Brussels Brief - June 12, 2009
June 12, 2009
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Key Developments
Energy: Commission Fines Electrabel EUR 20 Million for Gun Jumping
Lawrence Grabau
The European Commission has fined Electrabel, an electricity producer, EUR20 million for acquiring control of Compagnie Nationale du Rhone (CNR) without having received prior approval from the Commission under Article 14(2) of the EC Merger Regulation.
The Commission approved the acquisition under the Merger Regulation on 29 April 2008, but left open the issue of the precise date on which Electrabel acquired control of CNR. It then conducted a separate investigation into this issue and found that Electrabel had already acquired de facto sole control of CNR in December 2003 (i.e., nearly five years before the notification). The Commission therefore concluded that Electrabel was in breach of the obligation in Article 4(1) of the Merger Regulation to notify a concentration prior to its implementation.
The high value of the fine sends a clear signal that the Commission will not tolerate breaches of the EU merger notification system.
Competition: ECJ Rules That a Single Meeting Between Competitors May Constitute a Cartel
Katarzyna Wilk
The European Court of Justice (ECJ) has ruled that a single meeting between five Dutch mobile phone operators, in which the companies discussed cutting the fees paid to phone dealers for subscriptions, is sufficient to establish a concerted practice in breach of competition rules.
Acting on a reference for a preliminary ruling from the Dutch court hearing the case, the ECJ was asked to clarify the concept of a concerted practice and its application by national courts.
The ECJ first reminded the Dutch court that in order for a concerted practice to be regarded as having an anticompetitive object, it is sufficient that there be potential for a negative impact on competition. In this particular case, the ECJ stated that the fact that the practice has no direct effect on the price paid by end users, but instead relates to the remuneration of dealers, is irrelevant.
Second, the ECJ recalled that its case law establishes a presumption of a causal link between the concerted practice and subsequent conduct on the market. The Court confirmed that national courts are required to apply the presumption when the participating companies remain active on the market.
Finally, the ECJ concluded that a single meeting between competitors may constitute a sufficient basis on which to implement the anti-competitive object that the participating undertakings aim to achieve.
The case will now go back to the Dutch court for a final ruling.
Consumer Protection: National Courts Must Examine Unfair Terms in Consumer Contracts Even When Not Raised by the Parties
Teresa Arnoni
The European Court of Justice (ECJ) has ruled on a preliminary request from an Hungarian Court on the interpretation of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts. The issue was whether national courts must rule, on their own motion, on the unfairness of a contractual term contained in a contract with a seller or supplier.
The Directive provides that unfair terms used in a contract between a consumer and a seller or supplier are not binding on consumers. The protection conferred by the Directive on consumers extends to cases in which a consumer fails to raise the unfairness of the term, whether because he is unaware of his rights or because he is deterred from enforcing them on account of the cost of judicial proceedings.
On this basis, the ECJ ruled that it is for the national court to assess on its own motion whether a contractual term may be categorised as unfair, where it has the legal and factual elements necessary for that task. It is not necessary for the consumer to have raised the validity of an allegedly unfair term beforehand. Therefore, if the national court considers such a term to be unfair, it must not apply it, unless the consumer opposes that non-application.
State Aid: CFI Rejects Appeal Against Commission's Finding of Insufficient Grounds to Act
Contact Philip Bentley
The European Court of First Instance has rejected an appeal against a Commission decision finding not to investigate an allegation of State aid. The complaint was brought by a Swedish tourism company that alleged that the Stockholm Visitors Board, which is owned by the city of Stockholm and responsible for promoting the region, was receiving incompatible State aid for it commercial activities. These commercial activities consisted, inter alia, of hotel reservation services and the sale of the Stockholm Card, which offers free admission to places of interest and facilities in Stockholm and free parking facilities.
Following an investigation into the matter, the Commission wrote a letter to the complainant stating that in its view the Stockholm Card and the hotel bookings were carried out in line with private market principles. The parking facility, even if it did constitute aid, would have been considered existing aid in any case as it was put in place prior to Sweden's accession to the European Union. For these reasons, the Commission found that there were insufficient grounds to continue the complaint.
The complainant requested a formal decision from the Commission on the compatibility of the aid. However, the Commission refused, saying that it only need provide an advisory opinion. The complainant appealed this refusal to provide a decision but the CFI rejected the claim as being inadmissible. It held that the Commission was not required to issue a decision as it was merely providing an informal view that the aid was compatible and this was only available where there were grounds to consider the aid was illegal. In addition, there was no mechanism to require a Commission decision on the compatibility of existing aid and, in any case, the matter could be dealt with by national courts. As the letter was not a formal "decision", the action was declared inadmissible on the grounds that a mere letter of information is not actionable.
NEXT WEEK’S EVENTS
Monday 15 June – Friday 19 June 2009
COUNCIL MEETINGS
General Affairs and External Relations Council (GAERC) (15 – 16 June 2009)
European Council (18 – 19 June 2009)
COURT OF JUSTICE
Judgments
Approximation of laws
C-487/07 L'Oréal and Others
C-527/07 Generics (UK)
Common Customs Tariff
C-173/08 Kloosterboer Services
Environment and consumers
C-417/08 Commission v United Kingdom
C-422/08 Commission v Austria
Social policy
C-88/08 Hütter
Taxation
C-303/07 Aberdeen Property Fininvest Alpha
C-566/07 Stadeco
Opinion
Taxation
C-174/08 NCC Construction Danmark
COURT OF FIRST INSTANCE
Agriculture
T-369/05 Spain v Commission
T-50/07 Portugal v Commission
Commercial policy
T-498/04 Zhejiang Xinan Chemical Industrial Group v Council
Competition
T-48/04 Qualcomm v Commission
T-269/03 Socratec v Commission
Intellectual property
T-418/07 LIBRO v OHMI - Causley (LiBRO)
T-464/07 Korsch v OHMI (PharmaResearch)
