Publications / McDermott Newsletters / Brussels Brief - September 22, 2006

Brussels Brief - September 22, 2006

September 22, 2006

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KEY DEVELOPMENTS

Competition: Commission Fines Copper Fittings Producers for Price Fixing Cartel

Patrice Corbiau

The European Commission has fined 30 companies a total of EUR 314.7 million for participating in a copper fittings cartel.  Copper fittings connect pipes used to conduct water, air, gas, etc. in plumbing, heating, sanitation and other installations.  The Commission’s investigations started in 2001 and revealed that the companies concerned agreed on mechanisms to coordinate price increases, discounts and rebates.  The Commission increased the fines by 60 per cent for four of the companies, because they continued the illegal arrangements after the inspections.  In addition, the fine for one of these four companies was increased by a further 50 per cent for providing the Commission with misleading information.  One company, Mueller, received full immunity from fines under the Commission’s leniency programme, as it was the first company to come forward with information about the cartel.  The total fines imposed make this the fifth largest set of fines ever imposed on a single cartel.

 

Trade: Reform of the EC Banana Regime

Michal Cieplinski

The European Commission has adopted the proposal for a reform of the Common Market Organisation for bananas.  The current aid scheme, which was deemed by the World Trade Organisation (WTO) Appellate Body as inconsistent with WTO law, will be completely abolished.  This scheme will be replaced by a significant budget transfer to the POSEI scheme, which is designed to support agricultural production in the outermost regions of the EU.  POSEI gives Member States flexibility on the distribution of aid, which will now include bananas.  Community producers of bananas in Greece, Cyprus and continental Portugal will receive additional aid through the Single Payments Scheme which will now extend to the cultivation of bananas.  It is expected that the reform will enter into force by the end of 2006.

 

European Court of Justice: European Lawyers Wishing to Establish in a MemberStateAre Not Required to Prove Language Skills

Maria Scimemi

The European Court of Justice (ECJ) has delivered two judgments concerning the EU Directive on practice by lawyers under home title in a Member State other than that of qualification.  The ECJ ruled that Luxembourg had failed to fulfil its obligations under the Directive in several ways.  First, by making registration with the competent national authorities subject to a prior language test.  Second, by prohibiting those lawyers from accepting service on behalf of companies.  Third, by requiring them to file annually a certificate of registration issued by the competent authority of their home Member State.  Last of all, the ECJ clarified that in the event of a refusal of registration with the Bar of the host Member State, the right of appeal must be to an impartial committee not composed exclusively or predominantly of local lawyers.

 

Mergers: Toshiba Acquisition of Westinghouse Electric and BNFL USA

Geert Dierickx

The Commission has cleared the proposed acquisition by the Japanese conglomerate Toshiba of Westinghouse Electric and BNFL USA (both hereafter “Westinghouse”). The proposed transaction would combine two suppliers whose activities are to a significant extent complementary, both technologically and geographically. The Commission investigated in particular the effects of the transaction in the nuclear fuel assemblies markets, in which Westinghouse, Areva, and Global Nuclear Fuels (“GNF”) are the largest suppliers worldwide. GNF is controlled by General Electric (“GE”), and has Toshiba and Hitachi as minority shareholders. Concerns materialised as to possible effects on potential competition in the fuel assembly markets of the combination of Toshiba’s stake in GNF with its control of Westinghouse. To allay these concerns Toshiba has submitted a commitment to modify its contractual arrangements with its GE and Hitachi, its partners in GNF.

 

ECJ:  Court Clarifies Rules on Comparative Advertising

Andrea Hamilton

The European Court of Justice has issued a preliminary ruling interpreting EU law on misleading and comparative advertising under Directive 84/450/EEC, as amended.  The case arose when a Belgian retailer, Lidl, claimed that certain advertisements of its competitor, Colruyt, constituted impermissible comparative advertising.  The advertisements at issue compared the prices of a collection of comparable products sold by Lidl and Colruyt. They also claimed that certain products sold at Colruyt and designated “Basic” were sold at the lowest price in Belgium.  The ECJ held that advertisers may compare the general prices of a collection of products sold by a competitor, provided that the products are actually comparable and consumers can readily verify the claim(s).  The ECJ, however, cautioned that   an advertiser’s claim that its general prices are lower than that of a competitor may be misleading under the Directive unless the details and basis of the comparison are clear to consumers.  The case will return to the Belgian court for further proceedings.

 

Trade: Further Co-operation between Commission and Chinaon Toys and Food Products

Mélanie Bruneau

The European Commission and China have signed a Road Map outlining a strategy to improve the safety of Chinese toys exported to the EU focusing on training and technical assistance, exchange of information between EU and Chinese authorities through EU rapid alert system for non-food products (RAPEX) and tracking and following up mechanisms for dangerous products. They have also signed an agreement to fight trade in illegal food products, based on a better exchange of information and enhanced co-operation. The parties are therefore willing to investigate whenever illegal export consignments are detected, to speed up the approval process for food exports, to conduct joint investigations into sensitive matters and to cooperate on the mutual development of electronic means to prevent false certification. A joint seminar on market surveillance for industrial products is also scheduled between the Commission and Chinese authorities.

 

State Aid: Final consultation draft on new de minimis rules

Philip Bentley

The European Commission has published its revised draft regulation on de minimis thresholds below which state aid is exempt from notification.  The current threshold of EUR 100,000 over three years will be increased to EUR 200,000 over the same period.  In addition, aid under loan guarantee schemes for viable small and medium enterprises will be exempt from notification if the loan is not greater than EUR 1.7 million and the guarantee does not exceed 80 per cent of the loan.  The new rules will apply only if the gross grant equivalent of the aid can be determined in advance, with no risk of changed circumstances, such as the beneficiary becoming unable to repay a subsidised loan.  The scope of application of the de minimis rules will be extended to include (i) the marketing and processing of agricultural products and (ii) transport other than road transport.  The deadline for comments on the new draft is 20 October 2006.

Environment: EP Committee Votes to Revise Current Emission Limits for Motor Vehicles

James Arneill

The Environment Committee of the European Parliament has voted to revise the current “Euro 4” standards on emission limits for motor vehicles.  The new standards, to be known as “Euro 5”, will apply from 1st September 2009.  Transition periods will extend up to 1st January 2011 for private cars and 1st January 2012 for vehicles with a maximum laden weight of more than 2,500 kg (and designed to meet social needs).  As from these dates, national authorities must refuse to grant EC or national type approval to new vehicles which do not comply with the relevant new rules.  A contentious aspect of the regulation concerns access to information on car repairs, in respect of which MEP’s agreed a compromise stating that manufacturers must give independent operators access to websites with vehicle repair information, equivalent to that available to their authorised dealers and repair shops.

 

Agriculture : Member States Support Reform of Common Market Organisation for Wine

Yannis Virvilis

Most EU Member States have expressed their support in the ambitious reform of the European viticulture market proposed by the European Commission earlier this year.  The Commission had considered four options for reform of the wine market, expressing its preference for a radical change.  Most Member States asked the Commission to soften its approach in amending existing Community measures.  A majority of Member States, are in favour of the “Option 2”, whereby up to 400,000 hectares of vineyards will be grubbed-up over five years.  A final agreement within the Council is expected to be reached by the middle of next year.

 

NEXT WEEK’S EVENTS

Monday 25 September – Friday 29 September 2006

 

COUNCIL MEETINGS

Competitiveness Council (25 September 2006)

 

COURT OF JUSTICE

Opinions

Area of Freedom, Security and Justice

C-283/05 ASML

 

Freedom of movement for persons

C-212/05 Hartmann

C-213/05 Geven

 

COURT OF FIRST INSTANCE

Judgments

Competition

T-204/03 Haladjian Frères v Commission

T-153/04 Ferriere Nord v Commission

T-314/01 Avebe v Commission

T-322/01 Roquette Frères v Commission

T-330/01 Akzo Nobel v Commission

T-43/02 Jungbunzlauer v Commission

T-59/02 Archer Daniels Midland v Commission

Joined Cases T-44/02 OPPO, T-54/02 OPPO, T-56/02 OPPO, T-60/02 OPPO, T-61/02 OPPO Dresdner Bank v Commission

T-168/01 GlaxoSmithKline Services v Commission

 

Intellectual property

T-172/04 Telefónica v OHMI - Branch (emergia)

 

State aid

T-117/04 Werkgroep Commerciële Jachthavens Zuidelijke Randmeren and Others v Commission

 

McDermott Will & Emery

McDermott Will and Emery