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Mai Muto focuses her practice on European competition law matters, including merger control, cartels and abuse of dominance. She advises multinational companies on antitrust compliance matters and conducts internal investigations relating to antitrust violations. Mai counsels clients on distribution, research and development, and licensing agreements, as well as on data protection issues. She also assists clients in multi-jurisdictional merger filings and represents third parties in merger control procedures before the European Commission. Read Mai Muto's full bio.

On 14 February 2019, the General Court of the European Union (GCEU) annulled the decision of the European Commission (Commission) on the Belgian excess profit exemption system (SA.37667) in its entirety on the ground that the Commission erroneously categorized the system as an “aid scheme” (T‑131/16 and T‑263/16).

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Background

Since June 2013, the Commission has been investigating the tax practices of Member States. In the context of this investigation, on 11 January 2016, the Commission found that the so-called Belgian excess profit exemption system constituted an aid scheme that is incompatible with the internal market and that it had been implemented in breach of Article 108(3) of the Treaty on the Functioning of the European Union (TFEU). By the same decision, the Commission ordered that the Kingdom of Belgium recover the aid from the beneficiaries.

The excess profit exemption system allows Belgian entities of multinational companies to reduce their tax base in Belgium by deducting from their actually recorded profit so-called “excess profit”. That excess profit is determined by estimating the hypothetical average profit that a standalone company carrying out comparable activities could be expected to make in comparable circumstances and subtracting that amount from the profit actually recorded by the Belgian group entity concerned (the two-step methodology). To benefit from the excess profit system, multinational groups were required to obtain advance rulings from the Ruling Commission in respect of new situations (substantial investments and/or the creation of employment and/or the relocation of activities to Belgium) (the new-situation requirement).

The Kingdom of Belgium and Magnetrol International (one of the 55 beneficiaries listed in Annex to the decision) brought appeals against the decision.


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On 16 January 2019, the Court of Justice of the European Union (CJEU) dismissed the appeal by the European Commission (Commission) against the 2017 judgment of the General Court of the European Union (GCEU). This annuls the Commission’s decision to block the proposed acquisition of TNT Express NV (TNT) by United Parcel Services (UPS) in its entirety (C-265/17 P). The judgment reminds the Commission that it must maintain a balance between the need for speed and the observance of the rights of the defence in merger proceedings.

IN DEPTH

Background

By decision on 30 January 2013, the Commission blocked the proposed acquisition of TNT by UPS (Case M.6570).

On 7 March 2017, the GCEU annulled the Commission’s decision in its entirety on the grounds that (i) the Commission infringed UPS’s rights of defence by failing to communicate to UPS the final version of an econometric model on which it relied in its prohibition decision and that (ii) UPS might have been better able to defend itself if it had at its disposal the final version of that model.

The Commission challenged the GCEU judgment before the CJEU. First, the Commission argued that it was not required to communicate the final econometric analysis to UPS. Second, the Commission claimed that even if UPS’s rights of the defence had been infringed, the GCEU should have dismissed UPS’s plea alleging infringement of the rights of the defence as ineffective because a significant impediment to effective competition (“SIEC”) could in any event be established in Denmark and the Netherlands without having to rely on the econometric model concerned.


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On 8 September 2016 the General Court (“GC”) dismissed Heiploeg’s appeal against the European Commission’s (“Commission”) decision in Shrimps (AT.39633) and confirmed that the Commission may rely on recordings seized lawfully in a “dawn raid” even if the recordings were made illegally by a third party (T-54/14). This judgment reminds us of the delicate balance between the right to respect for private life and the Commission’s need to obtain high probative evidence when investigating cartels.
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On 19 July 2016, the European Commission (Commission) imposed fines totaling €2,926,499,000 on four truck producers (39824 – Trucks). The fine is the highest ever imposed on members of a cartel by the EU competition regulator. The case is also noteworthy because it is the first Commission prohibition decision following “Brexit” and could thus become a test case to see whether the UK remains a jurisdiction of choice for follow-on damages actions.
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The first European citizen to be extradited from Europe to the United States for criminal antitrust conduct recently succeeded in having a Berlin court refer the matter of his extradition to the Court of Justice of the European Union (CJEU) in the context of his damages action with regard to his extradition, after a series of multiple setbacks and a 24-month period of imprisonment.

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On 23 March 2016, the Netherlands Authority for Consumers and Markets (ACM) announced that it had fined four cold-storage firms for having put in place anticompetitive arrangements while in extended merger talks with one another.  (case number: 13.0698.31|15.0710.31|15.0327.31|15.0328.31). In addition, ACM fined five individuals for their personal involvement in these anticompetitive arrangements. The case at hand serves as a reminder that gun jumping, which is seen as an infringement of the merger control rules, is not the only antitrust risk associated with an M&A transaction.

While in discussions about a possible merger between them, the cold-storage firms frequently exchanged commercially sensitive information such as the price for food storage, current utilization rates of their storage facilities and whether or not they were looking for work. This information exchange, which took place between 2006 and 2009, sometimes resulted in price fixing, customer allocation or bid rigging.
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On 15 March 2016, the Japan Fair Trade Commission (JFTC) and the European Commission (Commission) announced their intention to upgrade the current antitrust co-operation agreement between Japan and the European Union. The upgrade will have a number of practical and legal implications for companies involved in international antitrust investigations or considering making leniency applications.

The review is understood to focus primarily on the facilitation of exchanges of information and evidence between the JFTC and the Commission. If the negotiations prove successful, it would be the second time that each of the agencies has entered into a “second generation” co-operation agreement.  The JFTC entered into a second generation co-operation agreement with the Australian Competition and Consumer Commission in April 2015 and a second generation agreement between the European Union and the Swiss Confederation was signed in May 2013.


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