Brussels Brief - June 17, 2005
June 17, 2005
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KEY DEVELOPMENTS
Trade: EU – China textile agreement 10 June 2005
Philip Torbøl
The European Commission and Chinese Ministry of Commerce have reached agreement to limit the increase of Chinese textile imports into the EU for ten product categories. The ten product categories concerned are, pullovers, men’s trousers, blouses, t-shirts, dresses, bras, flax yarn, cotton fabrics, bed linen, and linen for tables and kitchens. Depending on the category, the product increase will be limited to between 8 and 12.5 per cent per year until the end of 2007. As a result of the agreement, the Commission will terminate the investigation into nine product categories of Chinese textile imports that it had launched in April under the safeguard procedure (see Brussels Brief of 29 April).
State Aid: Application of Article 7(7) of Regulation 659/1999
Javier Berasategi
Where the European Commission has failed to take a decision regarding planned State aid under the formal investigation procedure within a period of 18 months, a Member State may request the Commission to take a decision within two months under Article 7(7) of EC Regulation 659/1999. On 15 June 2005 the Court of First Instance (CFI) reviewed for the first time the legality of a Commission Decision against a planned aid scheme, adopted following a request to act under Article 7(7) by the Italian State. The CFI established as a general principle that if a Member State requests the Commission to take a decision following the expiry of the indicative period of 18 months within which the preliminary investigation takes place, the Commission must take a decision in the light of the information available to it. If that information is not sufficient to establish the compatibility of the project, a negative decision must follow. Turning to the case under consideration, the CFI upheld the Commission’s Decision. It noted that despite the Commission’s attempts to obtain economic documentation to enable it to assess the effects of the project on the enterprises intended to benefit from the aid, as-well as on competition, Italy had failed to provide that documentation.
Competition: Commission opens sector inquiry into gas and electricity
Patrice Corbiau
The European Commission has launched an inquiry into competition in the gas and electricity markets that responds to concerns raised by consumers and new market entrants about the development of wholesale markets and limited consumer choice. This inquiry will complement the Commission’s parallel reporting on the development of the internal energy market. The inquiry will focus inter alia on the identification of possible distortions of competition and on other market conditions that permit anti-competitive behaviour. In particular, it will examine the functioning of wholesale markets, the reasons for recent energy price rises, the current slow level of integration of national markets, the functioning of cross-border interconnectors and the relations between network operators and their affiliates. Should evidence of competition infringement be identified, enforcement may be undertaken either by the Commission or by national competition authorities.
Competition: Inquiries launched into retail banking and business insurance
Nicola Chesaites
The European Commission seems to have financial services clearly within its sights at present. In conjunction with its initiatives to remove regulatory barriers to the cross-border supply of financial services within the Internal Market, the Commission has now launched a sector inquiry to examine competitive conditions in the retail banking and business insurance markets. The inquiry will initially focus on payment cards, with other aspects of retail banking market and the business insurance market expected to come under scrutiny by the end of 2005. Ideas to further integrate EU financial markets are also currently the subject of a Commission Green Paper public consultation procedure which will close on 1 August 2005. As part of the newly-launched inquiry the Commission can require companies or trade associations to supply information, documents or statements. The results of the inquiries are expected to be published in 2006.
Competition: Commission fines AstraZeneca EUR 60 million for misusing patent systemMelanie Bruneau
The Commission has fined the Anglo-Swedish group AstraZeneca EUR 60 million for misusing the patent system and marketing authorisation procedures in order to block or delay market access for generic competitors to its drug Losec. Losec pioneered a new generation of medicines to treat stomach ulcers and other acid-related diseases – so-called proton pump inhibitors. From 1993 to 2000, AstraZeneca gave misleading information to several national patent offices in the European Economic Area in order to obtain extended patent protection for Losec. AstraZeneca was also found to have misused marketing authorisation procedures by deregistering the market authorisations for Losec capsules with the aim of blocking or delaying market entry by generic firms and parallel traders. Therefore, the Commission has decided that AstraZeneca’s behaviour constitutes serious abuses of its dominant market position in violation of EC and EEA competition rules.
Internal market: Commission launches review of the EU Emission Trading SchemeElena Kostadinova
Directive 2003/87/EC requires the Commission to report to the European Parliament and the Council by 30 June 2006 on the functioning of the Emissions Trading Scheme (ETS) and to propose any necessary amendments. The Commission is launching a web survey to consult stakeholders, which will be open until 16 August 2005. The survey covers a wide range of issues, including the functioning of the allowance market, the further harmonisation of the allocation method, the allocation plans for the second trading period 2008-2012, the adaptation of the scheme to the enlarged European Union of 25 Member States, and the feasibility of including additional sectors and gases within the scope of the ETS. Any amendments to the Directive that the Commission may propose in 2006 would only take effect from the third trading period, beginning in 2013.
Mergers: Commission clears acquisition of Český Telecom by TelefónicaYannis Virvilis
The European Commission has found that the acquisition of the Czech company Český Telecom by the Spanish operator Telefónica will not impede effective competition in the EEA. Český Telecom is the incumbent fixed telecommunications operator in the Czech Republic and is also active in the mobile telecommunications market through its subsidiary Eurotel. Telefónica is a global telecommunications operator, active in different telecommunications markets and in different countries worldwide. The Commission found that the concentration should be cleared as there are no horizontal overlaps in the parties’ respective countries nor vertical concerns for the markets of wholesale international roaming and fixed and mobile communications.
Mergers: Commission approved joint venture between the Caisses d’Epargne and the Crédit Agricole GroupsMelanie Bruneau
The Commission has given the green light to the proposed joint venture between the Caisse d'Epargne and the Crédit Agricole groups active in the areas of safeguarding financial instruments and fund management for institutional investors. These two groups are all-purpose French banks. However, the Caisse d’Epargne group also offers financial products and services, while the Crédit Agricole group is also active in the insurance sector. Following its investigation into these markets, the Commission considered that, following the merger, clients using the services in question, including those resident in France, would continue to have a sufficient number of credible alternatives. The new company will therefore be faced with enough competitors, some of which have a much larger market presence in Europe and in the world. The Commission therefore concluded that the merger would not significantly impede effective competition in the EEA or a substantial part of it.
NEXT WEEK’S EVENTS
Monday 20 June – Friday 24 June 2005
COUNCIL MEETINGS
Agriculture and Fisheries Council (20 – 22 June 2005)
Environment Council (24 June 2005)
COURT OF JUSTICE
No judgments or opinions scheduled for next week.
COURT OF FIRST INSTANCE
Judgments
Intellectual Property
T-19/04 Metso Paper Automation v OHMI (PAPERLAB)
T-34/04 Plus v OHMI - Bälz and Hiller (Turkish Power)
Regional Policy
T-102/03 CIS v Commission
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