Two-minute Recap of Competition Law Matters Around the Globe – December 2022

AG Rantos’ Opinion in the European Super League Case Leans Towards UEFA and FIFA

In December, EU Advocate General Athanasios Rantos, a legal advisor to the European Court of Justice (“ECJ”), published his much-anticipated opinion in the case concerning UEFA and FIFA’s alleged abuse of dominance and violation of rules on anticompetitive agreements, following the announcement in 2021 by several major European football teams of their intention to form a separate European Super League. In the opinion, which is not binding on the ECJ, Rantos states that FIFA’s and UEFA’s rules requiring their prior approval for any new competition, and their threat of sanctions against clubs that participate in a project to create a new competition, are not prohibited under EU competition law. Further, Rantos notes that preserving the pyramid structure of sports and therefore protecting sporting merit and competitions that are accessible to all clubs, as well as financial solidarity, are legitimate objectives. In any case, Rantos in his opinion underlines that UEFA is the sole organiser of all major interclub football competitions at the European level and as such it has to “ensure that third parties are not unduly denied access to the market to the point that competition on that market is thereby distorted”.

First Excessive Pricing Fine in Israel

In December, Israel’s Competition Authority found that MBI Pharma abused its dominance by excessively pricing a genetic disorder treatment drug and fined the company EUR 2.2 million. The drug, CDCA-Leadiant, is used in cases of cerebrotendinous xanthomatosis (CTX), a rare genetic disorder that prevents cholesterol from being converted into a bile acid in the body. In 2018, the global manufacturer of Xenbilox, another drug for CTX that was also distributed by MBI, stopped manufacturing Xenbilox, and MBI started selling CDCA Leadiant after registering it with the Ministry of Health. However, the new medication costs roughly six times more than the old one.

European Commission Accepts Amazon’s Revised Commitments

By making Amazon’s proposed commitments binding, the European Commission has closed its investigations against the company without fines. The Commission was concerned that Amazon abused its dominant position in the French, German and Spanish markets for the provision of online marketplace services to third-party sellers. The Commission’s probe focused on whether Amazon's use of the non-public data of its marketplace sellers distorted fair competition on its platform.

Furthermore, the Commission was concerned that Amazon was treating its retail business and the sellers that use Amazon’s logistics and delivery services preferentially, due to the criteria that Amazon set to select the winner of the Buy Box (a tool that promotes a specific offer) and to enable sellers to offer products under its Prime Programme (Amazon’s loyalty programme that favours Amazon Retail and Amazon’s logistics and services). In an attempt to address the Commission’s competition concerns, Amazon offered remedies; however, the first commitment package was not adequate to eliminate the Commission’s concerns. To that end, Amazon revised its commitment proposal, which includes making a second competing Buy Box more visible on its e-commerce platform. Accordingly, Amazon offered to undertake (i) to prevent Amazon Retail from using non-public seller data, (ii) to present two Buy Boxes, and (iii) to treat sellers, including Amazon Retail, equally and allow a free choice of carriers.

The Commission found that Amazon's final commitments will ensure that Amazon does not use marketplace seller data for its own retail operations and that it grants non-discriminatory access to Buy Box and Prime. The commitment package covers all of Amazon's current and future marketplaces in the European Economic Area except for Italy, considering that the Italian competition authority already imposed remedies on the company to ensure the effective functioning of Italian markets. The Commission will monitor Amazon to ensure the proper implementation of its commitments. In case Amazon fails to comply with its commitments, the Commission could impose either a monetary fine of up to 10% of the company’s worldwide annual turnover without having to establish a breach of EU competition law rules, or alternatively, a periodic fine of 5% of the daily turnover for the time period of non-compliance.

Leniency Filing in the Bid Rigging Probe Concerning the 2020 Tokyo Olympics

Japan’s Fair Trade Commission and the Tokyo District Public Prosecutors Office are currently investigating nine companies with regards to alleged bid rigging for test events at the 2020 Tokyo Summer Olympics. These test events were conducted at the relevant venues to ensure security and identify any issues before the Olympics. The relevant investigation was launched after police arrested several officials of major advertising companies for bribing the Olympic and Paralympic Organising Committee to select them as sponsors. Reportedly, one of the investigated parties, Hakuhodo, admitted to prosecutors that they discussed contracts with their competitors. Another investigated party, ADK, reportedly filed for leniency regarding the alleged cartel.

Egypt to Adopt Ex-ante Merger Control Regime

Egypt is preparing to adopt a merger control regime that will require merging parties to seek the prior approval of the local competition authority and suspend the implementation of the transaction if the turnover thresholds are met. Under current legislation, the Egyptian competition authority is not vested with powers to approve a merger or acquisition, either in advance or subsequent thereto. However, the law currently provides for an ex-post notification obligation.

Tagged with: Competition, Competition Authority, Gen Temizer Ozer, Bulut Girgin, Simru Tayfun, Orcun Horozoglu