(Adobe Acrobat Reader required, available for free download here)
Air Transport: Court Annuls Decisions on Transfer of Passenger Data to the US
The European Court of Justice (ECJ) has annulled two decisions allowing European airlines to transfer Passenger Name Records (PNR) to the US Bureau of Customs and Border Protection, as required by US law. PNR is passenger information collected by the airline when a flight is sold or booked. The ECJ found that the legal basis for the annulled decisions could not be Article 95 EC as their primary purpose was not the establishment and functioning of the Internal Market. The Court consequently annulled the decisions for lack of appropriate legal basis, but suspended part of its judgment until 30 September. The European Commission will now seek the adoption of a new decision with the same content as the annulled decisions but this time under the EU Treaty rules on police cooperation.
Competition: Commission Imposes EUR 344.5 Million Fines in Acrylic Glass Cartel Case
The European Commission has imposed fines totalling EUR 344.5 million on producers of acrylic glass for participating in cartel activities. This is the fourth largest fine imposed by the Commission in a cartel case. Acrylic glass is a product widely used in cars, DVDs, lenses, and household appliances. The Commission found that the five companies involved in the cartel (Arkema, Degussa, Lucite, ICI and Quinn Barlo) had met on several instances and agreed on coordinated price increases. Degussa was granted full immunity from fines since it was the first company to provide information on the existence of the cartel. The fines for Arkema and ICI were increased, as they are repeat offenders in cartel cases.
Mergers: Commission Approves Acquisition of Bocchi and De Weide Blik by CVC
The European Commission has cleared under the EU Merger Regulation the proposed acquisition by CVC Luxembourg of Dutch company Bocchi and Belgian company De Weide Blik. Both Bocchi and De Weide Blik are active in the import, production and wholesale of fruit and vegetables. CVC is a private equity fund specialising in large-scale leveraged buy-outs. Despite the existence of a vertical link between the wholesale of fruit and vegetables and the activities of CVC in the out-of-home eating sector and production of ready-made food by De Weide Blik, the Commission considered that the proposed transaction would not give rise to any significant reduction of competition in the European Economic Area. In particular, the Commission concluded that the overlaps were limited and the combined market shares resulting from the transaction extremely small.
Competition: Second Round of Dawn Raids at Energy Companies
European Commission and German competition officials have conducted unannounced inspections at undisclosed German energy companies to gather evidence of possible market sharing, price fixing, and other unfair business practices. The inspections follow up on the Commission’s recent dawn raids at leading energy companies in the EU, including inter alia Austria’s OMV AG, Belgium’s Fluxys and Distrigas SA, Italy’s Eni SpA, Germany’s E.ON, and Hungary’s MVM Zrt. Since February, the Commission has expressed concern over competition in the energy sector, and has threatened legal action against utilities that bar rivals from using power grids and pipelines. See Brussels Brief of 24 February 2006 and 26 May 2006.
Mergers: Commission Clears Acquisition of European Petroleum Holdings by Petroplus
The European Commission has cleared under the EU Merger Regulation the proposed takeover by Petroplus International B.V., a Dutch company, of European Petroleum Holdings N.V., a Netherlands Antilles company. Both companies are active in the petroleum sector and present in a number of markets, such as the refining of crude oil, and the storage, marketing and trading of crude oil and refined petroleum products. In all those markets the new entity will face a number of strong competitors with market shares of at least similar size. Consequently, the investigation has shown that the proposed transaction would not impede effective competition in the European Economic Area or any substantial part of it.
Data Protection: EDPS Opinion on Exchange of Information from Criminal Records
The European Data Protection Supervisor (EDPS) has delivered a favourable opinion on the proposed Council Framework Decision on the exchange of criminal records between Member States. The proposal forms part of EU cooperation in justice and home affairs. Its main effects will be (i) the centralisation of the existing national criminal records in one authority, (ii) the inclusion of criminal records of nationals convicted in another Member State in the database of their own Member State and (iii) the development of technical systems facilitating the information exchange. According to the EDPS, the entry into force of this Decision should be delayed until the necessary provisions on effective protection of personal data are adopted. In addition, the EU legislators are called inter alia to clarify the definition of the purposes for which criminal records could be requested.
Mergers: Commission Clears Hexion’s Purchase of Akzo Nobel Unit
Contact Philip Bentley
The European Commission has cleared Hexion’s proposed acquisition of Akzo Nobel’s Inks and Adhesive Resins business (IAR). Hexion, which is controlled by the Apollo Group, produces and sells thermosetting and specialty resins. IAR mainly manufactures rosin-based products. The main impact of the transaction is on the market for resins used in the printing ink industry, in particular rosin resins. The Commission concluded that, despite the large market shares of the merged entity in the rosin resins market, the market structure would remain competitive after the proposed transaction. In particular, a number of effective competitors have sufficient spare capacity and will remain in the market. The investigation also showed that the merger is unlikely to create competition concerns with respect to the parties’ other activities, i.e. hybrid resins, alkyd resins and acrylic dispersions.
Taxation: EU Communication on Combating VAT Fraud
The European Commission has issued a Communication inviting comments on two possible ways of fundamentally changing the VAT system in order to prevent carousel fraud. The first possibility would be based on definitive taxation in the country of origin. The second possibility would be a reverse charge mechanism, whereby the supplier does not charge VAT to the business customer but the business customer invoices this to himself. While the application of the definitive VAT system would require greater harmonisation of VAT in Member States, the application of the reverse charge mechanism would necessitate significant changes in the existing VAT legislation. Any change would require unanimity in the EU Council.
Mergers: Commission Approves Acquisition of The Body Shop by L’Oréal
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the UK company The Body Shop International plc by the French group L’Oréal SA. After examining the operation, the Commission concluded that the transaction would not result in higher prices for cosmetics to the detriment of European consumers or otherwise significantly impede effective competition. The Body Shop is active world-wide in the marketing and distribution of cosmetics products through a network of owned and franchised single-brand “The Body Shop” stores. L’Oréal is active in the research & development, manufacturing, marketing, distribution and sale of cosmetics on world-wide scale. Given the limited size of the Body Shop stores’ network, the concentration would not deprive cosmetics manufacturers from access to a significant distribution channel.
NEXT WEEK’S EVENTS
Monday 5 June – Friday 9 June 2006
Economic and Financial Affairs Council (7 June 2006)
Transport, Telecommunications and Energy Council (8 – 9 June 2006)
COURT OF JUSTICE
Joined Cases C-7/05, C-8/05, C-9/05 Saatgut-Treuhandverwaltung
Common Customs Tariff
Environment and consumers
C-60/05 WWF Italia and Others
Freedom of movement for persons
C-164/05 Commission v France
C-430/04 Feuerbestattungsverein Halle
C-517/04 Visserijbedrijf D.J. Koornstra
C-71/05 Commission v Luxembourg
C-279/05 Vonk Dairy Products
Freedom of movement for persons
C-339/05 Zentralbetriebsrat der Landeskrankenhäuser Tirols
Police and judicial cooperation in criminal matters
C-150/05 van Straaten
C-35/05 Reemtsma Cigarettenfabriken
COURT OF FIRST INSTANCE
Joined Cases T-213/01, T-214/01 Österreichische Postsparkasse v Commission
T-613/97 Ufex and Others v Commission