Portuguese healthcare companies and hospitals sanctioned by the Portuguese Competition Authority (AdC) €190m for collusive behaviour in public health services tenders
On 1 July 2022, the Portuguese Competition Authority (AdC) sanctioned a group of hospitals for collusive behaviour and imposed a total fine of €190.995.000. This conduct restricted competition for hospital health services tenders issued by the public health subsystem Instituto de Proteção e Assistência na Doença (ADSE). ADSE is a public health system reserved mostly to Portuguese civil servants and their families. It is complementary to the national health system (SNS). Portuguese healthcare companies and hospitals sanctioned by the Portuguese Competition Authority (AdC) €190m for collusive behaviour in public health services tenders The practices were related to the Portuguese market for the provision of private hospital health services by health subsystems. These practices also directly impacted (add full name) (IASFA), another health subsystem used by Portugal’s armed forces. The IASFA is indexed on ADSE’s price table and rules. For five years, from 2014 to 2019, six healthcare companies and groups of hospitals coordinated their strategy in the negotiations with ADSE, with the clear objectives of fixing price levels and other commercial terms and coordinating several threats of termination of the agreement with ADSE. The entities harmed by the practices were be the ADSE, i.e., the public health sub-system, and its beneficiaries. Indeed, the limited access to health services provided by public sub-systems forced patients in need of complementary services (i.e. not provided by the SNS) to resort to private health systems. The illegal conduct also affected the competitors of the defendants, who acted in concert. The decision indicated that there was an average upward trend in billing under the ADSE agreement equal to 5% per year. For IASFA, the trend was an average growth of 4% per year. The volume of trade affected during the cartel period is estimated at EUR 2.37 billion (based on the figures provided in the decision). If 5% of this amount was due to the infringement, the damage could amount to EUR 118.5 million. Your contacts: Akos Reger Natacha Espelta
Trucks cartel: New CJEU landmark judgement empowers victims of antitrust infringements with the right to request ex novo documents, created by the defendants (C-163/21, PACCAR e.a.)
On 10 November 2022, the EU Court of Justice rendered another key judgment in relation to the series of damages proceedings brought in Spain against participants in the European Trucks Cartel. This judgment on the interpretation of Art. 5(1) of the Damages Directive clarifies the wide scope of evidence to which claimants can request access to substantiate potential damages claims. The judgment further strengthens the effectiveness of private enforcement of EU competition rules and should have a positive impact on the whole wave of compensation claims against truck manufacturers in Europe.
Finnish Competition Authority (KKV) proposes a total fine of €44 million on HVAC infrastructure pipeline companies for prohibited cooperation
On 8 September 2022, the Finnish Competition and Consumer Authority (KKV) found that six companies, namely the three largest Finnish wholesalers and the three largest manufacturers of plastic infrastructure pipeline products for heating, ventilation, and air-conditioning (HVAC), had participated in prohibited coordination. The infringement lasted for more than six years, from 2009 to 2016. The KKV proposed that the Market Court impose a total fine of approximately €44 million. Finnish Competition Authority (KKV) proposes a total fine of €44 million on HVAC infrastructure pipeline companies for prohibited cooperation Plastic heating, ventilation, and air conditioning (HVAC) infrastructure pipelines are used for different types of construction, electrical and water supply products, such as pipes, runoff water systems, sewage systems, drainage systems and cable protection pipelines. These products are typically used in major constructions projects. The aim of the prohibited coordination was to increase the price level for infrastructure pipeline products by restricting wholesale competition. The conduct of the infringers was based on reciprocity: as a rule, the manufacturers refrained from directly trading with customers and directed sales to wholesalers. This was to the detriment of customers, especially in large construction projects, who hoped for the opportunity to also trade directly with manufacturers (as the price level is typically lower than wholesale). In return, wholesalers refrained from taking important quantities of competing products of other manufacturers who were not part of the prohibited coordination. The products in question are used in large construction projects, with a total market value estimated at around EUR 156 million in 2016. While there are only a few large suppliers in the affected market, the parties represented the vast majority of the market for plastic plumbing and heating products, with a combined share of around 70% both in terms of production and sales. Given the size of the market in 2016 and assuming a stable market size during the cartel period, the volume of trade affected could be estimated at EUR 936 million. Your contacts: Akos Reger Fabrice Van Boeckel
Dutch Competition Authority (ACM) publishes a study on Dutch cloud services and identifies switching barriers
On 5 September 2022, the Dutch Competition Authority (ACM) published a market study on potential anti-competitive practices and their negative consequences on the Dutch and European market for cloud services. Dutch Competition Authority (ACM) publishes a study on Dutch cloud services and identifies switching barriers Cloud services are IT services that are offered over the Internet. Users do not purchase any physical hardware and software; instead, they pay for the actual use of one or more services that run on the infrastructure of a cloud provider. Cloud services are often categorized into three categories (also known as “layers”): Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). The ACM found that it is difficult for users of cloud services to switch providers due to technical, organizational (data cannot always be transferred easily from one operator to the other) or financial (i.e., cloud providers charge high fees for data transfers) barriers. The report found that these barriers increase market consolidation, meaning that users are locked into the chosen cloud provider for a long time. In a market that has become increasingly saturated, this leads to risks of lower levels of innovation, lower quality and higher prices. The evolution of the market for cloud services also has an impact on the competitive dynamics of the entire Internet ecosystem in which the cloud is set to play an increasingly important role. Your contacts: Ben Bornemann Fabrice Van Boeckel
Trucks cartel: District Court of Amsterdam confirms the possibility for entities to bundle multiple damage claims in one action and applies uniformly Dutch law to those claims
On 27 July 2022, the District Court of Amsterdam delivered an important judgment in which it confirmed previous case law of Dutch courts on the validity of the ‘assignment model’, by which entities, such as CDC, effectively bundle multiple damage claims in one single action. The judgment is in line with EU law, in particular the principle of effectiveness. By choosing Dutch law as the law applicable to all damage claims, the Court has provided an effective solution for victims of competition law infringements.
Spanish largest construction firms fined €203.6m by the CNMC for bid rigging of infrastructure construction and restoration tenders
On 7 July 2022, the CNMC imposed a fine of €203.6m on the six main national construction firms for manipulating public tenders to build infrastructure over more than 25 years, between 1992 and 2017. On the same day, four of the six defendants (Ferrovial, Acciona, Sacyr and ACS) announced the initiation of an appeal procedure against the Decision Spanish largest construction firms fined €203.6m by the CNMC for bid rigging of infrastructure construction and restoration tenders Between 1992 and 2017, the group of sanctioned companies (referred to in the decision as the “G7”) met weekly to analyze public works tenders that had been published on different state procurement platforms. Since Lantania, the seventh member of the group, was not an addressee of the Competition Authority’s procedure, the company and its subsidiaries were not sanctioned. At the meetings, the sanctioned companies decided which tenders would share part or all of the work that would make up their technical bids. The companies could not depart from the agreement without the knowledge and approval of the other members of the group. In addition, during the weekly meetings, the companies exchanged sensitive commercial information (different than the knowledge necessary to share their work). For example, they shared their intention to bid or not to bid for tenders or their strategic temporary joint venture plans. The participants dissolved the group in 2017, expressly pointing at the anticompetitive nature of the agreements in their transcripts. The infringement falls under Spanish and European competition law. Hence, the conduct affected the market for public procurement works contracts in infrastructures and public building, as well as residential buildings to a smaller extent. The main affected individuals or companies identified in the Decision are the public administrations (including the Ministry of Public Works and its dependent bodies and related entities). They have the right to seek damages from national courts of EU member states. Your contacts: Ben Bornemann Jakob Rüggeberg
Assessing the compatibility of seemingly contradictory statistical evidence in the case of damage estimations (reflections on the article written by Peter Bönisch and Roman Inderst)
In a recent publication, Peter Bönisch and Roman Inderst tackle the delicate issue of the evaluation of seemingly contradictory econometric evidence. Introducing the concept of severity measures, they propose a method to avoid the common obstacles plaguing the interpretation of seemingly conflicting empirical evidence through the practical example of financial damage estimation in follow-on cases. This blog post discusses the ideas presented in the paper.
When is a truck a truck? Defining the relevant products for cartel damages claims
On 1 August 2022, the Court of Justice of the European Union has ruled in Case C-588/20 Daimler (Ententes – Camions à ordures ménageres) that specialised trucks are covered by the cartel found in the European Commission’s 2016 decision in Case AT.39824 Trucks. The judgment concerns the fundamental and practically relevant question of how to identify the products directly affected by a cartel infringement according to the decision of a competition authority, which in this respect is binding for the civil courts in a follow-on action for damages. As a result, the right of injured parties to access the Statement of Objections sent by that authority to the cartelists prior to the adoption of the decision will gain in importance, especially if this decision has finally been adopted after a settlement.
Trucks Cartel: the Supreme Court of Norway confirms jurisdiction of the Norwegian courts for follow-on damage action based on the principles of joint and several liability and the civil liability of the ‘undertaking’
In an interesting decision the Supreme Court of Norway confirms jurisdiction of the Norwegian courts for a follow-on damage action based on the principles of joint and several liability and the civil liability of the ‘undertaking’.
CJEU clarifies the temporal application of the new EU Damages Directive’s five-year limitation in cartel cases
In its landmark judgment of 22 June 2022 in Case C-267/20 – Volvo and DAF Trucks, the CJEU confirmed that the five-year limitation period under the EU Damages Directive on antitrust damages applies to all cartel damages claims which at the time of the transposition of the Directive into national law were not yet time barred. Equally, the Court stresses that neither the burden nor the standard of proof for the quantification of competition damages must be too high, and that national courts can estimate the amount of cartel damages where the action was brought after 26 December 2014. The judgment provides much awaited legal certainty for many cases in which the temporal application of the new limitation period and the quantification of damages under the Directive is at the heart of the debate.