- European Commission kicks off consultation on EU merger control guidelines
- U.K. government emphasizes CMA’s independence while steering it to support U.K. growth and investment
- Top EU court emphasizes need for evidence of distributors’ acquiescence to active sales ban in exclusive distribution arrangements
- Belgian antitrust authority settles with pharma companies over joint category management arrangement
- EU and U.K. close in on competition cooperation agreement
- EU takes next step in revising the EU FDI Regulation
- U.S. agencies advance Executive Order on reducing anticompetitive regulation
- U.S. DOJ notches up first victory in a wage-fixing trial
- Polish antitrust authority further clarifies rules on notification of extra-territorial joint ventures
- U.K. extends public procurement exclusion and debarment regime to antitrust infringements
- APAC sees cartel enforcement against individuals, including for attempting to induce collusive agreements
European Commission kicks off consultation on EU merger control guidelines
The European Commission (EC) has launched a much anticipated, “comprehensive and ambitious” review of the EU’s merger guidelines with a wide-ranging consultation. The review covers both the assessment of mergers between actual or potential competitors in the same relevant market (i.e., its 2004 horizontal merger guidelines) and the assessment of mergers between companies at different levels of the supply chain or active in closely related markets (i.e., its 2008 non-horizontal merger guidelines).
The review will modernize the EC’s framework for assessing the impact of mergers on competition. This will allow the authority to reflect the approach it has taken in cases it has reviewed in the years since the guidelines were published.
The review may also lead to a major refresh. EC Competition Commissioner Teresa Ribera emphasizes that it will allow the EC “to account for disruptive changes in our societies and our economies” including digitalization. She adds that it will enable the authority to ensure that “innovation, resilience, and the investment intensity of competition are given adequate weight in light of the European economy’s acute needs.”
The EC published seven focused papers aimed at “stimulating discussion” cover competitiveness and resilience, market power, innovation, decarbonization, digitalization, efficiencies, defense, and labor market considerations.
The wide-ranging “current challenges” identified in the papers are noticeably in line with issues raised in Mario Draghi’s September 2024 report, as well as the EC’s “Competitiveness Compass,”, which was produced to provide a steer for the current EC’s work and translate Draghi’s recommendations into a roadmap.
While the final revised merger guidelines are unlikely to be published before the end of 2027, we may see the EC “testing” some new approaches in cases in the interim. Read our alert for more on how the consultation could indicate a greater future focus on supporting innovation and scale in strategic sectors as well as a broader role for public interest considerations.
U.K. government emphasizes CMA’s independence while steering it to support U.K. growth and investment
In the latest step in its pursuit of an aggressive growth agenda, the U.K. government has issued the final version of its “strategic steer” to the Competition and Markets Authority (CMA).
The steer directs the CMA to support growth and investment in the U.K. as the authority discharges its functions. It sets out the government’s expectation that the CMA’s actions will be swift, predictable, independent, and proportionate across the full range of its tools.
Importantly, the steer emphasizes the CMA’s independent status. The government has faced many calls to confirm this following its dramatic move to replace the CMA’s chair earlier this year.
The government also makes clear that it expects the CMA to continue to play an active role internationally. However, this is balanced by a direction that the CMA should avoid duplication where action by other agencies would effectively address issues in U.K. markets, suggesting the CMA will take a more back-seat role in some international cases.
The CMA has already set out how it plans to put the steer’s objectives into action. In its merger control activities, it has proposed or taken steps to improve its practice and processes. These should lead to shorter review periods, a greater willingness to accept remedies, and greater clarity for and engagement with businesses. Ultimately—and in good news for dealmakers—these shifts may result in a lighter touch approach to merger control enforcement in the U.K.
Read our alert for more about the steer and how it will impact the CMA’s enforcement. We also look ahead at what other plans the government might have to further reform the U.K. competition regime.
Top EU court emphasizes need for evidence of distributors’ acquiescence to active sales ban in exclusive distribution arrangements
The European Court of Justice (ECJ) has clarified the steps that suppliers operating exclusive distribution networks must take to comply with a “parallel imposition” requirement.
This requirement compels a supplier operating an exclusive distribution system in the EU to protect its exclusive distributors against active selling into the exclusive territory or customer group by all its other distributors. It is one of the criteria that must be met for an exclusive distribution agreement to benefit from an exemption from the EU antitrust rules.
The ECJ’s ruling relates to a dispute between two distributors of Beemster cheese, with one accusing the other of infringing its exclusive rights in Belgium.
The court concluded that, to comply with the parallel imposition requirement: (1) the supplier must invite “in any form whatsoever” its distributors not to engage in active sales in the allocated exclusive territory; and (2) those distributors must expressly or tacitly acquiesce to the supplier’s invitation.
These steps may be established either by direct evidence or on the basis of “objective and consistent indicia,” i.e., where it may be inferred with sufficient certainty that the two steps have been satisfied.
Significantly, the ECJ ruled that the mere finding that distributors have not engaged in active sales in an exclusive territory is not, by itself, sufficient to establish the existence of an agreement to restrict active sales. That is the case even where the distributors were aware of the allocation of the exclusive territory to another distributor.
The court did suggest, however, that a lack of active sales would be relevant to an inference of tacit acquiescence where, in parallel, the supplier: (1) has made an explicit invitation to comply with the active sales ban; and (2) has the means to implement the ban in practice, for example through a system of monitoring and penalties.
The ECJ also concluded that an exclusive distributor will benefit from protection only for the period for which it can prove that there is acquiescence by the other distributors to the supplier’s invitation not to make active sales in the exclusive territory.
Overall, the case serves as a reminder of the need to ensure that distribution arrangements comply with antitrust law, both when entered into and throughout the life of the arrangement. While it relates to the EC’s old vertical block exemption, the ECJ’s interpretation of the parallel imposition requirement equally applies to the EC’s current rules on the legality of vertical agreements.
Evidence will be key. As a result, suppliers operating in the EEA should ensure that any exclusive territories and/or customers and active sales bans are clearly articulated in all distribution agreements, for example by including these in an annex that can be updated by the supplier as changes occur. Communication of any such changes should be recorded in writing.
Belgian antitrust authority settles with pharma companies over joint category management arrangement
Under a category management agreement, a distributor entrusts a supplier with the marketing of a category of products. This can include the products of the supplier’s rivals as well as its own products. The supplier may be able to influence, for example, the placement, promotion, and selection of products in store.
In its guidelines on vertical restraints, the EC recognizes that these arrangements will generally not raise antitrust concerns. However, it notes that they may harm competition where the supplier is able to limit or disadvantage the distribution of its competitors’ products, or where an arrangement facilitates collusion.
European antitrust enforcement action in this area has been rare. Last month, the Belgian Competition Authority (BCA) reached a settlement with three pharmaceutical companies over an allegedly anticompetitive category management arrangement for the placement of over-the-counter (OTC) medicines in certain Belgian pharmacies.
According to the BCA, the practices lasted for more than 15 years and “pursued the common objective of sharing and controlling the placement of OTC medicines on the shelves of a significant number of pharmacies in Belgium.” The authority considered that the arrangement excluded the products of rivals in the design and implementation of placement plans and favored the companies’ own products. It concluded that EU and Belgian antitrust rules had been infringed.
The BCA imposed a total fine of EUR11.2 million on the companies (which includes a 10% reduction for settlement). The BCA’s head noted that, when setting the amount of the fine, the authority took into account that there is “little precedent available on the limits imposed by competition rules on category management arrangements in Europe.” He added that the decision is important as it “provides an example of what can go wrong with category management.”
EU and U.K. close in on competition cooperation agreement
The EU and the U.K. government have concluded talks on an agreement to cooperate on antitrust matters. Since Brexit, there has not been a framework to allow cooperation between the relevant antitrust authorities.
The proposed text has not been published but, according to an EC press release, the main elements include:
- Allowing the EC, EU member state antitrust authorities, and the CMA to coordinate investigations.
- Requiring important antitrust and merger control investigations to be brought to each other’s attention.
- Providing clear principles of cooperation aimed at avoiding conflicts between jurisdictions.
- Enabling the exchange of confidential information subject to consent being provided by the relevant company.
The agreement will be the first to enable EU national antitrust authorities to cooperate directly with a third- country antitrust authority.
EC competition commissioner Teresa Ribera noted that the agreement reflects a “shared and strong commitment to continue working together” on antitrust enforcement matters, “including in the digital sector,” and to ensure a level playing field in Europe.
For businesses with activities spanning the EU and the U.K., increased cooperation should streamline timelines and, where market conditions are largely homogeneous, reduce the likelihood of diverging outcomes. There is a potential downside, however, with an increased risk of an investigation in one jurisdiction triggering a similar probe elsewhere.
The agreement will enter into force once both the EU and U.K. have finalized their ratification procedures. In the EU, this requires formal sign off from the Council and the European Parliament. In the U.K., the agreement will need to be considered and approved by Parliament. Signature during 2025 is likely.
EU takes next step in revising the EU FDI Regulation
Following a hiatus during the European elections, the process towards adopting a revised EU foreign direct investment (FDI) regulation is now gathering pace.
The European Parliament has endorsed new screening rules which will:
- Require all EU member states to adopt a national FDI screening regime meeting certain minimum requirements (all 27 now have a mechanism in place or are in the process of adopting one).
- Make foreign investments in EU companies active in critical areas, such as semiconductors, critical raw materials, media services, AI, and transport infrastructure, subject to mandatory screening.
- Harmonize rules across national regimes, including setting criteria for the assessment of investments and streamlining cooperation between member states and the EC.
- Enable the EC to intervene on its own initiative and take final decisions where there are disagreements between member states on whether a specific investment raises potential security or public order risks.
- Expand the scope of the mechanism to cover transactions in the EU where the direct investor is ultimately owned by individuals or entities from a non-EU country.
The revisions aim to reflect new geopolitical and security challenges since the regulation took effect in 2020 as well as to address perceived gaps and shortcomings identified during its first few years of operation.
The European Parliament’s approval is not the final word. Negotiations with EU member states will now begin to shape the final text of the revised regulation. There may well be fierce debate around some of the core areas of reform, such as the strategic sectors subject to mandatory screening and the role of the EC.
Once settled, the final text must be adopted by both the European Parliament and the Council before it can enter into force.
We will update you as we learn more.
U.S. agencies advance Executive Order on reducing anticompetitive regulation
President Trump’s Executive Order on Reducing Anticompetitive Regulatory Barriers seeks to eliminate federal regulations that exclude new entrants and hinder competition, entrepreneurship, and innovation.
It tasks the heads of U.S. government agencies, in consultation with the Federal Trade Commission (FTC) and the Department of Justice Antitrust Division (DOJ), to review all the regulations within their remit.
The agencies must identify regulations that fall under certain categories, including those that create or facilitate the creation of monopolies, create unnecessary barriers to entry, limit competition, or otherwise impose anticompetitive restraints or distortions. And the agencies must recommend whether each of these regulations should be withdrawn or modified (and how), or must otherwise justify their anticompetitive effects.
To advance the process, the FTC and the DOJ have issued a joint letter directing agency heads to create lists of relevant anticompetitive regulations.
Significantly, the letter gives an indication of where these lists may be focused. The FTC and DOJ highlight areas where anticompetitive regulations can be found, including healthcare, energy, technology, food and agriculture, transportation, and government procurement. But the exercise is not limited to these sectors, with the letter noting that harmful regulations “can be found across the federal government.”
The joint letter follows an FTC request for information, inviting public comments on how federal regulations can harm competition in the U.S. economy. Separately, the DOJ has launched an Anticompetitive Regulations Task Force to advocate for the elimination of regulations that undermine free market competition.
Once input is received, the antitrust agencies will consolidate the public feedback, the lists of anticompetitive regulations, and recommendations from agency heads for the Office of Management and Budget’s review.
It is not yet clear how quickly the government will make modifications or rescind any regulations. But, given that the government views the exercise as essential to achieving economic growth, we could well see concrete action before the end of the year.
The U.S. is not the only government with a laser focus on reducing regulation.
In the U.K., the Labour government is also taking action to reduce regulatory barriers in a bid to encourage growth and investment. It has, for example, replaced the chair of the CMA and, most recently, issued a “steer” on how it expects the CMA to act (see our alert for more). It is planning a consultation on further reforms to the U.K. competition regime, and has announced the abolition of the Payment Systems Regulator (our commentary tells you about this development).
We will update you as developments unfold on both sides of the Atlantic.
U.S. DOJ notches up first victory in a wage-fixing trial
A U.S. federal jury has convicted a home health agency executive of fixing wages for home healthcare nurses in Las Vegas and fraudulently failing to disclose the criminal antitrust investigation during the sale of his company.
The verdict is the DOJ’s first criminal antitrust conviction relating to labor markets after a string of losses dating back to 2020. Importantly, in this case the DOJ submitted direct evidence of the alleged agreement including text messages with alleged co-conspirators.
Following the verdict, the Assistant Attorney General for the Antitrust Division of the DOJ described wage-fixing agreements as “nakedly unlawful” and warned that the DOJ will “zealously prosecute those who seek to unjustly profit off their employees.”
Our Need-to-Know article on the case provides more detail on the DOJ’s evidence as well as the defendant’s counterarguments and appeal.
Antitrust activity in relation to labor markets is not confined to the U.S. In March, the U.K.’s CMA found that sports broadcast and production companies had shared sensitive information about fees for freelance workers such as camera operators and sound technicians. Following reductions under both its leniency and settlement programs, the CMA issued a fine totaling GBP4m. The CMA’s executive director for competition enforcement noted that employers should ensure those hiring staff “know the rules and stick to them.” Further CMA guidance on avoiding anticompetitive behavior in labor markets is expected in the coming months. Read our Global antitrust enforcement report for more on this global trend.
Polish antitrust authority further clarifies rules on notification of extra-territorial joint ventures
Last October, the Polish Competition Authority (PCA) revised its guidelines on when merger control clearance must be sought for joint ventures with activities outside Poland.
Under the new approach, a joint venture will not require notification to the PCA if the market or markets in which the joint venture will operate (or in which the joint venture and its parents will have a vertical—supplier-customer—relationship) do not cover Poland, or any part of it.
Six months later, the PCA has further updated the guidelines. They clarify that there will be no filing obligation if the joint venture will not operate in any market(s) covering Poland either at the time of the transaction, or for the three years following completion.
This is good news for merging parties; it should reduce the number of joint venture notifications in Poland. However, there remains some uncertainty with the PCA’s revised approach, particularly where markets may be EU-wide, EEA-wide, or global in scope. Read our alert to find out more about these challenges.
U.K. extends public procurement exclusion and debarment regime to antitrust infringements
In February 2025, the U.K.’s new, post-Brexit procurement regime in the Procurement Act 2023 came into force. Significantly, the law sets out more prescriptive, and wider, mandatory and discretionary exclusion grounds.
This includes in relation to competition law infringements. Under the regime in place prior to February, which was based on the EU procurement directives, breaches of competition law were a ground for discretionary exclusion (that is, the authority could choose to exclude a person from a procurement process).
However, the new regime prescribes mandatory exclusion where a relevant individual has been convicted of the criminal cartel offense, or where the CMA (or a concurrent regulator) has made a decision that a supplier has participated in a cartel and that supplier has not been awarded immunity. Mandatory exclusion means that a contracting authority must exclude a supplier from a procurement process unless it considers that the supplier has “self-cleaned,” that is, taken action so that the wrongdoing is unlikely to arise again.
The scope for discretionary exclusion has also expanded. A contracting authority now has discretion to exclude suppliers where it considers that a supplier (or a connected person) not benefiting from immunity has engaged in conduct that breaches competition law. A court or antitrust authority does not need to have found an infringement. The anticompetitive conduct potentially caught under the discretionary exclusion regime is broader than under the mandatory exclusion regime, including anticompetitive agreements (even if not cartels) and abuse of a dominant position.
Perhaps most significantly, both the mandatory and voluntary exclusions have been expanded in three ways:
- They apply to U.K.-equivalent competition law infringements that take place outside the U.K.
- They can also arise based on wrongdoing of a supplier’s “associated persons” (for example, key subcontractors), its “connected persons” (which is defined widely and can include, for example, direct and indirect major shareholders), and even any “connected person” of an “associated person.”
- The timing for these exclusion grounds to apply has been extended. Previously a three-year limitation period started to run from the time of the conduct. Now a five-year limitation period for mandatory exclusion runs from the date of the infringement decision, and a three-year limitation period for discretionary exclusion runs from the date the contracting authority knew, or should have known, of the infringement.
Suppliers found to have infringed competition law may now be added to a new central, public debarment list. Inclusion on the debarment list removes the need for individual contracting authorities to apply the “self-cleaning” test, and so can amount to automatic exclusion from all public procurement for up to five years, or until removed from the list.
Read our A&O Shearman investigations blog for more on the key changes to the U.K.’s procurement regime, including the process for making representations against entry on, or removal from, the debarment list. Specific guidance for suppliers and contractors on exclusion and debarment on competition grounds has also been issued by the CMA.
Antitrust enforcement in public procurement is a priority for the CMA. In particular, the CMA plans to “deploy its deep anti-bid rigging expertise and AI capabilities” to help the government identify and tackle bid rigging in public procurement. Given this, and the potentially severe reputational and financial consequences of enforcement, suppliers should be alive to potential procurement risks and act expeditiously in the event of any investigation.
APAC sees cartel enforcement against individuals, including for attempting to induce collusive agreements
Under many antitrust regimes, authorities can take enforcement action against employees and executives—and not just their companies—for anticompetitive conduct. The threat of possible sanctions on individuals can itself be a powerful deterrent. But antitrust authorities are also willing to make use of these powers in practice. Two recent cases in APAC are prime examples.
In March 2025, China’s State Administration for Market Regulation (SAMR) for the first time imposed an antitrust penalty on an individual under a revised law introduced in 2022. The law allows penalties of up to CNY1m (USD140,000) against executives who play a direct role in an unlawful conspiracy.
SAMR fined an executive at Shanghai Sine United Pharmaceutical and Medicinal Materials CNY0.5m (USD70,000) for orchestrating a scheme to fix prices and divide the market for the sale of a hospital drug. He allegedly initiated contacts, led discussions, and instructed subordinates to implement the agreement. Shanghai Sine’s fine initially reached the statutory maximum of 10% of 2023 sales but was substantially reduced under SAMR’s leniency program to CNY50.3m (USD7m). Notably, the company was also required to pay a significant disgorgement sum of CNY115.47m (USD16m).
Reinforcing its commitment to scrutinize anticompetitive conduct in the pharma sector and target key facilitators, SAMR issued further sanctions this month. It fined Zhejiang Xianju Pharmaceutical’s chair and general manager CNY0.6m (USD83,000) for organizing a cartel involving an active pharmaceutical ingredient used in anti-inflammatory drugs and fined the company itself CNY195.3m (USD27m). Further fines are anticipated.
Elsewhere in APAC, Australia has also seen an executive convicted with their company. The Federal Court of Australia found that, on five occasions over a two-year period, oil and gas services company Qteq and its executive chairman attempted to induce competitors to enter into cartel arrangements. These arrangements included provisions to allocate customers, not to supply particular services to large oil and gas companies, to share markets, and to rig a substantial tender.
In announcing the decision, the head of the Australian Competition & Consumer Commission (ACCC) noted that it should send a strong warning that “attempting to enter or induce collusive agreements . . . will be met with strong enforcement action by the ACCC.” The ACCC head also indicated that the authority “brought this action because [it] believed these attempts had the potential to impact competition between Qteq and other current or likely competitors for the supply of goods and services in the oil and gas industry.”
The court has yet to decide on penalties and other orders.
Need-to-Know: updates on U.S. antitrust litigation
Our Need-to-Know Litigation Weekly publication analyzes notable U.S. litigation decisions, orders, and developments. From an antitrust perspective, we have featured the following cases over the past month:
You can access Need-to-Know Weekly in full here. If you would like to be added to the distribution list, contact us at litigation_weekly@aoshearman.com.
A&O Shearman Antitrust team in publication
Recent publications by members of the team include:
