EU antitrust updates
European Commission Fines Teva EUR 462.6 Million Over Patent System Misuse and Disparagement Campaign
On 31 October 2024, the European Commission imposed a EUR 462.6 million fine on Teva for abusing its dominant position to delay competition against its multiple sclerosis treatment, Copaxone. The Commission found that Teva misused patent procedures to extend Copaxone’s exclusivity and disseminated misleading information about a competitor’s product to hinder its market entry and uptake.
Teva, a global pharmaceutical firm, held a basic patent for the active ingredient glatiramer acetate in Copaxone, which expired in 2015. The Commission’s investigation revealed that Teva extended Copaxone’s market exclusivity in multiple EU countries through two main strategies:
The Commission determined that Teva’s actions collectively violated Article 102 of the Treaty on the Functioning of the European Union (TFEU), marking the first time the Commission has fined a company for these specific practices. Teva’s conduct may have prevented price reductions, impacting public health budgets. Following inspections of Teva’s facilities in 2019, the Commission opened proceedings in 2021 and issued a Statement of Objections in 2022.
- Patent Manipulation: As its original patent neared expiration, Teva filed multiple divisional patent applications, creating a web of secondary patents focused on production processes and dosage. Teva used these patents to initiate injunctions against competitors. When it appeared likely that these patents would be revoked, Teva withdrew them, avoiding formal invalidity rulings and prolonging legal uncertainty for rivals.
- Disparagement Campaign: Teva launched a systematic campaign to undermine a competing glatiramer acetate product, spreading misleading information about its safety and efficacy despite approval from relevant health authorities. This campaign targeted key stakeholders, including healthcare professionals and policymakers, to slow or block market entry in several EU states.
Collusion fine of EUR 48.7 million imposed on České dráhy and Österreichische Bundesbahnen
On 23 October 2024, the European Commission fined České dráhy (ČD) and Österreichische Bundesbahnen (ÖBB) EUR 48.7 million for colluding to prevent RegioJet, a new entrant in Czechia’s long-distance rail market, from accessing used wagons.
Between 2012 and 2016, ČD and ÖBB coordinated to block RegioJet’s access to used wagons, which were critical for its operations. The Commission found that they:
- Coordinated to preven RegioJet from purchasing ÖBB’s used wagons.
- Manipulated wagon sales to favour ČD over RegioJet.
- Identified alternative buyers to keep wagons out of RegioJet’s reach.
- Shared confidential information regarding other bidders’ interest.
ÖBB’s cooperation under the leniency programme resulted in a 45% fine reduction. The Commission emphasised the importance of effective competition in rail transport, aligning with EU Green Deal objectives that prioritise efficient and environmentally-friendly transport options.
Court of Justice confirms annulment of EUR 1.06 billion fine imposed on Intel
On 24 October, the Court of Justice of the European Union has upheld in case C-240/22 P the General Court’s annulment of a EUR 1.06 billion fine imposed on Intel in 2009 for abuse of dominance. The Commission’s decision was originally based on Intel’s loyalty rebates, which allegedly aimed to exclude competitors.
After the case was remanded, the General Court’s 2022 ruling annulled the Commission’s decision. The Commission appealed, arguing procedural errors in the General Court’s review of the as-efficient-competitor test. The Court of Justice rejected the appeal, confirming that the General Court had the right to question the evidential value of the Commission’s assessments.
Other antitrust updates
French competition authority fines Schneider Electric, Legrand, and Rexel EUR 470 million for price fixing
The French competition authority has imposed fines totalling EUR 470 million on Schneider Electric, Legrand, and distributor Rexel for engaging in vertical price agreements in the low-voltage electrical equipment market. The agreements, dating from 2012 to 2018, allowed Schneider Electric and Legrand to fix resale prices to end customers, thus maintaining high standard prices across France.
An investigation found that a so-called “derogation” system was implemented in annual framework distribution contracts whereby, when end customers of low-voltage electrical equipment request directly from the supplier lower prices than distributors’ standard purchase prices, distributors’ standard purchase prices can be adjusted to enable distributors to meet these demands without selling at a loss. More specifically, the distributor enjoys, through the granting of a credit, a new “derogated” purchase price and can thereby align itself with the price sought by the end customer.
The new purchase price is sufficiently low to allow the distributor, if it so wishes, to grant additional price reductions to the end customer, as this option was never prohibited in the contracts in the file examined by the French competition authority. However, it concluded that, in practice, the companies in question had agreed to neutralise this possibility and, in effect, to fix end-customer selling prices. In so doing, they limited intra-brand competition between distributors, to the detriment of end customers, and helped to maintain high standard prices in France.
Spanish Competition Authority Fines Marcial Chacón for “Gun-Jumping” in Energy Sector Acquisitions
The Spanish Competition Authority (CNMC) fined Marcial Chacón EUR 13,320 for failing to notify the acquisition of Decail Energía and Electra La Honorina before completing the transactions in 2023 and 2024. Known as “gun-jumping,” this failure to notify before assuming control violated Spanish competition law, which requires pre-transaction approval for mergers and acquisitions.
Marcial Chacón eventually submitted the notification in May 2024, following a request from the CNMC. The CNMC granted first-stage approval in June 2024 and subsequently opened a disciplinary case for non-compliance. Marcial Chacón acknowledged responsibility, receiving a reduced fine under Article 85(3) of Law 39/2015 on administrative procedure, which encourages early admissions of guilt in exchange for a reduction of up to 40% in fines.
EFTA Surveillance Authority Conducts Dawn Raid in Iceland’s Retail Market
On 23 October 2024, the EFTA Surveillance Authority conducted a dawn raid in the Icelandic retail market to investigate suspected breaches of competition law. The focus is on potential anti-competitive practices related to the provision of essential retail services. This raid highlights the EFTA Surveillance Authority’s commitment to preserving fair competition in key economic sectors within the European Free Trade Association (EFTA) region.
Polish competition authority investigates Meta’s display changes and potential abuse of dominance
On 22 October 2024, the Polish Competition Authority (UOKiK) initiated a preliminary investigation following recent changes to how Facebook displays content links, specifically affecting Polish publishers. Meta Platforms Ireland, responsible for Facebook in the EU, adjusted its display format, now showing content links as single links without visual previews. UOKiK is examining whether this shift could reduce interest in journalistic content by lowering article views, thereby potentially impacting publishers’ visibility and revenues.
As usual, at the current stage, the investigation is conducted in rem and not directed at specific businesses and will assess if Meta’s changes constitute an abuse of its dominance. Should the UOKiK confirm these concerns, it may bring formal antitrust charges, with penalties reaching up to 10% of Meta’s turnover.
This move may reflect Meta’s response to Poland’s recent implementation of the EU Copyright Directive, which mandates compensation for press publishers when their content is used on digital platforms. The Directive allows for negotiations on compensation amounts, and if publishers and platforms cannot agree, a mediation mechanism is available, overseen by the Office of Electronic Communications (UKE). Similar disputes between Meta and publishers have arisen globally, with Meta blocking access to publisher content in Canada and challenging copyright laws in Italy.
Latvian Supreme Court Upholds Annulment of Procedural Fine Against SIA DEPO DIY
On 18 October 2024, Latvia’s Supreme Court upheld the annulment of a fine imposed on construction materials retailer SIA DEPO DIY by the Latvian Competition Council (CC). The fine was issued after DEPO allegedly provided incomplete information during a 2017 investigation into resale price-fixing in the construction materials sector, a case that ultimately identified a hub-and-spoke cartel involving several major players.
The CC had imposed a EUR 701,811 procedural fine, claiming DEPO’s responses were incomplete, as the company’s representative initially struggled to recall details of emails from 2007 and 2009, despite later offering more specific information. The Court found that DEPO had not intentionally withheld information, and that the CC’s questions lacked clarity, failing to elicit the specific information it sought. This ruling highlights the importance of precise questioning by regulatory authorities to uphold fair cooperation standards.
Polish competition authority fines Dell EUR 1.38 million for misleading information and mandates sales practice reforms
On 14 October 2024, the UOKiK fined Dell EUR 1.38 million for providing misleading information during an investigation into alleged anti-competitive practices within its sales system for IT infrastructure products, including desktops, laptops, and enterprise IT solutions. The investigation focused on concerns that Dell’s sales model restricted competition by allocating customers to specific sellers through an internal transaction registration system. When an authorised seller registered a potential transaction, Dell reportedly prevented other partners from offering competing prices for the same customer, even if requested, potentially depriving customers of better prices and choices.
To address these concerns, UOKiK has required Dell to revise its sales practices. Dell must now allow multiple authorised sellers to independently pursue agreements with customers without requiring Dell’s approval or disclosing the customer’s name. Furthermore, Dell must modify its discount system, allowing up to three distributors to access the same discounts on non-public procurement transactions based on transparent criteria. For public tenders, all authorised sellers will receive identical discounts, enabling broader competition and providing customers with a wider range of offers.
Dell has six months to implement these changes and report back to UOKiK on compliance. In addition to sales reforms, the UOKiK fined Dell for providing false information on customer interactions, which obstructed the investigation by delaying the detection of potential anti-competitive practices. The penalty was determined with consideration of the investigation’s complexity and Dell’s hindrance to regulatory duties.
UOKiK Investigates DJI Polish Distributors Over Potential Price-Fixing Agreement
Poland’s competition regulator, UOKiK, has launched a preliminary investigation into suspected price-fixing agreements among four companies distributing DJI products, including drones, cameras, and related accessories. DJI products, manufactured by China-based SZ DJI Technology, are widely used in various sectors, from recreational to professional applications, including emergency services and aerial surveying.
As usual, the investigation is preliminarily conducted in rem, examining whether distributors might have coordinated prices to restrict competition. If evidence confirms these allegations, UOKiK will initiate formal proceedings. Companies found guilty of such agreements could face fines up to 10% of their turnover, and involved managers could face penalties up to PLN 2 million.
Digital regulations updates
Commission initiates Digital Services Act (DSA) investigation against Temu
On 31 October 2024, the European Commission opened formal proceedings to investigate Temu’s compliance with the DSA. The investigation will assess whether Temu has adequately addressed risks in four key areas: sale of illegal products, addictive design features, content recommendation transparency, and data access for researchers.
The inquiry follows a preliminary analysis of Temu’s risk assessment report and information obtained through the Digital Services Coordinators’ network. If found non-compliant, Temu may face penalties under Articles 27, 34, 35, 38, and 40 of the DSA. The proceedings allow the Commission to take enforcement actions, including issuing a non-compliance decision or accepting commitments from Temu.
Commission concludes X should not be designated under the Digital Markets Act (DMA)
On 16 October 2024, the European Commission announced that X, following an in-depth market investigation, would not be designated as a gatekeeper under the DMA. This investigation, launched in May 2024, evaluated X’s online social networking service after it met certain quantitative thresholds. In its defence, X argued it did not serve as an important gateway between business users and end users. Following thorough consideration of stakeholder input and consultation with the Digital Markets Advisory Committee, the Commission agreed, finding that X is of a small scale both in relative, i.e. compared to other online social network services, and in absolute terms.
