News Archive 2013

The EU Commission announced that it had decided to prohibit Ryanair’s third attempt to acquire full control of Aer Lingus on the grounds that it would reduce competition on flights in and out of Ireland.

London 21^st May – UK Competition Commission finds lack of competition in UK Cement market.

The UK Competition Commission (CC) issued the provisional findings of its inquiry into the aggregates, cement and ready-mixed concrete markets in the UK. The CC found that there was a combination of structural and conduct features that resulted in a lack of effective competition in cement markets through coordination.

London 30^th May – UK Competition Commission may force Ryanair to reduce Aer Lingus shareholding.

Ryanair may have to reduce its shareholding in Aer Lingus after the UK Competition Commission (CC) provisionally decided that its 29.8 per cent stake could reduce competition on routes between Great Britain and Ireland. The CC has provisionally concluded that the shareholding gives Ryanair the ability to influence the commercial policy and strategy of Aer Lingus, its main competitor on these routes. The Office of Fair Trading referred the matter to the Competition Commission in 2012.

Dublin 14^th August – High Court overturns ComReg Decision on Call Termination Rates.

The High Court ruled that communications regulator ComReg had acted ultra vires by requiring Vodafone to adopt a particular cost recovery methodology and in setting a maximum price for call termination of 1.01 cent per minute. Vodafone was the only mobile operator to appeal the ComReg decision.

Dublin 23^rd August – Newspaper reports Competition Authority searches of flooring contractors.

Newspaper reports claim that the Competition Authority had conducted searches of the offices of a number of flooring contractors as part of an investigation into alleged bid rigging. According to the reports the investigation was prompted by a complaint from a “whistleblower”.

London  28^th August – UK Competition Commission orders Ryanair to reduce its Aer Lingus shareholding.

The Competition Commission has concluded that Ryanair’s 29.8% shareholding in Aer Lingus restricts or is likely to restrict competition on air routes between Ireland and the UK. The Commission has instructed Ryanair to reduce its shareholding to just 5%. Ryanair had offered several remedies, but these were rejected by the Commission. Ryanair has said it intends to appeal the decision.

Dublin 4^th October – Rehab Lotteries to challenge lottery monopoly.

Charity group Rehab is reported to have issued proceedings against the State and An Post in respect of restrictions which impose a €20,000 prize cap on charitable lotteries. Rehab claims that this puts them at a competitive disadvantage relative to the State’s National Lottery.

Dublin 11^th October – Compecon submission calls for more ambitious programme of competitive tendering of bus services.

In a submission to the National Transport Authority (NTA), Compecon argued that the NTA had produced no economic case to support a finding that the continued operation of existing Dublin Bus and Bus Eireann services could only be guaranteed by entering new direct award contracts with the State bus operators when their current contracts expire in 2014. The Public Transport Regulation Act, 2009, provides that the NTA may enter into new direct award contracts only if it is satisfied that this is the only way to guarantee the continuation of such services. The NTA plans to reduce the services covered by the contracts by 10% in 2016 and competitively tender these services. Compecon’s submission calls for a more ambitious competitive tendering programme with 10% of Dublin Bus and Bus Eireann services being tendered annually beginning in 2015 with a corresponding reduction in their direct award contract services. 40% of services should be competitively tendered by 2019 when any new direct award contract would expire.

Dublin 16^th October – Compecon submission cited in Senate Debate on Taxi Regulation Bill.

For some reason, the Taxi Regulation Bill contains provisions relating to direct award contracts granting exclusive rights to Dublin Bus and Bus Eireann. Senator Sean Barrett cited Compecon’s submission to the National Transport Authority advocating increased competitive tendering of bus services during the Seanad debate on the Bill. Senator Barrett argued against the direct award of contracts to Dublin Bus and Bus Eireann and called for routes to be competitively tendered

London 8^th October – Competition Commission proposes major shake-up in cement and concrete sector.

The Competition Commission (CC) published proposed remedies to address competition concerns in the cement market. The CC’s provisional remedies propose requiring Lafarge Tarmac to sell a cement plant (and accompanying ready mix concrete plants if necessary) to facilitate entry of a new cement producer. The CC is also proposing to limit the flow of information and data between cement producers. Additionally, the CC is looking to increase competition in the supply chain for ground granulated blast furnace slag (GGBS—a partial substitute for cement) by ordering the sale of suitable production facilities. The latter remedy is subject to further consultation. The publication of proposed remedies is the penultimate stage of the CC’s investigation. The CC’s provisional findings, published in May, found that both structure and conduct in the cement sector limited competition by aiding coordination between the three largest producers (Lafarge Tarmac, Cemex and Hanson) and was likely to result in higher prices for all cement users.

Brussels 16^th October – EU Commission launches in-depth investigation into possible State Aid to airlines at Barcelona airports.

The European Commission announced that it has opened an in-depth investigation to assess whether marketing agreements concluded between public authorities and airlines using Girona-Costa Brava and Reus airports in Catalonia are in line with EU State aid rules. The Commission stated that it had received a complaint from an airline with operations at Barcelona-El Prat airport in May 2012 about marketing agreements related to Ryanair’s operations at Girona and Reus. The complainant alleged that the agreements amounted to illegal state aid in favour of Ryanair. The Commission stated that it will investigate all airlines that have signed similar agreements in respect of Girona and Reus airports. The Commission stated:

“On the basis of the information at its disposal the Commission cannot exclude that the marketing agreements give the airlines and/or the airports involved an undue advantage vis-à-vis their competitors, and are thus incompatible with the internal market.”

Brussels 4^th December – Eight Major Banks Agree €1.7 Billion Settlement over rate-rigging.

Eight major banks agreed to pay a settlement of €1.7 billion to the EU Commission in respect of alleged cartels which had fixed key benchmark interest rates.

Dublin 11^th December – High Court Upholds CER Ruling on Gas Interconnector Charges.

The High Court rejected a judicial review application brought by Shannon LNG Limited challenging a determination by the Commission for Energy Regulation on user charges in respect of the natural gas transmission network. Shannon LNG had challenged the decision because it provided that usage charges should include the cost of the two natural gas interconnectors between Ireland and Scotland.

Dublin 18^th December – High Court Rules Galway County Council did not Abuse a Dominant Position in setting charges for ferry passengers at Kilronan Harbour.

The judgment related to a judicial review brought by Island Ferries Teoranta (IFT) in respect of a decision by Galway County Council (GCC) to impose a charge of 80 cents per passenger for all ferry passengers landing at Kilronan harbour on Inis Mor, the largest of the three Aran Islands off the coast of Galway. IFT operates passenger ferry services between Rossaveal County Galway and Kilronan. IFT also alleeged that the charges involved an abuse of a dominant position by GCC as they were unfair and/or excessive. GCC had accepted that it had a dominant position as Kilronan harbour was the only harbour for passenger ferries serving Inis Mor. The Court found, however, that the charges were not unfair or excessive and did not therefore constitutes an abuse of a dominant position. The Court also rejected IFT’s judicial review application.  Compecon advised GCC in this case.