Publications / McDermott Newsletters / Brussels Brief - August 3, 2007

Brussels Brief - August 3, 2007

August 3, 2007

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Please note that, due to the closure of the Commission and other European Institutions over the summer period, the next Brussels Brief will be sent on Friday 7 September 2007.

KEY DEVELOPMENTS

Competition:  Commission Sends Statement of Objections Over Banana Cartel

Alana Tart

The European Commission has sent a Statement of Objections (SO) to six companies alleging their participation in a cartel for the sale of bananas.  The Commission suspects that market leaders such as Chiquita, Del Monte and Dole of the United States, Noboa of Ecuador and Fyffes of Ireland shared confidential information about volume and prices of imported bananas in order to fix prices.  The SO follows surprise inspections that the Commission carried out in 2005 at banana importers in Belgium, Great Britain, Germany and Ireland.  The companies have ten weeks to reply to the SO and will then have the right to be heard in an oral hearing.

 

Competition:  British Airways Fined For Price Fixing by UK and US Competition Authorities

Bróna Heenan

Unprecedented parallel antitrust investigations by the UK Office of Fair Trading (OFT) and the US Department of Justice (DOJ) have left British Airways with fines totalling £270 million (£121.5 million from the OFT and US$300 million from the DOJ).  In the first case of its kind, the two competition authorities simultaneously brought action against British Airways for fixing fuel surcharges with Virgin Atlantic.  The United States also included price fixing charges in relation to the international air cargo sector, involving a number of different airlines.  Virgin Atlantic, the first to apply for immunity under the respective leniency policies of both competition authorities, is expected to escape fines.  Both the OFT and DOJ are continuing criminal investigations in relation to the case.

 

Competition:  Commission Investigates E.ON and Gaz de France for Suspected Market Sharing

Sara Bacchio

The European Commission has initiated proceedings against the German energy group E.ON and the French gas company Gaz de France in relation to suspected market sharing.  In particular, the allegations concern supplies of natural gas transported over the MEGAL pipeline which is jointly owned by E.ON and Gaz de France.  The initiation of proceedings against E.ON and Gaz de France arises from information obtained during the inspection carried out by the Commission in May 2006.  The alleged infringements, which are thought to have been an attempt by the companies’ to protect their home markets, will be investigated in depth in the course of the proceedings.

 

Competition:  Proceedings Against Electricity Suppliers for Suspected Foreclosure

Geert Dierickx

The European Commission has initiated proceedings against both Electrabel, the incumbent Belgian electricity company belonging to the French SUEZ group and EDF, the French electricity supplier, for allegedly abusing their dominant position on the market.  The Commission believes that Electrabel and EDF introduced long term exclusive purchase obligations for industrial consumers, making it difficult for new entrant electricity suppliers to acquire these consumers.  As a result, the development of a more competitive electricity market in Belgium and France could be seriously hindered.  Such a delay in market competition could lead to higher prices and lower quality of service.  The alleged infringements will be investigated in depth in the course of the proceedings.

 

Environment:  Commission Applies for Injunction to Stop Polish Road Construction in Protected Valley

Benoît Keane

The European Commission has applied for an injunction before the European Court of Justice to prevent the construction of a road in the Rospuda Valley in Poland.  The valley, famed for its primeval forest and natural habitat, is protected as an area of European importance under EU law.  Despite this protection, the Polish planning authorities gave the green light for the construction of a new road through the valley.  This prompted the Commission to apply for interim measures to prevent construction from going ahead.  The Polish Government claims that the road is necessary for reasons of public safety but the Commission is unconvinced.  It considers that adequate safety measures could be made to existing routes but the damage to the valley would be irreparable if the project goes ahead. 

 

State Aid:  New Commission Regulation on State Aid for Fisheries Sector

Marta Becerra

On 24 July 2007, the European Commission adopted a Regulation increasing the de minimis ceiling for aid to the fisheries sector.  The ceiling will be set at EUR 30,000 per three year period, per beneficiary, on the condition that the total amount of such aid represents less than 2.5 per cent of the annual national fisheries output.  The previous level of aid, set at EUR 3,000 in 2004, was deemed to be very low and a higher level could be permitted without distorting competition.  The trawling sector is likely to be the main recipient of de minimis aid.  This new Regulation will apply until 31 December 2013.

 

NEXT WEEK’S EVENTS

Monday 6 August – Friday 10 August 2007

 

COUNCIL MEETINGS

No Council meetings scheduled for next week.

 

COURT OF JUSTICE

Judicial vacation of the Court of Justice from 16 July 2007 to 2 September 2007 inclusive.

 

COURT OF FIRST INSTANCE

Judicial vacation of the Court of First Instance from 16 July 2007 to 2 September 2007 inclusive.

 

 

McDermott Will & Emery

McDermott Will and Emery