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Mergers: Public Consultation on EC Merger Regulation
The European Commission has launched a public consultation on the EC Merger Regulation (Council Regulation 139/2004) that took effect in 2004. The Regulation contains rules for merger control in the European Economic Area including, among other things, jurisdictional thresholds for when transactions must be notified, as well as referral mechanisms that allow for the review of a transaction to be referred between the Commission and EU Member States. Under the terms of the Merger Regulation itself, the Commission must report to the EU Council of Ministers on the functioning of these jurisdictional and referral rules by 1 July 2009.
At the outset, the Commission reports that, in its experience, the Merger Regulation has functioned well. The Commission has, however, opened a public consultation on the Merger Regulation and states that comments received from stakeholders through this process will be a key aspect in its ultimate report. Comments on the Merger Regulation's jurisdictional thresholds and the referral mechanisms should be submitted to the Commission by 1 December 2008.
Finance – State Aid: Commission Approves German Rescue Package for Financial Markets
On 28 October 2008, the European Commission announced its approval, under EC Treaty State aid rules, of a package of measures intended to stabiliseGermany's financial markets and to address the malfunction of interbank lending. The measures consist of a recapitalisation and guarantee scheme, as well as a temporary acquisition of assets by the State. The German authorities notified the Commission of the package on 14 October. After a series of exchanges and discussions with the Commission on the details of its implementation, on 27 October the German authorities submitted a list of commitments to limit possible distortions of competition.
Sports & Media – State Aid: Commission Consults on Extension of State Aid Scheme to Film Industry
Contact Philip Bentley
The European Commission has launched a public consultation on its plans to extend the Cinema Communication until 31 December 2012. The EU State aid rules set out strict rules on the granting of State subsidies to private companies. The Cinema Communication sets out how EU governments can legally provide State support for films produced in the European Union. It also enables national governments to require producers to spend a proportion of the funds made available in the country that provided the aid. In addition, the Commission will consult on how the film industry should be supported in the future. Comments should be sent to the Commission by 30 November 2008.
Public Procurement: Commission Assesses Use of Electronic Procurement in Europe
The European Commission has launched an online survey to: (i) review actual experience of businesses and public purchasers with electronic public procurement ("e-procurement"); (ii) evaluate the use of e-procurement across the European Union; and (iii) guide future EU action in this field. The Commission will also be able to assess the achievements of the "Action Plan for the implementation of the legal framework for electronic public procurement" adopted by the Commission in December 2004. The objectives of the Action Plan were to help EU Member States remove obstacles to cross-border e-procurement and to further increase its efficiency while reducing the administrative burden. The Commission considers that opening up procurement markets across borders and expanding e-procurement is crucial to Europe's competitiveness and the creation of new opportunities for EU businesses. Public procurement is a key sector of the EU economy, accounting for about 16 per cent of GDP. Interested parties can participate in this survey until <18 December 2008.
Telecommunications – Competition: Commission Requests Stricter Control from Belgian Telecoms Regulator on Market for Fixed Phone Calls
The European Commission has communicated a request for more effective enforcement of telecoms regulation by the Belgian telecoms regulator, BIPT. In particular, the Commission considers that BIPT has been unsuccessful in implementing the telecoms regulation and this has been the cause for the lack of effective competition and high tariffs on the Belgian market for fixed telephone calls.
In September 2008, BIPT notified to the Commission the results of a national consultation regarding the markets for publicly available local and/or national fixed telephone services. In this notification, BIPT established that the market should be subject to ex-ante regulation because it met the three conditions provided for in the telecoms regulation. These conditions are: (i) there are high and non-transitory entry barriers; (ii) the structure of the market does not tend towards effective competition within the relevant time horizon; and (iii) the application of competition law alone would not adequately address the market failures. BIPT also found that obligations should be imposed on Belgacom, the leader on the national market, requiring it to act in a non-discriminatory, transparent manner, and prohibiting it to charge excessive or predatory prices.
As a response to these draft measures, the Commission agrees with BIPT’s analysis that Belgacom is dominant on the market and that ex-ante regulation should be applied. However, it points out that wholesale remedies such as wholesale line rental obligations and (pre-)carrier selection obligations put forward by BIPT on previous occasions have not yet had the desired effect on retail competition. Indeed, the wholesale line rental obligation to alternative operators imposed on Belgacom in 2006 has not yet been enforced. Other obligations, including (pre-)carrier selection obligations and the new price regulation recently imposed upon Belgacom, which should have led to more choice and affordable prices for consumers, appear to be ineffective.
The Commission has thus encouraged BIPT to ensure that all relevant wholesale remedies contribute to sustainable retail competition and, in the meantime, to address the issue of high prices with direct retail remedies. BIPT is also invited to carry out a new market study within a year.
Transport – Competition: Commission Opens Consultations on Review of Block Exemption for Liner Shipping Consortia
The European Commission has opened consultations on a draft regulation revising the exemption that liner shipping consortia currently enjoy from the EC Treaty's ban on restrictive business practices (Article 81). The Consortia Block Exemption Regulation (823/2000) currently allows shipping lines to enter into cooperation agreements for the purpose of providing a joint service (consortia). A consortium is a group of shipping lines that cooperate to provide joint maritime cargo transport services. Such agreements usually allow shipping lines to rationalise their activities and achieve economies of scale. If consortia are faced with sufficient competition, the users of the services provided by consortia usually benefit from improvements in productivity and quality of service.
The new draft regulation proposes continuing to allow for such cooperation within a new legislative and economic environment. In order to align the Consortia Block Exemption Regulation with the general EU competition rules, it is proposed that only consortia with a market share below 30 per cent should benefit from the exemption.
Observations on the draft regulation should be submitted by 21 November 2008 at the latest. The Commission will then consult Member States in 2009 and adopt the final block exemption regulation before the current regulation expires in April 2010.
NEXT WEEK’S EVENTS
Monday 3 November – Friday 7 November 2008
ECOFIN Council (4 November 2008)
COURT OF JUSTICE
C-248/07 Trespa International
Environment and consumers
C-95/08 Commission vLuxembourg
C-247/06 Commission vGermany
C-381/07 Association nationale pour la protection des eaux and rivières
C-405/07 P Netherlands v Commission
C-203/07 P Greece v Commission
Law governing the institutions
C-155/07 Parliament v Council
C-291/07 Kollektivavtalsstiftelsen TRR Trygghetsrådet
Approximation of laws
C-511/06 P Archer Daniels Midland v Commission
Environment and consumers
C-473/07 Association nationale pour la protection des eaux and rivières et Association OABA
Freedom of establishment
C-326/07 Commission v Italy
COURT OF FIRST INSTANCE
T-161/07 Group Lottuss v OHMI - Ugly (COYOTE UGLY)
T-304/07 Calzaturificio Frau v OHMI - Camper (Représentation d'un pont stylisé noir)
T-256/06 Neoperl Servisys v OHMI (HONEYCOMB)