Cut Mowi’s Morpol €20 million fine in half, recommends EU Court advocate general

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Mowi was given a “gun-jumping” fine in 2014. Advocate General argues it was fined twice for same thing and therefore should be halved in long-running court case.

On Thursday, Advocate General Evgeni Tanchev argued that the European Court of Justice should set aside a decision upholding the European Commission’s 2014 fine on Marine Harvest, reports Law360

Morpol
Mowi, then known as Marine Harvest, acquired its Polish rival Morpol salmon processor in three stages.

It acquired a 48.5 per cent shareholding in December 2012. Then it then purchased 38.6 per cent of the remaining shares in March 2013, as part of a mandatory public bid, then finally the acquisition of the remaining shares was completed in November 2013.

However, the Commission was not formally notified about the takeover until August 2013. In July 2014, the Commission concluded that at the time Marine Harvest had failed to notify the acquisition and had implemented the acquisition without prior notification in breach of competition legislation (EC Merger Regulation) and imposed a total fine of EUR 20 million.

Consequently, the Commission imposed two fines of EUR 10 million each for the infringement of those provisions.

“Gun jumping”
“Gun jumping” occurs when merging parties are competitors and co-ordinate their competitive conduct prior to the actual closing of the transaction.

In a nonbinding opinion, Advocate General Evgeni Tanchev sided with Mowi’s argument that a lower court misapplied the law by allowing two €10 million fines for the same conduct.

“The advocate general concluded that the failure to hold off on the transaction while waiting for approval effectively encompassed its failure to notify the commission of the transaction. As a result, only one of the fines was warranted, Tanchev said,” wrote 360law.

Annul
“They both seek to prevent the implementation of concentrations before they are notified and declared compatible, and thereby avoid any damage to competition that may arise from such early implementation. Therefore, those two provisions protect the same value and I see no reason why they should be applied together.”

The publication reported that Tanchev urged the ECJ to annul the commission’s decision to impose the second fine of EUR 10 million, as well as order the executive to pay Mowi’s costs.