Federal Cartel Office publishes preliminary assessment in Facebook probe

On December 19, 2017, the FCO has published a press release (here) and a background paper (here), outlining the preliminary assessment in the Facebook proceedings: Facebook is considered dominant in the German social media network market and to abuse its position through collecting and combining user data from third-party sources in a very broad way.

The allegations focus on collecting user data from third-party websites or Apps with a Facebook like button, even if the user does not click on it.  The FCO finds that this practice infringes data protection laws, and Facebook’s general t&cs therefore violate the legal principles on general terms and conditions, which in turn qualifies as an abuse of dominance.

The fact that the FCO publishes a background paper pending proceedings is unusual.  It may be explained by the great public interest in these proceedings, in which the FCO explores new territory.  In addition, the FCO thereby puts some public pressure on Facebook.  The proceedings raise the question whether antitrust law is the proper tool to tackle data protection law infringements.  Silke Heinz is quoted on this in Global Competition Review, see here.

Bundeskartellamt publishes background paper on innovation

The Bundeskartellamt has published a background paper on innovation and related challenges in the antitrust law practice in October 2017, see here.

The paper covers economic and legal aspects of innovation across various areas of antitrust analysis, a hotly debated topic in recent months, notably after the European Commission’s Dow/DuPont merger decision. Silke Heinz has published a blog on the background paper on Kluwer Competition Law Blog, see here.

Opinion of Advocate General at the Court of Justice of the EU supports selective distribution and the possibility to impose certain restrictions in online sales

On July 26, 2017, Advocate General Wahl issued his opinion in the proceedings referred to the Court of Justice of the EU from Frankfurt’s Court of Appeals in case Coty vs. Parfümerie Akzente.  The opinion confirms the Court’s longstanding jurisprudence that manufacturers of luxury goods can opt for selective distribution in order to protect a brand image and impose certain restrictions on authorized dealers.  The opinion finds that the Court’s ruling in case Pierre Fabre has not changed this principle.  In the case at hand, Wahl considers Coty’s prohibition for dealers to sell the luxury cosmetic goods via discernable third-party Internet platforms in principle as compatible with Article 101 TFEU.  Wahl does not qualify the prohibition as a hardcore restriction, so that it can at least be exempted under the vertical group exemption regulation or individually under Article 101(3) TFEU.  The opinion thus differs from the Bundeskartellamt’s position in similar questions. The Court of Justice now needs to rule. Silke Heinz is quoted on the opinion in Global Competion Review and by Bloomberg.

Bundeskartellamt fines car parts suppliers, taking into account car manufacturer’s strong buyer power

On July 13, 2017, the FCO imposed fines totaling € 9.6 million on three suppliers of heat shields for automotive engines and terminated the proceedings with settlements.  The proceedings were triggered by a fourth company through a leniency application.  Based on the FCO’s press release (see here in German), the case concerned exchange of sensitive information (i.a. on the status of negotiations with car manufacturer VW) as well as an agreement to pass on increased input material prices to VW in 2011.  It seems that the infringement was limited in time to 2011, which may explain the relative moderate total fine amount.  The FCO moreover took into account the cooperation of some of the companies and the settlements. Interestingly, it seems that the FCO also considered VW’s strong buyer power and the car manufacturer’s own conduct as mitigating factor when setting the fines.  Silke Heinz is quoted on the case in Global Competition Review, see here.

European Commission opens three proceedings against possible procedural infringements in merger control cases

On July 6, 2017, the Commission has opened two proceedings because of provision of incorrect or misleading information in merger control proceedings, i.e. against Merck (Merck/Sigma-Aldrich) and GE (GE/LM Wind).  The allegation is that the companies did not or disclose too late information that was important for the assessment of the merger or the remedies package, respectively.  At the same time, the Commission has opened proceedings against Canyon for possible gun jumping in the context of its acquisition of a Toshiba unit.  This concerns in particular the structure of “parking” the target with an interim third party prior to the merger clearance.  The parties in all three proceedings may face fines.  Silke Heinz is quoted on these proceedings in Global Competition Review, see here .

Bundeskartellamt publishes merger remedies guidelines

On May 30, 2017, the Bundeskartellamt (FCO) has published guidelines on remedies in merger control.  The guidelines offer a detailed and helpful overview of the FCO’s practice and related jurisprudence, with many examples.  The document elaborates on the regulatory framework requiring structural remedies under German law, as well as the FCO’s preference for divestitures in practice.  Silke Heinz deals with the most important aspects of the guidelines and compares the remedies practice in Germany to the practice at EU level in a contribution to e-Competition Bulletin, see here.

New competition law has entered into force

On June 8, 2017, the new competition law reform in Germany (9th amendment to the Act Against Restraints of Competition) has finally come into force.  It includes several novelties, such as in the area of private damages (implementation of the EU directive and disclosure of evidence), merger control (new threshold based on the transactional size), the notion of market definition and market power in the area of digital platforms, closing the liability gap regarding fines in the case of legal succession (so called “sausage gap”), new limited powers for the FCO in the area of consumer protection, etc.  Silke Heinz explained the most important changes in a blog on Kluwer Competition Law Blog, to which we refer again here.

EU Commission fines Facebook over misleading information in Facebook/WhatsApp merger

On May 19, 2017, the European Commission imposed a fine of € 110 million on Facebook for having provided misleading information in responses to requests for information during the merger control proceedings regarding the acquisition of WhatsApp in 2014.  The Commission has the power to impose fines for providing misleading or incorrect information in merger proceedings, in the amount of up to 1% of a company’s aggregated worldwide turnover.  This is now the first time that the Commission has used this power.  The fine on Facebook is relatively high, but remained below the 1% turnover threshold, given that the Commission found mitigating circumstances, inter alia that Facebook cooperated in the infringement proceedings.  Silke Heinz is quoted on the decision in Global Competition Review, see here.