Two-minute Recap of Competition Law Matters Around the Globe – March 2024

Potential gatekeepers have notified themselves, and Booking is under investigation in Italy

X (formerly Twitter) and Booking have notified the European Commission (“EC”) of their potential gatekeeper status under the Digital Markets Act (“DMA”). The EC has 45 working days from 1 March 2024 to review the gatekeeper status. Companies will have six months to comply with the DMA if they are designated as gatekeepers.

Speaking of Booking, the Italian Competition Authority is investigating whether Booking’s hotel partner program and discounted room rates have allowed the company to abuse its dominant position in the hotel booking services market. Booking gives more visibility to hotels that sign up to its hotel partner program and receives more commission from hotels. Booking offers discounted room rates to consumers through commissions it receives from hotels. However, these hotels are not allowed to offer a cheaper price on their own website or on any other platform than Booking. The authority will examine whether these practices exclude existing competitors from the market and create a barrier to entry for new competitors.

The trend towards scrutiny of below-threshold transactions continues to grow

The Italian competition authority has initiated its first Phase II investigation into a below-the-threshold merger. The authority found that the acquisition of the port terminal Termine San Giorgio by the shipping company Ignazio Messina & C could distort competition in the market for ro-ro cargo services.

While the number of under-the-threshold deals under investigation is increasing, they are not only on the radar of European authorities. Synopsys, a US chip design company, intends to notify its acquisition of Ansys, a software company, to the China’s State Administration for Market Regulation. Despite the deal falls below local merger thresholds, the SAMR is expected to review the USD 35 billion acquisition.

On the other hand, the future of Article 22 of the EU Merger Regulation (“EUMR”), which authorizes the examination of transaction below the thresholds, is uncertain. AG Nicholas Emiliou supported Illumina, a pharmaceutical company, in its appeal against the decision of the EU’s General Court, which upheld the EC’s interpretation of Article 22 of the EUMR. This interpretation allowed the EC to assess and block Illumina’s EUR 5.9 billion merger with Grail, another pharmaceutical company. AG Emiliou opposed the General Court’s interpretation stating that the General Court was interpreting Article 22 very broadly which resulted in a very significant extension of the EUMR. Furthermore, the General Court has granted the EC authority to assess and review any merger without regard to the merging companies’ turnover, EU presence, or the transaction value, and the EC could use this authority after the completion of the merger. The AG considers these decisions should be annulled.

The owner of the Formula One is set to acquire the owner of the MotoGP

Liberty Media, the owner of the Formula One, is close to finalizing its acquisition of Dorna Sports, a Spain-based company that holds the MotoGP motorcycle racing championship, for over EUR 4 billion. The transaction is expected that the transaction will undergo regulatory examination, particularly as in 2006 when private equity company CVC Capital Partners was forced to divest the MotoGP rights as part of its acquisition of Formula One.

Gatekeepers under the EC’s monitoring

The EC has initiated non-compliance investigations unter the DMA into Alphabet, Apple and Meta. These investigations relate to Alphabet’s steering and self-preferencing practices, Apple’s steering practices and Meta’s “pay or consent model”.

Prior to the non-compliance investigation against Apple, the EC has already fined Apple with a fine exceeding EUR 1.8 billion for abusing its dominant position in the market for distribution of music streaming apps to iPhone and iPad users via its App Store.

Spirit/JetBlue deal collapses

Following the district court’s decision to block their planned merger, US airlines, Spirit and JetBlue, have reached an agreement to mutually terminate their USD 3.8 billion agreement. The district court’s decision highlights that the merger would have led to higher fares and less choices for passengers.

Philippines updates merger thresholds

The Philippine competition authority has raised the thresholds for transactions subject to mandatory merger filing. Starting from 1 March 2024, transactions exceeding PHP 7.8 billion (approx. USD 139 million) in party size and PHP 3.2 billion (approx. USD 56 million) in transaction size must be notified to the authority before proceeding [1]. In the Philippines, both the party size and transaction size thresholds must be exceeded for a transaction to be required to undergo mandatory notification to the authority.