Brussels Brief - April 28, 2006
April 28, 2006
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KEY DEVELOPMENTS
Competition: Microsoft Appeal Hearing Before CFI
Lara Kuehl
Microsoft is currently appealing to the Court of First Instance (CFI) to overturn the Commission’s 2004 decision that Microsoft abused its quasi-monopoly of the PC operating-systems market. As a result of the original decision, Microsoft was fined EUR 497 million and ordered to take corrective measures. The appeal hearing runs from the 24 to 28 April 2006. The two key issues of the hearing are whether Microsoft’s practice of bundling Media Player with Windows has foreclosed the market, and whether Microsoft has prevented competitors producing interoperating software by withholding computer codes. Microsoft argues that there is, in fact, thriving competition in the software market, citing examples such as Apple’s iTunes and the Flash player. The company also claims it has already given its competitors extensive computer codes. The CFI is not expected to deliver its judgment until the end of the year at the earliest.
Mergers: Commission Clears Endesa/E.ON Deal
Maria Scimemi
The European Commission has cleared the acquisition of sole control of Endesa through a public takeover bid by the German E.ON. Endesa is a Spanish energy company mainly active in the electricity sector. The decision came after the Spanish Government had passed emergency legislation granting its regulator the power to block the acquisition of Endesa by a foreign company. With its offer of EUR 29.1 billion, E.ON has topped the hostile bid by Spain’s biggest gas provider, Gas Natural. The latter bid is favoured by the government but has been suspended by the Spanish High Court. The Commission’s unconditional approval of E.ON’s bid puts pressure on the Spanish regulator to approve the takeover, especially after Competition Commissioner Neelie Kroes requested Spain to respect the Commission’s exclusive right to veto pan-European mergers.
Biotechnology: First EU Authorisation of a “Biosimilar” Medicine
Philip Bentley QC
After a positive scientific opinion from the European Medicines Agency, the European Commission has granted the first marketing authorisation for a “biosimilar” medicine under new legislation adopted in 2004. Biosimilars are complex biological molecules which are found to be similar, but not identical, to already authorised biotechnology medicines. Once the periods of patent and data protection have expired for the original medicine, biosimilars can be authorised based on an assessment of their similarity with the original, after performing additional trials. The new medicine is Novartis’ growth hormone ‘Omnitrope’, demonstrated to have comparable quality, safety and efficiency to the original product ‘Genotropin’ manufactured by Pfizer.
Competition: Commission Supports More Airline Mergers
Philip Torbøl
In her recent speech on the occasion of the twentieth anniversary of the International Institute of Air and Space Law, Competition Commissioner Neelie Kroes expressed her support to more mergers in the European airline industry. Such mergers, she said, can bring important benefits to passengers and the objective is for European competitors to become global winners. However, the European Commission will continue to monitor possible negative effects of such concentrations, in particular on routes connecting the hub-airports of the merging airlines. The Commission will assess competition effects of global airline alliances in more detail than it has in the past and will include services between the EU and third countries. The Commission will apply this new approach for the first time in its current investigation of the Sky Team alliance.
Trade: Failure to Meet Doha Development Agenda Deadline
Michal Cieplinski
World Trade Organisation (WTO) members will not meet the April deadline for the conclusion of negotiations on farm and industrial goods. The April deadline for a deal on farm and industrial goods, pillars of any eventual trade treaty, was set by trade ministers last December. The Doha round of trade negotiations, which is also seeking to cut barriers to international trade in services, was launched in late 2001 to boost the global economy. The negotiations cannot drag on beyond July or there will not be enough time to finalise all the details before the US presidential powers to negotiate trade deals lapse in 2007. WTO members did not fix any new deadline but indicated that the agreement will be finalised in the following months.
Intellectual Property: EC Criminal Penalties to Combat Intellectual Property Offences
Elena Kostadinova
The European Commission has amended its proposal for a directive laying down criminal measures necessary to ensure the enforcement of intellectual property rights. The amended proposal treats as a criminal offence every intentional infringement of an intellectual property right on a commercial scale as well as attempting, aiding and abetting such infringement. Penalties vary from fines of up to EUR 300,000 to a minimum of four years imprisonment. The amended proposal comes after the European Court of Justice ruled, in Case C-176/03, that the Community legislature make take “measures which relate to the criminal law of the Member States which it considers necessary in order to ensure that the rules which it lays down … are fully effective”.
State Aid: In-Depth Investigations into Proposed Subsidy to General Motors Belgium
Patrice Corbiau
The European Commission has launched a State aid investigation into the Flemish Region’s plans to grant EUR 5.33 million aid for training at General Motors Belgium (GM Belgium) in Antwerp. The plant currently employs 5,400 people and produces the Opel Astra. GM Belgium’s investment programme for the period 2005-2007 comprises a total value of EUR 127 million, which will allow the production of an additional version of the Astra. However, the Commission doubts that the aid will generate additional training activities rather than just support normal operations.
Mergers: Commission Clears Acquisition of Austrian Mobile Phone Operator
Geert Dierickx
Subject to conditions, the European Commission has cleared under the EU Merger Regulation the acquisition of the Austrian mobile phone operator tele.ring by T-Mobile Austria. The Commission’s in-depth investigation showed that the concentration would have led to a substantial impediment of effective competition on the Austrian mobile telecom market. However, the Commission has now concluded that the proposed transaction would not have any negative effects on competition in the European Economic Area, taking into account the merging parties’ commitment to divest the UMTS frequencies and mobile telephony sites of tele.ring.
State Aid: European Commission Refers Greece to Court
Iveta Mikelsone
The European Commission has referred Greece to the European Court of Justice for failure to comply with its State aid decision of September 2005. This decision obliged Greece to determine the exact amount of aid granted to Olympic Airways and Olympic Airlines, and to recover the illegal State aid granted. The contested State aid involved (i) a grant of EUR 40 million to Olympic Airlines to cover certain costs; (ii) unjustified payments of some EUR 90 million by Greece to Olympic Airways achieved by overvaluation of assets transferred to the State; (iii) Greece’s toleration of Olympic Airways’ failure to pay about EUR 350 million in tax and social security contributions; and (iv) the assumption of other Olympic Airways liabilities by Greece amounting to EUR 60 million. However, to date, no exact amount of aid has been determined by Greece and no recovery has taken place.
NEXT WEEK’S EVENTS
Monday 1 May – Friday 5 May 2006
COUNCIL MEETINGS
Economic and Financial Affairs Council (5 May 2006)
COURT OF JUSTICE
Judgments
Agriculture
C-286/05 Haug
Approximation of laws
C-431/04 Massachusetts Institute of Technology
Area of Freedom, Security and Justice
C-341/04 Eurofood IFSC
Environment and consumers
C-290/03 Barker
C-508/03 Commission v United Kingdom
C-98/04 Commission v United Kingdom
Law governing the institutions
C-436/03 Parliament v Council
C-217/04 United Kingdom v Parliament and Council
Regional policy
C-417/04 P Regione Siciliana v Commission
Taxation
C-169/04 Abbey National
Opinions
Agriculture
C-138/05 Stichting Zuid-Hollandse Milieufederatie
Approximation of laws
C-479/04 Laserdisken
Freedom of establishment
C-196/04 Cadbury Schweppes and Cadbury Schweppes Overseas
Free movement of goods
C-140/05 Valesko
Taxation
C-251/05 Talacre Beach Caravan Sales
COURT OF FIRST INSTANCE
Judgments
Intellectual property
T-439/04 Eurohypo v OHMI (EUROHYPO)
