, i.e. Dublin city and County Dublin.


In 2015, the parties had a combined market share estimate of 5.76% in relation to the total retail sale of new and demonstration Ford-branded passenger cars in the State.This figure remained relatively unchanged in 2017.

In relation to the total retail sale of new and demonstration Ford-branded light commercial vehicles in the State, the parties combined market share estimate in 2015 was 11.1%.This figure also remained relatively unchanged in 2017.

There were also at least nine other Ford dealerships within an hour’s journey from the target business which would act as a competitive restraint on Armalou post-transaction.

Regarding pre-owned vehicles, there were approximately 200 dealers selling pre-owned vehicles in the State who would act as a competitive constraint on Armalou.

In the end, the CCPC concluded that the transaction would not substantially lessen competition in any market in the State.

The CCPC’s investigation into the suspected breach of the mandatory notification requirements is ongoing.


Practice Note

Control and decisive influence

Merger control requirements under the Competition Act 2002 need to be considered if an individual, that already controls one or more companies, or a company acquires ‘control’ of another company (Company X).

A person / company will ‘control’ Company X for the purposes of the Competition Act 2002 if he / she / it is in a position to
exercise decisive influence over Company X.

For these purposes ‘decisive influence’ may be capable of being exercised over Company X if by reason of securities, contracts, or other means, decisive influence is capable of being exercised over the activities of Company X.

 

For more information contact

Sean Ryan, Partner

Disclaimer

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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