The European Commission recently imposed a record fine of €4.34 billion on Google. The commission identified a number of abuses and concluded that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system. In such an innovative and competitive industry, a decision and fine on this scale arguably sends the wrong message.
The EU General Court recently opined for the first time on the legality of reverse payment settlement agreements. However, those waiting for practical guidance and clear guidelines delineating lawful from unlawful settlements will be disappointed. The judgment is a muddle of conflicting ideas about patents and competition law from which no coherent counselling standard emerges. It is hoped that the inevitable appeals will produce a clearer standard by which to judge settlements.
EU Competition Commissioner Margrethe Vestager recently announced that she will propose an inquiry into the e-commerce sector, focusing on contractual restrictions and geo-blocking in the online sale of goods and digital content. The European Union is likely to send detailed requests for information across the supply chain to suppliers, e-tailers and price comparison or marketplace platforms.
Over the course of 2014 the European Commission issued a total of €1.7 billion in fines for cartel activities, due largely to the penalties imposed in the automotive bearings cartel (approximately €950 million) – the fourth-highest cartel fine ever imposed at EU level. The trend to settle decisions prevailed and the commission continues to target facilitators of cartel behaviour.
During 2014 decisions are expected in a number of major cartel and abuse of dominance cases and new rules on patent and know-how licences are set to enter into force. Recent procedural changes to the EU merger control regime have entered into effect and aim to reduce the burden on parties to corporate transactions.
Dawn raids are a key investigative tool for the European Commission and officials have powers to inspect premises, seize documents and interview employees. The commission is increasingly tough on failures to play by the rules and serious fines have been imposed in recent years. During a raid companies are advised to remain calm, cooperate with inspectors and ensure that no documents are destroyed until further notice.
The European Commission imposed fines of €146 million on Lundbeck and a number of generic companies for entering into alleged pay-for-delay patent settlement agreements. Pay-for-delay deals are now classified as severe competition law infringements. The non-confidential version of the final decision is not yet publicly available; only once it is will the commission's theory of harm be fully understood.
'Crisis cartels' – schemes designed to downsize a sector in an orderly fashion – are not tolerated by the European competition authorities. In enforcement terms, there has been no retreat on this principle and the authorities are being particularly vigilant to the rise of cartels in a recession. But do Europe's competition laws offer any respite to industries feeling the effects of the economic crisis?
EU Competition Commissioner Joaquin Almunia has shown himself willing to tackle some difficult and sometimes highly political issues. In 2013 the commission is poised to take a stand on a number of key issues, including patent settlement agreements, cartels and controversial mergers. While the commission is committed to efficient enforcement, it has equally shown that it is prepared to tackle tough cases.