Developments in the aviation sector
The year began (13 February 2024) with the conditional approval by the Commission of the proposed merger between Korean Air and Asiana Airlines, subject to the implementation of specific remedies. On 13 January 2023, the parties formally informed the Commission of their intention to proceed with the merger. As Korean Air and Asiana are respectively the largest and second largest airlines in South Korea, the Commission expressed concerns about a possible restriction of competition in the markets for passenger and cargo services between the EEA and South Korea.
To address these concerns, the parties proposed the following remedies, which were eventually approved by the Commission:
- Cargo remedies: Korean Air will divest Asiana's global cargo business. This includes cargo aircraft, take-off and landing rights, traffic rights, flying staff, employees and cargo contracts with customers, among other assets.
- Passenger remedies: Korean Air will provide competitor T'Way with the necessary funds to launch flights on the four overlapping routes.
On 3 July 2024 the Commission approved EasyJet, IAG and KLM-Air France as suitable purchasers under the commitments entered into by Lufthansa and the Italian Ministry of Economy and Finance ("MEF") for joint control of ITA. This approval is a condition for Lufthansa and MEF to execute the latter transaction. The conditions are as follows:
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Short-haul routes: Lufthansa and MEF have agreed to provide one or two competitors with the necessary resources to launch non-stop flights between Rome or Milan and specific airports in Central Europe. In addition, one of these competitors has been guaranteed access to ITA's domestic network to offer indirect connections between specific airports in Central Europe and Italian cities outside Rome and Milan.
- Long-haul routes: Lufthansa and MEF have reached agreements with competitors to strengthen their position on key long-haul routes between Italy and North America. These measures include, for example, interlining agreements or slot exchanges, with the aim of increasing non-stop flight frequencies and improving connections for one-stop flights.
- Milan Linate airport: Lufthansa and MEF have agreed to hand over take-off and landing slots at Milan Linate airport to the remedy buyers for short-haul routes, to address competition concerns at this airport.
The final piece of the aviation business concerns proposed acquisition of Air Europa by IAG. Following the launch of a Phase II investigation in January 2024, the Commission raised concerns via a Statement of Objections in April 2024 on the grounds that competition would be restricted in the market for civil aviation and other aviation services. As a result, the parties abandoned the proposed concentration.
The Commission gave green light to a joint venture between telecoms giants Orange and MásMóvil in Spain. The joint venture was approved on 20 February 2024, creating a new leader in the Spanish telecoms market with more than 37 million broadband and mobile lines. The Commission initially raised concerns about possible restrictions of competition in the retail provision of mobile and fixed internet services. To address these concerns, the parties offered two remedies which the Commission accepted:
- MásMóvil transfers spectrum to DIGI (an operator of the largest virtual mobile network in Spain) in three frequency bands: two medium-wave bands (1,800 MHz and 2,100 MHz) and one high-frequency band (3.5 GHz). Virtual mobile network operators use the infrastructures of other telecom operators. The remedy offered allows DIGI to build its own mobile network and exert competitive pressure on the joint venture.
- In addition, DIGI will have the option to enter into a national roaming agreement with the joint venture. This option provides an addition to DIGI's own network that will be rolled out with the acquired spectrum. However, DIGI can also choose to continue using the roaming network of its current provider (Telefónica) or another operator.
Illumina - the end of a saga?
The Illumina Grail judgment has already been discussed in detail in our previous article, but it cannot be left out of this annual review. Following a referral request from six member states, the European Commission decided on 19 April 2021 to assess Illumina's proposed acquisition of GRAIL and opened an in-depth investigation on 22 July 2021. On 13 July 2022, the General Court upheld the Commission's jurisdiction to investigate the transaction, but that judgment has now been overturned by the Court: the Commission has no jurisdiction to assess a concentration without an EU dimension under Article 22 Merger Regulation if that concentration is also not caught by the merger control regime of a national competition authority. However, if that regime has a so-called "call-in" power, which also allows concentrations to be referred to the European Commission that do not exceed national notification thresholds, then such a referral can take place.
The Commission approved Eiffage's proposed acquisition of EQOS on 16 October 2024. The approval is subject to full compliance with the remedies offered by Eiffage and EQOS.
The Commission's investigation found that, as originally reported, the merger would reduce competition in the market for installation and maintenance services of railway electrification systems ('catenaries') in Belgium. In particular, the Commission found that Eiffage and EQOS are leading providers of these services in Belgium. To address the Commission's competition concerns, the parties offered to divest EQOS Belgium in its entirety, including all assets, personnel and current and future contracts of both the catenary and railway business. As a result, EQOS Belgium will remain an independent competitor to Eiffage in the relevant market in Belgium.
In November 2024, UK-based JD Sports Fashion Plc successfully completed the acquisition of French sportswear chain Groupe Courir. Both parties are internationally active in retailing leisure and performance sports shoes and apparel. The Commission was concerned that the merger would lead to a reduction of competition in the French leisure footwear market and the Portuguese leisure and performance sports footwear and apparel market. Courir, with more than 300 shops across France, Belgium, the Netherlands, Luxembourg, Portugal and Spain, brings a significant network to JD Sports. To gain approval, JD Sports had to make concessions. For instance, it will divest 15 French and six Portuguese shops to competitor Snipes, part of Germany's Deichmann group.
