Publications / McDermott Newsletters / Brussels Brief - September 26, 2008

Brussels Brief - September 26, 2008

September 26, 2008

Full Printable Version in PDF Format

(Adobe Acrobat Reader required, available for free download here)

KEY DEVELOPMENTS

Telecommunications – Consumer Protection:  Towards Cheaper Mobile Phone Services in Summer 2009

Bróna Heenan

In a move to ensure a more transparent single market for mobile phone users, the European Commission has proposed price caps on the cost of texting (SMS) and mobile data services across borders.  In the summer of 2007, the Commission capped wholesale and retail charges for roaming voice calls via its EU Roaming Regulation.  The Commission’s latest proposal goes further than voice calls and has four main aims:  (i) to cap the cost of cross-border text messages at EUR 0.11 per SMS plus VAT although receiving texts in another country would remain free; (ii) to further reduce, on an incremental basis from 1 July 2009, the maximum prices chargeable when making and receiving mobile calls across borders (starting at EUR 0.43 and EUR 0.19 respectively); (iii) to ensure greater transparency and competition for data roaming services by requiring that automatic messages be sent with information on data roaming charges on arrival across a border; and (iv) to introduce the principle of per second billing for all roaming calls made and received. 

These price capping proposals and transparency measures are a response to surveys that indicated wide variations in mobile charges to customers crossing borders.  Customers receiving extortionately high bills (such as one case of EUR 40,000 for downloading a television programme over a roaming mobile line) have led to calls for increased transparency to ensure that growth is not retarded in this sector.  The proposal will now go to the European Parliament and Council whose agreement is required before adoption.  Europe’s consumers should expect to see the benefits by summer 2009.

 

State Aid:  Commission Consults on Draft Guidance for State Aid Enforcement by National Courts

Mélanie Bruneau

The European Commission has launched a public consultation on a set of guidelines to assist Member States' courts in applying EU State aid rules.  The new draft notice aims to provide more detailed guidance to:  (i) national courts in their role of enforcement of EU State aid rules; and (ii) potential claimants in relation to challenging the granting of unlawful aid at national level.  This also includes guidance on issues such as the protection of individual rights, the recovery of illegal aid, interim relief and damages actions.  Based on the EU courts' jurisprudence on the role of national courts in the field of State aid, the draft notice will give national courts more practical support in their daily work.  In addition, national judges will be able to ask the Commission for information or opinions on the application of the State aid rules.  Interested parties are invited to comment on the draft by 23 October 2008.

 

Food and Beverage – Trade:  EU Takes India to WTO Again Over Wine and Spirits Taxes

Vasilios Bousis

The European Union has requested World Trade Organisation (WTO) consultations with India on its domestic tax regime for spirits and wines, following complaints by the EU drinks industry that barriers still remain at a regional level.  For instance, Maharashtra and Goa are still applying internal taxes to imported wines and spirits, or are applying a much higher rate to imports than those applied to domestic goods.   This is a breach of the WTO's national treatment principle requiring its members to treat imports and domestic goods equally.

The European Union’s request formally initiates a dispute under the WTO Dispute Settlement Agreement.  Bilateral consultations give WTO members, in this case the European Union and India, the opportunity to discuss the matter and to find a satisfactory solution without resorting to litigation.  If these consultations fail to reach a satisfactory solution within 60 days after receipt of the request for consultations, the complaining party may request the establishment of a panel.

This latest request for consultations follows a request by the European Union in 2007 for WTO intervention, as a result of which the nationwide customs tariff for imported bottled wines and spirits was reduced to 150 per cent.  Despite the Indian Government having lowered its national tariff, however, a problem still remains with the rates applied within the country.

 

Telecommunications – Competition:  Commission Consults on Next Generation Access Broadband Networks

Benoît Keane

The European Commission has launched a public consultation on the regulatory principles to be applied by EU Member States to Next Generation Access (NGA) broadband networks.  NGA broadband networks are optical fibre based networks that are capable of carrying a much greater volume of information than the traditional copper wire networks.  The Commission is concerned that telecommunications operators will use their dominance in the traditional markets to monopolise new networks. 

The Commission has issued a draft recommendation setting out the principles for regulating NGA broadband networks.  The basic principle is that national authorities should provide access to the networks of dominant operators, allowing competitors to roll out their own fibre optic lines even in low population areas.

The Commission’s consultation is an attempt to prevent competition problems before they arise.  Submissions should be made by 14 November 2008.

 

Taxation:  UK Must Properly Implement ECJ Ruling on Cross-Border Loss Compensation

Geert Dierickx

The European Commission has sent the United Kingdom a formal request to properly implement the 3 December 2005 Judgment of the European Court of Justice (ECJ) in Marks & Spencer v David Halsey (Her Majesty's Inspector of Taxes) [C-446/03] 2005.  In its ruling, the ECJ held that the UK ban on cross-border loss relief was disproportionate, insofar as it denied loss relief where a non-resident subsidiary had exhausted all possibilities for relief in the EU Member State in which it was established.  Following this ruling, the United Kingdom should in principle have granted relief for definitive losses of a subsidiary established in another Member State.  In the legislation implementing the Marks & Spencer ruling, however, the United Kingdom has imposed conditions on cross-border group relief that makes it virtually impossible for taxpayers to benefit from this relief.  One of these conditions includes the restrictive interpretation that there should be no possibility of using the loss in the subsidiary’s State.  In addition, this condition must be determined immediately after the end of the accounting period in which the loss arises.  The Commission considers these conditions contrary to the EC Treaty, and if the United Kingdom does not reply satisfactorily to the reasoned opinion within two months the matter may be referred to the ECJ.

 

Pharmaceuticals – Internal Market :  National Rules on Pharmacy Ownership Under Scrutiny

Laura Zadunayski

The European Commission has initiated proceedings against Germany and Portugal, formally requesting that they modify their legislation on ownership of pharmacies on the basis that the legislation restricts the EU principle of freedom of establishment.

German legislation reserves the ownership of pharmacies to pharmacists or partnerships consisting solely of pharmacists.  Moreover, it prohibits the ownership of more than one main pharmacy and three branch offices, as well as requesting proximity between the main office and its branch offices.  Portuguese legislation prohibits the ownership or the management of pharmacies by companies active in the wholesaling of medicines and also prohibits the ownership of more than four pharmacies.  In the Commission’s view, these restrictions cannot be justified by reasons of health protection.

Germany and Portugal have two months to reply, failing which the Commission may refer the matter to the European Court of Justice.

 

NEXT WEEK’S EVENTS

Monday 29 September – Friday 3 October 2008

 

COUNCIL MEETINGS

Agriculture and Fisheries Council (29 – 30 September 2008)

Employment, Social Policy, Health and Consumer Affairs Council (2 – 3 October 2008)

 

COURT OF JUSTICE

Judgments

Company law

C-157/06 Commission v Italy

 

Convention on jurisdiction

C-372/07 Hassett and Doherty

 

Customs union

C-411/07 X

 

Freedom of establishment

C-360/06 Heinrich Bauer Verlag

 

Intellectual property

C-144/07 P K-Swiss v Office for Harmonisation in the Internal Market

 

Opinions

Commercial policy

C-535/06 P Moser Baer India v Council

 

COURT OF FIRST INSTANCE

No judgments scheduled for next week.

McDermott Will & Emery

McDermott Will and Emery