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Environment: Commission Starts Legal Action over Airborne Particles
The European Commission has sent warning letters to ten EU Member States informing them that they have failed to comply with European legislation establishing limits for the concentration of airborne particles known as PM10. Sources of PM10 particles include motor vehicles, dust from construction sites, landfills and agriculture, industry and wood burning stoves. This action follows requests for information sent by the Commission in July 2008 to Cyprus, Estonia, Germany, Italy, Poland, Portugal, Slovenia, Spain, Sweden and the United Kingdom.
Council Directive 1999/30/EC (the 1999 Directive) gave Member States until 1 January 2005 to reduce exposure levels of PM10 to thresholds set out in that legislation. However, the new Air Quality Directive, Directive 2008/50/EC, allows Member States to request that the Commission grants an extension period to comply with the 1999 Directive. Extensions, which may run until 10 June 2011, are allowed where the Member State can show that its non-compliance relates to factors beyond its direct control. Examples of such factors are transboundary air pollution and climatic conditions.
Article 226 EC authorises the Commission to take legal action against a Member State for failure to meet its obligations. Ultimately, the Commission may take the matter before the European Court of Justice.
The Court of First Instance (CFI) has confirmed the Commission's decision to suspend an investigation into the Omya/Huber merger case until it received the information necessary to complete its analysis. The Commission has welcomed the CFI’s Judgment (Case T-145/06), as it confirms that the Commission is fully entitled to insist on obtaining all information necessary to perform an effective and complete assessment of mergers and takeovers.
In the course of its investigation, the Commission experienced difficulty in obtaining from the parties the data necessary to complete the database for purposes of market definition and evaluation of the proposed acquisition. In order to obtain such information it had to adopt decisions based on Article 11(3) of the EU Merger Regulation requiring the parties to provide the requested data, which had the effect of suspending the investigation until the information was submitted. The Commission’s Decision of 8 March 2006 stated that the information provided by Omya was partly incorrect. Omya subsequently supplied corrected data on 21 March 2006 and the acquisition was then approved by the Commission on 19 July 2006, subject to conditions.
In its appeal to the CFI, Omya claimed that the Commission had failed to comply with the conditions for adopting an Article 11(3) decision, that the decision was disproportionate, that the Commission had misused its powers and Omya's legitimate expectations had been infringed. The CFI dismissed all claims made by Omya and held that the Commission was justified in adopting the suspension decision. The CFI rejected the plea with regard to the Commission’s failure to comply with the conditions for Article 11(3) and also found that Omya had failed to prove that the data it had supplied was materially correct. Furthermore, the CFI underlined that the Commission needed the data to perform its econometric analysis. Finally, the CFI noted inter alia that the period between finding the errors and the date of the adoption of the decision did not appear to be exceptionally long.
Finance – Taxation: Commission Proposes Suppression of Bank Secrecy to Combat Tax Fraud
The European Commission has proposed two directives aimed at improving cooperation between tax authorities in the field of assessment and recovery of taxes. The final goal of these measures is to combat tax fraud that is facilitated by inefficiencies in information exchange between EU Member States and/or the inability to recover taxes due from fraudsters residing in another EU country, including VAT carousel fraud.
The proposals contain a number of unifying measures, such as common rules of procedure, standard forms and formats, channels for exchanging information and power for tax officials from one Member State to inspect actively on the territory of another Member State.
The most outstanding feature of the Commission’s proposals, however, is that they call for banking secrecy to be abolished in relations between tax authorities. This measure might meet resistance from Member States that still have banking secrecy rules, such as Austria, Belgium and Luxembourg. Luxembourg is expected to oppose these measures and request that Switzerland apply a similar regime before the directives can be adopted.
As the proposed directives require approval by all Member States, they are not likely to enter into force in the near future. Austria, Belgium and Luxembourg have, however, already concluded agreements with the United States that prevent them from invoking banking secrecy when the US tax authorities request information.
Pharmaceuticals – Competition: Pharmacist Order Challenges Commission’s Power of Investigation
Contact Philip Bentley
The French National Pharmacist Order has launched a challenge before the European Court of First Instance against the European Commission’s powers of investigation in competition cases. In November 2008, the Commission carried out a surprise investigation on the premises of the Pharmacist Order. This investigation arose from complaints that the Pharmacist Order and its network of members were restricting access to the market for biomedical analysis. At issue is the Pharmacist Order regulation (in line with French law) that only biologists are allowed to own biomedical analysis companies which, it is alleged, contravenes EU competition law. The Pharmacist Order claims that the investigation should not have taken place because the Order is a public body with no commercial activities and could not therefore be considered as an “association of undertakings” subject to EU competition law.
This decision could be important for similar professional organisations that regulate professional activities. In the event that the Pharmacist Order succeeds, the investigation will be found invalid.
Chemicals: Commission Proposes to Ban Biocide DMF in Imported Consumer Goods
The European Commission has adopted a draft decision to ban dimethylfumarate (DMF), a biocide commonly used to preserve leather consumer goods, such as footwear and furniture, from the EU market. The draft Commission decision is for an emergency EU-wide measure, pending the adoption of a more permanent regulatory regime concerning DMF.
DMF is a biocide used by manufacturers to prevent moulds from growing on leather goods produced in humid climates. The biocide, however, is linked to serious allergic reactions in consumers, including dermatitis, irritation, burns and respiratory difficulties.
The European Union has already banned DMF for use in the manufacture of goods in the European Union. But manufacturers located outside the European Union, particularly in China, use DMF in products that are then exported to the European Union. The Commission’s proposal would effectively extend the EU ban on DMF to imports, and would also mandate that any products containing DMF that are already on the EU market be withdrawn promptly. Before taking effect, the Commission’s decision must be submitted to the European Parliament for consultation and the College of Commissioners for final approval.
Energy: Commission to Investigate Electricity Retail Market
The European Consumer Commissioner has announced that the electricity retail market shall be subject to a Commission investigation in 2009. This was in response to the results of the Second Consumer Market Scoreboard, an annual report produced by the Commission on the state of consumer markets.
The Scoreboard indicated that less than two thirds of consumers were satisfied with their energy supplier. Further, the market scored poorly on several of the other Scoreboard indicators, including pricing and switching rates. The Commissioner also noted the importance of the market to the EU consumer, given that spending on energy accounts for 5.7 per cent of the average EU household budget.
Therefore, the Commissioner intends to produce a report on the market, including an examination of comparability of offers, unfair commercial practices and billing practices. The report will be produced in conjunction with the European Energy Commissioner. A timetable for the report has not yet been provided.
NEXT WEEK’S EVENTS
Monday 9 February – Friday 13 February 2009
Eurogroup (9 February 2009)
Economic and Financial Affairs Council (ECOFIN) (10 February 2009)
COURT OF JUSTICE
Approximation of laws
C-301/06 Ireland v Parliament and Council
C-475/07 Commission v Poland
Area of Freedom, Security and Justice
C-339/07 Deko Marty Belgium
Convention on jurisdiction
C-185/07 Allianz (anciennement Riunione Adriatica di Sicurta)
Free movement of capital
Free movement of goods
C-110/05 Commission v Italy
Freedom of movement for persons
C-224/08 Commission v France
Principles of Community law
C-45/07 Commission v Greece
C-515/07 Vereniging Noordelijke Land- en Tuinbouw Organisatie
C-505/07 Compañía Española de Comercialización de Aceite
Approximation of laws
C-487/07 L'Oréal and Others
C-5/08 Infopaq International
Own resources of the Communities
C-372/05 Commission v Germany
C-409/05 Commission v Greece
C-461/05 Commission v Denmark
C-294/05 Commission v Sweden
C-387/05 Commission v Italy
C-284/05 Commission v Finland
C-239/06 Commission v Italy
Joined Cases C-445/07 P, C-455/07 P Commission v Ente per le Ville vesuviane
C-29/08 AB SKF
COURT OF FIRST INSTANCE
T-413/07 Bayern Innovativ v OHMI - Life Sciences Partners Perstock (LifeScience)
T-165/07 Red Bull v OHMI - Grupo Osborne (TORO)
T-388/03 Deutsche Post and DHL International v Commission