EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 23.7.2009 
SEC(2009)1004 final 
  
COMMISSION STAFF WORKING DOCUMENT 
Accompanying the 
 
REPORT FROM THE COMMISSION 
 
on Competition Policy 2008 
  
{COM(2009)374 final} 
 
EN 2   EN TABLE OF CONTENTS 
I – Instruments................................................................................................................ ............ 8 
A – Anti-trust – Articles 81, 82 and 86 EC................................................................................ 8 
1. Applicable rules ........................................................................................................... 8  
1.1. White Paper on damages actions for breach of the EC anti-trust rules........................ 8 1.2. Cartels ................................................................................................................... ....... 9 
1.2.1. The Settlements Package.............................................................................................. 9 1.3. Other agreements and concerted practices................................................................. 10 1.3.1. Vertical agreements.................................................................................................... 1 0 
1.3.2. The Review of the Motor Vehicle Block Exemption Regulation.............................. 11 1.3.3. Review of the Insurance Block Exemption Regulation ............................................. 13 1.4. Abuse of dominant posit ions (Article 82 EC)............................................................ 14 
2. Application of Articles 81, 82 and 86 EC.................................................................. 14 2.1. Cartels ................................................................................................................... ..... 14 
2.2. Other agreements and concerted practices................................................................. 16 2.3. Abuse of dominant posit ions (Article 82 EC)............................................................ 16 
2.4. State measures: Public undertakings and/ or undertakings with exclusive or special 
rights......................................................................................................................... .. 17 
3. Selected Court cases................................................................................................... 18 3.1. The CFI upholds the Commission's Deutsche Telekom decision.............................. 18 3.2. AC Treuhand v. Commission..................................................................................... 19 3.3. Lelos & others v. GlaxoSmithKline........................................................................... 19 3.4. Competition Authority v. Beef Industry Development Society................................. 20 3.5. The ECJ clarifies the obligations of collec ting societies as rega rds royalties setting 
under Article 82 EC ................................................................................................... 20 
3.6. The ECJ rules against the Italian scheme of frequenc y allocation for terrestrial 
television broadcasting............................................................................................... 21 
B – Merger control ............................................................................................................. ...... 21 
1. Applicable rules ......................................................................................................... 21 1.1. The Remedies Notice ................................................................................................. 21 2. Application of the me rger control rules ..................................................................... 22 
 
EN 3   EN 3. Selected Court cases................................................................................................... 23 
3.1. Sony BMG/Impala ..................................................................................................... 23 3.2. MyTravel.................................................................................................................. .. 24 
3.3. Application of Article  21 of the EC Merger Regulation (ECMR)............................. 26 
C – State aid control.......................................................................................................... ....... 27 
1. Applicable rules ......................................................................................................... 27 2. Application of the State aid rules............................................................................... 32 2.1. Applying the State aid Framework for Research, Development and Innovation 
(R&D&I).................................................................................................................... 33 
2.2. Assessing risk capital financing for SME .................................................................. 34 2.3. Industrial restructuring............................................................................................... 34 2.4. Sports.................................................................................................................... ...... 35 
2.5. State aid in the agricultural sector.............................................................................. 35 2.6. Coal ...................................................................................................................... ...... 36 
3. Selected Court cases................................................................................................... 37 3.1. The concept of aid...................................................................................................... 37  
3.2. Compatibility assessment........................................................................................... 40 
3.3. Procedural issues........................................................................................................ 4 0 
3.4. Recovery of aid .......................................................................................................... 4 1 
II – Sector Developments....................................................................................................... .. 42 
A – Energy and environment ................................................................................................... 42  
1. Overview of the sector ............................................................................................... 42 2. Policy developments .................................................................................................. 42 2.1. Anti-trust enforcement ............................................................................................... 44 2.2. Mergers ................................................................................................................... ... 46 
2.3. State aid................................................................................................................. ..... 47 
B – Financial services ......................................................................................................... ..... 49 
1. Overview of the sector ............................................................................................... 49 2. Policy developments .................................................................................................. 50 2.1. The financial crisis ..................................................................................................... 5 0 
 
EN 4   EN 2.1.1. Impact on financial markets....................................................................................... 50 
2.1.2. Impact on the real economy ....................................................................................... 52 2.2. Single Euro Payments Area (SEPA).......................................................................... 53 
C – Electronic communications ............................................................................................... 55 
1. Overview of the Sector............................................................................................... 55 2. Policy Developments ................................................................................................. 56 2.1. Application of the Regulatory Framew ork and other policy developments .............. 56 
2.2. Developments in the area of State aid........................................................................ 59 
D – Information technology ..................................................................................................... 60 
1. Overview of the sector ............................................................................................... 60 2. Policy developments .................................................................................................. 61 2.1. Anti-trust ................................................................................................................ .... 61 
2.2. Merger control............................................................................................................ 61 
E – Media ...................................................................................................................... ........... 63 
1. Overview of the sector ............................................................................................... 63 2. Policy developments .................................................................................................. 64 2.1. Roundtable on opportunities for and barriers to on-line retailing and the European 
Single Market............................................................................................................. 64 
2.2. Rights management and on-line distribution ............................................................. 64 2.3. Digital broadcasting ................................................................................................... 65 2.4. Public service broadcasting........................................................................................ 65 2.5. State aid for films....................................................................................................... 67 
2.6. Application of merger control.................................................................................... 67 
F – Transport .................................................................................................................. .......... 68 
1. Overview of the sector ............................................................................................... 68 2. Policy developments .................................................................................................. 69 2.1. Road Transport........................................................................................................... 6 9 
2.2. Rail Transport and Combined Transport.................................................................... 71 2.3. Inland Navigation....................................................................................................... 73  
2.4. Maritime Transport .................................................................................................... 73 
 
EN 5   EN 2.5. Aviation.................................................................................................................. .... 75 
2.5.1. International aviation policy – EU-US cooperation................................................... 79 
G – Pharmaceutical industry .................................................................................................... 79 
1. Overview of the sector ............................................................................................... 79 2. Policy Developments ................................................................................................. 80 2.1. Pharmaceutical Sector Inquiry ................................................................................... 80 2.1.1. Competition between originator companies and generic companies......................... 81 2.1.2. Competition between originator companies............................................................... 82 2.1.3. Comments on the regulatory framework.................................................................... 83 2.1.4. Next steps.............................................................................................................. ..... 84 
H – Food Industry .............................................................................................................. ...... 84 
1. Overview of the sector ............................................................................................... 84 2. Policy developments .................................................................................................. 85 2.1. Anti-trust ................................................................................................................ .... 85 
2.2. Mergers ................................................................................................................... ... 86 
2.3. State aid................................................................................................................. ..... 87 
I – Postal Services ............................................................................................................ ........ 87 
1. Overview of the sector ............................................................................................... 87 
2. Policy developments .................................................................................................. 88 
III – Consumer activities ...................................................................................................... .... 90 
IV – The European Competition Network and cooperation with National Courts.................. 94 
A – General overview ........................................................................................................... ... 94 
1. Cooperation on policy issues ..................................................................................... 94 1.1. Convergence of national laws and instruments.......................................................... 95 2. Cooperation in individual cases ................................................................................. 96 2.1. Case allocation ........................................................................................................... 96 
2.2. Consistent application of the rules ............................................................................. 97 3. Application of EU Co mpetition rules by Nationa l Courts in the EU......................... 97 
3.1. Assistance in the form of information or in the form of an opinion .......................... 97 3.2. Judgments of national courts...................................................................................... 97 
 
EN 6   EN 3.3. Amicus curiae  intervention ........................................................................................ 97 
3.4. Financing the training of national judges in EU competition law ............................. 98 
V – International activities ................................................................................................... .... 98 
A – Enlargement, Western Balkans and Neighbourhood policy ............................................. 98 B – Bilateral cooperation...................................................................................................... .... 99 
1. Agreements with the USA, Canada and Japan........................................................... 99 2. Cooperation with other countries and regions ......................................................... 100 
C – Multilateral cooperation .................................................................................................. 1 01 
1. International Competition Network ......................................................................... 101 2. OECD....................................................................................................................... 1 01 
3. UNCTAD ................................................................................................................. 101 
VI – Inter-institutional cooperation........................................................................................ 102  
1. European Parliament ................................................................................................ 102 2. Council ..................................................................................................................... 103 
3. European Economic and Social Committee and Committee of the REGIONS....... 103 
VII – Outlook for 2009......................................................................................................... .. 103 
A – Anti-trust ................................................................................................................. ........ 103 
B – Mergers.................................................................................................................... ........ 104 
C – State aid .................................................................................................................. ......... 104 
D – Sector Developments....................................................................................................... 1 05 
1. Energy and environment .......................................................................................... 105 2. Financial services sector .......................................................................................... 106 2.1. Financial crisis ......................................................................................................... 1 06 
2.2. Economic crisis ........................................................................................................ 106  
2.3. Single Euro Payments Area (SEPA)........................................................................ 106 3. Electronic communications...................................................................................... 106 4. Information Technology........................................................................................... 107 5. Media....................................................................................................................... . 107 
6. Transport .................................................................................................................. 1 08 
 
EN 7   EN 7. Pharmaceutical industry........................................................................................... 109 
8. Food industry ........................................................................................................... 109 9. Postal services .......................................................................................................... 109  
E – International activities................................................................................................... ... 110 
LIST OF ABREVIATIONS................................................................................................... 111 
 
EN 8   EN I – Instruments 
A – ANTI-TRUST – ARTICLES 81, 82 AND 86 EC 
1. A PPLICABLE RULES  
1.1. White Paper on damages actions for breach of the EC anti-trust rules 
1. On 2 April, the Commission adopted the White Paper on damages actions for breach 
of the EU anti-trust rules1, to which is annexed a Comm ission Staff Working Paper, 
which explains in more detail the policy proposals. The White Paper follows on from 
a Green Paper on the same subject, published in December 2005, on the public consultation and on opinions of the European  Parliament (EP) and of the European 
Economic and Social Committee (EESC) on that Green Paper. 
2. The White Paper is part of an ongoi ng policy project of the Commission. The 
European Court of Justice (ECJ) has stat ed that, under EU law,  any individual can 
claim compensation for harm suffered wher e there is a causal relationship between 
that harm and an agreement or pr actice prohibited under Article 81 EC
2. The 
Commission has found that, in practice, victims of anti-trust infringements only 
rarely obtain compensation. The White Paper is focussed on changing this current 
ineffectiveness by making this right to co mpensation more effective in Europe. The 
White Paper puts forward concrete proposal s to overcome the obstacles which are 
currently standing in the wa y of effective compensation. 
3. The primary objective pursued is to improve  compensation of all victims. At the 
same time, more effective compensati on mechanisms will inherently produce 
beneficial deterrent effects. The proposal s in the White Paper consist of balanced 
measures which are rooted in European le gal culture and traditions and are designed 
to overcome the obstacles identified by the Commission. 
4. The individual policy proposals of the Co mmission address the following issues: 
• Collective redress  - through either (a)  group actions brought by victims acting 
together or (b) representative actions  brought, for example, by a consumer group 
or business association on behalf of all consumers or businesses who have 
suffered a harm; 
• Access to evidence  crucial for the bringing of th e claim and under the control of 
the other party; 
                                                 
1 Further information on this issue and on the policy initiative of the Commission in this field can be 
accessed here: http://ec.europa.eu/competition/antitrust/actionsdamages/index.html  
2 Joined Cases C-295/04 to C-298/04  Manfredi  [2006] ECR I-6619. See also Case C-453/99  Courage vs 
Crehan  [2001] ECR I-6297. While the ECJ only refers to infringements of Article 81 EC, it follows 
from the Court's reasoning that the same cons iderations apply for Article 82 EC as well. 
 
EN 9   EN • Final Infringement decisions by national competition authorities  are binding 
in subsequent civil actions for damages – a similar rule already exists for 
Commission decisions unde r Article 16(1) of Regul ation (EC) No 1/2003; 
• If an element of fault (intent or negligence)  has to be proven for the claim to 
succeed, the burden of proof shoul d lie with the infringer; 
• Clarification of what type of damages  compensation can be claimed for; 
• Clear rules on the passing-on defence , making it easier for indirect victims to 
sue and making it clear that, while the pa ssing-on defence is admissible, the 
burden of proof lies with the infringer; 
• Clear limitation periods , taking into account in partic ular the case of continuous 
infringements; 
• Cost rules  for actions for damages; 
• Interaction between leniency programmes  and actions for damages. 
5. The White Paper triggered a broad debate among stakeholders, and a large number of 
comments were submitted in the framework of the public consultation, which resulted in an almost unanimous approva l of the general approach to antitrust 
damages actions pursued by the Commi ssion, namely the guiding principle of 
compensation. There was a wide acknowledgement  of the existence of obstacles that 
prevent effective redress for victims of infringements of the competition rules. 
Different opinions were voiced as to the su bstantive measures s uggested in order to 
remedy the problems identified. 
6. In its White Paper, the Commission has stat ed that it in tends to draw up non-binding 
guidance for quantification of da mages in anti-trust cases in  order to facilitate this 
calculation. The Commission has since awarde d a contract for an external study on 
the quantification of damages. 
1.2. Cartels 
1.2.1. The Settlements Package 7. The Commission has introduced a new mech anism which will allow the Commission 
to settle cartel cases by m eans of a simplified procedure.  Under this procedure, the 
parties - having seen the evidence in th e Commission file - choose to acknowledge 
their involvement in the cartel, the precise  nature of their infringement and their 
liability for it. In return for this ac knowledgement, the fine is reduced by 10%. 
Settlements aim to simplify the administra tive proceedings and could result in fewer 
Commission resources being de voted to litigation before the Community courts in 
cartel cases. This will in turn free up Co mmission resources to pursue other cases. 
8. Cooperation within the Settlements Pack age is different from the voluntary 
production of evidence to initiate or adva nce the Commission's investigation, which 
is already covered by the Leniency Notice.  The Leniency Notice rewards companies 
involved in a cartel which voluntarily disclo se its existence to the Commission and 
 
EN 10   EN provide evidence to prove the infringeme nt. The Settlements Notice will reward 
concrete contributions to  procedural efficiency. 
9. Parties have neither the right  nor the duty to settle, but in cases where companies are 
convinced that the Commission could prove their involvement in a cartel to the 
required legal standard, a settlement can be reached with the Commission on the 
scope and duration of the cartel, and on th e individual liability of the companies 
involved. To this end, parties will be info rmed about the likely objections and the 
evidence supporting those objections, and will  be given the opportuni ty to state their 
views before formal objections are sent  out. If the parties c hoose to introduce a 
settlement submission acknowledging the obj ections, the Commission's statement of 
objections (SO) would reflect  the contents of the submission by the parties and 
therefore could be much shorter than a SO  issued without prio r cooperation. Since 
parties will have been heard in anticipation of the "settlement" SO, other procedural 
steps can be simplified in order that, following confirmation by the parties, the 
Commission can proceed swiftly  to adopt a final decision  after consulting Member 
States in the Advisory Committee of re presentatives of all Member States. 
10. A settlement only takes place when the Comm ission decision reflects the parties' 
settlement submissions. The Commission may only depart from the parties' 
settlement submissions by reverting to th e standard procedure.  In addition, if no 
settlement were explored or reached, the st andard procedure would apply by default. 
11. The legislative package consists of a Commission Regulation3 together with a 
Commission Notice (the settlement notice)4 explaining the new system in detail. The 
settlement package entered into force on 1 July 2008. 
1.3. Other agreements and concerted practices 
1.3.1. Vertical agreements 12. Vertical agreements are agreements for th e sale or purchase of goods or services 
between companies operating at different levels of the dist ribution chain, for 
example between a manufacturer, a wholesaler and a retailer.
 The vast majority of 
agreements entered into between firms are vertical, as this term covers agreements relating to the purchas e of inputs and dist ribution of outputs. 
13. The current EU block exemption regulation ap plicable to vertical agreements (the 
BER)
5 forms a package with the guidelines on vertical restraints (the Guidelines)6. 
This package was the first of a new generation of exemption regulations and guidelines inspired by a more economic a nd effects-based approach. The basic aim 
of this regulatory framework was to simp lify the rules appli cable to supply and 
distribution agreements and to reduce the regulatory burde n, especially for 
                                                
 
3 Commission Regulation (EC) No 622/2008 of 30 June 2008 amending Regulation (EC) No 773/2004, 
as regards the conduct of settlement procedures in cartel cases ( OJ L 171, 1.7.2008, p. 3 ). 
4 Commission Notice on the conduct of settlement procedures in view of the adoption of Decisions 
pursuant to article 7 and Article 23 of Counc il Regulation (EC) No 1/2003 in cartel cases ( OJ C 167, 
2.7.2008, p. 1 ). 
5 Commission Regulation (EC) 2790/1999  of 22 December 1999 on the a pplication of Article 81(3) of 
the Treaty to categories of vertical agreements and concerted practices ( OJ L 336, 29.12.1999, p. 21 ). 
6 Commission Notice Guidelines on Vertical Restraints ( OJ C 291, 13.10.2000, p. 1 ). 
 
EN 11   EN companies lacking market power, such as  small and medium-sized enterprises 
(SME), while ensuring a more effective control of agreements entered into by 
companies holding market power. 
14. In early 2008, the Commission began to revi ew the regulatory framework for the 
assessment of the vertical agreements unde r EU competition law, given that the BER 
is due to expire on 31 May 2010. The Comm ission is examining how the rules on 
vertical agreements have been applied so far and whether there is a need to amend 
the current rules. This wo rk is done in close coope ration with the NCA in the 
European Competition Network (ECN) in which context a working group has been 
set up to discuss the application of, and experience with, the current rules. The 
review will continue throughout 2009. 
1.3.2. The Review of the Motor Vehi cle Block Exemption Regulation 
15. In accordance with Article 11(2) of Regulation 1400/2002, the Commission adopted, 
on 31 May, an evaluation report on the operation of the motor vehicle block 
exemption Regulation7 (MVBER). The adoption of this report was the first formal 
step in a procedure that will ultimately decide  the form and content of the regime that 
is to apply to the motor vehicle sector after the period of validity of the MVBER 
ends in May 2010. It contains an in-dep th analysis of how the Regulation has 
operated, although without making, at this stage, any concrete proposals for the 
future. 
16. The MVBER sets out the conditions for the block exemption of motor vehicle 
distribution and after-sales service agr eements. It was adopted in July 2002 and 
became applicable on 1 October 2003. Its main  goal was to create a safe harbour for 
such agreements, reflecting the more ec onomic and effects-based approach of 
Regulation 2790/19998 (which applies to vertical agreements in all sectors other than 
motor vehicles), but at the same time introducing more detailed provisions and 
stricter conditions specific to the motor vehicle sector. 
17. The Evaluation Report was drawn up on the basis of an exte nsive fact-finding 
exercise which began in 2007 and involved all the various groups of stakeholders in 
the motor vehicle industry. In summary, the evidence uncovered by the Commission's fact-finding exer cise shows that, on the mark et for the sale of new 
vehicles, competition between car manufacturers has become more intense mainly owing to external factors such as manufacturing over-capacity, technological 
innovation and closer integr ation of global markets.  On the aftermarkets, 
independent repairers now have better acce ss to technical information, thanks to 
Commission enforcement actions
9. Meanwhile, the number of authorised repair 
outlets has increased, because – in li ne with general competition policy – 
manufacturers (whose networks have high market  shares as regards the repair of their 
                                                 
7 Commission Regulation (EC) No 1400/2002 of 31 July 2002 on the application of Article 81(3) of the 
Treaty to categories of vertical agreements and concerted practices  in the motor vehicle sector 
(OJ L 203, 1.8.2002, p. 30 ). 
8 See footnote 5. 
9 In September 2007, the Commission adopted four decisions that legally bind DaimlerChrysler, Toyota, 
General Motors and Fiat  to commitments to provide technical information about car repairs to all 
independent garages in the EU. The decisions were adopted under Article 9(1) of Regulation 1/2003. 
 
EN 12   EN vehicles) must allow everyone into their networks, provided that quality criteria are 
met. Suppliers of spare parts have maintained their competitive position vis-à-vis  the 
vehicle manufacturers' own spar e parts distribution channels. 
18. The report concludes that the general framework of the MVBER has had positive 
effects overall. However, many of the detail ed sector-specific provisions, such as 
those allowing dealers to run showroom s without repair shops, have proved 
unnecessary, and some may have been count er-productive. For instance, the higher 
(40%) market share threshold below wh ich quantitative sele ctive distribution 
agreements may benefit from the exemp tion may have skewed manufacturers' 
choices towards a uniform distribution mode l. In addition, over-prescriptive rules in 
areas such as multi-brand vehicle sales an d the opening of additional sales outlets 
may have encouraged the introduction of mo re onerous dealership standards, thereby 
making distribution more expensive – to  the detriment of consumers. Other 
provisions, such as those obliging manufactur ers to give independe nt repairers access 
to technical information, have been effectiv e, but in the future will be superseded by 
rules in other EU policy areas (nam ely, Council Regulation 715/2007 on motor 
vehicle emissions10). The suggestion from this report,  therefore, is that car owners 
might benefit from improvements in competition if less complex rules were to apply 
to the sector. 
19. Following the publication of the Report,  the Commission received around 115 
comments from a wide range of stake holders, including vehicle manufacturers, 
dealers and authorised repairers, the inde pendent motor trade, consumers, national 
authorities and the legal community. By far the most contributions came from 
authorised car dealers, but there were  only a limited number of replies from 
consumer associations. 
20. The main points raised by the stakeholders fa ll into two broad categories. In essence, 
the first category reflects a concern that bringing the motor vehicle sector under the 
common rules on vertical restraints could adversely affect the current level of 
protection of competition in the market. These provisions in the regulation include the protection of parallel trade, the exemption of lo cation clauses in selective 
distribution agreements (namely, in specific situations where the protection of intra-
brand competition might deliver benefits to consumers), the linking of sales and 
after-sales activities, the availability of technical information to independent 
operators, and the protection of  alternative channels for spare parts distribution. The 
second category seems to relate less to competition issues than to commercial 
concerns, although the latter are still politically sens itive nevertheless. These 
concerns relate to dealer protection and multi-branding.  
21. The form and content of the future regime will be decided in the next stage of the 
review process, which will include as a next step the publication of a Commission 
Communication based on an impact asse ssment of a range of possible options. 
                                                
 
10 Regulation (EC) No 715/2007 of the European Parliament and of the Council of 20 June 2007 on type 
approval of motor vehicles with respect to emissions from light passenger and commercial vehicles 
(Euro 5 and Euro 6) and on access to vehicle repair and maintenance information ( OJ L 171, 29.6.2007, 
p. 1). 
 
EN 13   EN 1.3.3. Review of the Insurance Block Exemption Regulation 
22. DG Competition is currently carrying out  a review of the Block Exemption 
Regulation in the insurance sector11 (hereinafter 'the Insurance BER') with a view to 
determining whether a new Insurance BER should be adopted before the current one expires on 31 March 2010. 
23. The key policy issue at stake is whether a new Insurance BER should be adopted, 
taking into consideration th e reasons for the adoption of  the current BER in 2003, the 
development of the sector since then, subm issions from market participants and the 
Commission's overall policy objectives. 
24. The Final Report of the Commission's sect or inquiry into business insurance – 
published on 25 September 2007 – did not direc tly investigate this  matter. However, 
some comments received in the context of the inquiry argued in favour of maintaining an Insurance BER beyond Marc h 2010. Clearly, therefore, there was a 
need for full consultation and a review in order to analyse all issues and arguments, 
and to determine whether the insurance sector would still require specific rules on the application of Article 81(3) EC beyond March 2010. 
25. The review exercise started in November  2007 with the consu ltation of the ECN, 
followed by the publication of a c onsultation paper in April 2008
12. The Commission 
is required to submit to the EP a nd Council, by 31 March 2009, a report on the 
functioning of the Insurance BER together  with options for amendment as may 
appear necessary in the light of experience. 
26. Of the 58 replies to the consultation, by fa r the majority (46) of respondents are in 
favour of renewal, 11 are e quivocal and only one (an Ital ian Consumer Association) 
is unequivocally against re newal. Of the 12 NCA that  responded, only three are 
unequivocally against renewal. Four are in favour of renewal, one is in favour of 
renewal with amendments and four are undecided. By far the greatest number of contributions came from insurers' and broke rs' associations (26), as well as from 
insurance companies and brokers (8). All of these undertakings were in favour of 
renewal. Other entities, such as law firm s, actuaries or indi vidual citizens, also 
replied in favour of renewal. DG Competitio n sent targeted questionnaires to all 
national consumer associations and to se veral large insurance customers. Seven 
consumer organisations/groups representing consumers replied: one was in favour of 
renewal, one was against and the five othe rs were undecided, but reported a range of 
problems in relation to the functioning of the Insurance BER. Of the seven 
associations of undertakings representing cu stomers to whom targeted questionnaires 
were sent, only the Federation of Eur opean Risk Management Associations 
(FERMA) replied and it favoured renewal. Ta rgeted questionnaires were also sent to 
Supervisory Authorities in all Member States, of which eight replied. Slovakia, Romania, Spain and Latvia were unequivoc ally in favour of re newal; Italy, Czech 
Republic and Portugal were uncertain, but l eaned in favour of renewal; Belgium was 
undecided. 
                                                
 
11 Commission Regulation (EC) No 358/2003 of 27 February 2003 on the application of Article 81(3) of 
the Treaty to certain categories of agreements, decisions and concerted practices in the insurance sector 
(OJ L 53, 28.2.2003, p. 8 ). 
12 See Press Release IP/08/596 , 17.4.2008. 
 
EN 14   EN 27. Whether the Insurance BER should be renewed or not depends on the answers to the 
following questions: 
• Do the business risks or other issues in th is sector make it "special" and different 
from other sectors, and does this lead  to an enhanced need for cooperation? 
• If so, does this enhanced need for coopera tion require a legal instrument such as 
the BER or Guidelines to protect or facili tate it (in comparison to other sectors, for 
example, where there is a high level of cooperation without such a legal 
instrument)? and 
• If so, is the current BER the most appropriate legal instrument for this purpose (or 
would partial renewal, amended renewa l or Guidelines be preferable)? 
28. If it is decided to renew the Insurance BER or any part of it, drafting and internal 
consultation will take place in the second half  of 2009 with a view to adoption at the 
beginning of 2010. Should the Commissi on decide against renewal, a 
Communication to that eff ect will be published in 2009. 
1.4. Abuse of dominant positions (Article 82 EC) 
29. On 3 December, the Commission issued Gu idance on its enforcement priorities in 
applying Article 82 EC to abusive exclus ionary conduct by dominant undertakings. 
This followed the publication by th e Commission, in December 2005, of a 
Discussion Paper on the application of  Article 82 to such conduct. 
30. The Guidance sets out an effects-based approach to Article 82. The Commission will 
pursue, as a matter of prior ity, exclusionary conduct by dom inant undertakings that is 
likely to restrict competition in such a way as to have harmful effects on consumers. The Guidance establishes the analytical fr amework that the Commission employs in 
determining whether the exclusionary conduc t of a dominant undertaking is likely to 
result in consumer harm. 
31. The Guidance consists of a general part, wh ich sets out the main principles of an 
effects-based approach to determining enfo rcement priorities in the application of 
Article 82, and then applies this general an alytical framework to the most commonly 
encountered forms of exclusionary conduct, such as exclusive d ealing, rebates, tying 
and bundling, predatory practices, refusal to supply and margin squeeze. This provides transparency and pred ictability as to the circum stances that are liable to 
elicit an intervention from the Commission. Ev en more importantly, it is meant to 
dissuade dominant undertakings from engaging in certain types of conduct in the first 
place. 
2. A
PPLICATION OF ARTICLES 81, 82 AND 86 EC 
2.1. Cartels 
32. In 2008, the Commission continued to atta ch high priority to the detection, 
investigation and sanctioning of cartels. The Commission's activities were focused on 
 
EN 15   EN significant hard-core cartels, in particular those with a European or worldwide scope. 
The Commission issued seven final decisions13 in which it fined 3414 undertakings a 
total of EUR 2 271 million (compared to 2007 when eight final decisions were 
issued, and 41 undertakings were fined a total of EUR 3 338 million). The Commission imposed the highest fine per car tel case to date of EUR 1 383 million in 
the Car Glass  case and also, in the same case, the highest fine per undertaking for a 
cartel violation, imposing a penalty of EUR 896 million on Saint Gobain. 
33. A key aspect in the detection of cartels is the Commission's leniency policy, which 
offers incentives to cartel members to re port their illegal activ ities. December 2006 
saw the introduction of a revised leniency notice (the 2006 Notice)
15. The 2006 
Notice is the Commission's third leniency notice, following ear lier versions in 1996 
and 2002, and applications under the re vised notice were made in 2008. The 
Commission received 50 applications for immunity16 and 30 applications for a 
reduction of fines under the 2006 Notice from when it entered into force up to the end of 2008. 
34. Although the leniency policy is an effective t ool in detecting cartels, recent decisions 
such as NBR , International Removal Services  and Car Glass  show that the 
Commission is able to uncove r cartel behaviour on its own initiative, outside of its 
leniency policy. The Commission continues to place considerable weight on such ex 
officio  investigations, which may result from market monitoring, sector enquiries and 
complaints, and also via national competition authorities in the ECN. 
35. Once it has detected the existence of a cartel, the Commission has proceeded to 
exercise its powers of investigation, in part icular its power to conduct inspections of 
business premises. On-site inspections have taken place in a wide variety of sectors, 
which include ship classification
17, cement18, the international airline passenger 
sector19, consumer detergents20, traders and distributo rs of cereals and other 
agricultural products21 and smart card chips22. Moreover, the Commission exercised 
for the second time its power to conduct a search of a private home. 
36. The Commission has also sought to impose appropriate sanctions to punish those 
participating in cartels and to put in place suitable deterrence against entering into 
                                                 
13 Case COMP/38.628 NBR (not yet published in the OJ) , Case COMP/38.543  International removal 
services (not yet published in the OJ) , Case COMP/38.695  Sodium chlorate (not yet published in the 
OJ), Case COMP/39.180 Aluminium fluoride (not yet published in the OJ), Case COMP/39.181  Candle 
Waxes (not yet published in the OJ) , Case COMP/39.188  Bananas (not yet published in the OJ) and 
Case COMP/39.125  Car Glass (not yet published in the OJ). 
14 This figure does not include th e companies that received immunity from fines for cooperation under the 
Leniency Notice. 
15 Commission Notice on Immunity from fines and reduction of fines in cartel cases ( OJ C 298, 
8.12.2006, p. 17 ). 
16 Where several applications for imm unity have been received for the sa me alleged infringement, the first 
application is counted as an immunity application and the subsequent ones as applications for a 
reduction of fines unless the first application is rejected. 
17 See MEMO/08/65 , 30.1.2008. 
18 See MEMO/08/676 , 5.11.2008. 
19 See MEMO/08/158 , 11.3.2008. 
20 See MEMO/08/424 , 20.6.2008. 
21 See MEMO/08/496 , 10.7.2008. 
22 See MEMO/09/1 , 7.1.2009. 
 
EN 16   EN cartel behaviour. The new Guidelines on fines23, introduced in 2006, were 
exclusively applied in the above decisions . Three points in particular are evident 
from Commission's decisions to impose fine s in 2008. First, companies that obstruct 
the Commission's investigations risk severe  penalties of up to one percent of annual 
turnover. The Commission imposed a fine of EUR 38 million on E.ON for the breach of a Commission seal in E.ON’s premises  during an inspection. Second, repeat 
offenders continued to see a significant increase in the amount of fine imposed. 
Arkema's fine was increased by 90% in Sodium Chlorate  and Saint Gobain's by 60% 
in Car Glass . Moreover, ENI and Bayer, which ha d seen their fines increased as 
repeat offenders in the Chloroprene Rubber  case in 2007, also had their fines 
increased for that reason in the Candle Wax  case (ENI) and the NBR  case (Bayer). 
Third, the Commission has shown that, under exceptional circumstances, it may use its discretion to re duce a fine. In the International Removal Services  case, although 
the Commission saw no grounds for reducing the amounts of the fines for four undertakings, who claimed their inability to pay
24, the Commission exceptionally 
took into account the in ability to pay and the particular  circumstances concerning the 
individual situation of a fifth undertaki ng, Interdean, and reduced its fine by 70%. 
2.2. Other agreements and concerted practices 
37. In the context of rights manage ment, the Commission adopted, on 16 July25, a 
decision based on Article 81 EC prohibi ting European Economic Area (EEA) 
collecting societies which are members of the International Confederation of 
Societies of Authors and Composers (CISAC)  from maintaining membership 
restrictions and exclusivity clauses under th eir reciprocal bilateral agreement. The 
decision also prohibits a concerted practi ce which extended the traditional national 
monopolies of collecting societ ies into the cable, satellite  and internet sectors and 
resulted in strict segmentation of  the market along national borders. 
2.3. Abuse of dominant positions (Article 82 EC) 
38. In November, a commitment decision wa s adopted rendering legally binding 
commitments proposed by E.ON to address co ncerns raised in the course of an 
investigation pursuant to Article 82 EC. This  investigation was started as a follow up 
to the energy sector inquiry carried out in 2006. In the course of this investigation, 
the Commission came to the preliminary conclusion that E.ON might have infringed Article 82 by withdrawing available genera tion capacity from the German wholesale 
electricity markets and have deterred ne w investors in electricity generation. 
Furthermore, the Commission had concer ns that E.ON may have favoured its 
production affiliate in terms of providi ng balancing services, while passing the 
resulting costs on to final consumers, and thus prevented other power producers from 
exporting balancing energy into its transmi ssion zone. E.ON offered to divest around 
5000 MW of its generation capacity to m eet concerns regarding the generation 
market and to divest its extra-high voltage  network to remove the incentive of the 
operator of that network to favour a particular supplier. 
                                                
 
23 Guidelines on the method of setting fines imposed purs uant to Article 23(2)(a) of Regulation No 1/2003 
(OJ C 210, 1.9.2006, p. 2 ). 
24 See paragraph 35 of the above mentioned Guidelines on fines. 
25 Case COMP/38.698  CISAC (not yet published in the OJ). 
 
EN 17   EN 39. Microsoft was the first company in the hi story of competition policy in the EU to 
have penalty payments imposed on it for non- compliance with a previous decision of 
the Commission. The Commission pur sued its proceedings against Microsoft  to 
ensure compliance with the 2004 Decision and with the principles laid down in the 
judgment of the Court of First Instance (C FI) of 17 September 2007, with regard to 
the pricing and licensing terms for the intero perability information that Microsoft has 
to disclose as part of the remedy imposed by the 2004 Decision. In 2006, the 
Commission had imposed on Microsoft a definitive penalty payment of EUR 
280.5 million for not providing complete and accu rate interoperability information. 
After a SO sent in March 2007, the Commi ssion adopted on 27 February a decision 
concluding that Microsoft had not complied with its obligation to offer the complete 
and accurate interoperability informa tion on reasonable and non-discriminatory 
terms by 21 October 2007. A definitive penalty payment of EUR 899 million was imposed on Microsoft
26. 
40. In the Intel case , a supplementary statement of objections (SSO) was issued on 
17 June reinforcing the Commission's prelim inary view outlined in a SO of 26 July 
2007 that Intel had infringed EC Treaty ru les on abuse of a dominant position with 
the aim of excluding its main rival, AM D, from the x86 Central Processing Units 
(CPU) market. 
2.4. State measures: Public undertakings a nd/or undertakings with exclusive or 
special rights 
41. The Commission was also active in the area of Article 86 EC in 2008. 
42. In March, the Commission a dopted a decision finding th at the Greek State had 
infringed Article 86 in conj unction with Article 82 EC by maintaining in force legal 
provisions which guaranteed the state-owne d incumbent Public Power Corporation 
(PPC) access to almost all exploitable lignite mines in Greece27. Lignite-fired power 
generation being the cheapest form of elect ricity production in Greece, this situation 
created an inequality of opportunity between market ope rators and allowed PPC to 
maintain its dominant position on the wholesale electricity market. Greece was requested to submit proposals on how to ensure that competitors obtain sufficient 
access to lignite which - should the Commission consider the proposals to be satisfactory – be made legally bindi ng on the Greek State by way of a second 
decision. 
43. On 7 October, the Commission adopted a decision finding that, by extending the 
monopoly of the postal incumbent, Slovenská Po šta, to services for the delivery stage 
of hybrid mail, without justif ication, the Republic of Sl ovakia had infringed Article 
86 EC (in conjunction with Article 82 EC)28. The decision finds that, in the Republic 
of Slovakia, the delivery of hybrid mail29 was open to competition until recent 
amendments to the postal legislation, and that several private operators had 
                                                 
26 Case COMP/34.792  Microsoft  (not yet published in the OJ). 
27 See Press Release IP/08/386 , 5.3.2008. 
28 Case COMP/39.562 Slovakian postal Law  (OJ C 322, 17.12.2008, p. 10 ). See also Press Release 
IP/08/1467 , 7.10.2008. 
29 Hybrid mail is a specific form of postal services wh ere the content is electronically transferred from the 
sender to the postal service oper ator who then prints, envelopes, sorts and delivers the postal items. 
 
EN 18   EN accordingly entered that market. The deci sion also finds that the Republic of 
Slovakia failed to provide evidence that  this re-monopolisation of the delivery of 
hybrid mail was necessary for the provision of the postal universal service. The 
Republic of Slovakia had one month to in form the Commission of the measures 
undertaken to put an end to the infringeme nt. In the absence of any such measure 
being submitted to the Commission, the latte r initiated an infringement procedure 
against the Republic of Slovakia, fo r non compliance with  the decision of 
7 October30. 
3. S ELECTED COURT CASES  
3.1. The CFI upholds the Commissio n's Deutsche Telekom decision31 
44. On 10 April, in the Deutsche Telekom v Commission  case, the CFI upheld the 
Commission decision of 21 May 2003 and c onfirmed that Deutsche Telekom had 
been abusing its dominant position on the markets for direct access to its fixed telephone network
32. 
45. The Commission had imposed a fine of EUR 12.6 million on Deutsche Telekom for 
charging its competitors for (wholesale) acces s to its network higher prices than the 
retail prices it charged its own retail customer s. This pricing in the form of a margin 
squeeze forced competitors to charge their customers prices that were higher than 
those charged by Deutsche Telekom to its own end-users, or incur losses. 
46. In its judgment the CFI rejected all the arguments put forward by Deutsche Telekom. 
The Court confirmed that the Commissi on had correctly found that Deutsche 
Telekom can be held responsible under co mpetition law for the margin squeeze 
although its fees met the general price indications imposed by the competent 
National Regulatory Authority (NRA). Th e CFI found that during the period when 
the anti-competitive conduct took place Deut sche Telekom had sufficient discretion 
to end or to reduce the margin squeeze, but  did not use that discretion in a manner 
that would avoid violating competition law. 
47. Regarding the methods used by the Commissi on to assess the exis tence of a margin 
squeeze, the CFI held that the abusive nature of the conduct in question was 
connected to the spread between the prices for wholesale access and the related retail 
prices. For this reason, the Commission wa s not required to demonstrate that the 
retail prices of Deutsche Tele kom were, as such, abusive. 
48. The CFI also ruled that the decisions of na tional authorities in respect of Community 
telecommunications law do not in any way affect the Commission’s power to find 
infringements of competition law. 
                                                 
30 See Press Release IP/08/1997 , 17.12.2008. 
31 Case T-271/03  Deutsche Telekom AG v Commission, not yet reported in the ECR . 
32 Deutsche Telekom decided to appeal against the CFI judgment and the case, C-280/08 P  Deutsche 
Telekom v Commission,  is pending before the ECJ. 
 
EN 19   EN 3.2. AC Treuhand v. Commission33 
49. In its appeal, the applicant, AC Treuhand , essentially disputed the importance that the 
Commission attributed to its activity in the organic peroxides cartel34. AC Treuhand 
was not a producer of the cartel products but a consultancy firm which provided the 
cartel members with clerical-administrative services subject to their instructions. 
50. In order to hold this  consultancy firm liable under Ar ticle 81(1) EC, the CFI stated 
that an agreement incompatible with Ar ticle 81 EC is merely another way of 
indicating coordinated and/or collusive c onduct which is restrictive of competition 
and in which at least two dis tinct undertakings participate, after expressing their joint 
intention to conduct themselves  on the market in a particul ar way. In that regard, any 
restriction of competition within the common market which comes as a result of collusive conduct may be qualified as an agreement restrictiv e of competition under 
Article 81(1) EC. For this provision to apply, it is not relevant whether the 
undertaking concerned is activ e on the particular market  where the restriction of 
competition takes place. The CFI also st ated that, under Article 81(1) EC, the 
undertaking may participate in the implementation of a restriction of competition even if it does not restrict its own free dom of action on the market on which it is 
primarily active. 
3.3. Lelos & others v. GlaxoSmithKline
35 
51. The background to this judgment is an Article 234 EC procedure (preliminary 
reference) which relates to the applicatio n of Article 82 EC in the pharmaceutical 
sector. Specifically, the ECJ had to addre ss the question of whether the refusal by a 
dominant pharmaceuticals company to supply certain medicinal products to 
wholesalers engaged in parallel trade may constitute an abuse of that company's dominant position. In that context, the na tional court making the referral asked the 
ECJ about the relevance of a se ries of factors, such as the degree of regulation to 
which the pharmaceuticals sector is subject in  Member States, the impact of parallel 
trade on the revenues of the pharmaceuticals companies, and the question of whether 
parallel trade is capable of generating financial benefits for the ultimate consumers of 
the medicinal products. 
52. The ECJ held that Article 82 EC must be  interpreted to mean that a dominant 
pharmaceuticals company which, in order to put an end to parallel exports carried out 
by certain wholesalers from one Member St ate to other Member States, refuses to 
meet ordinary  orders from those wholesalers, is  abusing its dominant position. In 
other words, the ECJ found that a re fusal to meet orders which are out of the 
ordinary  will not be considered an abuse of  dominance. The ECJ left it to the 
national courts to determine whether the orde rs in dispute are out of all proportion to 
those previously sold by the same wholesaler s to met the needs of the market in that 
Member State in the light of both (i) the size of those orders in relation to the 
requirements of the market in the (exportin g) Member State con cerned, and (ii) the 
                                                
 
33 Case T-99/04  AC - Treuhand AG v Commission of the European Communities , not yet reported in the 
ECR. 
34 Case COMP/37.857  Organic peroxides  (OJ L 110, 30.4.2005, p. 44). 
35 Joined Cases C-468/06 to C-478/06  Sot. Lelos kai Sia EE & Others v GlaxoSmithKline AEVE 
Farmakeftikon Proionton, formerly Glaxowellcome AEVE , not yet reported in the ECR. 
 
EN 20   EN previous business relations between the dominant pharmaceuticals company and the 
wholesalers concerned. 
53. It is noteworthy that the ECJ also stre ssed the relevance of the single market 
imperative in European competition law. To this end, the ECJ reiterated its previous 
case-law in relation to Article 81 EC, wher eby any agreement which tends to restore 
national divisions in trade between Member  States – i.e. which may frustrate the 
objective of the EC Treaty to achieve the integration of national markets through the 
establishment of a single market – is consider ed to have as its object a restriction of 
competition within the meaning of Article 81 EC. Hence, the ECJ made it clear that 
vertical agreements which aim at preventing or restricting parall el exports are still 
considered anti-competitive by object  – i.e. it is not necessary to show that the 
agreement has anti-competitive effects in or der to find an infringement of Article 
81(1) EC. 
3.4. Competition Authority v. Beef Industry Development Society36 
54. In this preliminary ruling unde r Article 234 EC, the ECJ had to rule on the scheme of 
the Beef Industry Development Society  in Ireland under which some of the beef 
processors undertake to l eave the processing industry in order to reduce 
overcapacity. This scheme came out of  a market study commissioned by the Irish 
Government and industry representatives, which found that there was considerable 
overcapacity in the proce ssing industry, which would lead to a decline in 
profitability. 
55. The ECJ found that a reduction of capacity un der the circumstances of this case has 
as its object a restriction of competition and, consequently, an assessment of its 
actual effects was not necessary in order to deem it incompatible with Article 81(1) EC. In its ruling, the ECJ did not expressly exclude the possi bility that a reduction of 
overcapacity could result in economies of scale among processors that stay in the 
industry. However, it was for the defendant  to prove under Article 81(3) EC that 
these positive effects offset the negative effects associated with reductions of 
capacity. 
3.5. The ECJ clarifies the obligations of co llecting societies as regards royalties 
setting under Article 82 EC 
56. On 11 December, the ECJ issued a prelimin ary ruling in a case brought by two TV 
channels, Kanal 5 and TV 4 AB , against STIM , the Swedish collecting society, for 
abuse of a dominant position
37. The ruling is important in two respects. The Court 
first held that a copyright management organisation with a dominant position does 
not abuse that position when it bases its music royalties charges to commercial TV channels partly on the broadcasters' reve nues, under the condition that the sum is 
proportionate to the amount of music used and provided that no other viable method 
of supervision enables the use of those wo rks and the audience to be identified more 
precisely. Secondly, the Court also held that  a copyright management organisation is 
                                                
 
36 Case C-209/07  Competition Authority v Beef Industry Development Society Ltd. and Barry Brother 
(Carrigmore) Meats Ltd. , not yet reported in the ECR. 
37 Case C-52/07  Kanal 5 Ltd TV 4 AB v Föreningen Svenska Tonsättare s Internationella Musikbyra 
(STIM) upa , not yet reported in the ECR.  
 
EN 21   EN likely to exploit its dominant position in an abusive manner if it applies with respect 
to private and public broad casters dissimilar conditions  for the calculation of 
royalties to equivalent services, unless su ch a practice can be objectively justified. 
3.6. The ECJ rules against the Italian scheme of frequency allocation for terrestrial 
television broadcasting 
57. On 31 January, the ECJ delivered its judgmen t in a reference for a preliminary ruling 
in the case Centro Europa 738. The judgment arose from a referral by a national 
Court (the " Consiglio di Stato ") originating from the fact that Centro Europa 7, 
though holding a legitimate title  to broadcast in Italy since 1999, was never granted 
the necessary frequencies to start operating, while other TV  operators in Italy were 
allowed to broadcast on the basis of tempor ary titles. The ECJ ruled that a national 
system of frequency allocation " which makes it impossible for an operator holding 
rights to broadcast in the absence of br oadcasting radio frequencies granted on the 
basis of objective, transparent, non -discriminatory and pr oportionate criteria " is 
incompatible with Article 49 EC and w ith Directives 2002/21/ EC (the Framework 
Directive39), 2002/20/EC (the Auth orisation Directive40) and 2002/77/EC (the 
Competition Directive41). 
B – MERGER CONTROL  
1. A PPLICABLE RULES  
1.1. The Remedies Notice 
58. Remedies are modifications to a merger pr oposed by the merging pa rties to eliminate 
competition concerns identified by the Commission. In order to provide improved guidance on questions related to remedies , the Commission adopted, on 22 October, 
a new notice on Remedies
42 (the Remedies Notice) while also amending the 
Implementing Regulation43 (together known as the remedies reform or, simply, 
reform). The Remedies Notice replaces and updates the previous remedies notice from 2001. The remedies reform is mainly a codification of recent past practice of 
the Community Courts
44 and of the Commission, but it also provides a number of 
                                                 
38 Case C-380/05  Centro Europa 7  [2008] ERC I-349 . 
39 Directive 2002/21/EC  of the European Parliament and of the Council of 7 March 2002 on a common 
regulatory framework for electroni c communications networks and services (Framework Directive) 
(OJ L 108, 24.4.2002, p. 33 ). 
40 Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the 
authorisation of electronic communications networks and services (Authorisation Directive) ( OJ L 108, 
24.4.2002, p. 21 ). 
41 Commission Directive 2002/77/EC of 16 September 2002 on competition in the markets for electronic 
communications networks and services ( OJ L 249, 17.9.2002, p. 21 ). 
42 Commission Notice on remedies accep table under the Council Regulatio n (EC) No 139/2004 and under 
Commission Regulation (EC) No 802/2004 ( OJ C 267, 22.10.2008, p. 1 ). 
43 Commission Regulation (EC) No 1033/2008 of 20 October 2008 amending Regulation (EC) 
No 802/2004 implementing Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings  (OJ L 279, 22.10.2008, p. 3
). 
44 See, in particular, Cases C-12/03 P  Commission v Tetra Laval  [2005] ECR I-987, C-202/06 P  
Cementbouw Handel & Industrie v Commission  [2007] ECR I-12129, T-119/02  Royal Philips 
 
EN 22   EN clarifications, taking into account the c onclusions drawn from the Remedies Study45 
and the replies to the public consultation on a draft Remedies Notice. 
59. First, the reform imposes more stringent in formation requirements on the parties. It is 
essential that the Commission should be able  to conclude with certainty that the 
remedies will be viable and effective. The Commission must therefore have all necessary information in or der to assess remedy proposal s. For this purpose, the 
reform introduces a new "Form RM". This is  a form that enables the notifying parties 
to systematise the information to be pr ovided and also allows the Commission to 
assess the precise scope of th e business to be divested a nd its links to the parties. 
60. Secondly, the reform clarifies and tighten s up the requirements for the sufficient 
scope of divestitures and for the suitability of purchasers. In part icular, it explains the 
application of "up-front buyer" provisions and "fix-it-first"  solutions that can address 
possible uncertainties in fi nding a suitable purchaser. 
61. Thirdly, the reform provide s that carve-outs may be accepted in certain 
circumstances, but that the parties are obliged to finalise such carve-outs prior to the sale to a purchaser, in order to minimise the risk of deterioration of the business to be 
divested while it is in the hands of the pa rties pending divestiture. In this respect, as 
well as generally, the reform also provide s for strengthened powers for monitoring 
trustees. 
62. Finally, as to non-divestiture remedies, the Remedies Notice - consistent with past 
practice - underlines that such remedi es are only acceptable where they are 
equivalent in their effects to a divestitur e. Access commitments are only acceptable if 
there is a sufficient likelihood that they will actually be used by competitors in 
practice. The Remedies Notice further stre sses that difficulties of monitoring and 
risks concerning effectiveness may lead to  non-divestiture remedies being rejected. 
2. A
PPLICATION OF THE MERGER CONTROL RULES  
63. The level of merger notifications continued at record levels in 2008, with a total of 
347 transactions being notifie d to the Commission. Although this is lowe r than the 
record level reached the previous year, it is still the third highest level on record. 
64. In total, the Commission adopted 340 final decisions during the year. Of these final 
decisions, 307 transactions were cleared wi thout conditions during Phase I. A total of 
118 decisions were cleared without condi tions under the normal procedure and a 
further 189 were cleared using the simplified procedure. There were also 19 transactions cleared in Phase I, but subject to conditions. 
65. The Commission initiated ten Phase II proceedings during the year. There was a 
notable increase in the numb er of Article 8 decisions adopted (14, or 4.0% of all 
                                                                                                                                                        
 
Electronics v Commission  [2003] ECR II-1433, T-158/00  ARD v Commission  [2003] ECR II-3825, T-
210/01  General Electric v Commission  [2005] ECR II 5575, T-87/05  EDP v Commission  [2005] ECR 
II-3745 and T-177/04  Easy Jet v Commission  [2006] ECR II-1931. 
45 Merger Remedies Study , DG Competition, European Commission, October 2005, Office for Official 
Publications of the European Communities, ISBN 92-79-00420-4. 
 
EN 23   EN notifications as opposed to 2.5 % the previous year) and in the number of Phase I 
(10, representing 2.9% in 2008 as opposed to 1.2% in 2007) and II withdrawals (3, 
amounting to 0.9% in 2008 against 0.7% in 2007).. No prohibition decisions were 
taken during the year. In ge neral, the proportion of notifie d concentrations resulting 
in either a prohibition or withdrawal in 2008 was within the usual range, as the chart 
below indicates. 
Chart 1 –Prohibitions and Phase II withdrawals, 1998-2008 
 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total
Notifications 276 330 335 277 211 247 313 356 402 347 3094 
Prohibitions 1 2 5 0 0 1 0 0 1 0 10 
Phase II 
withdrawals 5 5 4 1 0 2 3 2 2 3 27 
Regulatory 
Risk 2.2% 2.1% 2.7% 0.4% 0.0% 1.2% 1.0% 0.6% 0.7% 0.9% 1.2%
3. S ELECTED COURT CASES  
3.1. Sony BMG/Impala 
66. On 10 July, the ECJ set aside the CFI ruli ng concerning the Comm ission's decision to 
clear a joint venture between the two recorded music divisions of Sony and 
Bertelsmann46. The CFI had annulled the Comm ission decision on a number of 
procedural and substantive grounds. The case has now been referred back to the CFI. 
The ruling provides a number of clarificati ons as regards the substantive assessment 
of collective dominance, and the Commi ssion's merger review process more 
generally. First, it makes clear that there is  no higher standard of proof in relation to 
decisions prohibiting concentrations than in relation to decisions approving them. 
Thus, the standard of proof for prohibiting me rgers must be the same as that applied 
when clearing them. Second, the ECJ clarif ies the role of the SO and acknowledges 
that the Commission is not obliged to main tain the preliminary factual or legal 
assessments set forth in the SO. Third, th e ECJ considers that there is no ground to 
apply particularly demanding requirements as regards the probative value of the 
evidence and arguments put forward by the notifying parties in reply to the SO 
compared to those of othe r interested parties. Fina lly, the ruling provides some 
clarification with regard to the standard of reasoning in Article 8(2) ECMR decisions 
and points out that the Commission is not oblig ed to state reasons as to the appraisal 
of a number of aspects of the concentra tion which appear to it to be manifestly 
irrelevant or insignificant or of sec ondary importance to the appraisal of the 
concentration. 
                                                 
46 Case C-413/06 P  Bertelsmann and Sony Corporation of America v Impala , not yet reported in the ECR. 
 
EN 24   EN 3.2. MyTravel 
67. On 9 September, the CFI dismissed, in the MyTravel  judgment47, the claim for 
damages that followed the annulment48 of the Commission's 1999 decision 
prohibiting the concentration between Airtours  (renamed MyTravel in the meantime) 
and First Choice49. MyTravel had applied for dama ges for the loss it allegedly 
suffered by reason of the unlawfulness of the proceedings for determining whether 
the concentration referred to the CFI was compatible with the common market. In particular, MyTravel had requested the CF I to order the Commi ssion to pay it an 
amount in respect of the period between th e adoption of the prohibition decision and 
the date on which it could, in prin ciple, have acquired First Choice
50. 
68. According to settled case-law, in order fo r the Commission to incur non-contractual 
liability under the second paragraph of Article 288 EC for unlawful conduct of its 
institutions a number of conditions must be satisfied: (i) the institution’s conduct 
must be unlawful, (ii) actual damage must have been suffered and (iii) there must be 
a causal link between the c onduct and the damage pleaded51. In its judgment of 
9 September, the CFI confirmed that, as regards the first of these conditions, the 
mere annulment of a decision prohibiting a merg er is not, in itself, sufficient to make 
the Commission liable for damages, in the absence of a "manifest and grave" 
infringement of EC law52. The CFI based itself on the landmark judgment 
Bergaderm53 and concluded that a Community institution may only be liable where it 
commits a sufficiently serious breach of a rule of law intended to confer rights on 
                                                 
47 Case T-212/03  My Travel v Commission , not yet reported in the ECR. In a related case, the CFI rejected 
almost in its entirety the applican t's request to be granted access to a number of internal documents of 
the Commission (See Case T-403/05  My Travel v Commission , not yet reported in the ECR). 
48 Case T-342/99  Airtours v Commission  [2002] ECR II 2585. The CFI declared the plea related to the 
lawfulness of the Commission’s assessment of the eff ects of the Airtours/First Choice concentration on 
competition in the common market to be well founded, without examining the plea which concerned the 
lawfulness of the Commission’s assessment of the commitments submitted during the administrative procedure. 
49 Case COMP/M.1524  Airtours/First Choice (OJ L 093, 13.4.2000. p. 1). The Commission had 
considered that the acquisition by Airtours of Firs t Choice would create a collective dominant position 
on the market for UK short-haul holiday packages. 
50 MyTravel had originally estimated the damage at (at least) GBP 518 million. This amount included loss 
of profits of First Choice, loss of synergy saving s and abortive bid costs, less successful bid execution 
costs. 
51 Case 26/81  Oleifici Mediterranei v EEC  [1982] ECR 03057. Case T-383/00  Beamglow v Parliament 
and Others  [2005] ECR II-5459. 
52 It shall be recalled that the non-contractual liability of the Community in the exercise of merger control 
has also been the object of a recent judgment of the CFI (Case T-351/03  Schneider Electric v 
Commission , not yet reported in the ECR). The illegality iden tified in that case did not concern errors in 
the substantive assessment of the Commission but a procedural violation affecting the rights of defence 
of the applicant (see Case T-310/01  Schneider Electric v Commission  [2002] ECR II-4071). In its 
judgment in Case T-351/03, the CFI ordered the Community to make good, first, the expenses incurred by the applicant in respect of its participation in the resumed merger control procedure which followed 
the judgment annulling the decision prohibiting its proposed concentration and, second, two thirds of 
the loss sustained as a result of the reduction in the tr ansfer price of the target which the applicant had to 
concede to the transferee in exchange for the postpone ment of the effective date of sale. This judgment 
is currently under appeal (Case C-440/07 P
 Commission v Schneider Electric ): on 3 February 2009 
Advocate General Ruiz-Jarabo adopted his Opinion proposing to set aside in part the CFI judgment and 
limit the compensation granted to Schneider Electric. 
53 Case C-352/98 P  Bergaderm and Goupil v Commission  [2000] ECR I-5291. 
 
EN 25   EN individuals. The decisive criterion is, in that regard, whether the institution 
manifestly and gravely disregar ded the limits on its discretion. 
69. Thus, according to the CFI, equating the annulment of a merger decision with a 
sufficiently serious breach of EC law without further analysis would risk compromising the Commission's capacity to  fully function as a regulator of 
competition, as a result of the inhibiting eff ect that the risk of having to bear the 
losses alleged by the undertakings con cerned might have on the control of 
concentrations. This effect would be contra ry to the general Community interest. The 
CFI noted, however, that the right to compensation for damage resulting from the 
conduct of the Commission comes into play where such conduct takes the form of 
action that is manifestly contrary to the ru le of law and seriously detrimental to the 
interests of persons outside the institution and cannot be ju stified or accounted for by 
the particular constraints to which the staff of the latter, operating normally, are subject. 
70. In its MyTravel  judgment, the CFI concluded that, in  the case at issu e, there was not 
such a sufficiently serious breach of a rule  of law, either at  the stage of the 
Commission’s assessment of the effects of th e Airtours/First Choi ce concentration on 
competition in the common market or at the stage of its analysis of the commitments 
submitted by the parties. 
71. In particular, the CFI, alt hough recognizing that manifest and grave defects affecting 
the economic analysis underlying a prohibitio n decision of a con centration could in 
principle give rise to compensation, stre ssed the fact that the application of 
competition law involves complex and difficult in tellectual exercises, in particular in 
the field of merger control, in view of the time constraints to which the Commission 
is subject and the prospectiv e nature of its analysis. In  the case at issue, the CFI 
considered that the economic situation in  question was especially complex, inasmuch 
as the Commission was required to asse ss the possible creation of a collective 
dominant position of an oligopolistic natu re on a market for a product combining 
different services and on which competiti on was practised more in relation to 
capacity than to prices. The CFI also t ook account of the discretion enjoyed by the 
Commission in maintaining control over Community competition policy. On this 
basis, the CFI concluded that the errors of assessment established by the Court in its 
judgment annulling the Airtours' prohibition decision, taken either individually or 
cumulatively, was not sufficient to give rise  to the non-contractua l liability of the 
Community in the case at issue. 
72. Lastly, it should be noted that the MyTr avel judgment also gives some guidance 
regarding the possibil ity for the Commission to reject remedies submitted after the 
relevant deadline. The CFI reiterate d, in line with the EDP case law
54, that the 
Commission has a duty of diligence in that it has to examine whether or not those 
commitments clearly, and wit hout the need for further in vestigation, resolve the 
competition concerns previously identified, ex cept where there is not, in any event, 
sufficient time to consult the Member States about those proposed remedies. 
                                                 
54 Case T-87/05  EDP v Commission  [2005] ECR II-3745. 
 
EN 26   EN 3.3. Application of Article 21 of the EC Merger Regulation (ECMR) 
73. In 2008, both the ECJ and the CFI reminded Member States of their obligations 
under Article 21 of the EC Merger Regula tion (ECMR) and of the powers of the 
Commission to ensure the effectiv e application of this provision. 
74. It is recalled that, pursuant to Articl e 21 ECMR, the Commission has exclusive 
competence to assess the competitive impact  of concentrations with a Community 
dimension, and Member States cannot apply their national competition law to such operations. However, Member States may take appropriate measures to protect 
legitimate interests other than those taken into consideration by the ECMR
55 and 
compatible with the general principles and other provisions of Community law. 
Public security, plurality of the media and prudential rules are e xpressly regarded as 
legitimate interests in that connection. Be fore these measures may be taken, any 
other public interest must be communicated  to the Commission by the Member State 
concerned and shall be recognised by the Commission after an assessment of its 
compatibility with Community law. 
75. On 25 April 2006, the Commission author ized the concentration by which E.ON  
would acquire control of Endesa  by way of public bid56. On 27 July 2006, the 
Spanish authorities (the Comisión Nacional de la Energía , the Energy Regulator) 
made the authorization of the said concentration subj ect to a number of conditions57, 
subsequently modified by decision of the Ministro de Industri a, Comercio y Turismo  
(Minister of Industry, Tourism and Trad e). By decisions of 26 September and 
20 December 2006, the Commission found that Spain had violated Article 21 ECMR 
by imposing the said conditions without pr evious communication to the Commission 
and without its prior authoriz ation, and ordered that these conditions  be withdrawn. 
Owing to the failure of the Spanish author ities to comply with the decisions in 
question, the Commission started infringeme nt proceedings under Article 226 EC. In 
April 2007, the Comisión Nacional del Mercado de Valores  (the Spanish Stock 
Exchange authority) officially declared th at E.ON's public bid had failed to attain a 
majority of Endesa's share capital.  The operation was therefore abandoned. 
76. In its judgment in Commission v Spain58, the ECJ found that Spain had violated EC 
law by failing to comply with the above-mentioned Article 21 decisions. The ECJ confirmed that, before adopting the co ntested measures, Spain should have 
communicated to the Commission the legitimat e interests that those measures were 
intended to protect (namely, the guarantee of the supply of energy). The ECJ also 
stated that, when a Member State disa grees with an Article 21 decision by the 
Commission, it must challenge the legality of that decision before the Community 
Courts and cannot simply fail to comply with it. The ECJ declared finally that, 
contrary to what the Spanish authorit ies had argued, the mere fact that the 
                                                
 
55 Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between 
undertakings  (the EC Merger Regulation) ( OJ L 24, 29.1.2004, p. 1 ). 
56 Case COMP/M.4110  E.ON/Endesa (OJ C 114, 16.5.2006, p. 4). 
57 The Comisión Nacional de la Energía  acted in implementation of its newly-acquired powers granted by 
Royal Legislative Decree 4/2006, of 24 February 2006. The ECJ has later found that, by attributing these powers to the Energy Regulator, Spain had infringed Articles 43 and 56 EC (see Case C-207/07
 
Spain v Commission , not yet reported in the ECR). 
58 Case C-196/07  Commission/Spain , not yet reported in the ECR. 
 
EN 27   EN concentration had been aba ndoned in the meantime did not  render the infringement 
proceedings devoid of purpose and did not make it impossible to implement the 
Commission's decisions. 
77. The Endesa undertaking was the subject of a subsequent pub lic bid, on this occasion 
a joint offer by Acciona and Enel , notified to the Commission on 31 May 200759. 
This concentration was approved on 5 July 2007. The Comisión Nacional de la 
Energía  had authorised the operation on 4 July 2007, subject to a number of 
conditions, which were later modified by the competent Minist er. By decision of 
5 December 2007, the Commission found that Spain had violated Article 21 ECMR, as well as the Treaty provisions on free movement of capital and goods and freedom 
of establishment, and demanded that th e said conditions be withdrawn. Spain 
challenged the legality of th is decision before the CFI
60 and filed an application for 
interim measures requesting the suspensi on of the implementation of the said 
decision. By order of its President in Spain v Commission , the CFI rejected this 
application of interim measures61. 
C – STATE AID CONTROL  
1. A PPLICABLE RULES  
78. At the beginning of 2008 the Commission's focus in the State aid field was to 
continue with the implementation of the State Aid Action Plan (SAAP)62. However, 
the sudden onset of the financial and econom ic crisis shifted that focus, and the 
Commission rapidly issued th ree Communications on the role of St ate aid policy in 
the context of the crises and the recovery process. 
79. In the context of the financial crises , the Commission first gave guidance on  the 
application of State aid rules to measures taken in relation to financial institutions63. 
By way of exception these guidelines were  based on Article 87(3)(b) EC providing 
for aid to remedy serious disturbances in the economy of a Member State. The rules 
require that the measures taken do not give  rise to disproportionate distortions of 
competition, for example by discriminating against financial institutions based in other Member States and/or  allowing beneficiary banks  to unfairly attract new 
additional business solely as a result of gove rnment support. Other requirements 
include measures being limited in time and adequate contributions from the private 
sector. The Commission announced the aim to  approve schemes that comply with 
this guidance within very short d eadlines (24 hours,  if possible). 
80. Subsequently, the Commission complement ed and refined its guidance in a new 
Communication
 on how Member States can  recapitalise banks under the current 
                                                 
59 Case COMP/M.4685  Acciona/Enel/Endesa (OJ C 130, 12.6.2007, p. 19). 
60 Case T-65/08  Spain v Commission , not yet reported in the ECR. 
61 Case T-65/08 R  Spain v Commission , not yet reported in the ECR. 
62 State Aid Action Plan – Less and better targeted State aid: a roadmap for State aid reform 2005-2009 
(COM(2005)107 final, 7.6.2005 ). 
63 Communication from the Commission — The application of State aid rules to measures taken in 
relation to financial institutions in the context of the current global financial crisis ( OJ C 270, 
25.10.2008, p. 8 ). 
 
EN 28   EN financial crisis64 to ensure adequate levels of le nding to the rest of the economy and 
to stabilise financial markets whilst avoi ding excessive distortions of competition. 
The Communication entails, in particular, guidance on the ad equate pricing of State 
capital injections into banks designed to  stabilise the banks themselves. Also, it 
addresses the necessity of a ppropriate safeguards to ensure  that the public capital is 
used to sustain lending to th e real economy and not to fi nance commercial conduct to 
the detriment of competitors who mana ge without State aid. Furthermore, it 
distinguishes between, on th e one hand, banks that are fundamentally sound and 
receive temporary support to enhance the stability of financial markets and foster 
undisturbed access to credit for citizens and companies and, on the other hand, 
distressed banks whose business model has brought about a risk of insolvency. 
81. In addition, the Commission adopt ed a new temporary framework65 providing 
Member States with additional possibilities to  tackle the effects of the credit squeeze 
on the real economy. The temporary framework introduces a number of temporary measures to allow Member States to address the exceptional difficulties of companies to obtain finance. In particul ar, Member States will be able, without 
notification of individual cases, to grant subsidised loans, loan guarantees at a 
reduced premium, risk capital for SMEs and direct aids of up to EUR 500 000. All 
measures are limited until the end of 2010 although, based on Member States' reports, the Commission will evaluate whet her the measures should be maintained 
beyond 2010, depending on whether the crisis continues. 
82. As regards the implementation of the SAAP, the Commission adopted, as 
announced, a General Block Exemption Regulation (GBER)
66 giving automatic 
approval for a range of aid measures and so  allowing Member Stat es to grant such 
aid without first notifying the Commissi on, provided that they fulfil all the 
requirements laid down in the Regulation. Th e Regulation authorises aid in favour of 
SME, research, innovation, regional developmen t, training, employment, risk capital, 
environmental protection and entrepreneur ship. As well as encouraging Member 
States to focus their State resources on aid th at will be of real benefit to job creation 
and Europe's competitiveness, the Regulation reduces the administrative burden on public authorities, the beneficiarie s and the Commission. This new GBER 
harmonises and consolidates into one text the rules which previously existed in five separate Regulations, and it broadens th e categories of State aid covered by the 
exemption. 
83. In the context of the Climate Change Package the Commission adopted new 
Environmental aid guidelines
67. In line with the reform of the State aid assessment 
architecture, the guidelines introduce a st andard assessment for minor cases and a 
detailed assessment for cases that may invol ve significant distortions of competition. 
                                                 
64 Communication from the Commission — The recapitalisation of financial institutions in the current 
financial crisis: limitation of aid to the minimum necessary and safeguards against undue distortions of 
competition ( OJ C 10, 15.1.2009, p. 2 ). 
65 Communication from the Commission — Temporary Community framework for State aid measures to 
support access to finance in the curre nt financial and economic crisis ( OJ C 16, 21.1.2009, p. 1 ). 
66 Commission Regulation (EC) No 800/2008 of 6 August 2008 declaring certain categories of aid 
compatible with the common market in application of Articles 87 and 88 of the Treaty (General block 
exemption Regulation) ( OJ L 214, 9.8.2008, p. 3 ). 
67 Community Guidelines on state aid for environmental protection ( OJ C 82, 1.4.2008, p. 1 ). 
 
EN 29   EN Compared to the guidelines from 2001, the aid intensities have been increased 
considerably; in some cases they have b een doubled. Furthermore, rules have been 
established for trading schemes and a refined economic approach has been 
introduced for the analysis of reductions  in, or exemptions from, environmental 
taxes. The new rules require a facts-based necessity and proportio nality test, unless 
the resulting tax level is above  a harmonised minimum level. 
84. The Commission prolonged the Framewor k on State aid rules for shipbuilding68 for 
three more years, until 31 December 2011. This extension followed an earlier 
extension in 2006 of the Framework, whic h came into effect on 1 January 2004. 
85. A new Notice on State aid in the form of guarantees69 sets out clear and transparent 
methodologies to calculate the aid component  of a guarantee and provides simplified 
rules for SMEs, including predefined sa fe-harbour premiums and single premium 
rates for low-amount guarantees. The SAAP pr ovides for a new Notice as part of the 
Commission's efforts to clarify a nd simplify the State aid rules. 
86. In addition, public consultations were launched on the following: new rules on public 
service broadcasting, the possible extension until 2012 of the Cinema 
Communication, the guidance documents on th e in-depth assessmen t of regional aid 
to large investment projects and on criteria for the compatibility analysis in the field 
of training, as well as disa dvantaged and disabled workers for State aid cases subject 
to individual notification. 
87. As far as public broadcasting is concerned, based on recent decision-making practice 
and the results of the public consultati on held between January and March, the 
Commission launched a review of the Br oadcasting Communication. The main aims 
of the review are to provide greater clarity to all market participants and to secure a 
future-proof framework that is suitab ly adapted to the new technological 
environment. In November, the Commissi on presented a draft new Communication 
for further public consultation. 
88. As regards the Cinema Communication, th e Commission proposed that the validity 
of the State aid assessment criteria used  for the 2001 Cinema Communication should 
be extended by a further three years until  31 December 2012. This proposal followed 
the publication of the final report of a study financed by the Commission, which 
examined the economic and cultural impact of  territorial spending obligations in film 
support schemes. The conclusions of the re port were not conclusive one way or the 
other, which suggested a need for further reflection. At the same time, the proposed 
text of the extension identified a number of trends affecting the film sector which may need to be reflected in  a future Cinema Communica tion (scheduled for adoption 
in January 2009). By December, when the public consultation of the proposed text closed, a broad consensus in favour of the proposed text had emerged from those who contributed to the consultation. 
                                                
 
68 Communication from the Commission concerning the prolongation of the Framework on State aid to 
shipbuilding ( OJ C 173, 8.7.2008, p. 3 ). 
69 Commission Notice on the application of Articles 87 and 88 EC to State aid in the form of guarantees 
(OJ C 155, 20.6.2008, p. 10 ) and Corrigendum to Commission notice on the application of Articles 87 
and 88 EC to State aid in the form of guarantees ( OJ C 244, 25.9.2008, p. 32 ). 
 
EN 30   EN 89. The Commission also launche d a number of public cons ultations on procedural 
issues such as a consultation on a draft Best Practice Code (BPC) on the conduct of 
State aid control proceedings70 and on the draft notice on Simplified procedure (SP) 
for the treatment of certain types of Stat e aid. The aim of bot h documents, in line 
with the SAAP, is to ensure greater transp arency, predictability  and efficiency of 
State aid procedures. 
90. The draft BPC seeks to streamline the pr ocedures by fostering cooperation between 
the Commission and Member St ates within the framework of the existing Procedural 
Regulation n° 659/199971. Specifically, the draft BPC proposes to introduce: (i) more 
systematic pre-notification contacts to impr ove the quality of notifications, (ii) a 
mutually agreed planning of the handli ng of cases between the Member State 
concerned and the Commission for more co mplex cases, (iii) improvements in the 
information exchange between the Commissi on and (iv) a streamlined processing of 
complaints. Finally, in the event of Memb er States not provi ding the necessary 
information within the prescribed deadlines, the Commission would enforce existing procedural options more strictly than it has done in the past. This might involve 
deeming notifications to have  been withdrawn or adopti ng decisions on the basis of 
the information available. 
91. The existing simplified notification pro cedure provided for in Article 4 of 
Implementing Regulation n° 794/2004
72 has reached its limits in terms of 
contributing to the efficiency of State aid procedures. Therefore, the draft SP 
proposes the setting up of a fully fle dged, simplified approval procedure which 
would apply to measures squarely falling under the standard assessment sections (so-called "safe harbours") of ex isting horizontal Commission in struments, inspired by 
the merger simplified procedure
73 and going beyond simplified notification forms. 
By means of enhanced cooperation between the Member States and the Commission, 
these straightforward cases would be dealt with in an accelerated timeframe of one 
month after notification. In particular, the draft SP propos es the introduction of: (i) 
mandatory pre-notification contacts to ensure quality notifications and (ii) 
predictable stages of the procedure with clear deadlines, leading to a standardised 
short-form decision. 
92. The discussion with the Member States a nd other stakeholders regarding the BPC 
and SP will take place early in 2009. The drafts  are currently due to be adopted in the 
first half of 2009. 
93. The Commission also consulted on a dr aft Commission Notice concerning the 
enforcement of State aid law by national courts (the Enforcement Notice). The Enforcement Notice would replace the 1995 Notice on Cooperation between national 
                                                
 
70 See Press Release IP/08/1950 , 11.12.2008. 
71 Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application 
of Article 93 (now Art.88) EC ( OJ L 83, 27.3.1999, p. 1 ). 
72 Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Council Regulation (EC) 
No 659/1999 laying down detailed rules for the application of Article 93 EC ( OJ L 140, 30.4.2004, 
p. 1). 
73 Commission notice on a simplified procedure for treatment of certain concentrations under Council 
Regulation (EEC) No 4064/89 ( OJ C 217, 29.7.2000, p. 32 ). 
 
EN 31   EN courts and the Commission in the State aid field74 and its aim is to give clearer and 
more practical guidance to courts and potential claimants on legal issues in 
connection with domestic State aid litiga tion. In addition, the Enforcement Notice 
seeks to intensify the Commi ssion's cooperation with nationa l courts in the State aid 
area. In that respect, the Notice envisa ges the provision of Commission support for 
national courts based on the mechanisms al ready applied in the anti-trust field: 
• National courts would be able to ask the Commission for information in its 
possession, and 
• National courts would also be able to ask the Commission for its opinion on State 
aid issues which are rele vant to a pending case. 
• The Commission would aim to issue su ch opinions within four months. 
94. To make the use of these cooperation mech anisms as user-friendly as possible, the 
Commission would establish a dedicated contact point for national courts and 
introduce better guidance on pract ical issues, such as the protection of confidential 
information. A first discussion of the draf t Notice with Member States already took 
place in 2008. Based on the positive comm ents received, the Commission expects 
that the final version will  be adopted in early 2009. 
95. In 2008, the Commission continued its efforts to improve the enforcement and 
monitoring of State aid deci sions. The Commissions is seeking to achieve, on the 
basis of the recovery no tice adopted in 2007, a more  effective and immediate 
execution of recovery decisions. Information submitted by the Member States 
concerned shows that good progress toward s recovery was made during that period. 
The number of recovery decisions awa iting implementation was slightly reduced 
from 47 at the end of 2007 to 46 at the end of 2008. In all, 17 recovery cases were 
closed, or provisionally close d, in 2008: those are cases wh ere the recovery decisions 
were considered as being fully or provisionally implemented. In 2008, the 
Commission adopted 16 new rec overy decisions. The progress made is also reflected 
in the amounts of aid recovered. Of the EUR 10.3 billion of illegal and incompatible aid to be recovered under decisions adopted since 2000, so me EUR 9.3 billion (i.e. 
90.7% of the total amount) ha d been actually re covered by the end of 2008. A further 
EUR 2.5 billion in recovery intere sts had also been recovered. 
96. As announced in the SAAP, the Commission continued to take a strict line with 
Member States that failed to effectively implement recovery d ecisions addressed to 
them. In 2008 the Commission initiated legal action under either Ar ticle 88(2) EC or 
Article 228(2) EC for failure by Member Stat es to comply with recovery obligations. 
It took decisions initiating Article 88(2) EC in five cases, involving Italy and 
Slovakia, as well as decisions to proceed under Article 228(2) EC in eight cases 
involving Italy and Spain. 
97. As indicated above, the new GB ER will lead to a substantia l rise in the number and 
categories of measures which Member States may implement in the absence of prior notification to the Commission. The Commi ssion, in its role as guardian of the 
                                                
 
74 OJ C 312, 23.11.1995, p. 8 . 
 
EN 32   EN Treaty, will have to ensure that Member States implement those measures correctly, 
as set out in Article 10, para graph 1, of the GBER. The GB ER, in this perspective, 
sets out a series of measures to ensure the general transparency  of block exempted 
measures, but also to enable effectiv e Commission monitoring. More particularly, 
Article 9 GBER requires that the full text of aid schemes be publis hed on the internet 
in order to ensure that GBER provisions  are respected at Member State level. 
98. Against this background, the Commission ha s, as announced in the SAAP, stepped 
up its ex post  monitoring of several BER preda ting the GBER, on the basis of the 
experience gained in the 2006 monitoring pilot project. Afte r three rounds of 
monitoring exercises, DG Competition has co vered a significant part of the main 
substantive types of aid implemented under BER. DG Competition has now also 
addressed aid measures adopted by almost all of the 27 Member States of the 
Community, thereby ensuring a balanced geogr aphical coverage. The analysis of the 
results of the first two exercises shows that, overall, the part of the existing State aid 
architecture allowing the approval of aid schemes and enabling Member States to 
implement aid measures under BER is worki ng satisfactorily. In a minority of cases, 
substantive problems or procedural issues (such as transparenc y, reporting, speed and 
quality of answers) were identified. T hose cases in which no appropriate solution 
could be found are still being investigated. 
99. In the interests of increased transpar ency and better communication, DG Competition 
has published on its webpage a Vademecum on State aid rules75 a concise summary 
of the main rules applicable to State aid control. It can serve as a first point of 
reference for Community, national and loca l stakeholders dealing with State aid 
control issues, and directs the reader to the relevant legal texts. 
2. A PPLICATION OF THE STATE AID RULES  
100. The autumn 2008 update of the State aid Scoreboard76 shows that Member States are 
increasingly using the possibilities offered by the recently revised EU State aid rules 
to better target their aid. On average, Me mber States granted 80% of their aid to 
horizontal objectives in 2007, compared  to around 50% in the mid-1990s, with 
increased spending on Research and Devel opment (R&D) and environmental aid. In 
the face of the current financ ial crisis, coordinated action by Member States and the 
Commission has ensured that s upport schemes for the financial sector were able to be 
implemented quickly in complia nce with State aid rules. 
101. Over the past 25 years, the overall level of State aid has fallen from over 2% of GDP 
in the 1980s to around 0.5% in 2007. Whilst highlighting the continuing trend for 
Member States to focus their aid on horizontal objectives, the Scoreboard 
nevertheless showed that, in the wake of the recent financial crisis, the share of 
rescue and restructuring aid is likely to in crease significantly fo r some countries in 
2008. 
                                                 
75 The Vademecum is available at 
http://ec.europa.eu/competition/state_aid/studies_reports/studies_reports.html#vademecum  
76 Report from the Commission, State Aid Scoreboard - Autumn 2008 Update ( COM(2008) 751 final, 
17.11.2008 ). 
 
EN 33   EN 102. Already in 2007, before the new GBER ente red into force, block exempted aid 
measures accounted for 65% of all measures, compared with 40% in 2002. However, this is not yet reflected to the same extent in expenditure terms: 13% of total aid was awarded through the block exemptions in 2007 (compared with 6% in 2006). 
2.1. Applying the State aid Framework for Research, Development and Innovation 
(R&D&I) 
103. In 2008, the Commission approved 88 notifie d schemes on the basis of the 2006 
Community Framework for research and development and innovation
77; 66 were 
purely R&D schemes, nine were innovatio n oriented aid schemes and 13 were 
mixed, pursuing both R&D and innovation objectives. 
104. In three aid schemes78 and two individual cases79, the Commission concluded that 
there was no aid. In addition, two individual  aid measures were approved after an 
examination on the basis of Chapter 580 of the Framework, and 16 individual aid 
measures were approved after a detailed assessment under Chapter 7 of the Framework
81. Furthermore, the Commission adopted one decision to initiate a formal 
investigation procedure82 and one decision to close an opened Article 88(2) EC 
procedure following the wit hdrawal of the notifica tion by the Member State83. 
105. In addition, an important decision84 was adopted on several individual cases in the 
Italian aeronautical sector, following an assessment on the basis of the Community 
frameworks for State aid for R&D of 199685 and 198686. The decision, adopted on 
                                                 
77 Community Framework for state aid for re search and development and innovation ( OJ C 323, 
30.12.2006, p. 1 ). 
78 Fully in cases N 480/2007  Reducción del impuesto sobre activos intangibles  (OJ C 80, 1.4.2008, p. 3) 
and N 234/2007  Fomento de I+D+i (OJ C 229 6.9.2008, p. 1), and partially in case N 355/2007  
Modulation des cotisations sur le chiffre d'affair es des spécialités pharmaceutiques remboursables 
(OJ C 229, 6.9.2008, p. 5). 
79 Cases N 365/2007  Errichtung des Fraunhofer Center for Silicon Photovoltaics  (OJ C 91, 12.4.2008, 
p. 10) and N 343/2008  Individual aid to the College of Nyíregyháza (OJ C 35, 12.2.2009, p. 4). 
80 N 474/2007  NEDERLAND GATE – Innovative Pilot Safet y. Individuele O& O-steun aan THALES  
(OJ C 94, 16.4.2008, p. 11) and N 343/2008  Individual aid to the College of Nyíregyháza for the 
development of the Partium Knowledge Centre (OJ C 35, 12.2.2009, p. 4). 
81 List of individual aid measures approved after detail assessment under Chapter 7 of the R&D&I 
Framework: N 447/2007 Turbomeca  (OJ C 94, 16.4.2008); C 51/2007 Programme VHD  (OJ C 189, 
26.7.2008, p. 14), N 365/2007 Errichtung des Fraunhofer Center for Silicon Photovoltaics (OJ C 91, 
12.4.2008, p. 10), N 435/2007 Programme MINimage  (OJ C 137, 4.6.2008, p. 1), N 195/2007 FuE-
Einzelbeihilfe für Rolls-Royce Deutschland – Entwicklungsprojekt BR725  (OJ C 118, 15.5.2008, p. 1), 
N 469/2007 Programme "QUAERO"  (OJ C 243, 24.9.2008, p. 13), N 602/2007 Programme 
MaXSSIMM (OJ C 177, 12.7.2008, p. 3), N 603/2007 Programme GENESIS  (Not yet published in the 
OJ), N 597/2007 Programme LowCO2MOTION  (OJ C 299, 22.11.2008, p. 6), N 647/2007 Projet 
"PAMELAT, Pointe avant mixte Latécoère, Rech erche et innovation dans la filière composite 
aéronautique " (OJ C 206, 13.8.2008, p. 4), N 732/2007 (C 33/2008) Large R&D aid to Volvo Aero – 
Genx ( OJ C 253, 4.10.2008, p. 31), N 1/2008 Programme H2O (Not yet published in the OJ), N 
679/2007 Programme "DEFI COMPOSITE" (OJ C 2, 7.1.2009, p. 18), C 9/07 Industria de Turbo 
Propulsores (ITP) (Not yet published in the OJ), N 709/2007 Programme ADNA (Not yet published in 
the OJ) and N 733/2007 Programme "ISEULT-INUMAC"(Not yet published in the OJ). 
82 Case N 732/2007  Large R&D aid to Volvo Aero – Genx (OJ C 253, 4.10.2008, p. 31). 
83 Case C 51/2007  Programme VHD (OJ C 189, 26.7.2008, p. 14). 
84 Case C 61/2003  Loi aéronautique italienne N808/85 cas individuels (OJ C 284, 28.10.2008, p. 1). 
85 OJ C 45, 17.2.1996, p. 5 . 
86 OJ C 83, 11.4.1986, p. 2. 
 
EN 34   EN 11 March, covers 17 R&D individual projects  in the aeronautical sector supported by 
the Italian authorities during the 1990s . The decision requires an immediate 
reimbursement of the loans for most of th e individual projects, with interest on 
arrears in certain cases. The benefici aries have reimbursed around EUR 350 million 
within the time limit of tw o months set by the decision. 
2.2. Assessing risk capital financing for SME 
106. In 2008, the Commission approved 18 risk cap ital schemes under the Risk Capital 
Guidelines87. Eleven schemes were assessed on  the basis of Chapter 4 of the 
guidelines since they complied with the sa fe harbour provisions of the guidelines 
which allow a light assessment. Three schemes were assessed under Chapter 5 of the guidelines, following a detailed assessment
88. In three cases, the Commission 
considered that the scheme did not involve State aid89. One scheme was partly 
considered as no aid and partly asse ssed under Chapter 4 of the Guidelines90. 
2.3. Industrial restructuring 
107. On 27 February, the European Commission cl osed its in-depth investigation under 
EC State aid rules into the privatisation of Automobile Craiova91. The investigation, 
which was opened in October 2007, found that Romania had imposed conditions on 
the sale that were not aiming at obtaini ng the highest possible sales price, but at 
ensuring a certain level of production and em ployment. Since the conditions attached 
to the sale directly reduced  the sales price, the Commi ssion found that the difference 
between the market value of the compa ny and the sales price received by the 
Romanian authorities constituted State aid.  In order to avoid companies receiving 
unfair advantages over competitors, aid ca n only be granted under strict conditions. 
None of these conditions applied to the privatisation, and the aid is therefore 
incompatible with the Single Market. In or der to rectify the distortion of competition 
caused by the unlawful aid, the Romanian  Government will have to recover 
EUR 27 million from Automobile Craiova. 
108. On 6 November, following more than four  years of investigation, the Commission 
concluded that the attempts of the Polish au thorities to restructure the shipyards in 
Gdynia and Szczecin92 and to return them to viability have failed. Since the State aid 
granted to the shipyards over the years gave rise to disp roportionate distortions of 
competition in breach of the EC Treaty State aid rules, that aid had to be recovered. 
                                                 
87 Community guidelines on state aid to promote risk capital investments in small and medium-sized 
enterprises ( OJ C 194, 18.8.2006, p. 2 ). 
88 Cases N 263/2007  Technology Founder Fund Saxony (OJ C 93, 15.4.2008, p. 1), N 521/2007  
Risikokapitalregelung, Clusterfonds Start-up!“ Freistaat Bayern  (OJ C 100, 22.4.2008, p. 2) and N 
700/2007  Finance Wales JEREMIE Fund (OJ C 331, 31.12.2008, p. 2). 
89 N 836/2006  Mittelstandsfonds Schleswig-Holstein (OJ C 67, 12.3.2008, p. 1), C 33/2007  IBG 
Beteiligungsgesellschaft Sachsen-Anhalt mbH (OJ C 246, 20.10.2007, p. 20), N 389/2007  Risk capital 
fund Niedersachen  (OJ C 145, 11.6.2008, p. 1). 
90 N 696/2007  ERDF Risk Capital Fund Brandenburg (OJ C 180, 17.7.2008, p. 3). 
91 Case C 46/2007  Privatisation of Automobile Craiova (OJ C 239, 6.9.2008, p. 12). See Pres Release 
IP/08/315 , 27.2.2008. 
92 Cases C 17/2005  Restructuring aid for Stoczni Gdynia  (OJ C 220, 8.9.2005, p. 7) and C 19/2005  
Restructuring aid for Szczecin shipyard  (OJ C 220, 9.9.2005, p. 7) . See Press Release IP/08/1642 , 
6.11.2008. 
 
EN 35   EN 109. The Commission required Poland to recover the illegal State aid from Gdynia and 
Szczecin shipyards through a controlled sale of the yards' assets and subsequent liquidation of the companies. Such a solution should maximise opportunities for 
viable economic activities to continue at these sites, with good prospects for 
sustainable jobs there, while putting an  end to the undue distortion of competition 
caused by the huge subsidies received by th ese yards in recent years. The Polish 
authorities have undertaken to sell the ya rds' assets through open, transparent, non-
discriminatory and unconditional tenders. Given the fact that companies buying the assets under such tendering procedures will be free of the burden of having to repay 
past illegal State aid, the fi nal outcome might be even mo re jobs secured than would 
have been the case if the proposed restruct uring plans, which assumed significant job 
cuts, had been implemented. 
2.4. Sports 
110. In the field of Stat e aid control, the Co mmission adopted a final decision approving 
the investment of the municipa lity of Rotterdam in the Spor ts Palace, forming part of 
the Ahoy complex
93. This measure had been notified by the Dutch authorities in order 
to obtain legal certainty. The measur e involves an investment of up to 
EUR 42 million in the renovation and developm ent of the Sports Palace, whereby the 
municipality acts as the owner of the comp lex, which has been leased to a private 
operator. 
111. The Commission opened the formal inves tigation essentially because it had doubts 
about whether the private operator of th e Ahoy complex would benefit unduly from 
the investment by the municipality. As part of the investigation, the Dutch authorities 
provided further information concerning, inter alia , the contractual relationship 
between the municipality and the operator as well as the multi-functionality of the 
Ahoy complex. Following an in-depth assessment of the case, the Commission found that the investment did not gi ve undue advantages to the operator of the complex or 
any other company as the investment was properly taken into account in the sale and lease transactions concluded between the m unicipality and the operator. Therefore, 
the Commission concluded that no state aid was involved. 
2.5. State aid in the agricultural sector 
112. Notifications were assessed on the basis of the Guidelines for State aid in the 
agriculture and forest ry sector 2007 to 2013
94. 
                                                 
93 Case C 4/2008  Investment of the municipality of Rotterdam in the Ahoy complex (OJ C 68, 13.3.2008, 
p. 14). 
94 OJ C 319, 27.12.2006, p. 1 . 
 
EN 36   EN 2007 →31/12/2008
New cases registered95 254 144 
N 187 121 
NN 18 18 
C 5 3 
Total 210 142 
   
Compatible 202 139 
Does not constitute State aid 2 1 Final decision96 
Total 204 140 
positive decision 0 2 
conditional decision 0 1 
no aid decision 0 0 
negative decision 0 3 
withdrawal 4 0 
corrigenda 2 0 Investigations 
Total 6 6 
113. In 2007-2008, the Commission approved severa l aid schemes for the promotion of 
agricultural products97. The Commission decided that  for advertising that was 
generic in character no mention may be made of product origin and that, for 
Community-recognised denominations, the refe rence to the origin must correspond 
exactly to those references which have b een registered by the Community. The origin 
of the products may be mentioned in the cas e of national or regi onal quality labels as 
a subsidiary message. The Commission al lowed the use of corporate logos and 
names in State aid schemes under strict conditions only. 
2.6. Coal 
114. In 2008 coal spot market prices were ex tremely volatile. After strong rises from 
January to September, reflecting increas ed demand from the high-growth emerging 
countries, prices fell substantially in the last  quarter following the financial crisis and 
was close to the levels registered  at the beginning of the year. 
115. In the same year the Commission approve d aid to the coal sector in Poland98, 
Hungary99, Germany100 and Spain101. These aid schemes are intended to support 
access to coal reserves and to restructur e the coal sector in these countries. 
                                                 
95 10 NN cases not included. 
96 Excluding decision to open the formal investigation procedure, corrigenda, injunctions and proposals 
for appropriate measures. 
97 Example of cases: N 135/2008  Promotion Fund Law (Absatzfondsgesetz)  (OJ C 30, 6.2.2009, p. 14), N 
529/2007  Agriculture and Horticulture Levy Board — Promotion and Advertising  (OJ C 101, 
23.4.2008, p. 18), N 653/2007  Welsh Red Meat — Advertising and Promotion Scheme  (OJ C 165, 
28.6.2008, p. 1), N 659/2007  QMS Meat Quality Advertising Scheme  (OJ C 241, 20.9.2008, p. 9) and N 
697/2007  QMS Meat Generic Advertising Scheme  (OJ C 207, 14.8.2008, p. 1). 
98 Case N 575/07  Secteur du charbon 2008-2015  (OJ C 137, 4.6.2008, p. 2), the aid covers the period 
2008-2010. 
99 Case NN 3/08  Aid for coal industry (2007-2010)  (OJ C 323, 18.12.2008, p. 3), the aid covers the period 
2007-2010. 
100 Case N 631/07  Aides au charbon pour l'année 2008 (OJ C 42, 20.2.2009, p. 7), the aid covers year 2008. 
 
EN 37   EN 116. The Commission also approved an ai d scheme aimed at supporting the 
implementation of environmental rehabilitati on projects in coal mines in Bulgaria 
that have ceased operating102. The projects are targeted at cleaning up the previous 
coal mining sites and re-cultivating land for agricultural and forestry purposes. 
117. Lastly, the Commission appr oved the prolongation of an aid scheme implemented by 
the Spanish region of Castilla-León for research, development and innovation projects, as well as for proj ects aimed at environmental improvement related to coal 
mining, to be implemented in the period 2008-2012
103. 
3. S ELECTED COURT CASES  
118. In 2008, the Community Courts delivered se veral judgments which had implications 
for State aid control in general, and fo r the areas of definition of State aid, 
compatibility of aid, procedural issues a nd recovery in particular. A summary of 
these judgments is set out below. 
3.1. The concept of aid 
119. In the case BUPA and Others v Commission104, the CFI upheld a Commission 
decision raising no objection to the establishment of a risk equalisation system on the 
private health insurance market in Irela nd. The CFI confirmed that Member States 
have a wide margin of discretion in defini ng a SGEI mission and the conditions of its 
implementation, including the assessment of the additional costs incurred in 
discharging this mission. The Commission c ontrol is limited solely to ascertaining 
whether there is a manifest error of asse ssment. In particular, the CFI judgment 
found that the scheme did meet the Altmark criteri a, thereby enabling an 
interpretation of these criteria that ma kes it possible to apply them to complex 
systems with several operators, unconve ntional public service obligations and 
sophisticated compensation formulas 
120. In the NOx trading permits case105, the CFI examined the notions of advantage and 
the justification of the selective nature of such trading permits. As to the notion of advantage, the CFI confirmed the Commissi on's finding that, where the State grants 
tradable emission permits to undertakings free  of charge, it provi des an advantage in 
the form of forgone revenues resulting from  the market value of an intangible asset 
which the State could have sold or auctione d. As regards the noti on of selectivity, the 
CFI ruled that the grant of emission credit s was correctly limited under the scheme in 
question to a select group of  beneficiaries with relevant thermal capacity. For the 
CFI, such a scheme is not selective, to the extent that the grant of credits is aimed at 
all those undertakings which are the biggest polluters, and that such a criterion is 
general and in conformity with the aim of th e scheme of reference. It is justified by 
                                                                                                                                                        
 
101 Case NN 80/06 and NN 81/06  Aides à l'industrie du charbon pour l'année 2006  (OJ C 297, 20.11.2008, 
p. 1), the aid covers the period 2006-2007. 
102 Case N 261/07  Coal sector (8 companies)  (OJ C 177, 12.7.2008, p. 1), the aid covers the period 2006-
2007. 
103 Case N 131/08  Castilla-Leon - Aides aux mines de charbon , (OJ C 329, 24.12.2008, p. 3). 
104 Case T-289/03  BUPA and Others v Commission , not yet reported in the ECR. 
105 Case T-233/04  NOx trading permits,  not yet reported in the ECR. 
 
EN 38   EN the logic of the general system of whic h it is part. On 23 June, the Commission 
appealed this decision before the ECJ. The CFI partially annulled a Commission 
decision concerning the broadcasting sector,  case SIC v Commission106, insofar as it 
found that the exemption from registration charges does not constitute State aid. 
121. In case  Chronopost v UFEX and Others107, the ECJ annulled the CFI judgment 
which, in turn, annulled a Commission decisi on concluding that the logistical and 
commercial assistance provided by La Post e to SFMI-Chronopost did not constitute 
State aid. The ECJ stated that  it is necessary to take in to account the fact that the 
transaction takes place between two compan ies within the same group and that, in 
those circumstances, the strategic considera tions and synergies arising from the fact 
that Chronopost and La Poste belonged to  the same group cannot be disregarded. 
Further, the CFI could not, without erring in  law, conclude that it was unable to 
review whether the method used and the st ages of the analysis followed by the 
Commission were free from error and compa tible with the prin ciples laid down by 
the ECJ for determining the existence or abse nce of State aid. The ECJ stated that the 
Commission cannot be criticised for having based the contested decision on the only 
data available at the time. Therefore, it confirmed the Co mmission Decision in 
question. 
122. In the case Deutsche Post AG (DPAG)108 the CFI annulled the Commission Decision 
stating that DPAG had used  public funds – which were intended to compensate for 
universal service costs – to finance an a ggressive pricing policy in its door-to-door 
parcel business. This behaviour was, ther efore, not in line with the key principle 
according to which companies that receive State funding for services of general interest may not use these resources to s ubsidise activities open to competition, and 
the CFI ordered the recovery of the aid. It considered that the Commission had not 
shown that the transfer payments of public funds exceeded the amount of DPAG’s 
uncontested net additional costs of provi ding a universal postal service. The 
Commission therefore failed to check whether the total amount of transfer payments 
made was less than the total amount of the net additional costs of providing a service 
of general economic interest, for whic h the company received compensation (in 
accordance with the conditions laid down in the Altmark judgment). 
123. By its judgment in case Alitalia v Commission
109, the CFI confirmed the 
Commission's complex assessment adopted in  its Decision of 18 July 2001 leading it 
to consider that the capital injection by Italy constituted compatible State aid and validated all the conditions resulting from the commitme nts provided by the Italian 
authorities. This judgment also shows that, notwithstanding the annulment in 2000 of a previous decision that came to the sa me conclusion, the Commission's assessment 
was correct in substance. 
124. In case Unión General de Trabajadores de La Rioja
110, the ECJ did not agree with 
the Commission's arguments alleging that th e fiscal autonomy of the Basque Country 
                                                 
106 Case T-442/03  SIC v Commission,  not yet reported in the ECR. 
107 Joined cases C-341/06 P and C-342/06 P  Chronopost v UFEX and Others,  not yet reported in the ECR. 
108 Case T-266/02  Deutsche Post AG (DPAG) , not yet reported in the ECR. 
109 Case T-301/01  Alitalia v Commission,  not yet reported in the ECR 
110 Joined cases C-428/06 to C-434/06  Unión General de Trabajadores de La Rioja,  not yet reported in the 
ECR. 
 
EN 39   EN constitutes State aid. The ECJ declared th at, in order to determine whether laws 
adopted by an infra-State body constitute selective State aid, it is necessary to 
establish whether that body has sufficient institutional, procedural and economic 
autonomy (the Azores' criteria) in order for a law which it adopts within the limits of 
the powers conferred on it to be considered  as being of genera l application within 
that infra-State body and as being non-select ive. However, in that case the Court 
stated that it was for the national court to determine whether the Historical Territories 
and the Autonomous Community of the Basque Country have such autonomy. 
125. The CFI examined a range of issues concer ning broadcasting public services in the 
joined case TV 2 Denmark v Commission111. As to the definition of the public service 
mandate, the CFI upheld the findings of the Commission and confirmed the powers of the Member States to define broadcas ting SGEI in broad and qualitative terms. 
The CFI held that the definition of th e public service mandate should not be 
dependent on the activities of commercial  broadcasters. The dual funding model of 
public service broadcasters was also confirmed. The CFI equally upheld the 
Commission’s decision on the qualification of the licence  fee revenues – collected 
from viewers but imposed by the Danish authorities – as State resources. At the same 
time, the CFI annulled the Commission deci sion finding that the Commission did not 
take all the information submitted during the investigation duly into account. 
126. The CFI annulled the Commission decision on advantages granted by the Walloon 
Region and by Brussels South Charleroi Airport (BSCA) to Ryanair
112. The CFI 
rejects the Commission's view  that, as the Walloon Region acted in its capacity of 
public authority, the fixing of landing char ges and the guaranteed indemnity did not 
constitute an economic activity and theref ore cannot be assessed by reference to the 
private investor principle. In stead, it considered the fixi ng of the amount of landing 
charges and the accompanying indemnity to be an activity that is directly connected 
with the management of airport infrastruc ture which constitute s, by reason of its 
nature, its purpose and the rules to whic h it is subject, an economic activity. 
Moreover, the airport charges must be re garded as consideration for services 
rendered at Charleroi Airport. With resp ect to BSCA, the CFI notes that it is 
economically dependent on the Walloon Regi on and should therefore have been 
considered by the Commission to be one and the same entity for the purposes of 
determining whether, taken together, they ha d acted as rational operators in a market 
economy. 
127. In British Aggregates Association v Commission113, the ECJ sets aside a previous 
CFI judgment. With regard to material sele ctivity the Court focu sed on the effects of 
a measure, while taking the view that its objective is only of relevance for the 
assessment of compatibility. In contrast, th e CFI had accepted that the pursuance of a 
policy objective (here: environmental pr otection) may render a dedicated levy non-
selective. The ECJ also dismisses the di stinction made by th e CFI between, on the 
one hand, a partial exemption of certain companies from a levy and, on the other 
hand, the definition of the material scope of  a levy. Finally, the ECJ confirmed that, 
                                                 
111 Joined Cases T-309/04, T-317/04, T-329/04 and T-336/04  TV 2 Denmark v Commission, not yet 
reported in the ECR. 
112 Case T-196/04  Ryanair Ltd v Commission, not yet reported in the ECR. 
113 Case C-487/06 P  British Aggregates Association v Commission, not yet reported in the ECR. 
 
EN 40   EN when it comes to assessing the concept of aid, the Community Courts are called upon 
to carry out a comprehensive review (w hich the CFI had failed to conduct). 
128. In the  Gibraltar  case114 the CFI annulled the Commission's decision that declared the 
tax reform introduced in Gibraltar to be incompatible with the common market on 
account of the fact that the tax measur es were both regionally and materially 
selective, thus constituting State aid within  the meaning of Article 87(1) EC without 
there being any justification for co mpatibility. Concerning regional (i.e. 
geographical) selectivity, the CFI applied th e Azores test and found that the Gibraltar 
measures comply with all thr ee criteria. In part icular, it found that the mere existence 
of financial transfers from the central gove rnment to the region (as was the case with 
Gibraltar) is not sufficient to infringe th e third criterion. On the contrary, that 
criterion is not met only if the transfers are actually linked to the loss of tax revenue. Concerning material selectiv ity, the CFI found that the Commission had failed to 
carry out a proper assessment in that it failed to identify the general system, a possible derogation from which might have be en regarded as sele ctive and therefore 
as aid. The Commission will appeal  this ruling before the ECJ. 
3.2. Compatibility assessment 
129. In case Olympiaki Aeroporia Ypiresies AE v Commission
115, the CFI partially 
annulled a Commission decision inasmuch as it declares incompatible certain 
measures to compensate for losses in th e airline industry fo llowing the terrorist 
attacks of 11 September 2001. The CFI cons idered that where an aid measure 
satisfies the conditions of Article 87(2)(b) EC it must be declared compatible with 
the common market, even if the Commi ssion adopted a different position in the 
context of an earlier notice concerning the measure in question. Accordingly, even if, 
in accordance with that communication, any compensation paid under Article 87(2)(b) EC must concern co sts incurred during a define d period, aid compensating a 
loss which arose after that period, but ha ving a direct causal connection with the 
exceptional occurrence concerned and being accu rately evaluated, must be held to be 
compatible with the common market. 
3.3. Procedural issues 
130. The CFI partially annulled a Commission decision in case SIDE v Commission
116. 
The CFI stated that while the Commission en joys a wide discretion to allow aid by 
way of derogation from the general prohibition in Article 87(1) EC, that discretion cannot be used in order to disregard the fact  that during the period  in which the aid in 
question was unlawfully paid, it could have distorted competition in a manner contrary to the Community interest, as determined under the existing legislative 
framework. 
131. The ECJ found in case Athinaïki Techniki AE v Commission
117 that the CFI erred in 
law in considering an action for annul ment as being inadmissible because it 
                                                 
114 Joined Cases T-211/04 and T-215/04  Government of Gibraltar v Commission, not yet reported in the 
ECR. 
115 Case T-268/06  Olympiaki Aeroporia Ypiresies AE v Commission, not yet reported in the ECR. 
116 Case T-348/04  SIDE v Commission, not yet reported in the ECR. 
117 Case C-521/06 P  Athinaïki Techniki AE v Commission, not yet reported in the ECR. 
 
EN 41   EN concerned an act that has no legal effect (an administ rative letter rejecting a 
complaint). Where it is apparent from th e progress of the administrative procedure 
that the Commission has decided to bring an  end to the preliminary investigation 
procedure on the ground that the State measur e at issue does not c onstitute State aid, 
the contested act must be classified as a de cision within the meaning of Article 4(2) 
of Regulation No 659/1999, read in conjuncti on with Articles 13(1) and the third 
sentence of Article 20(2) of that Regula tion. Such decision constitutes an act open to 
challenge for the purposes of Article 230 EC (action for annulment). 
132. In the case Freistaat Sachsen118 the ECJ set aside the judgment of the CFI , which 
partially annulled a Commission decision c oncerning the application of SME BER to 
projects notified to the Commission before th e entry into force of that Regulation and 
referred the case back. The ECJ ruled that a notification by a Member State of an aid 
or a proposed aid scheme does not give rise to a definitely-established legal situation 
which would require the Commission to rule  on its compatibility with the common 
market by applying substant ive rules in force on the notification date. On the 
contrary, it is up to the Comm ission to apply the rules in force at the time when it 
announces its decision. 
3.4. Recovery of aid 
133. In the CELF119 case, the ECJ clarified that once the Commission has taken a positive 
view on an unnotified aid, EC law does not require the immediat e recovery of the 
full amount of aid. However, national courts have to take into account the undue time 
advantage gained by the beneficiaries of  unlawful aid which is subsequently found 
compatible by the Commission. In this cas e the national court must order the aid 
recipient to pay interest in respect of th e period of unlawfulness. Under national law, 
the court may also order the recovery of the unlawful ai d, without prejudice to the 
Member State’s right to re-implement it s ubsequently. Finally, it may be required to 
uphold claims for compensation for damage ca used by reason of the unlawful nature 
of the aid. 
134. In case Commission v Salzgitter120, the ECJ sets aside the judgment of the CFI which 
annulled a Commission decisi on concerning the obligation for Germany to recover 
incompatible State aid from the applicant and refers the case back to the CFI. The ECJ stated that,  even though the CFI was entitled to hold that a beneficiary of State 
aid can rely on the principle of legal certainty to support an action for annulment of a 
decision ordering recovery of that aid, the CFI wrongly applied the principle in this 
case because it failed to examine whether the Commission had manifestly failed to act and had clearly breached its duty of di ligence in the exercise  of its supervisory 
powers (which are the only grounds which can render illegal a Commission decision ordering recovery of unlawful aid under the ECSC Treaty). 
135. The ECJ confirmed in case Commission v France
121 that France had failed to fulfil 
its recovery obligations. 
                                                 
118 Case C-334/07 P  Freistaat Sachsen v Commission, not yet reported in the ECR .. 
119 Case C-199/06  Centre d'exportation du livre français, not yet reported in the ECR. 
120 Case C-408/04 P  Commission v Salzgitter, not yet reported in the ECR. 
121 Case C-214/07  Commission v France, not yet reported in the ECR. 
 
EN 42   EN 136. In Wienstrom v Bundesminister für Wirtschaft und Arbeit122, the ECJ concluded that 
the prohibition on putting State aid measures into effect laid down in the last sentence of Article 88(3) EC does not requi re a national court to dismiss an action 
brought by a recipient of State aid against the Memb er State granting the aid 
concerning the amount of that State aid allege dly due in respect of a period predating 
a positive Commission decision. 
II – Sector Developments 
A – ENERGY AND ENVIRONMENT  
1. O VERVIEW OF THE SECTOR  
137. European energy policy is built around three pi llars: sustainabilit y, security of supply 
and competitiveness. Reducing greenhouse gases is vital to combating climate change, and all European consumers ( households as well as commercial and 
industrial users) depend heavily on the s ecure and reliable provision of energy at 
competitive prices. These objectives can only be met effectively through a properly functioning and competitive European energy market which sends the right signals to investors and policy makers. This requires continued efforts to open up Europe’s gas 
and electricity markets to competition and to create a single European energy market. 
138. The aim of competition policy in the energy fi eld is ensuring a secure flow of energy, 
in particular electricity and gas, at co mpetitive prices to the EU’s households and 
businesses. An open and competitive si ngle EU market would also guarantee a 
secure provision of ener gy in the future by sending the necessary signals for 
investment and making the European market attractive to external suppliers. Such a 
market would also be open to new energy mixes and would play a major role in developing and deploying ne w environmentally friendly technologies. Prices that 
reflect costs will help encourage energy e fficiency, thereby supporting sustainability 
and security of supply. 
2. P
OLICY DEVELOPMENTS  
139. On 10 January 2007, the Commission adopted a comprehensive package of measures 
to establish a new Energy Policy for Europe  to combat climate change and boost the 
EU's energy security and competitiveness123. Together with this package, the 
Commission also adopted the Final Report on the energy sector inquiry124. On the 
basis of a general endorsement of the package by the Council in March 2007 and by 
the Parliament in July 2007, the Commi ssion put forward a proposal for a third 
                                                 
122 Case C-384/07  Wienstrom v Bundesminister für Wirtschaft und Arbeit, not yet reported in the ECR. 
123 Communication from the Commission to the European Council and the European Parliament – an 
energy policy for Europe ( COM(2007) 1 final, 10.1.2007 ). 
124 Communication from the Commission: Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 
into the European gas and electri city sectors (Final report) ( COM(2006) 851 final, 10.1.2007 ), and DG 
Competition report on energy sector inquiry ( SEC(2006) 1724, 10.1.2007 ). 
 
EN 43   EN liberalisation package for the Europ ean electricity and gas markets on 
19 September 2007125. It focuses in particular  on (i) effective unbundling of 
transmission networks; (ii) strengthen ing of the powers and independence of 
regulators; (iii) cooperati on between regulators; a nd (iv) cooperation among 
transmission system operators. 
140. The Internal Energy Market p ackage proposed by the Commission on 
19 September 2007 was the subject of intensive discussions between the three institutions in 2008. The Parliament adopted  its first-reading opinions on the Energy 
Package in the summer (on 18 June for elect ricity and on 9 July for gas). The Energy 
Council reached a political compromise on 10 October 2008. 
141. On 23 January the Commission put forward a far-reaching package of proposals that 
will deliver on the EU's ambitious commitme nts to fight climate change and promote 
renewable energy up to 2020 and beyond. In December, fully in line with the Commission's proposals, the European Par liament and Council reached an agreement 
on targets which will become legally binding by 2020. It has been agreed to cut greenhouse gas emissions by 20%, to establ ish a 20% share for renewable energy, 
and to improve energy efficiency by 20%. The agreement concerned revisions to the 
emissions trading system, the distribution of the reduction effort outside of the 
emissions trading system, binding national ta rgets for the share of renewable energy 
produced, a legal framework for environmen tally safe carbon capture and storage 
(CCS) as well as related proposals on CO2 emissions from cars and on fuel quality. 
This will help transform Europe into a low-carbon economy and increase its energy 
security.  In support of the Commission's overall  climate change and renewable 
energy policies, the package also incl udes new guidelines on State aid to 
environmental protection, specifying the conditions under which aid to 
environmental protection may be declared  compatible with the Treaty. These 
Guidelines became applicable in April. In July, the Commission adopted the new General Block Exemption Regulation under which State aid for renewable energy 
and energy efficiency are exempted from no tification when certain criteria are met.  
142. On 13 November, the Commission adopted  a Second Strategic Energy Review 
package
126, containing wide-ranging proposals on enhancing the security of energy 
supply and stressing, inter alia, the impor tance of the functi oning of a competitive 
Internal Energy market for security of energy supply. 
143. Addressing competition problems along the wh ole of the gas and electricity supply 
chains and making combined use of the fu ll range of the Commission's powers, from 
anti-trust rules (Articles 81, 82 and 86 EC) to merger control rules (Regulation 
                                                 
125 This package includes the following proposals:  Proposal for a Directive amending Directive 
2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity ( COM(2007) 528 final, 19.9.2007
); Proposal for a Directive 
amending Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 
concerning common rules for the internal market in natural gas ( COM(2007) 529, 19.9.2007 ); Proposal 
for a Regulation establishing an Agency for the Cooperation of Energy Regulators ( COM(2007) 530 
final, 19.9.2007 ); Proposal for a Regulation amending Regulation (EC) No 1228/2003 (electricity) 
(COM(2007) 531 final, 19.9.2007 ) and Proposal for a Regulation amending Regulation (EC) No 
1775/2005 (gas) ( COM(2007) 532 final, 19.9.2007 ). 
126 See Press release IP/08/1696 , 13.11.2008. 
 
EN 44   EN 139/2004) and State aid rules (Articles 87 and 88 EC), continues to be of relevance 
in order to maximize the overall enforcement impact. 
2.1. Anti-trust enforcement 
144. Properly functioning energy markets require entrants to be able to access energy 
networks and customers. The Commission ha s continued to focus in particular on 
three general types of abuses in the electric ity and gas sectors in order to address the 
main areas of market malfunctioning id entified by the sector inquiry. These 
investigations focus on exclusionary c onduct, exploitative a buses and collusion. 
Exclusionary conduct covers practices of vert ically integrated incumbents relating to 
the networks. More specifically, the Commi ssion investigated incumbents suspected 
of engaging in the foreclosure bot h of rivals and of customers. 
145. Investigations concerning exploitative abuses include conduct engaged in by 
incumbents to decrease production to the de triment of consumers. The Commission 
is also investigating alleged collusion be tween incumbents in the form of market 
sharing. 
146. In 2006 the Commission initiated investigatio ns into the German electricity market 
as a follow-up to the energy sector inquiry127. In the course of its investigation, the 
Commission came to the preliminary view that E.ON  might have abused its dominant 
market position in two ways: first, as a wholesaler on the electricity market, by strategically withholding production capacity of certa in power plants on the 
wholesale market in order to drive up th e price (the Commissi on also had concerns 
that E.ON had devised and implemented a strategy to deter third parties from 
investing in electricity gene ration); and, secondly, as a tr ansmission system operator, 
favouring its own production in the sec ondary electricity balancing market
128. 
147. To address the concerns raised in the fi rst case, E.ON proposed to divest about 5 000 
MW, i.e. more than 20% of its genera tion capacity, from different types of 
technologies and fuels in Ge rmany, effectively renderi ng E.ON unable to withdraw 
capacity in order to raise prices and also providing genera tion capacity to its 
competitors. To address the Commission's concerns in the second case, E.ON proposed to divest its transmission system  business consisting of an Extra-High-
Voltage line network and system operati ons currently run by E.ON Netz. This will 
remove the operator's incentive to favour a pa rticular supplier and demonstrates how 
the general concerns expressed by the Commission in the sector inquiry on the 
consequences of vertical integration in th is sector can be dealt with effectively. 
148. On 12 June, the Commission consulted in terested parties on the structural 
commitments proposed by E.ON to address these concerns of anticompetitive behaviour on the German electricity markets
129. The results confirmed that the 
commitments were proportionate and necessary to remedy the concerns. As a result, 
                                                 
127 See MEMO/06/483 , 12.12.2006. 
128 Balancing energy is last minute electricity supply to maintain the frequency of the current in the 
network. The Commission had concerns that E.ON was favouring its own productio n affiliate, even if it 
charged higher prices, passing on the increased costs to the final customer, and that E.ON prevented 
other power producers from selling balancing energy into the E.ON markets. 
129 See MEMO/08/396 , 12.6.2008. 
 
EN 45   EN the Commission adopted a decision on 26 November which made the commitments 
offered by E.ON legally binding a nd closed its investigation130. 
149. As regards other cases concerning the elec tricity market, the Commission issued a 
SO to Electricité de France (EdF)  on 23 December alleging customer foreclosure 
through de facto  and/or de jure  exclusive long-term contracts between EdF and large 
industrial users in France131. Furthermore, the Commission continued its 
investigation in Suez/Electrabel  concerning the same alleged behaviour in 
Belgium132. 
150. After conducting surprise inspections in  2006 on E.ON AG (E.ON), E.ON Ruhrgas 
AG and Gaz de France (GdF) premises in Germany and France133 and formally 
opening proceedings in July 2007134, the Commission issued a SO to E.ON  and GdF. 
The alleged infringement takes the form of  a suspected agreement and/or concerted 
practice between E.ON and GdF, according to  which they would not sell gas in the 
other party's home market even after the lib eralisation of the Eu ropean gas markets. 
This alleged agreement and/or concerted pr actice concerns, in pa rticular, supplies of 
natural gas transported via the MEGAL pi peline, which is jointly owned by E.ON 
and GdF and transports gas across sout hern Germany between the German-Czech 
and German-Austrian borders on the one si de and the French-German border on the 
other side. 
151. Furthermore, on 22 May the Commission decided to open formal proceedings 
against GdF for a suspected breach of EC competition law135. The Commission 
proceedings focus on behaviour which ma y prevent or reduce competition on supply 
markets for natural gas in France. The poten tial infringement consists of behaviour 
that might prevent or reduce competition on downstream supply markets for natural 
gas in France via, in partic ular, a combination of long-te rm reservation of transport 
capacity and a network of import agreem ents, as well as through strategic 
underinvestment in import infrastructure capacity. 
152. The Commission continued in 2008 to investigate RWE 's alleged behaviour on the 
German gas transmission market after initiating proceedings in 2007136. According to 
the Commission's preliminary assessment, RWE may have abused its dominant position on the gas transmission market within  its network area, notably by refusing 
to supply gas transmission services to thir d parties and by trying to lower the profit 
margins of its downstream competitors in gas supply
137. 
153. RWE offered structural commitments as a result of the preliminary assessment. It 
proposed to undertake to sell its gas transmission system network in the west of 
                                                 
130 See Press Release IP/08/1774 , 26.11.2008. 
131 See MEMO/08/809 , 29.12.2008. 
132 See MEMO/07/313 , 26.7.2007. 
133 See MEMO/06/205 , 17.5.2006. 
134 See MEMO/07/316 , 30.7.2007. 
135 See MEMO/08/328 , 22.5.2007. 
136 See MEMO/07/186 , 11.5.2007. 
137 In particular the German gas supply market has been foreclosed by a) discriminatory rebate systems, b) 
inflation of network costs, c) maintenance of sub-networks and d) lack of effective congestion 
management. 
 
EN 46   EN Germany to an independent operator138. The Commission invited comments from 
interested parties on the commitments offered on 5 December by RWE to meet 
concerns that it may have infringed EC  Treaty rules on the abuse of a dominant 
market position139. If the result of the market test is positive, the Commission will 
adopt a decision under Article 9 of Re gulation 1/2003, making the commitments 
legally binding on RWE. 
154. The investigation that was opened in 2007 into alleged capacity  hoarding, capacity 
degradation and strategic underinves tment by the Italian energy group ENI on the 
Tag and the TENP gas pipelines, resulting in suspected downstream market foreclosure, is still ongoing
140. 
2.2. Mergers 
155. On 21 October, the Commission cleared – s ubject to conditions - the acquisition of 
the retail motor fuel businesses in Sca ndinavia (JET Scandinavia belonging to the 
American energy firm, ConocoPhillips')141 by the Norwegian energy firm 
StatoilHydro. This firm is an integrated oi l and gas company active in the exploration 
and production of crude oil and natural ga s. The company also refines and sells 
motor fuels and other oil derivatives. Stat oilHydro operates fuel station networks in 
Scandinavia under the Statoil, Hydro and Uno-X brands. Jet Scandinavia operated 
fuel station networks in Denmark, No rway and Sweden under the JET brand. 
156. The Commission found that the proposed trans action – as originally notified – would 
have raised serious compet ition concerns in Norway and Sweden. In Norway, the 
proposed transaction would have reinfor ced the oligopolistic structure of the 
Norwegian market, and StatoilHydro's position as the largest provider of motor fuels 
in Norway would have been strengthene d. In Sweden, StatoilH ydro was already the 
market's largest supplier and, by acquiring on e of its main competitors, the company 
would have obtained a market share that  was more than double the share of the 
second largest competitor. The Commission had further concerns because JET was 
the most efficient low-cost operator in bot h Norway and Sweden, with a strong brand 
and a proven track record of  undercutting competitors' prices in markets with high 
entry barriers. To address the Commission's concerns, StatoilHydro offered to divest 
the entire JET network in Norway and a 158-station network in Sweden, made up 
entirely of unmanned fuel stations. In vi ew of these commitments, the Commission 
concluded that the transaction would no longer raise serious competition concerns in Norway and Sweden. Independently of the competition assessment, StatoilHydro had 
decided to close a number of less e fficient fuel stations in Sweden. 
157. On 22 December, the Commission approved
142 the proposed acquisition of British 
Energy (BE) by Electricité de France S.A (EdF). BE, active only within Great Britain, is present in the ge neration and wholes ale trading of electricity and in the 
                                                
 
138 See MEMO/08/355 , 31.5.2008. 
139 A summary of the commitments proposed by RWE has been published in the EU Official Journal 
(OJ C 310, 5.12.2008, p. 23 ) and the full non-confidential version of the commitments is available on 
the Europa Competition website . 
140 See MEMO/07/187 , 11.5.2007. 
141 Case COMP/M.4919  StatoilHydro/ConocoPhillips . 
142 Case COMP/M.5224  EdF/BE . 
 
EN 47   EN retail supply of electricity to industrial a nd commercial customers. It focuses mainly 
on nuclear generation, and opera tes most of the nuclear ge neration capacity in Great 
Britain. EdF is a global company active in th e generation and wholesale of electricity 
and in the transmission, distribution and reta il supply of electricity to all groups of 
customers. The main effects of the tran saction were therefore felt in the UK 
electricity markets. 
158. This transaction has to be seen in the context  of the UK government's objective of 
developing new nuclear power generation in  the UK. Despite the fact that the 
proposed transaction did not lead to very hi gh levels of concentration in terms of 
market shares in the affected markets (gen eration and wholesale of electricity; and 
the retail supply of electricity to industr ial and commercial customers), the market 
investigation led the Commi ssion to conclude that the transaction raised serious 
doubts as to its compatibility with the common market in four specific areas: 
(i) withdrawal of flexible generation cap acity leading to pri ce increases in the 
electricity wholesale market, (ii) decrease of  liquidity in the wholesale market due to 
the increased use of own generated electric ity to supply customers of the new entity 
instead of selling it in the wholesale market , (iii) very strong position with respect to 
the ownership of sites likely to be suitabl e for the development of new nuclear power 
generation sites and (iv) very strong positi on with respect to the ownership of rights 
to obtain additional connections to the transmission network. 
159. In order to dispel these competition concerns, the Commission has accepted a 
remedy package proposed by the parties, whic h consists of the divestiture of two 
flexible generation power plants, a commitment  to sell certain volumes of electricity 
on the wholesale market for a given peri od of time, the unconditional sale of one 
good site (to be selected by th e purchaser from two altern atives) for the development 
of new nuclear generation capacity and, fina lly, the release of a transmission network 
connection agreement. The Commission considered that these commitments are sufficient to remove the competitive problems identified, as they significantly limit the ability and incentives of the new entity  to engage in anti-competitive capacity 
withdrawal strategies or to  reduce wholesale market liqui dity. They facilitate new 
entry into the generation market in two wa ys: by facilitating access to new sites and 
by doing away with restrictions on conn ection to the transmission network. 
2.3. State aid 
160. In the area of State aid control , the Commission requested Hungary to end several 
long-term power purchase agreements (PPA)
143. These agreements grant favourable 
conditions to electricity generators selli ng electricity to the State-owned Magyar 
Villamos M űvek Zrt. (MVM). Hungary is also requested  to recover the aid granted 
since its accession to the EU in 2004. The PPA cover around two thirds of the electricity generated in Hungary. Even t hough these PPA agreements were concluded 
before the accession, they fall within the sc ope of EC State aid rules because they 
were applicable after accession (pursuant to point 3 of Annex IV to the Accession Act). They prevent competition on merits and close off a significant part of the 
                                                
 
143 Case C 41/2005  Hungarian stranded costs (not yet published in the OJ). A few months before the 
Commission requested Poland to end similar long term power purchase agreements (Case C 43/2005  
Stranded costs compensation in Poland , not yet published in the OJ). 
 
EN 48   EN market from new entrants, thus distorting competition to the de triment of Hungarian 
electricity consumers. Nevertheless, th e Commission has consistently acknowledged 
the major investments in power plants th at were made by the power generators 
before the liberalisation of the electricity markets. The Commission has allowed other Member States to grant State aid in order to help power generators to recover 
such investments. In this context, in  2001, the Commission issued the "Stranded 
Costs Methodology"
144, which sets out the principles for assessing this form of aid. 
However, the PPA did not meet the criteria laid down in that methodology. If Hungary were to decide to notify a genuine  stranded costs compensation scheme, this 
would need to be assessed on its own merits. 
161. In the area of renewable energies  the Commission approved aid of 
EUR 2 350 million for the use of re newable energies in Germany
145. Furthermore, 
the Commission authorised two Italian cas es of State aid in the form of tax 
reductions to stimulate the produ ction and the use of biodiesel146. In both cases the 
tax reductions were accompanied by supply obligations. This coexistence of supply 
obligations and tax reductions was a novelt y. Such a situation ma y raise the question 
of the need for aid, since bot h instruments (i.e. tax exem ption and supply obligation) 
pursue the same goal of bringing biofuels to the market. However, for the cases at 
hand, this problem remained limited in the short run and the Comm ission was able to 
approve the schemes until the end of 2010. This timeframe should also be adequate to collect sufficient data in order to assess in more detail the l ong-run effects that the 
coexistence of these two instruments will have on the market. 
162. In Austria, the Commission investigated the partial sale of a State-owned electricity 
provider
147. The Commission found that the market  value of the shares was fixed by 
two independent experts on the basis of generally accepted ma rket indicators and 
valuation standards. The Commission appr oved the sale on the grounds that the 
measure did not constitute State aid, si nce the State acted like a market economy 
investor operating under norma l market economy conditions. 
163. The Commission also investigated a public service compensation scheme notified by 
Spain. Under the scheme, Spain granted fi nancial compensation to certain power 
generators for electricity produced fr om indigenous coal. Following extensive 
discussions with the Commission, Spain deci ded to withdraw the notification. The 
use of indigenous primary energy resources  for power generation may, under certain 
circumstances, be regarded as a genuine Service of General Economic Interest (SGEI). However, the notified scheme was no t in line with the rules applicable to 
State aids in the form of  public service compensation. 
                                                
 
144 Commission letter SG (2001) D/290869 of 6.8.2001  - Commission Communication relating to the 
methodology for analysing State aid linked to stranded costs. 
145 Case N 287/2005  Modification and prolongation of the aid scheme "Aid for the use of renewable 
energies"  (OJ C 261, 14.10.2008, p. 2). 
146 Cases N 326/2007  Prolongation tax exemption biodiesel (OJ C 134, 31.5.2008, p. 1) and N 63/2008  
Excise duty reduction for biofuels (OJ C 323, 18.12.2008, p. 4). 
147 Case N 90/2008  Partial privatisation of Energie AG Oberösterreich by a private equity operation  
(OJ C 216, 23.8.2008, p. 13). 
 
EN 49   EN 164. As regards preferential el ectricity tariffs in Italy, the Commission opened a new 
procedure148 in addition to the ongoing investiga tions (concerning, in particular, the 
aluminium producer Alcoa149). Also, the Commission is continuing to investigate 
State aid cases related to regulat ed electricity tariffs in France150 and Spain151. 
B – FINANCIAL SERVICES  
1. O VERVIEW OF THE SECTOR  
165. 2008 proved to be extremely difficult for the financial sector, since the financial 
crisis hit the European economies in the autumn. Many EU governments reacted to this unprecedented crisis by taking measures to support fi nancial stabil ity (see 2.1.1. 
below). 
166. Financial markets are crucial to the func tioning of modern economies. The more 
integrated and the more competitive they ar e, the more efficient the allocation of 
capital and the long-run ec onomic performance will be. Banking, insurance and 
securities are three major areas of  the financial services sector. 
167. The European banking sector has undergone  significant growth and diversification 
over the last two decades. Today it directly provides over four million jobs in the EU. Retail banking remains the most important sub-sector of banking, representing over 
50% of total EU banking activity in terms of  gross income. However, the final report 
of the inquiry into the retail banking sector published in January 2007 underlined a 
number of competition issues. 
168. Following the sector inquiry, and on the ba sis of cases which had already been 
investigated during the inquiry, several decisions were adopted in the area of 
financial services during 2007. At the end of 2007, the Commission adopted a 
decision prohibiting the cro ss-border Multilateral Interchange Fees (MIF) applied by 
MasterCard. In March 2008, the Commission opened an investigation regarding 
VISA's cross-border MIF. In June, Mast erCard repealed these interchange fees
152. 
The Decision in the MasterCard case is currently under appeal before the CFI. 
169. To underpin the development of a single market for financial services and to harness 
the full potential benefits of the euro, th e European banking industry is creating a 
Single Euro Payments Area (SEPA). SEPA is  a self regulatory initiative from the 
European Payments Council (EPC), an asso ciation of undertakings , to move to an 
integrated euro payments area, ensuring that cross border payments become as easy and efficient as domestic payments. The SE PA framework for payment cards and the 
credit transfer scheme were launched in  2008 and the launch of the direct debit 
                                                
 
148 Case C 36/2008  State aid in favour of the Sulcis integrated power plant (OJ C 240, 19.9.2008, p. 14). 
149 Cases 38a/2004  Preferential electricity tari ff in favour of Alcoa  (OJ C 30, 5.2.2005, p. 7), C 38b/2004  
Preferential electricity tariff in favour of Portovesme, ILA and Euroallumina  (OJ C 30, 5.2.2005, p. 7), 
C 13/2006  Preferential Electricity Tariff for Energy Intensive Industry in Sardinia  (OJ C 145, 
21.6.2006, p. 8) and C 36b/2006  Preferential electricity tariff – Alcoa  (OJ C 214, 6.9.2006, p. 5). 
150 Case C 17/2007  Regulated electricity tariffs in France (OJ C 164, 18.7.2007, p. 9). 
151 Case C 3/2007  Regulated electricity tariffs in Spain  (OJ C 43, 27.2.2007, p. 9). 
152 See MEMO/08/397 , 12.6.2008. 
 
EN 50   EN scheme is scheduled for 2 November 2009. SEPA is intended to facilitate 
competition between banks by removing national barriers. 
170. The SEPA project is supported by the European Commission and the European 
Central Bank (ECB). However, as the pr oject is being led by the EPC, its 
implementation requires close competi tion scrutiny. Against this background, the 
Commission, together with the NCA, has ad dressed a number of SEPA related issues 
as part of an ongoing dialogue with the EPC. 
171. Insurance is another financial service of vital importance for big and small 
businesses throughout the European Union. Bu siness insurance is the most important 
sector of non-life insurance. A competitive environment in business insurance is therefore key to European economic growt h. A number of competition issues in the 
sector were underlined in the Commission's final report on the sector inquiry into 
business insurance, which was published in September 2007
153, and in particular 
concerns related to the operation of the subscription process in coinsurance and 
reinsurance markets and conflicts of interest  in brokerage. The former issue has been 
partly addressed by an indus try initiative which the Co mmission is continuing to 
monitor, whilst the latter is more systemic in nature and will need to be addressed 
through channels other than competition policy. 
2. P OLICY DEVELOPMENTS  
2.1. The financial crisis 
2.1.1. Impact on financial markets 172. At the beginning of the autumn the financ ial crisis had a systemic impact on the 
economies of EU Member States. Many EU governments have taken measures to 
support financial stability, to restore conf idence in the financial markets and to 
minimize the risk of a serious credit crunch. 
173. In the field of competition policy – and, in pa rticular, State aid control – the role of 
the Commission has been to support fina ncial stability by rapidly giving legal 
certainty to the measures taken by Member  States. The Commissi on also contributed 
to maintaining a level playi ng field and to ensuring that national measures would not 
simply export problems to other Member States. 
174. In its October Communication on the "Appli cation of State aid rules to measures 
taken in relation to financial institutions in  the context of the current global financial 
crisis"
154, the Commission clarified its genera l approach and provided guidance on a 
number of State interventions , particularly on State guarantees, which were the most 
widespread response to the cr isis in the initial phase. 
                                                 
153 Communication form the Commission to the European Parliament, the Council, the European 
Economic and Social Committee and the Committee of the Regions, Sector Inquiry under Article 17 of 
Regulation (EC) No 1/2003 on business insurance (Final Report) ( COM(2007) 556 final, 25.9.2007 ). 
154 OJ C 270, 25.10.2008, p. 8 . 
 
EN 51   EN 175. Subsequently, the recapitalisation of banks moved into the focus of Member States' 
attention. In December, the Commission provided guidance on the assessment of such measures under EU State aid rules in  the Communication "The recapitalisation 
of financial institutions in the current fi nancial crisis: limitation of aid to the 
minimum necessary and safeguards agai nst undue distortions of competition"
155. 
176. The two communications provided crucial guidance to Member States on how to 
take effective measures to stabilise financ ial markets and ensure sustained lending to 
the real economy without creating undue distortions of competition by exporting 
problems from one Member State to the others. 
177. The consistent methodology set out in these guidance documents has permitted the 
swift design and approval of a large number of national schemes and individual 
measures to tackle the crisis, whilst a voiding harmful economic imbalances between 
banks and between Member States. 
178. The Commission approved aid in the follo wing decisions on the basis of Article 
87(3)(c): Sachsen LB156, IKB157, West LB158, Roskilde Bank159, Hypo Real Estate160, 
Bradford and Bingley161. 
179. Due to the deepening of the crisis, th e Commission decided at the beginning of 
October 2008 to approve St ate aid under Art. 87(3)(b) – aid to remedy a serious 
disturbance in the economy of a Memb er State. In 2008, the Commission approved 
the following aid schemes  supporting financial stability:  
• eleven guarantee schemes  (Denmark162, Finland163, France164, Ireland165, Italy166, 
Latvia167, the Netherlands168, Portugal169, Slovenia170, Spain171 and Sweden172); 
• two recapitalisation schemes  (France173 and Italy174); 
• one asset purchase scheme  (Spain175); and 
                                                 
155 OJ C 10, 15.1.2009, p. 2 . 
156 C 9/2008 Restructuring aid to Sachsen LB, Germany . 
157 C 10/2008 Restructuring aid to IKB, Germany . 
158 C 43/2008 Restructuring aid to West LB, Germany . 
159 N 366/2008 Rescue aid to Roskilde Bank, Denmark . 
160 NN 44/2008 Rescue aid to Hypo Real Estate, Germany . 
161 NN 41/2008 Rescue aid to Bradford and Bingley, UK . 
162 NN 51/2008 Guarantee scheme for banks in Denmark . 
163 N 567/2008 Finnish guarantee scheme . 
164 N 548/2008 Financial support measures to the banking industry in France (refinancing), not yet 
published . 
165 NN 48/2008 Guarantee scheme for banks in Ireland . 
166 N 520a/2008 Guarantee scheme for Italian banks . 
167 N 638/2008 Guarantee scheme for banks . 
168 N 524/2008 Guarantee scheme for Dutch financial institutions . 
169 NN 60/08 Guarantee scheme for credit institutions in Portugal . 
170 N 531/2008 Guarantee scheme for credit institutions in Slovenia . 
171 NN 54b/2008 Spanish guarantee scheme for credit institutions . 
172 N 533/2008 Support measures for the banking industry in Sweden . 
173 N 613/2008 Financial support measures to the banking industry in France (recapitalisation) . 
174 N 648/2008 Recapitalisation scheme . 
175 NN 54a/2008 Fund for the Acquisition of Financial Assets in Spain . 
 
EN 52   EN • four holistic schemes  with two or more of th e above elements (Austria176, 
Germany177, Greece178, United Kingdom179). 
180. The Commission also approved a number of individual cases in 2008, including 
recapitalisation, guarantee and liquidity cases: ING180, KBC181, Parex182, SNS 
Reaal183, Bayern LB184, Fortis185, Dexia186, Nord LB187, guarantee for IKB188, 
Carnegie Sweden189, Aegon190, Fortis Bank and Fortis Bank Luxembourg191. 
181. The Commission has acted quickly to restor e confidence in the market. In adopting 
these decisions, it has provide d clarity and legal certainty to the Member States and 
demonstrated that EU State aid policy reac ts in a pragmatic and responsible manner 
to the evolving market circumstances. 
182. Recapitalization in some cases has led to the State acquiring control over financial 
institutions, and the resulting issues to be considered under the ECMR. In keeping 
with the principle of neutrality as regards public or private owners hip of the means of 
production which is set out in the Treaty, and more specifi cally with the principles 
laid out in the Merger Regulation and Jurisdictional Notice themselves, the Commission has considered that such operati ons are not notifiable  concentrations in 
the event that the acquired institutions re tain their independen t power of decision-
making and are not subject to commerc ial coordination with other State 
undertakings. In the opposite  case the Commission would review such operations 
under the Merger Regulation as usual. 
2.1.2. Impact on the real economy 
183. The financial crisis had a severe impact  on the economy of the EU. Banks were 
deleveraging and becoming much more ri sk-averse than in previous years. 
Companies started to experience difficulties with access to credit. A serious downturn was starting to affect the wider economy. 
184. The challenge for the Commission was to  avoid public interv ention which would 
distort competitive conditions on the Intern al Market and undermine the objective of 
a well targeted State aid. Nevertheless, the Commission has recognised that, under 
certain conditions, there is a need for State aid to tackle the crisis. However, State aid 
                                                
 
176 N 557/2008 Aid scheme for the Austrian financial sector . 
177 N 512/2008 Aid scheme for financial institutions in Germany . 
178 N 560/2008 Aid scheme to the banking industry in Greece . 
179 N 507/2008 Aid scheme to the banking industry in the UK . 
180 N 528/2008 Measure in favour of ING (recapitalisation), Netherlands . 
181 N 602/2008 KBC Recapitalisation, Belgium . 
182 NN 68/2008 Support measures for JSC Parex Banka, Latvia . 
183 N 611/2008 SNS Reaal/New capital injection by the Dutch authorities, Netherlands . 
184 N 615/2008 Guarantee and recapitalisation for Bayern LB, Germany . 
185 N 574/2008 Measures in favour of Fortis, Belgium/Luxembourg/Netherlands . 
186 NN 45-49-50/2008 Guarantee on liabilities of Dexia, Belgium . 
187 N 655/2008 Guarantee for Nord LB, Germany . 
188 N 639/2008 Guarantee for IKB, Germany . 
189 NN 64/2008 Emergency rescue measures regarding Carnegie Investment Bank, Sweden . 
190 N 569/2008 Measure in favour of Aegon, Netherlands . 
191 NN 42-46-53A/2008 Restructuring aid to Fortis Bank and Fortis Bank Luxembourg . 
 
EN 53   EN should not be used to postpone or avoid a necessary restructuring of companies faced 
with structural difficulties. 
185. With this objective in view, the Commission has taken several steps to address the 
situation in the real economy, in addition to specific actions taken in the financial and 
banking sector. 
186. In particular, the Commission adopted the "Temporary Framework for State aid 
measures to support access to finance in the current financial and economic crisis"192. 
187. This Temporary Framework gives Member St ates additional possibilities to tackle 
the effects of the credit squeeze on the real economy. In order to meet these 
objectives, Member States may, under certa in conditions and un til the end of 2010, 
grant e.g.:  
– a lump sum of aid up to EUR 500 000 per company for the next two years to 
relieve their current difficulties, 
– State guarantees for loans at a reduced premium, 
– subsidised loans, in particular for the production of 'green' products (meeting 
environmental protection standards ea rly or going beyond such standards), 
– risk capital aid up to EUR 2.5 million per SME per year (instead of the current 
EUR 1.5 million) in cases where at least 30% (instead of the current 50%) of 
the investment cost comes from private investors. 
Also the burden of proof of market failure s in the export credit insurance market is 
lowered. 
188. The Commission adopted a "can do" approac h, thereby ensuring that crisis measures 
are approved very swiftly. The first meas ures were approved at the end of 2008193. 
2.2. Single Euro Payments Area (SEPA) 
189. SEPA has been an important focus of anti- trust advocacy in the field of financial 
services in 2008. SEPA is a self-regulator y initiative launched by the European 
Banking Industry and led by the European Pa yments Council (EPC) to move to an 
integrated euro payments area. Its aim is  to ensure that cross border payments 
become as easy and efficient to make as domestic payments. Once implemented, 
SEPA will cover credit transfers, payment car ds and direct debit. SEPA is expected 
to enhance competition and to lead to efficien cy gains. It is strongly supported by the 
Commission and the ECB. 
190. However, since the implementation of SE PA is based on decisions by the EPC, 
which is an association of banks and banki ng associations representing the European 
banking industry, and is thereby based on decisions by and agreements between 
                                                 
192 OJ C 16, 22.1.2009, p. 1 . 
193 Cases N 661/2008  KfW run loan component of German Konjunkturprogramm  (OJ C 29, 5.2.2009, p. 3) 
and N 668/2008  Federal Framework "Small amounts of compatible aid" (not yet published in the OJ), 
both in Germany. 
 
EN 54   EN undertakings that are (potential) competito rs, it requires close competition scrutiny. It 
also needs to be implemented in accordan ce with the existing Community framework 
for payment services. 
191. In a detailed, in-depth analysis, Comm ission and NCA experts jointly identified 
competition concerns and raised a number of questions. In view of the exceptional 
character of the project and its importa nt potential consequences for European 
companies and consumers, it was decided to  address these concerns in an informal 
dialogue with the EPC which began in October 2007. Given the need for a common 
European approach, the ECB and DG Internal  Market were clos ely involved in the 
dialogue. 
192. The first milestone was reached in Decembe r 2007. This was an urgent priority as 
banks had to start making their card pa yments SEPA compliant by 1 January 2008. 
As a result of the dialogue, the SEPA Ca rd framework (SCF) was clarified by the 
EPC, which explained that SEPA compliant card schemes did not need to cover all 
31 States of the SEPA territory194. To be compliant, a scheme is only required to 
operate in such a way that there are no barriers to effective competition between issuers, acquirers and processors. SEPA co mpliant card schemes should therefore be 
capable of being acquired or issued in a ny SEPA country. An ob ligation to cover the 
whole of the SEPA territory could ha ve caused banks and national banking 
associations to abandon cheap and efficien t national systems for one of the only two 
existing (more expensive) international sc hemes (i.e. Maestro/V-Pay for debit cards 
or MasterCard/Visa for credit cards). On the basis of the clarification provided, the 
geographical coverage will be decided by market forces alone. New schemes will 
now stand a real chance of entering the ma rket, which should encourage the creation 
of a competitive SEPA-wide payment cards market. On 26 June the EPC published easy-to-read Questions and Answers document
195 clarifying key aspects of 
compliance with the SCF. 
193. Intensive discussions also t ook place in meetings runni ng from May until June, with 
a number of subsequent follow-up meetings. The dialogue will still be ongoing in 2009, but it can already be called a success,  since the EPC was able to provide 
satisfactory clarifications on a number of the competition issues identified. For instance, the EPC clarified that national banking communities were not in a position 
to foreclose the market through national sp ecifications (the so-called "Additional 
Options Services"). The rules and condi tions of access to schemes by payment 
institutions and equal treatment for pa yment institutions and banks under the SCF 
were also clarified. 
194. The dialogue with the EPC on SEPA provide d substantial clarification to market 
players and other stak eholders in 2008, a nd is still on track  for 2009. Interchange 
fees for SEPA Direct Debit, governance of  the EPC and of the schemes, and also 
standardisation, will be on the agenda for discussion. The momentum created in the 
earlier stages of the Dialogue should help  tackle the remaining obstacles to the 
achievement of a truly competitive European payment cards market. Reinforcing the 
                                                
 
194 EU27, other EEA countries (Norway, Iceland and Liechtenstein) and Switzerland 
195 Questions and Answers clarifying key aspects of the SEPA Cards Framework, 
http://www.europeanpaymentscouncil.eu/documents/EPC075-
SCF%20QAs%20Version10%20Final.pdf   
 
EN 55   EN competition dimension of SEPA will in turn he lp to achieve better services at a better 
price for retailers and consumers. 
C – ELECTRONIC COMMUNICATIONS  
1. O VERVIEW OF THE SECTOR  
195. The electronic communications sector in the EU is characterised by rapid 
technological and commercial changes. 2008 was the sixth c onsecutive year of 
increased investment in the sector. Howe ver, based on final data provided by the 
National Regulatory Authorities (NRAs), the rate of investment growth in 2007 was 
less than in 2006 and the trend is flattening out. 
196. Growth of revenue was again slightly slower  in 2008 than in the previous years. Due 
to more effective competition, technologi cal developments and new business models, 
the broadband markets are developing rapi dly. Penetration in the mobile voice 
markets increased again , while the growth  of revenues slowed. Traditional fixed 
voice telephony continued to d ecline, whereas a steady rise of Voice over Internet 
Protocol (VoIP) and a contin uing shift from fixed to mobile voice services were 
taking place. 
197. In reaction to increased competition, mainly from new entrants and cable operators, 
many telecom network operators started to offer their customers convergent services 
(fixed and mobile voice te lephony, broadband internet an d television) some years 
ago. To support this strate gy, as well as to reduce co sts in the medium term, 
investments by the network operators in the roll-out of optical fi bre networks have 
already taken place or have been announced. The roll-out of optical fibre networks 
itself will support new broadband applications and services that increasingly require 
higher bandwidths. 
198. Retail competition has resulted in lowe r prices for electronic communications 
services. Consumers with a high usage profile, in pa rticular, can in many cases 
benefit from flat rate fees for both fi xed voice telephony and broadband internet. In 
general, prices for mobile services have also fallen dur ing the year. The picture is 
one of increasing volume of communications  and falling prices, suggesting that the 
average European consumer of electron ic communications services in 2008 was 
better off than in the previous year. 
199. With regard to broadband internet se rvices customers have enjoyed higher 
bandwidths at lower prices. 
200. Providers of electronic comm unications services continued to operate within the 
confines of the EU regulatory framework for electronic communications (Regulatory 
Framework)196, which is designed to facilitate access to legacy infrastructure, foster 
                                                 
196 Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common 
regulatory framework for electroni c communications networks and services (Framework Directive) 
(OJ L 108, 24.4.2002, p. 33 ), Directive 2002/19/EC of the European Parliament and of the Council of 
7 March 2002 on access to, and interconnection of, electronic communications networks and associated 
 
EN 56   EN investment in alternative network infrastruc ture and bring choice and lower prices for 
consumers. 
2. P OLICY DEVELOPMENTS  
2.1. Application of the Regulatory Framework and other policy developments 
201. Ex ante regulation under the Regulatory Framework builds on competition law 
principles. This approach has been a dopted by National Regul atory Authorities 
(NRAs) in their assessmen t of electronic communica tion markets. National 
regulators concluding that a market is not  actually competitive must identify 
operators with significant market pow er and impose appropriate regulatory 
obligations. Regulators are required to  notify the Commission and the other 
regulators of their pro posals under a consultation mechanism provided by the 
Framework Directive (the so-called "Article  7 procedure"). The other regulators can 
comment on the notifying regulator's dr aft measures. The Commission may also, 
following an in-depth investigation, ask th e notifying regulator to  withdraw a draft 
measure if it does not comply with EU la w. In its new Recommendation on relevant 
product and service markets within the electronic communications sector the 
Commission has identified seven specific pr oduct and services markets, at both 
wholesale and retail levels, as susceptible to ex ante  regulation197. 
202. In 2008 the Commission received 123 notif ications from NRAs and adopted 85 
comments letters and 33 no-comments letters within the Community consultation mechanism under Article 7 of the Framework Directive. In five cases, the Commission raised serious doubt s as to the compatibility of the notified measures 
with EU law and opened second-phase inve stigations under Ar ticle 7(4) of the 
Framework Directive. 
203. Taking account of the Commission's positions under Article 7(4) of the Framework 
Directive, several NRAs opted for the with drawal of draft measures. This was the 
case in second-phase investigations concer ning the wholesale national market for 
trunk segments of leased lines
198 and the market for transi t services in the fixed 
public telephony network199 in Poland. In both cases the Commission took the view, 
that in particular the data  provided did not support the finding of significant market 
power in the markets concerned. The Sloveni an NRA withdrew the notification in a 
case that concerned the wholesale market  for access and call origination on public 
                                                                                                                                                         
facilities (Access Directive) ( OJ L 108, 24.4.2002, p. 7 ), Directive 2002/20/EC of the European 
Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (Authorisation Directive) ( OJ L 108, 24.4.2002, p. 21
), Directive 2002/22/EC of 
the European Parliament and of the Council of 7 March 2002 on universal service and users' rights 
relating to electronic communications networks and services (Universal Service Directive) ( OJ L 108, 
24.4.2002, p. 51 ), Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 
concerning the processing of personal data and the protection of privacy in the electronic 
communications sector (Directive on pr ivacy and electronic communications) ( OJ L 201, 31.7.2002, 
p. 37 ). 
197 Commission recommendation of 17.12.2007 on relevant product and service markets within the 
electronic communications sector ( OJ L 344, 28.12.2007, p. 65 ). 
198 Case PL/2008/0772  (SG-Greffe (2008) D/203315). 
199 Case PL/2008/0766  (SG-Greffe (2008) D/203269). 
 
EN 57   EN mobile telephone networks in Slovenia200. With regard to a notification on the 
wholesale broadband access market in Spai n, the Commission clos ed a second-phase 
investigation with comment s after the Spanish NRA had responded to the serious 
doubts of the Commission by amending th e proposed draft measure during the 
second-phase investigation201. 
204. The transition of the elec tronic communications sector from former national 
monopolies towards competition continue d in 2008. Pursuant to the 2007 
Recommendation on the relevant markets susceptible to ex ante  regulation202, the 
overall number of mark ets susceptible to ex ante  regulation has been reduced from 
18 to 7. According to the Recommendation when NRAs intend to regulate markets which are no longer listed, they should ha ve recourse to the so called "three 
criteria"
203 test. By stating these rules, the Recommendation is following the 
principles of the Regulatory Framework, th e aim of which is to gradually reduce ex 
ante regulation as competition in the ma rket develops. The new Recommendation 
has proved to be a strong instrument of  deregulation. In 2008 most NRAs concluded 
that, even when national sp ecificities are taken into  account, a number of (and 
possibly all) markets that are no longer listed in the Recommendation have to be 
deregulated. A good example is the Czech ma rket for retail fixed calls, which is no 
longer listed in the Recommendation on relevant markets. The Czech NRA, Český 
telekomunika ční úřad (CTU), carried out the three cr iteria test, found the barriers to 
entry to be low and, consequently, proposed  to withdraw the ex isting regulation. In 
contrast, the Polish NRA, Urz ąd Komunikacji Elektroniczn ej (UKE), proposed to 
maintain regulation on the ma rket of transit services in the fixed public telephony 
network After the Commission i ssued a letter expr essing serious doubts  in this case 
did the Polish NRA decide to withdraw th e notification. Later, UKE re-notified its 
draft measure, concluding that the mark et was competitive, and proposed to 
withdraw the regulation. 
205. The market analyses by NRAs have demonstrated increasing competition, 
particularly in the retail markets as a re sult of wholesale regul ation. The regulatory 
framework allows also defining sub-na tional geographic ma rkets where clear 
different conditions of competition arise.  Some NRA have indeed demonstrated 
differentiated competitive conditions in certain markets, which has allowed regulation to focus on those areas where a need for ex ante  regulation persists. As a 
consequence of this increased compe tition the British regulator, the Office of 
Communications (OFCOM), was the firs t NRA to identify different broadband 
markets in different geographic areas in a single country and proposed removing 
regulation in those geographic areas where there is now effective competition. The 
Commission approved the proposal on the basis of extensive data provided by 
                                                
 
200 Case SI/2008/0806 . 
201 Case ES/2008/0805 . 
202 Commission recommendation of 17.12.2007 on relevant product and service markets within the 
electronic communica tions sector ( OJ L 344, 28.12.2007, p. 65 ), replacing Commission 
Recommendation 2003/311/EC (2). 
203 The "three criteria" are: (i) high and non-transitory ba rriers to entry, (ii) a ma rket structure which does 
not tend towards effective competition within the re levant time horizon, (iii) the insufficiency of 
competition law alone to adequately address th e market failure(s) concerned (see Commission 
recommendation of 17.12.2007 on relevant product and service markets within the electronic 
communications sector, cited above). 
 
EN 58   EN OFCOM. Following this decision, several other NRAs also examined geographic 
segmentation. In a case concerning the wholesale broadband access market in Austria, the Austrian NRA, Rundf unk und Telekom Regulierungs-GmbH (RTR) 
proposed defining a national market, albeit acknowledging certain geographic 
variations in competitive conditions when defining the remedies
204. In a case 
concerning the market for wholesale broadband access and high-speed broadband access in Portugal, the Portuguese regulator , Autoridade Nacional De Comunicações 
(ANACOM), examined two different geogr aphic areas where competitive conditions 
differed. ANACOM then decided to dere gulate the geographic zones where 
structural competition problems no longer persist (e.g. densely populated zones like 
Lisbon or Porto). 
206. The work on the review of the Regulat ory Framework continued during 2008. On 
24 September, the European Parliament  adopted opinions on the Commission's 
legislative proposals at its first reading. On 27 N ovember, the Council of the 
European Union reached a political agreemen t on the package of measures to reform 
the EU electronic communications framework. 
207. Termination rates in the EU are high a nd are also not regulated consistently 
throughout the EU
205. This allows operators to expl oit their monopolistic termination 
market, which runs counter to the princi ples of competition law. This puts other 
operators and, ultimately, consumers at a di sadvantage. Therefore, the Commission 
has already proposed a recommendation that should bring termination rates down to 
an efficient level, ensuring a consistent a pproach to regulating these rates. There are 
plans to adopt such a recommenda tion as early as possible in 2009. 
208. Access to next generation networks is crit ically important for alternative network 
operators that have invested in infrastructure  at the level of local exchanges. In order 
to provide more regulatory certainty for mark et players and to foster investment and 
competition in this area, the Commi ssion is currently working towards a 
Recommendation on the appropria te regulatory approach and remedies applicable in 
the context of new generation network access. 
209. For the purpose of simplifying and accelerating the implementation of regulatory 
measures the Commission has streamlined  its Recommendation on notifications, 
time limits and consultations provided for in  Article 7 of the Framework Directive206. 
The aim of the new Recommendation is to reduce bureaucracy and ensure greater 
efficiency in the cooperation between NRAs  and the Commission. In particular, it 
allows national regulators to use a simplifie d and shortened standard form to notify 
certain decisions to the Comm ission. The simplified procedure applies, for instance, 
to decisions to withdraw regulation on markets which the Commission has removed 
from the list of markets susceptible to ex ante  regulation. It further invites NRAs to 
                                                 
204 Later, the decision by the Austrian NRA was overturned by the Austrian Administration Court. 
205 According to the snapshot of mobile termina tion rates from the European Regulators Group ( ERG (08) 
41 final ) mobile termination rates range from 2€c/min (in Cyprus) to above 15€c/min (in Bulgaria), the 
average being about 8.7€c/min. 
206 Commission Recommendation of 15.10.2008 on notifications, time limits and consultation provided for 
in Article 7 of Directive 2002/21/EG of the European Parliament and of the Council on a common 
regulatory framework for electronic communications networks and services ( OJ L 301, 12.11.2008, 
p. 23 ). 
 
EN 59   EN submit the proposed market definition, the market analysis and the proposed 
remedies in a single stage instead  of in several notifications. 
2.2. Developments in the area of State aid 
210. The Commission encourages State aid meas ures that aim to provide equitable 
broadband coverage at affordable prices fo r European citizens. In its assessment of 
public funding schemes under the State aid rules, the Commission acknowledges 
that, due to the economic principles or  technological restri ctions of broadband 
networks, private operators do not have sufficient market incentives to provide 
adequate broadband services, typically in  rural and remote areas. The Commission 
has built up a clear and consistent State aid policy in the last years and endorses properly justified and propor tionate broadband scheme s if the distortion of 
competition and the effect on trade is limited. 
211. In 2008, some Member States focused primarily on supporting affordable basic 
broadband services, typically in rural areas where such services do not exist. Their 
ultimate aim is to provide broadband services for all citizens and companies no matter where they live or where they are located. 
212. Commission decisions concerni ng State aid to broadband fell into this category in 
2008. Several Member States took significant st eps to bridge the "digital divide" in 
their territory, aiming to overcome the gap in terms of access to adequate broadband services between well-supplied urban areas and rural areas that  were under-supplied 
or receiving no services at all. In genera l, after the public authorities had clearly 
identified the targeted ar eas requiring public support, via thorough market research 
and consultation with existing operators, the Commission asked for several safeguards to be implemented to limit dist ortion of competition and to minimize the 
use of public funds. Such safeguards included, inter alia,  conducting an open tender 
procedure to grant aid, providing open w holesale access on the subsidized networks 
to other operators who could introduce competition where citizens had previously not had a choice, technological neutrality of th e measures so that citizens should secure 
the best offer, or monitoring of th e use of public monies by the granting 
authorities
207. 
213. Public intervention in some Member States  is gradually shifting towards support for 
very high speed broadband networks, th e so-called "next generation" networks208, 
targeting not only under-served  areas but also areas wher e basic broadband services 
are already available, with the aim of accel erating the deployment of such networks 
                                                 
207 See Cases N 412/2007  Aid to reduce digital divide in Piedmont  (OJ C 113, 8.5.2008, p. 1), N 14/2008  
Broadband in Scotland - Extending broadband reach  (OJ C 150, 17.6.2008, p. 3), N 73/2008  Public 
support to broadband  (OJ C 290, 13.11.2008, p. 1), N 250/2008  Broadband connections for Alto Adige 
II (OJ C 289, 12.11.2008, p. 2), N 115/2008  Broadband in rural areas of Germany  (OJ C 194, 
31.7.2008, p. 3), N 497/2007  Broadband infrastructure in Lazdijai and Alytus  (OJ C 290, 13.11.2008, 
p. 3), N 150/2008  Broadband in rural areas of Freistaat Sachsen  (OJ C 12, 17.1.2009, p. 2), N 
237/2008  Broadband support in Niedersachsen  (OJ C 18, 24.1.2009, p. 1), N 266/2008  Broadband in 
rural areas of Bayern  (OJ C 12, 17.1.2009, p. 2), N 508/2008  Provision of Remote Broadband Services 
in Northern Ireland  (OJ C 18, 24.1.2009, p. 2). 
208 Next generation access networks is a broad term to describe the new, typically  fibre-based, broadband 
networks that will provide much faster and more symmetrical broadband connection for the end-users 
than the current ones (for instance, ADSL). 
 
EN 60   EN in the absence of private initiatives. In 2008, the Commission did not endorse such 
measure under the State aid rules and it is currently examining these issues. 
D – INFORMATION TECHNOLOGY  
1. O VERVIEW OF THE SECTOR  
214. The information and communication technol ogy (ICT) sector is characterised by 
digital convergence and the concomitant growing importanc e of interoperability and 
standards. The sector accounts for around 5-6% of the GDP in the EU. Because of the economic downturn, ICT spending has been reduced, but growth in OECD countries for 2008 is still expected to be around 4%
209. 
215. Given the network effects that prevail in the ICT sector, interoperability is an 
important market feature. Although personal co mputers (PC) are cons idered to be the 
main gateway to the digital world, us ers are increasingly accessing data through 
other devices such as smart-phones, which are able to communicate with each other 
and with computing devices. This reinforces  the need for interoperability between 
software products and devices. 
216. Standards can play a key role in this cont ext by facilitating interoperability. It is 
important that standard-setting organisati ons establish rules which ensure fair, 
transparent procedures and early disclosure  of relevant intellectual property. The 
Commission will continue to monitor the operation of standard-setting organisations in this regard. 
217. On a parallel track, business models ar e moving towards convergent services and 
vertical and horizontal inte gration. The sale of soft ware applications and the 
provision of content are becoming increasi ngly interwoven. There is an increasing 
trend for companies to try to control digita l as well as physical networks and to aim 
to set and control the standard platforms. 
218. Intellectual Property Rights (IPR) have become a key element of the digital 
environment. Use and control of IPR, in the form of content or applications, has 
become central in business models and st rategies. Their use has thereby become a 
horizontal issue. 
219. Open source software has become an establ ished feature of the mainstream software 
market. In many software markets, open source software has become a strong 
competitor. 
                                                
 
209 See OECD Information Technology Outlook 2008 Highlights . 
 
EN 61   EN 2. P OLICY DEVELOPMENTS  
2.1. Anti-trust 
220. On 22 October 2007, Microsoft announced a significant reduction in its licence fees 
for interoperability information. On  21 February 2008, Microsoft voluntarily 
launched its "interoperability principles" a nd disclosed a wide range of information 
relating to interoperability on its websit e. At this stage the Commission does not 
know with certainty whether this informa tion is indeed complete and accurate. 
221. In the Intel case, a SSO was issued on 17 June, reinforcing the Commission's 
preliminary view outlined in a SO of 26 July 2007 that Intel infringed EC Treaty 
rules on abuse of a dominant position (Article  82) with the aim of excluding its main 
rival, AMD, from the x86 Central Processing Units (CPU) market.  
222. In June, Google and Yahoo announced they wo uld enter into an agreement under the 
terms of which Google would provide some of  the advertisements to be displayed on 
Yahoo’s properties. The Commission examined  the agreement in close cooperation 
with the US Department of Justice (D oJ). The parties fi nally announced on 
5 November that the deal was not being pursued. 
2.2. Merger control 
223. In 2008 the Commission issued decisions in tw o vertical merger cases in the satellite 
navigation industry. Both transactions we re cleared without conditions. On 14 May 
the Commission approved the acquisition by TomTom, a manufacturer of Portable 
Navigation Devices (PND) a nd navigation software, of Tele Atlas, one of two 
suppliers of navigable digital map databa ses with EEA-wide coverage. On 26 June 
the Commission approved the acquisition by  Nokia, a manufacturer of mobile 
handsets, of NAVTEQ, the only credible competitor to Tele Atlas. Both TomTom/Tele Atlas
210 and Nokia/NAVTEQ211 were vertical transactions and were 
examined strictly in the light of th e recently adopted non-horizontal merger 
guidelines212. 
224. Navigable digital map databases, such  as those supplied by Tele Atlas and 
NAVTEQ, are one of the key structural co mponents of dedicated navigation devices 
and other navigation applications. The di gital map databases include geographic 
information containing the position and sh ape of each feature on a map, additional 
attributes (street names, addresses, turn restrictions, etc.) and display information. 
Digital map databases are said to be navigable when they include sufficient 
functionalities to provide real -time turn-by-turn navigation. 
225. Over the past several years satellite naviga tion capabilities and navigable digital map 
databases have been included in a growing num ber of mobile devices, such as mobile 
phones, handheld computers and PND. Both  purchasers, i.e. TomTom and Nokia, 
embed digital maps in the devices they manufacture. Due to the high costs of entry 
                                                 
210 Case COMP/M.4854  TomTom/Tele Atlas.  
211 Case COMP/M.4942  Nokia/NAVTEQ.  
212 Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings (OJ C 265, 18.10.2008, pp. 6-25). 
 
EN 62   EN and the significant time required to creat e a navigable digital map with sufficient 
coverage and accuracy, the Commission found th at the market for navigable digital 
maps with EEA-wide coverage was e ssentially a duopoly, where the two main 
companies had market shares of appr oximately 50% each. The Commission found 
that the product lines of other digital map suppliers were unlikely to be comparable 
with Tele Atlas or NAVTEQ in the short-to-medium term. 
226. Although the satellite navigation industry ha s expanded very rapi dly, it still remains 
a nascent market in which different tec hnologies and business models compete. It 
was therefore crucial to prope rly assess the competitive impa ct of these transactions 
on the further development of th e satellite navigation industry. 
227. The theory of harm at the heart of both TomTom/Tele Atlas and Nokia/NAVTEQ 
concentrated on input foreclosure. In both cases, the merger led to the vertical 
integration of one of the two companies supplying navigable digital maps to the 
downstream competitors of the purchaser. The two transactions had only a limited impact on each other in terms of competitive assessment, as TomTom and Nokia are active on what the Commission found to  be different downstream markets. 
228. The concerns were that the merged en tities could block the access of downstream 
competitors to navigable digital map databases, degrade the quality of map databases 
supplied to competitors or use sensitive information passed by competing device manufacturers to Tele Atlas and NAVTEQ. The merged entities would have had an 
incentive to engage in input foreclosure if an increase in sales on the downstream 
market, at the expense of competitors, had allowed them to compensate for lost sales of digital map databases. 
229. The Commission conducted an in-depth qua litative and quantitative analysis to 
assess the incentive of TomTom and Tele  Atlas, and of Nokia and NAVTEQ, to 
foreclose their competitors in their respect ive downstream markets or to degrade the 
quality of digital map databases offered to competitors. 
230. In both cases the economic analysis c onducted by the Commission concluded that, 
under a foreclosure strategy, the merged enti ty would capture only relatively limited 
sales downstream by increasing map database pricing or lowering quality for their competitors, and that the loss of revenue due to decreasing sales of map databases would not be replaced by additional sales of mobile handsets by Nokia or PND by 
TomTom. 
231. The Commission finally conc luded that the merging parties had no incentive to 
foreclose their competitors and that they w ould continue to sell digital map databases 
to other manufacturers of mobile navi gation devices, including PND and mobile 
phones. 
 
EN 63   EN E – MEDIA  
1. O VERVIEW OF THE SECTOR  
232. As new technology increases the number of  ways people can access entertainment 
and information, there is tough competition in  the media sector to attract audiences. 
Traditional distribution cha nnels such as newspapers, television and compact discs 
are facing competition from new distribution platforms such as the internet or mobile devices. The increase in the overall number of distribution channels is fuelling the demand for content. User-generated conten t is another nascent market that puts 
pressure on traditional content providers. As a result, there is a trend towards 
consolidation between the more esta blished media players and new media 
businesses, as well as between the owners of infrastructure and content producers. 
233. Technological developments are also affec ting the way copyright is administered, 
especially for works distributed over the in ternet. The tradition of managing rights on 
a territorial basis is not suited to the on- line environment. EEA-wide distribution of 
media content could bring benef its to artists and consumers. 
234. Ongoing technological development and cha nging consumption patterns are breaking 
down barriers between broadcasters and other media operators. Private media 
operators continue to be c oncerned about State aid for public service broadcasters, 
with whom they compete for audience share, especially for what they consider to be 
purely commercial offers. They also allege that the State funding for public service broadcasters may exceed what is necessary for their public service mission, allowing them to subsidise commercial activities and to engage in anti-competitive practices. Private operators claim that the public f unding of public service broadcasters' new 
media activities distorts competition and discourages private initiatives to develop new and innovative services. 
235. The switch from analogue to digital broad casting, which Member States are due to 
complete by the beginning of 2012
213, is increasingly providing consumers with a 
greater number of TV cha nnels and radio stations, and better sound and picture 
quality. The digital switchover concerns  all commonly available broadcasting 
transmission platforms such as satellite, cable and terrestrial, obliging broadcasters and network operators to update their transmission equipment and viewers to install digital decoders. The Commission is comm itted to support the switch off of analogue 
terrestrial TV broadcasting and recognises th at the process may be delayed if left 
entirely to market forces. A number of Member States are pr oviding public funding 
to encourage broadcasters and consumer s to facilitate th e switchover. The 
Commission has no general objection to th e granting of State aid in this area. 
However, Member States have to demons trate that the aid is a necessary and 
appropriate instrument, is limited to the minimum necessary and does not unduly 
distort competition. 
                                                
 
213 Commission Communication on accelerating the transiti on from analogue to digital broadcasting ( COM 
(2005) 204 final, 24.5.2005 ). 
 
EN 64   EN 236. Across Europe, an estimated EUR 1.6 billion214 is spent on national film support 
each year, most of which is for film productio n. This mainly takes the form of direct 
grants or tax incentives. Films produced or part-financed by the major US film studios accounted for 70% of total EU box office data in 2008
215. 
2. P OLICY DEVELOPMENTS  
237. The Commission's main objective from a comp etition perspective is to ensure that 
there is a level playing field in the media sector, whethe r between different 
commercial operators or between comm ercial operators and publicly-funded 
operators. 
2.1. Roundtable on opportunities for and barriers to on-line retailing and the 
European Single Market 
238. On 17 September, Competition Commissioner Neelie Kroes discussed with senior 
consumer and industry representatives th e business opportunitie s created by the 
Internet and the existing barriers to incr eased online retailing of music and goods in 
Europe. The aim was to explore how to in crease the business opportunities and how 
to ensure that European consumers have access to the widest possible range of goods 
and services online. The services of DG Competition published an issues paper for 
the group and invited all inte rested parties to submit th eir own comments on this 
paper (more than 30 contributions were received)216. 
239. On 16 December a follow-up meeting took place which focused on the online 
distribution of music. The pa rticipants discussed in part icular how the practices of 
licensing music rights can be improved in order to facilitate Europe-wide online 
music offers. The possibility of EEA-wid e licensing of all rights concerned and 
competition between several rights managers  was addressed. Further, the conditions 
for setting up and maintaining a database which contains comprehensive information 
about the ownership of rights were explored. 
2.2. Rights management and on-line distribution 
240. As regards the management of music ri ghts, the Commission is sued a decision 
against 24 EEA collecti ng societies on 16 July217. Collecting societies manage the 
music rights of authors (both composer s and lyricists) on their behalf. The CISAC 
decision prohibits membership and exclusivity clauses in the reciprocal representation agreements between collecting societies and a concerted practice 
concerning the territorial delineation of these representation agreements. 
241. According to the membership clause, neithe r of the contracting collecting societies 
may, without the consent of th e other, accept as a member an author who is either 
already a member of another collecting soci ety or who is a national of the country 
                                                
 
214 Based on the survey of 2002-2005 EU film subsidy data prepared for the Copenhagen Think Tank on 
European Film and Film Policy.  
215 European Audiovisual Observatory, Focus 2009: World film market trends, p. 14. 
216 Further information is available in the On-line Commerce section  of the Europa Competition website. 
217 Case COMP/38.698  CISAC Agreement (summary decision published in OJ C 323, 18.12.2008, p. 12). 
 
EN 65   EN where the other collecting society operates. The membership clause thereby prevents 
authors from choosing or moving to anothe r collecting society. U nder the exclusivity 
clause, a collecting society authorises anot her collecting society to administer its 
repertoire on a given territo ry on an exclusive basis. This prevents the collecting 
society from licensing its repertoire itself in the territory of the domestic collecting society or from allowing an additi onal collecting society to do so. 
242. The decision also prohibits a concerte d practice between collecting societies 
according to which the collecting socie ties limit their mandates to the domestic 
territory of the other collecting societies. The result is a de facto  exclusivity for the 
granting of licences which cover the repertoi re of more than one collecting society 
and a strict segmentation of the market  on a national basis. The systematic 
delineation of the domestic territory amount s to a concerted practice, because it 
cannot be explained by indi vidual market behaviour or by an objective need for 
geographic proximity between the collecting society and the commercial user. The 
modes of transmission covered by the decisi on concerning this sp ecific infringement 
are internet, cable retransmission and sa tellite exploitation. Twenty-two parties 
appealed against the decision and eight requested interim measures
218. The President 
of the CFI rejected the requests for interim measures. 
2.3. Digital broadcasting 
243. In 2008, the Commission continued to mon itor the transition (switch-over) from 
analogue to digital terrestrial broadcasting in the EU Member States. In the context 
of the ongoing infringement procedure under Article 226 EC against Italy, following 
a complaint by the Italian consumers' association Altroconsumo219, the Commission 
services reviewed the ne w amendments to the Italian broadcasting regime220 and had 
various contacts with the Italian authoritie s on the scope of the new legislation and 
criteria for the digitalization of terrestr ial television networks. The amendments to 
the regime should lead to more frequenc ies being available to new entrants and 
smaller existing broadcasters. In parallel, the Italian authorities adopted a timetable 
for the implementation of the national "s witch-off" plan by 2012 (which is the 
current "switch-off" date) and completed the process of "digitisation" of the Sardinia Region. 
2.4. Public service broadcasting 
244. In line with the interpretative Protocol to the Treaty of Amsterdam on the system of 
public service broadcasting (the Amsterda m Protocol), the Co mmission recognises 
that it is the prerogative of Member Stat es to organise and fund public service 
broadcasting. The objective of the Commi ssion's policy towards State aid for public 
                                                
 
218 Cases T-392/08 R AEPI  v Commission , T-398/08 R Stowarzyszenie Autorów ZAiKS  v Commission,  T-
401/08 R Säveltäjäin Tekijänoikeustoimisto Teosto  v Commission , T-410/08 R GEMA  v Commission , 
T-411/08 R Artisjus  v Commission , T-422/08 R Sacem  v Commission , T-425/08 R KODA  v 
Commission  and T-433/08 R SIAE  v Commission . 
219 See Press Release IP/07/1114 , 18.8.2007. 
220 Article 8-novies of Law n. 101/08 (Legge 06/06/2008, n. 101 – Conversione in legge, con 
modificazioni, del decreto-legge 8 aprile 2008, n. 59 , recante disposizioni ur genti per l'attuazione di 
obblighi comunitari e l'esecuzione di sentenze della Corte di giustizia delle Comunità europee), 
published in Gazzetta Ufficiale della Repubblica Italia na – Serie Generale, numero 132, 7 giugno 2008. 
 
EN 66   EN service broadcasters is to ensure th at public funding does not exceed what is 
necessary to fulfil their public service mission and does not lead to unnecessary 
distortions of competition. 
245. The Commission considers that State aid to public service br oadcasters may be 
declared compatible where the requirements laid down in the Commission’s Broadcasting Communication
221 are fulfilled. The Commission has assessed the 
numerous notifications and complaints c oncerning the financing of public service 
broadcasters on the basis of the Broa dcasting Communication and has further 
clarified and developed the re quirements in its decisions. 
246. The Commission accepts a broadly defined publ ic service mission to offer balanced 
and varied programmes, including informati on as well as entertainment and sports. 
The Commission also recognises that th e public service remit may include new 
media activities, provided that they serve the same democratic, social and cultural 
needs of society as traditional broadcas ting and are properly de fined and entrusted. 
247. The Commission continued to approve State financing for public service 
broadcasters where both the public service re mit and the financing are determined in 
full transparency and where the State fundi ng does not exceed what is necessary to 
fulfil the public service mission. In 2008 the Commission adopted two decisions 
concerning the financing of public service br oadcasters pursuant to Article 86(2) EC 
in combination with the Broadcasting Communication. The first concerned the 
general financing system of the Belgian (Flemish) public service broadcaster VRT222. 
The second decision concerned the financi ng regime in favour of the Irish public 
service broadcasters RTÉ and TG4223. In both cases, the Commission closed the 
investigation, having received commitments from Belgium and Ireland. These commitments ensure a more precise definition and a proper entrustment of the public service mission as regards new media activities, adequate safeguards against overcompensation and cross-subsidisation, and respect for market principles in terms 
of the public service broadcasters' commercial  activities. In partic ular as regards the 
possible offer of new media activities, pr ior evaluation procedures allow for new 
offers to be evaluated taking into account their public service ch aracter, as well as 
their impact on the market. Moreover, in  2008, the Commission also cleared urgent 
State support to remedy the tight financia l situation of two public broadcasters, 
France Télévisions
224 under Article 86(2) EC, and TV2 Danmark225 under Article 
87(3)(c) EC and the provisions on aid to rescue and restructuring. 
248. Based on recent decision-making practice an d the results of th e public consultation 
held between January and March, the Commission has launched a review of the Broadcasting Communication
226. The main aims of the review are to provide more 
clarity to all market participants and to  secure a future-proof framework, properly 
                                                 
221 Communication from the Commission on the application of State aid rules to public service 
broadcasting ( OJ C 320, 15.11.2001, p. 5 ). 
222 Case E 8/2006  State funding for Flemish public broadcaster VRT (OJ C 143, 10.6.2008, p. 7). 
223 Case E 4/2005  State aid financing of RTE and TNAG (TG4) (OJ C 121, 17.5.2008, p. 5). 
224 Case N 279/2008  Capital injection for France Télévisions  (not yet published in the OJ). 
225 Case N 287/2008  Rescue Aid to TV2/Danmark A/S  (OJ C 9, 14.1.2009, p. 3). 
226 IP/08/1626. 
 
EN 67   EN adapted to the new technological environm ent. The Commission presented a draft 
new Communication for further pub lic consultation in November. 
249. Under the Commission's rules concerning SGEI , compensation paid to small local or 
regional public service broad casters may be compatible with Article 86(2) EC and 
not subject to prior notifi cation under certain conditions227. 
2.5. State aid for films 
250. As part of its proposal to extend the validity of the State aid assessm ent criteria in the 
2001 Cinema Communication228, the Commission identified a number of trends it 
had detected in State aid notifications  for film support schemes by mid-2008. These 
included support for a wider range of fi lm-related activities beyond the film and 
audiovisual production referred to in th e 2001 Cinema Communication, such as aid 
for film distribution and for digitisation of cinemas. At the same time, the Commission has been receiving  a growing number of notifications of regional film 
support schemes and is increasingly awar e of the competition among some Member 
States to use State aid to attract inward i nvestment from large-scale, mainly US, film 
production companies. During 2008, the Comm ission continued to closely monitor 
these developments when deciding on its  approach towards notified film support 
schemes. 
251. As in previous years, there were several State aid decisions a pproving film support 
schemes. The most notable of these in  2008 were the Hungarian film support 
scheme
229, the Italian film production tax incentives230, the Finnish film support 
scheme231 and the German film support scheme232. 
2.6. Application of merger control 
252. On 11 March, the Commission cleared the proposed acquisition by Google of the 
online advertising technology company DoubleClick233. This  merger generated 
considerable public interest as it concerne d the ubiquitous search engine that most 
Europeans use in their daily lives. Google o ffers search capabilities for end-users free 
of charge and provides on-line advertisi ng space on its own websites and on partner 
websites through its intermediation networ k called "AdSense". DoubleClick mainly 
sells ad serving, management and repor ting technology worldwide to website 
publishers and to advertisers and agencies. 
253. From a competition policy perspective, it was the first major concentration for which 
the Commission had to assess non-horizonta l effects following its  adoption of the 
Non-Horizontal Merger Guidelines. The investigation concerned a relatively new 
industry, which is constantly and rapidly evolving and in which reliable market data 
                                                 
227 Commission decision, 28.11.2005, on the application of Article 86(2) of the EC Treaty to State aid in 
the form of public service compensation granted to cer tain undertakings entrusted with the operation of 
services of general economic interest ( OJ L 312, 29.11.2005, p. 67 ). 
228 IP//08/1580. 
229 Case N 202/2008  Hungarian film support scheme (OJ C 237, 28.10.2008, p. 1). 
230 Case N 595/2008  Tax incentives for film production (not yet published in the OJ). 
231 Case NN 70/2006  Aid Scheme to cinema in Finland (not yet published in the OJ). 
232 Case N 477/2008  German film support scheme  (not yet published in the OJ). 
233 Case COMP/M.4731  Google/ DoubleClick . 
 
EN 68   EN are extremely difficult to obtain.  The Commission found that Google and 
DoubleClick were not exerting major comp etitive constraints on each other’s 
activities and therefore could not be considered as competitors. Furthermore, the elimination of DoubleClick as a potential competitor in the on-line intermediation 
advertising services market would not have  an adverse impact on competition, since 
other players would continue to exert sufficient competitive pressure. 
254. The Commission also analysed  the potential effects of non-horizontal relationships 
between Google and DoubleClick following co ncerns raised by th ird parties during 
the market investigation. The Commission found that the merged entity would not 
have the ability to engage in strategies aimed at marginalising Google’s competitors, 
mainly because of the presence of credib le ad serving alternatives to which 
customers (publishers, advertisers and ad  networks) can switch, in particular 
vertically integrated companies such as  Microsoft, Yahoo! and AOL. The market 
investigation also found that the merged enti ty would not have an incentive to close 
off access for competitors in the ad serving market, mainly because such strategies 
would be unlikely to be profitable. 
255. On 14 February, the Commission cleared th e proposed acquisition of the UK-based 
Reuters Group by the Canadian Thomson Corporation, subject to conditions and 
obligations
234. Both Thomson and Reuters are leading providers of financial 
information. These companies source, aggreg ate and disseminate financial data to 
respond to the needs of various financial pr ofessionals such as traders, financial 
analysts, fund managers and corporations. Reut ers is best known as one of the largest 
international news agencies. The Commission' s market investigation showed that the 
concentration would give rise to compe tition concerns in the supply and access of 
financial information, such as databases of  aftermarket research  (broker reports), 
earning estimates and fundamental financial data of enterprises and time series of 
economic data. The proposed transaction would have eliminated the rivalry between the two main and closest suppliers of such  products, leaving financial customers with 
a reduced choice and with a severe risk of discontinuation of  overlapping products 
and of price increases. The merging par ties undertook to dive st the databases 
containing the content sets of these fina ncial information products, together with 
relevant assets, personnel and customer base as appropriate. These commitments 
should allow third party purchasers of such a ssets to quickly establish themselves as 
a credible competitive force in the marketpl ace in competition with  the merged entity 
in the respective fields where rivalry was warranted pre-merger. On this basis, the 
Commission concluded that th e proposed concentration was compatible with the 
common market. 
F – TRANSPORT  
1. O VERVIEW OF THE SECTOR  
256. The transport industry accounts for about 7% of European GDP and for around 5% 
of employment in the EU. 
                                                 
234 Case COMP/M.4726  Thomson Corporation/Reuters Group . 
 
EN 69   EN 257. Competition policy in the transport sector s eeks to ensure the efficient functioning of 
markets which have been recently liberalised or which are in the process of liberalisation. Making liberalisation a succ ess requires action on two fronts. First, 
ensuring that the existing regulatory framew ork continues to be modernised where 
this has not been done to a sufficient ex tent. For decades, sector-specific rules 
governed the application of the competition rules (both substantive and procedural) 
in the field of transport. Bringing transport within the generally applicable competition law framework remains a general objective of competition policy. Second, since it is essent ial that regula tory efforts are not hindered by 
anticompetitive conduct, vigilant monitoring of market developments and targeted 
enforcement actions are another objective of competition policy in this sector. This is 
particularly true for markets where incumb ents retain significant market power or 
where market players are now subject to  the full force of competition law. 
258. 2008 has been a challenging year in the transp ort sector in general, as it was hit by 
the steady increase of fuel prices in the first half of the year and by the economic 
crisis in the second half. The slowdown of the economy has significantly affected 
both freight and passenger services for all so rts of transport services. This situation 
has led to a number of problems, in partic ular in the air transport sector where 
several flag carriers have been severely affected (see for instance, Alitalia's liquidation). Against this general b ackground of economic crisis, further 
consolidation has taken place in the transport sector and is likely to continue in 2009. 
2. P
OLICY DEVELOPMENTS  
2.1. Road Transport 
259. While the revised Regulation for public se rvices in the fiel d of land transport235 is not 
in force, the Commission c ontinues to apply the existing State aid rules to public 
service contracts and public servic e obligations. In its Altmark ruling236, the ECJ 
clarified the circumstances under which public  service subsidies will not be regarded 
as constituting State aid. Sinc e announcing this clarificatio n of the applicable rules, 
the Commission has received a large numbe r of complaints as well as some 
notifications of subsidised local and regional bus services. Such complaints focus in the main on contracts that have been aw arded without prior public tender. Indeed, 
without such a prior tender pr ocedure, it is difficult to  prove that the so-called 
"Altmark criteria" are satisfied  and, hence, that the co mpensation does not involve 
State aid. 
260. Following these complaints, the Commission started investigations in several 
Member States. In 2008, it took a final pos itive decision concer ning a public service 
contract for public passenger transport by bus  in the district of Linz in Austria
237. The 
contract was awarded to Postbus AG wit hout a public procurement procedure. The 
                                                 
235 Regulation (EC) No 1370/2007 of the European Parliament and of the Council of 23 October 2007 on 
public passenger transport services by rail and by road and repealing Council Regulations (EEC) no. 
1191/69 and no. 1107/70 ( OJ L 315, 3.12.2007, p. 1 ). 
236 Case C-280/00  Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft 
Altmark GmbH ("Altmark")  [2003] ECR I-7747. 
237 Case C 16/2007  (not yet published in the OJ). 
 
EN 70   EN Commission came to the conclusion that the compensation that was extended to 
Postbus AG under the terms of the contract  constituted State aid, but that such 
compensation did not exceed the costs incurred in discharging the public service obligations. The Commission also closed its formal investigation procedure on 
compensation granted to five companies operating public passenge r transport by bus 
in the South Moravia region of the Czech Republic
238. Unlike the Austrian case, 
however, the Czech authori ties had conducted a public tender procedure before 
awarding the public service contract. Ot her investigations concerning similar 
complaints are ongoing. The Commission al so initiated the formal investigation 
procedure concerning compensation grante d by the Czech Republic to various 
municipal transport operator s for discharging public se rvice obligations in the 
Ustecký Region239. Lastly, the Commission approved an aid scheme to modernise the 
outdated Czech passenger bus fleet ope rating under public service contracts240. In 
connection with the improvement of the public  transport infrastructure, and in order 
to facilitate an integrated passenger tr ansport system, the Commission approved two 
Czech aid schemes supporting the provisi on of 'park and ride' facilities241 and 
alternative refuelling stations242 in the region of St řední Čechy. 
261. In the area of the environment, the Comm ission maintained its policy of approving 
aid to favour the uptake of cl eaner technology, in particular  on old vehicles. In 2008 
the Commission continued approving Stat e aid for the acquisition of lorries 
satisfying the Euro V pollution standard243 in anticipation of the compulsory 
application of the standard from Oct ober 2009 onwards. Favourable decisions were 
taken concerning an Italian scheme244 and the prolongation of the German scheme245. 
The Commission also a pproved a French scheme246 giving incentives to private 
individuals, undertakings a nd associations to buy vehicles which consume less 
energy and are less polluting. The measure also  aims to reduce traffic volumes and to 
transfer road traffic to less energy-hungry and less polluting means of transport, such 
as rail and inland waterways. 
262. As regards public infrastructures, the Co mmission took the view that measures to 
assist the constructi on and operation of a number of mo torways and national roads in 
Greece247 did not constitute State aid, because the respective concession agreements 
had been concluded following tendering pro cedures conducted on an open and non-
discriminatory basis, ensuring the selection of the bids that were the least costly for the State and which incorporated the strictest profit-capping arrangements. 
263. The Commission approved one  restructuring aid measure and opened an 
investigation procedure on another restruct uring aid measure conc erning two Polish 
undertakings involved in transport and fr eight forwarding services, respectively 
                                                
 
238 Case C 3/2008  (not yet published in the OJ). 
239 Case NN 1/2006  (OJ C 187, 24.7.2008, p. 14). 
240 Case N 350/2007  (OJ C 140, 6.6.2008, p. 2). 
241 Case N 370/2008  (not yet published in the OJ).  
242 Case N 371/2008  (not yet published in the OJ).  
243 See Press Release IP/06/1800 , 13.12.2006. 
244 Case N 463/2007  (OJ C 70, 15.3.2008, p. 4). 
245 Case N 106/2008  (OJ C 137, 4.6.2008, p. 4). 
246 Case N 387/2008  (not yet published in the OJ). 
247 Cases N 565/2007 , N566/2007  and N 633/2007  (OJ C 70, 15.3.2008, p. 3-6) and Case N 45/2008  
(OJ C 177, 12.7.2008, p. 1). 
 
EN 71   EN Hartwig-Warszawa248 and Hartwig-Katowice249. While, in the first case, the 
Commission considered the restru cturing plan to be in line with State aid rules, in the 
second case it had doubts about whether the plan would be such as to restore long-
term viability and about the adequacy of the planned compensatory measures and the 
contribution of the benefici ary to the restructuring. 
264. The Commission opened a formal investigatio n procedure on measures in favour of 
the French company, Sernam, which is the ro ad transport subsidiary of the Société 
nationale des chemins de fer français (SNCF). The Commission has doubts about 
whether the conditions laid  down in its decision of 20 October 2004 have been 
complied with. The 2004 decision declared part  of the aid in favour of Sernam to be 
incompatible with State aid rules and ordere d the recovery thereof. It also laid down 
certain measures to be implemented by Fran ce to ensure the compatibility of the 
activities of Sernam. 
2.2. Rail Transport and Combined Transport 
265. As from 1 January 2007, rail transport serv ices for freight were fully opened to 
competition in the EU. As regards passenger transport, the third railway package adopted by the Council and the Parliame nt in 2007 provides that international 
passenger rail services will be opened to competition from 1 January 2010. The 
Regulation
 on public passenger transport services  by rail and by ro ad adopted in 
2007 also introduced some degr ee of liberalisation into lo cal transport. On 22 July, 
the Community guidelines on State aid for railway undertakings250 came into effect. 
These guidelines lay down th e Commission's approach to  State aid to railway 
undertakings as defined in Directive 91/440/EEC251 and to urban, suburban and 
regional passenger transport undertakings. Th e guidelines are based in particular on 
the principles established in the three su ccessive railway packages. Their aim is to 
improve the transparency of public financi ng and legal certainty with regard to the 
Treaty rules in the context of the opening- up of the markets. They deal with the 
following aspects: (i) public financing of railway undertakings by means of 
infrastructure funding, (ii) aid for the purchas e and renewal of rolling stock, (iii) debt 
cancellation by States with a view to the financial rejuvenation of railway 
undertakings, (iv) aid for restructuring railw ay undertakings, (v) aid for the needs of 
transport coordination and (vi) State guarantees for railway undertakings. 
266. The Commission adopted severa l decisions to promote rail transport and combined 
transport. It authorised the renewal of a Czech aid measure which guarantees a loan 
to Czech Railways ( Česke ráhy)252 to facilitate the purchase of new passenger rolling 
stock and an aid scheme for the acquisition and modernisation of rolling stock in the 
Czech Republic intended to improve the pr ovision of a service of general economic 
interest253. The Commission also approved the prolongation254, for the period 2007-
                                                 
248 Case N 506/2007  (OJ C 140, 6.6.2008, p. 1). 
249 Case N 909/2006  (OJ C 288, 11.11.2008, p. 3). 
250 OJ C 184, 22.7.2008, p. 13 . 
251 Council Directive 91/440/EEC of 29 July 1991 on the development of the Community's railways 
(OJ L 237, 24.8.1991, p. 25 ). 
252 Case N 685/2007  (OJ C 140, 6.6.2008, p. 1). 
253 Case N 495/2007  (OJ C 152, 18.6.2008, p. 21). 
254 Cases N 11/2008  and NN 34/2008  (OJ C 38, 17.2.2009, p. 3). 
 
EN 72   EN 2009, of the financial support by the It alian and French governments for the 
experimental transalpine railway motorway  service previously approved for the 
period 2003-2006. The project has been developed in parallel  with the re-opening of 
the Mont Blanc road tunnel in order to test  an efficient, safe and environmentally 
friendly way to cross the Alps, one of the bi ggest bottlenecks for terrestrial traffic in 
the EU. 
267. During the year, the Commission approved severa l measures in favour of alternatives 
to road transport, including combined transport, in France255, Poland256 and 
Belgium257. 
268. In 2008, the Commission opened the formal investigation procedure concerning the 
compensation for the provision of SGEI by Danske Statsbaner (DSB), which has 
historically been the railway operator in Denmark. The transport services in question 
are provided on the basis of two public service contracts,  concerning the periods 
2000-2004 and 2005-2014, between the Danish Mi nistry of Transport and DSB, 
which were concluded without a prior tendering procedure. The Commission has 
doubts about the absence of overc ompensation in this case. 
269. In the area of mergers, on 19 March the Commission cleared the acquisition of the 
Spanish logistics provider, Transfesa, by the German state-owned railway company, 
Deutsche Bahn (DB)258. DB's and Transfesa's activities mainly overlapped with 
regard to rail logistics services for car co mponents and finished vehicles. In these 
areas the merged entity might have had a competitive advantage due to the ownership of certain transport equipment whic h would be particularly suitable for the 
transport of cars and com ponent parts. However, th e Commission's investigation 
found the market characterised by the existe nce of current and potential competitors, 
by competitive constraints from road and sea and by a limited number of large customers with very specific needs and c onsiderable know-how in logistics. The 
Commission therefore concluded that the proposed transact ion did not give rise to 
competition concerns. 
270. On 25 November the Commission approved
259 the acquisition of Hungarian MÁV 
Cargo by the Austrian company RCA, subj ect to conditions. Both MÁV Cargo and 
RCA are active in the provision of rail fr eight transport and freight forwarding 
services, and each is a subsidiary of th e respective incumbent State-owned railway 
companies. The rail freight transport market s, notwithstanding their full liberalisation 
in 2007, are still characterised by limited competition and strong incumbents co-
operating in the area of cross-bo rder rail freight transport. 
271. According to the initial no tification, MÁV Cargo should have been acquired by RCA 
in a consortium together with GySEV, an integrated rail and infrastructure company 
with its own rail network located both in Austria and in Hungary, and active in rail 
passenger and freight transport in Austria a nd Hungary with a focus on rail freight 
cross-border transport. Afte r the notification, new facts relating to the transaction 
                                                 
255 Case N 159/2008  (OJ C 202, 8.8.2008, p. 1). 
256 Case N 195/2008  (OJ C 329, 24.12.2008, p. 3). 
257 Case N 352/2008  (OJ C 7, 13.1.2008, p. 1). 
258 Case COMP/M.4786 Deutsche Bahn/Transfesa . 
259 Case COMP/M.5096 RCA/MÁV Cargo.  
 
EN 73   EN were communicated to the Commission by RCA and by the Republic of Hungary. 
The Commission considered that these facts constituted material changes to the facts contained in the notification and which came to light after the notification. As these changes in the factual record could have a significant effect on the appraisal of the 
concentration, the Commission considered the notification pursuant to Article 5(3) of 
Commission Regulatio n (EC) No 802/2004
260 as becoming effective on the date 
when it had received all the relevant information. 
272. In the assessment of the transaction, the Commission identified serious competition 
concerns that would have arisen fr om the implementation of the proposed 
transaction, as initially no tified, because it would have  resulted in removing the 
closest potential competitor of RCA on the Austrian rail freight transport market and for MÁV Cargo on the Hungarian market. To remedy these concerns, the Commission accepted a commitment package proposed by RCA, which consisted of 
cutting all its structural li nks and reviewing its contra ctual links to GySEV. The 
commitments are supported by the Austrian  and Hungarian Governments who, as the 
main shareholders of GySEV, will ensure that the structural links to the merged 
entity are cut and that the influence of  the Republic of Aust ria over GySEV's rail 
freight activities is limited. Af ter market testing of the proposed commitments, the 
Commission concluded that th ey were viable measures, suitable to address the 
competition concerns identified in its investigation, namely by strengthening GySEV as an independent player and a competitor  of the new entity created by the merger. 
2.3. Inland Navigation 
273. As in previous years, se veral decisions were adopted  in 2008 to promote this 
environmentally friendly mode of  transport in the Czech Republic
261, France262 and 
Austria263. The main objective of these measures is to encourage the shift of freight 
transport from road to inland waterways. This is achieved by supporting the modernisation of inland waterway trans port infrastructures and vessels which, 
besides increasing the competitiveness of the sector, also raises the transport safety level and reduces the environmental im pact of this mode of transport. 
2.4. Maritime Transport 
274. On 1 July, the Commission adopted Guidelines  on the application of Article 81 EC to 
maritime transport services
264. The Guidelines set out the principles that the 
Commission will follow when defining market s and assessing information exchange 
schemes in liner shipping, as well as cooperation agreements involving maritime 
cabotage, liner and/or international tramp ve ssel services. This follows the repeal of 
Regulation 4056/86 containing th e liner conference block exemption, which became 
fully effective on 18 October, and the resul ting extension of the scope of Regulation 
1/2003 to include cabotage and tramp vessel services. The Guidelines have been adopted following a consultation on a draft published at the end of 2007. 
                                                
 
260 OJ L 133, 30.4.2004, p. 1. 
261 Case N 358/2007  (OJ C 177, 12.7.2008, p. 1). 
262 Case N 651/2007  (OJ C 216, 23.8.2008, p. 12). 
263 Case N 31/2008  (OJ C 253, 4.10.2008, p. 1). 
264 OJ C 245, 26.9.2008, p. 2 . See also Press Release IP/08/1063 , 1.7.2008. 
 
EN 74   EN 275. On 21 October, the Commission published a draft block exemption Regulation on the 
application of Article 81(3) EC to certain  categories of agreements, decisions and 
concerted practices between liner shipping companies ("consortia")265, looking ahead 
to the expiry of the current block exemption Regulation in 2010. The proposed 
changes take into account the necessary amendments due to the repeal of Regulation 4056/86 and seek to better reflect the curren t market situation. The review of the 
BER on consortia will complete the reform of the competition rules that apply to 
maritime transport services which was initiated in 2003. 
276. On 12 December, the Commission issued guidance on the treatment of State aid 
measures complementing Community funding for the launching of the motorways of 
the sea
266. 
277. This guidance is intended to align the maximum aid intensity and duration provided 
for in the Community guidelines on State aid to maritime transport267 to the more 
favourable conditions allowed for projec ts covered by the second "Marco Polo" 
programme for the granting of Community  financial assistance to improve the 
environmental performance of the freight  transport system ("Marco Polo II")268 and 
by Decision No. 1692/96/EC of the Europ ean Parliament and of the Council of 
23 July 1996 on Community guidelines for the development of the trans-European 
transport network (TEN-T)269. 
278. In the area of port infrastructure, the Commission approved a m easure to support the 
construction of a new port in Wilhelmshaven, Germany270 (Jade Weser Port project ). 
The Commission concluded that the public fi nancing of the planned infrastructure 
does not constitute State aid in favour of  the shipping companies using the Jade 
Weser Port, as long as access to this infrastructure is allowed on equal and non-discriminatory terms. As regards the c oncession agreement for the construction and 
operation of the terminal, the Commission f ound that it did not contain any State aid 
element, since it had been awarded on the ba sis of a Europe-wide, open, transparent 
and non-discriminatory public tender. 
279. This decision is in line with previous case practice and confirms the Commission's 
view that, in general, no form  of State aid is present at the users' level if transport 
infrastructure is open to all potential us ers on equal and non-discriminatory terms. 
On the other hand, when the construction of public infrastructure is directed at a particular user, giving it an unfair advant age over its competitors, the respective 
financing normally falls within the scope of Article 87(1) EC. 
280. In 2008, as in previous year s, the Commission adopted favourable decisions with 
regard to social aid for seafarers in France
271, Sweden272 and Italy273. A positive 
                                                 
265 OJ C 266, 21.10.2008, p. 2 . See also Press release IP/08/1566 , 22.10.2008. 
266 Communication from the Commission providing guidance on State aid complementary to Community 
funding for the launching of the motorways of the sea ( OJ C 317, 12.12.2008, p. 10 ). 
267 OJ C 13, 17.1.2004, p. 3 . 
268 Established by Regulation (EC) no. 1692/2006 of the European Parliament and of the Council of 
24 October 2006 ( OJ L 328, 24.11.2006, p. 1 ). 
269 OJ L 228, 9.9.1996, p. 1 . 
270 Case N 110/2008  (not yet published in the OJ). 
271 Cases N 538/2005  (OJ C 202, 8.8.2008, p. 1) and NN 40/2008  (OJ C 23, 29.1.2009, p. 1). 
272 Case N 442/2008  (OJ C 329, 24.12.2008, p. 3). 
 
EN 75   EN decision was also adopted concerning a re duction in the excise duty imposed on 
mineral oil used by stevedoring co mpanies in German maritime ports274. The 
Commission also approved a regional aid scheme aimed at compensating the additional costs of the operation of the inter-island carriage of goods and passengers 
in the autonomous region of Azores in Portugal
275. 
281. The Commission initiated a formal inves tigation procedure regarding a planned 
change of the Irish tonnage tax scheme. The scheme, which had previously been 
approved by the Commission, imposed a limit of 75% on the net tonnage of the qualifying ships of a beneficiar y that could be rented with  a crew provided by the 
charterer ("chartered in" ships). The Irish authorities intend to abolish this charter limit. The Commission took the view that  such abolition may trigger fiscal 
competition between different tonnage tax schemes across the EU and therefore decided to undertake an in-depth investigation. 
282. In the field of SGEI, following an in-dep th investigation the Commission considered 
that the compensation paid by the French State to Société Nationale Maritime Corse-Méditerranée (SNCM) for discharging public  service obligations  in the period 1991-
2001 was compatible with the common market
276. In the same decision, it was 
considered that certain measures in favour  of SNCM in the c ontext of its partial 
privatisation did not constitute State aid. Finally, as regards the support given by the 
State for the restructuring of SNCM, th e Commission considered that it was 
compatible with State aid rules. Howeve r, the Commission decided to start the 
formal investigation procedure regardi ng a compensation system for CalMac and 
Northlink to discharge public  service obligations relate d to the operation of ferry 
boats for passenger traffic between the Scottish islands277. The Commission has 
doubts about whether the public service oblig ations have been sufficiently well 
defined and entrusted. In the absence of a clear definition of the public service 
missions, it is not possible, at this stage, to determine whether the beneficiaries have 
been overcompensated for fulfilling those missions. 
2.5. Aviation 
283. On 1 November, the Air Service Regulation entered into force278. This Regulation, 
by simplifying and updating the text of the so-called "Third Package", now provides 
the legal framework for air transport in the EU, setting out the ru les on the grant and 
oversight of operating licences of Community  air carriers, market access, aircraft 
registration and leasing, public service ob ligations, traffic distribution between 
airports and pricing. 
284. At the end of 2007, the Commission adopted  a proposal aiming at simplifying and 
modernising the rules relating to computer  reservation systems (CRS), which were 
                                                                                                                                                         
273 Case N 80/2008  (OJ C 113, 8.5.2008, p. 1). 
274 Case N 643/2006  (OJ C 108, 29.4.2008, p. 3). 
275 Case N 503/2007  (OJ C 229, 6.9.2008, p. 1). 
276 Case C 58/2002  (not yet published in the OJ). 
277 Case C 16/2008 (OJ C 126, 23.05.2008, p.16) 
278 Regulation (EC) No 1008/2008 on the common rule s for the air services in the Community replacing 
regulations 2407/92, 2408/92 and 2409/92 (the "so-called Third Package") ( OJ L 293, 31.10.2008, p. 3 ). 
 
EN 76   EN defined 20 years ago279. The proposed new Regulation is expected to enter into force 
in 2009. The new rules will partially libe ralise the market, provide margins of 
negotiation for airlines and CRS and will al low CRS providers and the travel agents 
who are subscribed to a CRS to broaden their offer, thereby improving competition 
in the air tickets distribution market. Co mpetition will be further strengthened by 
new safeguard measures designed to protect consumers and to prevent competitive abuses. 
285. This was a difficult year for air transport companies, which were faced with 
consistently high crude prices  in the first half of the year followed by falling demand 
towards the end of the year as a side-effect  of the financial and economic crisis. In 
this market context, the Commission wa s called upon to take decisions on several 
rescue and restructuring measures. 
286. In relation to the long-running cases of Olympic Airways / Olympic Airlines, the 
Commission found that a privatisation pl an submitted by the Greek authorities 
involving the sale of certai n assets of the two companies in bundled form did not 
involve State aid, provided th at the undertakings given by the Greek authorities were 
fully met
280. The privatisation process must  be overseen by an independent 
monitoring trustee who will ensure compliance with the decision and the 
commitments made. In a separate but related decision281, after having ca rried out an 
in-depth study of the finan ces of Olympic Airways Servi ces and of Olympic Airlines, 
the Commission found that, since its last  decision in 2005, Greece had granted 
further State aid to the flagship carrier. This aid was considered to be illegal and incompatible with the Treaty, and the Co mmission ordered the recovery thereof. 
Since part of the investigation into th e payment by the State to Olympic Airways 
Services of "damages" following a series of arbitration panel awards required further 
detailed investigation, this part of the investigation remains open. In addition, the 
Court of Justice declared that Greece had failed to fulfil its obligation to recover the aid which the Commission had deemed incompatible in 2005, from Olympic Airlines
282. 
287. In June, the Commission opened the form al investigation procedure on a EUR 
300 million loan by the Ita lian State to Alitalia283. The loan did not appear to be in 
line with the State aid guidelines concer ning the aviation sector, nor with the 
guidelines on rescue and restructuring ope rations. In particular, there were no 
guarantees that the loan would be repaid or  that a restructuring or liquidation plan 
would be submitted within a period of six months. Moreover, the "one time, last time" requirement for approving rescue a nd restructuring aid was not met; since 
Alitalia had previously benefited from both rescue and restructuring aid. In 
November the Commission confirmed this  preliminary assessment with a final 
negative decision ordering recove ry of the incompatible aid
284. At the same time, the 
                                                 
279 The proposed Regulation will replace Regulation (E C) n° 2299/89 (OJ L 22 0, 29.7.1989, p. 1). 
280 Cases N 321/2008 , N 322/2008  and N 323/2008  (not yet published in the OJ). 
281 Case C 61/2007  (not yet published in the OJ). 
282 Case C 419/06  Application by the Commission against Olympic Airlines for non-compliance with 
Commission decision C(2005) 2706 of 14 September 2005 ordering the Greek authorities to recover incompatible aid extende d to Olympic Airlines [2008] ECR I-00027. 
283 Case NN 31/2008  (OJ C 184, 22.7.2008, p. 34). 
284 Case C 26/2008  (not yet published in the OJ). 
 
EN 77   EN Commission approved Alit alia's liquidation plan285. It came to the conclusion that the 
sale of certain of Alitalia's assets did not  constitute State aid, pr ovided that it took 
place on market terms in accordance with the commitments of the Italian authorities. 
In order to ensure compliance with the de cision, the procedure for the sale of the 
assets provides for different levels of  monitoring, in pa rticular through the 
appointment of a trustee. The solution found for the privatisat ion of Alitalia is similar 
to the process for the liquidation of Sabena and Olympic Airways / Olympic 
Airlines. In addition, the CFI confirmed a Commission d ecision of 2001 declaring 
that restructuring aid grante d by the Italian State to Alitalia was compatible with the 
common market subject to compliance w ith certain obligations and conditions286. 
288. In November, the Commission approved a rescue  aid in favour of Alpi eagles SpA, a 
regional air carrier based in the Veneto region of Italy287. It was found that the aid, in 
the form of a loan guarantee, met the condi tions of the State aid guidelines on rescue 
and restructuring aid. 
289. In the field of airport infrastructure, the Commission closed the formal investigation 
procedure concerning State measures involving the DHL Group and the Leipzig-
Halle Airport288. The three measures under invest igation were: capital contributions 
to Leipzig Airport for financing the cons truction of the new southern runway; an 
agreement between Leipzig Airport, its parent company and DHL, which provides several assurances to DHL; and a comfort letter issued by the Land Sachsen in favour of Leipzig Airport and DHL whic h guarantees that Land Sachsen will 
compensate DHL for damages in the event that DHL is no longer able to operate as planned at the airport, for example if night flights are banned by the regulatory 
authorities. The Commission c oncluded that the capital injections into Leipzig 
Airport were compatible with the Treaty rules. On the other hand, the Commission 
found that the assurances granted to DHL under the terms of the agreement and the 
comfort letter in favour of DHL ch anelled through Leip zig Airport were 
incompatible. The Commission consequently ordered recovery of the incompatible aid linked to the assurances  and prohibited the granti ng of the comfort letter. 
290. The Commission started a formal inves tigation procedure concerning the loan 
financing of Terminal 2 at Munich Airport
289. The Commission has doubts about 
whether certain loans provide d by the public banks to th e two companies responsible 
for the construction and operation of Termin al 2 have been granted on terms which 
could have been obtained under normal market conditions. In addition, the 
Commission has doubts as to whether the pric e paid by one of these undertakings to 
the company operating Munich Airport for re nting the land on which Terminal 2 is 
constructed is a market pr ice. In the same decision, the Commission came to the 
conclusion that the capital contribution of the operator of Muni ch Airport and the 
exclusive use of Terminal 2 by Deutsche  Lufthansa AG do not involve State aid. 
                                                 
285 Case N 510/2008  (OJ C 46, 25.2.2009, p. 6). 
286 Case T-301/01  Application by Alitalia for the annulment of Commission Decision 2001/723/EC of 
18 July 2001 concerning the recapitalisation of Alitalia, not yet reported in the ECR . 
287 Case N 388/2008  (OJ C 53, 6.3.2009, p. 1). 
288 Case C 48/2006  (OJ C 346, 23.12.2008, p. 1). 
289 Case NN 53/2007  (OJ C 5, 10.1.2009, p. 4) as amended by Commission decision of 12.11.2008 (not yet 
published in the OJ). 
 
EN 78   EN 291. Several State aids for invest ments in airport infrastructur e were approved at airports 
in Poland (Lublin- Świdnik Airport290, Gdańsk Rębiechowo Airport291 and Port 
Lotniczy Łódź Sp. z o.o.292). 
292. Another category of recurring support measur es assessed by the Commission relates 
to start-up aid for airlines departing fr om smaller regional airports, where such 
temporary support is earmarked to contribute to the development of the airport and of 
the whole region. The Commission approved measures in Cyprus293 and Italy 
(Grosseto airport294). 
293. With regard to the contractual arrangements between public authorities, airport 
operators and air transport companies, the Commission initiated a formal investigation concerning alle ged favourable treatment offered to Ryanair by Aarhus 
airport in Denmark
295, by Bratislava airport in Slovakia296 and by Frankfurt Hahn 
airport in Germany297. In addition, the CFI annulled a Commission decision of 2004 
ordering Belgium to recover incompatible  aid extended to Ryanair linked to its 
establishment at Charleroi airport298. The Court considered that the Commission 
should have examined the measures granted by the Walloon Region and by Brussels South Charleroi Airport together and s hould have applied the private investor 
principle to the measures adopted by the Walloon Region, since there are close 
economic links binding these two entities. 
294. In the social aid field, the Commission a pproved changes to a scheme aimed at 
lowering the price of air transport betw een Guadeloupe and metropolitan France for 
certain categories of Guadeloupe residents
299. It also approved the extension of a 
discount scheme for air services available to  people whose main residence is in one 
of the most peripheral parts of th e Highlands and Islands of Scotland300. 
295. In the merger field, on 6 August, the Comm ission cleared the proposed acquisition of 
Northwest Airline Corpor ation ("NWA") by Delta Ai r Lines, Inc. ("Delta")301, both 
U.S. carriers, under the EU Merger Regul ation. The Commission assessed the impact 
of the proposed merger on transatlantic scheduled air passenge r transport between 
the U.S. and the EEA, taking into account th e fact that Delta and Northwest are both 
SkyTeam members and already cooperate extensively on transatlantic routes with the 
European SkyTeam member airlines. To the extent that the Commission had previously found that the members of the SkyTeam alliance could not be considered as actual competitors on transatlantic routes  as a result of their membership of 
                                                
 
290 Case N 158/2008  (OJ C 309, 4.12.2008, p. 5). 
291 Case N 153/2008  (OJ C 46, 25.2.2009, p. 7). 
292 Case N 638/2007  (OJ C 140, 6.6.2008, p. 1). 
293 Case N 52/2008  (OJ C 134, 31.5.2008, p. 1). 
294 Case N 754/2007  (OJ C 70, 15.3.2008, p. 7). 
295 Case NN 58/2007  (OJ C 109, 30.4.2008, p. 15). 
296 Case NN 74/2007  (OJ C 173, 8.7.2008, p. 9). 
297 Case NN 54/2007  (OJ C 12, 17.1.2009, p. 6). 
298 Case T-196/04  Application by Ryanair for the annulment of Commission Decision 2004/393/EC of 
12 February 2004 concerning advantages granted by the Walloon Region and Brussels South Charleroi 
Airport to Ryanair in connection with its establishment at Charleroi, not yet reported in the ECR . 
299 Case N 421/2008  (OJ C 7, 13.1.2009, p. 1). 
300 Case N 27/2008  (OJ C 80, 1.4.2008, p. 5). 
301 Case COMP/M.5181. 
 
EN 79   EN SkyTeam, its assessment focused on the possible impact of the creation of a 
permanent structural link between Delta a nd Northwest as a result of the proposed 
merger. The Commission concluded that th e present transaction would not raise 
competition concerns, particularly in the light of the SkyTeam members' extensive 
cooperation on transatlantic routes independently of this merger, the mainly 
complementary nature of Delta's and Nort hwest's respective ne tworks as regards 
transatlantic routes, and the generally limited increment on the transatlantic routes where both parties are present. 
296. On 17 December, after an in-depth i nvestigation, the Commission declared the 
concentration between KLM and Martinair
302 to be compatible with the common 
market. The Commission established that the effects of the proposed transaction 
would be limited, not only because KLM alread y jointly controls Martinair, but also 
because Martinair's competitive strength has been falling steadily and, in order to regain its strength, Martinai r depends on KLM's agreement to a renewal of its long-
haul passenger fleet. 
2.5.1. International aviation po licy – EU-US cooperation 
297. Under the EU-US open aviation agreement signed in April 2007, which includes 
provisions for the strengthening of coope ration between the Commission and the US 
Department of Transportation (DoT) in th e field of competition, the Commission and 
the US DoT launched a joint rese arch project on airline alliances
303. This project 
aims to deepen their unders tanding of transatla ntic air services, the effects of 
alliances on airline competition and possible changes in the role of alliances following the EU-US open aviation agreement. 
G – PHARMACEUTICAL INDUSTRY  
1. O VERVIEW OF THE SECTOR  
298. A properly functioning pharmaceutical sector is  of key importance for the health of 
Europe's citizens who need access to innovative , safe and affordable medicines. Each 
European consumer paid almost EUR 430 for medicines in 2007. This amount will increase in the light of th e ageing population in Europe. 
299. The pharmaceutical sector is also still a strategic sector for Europe in terms of 
economic growth and sustainable employment. The market for prescription and non-prescription medicines is worth ove r EUR 138 billion ex factory and EUR 
214 billion at retail prices. The pharmaceutical sector employs more than 634 000 
persons and spends on average 17% of its  turnover on research and development. 
Most importantly, innovation in human me dicines has enabled patients to benefit 
from treatments considered unimaginable a few decades ago. 
300. The pharmaceutical sector is highly regulat ed. On the supply side, there are two 
types of companies. So-called "originato r" companies are active in research, 
                                                
 
302 Case COMP./M.5141. 
303 See Press Release IP/08/459 , 18.3.2008. 
 
EN 80   EN development, manufacturing, marketing a nd supply of innovative medicines. Their 
products are usually subject to patent pr otection, which is necessary in order to 
provide a reward for innovation and incentives for future research. When patent protection expires, the originator companies lose their exclusive rights to manufacture and market these medicines. The second category of companies, namely 
manufacturers of generic products, can ente r the market with medicines that are 
equivalent to the original medicines, but t ypically at lower prices. This helps contain 
public health budgets, contributes to an in crease in consumer welfare and creates 
incentives for further innovation. 
301. Several "blockbuster" medicine s (i.e. where annual global turnover for that medicine 
exceeds USD 1 billion) account for a substantia l part of the sales and profits of large 
originator companies. Many of these bloc kbusters have lost patent protection in 
recent years and more will do so in the year s to come. Combined with other factors, 
this has given originator companies an in centive to aim at maximising their revenues 
from these products for as long as possible. 
302. On the demand side, the pharmaceutical sector is unusual in that, for prescription 
medicines, the ultimate consumer (the patient) is not the decision maker (generally 
the prescribing doctor and, in certain Member States , the pharmacist also play a 
role). Nor does the ultimate consumer usually directly bear most of  the costs, as these 
are generally covered and/or reimbursed largely, or even entirely, by a national 
health scheme. Because of this unique st ructure, there is usually limited price 
sensitivity for prescription me dicines on the part of decision makers and patients, 
although various mechanisms to control prescription drug budgets do exist. Price 
sensitivity is greater for over-the-counter medicines and medicines used in a hospital 
context. 
2. P
OLICY DEVELOPMENTS  
2.1. Pharmaceutical Sector Inquiry 
303. One of the main pillars of the Lisbon stra tegy is the promotion of economic growth 
and boosting innovation. In this  context, sector inquirie s allow the Commission to 
proactively screen economic sectors in the EU in order to detect pot ential barriers to 
competition and to ensure that markets function properly, also with the aim of promoting innovation. As regards the applicat ion of the EU anti- trust rules in the 
pharmaceutical sector, the most important action taken by the Commission in 2008 
was to launch, on 15 January, the sector inquiry into pharmaceuticals
304. On the same 
date, the Commission carried  out unannounced inspections at the premises of a 
number of originator and ge neric companies in the EU. This was the first time that 
the Commission launched a sector inquiry with upfront inspections. 
304. The sector inquiry was opened in response to information that competition in the 
pharmaceutical market in the EU may not be working properly. This was indicated by a decline in innovation, measured by th e decreasing number of novel medicines 
                                                
 
304 Case COMP/39.514  Commission Decision of the 15 January 2008 initiating an inquiry into the 
pharmaceutical sector pursuant to Article 17 of Council Regulation (EC) No 1/2003 . More information 
is available at: http://ec.europa.eu/competition/sect ors/pharmaceuticals /inquiry/index.html  
 
EN 81   EN reaching the market each year and by instan ces of delayed market entry of generic 
medicines. The inquiry sought to ex amine whether certain practices of 
pharmaceutical companies may be among the reasons for the generic delay and the decline in innovation. The inquiry focused in particular on the practices which 
originator companies may use to block or delay competition by generic companies, as well as to delay or block the development of competing originator products. It also 
summarised the shortcomings in the regu latory framework applicable to the 
pharmaceutical sector as reported by responde nt companies and public authorities. 
305. In the course of the inquiry, the Commissi on consulted all interested stakeholders, 
such as originator and generic companies, industry associations, consumer and patients' associations, insurance companies,  associations of doctors, pharmacists and 
hospitals, health authorities, the European Pa tent Office (EPO), parallel traders, and 
NCAs. The Commission gathered data on the basis of requests for information sent 
to over 100 pharmaceutical companies active in  the EU, as well as to various other 
stakeholders. The data concern a sample of 219 chemical molecules relating to 
prescription medicines for human use, which were sold in the EU in the period from 
2000 to 2007. 
306. On 28 November, the Commission published its preliminary report on the 
pharmaceutical sector inquiry
305. The report confirmed that there is indeed a delay of 
generic entry and a decline in innovati on, and it examined some of the possible 
causes, most prominently those stemming from company behaviour. The preliminary report underlines the key role of patent ri ghts for the pharmaceutical sector. It does 
not identify individual cases of wr ongdoing or provide any guidance on the 
compatibility of the practices examined with EC competition rules. 
2.1.1. Competition between originator companies and generic companies 
307. The findings of the sector inquiry indicate that orig inator companies design and 
implement a variety of strategies (referred to as a "tool-box") in order to ensure 
continued revenue streams from their medi cines. The successful implementation of 
these strategies may have the effect of  delaying or blocking entry, but the report 
stresses that company behaviour might not be the only cause of the delays faced by 
generic companies as regards the market entry of their products. 
308. A strategy commonly applied by originator companies is to extend the breadth and 
duration of patent protection by filing num erous patents for the same molecule, 
forming so-called "patent clusters". In so me cases, individual blockbuster medicines 
were protected by up to 1 300 patents and pending patent applications EU-wide, 
causing uncertainty for generic companies seeking to enter the market without 
infringing an originator company's pate nts or patent appli cations. Originator 
companies also engaged in close to 700 ca ses of patent litig ation with generic 
companies in relation to the sample unde r investigation in the period 2000 to 2007. 
Generic companies won 62% of all cases where a final judgme nt was given, but a 
final judgment in court took on average 2.8 years. 
                                                
 
305 Pharmaceutical Sector Inquiry,  Preliminary Report, DG Competition Staff Working Paper , 28.10.2008. 
 
EN 82   EN 309. The sector inquiry also found that, betw een 2000 and 2008, more than 200 patent 
settlement agreements were concluded betw een originator and ge neric companies in 
the EU, with nearly half of these (48%) re stricting the ability of the generic company 
to market its medicine. 45 settlements cont ained – in addition to the restriction – a 
value transfer from the originator compa ny to the generic company, with direct 
payments to generic companies alone amounting to more than EUR 200 million. 
310. Originator companies also took issue w ith national marketing authorisation and 
pricing and reimbursement authorities rega rding the quality or safety of generic 
products and claiming that the marketing of these products would violate their patent 
rights. However, originator companies we re rarely successful in challenging the 
decisions of national authoritie s in court. Nevertheless, such interventions can lead to 
substantial delays for gene ric companies when bringing their products on to the 
market. 
311. Originator companies launched second gene ration products (known as “follow-on” 
products) for 40% of the medicines in the sample under investigation that faced a 
loss of exclusivity between 2000 and 2007, and they undertook intensive marketing 
efforts with the aim of switching patients to the new medicines prior to the market 
entry of a generic version of their first generation pr oduct. Other stakeholders 
sometimes criticise patents on second generation products as weak because they show only a marginal – if any – improvement  for the patient. Originator companies 
argue that incremental innovation deserves adequate protection. 
312. In many instances, originator companies us ed two or more instruments from the 
"tool-box" in parallel and/or successively  in order to protect the revenue streams 
generated from their (best-selling) medicines. 
313. The sector inquiry also confirmed that, in  many instances, generic entry takes place 
later than might be expecte d. For the sample of medicine s facing loss of exclusivity 
in the period 2000 to 2007, the average time to enter after loss of exclusivity was 
about seven months on a weight ed average basis, and still around four months for the 
most valuable medicines. On average, pr ice levels for medici nes (originator and 
generic together) in the sa mple facing loss of exclusiv ity in the period 2000 to 2007 
fell by nearly 20% one year after the first gene ric entry, and by about 25% after two 
years. Generic prices decreased at a signifi cantly greater rate than  these price levels. 
314. On the basis of a sample of medicines th at lost exclusivity in the period 2000 to 
2007, representing an aggregate post-expir y expenditure of about EUR 50 billion 
over the period in 17 Member States, the preliminary report estimates that generic entry resulted in savings of EUR 14 billi on. However, the savings from generic entry 
could have been increased by around EUR 3 billion, or over 5% more, on the basis of 
that sample alone if generic entry ha d taken place immediately after loss of 
exclusivity. 
2.1.2. Competition between originator companies 
315. As regards the competition between originat or companies, the preliminary findings 
of the inquiry show that originator comp anies had engaged in so-called "defensive 
patent strategies". Patents falling into this  category were primarily used in order to 
block the development of a new competing medicine. The sector inquiry also shows 
 
EN 83   EN that, in such cases, it is not the intention of the originator companies to pursue these 
patents in order to bring a new /improved medicine to the market. 
316. When considering patent-related exchanges ove rall, the inquiry reveals at least 1 100 
instances across EU Member States where patents held by an originator company 
relating to a medicine in the sample i nvestigated might overlap with the R&D 
programme and/or patents held by another originator company for their medicine. 
Such an overlap creates a si gnificant likelihood that orig inator companies will find 
their research activities blocked, with detr imental effects on th e innovation process. 
In many cases, originator companies tried to settle potential disputes, for instance through licensing. However, in approximate ly 20% of the cases where a licence was 
requested, the patent holde r refused to grant it. 
317. Originator companies also engage in litigat ion against other origin ator companies. In 
relation to the sample under investigation, these companies reported, for the period 2000-2007, a total of 66 cases of patent-related litiga tion which concerned 18 
different medicines. Litigation was initiat ed in equal measure by the patent holder 
and by the originator company allegedly vi olating the patent. In 64% of the cases, 
litigation was concluded by means of settlement agreements. The number of cases 
where a final judgment was reported was relatively low (13 of the 66 cases). The 
patent holders lost the majority (77%) of  cases where final judgments were handed 
down. 
318. The analysis of the sample of medicine s under investigation also reveals that, 
between 2000 and 2007, originator companies mainly opposed each other's secondary patents. The opposing originator  companies were very successful in 
challenging the patents of other originator companies.  During that period, they 
prevailed in approximately 89% of final decisions handed down by the EPO 
(including the Boards of Appeal). 
319. The inquiry confirmed that originator companies concluded settlement agreements 
with other originator companies in the EU  in order to resolve claims in patent 
disputes, oppositions or litigation. In the period 2000-2007, some 27 settlement agreements relating to the sample under investigation were reported. Approximately 
67% of these settlement agreements con cerned a licence agreement (including cross 
licensing). 
320. Besides settlement agreements, the prelimin ary findings of the inquiry also reveal 
that originator companies concluded many othe r agreements with each  other. In total, 
some 1 450 originator-origina tor agreements were reported during the sector inquiry. 
For certain medicines, a wide range of agreements were reported, of which the 
majority concerned the commercialisa tion phase rather than the R&D phase. 
2.1.3. Comments on the regulatory framework 
321. Stakeholders also submitted comments on the regulatory framework applicable to the 
pharmaceutical sector, highlighting perceived difficulties and shortcomings in relation to market entry and competition. Generic companies and originator companies agree on the need for a singl e Community patent and a unified and 
specialised patent judiciary in Europe. The preliminary findings of  the sector inquiry 
likewise support these views. Stakeholders also highlight what they perceive as 
 
EN 84   EN bottlenecks in the marketing authoris ation and pricing and reimbursement 
procedures, which can contribute to dela ys in bringing pharmaceutical products to 
market. 
2.1.4. Next steps 
322. The final report, expected in the summer of 2009, will take into account the 
comments received during the public consu ltation. As a follow-up, the Commission 
can launch investigations aimed at enforcing the competition rules in the sector. The Commission may also make  recommendations for improving the regulatory 
framework. 
H – FOOD INDUSTRY  
1. O VERVIEW OF THE SECTOR  
323. The food supply chain combines the agricu ltural sector, the food processing industry 
and the distribution sector, altogether acc ounting for 6% of the EU added value and 
12% of EU employment. 
324. Reversing the three decades-long trend of decl ining agricultural prices, the prices of 
a number of commodities began to chart a steady upward cour se in 2006. Prices 
increased dramatically in the second half of 2007 and reached  peak levels in the early 
part of 2008. Between September 2006 a nd February 2008, world agricultural 
commodity prices rose by 70% in dollar term s. In the EU, these price hikes caused a 
rapid increase in consumer food prices, which led to wide differences between 
Member States and to redu ced household purchasing power. 
325. The soaring food prices in the latter part  of 2007 and the first half of 2008 were the 
result of the coincidence of several globa l factors and trends, some structural and 
others temporary. Although in 2008 the pr ices of most major agricultural 
commodities have dropped dramatically to le vels comparable to or even lower than 
those recorded before the start of the price surge, EU consumer prices for retail food 
have not fallen substantially until now.  The observed (unprecedented) retail price 
hikes have raised concerns regarding th e possible malfunctions of the food supply 
chain, the competitive structure of food retail markets generally and certain 
regulatory hurdles which existing and new ma rket entrants face. Such malfunctions 
and regulatory hurdles have been identified as having a potentially negative impact 
on the transmission mechanisms linking agri cultural commodity pr ices with producer 
and consumer prices. In response to th ese concerns, the Co mmission initiated a 
process to provide both an immediate and a long-term response to the surge in food 
prices and to mitigate the impact that this trend has on final consumers. 
326. The Communication on "Tackling the challenge of rising food prices - Directions for 
EU action" of May 2008306, set up a Task Force to ex amine the functioning of the 
                                                 
306 Communication from the Commission to the European Parliament, the Council, the European 
Economic and Social Committee and the Committee of Regions - Tackling the challenge of rising food 
prices Directions for EU action ( COM(2008) 321 final, 20.5.2008 ). The Communication analyses 
 
EN 85   EN food supply chain, including concentration and market segmentation of the food 
retail and distribution sectors in the EU. Th e Task Force successfully produced a first 
Report on the situation before the end of 2008. The findings of  this Report fed into a 
second Communication on "Food Prices in Eu rope" that was adopted in December 
2008307. 
2. P OLICY DEVELOPMENTS  
327. The Communication of December 2008 pr oposes a roadmap to improve the 
functioning of the food supply chain. In terms of competition policy, the Communication calls for action by the Comm ission and NCA to ensure a vigorous 
and consistent enforcement of competiti on rules in the food supply markets, whilst 
emphasising the importance of competiti on anti-trust and merger instruments. 
2.1. Anti-trust 
328. Through this Communication, the Commissi on has undertaken to pay particular 
attention to a number of specific practices . Apart from hard-core restrictions on 
competition, such as cartels and resale pr ice maintenance, the following practices are 
singled out in the Communication as potenti ally harmful for competition and such as 
to merit closer scrutiny, on a case-by-case basis: 
• Buying alliances which, under certain circumstances, can be used as a tool for 
foreclosing rivals' access to essential inputs or can relate to collusive behaviour on 
downstream markets, 
• Exclusive supply agreements which can l ead to foreclosure of competing buyers, 
• Single branding obligations possibly rest ricting in-store inter-brand competition 
and/or foreclosing competing suppliers, 
• Use of private labels possibly foreclosing competing brands. 
329. On this basis, the Commission will endeavour  to develop a consistent orientation in 
terms of its forthcoming advocacy, monitoring and enforcement efforts so as to ensure that the food supply chain works op timally for the benefit of consumers. 
330. In 2008, the Commission has continued enforcing competition rules in food-related 
markets. In particular, it has ensured compliance by Coca-Cola  with the 
commitments it undertook in 2005 and has fined a cartel of banana traders  under 
Article 81 EC. It has also launched investig ations into an alleged cartel in the exotic 
fruit market and has raided cereal traders  on suspicion of another cartel. At national 
                                                                                                                                                        
 
structural and cyclical factors and proposes a th ree-pronged policy response, including short-term 
measures in the context of the Health Check of the Common Agricultural Policy and in the monitoring 
of the retail sector; initiatives to enhance agricultural supply and ensure food security including the 
promotion of sustainable future generations of biofuels; and initiatives to contribute to the global effort 
to tackle the effects of pri ce rises on poor populations. 
307 Communication from the Commission to the European Parliament, the Council, the European 
Economic and Social Committee and the Committee of Regions – Food Prices in Europe  
(COM(2008)821 final, 9.12.2008 ). 
 
EN 86   EN level, Competition Authorities have closel y scrutinised food-rela ted sectors and have 
initiated a number of investigations (e.g. bakery sector in Italy , olive oil sector in 
Spain ) and inquiries (e.g. the Grocery Monitor in Ireland ), to name but a few. 
331. Given that retail markets are often defined at most as nati onal in scope, it is crucial 
that Competition Authorities should address potential malfunctioning within the food 
supply chain by adopting a consistent and coordinated approac h. To this end, in 
2008, the ECN has served as a forum for disc ussion and exchange of best practice on 
issues related to food retail markets. In this context, DG Competition held two 
meetings of the ECN Food S ubgroup in July and November. 
2.2. Mergers 
332. Consolidation in the food sector is taking place along the supply chain. The degree of 
concentration varies along the chain, by product catego ry, and in the different 
national markets. Downstream, the increased concentration of the retail sector, which 
affects consumer goods generally, has often been identified as a potential cause of 
high food prices. Several NCAs have investig ated the functioning of the retail sector 
and are continuing to monitor developments. 
333. The consolidation of the food sector is refl ected in several merg er cases notified to 
the Commission. In 2008 a number of these we re subject to in-dep th investigations 
or cleared in the first phase onl y following important divestitures. 
334. In the Friesland/Campina  case308 the Commission undertook an in-depth 
investigation of the proposed merger be tween two Dutch dairy cooperatives, active 
in a range of dairy markets. This con centration was cleared following commitments 
by the parties to divest Friesland Food's fr esh dairy business and a part of Campina's 
cheese business, as well as two Campina brands for long-life dairy drinks. The 
remedy package included important remedies  to ensure access to raw milk in the 
Netherlands. 
335. In ABF/GBI309, the Commission carried out an in-depth investigation of the 
acquisition of parts of GB I by Associated British Foods (ABF), who are major 
producers of baker's yeast. The acquisition, as  originally notifie d, would have raised 
competition concerns in the markets for compressed baker's yeast in Spain and Portugal. ABF thus undertook to divest GBI's distribution business in Portugal and 
Spain to a suitable buyer with suffici ent production capacities to supply those 
businesses. 
336. Also in 2008 the Commission has dealt wi th mergers in the retail sector. The 
proposed takeover of ADEG of Au stria by the German REWE Group
310, both of 
which are active on the Austrian retail and wholesale markets for everyday consumer 
goods, was approved subject to conditions, name ly the divestiture of outlets in those 
regions where the Commission was concerne d that the strength of the combined 
company could result in highe r prices for consumer goods. 
                                                 
308 Case COMP/M.5046  Friesland Foods/Campina . 
309 Case COMP/M.4980  ABF/GBI BUSINESS . 
310 Case COMP/M.5047  REWE /ADEG . 
 
EN 87   EN 2.3. State aid 
337. The framework of analysis of State aid to  the food sector may vary depending on the 
type of products concerned. As a general rule, food products included in Annex I of 
the EC Treaty fall in the first place with in the remit of the State aid guidelines 
applicable to the agriculture311 and fisheries312 sectors. These guidelines set out 
special rules for the agricultural and fisheries sector in order to ensure, inter alia , 
consistency with the Common Agricultura l Policy (CAP) and the Common Fisheries 
Policy (CFP), but refer to horizontal rules in areas such as R&D or Rescue and 
Restructuring (R&R). The cas es concerning food products falling within Annex I of 
the EC Treaty are dealt with in the Ag riculture section of  this report (see 
I.C.2.5.above). 
338. Food products that do not fall within Annex I of the EC treaty are not subjec t to any 
specific rules and, therefore, fall within  the existing horizontal frameworks. In 
addition, because of the similarities between food processing and marketing 
companies that fall within the scope of  Annex I products and those which do not, 
State aid rules applying to food processing and marketi ng companies that concern 
Annex I products (except for the fisheries sector) have been ha rmonised with those 
applying to non-Annex I products. 
339. In 2008, the number of State aid cases re lating to the food s ector (non-Annex I 
products) was fairly limited, with only tw o small R&R aid cases being notified. The 
first case concerned a re structuring aid package of EUR 580 000 in favour of Bäcker 
Legat GmbH,  a medium-sized Austrian industrial baker,  and was approved by the 
Commission on 2 July313. The second case concerned a six-month rescue loan in 
favour of Delitzscher Schokoladen GmbH , a German chocolate manufacturer which 
was facing difficulties following its decision to sell part of its own brand chocolate production and focus on private labels for major retail chains, where margins are 
lower. The Commission approved the aid on 11 December
314 since all the conditions 
of the Community guidelines on rescue a nd restructuring of firms in difficulty315 
were fulfilled. 
I – POSTAL SERVICES  
1. O VERVIEW OF THE SECTOR  
340. Postal services in the EU generate about 0.9% of GDP. Th e postal sector is thus of 
great significance for th e economy of the EU. Virtually all Universal Service 
Providers (USP) in the EU are public undertakings contro lled by the Member States, 
with Germany and the Netherlands  being the notable exceptions. 
                                                 
311 Community guidelines for State aid in the ag riculture and forestry sector 2007-2013 ( OJ C 319, 
27.12.2006, p. 1 ). 
312 Guidelines for the examination of St ate aid to fisheries and aquaculture ( OJ C 84, 3.4.2008, p. 10 ). 
313 N 92/2008  Restructuring aid to "Der Bäcker Legat" (OJ C 203, 9.8.2008, p. 3). 
314 NN55/2008  Rescue aid to "Delitzscher Schokolade" (OJ C 12, 17.1.2009, p. 4). 
315 OJ C 244, 1.10.2004, p. 2 . 
 
EN 88   EN 341. Postal services are an essen tial vehicle of communication and trade, and they are also 
vital for many economic and social acti vities. Many key sectors, such as e-
commerce, publishing, mail order, insuran ce, banking and advertising, depend on the 
postal infrastructure. Postal services brin g social benefits which cannot always be 
qualified in economic terms. Postal services  are labour intensive and are also one of 
the principal public employers in Europe. Employment in the sector is principally 
provided by USP and is fairly stable, with about 1.71 million persons employed316. In 
total, roughly 5 million jobs are related to pos tal activities, i.e. ar e directly dependent 
on, or result from, the postal sector317. 
342. Postal services are changing rapidly. The sect or is at the crossroads of three dynamic 
business areas which are vital to th e European economy: communications, 
advertising and transportation/logistics. There are a number of drivers for change 
within the postal sector. The five most  important ones are: demand and changing 
customer needs; organisational cha nge; market opening; automation/new 
technologies; and el ectronic substitution. 
343. Most EU USP are active in at least five separate service markets in addition to the 
monopoly. All USP provide express and unaddr essed mail services. Similarly, most 
USP offer mail preparation services, hybr id mail services, e- mail services and 
financial services. Eight public postal operators (PPOs), mainly active in Member States with high volume markets, are activ e in ten or more different mail related 
markets. These activities share, to varying extents, the same commercial and logistic 
infrastructure which is also  used for the provision of services under monopoly and/or 
universal service obligations. 
344. Objective analysis of market shares of co mpetitors plus the s ubjective perception of 
key players confirm that, even in cases where the monopoly has been completely 
abolished or substantially reduced, genui ne competition is only just beginning to 
emerge. Meaningful competition in the letter post market has yet to develop. In the 
letter post segment, market shares of co mpetitors, although increasing, remain at a 
low level even in Member States that have fully liberalised their postal markets. Estimated market shares of competitors in  these Member States ranged from around 
8% to 14% in 2007. In the majo rity of the other Member States, market shares of 
competitors were, with some exceptions, below 2%
318. 
2. P OLICY DEVELOPMENTS  
345. On 20 February, the Parliament and the Council adopted the third postal Directive319. 
Under this Directive, full market opening will have to be accomplished by 31 December 2010 by most Member States, with a further two years allowed for eleven Member States. This constitutes a major new phase for postal services. The 
                                                
 
316 Main Developments in the Postal Sector (2002-2004) , Final Report, WIK Consult, 2006. 
317 Employment trends in the EU postal sector , Final Report, Pls Rambøll, October 2002. 
318 See Section 4.4 of Annex to Commission Report on the application of the Postal Directive (Directive 
97/67/EC as amended by Directive 2002/39/EC) ( SEC(2006) 1293, 18.10.2006 ). 
319 Directive 2008/06/EC of the European Parliament and of the Council of 20 February 2008 amending 
Directive 97/67/EC with regard to the full accomplis hment of the internal market of Community postal 
services ( OJ L 52, 27.2.2008, p. 3 ). 
 
EN 89   EN Directive provides in particular for the abol ition of the reserved area in all Member 
States, the confirmation of the scope and st andard of postal universal service and the 
upgrading of the role of natio nal regulatory authorities. Th e Directive also offers a 
variety of measures that Member States  may take to safeguard and finance the 
universal service, if this  proves to be necessary. 
346. Regarding the application of State aid rules to the postal sector in 2008, the 
Commission adopted several decisions with a view to ensuring that postal operators 
entrusted with SGEI and their subsidiari es do not enjoy unduly granted advantages. 
In particular, the Commission looked at the amount of compensation granted to 
postal operators in order to ensure that these compensations do not exceed what is 
necessary to cover the costs incurred in di scharging the public service obligations, 
taking into account the releva nt receipts and reasonable profit for discharging those 
obligations, and that commercial activities out side the SGEI are not  cross-subsidised. 
347. Among the State aid decisions, on e authorisation in favour of  the Italian Post Office 
should be mentioned. The Commission deci ded not to raise objections under EC 
Treaty State aid rules to a sum of EUR 1.1 billion compensation granted by Italy to 
Poste Italiane  from 2006 to 2008 to meet the cost s of fulfilling its  universal postal 
service obligations. The State support wa s found to be in line with EU rules on 
public service compensation, because it did not over-compensate Poste Italiane  for 
providing these services, and did not allow cross-subsid ies to other activities. 
348. On 12 November, the Commission found that La Banque Postale320 had not gained 
any advantage from the breakdown between La Poste and itself of the EUR 2 billion 
paid by La Poste in 2006 to the national public body responsible for financing retirement pensions. La Banque Postale di d not, therefore, receive State aid. The 
Commission was particularly concerned to  ensure that the calculation of the 
contribution by La Banque Po stale took account of the sh are relating to the general 
purpose staff actually working for it. 
349. The Commission continued its investigati on into the alleged overcompensation of 
Deutsche Post AG
321 for carrying out its universal service obligations. Due to the 
refusal by Germany to supply the requested  information, the Commission enacted an 
information injunction against Germany on 30 October. 
350. Furthermore, the CFI annulled322 the 2002 Commission decision which had already 
found certain aid measures for Deutsche  Post AG to be incompatible. The 
Commission has appealed against the judgment323. 
                                                 
320 Case NN 41/2006  Contribution de la Banque postale à la réforme du financement des retraites des 
fonctionnaires rattachés à La Poste (OJ C 46, 25.2.2009, p. 1) . The public version of this decision is 
not yet available. It will be displayed as soon as it has been cleansed of any confidential information. 
See Press release IP/08/1686 , 12.11.2008. 
321 Case C 36/2007  Complaint against the German State for unlawful State aid to Deutsche Post  
(OJ C 245, 19.10.2007 p. 21). 
322 Case T-266/02  Deutsche Post AG v Commission  , not yet reported in the ECR. 
323 Case C-399/08  Commission v Deutsche Post AG  (OJ C 301, 22.11.2008, p. 18). 
 
EN 90   EN 351. During the year, as well as verifying the compatibility of the level of compensation 
granted to postal operators for providi ng SGEI, the Commission also examined 
whether postal operators we re receiving other forms of aid from the State. 
352. The Commission closed its investigations into aid granted to Leipzig Airport and 
DHL324. While it cleared the aid granted to Leip zig airport for the construction of the 
southern runway, the Commission prohibited th e letter of comfor t and certain other 
warranties which DHL received as aid fo r moving its European hub to Leipzig. The 
aid which had already been made available to DHL will have to be returned. 
353. The adoption of the third Postal Directive will mean that it is no longer possible to 
use the State monopoly in respect of certain services (the so-cal led "reserved area") 
to finance the various public services carr ied out by postal opera tors. The role of 
State aid and, hence, the Commission's cont rol thereof will consequently increase in 
importance. The Commission will pay particul ar attention to ensuring that State aid 
is only used to finance public services a nd is not abused so as to prevent the 
development of competition, or to block the entry of or crowd out new market 
players. 
III – Consumer activities 
354. It is as consumers th at citizens interact most direc tly with the marketplace, through 
the products and services they buy. It is al so as consumers that citizens are most 
vulnerable to behaviour intended to preven t the market operating fairly. Ultimately it 
is choice and purchasing decisions at the e nd of a market that drive its requirements 
and needs upstream, and it is these choices made by consumers that enable businesses to decide where to focus inve stment and innovation in order to be 
successful. Where the benefits of this investment, innovation and efficiency are 
passed on to end consumers, it further empowers them to make an informed choice, thereby building a virtuous circle and a strong economy. 
355. It is for these reasons that it is vital that markets do not act to exclude or cause 
detriment to consumers, and - in response to this - it is essential that the impact of an effective competition policy is focused on maximising consumer welfare. Put simply, this means ensuring that the benefits of a functioning competition regime accrue to 
the end consumer in a given product ma rket. To achieve these objectives, the 
Commission places consumer concerns and i ssues at the heart of all its competition 
actions, and ensures that the results of this work are presented clearly and transparently. 
356. The Commission can undertake this work by analysing how markets are currently 
working when following up a suspicion or allegation of an infringement of competition rules, with a view to remedying and/or imposing a fine if the infringement is substantiated. Furthermore, the Commission can measure the likely impact on consumers and competition of a cha nge to the structure in a market, either 
through concentration as a resu lt of a merger or acquisiti on or through the input of 
                                                
 
324 Case C 48/2006  Measures by Germany to assist DHL and Leipzig Halle Airport  (OJ L 346, 23.12.2008, 
p. 1). 
 
EN 91   EN additional funding through State aid. In perfor ming this second type of analysis the 
Commission can establish whet her the change is  going to have a small impact on 
consumers and competition, or whether it needs to be modified or rejected. 
357. In anti-trust actions and cartels, the vast majority of cases pursued by the 
Commission in 2008 concerned markets that impacted on consumers of a product. In 
such cases there may have been higher pri ces, lower quality or less choice than there 
would otherwise have been. 
358. In cases such as the Bananas cartel325, the potential effect on consumers can occur 
when consumers are a direct purchaser or user of a product or service. In other cases, such as the Car Glass  cartel
326, the product subject to a cartel may cause consumer 
detriment because either it is a raw material  or component of the end product or it is 
a service, process or piece of machiner y used in the manufacture, transport or 
distribution of a product. For instance, mo st consumers purchase cars rather than 
windows as components (except in a small number of repair cases – although even 
here consumers are likely to  choose the repairer rather than the glass manufacturer). 
It is important to note that in these types of cases, the purpose or intent of reducing 
competition in the market – which thus creates a consumer detriment – is a key 
driver for Commission actions, and fines ar e set so as to take this into account. 
359. This approach to considering whether c onsumers are likely to have suffered past 
harm as a result of an infringement of  competition law also informs the thinking 
behind the proposals contained in the White  Paper on Damages Actions, published in 
April 2008327. In many cases, individual consumers may only suffer a small amount 
of detriment. However, on aggregate, the total loss suffered by all consumers can be 
high. Consumers who suffered as a result of a cartel or any breach of competition law therefore need a collective redress mechanism: it is not just a matter of justice for 
them; it is also a matter of overall confidence in the market economy. 
360. The Commission also uses an analysis of how markets are operating when looking at 
the effect of the wider market and re gulatory framework, for instance when 
considering the markets for telecommunica tions or professional services. The study 
into the conveyancing services market, published in January 2008
328, looked at a 
particular market served by professional se rvices in 21 Member States that had a 
significant economic impact on consumers.  The study highlighted the interaction 
between the level of regulation of the market  in various Member States, the price of 
services and the outcomes in terms of qua lity. It concluded that high levels of 
regulation generally go hand in hand with high prices, although they do not 
necessarily result in higher levels of quality. The Commission takes the view that 
regulation should be proportional to benefit – that is to say, where there are clear 
                                                 
325 On 15 October 2008 the Commission fined banana suppliers EUR 60.3 million for running a price 
cartel between 2000 and 2002. See Press Release IP/08/1509 , 15.10.2008. 
326 On 12 November 2008 the European Commission imposed fines totalling EUR 1 383 896 000 on 
Asahi, Pilkington, Saint-Gobain and Soliver for ille gal market sharing, and exchange of commercially 
sensitive information regarding deliveries of car glass in the EEA. See Press Release IP/08/1685 , 
12.11.2008. 
327 See Press Release IP/08/515 , 3.4.2008. 
328 Conveyancing Services Market: Study for the European Commission , DG Competition led by the 
Centre of European Law and Politics (ZERP)  at Bremen University, December 2007. 
 
EN 92   EN benefits to consumers, regulation may be appropriate; but this should be done in a 
manner that is proportionate  to its intended effect. 
361. Competition policy is, by its very nature, forw ard-looking: anti-trust policy itself is 
not only about punishing past misdeeds, but also explicitly about deterrence for the 
future, through an appropriate fining polic y. Even when no fine is imposed, the 
Commission can approve commitments from bus inesses to stop certain practices or it 
can undertake certain actions in order to  facilitate competition and ultimately 
improve the market for consumers. As re gards collecting soci eties (who represent 
music authors and collect royalties on thei r behalf), the Commission decision in the 
CISAC  case329 prohibited the use of territorial excl usivity clauses in contracts. This 
will make it easier, for instance, for a mu sic website to offer online content to 
consumers outside its own territory. Howeve r, while anti-trust enforcement puts an 
end to anticompetitive behaviour, other tools available to the Commission are directly shaping the future for the benefit of consumers, on markets that concern their 
everyday life. 
362. In the context of merger control, the Co mmission assesses the likely consequences of 
a proposal by companies to merge. It can prohi bit the transaction if it is likely to have 
negative consequences for consumers or approve such a transaction subject to 
conditions. Even where a merger is clear ed without any condi tions, it is still 
important to ascertain that there will be  no negative impact on consumers. In 
practice, conditions or remedies  often form part of a merg er clearance. For instance, 
the purchase of Austrian retailer,  ADEG, by the German supermarket chain  REWE
330 
raised concerns regarding the potential for increased price levels, because REWE 
would not face enough competition in several Austrian districts. Therefore, the 
acquisition was only approved subject to REWE selling all ADEG-owned shops in 
the relevant districts and encouraging ADEG merchants to leave the ADEG network. 
363. Similarly, and given the importance of food prices for consumers, the Dutch dairy 
cooperatives Friesland Foods and Campina331 were only allowed to merge after the 
former undertook to sell its fresh dairy product business (on which it would have become dominant) while the latter divested one cheese plant as well as two brands of 
long-life dairy drinks. However, even th en, consumers buying these products would 
not enjoy the full benefits of competition if  the merged entity continued to control 
most of the raw material needed for these products, i.e. raw milk. Hence, additional 
commitments were made to ensure that competitors in the fresh dairy and cheese 
markets would have access to raw milk, and to ensure lower exit barriers for dairy farmers wishing to leave the merged cooperative. 
364. The same concern was identified for motor fu el and fuel stations with the takeover 
by StatoilHydro of Jet Scandinavia
332, which is the most efficient low-cost operator 
in both Norway and Sweden with a str ong brand and a proven track record of 
undercutting competitors' prices in markets w ith high entry barriers. Since fuel prices 
are a major concern for consumers and since the transaction would have strengthened 
                                                 
329 Case COMP/38.698 CISAC Agreement (not yet published in the OJ). See Press Release IP/08/1165  and 
MEMO/08/511 , 16.7.2008. 
330 See Press Release IP/08/995 , 23.6.2008. 
331 See Press Release IP/08/1994 , 17.12.2008. 
332 See Press Release IP/08/1556 , 21.10.2008. 
 
EN 93   EN the acquirer's position as the largest provider of motor fu els, the Commission cleared 
Statoil's bid only after it offere d to divest the entire Jet ne twork in Norway, as well as 
158 stations in Sweden. 
365. It should be stressed that remedies are voluntary in that they are offered by the 
parties, but the Commission will only accept them if they really make a difference 
for consumers. If that is not the case, the parties will have to modify these remedies until they resolve the competition concer ns identified by the Commission in its 
investigation. 
366. The acquisition of  British Energy (BE) by Électricité de France (EdF)
333 was a case 
in point; it had to be watched closely, es pecially given the proportion of household 
incomes spent on energy. After a first set of remedies offered by EdF and BE were deemed insufficient in relation to the potential problems that arose, the parties submitted an improved remedy package ensuring a diversified ownership of power generation plants and more open access to  electricity for competitors. These 
commitments were seen as essential to ma intaining consumer choice in the market 
by avoiding a situation where one dominant player is able  to raise prices without a 
sufficient alternative electric ity supply being available. 
367. The Commission follows the same preventive or proactive approach when 
authorising – or blocking – St ate aid schemes. Public subsidies can be fully justified 
when the market itself does not provide adequate solutions , as has obviously been the 
case in the financial sector  during the recent fi nancial crisis. Rescuing banks was 
required in this case in orde r to protect citizens' deposit s and their ability to borrow 
money, but it was also tempting for Member  States to give priority support to 
national banks. However, uncoordinated reac tions could only make the crisis worse 
by exporting problems to other Member Stat es and distorting th e Internal Market 
with money flowing to banks that were benefiting from guarantees, while leaving 
other banks in trouble. The latter would ra pidly become bankrupt and their remaining 
clients would lose their deposits. Such a situation would then push each government 
into a subsidy race, thereby reinforcing the market positions of national banks on 
their respective territory. Reduced compe tition from foreign banks would then enable 
them to impose less favourable conditions on consumers. 
368. Dialogue and consultation are essential to any properly functioning policy, and the 
Commission is committed to conduct a pr oper dialogue with consumers also on 
competition issues. Therefore, a dedicated Consumer Liaison Unit was created in DG Competition in 2008. Consumers and their representatives are able to present helpful information to the Commission about potenti al market failures. Consumer input is 
also an important asset in understanding markets, as consumers and their 
representatives are best placed to explain directly how they  perceive the impact of a 
particular action. During 2008, DG Compe tition received approximately 2 500 letters 
from citizens on the subject of mergers, State aid and anti-tru st. The Commission 
asked for specific input in 2008 duri ng the Pharmaceutical Sector Inquiry
334 and, on 
a regular basis, in a number of merger  cases. By understanding this consumer 
                                                 
333 See Press Release IP/08/2048 , 22.12.2008. 
334 See Press Release IP/08/1829 , 28.11.2008. 
 
EN 94   EN perception, the Commission is better able to place all aspects of th e market in context 
when identifying issues and remedies. 
369. In developing policy, it is also important  to understand the concerns and impacts on 
our major stakeholders, and consumers ar e no exception. Both the Roundtable on 
opportunities and barriers to  online retailing and the European Single Market335 and 
the White Paper on Private Damages incl uded extensive consultation through which 
the views of consumers and their represen tatives were actively sought. Using their 
input, the Commission was better able to understand how these policies would 
operate in practice and to ensure that  their objectives are fully realised. 
370. Developing the linkages between competition and consumer welfare remains an area 
of ongoing importance for the Commission. The guidelines on Article 82 EC336 
reaffirmed the importance of this approac h, and these will be rolled out during 2009 
and beyond. 
IV – The European Competitio n Network and cooperation with 
National Courts 
A – GENERAL OVERVIEW  
371. The ECN is the network for cooperation be tween the EU Member States' NCAs and 
the Commission. In 2008 the ECN continued to  be a very active fo rum for discussion 
and exchange on good practices. As in prev ious years, it also performed well under 
the mechanisms laid down in Regulati on 1/2003, with a view to ensuring the 
efficient and consistent enfor cement of Articles 81 and 82 EC. 
1. C OOPERATION ON POLICY ISSUES  
372. The ECN provides a platform for EU comp etition authorities to constructively 
coordinate enforcement action, ensure upstream consistency and discuss policy 
issues of common interest. During 2008 the ECN met in the following fora 
• The annual meeting of the Director Gene ral of DG Competition and the heads of 
all NCAs in the ECN context, which wa s devoted to discus sion about recent 
developments in competition policy. 
• The so-called "plenary meetings", wher e the NCAs and the Commission met on 
three occasions and which served as an important tool for debates about general 
issues of common interest relating to  anti-trust policy and exchange of 
experiences and know-how. In this regar d, the plenary engaged in discussions on 
the experience of the NCAs with the enforcement instruments of Regulation 
1/2003, as part of the preparatory fact-f inding for the Report on the functioning of 
                                                 
335 For further details see http://ec.europa.eu/competition/s ectors/media/online_commerce.html  
336 See Press Release IP/08/1877 , 3.12.2008. 
 
EN 95   EN Regulation 1/2003 which th e Commission is called upon to present to the 
European Council and Parliament in 2009337. 
• Three working groups dealt with specific issues, such as enhancing 
communication within the ECN, and examin ed the application of the 'effect on 
trade' criterion in practice. These work ing groups provided an excellent forum for 
sharing experiences on concrete issues  and exchanging good practices. Two new 
working groups were created as part of  the review of the Commission's policy on 
horizontal agreements and vertical rest raints. These new working groups will 
explore the case experience of enforcers in  these fields and will feed into the 
Commission's review of the existing BER, and accompanying Guidelines, which are due to expire in 2010. 
• Moreover, fifteen ECN sectoral subgroups
338, dedicated to particular sectors, 
addressed specific issues and engaged in a useful exchange of experience and best 
practices. For example, the energy a nd food subgroups were very productive, 
most notably with regard to the analysis  of "sticky retail prices". The banking 
subgroup engaged in lively and wide-ranging discussions on the concepts and follow-up to the MasterCard decision, MIF and the SEPA file. Lastly, the 
pharmaceuticals subgroup focused primarily on the pharmaceutical sector inquiry. 
1.1. Convergence of national laws and instruments 
373. 2008 saw the continuation of the "convergence" process obs erved in the context of 
Regulation 1/2003
339. Over and above the legal obligations arising from the 
implementation of the Regulation, there is a trend towards greater approximation of 
national procedural laws and policies. 
374. A prime example of this trend towards further convergence is the ECN Model 
Leniency Programme340. The Programme was elaborated within the ECN during 
2006. The implementation of leniency progr ammes, in general, and of the ECN 
Model Programme, in particular, by the Memb er States and NCAs has advanced at a 
considerable pace. By the end of 2008, tw enty-five Member States had leniency 
programmes and the remaining two (Malta and Sl ovenia) are expected to introduce 
them in the near future. Many ECN memb ers have aligned their programmes with 
the ECN Model Programme or are in th e process of doing so. The state of 
implementation of the ECN Model Programme  at the end of 2008 is currently being 
assessed by the Commission and the NCAs. 
                                                 
337 See Article 44 of Regulation 1/2003: "Five years from  the date of application of this Regulation, the 
Commission shall report to the European Parliament and the Council on the functioning of this 
Regulation, in particular on the application of Article 11(6) and Article 17. On the basis of this report, 
the Commission shall assess whether it is appropriate to propose to the Council a revision of this 
Regulation". 
338 On banking, securities, insurance, food, phar maceuticals, professional services, healthcare, 
environment, energy, railways, ma ritime transport, motor vehicles, telecoms, media and sports. 
339 See Report on Competition Policy 2007, p. 20, available at 
http://ec.europa.eu/competition/annual_reports/2007/en.pdf  
340 Further information on the ECN Model Programme is available at : 
http://ec.europa.eu/competition/ecn/model_leniency_en.pdf  together with a list of frequently asked 
questions ( MEMO/06/356  of 29 September 2006). 
 
EN 96   EN 375. During 2008, the Commission and the NCAs have also worked together on a 
comparative analysis of commitment procedures. 
2. C OOPERATION IN INDIVIDUAL CASES  
376. Cooperation between the ECN members in individual cases is organised around two 
principal obligations on the part of the NCAs, namely to inform the Commission 
when new cases are opened341 and before the final decision is taken342. The first 
requirement of informing the Commission and the network facilitates the swift reallocation of cases on the few occasions where it appears necessary and promotes 
enhanced and effective enforcement, while  the second plays an important role in 
ensuring the consistent application of EU law. 
2.1. Case allocation 
377. In 2008 the Commission was informed of a pproximately 150 new case investigations 
launched by NCAs. Amongst the new cases about which the Commission was informed under Article 11(3) of the Re gulation, more than 55% concerned the 
application of Article 81 EC, 30% concerned the application of Article 82 EC and the 
remainder concerned the application of both Articles 81 and 82 EC. The figure for 
Article 81 cases includes the enforcement action of the NCAs in the area of cartels in 
particular. Clusters of cases were also observed inter alia  in the energy, food, media, 
transport, telecommunication and postal sectors. 
378. With regard to work-sharing within the ne twork, the flexible a nd pragmatic approach 
introduced by the Regulation and the Netw ork Notice continued to function very 
well in practice. In 2008, as in previous year s, there were very few instances of case-
allocation discussions, and even fewer oc casions where a case  changed hands. The 
situations where work-sharing plays a role typically occur when a complainant or a 
leniency applicant chooses to contact both the Commissi on and one or more NCAs. 
In 2008, a small number of complaints we re re-allocated from the Commission to 
NCAs that were willing to follow up the matters raised. Furthermore, in a limited 
number of instances, the Co mmission and the NCAs agreed on a way of dividing the 
work on a case–by-case basis. 
                                                
 
341 See Article 11(3) of Regulation 1/2003: "The compe tition authorities of the Member States shall, when 
acting under Article 81 or Article 82 of the Treaty, inform the Commission in writing before or without 
delay after commencing the first formal investigative measure. This information may also be made 
available to the competition authorities of the other Member States". 
342 See Article 11(4) of Regulation 1/2003: "No later than 30 days before the adoption of a decision 
requiring that an infringement be brought to an end, accepting commitm ents or withdrawing the benefit 
of a block exemption Regulation, the competition authorities of the Member States shall inform the 
Commission. To that effect, they  shall provide the Commission w ith a summary of the case, the 
envisaged decision or, in the absence thereof, any other document indicating the proposed course of 
action. This information may also be made available to the competition authorities of the other Member 
States. At the request of the Commission, the acting competition authority shall make available to the 
Commission other documents it holds which are n ecessary for the assessment of the case. The 
information supplied to the Commission may be made available to the competition authorities of the other Member States. National competition authorities may also exchange between themselves 
information necessary for the assessment of a case that  they are dealing with und er Article 81 or Article 
82 of the Treaty". 
 
EN 97   EN 2.2. Consistent application of the rules 
379. Further to information provided under Article 11(4) of Regulation 1/2003, the 
Commission services reviewed or advised on 61 envisaged decisions, as well as on 
informal requests and queries from NCAs. The envisaged decisions submitted to the Commission related to a broa d range of infringements in  different sectors of the 
economy. The Commission noted that the tre nd of an increased use of commitment 
decisions by NCAs that was obs erved in 2007 continued in 2008. 
380. To date, the Commission has not had to ini tiate proceedings with a view to ensuring 
consistency of decision making
343. 
3. A PPLICATION OF EU COMPETITION RULES BY NATIONAL COURTS IN THE EU 
3.1. Assistance in the form of informat ion or in the form of an opinion 
381. Regulation 1/2003 allows national judges to ask the Commission for information in 
its possession or for an opinion on questions  concerning the application of the EU 
competition rules344. In 2008, the Commission receive d several requests for opinions 
which were pending at the end of the year. 
3.2. Judgments of national courts 
382. Regulation 1/2003 requires the EU Member States to forward to the Commission a 
copy of any written judgment issued by nati onal courts deciding on the application of 
Articles 81 or 82 EC345. The Commission received copi es of some 50 judgments 
handed down in 2008, which were posted on DG Competition's website insofar as the transmitting authority did not class them  as confidential (conf idential judgments 
are merely listed). 
3.3. Amicus curiae  intervention 
383. Regulation 1/2003 provides that, where the co nsistent application of Articles 81 or 
82 EC so requires, the Commission, acting on its own initiative,  may submit written 
observations to courts of the Member Stat es, and may also make oral observations 
with the permission of the court in question
346. In 2008, the Commission did not 
intervene as amicus curiae  pursuant to Article 15 (3) of Regulation 1/2003. 
                                                 
343 See Article 11(6) of Regulation 1/2003: "The initiation by the Commission of proceedings for the 
adoption of a decision under Chapter III shall relieve the competition authorities of the Member States 
of their competence to apply Articles 81 and 82 of the Treaty. If a competition authority of a Member State is already acting on a case, the Commission sha ll only initiate proceedings  after consulting with 
that national competition authority". 
344 See Article 15(1) of Regulation 1/2003: "In proceedi ngs for the application of Article 81 or Article 82 
of the Treaty, courts of the Member States may ask the Commission to transmit to them information in 
its possession or its opinion on questions concerning the application of the Community competition 
rules". 
345 See Article 15(2) of Regulation 1/2003: "Member States shall forward to the Commission a copy of any 
written judgment of national courts deciding on the app lication of Article 81 or Article 82 of the Treaty. 
Such copy shall be forwarded without delay after the full written judgment is notified to the parties". 
346 See Article 15(3) of Regulation 1/2003: "Competition authorities of the Member States, acting on their 
own initiative, may submit written observations to the national courts of their Member State on issues 
 
EN 98   EN 3.4. Financing the training of nation al judges in EU competition law 
384. Continuous training and education of nationa l judges in EU competition law is very 
important in order to ensure both effective and consistent applica tion of those rules. 
In 2008, fifteen grant agreements were conc luded for the training of judges. A call 
for new proposals was also launched in October347. 
V – International activities 
385. In an increasingly globalised world ec onomy, competition policy must also adopt a 
global outlook. DG Competition is responding to this challenge by reinforcing and 
extending its relations with partners al l over the world in both bilateral and 
multilateral fora. Commissioner Kroes attaches the highest importance to effective 
international cooperation in the area of competition. Her bilateral meetings with 
counterparts in the United States, Japan and China, as well as her participation in the International Competition Network (ICN) annua l conference in Kyoto, testify to this 
commitment. 
A – ENLARGEMENT , WESTERN BALKANS AND NEIGHBOURHOOD POLICY  
386. In the context of enlargement, candida te countries must fulfil a number of 
requirements in the field of competition policy as a condition for joining the 
European Union. Candidate countries must  adopt national legislation compatible 
with the EU acquis . They must also put in place  the necessary administrative 
capacity and demonstrate a credible en forcement record. DG Competition provides 
technical assistance and s upport to help the candidate countries fulfil these 
requirements and it continuous ly monitors the extent to which the candidate 
countries are prepared for accession. 
387. During 2008, there was particularly close cooperation with Croatia and Turkey. 
These two candidate countries have to fu lfil "opening benchmarks" before accession 
negotiations on the competition chapter can start. Croatia has made important progress in meeting these opening benchmar ks, including on the remaining important 
issue of the restructuring of its shipyards.  Turkey has yet to introduce a system for 
the control and monitoring of State aid. 
388. DG Competition assisted the Western Balkan  countries in further aligning their 
competition rules with EU law. This include d, among others, help in drafting laws on 
competition and State aid and advice on setting up the necessary institutions to 
                                                                                                                                                        
 
relating to the application of Article 81 or Article 82 of the Treaty. With the permission of the court in 
question, they may also submit oral observations to  the national courts of their Member State. Where 
the consistent application of Article 81 or Article 82 of the Treaty so requires, the Commission, acting 
on its own initiative, may submit written observations  to courts of the Member States. With the 
permission of the court in question, it may also make oral observations. For the purpose of the 
preparation of their observations only, the competition authorities of the Member States and the 
Commission may request the relevant court of the Member State to transmit or ensure the transmission to them of any documents necessary for the assessment of the case". 
347 Detailed information on this call for proposals is available at 
http://ec.europa.eu/dgs/competition/proposals2/#call_training2008  
 
EN 99   EN enforce these rules. DG Competition helped Macedonia to improve the compliance 
of its fiscal legislation with  Community rules on State aid. 
389. In the framework of the European Neighbourhood Policy (ENP), DG Competition 
monitored the implementation of the compe tition-related priorities in the bilateral 
action plans agreed between the EU and EN P countries, which set out an agenda of 
political and economic reforms in the short and medium term. 
B – BILATERAL COOPERATION  
390. The Commission cooperates with numerous competition authorities on a bilateral 
basis and, in particular, w ith the authorities of the European Union's major trading 
partners. The European Union has entered into dedicated coopera tion agreements in 
competition matters with the United States, Canada and Japan. 
1. A GREEMENTS WITH THE USA,  CANADA AND JAPAN  
391. As in previous years, cooperation with th e United States of America was intense. 
Based on two dedicated competition cooperation agreements348, contacts between 
DG Competition and the Anti-tru st Division of the US Department of Justice (DoJ) 
and the US Federal Trade Commission (FTC ) were frequent. These contacts ranged 
from cooperation in individual cases to mo re general matters related to competition 
policy. Numerous meetings and video- or telephone-conferences took place to 
discuss issues such as cooperation in cartel investigations, abuse of dominance or the 
application of the competition rules in particular sectors. 
392. In case-related contacts, case teams usually update each other on the state of 
investigations (within th e limits of the above-menti oned agreements). Merger 
control, in particular, re quires good coordination with the DoJ and the FTC. The 
2002 EU-US best practices on cooperation in reviewing mergers provide a useful 
framework for cooperation, especially by indi cating critical points in the procedure 
where cooperation could be pa rticularly useful. The cases Thomson/Reuters  and 
Google/DoubleClick  can be cited as examples of  good cooperation between the EU 
and US agencies. 
393. Commissioner Kroes met her US counterpart s, Chairman William E. Kovacic of the 
FTC and Tom Barnett, the Assistant Attorn ey General, at the annual bilateral 
meeting which took place on 20 October in Brussels, and on seve ral other occasions. 
394. Cooperation with the Canadian Competitio n Bureau is based on the EU/Canada 
Competition Cooperation Agreement which was signed in 1999349. Contacts between 
the Commission and the Bureau have been  frequent and fruitful. Case-related 
                                                 
348 Agreement between the European Communities and the Government of the United States of America 
regarding the application of their competition laws  (OJ L 95, 27.4.1995, p. 47) and Agreement between 
the European Communities and the Government of the United States of America on the application of 
positive comity principles in the enforcement of their competition laws  (OJ L 173, 18.6.1998, p. 26). 
349 Agreement between the European Communities and the Government of Canada regarding the 
application of their competition laws  (OJ L 175, 10.7.1999, p. 50). 
 
EN 100   EN contacts concerned mainly merger and carte l investigations. In the area of cartel 
cases this also included the coordination of investigative measures and, in the area of 
mergers, the discussion of possible re medies. The Commission and the Canadian 
Competition Bureau continued their dial ogue on general competition issues of 
common concern. High level meetings took place both in Brussels and Ottawa, and 
officials from both sides c onducted reciprocal visits. 
395. Cooperation with the Japan Fair Trade Commission (JFTC) is based on the 2003 
Cooperation Agreement350. Commissioner Kroes met JFTC Chairman Takeshima at 
the occasion of the EU-Japan High Level meeting on competition policy  on 13 April 
in Kyoto. At the centre of discussions were policy initiatives on both sides, as well as 
recent enforcement actions. In addition to contacts on individual cases, the 
Commission and the JFTC continued thei r ongoing dialogue on general competition 
issues of common concern. 
2. C OOPERATION WITH OTHER COUNTRIES AND REGIONS  
396. The European Commission continued its cl ose cooperation with the European Free 
Trade Association (EFTA) Surveillance Aut hority in enforcing the Agreement on the 
European Economic Area (EEA). 
397. Cooperation with China under the EU-China competition policy dialogue351 
remained a priority in 2008. Contacts be tween DG Competition and the Chinese 
administration were intense and dealt main ly with questions concerning the newly 
adopted anti-monopoly law, the future implementing legislation and the administrative structure of the Chinese enforcement agencies. DG Competition organised several workshops in Beijing on EU  merger control and anti-trust issues 
for high-level representatives from th e Ministry of Commerce, the State 
Administration of Commer ce and Industry, and the National Development and 
Reform Commission. It also hos ted a visitor from the Ministry of Commerce for a 
period of five months. 
398. In the course of the year, DG Competiti on and the Korean Fair  Trade Commission 
(KFTC) finalised their negotiations for a bi lateral cooperation agreement in the field 
of competition. This agreemen t will contain provisions on enforcement cooperation, 
notification, consultation and exchange of non-confidential information. The 
adoption process is at a fairly advanced stage. The European Parliament issued a 
positive opinion on the proposal in Decembe r 2008. When it enters into force as 
scheduled, in early 2009, the agreement will replace the existing Memorandum of 
Understanding
352 between DG Competition and the KFTC. 
399. Moreover, DG Competition played an active role in the ongoing negotiations on Free 
Trade Agreements (FTA) with Ukraine, India and South Korea, and on the trade part of the Association Agreement with Central America, with a view to ensuring that 
                                                
 
350 Agreement between the European Community and the Government of Japan concerning cooperation on 
anti-competitive activities  (OJ L 183, 22.7.2003, p. 12). 
351 Terms of Reference of the EU-China competition policy dialogue  (May 2004). 
352 Memorandum of Understanding on cooperation between the Fair Trade Commission of the Republic of 
Korea and the Competition Directorate-General of the European Commission  (October 2004). 
 
EN 101   EN anti-competitive practices (including Stat e aid) do not erode the trade and other 
economic benefits sought through those agreements. 
C – MULTILATERAL COOPERATION  
1. I NTERNATIONAL COMPETITION NETWORK  
400. DG Competition continued to play a leading role in the ICN. More specifically, DG 
Competition is a member of the Steering Group, co-chair of the cartels Working 
Group and an active member of the other Working Groups (on mergers, competition 
policy implementation, unilateral conduct and advocacy). 
401. At the 2008 ICN Annual Confer ence, held in Kyoto (Jap an) from 14 to 16 April, 
Commissioner Kroes and Director-General  Philip Lowe delivered keynote speeches. 
402. The Unilateral Conduct Working Group (UCW G), which was set up in 2006, worked 
on two reports on tyi ng and bundled discounting and loya lty rebates. The reports are 
to be finalised at the beginning of 2009. The Working Group also started 
preparations for the ICN Un ilateral Conduct Workshop due to  be held in Washington 
in March 2009. 
403. The Cartels Working Group, co-chaired by DG  Competition, presented reports to the 
2008 annual conference on negotiated settleme nts in cartel cases and on determining 
fines for cartels where DG Competition contribution was key. Progress was made on drafting a chapter for the ICN anti-cartel enforcemen t manual on investigative 
strategy and interviewing. Th e 2008 ICN Cartels workshop was held in Lisbon from 
28 to 30 October. 
2. OECD 
404. DG Competition continued to contribute actively to the work of the OECD 
Competition Committee and participated in each of the three sessions held by the 
Committee in 2008. It submitted contributions  to most round tables on competition 
policy, including on resale price maintenance, buyer po wer, market studies and 
bundled and loyalty discounts and rebates, a nd gave presentations on several topics, 
including its decision in the MasterCard  case. 
3. UNCTAD 
405. DG Competition played a leading role at a round table discussion at the annual 
conference of the Intergovernmental Gr oup of Experts (IGE) on Competition Law 
and Policy of the United Nations Conference on Trade and Development (UNCTAD), which discusse d the division of compet ence between a regional 
competition authority and national competition authorities in the enforcement of 
competition laws. The topic was particularly important, as several regional groupings 
of third countries are in the process of  setting up a regional competition regime for 
which the EU system serves as an obvious model. 
 
EN 102   EN VI – Inter-institutional cooperation 
406. In 2008, the Commission continued its c ooperation with the other Community 
institutions in accordance with the respectiv e agreements or protocols entered into by 
the relevant institutions353. 
1. E UROPEAN PARLIAMENT  
407. In 2008, the European Parliament (EP) a dopted a resolution on the retail banking 
sector inquiry following an exchange of  views on the issues raised by its own-
initiative report on this subject. The EP al so adopted, via the consultation procedure, 
a report on the agreement concluded between  the Government of the Republic of 
Korea and the European Community c oncerning cooperation on anti-competitive 
activities. 
408. Own initiative reports on the White Paper on Damages Actions and the Annual 
Competition Reports for 2006 and 2007 were also discussed at committee level 
during 2008 and are due for adoption in 2009. 
409. The Commission also participated in disc ussions held in th e EP on Commission 
policy initiatives, incl uding the application of State aid in response to the unfolding 
financial and economic crisis . The Commissioner holds re gular exchanges of views 
with the responsible Parliamentary committ ees on the subject of competition policy. 
In 2008, there were three ex changes of views with the Economic and Monetary 
Affairs Committee, namely in March, June and October, and one  meeting with the 
Legal Affairs Committee in November. 
410. Outside the framework of these more formal  meetings, cooperation with the EP also 
took the form of bilateral meetings with  individual Members of Parliament on 
specific topics of interest to them. The Commissioner and the Di rector-General have 
also had correspondence with  the Chair of the Economic  and Monetary Affairs 
Committee on topics including competition la w and intellectual property rights, 
cooperatives, Livret A and financial servic es, the follow-up to the retail banking 
sector inquiry, liner shippi ng consortia and the review of the block exemption on 
motor vehicles. 
411. The Commission also cooperates closely with both the European Ombudsman and 
Members of the EP by replying to Parlia mentary Questions and Petitions. In 2008, 
the Commission responded to 549 written qu estions, 65 oral questions and 33 
petitions involving matters  of competition policy354. Moreover, the Commissioner 
also answered an oral questi on in Plenary on State aid to Polish shipyards . 
                                                 
353 Framework Agreement of 26 May 2005 on relations between the European Parliament and the 
Commission ( OJ C 117, 18.5.2006, p. E/123 ); Protocol of Cooperation between the European 
Commission and the European Economic and Social Committee of 7 November 2005 ; Protocol on the 
Cooperation Arrangements between the European Commission and the Committee of the Regions of 
17 November 2005 . 
354 Of these the Commissioner in charge of Competition directly responded to 162 written questions, 18 
oral questions and 10 petitions. 
 
EN 103   EN 2. C OUNCIL  
412. The Commission cooperates closely with th e Council by informing it of important 
policy initiatives in the field of competiti on, such as on State aid measures for the 
bank industry and other additional State aid m easures in the context of the financial 
and economic crisis. The Commission also  attends meetings of Council working 
groups dealing either directly with competiti on policy matters or with files that have 
an impact on competition policy, and it ma intains close links with the respective 
Presidencies. Depending on the case, cooperation may also consist in the participation of the Commissioner respons ible for Competition in different Council 
formations. The most usual ones are the Competitiveness Council or the Economic and Financial Affairs Council. In additi on, the Director-General for Competition 
regularly attends the meetings of the Economic and Financial Committee and contributes to meetings of the European Council. 
413. In 2008, the Commission made contributions on competition policy mainly in respect 
of conclusions adopted in the Competitiveness Council (such as on the Lisbon strategy, industrial policy and SME policy) , the Transport, Telecommunications and 
Energy Council (Internal Energy Market Legislative Package, Energy/Climate 
package) and the Economic and Financial Affairs Council (Single Market Review, 
Single Euro Payments Area, risk capital,  European Economic Recovery Plan). 
3. E
UROPEAN ECONOMIC AND SOCIAL COMMITTEE AND COMMITTEE OF THE 
REGIONS 
414. The Commission informs the European Economic and Social Committee (EESC) 
and the Committee of the Regions about majo r policy initiatives, and participates in 
debates that may be held in the respective Committee on those initiatives. One example is the adoption of the EESC re port on the Commission's Annual Report on 
Competition Policy. During 2008 the Comm ission attended EESC working group 
meetings on Competition and Democracy in the Internal Market, the Annual 
Competition Report 2007, and the White Paper on Damages Actions. 
VII – Outlook for 2009 
A – ANTI-TRUST  
415. The review of the current rules on verti cal agreements, which was launched in 2008, 
will continue in 2009355. The aim is to have the new regime in place early in 2010, 
with entry into force in May 2010. To achieve  this target, the Commission will have 
to adopt a draft proposal of the BER a nd Guidelines in summer 2009. Subsequently, 
the draft proposal will be s ubject to public consultation. 
                                                 
355 See DG Competition Annual Management Plan 2009, 28.11.2008, p. 22. 
 
EN 104   EN B – MERGERS  
416. By 1 July 2009 the Commission will present a report to the Council on the 
application of the Merger Regulation356. The Commission has an obligation to report 
to the Council on the application of the ECMR five years after its entry into force. In 
preparation for this report, the Commissi on launched a public consultation which 
focused, in particular, on the application of the jurisdictional thresholds and the 
referral mechanisms, but also on general issues relating to the application of the Merger Regulation. The Commission's experien ce so far is that, ov erall, the Merger 
Regulation and related instruments work well. 
417. In the context of the financial crisis,  rescue mergers between banks and 
nationalisation of banks by Member States  have thrown up new challenges to the 
application of EU merger control, in terms of juri sdictional, procedural and 
substantive issues. It is expected that these issues will continue to be a crucial part of the enforcement agenda in 2009. The ECMR is an appropriate and sufficiently flexible tool for merger control enforcement, including in such circumstances. The overall objective is to apply merger contro l in a manner that takes into account the 
requirements of financial stability for the banking system, whilst not allowing the 
creation of anti-competitive market structures. 
C – STATE AID  
418. In 2009, the Commission will continue to  implement the State aid action plan357. The 
Commission will in particular  adopt guidelines for the in-depth assessment of large 
amounts of individual aid in the fields of training, employment and regional aid. 
These guidelines will improve predictability and increase legal certainty for Member 
States and companies. The Commission will also actively implement the economic analysis in the cases notified. 
419. As regards the Temporary framework, the Co mmission will analyse the reports to be 
submitted by Member States by the end of October 2009 and will assess whether an amendment of the Temporary framework is necessary. 
420. In 2009, the Commission will also continue its work regarding competition advocacy 
in the field of State aid. Such advocacy is particularly important in order to 
encourage Member States to use existing possibilities, including the GBER adopted 
in 2008. 
421. Case workload pertaining to the financial crisis and its spill-over effects in the real 
economy will continue to be high in 2009. 
422. In the financial sector, existing aid schemes approve d at the end of 2008 must 
continue to be monitored. The Commissi on is reviewing their functioning and will 
also feed into the work of the Ec onomic and Financial Committee on the 
effectiveness of rescue measures. Als o, depending on the circumstances, some 
                                                
 
356 See DG Competition Annual Management Plan 2009, 28.11.2008, p. 22. 
357 See DG Competition Annual Management Plan 2009, 28.11.2008, p. 22. 
 
EN 105   EN emergency measures approved will need to be followed up with restructuring 
measures, which will require Commission scrutiny. In 2009 the Commission will 
provide more detailed guidan ce on its approach to the assessment of restructuring 
and viability plans of individual banks under the state aid rules358. It will make a 
case-by-case assessment, taking into acc ount the total aid received through 
recapitalisation, guarantees or a sset relief, to ensure long -term viability and a return 
to normal functioning of the European banking sector. 
423. Also, outside of banking, a large number of cases are expected, either under the 
Temporary framework for State aid measur es to support access to finance in the 
current financial and economic crisis, or  under the rescue and restructuring 
guidelines, particularly in certain sectors which have been seriously affected by the 
crisis or which were already in se rious difficulty (e.g. through structural 
overcapacity) before the crisis erupted. 
D – SECTOR DEVELOPMENTS  
1. E NERGY AND ENVIRONMENT  
424. In 2009, the Commission will continue to enforce the EC competition rules in the 
energy and environment sectors. 
425. From an anti-trust point of view, DG Competition will ensure the follow-up to the 
sector inquiry, which has identified key obs tacles along the electricity and gas supply 
chain to creating integrated and competitive markets359. In these markets, the 
Commission will continue to focus on abuses such as exclusionary conduct, exploitative abuses and collusion. A number of ongoing energy anti-trust 
investigations launched in recent year s are expected to be brought forward 
426. Continued attention will also be devoted to the Climate Change and Energy package 
as well as to the Second Strategic Ener gy Review package within the inter-
institutional dialogue
360. If necessary, the Commission will contribute to further 
refining relevant provisions, pending the final agreement between the institutions. 
427. Concerning mergers, DG Competition's action will focus on identifying and 
addressing anti-competitive effects stemmi ng from cross-border energy mergers. 
428. From a State aid viewpoint, the Commission will continue to apply the established 
policy, in particular applying the new gui delines on State aid to environmental 
protection and the new GBER adopted in 2008361. 
                                                 
358 Communication for the Spring European Council – Driving European Recovery  (COM(2009)114 final, 
4.3.2009, p. 4). 
359 See DG Competition Annual Management Plan 2009, 28.11.2008, p. 19. 
360 See DG Competition Annual Management Plan 2009, 28.11.2008, p. 25. 
361 See DG Competition Annual Management Plan 2009, 28.11.2008, p. 14. 
 
EN 106   EN 2. F INANCIAL SERVICES SECTOR  
2.1. Financial crisis 
429. The Commission will continue to examine na tional measures in favour of financial 
institutions and contribute  to financial stability by  providing legal certainty. 
430. If necessary, the Commission will give fu rther guidance to Memb er States on how 
new aid instruments should be designed in order to be compatible with EU State aid 
rules. 
431. DG Competition will focus on reviewing th e decisions taken in 2008 in order to 
assess whether the national schemes need to be extended and to ensure that inconsistencies between the nati onal aid schemes are ironed out. 
2.2. Economic crisis 
432. Several more measures contributing to na tional recovery plans have been announced 
or notified. The Commission will continue to examine these national measures swiftly. 
433. However, it should be stressed that th e Temporary Framewor k does not apply to 
companies whose problems date from before the crisis, i.e. prior to 1 July 2008 or that it may not be sufficient for companie s which face structural difficulties. For 
those companies, the R&R Guidelines constitute the most appropriate tool to restore 
long-term viability. In such cases, a rest ructuring operation which ensures long-term 
viability is the proper response. 
2.3. Single Euro Payments Area (SEPA) 
434. In addition to the financial and economic cr isis, the outlook of the financial services 
sector for 2009 is also determined by the SEPA project.  
435. Whereas the SEPA framework for payment car ds and the credit transfer scheme were 
launched in 2008, the launch of  the direct debit scheme is not scheduled until 
2 November 2009. 
3. E
LECTRONIC COMMUNICATIONS  
436. As the current economic crisis  is hitting the wider econom y hard, the call for national 
governments to take a more active role to foster broadband deployment as part of a 
wider stimulus initiative is  becoming more vocal. President Barroso has announced 
that the Commission will channel an additional EUR 1 billion in 2009 and 2010 to accelerate the roll-out of broadband depl oyment in under-served areas where the 
market does not have sufficient incentiv es to provide affordable broadband 
services
362. Such types of well-targeted aid measures will significantly facilitate the 
widespread availability of affordab le broadband servic e throughout Europe. 
                                                 
362 Communication from the Commission to the European Council: A European Economic Recovery Plan 
(COM(2008)800 final, 26.11.2008 ). 
 
EN 107   EN 437. Furthermore, DG Competition is work ing with DG Information Society on two 
major recommendations. The Recommendation on the regulatory treatment of fixed 
and mobile termination rates in the EU was presented as a draft for public consultation on 26 June. Its aims are to bring wholesale rates for termination on 
individual networks down to an efficien t level, and to harmonize the approach to 
regulating these rates. The Recommenda tion on next generation access networks, 
published as a draft for public consultati on on 18 September, addresses the regulation 
of next generation fibre optic networks in order to stimulate investment, while at the 
same time safeguarding competition in the market for high speed broadband services. 
438. The Commission is also prepar ing State aid guidelines on th e application of EU state 
aid rules to public funding for the deploymen t of broadband networks, including the 
deployment of so-called next ge neration access broadband networks. 
4. I
NFORMATION TECHNOLOGY  
439. Due to the economic crisis, growth in the ICT sector is likely to be negative in 2009, 
in spite of the positive growth in the IT services and software sectors363. The 
Commission will continue to monitor market developments closely and ensure that competition is not hindered, for example th rough reduced interoperability or through 
foreclosure by a dominant company of existing or emerging markets
364 It will also 
continue to monitor developments in standa rd-setting bodies, particularly in relation 
to intellectual property rights, so as to ensu re that procedures within standard-setting 
bodies culminate in a transpar ent process and contribute to the achievement of pro-
competitive outcomes365. 
440. By removing and preventing anticompetitive barriers to innovation and market entry, 
DG Competition will contribute to investment and growth in ICT markets and 
thereby to the deepening and extension of the European knowledge economy as a 
whole. 
5. M EDIA  
441. Following up on the Roundtable on opportunities  and barriers to online reta iling, a 
report will be drafted on the basis of the contributions received from the senior 
representatives of consumers and i ndustry who attended the meeting with 
Commissioner Kroes on 17 September.  The report and contributions from all 
interested parties on the questions raised in the issues paper of the Commission will be used as an input for the ongoing review of the rules on vertical agreements in relation to online distribu tion. On the subject of online music distribution, 
discussions with stakeholders  will continue, with the aim of exploring models for the 
EEA-wide licensing of music rights in a competitive framework. 
442. The Commission will continue to closely monitor the implementation of the CISAC 
Decision of 16 July. The abolition of terr itorial restrictions in the agreements 
                                                
 
363 See OECD Information Technology Outlook 2008 Highlights . 
364 See Annual Policy Strategy for 2009 (COM (2008) 72 final), 13.2.2008, p. 4). 
365 See DG Competition Annual Management Plan 2009, 28.11.2008, p. 19. 
 
EN 108   EN between collecting societies is expected to  lead to licensing practices which better 
suit the online environment and give both authors and commercial users a choice between collecting societies. 
443. In the field of broadcasti ng, the Commission is con tinuing its review of the 
Broadcasting Communication, taking into account the comments received on the new draft Communication. After having anal ysed the submissions received, the 
Commission intends to adopt a revised Broa dcasting Communication in the first half 
of 2009. 
444. The Commission will continue to implement its established policy concerning State 
aid for the digital switchover in the fiel d of broadcasting. In assessing the funding 
initiatives, the Commission will continue to  pay particular attention to technological 
neutrality and to the ultimate objective of  ensuring wide consumer access to digital 
broadcasting. 
445. Following the positive reaction to its public consultation on the proposal to extend 
the validity of the State aid assessment crite ria in its 2001 Cinema Communication, 
the Commission intends to adopt a decision accordingly
366. As a result, these criteria 
will now continue to be applied by the Commission until 31 December 2012 at the 
latest. They had been due to expire on 31 December 2009.   
6. T RANSPORT  
446. In 2009, the Commission expects that the cons olidation in the airline sector will 
continue, especially in light  of the economic crisis. Such  consolidation may take the 
form of either new mergers between airl ines or enhanced alliance agreements, 
especially in relation to transatlantic flight s. Such operations will have to be assessed 
either under the Merger Regulation or unde r Article 81 EC. The Commission and the 
US Department of Transportation also plan to publish the report on their joint project 
(see above, paragraph 297). 
447. The severe negative effects of the financ ial and real economy crisis on the air 
transport sector in 2008 are expected to be further aggravated in 2009, with both 
passenger and freight traffic levels declini ng at unprecedented rates. It is therefore 
expected that the number of State aid cas es in this sector will increase. The 
Commission will closely monitor sectoral  developments in 2009 and will take the 
necessary steps to ensure, through State ai d control, that the measures taken by 
Member States to support the real economy and employment are implemented in a timely, targeted and temporary manner. Such  measures should respect the following 
guiding principles: promoting openness within the internal market and vis-à-vis third 
countries; ensuring non-discrimination of pr oducts and services from other Member 
States and ensuring consistency w ith long-term reform objectives. 
448. Following the public consultation (see above , paragraph 275), the Commission plans 
to adopt the new block exempti on Regulation on consortia in 2009
367. The 
Commission will also monitor the mark et for maritime transport services, 
                                                 
366 See IP/09/138  
367 See DG Competition Annual Management Plan 2009, 28.11.2008, p. 22. 
 
EN 109   EN particularly in the light of the recen t expiry of the ex emption on maritime 
conferences. 
7. P HARMACEUTICAL INDUSTRY  
449. In 2009, the focus of the Commission's activit ies in the pharmaceutical sector will be 
directed at concludi ng the sector inquiry368. The final report, wh ich is expected in 
summer 2009, will take into account the comments received during the public consultation. As a follow-up, the Commission and/or national comp etition authorities 
may launch investigations aimed at enforcing competition rules in the sector. The Commission may also make  recommendations for improving the regulatory 
framework. A number of significant pharmaceuti cal mergers already appear to be in 
the pipeline for 2009, and so it is likely that  there will also be a heavy merger 
workload. 
8. F
OOD INDUSTRY  
450. In the context of the current economic downt urn, concerns relate d to the food supply 
chain are likely to remain high on the political agenda throughout the coming 
months. As a follow-up to the Communica tion on "Food Prices in Europe" (see 
paragraph 326 above), the work of the Commission's Food Taskforce will continue in 
2009 and focus on the actions identified in  this Communicati on. The Commission 
will report to the Counc il on its progress in December. Th is work will also feed into 
the forthcoming Review of the Single Ma rket, to be completed later in 2009. DG 
Competition will continue to actively contribute to the overall work of the Commission both in the framew ork of the Food Task Force and in the context of the 
Single Market Review. 
451. Given that food retail markets are often defi ned, at most, as national in scope, it is 
crucial for Competition Authorities thr oughout the EU to address potential 
malfunctioning within the food supply chain in  a consistent and coordinated manner. 
To this end, in 2009, the ECN will continue  to be used as a forum for discussion, 
exchange of best practice and market intel ligence-gathering on issu es related to food 
retail markets. In parallel, DG Competition will strive to deepen  its knowledge of the 
markets' structure and practices in orde r to identify and remedy any possible 
breaches of competition rules. 
9. P
OSTAL SERVICES  
452. From a State aid viewpoint, the Commission w ill continue to ensure that there is no 
overcompensation for the discharge of th e public service oblig ations and no cross-
subsidization of commercial activities out side the SGEI. The Co mmission expects to 
close its investigations on alleged State ai d granted by the UK and Germany to Royal 
Mail and Deutsche Post respectively. Con cerning the new Postal Directive, the 
Commission will closely monitor the impl ementation process and also provide 
Member States with the necessary assistance for that purpose. It will also reflect on 
                                                 
368 See DG Competition Annual Management Plan 2009, 28.11.2008, p. 20. 
 
EN 110   EN the possible implications of the new me thod of calculating the net cost of the 
universal service on State ai d policy in the postal sector369. 
E – INTERNATIONAL ACTIVITIES  
453. DG Competition’s work with the candidate co untries, the Wester n Balkan countries 
and the Neighbourhood Policy countr ies will continue in 2009. 
454. DG Competition intends to further strengthe n its cooperation with the South Korean 
competition authority by having the dedicated intergovernmental cooperation agreement in the field of competition signe d, as planned, in early 2009. It also 
intends to hold a first bilateral meeting with the South Korean competition authority 
in 2009. 
455. The focus in 2009 will be on cooperation w ith emerging economies, such as China 
and India. 
456. The Commission will continue to participate actively in the negotiation of Free Trade 
Agreements and Association Agreements with a number of countries, e.g. Ukraine, South Korea, China, India, the Andean Community and Central America. DG Competition will contribute to the negotiations on the competition provisions of these agreements aimed at guaranteeing a level playing field for European 
companies. 
457. DG Competition will c ontinue to participate actively in multilateral organisations 
that are active in the area of competition. It will play an active role in all sessions of 
the OECD's Competition Committee in 2009, as  well as in the activities of the 
International Competition Network (including the annual conference, which will be held in Zürich, Switzerland from 3-5 June 2009). 
                                                
 
369 See Directive 2008/6/EC of the European Parliament and of the Council of 20 February 2008 amending 
Directive 97/67/EC with regard to the full accomplis hment of the internal market of Community postal 
services (OJ L 52, 27.2.2008, p. 3). 
 
EN 111   EN LIST  OF ABREVIATIONS 
ANACOM Autoridade Nacional De  Comunicações, Portuguese NRA 
BER Block Exemption Regulation BPC Best Practices Code CAP Common Agricultural Policy CFI Court of First Instance CFP Common Fisheries Policy CISAC International Confederation of Societies of Authors and Composers 
CPU Central Processing Unit CTU Český telekomunika ční úřad, Czech NRA 
DoJ US Department of Justice EC (Treaty of the) European Community ECB European Central Bank ECJ European Court of Justice ECMR European Community Merger Regulation ECN European Competition Network ECSC European Coal and Steel Community EEA European Economic Area EESC European Economic and Social Committee EFTA European Free Trade Association ENP European Neighbourhood Policy EP European Parliament EPC European Payments Council EPO European Patent Office EU (Treaty of the) European Union EUR Euro 
 
EN 112   EN FERMA Federation of Risk Management Associations 
FTA Free Trade Agreement FTC US Federal Trade Commission GBER General Block Exemption Regulation GDP Gross Domestic Product ICN International Competition Network ICT Information and Communication Technologies IGE Intergovernmental Group of Experts on Competition Law and Policy IPR Intellectual Property Rights JFTC Japan Fair Trade Commission KFTC Korean Free Trade Commission MIF Multilateral Interchange Fees MVBER Motor Vehicle Block Exemption Regulation NCA National Competition Authority NRA National Regulatory Authority OECD Organisation for Economic Cooperation and Development OEM Original Equipment Manufacturer 
OFCOM Office for Communi cations, British NRA 
OJ Official Journal of the European Union PC Personal Computer PND Portable Navigation Devices PPC Public Power Corporation PPO Public Postal Operators R&D Research and Development R&D&I Research, Development and Innovation R&R Rescue and Restructuring RTR Rundfunk und Telekom Regulie rungs-GmbH, Austrian NRA 
 
EN 113   EN SAAP State Aid Action Plan 
SCF SEPA Card Framework SEPA Single European Payments Area SGEI Services of General Economic Interest SME Small and Medium-sized Enterprises SMR Single Market Review SO Statement of Objections SP Simplified Procedure SSO Supplementary Statement of Objections UCWG Unilateral Conduct Working Group UK United Kingdom UKE Urz ąd Komunikacji Elektronicznej, Polish NRA 
UNCTAD United Nations Conference on Trade and Development US United States of America USD United States Dollar USP Universal Service Providers VoIP Voice over Internet Protocol