Public Procurement: ECJ Enlarges Scope of Law on Public Service Concessions
Philip Bentley QC
In a recent ruling concerning the grant by a municipality of the right to operate a public car park, the European Court of Justice (ECJ) extended the law on public contracts in two important respects. First, although Directive 2004/18/EC does not apply to public service concessions, a public authority is obliged to put the award of a public service concession out to tender. This follows, according to the ECJ, from the principles of freedom of establishment, freedom to provide services, equal treatment, non-discrimination and transparency. Second, this obligation applies even to contracts between a municipality and a company in which it holds a majority of the share capital and has the right to appoint a majority of the board members, unless the municipality can prove that the control it exercises is similar to that exercised over its own internal departments. On the particular facts of the case, the ECJ ruled that the municipality did not exercise such control.
Mergers: Commission Opens In-Depth Investigation into AMI’s Purchase of Eurotecnica
The European Commission has opened an in-depth investigation into Austrian-based company AMI’s proposed acquisition of Italian engineering company Eurotecnica. This case was referred to the Commission by the German Competition Authority. AMI is a leading melamine producer and Eurotecnica is currently the only licensor for melamine production technology operating at a worldwide level. The Commission takes the view that the transaction may further strengthen AMI’s already strong position on the melamine market. According to the Commission, buying the only licensor of melamine production technology active at a global level, AMI seems likely to be in a position to hamper further market entry and to control the expansion projects of current competitors. The Commission’s closer analysis will focus in particular on the impact of the transaction on melamine prices if melamine producers are denied access to the production technology. The Commission has until 6 March 2006 to take a final decision.
Mergers: Commission Launches In-Depth Investigation into Danish Electricity Deal
The European Commission has decided to examine in detail the planned acquisition by DONG of Elsam and E2, the two Danish electricity generation incumbents, and of two main Danish electricity distributors in the Copenhagen area. DONG is the Danish state-owned gas incumbent, but it is also active in wind power generation and in the supply of electricity and heat. The Commission’s concerns regarding the consequences of the deal are threefold. First, in the markets for gas storage and gas supply, DONG would no longer face competition from Elsam and E2. Second, DONG itself would probably no longer constitute a potential new entrant in the electricity market in Denmark. Finally, the Commission considers that the merger risks impeding the development of a liquid wholesale market for natural gas. The opening of this second phase investigation enables the Commission until 6 March 2006 to take a final decision in the matter.
Mergers: Strabag Allowed to Acquire Zublin, but Referral Made to Germany
The European Commission has cleared the acquisition of German construction company Zublin by Finanz Industrie Management, the Austrian holding company of the construction group Strabag. Germany was the only country where a competition concern arose. As Strabag and Zublin’s combined market shares of construction and civil engineering will be under 15 per cent in Germany, the planned operation was deemed not to significantly impede competition. However, the merger was referred to the German Competition Authority as it will allegedly affect competition for asphalt in the regional markets of Berlin, Chemnitz, Leipzig/Halle, Rostock and Munich. The competitive market for asphalt is considered to be regional because asphalt mixes harden quickly and they can only be used on construction sites in close proximity to the mixing plant. It is felt that the acquisition may further restrict competition as one of the last remaining independent competitors for producing asphalt mix will come under Strabag’s control.
Mergers: Commission Clears Amer-Salomon Ski Equipment Deal Subject to Conditions
The European Commission has given the green light to the acquisition by the Finnish winter sports equipment manufacturer, Amer Group, of the Salomon business from the German group Adidas-Salomon. Both Amer and Salomon are active in ski equipment and accessories. The operation was originally only notifiable in several Member States. However the parties used the pre-notification referral mechanism under the Merger Regulation and applied for the examination of the case by the Commission. The Member States involved did not object. The Commission’s investigation showed that the operation would lead to competitive concerns in the market for cross-country skis in Austria, Germany and France, due to the close connection of Salomon to the Austrian manufacturer Fischer. In order to clear the operation, the parties agreed to the substantial modification of the cooperation agreement between Salomon and Fischer.
Trade: Mandelson Defends Tough Doha Negotiating Line to Cut EU Subsidies
On 18 October 2005, in a meeting in Luxembourg before the Council of Ministers, Peter Mandelson, EU Trade Commissioner, successfully defended his freedom to negotiate towards the liberalising of worldwide trade. Concentrating on agriculture, Mandelson pointed towards the progress made with the US. He highlighted US proposals to lower domestic agricultural aid in exchange for significant cuts in European subsidies. In the face of French criticism that he had gone too far, Mandelson stressed that he had conducted himself well within his mandate. Progress on other trade issues such as freer access to industry and services could only be achieved, he maintained, once real headway had been made on agriculture. However, he assured the Council that the Doha negotiations would not announce a departure from Common Agricultural Policy reform. The World Trade Organisation member countries are due to meet on 13 December 2005 in Hong Kong to discuss a new worldwide trade agreement.
Parallel Imports: Investigation into Rules on Parallel Imports of Pesticides
The European Commission has announced that it is inquiring into restrictions on parallel imports of pesticides into the United Kingdom, Italy, Poland and Hungary. Under EU law, parallel imports are a guaranteed right provided the product being sold is similar to one already authorised for sale in the Member State concerned. The Commission alleges that all four countries have made it difficult or impossible for second-hand brokers to sell pesticides. The four Member States have been asked to explain and clarify their importation rules. If they cannot justify their restrictions, the rules will have to be rewritten or the Member State may face litigation which could lead to fines. No indication of when the inquiries will be complete was provided by the Commission.
Internal Market: Reduction in Trade Mark Protection Costs
The European Commission has decided to reduce the fees payable to the Office for the Harmonisation in the Internal Market (OHIM), which is the agency responsible for granting EU-wide trade mark rights. Since its creation in 1994 the OHIM has increased its productivity by simplifying procedures, reducing bureaucracy and introducing the most advanced information technology tools and resources. Over the last few years, its services have attracted increasing numbers of users. Today, more than 200,000 companies from all over the world have come to OHIM in order to obtain EU-wide legal protection for their trade marks. The reduction in fees has been permitted by this success. The reduction in fees, which is even greater to those who file their application or renewal request online, will enter into force before 1 November 2005.
NEXT WEEK’S EVENTS
Monday 24 October – Friday 28 October 2005
Agriculture and Fisheries Council (24 - 25 October 2005)
COURT OF JUSTICE
Joined Cases C-465/02, C-466/02 Germany v Commission
C-175/03 Greece v Commission
C-387/03 Greece v Commission
C-525/03 Commission v Italy
Joined Cases C-187/04, C-188/04 Commission v Italy
C-234/03 Contse and Others
Environment and consumers
C-229/04 Crailsheimer Volksbank
C-166/04 Commission v Greece
Free movement of capital
C-329/03 Trapeza tis Ellados
Freedom of establishment
C-437/03 Commission v Austria
C-158/03 Commission v Spain
Joined Cases C-266/04, C-267/04, C-268/04, C-269/04, C-270/04, C-276/04, C-321/04, C-322/04, C-323/04, C-324/04, C-325/04 Nazairdis
C-41/04 Levob Verzekeringen and OV Bank
Approximation of laws
C-339/04 Nuova società di telecomunicazioni
C-551/03 P General Motors Nederland and Opel Nederland v Commission
C-222/04 Cassa di Risparmio di Firenze
Environment and consumers
C-209/04 Commission v Austria
Freedom of establishment
C-465/04 Honyvem Informazioni Commerciali
Freedom of movement for persons
C-408/03 Commission v Belgium
C-212/04 Adeneler and Others
Joined Cases C-131/04, C-257/04 Robinson-Steele
COURT OF FIRST INSTANCE
T-379/03 Peek & Cloppenburg v OHMI (Cloppenburg)
T-336/03 Editions Albert René v OHMI - Orange (MOBILIX)
T-305/04 Eden v OHMI (Odeur de fraise mûre)