COMMISSION STAFF WORKING DOCUMENT

Ten Years of Antitrust Enforcement under Regulation 1/2003

Accompanying the document

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

Ten Years of Antitrust Enforcement under Regulation 1/2003: Achievements and Future Perspectives

I INTRODUCTION

1. Over the last ten years, the European Commission ("Commission") and the Member States' Competition Authorities ("NCAs"), which together form the European Competition Network ("ECN"), have engaged in a high number of enforcement actions based on Articles 101 and 102 TFEU (the “EU competition rules”). A keystone of the legal framework underpinning these actions is Regulation 1/2003.[1] The recent tenth anniversary of its entry into application on 1 May 2004 makes this a timely moment to: (1) provide a facts-based review of enforcement by the Commission and NCAs during the last decade; and (2) examine some key aspects of enforcement by the NCAs. This Staff Working Document, which accompanies the Communication on Ten Years of Antitrust Enforcement under Regulation 1/2003: Achievements and Future Perspectives (the “Communication”), addresses aspect (1) and takes stock of the enforcement record of the Commission and the NCAs.[2]

2. This review of the application of the EU competition rules by the Commission and NCAs has illustrated their commitment and vigilance to detect and pursue infringements that may harm consumers and the economy in the EU. In the period covered, from 1 May 2004 until 31 December 2013, the Commission and NCAs have adopted more than 700 enforcement decisions, concerning a wide range of types of infringements, relating to almost all sectors of the economy and ensuring enforcement across all parts of the Union. More specifically, during the reported period the Commission has adopted 122 decisions enforcing the EU competition rules,[3] whilst NCAs have informed the Commission of 665 envisaged decisions applying these provisions.[4]

3. Regulation 1/2003 constitutes a major reform of antitrust procedures in the EU. It replaced the centralised notification and authorisation system set out in Regulation 17[5] by an enforcement system that is based on the direct applicability of the EU competition rules in their entirety. It has also empowered NCAs and national courts to apply all aspects of the EU competition rules and introduced new and closer forms of cooperation between enforcers, including notably the ECN.

4. The change in system has given greater scope to the Commission to set its priorities, enabling it to devote more significant resources to investigating cases and conducting inquiries into key sectors of the economy suffering from market distortions,[6] and give attention to new sectors presenting less conventional forms of anticompetitive behaviour, which can be of particular importance to consumers.

5. As the new system relies even more on market players assessing the compatibility of their (contemplated) conduct with the antitrust rules, and on targeted ex post control by competition authorities, the provision of general guidance is emphasised. In this respect, the Commission adopted a set of notices giving guidance on a range of substantive and procedural matters at the entry into application of the regulation. In the following years, the Commission continued its commitment to providing guidance by adopting and revising block exemption regulations and accompanying guidelines concerning the application of Article 101 TFEU to horizontal,[7] vertical[8] and technology transfer agreements.[9] The Commission, moreover, issued a guidance paper on its priorities in the application of Article 102 TFEU to exclusionary abuses.[10] It further adopted a new set of guidelines on setting fines, a new leniency notice, rules on settlements in cartel cases, provided an information note on inability to pay and published a notice on best practices in antitrust cases.[11]

6. Regulation 1/2003 greatly enhanced the role of NCAs and of national courts as enforcers of the EU competition rules.[12] Over and above the power to apply the EU competition rules in full, the Regulation obliges NCAs and national courts to apply EU competition law when agreements, decisions by associations of undertakings or concerted practices under scrutiny are capable of affecting trade between Member States. These changes have boosted enforcement of the EU competition rules by the NCAs. The Regulation also introduced cooperation tools and obligations with a view to ensuring efficient work sharing, effective cooperation in the handling of cases and to fostering coherent application. Building on the cooperation mechanisms in the Regulation, the ECN has developed into an effective forum for exchanging experience on the application of the EU competition rules as well as promoting the convergence of national procedures and sanctions with Regulation 1/2003.[13]

7. Since May 2004, the competent courts of the Member States also apply the EU competition rules in full. The present report focuses on the use of the tools for cooperation between the Commission and national courts that were clarified and refined by the Regulation. They include the possibility for national courts to request an opinion from the Commission and the now well established power of competition authorities to submit observations as amicus curiae to courts. The Commission has also been active in setting up regular training for national judges across the EU on the enforcement of the EU competition rules. Each year, hundreds of judges participate in these training programmes. The Commission has also focused on improving the effectiveness and coherence of private damages claims brought before national courts. Based on its proposal, a Directive on antitrust damages actions will be adopted soon.[14] Once implemented in the Member States,[15] private enforcement is likely to increase significantly across the EU. Moreover, as the Directive optimises the interplay between private damages claims and public enforcement by the Commission and the NCAs (for instance, the protection of investigation tools such as leniency programmes and strengthening the effect of infringement decisions by NCAs for damages actions before national courts, etc.), the overall effectiveness of antitrust enforcement in the EU is expected to increase. A review clause provides that within four years after the transposition deadline the Commission will review the impact of the Directive and, if appropriate, propose further legislative measures.

8. This report reviews the Commission’s and NCAs’ enforcement activities from three different perspectives: Chapter II looks at the Commission’s and NCAs’ enforcement practice by analysing the different types of infringements of the EU competition rules that were addressed in the decisions of these authorities. Chapter III examines the sectors on which the Commission’s and the NCAs’ antitrust enforcement activities have focussed in the past decade and considers in more detail the sectors which were at the centre of the authorities' actions. The last Chapter IV looks at the Commission’s and the NCAs’ antitrust enforcement activities by type of procedure used (e.g. prohibition decisions vs. commitment decisions). It also provides some insight into the enforcement and cooperation tools that the Commission and the NCAs have at their disposal. Finally, this chapter includes an overview of the cooperation mechanisms used within the ECN and those used in the relationship between the Commission and national courts.

II ENFORCEMENT ACTIVITY BY TYPE OF INFRINGEMENT

9. This Chapter looks at enforcement activities by type of infringement, and addresses the decision practice of the Commission and the NCAs, guidance provided through notices and regulations as well as general trends and developments.

A General overview 1 Commission

10. Since the entry into application of Regulation 1/2003, the Commission has adopted a total of 122 decisions applying Article 101 TFEU and Article 102 TFEU (including when applied in conjunction with Article 106 TFEU).[16] Figure 1 illustrates the breakdown of these decisions by type of infringement. The large majority of the 122 decisions were cases applying Article 101 TFEU (73%, 89 decisions) and most of them related to cartels (59 decisions, amounting to 48% of all decisions), which shows the clear priority given by the Commission to the fight against these pernicious infringements. Other horizontal agreements account for 15% (18 decisions) and vertical agreements account for 9% (eleven decisions) of all Commission cases during the period. More details on the Commission’s decisions applying Article 101 TFEU are set out in section B below.

11. In addition, the Commission since May 2004 adopted 24 decisions applying Article 102 TFEU (20% of all cases), which are discussed in more detail in section C below. The remaining cases consist of four decisions applying Article 106 TFEU in conjunction with Article 102 TFEU (3% of all cases)[17] and seven procedural decisions pursuant to Articles 23 and 24 of Regulation 1/2003 (6% of all cases).[18]

Figure 1: Commission's cartel and antitrust decisions from 1 May 2004 to 31 December 2013

2 NCAs

12. From May 2004 to December 2013, the NCAs informed the Commission of forthcoming enforcement decisions in 665 cases. [19] The majority were based on Article 101 TFEU (58%, 387 decisions),[20] whilst the remainder were mainly applying Article 102 TFEU (32%, 213 decisions) and a small percentage were based on both Articles 101 TFEU and 102 TFEU (10%, 65 decisions).

13. The material received shows that in many instances, NCAs pursued several types of alleged anti-competitive practices in the same envisaged decision. Within the 665 envisaged decisions, the NCAs have tackled abuses of dominant position (36%, about 278 instances), cartels (27%, about 203 instances), other horizontal agreements (19%, about 142 instances) and vertical agreements (18%, about 135 instances), calculated on a total of 758 practices.

Figure 2: Envisaged decisions submitted by NCAs in the period May 2004 – December 2013

B Article 101 TFEU 1 Commission

14. As can be seen in Figure 1 above, Article 101 TFEU has been the most applied provision of the EU competition rules by the Commission, in particular to cartels.

Cartels

15. Cartels are the most harmful type of competition infringement. As they are secret – hidden in particular from customers – public enforcement is vitally important as otherwise many cartels would never come to light. Rigorous enforcement action against cartels has therefore been the top priority of the Commission throughout the last ten years.[21] An analogue trend can be observed for a number of NCAs.[22]

16. Effective public enforcement requires a mix of both ex officio and leniency cases; without ex officio cases, the incentive on undertakings to apply for leniency may be reduced. Leniency programmes are important to detect secret cartels, to collect the necessary evidence to sanction cartels and to de-stabilise cartels. Enforcement therefore requires adequate protection of leniency statements by companies – without such protection the incentive to apply for leniency is again reduced. Over the past ten years, the Commission has maintained both a good track record of ex officio cases and strong protection of leniency statements, with the result that leniency applications have continued at a high level throughout the period. The use of the leniency programme is further addressed in Chapter IV.

Figure 3: Origin of Commission's Article 101 decisions from 1 May 2004 to 31 December 2013[23]

Cartels only || Other Article 101 cases

||

17. Figure 3 shows that in the Commission's cartel investigations, approximately one quarter of cases were initiated ex officio, whereas around three quarters were triggered by leniency applications. In other (non-cartel) cases based on Article 101 TFEU the investigations originated in broadly equal numbers from complaints and from ex officio inquiries. Even if complaints may have triggered Article 101 TFEU decisions to a lesser extent than ex officio inquiries, they play an important role in investigations and may provide the Commission with useful market information. This report does not cover decisions rejecting complaints taken pursuant to Article 7(2) of Regulation 773/2004[24] on the basis of insufficient grounds for acting.

18. With respect to cartels there has been a significant shift in the past ten years under Regulation 1/2003 as to the types of cases pursued. Firstly, the cases pursued are no longer primarily centred on industrial products and the chemicals sector in particular. Rather, investigations have branched out to incorporate a more diversified range of products (such as food and consumer electronics) and have also extended to the services sector, notably transport and financial services.

19. Secondly, due to the globalisation of the economy, cartels are also becoming more and more global nowadays. This implies that the geographic scope of investigations is often much wider than was previously the case. Investigation of worldwide cartels, which is undertaken alongside non-EU competition authorities, has become the norm rather than the exception. This is facilitated by the decentralisation put into place by Regulation 1/2003 as cartels that principally have effects in the territory of a single Member State or up to three Member States are usually pursued by the NCAs whilst the Commission is particularly well placed to tackle cartels of a broader geographic scope.

20. Thirdly, there has been an increasing number of follow on cases where an investigation in one market has led to leniency applications and subsequent investigations in related markets (see, for instance, the automotive parts investigations)[25]. This occurred without any system of additional incentives for leniency applicants as is the case in the United States (US) and the United Kingdom (UK) under their 'amnesty plus' and leniency plus' policies.

21. Fourthly, there are indications that cartels are becoming ever more sophisticated with the use of tools designed to minimize the risk of detection. This has been shown in recent cartels involving the use of code words, encrypted documents, dedicated email accounts and/or dedicated phones. There has also been a significant shift in the type of evidence found and relied upon. Nowadays a handwritten 'smoking gun' in hard copy form is unlikely to be found on the desk of one of the company's employees. Rather than finding such documents, which may have constituted sufficient proof of the cartel, the trend is more towards the piecing together of a huge number of documents to establish the infringement. Furthermore, documents are now almost exclusively in electronic form and the Commission responded to this by increasing the IT skills of its inspectors and by developing a specialist forensic IT capability.

22. Finally, conducting investigations into suspected cartel behaviour in recent years typically required in-depth cooperation with major authorities around the globe. Much more than in the past, the Commission now deals with large European-wide if not global cartels, involving large undertakings with considerable sales of the affected products or services, often over a long period (e.g. recent decisions in the TV & Computer Monitor Tubes,[26] Wire Harnesses[27] and Financial cases[28]). As a consequence, there is in recent years, in addition to cooperation within the ECN, increasing cooperation during the investigation with non-European authorities belonging to the International Competition Network (the ICN).[29]

Other horizontal anticompetitive agreement or concerted practices

23. The Commission’s focus on rigorous enforcement actions against cartels did not prevent it from dedicating attention and resources to other agreements between competitors (horizontal agreements), in particular horizontal cooperation agreements. The challenge in assessing such practices is often to determine whether they restrict competition and may or may not be justified under Article 101(3) TFEU.

24. To assist market participants as well as enforcers in this assessment and to provide for a considerable degree of legal certainty, the Commission reviewed and, in 2010, updated the Block Exemption Regulations applicable to horizontal cooperation agreements. One of the overarching policy objectives of the review process was to ensure that the EU competition rules in this area are applied in a manner that promotes rather than stifles innovation and competitiveness. To this effect, the Commission adopted new Block Exemption Regulations on research and development ("R&D") agreements,[30] and on specialisation agreements.[31]

25. Both Regulations provide greater clarity about what type of R&D, specialisation and production agreements are unlikely to raise competition concerns. They also considerably extend the scope of the safe harbours created by the exemptions in relation to certain types of horizontal agreements which do not contain hard-core restrictions and are entered into by undertakings with relatively low market shares (that is below 20 or 25%). With a view to facilitating innovation, the 2010 R&D Block Exemption Regulation covers not only joint R&D activities, but also so-called "paid-for-research" agreements where one party finances the R&D activities carried out by the other party.

26. Along with the adoption of the two regulations the Commission revised the accompanying guidelines on the assessment of horizontal cooperation agreements ("Horizontal Guidelines").[32] One of the major novelties of the revised text is that it provides, for the first time, comprehensive and widely demanded guidance on how to assess the compatibility of exchanges of information between competitors with EU competition law. Moreover, the Horizontal Guidelines contain a chapter on standardisation agreements that was substantially revised and updated with a view to encouraging the establishment of open standard-setting systems and reflecting recent developments in this sometimes controversial area.

27. Moreover, in the first half of 2012, the Commission carried out a public consultation on a proposal to revise the then applicable technology transfer Block Exemption Regulation as well as the accompanying guidelines.[33] The new rules were adopted on 21 March 2014 and entered into application in May 2014.[34] Similar to the block exemption regime for horizontal cooperation agreements, they are designed to facilitate and incentivise pro-competitive behaviour, in particular innovation and the diffusion of intellectual property, in a manner that does not give rise to competition concerns.

28. As regards concrete enforcement actions, the Commission has applied Article 101 TFEU since May 2004 in 18 decisions against horizontal cooperation practices. These include practices such as non-compete and non-disclosure/use obligations, the limitation of retail price competition, pay for delay agreements, exclusive dealing and joint marketing agreements with price setting mechanisms or revenue sharing joint ventures. The Commission’s intervention in these cases, be it through prohibition decisions pursuant to Article 7 of Regulation 1/2003 or through commitment decisions pursuant to Article 9, had an important impact in different sectors of the economy. For example, in a series of cases in the payment systems sector, such as MasterCard or Visa Debit,[35] the Commission challenged horizontal price setting agreements resulting in high interchange fees and achieved a reduction of these fees below an anti-competitive level to the benefit of millions of consumers and retailers in the EU.

29. The infringements tackled in the cases regarding horizontal practices were typically very serious infringements, with significant repercussions for consumers. In addition to protecting the effective competitive process and thus addressing consumer harm, many of the Commission’s decisions have given guidance to market participants on important and often topical issues. For example, the non-compete obligations in Telefónica/Portugal Telecom[36] which provided that Telefónica and Portugal Telecom would no longer compete with each other in the Iberian telecommunications markets, constituted a clear breach of Article 101 TFEU. More recently, the Commission used Article 101 TFEU to prohibit "pay for delay" arrangements in the pharmaceutical sector, fining both originator and generic undertakings for agreeing to delay the launch of generic medicines in return for considerable value compensation.[37] Such arrangements, whereby generic producers commit not to enter the market in exchange for a value transfer from the originator, allowing the originator to keep prices at supra-competitive level and to share the resulting rent with the generic producers, are a very serious violation of Article 101 TFEU. They cost European patients, national health schemes and private health insurance companies billions of Euros per year.

30. In the transport sector the Commission has been particularly vigilant regarding revenue-sharing joint ventures that may restrict competition to the detriment of a large number of consumers. In both the British Airways/American Airlines/Iberia case and the Star Alliance case, the Commission intervened and accepted entry facilitating commitments by a number of international air carriers that had formed joint ventures for their transatlantic flights.[38] Those joint ventures affect a large number of European consumers and businesses for whom the Commission's intervention brings about direct benefits in ensuring competition on economically important travel routes.

31. The Commission's 2009 commitment decision in the Ship Classification case not only dealt with practices that were harmful to the ship classification market; it also gave much needed guidance on the competition law assessment of standardisation agreements, a very topical issue at the time and still today. [39] Moreover, many of the issues dealt with during the investigation helped shaping the comprehensive guidance on standardisation agreements which was subsequently set out in the revised Horizontal Guidelines mentioned above.

Vertical restraints

32. Vertical agreements are the other large category of practices that can fall within the scope of Article 101 TFEU. These are agreements between undertakings that operate at different levels of the production or distribution chain and that therefore do not compete on the same markets. For many of these agreements, competition concerns only arise if there is insufficient competition at one or more levels of trade, in other words, if there is market power either at the level of the supplier or the purchaser. Vertical restraints are also generally seen as less harmful than horizontal restraints because they can provide substantial scope for efficiencies. Notwithstanding, certain restrictions contained in vertical agreements can have very significant negative effects on competition and thus be to the detriment of consumers.

33. During the past decade, the Commission addressed competition issues and provided guidance in relation to vertical agreements through a combination of policy initiatives and enforcement actions in concrete cases.

34. In April 2010, the Commission published a revised Block Exemption Regulation on vertical agreements, Regulation 330/2010,[40] and Guidelines on restraints in such agreements ("Vertical Guidelines").[41] The revised rules and guidance build on the approach which the Commission introduced fifteen years ago to take account of the effects of vertical agreements and continues to apply across sectors. The most significant novelty in the revised Regulation is that for an agreement to be block exempted not only the supplier's market share but also the market share of the buyer must be below 30%.

35. In the revised Vertical Guidelines, particular attention is given to restrictions that can arise in the rapidly growing area of e-commerce. In the context of online sales, the Guidelines establish the principle that authorised distributors must be free to sell on their websites as they do in their traditional shops and physical points of sales.[42] With these new rules in force, distributors have a clear basis to develop online activities allowing them to reach, and be reached by, customers throughout the EU thereby taking full advantage of the internal market.

36. The only sector for which specific rules for vertical agreements had continued to exist was the distribution of new cars and the corresponding aftersales services.[43] In 2010, the Commission reviewed these sector-specific rules and found that the level of competition regarding sales of new cars had appreciably increased in the past years whilst specific competition issues persisted with regards to aftersales services. The Commission therefore retained a sector specific Block Exemption Regulation only for repair and maintenance services for cars.[44] Regarding the distribution of new cars, the general rules of Regulation 330/2010 now apply.[45]

37. A significant number of vertical business practices across different industries are block exempted pursuant to Regulation 330/2010. Of those vertical practices in the EU that become subject of an investigation by a competition authority, a significant portion are being dealt with by the NCAs, especially when the agreement or agreements concerned principally have effects on competition in one or in a small number of Member States.

38. Nonetheless, the Commission has also carried out some important investigations into vertical restraints cases and adopted eleven Article 101 TFEU decisions concerning vertical practices These Commission decisions concerned issues such as hard-core restrictions of parallel trade (by Topps barring imports of Pokémon stickers and cards from low price to high price countries, and by Peugeot obstructing French consumers from buying cars in the Netherlands),[46] the imposition of non-compete obligations (by Repsol tying petrol stations for a long period of time)[47] and agreements between car manufacturers (DaimlerChrysler, Toyota, General Motors and Fiat) and their after-sales service partners restricting the release of technical information to independent car repairers which risked foreclosing the latter from the car after-sales markets.[48]

2 NCAs

39. Article 101 TFEU has also been significantly enforced by NCAs. In the period of May 2004 – December 2013, the Commission received envisaged decisions concerning approximately 203 cartels, 142 other horizontal practices and 135 vertical practices.

Cartels

40. As can be seen in Figure 2 above, the fight against cartels has also been an important area of enforcement for the NCAs, accounting for 27% of their overall enforcement in the past ten years. The envisaged decisions regarding cartels concerned a variety of sectors, but the highest level of activity was in basic industries and manufacturing (66 decisions), as well as food (34 decisions), transport (31 decisions) and consumer goods (14 decisions).

41. About one third of these envisaged decisions (34%) were initiated on the basis of applications made under leniency programmes. However, most of the envisaged decisions involving cartels have been initiated ex officio (37%), and a large proportion were based on complaints (29%). Some NCAs, e.g. the Dutch authority, have implemented a package of measures to boost ex officio anti-cartel enforcement, for example by adopting informant programmes and by establishing regular contacts with public bodies which may alert the NCA about suspected cartels. In a few Member States, where leniency programmes do not yet operate successfully, the NCAs continue to strongly rely on complaints and ex officio efforts. Continuous experience with ex officio enforcement strengthens EU-wide anti-cartel enforcement and makes it less dependent on the success of leniency programmes.

Figure 4: Origin of NCA Article 101 TFEU envisaged decisions in the period May 2004 – December 2013

Cartels only || Other Article 101

||

42. As can be seen from Figure 4 above, other Article 101 TFEU envisaged decisions dealt with by NCAs also originated mainly ex officio (51%) or are based on complaints (47%). A very small part of these envisaged decisions (2%) originated from leniency applications as certain Member States have expanded their leniency programmes to a wider range of infringements than hard-core cartels.

Other horizontal restraints

43. In their envisaged decisions, NCAs have tackled a significant number of other alleged horizontal practices (142),[49] including cases involving exchanges of information,[50] but also exclusivity, joint selling, marketing and/or commercialisation, non-compete clauses and joint purchasing. A significant number of such envisaged decisions, even though not qualified as cartels, concern pricing issues, including price recommendations by trade associations, and domestic multilateral interchange fees (MIFs) cases which complement the Commission's enforcement action targeting bank interchange fees for cross border transactions.

44. Some envisaged decisions regarding horizontal agreements concern less "classical" types of infringements, for example, practices which denigrate competitors' products. Others cover decisions by associations of undertakings which aim at limiting market output, restricting entry of new competitors, limiting advertisement and/or addressing various pricing issues.

45. As concerns envisaged decisions addressing exchanges of information which were deemed to be anticompetitive, roughly half of them involved exchanges of information on prices, such as the actual future prices or price increases. The other half or so involved exchanges of other types of information which was characterised as commercially sensitive, because it related to competitive parameters, such as the value and volume of sales, market shares, model formulas for calculating price, production costs, inventories, or other key terms of credit arrangements. Almost all of these envisaged decisions contemplated proceeding on a by “object" basis.

46. From a sectoral point of view, the highest number of horizontal practices were addressed in sectors such as liberal professions, media, basic industries and manufacturing and payments systems.

Vertical restraints

47. The envisaged decisions received by the Commission from NCAs contained approximately 135 alleged anti-competitive practices involving vertical agreements under Article 101 TFEU,[51] in particular Retail Price Maintenance, long term agreements, market partitioning/restriction of parallel trade, exclusive distribution, exclusive purchasing, and/or non-compete clauses. The NCAs also addressed some less "classical" types of practices, such as the obligation in vertical agreements to disclose information about competitors.

48. NCAs have tackled alleged restrictions to parallel trade[52] and other export/import limitations and practices that allegedly aimed at partitioning the internal market and which may have had cross-border effects. The Court of Justice has held that "agreements aimed at partitioning national markets according to national borders or making the interpenetration of national markets more difficult, in particular those aimed at preventing or restricting parallel imports, to be agreements whose object is to restrict competition" within the meaning of Article 101 TFEU.[53] Against that background, NCAs have tackled a variety of hindrances to parallel trade, including restrictions of both imports into, and exports from, Member States. Typical examples of restrictions imposed by suppliers include obligations not to sell to customers in certain Member States. They also include measures such as the threat of contract termination if such sales take place, monitoring systems to verify the destination of the supplied goods and the failure of the supplier to provide an after-sales guarantee service with respect to products sold in a particular Member State by "unauthorised" distributors. Such cases have been undertaken by the NCAs in a variety of sectors, ranging from pharmaceutical products to various electronic appliances.

49. The NCAs have also submitted envisaged decisions involving alleged restrictions to online trade. For example, several NCAs have been dealing with alleged vertical restrictions in the online hotel booking sector.

50. In terms of sectors, the highest numbers of alleged vertical practices dealt with by the envisaged decisions are to be found in energy, consumer goods, food/agriculture and motor vehicles.

C Article 102 TFEU

51. For both the Commission and NCAs, actions under Article 102 TFEU against abuses of a dominant position constituted a sizeable portion of their overall enforcement activity, namely 20% and 32% of all their decisions respectively.[54] Some of these cases are amongst those that during the past ten years attracted most public attention and spurred debate amongst stakeholders and commentators.

1 Commission

52. Since 2004, the Commission has adopted 24 decisions finding 31 infringements (or alleged infringements, in the case of Article 9 decisions) of Article 102 TFEU. Just under half of these cases arose from complaints (11), with the remainder being ex-officio cases (13).

Figure 5: Origin of Commission's Article 102 TFEU decisions from 1 May 2004 to 31 December 2013

53. In its enforcement of Article 102 TFEU, the Commission's main focus has traditionally been on exclusionary practices. These are practices of dominant undertakings that are likely or capable of foreclosing competitors or limiting effective competition, thereby causing harm to consumers. Cases involving exploitative practices of dominant firms, such as discriminatory or excessive pricing, have been less common in the Commission’s enforcement activity in the last ten years.

Figure 6: Article 102 TFEU[55] – 24 decisions addressing 31 exclusionary and exploitative behaviour from 1 May 2004 to 31 December 2013[56]

Exclusionary abuses

54. The Commission issued a guidance paper that set out its enforcement priorities when applying Article 102 TFEU to abusive exclusionary conduct.[57] The guidance paper provides a general framework for the Commission's analysis of unilateral exclusionary conduct and a methodology for the assessment of the most commonly encountered specific forms of exclusionary abuses (e.g. exclusive dealing, rebates, predatory pricing, and refusal to deal).

55. The 26 instances of exclusionary behaviour referred to in Figure 6 were tackled in 20 different decisions (certain decisions covered several infringements). Several of these behaviours concern "classical" exclusionary abuses such as refusals to deal, rebates, exclusive dealing, tying practices and margin squeeze (see paragraph 57 et seq. below). Others concern less ‘conventional’ forms of exclusionary abuses (see paragraph 61 below).

56. Article 102 TFEU has been used, inter alia, to effectively challenge refusals to deal by former vertically integrated monopolists. Refusals to deal are not uncommon, for instance in the telecoms sector, where despite the liberalisation of markets, incumbents have frequently obstructed access of competitors to infrastructures which they were under regulatory obligation to provide and thereby hindered unfettered competition. Antitrust intervention has therefore been warranted to remedy this problem. In 2011, the Commission prohibited the refusal of the Polish Telekom incumbent to give access to its broadband wholesale products thereby preventing competition in the downstream broadband market.[58]

57. The Commission also adopted a number of decisions, where it had concerns that the incumbents in the investigated markets restricted competitors' access to networks through various forms of refusal to deal. This included, in the energy sector, abuse by integrated network operators, such as capacity mismanagement, strategic underinvestment and capacity hoarding,[59] as well as foreclosure through long term capacity bookings of gas infrastructure[60] and through pre-emptive capacity reservations on the power transmission networks.[61] The Commission adopted commitment decisions to make structural divestitures to remedy these network foreclosure concerns binding and enforceable.

58. Another type of infringement observed in particular in newly liberalised sectors is margin squeeze, which occurs where the spread between the price charged to competitors upstream and the price charged to the dominant undertaking's own customers downstream is either negative or insufficient for competitors, that are as efficient as the dominant undertaking, to cover the specific cost of the downstream product.[62] In such circumstances, efficient competitors may be able to operate on the downstream market only at a loss or at artificially reduced levels of profitability.[63] After having expressly addressed margin squeeze in Deutsche Telekom,[64] the Commission adopted a few years later a prohibition decision against the Spanish telecommunications incumbent Telefonica.[65] More recently, the Commission expressed concerns that the pricing behaviour of the German railway incumbent Deutsche Bahn could have resulted in margin squeeze and could have prevented rivals from competing profitably on rail transport markets in Germany. At the end of 2013, the Commission accepted commitments from Deutsche Bahn that addressed those concerns.[66] The Union Courts have so far upheld the Commission's decisions in margin squeeze cases confirming that margin squeeze is an independent form of abuse and upholding the analytical assessment carried out by the Commission in the assessment of margin squeeze.[67]

59. The Commission has also successfully challenged other traditional forms of exclusionary abuses such as exclusive dealing arrangements and rebate schemes:

(1) In 2006 the Commission imposed a fine on a Norwegian producer of reverse vending machines, Tomra, for having concluded a number of exclusive dealing arrangements and for offering retroactive rebate schemes foreclosing Tomra’s actual and potential competitors. The Commission decision has been upheld on appeal by the Union Courts.[68]

(2) In 2009 the Commission found that Intel had been giving wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel. Intel had also made direct payments to a major retailer on condition it stock only computers with Intel x86 CPUs. Such rebates and payments were capable of effectively preventing customers - and ultimately consumers - from choosing alternative products. In addition to complying with the requirements established in case law, the Commission also conducted an equally efficient competitor analysis in its assessment of the compatibility of rebate schemes with Article 102 TFEU.[69] The Commission decision has been upheld on appeal by the General Court.[70]

(3) Exclusive dealing arrangements in the form of long term supply agreements may also raise concerns in the energy sector, notably to the extent that they lead to a significant degree of customer foreclosure. In 2007 and 2010, the Commission accepted commitments from incumbent operators in France and Belgium to put their customer foreclosure practices to an end and to restore competitive conditions.[71]

60. Tying is another type of traditional abusive behaviour which the Commission has continued to pursue. In 2009, the Commission accepted Microsoft's commitments offered in response to the Commission's concerns that Microsoft had been tying its web browser Internet Explorer to the Windows PC operating system.[72] In 2012, the Commission accepted commitments from Rio Tinto Alcan which put to an end the Commission's concern that the undertaking might have infringed the EU competition rules by contractually tying the licensing of its leading aluminium smelting technology to the purchase of equipment.[73]

61. In addition, the Commission has been confronted with some less conventional forms of exclusionary abusive behaviour which do not fit squarely in the traditional categories of exclusionary abuses. In AstraZeneca[74] for instance, the Commission dealt with the misuse of patent systems and national regulatory systems, while in the Intel case,[75] in addition to abusive rebates schemes, the Commission found that payments made by Intel to computer manufacturers for postponing or cancelling the launch of competitors' products constituted a naked restriction of competition falling within the ambit of Article 102 TFEU.

Exploitative abuses

62. Exploitative abuses are also liable to infringe Article 102 TFEU. They pertain to practices that exploit and harm consumers directly. Typical examples are excessively high prices or the discrimination of customers that undermines the integration of the internal market. The Commission's enforcement efforts have traditionally tended to focus particularly on exclusionary abuses, as intervening against such behaviour can prevent dominant companies from further consolidating their market power and exploiting consumers. This being said, exploitative abuses are as much caught by Article 102 TFEU as exclusionary abuses, and in some instances, challenging the exploitative conduct itself is the only way to remedy consumer harm.

63. Out of the 24 decisions referred to in Figure 6, five decisions concerned alleged exploitative abuses, two of which concerned discrimination,[76] two excessive pricing[77] and one capacity withholding with the view to increasing prices for consumers.[78] For example, in the Rambus case, the Commission had concerns that Rambus would have abused its dominant position by not disclosing relevant patents in the context of a standard-setting process for DRAM technology and thereafter claiming excessively high royalties for the use of those patents. In response to the Commission's preliminary assessment that the conduct may constitute an exploitative abuse, Rambus offered a set of commitments addressing the Commission's concerns. The Clearstream case is an example of abusive price discrimination.[79] The Commission found that the dominant undertaking Clearstream had infringed Article 102 TFEU by charging customers different prices for its clearing and settlement services. The Commission found no objective justification for the different treatment of equal transactions. The decision was upheld by the General Court on appeal.[80]

2 NCAs

64. From May 2004 to December 2013, NCAs informed the Commission of 278 envisaged decisions covering alleged abuses of dominant position contrary to Article 102 TFEU. Figure 7 shows that more than two thirds of the enforcement actions by NCAs under Article 102 TFEU originated from complaints whereas the remainder was based on ex officio inquiries.

Figure 7: Origin of NCA Article 102 TFEU envisaged decisions in the period May 2004 – December 2013

Figure 8: Types of alleged abuses submitted by NCAs[81]

65. Similar to the Commission's experience, the majority of NCAs’ envisaged decisions under Article 102 TFEU dealt with exclusionary abuses (63%). These were followed in frequency by envisaged decisions involving both alleged exclusionary and exploitative abuses (22%), and by envisaged decisions involving only alleged exploitative abuses (15%).[82]

66. Many envisaged decisions under Article 102 TFEU covered more than one type of abuse (see graph on the right above). When analysing the overall pool of alleged abuses tackled by the NCAs about 406 instances were counted, of which about 70% concerned exclusionary practices (about 283).

67. Most of the alleged exclusionary abuses investigated by NCAs concerned "classical" abuses such as refusal to deal, rebates, margin squeeze and tying/bundling, foreclosure through long-term supply agreements (especially in the energy sector) and exclusivity clauses. In addition, NCAs have submitted a number of alleged abuses that do not fit squarely in the usual categories of exclusionary abuses, for example, tackling cross-subsidies by a dominant undertaking and the denigration of a competitor's products.

68. The NCAs submitted about 123 instances of alleged exploitative abuse. Most commonly, the alleged practices were discrimination, unfair terms and excessive pricing. In a number of envisaged decisions alleging "discrimination", the practice under scrutiny did not concern discrimination among independent operators in equivalent transactions, but rather favouring without objective justification a group's related downstream entity (for example with respect to prices of inputs) as compared to conditions offered to competitors downstream. Furthermore, in a number of envisaged decisions addressing the behaviour of an incumbent operator in the market, an alleged infringement described as discrimination was included along with an exclusionary abuse (for example, refusal to supply).

69. In a few envisaged decisions, NCAs have investigated alleged excessive prices. These cases concerned the energy sector and media with intellectual property related issues, as well as the telecoms and transport markets.

70. As far as the energy markets are concerned, the Danish NCA ruled on the abusive behaviour of dominant electricity providers using their flexible production capacities to operate bidding strategies which allowed them to charge excessive prices on the wholesale market during certain critical hours.[83] In Germany, excessive pricing cases concerned electricity prices charged by dominant energy providers. The German NCA found that charging industrial customers the value of so-called CO2-allowances which had been allocated to these electricity providers free of charge according to a German Emissions Trading Scheme amounted to excessive pricing.[84]

71. In the media sector, excessive pricing was mostly interlinked with intellectual property rights. The Latvian NCA ruled on excessive tariffs imposed by the dominant collecting society for the public use of musical works.[85] Likewise, in Spain, the collecting society for intellectual property rights was found to have allegedly abused its dominant position by imposing excessive and discriminatory prices on private TV stations for the management of public performance and mechanical reproduction rights over phonograms.[86] Inter alia, the Spanish NCA compared the national fees with those applied in other EU member states. Further Spanish cases in the media sector concerned a collecting society’s abusive imposition of royalties for TV transmissions of audio-visual works in hotels while yet another decision ruled on the abusive tariffs applied by a specific collecting society for the collective management of performers' rights.[87]

72. In the telecoms sector, NCA cases dealing with excessive pricing include the Spanish investigation into excessive prices imposed by dominant mobile telephony providers for their provision of wholesale services for SMS and MMS[88] as well as a French case dealing with several alleged exclusionary practices of France Télécom in the French overseas territories’ markets for fixed line telecommunications and the Internet, together with the excessive pricing of leased submarine cable connections between La Réunion island and mainland France.[89]

73. The Italian NCA dealt with non-cost-related tariffs imposed by the manager of airports in Milan (SEA) and qualified them as abusive.[90] More specifically, SEA was fined by the Italian NCA for setting inequitable and excessive charges for: (i) the provision of refuelling infrastructure; (ii) common and individual catering infrastructure; and (iii) office space for cargo handlers. For all these services, the charges applied by SEA were found to be far above the economic value of the services provided. According to the Italian NCA, the prices giving access to airport infrastructure are in principle regulated and tariffs must be cost-related within the scope of the remaining independent decision-making powers of the relevant airport manager.

D Article 106 TFEU (in combination with Article 101 TFEU or 102 TFEU) 1 Commission

74. Article 106 TFEU enables the Commission to protect competition in the internal market by prohibiting measures of Member States which lead public or privileged undertakings to abuse a dominant position or to enter into anticompetitive agreements. In such instances, and provided that the measures go beyond what is necessary for the provision of a service in the public interest,[91] Article 106(3) TFEU entitles the Commission to adopt a decision against the Member States concerned.

75. Since May 2004, the Commission has adopted four decisions against Member States, finding infringements of Article 106(1) TFEU in conjunction with Article 102 TFEU. In the BdKEP/Deutsche Post AG decision of 2004[92] the Commission challenged certain provisions in Germany’s postal regulatory framework which barred commercial mail preparation firms from earning discounts for handing over pre-sorted letters at Deutsche Post AG’s (DPAG) sorting centres. The provisions induced DPAG, which enjoyed exclusive rights in providing basic postal services, to discriminate against mail preparation firms. While large senders were allowed to feed self-prepared mail directly into sorting centres and were granted discounts for doing so, commercial firms were barred from discounts for mail preparation.

76. In 2008, the Commission challenged an amendment in the Slovak postal law which had the effect of reserving the delivery of hybrid mail to the incumbent postal operator, Slovenská Pošta. Since the entry into force of that amendment, the delivery of hybrid mail had been re-monopolised to the benefit of the incumbent operator. Private operators were prevented from exercising their activity in this field and, as a consequence, incurred losses that endangered their viability.[93] In another decision of 2008, the Commission found that the Hellenic Republic had granted a public undertaking exclusive rights to explore and exploit all significant lignite deposits in Greece. These rights secured for the public undertaking the cheapest available fuel for production of electricity and enabled it to maintain or reinforce its dominant position in the downstream wholesale market of electricity by excluding or hindering market entry of competitors who could rely only on less competitive fuel.[94]

77. The Commission's experience suggests that Article 106 TFEU can be an effective instrument for safeguarding competition in newly liberalised markets, especially where these markets are closely linked to markets reserved by the State for public or privileged incumbents. Although the completion of the liberalisation process reduces the temptations of Member States to provide privileges that may induce anticompetitive behaviour, the Commission remains vigilant about any State measures that may restrict competition without justification.

2 NCAs

78. Many NCAs attentively follow government action and play a vital role as advisors to governments and legislators, advocating pro-competitive approaches and promoting a culture of competition in their jurisdictions. Such competition advocacy is an integral part of their remit. It is often used to promote competition friendly solutions in regulatory contexts and/or to warn against state action that could entail competition issues. Many NCAs have express powers to issue opinions or similar advocacy instruments[95] and use them regularly. Some are specifically equipped with powers to take action against measures taken by local or regional state authorities, where they raise competition problems. Moreover, in a limited number of envisaged decisions, NCAs have envisaged setting aside a state measure, held to be contrary to the EU competition rules, on the basis of the CIF judgment.[96] For example, in a recent decision against Poste Italiane, the Italian NCA decided to set aside national rules on VAT benefiting the incumbent and concluded that Poste Italiane engaged in an abuse of dominance.[97] The Greek NCA imposed a decision on the Port of Piraeus finding that it had breached Article 101 TFEU in conjunction with Article 106 TFEU for unjustified and exclusionary treatment which favoured one port user to the detriment of others.[98] In a decision against Riga International Airport, the Latvian NCA obliged the airport to discontinue the application of provisions establishing a discriminatory discount system for services provided to airlines.[99]

III ANTITRUST ENFORCEMENT ACTIVITY BY SECTOR

79. This chapter looks at enforcement activities by the Commission and the NCAs by sector. It first presents an overview of the overall level of antitrust enforcement by sector. Thereafter, it provides a more detailed presentation of the antitrust enforcement activities and general trends and developments in ten specific sectors.

A General overview 1 Commission

80. As mentioned above in Chapter II, since May 2004 the Commission has adopted a total of 122 decisions relating either to proceedings under the EU competition rules (including in conjunction with Article 106 TFEU) or to procedural issues under Article 23 and 24 of Regulation 1/2003. Figure 9 shows the distribution of these decisions among different economic sectors. Although these 122 decisions cover a broad range of products and services, it is clear that over the past ten years the Commission has focused on a number of specific key sectors.

Figure 9: Commission antitrust decisions by sector from May 2004 to December 2013

All antitrust decisions || Cartel decisions only || Other antitrust decisions only

|| ||

81. Over the review period, the basic and manufacturing industries sector has been the most heavily investigated by the Commission – 42 decisions were adopted in this area. Energy and the information technology ("IT") sector have also remained high on the enforcement agenda, with the Commission issuing 18 and 12 decisions, respectively. The remaining 50 decisions are spread broadly across thirteen different economic sectors, with only food and agricultural products accounting for more than 5 decisions. Whilst in the basic and manufacturing industries and the food sectors the decisions related almost exclusively to cartels, in sectors such as energy, IT & consumer electronics and payment systems, the majority of Commission decisions concerned other infringements.

82. Figure 10 compares the Commission's antitrust enforcement efforts per sector with the equivalent share of the EU's Gross Value Added (GVA) for each sector. GVA is a measure of output produced by a specific sector, assessing the difference between output and intermediate consumption. It can be seen as a measure of the weight of different sectors in the overall EU economy.

Figure 10: Commission antitrust decisions (May 2004 to December 2013) vs EU GVA (2011), by sector

All antitrust enforcement by the Commission || The EU's Gross Value Added (2011)

||

Source: Eurostat, DG COMP. NACE code O (Public administration) has been removed from the chart.

83. It should be noted that the comparison in Figure 10 can only provide a broad picture. Economic areas such as education and real estate activities (both included in "Other Services") are not frequently captured by competition law although they are responsible for around 17% of the EU's GVA. Furthermore, the categories used in the Eurostat databases do not always match precisely those used in the Commission's antitrust work. Finally, there is no reason that the intensity of antitrust enforcement should necessarily match the size a sector has in the economy in terms of GVA: there can be larger sectors of the economy that are less prone to antitrust infringements than others; equally, there can be smaller sectors that are more vulnerable to infringements whilst being particularly important for economic growth and welfare.

84. Nevertheless, some trends can still be noted:

(1) The amount of enforcement in areas such as financial services, telecoms, transport, motor vehicles and media (entertainment) generally matches the economic weight of these sectors.

(2) The Commission has undertaken a significant amount of work in information and communication technologies and the energy sector, which is proportionately higher than the relative importance of these sectors in the economy. Regarding the former, this corresponds to the importance of these sectors for digital development, which is a key element of the EU’s Lisbon Strategy and subsequent Europe 2020 Strategy. Regarding the latter, strong competition scrutiny and enforcement has closely followed the de-regulation of the energy sector.

(3) In contrast, professional and scientific services have not been targeted by the Commission at the level that their importance to the economy would suggest. The same also appears to apply to the wholesale and retail trade, as well as food products. In these cases, the enforcement activity of NCAs is higher than that of the Commission, which may be explained by the fact that the markets in those sectors tend to be national in scope.

85. The Commission has pursued a significant number of cases in regulated sectors where it had carried out sector inquiries, such as in energy, financial services and pharmaceuticals. Other sectors on which the Commission's antitrust enforcement has focussed are sectors that have been recently liberalised or were in the process of liberalisation over the last ten years. Examples include, in addition to the energy sector, the media, telecommunications and postal sectors.

2 NCAs

86. As concerns enforcement by NCAs, Figure 11 shows the number and types of alleged anti-competitive practices investigated in different economic sectors. Although there are several sectors which account for a significant proportion of the enforcement record, the envisaged decisions submitted by NCAs are spread over a variety of economic sectors, most notably basic industries and manufacturing (92), energy (80), transport (69), food (70), media (66), telecoms (48), consumer goods (42) and "other services" (35).

Figure 11: Envisaged decisions by NCAs by sector May 2004 – December 2013[100]

All envisaged decisions || Cartel only || Other antitrust

|| ||

87. Similarly to the Commission, a number of NCAs were active in recently liberalised sectors or sectors in the process of liberalisation. Both the Commission and NCAs were active in the sectors of energy, media, telecommunications and post. In addition, NCAs were active in other recently liberalised sectors, in particular transport.

88. The graph below provides details regarding the distribution of alleged anti-competitive practices submitted by the NCAs across various economic sectors. For example, there were a significant number of alleged cartels in the basic industries and manufacturing, food, and transport sectors. It appears that the telecoms, media, energy and transport sectors were more prone to alleged abuses of dominant positions. Indeed, these sectors are characterised by high market concentration and/or the presence of historically dominant operators.

Figure 12: type of infringement by NCAs by sector May 2004 – December 2013

B Specific sectors

89. This section examines and briefly comments on the work and type of cases investigated in different economic sectors by the Commission and NCAs since May 2004.

1 IT, Internet & Consumer Electronics

90. The IT, Internet and consumer electronics industries are fast-moving sectors in terms of technological development. They are widely seen as a high growth area for the European economy, a potential that can only be fully activated in properly functioning and competitive markets. At the same time, these are industries characterised with strong network efforts, which enable the lock-in of customers and further strengthening of dominant positions. Vigilance on the part of competition authorities is thus warranted.

91. The Commission's antitrust enforcement actions over the past ten years have contributed to achieving better functioning and more competitive markets, for instance, by targeting activities hindering interoperability between operating systems (Microsoft is the landmark decision).[101] Dealing with unjustified obstacles to the interoperability of software and systems has indeed been a recurring theme of antitrust enforcement in the sector in the past ten years. A second theme has been the intersection of intellectual property and antitrust law in the context of standardisation, where the focus of the Commission' activity has been on preventing undertakings from unfairly exploiting the market power that they have obtained as a result of the setting of a standard. Given the technological characteristics of the sector and the importance of innovation as a key parameter of competition, this theme together with the development of "new" technologies has taken a more prominent place in antitrust enforcement than more ‘traditional’ issues of price competition. That being said, the Commission also found and took action against price-fixing cartels in relation to products such as LCD panels, cathode ray tubes and videotape formats.

92. The twelve decisions adopted by the Commission in these sectors in the last decade were equally split between proceedings under Article 101 TFEU, proceedings under Article 102 TFEU and procedural cases. The Article 101 TFEU cases were all cartels, whereas the Article 102 TFEU cases concerned several types of (alleged) infringements, such as abusive rebates, tying, refusal to deal and unfair pricing. Six of the cases in this sector were initiated at the Commission's initiative. The remainder were three complaints and three applications for leniency.

93. Prominent examples of Article 102 TFEU cases are Microsoft (refusal to supply interoperability information and tying),[102] Intel (practices preventing new and innovative products of competitors from entering the market)[103] and Rambus (unfair pricing in the context of standardisation).[104]

94. Amongst the twelve cases mentioned above, there were three non-compliance decisions which were significant in their own right: two related to periodic penalties imposed on Microsoft in relation to its non-compliance with the prohibition decision against it 2004 regarding interoperability, and the other was a decision imposing a fine on Microsoft for its non-compliance with a subsequent commitments decision from 2009 regarding the tying of its browser to its PC operating system. These three decisions illustrate the Commission’s commitment to ensure that the EU competition rules and decisions ordering their enforcement are fully complied with.

95. NCAs informed the Commission of 14 envisaged decisions in the IT/Internet/consumer electronics sectors. Among the products investigated in the IT sector was, for example, advertising via the Internet where the French and Italian authorities investigated allegations of discriminatory practices by Google.[105] Consumer electronic products investigated included Hi-fi and home cinema equipment as well as plasma and LCD TVs. Furthermore, some envisaged decisions dealt with competition restrictions related to the distribution of business software. The infringements investigated by the NCAs were evenly distributed between Article 101 TFEU and Article 102 TFEU infringements, with vertical restrictions, such as retail price maintenance, constituting the majority of alleged Article 101 TFEU infringements.

96. There were also sector inquiries/market analyses carried out by NCAs regarding online delivery of services.[106] The reach of the Internet is such that ever more products and services are provided via this means, with online platforms becoming increasingly popular. Some NCAs have investigated so-called price parity or best price clauses which oblige providers of goods or services to offer their "best" prices and terms to online platforms offering consumers access to these goods or services from a wide selection of providers in a convenient one-stop shop. Recent examples include the investigations of the German and UK NCAs regarding use of these clauses by Amazon, when offering products in its online "marketplace" from other competing retailers. Both NCAs closed their investigations after Amazon dropped these clauses. Investigations by several NCAs of similar clauses used for hotel online bookings have led to date to enforcement decisions by the German and UK NCAs.[107] Both authorities addressed the same potential threat to competition, namely that it may: eliminate intra-brand price competition for the same room; reduce the incentive for online travel agents to compete on commission; and create barriers for new online travel agents to enter, and tailored the remedy to the cases before them. The use of these parity clauses was prohibited by the Bundeskartellamt for the booking of hotels located in Germany. The Office of Fair Trading accepted commitments from a large hotel group whereby: (i) online platforms can offer discounts from the rates of its hotels located in the UK to consumers participating in the platforms’ membership schemes; and (ii) its hotels can also offer discounts to consumers participating in the platforms’ membership schemes. The Lithuanian NCA has dealt with a case in which it imposed fines on several tour operators/travel agents for having coordinated their actions online.[108] The ECN closely coordinates its approach to online vertical issues in the Working Group on Vertical Issues.

2 Energy

97. The energy sector comprises, in particular, the electricity, gas, oil, coal and water industries. The enforcement of competition rules in EU energy markets forms an integral part of the EU's energy policy and has been a key driver for the EU's internal market agenda, in particular the adoption of the third energy package[109] and its subsequent implementing rules.[110]

98. The Commission’s antitrust enforcement activities in the energy sector have provided both backing and stimulus for the liberalisation process and the creation of the internal energy market. Once the decision is taken to dismantle the former legal monopolies and to create a functioning internal market, antitrust enforcement plays an essential role in ensuring that effective competition becomes a reality. The Commission's carefully tailored remedies, including ownership unbundling, have significantly contributed to the success of liberalisation and have shown the complementarity of antitrust enforcement and regulation.

99. Between 2005 and 2007, the Commission carried out a sector inquiry into the energy markets.[111] This inquiry was a useful and necessary tool to achieve the high level of successful antitrust enforcement during the following years. In particular, it identified several central problems standing in the way of well-functioning markets, namely the high concentration and illiquidity of energy markets, the insufficient unbundling of network and supply activities and the absence of cross-border integration and cross-border competition. The sector inquiry found that gas and electricity wholesale markets had remained largely national in scope and had maintained the high level of concentration of the pre-liberalisation period. The level of unbundling was also found to be insufficient. As a result, vertically integrated undertakings (usually the incumbents) had an incentive to take investment decisions which were not in the interest of network/infrastructure operations but on the basis of the supply interests of the integrated undertaking. Market integration was hampered inter alia by the fact that incumbents rarely entered other national markets as competitors, by insufficient or unavailable cross-border pipeline (gas) capacity or interconnector (electricity) capacity, by under-investment and by ineffective congestion management.

100. Over the past ten years, the Commission has adopted 18 decisions in the energy sector, dealing mainly with electricity and gas markets but also including two cases relating to automotive fuel and nuclear power. In recent years, investigations have been launched inter alia in the fuel markets.[112] The focus of the Commission’s antitrust enforcement has been on the three major structural problems mentioned above: the 2008 decision regarding German electricity wholesale, for instance, dealt with highly concentrated and illiquid energy markets,[113] the RWE Gas Foreclosure (2009) and ENI (2010) decisions dealt with the insufficient unbundling of network and supply activities[114] and the Swedish Interconnectors (2010) and E.ON/GDF (2009) decisions are examples for dealing with the absence of cross-border integration and cross-border competition.[115]

101. The vast majority of the decisions adopted by the Commission related to proceedings under Article 102 TFEU against exclusionary practices of dominant firms (mostly the former holders of legal monopolies), primarily in the form of refusals to grant access to infrastructure, for example in the form of sector specific practices, such as capacity hoarding,[116] strategic underinvestment[117] or foreclosure through long-term capacity bookings.[118]

102. The energy sector is a very good illustration of the significant role that sector inquiries can play in fostering the enforcement of competition rules: since the sector inquiry, all but two of the Commission’s cases leading to decisions began at the Commission's own initiative and did not depend on complainants or market informants bringing a competition issue to its attention). Furthermore, the sector inquiry also allowed the Commission to take an active role in the debate on unbundling in the third energy package and created a political momentum for increased competition enforcement and efficient remedies.

103. NCAs informed the Commission of 80 envisaged decisions in the energy sector. The majority tackled alleged abuses of dominant position under Article 102 TFEU, with the most frequently occurring alleged practices concerning refusal to deal, restrictions on market access, foreclosure, abusive long terms contracts and discriminatory behaviour. There were also a significant number of alleged infringements of Article 101 TFEU, most of which were vertical in nature, but they also included cartels and other horizontal practices.

104. The NCAs often addressed alleged abuses by energy incumbents, in particular in the traditional gas and electricity markets, which accounted for about two thirds of the envisaged decisions. A significant proportion derived from sets of cases investigated by the German and Spanish NCAs in the gas and electricity markets respectively. In the case of Germany, there were a number of envisaged commitment decisions that followed a case in which the NCA, in order to prevent the foreclosure of competitors, prohibited E.ON Ruhrgas from the continuation of existing, and the conclusion of, new gas supply agreements with regional and local gas resellers under certain conditions concerning duration and customers' capacity coverage.[119] With regard to Spain, most of the envisaged prohibition decisions provided for the imposition of fines on the main national electricity incumbents for hindering access of their competitors to information on the points of supply or for having abused their dominant positions in the connection works market.[120] The Italian NCA intervened in the electricity sector in most cases with commitment decisions for alleged exclusionary conduct in the local distribution and wholesale market.[121]

105. The other main focus of the NCAs' envisaged decisions concerned oil markets, with a large number of authorities addressing issues such as the production, distribution and supply of fuel and LPG.[122]

106. New ground has been broken by the NCAs in several cases. For example, the Italian and the Spanish NCAs were the first ECN authorities to act against network operators. In the case of Italy, the NCA took a decision against the gas network operator Eni for hindering the capacity expansion of the pipeline which imported gas from Algeria into Italy and, in a recent case, accepted commitments by the same operator concerning international gas transport.[123] The Spanish case related to restrictions imposed by the national natural gas operator Grupo Gas Natural on access to re-gasification infrastructures of third parties.[124] Likewise, the Danish NCA was the first ECN authority to act against excessive pricing by an undertaking in an exchange electricity market.[125] Elsam, an electricity production company active in the Nordic transmission exchange network, Nord Pool, was able to create or remove bottlenecks in the transmission network between neighbouring areas and countries, increasing wholesale prices.

107. In addition to investigations leading to possible enforcement actions, NCAs have also carried out a large number of sector inquiries/market analyses in the energy markets showing that this sector constitutes one of their top priorities. Inquiries were carried out into the electricity and gas markets, the fuel markets and the market for district heating.[126] These inquiries have allowed the NCAs to identify a variety of competition issues in different markets. A sector inquiry carried out by Germany into the fuel sector revealed the existence of dominant oligopolies or high levels of concentration in the retail sale of fuel at regional level in Germany.[127] The Italian NCA carried out a sector inquiry which found that liberalisation measures had made a positive impact on the growth of the number of unbranded distributors and contributed to modifying the oligopolistic structure of the fuel retail market.[128] In the same sector, the Spanish and Portuguese NCAs also carried out inquiries finding asymmetries between the formation of the pre-tax retail prices for petrol and diesel and the variations of international fuel prices.[129] In the gas sector, another inquiry in Germany revealed the risk of foreclosure in the use of transmission capacity at interconnection points which were fully booked due to long-term contracts and in the downstream market for gas distribution.[130] Other more recent inquires/market analyses have been also carried out by the UK,[131] Latvia,[132] and Bulgaria.[133]

108. By way of follow up, some NCAs have undertaken new initiatives to foster competition in certain markets. For example, in Germany a market transparency unit has been set up to ensure that information provided to the NCA by all undertakings operating or setting prices in public petrol stations is made available to consumers.[134] This makes the comparison of retail fuel prices easier and also allows the NCA to monitor price changes, facilitating potential investigations.

3 Pharmaceuticals and Health Products & Services

109. This sector involves pharmaceuticals, medical devices, other health products and health services. The effective enforcement of antitrust law in this sector is very important not only because of the increasing share of Member States' budgets which are dedicated to health spending (total healthcare expenditure is around 8% of the EU's gross domestic product, on average),[135] but also because competition law has been influential in encouraging reforms in the health sector and promoting growth and innovation.

110. A central theme of the Commission's competition enforcement over the past years has been the market entry by generic drugs producers, delays in such entry and the role originator undertakings played in such delay. Indeed, originator undertakings regularly face a "patent cliff" for their blockbuster products, i.e. where expiration of their patent is followed by an abrupt drop in sales due to cheaper generics entering the market. Depending on the market concerned, the entry of a generic medicine can lead to up to an 80% decrease in prices.[136] This situation has prompted originator undertakings to deploy certain strategies aimed at preserving their monopoly rents beyond the duration of their patents, to the detriment of health systems and ultimately tax payers.

111. The Commission carried out an extensive inquiry into the pharmaceuticals sector in 2008-2009. This allowed the Commission to better understand the patterns and impact of entry and uptake of generic medicines on the market, as well as the business practices developed by both originator and generic undertakings facing this challenge. It provided, in particular, valuable insight into patent settlements between originator and generics producers, which are now being addressed in individual cases. The inquiry also identified certain regulatory deficiencies (the absence of a single EU patent, lengthy reimbursement proceedings, etc.). Moreover, the sector inquiry created enforcement opportunities for the NCAs and the insights it produced had a considerable influence on shaping the Commission’s proposal for a transparency directive concerning national pricing and reimbursement decisions.[137]

112. Over the past ten years, the Commission adopted four prohibition decisions relating to the pharmaceuticals and health services industries. Further investigations, building on the results of the sector inquiry, are ongoing. Three of the mentioned four decisions (LABCO/ONP,[138] Lundbeck[139] and Fentanyl)[140] relate to non-cartel infringements under Article 101 TFEU and the other (AstraZeneca)[141] to exclusionary behaviour under Article 102 TFEU. The decisions in AstraZeneca (misusing the patent system and regulatory setting to delay market entry), Lundbeck (pay-for-delay settlements), Fentanyl (pay-for-delay transaction) are a good illustration of restrictions of competition relating to the foreclosure of generics manufacturers through practices of originator undertakings.

113. The NCAs informed the Commission of 30 envisaged decisions. Recently, NCAs have opened cases relating to practices aimed at delaying generic entry, namely a pay-for-delay agreement (UK),[142] denigration practices (France)[143] and exclusionary conduct based on the patent system (Italy).[144] The NCAs have also handled cases in the pharmaceutical and health markets in relation to predatory pricing,[145] anti-competitive influence on retail prices,[146] retail price maintenance,[147] bid-rigging,[148] price fixing and market partitioning,[149] exclusionary clauses in health care contracts,[150]refusal to license the production of an active principle[151] and restrictions to parallel trade (basically export and import ban clauses).[152]

114. A number of NCAs have carried out sector inquiries/market analyses in the pharmaceutical and healthcare sectors.[153] For example, the French NCA undertook a sector inquiry into the pharmaceutical industry which concluded in 2013, calling for more competition throughout the distribution chain and supporting the supervised opening up of the retail distribution of non-prescription medicinal products.[154] The Romanian NCA launched a sector inquiry in 2013 to assess possible malfunctions in the pharmaceutical market, following a sector inquiry which had concluded in 2011 that originator medicines were prevalent on the market although cheaper generics were expected to gain market shares. In 2012, the OFT carried out a market study of the dentistry market in which it identified a range of recommendations to foster competition, in particular with regard to patients' access to accurate and impartial information to help make informed decisions.[155] In the same year, the Dutch NCA commissioned a study on the medical devices market, which found that health care providers can curb the cost of medical equipment by having an efficient purchasing process in place. The Danish NCA also published an analysis containing recommendations on the deregulation of pharmacies in 2012

115. NCAs have also engaged in a variety of advocacy initiatives, including issuing opinions regarding pharmaceuticals and healthcare services, in particular on the compliance of their national pharmaceutical regulatory framework with competition rules, and have proposed measures to enhance competition in the markets concerned. For example, in late 2013 and early 2014, the Bulgarian NCA adopted opinions calling for more competition in the hospital services market and in the provision of ambulatory care.[156] In 2012, the French NCA issued an opinion on a draft decree regarding the supply of medicinal products for human use.[157] The Italian NCA repeatedly intervened in this sector to spur competition in the retail distribution by reporting, inter alia, on the positive effects of the sale of non-prescription pharmaceuticals in “para-pharmacies”[158] and the Spanish NCA issued reports on draft regulations relating to medicinal products.[159] .

4 Telecoms

116. Since 1998, the EU's telecommunications landscape has been liberalised, moving from static public service monopolies to competition. The application of competition law has been instrumental in ensuring that markets operate more competitively, bringing lower prices and better quality of service to consumers throughout the EU. In telecoms, competition law and sector regulation complement each other and go hand-in-hand; in sector regulation, it is on the basis of the competition law principles that markets are defined and the significance of market power is appreciated. Ex-ante regulatory obligations are imposed only where there is no effective and sustainable competition;[160] if effective competition in the market can be maintained through the enforcement of competition law only, there is no need for sector specific regulation and the role of competition law becomes even more crucial.

117. Consistent ex-ante regulation in the telecoms sector has played a key role in ensuring a level playing field between operators in the EU and has contributed to the dismantling of barriers to entry to various markets in the sector. However, the Commission's experience suggests that competition law enforcement will play an increasing role where individual markets no longer merit sector specific ex ante regulation

118. For example, recently the main focus of the Commission’s enforcement in the telecoms sector has been to improve access by new entrants to the incumbents' networks. Three Article 7 prohibition decisions have been adopted since 2007. Two of them were based on Article 102 TFEU (Telefónica in 2007[161] and Telekommunikacja Polska in 2011[162]) and dealt with access of competitors to the incumbent's broadband Internet and network infrastructure. In addition to setting a clear precedent, these two cases provide a good example of competition law being enforced in parallel with the application of ex ante sector specific rules by national telecom regulators. In the third case, (Telefónica, Portugal Telecom in 2013), the Commission challenged under Article 101 TFEU a non-compete clause in an agreement between competitors which risked partitioning markets and hindering the integration process of the EU telecoms sector.

119. Prior to 2007, the Commission had adopted two other prohibition decisions on the basis of Article 102 TFEU (Wanadoo Interactive[163] and Deutsche Telekom,[164] both in 2003). The Union Courts have fully confirmed the Commission's action in Wanadoo Interactive,[165] and Deutsche Telekom.[166] The Telefónica decision of 2007 has been upheld by the General Court and a decision on appeal by the ECJ is expected.[167]

120. While the Commission’s antitrust enforcement in these types of cases concerning access to the incumbent's network continues (see the pending investigation in the Slovak Telekom case),[168] the Commission has also began to investigate new areas such as the case on Internet connectivity, where inspections were carried out at the premises of three telecom operators in 2013.[169]

121. NCAs submitted 48 envisaged decisions in the telecoms sector. Most of the envisaged decisions tackled alleged abuses of dominant position, including by incumbent operators. Like the Commission, the bulk of envisaged decisions by NCAs were brought under Article 102 TFEU, and mainly tackled similar issues concerning access to networks and margin squeeze practices. However, the envisaged decisions also addressed other alleged anticompetitive practices, such as various forms of discrimination and the use of rebates/discounts,[170] tying/bundling, and long-term contracts. The use of information about customers to attract or keep them with the aim of excluding competitors was also alleged to be contrary to Article 102 TFEU.

122. The markets affected by NCAs' enforcement actions were mainly those for wholesale access to mobile networks. There were also several cases on the provision of electronic communication services via fixed networks. The remainder of the envisaged decisions submitted by NCAs in this sector tackled alleged horizontal agreements or concerted practices concerning prices between telecoms operators. Some were "classic" price cartels[171] while others related to coordinated terms for roaming services or refusals to supply a particular distributor. The German NCA also examined a planned joint venture of three mobile network operators for the setup and operation of a mobile television broadcasting platform under Article 101 TFEU and addressed competitive concerns by adopting a commitment decision.[172]

123. Over the period covered, a number of NCAs engaged in advocacy efforts and carried out sector inquiries/market analyses in the telecoms sector.[173]

5 Basic industries, manufacturing industries, including motor vehicles, and consumer goods.

124. This category includes a broad range of sectors consisting primarily of raw materials, manufactured goods and intermediate products used in the manufacture of end products, including motor vehicles.

125. Some of these sectors are of particular importance for the budget for the average consumer as well as for the European economy as a whole. A particular feature of many of the markets in these sectors, such as those for raw materials, is their maturity. This can imply inter alia oligopolistic market structures which may be prone to collusive conduct. Moreover, margins on primary product sales, such as those for motor vehicles, can be very slim and firms may therefore seek to extract profits from aftermarkets. The Commission's antitrust enforcement activities in this wide range of sectors have mainly targeted cartels but have also addressed vertical competition issues in relation to the distribution and servicing of consumer goods and in particular motor vehicles.

126. Out of a total of 50 Commission decisions in these sectors, 49 related to proceedings under Article 101 TFEU and the large majority of those (42) concerned cartel cases. The strong focus on cartels is explained by the fact that certain traditional industries are often characterised by highly concentrated markets and homogeneous products, a combination that can make these industries particularly vulnerable to cartelisation. 33 of the 42 cartel cases followed an application for leniency. A large number of cartel investigations related to the chemicals industry and the metal processing industry, but the Commission’s cartel decisions over the past ten years in this area also concerned products such as elevators, car glass, bathroom fittings, gas insulated switchgear and power transformers.

127. As to the motor vehicle sector, the Commission addressed competition concerns both by pursuing cases and by providing for a block exemption regime. During the first half of the last ten years, there were five Article 101 TFEU decisions (outside cartels) in the motor vehicles sector. One of these concerned the strategy of Peugeot SA, designed to prevent its Dutch dealers to sell cars to interested consumers in other Member States. Such behaviour constitutes a severe restriction of competition. The other four cases concerned a failure on the part of car manufacturers to grant independent car repairers' access to crucial technical information needed to undertake repair and maintenance work.[174] As already mentioned in Chapter II above, the Commission also reviewed and significantly revised its sector-specific block exemption regime applicable to vertical agreements in the motor vehicle sector.[175]

128. The Commission also dealt with competition concerns in relation to some other diverse product markets: these included the supply of rough diamonds (De Beers, 2006)[176] and technology for aluminium smelting (Rio Tinto Alcan, 2012).[177] In the former case, the Commission addressed the concern, under Article 102 TFEU, that De Beers might have abused its dominant position under a long-term purchase relationship with Alrosa, and rendered binding under Article 9 De Beers' commitment to end that relationship. In the latter case, commitments addressed the concern under both Articles 101 TFEU and 102 TFEU that Rio Tinto Alcan's practice of contractually tying the purchase of handling equipment to the licensing of its leading smelting technology could foreclose competitors and hamper innovation.

129. NCAs have also been active in these sectors and have informed the Commission of a significant number of envisaged decisions: 92 in basic industries and manufacturing, 17 in motor vehicles and 42 in consumer goods.

130. In the basic industries and manufacturing sector, NCAs have mostly dealt with cartels, which, in the case of the Dutch NCA, included approximately 1400 construction companies.[178] The manufacturing of materials used in house and road construction accounted for the majority of envisaged decisions. A wide variety of other products were also covered, ranging from metals, plastics, paint and chemicals to wood-based products, machinery and elements for electrical power systems. The French NCA also fined a cartel between major distributors of commodity chemicals.[179] In terms of other horizontal agreements, a number of envisaged decisions dealt with "stand alone" exchanges of sensitive information which did not form part of a broader cartel agreement. Exclusionary practices or joint selling were also addressed. A small number of envisaged decisions covered vertical agreements, most of them dealing with exclusive or selective distribution. The NCAs also conducted a number of sector inquiries/market analyses, covering products such as cement, ready-mix concrete, aggregates, lime, asphalt and wall construction materials.[180]

131. Regarding consumer goods, the actions taken by the NCAs cover numerous products and a variety of competition issues under Articles 101 and 102 TFEU. NCAs mostly tackled alleged vertical agreements, of which the majority concerned resale price maintenance for a wide array of products ranging from electrical household appliances, women's clothing, cosmetics, foreign language books, cat and dog food to aquarium products. Most other envisaged decisions concerned cartel conduct, namely price fixing (including information exchanges on future prices). For certain types of products, such as cosmetics, detergents and flour, infringements were pursued in a number of Member States; in relation to a range of other products enforcement action took place in a single Member State, as was the case for, e.g. stationery, ophthalmic glasses and lenses, and radiators.

132. The NCAs were also active enforcers in the motor vehicles sector with respect to products such as cars, motorcycles and other types of vehicles such as firefighting vehicles, heavy cargo and tourism cars. As is the case for the Commission, the majority of the NCA's enforcement actions tackled vertical agreements in the motor vehicle after-markets, addressing in particular limiting maintenance during warranty periods to authorised repairers, spare parts and access for independent repairers to technical information and training. In addition, several cartels were fined concerning car electrodes and speciality vehicles (firefighting) where the main producers of firefighting vehicles had divided up the market in the context of public tenders by municipalities. An investigation into an alleged abuse by a manufacturer of tyres for heavy cargo and tourism vehicles was closed with commitments. In addition to these case investigations, a number of NCAs conducted sector inquiries/market analyses.[181]

6 Food/Retail/Agricultural products

133. EU consumers spend 15% of their budget on food.[182] The food, retail and agricultural products sectors are often subject to regulation. There are rules governing the production and/or trade of products like wine, cheese, milk and fisheries as well as the actual management of different products supply chains. Antitrust enforcement complements regulatory action and contributes to more competitive markets, which is particularly important for a sector where all consumers are affected by price levels. Antitrust enforcement has, in particular, stopped and sanctioned cartels which raised prices significantly (e.g. cartel cases involving millers or regarding pasta and bread). It has also stopped manufacturers from preventing their distributors from reducing their prices (e.g. soft drinks) and it has contributed to an increased choice for consumers by removing exclusivity obligations imposed by manufacturers on distributors (e.g. coffee). Antitrust enforcement benefitted all operators in the food-chain, in particular farmers by ensuring access to inputs (seeds) and by sanctioning buyers' cartels (e.g. in the pork market).

134. The Commission's antitrust activities in the food/retail and agricultural sector have focused mainly on pursuing cartels, including price fixing behaviour. That was for instance the case in the beer,[183] raw tobacco,[184] shrimps[185] and bananas[186] cases. Outside the cartel area, the most prominent case was Coca Cola (2005)[187] where the Commission had concerns that Coca Cola's behaviour would foreclose competitors, reduce choice for consumers and prevent downward pressure on prices. The Commission looked, under Article 102 TFEU, at the undertaking's exclusivity arrangements with retailers and ultimately adopted a commitment decision pursuant to Article 9. Like in the Coca Cola case, and outside the cartel area, many of the potential antitrust issues regarding the food and retail sectors are likely to arise from vertical agreements between market players.

135. The Commission also carried out important advocacy and policy initiatives. The most significant example is the Commission's action in co-operation with NCAs in the 2013 reform of the Common Agricultural Policy,[188] to safeguard the market orientation of the sector: as a result new competition rules address the atomisation and other challenges of the agricultural production in a way that ensures the competitiveness of the EU food supply chain. An ECN Report was also adopted on the activities of the Competition Authorities in the Food Sector and analysed the many antitrust and merger enforcement actions including sector inquiries/market analyses of the NCAs[189] and the Commission in the food supply chain in the EU ("ECN Food Report").[190] Furthermore, the Commission, in reaction to concerns that practices of large operators in the supply chain may reduce choice and innovation to the detriment of consumer welfare, launched a comprehensive study aimed at measuring the impact of concentration and market imbalances on the evolution of choice and innovation. [191]

136. NCAs investigated a large number and a variety of anti-competitive practices in this as presented in the above mentioned ECN Food Report.[192] Since 2004, they have investigated more than 180 cases covering a wide range of food markets, with particular emphasis on multi-product retail (21% of all cases), cereals and cereal-based products (18%), milk and dairy products (12%), followed by fruit and vegetables (10%), and meat, poultry and eggs (9%). While NCAs have scrutinised all levels of the supply chain, the largest number of cases concern the processing level (28%), followed by retail (25%) and manufacturing (16%).

137. Half of the cases identified in the report are cartel cases in the form of price fixing, market and customer sharing in particular in the markets for cereals and meat, poultry and eggs. Approximately 20% of the cases concerned vertical restraints (resale price maintenance or exclusivity obligations) mainly in the coffee, sugar and multi-products markets. Other cases concerned abuses in the form of exclusionary practices in markets such as dairy products and soft drinks.

7 Media

138. The media sector includes music, film, television broadcasting, books, written press (magazines and newspapers), and related advertising, as well as the collective management of copyrights and related rights.[193] It is characterised by technological convergence and innovation, which has led to the emergence of new forms of media delivery and consumption, as well as the further evolution of more traditional forms of delivery and consumption.

139. Antitrust enforcement plays an important role in creating and strengthening the digital internal market and rendering markets more competitive. In particular, removing obstacles to the development of cross-border trade (such as territorial restrictions) and ensuring that consumers can reap the benefits of new and innovative services has been the focus for the Commission's enforcement in this area.

140. Over the past ten years, the Commission has adopted six decisions in the media sector. It has mainly focused on addressing competition concerns relating to collecting societies and joint selling of broadcasting rights for sports events, but it has also taken action in newly developed markets such as the E-books sector.

141. Many enforcement actions in the field of media aimed to overcome the territorial fragmentation of the internal market. One area of focus has been the collective rights management, which was addressed in the Cannes Extension Agreement case.[194] In that case, the Commission accepted commitments that set an important precedent on the acceptable level of cooperation between collecting societies and the major music publishers on licensing conditions, in particular by requiring a degree of price competition (in the form of rebates) among the collecting societies. In the CISAC case[195] the Commission addressed, among other restrictions, territorial fragmentation deriving from exclusivity clauses and adopted a decision prohibiting 24 European collecting societies from restricting competition by limiting their ability to offer their services to authors and commercial users outside their domestic territory.[196]

142. The Commission carefully assessed and enforced competition rules as regards joint selling of broadcasting rights. This is illustrated by the Bundesliga (2005) and Premier League (2006) cases.[197] In these cases, the Commission had concerns that the agreements to jointly sell the media rights for sports events entailed restrictions of competition which could not be outweighed by the efficiencies stemming from the agreements. The Commission therefore accepted commitments which reduced the negative effects of the agreements so that the efficiency gains, on balance, could prevail.

143. The E-books case[198] is an example of