Brussels Brief - March 24, 2006
March 24, 2006
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KEY DEVELOPMENTS
Mergers: Commission takes Action against Poland for Preventing Unicredit/HVB Merger
Contact Philip Bentley
The European Commission has decided that Poland has encroached upon the Commission’s exclusive competence in relation to mergers with a Community dimension. The Polish Treasury has instructed Unicredit to divest its shares in the Polish bank BPH despite the fact that the Commission cleared the takeover in October 2005 as part of the Unicredit/HVB merger. Poland argues that Unicredit is in breach of a “non-competition” clause which Unicredit agreed to when it acquired the Polish Pekao bank in 1999. The Commission has asked Poland to justify their actions within 15 working days, after which the Commission could adopt a decision based on Article 21 of the EC Merger Regulation requiring the Polish Government to refrain from using the “non-competition” clause to block the merger. Such a decision would be directly applicable, and could be invoked directly before the national courts in Poland. For further information see Brussels Brief of 20 January 2006.
Competition: Commission Approves FA Premier League Media Rights Deal
Andrea Hamilton
The European Commission has formally approved an agreement that resolves its long-standing dispute with FA Premier League (FAPL) over live broadcasting rights. The dispute, which arose in 2002, involved FAPL’s joint sale of exclusive broadcasting rights for all matches to British Sky Broadcasting. The agreement, which takes effect in 2007, permits FAPL to continue to auction the television, mobile phone, and internet broadcasting rights for all 20 member clubs under the supervision of an independent trustee. According to the agreement, FAPL must auction the media rights in six equally attractive packages of 23 matches each, and no one broadcaster may purchase all six packages. While the agreement ends Sky Broadcasting’s monopoly, Sky will still be able to purchase the broadcasting rights to 80 per cent of FAPL matches. The agreement is binding on the FAPL until 30 June 2013.
Mergers: Conditional Clearance of Acquisition of Formula One Owner by CVC
Yannis Virvilis
The European Commission has issued a conditional approval of the acquisition of SLEC, the owner of the Formula One Group, by the equity investment company CVC. CVC will have to divest its Spanish subsidiary Dorna, which is the promoter of the Moto GP motorcycle championship. The Commission’s investigation indicated that the combination of the two entities might lead to price increases for the TV rights to Formula One and Moto GP in the countries where these events are popular, i.e. Italy and Spain. Fears were also expressed that CVC would bundle the TV rights for both events. The divestment of CVC’s subsidiary has alleviated all these concerns by eliminating the only overlap of the parties’ activities.
Transport: EU Blacklist of Airlines
Michal Cieplinski
The European Commission has adopted the first EU airlines blacklist, banning certain airlines from European airspace, pursuant to Regulation (EC) No 2111/2005. This blacklist of unsafe airlines was compiled on the basis of national contributions and after an in-depth analysis by industry experts. The list, which will be published on the Commission’s website, consists of 92 companies which face a complete ban and three companies which face operational restrictions on certain of their aircraft. The EU blacklist is based on evidence of violation of objective criteria which are published in regulation (EC) No 2111/2005. These criteria focus on the results of checks carried out in European airports, poor aircraft maintenance, the inability to rectify shortcomings identified during inspections, and shortcomings in the civil aviation authority of the country of origin.
State Aid: French Cinema and Audiovisual Support Mechanisms Approved
Patrice Corbiau
The Commission has approved French cinema and audiovisual support measures on the basis of the EC State aid rules. These measures aim to support the production of both cinematic and audiovisual works. These measures provide support for the following categories: (i) production of theatrical short and feature films, (ii) distribution of films, (iii) cinema halls, (iv) production of TV films, (v) video industry and (vi) certain financing mechanisms. The Commission has approved the State aid elements on the basis of the cultural derogation in Article 87(3)(d) of the EC Treaty in accordance with its policy as set out in the 2001 Cinema Communication. Since the Communication expires in June 2007 and may be modified, the French authorities have undertaken to adapt their measures if necessary.
State Aid: Commission Accepts Portuguese Commitments on the Financing of Public TV
Philip Torbøl
In October 2003, the European Commission launched State aid procedures against certain Member States because it appeared that their financing of public TV could be made more transparent in order to prevent cross-subsidisations of commercial activities. Portugal has now offered to implement safeguards to ensure that no more subsidies are granted than are necessary to ensure the proper execution of the public service tasks of RTP, the Portuguese public service broadcaster. Portugal will also ensure that RTP cannot unduly cross-subsidise its commercial activities, and that public and private broadcasters compete on equal terms in commercial markets such as TV advertising. Following those commitments, the Commission has decided to close the inquiry into the Portuguese subsidies.
Financial Services: Consultation on Improved Supervisory Approval Process
Geert Dierickx
The European Commission has launched a consultation on how to improve the supervisory approval process for M&A in the banking, insurance and securities sectors. Current EU rules allow Member States' supervisory authorities to block proposed M&A if they consider that the “sound and prudent management” of the target company could be put at risk. In a 2005 survey, the financial services industry identified inconsistent application of these rules as a potential barrier to cross-border consolidation in the EU financial sector. Now, the Commission is asking the financial services industry how the clarity and transparency of these rules could be improved, and how best to ensure their consistent application across the EU. Based on the responses, the Commission may propose amendments to the existing EU legislation. Therefore, all interested stakeholders are invited to respond to web-based questionnaires by 19 April 2006.
Information Society: Bridging the Broadband Gap
Philip Bentley QC
The recently published European Commission communication “Bridging the Broadband Gap” sets the goal of achieving broadband infrastructure across Europe by 2010. This is necessary to promote regional development and allow all households access to e-government, e-health and e-learning services. Where deployment of broadband infrastructure has been hampered by market failures, notably in remote areas, aid from EU and national structural funds may be appropriate. For example, aid may take the form of public-private partnerships to support the construction of open networks. However, as Competition Commissioner, Neelie Kroes, emphasised, State aid must not crowd out private initiative nor distort competition to an extent contrary to the common interest.
Internal Market: Improved Registration of Protected Geographical Indications etc
Elena Kostadinova
Groups of producers or processors of agricultural products and foodstuff except wines and spirits will be able to register protected geographical indications (GI), designations of origin (DO) and traditional specialities guaranteed (TS) using a single document according to a simplified procedure. The enhanced controls will ensure the protection of the registered products and the credibility of the scheme. This is the result of adoption by the EU Council of two Regulations on the protection of GI, DO and TS for agricultural products and foodstuffs. The new Regulations replace the existing Community system and bring it in compliance with WTO law, in particular, by facilitating the registration of names corresponding to geographical areas in third countries.
State Aid: Cyprus Airway’s Restructuring Plan
Iveta Mikelsone
The European Commission has opened a formal investigation into the proposed restructuring plan for Cyprus Airways, notified by the Cypriot Government in November 2005. This notification was made pursuant to an undertaking by the Cypriot Government, given when the Commission authorised rescue aid in the form of a EUR 51 million loan guarantee back in May 2005. The proposed restructuring plan consists of a number of actions including cost cutting, capital increase, the issue of a EUR 96 million loan guarantee and sale of Cyprus Airway’s charter Eurocypria. Since the Commission cannot establish the exact amount of the State aid involved and has doubts as to the compatibility of such aid with the EC State aid rules, a formal investigation has been opened. Interested parties have a month in which to submit their comments.
Monday 27 March – Friday 31 March 2006
COUNCIL MEETINGS
Transport, Telecommunications and Energy Council (27 March 2006)
COURT OF JUSTICE
Judgments
Approximation of laws
C-259/04 Emanuel
Competition
C-451/03 Servizi Ausiliari Dottori Commercialisti
Fisheries policy
C-36/04 Spain v Council
Joined Cases C-87/03, C-100/03 Spain v Council
Freedom of movement for persons
C-10/05 Mattern and Cikotic
Taxation
C-46/04 Aro Tubi Trafilerie
C-184/04 Uudenkaupungin kaupunki
C-495/04 Smits Koolhoven
Opinions
Approximation of laws
C-108/05 Bovemij Verzekeringen
European citizenship
C-192/05 Tas-Hagen and Tas
Freedom of establishment
C-470/04 N
Free movement of goods
Joined Cases C-158/04, C-159/04 Trofo Super-Markets
COURT OF FIRST INSTANCE
Judgments
External relations
T-367/03 Yeda Tarim ve Otomotiv Sanayi ve Ticaret v Council and Commission
