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Energy – Competition: Commission Closes Article 82 Investigation of RWE
The European Commission has announced that it has decided to accept from German energy company RWE binding commitments under Article 9(1) of Regulation 1/2003. These commitments address the Commission’s concerns that RWE may have abused its dominant position under Article 82 of the EC Treaty in the gas transport market. RWE had allegedly refused to supply gas transmission services to third parties and imposed a “margin squeeze” on its downstream competitors. In reaction to the Commission’s concerns, RWE agreed to divest its current Western German gas transmission system business, including personnel and ancillary assets and services, to an independent operator. By making these commitments binding, the Commission has brought an end to its investigation.
This is the second time that the Commission has accepted structural divestment remedies under the Article 9 commitments procedure to close an Article 82 investigation. In December 2008, the Commission made binding commitments by E.ON to divest both 5,000 MW of general capacity from different types of technologies and fuels and its transmission system business consisting of an Extra-High-Voltage line network and system operations currently run by E.ON Netz.
Finance – State Aid: Commission Opens In-Depth Investigation into Dexia State Aid
In the wake of the credit crisis, the Belgo-French banking and insurance group Dexia was granted a joint relief package by the Belgian, French and Luxembourg Governments. This package consisted of (i) a capital injection of EUR 6.4 billion, (ii) a State guarantee of EUR 150 billion and (iii) an additional guarantee of USD 16.9 billion in view of the sale of Dexia's troubled US subsidiary, FSA.
The European Commission had previously authorised this relief package on the condition that a restructuring plan ensuring Dexia's further long-term viability would be notified to the Commission. The Commission has now announced an in-depth investigation into the restructuring plan with regard to its viability and its possible anti-competitive effects. The current relief package can remain in effect for the duration of the investigation.
Dexia has expressed surprise at the Commission's announcement but has declared that it will cooperate fully with the investigation and is confident of its outcome.
Chemicals – Mergers: Commission Clears BASF Acquisition of Ciba Subject to Divestments
BASF, a German chemical products company, has received clearance under the EU Merger Regulation for its acquisition of Ciba, a Swiss speciality chemicals company. The European Commission cleared the proposed acquisition subject to BASF’s commitment to divest various activities of the merged entity.
The Commission’s investigation into the proposed acquisition raised competition law concerns with regard to a number of speciality chemical product markets. These included products in the paper, plastics and skincare industries, as well as several pigments. To remedy these concerns, BASF offered to divest its production assets, know-how and businesses in these areas in several European countries.
The Commission concluded that the package of divestments offered by BASF was sufficient to allay its concerns and cleared the transaction without progressing to an in-depth, Phase II investigation. The parties still await clearance from the US and Swiss competition authorities, which are expected to approve the acquisition by early April.
Media – State Aid: CFI Concludes that French Audiovisual Licence Fee Constitutes State Aid
Sara Haj-Jabbari and Katarzyna Wilk
In its judgment in Télévision francaise 1 SA (TF1) v Commission T-354/05, the Court of First Instance (CFI) has upheld a Decision by the European Commission that the French licence fee system is compatible with the State aid provisions of the Common Market.
Following a 2003 investigation into the repayment by the French Government of audiovisual licence fees to public television channels, the Commission had concluded that this constituted State aid. It made certain recommendations to ensure compatibility with the Common Market, namely that (i) compensation payable by the State be proportionate to the cost of the public service and (ii) public service broadcasters perform commercial activities under market conditions. In 2005, following specific commitments made by the French Government, the Commission determined that the French licence fee system was compatible with the Common Market in accordance with Article 86(2) EC.
TF1, a commercial channel operating in France, appealed this Decision to the CFI. It argued that State aid schemes resulting in overcompensation could not be justified under Article 86(2) EC.
After reviewing existing case law, the CFI rejected TF1’s reasoning and concluded that so-called overcompensation schemes could be justified as compatible State aid. It concluded that the Commission had neither erred in its application of the relevant test, nor made inappropriate recommendations. Furthermore, the commitments made by the French Government satisfied those recommendations.
Energy: Commission Adopts Regulations to Phase Out Incandescent Bulbs from EU Markets
In the context of the EU Ecodesign Framework, the European Commission has adopted two regulations raising the energy efficiency standards for household lamps and products used to illuminate large spaces such as offices and streets. These regulations require the progressive removal of “non-directional” incandescent light bulbs (lamps that emit light in all directions equally) and conventional halogen bulbs from the market from September 2009 until September 2012.
The regulations require that by September 2009, 100 watt transparent incandescent light bulbs be replaced with more energy efficient class C halogen bulbs. By September 2011, 60 watt light bulbs will be replaced with class C energy efficiency products; 40 and 25 watt bulbs will be replaced by September 2012. This transitional period is designed to give manufacturers the opportunity to adapt their production to comply with these standards.
These regulations are expected to result in estimated savings of 80 trillion watts of electricity consumption per year (this is approximately equal to the annual electricity consumption of Belgium). The Commission has stated that it intends to adopt more Ecodesign measures in the coming months.
NEXT WEEK’S EVENTS
Monday 23 March – Friday 27 March 2009
Agriculture and Fisheries Council (23 – 24 March 2009)
COURT OF JUSTICE
C-113/07 P Selex Sistemi Integrati v Commission and Eurocontrol
Environment and consumers
C-331/08 Commission v Luxembourg
C-184/08 Commission v Luxembourg
Free movement of goods
C-445/06 Danske Slagterier
Freedom of establishment
C-326/07 Commission v Italy
C-21/08 P Sunplus Technology
C-559/07 Commission v Greece
Approximation of laws
C-527/07 Generics (UK)
Joined Cases C-125/07 P, C-133/07 P, C-135/07 P, C-137/07 P Erste Bank der österreichischen Sparkassen v Commission
Environment and consumers
C-438/07 Commission v Sweden
C-335/07 Commission v Finland
C-13/07 Commission v Council
Free movement of goods
Law governing the institutions
C-411/06 Commission v Parliament and Council
Police and judicial cooperation in criminal matters
C-2/08 Fallimento Olimpiclub
COURT OF FIRST INSTANCE
Joined Cases T-318/06, T-319/06, T-320/06, T-321/06 Moreira da Fonseca v OHMI - General Óptica (GENERAL OPTICA)
T-191/07 Anheuser-Busch v OHMI - Budějovický Budvar (BUDWEISER)
T-402/07 Kaul v OHMI - Bayer (ARCOL)
T-21/07 L'Oréal v OHMI - Spa Monopole (SPALINE)
T-109/07 L'Oréal v OHMI - Spa Monopole (SPA THERAPY)
T-332/06 Alcoa Trasformazioni v Commission