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Competition: Commission Welcomes E.ON’s Divestment Proposals
Contact Philip Bentley
Germany's largest energy group, E.ON, has agreed to sell off its transmission grid in a compromise deal that is designed to bring an end to its long-running competition case with the European Commission. E.ON’s proposals to sell its electricity transmission network and 4,800 MW of generation capacity have been welcomed by the Commission. E.ON’s offer is the first settlement proposal in the Commission’s investigation into the energy sector in the European Union. The Commission will now carry out a market test to determine whether E.ON’s proposals will address its concerns. Meanwhile, the Commission’s investigations into other EU national energy markets continue.
Justice and Home Affairs: ECJ Adopts Expedited Preliminary Rulings in the Area of Freedom, Security and Justice
Since 1 March, national court cases in relation to freedom, security and justice may be eligible for a new, urgent procedure when referred to the European Court of Justice (ECJ) for a preliminary ruling. A preliminary ruling is a procedure by which a national court may request a ruling from the ECJ on a matter of EU law relevant to the case. These preliminary rulings take, on average, a year and a half to be delivered. As a consequence, they have been impracticable in urgent cases, such as those concerning whether or not to deprive a person of his liberty, or where parental authority or custody of children is involved. A simplified and accelerated written ruling using electronic means of communication is the main feature of the new expedited procedure.
Mergers: Commission Gives Conditional Clearance to Saint Gobain – Maxit Deal
The European Commission has cleared the acquisition of the Swedish company Maxit by the French group Saint Gobain, subject to commitments. The Commission’s investigation showed that the transaction created competition concerns in the area of gypsum products. Gyspum is a raw material used in the production of cement, ceramics and plaster. Specifically, the Commission found that the combination of the two companies would create monopolies, or near monopolies, in a number of national markets for gypsum. The Commission, however, decided to clear the transaction, following commitments offered by Saint Gobain to divest two gypsum producing subsidiaries of Maxit.
Internal Market: Commission Proposes New Rules for Feed and Pet Food
The European Commission has adopted a proposal for a Regulation that is intended to simplify the existing procedures for labelling and marketing animal feed and pet food. The compound feed and pet food industry represents a turnover of approximately EUR 50 billion in the European Union. The proposal seeks to make the system more efficient and consumer-friendly, to encourage innovation and to promote the competitiveness of the EU livestock sector. Pre-market authorisations are to be made proportionate to risks and will no longer be based on pre-defined feed groups. Specific mandatory labelling requirements are laid down for feed materials, compound feed (including pet food) and "dietetic" feed. The initiative for updating the European Union's list of feed materials is to be transferred from the legislator to stakeholders.
Internal Market: Final Warning to Greece and the Netherlands over Gambling Restrictions
The European Commission has issued reasoned opinions to Greece and the Netherlands over national restrictions on gambling that allegedly restrict the free movement of services. The Commission claims that: (i) Greek restrictions bar gambling service providers licensed in another Member State from offering gambling services or advertising in Greece; and (ii) Dutch restrictions prevent gambling providers licensed in another Member State from offering sports betting services in the Netherlands. Greece and the Netherlands both assert that competition restrictions are needed to cut addiction to gambling, among other things. The Commission rejected this argument, noting that both countries have introduced new games of chance and advertised them—showing the absence of a national policy to curb gambling. Greece and the Netherlands have two months to respond to the reasoned opinions, or face a referral to the European Court of Justice.
Mergers: Cookson’s Acquisition of Foseco Cleared Following Divestment Commitments
The European Commission has cleared the proposed acquisition of Foseco by Cookson following commitments to divest Cookson’s foam filter business and most of Foseco’s isostatically pressed products (IPPs) business. Without these divestments, Cookson would have become too dominant in the market for IPPs following the merger and the limited remaining competitors were considered too few to counter Cookson’s market power. In relation to foam filters, the merger would have combined the existing market leaders in terms of quality, price and innovation. These divestments have, however, removed the overlaps in the companies’ activities.
Taxation: Commission Requests that Spain Amends its Discriminatory CFC Rules
Spanish tax law provides that profits of a Controlled Foreign Company (CFC) may be attributed to its shareholders. As a result, the profits of a subsidiary established in a Member State or EU territory qualifying as a tax haven are taxed immediately in the hands of the Spanish parent company as they arise and not after they are distributed. In addition, dividends distributed by these subsidiaries cannot benefit from a tax exemption even when the Spanish parent company holds more than 5 per cent of the shares. This exemption would apply to dividends distributed by subsidiaries located in Spain and other Member States not qualifying as tax havens. According to the Commission, these CFC rules are incompatible with the freedoms provided in the EC Treaty. This case will be referred to the European Court of Justice if Spain does not amend its legislation within two months.
Internal Market: Infringement Proceedings Against Italy Regarding Service Stations
The European Commission considers that the Italian provisions on the establishment of service stations are contrary to Article 43 of the EC Treaty, which provides for freedom of establishment within the European Union. These provisions, which are laid down at both national and regional level with regard to the retail distribution of fuel, impose a number of restrictions that make it extremely difficult for new competitors from other EU Member States to enter the Italian market. Following its reasoned opinion of June 2007, the Commission has decided to move on to the next stage in the infringement proceedings, granting Italy a period of four months before bringing the matter before the European Court of Justice.
Energy: Four Member States Implicated in Ecodesign Directive Infringement
The Ecodesign Directive establishes a framework for the setting of ecodesign requirements for products that use energy. It is one of the pillars of EU strategy on energy efficiency and Member States were required to transpose it into their national law by August 2007. In September 2007 the Commission sent formal letters to Finland, Greece, Portugal and Luxembourg for failure to inform the Commission of full transposition of the Directive. In February 2008, as the Member States in question had still failed to transpose the Directive into their national law, the Commission initiated the second stage of the infringement procedure by addressing reasoned opinions to each of them. The first ecodesign requirements are expected to enter into force next year, making it essential for the necessary provisions to be transposed into national law before then.
NEXT WEEK’S EVENTS
Monday 10 March – Friday 14 March 2008
General Affairs and External Relations Council (GAERC) (10 – 11 March 2008)
European Council (13 – 14 March 2008)
COURT OF JUSTICE
Joined Cases C-383/06, C-384/06, C-385/06 Vereniging Nationaal Overlegorgaan Sociale Werkvoorziening
C-96/06 Viamex Agrar Handel
Environment and consumers
C-81/07 Commission v Greece
Freedom of movement for persons
C-89/07 Commission v France
C-125/06 P Commission v Infront WM
Freedom to provide services
C-248/06 Commission v Spain
C-454/06 Pressetext Nachrichtenagentur
C-204/07 P C.A.S. v Commission
Environment and consumers
C-188/07 Commune de Mesquer
Freedom of establishment
Free movement of capital
C-11/07 Eckelkamp and Others
C-488/06 P L & D v Office for Harmonisation in the Internal Market and Sämann
C-54/07 Centrum voor gelijkheid van kansen en voor racismebestrijding
Joined Cases C-95/07, C-96/07 Ecotrade
COURT OF FIRST INSTANCE
T-332/03 European Service Network v Commission
T-345/03 Evropaïki Dynamiki v Commission
T-341/06 Compagnie générale de diététique v OHMI (GARUM)
T-332/04 Sebirán v OHMI - El Coto De Rioja (Coto D'Arcis)