Report from the Commission - Report on Competition Policy 2007 {SEC(2008)2038}
Date: 2008-06-16
Institutions: European Commission
Subjects: competition policy, control of State aid, merger control, report

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.6.2008 
COM(2008) 368 final 

REPORT FROM THE COMMISSION 

Report on Competition Policy 2007 

{SEC(2008)2038} 

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1. 

2. 

In 2007, competition policy continued to improve the functioning of markets for the 
benefit  of  European  consumers  and  businesses.  This  entailed  inter  alia 
investigating  and  sanctioning  anti-competitive  behaviour  by  market  participants  as 
well  as  addressing  anti-competitive  market  structures  and  regulation  across  key 
sectors  of  the  economy.  Competition  policy  was  further  embedded  in  the 
Commission’s overarching economic reform agenda — the Lisbon strategy. 

The  first  section  of  this  report  provides  an  overview  of  how  the  instruments  of 
competition  policy,  namely  the  antitrust,  merger  and  State  aid  rules,  were  further 
developed  and  applied.  The  second  section  discusses  how  these  and  other 
instruments were deployed in selected sectors. The third section gives an overview 
of  cooperation  within  the  European  Competition  Network  (ECN)  and  with 
national courts. Section four deals with international activities. Finally, in section 
five,  a  brief  description  of  interinstitutional  cooperation  is  given.  Further 
information can be found in a detailed Commission Staff Working Document and on 
the website of the Competition Directorate-General1. 

1. 

INSTRUMENTS 

1.1. 

Antitrust — Articles 81 and 82 EC 

1.1.1. 

Shaping the rules and policy 

3. 

4. 

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3 

4 

Apart  from  sanctions  to  punish  and  deter  cartels, effective action against this most 
pernicious  form  of  anti-competitive  conduct  requires  incentives  for  participants  to 
report  cartels.  The  Commission’s  leniency  policy  offers  incentives  to  cartelists  to 
report  their  illegal  activities.  December  2006  saw  the  introduction  of  a  revised 
leniency  Notice  (the  2006  Notice)2.  This  is  the  third  leniency  Notice  following 
earlier  versions  in  1996  and  2002.  The  Commission  received  20  applications  for 
immunity3 and 11 applications for a reduction of fines under the 2006 Notice from 
the date of its introduction to the end of 2007. 

The  Commission  2005  Green  Paper  on  damages  actions  for  breach  of  the  EU 
antitrust rules received strong support in a European Parliament resolution calling 
on the Commission to prepare a White Paper with detailed proposals to ensure more 
effective  antitrust  damages  claims4.  When  preparing  the  White  Paper,  the 
Commission  had  broad  consultations  with  representatives  of  Member  State 
governments,  judges  from  national  courts,  representatives  from  industry,  consumer 
associations, the legal community and many other stakeholders. 

http://ec.europa.eu/comm/competition/index_en.html 
Commission Notice on immunity from fines and reduction of fines in cartel cases, OJ C 298, 8.12.2006, 
p. 17. 
Where several applications for immunity have been received for the same alleged infringement, the first 
application  is  regarded  as  an  immunity  application  and  the  subsequent  ones  as  applications  for  a 
reduction of fines unless the first application is rejected. 
European Parliament Resolution of 25 April 2007 on the Green Paper on damages actions for breach of 
the EC antitrust rules (2006/2207 (INI)), available at:  
http://www.europarl.europa.eu/oeil/file.jsp?id=5378362 

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1.1.2.  Applying the rules 

5. 

6. 

7. 

8. 

9. 

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The Commission continued to attach high priority to the detection, investigation and 
sanctioning of cartels, focusing on significant hard-core cartels, in particular those 
with European or worldwide scope. The Commission issued eight final Decisions5 in 
which it fined 416 undertakings a total of EUR 3 334 million (compared with seven 
final Decisions, 417 undertakings fined and a total of EUR 1 846 million in 2006). In 
Elevators and Escalators the Commission imposed the highest fine per cartel case to 
date  (EUR  992 million)  as  well  as  the  highest  fine  per  undertaking  for  a  cartel 
violation (EUR 477 million8). 

The  Commission  has  been  able  to  detect  a  number  of  cartels  on  its  own  initiative. 
The recent cases of Elevators and Escalators, Fasteners, Professional Videotape and 
Flat  Glass  demonstrate  that,  although  the  Commission's  leniency  policy  is  an 
effective  tool  in  detecting  cartels,  the  Commission  is  not  dependant  on  evidence 
provided  by  leniency  applicants  to  uncover  cartel  behaviour.  The  Commission 
continues to place considerable weight on such ex officio investigations which may 
result  from  market  monitoring,  sector  enquiries,  complaints  and  via  national 
competition authorities in the European Competition Network. 

The Commission followed up on the sector inquiry into financial services launched 
in  2005  through  prohibition  Decisions  under  Article  81  EC  in  Groupement  des 
Cartes  Bancaires,  Morgan  Stanley/Visa  and  MasterCard,  with  all  these  cases 
concerning payment card systems (see 2.2. below). 

The Commission continued to  sanction abuses of dominance, not least in  network 
industries which are key for European competitiveness. On 4 July, the Commission 
adopted a Decision against the Spanish incumbent telecoms operator Telefónica for a 
very  serious  abuse  of  its  dominant  position  in  the  Spanish  broadband  market.  The 
fine  imposed  amounted  to  EUR  151 875 000.  The  conduct  concerned  a  margin 
squeeze  by  Telefónica  between  the  wholesale  prices  it  charged  to  competitors  and 
the retail prices it charged to its own customers from 2001 to 2006. 

On 11 October the Commission adopted an Article 9 Decision concerning the long-
term gas supply contracts concluded by Distrigas in Belgium. Under this Decision, 
the Commission renders legally binding until 2011 a set of commitments offered by 
Distrigas  to  address  concerns  raised  by  the  Commission  in  the  course  of  an 
investigation  under  Article  82.  The  effect  of  these  commitments  is  to  ensure  that 
Distrigas does not tie an excessive proportion of customers for  more than one year 

Case COMP/38.899, Gas Insulated Switchgear, Commission Decision 24.1.2007; Case COMP/38.823, 
Elevators  and  Escalators,  Commission  Decision  21.2.2007;  Case  COMP/37.766,  Netherlands  Beer, 
Commission  decision  18.4.2007;  Case  COMP/39.168,  Hard  Haberdashery:Fasteners,  Commission 
Decision  19.9.2007;  Case  COMP/38.710,  Bitumen  Spain,  Commission  Decision  3.10.2007;  Case 
COMP/38.432, Professional Videotapes, Commission Decision 20.11.2007; Case COMP/39.165, Flat 
Glass,  Commission  Decision  28.11.2007;  Case  COMP/38.629,  Chloroprene  Rubber,  Commission 
Decision 5.12.2007. 
This figure does not include the companies that received immunity from fines for cooperating under the 
Leniency Notice. 
This figure includes two undertakings where Decisions have been readopted. 
Imposed on the ThyssenKrupp group. 

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ahead,  while  allowing  Distrigas  as  much  flexibility  as  possible  in  managing  its 
portfolio of contracts. 

1.2. 

State measures 

10. 

11. 

In June the Commission closed an infringement procedure under Article 226 EC 
against the Czech Republic which had limited the power of the Czech Competition 
Authority  (Czech  NCA)  to  apply  Articles  81  and  82  EC  to  anti-competitive 
behaviour in the electronic communications sector9. Following a reasoned opinion in 
March10, the contested provision of the Czech Competition Act was repealed and EU 
competition rules can now be fully applied by the Czech NCA. 

The acquisition of joint control of Endesa by Enel and Acciona was notified to the 
Commission on 31 May and cleared unconditionally on 5 July. However, when Enel 
and Acciona requested the approval of the Spanish Energy Regulator (CNE) for their 
acquisition,  the  CNE  approved  the  transaction  subject  to  several  obligations.  On 
5 December,  the  Commission  adopted  a  Decision  based  on  Article  21  of  the  EC 
Merger  Regulation11  declaring  that  the  CNE  decision,  as  partially  modified, 
breached the said provision. 

1.3.  Merger control 

1.3.1. 

Shaping the rules and policy 

12. 

13. 

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To  provide  better  guidance  on  jurisdictional  questions  in  merger  control,  the 
Commission on 10 July adopted the Commission Consolidated Jurisdictional Notice 
under  the  Merger  Regulation  (the  “Jurisdictional  Notice”  or  the  “Notice”)12.  The 
Jurisdictional  Notice  replaces  the  four  previous  Notices  from  199813  dealing  with 
jurisdictional issues from 1998 under the previous Merger Regulation 4064/89. With 
the  exception  of  referrals,  the  new  Notice  therefore  covers,  in  one  document,  all 
issues  of  jurisdiction  which  are  relevant  for  establishing  the  Commission’s 
competence under the Merger Regulation. 

On  28  November,  the  Commission  adopted  Guidelines  on  the  assessment  of  non-
horizontal  mergers  under  the  Merger  Regulation.  Non-horizontal  mergers  include 
vertical mergers, such as the acquisition of a supplier by a customer (for example, a 
car  manufacturer  acquiring  a  gearbox  supplier),  and  conglomerate  mergers,  which 
concern  companies  whose  activities  are  complementary  or  otherwise  related  (for 
instance, a company producing razors buying a company producing shaving foam). 
The  non-horizontal  Merger  Guidelines  complement  the  existing  Guidelines  on 

See Press Release IP/07/956, 28.6.2007. 
See Press Release IP/07/400, 23.3.2007. 
See IP/07/1858, 5.12.2007 and IP/08/164, 31.1.2008. 
Commission  Consolidated  Jurisdictional  Notice  under  Council  Regulation  (EC)  No  139/2004  on  the 
control  of  concentrations  between  undertakings.  Currently,  the  Jurisdictional  Notice  can  be  found  in 
English, 
under 
on 
http://ec.europa.eu/comm/competition/mergers/legislation/draft_jn.html 
These are (i) the Notice on the concept of concentration (OJ C 66, 2.3.1998, p. 5); (ii) the Notice on the 
concept  of  full-function  joint  ventures  (OJ  C  66,  2.3.1998,  p.  1);  (iii)  the  Notice  on  the  concept  of 
undertakings concerned (OJ C 66, 2.3.1998, p. 14); and (iv) the Notice on calculation of turnover (OJ 
C 66, 2.3.1998, p. 25). 

COMP’s 

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French 

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horizontal mergers, which deal with mergers of companies who compete on the same 
markets. 

14. 

To  clarify  its  policy  with  regard  to  remedies  in  merger  control,  the  Commission 
launched a public consultation on the draft Revised Remedies Notice. Remedies are 
modifications  to  a  merger  proposed  by  the  merging  parties  to  eliminate  potential 
competition  concerns  identified  by  the  Commission.  The  Revised  Remedies  Notice 
will update and replace the current Notice. 

1.3.2.  Applying the rules 

15. 

16. 

The number of merger cases notified to the Commission reached an all-time high of 
402, a rise of more than 12% compared to the 356 transactions notified in 2006. In 
the  last  quarter  of  the  year  the  number  of  notifications  fell  both  in  relation  to  the 
previous quarters and the last quarter of 2006. In total the Commission adopted 396 
final  Decisions  in  2007,  of  which  368  were  cleared  in  the  first  phase  without 
conditions. Of these unconditional first-phase clearances 238 (or 65%) were adopted 
under  the  simplified  procedure.  A  further  18  transactions  were  cleared  in  Phase  I 
subject to conditions. 

Ten Decisions were adopted after in depth Phase II investigations. Five of these were 
cleared  without  conditions,  while  in  four  cases  the  clearances  were  subject  to 
conditions. One transaction — a horizontal merger involving a proposed takeover 
by Ryanair of Aer Lingus — was prohibited (see 2.7. below). 

1.4. 

State aid control 

1.4.1. 

Shaping the rules and policy 

17. 

18. 

19. 

20. 

The Commission continued implementation of the State Aid Action Plan launched 
in 2005. The Commission adopted a new method for setting reference and discount 
rates14 more aligned with market principles as the specific situation of the company 
or project is taken into account. 

The  Commission  launched  a  consultation  on  a  draft  General  Block  Exemption 
Regulation  ("GBER")  in  the  field  of  State  aid15.  This  GBER  will  simplify  and 
consolidate  into  one  text  five  existing  block  exemptions  for  aid  to  SMEs,  research 
and  development  aid  in  favour  of  SMEs,  aid  for  employment,  training  aid  and 
regional aid. In addition, the scope of the existing block exemptions will be extended 
to cover certain categories of new aid. The GBER is envisaged to be adopted by the 
Commission in June 2008. 

On  13  June  the  Commission  decided  to  extend  its  2001  Cinema  Communication 
until 31 December 2009 at the latest. The Cinema Communication contains rules on 
State aid to cinematographic and other audiovisual works. 

In  2007,  the  Commission  also  launched  the  procedure  for  revision  of  the 
Commission  Notice  on  the  application  of  Articles  87  and  88  of  the  EC  Treaty  to 

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Not yet published in the OJ. 
OJ C 210, 8.9.2007, pp. 14–40. 

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State  aid  in  the  form  of  guarantees.  The  draft  Notice  i)  clarifies  the  conditions 
relating to the presence or absence of aid in the form of guarantees and ii) quantifies 
the relevant amount of aid on the basis of market references and risk analysis. The 
new Notice is expected to be adopted by the Commission by the end of May 2008. 

1.4.2.  Applying the rules 

21. 

22. 

23. 

24. 

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Following  the  exceptionally  high  level  of  State  aid  notifications  in  2006  (922),  the 
number of new cases notified by Member States stood at 777 in 200716. This figure 
however  remains  significantly  above  the  level  in  2004  and  2005.  Moreover,  the 
decrease  is  in  line  with  the  Commission’s  commitment  to  facilitate  the  granting  of 
aid through block exemptions and to focus policy on the most distortive types of aid. 
In  2007,  Member  States  were  able  to  introduce  more  than  1  100  measures  without 
prior  notification  to  the  Commission17.  This  compares  with  410  block-exempted 
measures in 2006. 

The Commission took 629 final State aid Decisions18 in 2007. In the vast majority of 
cases,  the  Commission  approved  the  measures  without  a  formal  investigation, 
concluding that the examined aid was compatible with the State aid rules (87% of all 
Decisions in 2007) or did not constitute State aid (5% of all Decisions). 

The Commission published two editions of the State Aid Scoreboards19 in 2007. The 
autumn 2007 update20 shows that over the past six years Member States have been 
moving towards the European Council objective of less and better targeted aid. In 
particular,  the  EU-10  Member  States  have  progressively  reoriented  their  State  aid 
towards  horizontal  objectives  of  common  interest  such  as  regional  development, 
R&D, SMEs and protecting the environment. 

During  2007,  the  Commission  approved  the  regional  aid  maps21  of  Bulgaria  and 
Romania,  as  well  as  for  Belgium,  Cyprus,  Denmark,  France,  Italy,  the  Netherlands 
and  Portugal.  As  a  result,  regional  aid  maps  covering  the  period  2007–2013  have 
now been approved for all Member States. The Commission authorised regional aid 
for a number of large investment projects22. 

Of the 777 notifications, 53% mainly concerned the manufacturing and service sectors, 33% agriculture, 
8% transport and 6% fisheries. 
In the area of agriculture alone, the number of block-exempted measures increased from 119 in 2006 to 
496 in 2007. Member States also submitted around 200 measures under the recently introduced block 
exemption for regional aid. 
Included  in  this  figure  are:  Decisions  on  the  absence  of  State  aid,  Decisions  not  to  raise  objections, 
positive Decisions, conditional Decisions and negative Decisions. 
online 
http://ec.europa.eu/comm/competition/state_aid/studies_reports/studies_reports.html 
Scoreboard contains electronic versions of all Scoreboards, as well as a set of key indicators and a wide 
array of statistical tables. 
COM(2007) 791 final, 13.12.2007, State Aid Scoreboard, autumn 2007 update. 
http://ec.europa.eu/comm/competition/state_aid/regional_aid/regional_aid.cfm 
These  included  the  establishment  of  two  chemical  production  plants  (Cases  N  898/2006,  Repsol 
Polimeros;  N  899/2006,  Artensa.);  three  separate  investment  projects  in  the  pulp  and  paper  sector  in 
Portugal  (Cases  N  900/2006,  CELBI;  N  838/2006,  Soporcel;  N  564/2006,  About  the  future);  the 
extension  of  an  electricity  generation  plant  in  Hungary  (Case  N  907/2006,  Mátrai  Erőmű.);  a 
production plant for solar energy modules in Germany (Case N 863/2006, Avancis); the expansion of a 
car  manufacturing  plant  in  Slovakia  (Case  N  857/2006,  Kia  Motors  Slovakia)  and  an  automotive 
investment  project  in  the  Czech  Republic  (Case  N  661/2006,  Hyundai  Motor  Manufacturing  Czech). 

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25. 

26. 

27. 

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29. 

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Notifications  of  aid  for  research,  development  and  innovation  pending  on  1 
January as well as all new notifications received in the reporting year were assessed 
on the basis of the new Framework23. The Commission approved 48 notified R&D 
and/or innovation schemes. In addition, it approved four ad hoc aid measures below 
the  threshold  triggering  a  detailed  assessment  under  Chapter  7  of  the  Framework. 
The Commission took eight Decisions with a detailed assessment of large amounts of 
aid  to  projects  under  Chapter  7.  It  authorised  a  number  of  projects  financed  by  the 
French  Industrial  Innovation  Agency24.  The  Commission  approved  19  notified 
schemes under the risk capital guidelines25. 

Although  training  aid  is  covered  by  a  block  exemption  Regulation26,  the 
Commission  is  required  to  assess  projects  exceeding  EUR  1 million.  In  the  GM 
Antwerp27 case, the Commission found part of the notified State aid incompatible as 
it would have served to finance training activities which the beneficiary would have 
carried  out  anyway,  even  without  aid.  In  Fiat28  and  Club  Med  Guadeloupe29  the 
Commission found the aid to be necessary and compatible. In the DHL Leipzig/Halle 
case30 the Commission initiated the investigation because it had doubts whether DHL 
would not anyway have to provide the training to its employees. 

On  10  October31,  the  Commission  opened  the  formal  investigation  procedure  with 
respect to a tax incentive for the acquisition by Spanish companies of significant 
participations in foreign companies. The tax measure allows Spanish companies to 
amortise  over  a  20-year  period  the  goodwill  deriving  from  the  acquisition  of 
significant  shareholdings  in  foreign  companies,  whereas  the  goodwill  arising  from 
domestic acquisitions does not benefit from a similar measure. 

Rescue  and  restructuring  (R&R)  aid  to  firms  in  difficulty  may  be  regarded  as 
legitimate only if strict conditions are fulfilled. During 2007 the Commission applied 
the amended rules, laid down in the 2004 R&R Guidelines. 

In a number of rescue aid cases the Commission again emphasised that such aid is no 
more than a temporary measure facilitating the preparation of a restructuring plan or 
the  liquidation  of  the  company.  Accordingly,  in  certain  cases,  the  Commission 
opened  the  formal  procedure  because  rescue  aid  had  not  been  repaid  within  the 

The Commission also authorised German aid to AMD for the conversion and extension of its existing 
micro-processor wafer plants in Dresden (Case N 810/2006, AMD Dresden). 
OJ C 323, 30.12.2006, p. 1. 
Two  of  the  projects  concerned  R&D  aid  (“NanoSmart”  and  “HOMES”)  totalling  EUR  119 million 
(Cases  N185/2007,  OJ  C  284,  27.11.2007,  p.  3,  and  N89/2007,  OJ  C  275,  16.11.2007,  p.  3).  Other 
projects  approved  included:  EUR  26.5 million  in  aid  for  the  NeoVal  R&D  programme  (Case  N 
674/2006, OJ C 120, 31.5.2007, p. 2); EUR 37.6 million in aid for the “Télévision Mobile Sans Limite” 
R&D project (Case N 854/2006, OJ C 182, 4.8.2007, p. 5); EUR 31 million aid for the OSIRIS R&D 
programme (Case N 349/2007, OJ C 304, 15.12.2007, p. 5). 
OJ C 194, 18.8.2006, pp. 2–22. 
Commission Regulation (EC) No 68/2001 on the application of Articles 87 and 88 of the EC Treaty to 
training aid (OJ L 10, 13.1.2001, p. 20). 
Case C 14/2006, Training aid to General Motors Antwerp (OJ L 243, 18.9.2007, p. 71). 
Case N 541/2006, Fiat Auto S.p.A. (OJ C 220, 20.9.2007, p. 2). 
Case N 206/2007, Training aid for Club Med Guadeloupe (OJ C 284, 27.11.2007, p. 5). 
Case C 18/2007, Training aid for DHL Leipzig (OJ C 213, 12.9.2007, p. 28). 
OJ C 311/2007, 21.12.2007, p. 21. 

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statutory six months deadline and no serious restructuring plan had been submitted32. 
The Commission approved a number of restructuring aid cases33. In other cases the 
Commission  found  the  aid  to  be  incompatible34  or  opened  a  formal  investigation 
because of doubts regarding compatibility35. 

30. 

The  Commission  made  significant  progress  in  achieving  more  effective  and 
immediate  execution  of  recovery  Decisions.  The  number  of  recovery  Decisions 
awaiting implementation was reduced from 60 at the end of 2006 to 47 at the end of 
2007.  All  of  23  recovery  cases  were  closed, whilst 9  new recovery Decisions  were 
adopted  in  2007.  Of  the  EUR  8.9 billion  of  illegal  and  incompatible  aid  to  be 
recovered under Decisions adopted since 2000, some EUR 8.2 billion (i.e. 91.2% of 
the total amount) had been effectively recovered by the end of 2007. In addition, a 
further EUR 2.4 billion in recovery interests had been recovered. The case law and 
policy in this area were also summarised in a Notice36. 

1.5. 

The role of competition policy in the wider policy framework 

31. 

On  11  December  the  Commission  reviewed  the  Lisbon  strategy37  and  made 
proposals  with  a  view  to  the  next  three-year  cycle  (2008–2010)38.  The  review 
proposes to further embed competition in the wider Lisbon strategy framework. 
A particular focus is placed on the need to enhance sectoral market monitoring, and 
improve regulation where necessary, notably focussed on key services and network 
industries39. These proposals are in line with the Single Market Review carried out 
by  the  Commission  during  2007.  The  importance  of  reforms  in  the  area  of 
competition is reflected by the large number — both in relative and absolute terms 

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35 

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37 

38 

39 

See  Ottana  (Case  C  11/2007,  Aiuto  alla  ristrutturazione  di  Ottana  Energia  Srl  (OJ  C  122,  2.6.2007, 
p. 22));  Ixfin  (Case  C  59/2007,  Aiuto  al  salvataggio  alla  Ixfin  SpA  (Decision  of  11.12.2007,  not  yet 
published))  and  New  Interline  (Case  C  13/2007,  Aiuto  al  salvataggio  della  New  Interline  SpA  (OJ  C 
120, 31.5.2007, p. 12)). 
See  e.g.  Javor  Pivka  (Case  C  19/2006,  Restructuring  aid  for  Javor  Pivka,  Commission  Decision  of 
10.7.2007  (not  yet  published))  and  Novoles  Straza  (Case  C  20/2006,  Restructuring  aid  to  Novoles 
Straza Commission Decision of 10.7.2007 (not yet published)) (both approved under the 1999 rescue & 
for  Techmatrans, 
restructuring  guidelines),  Techmatrans  (Case  C  6/2007,  Restructuring  aid 
Commission  Decision  of  28.11.2007  (not  yet  published))  and  Bison-Bial  (Case  C  54/2006, 
Restructuring aid for Bison-Bial, Commission Decision of 12.9.2007 (not yet published)). 
See  e.g.  Nuova  Mineraria  Silius  (Case  C  16/2006,  Restructuring  aid  to  Nuova  Mineraria  Silius  (OJ 
L 185, 17.7.2007, p. 18)) and Biria (Case C 38/2005, Biria Gruppe (OJ L 183, 13.7.2007, p. 27)). 
See  e.g.  Legler  (Case  C  39/2007,  Aiuto  di  stato  per  la  ristrutturazione  del  gruppo  Legler  (OJ  C  289, 
1.12.2007,  p.  22)),  FagorBrandt  (Case  C  44/2007,  Restructuring  aid  to  FagorBrandt  (OJ  C  275, 
16.11.2007, p. 18)) or Fluorite di Silus (Case C 60/2007, Aid to Fluorite di Silius S.p.A, Commission 
Decision of 11.12.2007 (not yet published)). 
Towards  an  effective  implementation  of  Commission  Decisions  ordering  Member  States  to  recovery 
unlawful and incompatible State aid (OJ C 272, 15.11.2007). 
The  Commission’s  Communication  on  the  ’Strategic  Objectives  2005–2009’  states  that  “[t]he  top 
priority  today  is  to  restore  sustainable  dynamic  growth  in  Europe  in  accordance  with  the  Lisbon 
strategy”. COM(2005) 12 final, p. 3. 
Communication from the Commission to the European Council: Strategic report on the renewed Lisbon 
strategy  for  growth  and  jobs:  launching  the  new  cycle  (2008–2010)  Keeping  up  the  pace  of  change 
PART I (COM(2007) 803 final). 
Proposal  for  a  Community  Lisbon  Programme  2008–2010  (COM(2007)  804  final).  See  in  particular 
Objective  5:  The  Community  will  strengthen  the  single  market,  increase  competition  in  services,  and 
take further steps to integrate the financial services market. 

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—  of  recommendations  proposed  for  endorsement  by  the  Council  under  Article  99 
EC40. 

32. 

For example, the review proposes that competition policy contribute to the Lisbon 
strategy  objectives  in  the  gas,  electricity  and  financial  services  sector  through  the 
follow-up  of  sector  inquiries  launched  in  200541.  Competition  policy  is  also 
considered to be a complementary instrument in connection with efforts to enhance 
efforts to ensure interoperability and standardisation in a timely manner. The review 
also  mentions  ‘competition  rules’  among  the  policies  where  the  EU  can  contribute 
specific  expertise  which  could  be  beneficial  to  its  key  partners.  This  is  strongly 
linked  to  the  need  to  ensure  fair  competition  and  a  level  playing  field 
internationally42. 

2. 

SECTOR DEVELOPMENTS 

2.1. 

Energy 

33. 

34. 

40 

41 

42 
43 

44 

The final report on the sector inquiry into the European gas and electricity markets 
which was adopted on 10 January43 concluded that many energy markets (i) remain 
too highly concentrated; (ii) are characterised by a high degree of vertical integration 
(in particular in the form of insufficient unbundling of network and supply activities) 
as  well  as  a  lack  of  (iii)  cross-border  integration  and  cross-border  competition  and 
(iv) transparency. 

Drawing  on  these  findings,  the  Commission  put  forward,  on  19  September,  a 
proposal for a third liberalisation package regarding the European electricity and 
gas  markets44.  It  focuses  in  particular  on  (i)  effective  unbundling  of  transmission 
networks;  (ii)  strengthening  the  powers  and  independence  of  regulators;  (iii) 
cooperation  between  regulators  and  (iv)  cooperation  among  transmission  system 
operators. 

See  the  Commission  Recommendation  of  11  December  for  a  Council  Recommendation  on  the  2008 
update  of  the  broad  guidelines  for  the  economic  policies  of  the  Member  States  and  the  Community 
(COM(2007) 803 final). 
See the previously mentioned Objective 5 as well as Objective 8 concerning energy and climate change. 
See also the annex listing the EC-level measures concerning these objectives. 
See section 3.4 of the Strategic Report mentioned above. 
Communication  from  the  Commission:  Inquiry  pursuant  to  Article  17  of  Regulation  (EC)  No  1/2003 
into  the  European  gas  and  electricity  sectors  (Final  Report),  COM(2006)  851  final,  and  DG 
Competition report on energy sector inquiry, SEC(2006) 1724. 
This  package  includes  the  following  proposals:  proposal  for  a  Directive  amending  Directive 
2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules 
for  the  internal  market  in  electricity,  COM(2007)  528;  proposal  for  a  Directive  amending  Directive 
2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules 
for  the  internal  market  in  natural  gas,  COM(2007)  529;  proposal  for  a  Regulation  establishing  an 
Agency  for  the  Cooperation  of  Energy  Regulators,  COM(2007)  530;  proposal  for  a  Regulation 
amending  Regulation  (EC)  No  1228/2003  (electricity),  COM(2007)  531;  proposal  for  a  Regulation 
amending Regulation (EC) No 1775/2005 (gas), COM(2007) 532. 

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35. 

In  the  antitrust  area  the  Commission  has  —  in  close  cooperation  with  National 
Competition  Authorities  (NCA)45  focused  on  foreclosure  and  collusion  (market 
sharing) cases in the electricity and gas sectors that address the main areas of market 
malfunctioning.  The  foreclosure  cases  cover  practices  along  the  value  chain, 
including  foreclosure  of  downstream  markets  by  long-term  contracts  with  energy 
consumers; abusive practices to foreclose competitors from accessing networks (e.g. 
hoarding  of  network  capacity  and  failure  to  invest);  foreclosure  of  electricity  retail 
markets  by  raising  rivals’  costs  through  the  balancing  system46;  foreclosure  of 
downstream markets through the control of gas import infrastructure and long-term 
gas  procurement  agreements.  Other  issues  investigated  include,  for  example, 
allegations  of  price  manipulations  on  electricity  markets  through  withdrawal  of 
capacity  by  generators.  In  Italy47,  Spain48  and  France,  the  Commission  has  found 
indications that regulated electricity tariffs could amount to State aid to large and 
medium-sized electricity consuming companies. 

2.2. 

Financial services 

36. 

37. 

38. 

39. 

45 

46 

47 

48 

49 
50 
51 

On 10 January the European Commission published the Final Report of its sector 
inquiry into European retail banking markets49 covering payment cards and (non-
card)  payment  systems  and  current  accounts  and  related  services.  The  findings 
confirmed  that  markets  remain  fragmented  along  national  lines,  limiting  consumer 
choice  and  leading  to  higher  costs  for  current  accounts,  loans  or  payments.  High 
degrees  of  variation  of  prices,  profit  margins  and  selling  patterns  between  Member 
States  and  high  degrees  of  homogeneity  within  Member  States  were  found  to  be 
indicative of persisting regulatory or behavioural barriers to competition. 

The European payment card industry channels flows of EUR 1 350 billion per year, 
generating an estimated EUR 25 billion in fees for banks. The payment card industry 
is highly concentrated, entailing high fees and profitability. The rules governing the 
networks (including the Visa/MasterCard duopoly and national card schemes run by 
the main domestic banks) raise competition problems 

On 3 October the Commission fined Visa International and Visa Europe (Visa) EUR 
10.2 million for refusing to admit Morgan Stanley as a member from March 2000 to 
September 200650. 

In  a  Decision  of  17  October  the  Commission  concluded  that  the  Groupement  des 
Cartes Bancaires (CB) infringed Article 81 of the Treaty51. The Commission found 
that  the  Groupement  had  adopted  price  measures  hindering  the  issuing  of  cards  in 

A  dedicated  subgroup  for  energy  has  been  set  up  as  part  of  the  cooperation  within  the  European 
Competition Network (ECN). During 2007 this subgroup addressed national experiences in relation to 
competition case remedies. 
The balancing system serves to ensure that injections and withdrawals on the network are identical, in 
order to keep the system in equilibrium. 
Decision of 20 November in State aid case C36/A/2006, not yet published in OJ, but available on the 
Internet site http://ec.europa.eu/comm/competition/state_aid/register/ 
Concerning France, see Decision of 13.6.2007 in State aid case C17/2007, OJ C 164 of 18.7.2007, p. 9 
and concerning Spain, see Decision of 24.1.2007 in State aid case C3/2007, OJ C 43, 27.2.2007, p. 9. 
IP/07/114, 31.1.2007 and MEMO/07/40, 31.1.2007. 
Case COMP/37.860. 
http://ec.europa.eu/comm/competition/antitrust/cases/decisions/38606/dec_en.pdf 

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France  at  competitive  rates  by  certain  member  banks,  thereby  keeping  the  price  of 
payment cards artificially high and thus favouring the major French banks. 

On  19  December  the  Commission  adopted  a  Decision  prohibiting  MasterCard’s 
multilateral interchange fees (MIFs) for cross-border card payments with MasterCard 
and  Maestro  consumer  credit  and  debit  cards  between  Member  States  of  the 
European Economic Area (intra-EEA MIFs)52. 

On  25  September  the  Commission  adopted  the  Final  Report  on  the  business 
insurance  sector  inquiry53,  which  was  released  together  with  a  comprehensive 
working document of the Commission’s services containing the full findings. In the 
State  aid  area  the  Commission  cleared  the  two  remaining  recapitalisation  cases  in 
the  German  Landesbank  sector  (WestLB  and  Nord/LB)  on  18  July  as  complying 
with  the  private  market  economy  investor  test54.  During  the  summer  the  US 
subprime  crisis  began  to  impact  seriously  on  several  European  banks,  requiring 
considerable  public  support  measures  to  keep  the  banks  afloat.  The  Commission 
launched  investigations  into  two  cases  concerning  the  German  banks  IKB  and 
Sachsen LB. For the UK bank Northern Rock a Decision was taken on 5 December 
declaring  rescue  aid  to  be  compatible  with  State  aid  rules55.  Subsequent  additional 
measures in support of Northern Rock are also under assessment. 

On 9 October the Ecofin Council adopted Conclusions suggesting a series of actions 
to  enhance  the  arrangements  for  financial  stability  which  inter  alia  invited  the 
Commission and Member States to work together towards clarifying when a banking 
crisis  could  be  considered  by  the  Commission  to  be  “a  serious  disturbance  of  the 
economy”  under  the  Treaty  and  State  aid  rules.  It  also  invited  the  Commission  to 
consider streamlining procedures focusing on how State aid enquiries under critical 
circumstances can be treated rapidly. 

As  far  as  fiscal  aid  is  concerned,  the  Commission  opened  the  formal  investigation 
procedure  on  7  February  against  the ‘group interest box’ (Groepsrentebox) notified 
by  the  Dutch  authorities56.  On  21  March  the  Commission  also  opened  proceedings 
against  a  similar  scheme  which  was  already  in  force  in  Hungary57.  Both  schemes 
reduce the tax burdens on companies in respect of the net balance of interest received 
from  and  paid  to  affiliated  companies.  The  Commission  assessed  and  authorised  a 
number  of  concentrations  in  the  financial  services  sector.  In  the  ABN  AMRO 
cases58, the Commission analysed the proposed acquisition of the Dutch bank ABN 
AMRO by a consortium formed by RBS, Fortis and Santander. 

IP/07/1959, 19.12.2007 and MEMO/07/590, 19.12.2007. 
IP/07/1390, 25.9.2007. 
OJ C 4, 9.1.2008, p. 1. This test assesses whether, in similar circumstances, a private investor operating 
in  normal  conditions  of  a  market  economy  would  have  entered  into  the  transaction  in  question  (e.g. 
providing loans or funds to the bank) and whether it would have done so on similar terms. 
IP/07/1859, 5.12.2007. 
IP/07/154, 7.2.2007. 
IP/07/375, 21.3.2007. 
Case COMP/M.4843, RBS/ABN AMRO assets, Commission Decision, 19.9.2007; Case COMP/M.4845, 
Santander/ABN AMRO assets, Commission Decision, 19.9.2007 and Case COMP/M.4844, Fortis/ABN 
AMRO assets, Commission Decision, 3.10.2007. 

40. 

41. 

42. 

43. 

52 
53 
54 

55 
56 
57 
58 

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2.3. 

Electronic communications 

44. 

45. 

46. 

47. 

48. 

59 

60 
61 

62 

The Regulatory Framework put in place in 2002 is helping to make communications 
markets  increasingly  competitive.  Against  this  background  the  Commission  in 
December  recommended59  that  the  number  of  markets  susceptible  to  ex  ante 
regulation be more than halved from 18 to 7. Ex ante regulation is now likely to be 
lifted  in  many  areas  and  a  greater  part  of  the  industry  will  be  subject  only  to  EU 
competition rules. 

In  general,  mobile  telephony  markets  tend  to  be  effectively  competitive  at  retail 
level.  However,  wholesale  markets  for  mobile  call  termination  and,  under  the 
previous  Recommendation  on  relevant  markets60,  for  mobile  access  and  call 
origination were recommended for ex ante regulation. 

Throughout  the  year  the  Commission  assessed  170  notifications  from  National 
Regulatory  Authorithies  and  adopted  66  comments  letters  and  49  no-comments 
letters  under  the  consultation  mechanism  laid  down  in  Article  7  of  the  Framework 
Directive61  (FD).  In  five  cases,  the  Commission  raised  serious  doubts  as  to  the 
compatibility  of  the  notified  measures  with  EU  law  and  opened  second  phase 
investigations  under  Article  7(4)  FD.  In  one  case  the  Commission  adopted  a  veto 
Decision. 

As  far  as  the  application  of  EU  competition  law  in  the  electronic  communications 
sector was concerned, the most significant Decision adopted by the Commission in 
2007 was the Decision of 4 July against Telefónica (see 1.1.2. above). 

The  review  of  the  Regulatory  Framework  during  2007  led  the  Commission  to 
propose a regulatory package (covering two Directives, a Regulation establishing a 
European  Electronic  Communications  Market  Authority  (EECMA)  and 
the 
Recommendation  on  relevant  markets)  in  November62.  With  the  exception  of  the 
new  Recommendation  on  relevant  markets,  which  entered  into  force  in  December, 

Commission  Recommendation  of  17.12.2007  on  relevant  product  and  service  markets  within  the 
electronic  communications  sector,  OJ  L  344,  28.12.2007,  p.  65.  The  Recommendation  on  relevant 
markets is an important part of the Regulatory Framework. It lists those markets where in the view of 
the  Commission  ex  ante  regulation  is  the  appropriate  tool  to  promote  competition,  investment  and 
consumer choice. From a competition policy perspective the main objective of the review has been to 
assess where ex ante regulation is still needed and where it can be lifted. 
Commission Recommendation C(2003) 497 of 11.2.2003, OJ L 114 of 8.5.2003, p. 45. 
Directive 2002/21/EC of 7.3.2002 of the European Parliament and of the Council, OJ L 108, 24.4.2002, 
p. 33. 
Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  amending  Directives 
2002/21/EC on a common regulatory framework for electronic communications networks and services, 
2002/19/EC on access to, and interconnection of, electronic communications networks and services, and 
2002/20/EC  on  the  authorisation  of  electronic  communications  networks  and  services  (COM(2007) 
697),  Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  amending  Directive 
2002/22/EC  on  universal  service  and  users’  rights  relating  to  electronic  communications  networks, 
Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the 
electronic  communications  sector  and  Regulation  (EC)  No  2006/2004  on  consumer  protection 
cooperation  (COM(2007)  698)  and  Proposal  for  a  regulation  of  the  European  Parliament  and  of  the 
Council  establishing  the  European  Electronic  Communications  Market  Authority  (COM(2007)  699); 
for 
Society: 
http://www.ec.europa.eu/information_society/policy/ecomm/library/proposals/index_en.htm 

Information 

overview, 

website 

DG 

see 

an 

of 

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the  legislative  parts  of  the  proposed  regulatory  package  will  only  enter  into  force 
after  their  adoption  by  the  Council  and  the  European  Parliament,  expected  during 
2010–2011. 

The  consistently  high  international  roaming  charges  led  the  Commission  to 
propose, on the basis of Article 95 EC, a Roaming Regulation63, which entered into 
force on 30 June and will be applicable for three years. As a result, in all Member 
States  mobile  operators  were  obliged  to  offer  to  all  their  customers  by  30  July  a 
Eurotariff, which applied automatically from 30 September unless a customer chose 
to opt out. The Eurotariff sets a retail price cap for calls made or received abroad64. 
The  Commission  is  required  to  report  to  Council  and  the  European  Parliament  in 
2008  on  the  functioning  of  the  Regulation  and  in  particular  whether  it  should  be 
extended in duration and/or scope to include other services such as roaming SMS or 
data. 

The Commission adopted several Decisions concerning public funding schemes for 
broadband  in  rural  or  remote  areas  with  no  or  only  limited  broadband  coverage65. 
The Commission also accepted, in well-defined circumstances, State intervention in 
favour of advanced broadband services in areas where the incumbent operators were 
only partly offering basic broadband services66. 

The  Commission  conducted  a  preliminary  investigation  into  the  “Wireless  Prague” 
project,  the  first  municipal  wireless  network  case  assessed  by  the  Commission 
under  the  State  aid  rules67.  Following  modifications  to  the  project  the  Commission 
concluded that no State aid was involved. 

In  the  area  of  merger  control  the  Commission  relied  on  a  dynamic  approach  in 
respect of fast-moving markets such as those considered in Syniverse/BSG68, where 
the  Commission  assessed  the  market  for  GSM  roaming  data  clearing  services.  The 
market  characteristics  (such  as  the  availability  of  the  technology  needed  by 
competitors  to  enter  the  market)  identified  during  an  in-depth  investigation  led  the 
Commission  to  a  straight  clearance  Decision  even  though  the  merger  entailed  a 
reduction of market players currently active in Europe. 

Regulation (EC) No 717/2007 of the European Parliament and of the Council of 27/6/2007on roaming 
on public mobile telephone networks (OJ L 171, 29.6.2007, p. 32). 
At EUR 0.49 excl. VAT for calls made and EUR 0.24 excl. VAT for calls received; these price caps 
will be further reduced in 2008 and 2009. 
Cases  N  475/2007,  National  Broadband  Scheme  Ireland,  Commission  Decision  of  25.9.2007;  N 
473/2007,  Broadband  connections  for  Alto  Adige,  Commission  Decision  of  11.10.2007;  N  570/2007, 
Broadband  in  rural  areas  of  Baden-Württemberg,  Commission  Decision  of  23.10.2007;  N  442/2007, 
Aid in favour of broadband in remote areas of Veneto, Commission Decision of 23.10.2007. 
Cases  N  746/2006,  North  Yorkshire  NYNET  Project  United  Kingdom,  Commission  Decision  of 
21.2.2007;  N  890/2006,  Aide  du  Sicoval  pour  un  réseau  de  très  haut  debit,  Commission  Decision  of 
10.7.2007. 
Case NN 24/2007, Prague Municipal Wireless Network, Commission Decision of 30.5.2007. 
Case COMP/M.4662, Syniverse/BSG, Commission Decision of 4.12.2007. 

49. 

50. 

51. 

52. 

63 

64 

65 

66 

67 
68 

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2.4. 

Information technology 

53. 

54. 

55. 

56. 

57. 

69 

70 
71

72 

73 
74 
75 

The  Commission  pursued  its  proceedings  against  Microsoft  to  ensure  compliance 
with  the  2004  Decision69  with  regard  to  pricing  and  licensing  terms  for  the 
interoperability  information  relating  to  the  first  abuse  concerning  refusal  to  supply. 
Article  5  of  the  2004  Decision  requires  that  these  terms  be  reasonable  and  non-
discriminatory.  In  2006  the  Commission  had  already  imposed  on  Microsoft  a 
definitive  penalty  payment  of  EUR  280.5 million  for  not  providing  complete  and 
accurate  interoperability  information70.  Consequently,  on  1  March  the  Commission 
issued  a  statement  of  objections  addressed  to  Microsoft  which  set  out  the 
Commission’s  preliminary  assessment  that  Microsoft  had  not  complied  with  its 
obligation  to  offer  the  complete  and  accurate  interoperability  information  on 
reasonable and non-discriminatory terms71. 

Following  the  judgment  by  the  Court  of  First  Instance  of  17  September  dismissing 
the  substantive  elements  of  Microsoft’s  application  for  annulment  of  the  2004 
Decision  on  22  October  Microsoft  announced  a  significant  reduction  in  its  licence 
fees. It also offered an updated version of its relevant licence agreements. As of that 
date  the  Commission  has  no  further  objections  concerning  Microsoft's  compliance 
with the 2004 Decision72. 

A statement of objections was sent to Intel on 26 July indicating the Commission’s 
preliminary  conclusion  that  Intel  had  engaged  in  three  types  of  abusive  practices 
aimed  at  excluding  AMD,  Intel’s  main  rival,  from  the  x86  Computer  Processing 
Units (CPU) market. 

The  Commission  sent  a  statement  of  objections  to  Rambus  on  30  July  outlining  its 
preliminary  view  that  Rambus  had  abused  a  dominant  position  by  claiming 
unreasonable  royalties  for  the  use  of  certain  patents  for  Dynamic  Random  Access 
Memory  chips  (DRAMS)73.  The  Commission’s  preliminary  view  is  that  Rambus 
engaged  in  intentional  deceptive  conduct  in  the  context  of  the  standard-setting 
process in the form of what is known as a patent ambush74. 

On 30 August the Commission opened proceedings75 against Qualcomm Inc., a US 
chipset manufacturer and holder of IP rights in the CDMA and WCDMA standards 
for mobile telephony. Complaints allege that Qualcomm’s licensing practices are not 

Commission Decision of 24 May 2004 relating to a proceeding pursuant to Article 82 of the EC Treaty 
and  Article  54  of  the  EEA  Agreement  against  Microsoft  Corporation,  Case  COMP/37.792,  Microsoft 
(OJ L 32, 6.2.2007, p. 23). 
http://ec.europa.eu/comm/competition/antitrust/cases/decisions/37792/art24_2_decision.pdf 

http://ec.europa.eu/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=MEMO/07/90|0|RAPI

D&lg=EN 
http://ec.europa.eu/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/07/1567|0|RAPID&lg=EN 
On 27 February 2008 the Commission imposed a penalty payment of EUR 899 million on Microsoft for 
non-compliance with the 2004 Decision prior to 22 October 2007. This Decision adopted under Article 
24(2) of Regulation 1/2003, finds that, prior to 22 October 2007, Microsoft had charged unreasonable 
prices for access to interface documentation for work group servers (see IP/08/318, 27.2.2008). 
DRAMS are the computer’s “working” memory. 
See http://ec.europa.eu/comm/competition/antitrust/cases/index/by_nr_77.html#i38_636 
See http://ec.europa.eu/comm/competition/antitrust/cases/decisions/39247/proceedings.pdf 

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Fair, Reasonable and Non-Discriminatory (“FRAND”) and therefore may breach EC 
competition rules (Article 82 EC). 

58. 

In  the  field  of  State  aid  the  Commission  adopted  a  final  Decision  approving  the 
French tax credit in favour of the creation of video games76. This measure had been 
notified  under  Article  87(3)(d)  EC77.  It  enables  video  games  producers  that  are 
subject  to  taxation  in  France  to  deduct  20%  of  the  eligible  costs  of  production  of 
certain  video  games.  This  is  the  first  time  that  the  cultural  exception  laid  down  in 
Article 87(3) (d) has been applied to video games. 

2.5.  Media 

59. 

60. 

61. 

76 

77 

78 
79 
80 

81 

82 

83 

84 
85 

86 

The  Commission  continued  to  monitor  the  switchover  from  analogue  to  digital 
broadcasting.  In  July  it  issued  a  reasoned  opinion78  to  Italy  following  a  complaint 
by the Italian consumer association Altroconsumo79. The Commission considers that 
the  Italian  legislation  is  contrary  to  the  EU  Regulatory  Framework  for  Electronic 
Communications80. 

In the field of State aid the Commission continued to apply the approach adopted in 
earlier  Decisions  concerning  State  funding  to  support  the  digital  switchover.  The 
Commission  approved  three  support  schemes  (two  Italian81  and  one  Spanish82)  for 
the  acquisition  of  digital  decoders  with  open  API83  and  for  covering  the  costs  of 
adapting existing collective analogue terrestrial antennas. The Commission adopted 
two negative Decisions regarding subsidy schemes in Italy84 and in the German Land 
of North Rhine-Westphalia85. 

While  the  Commission  recognises,  in  line  with  the  Amsterdam  Protocol  on  the 
system of public service broadcasting, that it is the prerogative of Member States to 
organise  and  fund  public  service  broadcasting,  it  considers  that  the  financing  of 
public  service  broadcasters  by  means  of  budgetary  contributions  or  licence  fee 
financing  constitutes  State  aid86.  State  aid  to  public  service  broadcasters  may, 

Case C 47/2006, Crédit d’impôt mis en place par la France pour la création de jeux vidéo, Commission 
Decision of 11.12.2007. 
This  provision  states  that  “aid  to  promote  culture  and  heritage  conservation  where  such  aid  does  not 
affect trading conditions and competition in the Community to an extent that is contrary to the common 
interest” may be declared compatible with the common market. 
The second stage of the infringement procedure under Article 226 of the EC. 
IP/07/1114, 18.7.2007. 
Notably, Commission Directive 2002/77/EC of 16 September 2002 on competition in the markets for 
electronic communications networks and services (OJ L 249, 17.9.2002, p. 21). 
Cases  N  270/2006  Subsidy  to  digital  decoders  with  open  API  (OJ  C  80,  13.4.2007)  and  N  107/2007 
Subsidies to idTV — Italy (OJ C 246, 20.10.2007). 
Case N 103/2007, Support for the acquisition of digital decoders and for the adaptation of antennas in 
Soria, Commission decision of 25.9.2007 (OJ C 262, 1.11.2007). 
Open API is a term used to describe advanced program interfaces (API) that facilitate interoperability, 
i.e. portability of interactive content between delivery mechanisms with full functionality of the content 
intact. 
Case C 52/2005 (ex NN 88/2005), Subsidy to digital decoders in Italy (OJ L 147 8.6.2007). 
Case C 34/2006 (ex N 29/2005), Introduction of digital terrestrial television (DVB-T) in North Rhine-
Westphalia, Commission decision of 23.10.2007, not yet published. 
Under  the  conditions  set  out  in  the  Altmark  judgment:  Case  C-280/00  (Reference  for  a  preliminary 
ruling from the Bundesverwaltungsgericht): Altmark Trans GmbH, Regierungspräsidium Magdeburg v 
Nahverkehrsgesellschaft Altmark GmbH [2003] ECR I-7747. 

EN 

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62. 

63. 

64. 

65. 

however,  be  declared  compatible  where  the  requirements  of  Article  86(2)  are 
fulfilled (as further specified in the Broadcasting Communication87). 

The Commission adopted two Decisions concerning the financing of public service 
broadcasters  pursuant  to  Article  86(2)  EC  in  combination  with  the  Broadcasting 
Communication.  The  first  concerned  the  approval  of  the  financing  by  the  Spanish 
Government  of  workforce  reduction  measures  taken  by  the  Spanish  public  service 
broadcaster  RTVE88.  Second,  the  Commission  closed  its  investigation  into  the 
general financing regime in favour of public service broadcasters in Germany (ARD 
and ZDF)89. 

In  April  the  Commission  sent  a  statement  of  objections  to  major  record  companies 
and  Apple  in  relation  to  agreements  between  each  record  company  and  Apple 
deemed  to  restrict  online  music  sales,  in  contravention  to  Article  81.  During  the 
proceedings  Apple  announced  that  it  would  equalise  its  prices  for  downloads  of 
songs from its iTunes online store in Europe before mid-2008, which puts an end to 
the  different  treatment  of  UK  consumers.  On  this  basis,  and  following  further 
clarifications, the Commission closed the case. 

The Commission continues to give high priority to ensuring that premium content 
is  made  available  under  open  and  transparent  conditions  allowing  a  maximum 
number  of  operators  to  bid  for  the  rights.  In  2007,  the  Commission  closed  its 
investigation under Article 81 EC concerning the joint buying of TV rights of sports 
events by the European Broadcasting Union (EBU) and its members. 

As  regards  merger  control  in  the  media  sector  the  SFR/Tele2  merger  may  be 
highlighted90.  This  concentration  was  approved  subject  to  conditions  to  ensure 
effective competition in the French pay-TV market. As regards the music industry, in 
the case of Sony/BMG-II91, the European Commission granted regulatory approval to 
a joint venture combining the recorded music businesses of Sony and Bertelsmann, 
after the Court of First instance had annulled the previous Commission Decision of 
2004.  The  Commission  also  cleared  subject  to  remedies  the  concentration  between 
Universal and BMG in music publishing. 

2.6. 

Automotive industry 

66. 

The  Commission  continued  to  monitor  developments  in  the  sector  on  an  ongoing 
basis inter alia through its car price reports92. The motor vehicle block exemption 

87 

88 

89 

90 
91 
92 

of 

full 

Communication  from  the  Commission  on  the  application  of  State  aid  rules  to  public  service 
broadcasting (OJ C 320, 15.11.2001, p. 5). 
The 
the 
text 
http://ec.europa.eu/comm/competition/state_aid/register/ii/doc/NN-8-2007-WLWL-07.03.2007.pdf 
The full text of the Decision is published in English:   
http://ec.europa.eu/comm/competition/state_aid/register/ii/doc/E-3-2005-WLWL-en-24.04.2007.pdf 
Case COMP/M.4504, SFR/Tele2, Commission Decision, 18.7.2007. 
Case COMP/M.3333, Sony/BMG-II, Commission Decision, 3.10.2007. 
Latest car price report published on 27 July 2007: 
http://ec.europa.eu/comm/competition/sectors/motor_vehicles/prices/2007_05_full.pdf 

published 

Decision 

English: 

in 

is 

EN 

16 

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67. 

68. 

69. 

Regulation93  lays  down  a  regime  specific  to  the  automotive  sector  aimed  at 
strengthening intra-brand competition. 

In order to increase competition in the aftermarket, the Commission on 13 September 
adopted  four  commitment  Decisions94  under  Article  9(1)  of  Regulation  (EC) 
No 1/2003 binding until May 2010 four car manufacturers (DaimlerChrysler, Toyota, 
General  Motors  and  Fiat)  to  provide  technical  information  about  car  repairs  to  all 
independent  garages  in  the  EU.  Thereafter  the  vehicle  emissions  Regulation95  will 
place an obligation upon vehicle manufacturers to provide independent repairers with 
standardised access to all technical repair information. 

After  2005  and  2006,  2007  was  another  year  in  which  merger  activity  within  the 
automotive  industry  to  a  large  extent  concerned  the  automotive  supplier  segment. 
One major merger involved the two German companies Continental AG and Siemens 
VDO Automotive AG. It was cleared by the Commission on 29 November96. 

A  number  of  State  aids  were  addressed  in  2007  under  certain  general  State  aid 
frameworks, such as the rules on regional and restructuring aid97. The Commission 
also  examined  the  terms  of  privatisation  of  State-owned  car  manufacturers.  In  the 
case of Automobile Craoiva, a Romanian car plant (formerly Daewoo Craoiva), the 
Commission  opened  the  formal  investigation  procedure  under  Article  88(2)  EC  as 
the conditions attached to the privatisation appeared liable to confer an advantage on 
the undertaking undergoing privatisation98. 

2.7. 

Transport 

70. 

71. 

93 

94 

95 

96 
97 
98 
99 

100 

Competition policy in the transport sector aims to ensure the efficient functioning of 
markets which have been recently or which are in the process of liberalisation. 

In  the  area  of  road  transport  international  markets  are  largely  liberalised  for  both 
passenger  and  freight.  National  road  haulage  is  also  liberalised  through  a  Council 
Regulation on cabotage99 while national passenger markets are still largely protected. 
In applying State aid rules to this segment the Commission maintained its policy of 
approving aid in order to favour the uptake of cleaner technology, in particular on old 
vehicles100. With regard to the application of public procurement and State aid rules 
to public service contracts  and public service concessions, a revised Regulation for 

Commission Regulation (EC) No 1400/2002 of 31 July 2002 on the application of Article 81(3) of the 
Treaty  to  categories  of  vertical  agreements  and  concerted  practices  in  the  motor  vehicle  sector  (OJ 
L 203/30, 1.8.2002). 
See e.g. Commission Decision of 13.9.2007 relating to a proceeding pursuant to Article 81 of the EC 
Treaty (Case COMP/39.140, DaimlerChrysler) (OJ L 317, 5.12.2007, p. 76). 
Regulation (EC) No 715/2007 of the European Parliament and of the Council of 20 June 2007 on type 
approval  of  motor  vehicles  with  respect  to  emissions  from  light  passenger  and  commercial  vehicles 
(Euro 5 and Euro 6) and on access to vehicle repair and maintenance information (OJ L 171, 29.6.2007, 
p. 1). 
Case COMP/M.4878, Continental/Siemens VDO, Commission Decision, 29.11.2007. 
See 1.4.2. above. 
Case C 46/2007, Privatisation of Automobile Craoiva, Romania (OJ C 248, 23.10.2007, p. 25). 
Council  Regulation  (EEC)  No  3118/93  of  25  October  1993  laying  down  the  conditions  under  which 
non-resident  carriers  may  operate  national  road  haulage  services  within  a  Member  State,  OJ  L  279, 
12.11.1993, pp. 1–16. 
Commission Decision N 649/06, OJ C 139, 23.6.2007, p. 13. 

EN 

17 

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public services in the field of land transport, was adopted and will enter into force in 
December 2009101. 

The  opening  of  rail  freight  transport  market  was  completed.  However,  one  of 
several  remaining  structural  problems  concerns  unbundling/independence  of 
essential  functions  for  non-discriminatory  access  to  the  network  and  a  lack  of 
administrative capacity and independence of rail regulatory bodies102. 

As  regards  passenger  transport  by  rail,  the  Council  and  the  Parliament  finally 
adopted  on  23  October  the  third  railway  package,  ending  a  long  legislative 
process103.  The  third  railway  legislative  package  will  open  international  passenger 
transport including cabotage. 

The  Commission  also  prepared  draft  guidelines  on  State  aid  to  railway 
undertakings104  to  increase  legal  certainty  and  transparency  in  connection  with 
ongoing market opening. 

Maritime transport accounts for about 50% of the external trade in goods in terms 
of weight and about 20% of trade between Member States. In 2007 the Commission 
promoted tight convergence of aid schemes in maritime transport to achieve as far as 
possible  a  level  playing  field  within  Europe,  including  towage  and  dredging 
activities105. On 13 September 2007, the Commission adopted draft Guidelines on the 
application of Article 81 of the EC Treaty to maritime transport services, for public 
consultation106. 

In the area of air transport, on 19 October the Commission invited interested parties 
to  comment  upon  the  commitments  proposed  by  eight  members  of  the  SkyTeam 
airline alliance, namely Aeromexico, Alitalia, CSA Czech Airlines, Delta Air Lines, 
KLM,  Korean  Air,  Northwest  Airlines  and  Air  France107.  These  commitments  are 
designed  to  meet  concerns  under  Article  81  EC  raised  by  the  Commission  in  its 
statement of objections of 15 June 2006108. 

Regulation (EC) No 1370/2007 of the European Parliament and of the Council of 23 October 2007 on 
public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 
1191/69 and 1107/70, OJ L 315, 3.12.2007, p. 1. 
See the Commission Report on the implementation of the 1st railway package (COM(2006) 189 final of 
3 May 2006). See the Commission Recommendation of 11 December for a Council Recommendation 
on  the  2008  update  of  the  broad  guidelines  for  the  economic  policies  of  the  Member  States  and  the 
Community  (COM(2007)  803  final).  See  in  particular  the  Recommendation  in  respect  of  France  and 
Germany. 
Directive  2007/58/EC  of  the  European  Parliament  and  of  the  Council  of  23  October  2007  amending 
Council  Directive  91/440/EEC  on  the  development  of  the  Community’s  railways,  and  Directive 
2001/14/EC on the allocation of railway infrastructure capacity and the levying of charges for the use of 
railway  infrastructure,  OJ  L  315,  3.12.2007,  p. 44;  Directive  2007/59/EC  of  the  European  Parliament 
and of the Council of 23 October 2007 on the certification of train drivers operating locomotives and 
trains  on  the  railway  system  in  the  Community,  OJ  L  315,  3.12.2007,  p.  51;  Regulation  (EC)  No 
1371/2007 of the European Parliament and of the Council of 23 October 2007 on rail passengers’ rights 
and obligations, OJ L 315, 3.12.2007, p. 14. 
http://ec.europa.eu/dgs/energy_transport/state_aid/consultation_ms_en.htm 
N 93/06, OJ C 300, 12.12.2007, p. 22. 
OJ C 215, 14.9.2007, p. 3; see also Press release IP/07/1325, 13.9.2007. 
IP 07/1558, 19.10.2007. 
MEMO/06/243, 19.6.2006. 

72. 

73. 

74. 

75. 

101 

102 

103 

104 
105 
106 
107 
108 

EN 

18 

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76. 

77. 

78. 

On 27 June the Commission adopted a Decision to prohibit the proposed takeover 
by Ryanair of Aer Lingus. The acquisition would have combined the two leading 
airlines operating from Ireland which competed vigorously against each other. Both 
Ryanair and Aer Lingus were by far the largest airlines offering short-haul flights to 
and  from  Ireland.  Their  position  was  particularly  strong  on  routes  to  and  from 
Dublin, where the merged entity would have accounted for around 80% of all intra-
European traffic. 

During 2007 the Commission completed its investigation into government assistance 
to a carrier in difficulty (Cyprus Airways109), concluding  that  the restructuring plan 
submitted  by  the  Cypriot  authorities  was  compatible  with  the  common  market.  In 
relation  to  the  long-running  case  of  Olympic  Airways/Airlines  the  Commission 
opened  a  further  investigative  procedure  into  alleged  State  aid  granted  to  this 
company since 2005110. 

On  30  April  the  European  Union  and  the  United  States  of  America  signed  a  treaty 
establishing  an  open  aviation  area  between  the  EU  and  US111.  This  agreement, 
which  enters  into  force  on  30  March  2008,  allows  for  the  consolidation  of  the  EU 
aviation sector by recognising all European airlines as “Community air carriers” and 
allowing any such Community air carrier to fly between any point in the EU and any 
point  in  the  US,  without  any  restriction  on  pricing  or  capacity.  It  also  includes 
provisions  for  strengthening  cooperation  between  the  Commission  and  the  US 
Department of Transportation (DoT) in the competition field. 

2.8. 

Postal services 

79. 

80. 

81. 

109 
110 
111 
112 

113 

The  Commission  actively  negotiated  its  proposal  according  to  the  co-decision 
procedure (Article 251 EC)112. Following the first reading by Parliament, the Council 
reached a political agreement during the Telecommunications and Energy Council in 
Luxembourg  on  1  October.  On  the  basis  of  this  agreement,  the  Common  Position 
was  formally  adopted  by  the  Council  on  8  November.  However,  the  Common 
Position sets 2011 and for certain Member States 2013 as the starting date for market 
opening. 

In  the  State  aid  area  the  Commission  in  particular  examined  compensations  for 
public  service  obligations  granted  to  postal  operators  to  ensure  that  these 
compensations  do  not  exceed  the  actual  costs  of  discharging  the  public  service 
obligations and do not cross-subsidise commercial activities. 

Where  a  compensation  for  a  service  of  general  economic  interest  (SGEI)  does  not 
fulfil  the  conditions  set  out  in  the  Altmark113  case  law  and  therefore  cannot  escape 
qualification  asState  aid,  it  can  however  be  declared  compatible  with  the  Treaty 

C 10/06, not yet reported. 
C 61/07, not yet reported. 
OJ L 134, 25.5.2007, p. 4. 
On  18  October  2006,  the  Commission  put  forward  a  proposal  to  open  up  EU  postal  markets  fully  to 
competition by 2009, in line with the indicative target date set out in the current Postal Directive. 
Case C-280/00, Altmark Trans GmbH [2003] ECR I-7747. 

EN 

19 

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under Article 86(2)114. The conditions under which a compensation for SGEI can be 
declared  compatible  were  clarified  by  the  2005  Community  Framework115.  The 
Framework  requires,  in  particular,  that  the  compensation  does  not  exceed  the  costs 
incurred in discharging the public service obligations. 

Among  the  State  aid  decisions  two  authorisations  in  favour  of  the  UK  Post  Office 
(on  7  March116  and  29  November117)  may  be  mentioned.  The  Commission  also 
decided to open a formal investigation against Germany to assess whether Deutsche 
Post AG was overcompensated for carrying out its universal service obligations118. 

The  Commission  paid  particular  attention  to  State  aid  in  the  form  of  unlimited 
guarantees.  On  25  April,  the  Commission  formally  took  note  of  the  agreement  by 
Poland to end the unlimited State guarantee enjoyed by the Polish Post Office119. On 
29  November  the  Commission  decided  to  launch  an  in-depth  investigation  to 
examine  whether  the  French  La  Poste,  as  a  public  law  entity,  enjoys  an  unlimited 
State  guarantee120.  In  another  case  concerning  La  Poste  the  Commission  gave 
conditional authorisation for aid to finance pensions121. 

THE EUROPEAN COMPETITION NETWORK  AND NATIONAL COURTS — OVERVIEW 
OF COOPERATION 

2007 was the third full year of implementation of the enforcement system set up by 
Regulation  1/2003.  It  saw  a  further  strengthening  of  cooperation  between  the 
members of the European Competition Network (ECN), i.e. the EU Member States’ 
National  Competition  Authorities  (NCAs)  and  the  Commission.  The  actual 
intensity, scope and potential of cooperation within the ECN go beyond the legal 
obligations set out in Regulation 1/2003. 

Under  Article  86(2),  undertakings  entrusted  with  a  SGEI  can  avoid  application  of  the  rules  on 
competition if the application of these rules obstructs the performance, in law or in fact, of the particular 
tasks assigned to them. 
Community  Framework  for  State  aid  in  the  form  of  public  service  compensation  (OJ  C  297, 
29.11.2005, p. 4) 
Case N 822/2006, Debt payment funding to Post Office Limited (OJ C 80, 13.4.2007, p. 5). 
Case  N  388/2007,  Post  Office  Ltd:  Transformation.  The  Decision  is  available  on  DG  Competition’s 
website http://ec.europa.eu/comm/competition/state_aid/register/ii/ not yet published in the OJ. 
Case  C  36/2007,  Complaint against  the German  State  for  unlawful State  aid  to  Deutsche  Post (OJ C 
245,  19.10.2007  p.  21).  This  aid  was  in  addition  to  the  aid  already  found  to  be  incompatible  in  the 
Commission Decision of 19 June 2002 on measures implemented by Germany for Deutsche Post AG 
(OJ L 247, 14.9.2002, p. 27). 
Case E12/2005, Unlimited State guarantee in favour of Poczta Polska (OJ C 284, 27.11.2007). 
Case  C  56/2007  (ex  E15/2005),  Garantie  illimitée  de  l’Etat  en  faveur  de  La  Poste.  The  Decision  is 
available  on  DG  Competition’s  website  http://ec.europa.eu/comm/competition/state_aid/register/ii/  not 
yet published in the OJ. 
Case  C  43/2006,  Projet  de  réforme  du  financement  des  retraites  des  fonctionnaires  de  La  Poste 
française. 
website 
(http://ec.europa.eu/comm/competition/state_aid/register/ii) not yet published in the OJ. 

Competition’s 

available 

Decision 

The 

DG 

on 

is 

82. 

83. 

3. 

84. 

114 

115 

116 
117 

118 

119 
120 

121 

EN 

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85. 

86. 

87. 

88. 

89. 

90. 

91. 

92. 

122 

123 

124 

125 

Key  policy  areas  addressed  within  the  ECN  included  the  ability  of  NCAs,  in  their 
application  of  Articles  81  and  82  EC,  to  disapply  anti-competitive  State  measures 
(following the CIF ruling122 by the European Court of Justice). 

2007  saw  the  continuation  of  the  convergence  process  observed  in  the  context  of 
Regulation 1/2003. Over and above legal obligations arising from implementation of 
the Regulation, there is a trend towards greater approximation of national procedural 
laws and policies. 

A  prime  example  of  this  trend  towards  further  convergence  is  the  ECN  Model 
Leniency  Programme123.  The  Programme,  which  was  developed  within  the  ECN 
working  group  on  leniency  during  2006,  has  already  achieved  very  encouraging 
results in the first year following its endorsement. 

Another  example  is  that  a  large  number  of  NCAs  now  have  the  power  to  adopt 
commitment  decisions  in  line  with  Article  9  of  Regulation  1/2003.  As  a 
consequence,  a  significant  increase  in  such  decisions  could  be  observed  in  2007 
among the decisions communicated to the Commission on the basis of Article 11(4) 
of Regulation 1/2003 (29 commitment decisions in 2007 as compared to 7 in 2006). 

The  Commission  was  informed  under  Article  11(3)  of  Regulation  1/2003  of 
around 140 new case investigations launched by NCAs124. Clusters of cases could 
be  observed  inter  alia  in  the  energy,  food  and  media  sectors.  The  Commission 
services reviewed or advised on a very significant number of cases originating from 
NCAs,  following  up  on  information  provided under Article 11(4) or upon informal 
request. To date, the Commission has not made use of the possibility of relieving an 
NCA of its competence in a given case by initiating proceedings under Article 11(6). 

By virtue of Article 15(1) of Regulation 1/2003 which allows national judges to ask 
the  Commission  for  information  in  its  possession  or  for  an  opinion  on  questions 
concerning the application of the EU competition rules, the Commission issued three 
Opinions to national judges: two in reply to requests from Swedish courts and one 
to a Spanish court. 

Article 15(2) of Regulation 1/2003 requires the EU Member States to forward to the 
Commission  a  copy  of  any  written  judgment  issued  by  national  courts  deciding  on 
the application of Articles 81 or 82 EC. The Commission received copies of some 50 
judgments  handed  down  in  2007,  which  were  posted  on  DG  Competition’s 
website125. 

Article  15(3)  of  Regulation  1/2003  provides  that  where  the  coherent  application  of 
Articles 81 or 82 EC so requires, the Commission, acting on its own initiative, may 
submit  written  observations  to  courts  of  the  Member  States,  and  may  also  make 

Case  C-198/01,  Consorzio Industrie  Fiammiferi  (CIF)  and  Autorità Garante della  Concorrenza  e del 
Mercato [2003] ECR I-8055. 
The  ECN  Model  Programme  is  available  at  http://ec.europa.eu/comm/competition/ecn/index_en.html 
together with a list of frequently asked questions (MEMO/06/356). 
Approximately 45% concerned application of Article 81 EC, 31.5% concerned application of Article 82 
EC and 23.5% concerned application of both Articles 81 and 82 EC. 
http://ec.europa.eu/comm/competition/elojade/antitrust/nationalcourts/ 

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21 

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93. 

4. 

94. 

95. 

96. 

97. 

98. 

oral  observations  with  the  permission  of  the  court  in  question.  The  Commission 
decided to intervene as amicus curiae pursuant to Article 15(3) of Regulation 1/2003 
in  a  case  in  the  Netherlands  concerning  the  tax  deductibility  of  Commission 
competition fines. 

Continuous  training  and  education  of  national  judges  in  EU  competition  law  is 
very  important  in  order  to  ensure  both  effective  and  coherent  application  of  those 
rules. Since 2002, the Commission has co-financed 35 training projects, which have 
provided for the training of approximately 3 500 judges by the end of 2007. A new 
legal base was adopted on 25 September126. On the basis of the corresponding Work 
Programme 2007, a call for proposals for training national judges in EC competition 
law was launched at the end of 2007127. 

INTERNATIONAL ACTIVITIES 

In  the  context  of  Enlargement,  candidate  countries  must  fulfil  a  number  of 
requirements  in  the  competition  field  as  a  condition  for  acceding  to  the  European 
Union, including the adoption of national legislation compatible with the EU acquis. 
They must also put in place the necessary administrative capacity and demonstrate a 
credible  enforcement  record.  DG  Competition  provides  technical  assistance  and 
support to help the candidate countries fulfil these requirements, and it continuously 
monitors the extent to which the candidate countries are prepared for accession. 

During 2007 cooperation was particularly close with Croatia and Turkey. These two 
candidate countries must fulfil “opening benchmarks” before accession negotiations 
on  the  competition  chapter  can  start.  DG  Competition  assisted  the  Western  Balkan 
countries in further aligning their competition rules with EU law. 

The  Commission  cooperates  with  numerous  competition  authorities  on  a 
bilateral  basis,  in  particular  with  the  authorities  of  the  European  Union’s  major 
trading  partners.  The  European  Union  has  entered  into  dedicated  cooperation 
agreements in competition matters with the United States, Canada and Japan. 

In the course of the year, DG Competition and the Korean Fair Trade Commission 
(KFTC)  met  on  several  occasions  to  negotiate  a  bilateral  cooperation  agreement  in 
the competition field. 

Moreover,  DG  Competition  played  an  active  role  in  the  ongoing  negotiations  on 
Free  Trade  Agreements  with  India  and  South  Korea,  and  on  the  trade  part  of  the 
Association Agreements with the Andean Community with a view to ensuring that 
anti-competitive  practices  (including  State  aid)  do  not  erode  the  trade  and  other 
economic benefits sought through those agreements. 

99. 

DG  Competition  continued  to  play  a  leading  role  in  the  International  Competition 
Network (ICN). 

126 

127 

Decision  of  the  European  Parliament  and  the  Council  No.  1149/2007/EC  of  25  September  2007, 
establishing for the period 2007-2013 the specific programme “Civil Justice” (OJ L 257 of 3.10.2007, 
p. 16). 
The budget foreseen for these action grants in 2007 is EUR 800 000. 

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22 

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5. 

INTERINSTITUTIONAL COOPERATION 

100. 

101. 

102. 

103. 

104. 

The Commission continued its cooperation with the other Community institutions in 
accordance  with  the  respective  agreement  or  protocols  entered  into  by  the  relevant 
institutions128. 

As is the case each year, the European Parliament issued an own-initiative report 
on the Commission’s annual Report on Competition Policy of the previous year, after 
an exchange of views was held on the issues raised in the Report. 

The Commission also participated in discussions held in the European Parliament on 
Commission  policy  initiatives,  such  as  on  State  aid  reform  (in  particular  on  the 
environmental  guidelines  and  on  the  proposal  for  a  General  Block  Exemption 
Regulation) and the financial services sector inquiry. The Commissioner and/or the 
Director-General responsible for Competition hold regular exchanges of views with 
the responsible Parliamentary Committees to discuss competition policy matters. 

The Commission also closely cooperates with the Council, by informing the Council 
of  important  policy  initiatives  in  the  competition  field,  such  as  on  the  State  aid 
reform  and  the  energy  and  financial  services  sector  inquiries;  by  participating  in 
Council working groups dealing with competition policy matters, and by maintaining 
close links with the respective Presidencies. 

The Commission further informs the European Economic and Social Committee and 
the Committee of the Regions on major policy initiatives and participates in debates 
that may be held at the respective Committee, such as for instance for the adoption of 
the  yearly  report  by  the  European  Economic  and  Social  Committee  on  the 
Commission’s annual Report on Competition Policy. 

128 

Framework  Agreement  of  26  May  2005  on  relations  between  the  European  Parliament  and  the 
Commission; Protocol of Cooperation between the European Commission and the European Economic 
and  Social  Committee  of  7  November  2005;  Protocol  on  the  Cooperation  Arrangements  between  the 
European Commission and the Committee of the Regions of 17 November 2005. 

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