New EU Competition Commissioner Announced and Regulatory Reform Package Goes into Effect
December 3, 2009
Developments in Brussels will create challenges and opportunities for companies doing business in EuropeKey New Antitrust Personnel
For the next five years, the European Union’s antitrust enforcement will be headed by Joaquín Almunia, former European Commissioner for Economic and Monetary Affairs with extensive experience gained from politics in Spain where he occupied several top positions, including that of party leader. In his appointment of Almunia to Competition Commissioner, Commission President José Manuel Barroso pointed out the determination and courage with which Almunia had addressed difficult issues with national governments. In general, Almunia is seen as Barroso's choice of a close ally for a key position.
A crucial question is whether the appointment of Almunia will mean more focus on economics in competition cases. Almunia, himself an economist, has appointed another economist, Carlos Martinez-Mongay, as his Chef de Cabinet. In addition, the new Director General of DG Competition, Alexander Italianer, who replaces Philip Lowe, is also an economist. Italianer is highly regarded and served as Deputy Chef de Cabinet for President Barroso and Deputy Secretary General of the Commission.
Policy issues that will be watched closely in the coming months are the review of the block exemption on vertical agreements (distribution agreements) and the Commission planned initiative to promote private damages actions in Europe. In both cases, new Commissioner, Almunia. will have the chance to make his footprint and give an indication of where he stands in terms of policy. In general, Almunia is regarded as being a strong advocate of competition and effective regulation.
Before Almunia formally takes over, his appointment will have to be endorsed by the European Parliament. This could happen at the end of January.
There are expanded and clarified regulatory powers in the areas of energy, climate change, sport and intellectual property rights (amongst others). In the past, the fact that the European Union had more limited regulatory powers led to tension between policy imperatives and the risk of court challenges. The European Union now has greater flexibility to move forward in these key areas. Businesses can therefore expect more regulation from Brussels, with greater scope for political debate and involvement of the European Parliament during the regulatory process.
This greater flexibility will no doubt be welcomed by the former Competition Commissioner, Neelie Kroes, who now takes on a portfolio dealing with digital technology where she is expected to want to deal with the controversial subject of reform of intellectual property rules, in particular copyright on the internet.
In the energy sector, expansion of powers will enable the Commission to promote the establishment of an internal energy market and guarantee energy supplies. These reforms are considered as being vital to safeguard the European Union’s future energy requirements and will have a major impact upon energy suppliers in Europe.
The counterpart of increased regulatory powers is a relaxation by the Lisbon Treaty of the conditions of standing in which companies and individuals can challenge a “regulatory act” before the European Court. Under the old test of standing, a person challenging a “regulation” had to show that he was both directly and individually concerned. Under the new test, it will be sufficient for the person challenging a “regulatory act” simply to prove that he is directly concerned. This is clearly an easier test, although it remains to be seen quite how the European Court will interpret the term “regulatory act”.
Procedural Matters
From a procedural point of view, certain important terminology changed as from 1 December 2009:
-
There is no longer a distinction between the European Union and the European Communities. From now on there is just the “European Union” (EU).
-
The principal EU legal provisions on competition law, Articles 81 and 82, are now renumbered Articles 101 and 102, and the corresponding treaty, as amended, is renamed the “Treaty on the Functioning of the European Union” (TFEU).
-
The European Court of First Instance has been renamed the “General Court” and the highest court is renamed as “the Court of Justice of the European Union”.
