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Mergers: Commission Approves Acquisition of Arcelor by Mittal, Subject to Conditions
Contact Philip Bentley QC
The European Commission has cleared Mittal’s proposed acquisition of Arcelor, subject to conditions. Both companies are major steel producers. The Commission found that the two companies’ activities are largely complementary, both geographically and in terms of product range. The one exception was the market for heavy steel beams, in which the combined Mittal/Arcelor would be the undisputed market leader with a significant share of European Economic Area (EEA) capacity and limited alternatives for customers. To remove these competition concerns, Mittal has offered to divest two Arcelor steel mills in Germany and Italy and a Mittal mill in Poland, together with related commercial and distribution assets. The Commission has concluded that these remedies fully address the competition concerns and, as a result, the transaction would not significantly impede competition in the EEA.
Competition: Third Party Participation in Competition Cases
The Court of First Instance (CFI) has confirmed that third parties may participate in cases involving EU competition law. This case arose after the European Commission allowed an Austrian political party, Freiheitliche Partei Österreichs (FPÖ), to participate in its case against several Austrian banks, which alleged anti-competitive conduct affecting customers. As a customer of the banks, the FPÖ successfully argued that it suffered economic harm, and thus had a “legitimate interest” in the case under Article 3(2) of Regulation 17. Since the FPÖ had a “legitimate interest,” the Commission granted its request for a non-confidential version of the statement of objections issued to the banks. The CFI upheld this decision, finding it consistent with Community law concerning third party participation in competition cases, as well as the overall purpose of Articles 81 and 82 EC of promoting consumer welfare.
Energy: High Level Group Proposes Urgent Action
A week before the Council of Energy Ministers meet, a High Level Group (HLG) of energy experts has adopted its first report on the functioning of the energy market, access to energy, energy efficiency and EU Emissions Trading Scheme (ETS). The HLG consists of members of the EU institutions, ministers, industry representatives, non-governmental organisations, trade unions and regulators. The HLG observes that there is a need to establish minimum rules on transparency and disclosure in the energy market. The powers of the national regulatory authorities should be extended to foster unbundling and removal of regulated tariffs. In addition, the EU should establish a list of priorities for energy efficiency measures, whereby the value of energy savings is shared among industries. The HLG also urged that the ETS be improved, in view of the national allocation plans for 2008 – 2012. Finally, the HLG set up two ad hoc groups to analyse barriers and drivers for investment in innovative energy technologies and EU long-term energy objectives.
State Aid and Freedom of Establishment: Commission Examines French Savings Books
The European Commission has initiated a State aid investigation into whether the French bank, Crédit Mutuel, has been overcompensated by the French State for the costs incurred in distributing certain tax-free savings products. Allied to this, the Commission has also sent a letter of formal notice to the French authorities concerning the special distribution rights over certain tax-free savings products conferred on La Poste, Crédit Mutuel and the Caisses d’Épargne (savings banks). The Commission fears that these special rights may raise obstacles to the freedom of establishment and freedom to provide services because they make it less attractive for new operators to offer savings products in France either through a French establishment, or “cross-border” from an establishment in another Member State.
Food Law: Nitrates and Nitrites in meat
Philip Bentley QC
In line with a European Food Safety Authority opinion, the EU Council has agreed on the European Commission’s proposal concerning stricter authorisation levels for nitrate and nitrite additives in meat. These additives are used to inhibit the growth of bacteria in food, but they also react with certain substances occurring naturally in meat to form nitrosamines, which are carcinogenic. Back in 1990 and 1995, the Scientific Committee on Food (SCF) issued opinions that the levels of nitrate and nitrite additives in meat should be reduced so as to minimise exposure to nitrosamines. Relying on the SCF opinions, Denmark requested a derogation to allow it to apply stricter controls, but the Commission refused. In 2003, the European Court of Justice annulled the Commission’s refusal on the grounds that it failed to take due account of the SCF opinions.
Mergers: Commission Approves Acquisition of Tele Pizza by CVC
The European Commission has cleared the proposed acquisition of sole control of Tele Pizza, a Spanish company active in the fast food sector, by CVC, which specialises in managing investment funds. The Commission concluded that the proposed transaction would not limit competition as the parties’ joint market share in the Spanish fast food market would not be sufficient to lead to any concerns. This is the second clearance granted by the Commission in the bidding process for Tele Pizza. On 24 April 2006, the Commission cleared the acquisition of Tele Pizza by Foodco Pastries, a company controlled by Spanish and UK investment funds.
State Aid: Commission Authorises Dutch Aid to Promote European Train Control System
On 7 June 2006 the European Commission approved a Dutch aid measure to support the installation of the new European standard for train control. To ensure safety, a new Dutch railway line will be equipped with a signalling and speed control system called ETCS (European Train Control System). The ETCS will also contribute to the development of railway activities, which is in the common interest and in line with European transport policy. Currently, there are more than 20 different systems in operation in Europe and their incompatibility is a major technical barrier to international traffic. Since the introduction of the new standard requires substantial investment by railway undertakings, the objective of the aid measure is to lower the investment threshold. The Commission considers this measure compatible with the proper functioning of the common market.
Mergers: Linde/BOC Deal Cleared Subject to Conditions
The European Commission has approved the acquisition of UK-based BOC by German company Linde, following the latter’s extensive efforts to remedy the Commission’s competition concerns. The two companies are active in the market for industrial and specialty gases. The clearance is conditional upon the following commitments: (i) the divestiture of Linde’s industrial gas business in the UK; (ii) the divestiture of BOC’s industrial and specialty gas business in Poland; (iii) cutting BOC’s structural links with French Air Liquide in a number of Asian joint ventures; and (iv) divesting several helium wholesale supply contracts of both Linde and BOC.
NEXT WEEK’S EVENTS
Monday 12 June – Friday 16 June 2006
General Affairs and External Relations Council (12 – 13 June 2006)
European Council (15 – 16 June 2006)
COURT OF JUSTICE
C-28/05 Dokter and Others
Freedom of establishment
C-255/04 Commission v France
Law governing the institutions
C-173/03 Traghetti del Mediterraneo
C-459/04 Commission v Sweden
Social security for migrant workers
C-466/04 Acereda Herrera
Joined Cases C-393/04, C-41/05 Air Liquide Industries Belgium
C-249/05 Commission v Finland
C-264/04 Badischer Winzerkeller
C-494/04 Heintz van Landewyck
Approximation of laws
C-380/03 Germany v Parliament and Council
C-220/05 Auroux and Others
Police and judicial cooperation in criminal matters
C-467/04 Gasparini and Others
COURT OF FIRST INSTANCE
T-192/03 Atlantean v Commission
T-218/03 Boyle v Commission
T-219/03 Mullglen v Commission
T-220/03 Cavankee Fishing v Commission
T-221/03 Coneely v Commission
T-222/03 Island Trawlers v Commission
T-223/03 Doherty v Commission
T-224/03 Faherty v Commission
T-225/03 Fitzpatrick v Commission
T-226/03 Ocean Trawlers v Commission
T-227/03 Gill v Commission
T-228/03 Hannigan v Commission
T-229/03 Kelly v Commission
T-230/03 McBride v Commission
T-231/03 McBride v Commission
T-232/03 McClennaghan v Commission
T-233/03 McGing v Commission
T-234/03 McHugh v Commission
T-235/03 Minihane v Commission
T-236/03 Murphy v Commission
T-237/03 Oglesby v Commission
T-238/03 O'Malley v Commission
T-239/03 O'Neill Fishing v Commission
T-240/03 Sharkey v Commission