News (#7-8 July-August 2020)


EU court rejected claim filed by Nord Stream-2 against provisions of Gas Directive

The Court of Justice of the European Union has ruled that the Russian gas pipeline Nord Stream-2 must operate in compliance with EU regulations and has no right to exemption.

The General Court of the European Union declares that actions taken by Nord Stream AG and Nord Stream 2 AG against Directive 2019/692, which extends certain rules of the internal market in natural gas to pipelines from third countries, are unacceptable.

Nord Stream AG, a Swiss company in which the Russian energy company PJSCGazprom has a 51% stake, owns and operates Nord Stream-1 pipeline, ensuring gas flow between Vyborg (Russia) and Lublin (Poland) nearby Greifswald (Germany). Construction of this pipeline was completed in 2012 and it should be in operation for 50years.

On 17 April 2019, the European Parliament and EU Council adopted the Directive on common rules for the internal market in natural gas. This Directive came into force on 23 May 2019. As of the date of its coming into force, works installing the Nord Stream-2 pipe were 95% complete, according to Nord Stream 2 AG.

The General Court noted, inter alia, that Nord Stream AG was not allowed to operate and/or continue operating the Nord Stream dual pipeline system disregarding any EU regulatory restrictions, at least in relation to part of the line located within the EU, in this case, within the territorial waters of a Member State.

Supreme Court confirmed bail-in legality in case of Surkis deposits in PrivatBank

The Grand Chamber of the Supreme Court partially upheld the cassation appeal filed by the National Bank of Ukraine, the Cabinet of Ministers and PrivatBank, thus revoking resolution of lower courts on the Surkis familys claim to cancel NBU decisions on recognizing them as PrivatBank-related parties and invalidating agreements on exchange of their funds held in bank in the amount of more than UAH 1 billion for bank shares (bail-in), later purchased by the state for UAH 1.

Moreover, the NBU and the Cabinet of Ministers filed a petition supported by PrivatBank to close the case following provisions of the Banking Law No.590-IX.

The Sixth Administrative Court of Appeal is awaiting a judgement of the Supreme Court in this case, which is considering the appeal filed against the decision of the District Administrative Court to recognize PrivatBanks nationalization in 2016 as illegal, as well as the Commercial Court of Kyiv city in the case on claim filed by Igor Kolomoisky and Triantal Investments to return them PrivatBank shares.

Once the Sixth Administrative Court of Appeal has received the text of the judgment it will be able to unblock the consideration of the state appeal filed against the decision of the District Administrative Court on recognition of PrivatBanks nationalization as illegal.

At the same time, the Supreme Court judgement is important in yet another case related to the deposits of the Surkis offshore companies held in its Cyprus branch. On 9February 2017, the Lechers District Court of Kyiv delivered a judgement on the necessity to service these. Following which, in March, the same court clarified that the said service included compensation on part of PrivatBank funds deposited by offshore companies in 2012-2014, and interest thereon coming to a total of more than USD 250 million. On 15 April this decision was confirmed by the Kyiv Court of Appeal, fines were imposed on the bank for non-enforcement of that judgment, and its executives were called to the Prosecutors Office.

Claim worth USD 5 billion filed against Google in USA for collecting data in incognito mode

On 2 June a claim was filed against Google accusing the latter of illegal invasion into privacy of millions of users by tracking actions when tabs were opened in incognito mode. They demand at least USD5 billion from the company. The claim filed to the federal court in San Jose (California) alleges that Google collects data through Google Analytics applications, Google Ad Manager, as well as other applications and extensions, including those installed on smartphones.

It is noted that the claim was filed on behalf of three plaintiffs, but the lawyers plan to assign it collective status. The plaintiffs demand remuneration from Google USD5,000 for damages for each user who has been using incognito mode since 1 June 2016.

Facebook lost action in dispute with German antitrust authority

Facebook abused its dominant position in the social media market by collecting user data. This decision was adopted by the Federal Supreme Court of Germany on 23 June. According to the decision, Facebook has no right to combine and process users personal data collected through other services WhatsApp, Instagram, as well as websites and applications of other operators without their consent. Therefore, the court upheld the decision of the FederalCartelOffice of Germany, which in February 2019 introduced a number of restrictions on the social network related to processing of collected data.

Representatives of the social network challenged the position of the CartelOffice in the Higher Regional Court of Düsseldorf, noting that the regulator underestimates the seriousness of competition for Facebook on the part of YouTube, Snapchat, and Twitter. In August 2019, the court in Dusseldorf suspended the decision of the authority. Thus, the case will be returned to this court for a final judgement.

Andreas Mundt, head of the antitrust authority of Germany, approved the decision taken by the Federal Supreme Court. In his opinion, if collection and use of data is carried out in violation of the law, antitrust law should establish the possibility to intervene in order to prevent abuse.

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