European and Swedish Antitrust News (September 7, 2020)

Photo: Raysonho

The European Court of Justice has dismissed an appeal by Nexans against a EU Commission fine for a cartel, thereby clarifying that the Commission’s powers to conduct dawn raids are not to be interpreted narrowly. In other news, the Swedish government has proposed legislation to prohibit foreign takeovers and the SCA has voiced its support of another government proposal to reform competition among medical providers, a published study has found that innovation and growth-targeted grants are inefficient, and two online hotel booking agencies will continue their voluntary commitments on contract terms.

ECJ dismisses Nexans, clarifies extent of dawn raid rules. The European Court of Justice has dismissed an appeal by Nexans against a Commission decision to fine Nexans for a cartel in the power cable industry in 2014. Nexans argued that the Commission didn’t have the power to copy data without prior inspection at a dawn raid and continue inspection at the Commission’s premises. The judgement clarifies that the regulations of dawn raid powers are not to be interpreted narrowly.;jsessionid=E4B8641F25C82CFABC2C4C69B8058A71?text=&docid=228682&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=17305104

Government proposes legislation to prohibit foreign takeovers. Under current legislation, takeovers of businesses of importance to national security in Sweden must be notified to security services but the state cannot intervene. Under new legislation proposed for January 1 2021, the seller of such a business must first consult with a state authority and the state will gain power to prohibit a takeover.

Inefficient grants create “subsidy entrepreneurs”. The Journal of Industry, Competition and Trade has published a study of Swedish governmental grants which finds that the current way of supporting firms with innovation and growth-targeted grants is inefficient. Data suggest that there is a population of firms that specialize in grant seeking, at the expense of market production, which the authors label “subsidy entrepreneurs”.

Online hotel booking agencies to continue voluntary commitment. The agencies and Expedia were investigated in 2015 by the Swedish Competition Authority, as well as authorities in France and Italy, for contract terms that prohibited hotels to offer lower prices through competing sales channels. Those investigations were closed after the agencies offered voluntary five-year commitments on contract terms, and the agencies have now notified that they will continue those commitments.

SCA supports proposed health care reform for increased competition. Under current legislation, all medical and physiotherapy providers in Sweden are reimbursed according to national rates negotiated between the Swedish Association of Local Authorities and Regions and the Swedish Medical Association. The Swedish Competition Authority has stated its support of a proposed reform in which competition is expected to increase through regional public procurement of health care.

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