Publications / McDermott Newsletters / Brussels Brief - October 19, 2007

Brussels Brief - October 19, 2007

October 19, 2007

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KEY DEVELOPMENTS

State Aid:  Commission Investigates Subsidy to French Manufacturer FagorBrandt

Juan Gutiérrez

The European Commission has opened a second phase investigation into the compatibility of a subsidy, which the French authorities intend to grant to FagorBrandt, worth EUR 31 million, with the EC Treaty rules on State aid to firms in difficulties.  The investigation will notably focus on the long term viability of the company and the limitation of aid to the minimum necessary.  The Commission will also investigate whether this subsidy would be used to finance the repayment of EUR 22.5 million of illegal aid received in 2002.  The Commission is concerned about the likely negative impact of the aid on trade between EU Member States, since FagorBrandt competes mainly with other European manufacturers.  The opening of this in-depth investigation allows interested parties to submit their comments.

 

Competition:  Commission Decision Against Groupement des Cartes Bancaires

Chen Dingsheng

The European Commission has addressed a decision to Groupement des Cartes Bancaires (France) in which it concludes that the Groupement has infringed EC Competition rules.  According to the decision, the Groupement adopted price measures that hinder the issuing of cards in France at competitive rates by certain member banks.  The Commission alleges that consumers are deprived of a more diversified product offering at competitive prices.  The decision orders the Groupement to annul the price measures with immediate effect and to avoid taking any future measures with a similar purpose or effect.  The Commission has decided not to impose a fine on the Groupement as the measures were notified with a view to obtaining a decision on their compatibility with the competition rules.

 

Mergers:  Commission Approves Danish Book Publishers Deal with Conditions

Philip Torbøl

The European Commission has approved the acquisition by Egmont of Bonnier's Danish book publishing business.  Egmont and Bonnier, based respectively in Denmark and Sweden, are large media groups active mainly in Scandinavia.  The Commission had concerns that the transaction could significantly reduce competition in the strip cartoon segment of the market.  The parties therefore agreed to remove Bonnier's strip cartoon business from the deal.  Following this commitment, the Commission decided to raise no objections to the acquisition.

 

Internal Market:  Commission Attacks Nationality requirements for Notaries

Kate DaSilva

The European Commission is to send reasoned opinions to the Czech Republic, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia for allowing only their own citizens to pursue the profession of notary.  The Commission believes this nationality requirement is contrary to the EC Treaty rules on right of establishment and cannot be justified by the Treaty provision relating to the exercise of official authority, since notaries do not take decisions with regard to State authority.  By applying Directive 89/48/EEC on the general system for the recognition of diplomas, EU Member States are able to ensure that prospective notaries possess the necessary knowledge of national law, and so the nationality requirement is no longer justifiable.

 

Competition:  Distrigas Commitments to End Long-Term Gas Supply Agreements Become Binding

Elena Kostadinova

The European Commission has closed the abuse of dominant position case against Distrigas, the largest gas importer and supplier in Belgium and accepted the gas company’s commitments for remedies.  In 2004 the Commission launched an investigation into Distrigas’ supply of gas to large customers, including industrial customers, electricity producers and resellers.  The Commission investigated long-term supply contracts and restrictions on the use of gas.  Under the commitments, Distrigas will reduce the volumes of gas tied under long-term contracts sold in Belgium.  The maximum duration of new contracts will be two years with gas resellers and five years with industrial consumers. Breach of these commitments, which are binding until 31 December 2010, would expose Distrigas to a potential fine of up to 10 per cent of its total turnover.

 

State Aid:  Reform of Greek Pension Regime in Greek Banking Sector Complies With EC Treaty Rules

Contact Philip Bentley

The European Commission has decided that Greece’s reform of the supplementary pension regime in the banking sector does not involve State aid.  In particular, the case involves the creation of a new legal entity in Greece called ETAT (the single insurance fund for bank employees) which would be guaranteed by the Greek State.  The purpose of ETAT is to update and process the social security dossiers of bank personnel and to act as a link and mediation body between three key parties: (i) bank personnel, (ii) IKA-ETAM, which is the general security body for main pensions, and (iii) ETEAM, which is the general security body to which certain bank personnel are affiliated for their supplementary pension.  The Commission concluded that ETAT would not perform an economic activity within the meaning of Articles 87 and 88 of the EC Treaty and so the Greek State's guarantee falls outside the application of EC Treaty State aid rules.

 

State Aid:  Commission Launches New Investigation into Polish Machinery Producer

Contact Philip Bentley

The European Commission has reopened an in-depth investigation into financial aid granted to the Polish machinery producer Huta Stalowa Wola.  In 2006, the Commission cleared restructuring aid amounting to EUR 17.3 million given in the form of a loan.  However, it has transpired that the form of the restructuring aid was modified prior to the Commission’s decision without the Commission being informed.  It seems that the company received the funds in exchange for equity instead of as a loan.  This improves the liquidity of the company and enables it to borrow additional funds from other sources.  The Commission is now investigating whether this alteration to the restructuring plan conforms with State aid rules. 

 

Competition:  Commission Raids Freight Forwarders in Price Fixing Investigation

Andrea Hamilton

The European Commission has announced that, on 10 October 2007, it conducted surprise inspections at the offices of certain providers of international freight forwarding services.  The Commission believes that the companies may have engaged in pricing practices forbidden by Article 81 of the EC Treaty.  Freight forwarders arrange the transport and delivery of items for shipping companies.  While the Commission did not disclose the names of the companies involved, Swiss-based freight forwarders Kuehne & Nagel International AG and Panalpina Welttransport Holding AG acknowledged that they had been inspected, both in Europe and also in the United States, where a parallel investigation is being conducted by the US Department of Justice.  Unannounced investigations are the first step in a cartel investigation and there is no time frame for completion of cartel inquiries. 

 

Mergers:  Schering-Plough’s Acquisition of Organon BS Subject to Conditions

Geert Dierickx

The European Commission has cleared the proposed acquisition by Schering-Plough Corporation of Organon BS, a Dutch subsidiary of Akzo Nobel active in human and animal health.  The Commission found that the notified transaction raised competition concerns in 12 veterinary product areas and more than 30 relevant national markets.  Schering-Plough therefore proposed to divest the overlapping activities in all the markets where serious doubts were raised.  In the light of these commitments, the Commission has concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area.

 

NEXT WEEK’S EVENTS

Monday 22 October – Friday 26 October 2007

 

COUNCIL MEETINGS

Agriculture and Fisheries Council (22 October 2007)

 

COURT OF JUSTICE

Judgments

Agriculture

C-344/06 P Blom v Council and Commission

 

Citizenship of the Union

Joined Cases C-11/06, C-12/06 Morgan

 

Environment and consumers

C-334/04 Commission v Greece

C-248/05 Commission v Ireland

C-440/06 Commission v Greece

 

External relations

C-403/05 Parliament v Commission

 

Freedom of establishment

C-112/05 Commission v Germany

 

Free movement of capital

C-464/05 Geurts and Vogten

 

Intellectual property

C-238/06 P Develey v Office for Harmonisation in the Internal Market

 

New accessions

C-273/04 Poland v Council

 

Police and judicial cooperation in criminal matters

C-440/05 Commission v Council

 

Regional policy

C-427/05 Porto Antico di Genova

C-167/06 P Komninou and Others v Commission

 

Opinions

Agriculture

C-285/06 Schneider

 

Freedom of establishment

C-450/06 Varec

 

Freedom to provide services

C-250/06 United Pan-Europe Communications Belgium and Others

 

Taxation

C-132/06 Commission v Italy

C-271/06 Netto Supermarkt

 

COURT OF FIRST INSTANCE

Judgments

Company law

T-138/05 Commission v Impetus

 

ECSC

Joined Cases T-27/03, T-46/03, T-58/03, T-79/03, T-80/03, T-97/03, T-98/03 SP v Commission

T-94/03 Ferriere Nord v Commission

T-45/03 Riva Acciaio v Commission

T-77/03 Feralpi Siderurgica v Commission

 

Intellectual property

T-405/04 Borco-Marken-Import Matthiesen v OHMI (Caipi)

 

McDermott Will & Emery

McDermott Will and Emery