Brussels Brief - February 29, 2008
February 29, 2008
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KEY DEVELOPMENTS
Competition: Commission Reacts to Microsoft’s Statement on Interoperability
Benoît Keane
The European Commission has cautiously acknowledged the announcement by Microsoft that it intends to commit to a number of principles to promote interoperability in markets where it holds a high market share. The Commission stated that it would consider whether these statements comply with the principles set out in the Microsoft Judgment from last year. The Commissioner for Competition also emphasised that a press release from Microsoft was not sufficient; interoperability must happen in practice. The Commission made it clear that this statement will have no bearing upon the investigations it launched in January 2008 on Microsoft’s past conduct, such as its refusal to disclose information relating to interoperability with its Office suite of products.
Competition: Microsoft Fined Again
Yannis Virvilis
The European Commission has imposed a record penalty payment on Microsoft, amounting to EUR 899 million, for Microsoft’s failure to comply with the Commission’s March 2004 Decision. In that Decision, the Commission found that Microsoft had abused its dominant position and so required the company to disclose Windows interface documentation at a reasonable price. The Commission’s 2004 Decision was upheld by the European Court in September 2007 and Microsoft reduced the price charged for the disclosure of the relevant information in October 2007. However, the Commission has now found that the prices charged by Microsoft for this documentation prior to October 2007 were unreasonable.
Internal Market: ECJ Rules that only Cheese from Parmigiano Region Qualifies as “Parmesan”
Jonathan Aitken
On 26 February 2008, the European Court of Justice (ECJ) dismissed the European Commission’s action against Germany but confirmed that only cheese bearing the Protected Designation of Origin (PDO) “Parmigiano Reggiano” can be sold under the name “Parmesan”. Products registered as a PDO benefit from protection against any misuse, imitation or evocation of the products named. The European Commission had requested that the ECJ declare that Germany had failed in its duty to protect the registered PDO “Parmigiano Reggiano” by allowing products to be labelled “Parmesan”, even though they did not meet the requirements of the PDO. The ECJ dismissed the action on the grounds that: (i) EU rules do not oblige Member State authorities, other than that of the Member State from which the PDO originates, to take on their own initiative the measures necessary to penalise PDO infringements; and (ii) the Commission had failed to prove that Germany had not put in place any other measures to ensure the effective protection of the PDO. The ECJ did however confirm in its judgment that given the phonetic and visual similarity between the names in question and the appearance of the products, use of the name “Parmesan” was an evocation of the PDO “Parmigiano Reggiano”.
State Aid: Romania Requested to Recover EUR 27 Million in Aid from Automobile Craiova
Mélanie Bruneau
The European Commission has ordered the full recovery of State aid granted in the framework of the privatisation of Automobile Craiova. The Commission found that Romania had imposed conditions on the privatisation. These included, in particular: (i) the achievement of a minimum production level of 200,000 cars in the fourth year after the privatisation; (ii) a minimum level of investments and the continued employment of all 3,900 staff; and (iii) acceptance, in exchange, of a lower sales price. Ford offered a purchase price of EUR 57 million and won the tender. The Commission's investigation, opened in 2007, concluded that these conditions had lowered the sales price by EUR 27 million. This aid, which did not meet the criteria for compatible restructuring aid or regional aid, was considered by the Commission to be incompatible with the Single Market.
State Aid: Commission Investigation into German Banks Caught in Sub-Prime Market Crisis
Juan Gutiérrez
The European Commission has opened an in-depth investigation into State support measures in favour of the German banks IKB and Sachsen LB. As a consequence of investments in US sub-prime markets, both banks ran into financial difficulties. During the summer of 2007, the State-owned bank Kreditanstalt für Wiederaufbau provided a risk shield of EUR 9 billion to IKB. A group from State-owned Landesbanken also granted liquidity assistance of EUR 17 billion to Sachsen LB. Without these and several subsequent measures the banks would not have been able to continue their business. The Commission will assess whether these measures constitute State aid and, if so, whether they are compatible with EU rules for rescuing and restructuring firms in difficulties. Interested parties may submit their comments to the Commission.
Internal Market: Commission Report Proposes Extension of EU Rules on Cross-Border Euro Payments
Elena Kostadinova
The European Commission has published a report on the EU Member States’ implementation of the Regulation on cross-border Euro payments. The report concludes that the Regulation has triggered a decrease in fees for cross-border credit transfers and prompted financial institutions to create the Single Euro Payments Area. It recommends that a number of improvements be made to the current regime, in particular: (i) the scope of the Regulation should be extended to direct debits; and (ii) out-of-court redress procedures should be set up by all Member States to protect consumer rights. The report also encourages financial institutions to provide consumers with clear, transparent and easily comparable information on their payment services. A legislative proposal to amend the Regulation could be expected in autumn 2008 following an impact assessment and public consultation.
Competition: Commission Confirms Sending a Statement of Objections to Alcan
Patricia Armesto
On 21 February 2008 the European Commission sent a Statement of Objections (SO), the first step in formal competition infringement proceedings, to Alcan, the parent company of an international aluminium group. The SO outlines the Commission’s preliminary view that Alcan has infringed EC competition rules on abuse of a dominant position by tying its aluminium smelting technology, a market in which it is dominant, with handling equipment for aluminium smelters (the so-called Pot Tending Assembly or PTA). According to the Commission, this contractual tie might significantly harm Alcan’s customers (as they appear to be prevented from using PTAs from other suppliers) and, ultimately, end-users of aluminium, through reduction in innovation and a likely negative impact on aluminium prices. Alcan has eight weeks to reply to the SO.
State Aid: Commission Welcomes Changes to Financing of Irish Broadcaster
Benoît Keane
The European Commission has welcomed the changes to the financing of the Irish public service broadcasters RTÉ and TG4. The Irish Government has agreed to clarify the public service remit of the Irish broadcasters and establish transparent accounting methods for the broadcasters to ensure that there is no overspill of public funds into commercial activities. The new measures must be implemented by Ireland by December 2008. The Commission has consequently closed its investigation into the matter.
NEXT WEEK’S EVENTS
Monday 3 March – Friday 7 March 2008
COUNCIL MEETINGS
Eurogroup (3 March 2008)
Environment Council (3 March 2008)
Economic and Financial Affairs Council (ECOFIN) (4 March 2008)
COURT OF JUSTICE
Judgments
Competition
C-196/07 Commission v Spain
Freedom of establishment
Joined Cases C-287/06, C-288/06, C-289/06, C-290/06, C-291/06, C-292/06 Deutsche Post
Industrial Policy
C-82/07 Comisión del Mercado de las Telecomunicaciones
Taxation
C-98/07 Nordania Finans and BG Factoring
Opinions
Competition
C-49/07 MOTOE
State aid
Joined Cases C-75/05 P, C-80/05 P Germany v Kronofrance
Transport
C-173/07 Emirates Airlines
COURT OF FIRST INSTANCE
No judgments scheduled for next week other than staff regulation of officials cases.
