Publications / McDermott Newsletters / Brussels Brief - January 23, 2009

Brussels Brief - January 23, 2009

January 23, 2009

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KEY DEVELOPMENTS

 

Consumer Electronics – Competition:  Commission Confirms Sending Statement of Objections to Microsoft

Vasilios Bousis

On 15 January 2009, the European Commission sent a Statement of Objections (SO) to Microsoft, concerning Microsoft’s alleged tying of Internet Explorer to Windows.  The SO is reported to be based on evidence gathered during the Commission’s investigation, leading it to conclude that the tying of Internet Explorer to Windows harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice. 

This is the Commission’s latest action involving Microsoft.  On 17 September 2007, the Court of First Instance upheld the Commission's decision of March 2004 finding that Microsoft had abused its dominant position in the PC operating system market by tying Windows Media Player to its Windows PC operating system.

Microsoft has eight weeks to reply this latest SO and will then have the right to an oral hearing.  The Commission may then take a decision on whether or not the conduct addressed in the SO is compatible with the EC Treaty’s antitrust rules, in particular Article 82 EC.  Should the preliminary views expressed in the SO be confirmed, the Commission may then fine Microsoft, require Microsoft to cease the abuse and impose a remedy that would restore genuine consumer choice and competition.

 

Air Transport – Mergers:  Commission Clears Iberia's Acquisition of Vueling and Clickair, Subject to Conditions

Laura Zadunayski

The European Commission has approved the proposed acquisition of the two low-cost Spanish airlines, Vueling and Clickair, by the Spanish flag-carrier Iberia, on the condition that commitments to safeguard competition and passenger choice are implemented.  Under the proposed concentration, to be carried out through several interdependent transactions, Vueling and Clickair—in which Iberia already had a 20 per cent stake—would merge into "Nueva Vueling" over which Iberia would acquire control.

After analysing the proposed acquisition on a route-by-route basis, the Commission was concerned that the merger would restrict competition or even lead to a monopoly on 19 routes within Spain or from Spain to other European countries, in particular France, Greece and Italy.  More specifically, the strong position of the merged entity on these routes in terms of passengers transported could have been further strengthened by its high combined shares of slots at Barcelona-El Prat and Madrid-Barajas airports.

In response to this concern, the parties offered to transfer slots free of charge at several airports, in particular Barcelona and Madrid, where congestion at peak hours is most significant.  The Commission found that these commitments were likely to result in entry by one or more competitors on the routes where competition concerns were found and that these routes would therefore remain competitive.

 

Finance:  Commission Launches Public Consultation on Review of Prospectus Directive

Jacques Pieters

The Prospectus Directive aims to ensure that investors, especially non-professionals, are provided with sufficient information when making an investment decision to acquire shares that are offered through a public offer procedure, or that are admitted to public trading.  It also ensures a Europe-wide "single passport for issuers" that avoids companies seeking investors having to go through lengthy approval procedures in every EU Member State.

Following discussions with stakeholders and national regulators, the European Commission has come to the conclusion that the Prospectus Directive should be simplified.  As a consequence, a number of proposals have been drawn up to improve and simplify the Directive.  The main issues with the Directive in its present form lie in the fact that companies seeking investors and intermediaries are sometimes faced with unnecessary costs and burdens.

The Commission is requesting stakeholders' views on the proposals as they now stand with regard to exemptions, annual disclosure obligations, the time limit for exercise of right of withdrawal and a number of thresholds in the Directive.

The Commission will also welcome comments on a number of other issues not yet addressed by the current Commission proposals.  In particular: effectiveness of the prospectus summary, disclosure requirements for offers with Government guarantee schemes, disclosure requirements for offers regarding small quoted companies and rights issues (publicly traded options and strips).

Stakeholders are invited to submit their comments to the Commission by 10 March 2009.

 

Chemicals:  European Parliament Adopts Pesticide Regulation

Andrea Hamilton

On 13 January 2009, the European Parliament adopted a regulation to replace existing rules on so-called “plant protection products”.  Plant protection products are broadly defined as pesticides, including insecticides, fungicides and herbicides.

Once in force, the new regulation, which is based on a 2006 proposal from the European Commission, will tighten rules on pesticide use out of concern for human, animal and environmental health.  In particular, the new regulation contains new criteria for the approval of active substances in pesticides, and defines the role of the European Food Safety Authority.  It also provides for inspection and monitoring on the production, storage, transport and use of pesticides.  In this regard, the new regulation will require farmers and manufacturers to phase out 22 of the most toxic pesticides over the next ten years.  The regulation also restricts the use of pesticides in or near certain areas, including parks, urban areas and wetlands.

Some environmental interest groups are reportedly pleased with the legislation, but have criticised the ten-year period given to phase out the 22 most toxic pesticides, arguing that the ban should be immediate.  In contrast, certain industry groups, as well as certain British lawmakers, have reportedly criticised the legislation, arguing that it will lead to higher food prices.  The new regulation is likely to be approved by the EU Council in coming weeks, and enter into force soon after.

 

NEXT WEEK’S EVENTS

Monday 26 January – Friday 30 January 2009

 

COUNCIL MEETINGS

General Affairs and External Relations Council (GAERC) (26 – 27 January 2009)

 

COURT OF JUSTICE

Judgments

Area of Freedom, Security and Justice

C-19/08 Petrosian and Others

 

Freedom of movement for persons

C-311/06 Consiglio Nazionale degli Ingegneri

 

Taxation

C-318/07 Persche

 

Opinions

Area of Freedom, Security and Justice

C-533/07 Falco Privatstiftung and Rabitsch

C-523/07 A

 

Competition

Joined Cases C-322/07 P, C-327/07 P, C-338/07 P Papierfabrik August Koehler v Commission

 

COURT OF FIRST INSTANCE

Judgments

Company law

T-125/06 Centro Studi Manieri v Council

 

Intellectual property

T-174/07 Volkswagen v OHMI (TDI)

 

Regional policy

T-74/07 Germany v Commission

 

McDermott Will & Emery

McDermott Will and Emery