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Competition: E.ON and Gaz de France Investigated for Market Sharing
The European Commission has confirmed that it sent a Statement of Objections (SO) to E.ON and Gaz de France (GDF), alleging that E.ON and GDF have shared markets for gas in violation of Article 81 EC. The Commission is reportedly concerned that E.ON and GDF agreed, or participated in a concerted practice, to divide markets for the supply of gas (MEMO/08/394). E.ON and GDF are alleged to have agreed not to sell into each other’s home markets to any significant extent. The Commission suspects that the alleged agreement and/or concerted practice concerns supply of natural gas transported over the MEGAL pipeline, which is jointly owned by E.ON and GDF. The issuance of an SO is a formal part of the Commission’s investigation of E.ON and GDF in which it sets out its initial concerns. E.ON and GDF will have the right to reply to the SO and to request an oral hearing.
Competition: Cartel Fine on Hoechst Reduced on Appeal
The Court of First Instance (CFI) has reduced from EUR 99 million to EUR 74.25 million the fine imposed on the German company, Hoechst GmbH, for its participation in a cartel on the sorbates market. The CFI concluded that the Commission had made two errors that justified a reduction in the fine. The first error was to take Hoechst’s role as a cartel leader into account as an aggravating circumstance in its decision without making this sufficiently clear in its Statement of Objections. As a result, Hoechst was not in a position to defend itself properly. The second error related to the application of the principles of sound administration and equal treatment. The CFI granted a 10 per cent reduction because the Commission had given an unfair advantage to another cartel participant by promising that it would receive a “fair warning” if it looked as though another cartel participant was going to file an immunity application.
Competition: E.ON Commitments Market Tested
The European Commission has invited interested parties to submit comments on the commitments offered by E.ON in the context of two cases concerning E.ON's alleged behaviour in the German wholesale electricity market and the German “balancing electricity” markets respectively. “Balancing electricity” is last-minute electricity necessary to maintain the frequency of the current in the grid. The Commission's concerns relate in particular to the withholding of available generation capacity, deterring third parties from investing in new generation capacity, and certain practices as regards the operation of the transmission system. E.ON has offered the following commitments: (i) to divest generation capacity in Germany from different types of technology and fuels to remedy the Commission's concerns on the wholesale electricity market; and (ii) to dispose of its transmission system business, consisting of its extra-high-voltage line network and system operations, to meet the Commission's concerns on the “balancing electricity” market. Interested parties can submit comments within one month. In the light of such comments, the Commission could adopt a decision making the commitments legally binding on E.ON.
Competition: MasterCard Suspends Cross-Border Fees in EU Due to Commission Pressure
Contact Philip Bentley
The credit card company, MasterCard, has suspended its cross border fees within the European Union. The charge, known as a Multilateral Interchange Fee (MIF), applies to each payment made at a retail outlet with a MasterCard credit card or Maestro debit card from another European country. The decision to suspend the fee follows the European Commission’s decision in December 2007 that the MIF did not comply with European competition law. The Commission gave MasterCard six months to comply with competition rules, but MasterCard has, to date, been unable to provide a justification for the fees. Consequently, MasterCard will suspend the MIF until it has developed a fee structure that meets European competition law requirements.
Environment: European Parliament Approves Revision of Waste Framework Directive
On 17 June 2008 the European Parliament, in its second reading on the subject, approved the revisions to the Waste Framework Directive agreed between the European Commission and the EU Council. The European Environment Commissioner, Stavros Dimas, welcomed the vote, stating that the new Directive, with its clearer definitions, greater emphasis on prevention of waste and ambitious new recycling goals, will create a sound legal basis for the functioning of the waste sector. The new Directive will also streamline EU waste legislation by replacing three Directives (the Waste Oils Directive, the Hazardous Waste Directive and the existing Waste Framework Directive) with one.
Agriculture: EU to Maintain Suspension of Import Duties on Cereals
The European Commission has announced that the suspension of cereal import duties will remain in force for the next marketing year, which will end on 30 June 2009. At the same time, there will be no export refunds on cereal exports. Council Regulation (EC) No 1/2008 had temporarily suspended customs duties on imports of most cereals until 30 June 2008. The announcement to extend the suspension into the next marketing year is a reaction to the continuing tight situation on the cereals market and the resulting high prices. The Commission is, however, allowed to reintroduce import duties in the event of disruption or threatened disruption of the Community market.
Trade: EU Launches Investigation into US Biodiesel Imports
On 13 June 2008, the European Union initiated anti-subsidy and anti-dumping investigations into imports of biodiesel from the United States. The complaints were lodged by the European Biodiesel Board, which represents the interests of a major proportion of EU producers of biodiesel. Having examined the complaints, the European Commission has concluded that they fulfil the requirements of the European Union's basic anti-subsidy and anti-dumping regulations in order to initiate further proceedings. The Commission will make its provisional findings by 13 March 2009 at the latest, which it will then present to the EU Member States. If the measures proposed by the Commission are considered justified, these would take the form of specific duties on the product in question when imported into the European Union.
Mergers: Commission Clears Acquisition of Endesa by Enel and Acciona
The European Commission has approved the acquisition of joint control of Endesa S.A., a Spanish energy company active mainly in the electricity sector, through a public takeover bid by ENEL S.p.A., based in Italy, and Acciona S.A., based in Spain. The acquisition of joint control of Endesa by ENEL and Acciona had already been notified and cleared by the Commission on 5 July 2007. On 18 March 2008, however, Enel, E.ON and Acciona concluded another agreement modifying their 2007 agreement. This new agreement substantially modified the scope of the transaction and it therefore required a new notification. Following a fresh analysis, the Commission found, however, that the impact of the amendments on the wholesale supply of electricity in Spain – the only horizontally affected market – is negligible because of the minimal changes in the market shares of the parties as a result of the new agreement.
Mergers: Acquisition of Yves Saint Laurent Beauté by L’Oréal Cleared
The European Commission has cleared the proposed acquisition of Yves Saint Laurent Beauté by L’Oréal. Both French companies are active in the development, production and sale of cosmetics such as make-up and fragrances and they both own strong brands in this industry (Yves Saint Laurent and Lancôme). The Commission concluded that, notwithstanding the overlaps between the two companies, the concentration would pose no competition risk, as the combined entity would still face strong competition from international cosmetics producers such as Estée Lauder, LVMH and Chanel.
NEXT WEEK’S EVENTS
Monday 23 June – Friday 27 June 2008
Agriculture and Fisheries Council (23 – 24 June 2008)
COURT OF JUSTICE
Environment and consumers
C-188/07 Commune de Mesquer
Freedom of establishment
C-272/07 Commission v Luxembourg
Joined Cases C-329/06, C-343/06 Wiedemann
Joined Cases C-334/06, C-335/06, C-336/06 Zerche
Approximation of laws
C-252/07 Intel Corporation
Freedom of movement for persons
Law governing the institutions
C-155/07 Parliament v Council
Privileges and immunities
Joined Cases C-200/07, C-201/07 Marra
C-333/07 Regie Networks
COURT OF FIRST INSTANCE
T-94/98 Alferink and Others v Commission
T-224/06 Otto v OHMI - L'Altra Moda (l'Altra Moda)
T-36/07 Zipcar v OHMI - Canary Islands Car (ZIPCAR)
T-79/07 SHS Polar Sistemas Informáticos v OHMI - Polaris Software Lab (POLARIS)
T-268/06 Olympiaki Aeroporia Ypiresies v Commission
T-442/03 SIC v Commission