Brussels Brief - April 18, 2008
April 18, 2008
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KEY DEVELOPMENTS
Telecommunications: CFI Upholds Deutsche Telekom Abusive Pricing Decision
Andrea Hamilton
The Court of First Instance (CFI) has affirmed the European Commission’s decision that Deutsche Telekom (DT) infringed Article 82 EC through a pricing practice known as a “margin squeeze.” In 2003, the Commission fined DT EUR 12.6 million after concluding that DT abused its dominant position by charging its competitors higher prices for local network access than it charged to its own end-users at the retail level, resulting in higher retail prices for the end-users of DT's competitors. On appeal, the CFI acknowledged that DT’s prices were subject to regulatory approval, but held that DT had discretion to adjust its charges to preserve undistorted competition – and was obliged to do so given its dominant position. Moreover, the CFI found that the existence of an abusive “margin squeeze” depends on the price difference between the wholesale and retail level, not on the actual prices. DT has two months to appeal to the European Court of Justice.
REACH: Registration Fees Adopted
Bróna Heenan
The European Commission has adopted the level of fees and charges that will be applied by the European Chemicals Agency under the Regulation for the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH). REACH requires that all chemical substances manufactured and/or imported in the European Union in quantities above one tonne per year be registered before being placed on the EU market. According to the adopted Regulation, the basic registration fee ranges from EUR 1,600 for volumes below ten tonnes per year to EUR 31,000 for volumes above 1,000 tonnes per year. To limit the burden on small and medium sized enterprises, a differentiated pricing policy will be applied, allowing for discounts of up to 90 per cent for small firms. In addition, a 25 per cent discount will be available for firms that submit a registration dossier jointly.
State Aid: Commission Opens Formal Investigation into Aid to Scottish Ferry Operators
Juan Gutiérrez
The European Commission has decided to initiate a second phase investigation following complaints concerning subsidies paid by the Scottish Executive to the Scottish ferry companies NorthLink and CalMac. The Commission needs more information to ensure that the financing of ferry services by the public authorities has not led to over-compensation in favour of the ferry operators. The Commission will also look into whether the public financing may have been used in related commercial activities. The Commission does not question the need for a regular and affordable lifeline ferry service for local communities, nor does it threaten the continued provision of such essential services in the future. The mechanisms put in place to finance these services must, however, remain proportionate to these public interest objectives.
Mergers: Commission Opens Detailed Investigation into Textiles Merger
Jonathan Aitken
On 14 April 2008 the European Commission opened a Phase II in-depth investigation into the proposed acquisition of BarcoVision by Itema. The Belgian company BarcoVision focuses on the production and sale of sensors for textile machinery. The sensors are essential devices for ensuring textile quality and BarcoVision is one of the two main companies currently producing sensors for winders (machines used to stock yarn before it is woven or knitted). The Italian company Itema on the other hand is active in the production and sale of machinery for textile manufacturing. It is one of the three main suppliers of winders to textile mills. Given the strong position of BarcoVision in the supply of sensors for winders and the position of Itema in the downstream supply of winders, the Commission has serious concerns that the merged entity might increase the cost or affect the quality of sensors purchased by other competing winder producers. The Commission's 90 day basic deadline for the detailed investigation ends on 26 August 2008.
State Aid: Commission Endorses EUR 11 Million Training Aid to Vauxhall Motors
Patricia Armesto
Vauxhall Motors is a car manufacturer belonging to the General Motors Group. It has a car plant in Ellesmere Port in the United Kingdom that employs approximately 2,200 staff. A comprehensive staff training programme was developed at this plant for the years 2007 to 2012, and in February 2007 the United Kingdom informed the European Commission that it planned to subsidise this programme with a grant of EUR 11 million. According to the EU rules on State aid for training, only State aid that provides a genuine incentive for additional training is allowed. The Commission opened an in-depth investigation, concerned that some training might be indispensable to the plant's normal operations and would be necessary even without the State aid. Complementary information submitted by the United Kingdom, however, enabled the Commission to verify that the programme will provide trainees with transferable skills that could benefit other employers as well as other sectors. As a result, the Commission has authorised the grant.
Environment: EU Adopts Tighter Air Quality Rules
Benoît Keane
The European Union has adopted a new Air Quality Directive that limits the permissible amount of particles in the air that can cause health problems. Under the new Air Quality Directive Member States are to limit by 2015 the average concentration of fine dust particles with a diameter of less than 2.5 micrometres to 25 micrograms per cubic metre. In urban areas, Member States have committed to reduce this even further to 20 micrograms per cubic metre by 2015 and to a total of 20 per cent below 2010 levels by 2020. The Air Quality Directive also consolidates existing law by merging five different texts into one.
State Aid: Commission Endorses Italian Aid to LCD Panel Producer
Geert Dierickx
The European Commission has authorised EUR 180 million worth of financial aid granted by the Italian authorities to Digital Display Devices (DDD). DDD's investment project will set up a new plant in Campania for the production of LCD panels and their assembly into modules for flat screen television sets and computer monitors. The project involves eligible costs of EUR 900 million and will create 1,000 new jobs in a disadvantaged area. DDD will be the first producer of LCD panels in Europe. Currently, all LCD panels are produced outside the European Economic Area, mainly in the Far East. Since DDD is a new entrant in a growing and competitive market, and Campania is eligible for regional aid, the Commission found that the effect of the aid on competition is outweighed by its positive contribution to regional development.
NEXT WEEK’S EVENTS
Monday 21 April – Friday 25 April 2008
COUNCIL MEETINGS
No Council meetings scheduled for next week.
COURT OF JUSTICE
Judgments
Agriculture
C-418/06 P Belgium v Commission
ECSC
C-408/04 P Commission v Salzgitter
Industrial Policy
C-55/06 Arcor
Social policy
Joined Cases C-55/07, C-56/07 Michaeler and Subito GmbH
Opinions
Citizenship of the Union
C-353/06 Grunkin and Paul
Company law
C-265/07 Caffaro
Freedom of movement for persons
C-347/06 ASM Brescia
COURT OF FIRST INSTANCE
Judgments
Intellectual property
Judgment T-233/06 Casa Editorial el Tiempo v OHMI - Instituto Nacional de Meteorología (EL TIEMPO)
