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Competition: Inspections in the Marine Hose Sector
On 2 and 3 May 2007 the European Commission carried out unannounced inspections (“dawn raids”) at the premises of several marine hose producers in France, Italy and the United Kingdom. Marine hoses are involved in the transportation of crude oil and petroleum products. The Commission has reason to believe that the companies visited may be involved in cartel activity at a worldwide level, and similar actions were taken by the US Department of Justice. There is no timetable for cartel proceedings and the duration of an investigation depends on a number of factors such as the case complexity and extent of co-operation. The outcome of the inspections may not therefore be known for years.
Taxation: Discriminatory Taxation of Dividends and Interest Paid to Foreign Pension Funds
Nine EU Member States, namely the Czech Republic, Denmark, Lithuania, the Netherlands, Poland, Portugal, Slovenia, Spain and Sweden, are subject to an investigation by the European Commission for breach of EU rules on free movement of capital. In particular, the Commission has reason to believe that dividend and/or interest payments to foreign pension funds (outbound payments) may be taxed more heavily than dividend and/or interest payments to domestic pension funds (domestic payments). The nine EU Member States are asked to provide their observations within two months. This is the first step of the infringement procedure under the EC Treaty.
Competition: Commission Investigates Cartel for Chloroprene Rubber
Contact Philip Bentley
The European Commission has sent a Statement of Objections to a number of companies alleging that they participated in a cartel for chloroprene rubber. This substance is a synthetic rubber which is mainly used for the production of technical parts (cables, hoses, power transmission belts, etc). The companies have two months to submit a written defence to these allegations. If the Commission finds at the end of the investigation that a cartel was in operation, the companies concerned could face fines of up to 10 per cent of their worldwide turnover.
Internal Market: Commission Promotes New Car Safety Technology
The European Commission has launched a campaign to promote the uptake of Electronic Stability Control (ESC) in new passenger cars. This technology senses when the driver loses control of the vehicle and automatically applies braking pressure to the individual wheels to help stabilise the vehicle and avoid skidding. The Commission is in the process of making this technology mandatory on new passenger cars but in the meantime, it is promoting voluntary uptake of this life saving technology. The introduction of ESC is part of a package of measures proposed by the Commission in its recent Communication (CARS 21) aimed at improving European road safety.
Agriculture: Commission Seeks to Reform Sugar Restructuring Scheme
The European Commission has proposed amendments to the 2006 reform of the Common Market Organisation for sugar, which aims to improve the European sugar sector’s sustainability and competitiveness. The 2006 reform offered financial incentives for less competitive sugar producers to renounce quota or leave the sector through a “restructuring scheme” in which producers received financial incentives to exit the sector. Through the restructuring scheme, the Commission expected six million tonnes of sugar to be renounced, but the actual reduction to date is only 2.2 million tonnes. To achieve further reductions, the Commission plans to amend the restructuring scheme to provide additional incentives to sugar producers, including additional payments to growers and, among other things, adding a withdrawal scheme for 2009 – 2010. The amendments to the 2006 reform could take effect by October 2007.
Mergers: Commission Clears MyTravel Group/KarstadtQuelle Deal in Second Phase
The German department store and mail order company, KarstadtQuelle, and its UK target are both players on the travel market. The concentration would lead to horizontal overlaps, notably for the supply of package holidays in the UK and Ireland. Nevertheless, the European Commission has stated that the deal would not harm consumers. It found that the combined market shares of the parties would not enable them to act in an anticompetitive way. The internet also allows customers to access a large number of offers and compare them through dedicated websites. This prevents the risk of co-ordination of prices or capacity among the major tour operators. It is the first time since the Court of First Instance annulled the Airtours/First Choice decision in 2002 that the Commission has carried out a second phase investigation of the travel market.
Mergers: Commission Initiates Second Phase Investigation into Worldspan/Travelsport Deal
The European Commission has opened a second phase in-depth investigation into the planned acquisition of Worldspan by Travelsport. Both companies are active in the marketing and distribution of travel services through their respective Global Distribution Systems (GDS). A GDS is a computerised system used to process, store and retrieve information for the sale of travel and travel related products. There are four GDSs operating on a global basis: Amadeus, Galileo owned by Travelsport, Sabre and Worldspan. The proposed transaction would combine the second and the fourth largest GDSs in the EU. The in-depth investigation will enable the Commission to assess whether the reduction in the number of competitors in what the Commission considers to be a highly concentrated market would result in anti-competitive effects that harm consumers. A decision is expected to be adopted by 13 September 2007.
Telecommunications: Commission Pursues Infringement Proceedings Regarding German Telecom Laws
The European Commission has sent a reasoned opinion to Germany in which it maintains that German telecom laws are incompatible with EU law. According to the Commission, the national provisions in question could grant Deutsche Telekom a “regulatory holiday” with the result that its fast internet access network (VDSL) would be shielded from competition. The Commission argues that the national provisions jeopardise the competitive position of Deutsche Telekom's existing competitors and create barriers to entry into the market. Germany has consistently defended its position and has refused to amend its telecom laws. It has one month to respond to the reasoned opinion. If Germany fails to address the Commission’s concerns the case could be brought before the European Court of Justice in June.
The European Commission's proposed regulation to cut the cost of using mobile phones abroad ("roaming") has been postponed and re-scheduled for the European Parliament’s May plenary session in Strasbourg (21 – 24 May) due to the need for further negotiations among the European Institutions. This proposal was initially scheduled to be debated and voted on 9 May. There remains strong disagreement on the levels of the price caps and whether consumers should be automatically switched to the new rates or have to actively sign up to them. The Commission wants to speed up the process to ensure that, by this summer, European consumers will benefit from lower charges when using their mobile phone abroad.
NEXT WEEK’S EVENTS
Monday 14 May – Friday 18 May 2007
External Relations, Security and Defence, Development Council (14 – 15 May 2007)
COURT OF JUSTICE
Environment and consumers
Joined Cases C-439/05 P, C-454/05 P Land Oberösterreich v Commission
COURT OF FIRST INSTANCE
Joined Cases T-239/05,T-240/05, T-245/05, T-246/05, T-247/05, T-255/05, T-274/05, T-275/05, T-276/05, T-277/05, T-278/05, T-279/05, T-280/05 Black & Decker v OHMI - Atlas Copco
T-158/05 Trek Bicycle v OHMI - Audi (ALLTREK)
T-137/05 La Perla v OHMI - Worldgem Brands (NIMEI LA PERLA MODERN CLASSIC)
T-491/04 Merant v OHMI - Focus Magazin Verlag (FOCUS)