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The European Commission has conducted surprise inspections of companies that produce compressors used in refrigeration, on suspicion of price fixing and customer allocation in violation of Article 81 EC. These inspections, known as dawn raids, took place in several EU Member States. Coordinated inspections were also carried out by competition law enforcement authorities in Brazil and the United States on suspicion of the same conduct.
A statement by Brazil’s Secretariat of Economic Law confirmed the raids, and asserts that the investigations were launched after one company came forward seeking leniency. The names of the companies involved have not been released, although one Danish company confirmed that its facilities in Denmark, Germany and the United States had been raided. Dawn raids are only a preliminary step in an investigation, and do not prejudge the outcome.
This case provides an example of competition authorities working together on a coordinated, global basis to investigate alleged infringements of competition law.
Transport: Commission Supports Restructuring of European Automotive Industry
The European Commission has decided to support the European automotive industry in response to the current financial crisis in order to reduce its negative impacts and ensure long-term competitiveness. In announcing this policy, the Commission indicated that the existing EU programmes are adequate to achieve these goals and that new legislation would not be forthcoming. Actions already taken by the Commission include (i) organising the exchange of best practice guidelines to ensure the rapid adoption of national schemes and (ii) proposing common principles to serve as the basis on which car scrapping schemes should be adopted.
With regard to the existing legal and policy framework, the Commission stated that several programme funds and policy instruments can be utilised to support this sector. These include the European Economic Recovery Plan issued by the Council last November, the recently revised Temporary Framework for State aid measures and the possible qualification of car manufacturers’ financial divisions for aid under the schemes adopted by the Commission for the banking sector.
The European Commission has decided not to raise objections under EC Treaty State aid rules to the financial support of EUR 46.5 million that France plans to grant to the Solar Nano Crystal research and development (R&D) programme. The objective of the programme, implemented by a consortium led by PV Alliance LabFab, is to develop the whole value chain of solar energy, from the production of silicon to the module for obtaining solar energy. The programme was presented in the framework of the French Industrial Innovation Agency aid scheme, the so-called “OSEO”. Following an in-depth examination, the Commission found the aid to be compatible with its R&D framework. This programme will have benefits for the environment, since it aims at reducing carbon dioxide emissions. In addition, the impact on competition is limited given the size of the aid beneficiary, PV Alliance LabFab, and the market is expected to expand. The programme also remedies certain market failures and it would not have taken place without aid.
Finance – State Aid: Guidance for Treatment of Impaired Assets Published
A considerable number of European banks are confronted with assets on their balance sheet on which they are likely to incur losses, so-called "impaired assets" such as sub-prime mortgage-backed assets. A number of these banks will most likely require some sort of State aid to deal with this problem.
The European Commission has issued guidelines outlining a number of measures with regard to the disclosure and proper handling of foreseeable losses on impaired assets, notably (i) full disclosure on the foreseeable extent of the problem by each bank involved, (ii) the possible incorporation of "bad banks", to which all impaired assets would be transferred, and (iii) asset insurance schemes.
To ensure compliance with EU State aid rules the guidelines outline methods and procedures for evaluating the impaired assets and the amount the troubled banks would have to pay for access to an asset relief measure.
The design of the exact asset relief scheme will remain the responsibility of the individual Member States, but each scheme will be subject to a number of uniform assessment criteria outlined and checked by the Commission.
In each case, relief measures approved by the Commission will be granted for a period of six months. Within three months of accession to an asset relief programme, the Commission requires a viability assessment and restructuring plan from each "saved" bank.
NEXT WEEK’S EVENTS
Monday 2 March – Friday 6 March 2009
Environment Council (2 March 2009)
Competitiveness Council (5 – 6 March 2009)
COURT OF JUSTICE
Approximation of laws
C-350/07 Kattner Stahlbau
C-249/06 Commission v Sweden
C-205/06 Commission v Austria
C-479/07 France v Council
C-556/07 Commission v France
Free movement of goods
C-88/07 Commission v Spain
Freedom to provide services
C-388/07 The Incorporated Trustees of the National Council for Ageing
C-302/07 J D Wetherspoon
C-34/08 Azienda Agricola Disarò Antonio and Others
Area of Freedom, Security and Justice
C-14/08 Roda Golf & Beach Resort
C-429/07 X BV
C-319/07 P 3F
C-397/07 Commission v Spain
COURT OF FIRST INSTANCE
T-424/05 Italy v Commission
T-445/05 Associazione italiana del risparmio gestito and Fineco Asset Management v Commission
Joined Cases T-265/04, T-292/04, T-504/04 Tirrenia di Navigazione v Commission