Table of Contents
- Battery Manufacturers and Trade Association Fined for Surcharge Agreement
- First In-Depth Ex Officio Investigation Under EU Foreign Subsidies Regulation
- EU’s Highest Court Rules on Excessive Pricing by Copyright Agency
- Competitor Challenges Public Financial Assistance for Property Development in UK
Battery Manufacturers and Trade Association Fined for Surcharge Agreement
On 15 December 2025, the European Commission (EC) announced fines on three automotive starter battery manufacturers and their trade association for cartel behaviour in breach of EU competition law. A fourth manufacturer blew the whistle on the cartel and was not fined under the EC’s leniency programme.
The case concerned a surcharge on sales to automotive original equipment manufacturers (OEMs) in the European Economic Area.
The EC found that the four manufacturers, with assistance from the trade association EUROBAT, agreed to create and publish premiums calculated based on their purchasing prices of lead in the industry publication Metal Bulletin. They also agreed to use such premiums in price negotiations with their OEM customers. The cartel lasted for more than 12 years.
The EC pointed out that a surcharge is a legitimate tool suppliers use to reflect changes in raw material costs, but “it is clearly illegal” to secretly coordinate to introduce and use such a surcharge as an industry-wide standard.
EUROBAT was fined a nominal sum of €125,000 as a facilitator. The EC commented that “trade associations … should not use their position as representatives of the industry to facilitate collusion among their members.”
Cartel facilitators have been fined in the past, and the case again shows the need for trade associations and consultants to be aware of competition law and have suitable compliance measures in place. Companies that are members of trade associations or use consultants should be aware of the risk arising from these relationships and incorporate this consideration into their own compliance programmes.
First In-Depth Ex Officio Investigation Under EU Foreign Subsidies Regulation
Under the EU Foreign Subsidies Regulation (FSR), the EC has the power to investigate financial contributions granted by non-EU governments to companies active in the EU.
The obligation to notify certain large M&A transactions to the EC for clearance under the FSR has applied since 12 October 2023. A similar notification obligation exists for certain large public procurements, and the EC can also launch its own ex officio investigations into any other market situation.
When the EC, based on a preliminary review, has sufficient indications that a company received a foreign subsidy distorting the internal market, it will adopt a decision to open an in-depth investigation. At the end of its in-depth investigation the EC may (i) accept commitments proposed by the company if these fully and effectively remedy the distortion, (ii) impose redressive measures, or (iii) issue a no-objection decision.
On 11 December 2025, the EC opened its first in-depth ex officio investigation. The case concerns Nuctech, which is active in the production, sale and maintenance of threat detection systems (TDS). Nuctech is headquartered in China and forms part of the Tsinghua Tongfang group, which is indirectly controlled by the Chinese government .
The summary notice describing the in-depth investigation explains that the possible foreign subsidies to be investigated are in the form of grants, preferential tax measures and preferential financing in the form of loans. The EC has preliminary concerns that the foreign subsidies may have improved Nuctech’s competitive position in the EU, negatively affecting competition.
Foreign subsidies may have enabled Nuctech to offer, in tender contracts, prices and conditions that cannot be reasonably matched by other market players, for the supply of large TDS and for the provision of TDS-related services. In addition, the subsidies may have allowed to Nuctech to file patents in TDS-related technologies at a fast pace, contributing to its market penetration in the EU.
The China Chamber of Commerce to the EU (CCCEU) has been critical of the FSR as applied to Chinese companies. It repeated these criticisms on 12 December 2025 as a response to the EC’s announcement, saying “The [EC] should not abuse its investigative power and the FSR tool to unreasonably disrupt or interfere into the normal business activities of EU-based enterprises established by foreign investors.” It further commented, “Chinese enterprises have become the primary targets of FSR enforcement, in a clearly disproportionate and abusive manner, completely incompatible with the public announcement made by the Commission in the legislative process that all countries will be treated equally and non-discriminatory under the FSR enforcement.”
The FSR is formally neutral as to the origin of the companies investigated and applies to EU-based companies as well. In practice, however, most of the in-depth investigations to date involved Chinese companies. The CCCEU comments indicate that Chinese concerns about its use will not go away, and the FSR remains a controversial instrument.
Even some EU countries have concerns. Germany recently called for “a comprehensive reform and cutback of the FSR to slash the significant unnecessary administrative burden on and uncertainty for companies and to focus the FSR on relevant cases and sectors that are under threat by the strategic and structural use of subsidy policies by geopolitical actors.”
Nuctech is cooperating with the EC at this stage. Nevertheless, it reportedly warned the EC about its concerns about the process, stating “We expect the [EC], in conducting this investigation, to adhere to World Trade Organization rules and internationally accepted principles of fair competition, base its conclusions on facts, and avoid non-economic interference or preconceived judgments.”
EU’s Highest Court Rules on Excessive Pricing by Copyright Agency
On 18 December 2025, the European Court of Justice (ECJ), the EU’s highest court, handed down a judgment on excessive pricing as an abuse of dominance under EU competition law. The case concerned charges imposed on hotels by the OSA, a collective management organisation handling copyright in Czechia.
In 2019, the Czech Competition Authority (CCA) found that OSA charged royalties to hotel operators for their use of copyrighted works by means of TV and radio receivers that were calculated without taking the hotels’ occupancy rates into account. The OSA therefore required payment of royalties for unoccupied rooms in which no use of the works had taken place. The OCA found this to be an abuse of its dominant position on the Czechia national market for the granting licences for the use of copyrighted works through the imposition of unfair trading conditions.
The OSA appealed on the grounds the CCA should have analysed the case using case law that specifically considered excessive pricing as an unfair trading condition.
The ECJ agreed that that, when the allegedly unfair nature of the conduct concerns the level of royalties for works and not other conditions under which those works are made available, that level should be considered under the law relating to excessive pricing.
The ECJ confirmed that excessive pricing gives rise to an abuse of dominance when the price is excessive in relation to the economic value of the service provided. That determination must be made in the light of all the circumstances of the case. In relation to collective management of copyright, not only the economic value of the service, but also the nature and scope of the use of the works and of the economic value generated by that use must be taken into account.
In the case of hotels, the occupancy rate is a relevant factor. In addition to considering issues such as seasonal closures or closures for renovation, the royalty must at least estimate actual usage based on occupancy, taking account of rooms that are inaccessible or vacant.
The ECJ summarised its view by stating, “If a method for calculation of the royalties which took account of that occupancy rate could be used at a reasonable cost and entailed a substantial reduction in the amount of the royalties, the use of the current method for calculating those royalties could be regarded as leading to unfair prices, [amounting to an abuse of a dominant position].”
Importantly, the ECJ expressly refers to the use of technology to measure occupancy, including property management systems that allow hotels to easily produce and provide reliable occupancy reports.
The judgment is of particular interest to hotels and other hospitality providers, which now have a basis to challenge paying a fixed rate per room for copyright licences, particularly when a digital system is available to produce occupancy reports and using actual occupancy data would materially reduce the fee.
The case is also of general interest to other customers of dominant companies that may be paying for unnecessary or unused services or products.
Competitor Challenges Public Financial Assistance for Property Development in UK
The UK Subsidy Control Act (SCA), which came into effect on 4 January 2023, established a system of public subsidy oversight and control within the UK to replace the EU state aid regime, which the UK is no longer subject to following its exit from the EU. Only interested third parties can bring challenges to subsidies before the Competition Appeal Tribunal (CAT), and there is no regulatory enforcement mechanism.
Following on from a case filed on 19 September 2025, on 5 December 2025 various companies appealed before the CAT against the allocation of regeneration funding and related grants by Durham County Council (DCC) to third party competitors. The second case appears to build on and to some extent replace the initial appeal, which referred to competition law, public procurement issues and subsidy grounds, so far as it concerns the subsidy issues.
The appellants claim that the DCC “intends to award” funding of around £2 million for redevelopment of a specific site in Bishop Auckland. In addition, they claim the DCC has “taken several operative steps amounting to a decision” to give around £3.1 million for development of a new hotel in the town to a separate private operator.
Under the SCA, only a decision to award a subsidy can be challenged. In this new case, neither award has been finalised. However, the appellants argue that, while the relevant grant funding arrangements for the subsidies have not been finalised, a subsidy decision arises when a public authority decides, in substance, to provide an economic advantage through public funds. Given that the DCC decided in principle to grant both subsidies, it made subsidy decisions, which may be challenged.
The substantive arguments put forward in relation to both decisions are largely the same. The appellants claim that the DCC failed correctly to apply the required subsidy control principles it must consider under the SCA. Further, it failed to consider the general requirements of a subsidy scheme.
The DCC further allegedly failed to regard relevant considerations such as the impact on competitors and/or took into account irrelevant considerations such as political and reputational factors.
In addition, the appellants claim the decisions were procedurally unfair and there was a lack of transparency, including through selective engagement with the recipients.
In relation to one of the decisions, the appellants claim the DCC based its decision on material errors of fact and omissions, because it appears to rely on the recipient’s unverified assertions regarding costs escalation, without independent valuation or benchmarking.
The appellants seek a declaration that the decisions constitute unlawful subsidies. They also seek orders quashing the decisions and prohibiting further subsidies to either recipient.
The case is particularly interesting because the final decisions to award subsidies have not yet been made. The competitors to the potential recipients are pre-emptively challenging the awards on the basis that enough operative steps were taken. In practice, this is often an issue because a competitor is aware that a decision is about to be made, perhaps because it is negotiating with the public body in competition with another party. But strictly the SCA only provides for challenges to “decisions” to give a subsidy or make a subsidy scheme.
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