Brussels Brief - October 7, 2005
October 7, 2005
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KEY DEVELOPMENTS
Competition: Peugeot Fined EUR 49.5 Million for Limiting Dutch Exports of Cars
Philip Torbøl
The European Commission has fined French car manufacturer, Peugeot, EUR 49.5 million for obstructing the exports of new cars by its dealers in the Netherlands, where prices before taxes are lower than in France and Germany. The Commission investigation revealed that Peugeot had deliberately established a strategy to limit the sales of its new cars from the Netherlands to other EU markets. First, dealers would not obtain performance bonuses if they sold cars to non-Dutch citizens. Second, dealers who had a significant export activity would become the target of direct pressure including threats to reduce their supplies. The practice, considered by the Commission to be of a very serious nature, started in 1997 and was terminated by Peugeot in 2003.
Competition: Commission Appoints Trustee in Microsoft Case
Yannis Virvilis
Following the submission by Microsoft of several candidates, the European Commission has decided to appoint Professor Neil Barrett as the Trustee who will provide technical advice to the Commission on issues relating to Microsoft’s compliance with the Commission’s 2004 Decision. In that Decision the Commission found that Microsoft had violated Article 82 of the EC Treaty (abuse of dominant position) by leveraging its near monopoly in the market for PC operating systems onto the markets for work group server operating systems and for media players. The Commission imposed a fine of EUR 497 million and also required Microsoft to share with competitors sensitive interface information about its Windows operating system, to allow them to design products that work better with Windows-driven computers. The Commission also ordered the company to offer to PC producers a version of the Windows operating system without the Windows Media Player.
Internal Market: New Proposal on Data Protection
Iveta Mikelsone
In order to combat terrorism and crime, the European Commission has presented a proposal for a Framework Decision concerning reinforcement of protection of personal data and effective exchange of information between national law enforcement agencies. The current proposal is in line with a recent proposal on retention of data by communication providers (See Brussels Brief of 23 September 2005). The proposed Framework Decision provides strict rules on confidentiality and security of the processing of personal data. It provides that personal data should only be transferred to third countries that ensure adequate protection of personal data. At the same time, it ensures that exchange of information that is often vital for combating crime is not hampered.
Air Transport: EU and Canada Sign Agreement to Transfer Airline Passenger Data
Alana Tervo
On 3 October 2005, the EU and Canada signed an agreement allowing Canadian authorities to collect the personal data of passengers who fly from an EU Member State to Canada (see Brussels Brief of 22 July 2005). After the events of 11 September 2001, the Canadian Government authorised its border control agency to collect the data to help identify security threats. The EU only signed a deal once Canada agreed to ensure compliance with EU data protection laws. The Commission says that the agreement involves a higher level of data protection than a similar one signed with the US last year, and that fewer sets of data will be involved. Commission Vice-President Frattini stated that the result showed the World that the EU and Canada were “able to maintain our human rights standards”. The agreement will enter into force once Canada has completed the regulatory changes necessary for full implementation.
Competition: Final Stage of EU Reform on Competition in the Motor Industry Marks End of ‘Location Clauses’
Anthony Seymour
Since 1 October 2005, distribution agreements containing location clauses, which enable motor manufactures to impose geographical restrictions on their dealers, have no longer attracted protection from Block Exemption Regulation 1400/2002. Car and light commercial vehicle dealerships will now be able to compete wherever they choose within the EU, even in territories previously reserved for distributors of the same brand, so long as they comply with any qualitative conditions imposed by the manufacturer in that area. Although agreements containing location clauses will fall outside the Regulation, they will not be deemed anti-competitive if they fulfil the criteria contained in Article 81(3).
Mergers: Commission Authorises Joint Venture between Sofiprotéol and the Bunge Group
Mélanie Bruneau
The European Commission has authorised the creation of the joint venture between Sofiprotéol and the Bunge Group. Sofiprotéol is a French group operating in the oilseed and protein crop sector. Bunge is a US group operating in the agri-food sector. Both Sofiprotéol and Bunge produce and market biodiesel through their subsidiaries, Diester Industrie and Novaol, respectively. The two groups have decided to combine their biodiesel assets, except for those owned and operated in France, thus creating the biggest biodiesel supplier in the EU. The Commission has studied the effects of the proposed operation on the markets for biodiesel, glycerine and vegetable oils. It has considered that, as EU directives set minimum consumption levels of biodiesel and provide for tax exemption for this fuel to make it more competitive vis-à-vis mineral gas oil, the production of biodiesel is set to continue to increase significantly in the coming years. It has also found that biodiesel clients (oil companies or large retailers) will still have sufficient credible alternative suppliers after the operation. This conclusion also applies to the glycerine market.
Trade: WTO Panel Condemns US Subsidies to Exporters
Michal Cieplinski
The World Trade Organisation (WTO) panel has found that the US has not abided by previous WTO rulings and recommendations of the WTO Dispute Settlement Body regarding the Foreign Sales Corporations (FSC) dispute. The Panel made clear that the tax subsidies which have been carried forward by using transitional periods and so-called "grandfathering" violate WTO rules. The panel was formed as a result of the American Jobs Creation Act (AJCA), which preserved in a transitional or "grandfathered" form some of the federal payments under the FSC. The main aim of the grandfathering clause is to ensure that certain US exporters will continue to obtain WTO-prohibited FSC export subsidies beyond the expiry of the FSC transitional period in 2006. In May 2003 WTO arbitrators authorised the EU to impose sanctions in the amount of USD 4 billion by increasing customs duties on selected US products. These measures were suspended from 1 January 2005 due to the further WTO dispute settlement proceedings, but will become applicable again 60 days after the adoption of the compliance panel report, or, at the latest, on 1 January 2006.
NEXT WEEK’S EVENTS
Monday 10 October – Friday 14 October 2005
COUNCIL MEETINGS
Competitiveness Council (11 October 2005)
Economic and Financial Affairs Council (11 October 2005)
Justice and Home Affairs Council (12 – 13 October 2005)
COURT OF JUSTICE
Judgments
Agriculture
C-379/04 Richard Dahms
Company law
C-458/03 Parking Brixen
Judgments Convention/Enforcement of judgments
C-522/03 Scania Finance France
C-73/04 Klein and Klein
Taxation
C-200/04 iSt
Opinions
Law governing the institutions
C-173/03 Traghetti del Mediterraneo
COURT OF FIRST INSTANCE
No judgments scheduled for next week
