ANNEX TO THE COMMISSION STAFF WORKING PAPER ACCOMPANYING THE COMMISSION REPORT

ON COMPETITION POLICY 2010

Brussels, February 2011

State aid: Overview of national measures adopted as a response to the financial/economic crisis

(See table attached in annex)

This information is compiled from a range of sources and is provided for information only. The European Commission cannot confirm the completeness or accuracy of the information.

Communications from the Commission to provide guidance to Member States

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, 13 October 2008 (see IP/08/1495).

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, 5 December 2008 (see IP/08/1901).

Communication from the Commission on the Treatment of Impaired Assets in the Community Banking Sector, 25 February 2009 (see IP/09/322).

Communication from the Commission – Temporary framework for State aid measures to support access to finance in the current financial and economic crisis, adopted on 17 December 2008 (see IP/08/1993), as amended on 25 February 2009.

Communication from the Commission – The return to viability and the assessment of restructuring measures in the financial sector in the current crisis under the State aid rules, 23 July 2009 (see IP/09/1180).

Communication from the Commission – on the application, from 1 January 2011, of State aid rules to support measures in favour of banks in the context of the financial crisis (see IP/10/1636).

State aid cases – situation as of 31 December 2010

Decisions adopted by the Commission in 2008/2009/2010[1]

Austria

Type of measure / Beneficiary || Type of Decision || Date of adoption

N557/2008 – Aid scheme for the Austrian financial sector (guarantees, recapitalisation & other) || Decision not to raise objections IP/08/1933 || 9 December 2008

N352/2009 – Prolongation || EXME/09/0630 || 30 June 2009

N663/2009 – Second prolongation || EXME/09/1217 || 17 December 2009

N241/2010 – Extension || IP/10/839 || 25 June 2010

SA.32018 – Extension || EXME/10/16.12 || 16 December 2010

N214/2008 – Recapitalisation of Hypo Tirol || Decision not to raise objections IP/09/928 || 17 June 2009

N640/2009 – BAWAG – capital injection and asset guarantee || Decision not to raise objections IP/09/1989 || 22 December 2009

C16/2009 + N698/2009 – Emergency aid to Hypo Group Alpe Adria || Decision not to raise objections IP/09/1998 || 23 December 2009

Belgium

Belgium/Luxembourg

NN45-49-50/2008 – Guarantee on liabilities of Dexia || Decision not to raise objections IP/08/1745 || 19 November 2008

Prolongation || IP/09/1662 || 30 October 2009

N255/2009 and N274/2009 – Additional aid measures in favour of Fortis Bank and Fortis Bank Luxembourg || Decision not to raise objections IP/09/743 || 12 May 2009

Belgium/France/Luxembourg

C9/2009 – Guarantee in favour of Dexia on certain assets in FSA || Decision not to raise objections IP/09/399 || 13 March 2009

C9/2009 – Approval of restructuring plan for Dexia || Final conditional decision after formal investigation procedure IP/10/201 || 26 February 2010

Belgium/Luxembourg/Netherlands

N574/2008 – Measures in favour of Fortis || Decision not to raise objections IP/08/1746 || 19 November 2008

NN42-46-53A/2008 – Restructuring aid to Fortis Bank and Fortis Bank Luxembourg || Decision not to raise objections IP/08/1884 || 3 December 2008

Belgium

N602/2008 – Recapitalisation measure in favour of KBC || Decision not to raise objections IP/08/2033 || 18 December 2008

NN57/2008 – Capital Injection for Ethias Group || Decision not to raise objections IP/09/254 || 12 February 2009

C18/2009 – Recapitalisation and asset relief for KBC Group || Decision not to raise objections IP/09/1063 || 30 June 2009

C18/2009 – Asset relief and restructuring package for KBC || Final conditional decision after formal investigation procedure IP/09/1730 || 18 November 2009

N256/2009 – Restructuring aid for Ethias || Decision not to raise objections IP/10/592 || 20 May 2010

SA.29833 – Monitoring of KBC: extension of the target date of certain divestments by KBC || – || 16 December 2010

Cyprus

N511/2009 – Cypriot scheme to support credit institutions (guarantee) || Decision not to raise objections IP/09/1569 || 22 October 2009

Denmark

NN36/2008 – Rescue aid to Roskilde Bank || Decision not to raise objections (IP/08/1222) || 31 July 2008

NN39/2008 – Liquidation aid Roskilde bank || Decision not to raise objections IP/08/1633 || 5 November 2008

NN51/2008 – Guarantee scheme for banks in Denmark || Decision not to raise objections IP/08/1483 || 10 October 2008

N31a/2009 – Amendment of the guarantee scheme || IP/09/206 || 17 August 2009

N20/2010 – Second prolongation || EXME/10/0201 || 1 February 2010

N257/2010 – Extension || IP/10/854 || 28 June 2010

N31a/2009 – Recapitalisation scheme (and amendment of the guarantee scheme) || Decision not to raise objections IP/09/206 || 3 February 2009

NN46/2009 – Prolongation || EXME/09/0817 || 17 August 2009

N628/2009 – Second prolongation || EXME/09/1217 || 17 December 2009

NN23/2009 – Rescue aid for Fionia Bank || Decision not to raise objections IP/09/819 || 20 May 2009

N407/2010 – Danish fund for winding up of banks || Decision not to raise objections IP/10/1266 || 30 September 2010

SA.31938 (N537/2010) – Prolongation || EXME/10/1207 || 7 December 2010

N560/2009 – Aid for the liquidation of Fionia Bank || Decision not to raise objections IP/10/1374 || 25 October 2010

Finland

N567/2008 – Finnish guarantee scheme || Decision not to raise objections IP/08/1705 || 13 November 2008

N44/2009 – Amendment to the guarantee scheme || || 5 February 2009

N239/2009 – Prolongation and modification || IP/09/681 EXME/09/0430 || 30 April 2009

N674/2009 – Second prolongation and modification || EXME/09/1217 || 17 December 2009

NN2/2009 – Guarantee for Kaupthing Bank Finland || Decision not to raise objections IP/09/82 || 21 January 2009

N329/2009 – Capital injection scheme || Decision not to raise objections IP/09/1303 || 11 September 2009

N110/2010 – Prolongation || EXME/10/0414 || 14 April 2010

France

N548/2008 – Financial support measures to the banking industry in France (Refinancing) || Decision not to raise objections IP/08/1609 || 30 October 2008

N251/2009 – Extension of the scheme || IP/09/750 || 12 May 2009

N613/2008 – Financial support measures to the banking industry in France (Recapitalisation) || Decision not to raise objections IP/08/1900 || 8 December 2008

N29/2009 – Amendment to the Decision || IP/09/158 || 28 January 2009

N164/2009 – Amendment to the Decision || IP/09/461 || 23 March 2009

N249/2009 – Capital injection for Caisse d'Epargne and Banque Populaire || Decision not to raise objections IP/09/722 || 8 May 2009

Germany

C9/2008 – Restructuring aid to Sachsen LB || Conditional decision (after formal investigation procedure IP/08/849 || 4 June 2008

C10/2008 – Restructuring aid to IKB || Conditional decision (after formal investigation procedure) IP/08/1557 || 21 October 2008

NN44/2008 – Rescue aid to Hypo Real Estate Holding || Decision not to raise objections IP/08/1453 || 2 October 2008

N512/2008 – Aid scheme for financial institutions in Germany (guarantees, recapitalisations & other) || Decision not to raise objections IP/08/1589 || 27 October 2008

N625/2008 – Amendment to the Decision || || 12 December 2008

N330/2009 – Prolongation || EXME09/22.06 || 22 June 2009

N665/2009 – Second prolongation || EXME/09/1217 || 17 December 2009

N222/2010 – Extension || IP/10/789 || 23 June 2010

N615/2008 – Guarantee and recapitalisation for Bayern LB || Decision not to raise objections IP/08/2034 || 18 December 2008

N655/2008 – Guarantee for NordLB || Decision not to raise objections IP/08/2056 || 22 December 2008

N412/2009 – Prolongation || EXME/09/0910 || 10 September 2009

N639/2008 – Guarantee for IKB || Decision not to raise objections IP/08/2055 || 22 December 2008

N17/2009 – Guarantee for SdB – Sicherungseinrichtungsgesellschaft deutscher Banken mbH || Decision not to raise objections IP/09/114 || 22 January 2009

N244/2009 – Commerzbank capital injection || Decision not to raise objections IP/09/711 || 7 May 2009

C43/2008 – Aid for the restructuring of West LB || Conditional decision (after formal investigation procedure) IP/09/741 || 12 May 2009

N531/2009 – Temporary additional aid to West LB || Decision not to raise objections IP/09/1434 || 7 October 2009

N264/2009 – Recapitalisation of HSH Nordbank || Decision not to raise objections IP/09/854 || 29 May 2009

C17/2009 – Recapitalisation and asset relief for LBBW (Landesbank Baden Württemberg) || Decision not to raise objections IP/09/1058 || 30 June 2009

N314/2009 – German asset relief scheme || Decision not to raise objections IP/09/1216 || 31 July 2009

N400/2009 – Additional aid (guarantees) for IKB || Decision not to raise objections IP/09/1235 || 17 August 2009

N456 /2009 – Scheme to facilitate the refinancing of export credits || Decision not to raise objections IP/09/1319 || 15 September 2009

N48/2010 – Prolongation || EXME/10/0309 || 9 March 2010

C17/2009 – Landesbank Baden Württemberg "LBBW" – restructuring plan and impaired assets relief measure || Conditional decision (after formal investigation procedure IP/09/1927 || 15 December 2009

N694/2009 – State guarantees for Hypo Real Estate || Decision not to raise objections IP/09/1985 || 21 December 2009

N555/2009 – Rescue aid for WestLB; in-depth investigation into bad bank || Decision not to raise objections IP/09/1996 || 22 December 2009

N161/2010 – Recapitalisation of Hypo Real Estate || Decision not to raise objections || 19 May 2010

N380/2010 – Temporary authorisation of additional State support (guarantees) for Hypo Real Estate and creation of a bad bank structure, and extension of the ongoing investigation procedure C15/2009 || Decision not to raise objections IP/10/1172 || 24 September 2010

C32/2009 – Restructuring of savings bank Sparkasse KölnBonn || Decision not to raise objections IP/10/1192 || 29 September 2010

SA.29510 – WestLB divestments || || 21 December 2010

Greece

N560/2008 – Aid scheme to the banking industry in Greece (guarantees, recapitalisation & other) || Decision not to raise objections IP/081742 || 19 November 2008

Prolongation and modification || EXME/09/0918 || 18 September 2009

N690/2009 – Prolongation || EXME/10/0125 || 25 January 2010

N163/2010 – Amendment || || 12 May 2010

N260/2010 – Extension and amendment || IP/10/864 || 30 June 2010

SA. 31998 – Fourth extension || - || 21 December 2010

N328/2010 – Scheme for the recapitalisation of credit institutions in Greece under the financial Stability Fund (FSF) || IP/10/1092 || 3 September 2010

SA. 31999 – Prolongation || EXME/10/14.12 || 14 December 2010

Hungary

N664/2008 – Financial support measures to Hungarian financial industry in form of recapitalisation and guarantee scheme || Decision not to raise objections IP/09/253 || 12 February 2009

N355/2009 – Prolongation and modification || EXME/09/0903 || 3 September 2009

N662/2009 – Second prolongation || EXME/09/1217 || 17 December 2009

N224/2010 – Third prolongation of Hungarian recapitalisation scheme || IP/10/789 || 23 June 2010

SA.31928 (N536/2010) – Fourth prolongation || EXME/10/07.12 || 7 December 2010

N 358/2009 – Hungarian Mortgage Support Scheme || Decision not to raise objections IP/09/1123 || 13 July 2009

N603/2009 – Prolongation || EXME/09/1124 || 24 November 2009

SA.31922 – Prolongation || EXME/10/08.12 || 8 December 2010

NN68/2009 – Hungarian liquidity support scheme || Decision not to raise objections IP/10/19 || 14 January 2010

N225/2010 – Extension || IP/10/854 || 28 June 2010

SA.31927 (N 535/2010) – Prolongation || EXME/10/07.12 || 7 December 2010

Ireland

NN48/2008 – Guarantee scheme for banks in Ireland || Decision not to raise objections IP/08/1497 || 13 October 2008

N9/2009 – Recapitalisation of Anglo Irish Bank || Decision not to raise objections IP/09/50 || 14 January 2009

N356/2009 – Recapitalisation of Anglo Irish Bank || Decision not to raise objections IP/09/1045 || 26 June 2009

N61/2009 – Change of ownership of Anglo Irish Bank || Decision not to raise objections IP/09/271 || 17 February 2009

N149/2009 – Recapitalisation of Bank of Ireland || Decision not to raise objections IP/09/483 || 26 March 2009

N241/2009 – Recapitalisation of Allied Irish Bank || Decision not to raise objections IP/09/744 || 12 May 2009

N349/2009 – Revised Irish guarantee scheme for financial institutions (Eligible Liabilities Guarantee scheme) || Decision not to raise objections IP/09/1787 || 20 November 2009

N198/2010 – Prolongation || EXME/10/0531 || 31 May 2010

N254/2010 – Extension || IP/10/854 || 28 June 2010

N487/2010 – Extension (including guarantees on short-term liabilities) || Decision not to raise objections EXME/10/10.11 || 10 November 2010

N725/2009 – Irish impaired asset relief scheme (National Asset Management Agency (NAMA)) || Decision not to raise objections IP/10/198 || 26 February 2010

NN11/2010 – Temporary approval of Rescue measure in favour of INBS || Decision not to raise objections IP/10/400 || 30 March 2010

NN12/2010 and C11/2010 – Temporary approval of second recapitalisation of Anglo Irish Bank and restructuring of Anglo Irish Bank || Decision not to raise objections on recapitalisation, and opening of proceedings on restructuring IP/10/400 || 31 March 2010

N160/2010 – Temporary approval of recapitalisation of EBS || Decision not to raise objections IP/10/658 || 2 June 2010

N564/2009 – Approval of restructuring plan of Bank of Ireland || Decision not to raise objections IP/10/954 || 15 July 2010

N331/2010 – Approval of the transfer of the first tranche of impaired assets under the Irish asset relief scheme NAMA || Decision not to raise objections EXME/10/03.08 || 3 August 2010

NN35/2010 – Temporary approval of third recapitalisation of Anglo Irish Bank || Decision not to raise objections IP/10/1046 || 10 August 2010

N347/2010 – Guarantee scheme for Irish Financial Institutions || Decision not to raise objections IP/10/1154 || 21 September 2010

SA.31919 – Approval of the transfer of the second tranche of impaired assets under the Irish asset relief scheme NAMA || Decision not to raise objections EXME/10/29.11 || 29 November 2010

SA.31891 – Second recapitalisation of Allied Irish Bank || Decision not to raise objections IP/10/1765 || 21 December 2010

SA.32057 – Temporary approval of fourth recapitalisation and certain guarantees in favour of Anglo Irish Bank || Decision not to raise objections IP/10/1765 || 21 December 2010

SA.31714 – Second recapitalisation of Irish Nationwide Building Society (INBS) || Decision not to raise objections IP/10/1765 || 21 December 2010

Italy

N520a/2008 – Guarantee scheme for Italian banks || Decision not to raise objections IP/08/1706 || 14 November 2008

N328/2009 – Prolongation || IP/09/929 || 16 June 2009

N648/2008 – Recapitalisation scheme || Decision not to raise objections IP/08/2059 || 23 December 2008

N97/2009 – Amendment || || 20 February 2009

N466/2009 – Prolongation || MEX/09/1006 || 6 October 2009

N425/2010 – Prolongation || EXME/10/21.10 || 21 October 2010

Latvia

NN68/2008 – Public support measures to Parex Banka || Decision not to raise objections IP/08/1766 || 24 November 2008

NN3/2009 – Amendment to the Decision || || 11 February 2009

N189/2009 – Amendment to the Decision || IP/09/732 || 11 May 2009

N638/2008 – Guarantee scheme for banks || Decision not to raise objections IP/08/2054 || 22 December 2008

N326/2009 – Prolongation || EXME/09/0630 || 30 June 2009

N664/2009 – Second prolongation || EXME/09/1217 || 17 December 2009

N223/2010 – Extension || IP/10/839 || 24 June 2010

NN60/2009 – Capital injection for Mortgage Bank of Latvia || Decision not to raise objections IP/09/1742 || 19 November 2009

C26/2009 – Restructuring of Parex Banka || Final positive decision IP/10/1127 || 15 September 2010

Lithuania

N200/2009 and N47/2010 – Support Package for Lithuanian Financial Institutions (guarantees, recapitalisations and asset relief) || Decision not to raise objections IP/10/1032 || 5 August 2010

Luxembourg

N344/2009&N380/2009 – Restructuring aid for Kaupthing Bank Luxembourg || Decision not to raise objections IP/09/1107 || 9 July 2009

Netherlands

N524/2008 – Guarantee scheme for Dutch financial institutions || Decision not to raise objections IP/08/1610 || 30 October 2008

N379/2009 – Prolongation and modification || EXME/09/0707 || 7 July 2009

N669/2009 – Second prolongation || EXME/09/1217 || 17 December 2009

N238/2010 – Extension || IP/10/864 || 29 June 2010

N528/2008 – Measure in favour of ING || Decision not to raise objections IP/08/1699 || 13 November 2008

N569/2008 – Measure in favour of Aegon || Decision not to raise objections IP/08/1822 || 27 November 2008

N611/2008 – SNS REAAL/New capital injection by Dutch authorities || Decision not to raise objections IP/08/1951 || 10 December 2008

C10/2009 – ING Illiquid asset facility || Decision not to raise objections IP/09/514 || 31 March 2009

C10/2009 – ING restructuring plan and illiquid asset back-up facility || Final positive decision IP/09/1729 || 18 November 2009

N371/2009 – Approval of recapitalisation of SNS REAAL || Decision not to raise objections IP/10/82 || 28 January 2010

N19/2010, NN2/2010, C11/2009 – Temporary approval of additional recapitalisation package in favour of ABN AMRO and Fortis Bank Nederland || Decision not to raise objections IP/10/138 || 4 February 2010

N372/2009 – Approval of recapitalisation of AEGON || Decision not to raise objections IP/10/1053 || 17 August 2010

SA.29832 – ING call of hybrid instruments || IP/10/1619 || 30 November 2010

Poland

N208/2009 – Polish support scheme for financial institutions (guarantee and liquidity support) || Decision not to raise objections IP/09/1360 || 25 September 2009

N658/2009 – Prolongation || EXME/10/0209 || 9 February 2010

N236/2010 – Second Extension || IP/10/864 || 29 June 2010

SA.31923 – Third Prolongation || EXME/10/16.12 || 16 December 2010

N302/2009 – Polish bank recapitalisation scheme || Decision not to raise objections IP/09/1979 || 21 December 2009

N262/2010 – Prolongation || || 5 July 2010

SA.31924 – Second extension || EXME/10/16.12 || 16 December 2010

Portugal

NN60/2008 – Guarantee scheme for credit institutions in Portugal || Decision not to raise objections IP/08/1601 || 29 October 2008

N51/2010 – Prolongation || EXME/10/22.02 || 22 February 2010

N315/2010 – Extension || IP/10/997 || 23 July 2010

NN71/2008 – State guarantee for Banco Privado Português || Decision not to raise objections IP/09/400 || 13 March 2009

N556/2008 – Bank recapitalisation scheme || Decision not to raise objections IP/09/818 || 20 May 2009

N80/2010 – Prolongation || EXME/10/0317 || 17 March 2010

N314/2010 – Second prolongation || IP/10/997 || 23 July 2010

C33/2009 – Banco Privado Português – recovery of illegal State aid || Negative decision with recovery IP/10/972 || 20 July 2010

Slovakia

N392/2009 – Slovak bank support scheme (guarantees and recapitalisations) || Decision not to raise objections IP/09/1889 || 8 December 2009

Slovenia

N531/2008 – Guarantee scheme for credit institutions in Slovenia || Decision not to raise objections IP/08/1964 || 12 December 2008

N331/2009 – Prolongation || EXME/09/22.06 || 22 June 2009

N651/2009 – Second prolongation || EXME/09/1217 || 17 December 2009

N245/2010 – Extension || IP/10/864 || 29 June 2010

N637/2008 – Liquidity scheme for financial sector || Decision not to raise objections IP/09/452 || 20 March 2009

N510/2009 – Prolongation || EXME/09/19.10 || 19 October 2009

N113/2010 – Second Prolongation || EXME/10/0415 || 15 April 2010

N321/2010 – Extension || IP/10/1066 || 24 August 2010

Spain

NN54a/2008 – Fund for the Acquisition of Financial Assets in Spain || Decision not to raise objections IP/08/1630 || 4 November 2008

Modification || Decision not to raise objections || 8 April 2009

N337/2009 – Prolongation || EXME/09/0807 || 7 August 2009

NN54b/2008 – Spanish guarantee scheme for credit institutions || Decision not to raise objections IP/08/2049 || 22 December 2008

Prolongation || EXME/09/0625 || 25 June 2009

N588/2009 – Second prolongation || EXME/09/1201 || 1 December 2009

N263/2010 – Extension || IP/10/854 || 28 June 2010

SA.32921 – Prolongation || EXME/10/29.11 || 29 November 2010

N28/2010 – Spanish recapitalisation scheme for credit institutions (Fondo de Reestructuración Ordenada Bancaria" (FROB)) || Decision not to raise objections IP/10/70 || 28 January 2010

N317/2010 – Prolongation || IP/10/997 || 23 July 2010

NN61/2009 – Restructuring aid for Caja Castilla La Mancha || Decision not to raise objections IP/10/855 || 29 June 2010

N392/2010 – Restructuring aid for Spanish saving bank Caja Sur || Decision not to raise objections IP/10/1479 || 8 November 2010

Sweden

N533/2008 – Support measures for the banking industry in Sweden (guarantees) || Decision not to raise objections IP/08/1600 || 29 October 2008

N26/2009 – Amendment to the decision || IP/09/186 || 28 January 2009

N154/2009 – Amendment and prolongation || IP/09/652 || 28 April 2009

N544/2009 – Prolongation || EXME/09/1026 || 26 October 2009

N127/2010 – Second Prolongation || EXME/10/0422 || 22 April 2010

N207/2010 – Extension of Swedish guarantee scheme || EXME/10/0615 || 15 June 2010

SA.31949 – Prolongation || EXME/10/01.12 || 1 December 2010

NN64/2008 – Emergency rescue measures regarding Carnegie Investment Bank || Decision not to raise objections IP/08/1977 || 15 December 2008

N69/2009 – Recapitalisation scheme || Decision not to raise objections IP/09/241 || 11 February 2009

N436/2009 – Prolongation || EXME/09/0805 || 5 August 2009

NN18/2010 – Clearance of restructuring aid for Carnegie Investment Bank || Decision not to raise objections IP/10/558 || 12 May 2010

United Kingdom

NN41/2008 – Rescue aid to Bradford and Bingley || Decision not to raise objections IP/08/1437 || 1 October 2008

N507/2008 – Aid scheme to the banking industry in the UK (guarantees, recapitalisation & other) || Decision not to raise objections IP/08/1496 || 13 October 2008

N650/2008 – Amendment to the Decision || || 23 December 2008

N193/2009 – Prolongation || IP/09/586 || 15 April 2009

N537/2009 – Prolongation || EXME/09/13.10 || 13 October 2009

N677/2009 – Prolongation || EXME/09/17.12 || 17 December 2009

N111/2009 – Working capital guarantee scheme || Decision not to raise objections IP/09/471 || 24 March 2009

UK Asset backed Securities guarantee scheme || Decision not to raise objections IP/09/613 || 21 April 2009

Prolongation || EXME/09/27.10 || 27 October 2009

C14/2008 – Restructuring package for Northern Rock || Final conditional decision after formal investigation procedure IP/09/1600 || 28 October 2009

N428/2009 – Restructuring plan of Lloyds Banking Group || Decision not to raise objections IP/09/1728 || 18 November 2009

N422/2009 and N621/2009 – Royal Bank of Scotland, impaired asset relief measure and restructuring plan || Decision not to raise objections IP/09/1915 || 14 December 2009

N194/2009 – Liquidation aid to Bradford & Bingley || Decision not to raise objections IP/10/47 || 25 January 2010

NN19/2009 – Restructuring of Dunfermline Building Society || Decision not to raise objections IP/10/48 || 25 January 2010

Cases currently under formal investigation procedure (in-depth investigation under the EC Treaty’s rules on state aid)

Country || Type of measure / Beneficiary || Date of decision regarding the opening of formal investigation ||

Germany || C15/2009 – Aid package for Hypo Real Estate (restructuring) Extension and temporary approval of capital injections || 7 May 2009 IP/09/712 13 November 2009 IP/09/1708 || Case under assessment

Germany, Austria || C16/2009 – Aid package for Bayern LB and its Austrian subsidiary Hypo Group Alpe Adria Extension C16/2009 – Extension of temporary approval of restructuring aid for Hypo Group Alpe Adria || 12 May 2009 IP/09/742 23 December 2009 IP/09/1998 22 June 2010 IP/10/774 || Case under assessment

Germany || C29/2009 – Aid package for HSH Nordbank AG || 22 October 2009 IP/09/1577 || Case under assessment

Germany || C43/2009 – WestLB: in-depth investigation into bad bank C43/2009 – Prolongation of temporary approval of aid to WestLB C43/2009 – Extension || 22 December 2009 IP/09/1996 22 June 2010 IP/10/774 5 November 2010 IP/10/1472 || Case under assessment

Ireland || C11/2010 – Temporary approval of Second recapitalisation of Anglo Irish Bank and restructuring of Anglo Irish Bank || 31 March 2010 IP/10/400 || Case under assessment

Ireland || C25/2010 – Restructuring of EBS || 11 October 2010 IP/10/1310 || Case under assessment

Netherlands || C11/B/2008 – State measures in favour of Fortis Bank Nederland (FBN) and the activities of ABN Amro Extension || 8 April 2009 IP/09/565 4 February 2010 IP/10/138 || Case under assessment

Hungary || SA.29608 – Recapitalisation of FHB* || 16 December 2010 IP/10/1731 || *Decision replaced on 24 January 2011

[1] As a general rule, aid schemes are reviewable six months after approval. Some individual decisions are subject to a review and possible restructuring plan.

TABLE OF CONTENTS

I – Instruments.............................................................................................................................. 7

A – Follow-up to the implementation of the crisis framework for state-aid...................................... 7

1........... Crisis-related support for the financial sector................................................................... 7

2........... Application of the Temporary Framework....................................................................... 8

3........... Exit strategy.................................................................................................................... 9

4........... Contribution of competition policy to the economic adjustment programmes of Greece and Ireland 11

4.1........ Greek economic adjustment programme........................................................................ 11

4.2........ Irish economic adjustment programme........................................................................... 12

B – Antitrust – Articles 101 and 102 TFEU................................................................................. 13

1........... Shaping and applying the rules....................................................................................... 13

1.1........ Shaping the rules: review of Block Exemption Regulations.............................................. 13

1.1.1..... Block Exemption Regulation on vertical agreements....................................................... 13

1.1.2..... Block Exemption Regulations on horizontal cooperation agreements............................... 15

1.1.3..... Sectoral Block Exemption Regulations.......................................................................... 17

1.2........ Private enforcement of the EU antitrust rules.................................................................. 18

1.3........ Applying Article 101: Cartels and other agreements and concerted practices.................. 19

1.3.1..... Cartels......................................................................................................................... 19

1.3.2..... Other agreements and concerted practices.................................................................... 21

1.4........ Applying Article 102 TFEU: Abuse of dominant positions.............................................. 21

2........... Selected Court cases.................................................................................................... 22

2.1........ Exclusivity agreements.................................................................................................. 22

2.2........ Margin squeeze............................................................................................................ 23

2.3........ Level of fines................................................................................................................ 24

2.4........ Legal professional privilege and in-house lawyers........................................................... 24

2.5........ Misuse of intellectual property rights and regulatory procedures..................................... 25

2.6........ Lack of sufficient Union interest..................................................................................... 26

2.7........ Commitments............................................................................................................... 26

C – Merger control..................................................................................................................... 27

1........... Shaping and applying the rules....................................................................................... 27

2........... Selected Court cases.................................................................................................... 29

2.1........ Quantitative evidence and econometric studies............................................................... 29

2.2........ Minority shareholdings.................................................................................................. 30

D – State aid control................................................................................................................... 31

1........... Shaping and applying the rules....................................................................................... 31

1.1........ Horizontal aid............................................................................................................... 33

1.1.1..... Regional aid.................................................................................................................. 33

1.1.2..... Environmental aid and security of electricity supply........................................................ 34

1.1.3..... Research & Development & Innovation (R&D&I) aid................................................... 34

1.1.4..... Aid to promote risk capital and urban development....................................................... 35

1.2........ Sectoral and individual State aid.................................................................................... 35

1.2.1..... Rescuing and restructuring aid for industry..................................................................... 35

1.2.2..... Aid to the transport sector............................................................................................ 36

1.2.3..... State aid for Broadband networks................................................................................. 37

1.2.4..... Aid to the coal sector.................................................................................................... 37

1.2.5..... Aid to the agricultural sector.......................................................................................... 38

1.2.6..... Aid for compensating provision of Services of General Economic Interest: Social Housing undertakings 38

1.3........ State aid enforcement by national courts........................................................................ 39

1.4........ Ex-post monitoring of State aid measures...................................................................... 40

1.5........ Recovery policy............................................................................................................ 40

2........... Selected Court cases.................................................................................................... 41

2.1........ Notion of aid................................................................................................................ 41

2.2........ Compatibility assessment.............................................................................................. 43

2.3........ Recovery of aid............................................................................................................ 44

II – Sector Developments........................................................................................................... 45

A – Financial services................................................................................................................. 45

1........... Overview of sector....................................................................................................... 45

2........... Policy developments..................................................................................................... 47

2.1........ Antitrust enforcement.................................................................................................... 47

2.1.1..... Antitrust enforcement in the payments services sector.................................................... 47

2.1.2..... Securities Trading, Clearing and Settlement (C&S)........................................................ 49

2.1.3..... Insurance sector........................................................................................................... 50

2.2........ Merger control............................................................................................................. 51

2.3........ State aid control: restructuring of financial institutions...................................................... 52

B – Energy & Environment.......................................................................................................... 58

1........... Overview of sector....................................................................................................... 58

2........... Policy developments..................................................................................................... 59

2.1........ Antitrust enforcement.................................................................................................... 59

2.2........ State aid control........................................................................................................... 61

C – Information, Communication and Media................................................................................ 64

1........... Overview of sector....................................................................................................... 64

1.1........ Telecommunications...................................................................................................... 64

1.2........ Information and Communication Technology (ICT)........................................................ 66

1.3........ Media.......................................................................................................................... 66

2........... Policy developments..................................................................................................... 67

2.1........ Policy developments in telecommunications sector......................................................... 67

2.1.1..... Antitrust enforcement.................................................................................................... 68

2.1.2..... Merger control............................................................................................................. 68

2.1.3..... State aid control........................................................................................................... 68

2.2........ Policy developments in ICT sector................................................................................ 69

2.2.1..... Antitrust enforcement.................................................................................................... 69

2.2.2..... Merger control............................................................................................................. 71

2.3........ Policy developments in the Media and Sport sector....................................................... 72

2.3.1..... Antitrust and regulatory enforcement............................................................................. 72

2.3.2..... Merger control............................................................................................................. 73

2.3.3..... State aid control........................................................................................................... 73

D – Pharmaceutical industry & Health......................................................................................... 74

1........... Overview of sector....................................................................................................... 74

1.1........ Overview of the pharmaceutical sector.......................................................................... 75

1.2........ Overview of the health services sector........................................................................... 75

2........... Policy developments..................................................................................................... 76

2.1........ Policy developments in the pharmaceutical sector.......................................................... 76

2.1.1..... Antitrust enforcement.................................................................................................... 77

2.1.2..... Merger control............................................................................................................. 79

2.2........ Policy developments in the health services sector........................................................... 80

2.2.1..... Antitrust enforcement.................................................................................................... 80

2.2.2..... Merger control............................................................................................................. 80

2.2.3..... State aid control........................................................................................................... 80

E – Transport............................................................................................................................. 82

1........... Overview of sector....................................................................................................... 82

2........... Policy developments..................................................................................................... 83

2.1........ Air transport................................................................................................................. 83

2.1.1..... Antitrust enforcement.................................................................................................... 83

2.1.2..... Merger control............................................................................................................. 85

2.1.3..... State aid control........................................................................................................... 85

2.2........ Rail and inland transport................................................................................................ 87

2.2.1..... Merger control............................................................................................................. 87

2.2.2..... State aid control........................................................................................................... 88

2.3........ Maritime transport........................................................................................................ 89

2.3.1..... Antitrust enforcement.................................................................................................... 89

2.3.2..... Merger control............................................................................................................. 89

2.3.3..... State aid control........................................................................................................... 90

F – Postal Services..................................................................................................................... 91

1........... Overview of sector....................................................................................................... 91

2........... Policy developments..................................................................................................... 92

2.1........ Merger control............................................................................................................. 92

2.2........ State aid control........................................................................................................... 92

G – Automotive industries........................................................................................................... 95

1........... Overview of the automotive sector................................................................................ 95

2........... Policy developments..................................................................................................... 97

2.1........ Antitrust enforcement.................................................................................................... 97

2.1.1..... Vertical agreements in the vehicle sales markets............................................................. 97

2.1.2..... Vertical agreements in the repair and spare parts markets.............................................. 98

2.2........ Merger control............................................................................................................. 99

2.3........ State aid control........................................................................................................... 99

H – Food supply chain.............................................................................................................. 100

1........... Overview of sector..................................................................................................... 100

2........... Policy developments................................................................................................... 101

2.1........ Food supply chain...................................................................................................... 101

2.2........ Dairy sector................................................................................................................ 102

2.3........ State aid to the agricultural sector................................................................................ 103

III – The European Competition Network and cooperation with National Courts....................... 105

1........... Cooperation on policy issues....................................................................................... 105

1.1........ The ECN Brief........................................................................................................... 106

1.2........ Cooperation in individual cases................................................................................... 106

1.2.1..... Case allocation........................................................................................................... 106

1.2.2..... Coherent application of the rules................................................................................. 107

2........... Application of EU Competition rules by National Courts in the EU............................... 107

2.1........ Assistance in the form of providing information or in the form of issuing an opinion........ 107

2.2........ Amicus curiae interventions under Article 15(3) of Regulation 1/2003......................... 108

2.3........ Financing the training of national judges in EU competition law..................................... 109

IV – International activities........................................................................................................ 109

1........... Multilateral cooperation.............................................................................................. 109

1.1........ International Competition Network (ICN)................................................................... 109

1.2........ OECD....................................................................................................................... 110

1.3........ UNCTAD.................................................................................................................. 110

2........... Bilateral cooperation................................................................................................... 111

2.1........ Agreements with the USA, Canada, Japan, South Korea and Switzerland.................... 111

2.2........ Cooperation with other countries and regions.............................................................. 112

3........... Enlargement and Neighbourhood Policy...................................................................... 113

V – Dialogue with Consumer organisations and other stakeholders............................................. 114

1........... Dialogue with consumer organisations.......................................................................... 114

1.1........ The European Consumer Consultative Group (ECCG)................................................ 114

1.2........ Training of European consumers' representatives – the TRACE programme................. 115

1.3........ Interactive consumer corner on Competition website and point of contact with consumers 115

2........... Dialogue with stakeholders.......................................................................................... 115

VI – Inter-institutional cooperation............................................................................................ 116

1........... Cooperation with the European Parliament.................................................................. 116

2........... Cooperation with the Council...................................................................................... 117

3........... Cooperation with the European Economic and Social Committee................................. 118

I – Instruments

A – Follow-up to the implementation of the crisis framework for state-aid

1. Crisis-related support for the financial sector

1. Since the beginning of the global financial crisis in the autumn of 2008, the Commission has issued four Communications which provided detailed guidance on the criteria for the compatibility with the Treaty on the Functioning of the European Union (TFEU) of temporary crisis-related support for financial institutions[1]. The first three of these Communications set out the criteria for compatibility of State support in the form of State guarantees, recapitalisations and asset relief measures. The fourth addressed the follow-up to such support measures. Through the application of State aid rules, the Commission ensured that distortions of competition within the internal market were limited to a minimum despite the important amounts of State aid and that beneficiary banks were restructured when necessary.

2. As a result of policy intervention, the severe shortage of bank funding that occurred in autumn 2008 was overcome relatively quickly. However, the sovereign crisis which struck in the first half of 2010 clearly showed that, although the level of stress in financial markets had fallen significantly from its peak in late 2008, there was still a need for crisis-related support in 2010.

3. During the crisis, the availability of government guarantees proved to be an appropriate and effective tool to improve access to funding for banks and to restore market confidence. However, a review by the Commission of the use of guarantees showed that by the early months of 2010, the more solid financial institutions were no longer significant issuers of guaranteed debt. The conditions of compatibility of guarantee schemes were therefore reviewed and tightened with effect from 1 July 2010[2].

4. Twelve Member States extended their guarantee schemes, on these new conditions, until 31 December 2010[3]. A further seven Member States which previously had guarantee schemes in place terminated these schemes or allowed them to expire[4]. Despite the continuance of a significant number of guarantee schemes, their use has been diminishing. The monthly average volume of guaranteed bond issuance under schemes, which in 2009 was EUR 37.2 billion, was EUR 2.8 billion for the first eight months of 2010.

5. Of the 15 Member States which have at some time introduced a recapitalisation scheme, six still had such a scheme in force as of 31 December 2010[5]. However, the use of such schemes during 2010 was limited; as for ad hoc interventions, these continued to take place during 2010. However, the overall situation showed a reduction in the use of State capital injections in 2010 compared to 2009.

6. The restructuring of a number of European banks was among the main challenges of 2010. The restructuring process of banks is based on the crisis-related State aid rules as laid down in the Restructuring Communication of 22 July 2009. The Communication provides guidance on the conditions under which restructuring aid for banks in need of financial assistance beyond an emergency rescue can be authorised. It is based on the three principles of return to long-term viability without State aid, burden sharing between the bank and its stakeholders and the State and limitation of competition distortions, usually through structural (divestment) and behavioural measures (acquisition bans or limitations on aggressive commercial behaviour). The Commission approved in 2010 restructuring or liquidation plans for 14 banks and adopted one negative decision (see Section II.A.2.3., points 176 to 206 for detailed description of restructuring cases).

7. Between 1 October 2008 and 1 October 2010, the Commission took more than 200 decisions on State aid measures to the financial sector aiming to remedy a serious disturbance in Member States' economies. These decisions authorised, amended or prolonged more than 40 schemes and addressed with individual decisions the situation of more than 40 financial institutions in 22 Member States[6]. The maximum volume of Commission-approved measures until 1 October 2010 amounted to EUR 4 588.9 billion, of which the greatest bulk was approved as guarantees (76% of the maximum volume). Not all the approved aid was used by Member States. In 2009, the nominal amount of aid used by Member States constituted EUR 1 106.65 billion or 9.3% of EU Gross Domestic Product (GDP), whereas the figure for 2008 was EUR 1 236 billion[7].

2. Application of the Temporary Framework

8. In 2008, the Commission adopted the Temporary Framework (TF)[8] which was due to expire on 31 December 2010 and had as its main objective to facilitate companies' access to finance. The Commission collected information on the use and impact of the Framework via a questionnaire sent to the Member States on 17 March 2010. Third parties had also the opportunity to submit comments. The additional possibilities to grant State aid provided by the TF were generally very well received by the Member States and stakeholders.

9. Between its introduction and 1 October 2010, the Commission approved 73 schemes and four ad-hoc aid measures under the TF. The volume of aid approved in 2009 was EUR 82.5 billion (0.7% of EU GDP). Member States tried to fix aid envelopes of a sufficient size to reassure the markets; however, the amount taken up was much lower. Both the availability of market funding for some companies on one hand, and budgetary constraints on the other, contributed to smaller actual use of the TF measures.

10. The main measures used were the compatible limited amount of aid (the so called "500k" – EUR 500 000 – measure), the subsidised guarantees and the subsidised loans. The relaxation of the conditions for exceptional acceptance of government export credit insurance within the Community were also largely used and contributed to effectively sustain trade.

11. The risk capital adaptation was positively perceived by the Member States as an important signal for private investors. Austria, Belgium, France, Germany, Italy, Spain and the United Kingdom made use of this possibility.

12. The fact that Member States originally planned higher budgets than the amount effectively granted is evidence of a cautious budgetary approach given the uncertainties as to the depth and duration of the crisis and the need to send the markets a clear signal of public authorities' availability to meet potential demand. Moreover, Member States appear to have applied the conditions for granting the aid strictly, largely in view of budgetary constraints, which in turn is likely to have kept the number of beneficiaries small.

3. Exit strategy

13. An appropriate and timely "exit strategy" from the exceptional crisis measures constitutes a key element of the European recovery. The exit process should, for the financial sector as well as for the real economy, lead to viable solutions that do not discriminate between Member States while promoting a return to normal market functioning.

14. The Commission collected information on the use of the TF as well as on the state of credit supply to creditworthy companies and the use of exceptional crisis-related support by banks in order to adopt an informed decision on the exit process for both the financial sector and the real economy. On the one hand, there were encouraging signs of stabilisation in financial markets and of a recovery in Member States' economies. On the other hand, the recent sovereign crisis and the perception of the risk of a double-dip recession illustrated the fragility of the recovery process and the risk of serious setbacks.

15. In view of this objective, the main elements that the Commission took into account when deciding on the phasing-out of the TF was the evolution of access to finance to creditworthy companies and its usefulness as a credit support tool beyond 2010. It was considered premature to let it expire in its entirety at the end of 2010 because of the fragility of the recovery. However, considering that the market situation was far from being as dramatic as it was at the turn of 2008/2009, a full prolongation was not an option either. In a forward-looking perspective, it was necessary to be mindful of the usefulness of the TF as an instrument to promote the economic recovery in the longer term as well as a progressive return to normal State aid rules while sustaining Member States' efforts towards fiscal consolidation and higher effectiveness of public spending.

16. A progressive phasing-out of the TF was thus considered the most suitable response to the current market situation. On this basis, the Commission approved a limited prolongation of the TF[9] until the end of 2011 with a special focus on SMEs and a limited spectrum of measures:

– Maintenance of measures that address outstanding market failures: in particular the remaining problems on access to finance, notably for SMEs;

– Tightening of conditions: the measures prolonged during 2011 would be subject to tighter conditions to reflect a gradual transition into the normal State aid regime;

– Encouraging long term recovery in line with the Europe 2020 priorities[10]: measures that contribute to the Europe 2020 objectives should be encouraged (e.g. prolongation of subsidised loans for the production of green products).

17. This approach was also in line with the initiatives adopted for the financial sector. The first step in the exit process for financial institutions was the modification of the regime applying to guarantee schemes, which took place with effect from 1 July 2010[11]. A review by the Commission of the use of government guarantees concluded that the more solid and unquestionably sound institutions were no longer significant issuers of guaranteed debt. On this basis, the conditions for use of government guarantees were tightened by applying an increased guarantee fee and requiring a viability plan for beneficiaries having recourse to new guarantees and exceeding certain thresholds. These criteria were aimed at sending a clear signal that financial institutions need to prepare to secure their financing without State support.

18. A similar approach, of extending the validity of crisis-related rules while bringing those rules closer to the normal State aid regime, was also adopted for other support to financial institutions. On 1 December 2010, the Commission adopted a Communication extending the validity of the crisis-related measures for the financial sector until the end of 2011[12]. However, given the evidence that banks were facing fewer difficulties in raising capital on the markets at the time of adoption of the Communication, the Commission no longer considered it appropriate to distinguish between distressed banks, from which a restructuring plan had previously been required in connection with any recapitalisation, and their fundamentally sound counterparts, from which only a viability review had been needed. Instead, from 1 January 2011, a restructuring plan will be required from every beneficiary of a recapitalisation or an impaired asset measure.

4. Contribution of competition policy to the economic adjustment programmes of Greece and Ireland

4.1. Greek economic adjustment programme

19. In 2009, already before the sovereign crisis, Greece had put together a banking rescue package, including a Guarantee Scheme, a Bond Loan Scheme and a Recapitalisation Scheme, which provided for liquidity and capital support to banks in Greece. This support package was used by all major Greek banks; ten banks were recapitalised in May and July 2009 and had to present restructuring plans to the Commission.

20. In the course of 2010, Greece found itself in a weak fiscal position. To support the Greek government's efforts to get its economy back on track, the Commission, the European Central Bank and the International Monetary Fund (IMF) pledged on 2 May 2010 a three-year economic adjustment programme[13] financed by Euro Area Member States in bilateral loans totalling EUR 80 billion and supported by the IMF with a stand-by arrangement of about EUR 30 billion, bringing the joint commitment to a total financing of EUR 110 billion.

21. The Greek authorities agreed to a multi-annual programme of fiscal consolidation and structural reforms in order to put the Greek economy on a sustainable path, to restore confidence on sovereign debt markets and to preserve the stability of the Euro area. The programme includes a sustainability-enhancing fiscal consolidation through measures that generate savings in public sector expenditure and improve the government's revenue-raising capacity as well as financial sector policies aiming at stabilising the Greek financial system. The programme also includes medium-term structural reforms in order to improve the Greek economy's competitiveness through the modernization of the public sector, the increase in efficiency and flexibility of product and labour markets and the creation of a more open and accessible business environment for domestic and foreign investors, including a reduction of the State's direct participation in domestic industries.

22. In order to strengthen the Greek financial system, two important support instruments were put into place:

– Issuance of additional Government guarantees: the main purpose of these guarantees is to use them as collateral in order to obtain funding from the ECB. An additional amount of EUR 25 billion was authorised by the Commission in the summer of 2010[14]. Another extension of the scheme, by EUR 30 billion, is planned for the first half of 2011.

– The establishment of an independent Financial Stability Fund (FSF) as a safety net to preserve the solvency of the financial sector, by providing capital support to banks. EUR 10 billion were earmarked which have not been used so far. The granting of aid was subject to a scheme which was also authorised by the Commission in the summer of 2010[15].

23. In line with EU State aid rules, on 1 October 2010 Greece submitted to the Commission the restructuring plans for six of the recapitalised banks. The Commission entered into discussion with Greece in particular regarding the banks in which the State holds significant stake such as Agricultural Bank of Greece (ATE), Hellenic Postbank (TT), Attica Bank and the Consignment Deposit and Loan Fund (CDLF). A need for in-depth restructuring of ATE and CDLF was identified and restructuring plans are to indicate measures that lead to the restoration of viability of the bank in the long-term without State aid, and be accompanied by adequate burden-sharing and measures to minimise distortions of competition.

24. As regards structural reforms, competition policy was identified as an important pillar to support the increase in efficiency of product markets. Greece thus cooperated with the Commission on drafting a new investment law, on reforming the Hellenic Competition Authority and on liberalising closed professions.

4.2. Irish economic adjustment programme

25. As regards Ireland, the situation became very stressed for both the banks and the Sovereign debt in the last quarter of the year. The combination of a severe economic crisis and of the huge losses taken by a banking sector several times bigger than the Irish economy led to great pressure on the Irish sovereign debt. Ireland and the Irish banks faced the drying up of access to wholesale funding, severe deposit outflows, the collapse of the Irish property market and a considerable down-turn of the economy with a severe fall in GDP in the last years and rising unemployment.

26. The Irish authorities therefore made an application to the EU/IMF financial stability facilities in place on 22 November 2010. On 28 November 2010, a Programme was agreed between the Commission, the European Central Bank (ECB), the IMF and the Irish authorities[16]. The Programme foresees a loan of EUR 85 billion to Ireland, of which EUR 35 billion are available to restore banks' viability.

27. As part of the Programme, two domestic banks will be wound down (Anglo Irish Bank & INBS), while others will be capitalised and restructured in compliance with EU State aid rules. This means that all the Irish banks currently under restructuring will receive extra aid, currently estimated at a total of EUR 10 billion. A new capital adequacy review will be undertaken early 2011 by the Financial Regulator together with the Commission, ECB and IMF in order to determine whether further capital injections would be needed. At the end of 2010, bank recapitalisations totalled more the 30% of Irish GDP.

28. Furthermore, deleveraging targets will be set for each of the viable banks. The Programme foresees that the viable banks will submit to the Commission, under EU State aid rules, a restructuring plan in the second quarter of 2011 that shows: (i) how they will reach these targets, (ii) how they intend to fulfil the other requirements of the Commission's Restructuring Communication (return to viability, burden-sharing, measures limiting the distortion of competition). EU State aid rules are therefore not lifted by the Programme and continue to apply to the rescue and restructuring of the Irish banks.

29. As regards competition-related structural reforms, a number of policy measures will be taken to bolster competition in product and energy markets and other network industries. This includes introducing legislative changes to remove restrictions to trade and competition in sheltered sectors, addressing the current exclusion of certain sectors from the scope of the national competition law and improving deterrence of anticompetitive behaviour.

B – Antitrust – Articles 101 and 102 TFEU

1. Shaping and applying the rules

1.1. Shaping the rules: review of Block Exemption Regulations

1.1.1. Block Exemption Regulation on vertical agreements

30. On 20 April 2010, the Commission adopted a revised Block Exemption Regulation[17] (BER) and Guidelines[18] regarding vertical agreements, i.e. agreements between suppliers and buyers operating at different levels of the production and distribution chain for the supply and distribution of products and services. The revision was carried out in view of the expiry, on 31 May 2010, of the Block Exemption Regulation adopted in 1999[19] and which marked the evolution from an approach mainly centred on the form of an agreement to one consisting in assessing its likely effects on the market. The basic principle formulated in 1999 was that, absent any hardcore restriction of competition, if a supplier only has limited market power, its vertical agreements are either unlikely to restrict competition, or that the efficiencies that they bring about are likely to prevail over any restrictive effects so that on balance the agreements are either neutral or beneficial to the consumers. For that reason, under the 1999 Regulation vertical agreements concluded by suppliers with a market share not exceeding 30% were exempted "as a block" from the prohibition set out in Article 101(1) TFEU.

31. The basic principle set out in the revised rules remains that, in the presence of limited market power, companies are free to decide how their products are distributed, provided their agreements do not contain price-fixing or other hardcore restrictions. However, the rules were revised to the effect that in order to be block exempted all parties to the agreement, i.e. not just the supplier but also the buyer, must have a market share not exceeding 30%. This change was motivated by the fact that in the light of the increasing concentration of distribution, it cannot be assumed that agreements involving powerful buyers are neutral or beneficial for consumers as a general rule and that they should therefore be block exempted whenever the supplier's market share does not exceed 30%. Cases tackled in particular by some National Competition Authorities in the last years have shown that such an assumption is indeed not justified. The introduction of a market share threshold that takes into account the buyers' potential market power means that a case-by-case approach will be applied to vertical agreements where the buyer has a market share exceeding 30%, similarly to what is already being applied to agreements involving suppliers' market power. There is no presumption of illegality outside the block exemption. This revision will allow for instance to tackle more effectively than under the previously applicable rules vertical restraints led by powerful distributors that may cause prejudice to SMEs and to the final consumers.

32. The Regulation and accompanying Guidelines were also revised in order to take into account the rapid development since the adoption of the previous BER in 1999 of the internet as a force for online sales and for cross-border commerce, which increases consumer choice and price competition. This part of the revision did not entail any change of policy or of the scope of the rules, but rather responded to calls made to the Commission to provide more explicit guidance to firms regarding the restrictions that may and may not be agreed regarding on-line distribution.

33. The revised Guidelines make it clear that under the BER, approved distributors must be free to sell on the internet without limitation on quantities, customers' location and restrictions on prices. At the same time, a supplier and buyer can agree that the latter must have a physical point of sales ("brick and mortar shop") and that its on-line distribution must comply with certain quality and other requirements that are equivalent with the conditions governing the sales from brick and mortar shops. The Guidelines also provide examples of restrictions (such as an agreement between the supplier and the distributor where the latter limits the proportion of sales made over the internet) that are not exempted under the BER and are considered hardcore resale restrictions. Through the added clarity and thereby greater predictability of the new rules, distributors have a clear basis and incentives to develop online activities to reach and be reached by customers throughout the EU and fully take advantage of the internal market. This can be expected to contribute to the development of online commerce and the digital internal market.

34. Finally, the third major strand of the revision consisted in clarifying the notion of hardcore restriction of competition, whose inclusion in a vertical agreement entails that the agreement as a whole cannot benefit from the block exemption. Based on case experience, it is presumed that agreements containing one or more hardcore restrictions restrict competition and are unlikely to fulfil the four conditions of Article 101(3), i.e. are unlikely to produce outweighing positive effects. The Guidelines clarify that this double presumption does not, contrary to a widespread perception, amount to considering hardcore restrictions as illegal per se. In line with case law, the Guidelines specify that undertakings may demonstrate pro-competitive effects, in an individual case, and that the agreement meets all the conditions set out in Article 101(3), not least that there is an eventual net benefit for the consumers. The Guidelines further provide examples of pro-competitive effects that could, in certain circumstances, be associated with hardcore restrictions such as resale price maintenance.

1.1.2. Block Exemption Regulations on horizontal cooperation agreements

35. On 14 December 2010, the Commission adopted new rules and guidelines for the assessment of horizontal cooperation agreements, i.e., agreements concluded between companies operating at the same level of the supply chain, such as agreements to cooperate on research and development, production, purchasing, commercialisation, standardisation, and exchange of information. This new regime consists of a set of guidelines, the so-called "Horizontal Guidelines", and two Block Exemption Regulations[20] (BER) regarding research and development agreements on one hand and specialisation and joint production agreements on the other hand.

36. Horizontal cooperation can lead to substantial economic benefits and allow companies to respond to increasing competitive pressures and a changing market environment driven by globalisation. However, they can also lead to serious competition problems, in particular where they increase the market power of the parties to an extent that enables them to increase prices, limit output or reduce innovation efforts. The Commission's approach enshrined in the new rules is to leave companies maximum freedom to cooperate while at the same time protecting competition from such cooperations which are contrary to Article 101 TFEU, e.g. by being harmful to consumers.

37. The Commission published drafts of the revised Guidelines and BERs for public consultation in May and June 2010. Almost 120 stakeholders submitted contributions during the public consultation. This allowed the Commission to further improve and refine the texts prior to adopting the final versions.

38. The new rules should be seen as an evolution, not a revolution. They aim at giving comprehensive guidance and adequate legal certainty for companies wishing to cooperate with competitors. Whilst the Commission's view on how competitors can cooperate has not fundamentally changed since the previous rules were put in place in 2000, the new Horizontal Guidelines[21] are more detailed and user-friendly than the previous ones. Two key features of the reform include the insertion of a new chapter on information exchange and a substantial revision of the chapter on standardisation agreements.

39. A well functioning system for standard-setting is vital for the European economy as a whole and in particular for the information, communication and telecoms (ICT) sector. The objective of improving the efficiency and effectiveness of the European standardisation has been set out as a priority of the Flagship Initiative of the Europe 2020 Strategy on "An Integrated Industrial Policy for the Globalisation Era"[22]. The revision of standardisation chapter of the Horizontal Guidelines fits into this context by promoting a standard-setting system that is open and transparent and thereby increases the visibility of licensing costs for Intellectual Property Rights (IPRs) used in standards. In doing so it attempts to find a balance between the sometimes contradictory interests of companies with different business models (from the pure innovator to the pure manufacturer) involved in the standard-setting process. The system will thus provide sufficient incentives for further innovation and at the same time ensure that the traditional benefits from standardisation are passed on to consumers.

40. Concretely, the chapter on standardisation agreements contains certain criteria, which, if fulfilled by standard-setting organisations, provide comfort that the Commission will not take issue with a standard-setting agreement (safe harbour). These criteria include: (i) that the procedure for adopting the standard is unrestricted with participation open to all relevant competitors on the market; (ii) transparency to ensure that stakeholders are able to inform themselves of upcoming, on-going and finalised work on standards, also for those involving IPR; and (iii) a balanced IPR policy with good faith disclosure of those IPRs which are essential for the implementation of a standard, and a requirement for all IPR holders that wish to have their technology included in the standard to provide an irrevocable commitment to license their IPR on fair, reasonable, and non-discriminatory terms ("FRAND commitment"). However, these criteria are not a "straight jacket": not fulfilling them does not mean that a standardisation agreement infringes EU competition rules. Consequently, the Commission gives detailed guidance for those standard-setting organisations whose rules do not meet the safe harbour criteria, in order to allow them to assess whether their agreements are in line with EU competition law.

41. Certain standard-setting organisations may wish to provide for their members to unilaterally disclose, prior to setting a standard, the most restrictive licensing terms that they would charge for their IPRs if those were to be included in the standard. Such a system could enable a standard-setting organisation and the industry to take an informed choice not only on quality but also on price when selecting which technology should be included in the standard. The Commission gives comfort to standard-setting organisations that such a system would normally not infringe EU competition rules.

42. Information exchange can be pro-competitive when it enables companies to gather general market data that allow them to become more efficient and better serve customers. It also enables consumers to make better informed choices when deciding which product to purchase. However, there are also situations where the exchange of market information can be harmful for competition, for instance when companies use sensitive information to coordinate their pricing. The new chapter on information exchange in the Horizontal Guidelines is the first Commission document to give clear and comprehensive guidance on how to assess the compatibility of information exchanges with EU competition law and will therefore play a significant practical role for businesses and their legal advisors. The chapter sets out the various factors relevant for the assessment and their interplay and contains a number of practical examples to help businesses assess typical information exchange scenarios.

43. With a view to facilitating innovation in Europe, the Commission has considerably extended the scope of the R&D Block Exemption Regulation, which now not only covers R&D activities carried out jointly but also so-called "paid-for research" agreements where one party merely finances the R&D activities carried out by the other party. In addition, the new Regulation gives parties more scope to jointly exploit the R&D results. Moreover, the list of "hardcore restrictions" has been streamlined and it has been clarified that restrictions on active sales to territories not exclusively allocated to one party are considered hardcore and can therefore not benefit from the BER. It has furthermore been clarified that passive sales restrictions with regard to customers, and not only those with regard to territories, are also considered hardcore restrictions.

44. The scope of the Specialisation BER has been slightly extended so that its benefit applies to specialisation agreements, even where one of the parties to the agreement only partly ceases production. This enables a company that has two production plants for a certain product to close down one of its plants, outsource the output of the closed plant, and still avail of the Specialisation BER. The Specialisation BER also provides that, where the products concerned by a specialisation or joint production agreement are intermediary products which one or more of the parties use captively for the production of certain downstream products which they also sell, the exemption is also conditional upon a 20% market share threshold downstream. In such a case, merely looking at the parties' market position at the level of the intermediary product would ignore the potential risk of closing off inputs for competitors at the level of the downstream products. Consequently, such a specialisation or joint production agreement will not benefit from the Specialisation BER but will be subject to an individual assessment.

1.1.3. Sectoral Block Exemption Regulations

45. In the field of insurance, the new Insurance Block Exemption Regulation[23] (BER) was adopted on 24 March 2010. The previous BER was due to expire on 31st March 2010. Following a two and a half years review, involving all interested market players and National Competition Authorities, the Commission decided not to renew two of the four types of cooperation that the previous BER covered, namely agreements concerning (i) standard policy conditions (SPCs) and (ii) security devices (see Section II.A.2.1.3., points 167 to 172).

46. On 27 May 2010, the Commission adopted new competition rules for agreements between vehicle manufacturers and their authorised dealers, repairers and spare parts distributors. Agreements regarding the aftermarkets are subject to the general vertical BER of 20 April from 2010 onwards. Agreements regarding the markets for the sale of new vehicles will be subject to the same general vertical BER from 2013. In addition, the Commission adopted Regulation 461/2010[24], which sets out three supplementary hardcore clauses relating to spare parts distribution, and a detailed set of supplementary Guidelines[25] for assessing vertical agreements in the sector. The new rules broadly align competition policy in the car market to the general regime applicable to other sectors (see Section II.G.2.1., points 362 to 370).

1.2. Private enforcement of the EU antitrust rules

47. Private enforcement of the EU antitrust rules is an essential complement to a strong public enforcement by the Commission and National Competition Authorities (NCAs). In its 2008 White Paper on antitrust damages actions[26], the Commission suggested a number of measures to improve the possibilities for consumers and businesses to obtain compensation for harm caused to them by antitrust infringements. Collective redress and quantification of damages were among the issues addressed in the White Paper.

48. The Commission's suggestions on collective redress have triggered a broad public debate that goes beyond the boundaries of the antitrust field and focuses on the role to be played by collective redress more generally in any circumstances where a single infringement of EU rules harms large groups of victims. Indeed, collective redress may be necessary to ensure effective and efficient access to justice also in other areas of EU law. On 12 October 2010, Vice-Presidents Reding and Almunia and Commissioner Dalli jointly presented to the College an information note "Towards a Coherent European Approach to Collective Redress: Next Steps"[27], discussing horizontal issues such as effective compensation, safeguards against abusive litigation, the role of alternative dispute resolution, jurisdictional rules and funding. On the basis of the note, the Commission decided to prepare a public consultation which should contribute to identify a set of common principles that shall guide any future legislative proposals concerning collective redress, including in the antitrust field. A Communication presenting such principles has been scheduled for adoption in 2011[28].

49. As regards quantification of antitrust damages in civil proceedings, the Commission announced in the White Paper that it intended to draw up a non-binding Communication providing a succinct and easily accessible overview of the methods and techniques that can be used by courts and parties to antitrust damages actions when faced with the often complex task of quantifying damages. As part of the expertise sought in the preparation of the Communication on quantification of harm, a group of economic consultants and lawyers produced for the Commission an external study on quantifying antitrust damages[29]. The Directorate-General for Competition also organised on 26 January 2010 a workshop with external economists to discuss a range of issues concerning this topic[30]. A Communication on quantification of harm in antitrust damages actions has been scheduled for adoption in 2011[31].

1.3. Applying Article 101: Cartels and other agreements and concerted practices

1.3.1. Cartels

50. In 2010 the Commission adopted seven cartel decisions[32] imposing fines totalling over EUR 3 billion on 70 undertakings. As the fight against cartels continued to be one of its main priorities, the Commission focused on making the process more efficient through the application of the settlement procedure, which was applied in 2010 for the first time in two cases. Moreover, against the background of difficult economic conditions, a number of mainly small and medium-sized enterprises were granted a fine reduction in application of point 35 of the Fines Guidelines[33] (inability to pay).

51. In the Airfreight case[34] the Commission fined 11 air cargo carriers almost EUR 800 million for coordinating surcharges for fuel and security from December 1999 to February 2006. Airlines providing airfreight services primarily supply air transport services to freight forwarders, who arrange "door to door" carriage of goods including associated services and formalities on behalf of shippers. All carriers were granted a 50% reduction on sales between the EEA and third countries in order to take into account the fact that on these routes part of the harm of the cartel fell outside the EEA. All carriers received a reduction of 15% on fines on account of the general regulatory environment in the sector which can be seen as encouraging price coordination. One carrier received immunity from fines, and ten others fines reductions, under the Commission's Leniency policy[35] for undertakings that cooperate with its investigations.

52. An important issue in the area of cartels was settled by the Court of Justice in 2010, namely the question of scope of Legal Professional Privilege (LPP) protection, raised by Akzo Nobel Chemicals Ltd, one of the parties in the Heat Stabilizers case[36]. In its judgment of 14 September 2010[37], the Court of Justice upheld the position of the Commission, confirming that correspondence with an in-house lawyer is not covered by LPP (see Section I.B.2.4., points 69 and 70).

Settlements procedure

53. In 2010 the Commission adopted its two first settlement decisions: a full settlement decision in DRAMs case[38] and a hybrid settlement decision in Animal Feed Phosphates case[39].

54. The DRAMs case constituted a milestone in EU cartel practice, not only because it brought the first settlement decision but also because of the characteristics of the DRAMs cartel. Ten producers in a high technology setting were involved in a network of anticompetitive contacts and secret information sharing, mostly on a bilateral basis, through which they coordinated the price levels and price quotations for DRAMs (a form of memory chips, the so-called Dynamic Random Access Memories – DRAM) sold to major PC and server equipment manufacturers in Europe. The settlement of this highly complex cartel comprised all ten undertakings; the Commission imposed an almost EUR 330 million fine. The decision was not appealed, entailing large cost savings for all concerned.

55. In the other settlement case, Animal Feed Phosphates, which concerned a cartel lasting over 30 years in the animal nutrition sector, one group of undertakings discontinued the settlement proceedings (hybrid case). The finalization of this first hybrid case proved that the Commission can successfully conclude settlement even when one party withdraws from the settlement process.

Inability to pay

56. Against the background of the economic crisis, the seven cartel decisions adopted in 2010 dealt with 32 applications for a fine reduction on grounds of inability to pay, nine of which were granted. Point 35 of the Fines Guidelines states that "in exceptional cases, the Commission may, upon request, take account of [an] undertaking's inability to pay in a specific social and economic context". The purpose of this provision is to avoid that the Commission's fines drive financially distressed undertakings out of the market and cause adverse social and economic consequences. After an intense scrutiny of their individual financial situation, fines were reduced because of inability to pay for a total number of nine undertakings in the Bathroom Fittings, Pre-stressing Steel and Animal Feed Phosphates cases.

57. The Bathroom fittings and fixtures cartel case[40] concerned an important number of relatively small companies. In this case, the Commission received ten applications for inability to pay. The Commission carried out a thorough analysis of the financial situation of each of the undertakings and assessed the specific social and economic context for those undertakings whose financial situation was found to be sufficiently critical. In this context, the impact of the global economic and financial crisis on the bathroom fitting sector was taken into account. The Commission concluded for five undertakings concerned that the fine would cause their assets to lose significant value and reduced their fines. The final decision adopted on 23 June 2010 imposed a fine of over EUR 622 million on 17 undertakings.

1.3.2. Other agreements and concerted practices

58. In 2010, the Commission took three major decisions regarding agreements and concerted practices in addition to the fight against cartels. The Commission put an end to a major investigation under Article 101 in the air transport sector by making legally binding commitments offered by British Airways, American Airlines and Iberia[41]. This decision will entail significant benefits for European consumers by ensuring that sufficient competition on the transatlantic flights, in particular from London, is maintained (see Section II.E.2.1.1., points 309 to 312). In the financial sector, the Commission made binding Visa Europe's commitments[42] on Multilateral Interchange Fees for immediate debit cards transactions applicable to cross-border transactions in the EEA and to domestic transactions in nine EEA countries[43] . The decisions brings Visa Europe's MIFs for consumer immediate debit cards transactions in line with MasterCard's unilateral undertakings of 1 April 2009[44] and the "merchant-indifference methodology" to modes of payment (see Section II.A.2.1.1., points 157 to 160). The Commission also adopted its first antitrust decision in the health services market. It imposed a fine of EUR 5 million on the French Association of Pharmacists[45] condemning its market behaviour in the French market for clinical laboratory testing (see Section II.D.2.2.1., points 294 and 295).

1.4. Applying Article 102 TFEU: Abuse of dominant positions

59. The Commission continued its enforcement activities of Article 102 TFEU, notably in the energy sector, where it took four decisions and in the Information and Communication Technology (ICT) sector, where it opened several proceedings.

60. In the energy sector, the Commission continued in 2010 its work following its 2007 energy sector inquiry, adopting four major antitrust decisions under Article 9 of Regulation 1/2003[46], whereby the Commission makes binding the commitments proposed by undertakings to put an end to a potential infringement. They relate to incumbents of France, Germany, Italy and Sweden foreclosing access to their domestic markets through various means, such as long-term supply contracts with resale restrictions or limiting available transport or export capacities on energy networks (see Section II.B.2.1., points 211 to 215).

61. The Commission was also active in the field of ICT markets to monitor potential abuse of dominant position. In spring, the Commission launched two preliminary investigations into Apple's business practices relating to the iPhone (the limitation of warranty rights to the country of purchase and the imposition of restrictions on independent developer tools for iPhone applications), which were both subsequently closed after Apple proposed to change these practices[47]. The Commission opened in July proceedings against IBM concerning potential abuses of a dominant position: IBM is alleged inter alia to have engaged in illegal tying of its mainframe hardware products to its allegedly dominant mainframe operating system[48]. In November 2010, the Commission initiated formal proceedings against Google with a view to further investigating allegations that Google has abused a dominant market position in online search, online advertising and online advertising intermediation, following complaints from several search service providers[49] (see Section II.C.2.2.1., points 253 to 255).

2. Selected Court cases

2.1. Exclusivity agreements

62. The Tomra Systems and Others v European Commission[50] judgment of the General Court of 9 September 2010 relates to a Commission decision of 2006 prohibiting Tomra's practices consisting of exclusivity agreements, individualised quantity commitments and individualised retroactive rebate schemes in the markets for reverse vending machines in a series of national markets. The judgment of the General Court re-affirms long-standing case law on exclusivity agreements. The Court paid particular attention to the fact that the Commission analysed the structure and characteristics of the market, the position held by Tomra and its competitors, the size of the customers, the terms of the agreement, the development of demand, the coverage and duration of the contracts, and the "suction effect" of the rebate schemes. The General Court established that the potential foreclosure by a dominant undertaking of a substantial part of the market cannot be justified by showing that the contestable part of the market is still sufficient to accommodate a limited number of competitors, because the customers on the potentially foreclosed part of the market should have the opportunity to benefit from whatever degree of competition is possible on the market and competitors should be able to compete on the merits for the entire market and not just for a part of it, and because it is not the role of the dominant undertaking to dictate how many viable competitors will be allowed to compete for the remaining contestable portion of demand.

2.2. Margin squeeze

63. The Deutsche Telekom AG v Commission of the European Communities[51] judgment of the Court of Justice of 14 October 2010 dismissed Deutsche Telekom's appeal against the General Court's judgment of 2009[52] which upheld the Commission's decision of 2003 finding that Deutsche Telekom (DT) had squeezed its competitors out of the market by charging abusive prices to access the local loop (the "last mile" connecting the network to end-users). This landmark judgment re-confirms the principles for assessing an abuse of a dominant position in the form of a margin squeeze under Article 102 that had been set out by the General Court in its judgment of 2008. The Court established that margin squeeze is a stand alone abuse in the sense that there is no need to demonstrate that wholesale prices or retail prices are, in themselves, abusive since the abusive nature of the incumbent's conduct is connected with the unfairness of the spread between its prices for wholesale access and its retail prices.

64. The Court upheld the lawfulness of the method used by the Commission to establish a margin squeeze, namely the use of the equally efficient competitor test. This test establishes whether DT would have been able to offer its retail services to end-users otherwise than at a loss if it had first been obliged to pay its own wholesale prices for local loop access services. The Court required that in order for a margin squeeze to be considered abusive, it must be shown that it is capable of making market entry or market penetration of competitors, who are at least as efficient as the dominant undertaking, more difficult or impossible. In this regard, the Court noted that since the wholesale local loop access services provided by DT are indispensable to its competitors' effective penetration of the retail markets for the provision of services to end-users, a margin squeeze resulting from the spread between wholesale prices for local loop access services and retail prices for end-user access services, in principle, hinders the growth of competition in the retail markets in services to end-users, since a competitor who is as efficient as the incumbent cannot carry on his business in the retail market for end-user access services without incurring losses. The Court of Justice underlined that where a dominant undertaking actually implements a pricing practice resulting in a margin squeeze of its equally efficient competitors, with the purpose of driving them out of the relevant market, the fact that the desired result is not ultimately achieved does not alter its categorisation as abuse within the meaning of Art. 102 TFEU.

65. Finally, the margin squeeze at issue was attributable to DT, since the latter had sufficient scope to adjust the retail prices charged to its end-users, notwithstanding the presence of price regulation. It thus confirms that decisions of national regulators (in this case, the approval by the German telecommunications Regulator RegTP of DT's wholesale prices) do not shield a dominant company from respecting competition rules. The Court held that regardless of the national price regulation, DT had sufficient scope to adjust its prices to end the margin squeeze and fulfil its obligations under competition law. In other words, decisions of national authorities under EU telecommunications law do not in any way affect the Commission's power to find infringements of EU competition law.

2.3. Level of fines

66. On 19 May 2010, the General Court delivered six judgments[53] on the appeals launched by several undertakings against the Copper Plumbing Tubes[54] Commission's decision of 3 September 2004, punishing a cartel in the market for copper tube manufacturing. The General Court clarified a number of questions related to the level of fines.

67. In KME Germany AG, KME France SAS, KME Italy SpA v Commission, the General Court dismissed the appeal of the applicants. On the assessment of the gravity of the infringement, the General Court confirmed that the actual impact on the market of cartels is irrelevant for their classification as "very serious" infringements under the 1998 Fines Guidelines. Therefore, the question to what extent a cartel resulted in a market price higher than without the cartel is not a decisive factor for determining the level of fines. The assessment of the size of the sector affected by the cartel is relevant to determine the basic amount of the fine. The applicants claimed that, when assessing the size of the sector affected by the cartel, the Commission was wrong in including the price of raw materials (metal) in market turnover, since that price is set by daily listings on the London Metal Exchange and is therefore outside their control. The General Court rejected that argument, stating that despite its approximate nature, turnover is currently considered as an adequate criterion in the context of competition law for assessing the size and economic power of the undertakings concerned. The General Court also stated that when the Commission increases the amount of the fine to take into account the duration of the infringement, it is not bound to fix the increase for each year of participation by reference to the intensity of the infringement (i.e. frequency of collusive meetings).

68. In the IMI plc, IMI Kynoch Ltd, Yorkshire Copper Tube case, the General Court partially annulled the Commission's decision and reduced the starting amount of the fine paid by the applicant because, unlike the other cartelists, the applicant participated in only one branch of the cartel. The applicants claimed that they suspended their involvement in the cartel for more than 16 months before being involved again in the cartel arrangements. Other cartelists were meeting regularly during that time. The Commission was not able to provide any evidence that the applicants were attending those collusive meetings during the 16 month "break". Although the applicants were not disputing that the cartel was a single and continuous infringement, the General Court decided to reduce the amount of the fine imposed on the applicants in order to take account of their sequential participation in the cartel.

2.4. Legal professional privilege and in-house lawyers

69. In its judgment of 14 September 2010[55], dismissing in its entirety the appeal brought by Akzo Nobel Chemicals Limited and Akcros Chemicals Limited against the Commission, the Court of Justice confirmed the position in the previous case of AM&S Europe v Commission[56] that internal company communications with in-house lawyers do not attract legal professional privilege (LPP) in the context of EU competition investigations.

70. The Court of Justice considered that in-house lawyers are in a different position to external lawyers, due to the in-house lawyer's relationship of employment with his client. In-house lawyers fail to fulfil the two cumulative conditions for legal privilege, first set down by the Court in the case of AM & S Europe v Commission. These conditions require that: (i) the advice is requested and given for the purposes of the client's rights of defence, and (ii) that the advice must emanate from "independent lawyers, that is to say, lawyers who are not bound to the client by a relationship of employment". The