Commission staff working document - Accompanying the Report from the Commission on Competition Policy 2009 COM(2010)282 final
Date: 2010-06-03
Institutions: European Commission
Subjects: competition law, competition policy, control of State aid, economic recession, merger control, report, restriction on competition

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EUROPEAN COMMISSION 

Brussels, 3.6.2010 
SEC(2010)666 final 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying the  

REPORT FROM THE COMMISSION 

on Competition Policy 2009 

COM(2010)282 final 

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TABLE OF CONTENTS 

I – Instruments............................................................................................................................ 8 

A – State aid control................................................................................................................... 8 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

1.5. 

1.6. 

1.7. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

Shaping and applying the rules .................................................................................... 8 

State aid control – the Simplification Package .......................................................... 14 

Recovery policy ......................................................................................................... 15 

State aid enforcement by national courts ................................................................... 16 

Monitoring of State aid measures .............................................................................. 17 

Horizontal State aid.................................................................................................... 18 

Coal ............................................................................................................................ 19 

State aid in the agricultural sector.............................................................................. 19 

Selected Court cases................................................................................................... 21 

Notion of aid .............................................................................................................. 21 

Compatibility assessment........................................................................................... 23 

Procedural issues........................................................................................................ 24 

Recovery of aid .......................................................................................................... 25 

B – Antitrust – Articles 101, 102 and 106 TFEU..................................................................... 25 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

Shaping and applying the rules .................................................................................. 25 

Enforcement rules ...................................................................................................... 25 

Private enforcement of the EU antitrust rules ............................................................ 27 

Cartels ........................................................................................................................ 29 

Other agreements and concerted practices................................................................. 31 

1.4.1.  The review of the Block Exemption Regulation on Vertical agreements.................. 31 

1.4.2.  The review of the Block Exemption Regulations on Horizontal agreements............ 32 

1.4.3.  The review of the Motor Vehicle Block Exemption Regulation ............................... 33 

1.4.4.  The review of the Insurance Block Exemption Regulation ....................................... 34 

1.4.5.  The Review of the Consortia Block Exemption Regulation...................................... 35 

1.5. 

1.6. 

Abuse of dominant positions (Article 102 TFEU)..................................................... 37 

State measures (Public undertakings/Undertakings with exclusive and special rights)
.................................................................................................................................... 38 

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2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

2.6. 

Selected Court cases................................................................................................... 39 

Case C-8/08 T-Mobile Netherlands & Others v. Raad van bestuur van der 
Nederlandse Mededingingsautoriteit (NMa).............................................................. 39 

Case C-429/07, Inspecteur van de Belastingdienst v. X BV...................................... 40 

T-301/04, Clearstream Banking AG and Clearstream International SA v. 
Commission................................................................................................................ 41 

Case C-202/07 P, France Télécom SA v. Commission ............................................. 42 

Case C-125/07 P e.a., Bank Austria v Commission................................................... 43 

Case C-97/08P, Akzo Nobel et al. v. Commission .................................................... 44 

C – Merger control ................................................................................................................... 45 

1 

Shaping and applying the rules .................................................................................. 45 

1.1. 

The Merger Report..................................................................................................... 46 

2. 

Selected Court cases................................................................................................... 47 

2.1. 

Case C-440/07 P, Commission v. Schneider Electric SA.......................................... 47 

II – Sector Developments......................................................................................................... 47 

A – Financial services .............................................................................................................. 47 

1. 

2. 

2.1. 

2.2. 

2.3. 

Overview of sector ..................................................................................................... 47 

Policy developments .................................................................................................. 48 

Financial services – State aid ..................................................................................... 48 

Financial services – Merger control........................................................................... 54 

Financial services – Antitrust..................................................................................... 54 

2.3.1.  Single Euro Payments Area ....................................................................................... 55 

2.3.2 

Payment cards ............................................................................................................ 56 

2.3.3 

Financial market data distribution.............................................................................. 56 

2.3.4.  Securities Trading, Clearing and Settlement (C&S) .................................................. 57 

2.3.5.  OTC Derivatives ........................................................................................................ 57 

2.4. 

Insurance sector.......................................................................................................... 58 

B – Energy and Environment ................................................................................................... 58 

1. 

2. 

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

Policy developments .................................................................................................. 58 

2.1. 

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

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2.1.1.  Decisions .................................................................................................................... 60 

2.1.2.  Other procedural steps................................................................................................ 61 

2.2. 

2.3. 

Merger control............................................................................................................ 62 

State aid enforcement................................................................................................. 64 

C – Electronic communications ............................................................................................... 68 

1. 

2. 

2.1. 

2.2. 

Overview of sector ..................................................................................................... 68 

Policy developments .................................................................................................. 69 

Application of the Regulatory Framework and other policy developments .............. 69 

State aid...................................................................................................................... 71 

D – Information technology ..................................................................................................... 73 

1. 

2. 

3. 

Overview of sector ..................................................................................................... 73 

Policy developments .................................................................................................. 74 

Main Cases ................................................................................................................. 75 

E – Media ................................................................................................................................. 77 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

2.6. 

Overview of sector ..................................................................................................... 77 

Policy developments .................................................................................................. 78 

Roundtable on opportunities and barriers to on-line distribution of music ............... 78 

Digital broadcasting ................................................................................................... 78 

Sports.......................................................................................................................... 79 

Public service broadcasting........................................................................................ 79 

State aid for films ....................................................................................................... 80 

Newspapers ................................................................................................................ 81 

F – Pharmaceutical industry & Health ..................................................................................... 81 

Pharmaceutical Industry........................................................................................................... 81 

1. 

2. 

Overview of sector ..................................................................................................... 81 

Policy developments .................................................................................................. 82 

2.1. 

Pharmaceutical Sector Inquiry ................................................................................... 82 

2.1.1.  Competition between originator and generic companies – The issues ...................... 83 

2.1.2.  Competition between originator companies – The issues.......................................... 85 

2.1.3.  Policy recommendations and the way forward .......................................................... 86 

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2.2. 

2.3. 

Developments on Parallel Trade ................................................................................ 87 

Merger Cases in the Pharmaceutical Sector............................................................... 88 

Health Care Services ................................................................................................................ 88 

1. 

2. 

Overview of sector ..................................................................................................... 88 

Policy developments .................................................................................................. 89 

G– Transport ............................................................................................................................ 91 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

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

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

Road Transport........................................................................................................... 92 

Rail Transport and Combined Transport.................................................................... 94 

Inland Navigation....................................................................................................... 95 

Maritime Transport .................................................................................................... 95 

2.4.1.  Policy developments .................................................................................................. 95 

2.4.2.  State aid cases ............................................................................................................ 96 

2.5. 

Aviation...................................................................................................................... 98 

2.5.1.  Policy developments .................................................................................................. 98 

2.5.2.  State aid cases .......................................................................................................... 100 

2.6. 

2.7. 

Ship Classification ................................................................................................... 101 

International aviation policy – EU-US cooperation................................................. 102 

H – Postal services ................................................................................................................. 103 

1. 

2. 

Overview of sector ................................................................................................... 103 

Policy developments ................................................................................................ 103 

2.1. 

State aid.................................................................................................................... 104 

2.1.1.  Deutsche Post ........................................................................................................... 104 

2.1.2.  Belgian Post ............................................................................................................. 105 

2.1.3.  Royal Mail................................................................................................................ 105 

2.1.4.  Unlimited guarantee to the French La Poste ............................................................ 105 

2.2. 

2.3. 

Infringement procedures .......................................................................................... 106 

Merger control.......................................................................................................... 106 

I – Automotive industry ......................................................................................................... 106 

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1. 

2. 

2.1. 

2.2. 

Overview of sector ................................................................................................... 106 

Policy developments ................................................................................................ 107 

Antitrust and Advocacy............................................................................................ 107 

State aid to the car sector ......................................................................................... 108 

J – Food industry .................................................................................................................... 111 

1. 

2. 

Overview of sector ................................................................................................... 111 

Policy developments ................................................................................................ 111 

III – Consumer activities ........................................................................................................ 112 

1. 

Key actions............................................................................................................... 112 

IV – The European Competition Network and cooperation with National Courts – Overview 
of cooperation......................................................................................................................... 114 

A – General overview ............................................................................................................ 114 

1. 

1.1. 

1.2. 

Cooperation on policy issues ................................................................................... 114 

Convergence of ECN leniency programmes............................................................ 115 

Cooperation in individual cases ............................................................................... 116 

1.2.1.  Case allocation ......................................................................................................... 116 

1.2.2.  Coherent application of the rules ............................................................................. 117 

2. 

Application of EU Competition rules by National Courts in the EU: Report on the 
implementation of Article 15 of Regulation 1/2003 ................................................ 117 

2.1. 

Assistance in the form of information or in the form of an opinion ........................ 117 

2.1.1.  The opinion requested by a Belgian court................................................................ 117 

2.1.2 

The opinion requested by a Lithuanian court........................................................... 118 

2.1.3.  The opinions requested by Spanish courts ............................................................... 118 

2.2. 

2.3. 

Amicus curiae interventions under Article 15(3) of Regulation 1/2003 .................. 119 

Financing the training of national judges in EU competition law ........................... 120 

V – International activities ..................................................................................................... 120 

A – Multilateral cooperation .................................................................................................. 121 

1. 

2. 

3. 

International Competition Network ......................................................................... 121 

OECD....................................................................................................................... 121 

UNCTAD ................................................................................................................. 122 

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B – Bilateral cooperation........................................................................................................ 122 

1. 

2. 

Agreements with the USA, Canada, Japan and South Korea .................................. 122 

Cooperation with other countries and regions ......................................................... 123 

C – Enlargement..................................................................................................................... 124 

VI – Interinstitutional cooperation ......................................................................................... 125 

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I – Instruments 

The  Lisbon  Treaty  entered  into  force  on  1  December  2009.  Since  then,  the 
numbering of the articles has changed. For antitrust, Articles 81, 82 and 86 EC have 
respectively  become  Articles  101,  102  and  106  TFEU.  The  provisions  are  in 
substance  identical.  However,  throughout  this  document,  references  to  the  old 
numbering  have  been  maintained  when  they  relate  to  proceedings  taken  before  1 
December 2009. Similarly, old references to EC Treaty articles in the field of State 
aid (Articles 87 to 89 EC) have been maintained when the procedural steps referred 
to occurred before the entering into force of the Lisbon Treaty. 

Also, since 1 December 2009, the Court of First Instance (CFI) is named the General 
Court. However, the term CFI has been maintained in the present Communication for 
those judgments taken before that date. 

A – STATE AID CONTROL 

SHAPING AND APPLYING THE RULES 

Since  the  onset  of  the  financial  crisis,  the  Commission  has  adopted  four  major 
guidance documents specifically for State aid to financial institutions. The Banking 
and Recapitalisation communications1 adopted in 2008 allowed to preserve financial 
stability and to prevent a credit crunch whilst keeping distortions of competition to a 
minimum. The Recapitalisation  Communication in particular proved to be essential 
for providing systemic banks with a sufficient capital base in line with State aid rules 
so  that  they  could  continue  to  fulfil  the  role  as  a  lender  to  the  real  economy.  The 
level of remuneration for State capital, in combination with step-up mechanisms in 
schemes  and  individual  measures,  ensures  that  this  capital  is  paid  back  as  early  as 
economic circumstances permit.  

Between October 2008 and 31 December 2009, the Commission approved guarantee 
schemes  for  12  Member  States2.  Seven  Member  States  implemented  pure 
recapitalisation  schemes3,  whilst  seven  Member  States  designed  mixed/holistic 
schemes with both instruments4.Spain, Slovenia, the United Kingdom, Hungary and 
Germany also implemented other forms of support schemes. 

Communication from the Commission - The application of State aid rules to measures taken in relation 
to financial institutions in the context of the current global financial crisis. (OJ C 270, 25.10.2008, p. 8); 
Commission  Communication  -  Recapitalisation  of  financial  institutions  in  the  current  financial  crisis: 
limitation of the aid to the minimum necessary and safeguards against undue distortions of competition. 
(OJ C 10, 15.1.2009, p. 2). 
Cyprus, Denmark, Finland, Ireland, Italy, Latvia, the Netherlands, Poland, Portugal, Slovenia, Spain and Sweden. 
Denmark, Finland, France, Italy Poland, Portugal and Sweden. 
Germany, United Kingdom, Greece, Austria , Poland, Hungary and Slovakia. 

1. 

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3. 

4. 

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In  terms  of  aid  to  individual  entities,  in  2009  the  Commission  approved 
recapitalisation and other support measures to 29 entities5. 

The  2008  communications  were  complemented  in  2009  by  the  Communication  on 
the  Treatment  of  Impaired  Assets  in  the  Community  banking  sector  ("Impaired 
Assets  Communication")6 and by the Communication on the return to viability and 
the assessment of restructuring measures in the financial sector in the current crisis 
under the State aid rules (Restructuring Communication")7. 

The Impaired Assets Communication responded to a growing consensus on the need 
to  tackle  the  root  causes  of  the  crisis  in  the  form  of  toxic  assets  on  banks'  balance 
sheets.  Thus,  on  25  February  2009,  the  Commission  set  out  in  this  communication 
how  it  would  assess  under  State  aid  rules  asset  relief  measures  for  financial 
institutions.  The  communication  is  based  on  the  principles  of  transparency  and 
disclosure,  adequate  burden-sharing  between  the  State  and  the  beneficiary,  and 
prudent valuation of assets based on their real economic value. Given the complexity 
surrounding the appropriate valuation of the assets, the Commission decided to call 
upon  technical  experts  to  undertake  the  valuation  in  an  independent  manner.  Such 
experts were chosen under a framework contract following a tender procedure. 

The  Restructuring  Communication,  issued  on  14  August  2009  and  dealing  with 
banks which are under obligation to restructure,  reflects  the Commission's  thinking 
for  a  future  beyond  the  current  crisis.  It  contains  rules  for  those  beneficiaries  that 
were  not  only  in  need  of  short-term  rescue  aid,  but  required  aid  to  implement 
structural  changes  to  their  business  models.  The  Communication  retains  the  main 
principles of the Community Guidelines on rescue and restructuring aid to companies 
in  financial  difficulties,  but  has  been  adapted  to  the  extraordinary  economic 
circumstances of the financial crisis. The main conditions that need to be complied 
with  are  the  following:  First,  banks  that  are  obliged  to  restructure  need  to 
demonstrate  their  capacity  to  return  to  long-term  viability  without  State  support. 
Second, they have to contribute to the restructuring costs (burden-sharing) and they 
thirdly have to adopt measures to limit competition distortions.  

The above principles contribute to addressing the issue of moral hazard. In order not 
to reward the risky behaviour that occurred in the past, the communications require 
appropriate  remuneration  of  the  aid,  and  impose  temporary  restrictions  on  coupon 
and  dividend  payments  to  bond-  and  shareholders.  Tailor-made,  case-specific 
measures  to  limit  the  distortions  of  competitions  resulting  from  the  aid,  which  are 
predominately determined by the relative/absolute size of the aid and the position of 
the  beneficiary  on  the  relevant  markets,  are  also  necessary  for  the  aid  to  be 
compatible with the Treaty.  

ING,  KBC,  Parex  Banka,  Anglo  Irish  Bank,  Bank  of  Ireland,  Allied  Irish  Bank,  Fortis,  Dexia,  Nord  LB,  IKB, 
Kaupthing  Bank  Finland,  Ethias,  SdB,  Banco  Privado  Portugues,  Hypo  Real  Estate,  WestLB,  Fionia,  HSH 
Nordbank,  Hypo  Tirol,  LBBW,  Kaupthing  Luxemburg,  Caisse  d'Epargne/Banque  Populaire,  Mortgage  Bank  of 
Latvia, Northern Rock, Commerzbank, Lloyds Banking Group, BAWAG, Hypo Group Alpe Adria and RBS. 
Communication from the Commission on the Treatment of Impaired Assets in the Community Banking 
sector (OJ C 72, 26.3.2009, p. 1). 
Communication  from  the  Commission  "The  return  to  viability  and  the  assessment  of  restructuring 
measures  in  the  financial  sector  in  the  current  crisis  under  the  State  aid  rules"  (OJ  C 195, 19.8.2009, 
p. 9). 

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11. 

12. 

13. 

Between  October  2008  and  31  December  2009,  the  Commission  had  adopted  73 
decisions  in  relation  to  33  schemes  and  68  decisions  on  individual  measures  to  38 
banks. These 141 decisions encompass 21 Member States. Because of the urgency, 
some of those decisions were taken overnight, to avoid a domino effect and the major 
collapse of the EU's financial system. 

To further limit negative spill-over effects of the financial crisis to the real economy, 
the Commission also amended the Temporary Framework8 to provide Member States 
with  additional  possibilities  to  tackle  the  effects  of  the  credit  squeeze  on  the  real 
economy.  The  amended  Framework9  takes  into  account  different  levels  of 
collateralisation  (in  particular  for  low  rating  categories)  when  calculating  the 
permissible  guarantee  premiums.  Furthermore,  rules  were  clarified  for  guarantees 
with underlying loans exceeding a maturity of 2 years. In October, the Commission 
adopted  another  amendment  to  the  Framework,  in  order  to  allow  for  a  separate 
compatible  limited  amount  of  aid  of  EUR  15.000  for  farmers10.  A  technical 
modification  of  the  Framework  was  introduced  in  December  to  further  facilitate 
access to finance especially in Member States with low labour costs by allowing to 
determine the maximum amount of an investment loan covered by a guarantee either 
on  the  basis  of  the  total  annual  wage  bill  of  the  beneficiary  or  on  the  basis  of  the 
EU27 average labour costs11. 

By  31  December  2009,  the  Commission  had  approved  79  measures  in  25  Member 
States  aimed  at  stabilising  companies  and  jobs  in  the  real  economy12.  Out  of  these 
measures, 18 related to guarantees, 11 to short-term export credit measures, nine to 
reduced interest rate  loans, six to  risk capital measures and five to reduced interest 
rate loans for green products. A large number of the measures approved (30) related 
to the granting of up to EUR 500 000 per undertaking. 

According to the Temporary Framework, Member States had to provide a report to 
the  Commission  by  31  October,  to  give  feedback  on  the  implementation  of  the 
Framework  and  on  its  effectiveness  in  the  reactivation  of  the  bank  lending  and  in 
supporting  companies13.  To  this  end,  the  Commission  prepared  a  questionnaire 
which  was  also  published  on  DG  Competition's  webpage,  so  as  to  also  obtain 
comments from interested parties. 

14. 

The  Commission  prolonged  the  validity  of  the  current  Community  Guidelines  on 
State  Aid  for  Rescuing  and  Restructuring  Firms  in  Difficulty,  which  would  have 

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Communication from the Commission – Temporary Community framework for State aid measures to 
support access to finance in the current financial and economic crisis (OJ C 16, 21.1.2009, p. 1). 
Communication from the Commission - Temporary framework for State aid measures to support access 
to finance in the current financial and economic crisis (consolidated version) (OJ C 83, 7.4.2009, p. 1). 
Communication from the Commission amending the Temporary Community Framework for State aid 
measures  to  support  access  to  finance  in  the  current  financial  and  economic  crisis  (OJ  C  261, 
31.10.2009, p. 2). 
Communication from the Commission amending the Temporary Community Framework for State aid 
measures  to  support  access  to  finance  in  the  current  financial  and  economic  crisis  (OJ  C  303, 
15.12.2009, p. 6). 
Excluding temporary measures in the agricultural sector. 
See point 6 of the Communication from the Commission – Temporary Community framework for State 
aid  measures  to  support  access  to  finance  in  the  current  financial  and  economic  crisis  (OJ  C  16, 
21.1.2009, p. 1). 

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15. 

16. 

17. 

expired in October14. Since their adoption in 2004, the Commission has applied these 
guidelines  in  numerous  cases.  Experience  has  shown  that  the  guidelines  provide  a 
sound basis for the control of this type of State aid. The economic crisis has created a 
difficult and unstable economic situation. To ensure continuity and legal certainty in 
the  treatment  of  State  aid  to  enterprises  in  financial  difficulty,  the  Commission 
extended the validity of the existing guidelines until October 2012. 

In 2009 the Commission authorized, under the Community Guidelines on State aid 
for rescuing and restructuring firms in difficulty15, State aid granted and planned by 
Poland to Gdansk Shipyard for its restructuring16. The Commission found compatible 
the aid already received by the yard since 2004 in the amount of EUR 94 million as 
well  as  the  planned  aid  of  EUR  35  million.  In  addition,  the  Commission  approved 
production  guarantees  for  the  yard  for  a  total  amount  of  EUR  122  million.  By  this 
decision the Commission finalized an in-depth investigation launched in June 200517 
following a notification of aid to the yard dating from October 2004, soon after the 
Polish accession to the EU.  

In its decision the Commission concluded that the restructuring plan by new private 
owner  of  the  yard,  ISD  Polska,  proposed  a  sustainable  business  strategy  based  on 
diversification  of  the  yard's  activities  and  synergies  with  other  companies  in  the 
Group of ISD Polska. This restructuring plan allayed the Commission's doubts on the 
ability of the yard to restore long-term viability. The plan also envisaged a significant 
private  contribution  to  finance  the  cost  of  the  restructuring,  ensuring  that  the  State 
support would be limited to the necessary minimum. 

Finally, the Commission took into account that without the prolonged State support, 
the yard would long have become insolvent and bankrupt. By keeping the inefficient 
Gdansk Shipyard afloat, the aid crowded out more efficient competitors, which could 
have  benefited,  in  terms  of  increased  market  shares,  from  the  yard's  exit  from  the 
market.  It  was  thus  important  to  ensure  that  far-reaching  and  meaningful  measures 
limiting  the  distortion  of  competition  created  by  the  aid  were  implemented.  In  its 
decision  the  Commission  concluded  that  the  planned  reductions  of  the  yard's 
production capacity combined with the committed production cap comply with these 
requirements without jeopardizing the yard's viability. 

18. 

The  Commission  completed  the  implementation  of  the  State  Aid  Action  Plan 
(SAAP)18  by  adopting  guidance  papers  on  training  aid19  and  aid  to  disabled  and 
disadvantaged  workers20.  The  General  Block  Exemption  Regulation  (GBER)21 

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Prolongation  of  Community  guidelines  on  State  aid  for  rescuing  and  restructuring  firms  in  difficulty 
(OJ C 156, 9.7.2009, p. 3). 
OJ C 244, 1.10.2004, p. 2. 
Case C18/2005. 
OJ C 220, 8.9.2005, p. 7. 
State Aid Action Plan – Less and better targeted State aid: a roadmap for State aid reform 2005-2009 
(COM(2005)107 final, 7.6.2005).  
Communication  from  the  Commission  -  Criteria  for  the  compatibility  analysis  of  training  State  aid 
cases subject to individual notification (OJ C 188, 11.8.2009, p. 1). 
Communication from the Commission -  Criteria  for  the  analysis  of  the  compatibility  of State  aid  for  the 
employment of disadvantaged and disabled workers subject to individual notification (OJ C 188, 11.8.2009, 
p. 6).  

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19. 

enables  Member  States  to  grant  a  large  number  of  aid  measures, including  training 
aid and aid for the employment of disabled or disadvantaged workers, without prior 
notification to the Commission. However, as individual aid measures involving large 
aid  amounts  can  entail  a  higher  risk  of  distorting  competition,  notification  remains 
necessary for such measures. The guidance papers on training aid and employment 
aid set out the criteria for the Commission's assessment of the compatibility of such 
individually notified aid measures. Guidance is provided on the information required 
and on the assessment methodology. The criteria are based on the  principles of the 
Commission's SAAP, in particular the balancing test that weighs the positive effects 
brought  about  by  the  aid  against  the  negative  impact  a  potential  distortion  of 
competition might entail. 

The European Commission also adopted a guidance paper setting out criteria for the 
in-depth assessment of regional aid to large investment projects22. The Regional Aid 
Guidelines  2007-201323  foresee  that  large  investment  projects  above  certain 
thresholds  need  to  be  individually  notified  to  the  Commission.  For  such  projects 
where  the  aid  beneficiary  has  a  market  share  of  more  than  25 %  or  where  the 
production capacity created by the project exceeds 5 % of the market (if the market 
concerned is considered as underperforming), the Commission has to open a formal 
investigation. Regional aid to such large investment projects may carry a greater risk 
of distorting competition and thus requires a detailed compatibility assessment. The 
criteria  for  the  in-depth  assessment  of  regional  aid  to  large  investment  projects, 
which are based on the principles of the SAAP, and in particular the balancing test, 
detail  how  the  Commission  shall  evaluate  the  positive  and  negative  effects  of  such 
aid.  Member  States  have  to  provide  information  on  the  project’s  contribution  to 
regional  development  as  well  as  the  appropriateness,  proportionality  and  incentive 
effect of the aid. Negative effects include the crowding-out of private investment or 
effects  on  trade  such  as  displacement  of  investments.  The  Dell  Poland  case 
(C 46/2008)  was  the  first  case  where  the  Commission  conducted  the  type  of 
assessment  detailed  in  the  guidance  paper.  The  Commission  concluded  that  the 
investment  project  by  Dell  to  set  up  a  manufacturing  plant  in  Łódź  would 
significantly contribute to regional development and that these benefits outweighed 
any potential negative effects on competition and loss of jobs elsewhere.  

20. 

A  public  consultation  was  launched  on  "Common  principles  for  an  Economic 
Assessment of the Compatibility of State aid under Article 87(3) EC". The document 
sets out the general framework underlying the economic analysis of State aid. It aims 
at  providing  coherence  in  the  application  of  State  aid  rules.  It  clarifies  the  overall 
principles  of  State  aid  compatibility  analysis  which  are  (and  have  already  been) 
translated into more specific rules for particular kinds of aid. 

21. 

In  the  field  of  Services  of  General  Economic  Interest  (SGEI),  the  Commission 
responded to 16 questions by citizens, stakeholders and public administrations in the 

21 

22 

23 

Commission  Regulation  (EC)  No  800/2008  of  6  August  2008  declaring  certain  categories  of  aid 
compatible with the common market in application of Articles 87 and 88 EC (General block exemption 
Regulation) (OJ L 214, 9.8.2008, p. 3). 
Communication from the Commission concerning the criteria for an in-depth assessment of regional aid 
to large investment projects (OJ C 223, 16.9.2009, p. 3). 
Guidelines on national regional aid for 2007-2013 (OJ C 54, 4.3.2006, p. 13). 

EN 

12 

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framework  of  the  Interactive  Information  Service24.  These  answers  further  clarified 
several aspects of the application of the SGEI Package, including the notion and the 
content of the act of entrustment, the margin of discretion Member States have in the 
organisation of SGEI, but also the general conditions of application of State aid rules 
and the notion of SGEI itself. 

The  autumn  2009  State  aid  Scoreboard25  shows  that  the  overall  aid  volume  rose  in 
2008  from  around  0.5%  of  GDP  to  2.2%  of  GDP  or  EUR  279.6  billion  due  to  the 
financial  and  economic  crisis.  Crisis-related  aid  represented  roughly  1.7%  or  EUR 
212.2  billion  and  related  to  aid  to  financial  institutions  only26.  Aid  to  the  real 
economy  under  the  Temporary  Framework  started  to  be  implemented  by  Member 
States  only  in  2009.  Crisis  measures  aside,  total  aid  amounted  in  2008  to  0.5%  of 
GDP  or  EUR  67.4  billion,  a  level  similar  to  2007  and  the  years  before.  Aid  was 
mainly directed towards horizontal objectives of common interest (on average 88%), 
of which regional aid, research and development and environmental aid represented 
around  two-thirds  whereas  rescue  and  restructuring  aid  fell.  Although  figures  for 
2009 are not yet available, we do not expect the volume and share of non-financial 
aid to dramatically change in 2009. 

Reform introduced by the SAAP continued to bear fruit. Aid granted through block 
exemption, in particular the GBER, rose significantly in terms of the aid volume and 
represented EUR 10 billion or 19% of total aid in 2008, compared to 2007 (EUR 6.3 
billion or 13%) and 2006 (EUR 3 billion or 6% of total aid). Another 76% of total 
aid was granted through schemes and only 5% represent individual aid. 

In  the  field  of  State  aid  in  the  electronic  communications  sector,  the  Commission 
encourages  State  aid  measures  that  are  aimed  at  providing  equitable  broadband 
coverage  at  affordable  prices  for  European  citizens.  In  2009,  the  Commission 
continued to address in its decisions two major trends of public intervention on the 
broadband  market:  support  for  affordable  basic  broadband  services  in  areas  where 
such  services  do  not  exist  and  public  intervention  in  support  of  very  high  speed 
broadband networks ("next generation" networks). 

On  the  basis  of  its  decisional  practice,  in  September  the  Commission  adopted 
Guidelines  on  the  application  of  State  aid  rules  to  public  funding  for  the  rapid 
deployment  of  broadband  networks,  which  also  addressed  public  funding  to  the 
deployment  of  so-called  next  generation  access  broadband  networks27.  In  45 
decisions  the  Commission  had  clarified  the  conditions  under  which  such  support 
would  be  compatible  with  the  State  aid  provisions  (inter  alia,  detailed  mapping 
showing the need for broadband coverage, transparent tendering process, technology 
neutrality  of  the  aid,  open  wholesale  access).  These  conditions  are  incorporated  in 
the Guidelines and will equally apply to next generation access support. 

http://ec.europa.eu/services_general_interest/registration/form_en.html 
COM(2009) 661 final, 7.12.2009. 
The maximum volume of Commission approved measures set up by Member States in 2008 to stabilise 
the financial markets amounted to € 3361 billion. According to the annual reports submitted by Member 
States, Member States implemented measures amounting to a nominal value of € 958 billion. According 
to  first  estimates,  the  aid  element  of  the  support  measures  put  in  place  in  2008  –  as  proxy  for  the 
benefits passed by the State to the benefitting financial institutions – amounted to € 212.2 billion. 
Community  Guidelines  for  the  application  of  State  aid  rules  in  relation  to  rapid  deployment  of 
broadband networks, OJ C 235, 30.9.2009, p. 7. 

22. 

23. 

24. 

25. 

24 
25 
26 

27 

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13 

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26. 

27. 

In  the  media  sector,  the  Commission  adopted  on  2  July  a  revised  Broadcasting 
Communication  which  aims  at  showing  the  specific  mechanisms  on  which  the 
Commission's  assessment  of  publicly  funded  new  media  services28  is  based  (see 
section II.E.2.4). The new framework provides more flexibility for the financing of 
public  service  broadcasters  and  at  the  same  time  clarifies  the  requirements  for  an 
effective  control  of  the  public  service  mission  at  the  national  level.  It  adapts  the 
framework  to  the  fast  changing  market  environment  while  maintaining  the  core 
principles of the Commission's policy based on the Amsterdam Protocol (see section 
II.E.2.4) and the jurisprudence of the European Court of Justice29. A center piece of 
the  new  Communication  is  the  prior  evaluation  of  new  audiovisual  services  at 
national level. Publicly funded audiovisual services must perform their remits in an 
economically neutral way, i.e. satisfy the social, democratic and cultural needs of a 
society without distorting cross border trade and competition contrary to the common 
interest.  

In  January,  the  Commission  decided  to  extend  the  validity  of  the  State  aid 
assessment criteria of the 2001 Cinema Communication30 until 31 December 201231. 
Under the current criteria, State support for film production can be exempted under 
certain  conditions,  in  particular  where  that  support  concerns  cultural  films,  while 
respecting  certain  thresholds  regarding  territorial  requirements  and  aid  intensity.  A 
number  of  different  trends  have  emerged  since  the  2001  Cinema  Communication 
which will require some refinement of these criteria and a possible extension of the 
scope  of  application  in  due  course.  These  trends  include  support  for  aspects  other 
than film and TV production (such as film distribution and digital projection), as well 
as  competition  among  some  Member  States  to  use  State  aid  to  attract  inward 
investment from large-scale, mainly US, film production companies.  

1.1. 

State aid control – the Simplification Package 

28. 

Following  the  SAAP,  the  Commission  adopted  a  Simplification  Package  to 
modernise  and  simplify  State  aid  procedures.  This  Package  (in  force  since  1 
September  2009)  comprises  a  Best  Practice  Code32  and  a  Notice  on  a  Simplified 
Procedure33,  both  of  which  aim  at  improving  the  effectiveness,  transparency  and 
predictability  of  State  aid  procedures,  within  the  existing  legal  context  of  the 
Procedural Regulation34. 

29. 

The  Simplified  Procedure  aims  at  improving  the  Commission's  treatment  of 
straightforward  cases,  such  as  those  clearly  in  line  with  existing  Guidelines  or 

28 

29 
30 

31 

32 
33 

34 

Communication  on  the  application  of  State  aid  rules  to  public  service  broadcasting  of  2  July  2009, 
OJ C 257, 27.10.2009. 
Judgment Altmark Trans, C-280/00; Judgment Chronopost, 83/01P. 
Communication  on  certain  legal  aspects  relating  to  cinematographic  and  other  audiovisual  works, 
OJ C 43, 16.2.2002, p. 6. 
Communication  concerning  the  State  aid  assessment  criteria  of  the  Commission  communication  on 
certain legal aspects relating to cinematographic and other audiovisual works (Cinema Communication) 
of 26 September 2001, OJ C 31, 7.2.2009, p. 1. 
Code of Best Practice for the conduct of State aid control procedures (OJ C 136, 16.6.2009, pp. 13-20). 
Notice  from  the  Commission  on  a  simplified  procedure  for  treatment  of  certain  types  of  State  aid 
(OJ C 136, 16.6.2009, pp. 3-12). 
Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application 
of Article 93 of the EC Treaty, OJ L 83, 27.3.1999, p. 1. 

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14 

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established Commission decision-making practice. The Commission wants to ensure 
that clearly compatible aid measures are approved within one month from a complete 
notification by a Member State. This procedure requires important adaptations to the 
Commission's  and  Member  States'  working  methods.  Arrangements  to  this  effect 
(templates, standard decisions etc.) have been put in place. A transparency provision 
also ensures that third parties can provide input. 

30. 

The Best Practices Code details how all other State aid procedures should be carried 
out in practice. It includes a certain number of voluntary arrangements between the 
Commission  and  Member  States  to  achieve  more  streamlined  and  predictable 
procedures at each step of a State aid investigation. Consequently, the Commission 
should be able to deliver State aid decisions within more business relevant deadlines. 

1.2. 

Recovery policy 

31. 

32. 

33. 

When  a  negative  decision  is  taken  in  cases  of  unlawful  State  aid,  the  Commission 
shall decide that the Member State must take all necessary measures to recover the 
aid  from  the  beneficiary.  Recovery  has  not  been  conceived  as  a  penalty,  but  as  a 
means to restore the situation previous to the granting of the illegal and unlawful aid. 
This  objective  is  obtained  once  the  aid  (plus  compound  interests)  is  repaid  by  the 
recipient who enjoyed an advantage over its competitors on the market. 

A Member State is deemed to comply with the recovery decision when the aid (plus 
compound interests) has been fully reimbursed within the prescribed time limit or, in 
the  case  of  an  insolvent  beneficiary,  when  the  company  is  liquidated  under  market 
conditions. Where the Member State concerned has not complied with the recovery 
decision,  and  where  it  has  not  been  able  to  demonstrate  the  existence  of  absolute 
impossibility, the Commission may initiate infringement proceedings: 

•  The  Commission  may  refer  the  matter  directly  to  the  Court  of  Justice  (CoJ)  in 

accordance with Article 108(2) TFEU. 

•  If the Member State concerned has not complied with a judgment of the CoJ, the 
Commission  may  pursue  the  matter  in  accordance  with  Article 260(2)  TFEU.  If 
the CoJ recognises that the Member State did not comply with its judgment, the 
CoJ may impose the payment of penalties on the Member State. 

It  is  essential  for  the  credibility  of  the  Commission's  State  aid  policy  that  recovery 
decisions  are  enforced  effectively  and  immediately.  However,  enforcement  of  the 
recovery orders by the Member State is not always easy due to the obstacles existing 
in  the  different  national  legal  and  judicial  systems.  In  2007,  the  Commission 
therefore  adopted  a  Notice  on  the  implementation  of  decisions  ordering  Member 
States to recover unlawful and incompatible State aid (Recovery Notice)35 in order to 
clarify  the  applicable  rules  and  give  Member  States  concrete  guidance  on  how  to 
achieve a more immediate and effective execution of recovery decisions. So far, the 
adopted measures have proven to be successful. 

35 

Notice from the Commission – Towards an effective implementation of Commission decisions ordering 
Member States to recover unlawful and incompatible State aid (OJ C 272, 15.11.2007, pp. 4-17). 

EN 

15 

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34. 

By 31  December,  the amount  of  illegal  and incompatible aid recovered had further 
increased  from  EUR  2.3  billion  in  December  2004  to  EUR  10.4  billion.  The 
percentage  of  illegal  and  incompatible  aid  still  to  be  recovered  has  evolved 
accordingly (from 75% at the end of 2004 to 12% at 31 December 2009). The share 
of  the  total  amount  recovered  has  however  slightly  decreased  between  2008  and 
2009  (from  90.9%  to  88%),  due  to  seven  new  recovery  decisions  adopted  in  2009 
and  high  amounts  of  aid  identified36  in  several  2008  decisions.  In  order  to  ensure 
better  enforcement  of  its  decisions,  the  Commission  initiated  actions  under  Article 
108(2) TFEU37 in five cases, and an action under Article 260(2) TFEU38 in one case, 
thus leading to 27 cases under litigation. DG Competition currently has 44 pending 
active recovery cases. 

Decisions adopted 

Cases closed 

Aid amount known (in mio EUR) 

Amounts recovered (in mio EUR) 

Recovery interests 

Amounts outstanding 

% recovered 

2000 –2009 

140 

85 

11 806,5 

10 391,8 

2 336,5 

1 414,6 

88% 

1.3. 

State aid enforcement by national courts 

35. 

The enforcement of the State aid rules by the Commission is, for the time being, the 
most  important  system  of  State  aid  review  in  the  EU.  National  courts  could 
nevertheless play a important role in the State aid field, since they can offer possible 
complainants  effective  legal  protection  "close  to  home",  including  remedies 
unavailable at Commission level. According to a recently updated study39, more and 
more  cases  are  brought  before  national  courts,  covering  an  increasing  variety  of 
issues. 

36 

37 

38 

39 

This is due to the fact that the Commission cannot always quantify the aid amount to be recovered (in 
such cases, Commission decisions include information enabling the Member State to determine the aid 
amount). 
Actions under Article 108(2) TFEU are aimed at condemning a Member State for non- implementation 
of a State aid recovery decision. 
Actions under Article 260(2) TFEU are infringement actions aimed at condemning a Member State for 
non-implementation  of  a  Court  judgment,  and  may  include  the  payment  of  fines  (periodic  penalties 
and/or lump sums). 
2009 
State 
on 
http://ec.europa.eu/competition/court/state_aid_info.html 

enforcement 

national 

Study 

level. 

See: 

law 

aid 

the 

of 

at 

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16 

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36. 

The  potential  of  private  State  aid  enforcement  underlies  a  new  Notice  on  State  aid 
Enforcement  by  National  Courts40  issued  by  the  Commission  in  April.  This  new 
Notice has two key objectives: 

•  To provide more detailed guidance to national courts and to potential claimants on 
all aspects of private State aid enforcement. This guidance is based on the existing 
CoJ  case  law  on  the  role  of  national  courts  in  the  State  aid  field.  The  guidance 
covers  issues  such  as  the  protection  of  individual  rights,  the  recovery  of  illegal 
aid, interim relief and damages actions. 

•  To offer national courts more practical and user-friendly Commission support in 
their daily work. National judges would thus be able to ask the Commission for 
information in its possession and/or for its opinion on the application of the State 
aid  rules.  A  number  of  such  requests  have  already  been  received  following  the 
publication of the Notice. 

37. 

The Commission also undertook additional advocacy and public awareness efforts to 
ensure wide-spread use of the Notice, in particular through web pages dedicated to 
national judges41. 

1.4.  Monitoring of State aid measures 

38. 

39. 

40. 

To  ensure  effective  enforcement  of  the  State  aid  rules,  in  which  an  increasing 
number  of  aid  measures  are  no  longer  subject  to  the  notification  obligation  (–see 
GBER), the Commission has stepped up ex post monitoring since 2006. 

Since  then,  the  Commission  has  covered  an  important  part  of  the  main  substantive 
types  of  aid:  the  SME  block  exemption  regulation  (hereinafter,  "BER"),  training 
BER, employment BER, regional BER, the Research, Development and Innovation 
(R&D&I) Framework, the environmental guidelines and the rescue and restructuring 
guidelines.  The  Commission  has  also  addressed  aid  measures  adopted  by  24  of  the 
27  Member  States  of  the  Community,  thereby  ensuring  a  balanced  geographical 
coverage. Monitoring takes place both at the level of the general legislation outlining 
the  conditions  for  the  scheme  and  at  the  level  of  important  individual  decisions 
implementing such schemes (typically cases above EUR 500 000). 

The analysis of the results of the first exercises shows that, overall, this part of the 
existing  State  aid  architecture  (schemes  and  BERs)  functions  in  a  satisfactory 
manner.  In  a  minority  of  cases  substantive  problems  or  procedural  issues  (such  as 
transparency, reporting, speed and quality of answers) were identified. The cases in 
which no appropriate solution was yet identified are currently still being investigated 
(2  in  2006,  2  in  2007,  at  this  stage  2  in  2008).  Finally,  it  has  to  be  noted  that  all 
Member  States  have  cooperated  with  the  Commission,  albeit  many  have  submitted 
the requested information requested with considerable delay. The CFI also delivered 
a judgment42 which confirms the legality of the monitoring exercises. 

40 
41 
42 

OJ C 85, 9.4.2009, p. 1. 
http://ec.europa.eu/competition/court/state_aid.html 
Judgment in Case T-376/07, Germany v Commission, 25.11.2009. 

EN 

17 

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1.5. 

Horizontal State aid 

41. 

42. 

43. 

44. 

45. 

In 2009, the Commission approved 29 aid schemes and adopted 4 non aid decisions 
on  the  basis  of  the  Community  Framework  for  research  and  development  and 
innovation43; 19 out of these measures were pure R&D schemes, 2 were innovation-
oriented schemes and 12 were mixed, pursuing both R&D and innovation objectives. 
In  addition,  and  following  an  in-depth  economic  assessment,  the  Commission  has 
decided  not  to  raise  objections  on  9  individually  notifiable  aids  to  large  R&D 
projects.  Furthermore,  it  has  monitored  information  submitted  on  aids  to  73  other 
R&D projects, which exceed EUR 3 million although without falling under the duty 
for individual notification. 

As to State aid granted in favour of R&D projects under the GBER44, there were 51 
schemes providing aid for fundamental research, 186 for industrial research and 181 
for  experimental  development.  At  the  same  time,  the  GBER  was  also  used  by 
Member States for measures relating to innovation, 57 of which referred to industrial 
property  rights  for  SMEs,  26  to  young  innovative  enterprises,  47  to  innovation 
advisory and support services, and 23 to the loan of highly qualified personnel. 

As far as environmental aid is concerned, the Commission approved 34 aid schemes 
and  four  individual  applications,  most  of  them  under  the  Environmental  Aid 
Guidelines45. Furthermore, the Commission cleared one case as not constituting State 
aid. Moreover, following a formal investigation procedure, the Commission took two 
negative  decisions,  one  conditional  decision  as  well  as  a  positive  decision.  At  the 
same time the Commission decided to open formal investigations in four other cases 
related to environmental aid. 

In the area of risk capital financing for SMEs, and in addition to the six aid schemes 
authorised under the Temporary Framework, the Commission approved 25 measures 
under  the  Risk  capital  guidelines46;  16  of  these  complied  with  the  safe  harbour 
provisions allowing for a light assessment. The Commission has conducted a detailed 
assessment of the compatibility of the measures in seven other cases, and considered 
that  they  did  not  involve  State  aid  in  the  remaining  two  cases.  Furthermore,  13 
additional  aid  schemes  have  been  implemented  in  2009  under  the  GBER,  which 
Member States also start to use for risk capital purposes. 

In  total  the  Commission  received  some  971  aid  measures  which  have  been 
implemented in 2009 under the GBER. Apart from the above-mentioned objectives, 
these exempted aid measures covered also the fields of employment aid, training aid, 
aid for environmental purposes47 and regional aid. 

46. 

In the field of regional aid, in 2009 the Commission approved 45 schemes, mostly on 
the basis of the Guidelines on national regional aid for 2007-201348, as well as 12 ad 

43 
44 
45 
46 
47 

48 

OJ C 323, 30.12.2006, p. 1. 
OJ L 214, 9.8.2008, p. 3. 
OJ C 82, 1.4.2008, p. 1. 
OJ C 194, 18.8.2006, p. 2. 
124 aid measures; more information will be available in 2010 on the basis of the national annual reports 
for 2009. 
OJ C 54, 4.3.2006. 

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47. 

48. 

hoc  aid  measures  in  favour  of  single  enterprises  for  investments  in  areas  under  the 
Regional Aid maps 2007-201349. 

On  the  basis  of  the  same  Guidelines  on  national  regional  aid  for  2007-2013,  the 
Commission  approved  State  aid  to  nine  large  investment  projects50  and  decided  to 
initiate the formal investigation procedure regarding two others51 as well as one ad 
hoc  regional  aid  case52.  The  Commission  also  closed  the  formal  investigation 
procedure for two other large investment projects with a positive decision53. 

Under  the  Temporary  Framework,  in  2009  the  Commission  adopted  30  decisions 
approving  limited  amounts  of  compatible  aid  schemes,  15  decisions  approving 
measures for State aid in the form of guarantee and 9 decisions approving measures 
in the form of subsidized interest rates. 

1.6. 

Coal 

49. 

50. 

51. 

Following  a  sharp  fall  during  the  last  quarter  of  2008,  mainly  due  to  the  economic 
crisis,  coal  prices  are  now  returning  to  the  levels  registered  at  the  end  of  2007 
(around  EUR  56  per  tonne  of  coal  equivalent).  Negotiated  prices  for  2010  are 
expected to be low in this range with an increasing trend. Recent forecasts until 2020 
foresee a constant rise of coal prices which should, however, remain below EUR 100 
per tonne of coal equivalent. 

During  2009  the  Commission  approved  aid  to  the  coal  sector  in  Germany54, 
Slovakia55  and  Spain56.  These  aid  schemes  are  intended  to  support  access  to  coal 
reserves and to restructure the coal sector in these countries. 

In  view  of  the  forthcoming  expiry  of  Regulation  (EC)  No1407/200257  (on  31 
December  2010),  the  Commission  carried  out  a  public  consultation  on  the  future 
policy options with respect to the aid to the coal industry58. 

1.7. 

State aid in the agricultural sector 

52. 

The  Commission  assesses  State  aid  granted  to  the  agriculture  and  to  the  forestry 
sector  on  the  basis  of  the  Guidelines  for  State  aid  in  the  agriculture  and  forestry 

49 
50 

51 

52 
53 
54 
55 
56 
57 
58 

Decisions to be found at: http://ec.europa.eu/competition/state_aid/regional_aid/regional_aid.html 
In the energy sector: Case N538/2008 Ersol Thin Film; Case N453/2008 Sunfilm AG; Case N539/2008 
ASI Industries/Ersol Solar Energy; Case N180/2009 EnPlus Centrale Termoelettrica di San Severo. In 
the  automotive  sector:  Case  N473/2008  Ford  España;  Case  N671/2008  Aid  to  Mercedes  Benz 
Manufacturing  Hungary;  Case  N635/2008  Fiat  Sicily;  Case  N674/2008  Volkswagen  Slovakia.  In  the 
paper industry: Case N203/2008 Hamburger Spremberg GmbH. 
Case N113/2009 Aid to Audi Hungaria Motor Ltd andCase N588/2008 Petróleos de Portugal – Petrogal 
S.A.  
Case N357/2008 Fri-el Acerra s.r.l. 
Case C21/2008 Sovello Ag (formerly EverQ) and Case N46/2008 Aid to Dell Poland. 
Case N563/2008 Aid for German hard coal in 2009 (OJ C 199, 25.8.2009, p. 1). 
Case N347/2009 – Slovak Republic, Baňa Dolina a.s. 
Case NN20/2009, ex N647/2008 Aid for the coal sector in 2008-2010 (OJ C 234, 29.9.2009, p. 5). 
OJ L 205, 2.8.2002, p. 1. 
http://ec.europa.eu/energy/coal/consultations/2009_07_15_en.htm 

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sector  2007  to  201359.  In  2009,  the  Commission  registered  139  new  State  aid 
notifications  and  adopted  146  decisions.  State  aid  decisions  adopted  in  relation  to 
four separate issues merit a closer look.  

First,  in  the  aftermath  of  the  dioxin  contamination  of  pigs,  cattle  and  pigmeat  and 
beef  products,  first  discovered  in  Ireland  in  December  2008,  the  Commission 
adopted  three  State  aid  schemes60  authorising  Ireland  and  the  United  Kingdom 
(region  of  Northern  Ireland)  to  grant  compensation  to  processors  and  primary 
producers  who  suffered  losses  as  a  result  of  the  dioxin  incident.  In  addition  to  the 
compensation  for  the  losses,  support  would  be  granted  towards  the  transport, 
rendering and slaughtering costs in order to ensure the safe destruction of the eligible 
products and animals. 

Second,  on  28  January  the  Commission  adopted  a  final  negative  decision  with 
recovery  concerning  the  contingency  plans  in  the  French  fruit  and  vegetable  sector 
designed to prevent or mitigate the potential effects of a surplus of French fruit and 
vegetables  on  the  Community  market61.  It  was  found  that  the  sums  allocated  for 
financing  contingency  plans  between  1992  and  2002  (between  EUR 14  and 
46 million a year), constituted operating aid, likely to disturb seriously the operation 
of the common organisation of the market in fruit and vegetables. On 8 April France 
filed  an  appeal62  against  the  negative  decision  of  the  Commission  seeking  the 
annulment of the decision, on the grounds that it does not constitute State aid. 

Third, on 3 June the Commission approved an aid scheme63 designed to compensate 
for  the  damages  caused  in  North-West  France  by  the  passage  of  storm  Klaus  on 
24 January  2009.  This  climatic  phenomenon  was  recognised  by  the  Government  as 
“natural disaster”. The estimated budget of the scheme was approximately EUR 791 
million. 

Finally,  the  Commission  approved  a  final  negative  decision  with  recovery 
concerning  an  Italian  aid  scheme  providing  for  exemptions  from  excises  duties 
applicable to diesel used for heating greenhouses between October 2000 and the end 
of  200464.  After  having  examined  all  data  received  from  Italy,  the  Commission 
noticed that the aids could not be justified in the light of the Community guidelines 
concerning State aid in the agriculture and forestry sector 2007-2013 (because they 
were  not  granted  without  differentiation  between  operators),  nor  in  the  light  of  the 
Community  Guidelines  on  State  aid  for  environmental  protection  from  1994  and 

Community  guidelines  for  State  aid  in  the  agriculture  and  forestry  sector  2007-2013  (OJ  C  319, 
27.12.2006, p. 1). 
Case  N643/2008  Special  measures  relating  to  meat  products  of  animal  origin  from  pigs  following  a 
dioxin  contamination  in  Ireland  (OJ  C  36,  13.2.2009,  p.  1),  case  N147/2009  Pigmeat  Processors 
hardship  assistance  (Northern  Ireland)  (OJ  C  147,  27.6.2009,  p.  5)  and  case  NN44/2009  Special 
measures relating to a dioxin contamination in Ireland. 
Case C29/2005 'Contingency plans' in the fruit and vegetable sector implemented by France (OJ L 127, 
26.5.2009, p. 1). 
Case T-139/09 France v Commission (OJ C 141, 20.6.2009, p. 49). 
Case N227/2009 Régime d'aides destine à secourir les forêts de Sud-Ouest de la France sinistrées par 
la tempête Klaus du 24 janvier 2009 (OJ C 189, 12.8.2009, p. 4). 
Joint  State  aid  cases  C6/2004  and  C5/2005  Exonération  d'accises  sur  les  carburants  agricoles 
(OJ L 327, 12.12.2009, p. 6). 

53. 

54. 

55. 

56. 

59 

60 

61 

62 
63 

64 

EN 

20 

   EN 

                                                 
57. 

2. 

58. 

2001,  applicable  during 
Commission's decision before the CFI. 

the  above-mentioned  period.  Italy  challenged 

the 

In  the  context  of  the  exceptional  and  transitory  financing  problems  linked  to  the 
financial crisis and its impact on the agricultural sector, the Commission adopted on 
28 November an amendment to the Temporary Community framework for State aid 
measures  to  support  access  to  finance  in  the  current  financial  and  economic  crisis, 
enabling  the  Member  States  to  grant  compatible  limited  amount  of  aid  of  EUR 
15 000 for undertakings active in the primary production of agricultural products65. 
This  amount  can  be  granted  once  per  undertaking  until  31  December  2010.  Any 
agricultural  de-minimis  aid  received  since  the  beginning  of  2008  by  individual 
undertakings in compliance with Commission Regulation (EC) No 1535/200766 has 
to be deducted from this amount. A scheme put in place under the newly introduced 
possibility  will  have  to  be  open  to  all  primary  producers  and  it  will  have  to 
complement a general scheme put in place by the Member State concerned.  

SELECTED COURT CASES 

In  2009,  the  Community  Courts  handed  down  several  judgments  which  had 
implications  for  State  aid  control  in  general  and  for  the  areas  of  definition  of  state 
aid, compatibility of aid, procedural issues and recovery in particular. A summary of 
the main judgments is set out below. 

2.1. 

Notion of aid 

59. 

60. 

65 

66 

67 
68 

In  case  Iride  SpA  and  Iride  Energia  SpA  v  Commission67,  the  CFI  upheld  a 
Commission  decision  declaring  that  the  aid  to  AEM  Torino  for  stranded  costs  was 
compatible subject to the effective recovery of the earlier illegal aid granted to this 
company.  AEM  Torino  claimed  that  the  stranded  costs  compensation  did  not 
constitute  aid.  The  CFI  followed  the  Commission  confirming  in  particular  the 
fulfilment of the State resources and imputability criteria. The CFI considered that 
the resources at stake were collected from private persons but transferred to a public 
Fund  under  constant  control  of  the  State.  Furthermore,  the  Fund  had  no  legal 
personality distinct from that of the State, who should be regarded as the owner of 
the funds. 

The  CFI  also  confirmed  the  Commission's  position  stating  that  the  beneficiary 
received  an  economic  advantage  which  it  would  not  have  obtained  under  normal 
market  conditions.  In  fact,  the  alteration  of  the  legislative  framework  in  the 
electricity  sector  which  occurred  as  a  result  of  Directive  96/92/EC68  has  to  be 
considered  as  part  of  normal  market  conditions.  When  AEM  Torino  made  the 

Communication from the Commission amending the Temporary Community Framework for State aid 
measures  to  support  access  to  finance  in  the  current  financial  and  economic  crisis  (OJ  C  261, 
31.12.2009, p. 2). 
Commission Regulation (EC) No 1535/2007 of 21 December 2007 on the application of Articles 87 and 
88 EC to de minimis aid in the sector of agricultural production (OJ L 337, 21.12.2007, p. 35). 
Case T-25/07 – Iride SpA and Iride Energia SpA v Commission. 
Directive 96/92/EC  of  the European Parliament  and of  the  Council  of 19  December  1996  concerning 
common rules for the internal market in electricity, OJ L 27, 30.1.1997, pp. 20-29. 

EN 

21 

   EN 

                                                 
investments that gave rise to the stranded costs in question, it was taking the normal 
risks related to possible legislative amendments. 

As  to  the  notion  of  selectivity,  the  CFI  ruled  in  case  Italian  Republic  v 
Commission69  that  the  tax  advantages  granted  by  the  Italian  authorities  to  newly 
listed  companies  were  selective,  since  they  were  available  only  to  undertakings 
newly  listed  on  regulated  markets  and  having  obtained  the  listing  during  the  brief 
period for which the aid scheme was applicable. Furthermore, the measure was not 
justified  by  the  nature  and  the  overall  scheme  of  the  Italian  tax  system  and  in  any 
case  Italy  did  not  demonstrate  that  it  was  justified  by  the  alleged  objective,  i.e.  to 
encourage listing on the stock exchange. 

In  joined  cases  Basque  tax  credits70,  the  CFI  upheld  the  negative  Commission’s 
decisions  on  the  tax  reductions  granted  by  the  Basque  authorities.  The  Court 
confirmed that the measures were selective and restricted to undertakings which have 
at  their  disposal  significant  financial  resources.  The  Court  also  noted  the 
discretionary powers of the Basque authorities relating to the amount of the tax credit 
and the scope of the eligible investment. The CFI also found that the measures were 
not  justified  by  the  nature  and  the  internal  logic  of  the  tax  system  as  to  restrict 
entitlement to aid to a limited category of businesses is not symptomatic of a general 
intention to encourage investment and, in any case, general objectives of economic 
policy are extraneous to the tax system.  

The CFI upheld in joined cases Italian Republic v Commission71 the Commission’s 
decision stating that a three-year income tax exemption and the possibility to contract 
reduced-interest  loans  with  Cassa  Depositi  e  Prestiti  granted  to  utilities  companies 
with a majority public shareholding, must be considered as State aid. These measures 
had  the  effect  of  strengthening  the  competitive  position  of  the  undertakings 
concerned vis-à-vis that of privately owned operators, Italian or other, and conferring 
a selective advantage. 

In  its  judgment  of  15  December  200972,  the  General  Court  annulled  the 
Commission’s decision declaring aid granted in favour of EDF incompatible with the 
common market as the Commission failed to assess whether the French State acted 
according to the private investor principle.  

The  case  AceaElectrabel  v  Commission73  provides  interesting  clarifications  on  the 
identification of the aid beneficiary and the notion of economic entity. The CFI 
underlined  that  the  Commission  has  in  the  context  of  State  aid  broad  discretionary 
powers  to  determine  if  an  undertaking  which  forms  part  of  a  group  should  be 
considered as a single economic entity or a legally and financially autonomous unit. 
It  upheld  the  Commission's  conclusion  that,  based  on  a  number  of  elements,  the 

Case T-211/05 – Italian Republic v Commission. 
Cases T-227/01 to T-229/01, T-265/01, T-266/01 and T-270/01; see similarly T-30/01 to T-32/01; T-
86/02 to T-88/02; T-230/01 to 232/01; T-267/01 to 269/01.  
Case  T-222/04  –  Italian  Republic  v  Commission,  T-189/03  –  ASM  Brescia  SpA  v  Commission,  T-
309/02 – Acegas-APS SpA v Commission, T-301/02 – AEM SpA v Commission, T-300/02 – Azienda 
Mediterranea  Gas  e  Acqua  SpA  (AMGA)  v  Commission,  T-297/02  –  ACEA  SpA  v  Commission,  T-
292/02 – Confederazione dei Servizi v Commission.  
T-156/04 – EDF v Commission.  
Case T-303/05 – AceaElectrabel v Commission.  

61. 

62. 

63. 

64. 

65. 

69 
70 

71 

72 
73 

EN 

22 

   EN 

                                                 
66. 

67. 

“old” and the “new” beneficiary constituted a single economic entity, for the purpose 
of applying the Deggendorf jurisprudence (see paragraph 69 below).  

In  the  same  case,  the  CFI  also  confirmed  that  aid  in  a  sector  which  is  subject  to 
liberalisation  at  EU  level  can  lead  by  itself  to  a  real  or  potential  impact  on 
competition and trade. The CFI thereby rejected the argument that heating through 
a municipal heating network is not in competition with any other products. 

The ECJ confirmed in case Commission v Italy and Wam74 the judgment of the CFI 
which had annulled the Commission’s decision for reasons of insufficient motivation 
on the existence of aid. The ECJ stated that in the specific circumstances of the case 
(small  amounts  of  aid  for  market  penetration  targeting  specifically  third  countries), 
the  Commission  did  not  properly  motivate  how  the  aid  affected  competition  and 
trade  between  Member  States.  However, 
traditional  EC 
jurisprudence concerning the meaning of these two notions.  

it  confirmed 

the 

2.2. 

Compatibility assessment 

68. 

69. 

70. 

In case FAB v Commission75, the CFI endorsed the Commission’s policy regarding 
the  funding  of  digitisation  of  broadcasting.  The  Court  confirmed  that  the 
Commission was entitled to assess compatibility according to the criterion of market 
failure  and  that  the  Commission  had  not  exceeded  its  discretion  under  Article 
87(3)(c)  EC  (current  Article  107(3)(c)  TFEU)  when  finding  that  the  aid  was 
incompatible. In fact, Germany was not able to demonstrate that the financial support 
granted  for  terrestrial  digital  television  was  an  appropriate  and  necessary  means  to 
enable the switch-over from analogue to digital broadcasting.  

In  case  Iride  SpA  and  Iride  Energia  Spa  v  Commission76,  as  well  as  in  case 
AceaElectrabel v Commission77 the CFI upheld the Commission's application of the 
Deggendorf  case  law.  It  confirmed  that  in  its  compatibility  assessment  the 
Commission  has  to  take  account  of  all  relevant  factors,  including  earlier  non-
recovered aid, regardless of whether the earlier aid was granted as individual aid or 
under an incompatible aid scheme. 

On 9 September the CFI ruled on Case T-369/06 Holland Malt78, dismissing the four 
grounds  of  appeal  raised  by  Holland  Malt.  The  judgment  confirmed  the  factual 
assessment  of  the  Commission  on  the  existence  of  overcapacity  and  the  lack  of 
normal  market  outlets.  In  addition,  the  Court  stated  that  a  Member  State  has  to 
provide  all  information  necessary  to  enable  the  Commission  to  verify  that  the 
conditions of Article 87(3)(c) EC are satisfied and that the Commission is under no 
obligation  to  consider  on  its  own  motion  and  on  the  basis  of  prediction,  what 
information might have been submitted to it. 

74 
75 

76 
77 
78 

Case C-494/06 – Commission v Italy and Wam. 
Joined  cases  T-8/06  –  FAB  Fernsehen  aus  Berlin  GmbH  v  Commission,  T-21/06  –  Germany  v 
Commission, T-24/06 – MABB v Commission.  
Case T-25/07 – Iride SpA and Iride Energia Spa v Commission. 
Case T-303/05 – AceaElectrabel v Commission.  
Case T-369/06 Holland Malt v Commission [2009] (OJ C 256, 24.10.2009, p. 23). 

EN 

23 

   EN 

                                                 
2.3. 

Procedural issues 

71. 

72. 

73. 

74. 

In  case  FAB  v  Commission,  the  CFI  found  that  the  application  of  the  Media 
Authority (MABB, the public body granting the aid) was not admissible. The Court 
considered  that  MABB  was  not  independent  but  part  of  the  State,  because  it  was 
under budgetary and legal supervision. In addition, its resources were State resources 
because  they  came  from  charges  imposed  by  the  public  authorities  and  non-used 
resources went back to the Länder. 

The  ECJ  dismissed  the  Commission’s  appeal  to  set  aside  the  judgment  of  the  CFI, 
which had partially annulled the Commission’s decision of 9 April 2002 because the 
Commission  had  not  sufficiently  motivated  why  it  ordered  to  recover  jointly  and 
severally  from  SKL-M  and  MTU  Friedrichshafen  GmbH  (MTU)  79  the  amount  of 
EUR 2.71 million. The Court clarified that, although in case of lack of cooperation 
the  Commission  can  decide  on  the  basis  of  the  information  available,  it  cannot 
presume  solely  on  the  basis  of  a  negative  presumption,  based  on  a  lack  of 
information,  that  an  undertaking  has  benefited  from  aid.  It  must  ensure  that  the 
information  at  its  disposal,  even  if  incomplete  and  fragmented,  constitutes  a 
sufficient  basis  on  which  to  make  such  conclusion,  in  particular  where  the 
Commission orders, as in the present case, the recovery of the aid.  

In case NDSH AB v Commission80, the CFI clarified that, when the examination of a 
complaint does not reveal the existence of illegal aid, the Commission does not need 
to  take  a  decision.  This  is  in  particular  the  case  where  the  complaint  concerns 
existing aid. In such a case, it is sufficient to inform the complainant by an informal 
communication  under  Article  20(2)  of  Regulation  659/1999  EC81,  which  does  not 
constitute an actionable measure for the purposes of Article 230 of the EC Treaty.  

In the Commission v Koninklijke FrieslandCampina NV82 case, the ECJ set aside the 
judgment  of  the  CFI  in  case  T-348/03,  which  partially  annulled  the  Commission's 
negative  decision  regarding  the  Dutch  tax  scheme  for  international  financial 
activities  insofar  as  it  excluded  transitional  periods  for  certain  beneficiaries  and 
referred the case back to the CFI. The ECJ confirmed the CFI assessment as regards 
the admissibility  of an  action by a potential beneficiary of a scheme. However, the 
Court considered that the CFI erred in law by accepting the existence of legitimate 
expectations also for  companies which did not benefit from  the scheme but merely 
submitted  an  application  when  the  Commission  opened  the  investigation  procedure 
on the compatibility of the scheme. The Court also stated that the CFI erred in law by 
finding the Commission to have breached the equal treatment principle by allowing 
transitional periods only for companies already accepted by the scheme and not for 
those with a pending application at the date of the opening.  

75. 

Finally,  the  CFI  confirmed  in  case  Germany  v  Commission83  the  Commission's 
powers to request additional information on block exempted schemes for monitoring 

79 
80 
81 

82 
83 

Case C-520/07 P – Commission v MTU Friedrichshafen GmbH. 
Case T-152/06 – NDSH Nya Destination Stockholm Hotell & Teaterpaket AB v Commission. 
Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application 
of Article 93 of the EC Treaty (OJ L 83, p. 1). 
Case C-519 P/2007 – Commission v Koninklijke FrieslandCampina NV. 
Case T-376/07 – Germany v Commission. 

EN 

24 

   EN 

                                                 
purposes.  It  thus  rejected  Germany's  argument  that  information  could  only  be 
requested where the Commission had evidence raising doubts about compliance.  

2.4. 

Recovery of aid 

76. 

77. 

In  Italian  Republic  v  Commission84,  the  CFI  upheld  the  Commission’s  negative 
decision with recovery and confirmed that the Commission is not required to analyse 
the individual measures granted under an aid scheme.  

In Commission v Hellenic Republic85, the Court for the first time imposed penalties 
in  a  State  aid  case  for  non  compliance  with  a  previous  2005  judgment,  which 
confirmed the non implementation of a recovery decision. Greece was ordered to pay 
to the Commission EUR 16 000 for each day of delay to comply with the judgment, 
as well as a lump sum of EUR 2 million. These amounts were based on the duration 
of the infringement, its degree of seriousness and the Member State’s ability to pay. 

B – ANTITRUST – ARTICLES 101, 102 AND 106 TFEU 

1. 

SHAPING AND APPLYING THE RULES  

1.1. 

Enforcement rules 

78. 

79. 

80. 

81. 

84 
85 
86 

On  29  April,  the  Commission  adopted  its  Report  on  the  functioning  of  Council 
Regulation 1/200386. The Regulation introduced the most far-reaching reform of the 
rules for enforcing the EU competition rules in more than 40 years. It abolished the 
centralised  notification  and  authorisation  system  and  replaced  it  by  a  system  based 
on the direct application of Articles 101 and 102 TFEU. The Regulation also granted 
the  Commission  enhanced 
investigation  and  decision-making  powers  and 
empowered  national  competition  authorities  (NCAs)  and  courts  to  apply  the  EU 
antitrust  provisions  in  their  entirety,  including  with  regard  to  agreements  the 
assessment of the conditions under Article 101(3) TFEU. 

In its Report the Commission takes stock of how the modernisation of EU antitrust 
enforcement rules has worked since the entry into force of the Regulation on 1 May 
2004.  It  describes  the  experience  in  all  major  areas  covered  by  the  Regulation  and 
evaluates the progress made by introducing new instruments and working methods. 

The  main  conclusion  of  the  Report  is  that  Regulation  1/2003  has  contributed  to 
stronger  enforcement  of  antitrust  rules  within  the  EU.  The  change  from  the 
centralised notification system to one of direct application has worked very smoothly 
in practice without any major difficulties with the direct application of Article 101(3) 
TFEU, which has been widely welcomed by stakeholders.  

The Report shows that EU competition rules have to a large extent become the 'law 
of  the  land'  for  the  whole  of  the  EU.  This  is  the  result  of  Article  3(1)  of  the 
Regulation which obliges NCAs and courts to apply Articles 101 and 102 TFEU to 

Case T-222/04 – Italian Republic v Commission. 
Case C-369/07 – Commission v Hellenic Republic. 
COM(2009)206 final, accompanied by a Staff Working Paper, SEC(2009)574 final. 

EN 

25 

   EN 

                                                 
82. 

83. 

84. 

85. 

all cases within their scope. It has led to a very significant increase in the application 
of the EU antitrust provisions. At the end of March 2009 more than 1000 cases had 
been  pursued  by  both  the  Commission  and  NCAs  in  a  wide  variety  of  sectors, 
making a single legal standard a reality on a very large scale. 

The  system  change  also  supported  a  shift  in  the  Commission's  priorities  to  areas 
where it can make an important contribution to the enforcement of Articles 101 and 
102 TFEU, such as cartels and other serious infringements, and led to an increase in 
the  number  of  enforcement  decisions  adopted.  It  has  allowed  the  Commission  to 
become more proactive, tackling weaknesses in the competitiveness of key sectors of 
the economy in a focused way by using sector inquiries as a major investigative tool. 
Accordingly,  the  new  enforcement  system  is  more  focused  on  giving  general 
guidance that can be useful to numerous undertakings and other enforcers instead of 
offering comfort to individual agreements. 

The  Regulation  entrusts  NCAs  with  a  key  role  in  the  effective  and  consistent 
enforcement  of  the  EC  antitrust  rules.  The  Commission  had  been  informed  by  the 
end  of  the  reporting  period  of  more  than  300  envisaged  decisions  by  the  national 
authorities  on  the  basis  of  Article  11(4)  of  the  Regulation  and  none  of  these  cases 
resulted  in  the  Commission  relieving  a  national  authority  of  its  competence  for 
reasons  of  coherent  application  of  the  EU  antitrust  rules.  The  Report  confirms  that 
cooperation  within  the  European  Competition  Network  (ECN)  has  successfully 
contributed towards the aim of ensuring consistency. The ECN has proven to be an 
innovative  model  of  governance  for  the  implementation  of  EU  law  by  the 
Commission  and  Member  State  authorities  and  a  successful  forum  for  discussing 
both  specific  cases  and  general  policy  issues.  The  flexible  and  pragmatic 
arrangements  on  work  sharing  and  cooperation  within  the  ECN  introduced  by  the 
Regulation have worked well over the past five years. 

National courts are also empowered by the Regulation to apply both Article 101 and 
102 TFEU in full. They have used this power in a number of sectors and have tackled 
a range of issues. By the time of the report, the Commission had issued 18 opinions 
on  questions  concerning  the  application  of  the  EU  antitrust  rules.  In  addition,  both 
the Commission and the NCAs have submitted observations as amicus curiae under 
Article  15(3)  of  the  Regulation.  The  Commission  has  used  this  power  on  two 
occasions during the reporting period when it considered that issues arose as to the 
coherent application of the EU competition rules. 

Finally, the Report highlights a number of aspects which merit further evaluation, in 
view  of  enabling  the  Commission  to  assess,  in  a  next  stage,  whether  further  policy 
initiatives are deemed appropriate. The Report first mentions certain specific issues 
relating to the Commission's enforcement powers including, for example, a perceived 
lack  of  clarity  in  Article  22(2)  of  the  Regulation,  which  provides  the  Commission 
with the power to request NCAs  to carry  out inspections on its behalf.  Second, the 
Report identifies the persisting substantive divergence of national laws in the area of 
unilateral conduct. The convergence rule contained in Article 3(2) of the Regulation 
does not cover unilateral conduct and, as a result, Member States remain free to enact 
and  maintain  stricter  national  rules.  This  divergence  was  criticised  by  the  business 
and  legal  community  and  the  Report  foresees  an  assessment  of  the  extent  of  the 
problems caused by this divergence and of the need for action at European level. 

EN 

26 

   EN 

86. 

Third, the Regulation does not formally regulate or harmonise neither the procedural 
divergence  nor  the  variety  of  sanctions  which  still  exist  when  NCAs  are  applying 
Articles  101  and  102  TFEU.  Although  such  differences  do  not  impede  the 
functioning of Regulation 1/2003 as such and many Member States have voluntarily 
aligned  elements  of  their  procedures  with  Commission  procedures,  there  may  be 
potential  for  further  enhancing  effective  enforcement  and  cooperation.  Fourth,  in 
response to stakeholders requests for greater recourse by the Commission to amicus 
curiae interventions the Report calls for a reflection on how to further develop this 
practice.  Moreover,  it  proposes  to  explore  options  for  ensuring  effective  access  to 
national  court  judgments  as  the  obligation  for  the  Member  States  to  transmit  these 
judgments  under  Article  15(2)  of  the  Regulation  has  not  functioned  optimally. 
Finally,  the  Report  considers  that  in  the  context  of  third  country  enforcement  the 
current  legal  framework  may  benefit  from  further  clarification  to  enhance  existing 
levels of protection against disclosure of information from the Commission's file, as 
well as of disclosure of the Statement of Objections (SO) and non-public version of 
the Commission Decision. 

1.2. 

Private enforcement of the EU antitrust rules 

87. 

88. 

The EU antitrust rules are enforced not only by the Commission and NCAs (public 
enforcement).  Given  that  these  rules  have  direct  effect,  they  confer  rights  on 
individuals,  including  the  right  to  damages,  that  can  be  enforced  before  national 
courts  (private  enforcement).  The  European  Court  of Justice  (ECJ) has  pronounced 
that the full effectiveness of the EU antitrust rules would be put at risk if it were not 
open to any individual to claim damages for harm caused by infringements of these 
rules87.  Yet,  in  practice  the  victims,  often  consumers  and  SMEs,  only  rarely  obtain 
compensation. 

The  Commission  has  therefore  launched  a  policy  project  aimed  at  ensuring  the 
effectiveness  of  EU  antitrust  damages  actions.  The  Commission's  2005  Green 
Paper88 identified the main obstacles to effective enforcement and launched a public 
debate on various options to overcome them. The Commission's 2008 White Paper89 
put forward concrete suggestions, such as: 

•  clarifying what type of damages can be claimed by whom; 

•  facilitating  the  position  of  consumers  and  other  indirect  victims  in  situations 

where an illegal overcharge has been passed on to them; 

•  improving the efficiency of follow-on actions for damages by providing that final 
infringement decisions of NCAs constitute sufficient proof of an infringement; 

•  ensuring  that  claimants  can  obtain  fair  access  to  evidence  through  disclosure  in 

court; 

87 

88 
89 

Joined Cases C-295/04 to C-298/04 Manfredi [2006] ECR I-6619. See also Case C-453/99 Courage vs. 
Crehan  [2001]  ECR  I-6297.  While  the  ECJ  only  refers  to  infringements  of  Article  81  EC,  it  follows 
from the Court's reasoning that the same considerations apply for Article 82 EC as well. 
COM(2005) 672 final, see http://ec.europa.eu/competition/antitrust/actionsdamages/index.html 
COM(2008) 165 final, see http://ec.europa.eu/competition/antitrust/actionsdamages/index.html 

EN 

27 

   EN 

                                                 
89. 

90. 

91. 

92. 

93. 

•  providing for effective collective redress; and 

•  suggesting  rules  to  ensure  a  smooth  interplay  between  private  and  public 

enforcement, including protection of leniency programmes. 

On 25 March, the European Economic and Social Committee adopted an opinion on 
the  White  Paper90  that  welcomes  the  White  Paper  and  explicitly  calls  on  the 
Commission to propose appropriate follow-up measures to achieve the White Paper's 
objectives. 

On  26  March,  the  European  Parliament  adopted  a  resolution  on  the  White  Paper91 
that  welcomes  the  White  Paper  and  stresses  that  effective  enforcement  of  the  EU 
antitrust rules requires that victims of breaches of these rules must be able to claim 
compensation for the damage suffered. The resolution agrees with the main finding 
of  the  White  Paper,  namely  that  consumers  as  well  as  businesses  are  currently 
hampered in exercising their right to compensation. The resolution also agrees with 
the  overall  objective  of  the  White  Paper,  namely  that  measures  are  to  be  taken  to 
ensure  full  compensation  of  the  victims,  while  avoiding  excessive  litigation,  and 
broadly supports the policy suggestions of the White Paper. 

As  regards  collective  redress,  the  Parliament's  resolution  acknowledged  the 
importance  of  collective  redress  mechanisms  for  the  ability  of  victims  to  obtain 
compensation  in  cases  of  scattered  damage,  and  welcomed  the  suggestions  in  the 
White Paper to set up collective redress mechanisms which are designed to include 
safeguards  against  excessive  litigation.  The  resolution  encouraged  the  Commission 
to give careful consideration to the possibility of a horizontal or integrated approach 
to collective redress and to ensure consistent treatment of damages claims in the area 
of  EU  competition  law  and  in  other  areas,  such  as  consumer  protection  laws.  It 
stressed, however, that such a horizontal or integrated approach does not necessarily 
require  a  single  horizontal  instrument  and,  moreover,  must  not  delay  or  avoid  the 
development  of  proposals  and  measures  identified  as  necessary  for  the  full 
enforcement of the EU antitrust rules. 

The Commission services have started work on the technical instruments designed to 
achieve  the  objectives  of  the  White  Paper,  while  taking  due  account  of  the 
resolutions, opinions and comments received within the public consultation. 

Apart  from  the  follow-up  measures  to  the  White  Paper,  the  Commission  services 
have started work on a non-binding guidance on quantification of damages. The 2005 
Green Paper already identified the existence of a number of specific difficulties faced 
by  parties  as  well  as  judges  with  regard  to  quantification  of  harm  resulting  from 
breaches  of  the  EU  antitrust  rules.  In  the  White  Paper,  the  Commission  therefore 
committed  to  publishing  a  pragmatic,  non-binding  guidance  paper  designed  to 
facilitate quantification of damages. In 2008, the Commission signed a contract for 
the provision of an external study on this subject-matter. Key aspects to be addressed 
in the guidance include the conceptual framework for quantifying antitrust damages, 

90 

91 

Opinion of the European Economic and Social Committee on the White paper on damages actions for 
breach of the EC antitrust rules, OJ C 228, 22.9.2009, p. 40. 
European Parliament resolution of 26 March 2009 on the White Paper on damages actions for breach of 
the EC antitrust rules (2008/2154(INI)). 

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28 

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including  identification  of  the  types  of  harm  that  can  be  inflicted  by  various 
infringements  of  Articles  101  and  102  TFEU,  concrete  methods  that  can  be 
employed  in  quantifying  the  harm,  as  well  as  any  economic  insights  that  can  be 
useful to judges and parties when estimating the harm suffered. 

1.3. 

Cartels 

94. 

95. 

96. 

97. 

92 

93 

94 
95 
96 
97 

In 2009, the Commission continued its strong enforcement record for the application 
of  the  antitrust  rules  to  cartel  cases  by  adopting  six  decisions92  imposing  fines 
amounting  to  EUR  1 623 million93,  on  43  undertakings94.  An  important  cartel  case 
concerns 
the  energy  markets 
(E.ON/GDF),  imposing  fines  of  EUR  553  million  on  GDF  Suez  as  well  as  on  the 
German E.ON group for participating in a market sharing arrangement relating to the 
French and German gas markets.  

the  Commission's  2009  decision  relating 

to 

For the first time it served a cartel decision to undertakings in Slovakia and Slovenia 
in  the  Calcium  Carbide  case.  The  fight  against  cartels  with  an  international 
dimension  continued  to  be  very  successful,  epitomized  by  the  decisions  in  Marine 
Hoses  (a  market  sharing  and  price  fixing  cartel  for  which  the  EU  co-operated  with 
the  US,  UK  and  Japan95),  as  well  as  in  Power  Transformers  (a  market  sharing 
agreement  between  European  and  Japanese  producers.  The  Commission  has  also 
underscored its policy of deterrence towards companies that are repeat offenders96. 

The  coordination  between  competition  authorities  during  the  investigation  period 
was  important,  particularly  in  Marine  Hoses  as  the  UK  and  the  US  also  foresee 
criminal  prosecution  of  individuals  for  cartel  violations.  This  demanded  a 
particularly  sensitive  and  coordinated  approach,  ensuring  the  integrity  of  the 
respective  procedures.  The  case  showed  how  well  competition  authorities  worked 
together  and  coordinated  their  efforts  without  compromising  procedural protections 
offered under their laws, be it of administrative or of criminal nature. 

In the case of Heat Stabilisers the Commission fined the Swiss based company AC 
Treuhand  again  for  its  active  role  as  facilitator  in  a  cartel.  AC  Treuhand  already 
received  a  fine  from  the  Commission  in  2003  for  the  same  function,  but  in  the 
context  of  another  cartel.  Back  in  2003  the  Commission  imposed  a  mere  symbolic 
fine on AC Treuhand of EUR 1 000 as it was to a certain extent a novelty to impose a 
fine for this kind of role97. This time, however, the Commission calculated the fine 
based on the gravity, duration and deterrent effect taking into account AC Treuhand's 

Cases  COMP/39406  Marine  Hoses;  COMP/39401  E.on/GDF;  COMP/39396  Calcium  Carbide; 
COMP/37956  Concrete  reinforcing  bars  (re-adoption);  COMP/39129  Power  Transformers  and 
COMP/38589 Heat Stabilisers. 
In 2008 the Commission issued seven final decisions in which it fined 37 undertakings a total of EUR 
2 271 million. 
This figure includes those companies which received immunity from fines under the Leniency Notice. 
See Annual Competition Report 2007, p. 43. 
See Case COMP/39396, Calcium carbide and COMP/38589 Heat Stabilisers. 
See Case COMP/37857, Organic peroxides, OJ L 110, 30.4.2005, p. 44 upheld by T-99/04 from 8 July 
2008 [2008] ECR II-1501. 

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29 

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involvement  in  the  cartel  activities  leading  to  a  total  amount  of  EUR  348 00098. 
Apart  from  Treuhand,  the  Commission  also  fined  a  number  of  EU  and  US 
undertakings. 

The  Court  confirmed  its  jurisprudence  and  thereby  the  Commission's  practice  in 
relation to parental responsibility in case C-97/08P, Akzo Nobel et al. v. Commission. 
According  to  the  Court,  the  Commission  is  entitled  to  assume  that  the  parent 
company  which  owns  100%  of  its  subsidiary forms one undertaking with the latter 
and  therefore  may  be  held  responsible  for  the  payment  of  the  cartel  fine  (for  more 
details see point 171 below). 

With Concrete Reinforcing Bars the Commission sent, yet again99, the clear message 
that  cartel  participants  cannot  escape  fines  if,  for  procedural  reasons,  the  Court 
quashes  the  Commission's  decision.  In  2009  the  Commission  readopted  its  initial 
decision  from  2002  after  the  judgment  of  the  CFI  in  2007100  and  retained  all  eight 
undertakings, confirming an almost identical fine to them101. 

The Leniency policy of the Commission continues to prove helpful in detecting and 
investigating  cartels.  About  75%  of  cartel  investigations  are  based  on  immunity 
applications. Undertakings which provided significant added value when cooperating 
with the Commission during the investigation received substantial reductions to their 
respective fines for which the cartel decisions in 2009 are a case in point. 

The  Commission  attaches  great  importance  to  the  protection  of  its  leniency 
programme and more generally to the protection of the integrity of its enforcement 
procedure.  That  is  why  the  Commission  intervened  in  a  US  Court102,  where  the 
discovery of leniency material as well as other documents from the Commission file 
were  being  ordered,  in  a  matter  relating  to  the  Commission  investigation  into  Flat 
Glass, a case decided end of 2007. The intervention by the Commission in this case 
was successful, as discovery was avoided through settlement of the parties. 

In order to detect and/or examine cartels, Regulation 1/2003 gives the Commission 
powers of investigation, notably the power to conduct inspections either at business 
premises or in private homes. During 2009, on-site inspections took place in a wide 
variety  of  sectors,  such  as  Power  Cables103,  Compressors  for  Refrigeration104, 
Shrimps105, Special glass sector106 as well as Cement and related products107. 

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/1695&format=HTML&aged=0

&language=EN&guiLanguage=en 
See  also  Case  COMP/39234  Alloy  surcharge  readoption  (OJ  L  182,  12.7.2007,  pp.  31-32  and  non-
confidential version of the decision on the website of DG Competition). The undertaking submitted an 
appeal which was fully rejected by the CFI in T-24/07 Thyssen Krupp Stainless AG/Commission [2009]. 
The latter's judgment is currently under appeal. 
T–77/03 Feralpi Siderugica SpA/Commission [2007] ECR II-139 Summ.pub. 
With the re-adoption decision the Commission imposed a fine of EUR 83,250 million, reducing the fine 
for one of the undertakings from EUR 16,140 million to EUR 14,350 million because of a shift in the 
latter's relative size. 
Flat Glass Antitrust Litigation (II) Civil Action No 08-mc-180 MDL No. 1942. 
Case COMP/39610. 
Case COMP/39600. 
Case COMP/39633. 
Case COMP/39605. 

98. 

99. 

100. 

101. 

102. 

98

99 

100 
101 

102 
103 
104 
105 
106 

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30 

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1.4. 

Other agreements and concerted practices 

103. 

104. 

105. 

106. 

In  July,  the  Commission  adopted  its  final  report  on  the  sector  inquiry  into 
pharmaceuticals (launched in 2008) identifying serious shortcomings in the sector. 

Concerning the application of the antitrust rules to non-cartel cases, the Commission 
adopted,  on  14  October,  a  commitment  decision108  under  Article  9(1)  of  Council 
Regulation  (EC)  No  1/2003  rendering  legally  binding  commitments  offered  by  the 
International  Association  of  Classification  Societies  (IACS)  to  address  concerns 
raised in the course of an investigation pursuant to Article 81 EC and Article 53 of 
the EEA Agreement in the worldwide ship classification market.  

The  Commission  also  opened  proceedings  in  relation  to  the  cooperation  between 
certain STAR alliance and Oneworld airline companies on transatlantic routes. 

The  Commission  is  presently  in  the  process  of  reviewing  a  number  of  Block 
Exemption Regulations and, when relevant, accompanying guidelines relating to the 
application of Article 101 TFEU, which are due to expire in the near future. These 
reviews concern in particular the Block Exemptions for Vertical Agreements and for 
Horizontal Agreements as well as the sector specific Block Exemption for Insurance. 
The  revisions  of  the  Block  Exemptions  for  Motor  Vehicles  and  for  Maritime 
Transport (liner shipping consortia) were concluded in 2009. 

1.4.1.  The review of the Block Exemption Regulation on Vertical agreements 

107. 

108. 

109. 

Vertical  agreements  are  agreements  for  the  sale  or  purchase  of  goods  or  services 
between  companies  operating  at  different  levels  of  the  distribution  chain,  for 
example  between  a  manufacturer,  a  wholesaler  and  a  retailer.  Vertical  agreements 
are pervasive: indeed, the vast majority of agreements entered into between firms are 
vertical,  as  this  term  covers  agreements  relating  to  the  purchase  of  inputs  and 
distribution of outputs. 

In  2009,  the  Commission  continued  its  review  of  the  current  EU  block  exemption 
regulation  applicable  to  vertical  agreements  (the  BER)  and  the  accompanying 
guidelines on vertical restraints (the Guidelines). In 1999, this package was the first 
of  a  new  generation  of  exemption  regulations  and  guidelines  inspired  by  a  more 
economic  and  effects-based  approach  which,  in  the  Commission's  and  the  NCAs' 
assessment, has worked well in practice.  

The  Commission  issued  draft  BER  and  Guidelines  for  public  consultation  in  July, 
where the Commission proposed to maintain, in essence, the current rules, while at 
the  same  time  adapting  and  refining  them  to  take  account  of  developments  in  the 
marketplace, in particular the market power of buyers, and the continuous increase of 
on-line sales.  

110. 

In  order  to  reflect  the  increased  attention  to  buyer  power  issues,  the  Commission 
proposed that for a vertical agreement to benefit from the block exemption, not only 
the supplier's market share (as is currently the case) but also the buyer's market share 

107 
108 

Case COMP/39520. 
Case COMP/39416 Ship Classification. 

EN 

31 

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111. 

112. 

should not exceed 30% on the affected markets where the buyer resells the contract 
products.  In  addition,  the  Commission  added  in  the  draft  Guidelines  two  new 
sections  which  provide  guidance  on  the  assessment  of  restraints  which  are  mainly 
buyer driven, namely upfront access fees, such as slotting allowances, and category 
management. 

Regarding  on-line  sales,  on  the  one  hand  there  is  a  need  to  protect  consumers' 
possibilities to purchase to their advantage across borders, which is greatly facilitated 
by  the  internet.  On  the  other  hand,  certain  sales  restrictions  that  aim  at  limiting  or 
preventing  distributors  from  taking  unfair  advantage  of  marketing  and  brand 
promotion  undertaken  by  others  (i.e.  free  riding)  may  enable  consumers  to  benefit 
from better services. The Commission's suggested approach therefore refines, in the 
on-line  context,  the  distinction,  between  sales  made  as  a  result  of  active  marketing 
and sales made as a result of the consumer taking the initiative (i.e. between active 
and  passive  sales),  and  explains  how  the  revised  texts  would  deal  with  conditions 
imposed in relation to internet sales, such as a requirement imposed by a supplier that 
the  distributor  should  have  a  "brick  and  mortar"  shop  before  engaging  in  on-line 
sales. 

The  Commission  received  some  160  contributions  from  a  wide  range  of 
stakeholders,  including  businesses,  consumer  organisations,  national  authorities, 
academics  and  the  legal  community.  The  stakeholders  expressed  strong  support  to 
maintain in force a system of block exemption and accompanying Guidelines, which 
is considered to have overall worked well in practice. The stakeholders commented 
extensively on the two major issues, in particular the extension of the market share 
threshold  to  buyers  and  the  treatment  of  restrictions  on  the  use  of  the  internet. 
Beyond  these  issues,  the  Commission's  proposed  approach  to  hardcore  restrictions 
was generally welcomed, in particular the clarification that also hardcore restrictions 
may individually fulfil the conditions of Article 101(3) TFEU. 

113. 

The  Commission  services  are  currently  analysing  the  results  of  the  public 
consultation in order to propose a final text for the adoption by the College. The new 
rules should enter into force upon the expiry of the current BER in May 2010. 

1.4.2.  The review of the Block Exemption Regulations on Horizontal agreements 

114. 

Horizontal  agreements  are  agreements  between  competitors  operating  at  the  same 
level,  cooperating  in  areas  such  as  research  and  development,  joint  production  or 
selling,  information  exchange,  standardisation  etc.  Such  agreements  may  lead  to 
important  efficiencies  and  increased  consumer  welfare.  However,  since  they  imply 
cooperation by competitors they also risk leading to anti-competitive effects.  

115. 

The  Block  Exemption  Regulations  for  Specialisation  agreements109  ("Specialisation 
BER") and for Research and Development agreements110 ("R&D BER") expire on 31 
December  2010.  The  Commission  has  therefore  started  the  revision  of  these 

109 

110 

Commission Regulation (EC) No 2658/2000 of 29 November 2000 on the application of Article 81(3) 
to categories of specialisation agreements, OJ L 304, 5.12.2000, p. 3. 
Commission Regulation (EC) No 2659/2000 of 29 November 2000 on the application of Article 81(3) 
to categories of research and development agreements, OJ L 304, 5.12.2000, p. 7. 

EN 

32 

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regulations and the accompanying horizontal guidelines111. The horizontal guidelines 
cover  not  only  specialisation  and  R&D  agreements  but  also  other  types  of 
agreements  such  as  production,  commercialisation  and  joint  purchasing  agreements 
and aim at giving guidance on how to assess such agreements under EU competition 
law. 

116. 

The Commission is in the process of examining how the Specialisation and the R&D 
BERs  have  been  applied  so  far  and  whether  there  is  a  need  to  amend  the  current 
rules.  This  work  is  done  in  close  cooperation  with  the  NCAs  within  the  European 
Competition Network. A first consultation of stakeholders took place at the turn of 
2008/2009. The Commission intends to publish the draft block exemption regulations 
and guidelines in early 2010.  

1.4.3.  The review of the Motor Vehicle Block Exemption Regulation 

117. 

118. 

119. 

On 28 October, the Commission adopted a set of draft guidelines and a draft Block 
Exemption  for  the  motor  vehicle  sector  ("Motor  vehicle  BER").  These  two  draft 
instruments  apply  to  agreements  for  motor vehicle  distribution  (primary  market)  as 
well  as  to  the  markets  for  repair,  maintenance  and  the  distribution  of  spare  parts 
(aftermarket).  They  are  intended  to  replace  the  existing  BER112  as  of  1  June  2010 
with  regard  to  the  aftermarket,  and  as  of  1  June  2013  for  the  primary  market. 
Following  the  Advisory  Committee  meeting  with  Member  States,  on  21  December 
the  Commission  published  the  two  documents  for  public  consultation  until  10 
February 2010. 

The two draft texts follow the course set in the Commission's Communication of 22 
July. That Communication identified clear differences between the primary market, 
on  which  competition  is  strong,  and  the  markets  for  repair  and  maintenance  and 
spare parts, on which competition is more limited due to their brand-specific nature. 

An  in-depth  market  analysis113  revealed  that  there  are  no  significant  competition 
shortcomings  justifying  distinguishing  the  markets  for  new  motor  vehicles  from 
other economic sectors. The markets are fairly open, with relatively low barriers to 
entry.  Technology  is  an  increasingly  important  factor  driving  competition.  Model 
ranges have expanded, and manufacturers tend to have a global or regional presence 
rather than simply having a strong position on their home market. This vigorous and 
increasing inter-brand competition has translated into highly competitive price levels. 

120. 

The  Commission  believes  that  car  distribution  agreements  should  not  be  treated 
differently  from  any  similar  agreements  in  other  sectors.  The  draft  BER  therefore 
provides that the future general Block Exemption for vertical restraints will take the 
place of the current specific rules for such agreements. However, in order to protect 

111 

112 

113 

Commission  Notice  –  Guidelines  on  the  applicability  of  Article  81  to  horizontal  cooperation 
agreements, OJ C 3, 6.1.2001, p. 2. 
Commission Regulation 1400/2002 of 31 July 2002 on the application of Article 81(3) of the Treaty to 
categories  of  vertical  agreements  and  concerted  practices  in  the  motor  vehicle  sector,  OJ  L  203, 
1.8.2002, pp 30-41. 
See  Evaluation  Report  on  the  operation  of  Commission  Regulation  (EC)  1400/2002  of  28  May  2008 
and  the  Commission  Communication  on  The  Future  Competition  Law  Framework  applicable  to  the 
Motor Vehicle sector of 22 July 2009 (COM(2009)388 final), including an Impact Assessment Report 
(SEC(2009)1052). 

EN 

33 

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121. 

122. 

investments made by car dealers under the old rules, for instance in multi-brand sites, 
it  is  proposed  that  this  changeover  will  not  occur  until  31  May  2013.  As  to  the 
assessment of such agreements after this date, the draft Guidelines give explanations 
on key issues such as the protection of cross-border trade in cars and the approach to 
be  taken  should  single-branding  arrangements  between  manufacturers  and  dealers 
lead to competing manufacturers being shut out of a particular market. 

In  the  Communication,  the  Commission  took  the  line  that  the  application  of  the 
future  general  Block  Exemption  to  the  motor  vehicle  aftermarkets  might  prove 
insufficient  to  protect  competition.  Sector-specific  provisions  were  needed  in  a 
number of areas, although the Communication left open the question as to what form 
they would take. 

The  draft  Guidelines  adopted  on  28  October  deal  with  issues  such  as  access  to  the 
franchised  repair  networks,  the  provision  of  technical  information  to  independent 
repairers, and refusals to honour warranties unless all repairs have been carried out in 
the  authorised  networks.  The  Block  Exemption  was  considered  a  more  appropriate 
instrument  for  protecting  competition  as  regards  the  supply  of  spare  parts,  in 
particular  since  market  definition  in  this  area  can  be  problematic,  and  contains 
specific  hardcore  clauses in this respect. The draft proposal foresees that new rules 
will apply to agreements for repair and maintenance and to the distribution of spare 
parts from 1 June 2010.  

1.4.4.  The review of the Insurance Block Exemption Regulation 

123. 

124. 

125. 

The  Commission  has  carried  out  a  review  of  the  functioning  of  the  current  Block 
Exemption Regulation in the insurance sector114 ("the current Insurance BER") with 
a view to determining whether a new Insurance BER should be adopted  before the 
current one expires on 31 March 2010. 

Under  the  Implementing  Regulation115,  the  Commission  is  required  to  submit  a 
report  to  the  European  Parliament  and  Council  on  the  functioning  of  the  Insurance 
BER, six years after its entry into force, together with any proposals for amendment 
which would derive from experience.  

The  Commission  began  its  review  of  the  functioning  of  the  Insurance  Block 
Exemption Regulation (the Review) in November 2007 by consulting NCAs and in 
April  2008  it  launched  a  public  consultation.  In  addition,  the  Commission  sent 
targeted  questionnaires  to  certain  stakeholders,  public  authorities  and  consumer 
organisations. Following closure of the consultation, the Commission sent follow-up 
questionnaires  to  certain  stakeholders  including  small  and  medium-sized  insurers, 
pools and producer federations of security devices. The NCAs were closely involved 
in the review.  

126. 

The  primary  original  objective  of  the  current  Insurance  BER  was  to  facilitate  the 
Commission's task in view of the large number of notifications being received. Since 

114 

115 

Commission Regulation (EC) No 358/2003 of 27 February 2003 on the application of Article 81(3) to 
certain  categories  of  agreements,  decisions  and  concerted  practices  in  the  insurance  sector  (OJ L 53, 
28.2.2003, p. 8). 
Council Regulation (EC) 1534/91, OJ L 143, 7.6.1991, p. 1. 

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the  adoption  of  Regulation  1/2003  and  the  consequent  abolition  of  the  notification 
system,  such  objective  is  no  longer  of  relevance.  To  assess  whether  to  renew  the 
current  Insurance  BER,  the  Commission  asked:  (i)  whether  the  business  risks  or 
other issues in the insurance sector make it "special" and different from other sectors 
and whether  this  leads to an enhanced need for cooperation; (ii) if so, whether this 
enhanced need for cooperation requires a legal instrument such as for example, the 
BER  to  protect  or  facilitate  it;  and  (iii)  if  so,  whether  the  current  BER  is  the  most 
appropriate  legal  instrument  (or  whether  partial  renewal,  amended  renewal,  or 
Guidelines would be preferable). 

Report to European Parliament and Council 

On 24 March, the Commission adopted its Report116 to the European Parliament and 
Council  which  is  accompanied  by  a  detailed  Working  Document.  The  documents 
analyse  in  detail  the  Commission's  findings  during  the  Review.  On  2  June  the 
Commission held a public event, in order to hear further reactions on the Report and 
accompanying Working Document.  

Public Consultation on Draft New Insurance BER 

The  Commission's  conclusion  on  the  basis  of  the  evidence  it  found  during  the 
Review is that it is not appropriate to renew two of the four exemptions in the current 
Insurance  BER,  i.e.  the  exemptions  for  standard  policy  conditions  ("SPCs")  and 
security devices.  

The  Commission  considers  that  both  SPCs  and  agreements  on  security  devices  are 
not specific to the insurance sector and as such do not require a sector-specific BER. 
However, the Commission is considering addressing both SPCs and security devices 
in  the  general  standardisation  chapter  in  its  Horizontal  Guidelines  which  are 
currently being revised. 

The  evidence  did  however  support  renewal  of  the  BER  for  the  remaining  two 
categories  of  agreements,  namely  joint  compilations,  tables  and  studies  as  well  as 
agreements on co-insurance and co-reinsurance pools. The draft new Insurance BER 
therefore exempts both these categories. This draft was published for consultation on 
5 October for 8 weeks. 

127. 

128. 

129. 

130. 

131. 

The Commission plans to have the new Insurance BER adopted and published before 
expiry of the current Insurance BER on 31 March 2010. 

1.4.5.  The Review of the Consortia Block Exemption Regulation 

132. 

On  28  September  the  Commission  adopted  Regulation  (EC)  No  906/2009  on  the 
application  of  Article  81(3)  EC  to  certain  categories  of  agreements,  decisions  and 
concerted practices between liner shipping companies (consortia)117. This Regulation 
allows operational cooperation to provide a joint liner shipping service between liner 
shipping  carriers  subject  to  certain  conditions.  Such  type  of  cooperation  has  been 

116 
117 

COM/2009/0138. 
OJ L 256, 29.9.2009, p. 31. 

EN 

35 

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133. 

134. 

135. 

136. 

137. 

exempted from the EU competition rules since 1995. The new Regulation enters into 
force on 25 April 2010 for a duration of five years. 

Liner  shipping  involves  the  transport  of  cargo  on  a  regular  basis  to  ports  of  a 
particular  geographic  route,  in  accordance  with  time  tables  and  sailing  dates 
advertised  in  advance  and  available  to  any  transport  user.  A  consortium  is  an 
operational  cooperation  agreement  between  two  or  more  liner  shipping  carriers  to 
provide  a  joint  liner  shipping  service  on  a  given  route.  Due  to  the  high  level  of 
investment required to set up a service with fixed schedules, liner shipping is mostly 
provided by groups of shipping lines organised in consortia. 

The review of the Regulation was launched with a general market investigation in the 
summer of 2007, followed by a public consultation in October 2008. The aim was to 
incorporate  amendments  necessary  due  to  the  repeal  of  the  liner  conference  Block 
Exemption Regulation 4056/86118 and the adoption of Regulation 1/2003, as well as 
to better reflect current market practices and to bring the consortia block exemption 
in  line  with  other  block  exemption  regulations  for  horizontal  cooperation  between 
companies. 

The new Regulation has reduced the market share threshold to 30% from previously 
35% or 30% depending on whether a consortium operated within or outside a liner 
shipping  conference.  Furthermore  the  Regulation  clarified  that  for  assessing  the 
market  share  threshold  the  sum  of  the  market  shares  of  the  individual  consortium 
members in the relevant market needs to be taken into account. For that purpose not 
only  the  volumes  the  consortium  member  transports  within  the  consortium  in 
question is relevant, but also all volumes carried by it outside the consortium need to 
be taken in to account. Such volumes might either be carried by the member, on the 
basis of a parallel individual service, or by another carrier on behalf of that member, 
on the basis of a slot charter arrangement or another consortium agreement. 

In  view  of  the  increasing  cross-linking  of  consortia  and  their  members,  the 
Regulation clarifies in its recitals that the Commission may withdraw the benefit of 
the block exemption if a consortium agreement has effects incompatible with Article 
81(3) EC that may derive from the existence of links between the consortium and/or 
its members and other consortia and/or liner carriers on the same relevant market. 

Finally the scope of the Regulation was widened to include all liner shipping services 
transporting cargo, whether containerised or not. The list of exempted activities was 
revised to better reflect current market practices. The new Regulation simplifies the 
conditions which a consortium agreement has to comply with in order to benefit from 
the Block Exemption Regulation. In particular, it sets the maximum duration of the 
so-called  exit  clauses  and  lock-in  provisions  in  case  a  member  wants  to  withdraw 
from the consortium. 

118 

Regulation (EEC) No 4056/86 of 22 December 1986 laying down detailed rules for the application of 
Articles 85 and 86 EC to maritime transport, OJ L 378, 31.12.1986, p. 4. 

EN 

36 

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1.5. 

Abuse of dominant positions (Article 102 TFEU) 

138. 

139. 

140. 

141. 

The "Commission's Guidance on its enforcement priorities in applying Article 82 EC 
of  the  Treaty  to  abusive  exclusionary  conduct  by  dominant  undertakings"  was 
published in the Official Journal (OJ)119. 

On  13  May,  the  Commission  adopted  a  prohibition  decision  in  the  Intel  case120 
finding that Intel had infringed Article 82 EC by engaging in illegal anticompetitive 
practices  with  the  aim  of  excluding  competitors  from  the  market  for  x86  Central 
Processing Units (CPU). These practices harmed consumers throughout the EEA. By 
undermining its competitors' ability to compete on the merits of their products, Intel's 
actions undermined competition, reduced consumer choice and hindered innovation.  

In  the  Microsoft  case,  the  commitments  offered  by  Microsoft  provide  for  a  timely 
and satisfactory solution to the competition concerns raised by the Commission in a 
Statement  of  Objections  in  January  2009  related  to  the  tying  of  Microsoft's  web 
browser  Internet  Explorer  to  its  dominant  client  PC  operating  system  Windows. 
Microsoft  committed  (a)  to  distribute  a  Choice  Screen  software  update  to  users  of 
Windows client PC operating systems within the EEA by means of Windows Update 
that will offer users an unbiased choice between the most widely used web browsers 
in  the  EEA, and  (b)  to  make available a mechanism in Windows 7 and subsequent 
versions  of  Windows  in  the  EEA  enabling  PC  manufacturers  and  end  users  to  turn 
Internet Explorer on and off. The commitments were made binding on Microsoft by 
a Decision of 16 December 2009121. 

In  the  Rambus  case,  the  Commission  had  expressed  concerns  that  Rambus  was 
imposing unreasonable royalties for the use of certain patents for DRAM chips used 
in virtually all PCs. The Commission adopted a  decision  on  9  December  2009 that 
renders legally binding commitments offered by Rambus that in particular put a cap 
on  its  royalty  rates122.  In  2008,  worldwide  DRAM  sales  exceeded  US$  34  billion 
(more  than  EUR  23  billion).  Rambus  committed  to  put  a  worldwide  cap  on  its 
royalty  rates  for  five  years.  Rambus  agreed  to  charge  zero  royalties  for  the  earlier 
generations of chips concerned in combination with a maximum royalty rate of 1.5% 
for the later generations of chips concerned. This is substantially lower than the 3.5% 
Rambus  was  previously  charging.  The  case  shows  once  more  that  an  effective 
standard-setting  process  should  take  place  in  a  non-discriminatory,  open  and 
transparent  way  to  ensure  competition  on  the  merits  and  to  allow  consumers  to 
benefit from technical development and innovation123.  

142. 

In  the  field  of  energy,  the  Commission  adopted  a  further  decision  as  part  of  the 
follow-up  of  the  energy  sector  inquiry  in  2007.  In  March  2009,  the  Commission 
adopted a decision rendering binding divestiture commitments from the German gas 

119 
120 
121 

122 

123 

OJ C 45, 24.2.2009, p. 7. 
Case COMP/37990 Intel (OJ C 227, 22.9.2009, p. 13). 
The Decision is published on the website of the Directorate-General for Competition under "Antitrust 
cases". 
A  non-confidential  version  of  the  Decision  and  the  commitments  is  available  on  the  Commission's 
website at: http://ec.europa.eu/comm/competition/antitrust/cases. 
The  decision  and  the  commitments  are  published  on  the  website  of  the  Directorate-General  for 
Competition under "Antitrust cases". 

EN 

37 

   EN 

                                                 
143. 

144. 

incumbent RWE which committed to divesting its Western German gas transmission 
network124. 

The  Commission  also  initiated  proceedings  against  the  Polish  and  Slovakian 
incumbents in the broadband market125 and against Svenska Kraftnät concerning the 
Swedish electricity transmission market126. 

Lastly,  in  the  field  of  financial  services,  the  Commission  sent  a  SO  to  Standard  & 
Poor's  (S&P)  in  October,  outlining  the  preliminary  view  that  S&P  infringed  its 
dominant position in relation to issuance and licensing of securities identifier codes 
called ISINs127. The Commission also opened formal proceedings against Thomson 
Reuters concerning the use of RICs128. 

1.6. 

State  measures  (Public  undertakings/Undertakings  with  exclusive  and  special 
rights) 

145. 

In 2009, the Commission was also active in the area of Article 106 TFEU.  

146. 

On 2 February, following up on the infringement proceedings initiated in the course 
of  2008129,  the  Commission  sent  a  Reasoned  Opinion130  to  the  Slovak  Republic 
requesting  it  to  bring  the  Slovak  Competition  Act  in  conformity  with  EU  law.  The 
Reasoned  Opinion  concerned  in  particular  Section  2(6)  of  the  Slovak  Competition 
Act, which excluded the applicability of the Act  in situations where the conduct of 
the  undertakings  is  at  the  same  time  subject  to  sector  specific  ex-ante  regulatory 
obligations (such as in the electronic communications, energy or postal sectors), thus 
limiting  the  ability  of  the  NCA  to  effectively  apply  Articles  81  and  82  EC  to 
anticompetitive behaviour which would also fall within the competence of regulatory 
authorities.  In  the  Reasoned  Opinion  the  Commission  considered  this  provision  of 
the Competition Act to be incompatible with Article 10 EC and Regulation 1/2003 
and enjoined the Slovak Republic to take the necessary measures to put an end to the 
infringement.  Following  the  Reasoned  Opinion,  the  Slovak  Republic  repealed  the 
contested  provision  in  its  entirety  with  effect  from  1  June.  On  25  June  the 
Commission therefore adopted a decision to close the infringement procedure131. 

124 
125 
126 
127 

128 

129 

130 
131 

See IP/09/410, 18.3.2009. 
MEMO/09/203, 27.4.2009. 
Status October 2009 (commitments Microsoft and Svenska Kraftnät being market tested). 
ISIN  are  the  global  identifiers  for  securities  and  are  governed  by  International  Standardisation 
Organisation  (ISO)  standard  6166.  They  are  indispensable  for  a  number  of  operations  that  financial 
institutions  carry  out  (for  instance,  reporting  to  authorities  or  clearing  and  settlement)  and  cannot  be 
substituted by other identifiers for securities. See also MEMO/09/508. 
RICs are short, alphanumerical codes that identify securities and their trading locations. They are used 
to retrieve information from Thomson Reuters' real-time datafeeds, for example real-time information 
on stock prices at a certain exchange. See also IP/09/1692 of 10.11.2009. 
The  Commission  sent  a  letter  of  formal  notice  to  the  Slovak  Republic  on  6  June  2008.  The  Slovak 
Government replied to the letter of formal notice on 14 August 2008.  
See Press Release IP/09/200, 2.2.2009. 
See  Press  Release  IP/09/1182,  23.7.2009.  The  successful  resolution  of  this  case  follows  a  previous 
infringement  procedure  against  the  Czech  Republic  where  similar  problematic  legislation  was  also 
repealed in 2007.  

EN 

38 

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147. 

148. 

In  August,  the  Commission  adopted  a  decision  pursuant  to  Article  86(3)  EC  by 
which it has accepted commitments made by Greece to ensure fair access to Greek 
lignite deposits132. 

On 10 May 2007, the Commission adopted a decision on the basis of Article 86(3) 
EC  finding  that  the  exclusive  right  for  the  distribution  of  a  savings  book  product 
(Livret A) granted by France to three banks (Banque Postale, Caisses d’Epargne and 
Crédit Mutuel) constituted an infringement of Article 86(1) EC in conjunction with 
the freedom of establishment and the freedom to provide services (Articles 43 and 49 
EC)  due  to  the  resulting  obstacles  for  French  and  foreign  competitors  to  enter  and 
develop the market for liquid savings in France. The decision also set a deadline to 
amend  the  legislation  within  nine  months.  As  no  such  amendment  was  adopted 
within  the  prescribed  period,  the  Commission  sent  a  Letter  of  Formal  Notice  on  5 
June 2008 with a view to obliging France to ending the infringement. As a result of 
the  infringement  proceedings,  France  opened  up  the  distribution  of  Livret  A  on  1 
January 2009. Since then, a significant number of new "livret A" accounts have been 
opened  in  banks  which  are  now  enabled  to  distribute  these  accounts  and  the 
brokerage fees have been cut by nearly half. On 8 October the European Commission 
therefore decided to close the infringement procedure. 

149. 

The Commission pursued its infringement proceedings under Article 226 EC against 
the  Slovak  Republic  for  the  non-implementation  of  the  2008  Commission  decision 
on the Slovakian postal Law133. 

2. 

SELECTED COURT CASES  

2.1. 

Case  C-8/08  T-Mobile  Netherlands  &  Others  v.  Raad  van  bestuur  van  der 
Nederlandse Mededingingsautoriteit (NMa) 

Criteria for establishing a concerted practice 

150. 

The background to this case is a reference for a preliminary ruling under Article 234 
EC  from  a  Dutch  court  in  the  proceedings  between  five  mobile  telephone  network 
operators134 and the Dutch competition authority (NMa). The NMa imposed a fine on 
the mobile telephone operators active in the Netherlands for exchanging information 
and agreeing, during a meeting, on the reduction and "standardisation" of the fees for 
postpaid  subscriptions  required  by  dealers  who  sell  to  final  consumers  those 
subscriptions on behalf of the telecom operators. This decision was appealed before 
the  referring  court  which  referred  to  the  ECJ  several  questions  related  to  the 
interpretation of Article 81 EC. 

151. 

On  4  June,  the  ECJ  clarified,  in  accordance  with  existing  jurisprudence,  when  a 
concerted  practice,  in  particular  an  exchange  of  information  between  competitors, 
restricts  competition  by  object.  According  to  the  ECJ,  the  criteria  laid  down  in  the 

132 
133 

134 

OJ C 243, 10.10.2009, p. 5.  
Case  COMP/39562  Slovakian  postal  Law  (OJ C 322,  17.12.2008,  p. 10).  See  also  Press  Release 
IP/08/1467, 7.10.2008. 
T-Mobile  Netherlands  BV  (previously  Ben  Nederland  BV);  Orange  Nederland  NV  (previously 
Dutchtone NV); KPN Mobile NV; Telfort BV (previously O2 Netherlands BV) and Vodafone Libertel 
NV. 

EN 

39 

   EN 

                                                 
Court’s  case-law  for  the  purpose  of  determining  whether  an  agreement  has  as  its 
object  a  restriction  of  competition  are  applicable  mutatis  mutandis  to  a  concerted 
practice. Accordingly, there is no need to consider the effects of a concerted practice 
where  its  anti-competitive  object  is  established.  A  concerted  practice  pursues  an 
anti-competitive  object  where,  according  to  its  content  and  objectives  and  having 
regard  to  its  legal  and  economic  context,  it  is  capable  in  an  individual  case  of 
resulting  in  the  prevention,  restriction  or  distortion  of  competition  within  the 
common  market.  It  is  not  necessary  for  there  to  be  actual  prevention,  restriction  or 
distortion  of  competition  or  a  direct  link  between  the  concerted  practice  and 
consumer  prices.  The  prohibition  in  Article  81  EC  is  not  limited  to  concerted 
practices which have a direct effect on the prices paid by end users, since Article 81 
EC, like the other competition rules of the Treaty, is designed to protect not only the 
immediate  interests  of  individual  competitors  or  consumers  but  also  to  protect  the 
structure  of  the  market  and  thus  competition  as  such.  An  exchange  of  information 
between  competitors  is  tainted  with  an  anti-competitive  object  if  the  exchange  is 
capable  of  removing  uncertainties  concerning  the  intended  conduct  of  the 
participating undertakings. 

In  addition,  contrary  to  the  opinion  of  its  Advocate  General,  the  ECJ  held  that  the 
presumption  of  a  causal  connection  between  the  "concertation"  and  the  conduct  of 
the  undertakings  on  the  market  established  in  the  case  law  does  not  constitute  a 
procedural rule, but rather stems from Article 81(1) EC, and it consequently forms an 
integral  part  of  the  applicable  Community  law,  which  has  to  be  followed  by  the 
national enforcers. The ECJ finally ruled that the presumption of a causal connection 
between "concertation" and market conduct can be established even if the concerted 
practice is an isolated event, one meeting of the undertakings being enough for this 
presumption to apply. The ruling of the ECJ therefore strengthens the enforcement of 
Article  81  EC  since  the  presumption  established  in  the  case  law  facilitates 
considerably the bringing of evidence of a concerted practice. 

152. 

2.2. 

Case C-429/07, Inspecteur van de Belastingdienst v. X BV  

153. 

154. 

Deductability of fines for tax purposes and the effectiveness of EU competition 
law 

The background to this case is a reference for a preliminary ruling under Article 234 
EC  from  a  Dutch  court  (the  referring  court)  in  the  proceedings  between  the  Dutch 
Tax authorities and a company, X BV who was trying to partially deduct the amount 
of the fine imposed by the Commission from the amount of its taxable profits. 

This  ruling  of  the  ECJ  of  11  June  relates  to  the  interpretation  of  Article  15(3)  of 
Regulation  1/2003,  which  provides  that  the  Commission  may  submit  on  its  own 
initiative  written  observations  (intervention  as  amicus  curiae)  to  national  courts 
applying Articles 81 and 82 EC where "the coherent application of Articles 81 or 82 
EC  so  requires".  The  ECJ  ruled  that  the  option  for  the  Commission,  acting  on  its 
own  initiative,  to  submit  written  observations  to  courts  of  the  Member  States  is 
subject to the sole condition that the coherent application of Articles 81 or 82 EC so 
requires.  That  condition  may  be  fulfilled  even  if  the  proceedings  concerned  to  not 
pertain to issues relating to the application of Article 81 or Article 82 EC. The ECJ 
stated further that the effectiveness of the fines imposed by the Commission relates 
to  the  coherent  application  of  Articles  81  and  82  EC.  The  effectiveness  of  the 

EN 

40 

   EN 

Commission’s  decision  by  which  it  imposed  a  fine  on  a  company  might  be 
significantly  reduced  if  the  undertaking  concerned  was  allowed  to  partially  deduct 
the amount of that fine from the amount of its taxable profits. The ECJ concluded on 
this basis that the Commission was entitled to submit its written observations in this 
case.  The  ruling  of  the  ECJ,  by  an  extensive  interpretation  of  the  Commission's 
possibilities  to  intervene  as  amicus  curiae  in  national  proceedings,  strengthens  the 
Commission's role in ensuring uniform and effective application of competition rules 
by national courts in the EU. The Commission has subsequently submitted its written 
observations opposing tax deductibility of competition fines. 

2.3. 

T-301/04,  Clearstream  Banking  AG  and  Clearstream  International  SA  v. 
Commission  

155. 

156. 

157. 

158. 

Refusal to supply certain post-trading services in the financial sector 

The  case  concerns  an  appeal  before  the  CFI  launched  against  the  Commission's 
decision  COMP/38096  Clearstream  (Clearing  and  Settlement).  The  Commission 
found  in  its  decision  that  Clearstream  Banking  AG  (CBF),  the  German  Central 
Securities  Depository,  and  Clearstream  SA,  its  100%  shareholder,  had  infringed 
Article 82 EC by refusing to supply certain clearing and settlement services135 to one 
of  its  customers,  Euroclear  Bank  SA  (EB)  as  well  as  by  applying  discriminatory 
prices to the same customer. 

In  their  appeal,  the  applicants  contested  the  definition  of  the  product  market  and 
hence  the  dominant  position  held  by  CBF.  The  applicants  claimed  also  that  their 
conduct  was  not  abusive  with  regard  to  the  refusal  to  supply  as  the  difficulties 
resulting  in  the  delay  of  linking  EB  to  CBF's  settlement  processing  system  were 
attributable  to  EB.  Furthermore,  the  applicants  argued  that  the  pricing  was  not 
discriminatory,  as  foreign  central  securities  depositories  (CSDs)  and  international 
central  securities  depositories  (ICSDs)  like  EB  received  different  service  packages 
involving different costs. 

On  9  September,  the  CFI  dismissed  the  appeal  in  its  entirety.  The  judgment  of  the 
CFI  confirming 
important  since 
competition  in  the  post-trading  arena  is  still  limited  and  national  monopolies  of 
historic incumbents are often reinforced by various state measures. 

the  Commission's  decision 

is  particularly 

First, as regards market definition the Commission argued that a distinction had to be 
made  between  primary  and  secondary  clearing  and  settlement  services.  The  CFI 
confirmed  this  definition  by  rejecting  the  applicants'  argument  that  the  persons 
requesting post-trading clearing and settlement services are the sellers and the buyers 
of the security transaction and that therefore there should be one general market for 
clearing and settlement services in which those seeking services are the parties to the 
securities transaction. The CFI reached the conclusion that CBF's custody monopoly 
in  respect  of  securities  issued  under  German  law  results  in  a  monopoly  of  primary 

135 

Clearing and settlement are post-trading processes in relation to the transactions in securities. Clearing 
ensures that the seller and the buyer have agreed on an identical transaction and that the seller is entitled 
to sell the securities in question. Settlement refers to the final transfer of the ownership of the securities 
from  seller  to  buyer  and  the  final  transfer  of  the  funds  from  buyer  to  seller  as  well  as  the  relevant 
annotations in securities accounts. 

EN 

41 

   EN 

                                                 
clearing and  settlement for those securities. This market definition  proposed  by the 
Commission  and  the  differentiation  between  primary  and  secondary  clearing  and 
settlement services constitutes a good basis for future cases. 

159. 

Secondly,  the  case  was the first major case relating to the technically  complex and 
evolving  sector  of  cross-border  post  trading  services  for  securities.  Cross-border 
arrangements in the EU on clearing and settlement are still considered to be complex 
and fragmented, imposing costs, risks and inefficiencies on investors, institutions and 
issuers. 

2.4. 

Case C-202/07 P, France Télécom SA v. Commission 

160. 

161. 

162. 

163. 

164. 

Criteria for establishing an abuse in the form of predatory pricing 

On  2  April  the  ECJ  dismissed  in  its  entirety  France  Télécom's  appeal  of  a  2007 
judgment of the CFI136. The 2007 judgment had confirmed the Commission decision 
of  2003  imposing  a  fine  of  EUR 10.35  million  on  Wanadoo  Interactive  S.A. 
(Wanadoo),  at  the  time  a  subsidiary  of  France  Télécom137,  for  an  abuse  of  a 
dominant position in the form of predatory pricing.  

The judgment of the ECJ confirms the Commission's finding that Wanadoo abused 
its  dominant  position  on  the  French  market  for  high-speed  internet  access  for 
residential  customers  by  charging  below  cost  prices  for  its  Pack  eXtense  and 
Wanadoo ADSL services. The Commission also found that Wanadoo had developed 
a  plan  aimed  at  excluding  competitors  from  the  market  for  high  speed  internet 
access,  restricted  market  entry  by  competing  internet  providers  and  thus  harmed 
consumers.  

In  2007,  the  CFI  dismissed  France  Télécom's  action  for  annulment  against  the 
Commission  decision,  holding  that  the  Commission  correctly  concluded  that 
Wanadoo  had  abused  its  dominant  position  in  the  French  market  for  high-speed 
internet access. The CFI upheld all aspects of the Commission decision including the 
amount of the fine imposed on Wanadoo. 

In its judgment the ECJ approved the CFI's and Commission's definition of predatory 
pricing as it results from the previous case law such as AKZO v. Commission138, and 
Tetra  Pak  v.  Commission139.  The  ECJ  confirmed,  first,  that  price  below  average 
variable  costs  must  always  be  considered  abusive  and,  second,  that  prices  below 
average total costs but above average variable costs are only to be considered abusive 
if an intention to eliminate competitors can be shown. 

In addition, the ECJ held that the CFI was right in confirming that for a finding of 
predatory pricing the Commission was not required to prove that Wanadoo had the 
possibility  of  recouping  its  losses.  The  ECJ  also  stated  that  this  interpretation  does 
not  preclude  the  Commission  from  finding  that  the  possibility  of  recoupment  of 

136 
137 
138 
139 

Case T-340/03. 
Wanadoo merged with France Télécom on 1 September 2004. 
Case C-62/86 AKZO v. Commission. 
Case C-333/94 P Tetra Pak v. Commission. 

EN 

42 

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losses may be a relevant factor in assessing whether or not the practice concerned is 
abusive. 

165. 

In addition, the Court held that demonstrating that it is possible to recoup losses is 
not a necessary precondition for finding a predatory pricing. It stated that the lack of 
any possibility of recoupment is not sufficient to prevent the undertaking concerned 
reinforcing  its  dominant  position,  so  that  the  degree  of  competition  existing  on  the 
market is further reduced and customers suffer loss as a result of the limitation of the 
choices available to them. Nevertheless, the Court stated that this does not preclude 
the Commission from finding such a possibility of recoupment to be a relevant factor 
in assessing whether or not the practice concerned is abusive, for example to assist in 
excluding  economic  justifications  other  than  the  elimination  of  a  competitor  or  in 
establishing that a plan to eliminate a competitor exists. 

2.5. 

Case C-125/07 P e.a., Bank Austria v Commission 

Burden of proof as regards effects of price fixing cartels 

166. 

167. 

In  a  judgment  rendered  on  24  September140,  the  ECJ  clarified  the  Commission's 
burden of proof in qualifying price fixing cartels as "very serious" due to restrictive 
effects on the market141. 

In  2002,  the  Commission  qualified  a  price  fixing  cartel  on  the  Austrian  banking 
market (the "Lombard Club")142 for several reasons as "very serious" amongst others 
because  it  led  to  effects  on  the  market  concerned.  Indeed,  the  Commission  could 
prove  that  the  banks  had  implemented  their  agreements.  The  banks  had  claimed, 
based  on  an  economic  study,  that  the  cartel  had  had  no  effects  on  the  Austrian 
banking market. The Commission rejected the conclusion in the study that the cartel 
had  not  affected  the  business  strategies  of  the  banks  involved.  The  possibility  that 
interest rates and bank profit margins in Austria developed more or less similarly to 
those in a neighbouring country cannot prove that the cartel did not produce effects 
on the Austrian market. In the Commission's view, it was only relevant whether and 
to which extent the cartel influenced the banks' business strategies and decisions, i.e.: 
whether  the  agreed  interest  rates  were  also  implemented.  The  Commission 
demonstrated that this was indeed the case, based on ample evidence in the file. 

168. 

The CFI in 2006 upheld the Commission's conclusion143. 

140 
141 

142 
143 

Cases C-125/07 P, C-133/07 P, C-135/07 P and C-137/07 P. 
The Commission's then Guidelines on Fines provided, at Section 1, that, for the purpose of calculating 
the  amount  of  fines,  the  basic  amount  is  to  be  determined  according  to  the  criteria  set  out  in  Article 
15(2) of Regulation No 17, namely the gravity and duration of the infringement. In assessing the gravity 
of the infringement, account must be taken of its nature, its actual impact on the market, where this can 
be measured, and the size of the relevant geographic market. Infringements will thus be put into one of 
three categories: minor infringements, serious infringements and very serious infringements.  
Commission Decision of 11.6.2002 (OJ L 56, 24.2.2004, p. 1) 
T-257/02 e.a. Bank Austria v Commission, 14.12.2006. For finding that a cartel is very serious due to 
effects on the market, it was not necessary for the Commission to demonstrate that the agreement had 
actually  led  to  higher  transaction  prices  than  those  which  would have  prevailed  in  the  absence  of  the 
cartel. Such burden of proof would in fact absorb considerable resources, given that it would necessitate 
hypothetical calculations based on economic models whose accuracy it would be difficult for the Court 
to verify. 

EN 

43 

   EN 

                                                 
169. 

170. 

that  a  fine  distinction  should  have  been  drawn  between 

However,  on  appeal,  Advocate  General  (AG)  Bot  recommended  that  the  ECJ  set 
aside the CFI's ruling on this point and consequently that the fines be reduced144. AG 
Bot  found 
the 
implementation of a cartel and its effects on the market. The Commission could not 
derive effects on the market from the mere implementation of the cartel. Rather, the 
Commission  should  have  investigated  transaction  prices  before  the  infringement 
started and after it was implemented. The AG did not further consider the CFI's view 
that such burden of proof was disproportionate145. Advocate General Bot also upheld 
the  appellants'  arguments  regarding  the  attribution  to  central  institutions  of  market 
shares held by banks operating in decentralised sectors. 

On 24 September, the ECJ finally did not follow the opinion of its AG on these two 
points, and upheld the CFI judgment in all respects. Like the CFI, the ECJ found that 
the Commission had sufficiently demonstrated effects on the market by proving the 
implementation of the cartel. The cartel members had announced the agreed prices to 
their  customers,  they  gave  instructions  to  employees  to  use  them  as  a  basis  for 
negotiations and they monitored their application by competitors' and their own sales 
departments146. The ECJ also upheld the attribution to central institutions of market 
shares held by banks in the decentralised sector. The ECJ noted that the Commission 
had  thereby  sought  to  ensure  that  the  level  of  fines  imposed  on  central  institutions 
appropriately  reflects  the  gravity  of  their  own  unlawful  conduct.  The  central 
institutions  had  played  an  essential  role  within  their  respective  networks  through 
exchanges  of  information  and  as  representatives  of  the  decentralised  sectors  within 
the cartel.  

2.6. 

Case C-97/08P, Akzo Nobel et al. v. Commission 

Liability of a parent company for the behaviour of a subsidiary 

144 

145 

146 

Opinion of AG Bot delivered on 26.3.2009 in Joined Cases C-125/07 P, C-133/07 P, C-135/07 P and C-
137/07 P. AG Bot considered that the fact that the Commission did not demonstrate the alleged effects 
of the infringement on the market called in question the assessment of the starting amount of the fine 
fixed by reference to the gravity of the infringement.  
T-257/02 e.a. Bank Austria v Commission, of 14.12.2006 ("Moreover, it would be disproportionate to 
require  such  proof  …").  Indeed,  demonstrating  a  causal  link  between  a  cartel  agreement  and  final 
consumer  prices  presupposes  the  use  of  highly  abstract  hypothetical  models  which  would  have  to 
eliminate  external  factors  influencing  final  consumer  prices  such  as,  for  instance,  inflation  or  the 
collapse of the stock market as a consequence of the financial crisis in 2008.  
C-125/07 e.a. Bank Austria v Commission, of 24.9.2009 and T-257/02 e.a. Bank Austria v Commission, 
of 14.12.2006. Both Courts also dismissed as irrelevant the fact that some members of the cartel had (as 
it  so  often  happens)  cheated  on  their  competitors  by  offering  prices  under/above  the  agreed  upon 
interest rate. See also Case C-534/07 Prym and Prym Consumer v Commission, of 3.9.2009, paragraphs 
79-83. 

EN 

44 

   EN 

                                                 
171. 

On 10 September the ECJ confirmed its jurisprudence and the judgment of the CFI147 
on the question if a parent company may be held liable for the payment of the fine 
imposed  resulting  from  the  involvement  of  the  subsidiary  in  an  infringement.  The 
judgment  confirmed  that  in  case  a  parent  company  holds  –  directly  or  indirectly  - 
100%  of  the  capital  of  the  subsidiary  which  infringed  competition  rules,  the 
Commission  may  apply  the  rebuttable  presumption  that  the  parent  company  did 
exercise decisive influence over the conduct of the subsidiary and thus infer that both 
constitute  a  single  undertaking  within  the  meaning  of  Article  81  EC  In  these 
circumstances, it is for the parent company to show that the subsidiary was able to 
determine  its  business  policy  autonomously,  having  regard  in  particular  to  the 
economic  and  legal  links  between  them  such  as  a  unitary  organisation  of  personal, 
tangible  and  intangible  elements  pursuing  a  specific  economic  aim  on  a  long-term 
basis. In case the parent company fails to rebut the presumption the Commission may 
hold the parent company liable for the payment of the fine as imposed on the directly 
involved subsidiary.  

C – MERGER CONTROL 

1 

SHAPING AND APPLYING THE RULES 

172. 

173. 

174. 

147 

In  2009  the  number  of  mergers  notified  was  below  the  record  levels  of  previous 
years.  In  total,  259  transactions  were  notified  to  the  Commission  and  243  final 
decisions  were  adopted.  Of  these  final  decisions,  225  transactions  were  approved 
without  conditions  during  Phase  I,  82  decisions  were  approved  without  conditions 
under  the  normal  procedure  and  143  (or  63.6%)  were  cleared  using  the  simplified 
procedure. A total of 13 transactions were cleared in Phase I subject to conditions. 

Furthermore,  the  Commission  initiated  five  Phase  II  proceedings,  with  three 
decisions adopted subject to conditions. Two cases were withdrawn in Phase II and 
six cases in Phase I. No prohibition decisions were taken during the year. 

The legal powers provided for  in  Article 21(4) of the  EC Merger Regulation  allow 
the Commission to intervene in order to deter and ultimately prevent Member States 
from  preventing  or  restricting  the  takeover  of  domestic  companies  by  companies 
from  other  Member  States  on  unjustified  grounds.  This  provision  also  provides  a 
procedural framework to exchange views in a timely manner with Member States to 
distinguish interventions with a "protectionist" motivation from a genuine pursuit of 
legitimate  public  interests  (other  than  competition).  From  its  inception,  there  have 
been fewer than 20 cases in application of Article 21. After a period of more frequent 

Case  T-405/06,  Arcelor  Mittal  et  al.  v  Commission,  judgment  of  31.3.2009,  paragraph  89;  Case  T-
85/06, General Quimica,SA et al. v Commission, judgment of 18.12.2008, paragraph 62; Case T-69/04 
Schunk  et  al.  v  Commission,  judgment  of  8.10.2008,  paragraph  56;  Case  T-112/05,  Akzo  et  al.  v 
Commission [2007] ECR II-5049, paragraph 60; Joined Cases T-71/03 etc, Tokai Carbon and Others v 
Commission  [2005]  ECR  II-10,  paragraph  60;  Case  T-354/94,  Stora  Kopparbergs  Bergslags  v 
Commission  [1998]  ECR  II-2111,  paragraph  80,  upheld  in  case  C-286/98P,  Stora  Kopparbergs 
Bergslags  v  Commission,  [2000]  ECR  I-9925,  paragraphs  27,  28  and  29;  Case  107/82,  AEG  v 
Commission, [1983] ECR 3151, paragraph 50. See also the Opinion of AG Kokott in case C-97/08 - the 
appeal to the Akzo judgment in case T-112/05 paragraphs 46-76. 

EN 

45 

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application  of  Article  21,  in  2009  no  new  proceeding  was  opened  under  this 
provision. 

1.1. 

The Merger Report 

175. 

176. 

177. 

On 18 June the Commission presented a report to the Council on the application of 
the  European  Community  Merger  Regulation  (ECMR)148.  The  Commission  had  an 
obligation to report to the Council on the application of the ECMR five years after its 
entry  into  force.  In  preparation  for  this  report,  the  Commission  launched  a  public 
consultation  which  focused,  in  particular,  on  the  application  of  the  jurisdictional 
thresholds  and  the  referral  mechanisms,  but  also  on  general  issues  relating  to  the 
application of the ECMR. 

The  report  concludes  that  overall,  the  jurisdictional  thresholds  and  the  referral 
mechanisms have provided the appropriate legal framework for a flexible allocation 
and  re-allocation  of  cases  between  the  Commission  and  the  NCAs.  In  fact,  the 
jurisdictional  thresholds,  including  the  "two-thirds  rule",  have  in  most  cases  been 
effective  in  distinguishing  cases  that  have  Community  relevance  from  those  with  a 
primarily  national  nexus.  Also,  the  pre-notification  referral  mechanisms  introduced 
in 2004 have  significantly contributed to the efficient  allocation of  merger  cases to 
the  authority  which  is  more  appropriately  placed  to  carry  out  a  review  and  have 
avoided  unnecessary  parallel  proceedings.  For  example,  it  is  estimated  that  during 
the period 2004 to 2008, these referral mechanisms reduced the number of potential 
parallel  proceedings  from  around  1 000  to  about  150.  During  the  same  period  40 
cases  were  referred  from  the  Commission  to  NCAs.  The  report  also  finds  that  the 
post-notification  mechanisms  in  the  hands  of  the  Member  States  provided  by  the 
ECMR  have  proven  to  continue  to  be  useful  in  re-allocating  cases  notwithstanding 
the introduction of the pre-notification referral mechanisms. 

The  report  nevertheless  highlights  areas  where  there  may  be  potential  room  for 
improvement: For example there were a small number of cases which potentially had 
cross-border  effects  across  the  Community  which  nevertheless  were  assessed  by 
NCAs  as  a  result  of  the  operation  of  the  "two-thirds  rule".  Also,  in  some  cases, 
companies  continue  to  notify  mergers  to  three  or  more  NCAs  rather  than  make  a 
single notification to the Commission (about 100 cases in 2007). There may therefore 
be further scope to achieve a "one-stop-shop" review for such cases, e.g. through the 
increased use of referral mechanisms. Conversely, there may also be scope for more 
referrals  in  the  direction  of  the  Member  States.  In  this  regard,  some  concerns  were 
raised by stakeholders regarding the cumbersomeness and the length of the pre- and 
post-merger  referral  procedures.  The  public  consultation  also  suggested  that  efforts 
towards further convergence of the various national rules governing merger control 
and their relation to Community rules would be beneficial to alleviate any difficulties 
encountered in connection with multiple filings. 

148 

Communication  from  the  Commission  to  the  Council  of  18  June  2009,  Report  on  the  functioning  of 
Regulation  No  139/2004  (COM(2009)281  final),  and  the  accompanying  Commission  staff  working 
paper (SEC(2009)808 final/2). 

EN 

46 

   EN 

                                                 
2. 

SELECTED COURT CASES  

2.1. 

Case C-440/07 P, Commission v. Schneider Electric SA 

178. 

179. 

Causal link between an infringement of the rights of defence by the Commission 
and  the  loss  suffered  by  a  notifying  party  in  the  context  of  non-contractual 
liability 

By  its  appeal,  the  Commission  requested  the  ECJ  to  set  aside  the  judgment  of  the 
CFI  in  which  the  CFI  found  the  Community  liable  in  damages  as  a  result  of  the 
infringement  by  the  Commission  of  the  rights  of  the  defence  of  the  notifying 
undertaking (Schneider) in the merger case COMP/M.2283 Schneider/Legrand. The 
ECJ partially annulled the CFI judgment. The ECJ upheld the CFI's finding that, in 
the  present  case,  the  violation  of  the  rights  of  the  defence  resulted  in  a  sufficiently 
serious  breach  of  Community  law  capable  of  engaging  the  non-contractual liability 
of the Community. 

However, the ECJ ruled that the CFI incorrectly held there to be a direct causal link 
between the Commission's illegality and the loss suffered by Schneider as a result of 
the  reduction  in  the  transfer  price  of  the  target  company  (Legrand).  The  ECJ 
considered that the direct cause of the damage claimed by Schneider was Schneider's 
decision to allow the transfer of Legrand to take effect, which it was not obliged to 
take following the annulment by the CFI of the Commission decisions declaring its 
proposed acquisition of Legrand incompatible with the common market and ordering 
it to separate itself from Legrand. 

180. 

The  ECJ  nevertheless  upheld  the  judgment  of  the  CFI  in  so  far  as  it  ordered  the 
Community  to  make  good  the  loss  represented  by  the  expenses  incurred  by 
Schneider  as  a  result  of  its  participation  in  the  resumed  merger  control  procedure 
following  the  annulment  by  the  CFI  of  the  Commission's  incompatibility  and 
separation decisions. 

II – Sector Developments 

A – FINANCIAL SERVICES  

1. 

OVERVIEW OF SECTOR 

181. 

Financial  markets  continue  to  be  crucial  to  the  functioning  of  modern  economies. 
They are the lifeblood of the real economy as they provide and facilitate businesses' 
and consumers' access to finance. The more integrated and the more competitive they 
are, the more efficient the allocation of capital and long-run economic performance 
will  be.  With  the  financial  and  economic  crisis  continuing  into  2009,  the  year  has 
been  another  extremely  difficult  one  for  the  financial  sector  and  EU  governments 
have continued to take a series of emergency measures. 

182. 

Therefore,  in  the  field  of  State  aid,  the  Commission  has  played  a  leading  role  by 
providing legal certainty as regards Member States'  measures. Building on its 2008 
Communications  on  Banking  and  Recapitalisation,  the  Commission  issued  an 

EN 

47 

   EN 

Impaired  Assets  Communication  on  25  February149  and  a  Restructuring 
Communication on 22 July150. 

The  Commission  also  ensured  that  national  measures  did  not  exported  problems 
across  borders.  The  Commission  approved,  subject  to  conditions,  a  number  of 
restructuring  measures  in  respect  of  banks  that  have  received  state  support  which 
should  lead  to  the  restoration  of  long-term  viability  in  the  sector  and  a  return  to 
normal  market  conditions.  In  2008  and  2009,  the  Commission  authorised  over  30 
rescue schemes in 19 countries and a large number of measures in favour of specific 
credit 
than 
EUR 3.630 billion or approximately 29% of the EU-27 GDP151. 

institutions.  The  overall  authorised  aid  amounts 

to  more 

The  Commission's  actions  contributed  to  maintaining  financial  stability  whilst 
ensuring that a level playing field to the benefit of consumers and competition. 

In  2009  merger  activity  in  the  financial  sector  declined  as  a  result  of  the  financial 
crisis.  However,  cases  notified  in  2009  and  the  implementation  of  remedies  from 
earlier cases often raised difficult jurisdictional and procedural questions. 

183. 

184. 

185. 

2. 

POLICY DEVELOPMENTS 

2.1. 

Financial services – State aid 

The financial crisis 

186. 

187. 

188. 

Since the beginning of the financial crisis, the role of the Commission in the field of 
competition  policy  was  twofold:  (i)  to  support  financial  stability  by  rapidly  giving 
legal  certainty  to  measures  taken  by  Member  States  and  (ii)  to  maintain  a  level 
playing  field  and  ensure  that  national  aid  measures  would  not  simply  export 
problems to other Member States.  

In  2009,  the  restructuring  of  many  European  banks  became  the  biggest  challenge. 
Restoring  the  viability  of  the  EU  banking  sector  as  a  whole  includes  restoring 
viability  of  individual  financial  institutions.  Restructuring  is  a  prerequisite  for  the 
return to viability of credit institutions, lending to the real economy, re-establishing a 
level playing field across institutions, and for the smooth functioning of the European 
internal market. 

The restructuring process of banks is based on the crisis-related State aid rules as laid 
down  in  the  Restructuring  Communication  of  22  July  2009.  The  communication 
provides guidance on the conditions under which restructuring aid for banks in need 
of  financial  assistance  beyond  an  emergency  rescue  can  be  authorised.  The  first 
principle  is  the  return  to  long-term  viability  without  State  aid,  based  on  a  sound 
restructuring  plan  (including  stress-testing  of  the  bank's  financial  projections).  The 
second principle is burden sharing between the bank/its stakeholders and the State. 
Shareholders  and  other  capital  holders  must  adequately  contribute  to  bearing  the 

149 
150 
151 

OJ C 72, 26.3.2009. 
OJ C 195, 19.8.2009. 
EU-27 GDP of 2008. See also State aid Scoreboard Autumn 2009 at: 
http://ec.europa.eu/competition/state_aid/studies_reports/studies_reports.html 

EN 

48 

   EN 

                                                 
costs of financial, organisational and other necessary restructuring measures. Finally, 
the third principle requires measures to limit competition distortions. These usually 
comprise  structural  measures  (divestitures)  and  behavioural  measures  (e.g. 
acquisition  bans,  limitations  to  aggressive  commercial  behaviour  financed  by  State 
aid). The measures are decided on a case-by-case basis. 

The  Commission  requests  detailed  regular  reports  on  the  implementation  of  the 
restructuring plans. Moreover, separate managers, monitoring trustees and divestiture 
trustees can be appointed to ascertain that the approved restructuring plans are being 
implemented properly. 

In the course of 2009, the discussion began on how to return to market discipline in 
the financial sector. While it seemed too early to withdraw support measures to the 
economy  and  the  financial  sector,  a  debate  about  how  to  incentivise  banks  to 
progressively return to the markets began. 

Discussions on a gradual phasing out of financial support to banks when the situation 
allows  it  took  place  with  Member  States  and  the  European  Central  Bank  in  the 
context of the wider policy debate on how to best pave the way for a return to normal 
market conditions.  

Restructuring cases 

In  2009,  the  Commission  approved,  subject  to  specific  conditions,  a  number  of 
restructuring  measures  in  respect  of  banks  that  received  State  support.  The 
restructuring  aims  at  restoring  long-term  viability  of  the  institutions  concerned 
without the need for further State aid and at encouraging the return to normal market 
conditions in the financial sector. 

Commerzbank AG (DE) 

Commerzbank  is  a  credit  institution  with  a  total  group  balance  sheet  of 
approximately EUR 1 100 billion. It is the second biggest private credit institution in 
Germany since its acquisition of Dresdner Bank AG ("Dresdner Bank") in 2008.  

In  December  2008  and  January  2009,  Commerzbank  received  capital  injections  l 
amounting  to  EUR  18.2  billion  from  SoFFin152  under  the  German  bank  rescue 
scheme. The capital was granted in the form of ordinary shares (25% plus one share) 
and silent participations. In addition, SoFFin provided a guarantee for bond issuances 
worth EUR 15 billion.  

On  7  May,  the  Commission  approved  that  recapitalisation  of  Commerzbank  (The 
total  amount  corresponds  to  8.2%  of  risk  weighted  assets).  It  was  one  of  the 
Commission's  first  decisions  on  a  restructuring  case  originating  from  the  financial 
crisis.  

189. 

190. 

191. 

192. 

193. 

194. 

195. 

196. 

The  main  element  of  Commerzbank's  viability  plan  is  the  focus  on  its  core 
businesses, namely retail and corporate banking. To achieve that, Commerzbank will 

152 

The  Sonderfonds  Finanzmarktstabilisierung,  created  by  the  German  government  for  dealing  with  the 
banking aid measures. 

EN 

49 

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197. 

198. 

199. 

200. 

201. 

202. 

203. 

sell a significant amount of ownership stakes and other assets, amounting to roughly 
45% of its current balance sheet total.  

The plan also includes a number of measures which are aimed at keeping the aid to 
the  minimum  necessary  and  which,  at  the  same  time,  limit  its  potential  to  distort 
competition. These measures include divestments by Commerzbank of activities and 
the sale of subsidiaries (including the sale of its subsidiary Eurohypo) to address the 
Commission's concerns regarding possible distortions of competition due to the large 
size of the aid granted. 

The  Commission  found  that  the  large-scale  divestments  and  the  suspension  of 
payments  of  dividends  and  interest  provided  for  in  the  plan  limit  the  aid  to  the 
minimum necessary and ensure an adequate contribution of the bank and its owners 
to the restructuring.  

In  addition,  behavioural  measures  in  the  Commission's  Decision  limit  organic  and 
external growth  at  the  expense of  competitors  that have not received  State support, 
which  have  become  a  standard  of  other  restructuring  decisions  in  the  meantime. 
Commerzbank  is  subject  to  a  ban  of  acquisitions  of  financial  institutions  and  is 
furthermore not allowed to do business under more favourable price conditions than 
its top three competitors in markets/products where it has a market share above 5%. 
Commerzbank  must  not  pay  out  dividends  and  coupons  on  own  funds  instruments 
for the business years 2009 and 2010 unless there is a binding legal obligation to do 
so. Moreover, Commerzbank must not liquidate any reserves in order to make such 
payments possible. 

ING (NL) 

Based  in  the  Netherlands,  ING  operates  in  more  than  50  countries,  with  a  balance 
sheet of EUR 1.332 billion in 2008.  

In November 2008 the Dutch authorities granted a recapitalisation for the benefit of 
ING  amounting  to  EUR  10  billion.  On  26  January  2009,  the  Dutch  government 
provided ING with an impaired asset measure of USD 39 billion. In October 2009, 
the Netherlands have provided a detailed commitment to bring the measure fully in 
line with the Impaired Assets Communication of 25 February 2009 in particular by 
raising the guarantee fee, lowering the funding fee and reducing the management fee. 
In  addition,  ING  had  received  guarantees  on  medium-term  liabilities  amounting  to 
about  EUR  12  billion  under  the  Dutch  guarantee  scheme.  The  total  aid  amount 
corresponds to 5% of risk weighted assets. 

On  18  November  2009,  the  Commission  approved  ING's  restructuring  plan  and 
illiquid  asset  back-up  facility.  Actions  in  the  plan  include  the  reduction  of  the  risk 
profile of ING's balance sheet and the divestment of activities amounting to 45 % of 
the balance sheet, including ING's insurance and asset management. The Netherlands 
also committed that ING adheres to a temporary acquisition ban of other firms. 

The plan also envisages additional guarantees of up to EUR 10 billion provided by 
the  Netherlands  to  make  this  carve-out  possible.  In  addition  to  regular  monitoring 
reports,  trustees  will  be  appointed,  subject  to  the  Commission  approval,  to  monitor 
the implementation of various commitments foreseen  in the  restructuring plan. The 
Netherlands committed to a clear timetable for implementing the restructuring plan. 

EN 

50 

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204. 

205. 

206. 

207. 

208. 

209. 

The Commission considered the proposed measures sufficient in respect to burden-
sharing, and appropriate and proportional to offset the competition-distorting effects 
of  the  aid  measures  in  question,  namely  the  recapitalisation,  the  impaired  asset 
measure, the already granted liability guarantees and the liability guarantees foreseen 
in  the  restructuring  plan.  Also,  the  Commission  considered  that  additional  aid 
deriving from the modified terms of the repayment conditions for the capital from the 
Netherlands was sufficiently taken into account with the presented measures foreseen 
in the restructuring plan and can therefore be considered compatible. 

In  particular  the  structural  and  behavioural  commitments  as  described  above  are 
sufficient  to  mitigate  the  distortions  of  competition  stemming  from  such  a  large 
amount  of  aid.  The  use  of  trustees  for  monitoring  the  implementation  of  the 
restructuring plan is also viewed positively. 

Royal Bank of Scotland (UK) 

RBS  has  been  particularly  hit  by  the  financial  crisis,  because  of  its  risky  lending 
activities, its aggressive acquisition policy and its very leveraged balance sheet. As a 
consequence,  RBS  has  received  the  largest  aid  by  a  Member  State  with  GBP  45.5 
billion of recapitalisation, a GBP 8 billion of contingent capital and participation in 
the UK asset protection scheme for a portfolio of GBP 281 billion of impaired assets 
(total  restructuring  aid  between  11.3%  and  19.6%  of  risk  weighted  assets).  As  a 
consequence,  the  State  is  now  the  controlling  shareholder  with  an  economic 
ownership of 84% of the capital of the bank. 

The restructuring plan was submitted to the Commission on 2 June 2009 and is based 
on  the  run-off  of  a  risky  and  funding-consuming  loan  portfolio.  These  actions  are 
necessary to restore the bank's long-term viability. Following the discussion with the 
Commission,  the  plan  also  contains  some  material  divestments  as  well  as  some 
behavioral  commitments  in  order  to  address  issues  of  viability,  burden-sharing  and 
limitations of distortions of competition. In addition, following a detailed evaluation 
of  the  expected  losses  of  the  assets  covered  by  the  asset  protection  scheme,  it  was 
decided to increase the first loss tranche – the amount of credit losses borne by RBS - 
from  GBP  43  billion  to  GBP  60  billion.  This  means  that  the  State  will  only 
indemnify the bank for the losses exceeding that amount. This significant adjustment 
put  the  measure  in  line  with  the  Impaired  Assets  Communication  of  25  February 
2009.  

The divestments proposed consist of: (i) a divestment of 318 branches and associated 
customers  in  the  SME  and  mid-corporate  banking  market;  (ii)  the  sale  of  Global 
Merchant Services, a transaction service business; (iii) the sale of the RBS insurance 
business,  which  is  the  leading  UK  general  insurance  company;  (iv)  the  sale  of  a 
business  active  in  commodities  trading;  and  v)  the  sale  of  a  contingent  divestment 
representing in the event its core Tier  1 capital ratio declines to below 5% or RBS 
falls short of its balance sheet reduction targets. 

RBS  will  respect  an  acquisition  ban  for  at  least  three  years.  RBS  will  pay  an 
adequate remuneration for its capital injection which is in line with the Commission's 
Recapitalisation  Communication,  as  well  as  for  its  guarantees  on  medium-term 
liabilities  in  line  with  the  UK  guarantee  scheme  which,  in  turn,  is  in  line  with  the 
Banking  Communication.  Except  when  it  is  legally  compulsory,  RBS  will  not  pay 

EN 

51 

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210. 

211. 

212. 

213. 

214. 

215. 

216. 

dividends  or  coupons  on  existing  hybrid  capital  instruments  for  a  period  of  two 
years.  

The bank also committed to a cap in its overall annual position in the Global Debt 
League Table, to be in the leading edge of implementing the G20 principles and the 
UK Financial Services Authority (FSA) code on remuneration practices and bonuses, 
as well as not to make any reference to State support in its marketing.  

The Commission considered that RBS' restructuring plan entails sufficient structural 
and behavioural measures to address the distortion of competition created by the aid 
and  that  the  restructuring  measures  are  apt  to  enable  RBS  to  restore  its  long-term 
viability. Therefore, the Commission approved under EU State aid rules the impaired 
asset  relief  measure  and  the  restructuring  plan  of  Royal  Bank  of  Scotland  on  14 
December 2009.  

The restructuring plan has a number of provisions with regards to the monitoring of 
the  plan  (monitoring  trustee),  the  enforcement  of  divestments  (divestiture  trustee  if 
divestments not completed by the deadlines) and the preservation of the value of the 
businesses (hold separate manager). 

Lloyds Banking Group (UK) 

The Lloyds Banking Group ("LBG") was formed through the acquisition of Halifax 
Bank of Scotland (HBOS) by Lloyds TSB announced in September 2008. It rapidly 
turned out that the situation of HBOS was much worse than expected. Therefore, this 
acquisition,  while  allowing  the  group  to  consolidate  its  leading  position  on  the  UK 
retail  market,  contributed  to  LBG's  difficulties  which  lead  to  the  need  for  State 
intervention in the bank.  

In its decision of 13 October 2008, the Commission approved a package of financial 
support  measures  to  the  banking  industry  in  the  UK.  On  the  basis  of  that  scheme 
LBG  received  a  capital  injection  of  GBP  17  billion,  of  which  GBP  2.3  billion  was 
repaid in June 2009.  

In  addition,  the  State  participated  in  LBG's  rights  issue  of  November  2009, 
amounting  to  a  State  participation  of  GBP  5.9  billion  to  maintain  its  43.5% 
shareholding.  In  total,  the  recapitalisations  by  the  State  corresponds  to  4.1%  of  the 
risk weighted assets of the bank at the end of 2008. 

LBG submitted a restructuring plan on 16 July 2009. After discussions with the UK 
authorities,  the  Commission  approved  a  modified  plan  on  18  November  2009.  The 
measures  described  in  the  approved  restructuring  plan  will  result  in  the  disposal  or 
run-down  of  non-core  businesses  and  activities  resulting  in  an  asset  reduction  of 
around  GBP  181  billion  by  the  end  of  2014.  In  order  to  limit  the  distortion  of 
competition created by the aid LBG will divest part of its UK retail banking activities 
by  selling  more  than  600  branches  accounting  for  a  market  share  of  4.6%  in  the 
current  account  segment.  In  addition,  LBG  will  respect  a  number  of  behavioural 
commitments such as an acquisition ban for at least three years.  

217. 

LBG will pay an adequate remuneration for its capital injection which is in line with 
the  Recapitalisation  Communication.  LBG  will  also  pay  an  adequate  remuneration 
for its guarantees on medium-term liabilities in line with the UK guarantee scheme 

EN 

52 

   EN 

which, in turn, is in line with the Banking Communication. Finally, LBG will comply 
with  the  Commission's  policy  on  Tier  1  and  Tier  2  capital  instruments,  i.e.  during 
two  years  LBG  will  not  pay  investors  any  coupon  on  existing  hybrid  capital 
instruments (issued before 3 November 2009) unless there is a legal obligation to do 
so. 

The  Commission  concluded  that  the  restructuring  plan  enables  LBG  to  restore  its 
long-term  viability,  is  sufficient  in  respect  to  burden-sharing  requirements  and 
contains sufficient structural and behavioural measures to offset the distorting effects 
of  the  aid  measures  in  question.  The  Commission  has  therefore  concluded  that  the 
aid was compatible pursuant to Article 87(3)(b) EC. 

KBC 

KBC is a Belgium-based bank with a total balance sheet of EUR 355 billion (as per 
December  2008),  which  got  into  difficulties  largely  because  of  the  substantial 
downward revaluation of its portfolio of Collateralised Debt Obligations (CDOs). 

In December 2008, KBC received a recapitalisation of EUR 3.5 billion. This measure 
was  approved  for  a  period  of  six  months  and  subject  to  the  submission  of  a  plan 
showing how KBC would return to viability within this period.  

On 22 January 2009, a second recapitalisation of EUR 3.5 billion was announced by 
the Belgian authorities. On 14 May 2009, an asset relief measure, covering the losses 
on  a  CDO  portfolio  with  a  notional  value  of  EUR  20  billion  was  announced  by 
Belgium.  Consequently,  the  total  aid  amount  corresponds  to  at  least  4.1%  of  risk 
weighted assets. On 30 June 2009, the Commission initiated the formal investigation 
procedure  with  regard  to  several  aspects  of  that  asset  relief  measure,  while  it 
approved  the  second  recapitalisation  as  rescue  aid  for  a  period  of  six  months  and 
subject to the submission of a restructuring plan. The Belgian authorities submitted a 
restructuring plan on 30 September 2009. 

On 18 November 2009, the Commission approved the restructuring plan, concluding 
that it met the criteria of the Restructuring Communication. The Commission found 
that the restructuring measures proposed by the Belgian authorities were appropriate 
to enable KBC to restore its long-term viability through the run-off of KBC Financial 
Products,  the  unit  that  originated  the  CDOs  which  were  the  cause  of  most  of  its 
problems,  and  the  divestment  of  subsidiaries  that  either  cannot  operate  on  a  stand-
alone basis or do not fit in the refocused KBC business model. 

The  restructuring  plan  furthermore  provided  for  sufficient  own  contribution  and 
burden-sharing  through  the  listing  of  two  fully-owned  subsidiaries  in  the  Czech 
Republic  and  Hungary  on  local  stock  exchanges  and  the  divestment  of  KBC’s 
European Private Banking business unit. The Commission also concluded that KBC 
pays  a  remuneration  for  the  aid  which  is  higher  than  the  minimum  required  in  the 
Recapitalisation Communication.  

Finally,  the  Commission  concluded  that  appropriate  and  proportional  measures  to 
offset the market-distorting effects of the aid measures in question have been put into 
place amounting to around 17% of KBC's total balance sheet. More specifically, this 
includes  the  sale  of  Centea  (bank)  and  Fidea  (insurer)  in  Belgium,  businesses  in 
Central and Eastern Europe (CEE) as well as various merchant banking and leasing 

218. 

219. 

220. 

221. 

222. 

223. 

224. 

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53 

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operations. These divestments should, amongst others, help stimulate competition on 
the  concentrated  Belgian  market.  KBC  is  also  subject  to  behavioural  constraints, 
including an acquisition ban and a price leadership ban in countries where the market 
share is higher than 5% (except Belgium). Moreover, KBC will not pay investors any 
coupon on hybrid capital instruments during 3 years, unless there is a legal obligation 
to do so. KBC will also refrain from calling hybrids during this period. 

2.2. 

Financial services – Merger control 

225. 

226. 

227. 

In  2009  merger  activity  in  the  financial  sector  declined  as  a  result  of  the  financial 
crisis.  However,  cases  notified  in  2009  and  the  implementation  of  remedies  from 
earlier cases often raised difficult jurisdictional and procedural questions. Two main 
points  should  be  noted  about  the  merger  activity  in  the  financial  sector  in  the  past 
year. 

Firstly, the acquisition of majority stakes in financial institutions by Member States 
raised  jurisdictional  questions,  in  particular,  whether  nationalisations  of  financial 
institutions  were  notifiable  under  the  Merger  Regulation.  This  required  an 
assessment  of  whether  or  not  the  nationalised  entity  would  continue  to  act 
independently  in  the  market  post-nationalisation,  or  whether  the  nationalised  entity 
should be considered as part of a single economic entity with other state-controlled 
undertakings. In most cases, the Commission was satisfied that the arrangements put 
in  place  by  the  Member  States  ensured  the  independence  of  the  nationalized  banks 
and  thus  that  no  concentration  took  place.  However,  in  one  case  the  facts  were 
different and a concentration was subsequently notified153. 

Secondly, divestiture commitments had to be closely monitored in a number of cases 
and  the  implementation  of  commitments  was  made  more  difficult  by  market 
circumstances. In the Fortis/ABN AMRO Assets154 case, dating from 2007, Fortis had 
committed to the Commission not to merge the Dutch activities of ABN Amro and 
Fortis without prior divestments. During the financial crisis the Dutch State acquired 
control  of  the  Dutch  parts  of  both  banks  and  took  over  Fortis’  position  in  the 
Consortium  Agreement.  The  Commission  extended  the  deadline  for  divestiture 
several  times.  The  Parties  finally  signed  a  Sales  and  Purchase  Agreement  on  23 
December 2009 which remains subject to a certain number of closing conditions 

2.3. 

Financial services – Antitrust  

228.  Whilst  in  some  fields  of  the  financial  services  sector  like  payment  systems  and 
payment cards, the Commission has been very active in the past, the Commission is 
only starting to intensify its work in antitrust in other sectors like banking, securities, 
trading,  clearing  &  settlement  infrastructure,  insurance  and  financial  market  data 
distribution. 

153 

154 

Case COMP/M.5528 SOFFIN/Hypo Real Estate. The nationalisation of Hypo Real Estate Bank by the 
Federal Republic of Germany. 
Case COMP/M.4844 Fortis/ABM AMRO Assets. 

EN 

54 

   EN 

                                                 
2.3.1. 

Single Euro Payments Area 

229. 

230. 

231. 

SEPA (Single Euro Payments Area) was an important focus of antitrust advocacy in 
the field of financial services in 2009. SEPA is a self regulatory initiative launched 
by the European Banking Industry and led by the European Payments Council (EPC) 
to  move  to  an  integrated  Euro  payments  area,  ensuring  that  cross  border  payments 
become as easy and efficient as domestic payments. Once fully implemented, SEPA 
will cover credit transfers, payment cards and direct debits. SEPA, whilst primarily 
devised  by  the  industry  itself,  is  strongly  supported  by  the  European  Central  Bank 
(ECB)  and  the  Commission.  Since  it  is  based  on  decisions  of  and  agreements 
between  undertakings  that  are  (potential)  competitors  it  deserves  close  competition 
scrutiny. It also needs to be implemented in accordance with the existing Community 
framework for payment services. 

As  a  result  of  the  informal  dialogue  ("the  Dialogue")  with  the  EPC  launched  in 
October  2007,  a  number  of  competition  concerns  were  addressed.  For  instance  the 
SEPA Card framework (SCF) was clarified to the extent that SEPA compliant card 
schemes do not need to cover all 32 states of the SEPA territory. New schemes stand 
a real chance of entering the market. In the course of 2009, informal discussions with 
potential  new  entrants  –  Payfair  and  Monnet  in  particular  –  were  held,  notably  to 
clarify the  compatibility of  their envisaged financing  mechanisms  with competition 
rules  and  to  encourage  the  creation  of  a  competitive  SEPA-wide  payment  cards 
market. 

The Dialogue continued in 2009, with a focus on interchange fees for SEPA Direct 
Debit (SDD), governance of the EPC and of the schemes as well as standardisation. 
With SEPA Direct Debit launched on 2 November 2009, it was urgent to provide the 
necessary  incentives  for  banks  to  migrate.  As  SEPA  involves  agreements  between 
competing parties, collective financing arrangements for SDD must comply with the 
EC Treaty competition rules. As a result, the Commission and the ECB clarified in 
September  2008  that  a  transitional  default  multilateral  interchange  fee  (MIF)  for 
cross border SDD transactions, as well as maintaining the same interchange fees as 
domestic legacy direct debit for domestic SEPA transactions could be envisaged for a 
short and well defined transition period. This was taken on board in the discussions 
on and incorporated in Regulation 924/2009 which applies from 1 November 2009. 
In  addition,  the  joint  Commission  and  ECB  statement  of  March  2009155  clarified 
financing  principles.  On  the  basis  of  the  information  available,  the  Commission's 
preliminary  assessment  was  that  there  appeared  to  be  no  clear  and  convincing 
reasons for per transaction MIFs to exist after 31 December 2012. This provided the 
industry with the clarity needed to agree on the launch of this scheme. The EPC took 
a decision to this effect at the end of March. 

232. 

In addition, the joint statement said that the Commission expected to be in a position 
to provide further guidance by November 2009 (provided that the Commission will 
have received the necessary contributions by relevant market actors). Even though no 
submissions  have  been  received,  a  Commission  working  document  that  aims  to 
consult  on  further  guidance  to  participants  in  the  SDD  scheme  as  regards  the 
assessment  of  collective  financing  mechanisms  under  European  competition  rules 

155 

Joint  statement  by  the  European  Commission  and  the  European  Central  Bank  clarifying  certain 
principles underlying a future SEPA direct debit (SDD) business model, SEC(2009)397. 

EN 

55 

   EN 

                                                 
was released and a public consultation launched on 3 November, for contributions to 
be received by 14 December. The Commission will then decide on next steps and it 
may,  if  appropriate,  decide  to  adopt  final  guidance  to  provide  greater  clarity  and 
predictability on the general framework of analysis. 

233. 

The momentum created in the earlier stages of the Dialogue should help to tackle the 
remaining  obstacles  to  the  achievement  of  a  truly  competitive  European  payment 
cards  market.  Reinforcing  and  strengthening  the  competition  dimension  of  SEPA 
will  in  turn  help  to  achieve  better  services  at  a  better  price  for  retailers  and 
consumers. 

2.3.2 

Payment cards 

234. 

Following its decision prohibiting MasterCard's cross border Multilateral Interchange 
Fees (MIFs) in 2007156, the Commission continued to closely monitor MasterCard's 
implementation of the Decision. In June 2008, MasterCard withdrew its cross border 
MIFs.  However,  on  1  October  2008  it  increased  certain  acquirer  fees.  This  led  to 
negotiations  with  the  Commission's  services  on  compliance,  which,  in  April  2009, 
resulted in a decision by MasterCard to reintroduce substantially lower cross-border 
MIFs157 to repeal the scheme fee increases, and to change its system rules as of July 
2009  in  order  to  increase  transparency  and  competition  in  the  payment  cards 
market158. These changes were considered by The Commissioner for Competition to 
be  sufficient  in  order  to  conclude  that  it  was  not  appropriate  to  pursue  MasterCard 
for  non-compliance  with  the  Decision  of  19  December  2007  or  for  infringing  the 
antitrust  rules.  Implementation  of  these  undertakings  is  closely  monitored  by  an 
independent trustee. 

235. 

Further  to  the  Commission’s  opening  of  investigations  in  March  2008  regarding 
VISA Europe's cross border MIFs, a SO was sent in April 2009. A hearing took place 
in this case on 30 November and 1 December 2009.The investigation is on-going. 

236. 

In addition, in May the Commission has commissioned a study comparing the costs 
of payments by cash and by cards, which is carried out by an external consultant 

2.3.3 

Financial market data distribution 

237. 

The financial sector is highly dependent on the delivery of highly precise market data 
in  relation  to  prices  and  structures  of  securities.  A  large  number  of  internal  and 
external banking applications rely upon encoded standards and identifiers that permit 
to  recognise  securities  and  interoperate.  The  sector  of  market  data  distribution  in 
general is characterised by a high degree of concentration, as well as by competition 
issues  related  to  standard  setting,  IP  rights  and  interoperability  or  possibility  to 
switch providers. 

238. 

In  2009  the  Commission  opened  formal  proceedings  against  Standard  &  Poors'  for 
allegedly  abusing  its  dominant  position  related  to  the  issuance  and  licensing  of 

156 

157 

158 

COMP/34579;  http://ec.europa.eu/competition/antitrust/cases/decisions/34579/en.pdf  The  decision  is 
currently under appeal before the General court of the European Union. 
Following the new methodology, the maximum weighted average MIF per transaction is now reduced 
to 0.30% for consumer credit cards and to 0.20% for consumer debit cards. 
See IP/09/515 and MEMO/09/143. 

EN 

56 

   EN 

                                                 
securities  identifier  codes  called  ISINs159.  The  Commission  also  opened  formal 
proceedings  against  Thomson  Reuters  concerning  the  use  of  RICs160.  The 
Commission  will  investigate  Thomson  Reuter's  practices  in  the  area  of  real-time 
market datafeeds and in particular, whether customers or competitors are prevented 
from mapping RICs to alternative identifiers of other datafeed providers and whether 
this potentially creates a "lock-in"-effect for customers as the replacement of RICs in 
customers'  applications  may  be  a  long  and  costly  procedure.  Such  a  practice  may 
potentially constitute an infringement of Article 102 TFEU. 

2.3.4. 

Securities Trading, Clearing and Settlement (C&S) 

239. 

The implementation of the Markets in Financial Instruments Directive (MiFID) has 
contributed  to  opening  up  these  markets.  Significant  changes  to  market  structures 
were  observed,  especially  with  the  entry  of  new  players  like  Multilateral  Trading 
Facilities  (MTFs)  on  the  trading  layers  and  new  Central  Counterparties  (CCPs)  on 
the clearing layer. On the post-trading layer, the Code of Conduct which was signed 
by the post-trade infrastructure providers ensured positive developments on the level 
of  unbundling  the  services  and  increasing  the  level  of  price  transparency.  But  the 
progress  in  the  implementation  of  interoperability  links  with  the  competitors  that 
operate or  will operate  behind  the same trading  venue is slow. From  a  competition 
policy  perspective,  a  closer  scrutiny  of  the  sector  and  the  market  practices  that 
determine slow progress in opening up these markets might be required. 

240.  While  each  case  has  to  be  assessed  individually,  the  Clearstream  judgment  (see 
paragraphs  155  to  159)  brought  some  clarification  with  regard  to  the  market 
definition  and  the  differentiation  between  primary  and  secondary  clearing  and 
settlement services, which will serve as a good basis for future cases. Furthermore, 
the judgment clearly illustrates special obligations of incumbent infrastructures in the 
area  of  Clearing  and  Settlement  (C&S)  that  enjoy  dominant  positions  in  a  given 
market when dealing with market access requests from other infrastructures wishing 
to compete. 

2.3.5.  OTC Derivatives 

241. 

In the area of derivatives, on 20 October, the Commission adopted a Communication 
on  ensuring  efficient,  safe  and  sound  derivatives  markets  that  sets  out  the  future 
policy  actions  to  increase  transparency  of  the  derivatives  market  and  reduce 
counterparty and operational risks. In response  to  the Commission's call for central 
clearing of credit default swaps (CDS), ten major dealers committed to clear CDS on 
European  reference  entities  through  central  counterparties  (CCPs)  established  and 
regulated in the European Union. The high degree of concentration in CDS markets 
both on the level of market data and transactional levels as well as possibly emerging 

159 

160 

ISIN  are  the  global  identifiers  for  securities  and  are  governed  by  International  Standardisation 
Organisation  (ISO)  standard  6166.  They  are  indispensable  for  a  number  of  operations  that  financial 
institutions  carry  out  (for  instance,  reporting  to  authorities  or  clearing  and  settlement)  and  cannot  be 
substituted by other identifiers for securities. See also MEMO/09/508. 
RICs are short, alphanumerical codes that identify securities and their trading locations. They are used 
to retrieve information from Thomson Reuters' real-time datafeeds, for example real-time information 
on stock prices at a certain exchange. See also IP/09/1692 of 10.11.2009. 

EN 

57 

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concentration  on  the  clearing  layer  require  closer  market  monitoring  from  the 
competition policy point of view. 

2.4. 

Insurance sector 

242. 

In the field of insurance, the current Insurance Block Exemption Regulation (BER) 
expires on 31 March 2010 (see Section I.B.1.4.4. above). 

B – ENERGY AND ENVIRONMENT  

1. 

OVERVIEW OF SECTOR 

243. 

244. 

European energy policy is built around three pillars: sustainability, security of supply 
and  competitiveness.  Reducing  greenhouse  gases  is  vital  to  combating  climate 
change,  and  all  European  consumers  (households  as  well  as  commercial  and 
industrial  users)  depend  heavily  on  the  secure  and  reliable  provision  of  energy  at 
competitive prices. Interconnections between European gas and electricity grids need 
to be substantially improved. These objectives can only be met effectively through a 
properly functioning and competitive European energy market which sends the right 
signals  to  investors  and  policy  makers.  This  requires  continued  efforts  to  open  up 
Europe’s gas and electricity markets to competition and to create a single European 
energy market. 

Competition policy in the energy field aims at ensuring a secure flow and supply of 
energy  at  competitive  prices  to  the  EU’s  households  and  businesses.  An  open  and 
competitive  single  EU  market  will  guarantee  a  secure  provision  of  energy  in  the 
future  by  sending  the  necessary  signals  for  investment  and  making  it  attractive  to 
suppliers. Such a market will also be open to new energy mixes and will play a major 
role in developing and deploying new environmentally friendly technologies. Prices 
that  reflect  costs  will  help  encourage  energy  efficiency,  thereby  supporting 
sustainability and security of supply. 

2. 

POLICY DEVELOPMENTS 

245. 

The Internal Energy Market package proposed by the Commission on 19 September 
2007 was adopted in 2009. It is recalled that the Commission's Final Report on the 
energy sector inquiry161 was a key element in the Commission's resolve to propose an 
improved regulatory framework for electricity and gas. Subsequent to the conclusion 
of the first reading on 9 January 2009162, the European Parliament, the Council and 
the  Commission  entered  into  intensified  discussions  ("trilogue")  with  a  view  to 
reaching  agreement  on  the  package  in  the  second  reading.  These  discussions 
succeeded163 and the package was adopted on 13 July164. 

161 

162 
163 

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, 10.1.2007), and DG 
Competition report on energy sector inquiry (SEC(2006)1724, 10.1.2007). 
Adoption of the Council's Common Position on 9 January 2009. 
Cf Position of the European Parliament of 22 April 2009 and Council Decision of 25 June 2009. 

EN 

58 

   EN 

                                                 
246. 

On  6  April  the  European  Parliament  and  the  Council  adopted  the  climate-energy 
legislative  package  containing  measures  to  fight  climate  change  and  promote 
renewable energy that had been proposed by the Commission in January 2008. This 
package is designed to achieve the EU's unilateral commitment of a 20% reduction in 
greenhouse  gases  compared  to  1990  and  a  20%  share  of  renewable  energy  in  the 
EU's  total  energy  consumption  by  2020.  The  package  contains  a  directive  on 
renewable  energy  establishing  sustainability  criteria  for  biofuels  and  bioliquids165 
which are also relevant for the assessment of State aid in that area. Moreover, as part 
of the package, the Council adopted a Directive revising the EU Emissions Trading 
System (ETS) for greenhouse gases166. Under the revised directive up to 300 million 
emission  allowances  (at  current  EUA  price  worth  some  EUR  4  billion)  will  be  set 
aside for the financing of clean technologies. They will contribute to the funding of 
up  to  twelve  demonstration  projects  in  carbon  capture  and  storage  and  also 
innovative renewable energy projects. 

247. 

Furthermore,  on  13  July  the  European  Parliament  Council  adopted  a  regulation167, 
which had been proposed by the Commission in November 2008 as a response to the 
financial  crisis  with  the  aim  of  reinforcing  the  EU's  energy  supply.  The  projects  in 
the  field  of  energy  supported  under  the  regulation  will  contribute  to  achieving  the 
objectives  of  security  of  energy  supply  and  reducing  greenhouse  gas  emissions.  A 
financial envelope of nearly EUR 4 billion is foreseen in the following 3 areas: gas 
and  electricity  interconnection,  offshore  wind  technology  and  Carbon  Capture  and 
Storage. 

248. 

After adoption of a second Strategic Energy Review in 2008168 and endorsement of 
its  main  conclusions  by  the  European  Council  in  March  2009,  the  Commission 
adopted  on  16  July  a  proposal  for  a  Regulation  concerning  measures  to  safeguard 
security of gas supply and repealing Directive 2004/67/EC169. 

2.1. 

Antitrust enforcement 

249. 

The  work  in  2009  concentrated  on  carrying  forward  existing  Article  102  and  101 
TFEU cases. 

164 
165 

166 

167 

168 
169 

OJ L 211, 14.8.2009. 
Directive  2009/28/EC  of  the  European  Parliament  and  of  the  Council  of  23  April  2009  on  the 
promotion  of  the  use  of  energy  from  renewable  sources  and  amending  and  subsequently  repealing 
Directives 2001/77/EC and 2003/30/EC (OJ L 140, 5.6.2009, p. 16). 
Directive  2009/29/EC  of  the  European  Parliament  and  of  the  Council  of  23  April  2009  amending 
Directive  2003/87/EC  so  as  to  improve  and  extend  the  greenhouse  gas  emission  allowance  trading 
scheme of the Community (OJ L 140, 5.6.2009, p. 63). 
Regulation  (EC)  No  663/2009  of  the  European  Parliament  and  of  the  Council  of  13  July  2009 
establishing  a  programme  to  aid  economic  recovery  by  granting  Community  financial  assistance  to 
projects in the field of energy (OJ L 200, 31.7.2009, p. 31). 
See Press release IP/08/1696, 13.11.2008 
COM(2009)363;  see  also  IP  09/1153,  16.7.2009.  The  Commission  also  adopted  a  proposal  for  a 
regulation concerning the notification to the Commission of investment projects in energy infrastructure 
within the European Community and repealing Regulation (EC) No 736/96, COM(2009) 361; see also 
IP/ 09/1152, 16.7.2009. 

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59 

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2.1.1.  Decisions 

250. 

251. 

In  RWE  Gas  Foreclosure170,  the  Commission  adopted  on  18  March  a  decision171 
under Article 9 of Regulation 1/2003 rendering commitments previously proposed by 
RWE legally binding upon RWE and closing its investigation. The Commission had 
concerns that RWE may have abused the dominant position on its gas transmission 
network to restrict its competitors' access to the network, thereby violating Article 82 
EC.  The  Commission's  suspicion  related  to  a  possible  refusal  to  supply  gas 
transmission services to other companies and to network-related behaviour aiming at 
lowering  the  margins  of  RWE's  downstream  competitors  in  gas  supply  ("margin 
squeeze"). In reaction to the Commission's concerns, RWE offered to divest its entire 
Western  German  high-pressure  gas  transmission  network172.  On  5 December  2008, 
the  Commission  had  consulted  interested  parties  on  the  commitments  proposed  by 
RWE173.  The  respondents  confirmed  that  the  commitments  were  necessary  and 
proportionate  to  remedy  the  concerns.  The  divestment  constitutes  a  clear-cut  and 
lasting solution to the concerns the Commission raised, ensuring that RWE will no 
longer be able to use the control of its network to favour its own gas supply affiliate 
over its competitors. 

In  E.ON/GDF174  the  Commission  adopted  on  8  July  a  decision  under  Article  7  of 
Regulation  1/2003,  imposing  toal  fines  of  EUR  1 106  million  on  E.ON  and  GDF 
Suez  for  market  sharing  in  breach  of  EC  Treaty  rules  on  cartels  and  restrictive 
business  practices  (Article  81  EC)175.  After  conducting  surprise  inspections  in 
2006176  and  formally  opening  proceedings  in  July  2007177,  the  Commission  had 
issued  a  SO  to  E.ON  and  GDF  Suez  in  June  2008178  and  both  companies  had  the 
opportunity to fully exercise their rights of defence. The infringement took the form 
of an agreement between E.ON and GDF, according to which they would not sell gas 
transported  via  the  MEGAL  pipeline  in  the  other  party's  home  market.  The 
agreement  was  concluded  in  1975,  when  the  parties  concerned  decided  to  jointly 
build the MEGAL pipeline across Germany to import Russian gas into Germany and 
France.  It  was  maintained  after  European  gas  markets  were  liberalised,  and  only 
abandoned definitely in 2005. The fines in this case were the first Commission fines 
imposed for an antitrust infringement in the energy sector and constitute the highest 
fines imposed in 2009. 

252. 

The  Gaz  de  France  Foreclosure179  case  addresses  suspected  abusive  behaviour  by 
the French incumbent GDF Suez. The Commission was concerned in particular that 
GDF Suez might be closing off competitors from access to gas import capacity into 
France  and  that  it  thereby  might  have  infringed  EC  Treaty  rules  on  abuse  of  a 
dominant market position (Article 82 EC) in the gas sector. GDF Suez proposed to 
address the Commission's concerns through a major structural reduction in its long-

170 
171 
172 
173 
174 
175 
176 
177 
178 
179 

Case COMP/39402 on the initiation of proceedings see MEMO/07/186, 11.5.2007. 
See IP/09/410, 18.3.2009. 
See MEMO/08/355, 31.5.2008. 
See MEMO/08/768, 5.12.2008. 
Case COMP/39401. 
See IP/09/1099, 8.7.2009. 
See MEMO/06/205, 17.5.2006. 
See MEMO/07/316, 30.7.2007. 
See MEMO/08/394. 
Case COMP/39316. 

EN 

60 

   EN 

                                                 
253. 

term reservations of gas import capacity into France. The proposed remedies foresee 
a very significant immediate reduction of the long-term capacities held by GDF and a 
reduction  to  below  50%  within  4-5  years.  The  Commission  received  commitments 
offered  by  GDF  Suez  to  remedy  these  concerns  and  reviewed  the  commitments  in 
close  cooperation  with  the  French  energy  regulator.  On  8  July,  the  Commission 
invited interested parties to present their comments on the commitments offered by 
GDF Suez. On 2 December, the Commission adopted a decision under Article 9 of 
Regulation  1/2003  making  the  commitments  legally  binding  on  GDF  Suez.  The 
commitments will make it easier for competitors to enter the French gas market and 
so  contribute  to  delivering  the  benefits  of  the  Single  Market  to  French  energy 
consumers in terms of greater choice of gas supplier and more competition on prices. 

On 6 August, the European Commission accepted commitments made by Greece to 
ensure  fair  access  to  Greek  lignite  deposits180.  The  commitments  were  made  to 
comply  with  a  decision  adopted  by  the  European  Commission  on  5 March  2008181 
which found that Greece had infringed competition rules (Articles 82 and 86 EC) by 
maintaining  rights  giving  the  state-owned  electricity  incumbent  Public  Power 
Corporation (PPC) privileged access to lignite. In particular, Greece has committed 
to  granting  exploitation  rights  to  four  lignite  deposits  through  public  tenders 
excluding  PPC,  to  ensure  that  competitors  of  PPC  in  the  Greek  electricity  market 
obtain  access  to  lignite  and  to  lignite-fired  generation.  The  Commission's  decision 
makes the proposals legally binding on Greece and requires the commitments to be 
implemented  within  one  year.  The  Commission's  decision  makes  sure  that 
competitors  of  PPC  will  get  fair  access  to  lignite,  which  is  crucial  to  allow  new 
entrants  into  the  Greek  electricity  generation  market.  This  should  ensure  greater 
choice  of  electricity  supplier  for  Greek  consumers  and  increase  the  security  of 
supply. 

2.1.2.  Other procedural steps 

254. 

The Commission addressed a SO to ENI S.p.A. on 6 March182. The SO sets out the 
Commission's  preliminary  view  that  the  management  and  operation  of  natural  gas 
transmission  pipelines  by  ENI  may  be  in  breach  of  EC  Treaty  rules  on  abuse  of  a 
dominant  market  position  (Article  82  EC).  This  behaviour  concerns  an  alleged 
refusal  to  grant  access  to  capacity  available  on  the  transport  network  (capacity 
hoarding),  the  granting  of  access  in  an  allegedly  less  useful  manner  (capacity 
degradation)  and  an  alleged  strategic 
(strategic 
underinvestment)  in  ENI's  international  transmission  pipeline  system.  These 
practices allegedly took place despite very significant short- and long-term demand 
from third party shippers. The SO indicates that these practices may have weakened 
competitors  on  the  market,  and  harmed  customers  in  Italy.  In  the  interest  of  ENI's 
exercise of its rights of defence, a hearing took place in this case on 27 November. 

limitation  of 

investment 

255. 

In the Svenska Kraftnät183 case the Commission opened proceedings on 23 April184. 
On  6  October,  the  Commission  launched  a  market  test185  inviting  comments  from 

180 
181 
182 
183 
184 

See IP/09/1226, 6.8.2009. 
See IP/08/386, 5.3.2008. 
Case COMP/39315. See MEMO/09/120, 19.3.2009. 
Case COMP/39351. 
See MEMO/09/191, 23.4.2009. 

EN 

61 

   EN 

                                                 
256. 

interested  parties  on  the  commitments  offered  by  Svenska  Kraftnät  (SvK),  the 
Swedish  transmission  system  operator,  following  the  Commission's  concerns  that 
SvK  might  have  breached  EC  Treaty  antitrust  rules  on  the  abuse  of  a  dominant 
market  position  (Article  82  EC).  The  Commission's  concerns  relate  to  the  Swedish 
electricity transmission market, and in particular that SvK is limiting the amount of 
export  transmission  capacity  available  on  electricity  interconnectors  situated  along 
Sweden's borders, with the objective of relieving internal congestion on its network. 
This would appear to favour consumers in Sweden over consumers in neighbouring 
EU  and  EEA  Member  States  by  reserving  domestically  produced  electricity  for 
domestic consumption. To alleviate these concerns, SvK has offered to subdivide the 
Swedish  transmission  system  into  two  or  more  bidding  zones  and  to  manage 
congestion in the Swedish transmission system without limiting trading capacity on 
interconnectors.  If  the  result  of  the  market  test  is  positive,  the  Commission  may 
adopt  a  decision  under  Article  9  of  Regulation  1/2003,  making  the  commitments 
legally binding on SvK. 

In  the  EDF  Customer  Foreclosure  case186
,  in  which  a  SO  was  sent  to  the  party 
concerned  in  December  2008187,  the  Commission  launched  a  market  test  on  4 
November.  The  European  Commission  thereby  invited  comments  from  interested 
parties  on  commitments  offered  by  the  French  energy  company  EDF.  These 
commitments seek to address the Commission's concerns that EDF may be abusing 
its  dominant  position  in  France.  Under  the  proposed  commitments,  EDF  would 
ensure  that  competitors  could  compete  for  on  average  65%  of  the  electricity  it 
contracts  with  large  industrial  users  in  France  each  year  during  the  period  of  the 
commitments. Should EDF's market share fall, this percentage would be reduced but 
the volumes which EDF could contract for more than one year would be capped. In 
addition,  the  duration  of  any  new  contract  concluded  with  large  industrial  users 
would  not  exceed  five  years.  Therefore,  the  proposed  commitments  have  the 
potential  to  provide  actual  and  potential  competitors  with  a  regular  opportunity  to 
acquire  EDF  customers.  If  the  market  test  indicates  that  EDF's  proposals  would 
remedy  the  Commission's  competition  concerns,  the  Commission  may  adopt  a 
decision  under  article  9  of  Regulation  1/2003  making  the  commitments  legally 
binding on EDF. Together with the reform of the regulated electricity market being 
implemented  by  the  French  government188,  the  commitments  in  this  case  have  the 
potential  to  constitute  an  important  step  towards  a  fully  competitive  electricity 
market in France. 

257. 

Furthermore,  on  11  March,  the  Commission  carried  out  surprise  inspections  in  the 
French electricity sector189. 

2.2.  Merger control 

258. 

In 2009 the European Commission cleared three transactions concerning the supply 
of  gas  and  electricity  with  remedies:  Vattenfall's  acquisition  of  Nuon  Energy190, 

185 
186 
187 
188 
189 
190 

See IP/09/1425, 6.10.2009. 
Case COMP/39386 Long term electricity contracts in France.  
See MEMO/08/809, 29.12.2008. 
See below (State aid section). See MEMO/09/394. 
Case COMP/39442. See MEMO/09/104, 11.3.2009. 
Case COMP/M.5496 Vattenfall/Nuon decision. 

EN 

62 

   EN 

                                                                                                                                                         
RWE's  purchase  of  Essent191  and  Segebel's  acquisition  by  EDF192.  In  all  of  these 
three cases the Commission identified competition problems and the parties offered 
remedies 
the  Commission  cleared 
unconditionally  two  cases193  arising  from  the  remedies  given  by  E.ON  antitrust 
proceedings194. 

issues.  Furthermore, 

that  resolved 

these 

Vattenfall/Nuon 

259. 

Vattenfall,  which  is  ultimately  controlled  by  the  Swedish  State,  operates  along  the 
entire  energy  chain.  Its  main  activities  are  in  Sweden,  Germany,  Finland,  France, 
Denmark and Poland. Nuon Energy is also active across the entire energy chain, in 
the  production  and  supply  of  electricity  and  gas,  and  in  the  supply  of  heating  and 
cooling  services.  It  is  mainly  active  in  The  Netherlands  but  also  has  activities  in 
Belgium and Germany. 

260.  When  assessing  the  Vattenfall/Nuon  case,  the  Commission's  investigation  revealed 
that the proposed transaction would not raise competition concerns on most relevant 
markets  due  to  the  minor  horizontal  overlaps  between  the  parties'  activities. 
However, the Commission found that the two firms' retail operations in Germany and 
in particular the supply of electricity to small commercial and domestic customers in 
Berlin and Hamburg raised competition issues. Vattenfall was the incumbent supplier 
and  Nuon  the  strongest  new  entrant  in  these  cities.  Consequently  the  proposed 
transaction  would  have  further  strengthened  the  position  of  Vattenfall,  reversing  a 
substantial part of the gains of market liberalisation. 

261. 

To  resolve  these  competition  concerns,  Vattenfall  proposed  to  divest  Nuon 
Deutschland  GmbH,  Nuon  Energy's  electricity  retail  business  in  Germany.  This 
divestiture will ensure that effective competition is maintained. 

RWE/Essent 

262. 

263. 

RWE is active on both electricity and natural gas markets in most EU Member States 
and  in  particular  in  Germany,  the  UK,  the  Czech  Republic  and  Hungary.  Essent  is 
active  in  the  electricity  and  natural  gas  markets,  mainly  in  The  Netherlands  and  to  a 
lesser  extent  in  Germany  and  Belgium.  The  two  companies'  activities  overlap  in  the 
electricity and gas markets in both The Netherlands and Germany. 

In  this  case  the  Commission's  investigation  found  that  the  proposed  transaction 
would have raised competition concerns in the German wholesale electricity and gas 
markets.  At  the  time  of  the  proposed  transaction,  Essent  had  a  controlling 
shareholding in Stadtwerke Bremen AG (SWB), which, like RWE, is active in these 
markets.  On  the  wholesale  electricity  market,  the  Commission  found  that  the 
proposed  transaction  would  have  strengthened  RWE's  current  collective  dominant 
position  (together  with  at  least  E.ON)  by  removing  SWB  as  an  actual  competitor 
while at the same time increasing RWE's incentives to withdraw generation capacity 
to raise prices. 

191 
192 
193 
194 

Case COMP/M.5467 RWE/Essent. 
Case COMP/M.5549 EDF/Segebel. 
Case COMP/M.5512 Electrabel/E.ON (certain assets) and M.5519 E.ON/Electrabel acquired assets. 
Cases COMP/39388 and COMP/39389 E.ON electricity. 

EN 

63 

   EN 

                                                 
264. 

265. 

On  the  gas  wholesale  market  the  Commission  was  concerned  that  the  proposed 
transaction  would  have  given  rise  to  a  vertical  relationship,  resulting  in  closing  off 
supplies to customers, between the upstream market for gas short-distance wholesale 
supply and the downstream markets for gas retail sales in RWE's TSO area. 

To resolve these competition concerns, RWE proposed to divest Essent's controlling 
shareholding  of  51%  in  SWB  and  thus  transferring  swb's  gas  and  electricity 
operations to an independent third party. 

EDF/Segebel 

266. 

267. 

268. 

269. 

On  23  September,  EDF  notified  a  proposed  concentration  whereby  EDF  would 
obtain  51%  stake  in  SPE  by  acquiring  Segebel.  EDF  is  active,  in  France  and  other 
countries,  in  the  generation  and  wholesale  trading  of  electricity  and  in  the 
transmission, distribution and retail supply of electricity, as well as in the provision 
of  other  electricity-related  services.  Its  presence  in  Belgium  had  been  relatively 
limited, although it was the third largest operator. SPE is a Belgian company active 
in the production of electricity and in the trading and supply of electricity and gas in 
Belgium. It is the second largest electricity operator in Belgium, after the incumbent 
operator GDF SUEZ (Electrabel).  

Although  the  Commission's  investigation  revealed  that  the  transaction  would  not 
significantly affect competition on most relevant markets, competition concerns were 
identified,  in  particular  with  regard  to  the  Belgian  wholesale  electricity  market. 
These arose because the transaction removed EDF as a significant potential entrant in 
this market. The incentives of the merged entity to develop new generation capacity 
in Belgium would be significantly reduced because of the concentration.  

To remove the Commission's concerns, EDF proposed the immediate divestment of 
the assets of the company responsible for the development of one of the two sites and 
the  divestment  of  the  assets  of  the  other  company  if,  by  a  later  date,  EDF  had  not 
taken a final investment decision or had decided not to develop the remaining site.  

On 14 October, the Belgian NCA requested the partial referral of the transaction to 
allow it to assess the Belgian electricity markets under Belgian competition law. As 
the  Commission  was  the  better  placed  authority  to  review  the  transaction  and 
because 
the 
Commission,  on  12  November,  refused  the  referral  request  and  approved  the 
transaction subject to commitments. 

identified  competition  concerns, 

the  commitments  solved 

the 

2.3. 

State aid enforcement 

270. 

In  the  area  of  State  aid  control  the  Commission  has  made  progress  with  regard  to 
French regulated electricity tariffs195. These tariffs are lower than market prices and 
provide French companies with an economic advantage. They also contribute to the 
foreclosure of the French electricity market since mainly EDF was entitled to provide 
such  tariffs.  The  Commission  had  opened  a  State  aid  procedure  against  regulated 
electricity  tariffs  for  French  companies  in  2007.  On  19  the  Commission  welcomed 
the French government's announcement of a reform plan providing for a phasing-out 

195 

Case C17/2007 (ex NN19/07) Regulated electricity tariffs in France (OJ C 96, 25.4.2009, p. 18). 

EN 

64 

   EN 

                                                 
of  the  tariffs  and  a  mechanism  aimed  at  stimulating  competition  on  the  electricity 
market  by  ensuring  access  to  competitors  to  a  certain  percentage  of  EDF  nuclear 
generation  capacity  at  a  regulated  price.  The  adoption  of  the  French  legislation  is 
required  before  the  Commission  can  take  a  final  decision196.  In  addition,  a  similar 
State aid procedure against Spanish regulated tariffs is still pending197. 

A  distinction  can  be  made  between  regulated  tariffs  and  preferential  tariffs.  While 
regulated  tariffs  usually  apply  to  the  whole  of  the  economy  of  a  Member  State, 
preferential tariffs apply only to certain sectors or individual companies. So far, the 
Commission  has  taken  decisions  only  on  preferential  tariffs.  In  particular,  the 
Commission  adopted  on  18  November  a  negative  decision  with  recovery  in  the 
preferential  tariffs  for  Alcoa  plants  in  Veneto  and  Sardinia198,  reaffirming  the 
negative  approach  already  taken  in  the  Terni  case  in  2007  towards  this  type  of 
operating  aid  given  for  competitiveness  reasons  and  distorting  competition  in  the 
Single  market199.  Following  the  opening  of  the  formal  investigation  procedure200, 
Italy decided to withdraw a notification for a preferential tariff for selected energy-
intensive industries in Sardinia on 30 September. In the meantime the Commission is 
assessing  a  notification  from  Germany  concerning  electricity  tariffs  for  certain 
energy intensive industries201. 

In  the  area  of  renewable  energies  the  Commission  authorised  a  Cypriot  scheme202, 
three Danish schemes203 and an Austrian scheme subsidising feed-in tariffs in favour 
of producers of renewable energies204. Concurrently the Commission opened an in-
depth  investigation  in  certain  provisions  of  the  Austrian  scheme  which  seem  to 
favour large energy consumers205. The Commission expressed doubts with regard to 
the  compatibility  of  the  scheme  with  State  aid  rules  since  the  partial  exemption  of 
energy intensive industries from the feed-in tariffs may provide these industries with 
an  unfair  competitive  advantage  that  does  not  seem  justified  by  the  logic  of  the 
system. 

At  the  same  time  the  Commission  cleared  a  Danish  project  to  grant  CO2  tax 
exemptions  to  companies  covered  by  the  EU’s  Emissions  Trading  Scheme  (EU 
ETS), subject to conditions206. After an in-depth investigation, opened in September 
2006,  the  Commission  concluded  on  17  June  2009  that  if  the  proposed  full  tax 
exemption would be implemented, some of the environmental objectives inherent to 
a  tax  on  energy  products  would  be  lost.  The  Commission  also  had  concerns  that  a 

MEMO/09/394, 15.9.2009.  
Case C3/2007 Regulated electricity tariffs in Spain (OJ C 43, 27.2.2007, p. 9). 
Case C36b/2006 Preferential electricity tariff – Alcoa. 
Case C36a/2006 Preferential electricity tariff - Terni companies (OJ L 144, 4.6.2008, p. 37). 
Case C36/2008 State aid in favour of the Sulcis integrated power plant (OJ C 240, 19.9.2008, p. 14). 
Case N452/2009 Aid for the production of non-ferrous metals. 
Case  N143/2009  Aid  scheme  to  encourage  electricity  generation  from  large  commercial  wind,  solar, 
photovoltaic systems and biomass (OJ C 247, 15.10.2009, p. 2).  
Case  N359/2008  Supplement  for  electricity  generated  by  incinerating  biomass  (OJ  C  179,  1.8.2009, 
p. 1); Case N354/2008 Supplement for electricity from new wind turbines (OJ C 143, 24.6.2009, p. 6); 
Case N356/2008 Supplement for electricity generated with bio gas (OJ C 151, 3.7.2009, p.16).  
Case N446/2008 Second amendment of the Green Electricity Act 2008 (OJ C 217, 11.9.2009, p.12). 
C24/2009 (ex N446/2008) Second amendment of the Green Electricity Act 2008 (OJ C 217, 11.9.2009, 
p. 12).  
Case C41/2006 Modification of the CO2 tax for quota-regulated fuel consumption in the industry (the 
public version is not yet available). 

271. 

272. 

273. 

196 
197 
198 
199 
200 
201 
202 

203 

204 
205 

206 

EN 

65 

   EN 

                                                 
full tax exemption would distort competition by increasing tax differentiations in an 
area where the EU has harmonised taxes and set tax minima to create a level playing 
field  between  companies.  The  Commission  therefore  approved  the  measure  on  the 
condition that it is amended, so that all the companies concerned pay an energy tax 
and  thus  respect  at  least  the  harmonised  minima  tax  levels.  Furthermore  the 
Commission approved NOx tax reductions for the Danish cement industry which was 
the  first  of  such  cases  to  be  approved  under  the  new  rules  for  aid  in  the  form  of 
reductions of environmental taxes in  the Environmental Aid Guidelines207. Another 
case of waste tax reductions for the Danish cement industry has been made subject to 
an  in-depth  investigation  because  of  doubts  with  regard  to  the  necessity  and 
proportionality of the measure208. In a similar Dutch case on tax exemptions for the 
ceramic industry the Commission concluded on 15 December 2009 after an in-depth 
investigation  that  the  measure  was  incompatible  with  the  internal  market  since  the 
tax exemptions could not be found necessary or proportional209. 

On  the  other  hand  the  Commission  authorised  under  State  aid  rules  a  scheme 
proposed  by  the  United  Kingdom  introducing  a  trading  system  for  CO2  emissions 
related  to  energy  consumption210.  The  scheme  does  not  fall  under  the  rules  for 
exemptions from environmental taxes of the Environmental Aid Guidelines, because 
of  its  innovative  character  and  because  of  the  specific  objective  it  pursues.  The 
national system, called "the Carbon Reduction Commitment" (CRC), applies to non 
energy intensive sectors of economy e.g. hospitals, hotels, banks, not covered by the 
EU ETS. In these sectors, energy costs are so minor that the additional costs related 
to  the  introduction  of  the  system  would  not  be  enough  to  trigger  a  change  in 
behaviour  of  the  companies.  Therefore  in  addition  to  all  allowances  in  the  CRC 
system  being  sold  by  auction,  participants’  environmental  performance  would  be 
ranked in a performance league table and the auction revenue would be paid back to 
participants as a subsidy. Participants ranked on the top of the Performance League 
Table would benefit the most from the recycling mechanism. The measure is in line 
with  Article  87(3)(c)  EC  because  it  pursues  an  objective  of  common  interest  in  a 
necessary and proportionate way. 

Furthermore,  the  Commission  has  approved  a  Polish211,  a  Lithuanian212  and  a 
Bulgarian213  scheme  providing  for  tax  reduction  to  stimulate  the  production  of 
certain forms of biofuels. In the Polish case the tax reductions were accompanied by 
supply obligations and in the Bulgarian and Lithuanian cases such type of obligations 
are  not  in  force  but  were  about  to  be  implemented.  The  coexistence  of  supply 
obligations and tax reductions may raise the question of the need for aid since both 
instruments pursue the same goal of bringing biofuels to the market. However, in all 
of these cases the duration of the schemes was limited to less than three years. This 
timeframe  should  enable  the  Member  States  to  collect  sufficient  data  to  assess  the 

274. 

275. 

207 

208 

209 

210 
211 
212 
213 

Case  N327/2008  NOx  tax  reductions  for  large  polluters  and  companies  reducing  pollution,  and  tax 
reductions for biogas and biomass (the public version is not yet available). 
Case C30/2009 (ex N328/2008) Tax exemption for pollution from companies' own cement production 
(the public version is not yet available). 
Case C5/2009 (ex N210/2008) Exemption from environmental taxes for ceramic producers (the public 
version is not yet available). 
Case N629/2008 Carbon Reduction Committment (CRC). 
Case N57/2008 Operating aid for biofuels – Poland (OJ C 247, 15.10.2009, p. 1). 
Case N372/2007 Support for biofuel (OJ C 106, 8.5.2009, p. 14). 
Case N607/2008 Tax reductions for biofuels. 

EN 

66 

   EN 

                                                 
276. 

277. 

long  term  effects  of  the  coexistence  of  these  two  instruments  in  the  market  for 
biofuels. Also, in the Polish case the incentive effect was justified as being temporary 
because  the  functioning  of  the  obligation  was  expected  to  drive  the  demand  for 
biofuels  up  to  a  level  when  it  was  not  excluded  that  for  a  limited  time  companies 
subject  to  the  obligation  will  rather  pay  a  fine  than  comply  with  the  obligation.  In 
such  a  case,  the  environmental  effect  would  not  be  reached  by  applying  the 
obligation alone. 

Furthermore the Commission dealt with a number of measures promoting electricity 
and  heat  generation  and  distribution  infrastructure.  With  regard  to  Austria,  the 
Commission  approved  a  scheme  supporting  the  construction  of  combined  heat  and 
power  plants  (CHP  plants)214  under  the  Environmental  Aid  Guidelines  as  well  as  a 
scheme  promoting  the  construction  of  district  heating  and  cooling  installations215 
which was approved partly under the Environmental Aid Guidelines and partly under 
Article 87(3)(c) EC. Moreover, the Commission authorised three Polish schemes on 
heating  distribution  networks216,  on  electricity  connection  networks  for  renewable 
energies217 and on modernisation of electricity distribution networks218 directly under 
Article 87(3)(c) EC. Also, in the United Kingdom the Commission cleared a scheme 
for  a  tender  to  conduct  two  front  end  engineering  and  feasibility  studies  (FEED 
studies)  on  two  industrial-scale  carbon  capture  and  storage  (CCS)  demonstration 
projects. The FEED studies should reduce the technical, environmental and financial 
risks of the construction of a commercial scale coal-fired power plant equipped with 
post-combustion CCS technology219. 

Finally,  on  the  basis  of  the  Temporary  Framework220  the  Commission  approved 
national  aid  schemes  from  France,  United  Kingdom,  Spain,  Germany  and  Italy221. 
The  Temporary  Framework  had  been  introduced  in  2009  in  order  to  give  Member 
States  additional  possibilities  for  providing  businesses  with  improved  access  to 
financing  during  the  economic  and  financial  crisis.  Since  the  schemes  fulfilled  the 
conditions  set  out  in  the  Temporary  Framework,  they  were  found  compatible  with 
Article 87(3)(b) EC, which permits aid intended to remedy a serious disturbance in 
the  economy  of  a  Member  State.  The  approved  schemes  support  businesses  faced 
with  financing  problems  because  of  the  credit  squeeze,  while  at  the  same  time 
preserving  investments  in  products  with  an  environmental  benefit  (i.e.  green 
products). The schemes were dealt with in an accelerated procedure as compared to 
standard cases. 

214 
215 

216 

217 

218 

219 
220 

221 

Case N461/2008 Law on Combined Heat and Power Stations (CHP) (OJ C 109, 13.5.2009, p. 1). 
Case N485/2008 Aid Scheme for District Heating and Cooling Infrastructure and Cooling Installations 
(AT) (OJ C 191, 14.8.2009, p. 1). 
Case N54/2009 Aid for modernisation of heating distribution networks in Poland (OJ C 204, 29.8.2009, 
p. 2). 
Case  N55/2009  Aid  for  constructing  and  modernisation  of  electricity  connection  networks  for 
renewable energies in Poland (OJ C 206, 1.9.2009, p. 3). 
Case  N56/2009  Aid  for  modernisation  and  replacement  of  electricity  distribution  networks  in  Poland 
(OJ C 206, 1.9.2008, p. 4). 
Case N74/2009 CCS Demonstration Competition – FEED (OJ C 203, 28.8.2009, p. 2). 
Temporary Framework for State aid measures to support access to finance in the current financial and 
economic crisis (OJ C 83, 7.4.2009, p. 1). 
N11/2009  (France),  N72/2009  (United  Kingdom),  N140/2009  (Spain),  N426/2009  (Germany), 
N542/2009 (Italy). 

EN 

67 

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C – ELECTRONIC COMMUNICATIONS  

1. 

OVERVIEW OF SECTOR 

278. 

279. 

280. 

281. 

In  2009,  it  is  estimated  that  growth  in  the  electronic  communications  sector  was 
close  to  zero.  The  sector  however  remained  relatively  resilient  to  the  current 
economic  crisis.  More  effective  competition  due  to  competition  law  enforcement, 
sector regulation, technological developments and new business models has resulted 
in  lower  prices  for  electronic  communication  services,  investment  in  new  network 
infrastructure and innovative service offers. Business and retail costumers have both 
benefited from a broad choice of electronic communications services in the fixed and 
mobile markets. 

the 

regards 

trend  of 

retail  competition, 

As 
for  electronic 
communications  services  persisted.  In  the  light  of  the  steady  rise  of  Voice  over 
Internet  Protocol  (VoIP)  and  fixed  mobile  convergence,  the  market  for  traditional 
fixed voice telephony continued to decline. In the mobile voice markets, penetration 
increased  again,  while  growth  of  revenues  slowed  down.  The  broadband  service 
market showed a slight increase of broadband penetration and an increase of average 
download speeds. 

lower  prices 

In the mobile  market, decreasing prices for mobile voice services resulted in lower 
revenues  for  operators.  This  development  was  partially  offset  by  increasing  use  of 
mobile  data  services.  In  addition,  an  increasing  number  of  consumers  decided  to 
replace fixed access with mobile access only. This trend also reflected the advanced 
acceptance  of  mobile  broadband  by  the  consumers,  even  if  prices  and  product 
characteristics  widely  differ  throughout  the  EU.  The  trend  towards  fixed-mobile 
integration could also advance further, when mobile network operators will upgrade 
their networks to new transmission technologies that will allow download speeds up 
to  100  MBit/s.  However,  increased  data  traffic  may  only  produce  limited  revenue 
growth given that retail offerings are increasingly based on flat rates. 

In some Member States the fixed network operators have started the deployment of 
optical  fibre  networks  to  provide  very  high  bandwidth  broadband  internet  services, 
although  these  deployments  have  so  far  been  very  limited.  In  addition,  many  cable 
operators have also been upgrading their networks to deliver internet services up to 
100 MBit/s. The upgrade of the existing infrastructure for electronic communications 
may  bring  large  growth  opportunities  for  the  IT  and  content  industries  and  for  the 
European  economy  as  a  whole.  Gradual  availability  of  very  high  bandwidth  will 
allow  content  providers  to  market  new  broadband  applications  and  services. 
Consumers will not only benefit from higher download speeds and the availability of 
services, both for entertainment (on-line gaming, high-definition TV, etc.) and daily 
life (interactive applications, e-health, e-government, etc.) but also from wider choice 
and enhanced competition between operators. 

282. 

Since the beginning of the Internet, network capacity and availability of bandwidth 
have influenced the offer of certain types of content/services on-line (the move from 
text based to image based websites; from web 1.0 to web 2.0 etc). The emergence of 
new  content/services  also  creates  a  societal  need  for  further  increase  in  bandwidth, 

EN 

68 

   EN 

even where it is not profitable for market operators to offer access, e.g. in remote and 
sparsely  population  areas.  This  often  triggers  use  of  public  funding,  and  therefore 
numerous  aid  schemes  have  been  motivated  in  the  past  by  the  need  to  follow  the 
above  evolution.  Public  intervention  in  some  Member  States  is  now  gradually 
shifting towards support for very high speed broadband networks, the so-called "next 
generation access" (NGA) networks. 

2. 

POLICY DEVELOPMENTS 

2.1. 

Application of the Regulatory Framework and other policy developments 

283. 

284. 

Providers  of  electronic  communications  services  continued  to  operate  within  the 
confines of the EU regulatory framework for electronic communications222, which is 
designed to facilitate access to legacy infrastructure, foster investment in alternative 
network infrastructure and bring choice and lower prices for consumers. 

Ex  ante  regulation  under  the  Regulatory  Framework  builds  on  competition  law 
principles.  This  approach  has  been  adopted  by  National  Regulatory  Authorities 
(NRAs)  in  their  assessment  of  electronic  communication  markets.  National 
regulators  concluding  that  a  market  is  not  effectively  competitive  must  identify 
operators  with  significant  market  power  and  impose  appropriate  regulatory 
obligations. Regulators are required to make accessible to the Commission and other 
regulators  their  proposals  under  a  consultation  mechanism  provided  by  the 
Framework  Directive  (the  so-called  "Article  7  procedure").  These  can  comment  on 
the  regulator's  draft  measures.  The  Commission  may  also,  following  in-depth 
investigation, ask the regulator to withdraw a draft measure which concerns market 
definition  or  the  assessment  of  the  significant  market  power  if  it  does  not  comply 
with  EU  law.  In  its  new  Recommendation  on  relevant  product  and  service  markets 
within  the  electronic  communications  sector  the  Commission  identified  seven 
specific  product  and  services  markets,  susceptible  to  ex  ante  regulation223,  both  at 
wholesale and at retail level. 

285. 

In  2009  the  Commission  received  161  notifications  from  NRAs  and  adopted  87 
comments  letters  and  59  no-comments  letters  within  the  Community  consultation 
mechanism  under  Article  7  of  the  Framework  Directive.  Five  notifications  were 

222 

223 

Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common 
regulatory framework for electronic communications networks and services (Framework Directive) (OJ 
L  108,  24.4.2002,  p.  33),  Directive  2002/19/EC  of  the  European  Parliament  and  of  the  Council  of 
7 March 2002 on access to, and interconnection of, electronic communications networks and associated 
facilities  (Access  Directive)  (OJ  L  108,  24.4.2002,  p.  7),  Directive  2002/20/EC  of  the  European 
Parliament  and  of  the  Council  of  7  March  2002  on  the  authorisation  of  electronic  communications 
networks and services (Authorisation Directive) (OJ L 108, 24.4.2002 p. 21), Directive 2002/22/EC of 
the  European  Parliament  and  of  the  Council  of  7  March  2002  on  universal  service  and  users'  rights 
relating to electronic communications networks and services (Universal Service Directive) (OJ L 108, 
24.4.2002, p. 51), Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 
concerning  the  processing  of  personal  data  and  the  protection  of  privacy  in  the  electronic 
communications  sector  (Directive  on  privacy  and  electronic  communications)  (OJ  L  201,  31.7.2002, 
p. 37). 
Commission  recommendation  of  17.12.2007  on  relevant  product  and  service  markets  within  the 
electronic  communications  sector 
replacing  Commission 
Recommendation 2003/311/EC (2). 

(OJ  L  344,  28.12.2007,  p.  65), 

EN 

69 

   EN 

                                                 
286. 

287. 

withdrawn by the notifying NRA, whereas 9 cases were still open at the end of the 
year.  In  one  of  these  cases224,  the  Commission  raised  serious  doubts  as  to  the 
compatibility  of  the  notified  measures  with  EU  law  and  opened  a  second  phase 
investigation under Article 7(4) of the Framework Directive. 

On 7 May the Commission issued a Recommendation on termination rates225 in view 
of  the  fact  that  termination  rates  of  mobile  operators  as  well  as  of  fixed  network 
operators  are  not  consistently  regulated  in  the  EU,  and  the  rates  feature  wide 
differences  which  cannot  be  explained  solely  by  national  circumstances.  The 
Recommendation sets out a methodology for regulating termination rates, aiming at 
ensuring  consistency  of  regulatory  approaches  and  promoting  competition.  It 
indicates specifically that termination rates at national level should be set at the level 
of the real costs that an efficient operator incurs when receiving (terminating) a call 
in its network. This implies that the same (symmetric) termination rate will apply to 
all  operators.  The  Commission  expects  that  eliminating  price  distortions  between 
phone operators across the EU will lower consumer prices for voice calls within and 
between Member States. All EU national regulators should apply the recommended 
approach to termination rates by the end of 2012. However, national regulators with 
limited resources may use different approaches for a limited further period as long as 
the resulting termination rates do not exceed the average level calculated according 
to the recommended cost methodology. 

On 1 July a new EU Regulation on intra-community roaming became applicable. The 
new rules further reduce price caps for mobile roaming calls to EUR 0.43 for calls 
made  abroad  and  EUR  0.19  for  calls  received  abroad  (per  minute  and  excluding 
VAT)  as  from  July  2009  with  further  yearly  reductions,  limit  the  price  that 
consumers  can  be  charged  for  sending  a  text  message  while  abroad  to  EUR  0.11 
excluding VAT (compared to a previous average of EUR 0.28) and reduce the cost of 
downloading data with a mobile phone while abroad by introducing a wholesale cap 
of EUR 1 per MB downloaded which will also be reduced on a yearly basis. The new 
roaming rules build on the first EU Roaming Regulation of 2007, which introduced 
the  "Euro  tariff"  caps  for  calls  made  and  received  while  travelling  in  the  EU.  As  a 
result,  Euro  tariff  roaming  consumers  saved  on  average  70%  compared  to  2005, 
before  the  EU  acted.  The  new  roaming  rules  will  apply  until  the  summer  of  2012. 
The  European  Parliament  and  Council  have  asked  the  Commission  to  prepare  an 
Interim  report  on  the  new  rules  and  the  developments  of  roaming  services  in  the 
Community by June 2010. In addition, the Commission will review the functioning 
of the EU Roaming Regulation by June 2011 and would then propose the appropriate 
actions if required. 

288. 

On  18  December  new  rules  for  the  EU  telecoms  markets  were  published  in  the 
Official Journal of the European Union (the Telecoms package)226. The EU telecoms 

224 
225 

226 

Case AT/2009/970 concerning the Austrian Wholesale broadband access market. 
Commission  Recommendation  2009/396/EC  of  7  May  2009  on  the  regulatory  treatment  of  fixed  and 
mobile  termination  rates  in  the  EU,  OJ  L  124,  20.5.2009.  Termination  rates  are  wholesale  tariffs 
charged by the operator of a called party to the operator of the calling party's network. Operators have 
both the incentive and the ability to charge excessively high termination. The termination tariffs have a 
considerable  impact  on  consumers'  phone  bills  and  are  therefore  subject  to  price  regulation  by  the 
national regulatory authorities. 
The  Telecoms  package  consists  (i)  of  the  Directive  of  the  European  Parliament  and  of  the  Council 
amending  Directives  2002/21/EC  on  a  common  regulatory  framework  for  electronic  communications 

EN 

70 

   EN 

                                                 
regulatory 

reform  comprises  two  Directives  amending  five  different  EU  Directives  of  the 
(Framework  Directive,  Access  Directive, 
European 
Authorisation  Directive,  Universal  Service  Directive  and  the  e-Privacy  Directive) 
and a new Regulation setting up the European Body of Telecoms Regulators BEREC 
(Body of European Regulators for Electronic Communications). 

framework 

289. 

The new telecoms rules comprise inter alia the following prominent reforms: 

•  The  Commission  acquires  additional  power  to  oversee  regulatory  remedies 
proposed  by  national  regulators  (e.g.  the  conditions  on  which  network  operators 
with significant market power have to grant access to the network; or concerning 
termination  rates).  The  objective  is  to  avoid  inconsistent  regulation  that  could 
distort competition in the single telecoms market. 

•  The  creation  of  the  new  European  Telecoms  Authority  (BEREC).  BEREC  will 
provide opinions in the context of the Commission's analysis of remedies notified 
by  national  regulators,  and  will  also  advise,  support  and  complement  the 
independent  work  of  national  telecoms  regulators,  especially  when  it  comes  to 
regulatory decisions with cross-border relevance. 

•  The  introduction  of  the  additional  tool  of  functional  separation  that  enables 
to  separate 
to  oblige 

telecoms  operators 

national 
regulators 
communication networks from their service branches. 

telecoms 

•  With  regard  to  "net  neutrality",  i.e.  the  differentiation  between  the  various  data 
transmissions or data users on the internet, national telecoms authorities will have 
the  power  to  set  minimum  quality  levels  for  network  transmission  services. 
Furthermore  network  operators  will  be  required  to  inform  end-users  –  before 
signing a contract – about the nature of the service to which they are subscribing, 
including traffic management techniques and their impact on service quality. 

290. 

The Member States are required to transpose the two Directives of the package into 
national legislation by 26 May 2011. BEREC is foreseen to be established in spring 
2010. 

2.2. 

State aid 

291. 

There  is  widespread  consensus  about  the  crucial  importance  of  investments  in 
broadband  infrastructures  for  the  countries'  economic  and  social  development.  The 
Commission actively supports the widespread availability of broadband services for 
all  European  citizens  as  laid  down  in  the  Lisbon  strategy  and  the  subsequent 

networks  and  services,  2002/19/EC  on  access  to,  and  interconnection  of,  electronic  communications 
networks  and  associated  facilities  and  2002/20/EC  on  the  authorisation  of  electronic  communications 
networks  and services;  (ii)  of  the  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  cooperation 
between national authorities responsible for the enforcement of consumer protection laws; and (iii) of 
the Regulation (EC) of the European Parliament and of the Council establishing the Body of European 
Regulators for Electronic Communications and the Office (BEREC). 

EN 

71 

   EN 

                                                                                                                                                         
292. 

293. 

294. 

295. 

Communications227.  The  importance  of  broadband  investments  has  been  further 
stressed  by  President  Barroso  in  the  European  Economic  Recovery  Plan  (the 
"Recovery  Plan")228,  where  the  Commission  decided  to  earmark  part  of  EUR  1.02 
billion from the European Agricultural Fund for Rural Development (EAFRD) to be 
invested in the roll-out of broadband networks in rural and remote areas. 

The Commission encourages aid measures having the objective to provide adequate 
broadband coverage at affordable prices for all European citizens. In its assessment 
of public funding schemes under the State aid rules, the Commission acknowledges 
that, due to the economic or technological restrictions of broadband networks, private 
operators may not have sufficient market incentives to provide adequate broadband 
services,  typically  in  rural  and  remote  areas.  The  Commission  has  built  up  a  clear 
and consistent State aid policy in the last years and endorses properly justified and 
proportionate  broadband  schemes  if  the  distortion  of  competition  and  the  effect  on 
trade is limited229. Until 2009, the Commission has assessed and approved the use of 
State  aid  and  other  types  of  public  funding  of  approximately  EUR  2  billion230  in 
Europe that generated total investments in broadband networks of more than EUR 3 
billion. 

Building on the Commission's practice in this area, in order to help Member States to 
design State aid measures compatible with the Treaty, the Commission has adopted a 
horizontal  document  that  lays  down  the  detailed  rules  and  conditions  for  public 
support  of  broadband  infrastructure.  Following  consultation  with  all  interested 
stakeholders,  the  "Community  Guidelines  for  the  application  of  State  aid  rules  in 
relation  to  rapid  deployment  of  broadband  networks"  (hereafter:  Broadband 
Guidelines) were adopted in September231. 

The Broadband Guidelines address not only aid to basic broadband networks  (such 
as ADSL, cable, mobile, wireless or satellite broadband services) but also support to 
very high speed NGA networks (fibre-based or advanced upgraded cable networks, 
at the current stage). 

The section on public funding of basic broadband networks outlines the Commission 
current case practice in this field. To grant State aid for broadband development, the 
granting  authorities  have  to  clearly  identify  the  targeted  areas  requiring  public 
support through a thorough market research and consultation with existing operators. 
Furthermore, a number of safeguards are included to limit distortion of competition 
and  to  minimise  the  use  of  public  funds;  for  example,  aid  shall  be  granted  via  an 
open  tender  procedure,  effective  wholesale  access  shall  be  provided  on  the 

227 

228 
229 

230 
231 

See  for  instance  “i2010  –  A  European  Information  Society  for  growth  and  employment, 
COM(2005)229  final,  1  June  2005;  “eEurope  2005:  An  information  society  for  all”  COM(2002)263 
final, "Bridging the broadband gap", COM(2006)129. 
Communication from the Commission to the European Council, COM(2008)800. 
See  cases  N238/2008  Broadband  infrastructure  development,  OJ  C  154,  7.7.2009;  N153/2009 
Amendment of the State aid broadband scheme N266/2008, OJ C 284, 25.11.2009; N183/2009 RAIN 
project, OJ C 216, 10.9.2009; N243/09 Extension of broadband coverage in Niedersachsen, OJ C 219, 
12.9.2009; N172/2009 Broadband development in Slovenia, OJ C 264, 6.11.2009;, N418/2009 - UK - 
Northern Ireland. 
Out of which EUR 1.5 billion constituted as State aid within the meaning of Article 107 TFEU. 
OJ C 235, 30.9.2009, p. 7. 

EN 

72 

   EN 

                                                 
296. 

297. 

subsidised  networks  to  other  operators,  the  measure  shall  be  neutral  as  regards  the 
technology and adequate monitoring of the use of public funds shall be implemented 
by the granting authorities. 

Concerning public funding of NGA networks, the main objective of the Commission 
is to accelerate the deployment of such networks, in order to avoid the creation of a 
new  digital  divide  in  the  area  of  NGA  networks.  The  Commission's  policy  in  this 
field builds on the experience with "traditional" broadband networks and adds certain 
new  specific  safeguards  to  promote  competition  and  limit  crowding  out  of  private 
investment.  Since  investments  to  NGA  networks  are  just  starting  and  are  not 
completed  yet,  when  a  public  authority  intends  to  support  the  roll-out  of  an  NGA 
network,  it  needs  to  take  into  account  also  the  investments  plans  of  the  private 
operators for the next 3 years. Furthermore, in order to help existing basic broadband 
operators to upgrade their services, the new infrastructure shall support effective and 
full unbundling and satisfy all different types of network access that operators may 
seek. 

For  the  cases  in  which  a  member  State  qualifies  the  operation  of  a  broadband 
network  as  a  service  of  general  economic  interest  (SGEI),  the  Guidelines  provide 
additional explanation about the way the existing case law applies in the broadband 
sector.  In  this  context,  the  Commission  approved  public  financing  worth  EUR  59 
million  for  an  NGA  project  in  the  French  department  of  Hauts-de-Seine232.  The 
Commission  concluded  that  the  public  funding  constituted  a  compensation  for 
complying with the obligations of a SGEI according to the Altmark criteria, and did 
not  constitute  State  aid.  The  network  will  cover  the  entire  French  department  of 
Hauts-de-Seine,  including the non-profitable areas with a passive, neutral and open 
broadband  network  that  will  further  stimulate  competition  and  the  provision  of 
innovative services. 

D – INFORMATION TECHNOLOGY  

1. 

OVERVIEW OF SECTOR 

298. 

299. 

The  recent  economic  crisis  negatively  affected  the  global  information  and 
communications  technology  (ICT)  industry  during  2009,  but  a  sudden  upturn  in 
global  sales  of  ICT  goods  in  May  and  June  suggested  that  the  industry  may  have 
reached a turning point and may be on the road to recovery233. 

The  ICT  sector  is  of  particular  importance  for  driving  innovation  and  realizing  the 
potential  of  the  digital  economy.  Information  technology  markets  are  frequently 
prone to network effects, as illustrated by the Commission's 2004 Microsoft case234. 
These effects may result in customer lock-in as well as in the emergence of dominant 

232 

233 

234 

Commission  decision  of  30  September  2009  on  N331/2008  "Réseau  à  très  haut  débit  en  Hauts-de-
Seine". 
See OECD report of August 2009 on "The impact of the crisis on ICTs and their role in the discovery" 
(http://www.oecd.org/dataoecd/33/20/43404360.pdf)  and  the  summary  on  the  OECD  website  at 
http://www.oecd.org/document/21/0,3343,en_2649_34223_43410005_1_1_1_1,00.html 
Case COMP/37.792 Microsoft (OJ L 32, 6.2.2007, p. 23). 

EN 

73 

   EN 

                                                 
market  positions,  which  are  not  in  and  of  themselves  problematic,  but  may 
necessitate timely competition law enforcement to ensure competition on the merits 
in the markets concerned or in related markets. In this context, interoperability and 
standards are key recurring issues in an increasingly inter-connected world. 

The main features of the ICT sector as it stands today remain digital convergence and 
the growing importance of interoperability and standards. 

Given  that  network  effects  are  one  of  the  major  characteristics  of  the  ICT  sector, 
interoperability  steadily  growing  in  importance  in  the  market.  Although  personal 
computers (PCs) are considered to be the main gateway to the digital world, users are 
increasingly  accessing  data  through  other  devices  such  as  smart-phones,  which  are 
able to communicate with each other and with computing devices. This reinforces the 
need for interoperability between software products and devices. 

Also  standards  play  an  increasingly  important  role  in  the  rapidly  changing 
information  society.  Against  this  background,  it  is  of  utmost  importance  that 
standard-setting  organisations  establish  rules  which  ensure  fair, 
transparent 
procedures and early disclosure of relevant intellectual property. 

300. 

301. 

302. 

2. 

POLICY DEVELOPMENTS 

303. 

304. 

In  the  field  of  standard-setting,  a  number  of  developments  occurred,  particularly  in 
relation to intellectual property rights (IPR). The Commission is currently reviewing 
the  regime  for  the  assessment  of  horizontal  cooperation  agreements  under  EU 
antitrust rules. To this end, it held a public consultation from 4 December 2008 to 30 
January  2009235.  The  review  also  covers  standard-setting  with  a  view  to  providing 
more  guidance  on  this  topic.  Furthermore,  from  3  July  to  15  September,  a  public 
consultation  took  place  on  the  Commission  White  Paper  on  Modernising  ICT 
Standardisation in the EU236. 

The  issue  of  ex  ante  disclosure  came  to  the  fore  in  these  public  consultations.  To 
obtain  more  complete  information  about  proposed  licensing  terms  earlier  in  the 
standards development process, some standards development organizations consider 
adopting  IPR  policies  that  require  or  permit  early  disclosure  of  actual  licensing 
terms.  Some  participants  in  standards  development  favour  the  adoption  of  such 
policies  because  they  believe  they  promote  competition  between  technological 
alternatives before a particular alternative is selected for inclusion in a standard. 

305. 

The  US  standards  development  organization  VITA  already  adopted  an  IPR  policy 
including ex ante disclosure in 2006, while the discussion in the EU ensued in 2009. 
VITA adopted an IPR policy under which each member of a working group must not 

235 

236 

the  website  of 

the  Directorate-General 

The  Commission's  questionnaire  and  the  replies  to  the  consultation  on  the  "Review  of  the  current 
regime for the assessment of horizontal cooperation agreements under EU antitrust rules" can be found 
on 
for  Competition  under  "Public  consultations" 
(http://ec.europa.eu/competition/consultations/2009_horizontal_agreements/index.html). 
The Commission's questionnaire and related documents can be found on the website of the Directorate-
consultations" 
General 
(http://ec.europa.eu/enterprise/newsroom/cf/newsbytheme.cfm?lang=en&displayType=consultation&fo
T=pa). 

Enterprise 

Industry 

"Public 

under 

and 

for 

EN 

74 

   EN 

                                                 
only identify all patents or patent applications of which the member that knowledge 
and  that  the  member  believes  may  become  essential  to  the  implementation  of  the 
future standard, but in addition the member must declare the maximum royalty rates 
and  most  restrictive  non-royalty  terms.  A  working  group  member  who  fails  to 
disclose this information is obliged to license the essential claims of the undisclosed 
patent for implementation of the VITA standard to all interested parties on a royalty-
free basis237. 

306. 

307. 

Under  the  current  European  Telecommunications  Standards  Institute  (ETSI)  IPR 
policy, any public and unilateral ex ante disclosure of licensing terms by licensors of 
essential  IPRs  in  ETSI  is  fully  voluntary  and  for  the  sole  purpose  of  assisting 
members in making informed decisions in relation to whether solutions best meet the 
technical objectives238. 

At  present,  the  Commission  does  not  prescribe  specific  schemes  to  industry  and 
standard setting bodies, but rather sets the limits within which these are free to adopt 
the  policies  of  their  choice.  The  upcoming  guidelines  on  horizontal  cooperation 
agreements  will  address  various  issues  with  respect  to  standardisation  (i.e.  ex-ante 
disclosure). 

3. 

MAIN CASES 

Intel 

308. 

On 13 May 2009, the Commission adopted a prohibition decision against Intel. The 
Commission found that between October 2002 and December 2007 Intel had abused 
its dominant position on the market for x86 CPUs by engaging in two specific forms 
of  illegal  practice.  First,  Intel  gave  wholly  or  partially  hidden  rebates  to  computer 
manufacturers conditional upon (quasi) exclusivity for its x86 CPU. Intel also made 
direct payments to a major retailer to sell only computers with its x86 CPUs. Second, 
Intel made direct payments to computer manufacturers to halt or delay the launch of 
specific products containing competitors' x86 CPUs and/or to limit the sales channels 
available 
its 
these  products.  The  Commission  ordered  Intel 
anticompetitive  practices  and  refrain  from  engaging  in  similar  or  equivalent 
practices. The Decision also imposes on Intel a fine of EUR 1.06 billion, which is the 
highest  fine  ever  imposed  on  a  single  company  by  the  Commission.  A  provisional 
non-confidential  version  of  the  decision  was  published  on  21  September  on  the 
website of the Directorate-General for Competition239. Intel lodged an appeal against 
the decision with the CFI on 22 July240. 

to  cease 

to 

Microsoft 

309. 

In  the  Microsoft  case,  the  Commission  sent  a  SO  to  Microsoft  in  January  2009, 
outlining the preliminary view that Microsoft infringed its dominant position in the 
client  PC  operating  system  market  by  tying  its  web  browser  Internet  Explorer  to 

237 
238 
239 

240 

See Vita's homepage under "Disclosure/Licensing" (http://www.vita.com/disclosure/). 
See ETSI's homepage at http://www.etsi.org/WebSite/AboutETSI/IPRsInETSI/IPRsinETSI.aspx 
The provisional non-confidential version of the decision is published on the website of DG Competition 
under "Key Issues – Intel Antitrust Case". 
T-286/09 Intel v Commission (OJ C 220, 12.9.2009, p. 41). 

EN 

75 

   EN 

                                                 
Windows.  The  Commission  was  concerned  that  the  tying  distorted  competition  on 
the merits between competing web browsers insofar as it provided Internet Explorer 
with  an  artificial  distribution  advantage  which  other  web  browsers  were  unable  to 
match.  The  Commission  also  took  the  preliminary  view  that,  through  the  tying, 
Microsoft  shielded  Internet  Explorer  from  head  to  head  competition  with  other 
browsers which was detrimental to the pace of product innovation and to the quality 
of  products  which  consumers  ultimately  obtain.  In  addition,  the  Commission 
preliminarily  concluded  that  the  ubiquity  of  Internet  Explorer  created  artificial 
incentives  for  content  providers  and  software  developers  to  design  websites  or 
software  primarily  for  Internet  Explorer,  which  ultimately  risks  undermining 
competition and innovation in the provision of services to consumers. 

In  October,  Microsoft  proposed  commitments  in  order  to  solve  the  competition 
concerns raised by the Commission in its SO. The Commission decided to put these 
proposals  to  a  formal  market  test.  Microsoft  proposed  to  make  available  a 
mechanism  in  Windows  client  PC  operating  systems  within  the  EEA  that  enables 
computer  manufacturers  (OEMs)  and  end  users  to  turn  off  Internet  Explorer  in 
Windows  7  and  subsequent  versions  of  Windows.  Under  Microsoft's  proposal, 
OEMs would be free to pre-install any web browser(s) of their choice on PCs they 
ship and set it as  default web browser.  Microsoft would  distribute  a  Choice  Screen 
software update to users of Windows client PC operating systems within the EEA by 
means  of  Windows  Update.  Users  who  have  Internet  Explorer  set  as  their  default 
web browser would be prompted with this Choice Screen. The Choice Screen would 
give users an opportunity to choose whether and which competing web browser(s) to 
install. The Choice Screen would display icons of and basic identifying information 
on  the  most  widely-used  web  browsers.  Following  the  result  of  the  market  test, 
Microsoft improved the design of the Choice Screen and agreed regular review. An 
Article  9(1)  decision  adopted  on  16  December  2009  made  these  commitments 
binding on Microsoft for a period of 5 years241. 

In the Rambus case, the Commission sent a SO to Rambus on 30 July 2007, in which 
it  came  to  the  preliminary  conclusion  that  Rambus  had  infringed  Article  82  EC  by 
claiming unreasonable royalties for the use of certain patents for “Dynamic Random 
Access  Memory”  chips  subsequent  to  a  so-called  "patent  ambush."  Whilst 
disagreeing with the Commission's provisional findings, Rambus eventually decided 
to offer commitments to the Commission on 8 June242. On 12 June, the Commission 
published a notice in the OJ pursuant to Article 27(4) of Regulation 1/2003, outlining 
its intention to adopt a decision under Article 9(1) of Regulation 1/2003 declaring the 
commitments to be binding on Rambus, subject to market testing243. 

310. 

Rambus 

311. 

312. 

In  light  of  the  comments  received,  the  Commission  asked  Rambus  to  clarify  a 
number of issues, such as that all relevant current and future standards are  covered 
and that the sale of patents to a third party would not affect the commitments. The 
Commission then concluded that the commitments in their final form, as modified by 
Rambus, were adequate to meet the competition concerns expressed in the SO. 

241 
242 
243 

The commitments are published on the website of DG Competition under "Antitrust cases". 
The commitments are published on the website of DG Competition under "Antitrust cases". 
Case COMP/38636 Rambus (OJ C 133, 12.6.2009, p. 16). 

EN 

76 

   EN 

                                                 
313. 

314. 

Therefore,  on  9  December  2009,  the  Commission  adopted  a  decision  based  on 
Article 9 of Regulation 1/2003 ("commitment decision"). This decision, which does 
not come to a finding on an infringement, legally binds Rambus to the commitments 
it offered244.  

The  Commission  clarified  in  the  decision  that  an  effective  standard-setting  process 
should  take  place  in  a  non-discriminatory,  open  and  transparent  way  to  ensure 
competition  on  the  merits  and  to  allow  consumers  to  benefit  from  technical 
development  and  innovation.  Abusive  practices  in  standard  setting  can  harm 
innovation and lead to higher prices for companies and consumers. For its part, the 
Commission will vigorously enforce the competition rules in this area, for the benefit 
of technical progress and European consumers. 

E – MEDIA 

1. 

OVERVIEW OF SECTOR 

315. 

316. 

Two general trends in the media sector can be identified. Firstly, the multiplication of 
distribution  platforms  and  ongoing  technological  development  and  changing 
consumption  patterns  are  breaking  down  barriers  between  broadcasters  and  other 
media operators and will lead to increased competition between traditional actors like 
broadcasters  and  new  players.  Secondly,  media  convergence245  will  demand  new 
business  models  and  the  production  of  more  content.  Competition  issues  resulting 
from  these  trends  affect  both  businesses  and  consumers.  They  generally  fall  into 
three  categories:  (i)  availability  of  attractive  content,  (ii)  access  and  digitisation 
issues  (including  "copyright"  bottlenecks),  and  (iii)  challenges  posed  by  new 
revenue-generating models (a "monetisation" issue) as well as the limitations of State 
financed intervention in this sector. 

Regarding State aid policy, private media operators continue to be concerned about 
State  aid  for  public  service  broadcasters,  with  whom  they  compete  for  audience 
share,  especially  for  what  they  consider  to  be  purely  commercial  offers.  They  also 
allege  that  the  State  funding  for  public  service  broadcasters  may  exceed  what  is 
necessary  for  their  public  service  mission,  allowing  them  to  subsidise  commercial 
activities and to engage in anti-competitive practices. Private operators claim that the 
public  funding  of  public  service  broadcasters'  new  media  activities  distorts 
competition  and  discourages  private  initiatives  to  develop  new  and  innovative 
services. 

317. 

The switch from analogue to digital broadcasting,  which Member States  are due to 
complete  by  the  beginning  of  2012246,  is  increasingly  providing  consumers  with  a 
greater  number  of  TV  channels  and  radio  stations,  and  better  sound  and  picture 
quality.  The  digital  switchover  concerns  all  commonly  available  broadcasting 

244 

245 

246 

The decision and the commitments are published on the website of DG Competition under "Antitrust 
cases". 
The term  media convergence relates to the consumer's ability to receive multiple services on a single 
device. 
Commission  Communication  on  accelerating  the  transition  from  analogue  to  digital  broadcasting 
(COM(2005)204 final, 24.5.2005). 

EN 

77 

   EN 

                                                 
transmission  platforms  such  as  satellite,  cable  and 
terrestrial,  and  obliges 
broadcasters  and  network  operators  to  update  their  transmission  equipment  and 
viewers  to  install  digital  decoders.  The  Commission  is  committed  to  support  the 
switch  off  of  analogue  terrestrial  TV  broadcasting  and  recognises  that  the  process 
may  be  delayed  if  left  entirely  to  market  forces.  A  number  of  Member  States  are 
providing  public  funding  to  encourage  broadcasters  and  consumers  to  facilitate  the 
switchover. The Commission has no general objection to the granting of State aid in 
this  area.  However,  Member  States  have  to  demonstrate  that  the  aid  is  a  necessary 
and appropriate instrument, is limited to the minimum necessary and does not unduly 
distort competition. 

2. 

POLICY DEVELOPMENTS 

318. 

The  Commission's  main  objective  from  a  competition  perspective  is  to  ensure  that 
there  is  a  level  playing  field  in  the  media  sector,  whether  between  different 
commercial  operators  or  between  commercial  operators  and  publicly-funded 
operators. 

2.1. 

Roundtable on opportunities and barriers to on-line distribution of music 

319. 

In  2009,  the  Commissioner  for  Competition  continued  discussions  with  senior 
consumer  and  industry  representatives  about  the  business  opportunities  created  by 
the Internet and the existing barriers to, in particular, increased on-line distribution of 
music  in  Europe.  In  such  context,  a  report  on  opportunities  and  barriers  to  on-line 
retailing  was  published  in  May  2009  and  two  further  meetings  of  the  Roundtable 
were held in September and October 2009 under the aegis of the Commissioner for 
Competition.  These  meetings  were  attended  not  only  by  the  initial  participants 
(iTunes, EMI and the French collecting society SACEM), but also by other important 
market  players  (Nokia,  Amazon,  the  UK's  PRS  for  Music  and  Sweden's  STIM 
collecting  societies  and  Universal  Music  Publishing).  Consumers'  interests  were 
represented  by  the  European  Consumers'  Organisation  (BEUC).  The  Roundtable 
initiative  resulted  in  two  joint  statements:  a  Joint  Statement  by  the  Roundtable 
participants  on  "General  principles  for  the  on-line  distribution  of  music"  and  a 
statement  from  some  Roundtable  participants  on  a  "Working  Group  on  a  Common 
Framework for Rights Ownership Information". Following the Roundtable, a number 
of  participants  announced  concrete  steps  and  commitments  that  should  result  in 
improved access of European consumers to music online247. 

2.2. 

Digital broadcasting 

320. 

In 2009, the Commission continued to closely monitor the transition from analogue 
to digital terrestrial broadcasting in Italy in the context of the infringement procedure 
that it had started in 2006 concerning the Italian broadcasting legislation. Following 
close contacts with the Commissioners for Competition and Information Society248, 
the  Italian  authorities  adopted  new  criteria  for  the  "digitization"  of  terrestrial 
television  networks  in  Italy  aimed  at  ensuring  that  more  frequencies  would  be 
available  to  newcomers  and  to  smaller  existing  broadcasters.  The  Italian  Authority 

247 
248 

All the documents are available at http://ec.europa.eu/competition/sectors/media/online_commerce.html 
The Commission had sent to Italy a Reasoned Opinion in this case on 18.7.2007. 

EN 

78 

   EN 

                                                 
for  Communications  (AGCom)  conducted  a  public  consultation  on  draft  tendering 
rules  for  the  allocation  of  the  frequencies  at  the  end  of  2009  and  the  tender  is 
expected to be launched in early 2010. 

321. 

As  regards  State  aid,  the  Commission  continued  to  monitor  the  transition  (switch-
over) from analogue to digital terrestrial broadcasting in the EU Member States. The 
CFI confirmed on 6 October a negative decision concerning Germany249, also based 
on a lack of technology neutrality of the scheme250. 

2.3. 

Sports 

322. 

On  12  October,  the  Commission  issued  a  rejection  decision  for  the  lack  of 
Community interest in the case Certain joueur de tennis professionnel v. World Anti-
Doping Agency, ATP Tour Inc. and International Council of Arbitration for Sport251. 
The case concerned a professional tennis player who complained against the alleged 
excessive  scope  of  the  international  anti-doping  rules  and  their  application  in  his 
case. The complainant questioned the proportionality of the anti-doping rules applied 
by  the  three  bodies  –  the  World  Anti-Doping  Agency,  the  international  tennis 
federation  (ATP  Tour  Inc.)  and  the  International  Council  of  Arbitration  for  Sport 
(ICAS) and claimed that they together or separately breached Articles 81 and/or 82 
EC. The Commission examined the complaint and rejected it for lack of Community 
interest, as the rules did not appear to be applied in a disproportionate manner. The 
Commission  also  noted  that  in  the  context  of  the  application  of  legitimate  anti-
doping rules by the relevant sporting bodies, its role is not to act as an appeals body 
in individual cases. 

2.4. 

Public service broadcasting 

323. 

324. 

In line with the interpretative Protocol to the Treaty of Amsterdam on the system of 
public  service  broadcasting  (the  Amsterdam  Protocol)  and  the  jurisprudence  of  the 
European Court of Justice mentioned above, the Commission recognises that it is the 
prerogative  of  Member  States  to  organise  the  functioning  and  funding  of  public 
service  broadcasting.  The  objective  of  the  Commission's  policy  is  to  ensure  that 
public  funding  does  not  exceed  what  is  necessary  for  public  broadcasters  to  fulfil 
their  public  service  mission  and  does  not  lead  to  unnecessary  distortions  of 
competition. 

On  2  July,  the  Commission  adopted  a  revised  Broadcasting  Communication  which 
aims  at  demonstrating  the  specific  mechanisms  on  which  the  Commission's 
assessment of publicly funded new media services is based252. The new framework 
provides more flexibility for the financing of public service broadcasters and at the 
same  time  clarifies  the  requirements  for  an  effective  control  of  the  public  service 
mission  at  the  national  level.  It  adapts  the  framework  to  the  fast  changing  market 
environment while maintaining the core principles of the Commission's policy based 

249 
250 
251 

252 

Case C-25/2004 DVB-T Berlin Brandenburg. 
Cases T-8/06, T-21/06, T-24/06. 
Case  COMP/39471  Certain  joueur  de  tennis  professionnel  /  Agence  mondiale  antidopage  +  ATP  + 
CIAS. 
Communication on the application of State aid rules to public service broadcasting of 2 July 2009, OJ 
C 257, 27.10.2009. 

EN 

79 

   EN 

                                                 
325. 

on the Amsterdam Protocol (see section 2.4) and the jurisprudence of the European 
Court of Justice253. A centerpiece of the new Communication is the prior evaluation 
of  new  audiovisual  services  at  national  level.  Publicly  funded  audiovisual  services 
must satisfy the social, democratic and cultural needs of a society without distorting 
cross border trade and competition contrary to the common interest of the European 
Union. 

The  Commission  continued 
to  approve  State  financing  for  public  service 
broadcasters where both the public service remit and the financing are determined in 
full transparency and where the State funding does not exceed what is necessary to 
fulfil the public service mission. In 2009, the Commission also adopted a number of 
positive individual decisions concerning the financing of public service broadcasting 
systems in France, Spain, Austria and Denmark. Regarding the financing of Austria's 
public service broadcaster ORF, the Commission applied for the first time the revised 
Broadcasting  Communication.  The  decision  of  28  October  accepts  a  number  of 
commitments  to  modify  Austria's  existing  aid  scheme  for  ORF.  This  decision254 
closed  an  investigation  which  started  in  January  2008  and  was  triggered  by 
complaints  from  newspaper  publishers  and  commercial  television  operators.  On  1 
September, the Commission also opened a formal investigation into the new system 
of financing the public service broadcaster France Télévisions in view of the phasing 
out  of  advertising  by  this  chain.  The  opening  decision  raises  preliminary  concerns 
regarding  a  potential  overcompensation  by  the  envisaged  measures  and  the  way 
France  Télévisions'  funding  will  in  the  future  be  financed  from  taxes  on  telecom 
operators  and  on  commercial  television  companies255.  On  2  December  the 
Commission opened for similar reasons the formal procedure to investigate the new 
financing  of  Spain's  public  broadcaster  RTVE  which  is  likewise  triggered  by  the 
phasing  out  of  advertising256.  In  July  2009  the  Commission  opened  an  in  depth 
investigation  regarding  the  restructuring  plan  for  the  Danish  public  service 
broadcaster TV2 Denmark257. Having agreed to rescue aid in favor of TV 2 in 2008, 
the Commission will now assess whether the restructuring support is necessary and 
whether  the  compensatory  measures  proposed  by  Denmark  for  mitigating  the 
competition distortions, e.g. not to launch new pay channels, are proportionate to the 
strength of TV2 on the Danish market. 

2.5. 

State aid for films 

326. 

In January the Commission extended the validity of the State aid assessment criteria 
in  the  2001  Cinema  Communication,  until  31  December  2012  at  the  latest.  As  in 
previous  years,  there  were  several  State  aid  decisions  approving  film  support 
schemes. The most notable of these in 2009 were the second package of Italian film 
tax incentives258, the French tax credit for foreign films259 and the Irish film support 
scheme260.  The  Commission  also  opened  a  formal  investigation  into  the  proposed 

253 
254 
255 
256 
257 
258 
259 
260 

Judgment Altmark Trans, C-280/00; Judgment Chronopost, 83/01P. 
Case E2/2008. 
Case C27/2009. 
Case C38/2009. 
Case C19/2009. 
Case N595/2008. 
Case N106/2009. 
Case NN10/2009. 

EN 

80 

   EN 

                                                 
Italian tax credit for digitisation of cinemas, the outcome of which is likely to set a 
precedent  for  the  Commission’s  State  aid  assessment  criteria  for  this  type  of 
support261. 

2.6. 

Newspapers 

327. 

In  June,  the  Commission  adopted  a  proposal  for  appropriate  measures  necessary  to 
make the Swedish press aid to high circulation metropolitan newspapers compatible 
with the State aid rules262. 

F – PHARMACEUTICAL INDUSTRY & HEALTH 

PHARMACEUTICAL INDUSTRY 

1. 

OVERVIEW OF SECTOR  

328. 

329. 

330. 

331. 

In  2009  the  Commission  concluded  its  sector  inquiry  into  the  EU  pharmaceutical 
sector.  This  inquiry  dealt  with  the  competitive  relationship  between  originator  and 
generic  companies  as  well  as  between  originator  companies.  It  made  important 
policy recommendations to improve the functioning of the sector. The Commission 
stepped  up  its  antitrust  enforcement  and  adopted  a  number  of  merger  decisions. 
Finally,  the  ECJ  adopted  its  long  awaited  judgment  on  the  application  of  EU 
competition law to dual pricing mechanisms (parallel trade). 

The  pharmaceutical  sector  is  essential  for  the  health  of  Europe's  citizens  who  need 
access  to  innovative,  safe  and  affordable  medicines.  The  sector  is  highly  regulated 
and R&D driven. On the supply side, originator companies aim to bring innovative 
products  to  the  market.  The  patent  system  provides  the  legislative  framework 
allowing  the  companies  to  reap  the  benefits  of  their  research  and  development 
activities.  At  the  same  time,  public  health  systems  are  under  financial  constraints. 
Generic  companies,  which  bring  generic  versions  of  previously  patent  protected 
products to the market, help to keep public budgets under control, as their products 
are  much  cheaper  than  the  originator  product  whilst  having  the  same  therapeutic 
effects. 

An intensified consolidation has been observed in the pharmaceutical sector in recent 
years. The consolidation concerns acquisition of generic and originator companies by 
other originator companies, as well as mergers between generic companies creating 
large multinationals. 

On  the  demand  side,  the  pharmaceutical  sector  is  unusual  in  that,  for  prescription 
medicines, the ultimate consumer (the patient) is not the decision maker. Decisions 
are generally made by the prescribing doctors. The patient does not directly bear the 
costs  either,  as  these  are  generally  covered  and/or  reimbursed  largely,  or  even 
wholly, by national health (insurance) schemes. 

261 
262 

Case C25/2009. 
Case E4/2008. 

EN 

81 

   EN 

                                                 
2. 

POLICY DEVELOPMENTS 

2.1. 

Pharmaceutical Sector Inquiry 

332. 

333. 

334. 

Given  the importance  of  a  well-functioning pharmaceutical sector and the presence 
of indications that competition in the pharmaceutical market in the European Union 
may  not  be  working  well,  the  Commission  launched  a  sector  inquiry  into 
pharmaceuticals  on  15  January  2008263.  After  the  presentation  of  the  Preliminary 
Report  in  November  2008264  and  a  subsequent  public  consultation  involving  all 
interested stakeholders, the Commission published its Final Report on 8 July 2009265. 

The Final Report confirmed the preliminary findings of the sector inquiry suggesting 
that the behaviour of originator companies contributes to generic delay and is among 
the  reasons  for  the  difficulties  encountered  in  bringing  new  medicines  onto  the 
market.  The  report  also  confirmed  the  important  role  of  the  legislative  framework 
and  called  upon  all  stakeholders  to  ensure  a  proper  implementation  of  the  existing 
framework and to take the necessary measures adapting the framework in the areas 
of patent law, marketing authorisation and pricing and reimbursement. 

to 

the  pharmaceutical  sector 

The sector inquiry was part of well-established Commission policies and initiatives 
the 
relevant 
Commission's  Industrial  Property  Rights  Strategy266,  the  Communication  on  a 
Renewed  Vision  of  the  Pharmaceutical  Sector267  and  the  Innovative  Medicines 
Initiative268. 

the  Lisbon  Strategy, 

including 

335.  Within this context, the pharmaceutical sector inquiry sought to examine the reasons 
for observed delays in the entry of generic medicines to the market and the apparent 
decline  in  innovation  as  measured  by  the  number  of  novel  medicines  reaching  the 
market.  Taking  into  account  that  sector  inquiries  are  a  tool  under  EU  competition 
law, the inquiry's main focus was company behaviour. The inquiry concentrated on 
those  practices  which  originator  companies  may  use  to  block  or  delay  generic 
competition  as  well  as  to  block  or  delay  the  development  of  competing  originator 
products. 

263 

264 

265 

266 

267 

268 

press 

Commission decision of 15 January 2008 initiating an inquiry into the pharmaceutical sector pursuant 
to Article 17 of Council Regulation (EC) No 1/2003. 
Pharmaceutical Sector Inquiry, Preliminary Report, DG Competition Staff Working Paper, 28.11.2008, 
available at: http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html 
Commission Communication of 8 July on the Executive Summary of the Pharmaceutical Sector Inquiry 
Report, 
at: 
http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html 
Commission  Communication  of  16  July  2008  on  an  Industrial  Property  Rights  Strategy  for  Europe, 
COM(2008)465 final. 
See, in particular, Commission Communication of 10 December 2008 (COM(2008)666 of 10.12.2008: 
Safe, Innovative and Accessible Medicines: A Renewed Vision for the Pharmaceutical Sector). 
The Innovative Medicines Initiative is a Public-Private Partnership (PPP) between the pharmaceutical 
industry  represented  by  the  European  Federation  of  Pharmaceutical  Industries  and  Associations 
(EFPIA) and the European Communities represented by the European Commission. 

IP/09/1098, 

available 

release 

EN 

82 

   EN 

                                                 
2.1.1.  Competition between originator and generic companies – The issues 

336. 

The results of the sector inquiry indicate that originator companies use a variety of 
instruments  (referred  to  as  "tool-box")  to  extend  the  commercial  life  of  their 
medicines and suggest that the behaviour of companies contributes to generic delay. 

Patent filing strategies 

337. 

A  strategy  commonly  applied  by  originator  companies  is  to  seek  to  extend  the 
breadth  and  duration  of  patent  protection  by  filing  numerous  patents  for  the  same 
medicine  (forming  so-called  "patent  clusters"  or  "patent  thickets").  Documents 
gathered  in  the  course  of  the  inquiry  confirm  that  an  important  objective  of  this 
approach  is  to  delay  or  block  the  market  entry  of  generic  medicines269.  In  some 
cases,  individual  blockbuster  medicines  can  be  protected  by  up  to  nearly  100 
product-specific  patent  families,  which  can  lead  to  up  to  1 300  patents  and/or 
pending patent applications across the Member States This can cause uncertainty for 
generic competitors affecting their ability to enter the market. 

Patent-related exchanges and litigation 

338. 

339. 

Enforcing patent rights in court is legitimate and a fundamental right guaranteed by 
the European Convention on Human Rights. Like in any other industry the inquiry's 
findings  show,  however,  that  litigation  can  also  be  an  efficient  means  of  creating 
obstacles  for  generic  companies,  in  particular  for  smaller  ones.  In  certain  instances 
originator companies may consider litigation not so much on its merits, but rather as 
a signal to deter generic entrants. 

According to the conclusions of the pharmaceutical sector inquiry, between 2000 and 
2007,  originator  and  generic  companies  engaged  in  at  least  1.300  patent-related 
contacts and disputes out-of-court concerning the launch of generic products for the 
219  molecules  in  the  sample  under  investigation.  The  number  of  patent  litigation 
cases  between  originator  and  generic  companies  increased  fourfold  between  2000 
and  2007.  Whilst  the  originator  companies  initiated  the  majority  of  the  700  court 
cases  reported  to  the  Commission,  generic  companies  won  62%  of  cases  where  a 
final  judgment  was  given.  Patent  litigation  took  on  average  2.8  years  with 
considerable  variations  across  EU  Member  States.  Of  the  cases,  in  which  the 
originator  companies  originally  obtained  interim  injunctions,  approximately  50% 
ultimately ended with an outcome that was favourable to the generic company (i.e. 
they won the main proceedings or a settlement was concluded that was beneficial for 
the generic allowing immediate entry or foreseeing a value transfer). The total cost of 
patent  litigation  in  the  EU  in  the  cases  reported  is  estimated  to  exceed  EUR  420 
million.  In  11%  of  the  final  judgments  reported,  courts  in  different  EU  Member 
States  gave  conflicting  final  judgments  on  the  same  issue  of  patent  validity  or 
infringement. 

Oppositions and appeals before the European patent office (EPO) 

269 

Under patent legislation, all patent applications do, however, need to be evaluated on the basis of the 
statutory  patentability  criteria  by  the  patent  offices,  not  on  the  basis  of  underlying  intentions  of  the 
applicant. 

EN 

83 

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340. 

The sector inquiry confirmed that the opposition rate (i.e. the number of oppositions 
filed  per  100  granted  patents)  before  the  EPO  is  consistently  higher  for  the 
pharmaceutical sector than across all other sectors. In the cases where they opposed a 
patent,  generic  companies  prevailed  in  approximately  60%  of  final  decisions 
rendered by the EPO (including appeal) in the period 2000 to 2007. The scope of the 
originator patent was restricted in another 15% of the cases. However, it took more 
than  two  years  on  average  to  obtain  80%  of  the  final  decisions  which  can  limit 
generic companies' ability to clarify the patent situation of potential generic products 
in a timely manner. 

Patent settlements and other agreements 

341. 

The inquiry established that between 2000 and June 2008, more than 200 settlement 
agreements  were  concluded  between  originator  and  generic  companies  with  nearly 
50%  restricting  the  generic  company's  ability  to  market  its  medicine.  A  significant 
proportion  of  these  settlements  contained  –  in  addition  to  the  restriction  –  a  value 
transfer from the originator company to the generic company (e.g. direct payment, a 
licence,  distribution  agreement  or  a  "side-deal").  Direct  payments  from  originator 
companies to generic companies occurred in more than 20 settlement agreements and 
exceeded  EUR  200  million.  The  latter  type  of  agreements  has  attracted  antitrust 
scrutiny in the USA. 

Other practices affecting generic entry 

342. 

The  sector  inquiry  found  that  originator  companies  intervene  before  national 
marketing  authorisation  and/or  pricing  and  reimbursement  authorities  claiming  that 
generic medicines are less safe, less effective and of inferior quality or will  violate 
their  patent  rights  even  though  marketing  authorisation  bodies  must  not  take  this 
argument  into  account  according  to  EU  legislation.  However,  originator  companies 
were  rarely  successful  in  challenging  the  decisions  of  national  authorities  in  court, 
e.g.  the  success  rate  against  marketing  authorisations  was  only  2%.  The  sector 
inquiry estimated that in cases, in which interventions by originator companies took 
place,  the  duration  of  the  authorisation  procedures  takes  four  months  longer.  The 
sector inquiry also observed information campaigns by originator companies against 
individual generic medicines and generic medicines in general. 

Lifecycle strategies for second generation products 

343. 

Incremental  research  is  important  as  it  can  lead  to  significant  improvements  of 
existing  products,  also  from  the  perspective  of  the  patients.  However,  generic 
companies and consumer associations sometimes questioned the actual improvement 
of certain medicines in terms of therapeutic benefits. For 40% of the medicines in the 
sample  selected,  which  had  lost  exclusivity  between  2000  and  2007,  originator 
companies  launched  second  generation  products,  undertaking  intensive  marketing 
efforts  with  the  aim  of  switching  a  substantial  number  of  the  patients  to  the  new 
medicine  prior  to  the  market  entry  of  a  generic  version  of  the  first  generation 
product.  When  the  launch  of  a  second  generation  product  took  place  prior  to  the 
launch of the generic version of the first generation product the switching rates are 
reported to be significantly higher. 

EN 

84 

   EN 

344. 

Patent  and  other  strategies/instruments  described  above  may  sometimes  be  used 
cumulatively  with  a  view  to  prolonging  the  life  cycle  of  medicines  depending  on 
their  commercial  importance.  The  sector  inquiry  shows  that  more  life  cycle 
instruments are used for best-selling medicines. 

Impact of generic entry 

345. 

346. 

The sector inquiry confirmed that, in many instances, generic entry takes place later 
than might be expected. For the sample of medicines facing loss of exclusivity in the 
period  2000  to  2007,  the  average  time  to  enter after  loss  of  exclusivity  was  almost 
eight months (on a weighted average basis), and still around four months for the most 
valuable  medicines.  Delays  are  important  as  the  price  at  which  generic  companies 
enter  the  market  was,  on  average,  25%  lower  than  the  price  of  the  originator 
medicines  prior  to  the  loss  of  exclusivity.  Two  years  after  entry,  prices  of  generic 
medicines  were  on  average  40%  below  the  former  originator  price  leading  to 
important savings for the national health systems. Econometric analysis suggests that 
a number of factors have an influence on the observed pattern and speed of generic 
entry,  e.g.  the  turnover  of  the  originator  medicines  before  the  expiry  of  the  patent, 
data exclusivity or the regulatory environment. 

In relation to the sample of medicines analysed, the report estimates that savings due 
to  generic  entry  could  have  been  20%  higher  than  they  actually  were  if  entry  had 
taken  place  immediately  following  loss  of  exclusivity.  Hence,  the  aggregate 
expenditure on the sample of EUR 50 billion would have been about EUR 15 billion 
higher  without  generic  entry  (evaluated  at  constant  volumes).  However,  additional 
savings  of  some  EUR  3  billion  could  have  been  attained,  had  entry  taken  place 
immediately. This is a very conservative estimate as volume developments and other 
factors were not taken into account in the calculations. 

2.1.2.  Competition between originator companies – The issues 

347. 

The  inquiry  also  sought  to  examine  whether  the  behaviour  of  originator  companies 
might  be  among  the  reasons  for  the  difficulties  to  bring  new  medicines  to  the 
market270. 

Patent strategies and litigation 

348.  While  patent  strategies  to  protect  innovative  efforts  are  legitimate,  in  certain  cases, 
however,  these  strategies  may  interfere  with  the  development  of  competing 
medicines.  They  are  called  by  some  originator  companies  "defensive  patent 
strategies"271.  The  inquiry  unearthed  a  significant  number  of  strategy  documents 
confirming that originator companies engage in defensive patenting.  

270 

271 

Other  factors  were  cited  by  the  originator  industry  for  the  decline  in  innovation  such  as  increased 
scientific complexities, high attrition rates in late stage development and uncertainty about the financial 
rewards. These factors were not subject of the inquiry. 
The term “defensive” patents cannot be found in patent law and under such law all patent applications 
need to be evaluated on the basis of the statutory patentability criteria, not on the basis of underlying 
intentions by the applicant. Also, it is an inherent feature of a patent system to grant exclusive rights. 
The notion of “defensive patents” should therefore not be understood to mean that these patents are of a 
lower quality or value, but it tries to capture a classification made in industry for this type of patents 
from a commercial perspective. 

EN 

85 

   EN 

                                                 
349. 

The inquiry also found that originator companies engaged in litigation against other 
originator  companies.  66  patent-related  litigations  were  reported  concerning  18 
medicines.  In  64%  of  the  cases,  litigation  was  concluded  by  means  of  settlement 
agreements. 

Opposition and appeal before the EPO 

350. 

Originator companies mainly opposed each other's secondary patents. The opposing 
originator  companies  were  very  successful  when  challenging  the  patents  of  other 
originator  companies  prevailing  in  nearly  70%  of  final  decisions  rendered  by  the 
EPO  (including  on  appeal).  In  addition,  the  scope  of  the  patents  was  reduced  in 
another 19% of the cases. 

2.1.3.  Policy recommendations and the way forward 

351. 

352. 

In  the  final  report  of  the  sector  inquiry,  the  Commission  invited  all  interested 
stakeholders  to  bring  potential  competition  concerns  to  the  attention  of  the 
competition authorities. 

The Commission will address the issues identified in the course of the sector inquiry 
by  applying  increased  scrutiny  under  EU  competition  law  to  the  sector  and  by 
bringing  specific  cases,  where  appropriate.  The  first  enforcement  action  is  already 
under  way272.  This  case  investigates  amongst  others  patent  settlement  agreements 
concluded  by  Servier  and  a  number  of  generic  operators,  which  might  be  anti-
competitive.  This  investigation  does  not  form  part  of  the  sector  inquiry,  but  the 
knowledge acquired during the sector inquiry has allowed the Commission to draw 
conclusions on the areas where Commission action based on competition law could 
be appropriate and effective. 

353. 

In addition a number of surprise inspections were carried out.  

354.  With  regard  to  the  regulatory  framework,  the  Final  Report  highlights  three  main 
areas  of  concerns:  patents,  marketing  authorisation  and  pricing  and  reimbursement. 
With respect to patents the Commission reaffirms – on the basis of its findings – the 
urgent need for the establishment of a Community patent and of a unified specialised 
patent  litigation  system  in  Europe.  The  sector  inquiry  also  fully  confirms  the 
relevance  of  the  recent  initiatives  of  the  European  Patent  Office  to  ensure  a  high 
quality standard of patents granted and to accelerate procedures ("raising the bar"). 

355.  With  respect  to  marketing  authorisation,  the  Commission  will  focus  on  the  full 
implementation  and  effective  enforcement  of  the  regulatory  framework,  e.g. 
regarding  the  deadlines  foreseen  for  marketing  authorisation  processes.  Further 
analysis  will  be  carried  out  looking  into  the  cooperation  between  authorities  and 
building up capacities/expertise throughout the EU. The Commission also reminded 
stakeholders  of  the  prohibition  of  patent  linkage  and  the  need  to  stop  unwarranted 
interventions.  

272 

EN 

Case  COMP/39612 
(perindopril), 
http://ec.europa.eu/competition/antitrust/cases/decisions/39612/opening_proceedings.pdf 

proceeding 

opening 

Servier 

of 

on 

86 

2 

July: 

   EN 

                                                 
356. 

Concerning  pricing  and  reimbursement,  the  Commission  invites  Member  States  to 
consider  provisions  that  would  grant  pricing  and  reimbursement  status  to  generic 
products  automatically  where  the  corresponding  originator  product  already  benefits 
from  such  a  status  and  consider  policies  facilitating  rapid  generic  uptake  and/or 
generic competition. This might also include tender procedures, but stakeholders are 
reminded to consider not only the short term effects. Depending on the outcome of 
the various initiatives the Commission will examine the potential need for a review 
of  existing  EU  rules  in  the  area  of  pricing  and  reimbursement  (Transparency 
Directive 89/105/EEC). 

357. 

Based  on  the  objectives  outlined  in  this  Communication,  the  Commission  will 
continue  to  pursue  a  constructive  dialogue  with  all  stakeholders  to  ensure  that  the 
innovative  potential  of  the  Community's  pharmaceutical  industry  can  fully  develop 
and  that  patients'  benefit  from  better  access  to  safe  and  innovative  medicines  at 
affordable prices without undue delays. 

2.2. 

Developments on Parallel Trade 

358. 

359. 

360. 

Parallel  trade  in  medicines  in  the  EU  takes  place  because  of  the  existing  price 
differences  between  EU  Member  States.  The  long  awaited  judgment  of  the  ECJ  of 
6 October  2009  in  the  case  Glaxo  Wellcome  (hereafter  GSK)  provides  important 
clarifications  on  restrictions  of  parallel  trade  in  the  pharmaceutical  sector,  in 
particular regarding so called dual pricing systems273. 

The origin of the case is a Commission decision of 2001274, rejecting GSK's request 
for exemption under Article 81(3) EC regarding its dual pricing policy in Spain. The 
Commission found that dual pricing mechanisms was a restriction of competition “by 
object” and maintained that GSK had not established the positive effects of its dual 
pricing  scheme  for  consumers  in  order  to  benefit  from  an  exemption  under  Article 
81(3) EC. 

GSK lodged an appeal against the Commission decision before the CFI275 which held 
in 2006 that the dual pricing agreement at stake was not a restriction by object, but 
“by effect”. The CFI annulled the Commission decision as the Commission had not 
taken  into  account  all  the  factual  arguments  and  relevant  economic  evidence 
submitted  by  GSK  when  evaluating  whether  the  agreement  could  have  benefited 
from an individual exemption. 

361. 

In  its  judgment  of  6  October  2009,  following  appeals  by  both  GSK  and  the 
Commission, the ECJ held that the dual pricing scheme at stake is a "restriction by 

273 

274 

275 

See  Case  C-501/06  GlaxoSmithKline  v.  Commission  (2009),  available  at:  http://eur-lex.europa.eu.  In 
March 1998, GSK notified to the Commission its pricing policy for 82 medicines in Spain applicable to 
Spanish  wholesalers.  According  to  the  notified  policy  GSK  charged  a  different  price  to  wholesalers 
depending on the final destination of the product, i.e. if the product was intended for consumption in 
Spain a lower price would apply, and if exported, a higher price was charged. A number of wholesalers 
and wholesaler associations lodged complaints against this policy with the Commission, which in May 
2001, adopted a decision declaring that GSK had infringed Article 81(1) EC. 
See  Commission  decision  2001/791/EC  relating  to  a  proceeding  pursuant  to  Article  81  EC  in  Case 
COMP/36957 Glaxo Wellcome, OJ L 302, 17.11.2001. 
Case T-168/01 GlaxoSmithKline v. Commission (2006), available at: http://eur-lex.europa.eu 

EN 

87 

   EN 

                                                 
object" which infringes Article 81(1) EC276. However, the ECJ found no error in the 
assessment of the CFI regarding the loss in efficiency associated with parallel trade.. 

2.3.  Merger Cases in the Pharmaceutical Sector 

362. 

In  2009  a  number  of  large  mergers  in  pharmaceuticals  took  place,  confirming  the 
trend  of  consolidation  in  the  industry.  Three  categories  of  cases  can  be  identified. 
Firstly,  mergers  between  originator  companies  whereby  the  rationale  for  the 
acquisition  of  another  originator  company  appears  to  lie  particularly  in  the 
broadening  of  R&D  activities  into  further  therapeutic  areas  and  in  the  filling  up  of 
the  R&D  pipeline277.  Secondly,  mergers  between  generic  companies278,  which  are 
leading  to  very  significant  players  in  generics  markets.  Thirdly,  mergers  between 
originator and generic companies279, whereby originators wish to pursue additionally 
a generics medicines business. All cases were cleared in the first phase either with or 
without  commitments.  Given  that  pharmaceutical  companies  are  often  active 
worldwide,  the  procedure  involves  cooperation  with  the  US  competition  authority 
(the FTC) and other competition authorities outside Europe. 

363. 

The  assessment  of  pharmaceutical  mergers  has  shown  that  animal  health  markets 
have generally become quite concentrated. Therefore, in order to allow the new entry 
of a purchaser into the field of animal health vaccines, the divestiture package in the 
Pfizer/Wyeth280 case included for the first time a production facility. 

HEALTH CARE SERVICES 

1. 

OVERVIEW OF SECTOR  

364. 

Health care is a very important economic sector, representing about 9% of GDP in 
the  EU,  within  which  health  services281  account  for  the  largest  share  with  6.5%  of 
GDP. Member States bear directly or indirectly the largest share of the costs for the 
provision of health care, whereas consumers/patients pay directly out of their pockets 
over 11% of the costs, equivalent to EUR 122 billion per annum282. In addition, price 
increases  for  health  services  are  often  paid  for  directly  by  patients  inter  alia  via 
higher  co-payments.  This  has  potentially  negative  effects  on  consumer  welfare  and 
even  possibly  health  status,  an  issue  which  has  triggered  a  number  of  NCA-led 
initiatives283. 

276 
277 

278 
279 
280 
281 
282 
283 

Case C-501/06 GlaxoSmithKline v. Commission (2009), available at: http://eur-lex.europa.eu 
See  Cases  COMP/M.5476  Pfizer/Wyeth;  COMP/M.5502 Merck/Schering-Plough,  and COMP/M.5530 
Glaxo Smith Kline/Stiefel. 
See Case COMP/M.5295 Teva/Barr. 
See Cases COMP/M.5253 Sanofi-Aventis / Zentiva and COMP/M.5555 Novartis/Ebewe. 
See Case COMP/M.5476 Pfizer/Wyeth. 
Excluding medicines, government investment on education, health prevention and other therapeuticals. 
DG Competition estimate based on data from the OECD 2008 Health database. 
Including the Italian NCA ongoing inquiry in hospital markets, Dutch NCA report on health insurance 
(2007)  and  ongoing  inquiry  on  hospital  service  prices,  Irish  NCA  inquiry  on  dentists  (2007),  health 
insurance  (2007)  and  physician  services  (2008),  Polish  and  Portuguese  NCAs  reports  on  pharmacists 
(2004 and 2005), OFT survey on the private dentistry market (2003, Swedish NCA report on consumer 
welfare in health (2008). 

EN 

88 

   EN 

                                                 
365. 

366. 

The organisation of the health care sector is primarily the responsibility of Member 
States under Article 168 TFEU. However, to the extent that the activities in question 
involve offering goods and/or services on the market284, the provision of health care 
services is generally subject to EU competition rules. 

In  its  mid-term  review  of  the  Community  Lisbon  Programme285,  the  Commission 
identified as a priority for action to ensure healthy and open competition in services 
markets  alongside  the  need  to  modernize  health  care  systems.  The  importance  of 
effective  competition  in  services  markets  with  a  view  to  strengthening  the  Single 
Market remains a key priority in the Community Lisbon Program for 2008-2010286. 

2. 

POLICY DEVELOPMENTS 

367. 

368. 

369. 

The provision of most health care services requires public support. Such support may 
not be considered State aid, provided that the strict conditions defined by the ECJ's 
case law are rigorously complied with287. Furthermore, should such financial support 
measure nevertheless constitute State aid, they can be declared compatible with the 
Treaty  if  they  are  necessary  and  proportionate  to  fulfil  an  appropriately  entrusted 
public service mission, under certain conditions288. 

In  the  field  of  State  aid  control  regarding  hospitals,  compensations  for  SGEI  are 
normally  covered  by  the  2005  Commission  Decision289,  exempting  them  from 
notification without any predetermined ceilings, other than the costs incurred. 

It  is  clear  both  from  the  case-law  of  the  Court  and  from  Article  168(5)  that 
Community law does not detract from the power of the Member States to organize 
their  social  security  and  health  care  systems  and  to  adopt,  in  particular,  legal 
requirements  intended  to  govern  the  provision  of  health  services  and  medical  care. 
Pursuant  to  case  law,  Member  States  enjoy  a  wide  margin  of  discretion  not  only 
regarding  the  definition  and  entrustment  of  SGEI,  but  also  as  regards  the 
determination of the cost compensation.  

370. 

Over  the  past  year,  the  Commission  has  received  a  number  of  complaints  from 
private  hospitals  against  allegedly  unfair  treatment  or  excessive  compensation 
towards  publicly-owned  hospitals  in  various  Member  States,  the  latter  often  being 
subject  to  allegations  of  cross-subsidizing  commercial  activities  from  public 

284 

285 
286 
287 
288 

289 

Cases 118/85 Commission v Italy [1987] ECR 2599, paragraph 7; C-35/96 Commission v Italy [1998] 
ECR I-3851, paragraph 36; Jointed cases C-180/98 to C-184/98, Rec.2000, p.I-6451. 
COM(2005)24. 
COM(2007)804. 
C-280/00, Altmark Trans, 24 July 2003, [2003] ECR I-7747. 
In  particular,  the  Commission  has  explained  the  manner  in  which  it  intends  to  apply  Article  106(2) 
TFEU within the Community framework for State aid in the form of public service compensation (OJ C 
297,  29.11.2005,  p.  4-7)  and  the  Commission  Decision  of  28  November  2005  on  the  application  of 
Article 86(2) EC to State aid in the form of public service compensation granted to certain undertakings 
entrusted with the operation of services of general economic interest (notified under document number 
C(2005) 2673; OJ L 312, 29.11.2005, p. 67-73). 
Commission Decision of 28 November 2005 on the application of Article 86(2) EC to State aid in the 
form  of  public  service  compensation  granted  to  certain  undertakings  entrusted  with  the  operation  of 
services  of  general  economic  interest  (notified  under  document  number  C(2005)  2673)  OJ L  312, 
29.11.2005, p. 67-73. 

EN 

89 

   EN 

                                                 
371. 

372. 

373. 

financing. Regarding State aid, in the area of health services, most of the complaints 
concerning  subsidies  for  hospitals  came  from  Member  States  who  have  already 
opened up their markets to competition (e.g. Germany and Belgium). 

The  constant  contacts  and  cooperation  between  the  Commission  and  the  Member 
States  have  shown  that  some  of  the  main  challenges  for  national  authorities  have 
been to establish transparent entrustment acts which precisely define public services 
and  their  public  funding,  and  to  design  an  accurate  separation  of  accounts  between 
public and commercial services in order to ensure that public funds are not used to 
cross-subsidize other commercial activities. 

In  particular,  the  Commission  has  recently  finalised  its  examination  in  a  complex 
case  concerning  Belgium,  where  two  Belgian  associations  representing  the  leading 
private  hospitals  operating  in  the  Brussels  Region  complained  about  State  aid 
received by the public hospitals operating within the same region. These public funds 
were  granted  for  the  provision  of  health  and  social  services  identified  as  SGEIs  by 
the 
the  Member  State.  Consequently, 
corresponding  activities  qualified  as  economic  or  non-economic,  and  examined  the 
definition and entrustment of the respective public service missions and the necessity 
and proportionality of the compensation received by the concerned public hospitals 
in respect thereof, as well as the absence of cross-subsidisation and compliance with 
EU  transparency  requirements.  On  28  October,  the  Commission  concluded  its 
examination  by  adopting  a  positive  decision  which  found  that  the  public  financing 
granted  in  favour  of  the  public  hospitals  concerned  for  the  provision  of  the  public 
service  missions  entrusted  to  them  was  in  line  with  the  requirements  set  out  under 
Article 86(2) EC290. 

the  Commission  assessed  whether 

The Commission has also examined a case of particular interest in relation to State 
aid  for  health  insurance  in  Ireland.  The  tax  funded  public  health  care  system  in 
Ireland  has  a  very  limited  capacity  and  thus  more  than  50  %  of  the  population  has 
private  medical  insurance.  Due  to  their  importance  in  the  overall  health  system, 
private  insurers  are  subject  to  special  regulation,  which  is  designed  to  promote 
intergenerational  solidarity291.  As  insurers  lack  the  ability  to  apply  risk  rated 
premiums, differences between their risk profiles can develop. Thus as a corollary to 
these  regulations  Ireland  adopted  the  Risk  Equalisation  Scheme  (RES),  which 
involved  financial  transfers  from  insurers  with  a  better  risk  profile  to  those  with  a 
worse  one.  The  RES  was  authorised  by  the  Commission  under  State  aid  rules292,  a 
decision upheld by the CFI in February 2008293, but subsequently struck down by the 
Irish Supreme Court under national law. The Irish authorities then devised an interim 
scheme of levies and tax relief in the health insurance sector that worked in a similar 

290 

291 

292 

293 

Case NN54/2009 Association bruxelloise des institutions des soins de santé privées asbl (ABISSP) vs. 
Belgique. The public version of this decision is not yet available. It will be displayed as soon as it has 
been cleansed of any confidential information. 
For example insurers cannot reject customers seeking coverage, are obliged to provide a minimum of 
coverage and have to apply the same premium regardless of age, gender and health status. 
Case  N46/2003  of  13  May  2003  Risk  equalisation  scheme  in  the  Irish  health  insurance  market,  (OJ 
C 186, 6.8.2003). 
Case T-289/03 BUPA and Others v Commission, 12.2.2008 (OJ C 79, 29.3.2008, p. 25). The judgment 
was notable for clarifying certain aspects of the State aid treatment of public services but above all for 
relaxing  the  strict  Altmark  criteria  that  had  thus  far  determined  the  conditions  under  which  public 
service compensation does not constitute aid. 

EN 

90 

   EN 

                                                 
374. 

way  to  the  RES.  The  objective  of  the  scheme  is  to  promote  intergenerational 
solidarity  by  decreasing  the  risk  differentials  for  health  insurers  between  old  and 
young  customers.  In  its  decision  of  17  June  the  Commission  approved  the  new 
scheme,  concluding  that  the  measure  was  in line with the EU Framework for  State 
aid in the form of public service compensation and as such compatible with Article 
86(2) EC294. 

In  the  area  of  antitrust,  in  October  the  Commission  adopted  a  SO  for  a  suspected 
infringement of Article 81 EC by the French Association of Pharmacists (i.e., Ordre 
National des  Pharmaciens, Conseil National de l'Ordre des Pharmaciens, Section G 
de l'Ordre National des Pharmaciens and Conseil Central de la Section G de l'Ordre 
des Pharmaciens)295. In the SO, the Commission set out its preliminary conclusions 
concerning the market behaviour of ONP in the French market for clinical laboratory 
testing services, that may be contrary to EC Treaty competition rules. In particular, 
the  Commission  was  concerned  that  ONP  may  be  imposing  minimum  prices  for 
clinical analysis and restricting the development of some market players with a view 
to  protecting  the  economic  interests  of  its  members,  the  French  pharmacists.  The 
Commission  considered  that  such  behaviour  may  undermine  competition  and 
innovation  in  the  provision  of  clinical  analysis  services  to  consumers.  Moreover, 
ONP may be using the powers of public authority, delegated to it by the state for the 
supervision  of  professional  deontology  in  the  market,  to  champion  private 
commercial interests. 

G– TRANSPORT  

1. 

OVERVIEW OF SECTOR 

375. 

376. 

Transport  is  an  essential  component  of  the  European  economy.  The  transport 
industry as a whole accounts for 7% of GDP and for over 5% of total employment in 
the  EU.  Competition  policy  in  the  transport  sector  aims  to  ensure  an  efficient 
functioning  of  markets  which  have  recently  been  liberalised  or  which  are  in  the 
process  of  liberalisation.  To  this  end,  the  regulatory  framework  continued  to  be 
modernised,  bringing  transport  sector  within  the  generally  applicable  competition 
rules.  The  regulatory  work  was  complemented  by  investigation  and  enforcement 
actions.  

The  economic  downturn  in  2009  had  a  significant  impact  on  almost  all  transport 
sectors,  whether  for  freight  or  for  passengers.  Faced  with  the  aftermath  of  the 
economic  crisis,  the  airline  industry  continued  to  undergo  a  restructuring  which 
included multiple mergers and financial difficulties/bankruptcies of both network and 
low-cost  carriers.  The  Commission  assessed  a  number  of  mergers  and  ensured  that 
such  consolidation  was  not  to  the  detriment  of  consumers.  Airport  congestion  also 
remained a critical issue. 

294 

295 

EN 

Case  N582/08  Health  Insurance 
C(2009)3572 final (OJ C 186, 8.8.2009). 
Case COMP/39510 LABCO/ONP. 

intergenerational  solidarity  relief  (Ireland).  Final  decision 

91 

   EN 

                                                 
377. 

378. 

The maritime transport was also severely affected by the crisis, trying to cope with 
overcapacity, falling demand and tight credit leading to sharp decreases in rates. The 
Commission remained vigilant to any signs of crisis cartels, protectionist measures or 
other forms of anticompetitive behaviour.  

The Commission's enforcement activity was also complemented by that of NCAs, in 
particular in areas where an investigation at national level is appropriate, such as in 
the  case  of  airport  infrastructure  (degree  of  concentration  with  regard  to  London 
airports for instance). 

2. 

POLICY DEVELOPMENTS 

2.1. 

Road Transport 

379. 

380. 

381. 

382. 

The  new  Regulation  on  public  passenger  transport  services296  entered  into  force  on 
3 December.  The  regulation  lays  down  the  rules  applicable  to  the  compensation  of 
public  service  obligations  in  inland  traffic.  Until  the  entering  into  force  of  the  new 
rules,  the  Commission  has  continued  to  apply  the  existing  State  aid  rules  to  public 
service contracts and public service obligations, clarified in the Altmark Judgment297. 

On the basis of these rules, the Commission concluded that the new Danish system of 
reduced  tariffs  in  favour  of  certain  categories  of  passengers  travelling  in  long-
distance bus services involved State aid, compatible with the common market298. The 
aim of the scheme is to ensure adequate transport services to low-income groups of 
the  population  and  overall  to  boost  public  transport.  The  scheme  will  also  help  to 
create  harmonised  conditions  for  competition  between  railway  undertakings,  which 
already  receive  compensation  for  giving  similar  or  higher  discounts,  and  long-
distance bus operators. 

As  in  previous  years,  the  Commission  received  several  notifications  of  subsidised 
regional  bus  services.  In  conformity  with  the  Altmark  ruling,  the  Commission 
declared  as  non-aid  the  compensations  granted  by  Landkreis  Sachsen-Anhalt  in 
Germany  for  the  public  bus  transport299.  Similarly,  the  Commission  concluded  that 
the  extension  of  the  compensation  for  public  services  in  the  district  of  Wittenberg 
linked to supplementing the existing bus lines did not constitute State aid300.  

The in-depth assessment started in March 2005 in relation to the restructuring aid in 
the form of capital injections granted to the Danish bus transport company Combus 
was  concluded.  Following  the  CFI's  partial  annulment  in  March  2004301  of  its 
previous  decision  adopted  in  March  2001,  the  Commission  concluded  that  the  aid 

296 

297 

298 
299 
300 
301 

Regulation  (EC)  No.  1370/2007  of  the  European  Parliament  and  the  Council  of  23  October  2007  on 
public  passenger  services  by  rail  and  road  and  repealing  Council  regulations  (EEC)  No.  1191/69  and 
No. 1107/70 (OJ L 315, 3.12.2007). 
Case C-280/00 Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft 
Altmark GmbH ("Altmark") [2003] ECR I-7747. 
Case N332/2008 (OJ C 46, 25.2.2009). 
Case N206/2009 (OJ C 255, 24.10.2009). 
Case N207/2009 (OJ C 255, 24.10.2009). 
Case T-157/01 Danske Busvognmænd/Commission [2004] ECR II-917. 

EN 

92 

   EN 

                                                 
383. 

384. 

385. 

386. 

was  incompatible  with  the  common  market  and  should  be  recovered  from  the 
company which received it302. 

In  the  field  of  urban  transport,  the  Commission  closed  the  formal  investigation 
procedure regarding the State aid for reform of the financing method for the special 
pension  scheme  for  the  staff  of  the  French  public  transport  company  RATP.  The 
Commission considered that the reform notified by the French authorities constituted 
State aid benefiting the RATP but concluded that this reform was necessary to create 
equal  conditions  with  regard  to  contributions  for  compulsory  old-age  pension 
insurance and to place the Ile-de-France transport company on an equal footing with 
its competitors303. 

In  line  with  the  wider  Community  objectives  of  the  common  transport  policy  and 
environmental  protection,  the  Commission  authorised  a  regime  promoting  the 
purchase  of  more  environmentally-friendly  heavy  goods  vehicles  in  Slovenia304. 
Such vehicles use exhaust emission control equipment in anticipation of the deadline 
for  the  start  of  its  mandatory  use.  As  such,  the  Commission  concluded  that  the 
measure  was  in  line  with  the  Environmental  Guidelines.  The  Commission  also 
authorised a German aid scheme aiming at supporting market acceptance of available 
highly efficient vehicle technologies305 and an aid scheme supporting the purchase of 
low-carbon buses in England. The main objective of the UK scheme is to reduce the 
CO2  emissions  produced  by  public  buses  through  the  introduction  of  a  'Green  Bus 
Fund'306. 

As  regards  the  improvement  of  the  public  transport  infrastructure,  the  Commission 
authorised  several  major  projects.  Among  these,  it  declared  the  public  financing  of 
the construction and maintenance of the motorway A1307 and A2308 in Poland to be 
compatible State aid. 

The  Commission  also  adopted  a  non-aid  decision  concerning  the  financing  of  the 
planning  phase  of  the  Fehmarn  Belt  fixed  link309.  The  Fehmarn  Belt  fixed  link 
project  will  involve  the  construction  and  the  exploitation  of  either  a  bridge  or  a 
tunnel  to  form  a  fixed  road  and  rail  link  spanning  the  19  km-wide  Fehmarn  Strait 
between  the  north  of  Germany  and  the  south  of  Denmark.  It  is  considered  a  key 
element for the completion of the main North-South route connecting central Europe 
and  the  Nordic  countries  and  is  regarded  as  contributing to  the  development  of  the 
trans-European transport network. 

387. 

Finally,  the  Commission  authorised  the  prolongation  by  one  year  of  certain 
motorway concession contracts in France310. 

302 
303 
304 
305 
306 
307 
308 
309 
310 

Case C10/2005 (OJ L 345, 23.12.2009). 
Case C42/2007 (OJ L 327, 12.12.2009). 
Case N395/2008 (OJ C 125, 5.6.2009). 
N457/2009. 
Case N517/2009. 
Cases N151/2009, N152/2009 (OJ C 164, 16.7.2009). 
Case N462/2009. 
Case N157/2009 (OJ C 202, 27.8.2009). 
Case N362/2009 (OJ C 264, 6.11.2009). 

EN 

93 

   EN 

                                                 
2.2. 

Rail Transport and Combined Transport 

388. 

389. 

390. 

391. 

Despite  full  liberalisation  in  2007,  European  rail  freight  transport  markets  are  still 
characterised  by  limited  competition  and  strong  incumbents  co-operating  for  cross-
border rail freight transport. Since 2007, the Commission has assessed a number of 
merger  cases  in  the  railway  sector.  On  12  June,  the  Commission  approved  the 
acquisition of the Polish railway company PCC Logistics by Deutsche Bahn AG311. 
It is the Commission's policy to ensure that in line with the ECMR, mergers in the 
rail  sector  do  not  lead  to  a  weakening  of  competitive  constraints,  for  example,  by 
reducing potential competition. 

International rail passenger transport will be liberalised only as of 1 January 2010. In 
October,  the  Commission  referred  to  France  the  assessment  of  a  concentration  by 
which  SNCF  would  notably  take  joint  control  of  Keolis,  an  undertaking  active  in 
passenger public transport312. 

As in previous years, the Commission adopted several aid decisions to promote rail 
transport and combined transport. The Commission authorised the public funding for 
the construction and the upgrading of private sidings in order to increase rail freight 
traffic  in  Germany313  and  the  prolongation  of  an  aid  scheme  to  support  the  costs 
associated with the installation of the European Train Control System (ETCS) on the 
railway  line  connecting  the  port  of  Rotterdam  and  Germany,  exclusively  used  for 
freight transport314.  

Further aid measures were approved for the acquisition and modernisation of rolling 
stock in Bulgaria315 and the Czech Republic316. The Commission authorised a Czech 
regime  aiming  to  ensure  a  gradual  technical  and  operational  interconnection  of  the 
Czech  and  the  neighbouring  railway  systems,  as  well  as  amongst  the  individual 
entities  involved  in  railway  transport317.  The  Commission  also  approved  a  German 
scheme  providing  for  public  funding  for  measures  of  noise  reduction  for  existing 
railway freight wagons under the framework of the pilot project "Silent Rhein". The 
retrofitting of railway freight wagons which are mainly used in the Rhine valley with 
less noisy brake systems is envisaged in order to enhance noise-reduction318. 

392. 

The Commission also approved State aid for the high-speed rail link service between 
London and the Channel Tunnel as well as the restructuring of Eurostar (UK)319. The 
measure was approved as restructuring aid and aid to promote a project of significant 
European interest. 

393. 

In addition, the Commission authorised the prolongation or the setting up of several 
aid measures to promote combined transport and to achieve a traffic shift of freight 

311 
312 
313 
314 
315 
316 
317 
318 
319 

Case COMP/M.5480 (OJ C 185, 7.8.2009). 
Case COMP/M.5557 SNCF/CDPQ/Keolis/Effia. 
Case N184/2009 (OJ C 246, 14.10.2009). 
Case N474/2009 (OJ C 264, 6.11.2009). 
Case N175/2009 (OJ C 246, 14.10.2009). 
Cases N409/2008, N410/2008 and N411/2008 (OJ C 106, 8.5.2009). 
Case N469/2008 (OJ C 53, 6.3.2009). 
Case N324/2009 (OJ C 299, 9.12.2009). 
Case N420/2008 (OJ C 183, 5.8.2009). 

EN 

94 

   EN 

                                                 
from  road  transport  to  other  modes  of  transport  in  Belgium320,  Austria321, 
Germany322, UK323, Italy324, Poland325 and Hungary326.  

394. 

A positive decision was adopted concerning an amendment to a Dutch regime for the 
construction  of  inland  transhipment  terminals  in  order  to  shift  more  freight  traffic 
from  road  to  inland  waterway  and  rail  transport327.  Along  the  same  lines,  the 
Commission  authorised  a  State  aid  measure  designed  to  shift  traffic  from  road  and 
increasing  the  efficiency  and  safety  of  freight  transport  by  means  of  establishing  a 
rail  based  combined  transport  between  the  Port  of  Naples  and  the  Interporto  di 
Nola328.  

395. 

The Commission also authorised a Dutch aid scheme entailing the development and 
application  of  environmentally  friendly  techniques  in  the  field  of  traffic  and  water 
management329.  

2.3. 

Inland Navigation 

396. 

In February, the Council adopted a codified version of the 1968 Regulation applying 
competition rules to transport by rail, road and inland waterway alike330. 

2.4.  Maritime Transport 

2.4.1.  Policy developments 

397. 

398. 

320 
321 
322 
323 
324 
325 
326 
327 
328 
329 
330 

331 

332 

333 

In  June  a  Communication  on  State  aid  to  ship  management  companies331  was 
adopted.  The  Communication  lays  down  the  criteria  for  eligibility  of  ship 
management  companies  for  the  reduction  of  corporate  tax  or  the  application  of  the 
tonnage tax under the Guidelines on State aid to maritime transport332. 

On  28  September  the  Commission  adopted  Commission  Regulation  (EC)  No 
906/2009 on the application of Article 81(3) EC to certain categories of agreements, 
decisions  and  concerted  practices  between  liner  shipping  companies  (consortia)333. 
The  revised  consortia  block  exemption  regulation  will  enter  into  force  on  25  April 
2010 and is part of the European Commission's effort to review transport regulations 
for the maritime transport sector (see section I.B.1.4.5). 

Case N571/2008 (OJ C 160, 14.7.2009). 
Case N415/2008 (OJ C 53, 6.3.2009). 
Case N304/2008 (OJ C 106, 8.5.2009). 
Case N247/2009 (OJ C 255, 24.10.2009). 
Case N483/2009 (OJ C 280, 20.11.2009); case N259/2008 (OJ C 280, 20.11.2009). 
Case N546/2008 (OJ C 203, 28.8.2009). 
Case N316/2008 (OJ C 232, 26.9.2009). 
Case N60/2009 (OJ C 125, 5.6.2009). 
Case N449/2008 (OJ C 196, 20.8.2009) 
Case N456/2008 (OJ C 188, 11.8.2009). 
Council Regulation (EC) No 169/2009 of 26 February 2009 applying rules of competition to transport 
by rail, road and inland waterway (Codified version) (OJ L 61, 5.3.2009).  
Communication from the Commission providing guidance on State aid to ship management companies 
(OJ C 132, 11.6.2009). 
Commission  Communication  C(2004)  43  Community  guidelines  on  State  aid  to  maritime  transport 
(OJ C 13, 17.1.2004, p. 3). 
OJ  L  256,  29.9.2009,  p.  31;  See  also  Press  Release  IP/09/1367,  28.9.2009  and  MEMO/09/420, 
28.9.2009. 

EN 

95 

   EN 

                                                 
399. 

The abolition of the liner conference block exemption in 2008 forced major container 
shipping firms to adjust to the new regime. In non-containerised markets, the world's 
largest shipping conglomerate, Maersk, acquired Broström334 in 2009. 

2.4.2. 

State aid cases 

400. 

401. 

402. 

The Commission adopted positive decisions with regard to aid to seafarers in Italy335 
and Finland336.  

The  Commission  concluded  the  formal  procedure  opened  in  2007  regarding  the 
extension to dredging and cable-laying activities of the regime exempting maritime 
transport companies from the payment of the income tax and social contributions of 
seafarers  ("DIS  regime")  in  Denmark.  The  Commission  had  expressed  doubts 
whether such activities constituted or could be assimilated to maritime transport. In 
the end, the Commission concluded that all dredging activities can be assimilated to 
maritime  transport  except  for  sailing  at  the  places  of  extraction.  In  addition,  it 
accepted  the  extension  of  the  DIS  regime  to  cable-laying  vessels  by  applying  by 
analogy the Maritime Guidelines337. 

In  addition,  the  Commission  concluded  several  investigation  procedures  regarding 
tonnage  tax  schemes.  Firstly,  it  finalised  the  in-depth  assessment  initiated  in  2008 
regarding amendments to the Irish tonnage tax scheme. In the opening decision, the 
Commission  expressed  doubts  as  to  the  removal  of  the  time  charter  limit.  The 
Commission concluded in the final decision that such amendments can contribute to 
the Community's interests in the field of maritime policy when, for a given tonnage 
tax company, each of the chartered-in vessels is either registered in a Community or 
EEA maritime register or its crew and technical management are carried out on the 
territory of the Community or the EEA338. 

403.  Moreover,  the  Commission  concluded  the  investigation  procedure  initiated  in  2007 
regarding  amendments  to  the  Danish  tonnage  tax  scheme.  In  line  with  the  doubts 
expressed  in  the  opening  decision,  the  Commission  found  that  the  alleviation  of 
information obligation for tonnage tax companies which carry out transactions with 
foreign (non-Danish) affiliates was not compatible with the common market. It was 
therefore not authorised339. 

404. 

The  Commission  also  approved  an  amendment  to  the  Dutch  tonnage  tax  scheme 
which  reduces  the  tonnage  tax  base  for  large  vessels  and  to  ship  management 
technical 
companies  which  exercise  simultaneously  crew  management  and 
management  of  vessels340  and  the  introduction  of  a  tonnage  tax  scheme  in 
Slovenia341 and Poland342. 

334 
335 
336 

337 
338 
339 
340 
341 
342 

Case COMP/M.5346 APMM/Broström. 
Case N219/2009 (OJ C 196, 20.8.2009). 
Cases N120/2009 (OJ C 232, 26.9.2009), N67/2009 (OJ C 232, 26.9.2009) and N300/2009 (OJ C 299, 
9.12.2009). 
Case C22/2007 (OJ L 119, 15.5.2009). 
Case C2/2008 (OJ L 228, 1.9.2009). 
Case C5/2007 (OJ L 315, 2.12.2009). 
Case N457/2008 (OJ C 106, 8.5.2009). 
Case N325/2007 (OJ C 53, 6.3.2009). 
Case C34/2007. 

EN 

96 

   EN 

                                                 
405. 

406. 

407. 

408. 

409. 

As regards port infrastructure development projects, the Commission authorised the 
co-financing of the construction of a pedestrian bridge and of jetties in the passenger 
section  of  the  Port  of  Piraeus.  However,  it  expressed  doubts  regarding  the  public 
funding  of  the  construction  of  a  jetty  and  the  acquisition  of  different  types  of 
equipment in the container terminal section of the same port, and opened the formal 
investigation procedure in their respect343. 

The Commission subsequently separated its assessment of the public financing of the 
construction of the jetty from the acquisition of equipment elements and decided that 
the  public  financing  for  the  construction  of  the  jetty  is  compatible  with  State  aid 
rules344.  

The  Commission  also  raised  doubts  as  to  whether  the  granting  of  the  35-year 
concession for the operation of a dry bulk terminal and two berths in Ventspils port 
involves aid at the level of the concession holders. The concession fees to be paid by 
the  respective  port  service  providers  have  been  established  on  the  basis  of  an 
independent valuation. The Commission has doubts that in this case the concession 
fee represents a market price345.  

The  Commission  initiated  a  formal  investigation  procedure  regarding  certain  fiscal 
measures in favour of the port sector in France346. The Commission also confirmed 
its  view  that,  in  the  lack  of  an  open,  transparent  and  non  discriminatory  tendering 
procedure, a sale transaction carried out by the State does not involve aid elements to 
the buyer only if the market price is paid for the assets acquired thereafter.  

The  Commission  concluded  the  formal  investigation  procedure  initiated  in  2008 
regarding  the  public  financing  of  ferry  shipping  services  between  the  Scottish 
mainland  and  the  islands  off  the  west  and  north  coasts  of  Scotland347.  With  the 
exception  of  one  route  in  the  western  islands,  these  services  are  currently  provided 
under public service contracts, which followed open public tender procedures. After 
an  in-depth  investigation,  the  Commission  confirmed  that  the  public  service 
obligations  for  the  western  and  northern  islands  were  legitimately  defined  and 
entrusted on the operators, with the exception of the Gourock-Dunoon route. In the 
case of this route, the national authorities have committed to take the necessary steps 
to launch a public tender for its operation before the end of 2009. On the basis of the 
commitment from the national authorities to launch a public tender for the operation 
of the Gourock-Dunoon route, the Commission decided to close the procedure with a 
positive decision.  

410. 

In line with the wider community objectives in the field of transport, the Commission 
authorised the prolongation of a UK aid scheme supporting the modal shift of freight 
from  road  to  water  by  means  of  granting  support  to  costal  and  short  sea  shipping 
services  on  condition  that  they  avoid  journeys  by  lorry  and  they  generate 
environmental benefits within the UK348. 

343 
344 
345 
346 
347 
348 

Cases N169/2008, N105/2008 and N168/2008. 
Case C21/2009. 
Case N385/2009. 
Case N614/2008 (C 122, 30.5.2009). 
Case C16/2008. 
Case N246/2009 (OJ C 209, 4.9.2009). 

EN 

97 

   EN 

                                                 
2.5. 

Aviation 

2.5.1.  Policy developments 

411. 

412. 

413. 

414. 

The Regulation on computer reservation systems (CRS)349 entered into force  on  29 
March.  The  new  rules  aim  to  increase  competition  in  the  field  of  airline  ticket 
distribution  by  reducing  booking  fees  and  allowing  airlines  to  provide  more  travel 
options via the CRSs. 

The new Directive on airport charges entered into force in March350. It applies to EU 
airports  that  are  above  a  minimum  size  and  establishes  a  common  framework  of 
airport  charging  thereby  setting  common  principles  to  be  observed  by  EU  airports 
when determining the level of the charges in order to ensure that airport charges do 
not  discriminate  among  airport  users.  The  Directive  sets  forth  a  compulsory 
procedure  for  regular  consultation  between  airport  managing  bodies  and  airport 
users,  with  the  possibility  for  either  party  to  have  recourse  to  an  independent 
supervisory authority whenever a decision on airport charges or the modification of 
the charging system is contested by airport users.  

On 18 June the Council and the European Parliament approved an amendment to the 
existing  rules351,  aiming  at  bringing  more  flexibility  in  slot  allocation  in  order  to 
counteract the impact of the crisis on air transport. The measure temporarily freezes 
the "use it or lose it" rule during the 2009 summer season and allows airlines to keep 
their rights over slots.  

On  April  8  the  Commission  decided  to  open  two  formal  proceedings  in  its 
investigations of the airline cooperation on transatlantic flights352. One case concerns 
the  cooperation  agreements  concluded  between  three  members  of  the  oneworld 
airline  alliance  –  British  Airways,  American  Airlines  and  Iberia.  The  second 
proceedings relate to separate cooperation agreements entered into by four airlines of 
the Star Alliance – Lufthansa, United, Continental and Air Canada. In both cases the 
agreements provide for extensive cooperation between the parties, including revenue 
sharing,  joint  price-setting  and  coordination  of  capacity  and  schedules  on 
transatlantic  flights  between  Europe  and  North  America.  In  the  oneworld  case,  on 
September 30, the Commission sent a SO to British Airways, American Airlines and 
Iberia353.  The  Commission  expressed  concerns  that  the  parties'  agreements  would 
have  adverse  effects  for  passengers  on  several  transatlantic  routes  where  British 
Airways,  American  Airlines  and  Iberia  enjoy  a  strong  market  position  and  where 
barriers to entry are significant. 

349 

350 

351 

352 
353 

Regulation (EC) No 80/2009 of the European Parliament and of the Council of 14 January 2009 on a 
Code  of  Conduct  for  computerised  reservation  systems  and  repealing  Council  Regulation  (EEC)  No 
2299/89 (OJ L 35, 4.2.2009). 
Directive  2009/12/EC  of  the  European  Parliament  and  of  the  Council  of  11  March  2009  (OJ  L  70, 
14.3.2009). 
Regulation (EC) no 545/2009 of the European Parliament and of the Council of 18 June 2009 amending 
Regulation  (EEC)  no  95/93  on  common  rules  for  the  allocation  of  slots  at  community  airports 
(OJ L 167, 29.6.2009, p. 24). 
See Press Release MEMO/09/168, 20.4.2009. 
See Press Release MEMO/09/430, 2.10.2009. 

EN 

98 

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415. 

The  airline  industry  faced  significant  turbulence  in  2009.  Following  2008's  peak  in 
fuel  prices,  the  fall  in  passenger  and  cargo  demand  in  2009,  in  particular  at  the 
premium end of the fare scale, resulted in significant losses for many carriers. Both 
phenomena  gave  impetus  to  the  pre-existing  trend  towards  restructuring  and 
consolidation  in  the  sector.  Given  the  legal  framework  applicable  to  transatlantic 
mergers,  the  restructuring  took  the  form  of  intensified  cooperation  within  global 
airline  alliances  resulting  in  joint  venture  agreements  covering  transatlantic  routes. 
The  European  airline  industry,  on  the  other  hand,  went  through  a  process  of 
consolidation  with  mergers  of  both  network  and  low-cost  carriers354  taking  place. 
Some  large  network  carriers,  in  particular  Lufthansa,  seized  this  opportunity  to 
expand  via  acquisitions  of  smaller  regional  players,  namely  Brussels  Airlines355, 
Bmi356 and Austrian airlines357.  

416.  While  the  Commission  encourages  airline  consolidation  in  Europe,  it  has  to  make 
sure  that  the  latter  does  not  take  place  to  the  detriment  of  consumers.  It  is  in  this 
context that in 2009 the Commission conducted several thorough first phase and two 
second phase market investigations. The 2009 airline merger wave also highlighted 
some policy issues, in particular as concerns the treatment of pre-existing agreements 
between the parties and remedies in the airline sector. 

417. 

Pre-merger  competition  between  the  merging  parties  is  often  characterized  by  a 
network  of  pre-existing  cooperation  agreements  ranging  from  simple  code-sharing 
agreements to cost and revenue sharing joint ventures. These agreements have to be 
analyzed in order to determine the relevant counterfactual for the assessment of the 
effects of each transaction. Pre-merger cooperation that is contrary to Article 101 TFEU 
cannot be considered as a relevant counterfactual. In the context of merger control, if 
the  illegality  of  a  pre-merger  agreement  between  the  parties  were  not  taken  into 
account, the parties could argue that there would only be a small reduction or even 
no  reduction  of  competition  as  a  result  of  the  merger.  A  merger  decision  in  such 
circumstances would effectively incorporate and perpetuate the pre-merger illegality, 
since mergers that are approved under the ECMR are no longer challengeable under 
Article  101  TFEU.  The  Commission  analyzed  on  a  case-by-case  basis  the  specific 
effects  of  the  creation  of  a  permanent  structural  link  (as  opposed  to  a  contractual 
link) between the parties in order to assess the extent to which competition may be 
affected post-merger. 

418. 

As  concerns  airline  remedy  policy,  the  Commission,  in  order  to  ensure  the 
effectiveness  of  the  slot  remedies  offered  in  appropriate  airline  cases,  agreed 
remedies with the potential to foster entry at concerned airports by incentivising new 
entrants to create a base358. In addition, the Commission improved and substantially 
simplified  the  procedure  for  slot  application  for  new  entrants  so  as  to  provide 
additional incentives to new entrants to take up slots offered by the parties and thus 
further foster the effectiveness of the remedies. 

354 
355 
356 
357 
358 

Case COMP/M.5364 Iberia/Vueling/Clickair. 
Case COMP/M.5335 Lufthansa/Brussels Airlines. 
Case COMP/M.5403 Lufthansa/bmi. 
Case COMP/M.5440 Lufthansa/Austrian Airlines. 
Case COMP/M.5364 Iberia/Vueling/Clickair. 

EN 

99 

   EN 

                                                 
2.5.2. 

State aid cases 

419. 

420. 

421. 

422. 

423. 

The  economic  and  financial  crisis  has  had  a  significant  effect  on  the  airline  sector. 
The Commission authorised the rescue aid granted to the Austrian Airlines Group in 
the form of a loan guarantee359.  

During  2009,  the  Commission  also  opened  and  subsequently  closed  the  formal 
investigation procedure into the privatisation and restructuring of Austrian Airlines. 
The  Commission  had  doubts  whether  sufficient  compensatory  measures  had  been 
proposed by the Austrian authorities to address the resulting market distortions360. In 
addition, the Commission could not conclude whether the amount of the aid element 
of the restructuring plan had been kept to a minimum nor whether the level of own 
contribution could be considered appropriate under the 2004 Guidelines. 

In the final decision361, the Commission concluded that, since the insolvency of the 
airline  would  have  been  a  cheaper  option  for  the  State,  the  decision  of  Austria  to 
accept  a  negative  price  amounted  to  a  grant  of  State  aid.  After  assessing  the 
restructuring plan, the Commission concluded that this plan was in conformity with 
the applicable Community rules.  

The  Commission  decided  on  certain  changes  envisaged  by  the  Greek  authorities  in 
connection  with  the  sales  processes  of  Olympic  Airlines,  as  authorised  in  2008362. 
The  Greek  authorities  carried  out  a  tender  procedure  in  conformity  with  the 
Commission  decision.  However,  no  valid  offers  were  received.  Thus,  the  Greek 
authorities  informed  the  Commission  on  their  intention  to  carry  out  the  sales  by 
direct negotiation with interested parties. The Commission concluded that, given the 
specific circumstances of this case, and taking into account the financial turmoil, the 
direct sale solution was the most likely to maximise the value of the two companies 
and  consequently  the  State  aid  to  be  recovered.  However,  the  acceptance  by  the 
Commission  of  such  amendment  to  the  sale  processes  has  been  made  subject  to 
observance of several conditions363. 

The Commission also approved the intention of the Greek authorities to cover part of 
the  costs  of  the  voluntary  redundancy  scheme  to  be  implemented  by  Olympic 
Catering  SA  in  respect  of  certain  of  its  staff.  The  Commission  considered  that  the 
measure,  which  pays  part  of  the  abnormal  costs  of  the  scheme,  can  be  considered 
compatible  with  the  common  market.  The  abnormal  costs  in  question  result  from 
certain  Olympic  Catering  staff  taking  part  in  an  early  retirement  voluntary 
redundancy  scheme.  These  staff  members  enjoy  a  permanent  status  and  salaries 
which  were  negotiated  when  the  company  was  a  state-owned  undertaking  and  are 
therefore not comparable to normal market conditions364. 

359 
360 
361 
362 

363 
364 

Case NN72/2008. 
Case N663/2008 (OJ C 57, 11.3.2009). 
Case C6/2009. 
In 2008 the Commission found that the sale of certain assets of Olympic Airways / Olympic Airlines in 
bundled  form  did  not  involve  State  aid,  provided  that  certain  commitments  made  by  the  Greek 
authorities  are  fully  complied  with.  These conditions  mainly  required  that  the  sales  should  be  carried 
out on the basis of a transparent, open and non-discriminatory public tender, accepting the highest bid. 
Case N83/2009. 
Case N487/2009. 

EN 

100 

   EN 

                                                 
424. 

425. 

426. 

Several State aids for investments in airport infrastructure were approved at airports 
in  Italy  (Falconara  airport  and  Tuscan  airports)365,  Germany  (Berlin  Brandenburg 
International  Airport,  Kassel-Calden  airport,  Dresden  airport,  Münster/Osnabrück 
airport)366,  UK  (Newquay  Cornwall  Airport)367,  Poland  (Lublin-Świdnik,  Modlin, 
Podlaskie,  Olsztyn/Szymany,  Zegrze  Pomorskie,  Łódź,  Bydgoszcz,  Rzeszów-
Jasionka, Poznań-Ławica, Kraków-Balice, Warszawa–Okęcie, Katowice–Pyrzowice, 
airports)368, 
Wrocław–Strachowice,  Gdańsk–Rębiechowo,  Szczecin–Goleniów 
Lithuania  (Vilnius,  Kaunas  and  Palanga  International  Airports)369  and 
the 
Netherlands370. The Commission concluded that the measures were not prejudicial to 
the common interest as they could be deemed necessary and proportionate to reach 
objectives of Community interest. The Commission also authorised the co-financing 
of  the  apron-related  equipment  and  other equipment  necessary  for  the  management 
of the Ostrava airport371.  

The  Commission  also  authorised  a  regime  put  in  place  by  the  Flemish  authorities 
intended, through the grant of "start-up" aid, at the creation of new air routes from 
Ostend-Bruges International Airport to other EU airports372. 

Finally, the Commission accepted the measures taken by France in view of bringing 
to an end the differentiation in passenger charges amongst national and EU flights, 
which in fact granted an advantage to airlines operating internal flights373. 

2.6. 

Ship Classification 

427. 

428. 

In 2008, the Commission started investigations into the worldwide ship classification 
market374 concerning the treatment by the International Association of Classification 
Societies  (IACS)  of  third  party  classification  societies  which  are  not  members  of 
IACS. 

In its preliminary assessment, the Commission took the preliminary view that IACS 
may have reduced the level of competition in the ship classification market, notably 
by  decisions  preventing  classification  societies  which  are  not  already  members  of 
IACS  from  joining  IACS,  from  participating  in  IACS'  technical  working  groups 
(which  develop  IACS'  technical  resolutions  that  lay  down  requirements  and 
interpretations  to  be  incorporated  into  the  classification  rules  and  procedures  of 
individual  classification  societies)  and  from  accessing  to  technical  background 
documents  which  relate  to  IACS'  technical  resolutions  and  which  are  necessary  to 
understand  and  apply  these  resolutions.  Given  the  Commission's  preliminary  view 
that  the  ten  members  of  IACS  have  a  strong  position  on  the  market  and  that 

365 
366 

367 
368 

369 
370 
371 
372 
373 
374 

Case N12/2009 (OJ C 164, 16.7.2009), case N45/2009 (OJ C 125, 5.6.2009). 
Case  NN25/2009  (OJ  C  179,  1.8.2009),  case  N112/2008  (OJ  C  97,  28.4.2009)  case  NN4/2009 
(OJ C 125, 5.6.2009), case N30/2008. 
Case N269/2009, (C 204, 29.8.2009). 
Case N196/2008 (OJ C 204, 29.8.2009), case N472/2008 (OJ C 79, 2.4.2009), case N 570/2008 (OJ C 
125, 5.6.2009). 
Case NN9/2009. 
Case NN43/2009 (OJ C 320, 24.12.2009). 
Case N307/2008 (OJ C 46, 25.2.2009). 
Case N377/2009. 
Case E4/2007 (OJ C 83, 7.4.2009). 
See MEMO/08/65, 30.1.2008. 

EN 

101 

   EN 

                                                 
classification  societies  which  are  not  members  of  IACS  may  face  significant 
competitive disadvantages, the Commission's preliminary assessment was that these 
decisions  therefore  raised  concerns  as  to  their  compatibility  with  Article  81(1)  EC 
and  Article  53(1)  EEA  Agreement.  Moreover,  the  Commission's  preliminary  view 
was  that  these  decisions  did  not  appear  to  fulfil  the  cumulative  requirements  for 
exemption under Article 81(3) EC and Article 53(3) EEA Agreement. 

429. 

To  address  the  Commission's  competition  concerns,  IACS  offered  the  following 
commitments: 

•  To  set  up  objective  and  transparent  membership  criteria  and  to  apply  them  in  a 
uniform and non-discriminatory manner. The commitments foresee detailed rules, 
including  clear  deadlines,  for  the  different  steps  of  the  membership  application, 
suspension and withdrawal procedure. 

•  To  ensure  that  classification  societies  which  are  not  members  of  IACS  will 

nonetheless be able to participate in IACS' technical working groups. 

•  To  put  all  current  and  future  IACS  resolutions  and  their  related  technical 
background documents into the public domain at the same time and in the same 
way as they are made available to IACS members.  

•  To set up an independent appeal board to settle possible disputes about access to, 
suspension  or  withdrawal  of  membership  of  IACS,  participation  in  IACS' 
technical  working  groups  and  access  to  IACS'  resolutions  and  to  their  technical 
background documents. 

430. 

Between 10 June and 10 July 2009, the Commission consulted interested parties on 
the  commitments  proposed  by  IACS375.  The  results  of  that  consultation  confirmed 
that the commitments were necessary and proportionate to remedy the concerns. As a 
result, the Commission adopted a decision on 14 October rendering the commitments 
offered by IACS legally binding, and closed its investigation376. 

2.7. 

International aviation policy – EU-US cooperation 

431. 

Under the framework of cooperation set up by Annex 2 of the EU-US Air Transport 
agreement,  the  Commission  and  the  US  Department  of  Transportation  (DOT) 
continued their joint work on the research project on airline alliances377. The project 
has  a  quantitative  and  a  qualitative  part.  The  quantitative  part  of  the  project  – 
analysis  of  the  impact  of  alliances  on  fares  and  number  of  passengers  –  has  been 
finalised resulting in a detailed report by the external consultant. A brief final report 
outlying the main qualitative findings is scheduled for publication early next year. 

375 
376 
377 

See Press release IP/09/898, 10.6.2009. 
See Press release IP/09/1513, 14.10.2009. 
See Press Release IP/08/459, 18.3.2008. 

EN 

102 

   EN 

                                                 
H – POSTAL SERVICES  

1. 

OVERVIEW OF SECTOR 

432. 

433. 

434. 

The  postal  sector  is  of  great  significance  for  the  economy  of  the  EU,  generating 
about 1% of EU GDP378. Virtually all Universal Service Providers (USP) in the EU 
are public undertakings controlled by the Member States. 

Postal services are an essential vehicle of communication and trade, and they are also 
vital  for  many  economic  and  social  activities.  Many  key  sectors,  such  as  e-
commerce, publishing, mail order, insurance, banking and advertising, depend on the 
postal  infrastructure.  Postal  services  bring  social  benefits  which  cannot  always  be 
qualified in economic terms. Postal services are labour intensive and are also one of 
the  principal  public  employers  in  Europe.  Employment  in  the  sector  is  principally 
provided by USP and is fairly stable, with about 1.6 million persons employed351. 

Postal  services  are  evolving  substantially.  Postal  operators  are  facing  fierce 
competition from electronic means of communication. This is in turn forcing them to 
adapt  their  businesses  to  better  respond  to  customers'  needs  and  to  improve 
efficiency. The latter was also used as the main tool by USP to face the increasing 
number  of  postal  competitors.  In  addition,  physical  mail  is  increasingly  being 
supplemented by multi-channel delivery and tailor-made solutions for customers, for 
example via hybrid mail services. 

435.  Many postal operators are entering adjacent markets through developing IT services 

for their customers or other new or value-added services. 

436. 

Despite  the  progress  to-date,  genuine  competition  is  only  just  beginning  to  emerge 
even  in  cases  where  the  monopoly  has  been  completely  abolished  or  substantially 
reduced.  In  the  letter  post  segment,  market  shares  of  competitors,  although 
increasing,  remain  at  a  low  level  even  in  Member  States  that  have  fully  liberalised 
their postal markets. Estimated market shares of competitors in these Member States 
ranged from around 8% to 14% in 2007351. Apart from the issue of the reserved area, 
other legal and strategic market entry barriers still persist. 

2. 

POLICY DEVELOPMENTS 

437. 

Under the third postal Directive379, most Member States, will have to accomplish full 
market  opening  by  31 December  2010  with  a  further  two  years  allowed  for  eleven 
Member  States380.  The  Directive  provides  in  particular  for  the  abolition  of  the 

378 

379 

380 

Report  from  the  Commission  to  the  Council  and  the  European  Parliament  on  the  application  of  the 
Postal  Directive  (Directive  97/67/EC  as  amended  by  Directive  2002/39/EC)  of  22.12.2008, 
SEC(2008)3076. 
Directive  2008/06/EC  of  the  European  Parliament  and  of  the  Council  of  20 February  2008  amending 
Directive 97/67/EC with regard to the full accomplishment of the internal market of Community postal 
services (OJ L 52, 27.2.2008, p. 3). 
Czech  Republic,  Greece,  Cyprus,  Latvia,  Lithuania,  Luxembourg,  Hungary,  Malta,  Poland,  Romania 
and Slovakia. 

EN 

103 

   EN 

                                                 
reserved  area  in  all  Member  States,  the  confirmation  of  the  scope  and  standard  of 
postal  universal  service  and  the  upgrading  of  the  role  of  national  regulatory 
authorities. The Directive also offers a variety of measures that Member States may 
take to safeguard and finance the universal service, if this proves to be necessary. 

2.1. 

State aid 

438.  Within  the  postal  sector,  the  State  aid  assessment  carried  out  by  the  Commission 
includes a verification of the amount of compensation granted to postal operators in 
order  to  ensure  that  these  compensations  do  not  exceed  what  is  necessary  to  cover 
the costs incurred in discharging the public service obligations, taking into account 
the relevant receipts and reasonable profit, and that commercial activities outside the 
SGEI are not cross-subsidised. The compatibility principles the Commission applies 
in  its  assessment  are  contained  in  the  Community  framework  for  State  aid  in  the 
form  of  public  service  compensation  (the  Framework)381.  However,  the  new  Postal 
Directive provides for a new method of calculating the net costs of postal universal 
services382,  which  departs  from  the  mere  accounting  approach  of  actual  loss 
compensation embodied in the Framework. The possible implications of this method 
will have to be reflected in the future compensation mechanisms. 

2.1.1.  Deutsche Post 

439. 

440. 

its 

into 

investigation 

The  Commission  currently  continues 
the  alleged 
overcompensation  of  Deutsche  Post  AG383  for  carrying  out  its  universal  service 
obligations from 1989 to 2007. The main focus is on two public measures concerning 
the  subsidy  which  Deutsche  Post  received  from  its  affiliate  Deutsche  Telekom 
between 1990 and 1995 to cover its losses and the public financing which Deutsche 
Post has received since 1995 in order to finance the pension of its civil servants. It is 
important to note that the CFI annulled384 the 2002 Commission decision which had 
already  found  certain  aid  measures  for  Deutsche  Post  AG  as  incompatible.  The 
Commission appealed this judgment385. 

Following  considerable  delays  incurred  due  to  an  initial  refusal  of  Germany  to 
provide all necessary accounting data for the period after 1995, the investigation was 
eventually  continued  based  on  accounting  information  for  the  whole  period  until 
2007 which Germany submitted further to the issuance of an information injunction 
on 30 October 2008. The Commission has recently received the formal submission of 
the expert's final report aiming to quantify the possible amount of overcompensation; 
on  that  basis  and  the  comments  of  the  German  authorities  a  final  decision  can  be 
anticipated for the beginning of the year 2010. 

381 

382 

383 

384 
385 

Community framework for State aid in the form of public service compensation (OJ C 297, 29.11.2005, 
pp. 4-7). 
The cost for providing the universal service shall be calculated as the difference between the net cost for 
a designated universal service provider of operating with the universal service obligations and the same 
postal service provider operating without universal service obligations. 
Case C36/2007 Complaint against the German State for unlawful State aid to Deutsche Post (OJ C 245, 
19.10.2007 p. 21). 
Case T-266/02 Deutsche Post AG v Commission, [2008] ECR II-01233. 
Case C-399/08 Commission v Deutsche Post AG (OJ C 301, 22.11.2008, p. 18). 

EN 

104 

   EN 

                                                 
2.1.2.  Belgian Post 

441. 

442. 

The European Commission has opened a formal investigation procedure to examine 
whether measures in favour of La Poste, the Belgian postal operator, in particular the 
yearly  compensation  for  public  service  obligations,  are  in  line  with  EU  State  aid 
rules386. 

The Commission's initial approval of  a series  of  measures  in  favour  of  La  Poste  in 
2003  was  overturned  by  the  CFI  on  10  February,  who  found  that  a  formal 
investigation  procedure  was  required  in  order  to  guarantee  the  possibility  for 
competitors  to  submit  their  views  to  the  Commission.  The  Commission's  current 
investigation, opened on 13 July, aims to establish in a comprehensive way whether 
the  totality  of  the  measures  in  favour  of  La  Poste  since  its  incorporation  can  be 
considered  compatible  with  the  Single  Market.  The  investigation  concerns  a  large 
number  of  measures,  including  the  yearly  compensation  granted  by  Belgium  for 
public  service  tasks,  capital  injections,  relief  of  pension  liabilities,  transfer  of 
buildings  and  tax  exemptions.  The  investigation  is  progressing  swiftly  with  active 
cooperation of the Belgian authorities. 

2.1.3.  Royal Mail 

443. 

444. 

The European Commission has decided that four state measures granted in favour of 
the  UK  postal  incumbent  Royal  Mail  between  2001  and  2007  are  in  line  with  EU 
State aid rules387. 

Further  to  a  State  aid  investigation  opened  in  2007  following  complaints  by 
competitors,  the  Commission  concluded  that  three  loan  measures  granted  in  2001-
2007  did  not  contain  State  aid  because  they  were  granted  under  market  conditions. 
The  Commission  authorised  a  fourth  measure  concerning  Royal  Mail's  pension 
liabilities  under  EC  Treaty  rules  allowing  State  aid  to  facilitate  certain  economic 
activities (Article 87(3)(c) EC) because it covered abnormal costs which had arisen 
from the previous period when Royal Mail had a monopoly over the letters market. 
None of the measures had been notified, because the UK had contended that they did 
not constitute State aid. 

445. 

The decision adopted on 8 April does not cover measures initially announced by the 
UK authorities in December 2008 in response to the recommendations of the Hooper 
report, and currently still under discussion in the UK. This decision does not concern 
either  the  separate  measures  in  favour  of  Royal  Mail's  subsidiary,  Post  Office 
Limited, which runs the network of post offices388. 

2.1.4.  Unlimited guarantee to the French La Poste 

446. 

In  2007  the  Commission  opened  the  formal  procedure  to  investigate  the  unlimited 
State  guarantee  resulting  from  the  public-law  status  of  the  French  La  Poste389.  The 

386 
387 

388 

389 

Case C20/09 (ex N763/02) La Poste (OJ C 176, 29.7.2009, p. 17). 
Case  C7/07  (ex  NN82/06  and  NN83/06)  Alleged  aid  in  favour  of  Royal  Mail  (OJ  L  210,  14.8.2009, 
p. 16). 
The  Commission  approved  a  series  of  measures  in  favour  of  Post  Office  Limited,  most  recently  in 
November 2007. 
Case C56/2007 Garantie d'Etat illimitée - La Poste (France). 

EN 

105 

   EN 

                                                 
investigation includes an expert study that has concluded that La Poste indeed enjoys 
an unlimited guarantee due to its public-law status. In July, the French government 
adopted  a  bill  of  law  providing  for  the  incorporation  of  La  Poste  as  a  société 
anonyme, which would put an end to the guarantee. The law should be adopted early 
2010.  In  consideration  of  the  above,  the  Commission  is  currently  finalising  its 
decision. 

2.2. 

Infringement procedures 

447. 

448. 

449. 

The  European  Commission  pursued  an  infringement  proceeding  under  Article  258 
TFEU  against  the  Slovak  Republic  for  the  non-implementation  of  the  2008 
Commission decision on the Slovakian postal Law390. 

In  its  decision,  the  Commission  found  the  re-monopolisation  of  the  hybrid  mail 
sector  to  the  benefit  of  the  postal  incumbent  Slovak  Post  to  be  in  breach  of 
competition rules. Hybrid mail is a service whereby the content of a communication 
is  electronically  transmitted  from  the  sender  to  the  service  provider,  which  then 
prints, envelopes, processes and delivers the postal item to the final addressee. As a 
result  of  the  Slovak  postal  law  amendment,  alternative  postal  operators  were  no 
longer  allowed  to  deliver  hybrid  mail  items,  an  activity  previously  open  to 
competition. 

Following  the  Commission´s  decision,  Slovakia  did  not  inform  the  Commission  of 
any  measures  which  would  have  put  an  end  to  the  infringement.  As  a  result,  the 
Commission opened infringement proceedings and on 29 October issued a reasoned 
opinion in this case391. Slovakia has an obligation to comply with the Commission's 
decision,  failing  which  the  Commission  may  bring  the  matter  to  the  ECJ  In  the 
meantime, the alternative operators may rely on the Commission's decision. 

2.3.  Merger control 

450. 

On  21 April,  the  Commission  cleared  the  first  merger  between  incumbent  postal 
operators,  Posten  (of  Sweden)  and  Post  Danmark392.  The  transaction  was  cleared 
subject  to  conditions  relating  to  parcel  delivery  services.  The  Commission's 
investigation showed that liberalisation of the Danish mail market (scheduled to take 
place  before  2011)  is  not  at  risk,  as  the  proposed  merger  was  unlikely  to  increase 
barriers to entry or expansion, or impede competition in the Danish mail market. 

I – AUTOMOTIVE INDUSTRY  

1. 

OVERVIEW OF SECTOR 

451. 

The motor vehicles sector was hit particularly hard by the economic crisis. Although 
world demand for cars in 2009 fell only by 2.4% compared to 2008 thanks to strong 

390 

391 
392 

Case  COMP/39562  Slovakian  postal  Law  (OJ C 322,  17.12.2008,  p. 10).  See  also  Press  Release 
IP/08/1467, 7.10.2008. 
See Press Release IP/09/1632, 29.10.2009. 
Case COMP/M.5152. 

EN 

106 

   EN 

                                                 
demand  in  China393,  car  sales  (passenger  cars  and  light  commercial  vehicles  up  to 
3.5to)  in  the  EU  decreased  by  4.6%  compared  to  2008  and  12.5%  compared  to 
2007394. In 2009, scrapping schemes were introduced in twelve Member States; they 
had a positive impact on sales in the short term, in particular in Germany, where the 
scheme  had  a  significant  budget  (EUR  5  billion).  On  the  basis  of  the  information 
mechanism set up by Directive 98/34/EC, the national scrapping schemes containing 
in  addition  technical  regulations  were  notified  before  adoption  to  the  Commission 
and the Member States, which guaranteed transparency, exchange of information and 
the prevention of obstacles to the single market. 

452. 

453. 

Falling demand and world overcapacity which have characterised the sector for some 
years resulted in bankruptcy proceedings of several major automotive suppliers, most 
notably the two US suppliers General Motors and Chrysler. As a consequence, two 
of GM's European operations, Opel/Vauxhall and Saab, where put up for sale and, in 
the case of Opel, required state loans to continue operations. 

The second challenge the sector is currently facing is the transition towards greener 
cars.  Increasing  demand  by  customers  for  low  emission  cars  and  a  tightening 
regulatory  environment  requires  large  scale  investments  for  the  development  of 
vehicles which meet the standards of the future. The Commission authorised several 
State aid schemes in this respect. At the same time, the sector benefited from eased 
access to finance through loans and guarantees.  

2. 

POLICY DEVELOPMENTS 

2.1. 

Antitrust and Advocacy 

454. 

455. 

456. 

The current Motor Vehicle Block Exemption Regulation (1400/2002) expires on 31 
May 2010. The Commission carried out a review of the Regulation, and on 22 July it 
adopted  a  Communication  on  the  future  competition  policy  orientations  for  the 
sector.  On  the  basis  of  those  policy  orientations  the  Commission  adopted  on  28 
October  a  preliminary  draft  of  a  new  Motor  Vehicle  Block  Exemption  Regulation 
and  accompanying  guidelines  which  where,  after  consultation  with  the  Member 
States, published for public consultation on 21 December. 

The Commission concluded that the markets for vehicle sales are competitive, due to 
a  number  of  external  factors  such  as  structural  overcapacities  and  technological 
innovation. As a consequence, real car prices, i.e. adjusted for inflation and quality 
improvements, have been falling for years leading to highly competitive price levels. 

On  the  other  hand,  competition  on  the  markets  for  vehicle  repair  and  spare  part 
distribution  is  much  more  limited,  because  there  is  a  specific  aftermarket  for  each 
brand of vehicle on which the car manufacturers enjoy a high market share. Vehicle 
repair is important for buyers, as it accounts for a significant portion of the lifetime 
cost of owning and running a vehicle. Therefore, the Commission distinguished in its 

393 
394 

Global auto report, Scotia Bank, http://www.scotiacapital.com/English/bns_econ/bns_auto.pdf 
ACEA, New registrations by country 
http://www.acea.be/index.php/news/news_detail/new_vehicle_registrations_by_country/ 

EN 

107 

   EN 

                                                 
Communication of 22 July between the markets for the sales of new motor vehicles 
and the repair and maintenance markets. 

457. 

As  it  does  not  appear  justified  to  treat  the  competitive  vehicle  sales  markets  any 
differently  from  other  sectors,  the  Commission  has  proposed  to  remove  the  sector 
specific rules applying to the market for vehicle sales laid down in the current Motor 
Vehicle  Block  Exemption  Regulation  and  apply  the  general  competition  rules  on 
vertical agreements together with sector-specific guidelines. In order to give dealers 
time  to  adapt  to  the  new  rules,  the  Commission  envisages  prolonging  the  current 
rules regarding markets for new vehicle sales for three years. 

458.  With  regard  to  the  aftermarkets,  the  Commission  has  proposed  to  retain  sector 
specific  provisions,  in  the  form  of  a  focused  block  exemption  in  combination  with 
guidelines.  These  sector  specific  provisions  are  designed  to  address  efficiently, 
serious competition concerns, including the issue of independent operators' access to 
technical  information,  the  free  access  to  competing  spare  parts  and  the  misuse  of 
warranties. 

459. 

These  measures  are  fully  coherent  with  initiatives  taken  by  the  EU  institutions  in 
other policy areas such as the proposal for liberalisation of the rules on design rights 
for  replacement  parts.  In  addition,  very  specific  conditions  for  access  to  repair  and 
maintenance information for passenger cars and light commercial vehicles have been 
set out in the legislation governing light duty vehicle emissions (Euro 5 and Euro 6 
limit values)395.  

2.2. 

State aid to the car sector 

Temporary Framework 

460. 

The  Temporary  Framework  for  State  aid396  was  widely  used  to  support  the  car 
industry.  For  example,  it  allows  financing  of  projects  for  the  development  of  low 
emission  vehicles.  The  Commission  approved  aid  schemes  for  green  products,  i.e. 
"green cars", notified by France, UK, Spain, Germany and Italy397. Furthermore, the 
Commission  approved  several  guarantee  and/or  loan  schemes  for  a  number  of 
Member  States,  such  as  France,  UK,  Germany,  Belgium  (Flemish  region),  Sweden 
and Romania among others398. 

461. 

In  all  cases  of  State  aid  to  the  car  sector,  the  Commission  continued  to  enforce  a 
strict policy line. In particular, the Commission  consistently indicated that it would 
not  accept  that  State  aid  granted  under  schemes  approved  on  the  basis  of  the 
Temporary  Framework  would  be  subject  –  de  jure  or  de  facto  –  to  protectionist 

395 

396 

397 
398 

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). 
Under  the  Temporary  Framework,  the  car  industry  can  benefit  from  aid  up  to  EUR  0.5  million  per 
company  for  the  next  two  years  'small  amounts  of  aid',  state  guarantees  on  loans,  subsidies  loans, 
including specifically for green cars, and of facilitated access risk capital for SMEs.  
N11/2009 (France), N72/2009 (UK), N140/2009 (Spain), N426/2009 (Germany), N542/2009 (Italy).  
N23/2009  (France),  N71/2009  (UK),  N27/2009  (Germany),  N117/2009  (Flemish  region/Belgium), 
NN34/2009 (Sweden), N286/2009 (Romania). 

EN 

108 

   EN 

                                                 
462. 

463. 

464. 

465. 

conditions,  such  as  conditions  concerning  the  geographic  location  of  investments. 
The Commission carefully examined each case that raised this type of protectionist 
concerns,  ensuring  that  the  aid  was  not  biased  by  unjustified  non-commercial 
considerations and that it contributed to the future viability of the car industry. 

This  approach  was  followed  when  early  in  2009  France  announced  its  intention  to 
grant State aid to its national car producers on the basis of a scheme approved under 
the  Temporary  Framework399.  Following  extensive  contacts  between 
the 
Commission  and  the  French  authorities,  the  French  authorities  eventually  made 
undertakings to the effect that the loan agreements intended for the car manufacturers 
would not contain any condition regarding either the location of their activities or a 
preference  for  France-based  suppliers.  A  similar  issue  was  raised  in  the  context  of 
State  aid  that  Germany  intended  to  grant  to  Adam  Opel  GmbH  under  an  approved 
Temporary Framework scheme400, in connection with a sale by General Motors of its 
Opel/Vauxhall  European  operations  to  an  investor.  Eventually,  General  Motors 
reversed its decision to sell Opel and the investor's process was terminated. 

As regards notified aid to the car industry, on 13 May the Commission authorised a 
EUR 11 million training aid for staff at the truck maker Scania's plants in Sweden401. 
The training programme, that will increase the skills and problem-solving ability of 
blue-collar workers, was found compatible with Article 87(3) EC.  

On 13 November, the Commission authorised a state guarantee from the Romanian 
State  to  Ford  Romania  SA402.  The  Commission  also  authorised,  on  2  December,  a 
EUR  57  million  training  aid  to  Ford  Romania  SA,  thus  closing  the  investigation 
procedure on this case403. 

On  5  June  the  Commission  authorised  state  guarantees  from  the  Swedish  state  to 
Volvo  Personvagnar  (Volvo  PV)404.  The  guarantees  will  allow  Volvo  PV  to  access 
loans  from  the  European  Investment  Bank  to  co-finance  the  development  of 
environment-friendly  cars.  The  Commission  found  that  90%  of  the  guarantees  met 
the conditions of the Temporary Framework, in particular as Volvo PV would pay an 
adequate remuneration for the guarantee and provide sufficient securities in case the 
guarantee would be drawn. The remaining 10% of the guarantees would be provided 
on market conditions and therefore do not constitute State aid. 

Regional aids 

466. 

The Commission authorised on 29 April regional investment aid for EUR 46 million, 
which  the  Italian  authorities  intended  to  grant  to  Fiat  Group  for  a  large  investment 
project for the production of a new car model in Sicily405. Sicily is an area eligible 
for regional aid under Article 107(3)(a) TFEU, as a region with an abnormally low 
standard of living and high unemployment. The project aimed at the extension of the 
existing plant of Fiat in Termini Imerese in order to change the production process 

399 
400 
401 
402 
403 
404 
405 

N15/2009, OJ C 122, 30.5.2009, p. 1. 
N38/2009, decision of 19.2.2009. 
N98/2009 Training aid to Scania, OJ C 147, 27.6.2009, p. 6. 
N478/2009 Individual State Guarantee for Ford Romania S.A.. 
Case C39/2008 (ex N148/2008) Training Aid to Ford Craiova, Romania. 
N80/2009 State guarantees in favour of Volvo Cars, OJ C 172, 24.7.2009, p. 2. 
Case N635/2008 FIAT Termini Imerese. 

EN 

109 

   EN 

                                                 
467. 

468. 

and  to  diversify  its  production,  more  specifically  to  produce  a  new  passenger  car 
under the Lancia brand to replace the existing small car model Lancia Ypsilon. The 
investment  was  expected  to  maintain  existing  jobs  in  the  region.  The  Commission 
found  the  measure  to  be  compatible  with  the  requirements  of  the  Regional  Aid 
Guidelines 2007-2013 and in particular with the rules on large investment projects, 
because Fiat would not increase significantly its capacity. 

On  29  October  the  Commission  opened  the  formal  investigation  against  Hungarian 
regional aid of some EUR 50 million for a large investment project of Audi Hungaria 
Motor  Kft.  in  its  existing  plant  in  Györ406,  since  the  25%  market  share  threshold 
applicable  under  the  relevant  regional  aid  rules  for  large  investment  projects  was 
exceeded.  Hungary  intends  to  subsidise  the  installation  of  new  high-tech  engine 
production lines for new generation engines and engine components for a wide range 
of passenger car models of the Volkswagen-Porsche Group. The aid would take the 
form of a direct grant and a corporate tax allowance. In the preliminary investigation, 
the Commission carried out the "market share"-test under point 68(a) of the Regional 
Aid  Guidelines  regarding  all  individual  passenger  car  segments.  For  several 
segments, both at EEA and global level, the 25% threshold set by the guidelines was 
exceeded.  

On  13  July  the  European  Commission  authorised,  under  EC  Treaty  State  aid  rules, 
EUR  111.5  million  of  aid,  which  the  Hungarian  authorities  intend  to  grant  to 
Mercedes-Benz Hungary407, owned by Daimler AG, for the construction of a new car 
manufacturing  plant  in  the  region  of  Dél-Alföld.  The  investment  project  aimed  at 
installing new machinery and equipment for the manufacture of two new passenger 
car models. The project involved investments eligible for the calculation of the aid of 
EUR 548.4 million and an aid amount of EUR 111.5 million in the form of a cash 
grant  and  a  corporate  tax  allowance.  In  addition,  Mercedes-Benz  Hungary  will 
receive  financial  support  for  railway  access  to  the  public  railway  network  which 
amounts to some HUF 214 million (EUR 0.8 million). Mercedes-Benz Hungary will 
finance the project using own equity and bank loans. The measures are in line with 
the requirements of the Regional Aid Guidelines 2007-2013. In particular, the project 
will  significantly  contribute  to  the  development  of  the  region's  economy,  including 
the  creation  of  2 500  direct  jobs,  and  respects  the  market  share  and  capacity 
thresholds of the Regional Aid Guidelines 

469. 

On 17 June, the Commission authorised EUR 51.9 million of aid, which the Spanish 
authorities intend to grant to Ford España408, part of the Ford Motor Company, for a 
radical  transformation  of  the  existing  plant  on  Almussafes,  in  the  Valencia  region. 
The  Commission's  assessment  found  the  measure  to  be  compatible  with  the 
requirements of the regional Aid Guidelines 2007-2013. The investment guarantees 
the continuity of activity at the Almussafes plant and will maintain some 5 000 direct 
jobs  at  the  plant.  Ford's  investment  project  is  aimed  at  dismantling  existing 
production lines and installing new machinery and equipment for the manufacture of 
three  new  passenger  car  models.  The  investment  project  involves  costs  eligible  for 

406 
407 

408 

Case C31/2009 (ex N113/2009) Audi Hungaria Motor Kft. 
N671/2008, see IP/09/1147 State aid: Commission endorses EUR 111.5 million aid for Mercedes-Benz 
investment in Kecskemét, Hungary.. 
N473/2008, see IP/09/958 State aid: Commission endorses EUR 51.9 million aid for Ford investment in 
Almussafes, Spain. 

EN 

110 

   EN 

                                                 
the  calculation  of  the  public  support  of  EUR  493.6  million  and  an  aid  amount  of 
EUR  51.9  million.  Ford  is  financing  the  bulk  of  the  project  through  its  own 
resources. 

J – FOOD INDUSTRY  

1. 

OVERVIEW OF SECTOR 

470. 

471. 

472. 

473. 

The  food  supply  chain  brings  together  the  agricultural  sector,  the  food  processing 
industry  and  the  distribution  sector,  altogether  accounting  for  6%  of  the  EU  added 
value and 12% of EU employment. 

Reversing  the  trend  of  three  decades  of  declining  agricultural  prices,  in  2006  the 
prices of a number of commodities started to follow a steady upward course. Prices 
increased dramatically in the second half of 2007 and reached peak levels in the first 
months  of  2008.  Between  September  2006  and  February  2008,  world  agricultural 
commodity prices rose by 70% in dollar terms. In the EU, these price hikes caused a 
rapid increase in consumer food prices, which reduced household purchasing power. 
The extent of the price increases differed widely between Member States. 

In 2008 the Commission initiated a process to provide both an immediate and a long-
term  response  to  the  surge  in  food  prices  and  to  mitigate  the  impact  on  final 
consumers. In line with the Communication on "Tackling the challenge of rising food 
prices; Directions for EU action" of May 2008409, an inter-service Task Force was set 
up to examine the functioning of the food supply chain. 

The Task Force produced a first report on the situation in a second Communication 
on "Food Prices in Europe" adopted on 10 December 2008410. It proposed a roadmap 
to improve the functioning of the food supply chain. In terms of competition policy, 
it called for ensuring a vigorous and coherent enforcement of competition rules in the 
food  supply  markets  by  the  Commission  and  NCAs.  Given  the  difficult  situation 
faced by the dairy sector, the Commission also adopted a "Report on the dairy market 
situation" in July 2009411. 

2. 

POLICY DEVELOPMENTS 

474. 

The Commission continued enforcing competition rules on food markets through the 
active  monitoring  of  existing  commitment  decisions  and  pursued  the  assessment  of 
cases  in  which  inspections  were  carried  out  in  2008.  The  work  of  the  Commission 
Food  Task  Force  continued  in  2009.  In  this  context,  the  Commission  undertook  a 

409 

410 
411 

(COM(2008)321).  The  Communication  analyses  structural  and  cyclical  factors  and  proposes  a  three-
pronged  policy  response,  including  short-term  measures  in  the  context  of  the  Health  Check  of  the 
Common  Agricultural  Policy  and  in  the  monitoring  of  the  retail  sector;  initiatives  to  enhance 
agricultural supply and ensure food security including the promotion of sustainable future generations 
of biofuels; and initiatives to contribute to the global effort to tackle the effects of price rises on poor 
populations. 
COM(2008)821. 
http://ec.europa.eu/agriculture/markets/milk/report2009/index_en.htm 

EN 

111 

   EN 

                                                 
focused  fact-finding  exercise,  holding  a  set  of  bilateral  meetings  with  a  number  of 
European associations representing different players active in the food supply chain. 
The  objective  of  these  meetings  was  to  obtain  insights  into  the  specific 
characteristics  of  food  markets,  in  the  light  of  the  most  recent  economic 
developments.  This  exercise  further  aimed  at  identifying  potential  competition-
related  concerns  that  may  affect  the  functioning  of  the  food  sector.  Apart  from 
hardcore restrictions on competition, this exercise identified some other practices as 
potentially  harmful  for  competition.  Such  practices,  which  may  merit  a  closer 
assessment  by  Competition  Authorities,  always  on  a  case-by-case  basis,  relate  to 
joint purchasing agreements ("buying alliances"); joint selling agreements; tying and 
bundling obligations; and the increased use of private labels. The results of this fact 
finding exercise were shared with NCAs and incorporated into a Communication on 
"A better functioning of the food supply chain", adopted by the Commission on 28 
October412. 

Given  that  food  markets  are  often  national/regional  in  scope,  it  is  crucial  for 
Competition Authorities to address potential malfunctioning within the food supply 
chain  through  a  coherent  and  coordinated  approach.  To  this  end,  in  2009,  the 
European Competition Network has served as a forum for discussion and exchange 
of  best  practice  on  issues  related  to  food  markets.  In  this  context,  the  Commission 
has organised two meetings of the ECN Food Subgroup in July and November..  

The  dairy  sector  is  one  of  the  sectors  that  have  faced  most  difficulties  in  2009.  In 
view  of  these  difficulties,  the  Commission  adopted  in  July  a  "Report  on  the  dairy 
market  situation"413.  A  High  Level  Group  on  Milk  bringing  together  national 
agriculture  experts  was  also  set  up  and  its  work  is  ongoing.  The  Commission's 
dialogue  with  NCAs  regarding  the  milk  sector  has  also  intensified  through  the 
creation  of  an  ECN  Joint  Working  Team  on  Milk  whose  work  will  continue 
throughout 2010. 

At national level, as evidenced by the significant efforts deployed over the last two 
years  by  NCAs  and  which  continued  in  2009,  ECN  members  have  attached  due 
priority to case-by-case investigations, as well as to broader inquiries regarding food 
markets,  leading  to  the  finding  of  an  appreciable  number  of  serious  infringements, 
such as cartels and resale price maintenance cases. These infringements were swiftly 
remedied  through  cease-and-desist  orders,  accompanied  where  appropriate  by 
substantial fines. Such cases spanned a variety of product markets, such as the dairy, 
milk,  flour,  bakery,  pasta,  eggs,  poultry,  beef,  vegetables,  fruit,  olive  oil,  chocolate 
and herbs markets. 

III – Consumer activities 

475. 

476. 

477. 

1. 

KEY ACTIONS 

478. 

The  Consumer  Liaison  Unit  has  been  in  place  and  operational  for  over  a  year, 
pursuing the objectives of deepening DG Competition's engagement with consumer 

412 
413 

http://ec.europa.eu/economy_finance/publications/publication16061_en.pdf 
http://ec.europa.eu/agriculture/markets/milk/report2009/index_en.htm 

EN 

112 

   EN 

                                                 
479. 

480. 

481. 

482. 

483. 

484. 

representatives  and  developing  new  ways  of  communicating  directly  with  the 
broader public. 

forum 

the  Commission's  main 

In  2003  the  Commission  created  the  European  Consumer  Consultative  Group 
(ECCG)  as 
for  engaging  with  consumer 
organisations414. The ECCG constitutes a platform for general discussions on issues 
relating  to  consumer  interests;  it  gives  an  opinion  on  Community  matters  affecting 
the  protection  of  consumer  interests  and  advises  the  Commission  when  it  outlines 
policies  and  activities  having  an  effect  on  consumers.  The  ECCG  has  set  up  a 
Subgroup  on  competition  that  now  meets  twice  a  year  in  Brussels.  Subgroup 
meetings  provide  the  opportunity  to  discuss,  from  a  consumer  point  of  view, 
Commission decisions and policy actions in the field of competition, thus matching 
consumer bodies' demands for a more practical approach to competition issues.  

The  ECCG  Competition  Subgroup  consists  of  one  national  consumer  organisation 
representative  per  EU  Member  State,  plus  one  representative  from  BEUC  and  two 
from EEA observers (Iceland and Norway). The Commission provides the secretariat 
for the Subgroup. 

In 2009 the themes discussed during Subgroup meetings reflected the importance of 
the  economic  and  financial  crisis.  State  aid  measures,  which  could  a  priori  seem 
remote  for  consumers,  have  raised  strong  interest  among  Subgroup  members,  who 
are  fully  aware  that  State  aid  is  about  taxpayers'  money.  The  Commission's 
presentation  on  the  economic  and  financial  crisis  and  State  aid  led  to  fruitful 
discussions on the structure of the banking sector and its incentives to fulfil its role of 
financing the real economy. Particular emphasis was put on the passing-on of lower 
interest  rates  to  consumers  and  the  possible  reinforcement  of  'too-big-to-fail'  banks 
through state support. 

Another illustration of the potential impact of State aid on consumers' every day life 
came from the Commission's public consultation on digital cinema. It was underlined 
that conversion costs to a new technology could threaten the very existence of a large 
proportion  of  cinemas  across  Europe,  especially  smaller  art  houses.  Consumers' 
representatives  were  therefore  interested  in  raising  the  issues  related  to  this  matter 
(notably cultural diversity) back in their respective countries, so as to be better able 
to  inform  the  Commission  of  which  type  of  cinemas  consumers  think  should  be 
supported by public funding. 

Other topics such as the Intel decision and the Pharmaceutical Sector Inquiry were on 
the agenda of the ECCG Competition Subgroup. 

On  21  October,  the  Commission  hosted  a  public  event  on  "Competition  and 
Consumers in the 21st century", bringing together consumer organisations,  business 
representatives  and  academics  as  well  as  Member  State  judges  and  officials,  to 
underline the impact of competition policy on European consumers' welfare and its 
synergies with consumer protection policy. In the opening speech, the Commissioner 
for  Competition  stressed 
to  be 
complemented by effective damages action mechanisms at national level, in order to 

the  need  for  existing  public  enforcement 

414 

2003/709/EC decision of 9 October 2003 

EN 

113 

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allow consumers to be compensated for the harm suffered as a result of a breach of 
competition law. 

485. 

Reaching out to consumers is not merely a question of explaining and discussing EU 
competition  policy  principles  and  achievements.  It  is  also  about  empowering 
consumers;  for  if  they  understand  better  the  mechanics  of  a  competitive  economy, 
they  will  play  a  more  active  role  on  the  market  by  rewarding  those  suppliers  that 
operate fairly and best respond to consumers’ needs, thus ensuring that their voice be 
heard by businesses. 

486.  Much effort has been devoted to following a user-friendly approach in updating the 
consumer  pages  of  the  competition  website  by  making  use  of  different  methods  of 
communication.  The  explanatory  pages  now  include  a  short  video  presenting  the 
benefits of competition in consumers' everyday life. They also contain an interactive 
animation  where  visitors  can  see  how  actions  by  the  Commission  relate  directly  to 
everyday products.  

487. 

Raising  the  public's  awareness  on  competition  issues  is  not  only  key  to  having 
consumers  fully  exerting  their  power  of  choice;  it  should  also  allow  further 
improving the input they may give to the Commission. 

IV – The European Competition Network and cooperation with 
National Courts – Overview of cooperation  

A – GENERAL OVERVIEW 

488. 

In 2009, the European Competition Network (ECN), i.e. the network for cooperation 
of  the  Member  States'  NCAs  and  the  Commission  for  the  enforcement  of  EU 
antitrust  rules, continued to be a  very active forum for discussion and exchange on 
good  practices.  As  in  previous  years,  it  performed  well  under  the  mechanisms  laid 
down  in  Regulation  1/2003,  with  a  view  to  ensure  the  efficient  and  consistent 
enforcement of Articles 101 and 102 TFEU. 

1. 

COOPERATION ON POLICY ISSUES 

489. 

The  ECN  provides  a  platform  for  EU  competition  authorities  to  constructively 
coordinate  enforcement  action,  ensure  consistency  and  discuss  policy  issues  of 
common interest. During 2009, the ECN met in the following fora. 

•  The annual meeting of the Director General of DG Competition and the heads of 
all NCAs took place on 13 October. For the first time the meeting was organised 
to  include  break-out  sessions  which  allowed  a  more  in-depth  discussion.  The 
sessions  focussed  on  challenges  in  competition  enforcement  for  all  ECN 
members: priority setting, convergence/transparency of procedures, sanctions and 
criminalisation,  cooperation  in  mergers.  The  meeting  also  addressed  the 
Commission's actions in the financial crisis and endorsed unanimously the report 
on  leniency  convergence  under  the  ECN  Model  Leniency  Programme  (see  1.1. 
below).  

EN 

114 

   EN 

•  Four ECN plenary meetings served as an important tool for debates about general 
issues  of  common  interest  and  exchange  of  experiences  and  know-how.  The 
plenary  took  part  in  the  preparatory  fact-finding  work  for  the  Report  on  the 
functioning  of  Regulation  1/2003,  which  the  Commission  issued  on  29  April415 
(see section I.B.1.1.). Furthermore, the plenary participated in  the  preparation of 
the  report  on  leniency  convergence  under  the  ECN  Model  Leniency  Programme 
(see 1.1. below).  

•  Two  working  groups  dealt  with  specific  issues  such  as  enhancing  cooperation 
within  the  ECN.  These  working  groups  provided  an  excellent  forum  for  sharing 
experiences  on  concrete  issues  and  exchanging  good  practices.  Two  additional 
ECN working groups provided fora for discussions concerning the review of the 
Commission's  policy  on  horizontal  agreements  and  on  vertical  restraints.  They 
explored  the  case  experience  in  these  fields  and  provided  input  for  the 
Commission's  review  of  the  existing  Block  Exemption  Regulations,  and 
accompanying Guidelines, which are due to expire in 2010. Furthermore, the chief 
economists  of  the  NCAs  and  DG  Competition  met  for  exchanges  on  matters 
within their area of expertise. 

•  Moreover,  several  ECN  subgroups  dedicated  to  particular  sectors  addressed 
sector-specific  issues  and  engaged  in  a  useful  exchange  of  experience  and  best 
practices. For example, the subgroup on pharmaceuticals dealt with the results and 
follow-up  to  the  Pharma  Sector  Inquiry  (see  II.F.  above)  and  the  Banking 
subgroup (see II.A. above) concentrated on further guidance in the area of MIFs 
and SEPA. 

1.1. 

Convergence of ECN leniency programmes 

490. 

491. 

During 2009, the ECN assessed the state of convergence in the field of leniency. On 
13  October,  the  heads  of  the  ECN  authorities  endorsed  a  report  which  reviews  the 
state of convergence of the leniency programmes of the ECN members with regard to 
the  provisions  of  the  ECN  Model  Leniency  Programme416.  The  report  is  based  on 
information  from  the  competition  authorities  and  covers  developments  up  to 
1 October. An annex to the report lists applicable leniency programmes.  

The  report  concludes  that  the  work  within  the  ECN  was  a  major  catalyst  in 
encouraging  Member  States  to  introduce  leniency  programmes  and  in  promoting 
convergence between them. At the date of the report, twenty five Member States (all 
except  Malta  and  Slovenia)  and  the  European  Commission  operated  leniency 
programmes. The first Slovenian leniency programme comes into force on 1 January 
2010; the Maltese competition authority considers introducing a leniency programme 
in  the  near  future.  Reforms  of  existing  leniency  programmes  were  pending  in  five 
Member States. Hence, the convergence process is still on-going. 

492. 

The ECN Model Leniency Programme417 was endorsed by the ECN members on 29 
September 2006. Just three years after its endorsement, most Member States revised 

415 

416 
417 

Article  44  of  Regulation  1/2003.  COM(2009)206  final,  accompanied  by  a  Staff  Working  Paper, 
SEC(2009)574 final. 
The Report is available at http://ec.europa.eu/competition/ecn/documents.html  
Available at http://ec.europa.eu/competition/ecn/model_leniency_en.pdf  

EN 

115 

   EN 

                                                 
their  existing  programmes  or  adopted  new  ones  to  align  with  the  ECN  Model 
Leniency  Programme.  In  the  revision  process,  the  ECN  members  essentially 
followed  the  key  features  of  the  Model  Programme.  The  report  also  finds  that  full 
convergence has not yet occurred in all areas.  

493. 

The  purpose  of  the  ECN  Model  Leniency  Programme  is  to  provide  a  basis  for  the 
soft  harmonisation  of  the  leniency  programmes  of  the  ECN  members,  setting  out 
provisions  that  the  ECN  members  believed  every  leniency  programme  should 
contain.  It  also  introduced  a  model  for  a  uniform  summary  application  system  at 
national  level  for  immunity  applications  in  cases  where  the  Commission  is 
particularly  well  placed  to  deal  with  the  case418.  The  report  reviews  in  detail  the 
textual convergence in areas such as the scope of leniency programmes, the types of 
applicants excluded from immunity, the marker system, the possibility of summary 
applications and of oral submissions, and the conditions for leniency.  

1.2. 

Cooperation in individual cases 

494. 

Cooperation between the ECN members in individual cases is organised around two 
principal  obligations  on  the  NCAs  under  Regulation  1/2003,  namely  to  inform  the 
Commission  when  new  cases  are  opened  (Article  11(3))  and  before  the  final 
enforcement  decision  is  taken  (Article  11(4)).  Informing  the  Commission  and  the 
Network  about  new  cases  facilitates  swift  reallocation  of  cases  on  a  few  occasions 
where  it  appears  necessary  and  promotes  enhanced  and  effective  enforcement.  The 
second requirement contributes to the coherent application of EU law. 

1.2.1.  Case allocation 

495. 

The  Commission  was  informed  under  Article  11(3)  of  the  Regulation  of  129  new 
case  investigations  launched  by  NCAs  in  2009.  Amongst  the  new  cases,  62% 
concerned  the  application  of  Article  101  TFEU,  29%  concerned  the  application  of 
Article 102 TFEU and the remainder concerned the application of both Articles 101 
and  102  TFEU.  The  figure  for  Article  101  TFEU  cases  includes  notably  the 
enforcement action of the NCAs in the area of cartels. Large numbers of cases could 
be observed inter alia in the energy, media, telecom, transport and financial services' 
sectors. 

496.  With  regard  to  work-sharing  within  the  Network,  the  flexible  and  pragmatic 
approach introduced by the Regulation and the Network Notice continued to function 
very  well  in  practice.  As  in  previous  years,  in  2009  there  were  very  few  instances 
where case-allocation discussions took place, and even fewer occasions where a case 
changed hands. The situations where work-sharing plays a role typically occur when 
a complainant  or a leniency applicant  chooses to contact both the Commission  and 
one  or  more  NCAs.  In  2009,  a  small  number  of  complaints  were  re-allocated  from 
the  Commission  to  NCAs  that  were  willing  to  follow  up  the  matters  raised. 
Furthermore, in a limited number of instances, the Commission and NCAs agreed on 
a way of dividing work on a case-by-case basis. 

418 

EN 

See 
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52004XC0427(02):EN:NOT 

paragraph 

available 

Network 

Notice, 

the 

14 

of 

at 

http://eur-

116 

   EN 

                                                 
1.2.2.  Coherent application of the rules 

497. 

The  Commission  services  reviewed  69  envisaged  decisions  under  Article  11(4)  of 
Regulation 1/2003, as well as advised on informal requests and queries from NCAs. 
The  number  of  envisaged  decisions  went  up  by  15%  compared  with  2008.  The 
envisaged  decisions  submitted  to  the  Commission  related  to  a  broad  range  of 
infringements in different sectors of the economy. 

498. 

To  date,  the  Commission  has  not  initiated  proceedings  with  the  view  to  ensure 
decision-making coherency as foreseen by Article 11(6) of Regulation 1/2003. 

2. 

APPLICATION  OF  EU  COMPETITION  RULES  BY  NATIONAL  COURTS  IN  THE  EU: 
REPORT ON THE IMPLEMENTATION OF ARTICLE 15 OF REGULATION 1/2003 

2.1. 

Assistance in the form of information or in the form of an opinion 

499. 

Article 15(1) of Regulation 1/2003 allows national judges to ask the Commission for 
information  in  its  possession  or  for  an  opinion  on  questions  concerning  the 
application  of  the  EU  competition  rules.  In  2009,  the  Commission  issued  five 
opinions:  one  in  reply  to  a  request  from  a  Belgian  court,  one  to  a  Lithuanian  court 
and three to Spanish courts. 

2.1.1.  The opinion requested by a Belgian court 

500. 

501. 

On  2  February,  the  Commission  received  a  request  for  an  opinion  from  the 
Rechtbank van Koophandel te Dendermonde in the context of an action brought by 
BVBA  DD  Bikes  (DD  Bikes),  a  former  authorised  dealer  and  repairer  for  Ducati 
Motorbikes  against  BV  Ducati  North  Europe  (Ducati)  for  failure  to  be  admitted  to 
the Ducati authorised repair network.  

In  terms  of  whether  the  distribution  system  implemented  by  Ducati  could  benefit 
from the exemption provided by Regulation 2790/1999 on Vertical Restraints419, it is 
noted in the opinion that it is first necessary to establish whether there is a separate 
market for the repair and maintenance of Ducati bikes and if so, the market share of 
Ducati  as  supplier  of  the  spare  parts  is  relevant.  If  Ducati's  market  share  were  to 
exceed 30% (subject to the two year grace period if the market share goes up to 35% 
or  subject  to  one  year  if  it  rises  above  35%  according  to  Article  9  of  Regulation 
2790/1999) its agreements with its authorised repairers would not be able to benefit 
from the exemption provided by Regulation 2790/1999, but could still benefit from 
individual  exemption  depending  on  the  competitive  strength  of  the  authorised 
dealers. If however, the national court did not find that there are separate markets for 
the sale of new motor bikes and their repair and maintenance respectively, the market 
share of Ducati on the primary market for the sale of new motor bikes is likely to be 
below  30%,  and  its  agreements  with  its  authorised  repairers  would  prima  facie  be 
covered by Regulation 2790/1999.  

419 

OJ L 336, 29.12.1999, p. 21. 

EN 

117 

   EN 

                                                 
2.1.2 

The opinion requested by a Lithuanian court 

502. 

The Commission replied to the request for an opinion by the Supreme Administrative 
Court  of  Lithuania,  concerning  the  assessment  of  an  agreement  on  information 
exchange.  The  affected  markets  were  Lithuanian  paper  wholesale  markets.  The 
Commission observed that the assessment of a practice concerning the disclosure of 
information among competitors depends on whether it concerns an infringement by 
object  or  an  infringement  by  effect.  Insofar  as  the  assessment  of  likely  effects  is 
concerned, the market structure is one of the factors to be taken into account. With 
reference to the case-law of the Community Courts, the Commission explained that it 
is necessary that the market structure is not "fragmented" or "atomised"; however, it 
does not follow that both elements of there being a "highly concentrated market" and 
the  affected  markets  being  "oligopolistic"  in  nature  need  to  be  established  in  every 
case for the purpose of establishing an infringement by effect. The Commission then 
examined (taking into account the nature of information) the criteria relevant for the 
assessment of the market structure in information exchange cases, where the assessed 
infringement  is  an  infringement  by  effect.  As  whether  the  agreement  in  question 
constituted an infringement of Article 81 EC and whether it had appreciable effects 
on  trade  between  Member  States,  the  Commission  concluded  that  the  assessment 
depended on case-specific elements which were for the national court to assess.  

2.1.3.  The opinions requested by Spanish courts 

503. 

504. 

Firstly,  on  24  March,  the  Juzgado  de  lo  Mercantil  n°2  of  Barcelona  requested  an 
opinion  regarding  the  application  of  Article  81  EC  in  the  context  of  litigation 
between Bright Service S.A. and REPSOL C.P.P., one of the largest suppliers on the 
Spanish  wholesale  market  for  petroleum  products.  The  questions  raised  by  the 
national  court  mainly  concern  the  implications  of  a  Commission  decision  of 
12/04/2006420 (the REPSOL Decision) and whether it precludes national courts and 
competition authorities from assessing whether an exclusive supply agreement which 
is  part  of  the  commercial  REPSOL  network  is  harming  or  has  infringed  the 
competition rules.  The opinion specifies that  commitment  decisions  adopted  by  the 
Commission  on  the  basis  of  Article  9  of  Regulation  1/2003  do  not  conclude  as  to 
whether  or  not  there  has  been  or  still  is  an  infringement.  Notwithstanding  this,  a 
national court cannot take a decision which would run counter to the operative part 
of the Commission's decision, i.e. which would conflict with the implementation of 
the commitments which were made binding by the REPSOL Decision.  

Secondly, the Commission replied to a request from the Juzgado de lo Mercantil n°1 
of  Madrid  in  the  context  of  litigation  following  the  acquisition  of  Dalphi  Metal 
España's  (DME)  car  airbag  and  steering  wheel  business  by  TRW  Automotive 
(TRW),  a  US  automotive  component  manufacturer.  This  acquisition  was  approved 
by the Commission in 2005 under the EU Merger Regulation421. This decision took 
into  account  the  fact  that  at  the  time  Takata-Petri  (Takata),  which  is  also  a 
manufacturer  of  car  airbags  and  steering  wheels,  held  a  minority  stake  in  DME 
(21.6%)  and  had  a  shareholding  of  49%  in  each  of  three  DME  production  joint 
ventures.  The  Commission  considered  that  this  could  not  give  rise  to  a  risk  of 

420 
421 

Case COMP/38348 REPSOL C.P.P. SA - Distribution de Carburants et Combustibles . 
Case COMP/M.3972, TRW Aotomotive/Dalphi Metal España, Article 6(1)(b) non-opposition. 

EN 

118 

   EN 

                                                 
505. 

506. 

coordination  between  TRW  and  Takata  on  the  markets  for  airbags  and  steering 
wheels.  

Takata subsequently brought proceedings against some decisions taken by the Board 
of Directors of DME's production companies, in particular, against its refusal to give 
Takata  access  to  the  transfer  prices  charged  to  DME  for  certain  products 
manufactured  by  DME's  production  companies  on  the  grounds  that  this  would 
infringe Article 81 EC. The questions raised by the court are addressed in the opinion 
as follows. Firstly, in terms of whether the "unilateral" provision of information by 
an undertaking to a competitor could constitute an exchange of information contrary 
to  Article  81  EC,  it  is  specified  that  the  mere  receipt  of  information  by  an 
undertaking  could  be  anti-competitive  because  it  could  eliminate  uncertainty  about 
the future conduct of competitors and allow this undertaking to take into account this 
information in order to determine its policy on the market, although a case-by-case 
analysis  of  this  is  needed.  Secondly,  the  exchange  of  historical  data  does  not 
influence  market  conditions  and  therefore  does  not  constitute  an  infringement  of 
Article 81 EC. On the basis of Commission practice, information which is more than 
one  year  old  can  generally  be  regarded  as  "historical",  however  this  has  to  be 
assessed taking into account the extent to which data becomes obsolete on the market 
concerned, and depending on the market structure in the case at hand.  

The  third  opinion  was  requested  by  the  Juzgado  de  lo  Mercantil  n°5  of  Madrid 
regarding  the  application  of  Article  81  EC  in  the  context  of  litigation  between 
PETROCAT, a supplier on the Spanish wholesale market for petroleum products and 
two operators of service stations, CANALS y FILS S.L. and ZERO SETS S.L. With 
regard to the first question concerning whether a long term exclusive supply contract 
(of  a  duration  of  27  years  or  more)  can  result  in  a  significant  restriction  of 
competition  contrary  to  Article  81  EC,  the  opinion  specifies  that  the  assessment  of 
whether  there  is  foreclosure  has  to  be  examined  in  the  context  of  the  overall 
competitive  situation  and  existing  economic  and  legal  links  (see  the  REPSOL 
Decision  and  the  decision  adopted  by  the  Spanish  Competition  Authority  in  the 
CEPSA case). With regard to clauses in long term exclusive supply contracts which 
set  the  retail  price,  the  opinion  distinguishes  between  different  types  of  contracts 
entered  into  between  wholesaler  distributor  and  service  stations,  according  to  the 
ownership  and  degree  of  risk  involved  in  order  to  assist  the  national  court  in 
identifying  whether  the  service  station  is  ultimately  an  agent.  If  it  is  not  a  genuine 
agent, such a clause would violate Article 81(1) EC. The opinion also clarifies that in 
accordance  with  Article  5(a)  of  Regulation  2790/1999  on  Vertical  Restraints, 
exclusivity clauses of such long duration can only be exempted from the prohibition 
in Article 81(1) EC if the market share of the supplier is less than 30% and, if on 1 
January 2003, the remaining duration of the contract would be less than five years or 
if  the  contractual  goods  or  services  are  sold  by  the  buyer  from  premises  and  land 
owned  by  the  supplier  or  are  rented  by  the  supplier  to  third  parties  not  connected 
with the buyer. It is noted in the opinion that these conditions should be interpreted 
restrictively and do not appear to be met in this case.  

2.2. 

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

507. 

Article  15(3)  of  Regulation  1/2003  provides  that  where  the  coherent  application  of 
Articles 101 or 102 TFEU so requires, the Commission, acting on its own initiative, 

EN 

119 

   EN 

508. 

509. 

510. 

may submit written observations to courts of the Member States, and may also make 
oral observations with the permission of the court in question.  

In 2009, the Commission submitted written observations in one case before the Paris 
Court  of  Appeal,  relating  to  a  restriction  of  on-line  sales  in  selective  distribution 
agreements422.  

The Commission observed that a general prohibition of on-line sales imposed by the 
supplier on its selected distributors is an infringement by object under Article 81(1) 
EC,  which  is  not  block-exempted  under  Regulation  2790/1999.  Moreover,  the 
Commission observed that the notion of "objective justification", mentioned in point 
51  of  the  Guidelines  on  Vertical  Restraints,  should  be  interpreted  strictly  and  shall 
not  replace  the  analysis  of  efficiencies  under  Article  81(3)  EC.  In  general,  only 
exceptional circumstances, external to the parties, may be considered as an objective 
justification  for  restrictions  by  object.  If  however  the  supplier  proves  that  the 
conditions  of  Article  81(3)  EC  are  fulfilled,  the  agreement  may  be  individually 
exempted  under  that  Article.  On  29  October,  the  Paris  Court  of  Appeal  referred  to 
the ECJ a question for preliminary ruling under Article 234 EC423. 

Furthermore,  the  Commission's  powers  to  submit  written  observations  as  amicus 
curiae in national court proceedings were addressed in the judgment of the ECJ of 11 
June, in case C-429/07, Inspecteur van de Belastingdienst v X BV. In this judgment, 
the  ECJ  gave  a  broad  interpretation  of  the  condition  of  "coherent  application  of 
Articles  81  and  82  EC"  as  laid  down  in  Article  15(3)  of  Regulation  1/2003  (see 
paragraph  153  above).  Following  the  ECJ  ruling,  the  Commission  submitted  its 
observations opposing tax deductibility of fines. 

2.3. 

Financing the training of national judges in EU competition law 

511. 

Continuous  availability  of  training  programmes  for  national  judges  in  EU 
competition law contributes to the effective and coherent application of those rules. 
In 2009, 10 grant agreements were concluded for training of judges' programmes in 
various Member States. 

V – International activities  

512. 

In an increasingly globalised world economy, competition policy must also adopt a 
global outlook. The Commission is responding to this challenge by reinforcing and 
extending  its  relations  with  partners  all  over  the  world  in  both  bilateral  and 
multilateral  fora.  The  Commission  attaches  the  highest  importance  to  effective 
international cooperation in the area of competition. Bilateral meetings between the 
Commissioner  for  Competition  with  counterparts  in  the  United  States,  Brazil, 
Canada,  Japan  and  China,  as  well  as  participation  by  the  Commissioner  for 

422 
423 

Case at Paris Court of Appeal, No RG 2008/23812, Pierre Fabre Dermo-Cosmétique. 
Case  C-439/09,  Pierre  Fabre  Dermo-Cosmétique.  The  referred  question  is  whether  a  general  and 
absolute  prohibition  to  sell  contract  goods  to  end  users  via  the  Internet,  imposed  on  authorised 
distributors  within  the  framework  of  a  selective  distribution  network,  constitutes  an  infringement  of 
Article  81(1)  EC,  which  is  not  exempted  under  Regulation  No  2790/1999,  however  could  possibly 
benefit from an individual exemption under Article 81(3) EC. 

EN 

120 

   EN 

                                                 
Commission  in  the  February  meeting  of  the  OECD  Competition  Committee 
demonstrate this commitment. 

A – MULTILATERAL COOPERATION 

1. 

INTERNATIONAL COMPETITION NETWORK 

513. 

514. 

DG Competition continued to play a leading role in the ICN. More specifically, DG 
Competition  is  a  member  of  the  Steering  Group,  co-chair  of  the  cartels  Working 
Group  and  an  active  member  of  the  other  Working  Groups  (on  mergers,  agency 
effectiveness, unilateral conduct and advocacy). 

DG Competition hosted on 22 and 23 January in Brussels a "Seminar on Competition 
Agency Effectiveness", the first such event of its type. The seminar addressed issues 
that are of central importance to the effectiveness of implementation of competition 
policies such as strategic planning of agency activities and prioritisation of actions, 
effective  project  delivery,  evaluation  and  accountability  and  communication. 
Representatives of 47 competition agencies participated in the seminar, most of them 
heads of agencies or senior staff responsible for the planning of agency operations. 

515. 

The 8th Annual Conference took place in Zürich (Switzerland) from 3 to 5 May. 

516. 

517. 

518. 

The Merger Working Group continued its work to draft Recommended Practices in 
several  areas  of  substantive  merger  analysis  and  presented  them  at  the  Annual 
Conference on Recommended Practices on competitive effects in horizontal merger 
review, on unilateral effects and on coordinated effects. 

The  Unilateral  Conduct  Working  Group,  which  was  set  up  in  2006,  presented  two 
reports on tying, bundled discounting and loyalty rebates. The Working Group also 
started  preparations  for  a  report  on  refusals  to  supply.  In  March  the  ICN  held  a 
workshop on Unilateral Conduct in Washington. 

The Cartels Working Group, co-chaired by DG Competition, continued its work on 
the  Anti-Cartel  Enforcement  Manual,  in  particular  on  searches  and  inspections  and 
on developing an effective leniency program. The 2009 ICN Cartels workshop was 
held in Cairo (Egypt) from 27 to 29 October. 

2. 

OECD 

519. 

The  Commission  continued  to  contribute  actively  to  the  work  of  the  OECD 
Competition  Committee  and  participated  in  each  of  the  three  sessions  held  by  the 
Committee  in  2009.  It  submitted  contributions  to  most  roundtables  on  competition 
policy,  including  on  the  role  of  competition  law  in  times  of  crises,  the  standard  of 
merger  review,  two-sided  markets,  competition,  patents  and  innovation,  margin 
squeeze,  state-owned  companies  and  failing  firm  defence.  The  Commissioner  for 
Competition made a speech on the "Road to recovery" in the context of the OECD 
session dedicated to the financial crisis. 

EN 

121 

   EN 

3. 

UNCTAD 

520. 

The Commission participated at the 10th annual conference of the Intergovernmental 
Group  of  Experts  (IGE)  on  Competition  Law  and  Policy  of  the  United  Nations 
Conference  on  Trade  and  Development  (UNCTAD).  It  submitted  contributions  to 
most roundtable discussions, such as the one on the relationship between competition 
and  industrial  policies  in  promoting  economic  development,  the  one  on  public 
monopolies, concessions, competition law and policy as well as the one on the role 
of economic analysis in competition cases. 

B – BILATERAL COOPERATION 

521. 

The  Commission  cooperates  with  numerous  competition  authorities  on  a  bilateral 
basis  and,  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. 

1. 

AGREEMENTS WITH THE USA, CANADA, JAPAN AND SOUTH KOREA 

522. 

523. 

As  in  previous  years,  cooperation  with  the  United  States  of  America  was  intense. 
Based  on  two  dedicated  competition  cooperation  agreements424,  contacts  between 
DG  Competition  and  the  Antitrust  Division  of  the  US  Department  of  Justice  (DoJ) 
and the US Federal Trade Commission (FTC) were frequent. These contacts ranged 
from cooperation in individual cases to more general matters related to competition 
policy.  Numerous  meetings  and  video-  or  telephone-conferences  took  place  to 
discuss issues such as cooperation in cartel investigations, abuse of dominance or the 
application  of  the  competition  rules  in  particular  sectors.  The  Commissioner  for 
Competition  met  her  US  counterparts,  Chairman  Jon  Leibowitz  of  the  FTC  and 
Christine Varney, the Assistant Attorney General, at several occasions.  

In  case-related  contacts,  case  teams  regularly  updated  each  other  on  the  state  of 
investigations  (within  the  limits  of  the  above-mentioned  agreements).  Merger 
control,  in  particular,  requires  good  coordination  with  the  DoJ  and  the  FTC.  The 
2002 EU-US Best Practices on cooperation in reviewing mergers provided a useful 
framework  for  cooperation, especially by indicating critical  points in the procedure 
where  cooperation  could  be  particularly  useful.  The  Pfizer/Wyeth  and 
Panasonic/Sanyo  cases  can  be  cited  as  examples  of  good  cooperation  between  the 
EU and US agencies. 

524. 

Cooperation  with  the  Canadian  Competition  Bureau  is  based  on  the  EU/Canada 
Competition Cooperation Agreement which was signed in 1999425. Contacts between 
the Commission and the Bureau have been frequent and fruitful. Case-related contact 
concerned  mainly  merger  and  cartel  investigations.  In  the  area  of  cartel  cases  this 

424 

425 

Agreement between the European Communities and the Government of the United States of America 
regarding the application of their competition laws (OJ L 95, 27.4.1995, p. 47) and Agreement between 
the European Communities and the Government of the United States of America on the application of 
positive comity principles in the enforcement of their competition laws (OJ L 173, 18.6.1998, p. 26). 
Agreement  between  the  European  Communities  and  the  Government  of  Canada  regarding  the 
application of their competition laws (OJ L 175, 10.7.1999, p. 50). 

EN 

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also included the coordination of investigative measures and, in the area of mergers, 
the discussion of possible remedies. The Commission and the Canadian Competition 
Bureau continued their dialogue on general competition issues of common concern. 
The  Commissioner  for  Competition  met  the  Head  of  the  Canadian  Competition 
Bureau,  Melanie  Aitken,  at  the  annual  bilateral  high  level  meeting  on  30  March  in 
Toronto and officials from both sides conducted other reciprocal visits. 

Cooperation  with  the  Japan  Fair  Trade  Commission  (JFTC)  is  based  on  the  2003 
Cooperation  Agreement426.  The  Commissioner  for  Competition  met  with  JFTC 
Chairman  Takeshima  during  the  EU-Japan  High  Level  meeting  on  competition 
policy  on  10  September  in  Brussels.  At  the  centre  of  discussions  were  policy 
initiatives on both sides (especially merger remedies and the JFTC's draft guidance 
on unilateral conduct), as well as recent enforcement actions. In addition to contacts 
on individual cases, the Commission and the JFTC continued their ongoing dialogue 
on general competition issues of common concern. 

On  23  May,  the  European  Community  and  South  Korea  signed  a  bilateral 
cooperation agreement in the field of competition, which entered into force on 1 July 
2009427.  This  agreement  contained  provisions  on  enforcement  cooperation, 
notification,  consultation  and  exchange  of  non-confidential  information.  The 
the  Memorandum  of  Understanding428  between  DG 
agreement  supersedes 
Competition and the KFTC. 

525. 

526. 

2. 

COOPERATION WITH OTHER COUNTRIES AND REGIONS 

527. 

528. 

The  European  Commission  continued  its  close  cooperation  with  the  European  Free 
Trade Association (EFTA) Surveillance Authority in enforcing the Agreement on the 
European Economic Area (EEA). 

Relations  with  Brazil  have  intensified  with  cooperation  on  cases  and  DG 
the  Brazilian  decision-making 
Competition  hosting  a  visitor  from  CADE, 
competition authority, for a 3 month period. They reached a new level on 8 October 
when The Commissioner for Competition signed a Memorandum of Understanding 
(MoU)  with  the  Brazilian  Ministry  of  Justice  and  the  heads  of  the  Brazilian 
Competition  Authorities  in  order  to  ensure  a  closer  cooperation  between  DG 
Competition  and  its  Brazilian  counterparts.  This  MoU  reflects  the  importance  of 
Brazil as a trading partner for the EU and the maturity of its competition enforcement 
authorities. 

529. 

Cooperation  with  China  under  the  EU-China  competition  policy  dialogue429 
remained  a  priority  in  2009  with  the  annual  competition  dialogue  being  held  in 
Brussels  on  22-23  June.  In  addition,  contacts  between  DG  Competition  and  the 
Chinese  administration  were  intensive  and  dealt  mainly  with  questions  concerning 

426 

427 

428 

429 

Agreement between the European Community and the Government of Japan concerning cooperation on 
anti-competitive activities (OJ L 183, 22.7.2003, p. 12). 
Agreement  between  the  European  Community  and  the  Government  of  the  Republic  of  Korea 
concerning cooperation on anti-competitive activities (OJ L 202, 4.8.2009, p. 36). 
Memorandum of Understanding on cooperation between the Fair Trade Commission of the Republic of 
Korea and the Competition Directorate-General of the European Commission (October 2004). 
Terms of Reference of the EU-China competition policy dialogue (May 2004). 

EN 

123 

   EN 

                                                 
530. 

531. 

the  recently  adopted  anti-monopoly  law  and  the  implementing  legislation  which  is 
being  elaborated.  Together  with  the  Chinese  Anti  Monopoly  Enforcements 
Authorities, the National Development and Reform Commission (NDRC), the State 
Administration  of  Commerce  and  Industry  (SAIC)  and  Ministry  of  Commerce 
(Mofcom),  DG  Competition  co-hosted  several  workshops  in  Beijing  as  well  as  the 
Competition  Weeks  in  the  provinces  on  EU  merger  control  and  antitrust  issues  for 
high-level  representatives  from  the  Anti  Monopoly  Enforcements  Authorities. 
Moreover,  high-level  representatives  visited  the  Anti  Monopoly  Enforcements 
Authorities  in  Beijing  to  discuss  technical  and  enforcement  cooperation.  DG 
Competition  is  furthermore  actively  negotiating  a  competition  chapter  to  be  part  of 
the 1985 upgrade agreement/Partnership and Cooperation Agreement. 

Cooperation  with  India  intensified  during  2009  as  India  has  appointed  seven 
Commissioners  to  constitute  the  Competition  Commission  of  India  (CCI)  which  is 
entrusted with the enforcement of the 2002 Competition Act. India moreover notified 
the  operative  parts  of  the  2002  Competition  Act  regarding  restrictive  agreements, 
abuse  of  dominance  and  merger  control,  which  is  a  pre-requisite  for  their 
enforcement.  Consequently,  a  number  of  meetings  between  the  CCI  and  high  level 
DG  Competition  officials  took  place  throughout  2009  and  the  Commissioner  for 
Competition also paid a visit to the CCI in November. DG Competition is moreover 
engaged  in  technical  cooperation  with  the  CCI  and  it  welcomed  6  high  level  CCI 
officials in September for discussions on the most efficient ways to combat cartels. 

DG  Competition  played  an  active  role  in  the  ongoing  negotiations  on  Free  Trade 
Agreements  (FTA)  with  India,  Ukraine,  India,  South  Korea,  Andean  Countries 
(Colombia  and  Peru)  and  Canada,  and  on  the  trade  part  of  the  Association 
Agreement  with  Central  America,  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. DG Competition continued to play an active role in 
the  negotiation  of  the  competition  chapter  of  Economic  Partnership  Agreements 
(EPAs) with five groupings of former ACP countries, (four in Africa and one in the 
Pacific).  The  FTA  with  South  Korea  was  initialled  on  15  October  2009  and  is 
expected  to  be  signed  and  enter  into  force  during  the  course  of  2010.  It  is  the  first 
time that an FTA contains a prohibition on certain types of subsidies. Moreover, DG 
Competition  is  negotiating  competition  provisions  in  a  number  of  Partnership  and 
Cooperation  Agreements  with  Mongolia  and  certain  ASEAN  countries  and  in 
particular Vietnam, Indonesia, Thailand, Brunei, Singapore and Malaysia. 

C – ENLARGEMENT 

532. 

In  the  context  of  enlargement,  candidate  countries  must  fulfil  a  number  of 
requirements  in  the  field  of  competition  policy  as  a  condition  for  joining  the 
European  Union.  Candidate  countries  must  adopt  national  legislation  compatible 
with  the  EU  acquis.  They  must  also  put  in  place  the  necessary  administrative 
capacity  and  demonstrate  a  credible  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. 

EN 

124 

   EN 

533. 

534. 

535. 

536. 

537. 

538. 

During  2009,  there  was  particularly  close  cooperation  with  Croatia  and  Turkey. 
These two candidate countries have to fulfil "opening benchmarks" before accession 
negotiations on the competition chapter can start. Croatia made important progress in 
meeting  these  opening  benchmarks,  including  on  the  remaining  important  issue  of 
the restructuring of its shipyards. Turkey has yet to introduce a system for the control 
and monitoring of State aid. 

DG  Competition  assisted  the  Western  Balkan  countries  in  further  aligning  their 
competition rules with EU law. This included, among others, help in drafting laws on 
competition  and  State  aid  and  advice  on  setting  up  the  necessary  institutions  to 
enforce  these  rules.  DG  Competition  continued  to  help  Macedonia  improve  the 
compliance of its fiscal legislation with Community rules on State aid. 

DG  Competition  also  took  part  in  the  preliminary  discussions  on  Iceland's  EU 
membership prospect. 

In  the  framework  of  the  European  Neighbourhood  Policy  (ENP),  DG  Competition 
monitored  the  implementation  of  the  competition-related  priorities  in  the  bilateral 
action plans agreed between the EU and ENP countries, which set out an agenda of 
political  and  economic  reforms  in  the  short  and  medium  term.  It  also  organised  a 
certain number of seminars financed by the TAIEX program on competition-related 
issues for these countries. 

VI – Interinstitutional cooperation 

In 2009, the Commission continued its cooperation with the other institutions of the 
European  Union  in  accordance  with  the  respective  agreements  or  protocols  entered 
into by the relevant institutions430. 

The Commission cooperates closely with the European Parliament (EP). In 2009, the 
EP adopted two resolutions on competition policy issues: a resolution on the White 
paper  on  damages  actions  for  breach  of  the  EC  antitrust  rules,  and  on  the  Annual 
Competition Reports for 2006 and 2007. In addition to the regular dialogue between 
the  Commissioner  for  Competition  and  the  ECON  committee,  the  Commission 
participated in discussions held in other Parliamentary committees, and on a range of 
subjects  including  the  Annual  Competition  Report,  the  White  Paper  on  Damages 
Actions,  the  Broadcasting  Communication,  State  aid  and  the  financial  crisis,  the 
Pharmaceutical Sector Inquiry and the Motor Vehicle Block Exemption Regulation. 
Bilateral  meetings  with  MEPs  were  held  on  these  and  on  a  range  of  other  issues, 
including the Insurance Block Exemption Regulation. 

539. 

The  Commission  also  cooperates  closely  with  both  the  European  Ombudsman  and 
Members  of  the  EP  by  replying  to  Parliamentary  Questions  and  Petitions.  In  2009, 

430 

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. 

EN 

125 

   EN 

                                                 
540. 

541. 

542. 

the  Commission  responded  to  446  written  questions,  38  oral  questions  and  43 
petitions involving matters of competition policy431. 

The  Commission  cooperates  closely  with  the  Council  by  informing  it  of  important 
policy  initiatives  in  the  field  of  competition,  such  as  on  State  aid  measures  and 
guidelines  for  the  banking  industry  and  other  additional  State  aid  measures  in  the 
context of the financial and economic crisis. The Economic and Financial Committee 
(EFC),  has  been  consulted  on  the  Banking,  Recapitalisation,  Impaired  Assets  and 
Restructuring  Communications,  and  on  a  review  of  guarantee  and  recapitalisation 
schemes.  The  EFC  prepares  the  work  for  the  Economic  and  Financial  Affairs 
Council (ECOFIN) and includes a European Central Bank representative. 

The Commission made contributions on competition policy in respect of conclusions 
adopted  in  the  ECOFIN  Council  (Single  Market  Review,  Single  Euro  Payments 
Area,  exit  strategies  for  the  financial  sector)  and  the  European  Council  (exit 
strategies),  the  Competitiveness  Council  (such  as  on  contribution  to  the  EU2020 
agenda, industrial policy or single market), the Transport, Telecommunications and 
Energy  Council  (Internal  Energy  Market  legislative  package,  energy/climate 
package). 

The  Commission  informs  the  European  Economic  and  Social  Committee  (EESC) 
and the Committee of the Regions about major policy initiatives, and participates in 
debates  that  may  be  held  in  the  respective  Committee  on  those  initiatives.  During 
2009, the EESC published reports on the Annual Competition Report 2007, and the 
White  Paper  on  damages  actions.  DG  Competition  services  have  also  attended 
working  group  meetings,  and  had  bilateral  meetings  with  EESC  rapporteurs  on  a 
number  of  other  subjects  including  SMEs  adapting  to  global  market  changes, 
shipbuilding and State aid.  

431 

Of  these  the  Commissioner  in  charge  of  Competition  directly  responded  to  149  written  questions,  15 
oral questions and 19 petitions. 

EN 

126 

   EN 

                                                 
ANNEX:  State  aid  -  Overview  of  national  measures  adopted  as  a  response  to  the 
financial/economic crisis (2008 & 2009) 

Brussels, January 2010 

STATE  AID:  OVERVIEW  OF  NATIONAL  MEASURES  ADOPTED  AS  A  RESPONSE  TO  THE 

FINANCIAL/ECONOMIC CRISIS 

(See table attached in annex) 

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

EN 

127 

   EN 

COMMUNICATIONS FROM THE COMMISSION TO PROVIDE GUIDANCE TO MEMBER STATES 

Communication  from  the  Commission  —  The  application  of  State  aid  rules  to  measures 
taken in relation to financial institutions in the context of the current global financial crisis, 13 
October 2008 (see IP/08/1495) 

Communication  from  the  Commission  —  The  recapitalisation  of  financial  institutions  in 
the current financial crisis: limitation of aid to the minimum necessary and safeguards against 
undue distortions of competition, 5 December 2008 (see IP/08/1901) 

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

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

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

STATE AID CASES - SITUATION AS OF 8 JANUARY 2010 

Decisions adopted by the Commission in 2008/2009/2010432 

  Member State 

Type of measure / Beneficiary 

Type of Decision 

Date of adoption 

Austria 

-  Aid  scheme 

N557/2008 
the 
Austrian  financial  sector  (guarantees, 
recapitalisation & other) 

for 

Decision 
raise 
IP/08/1933 

not 

to 
objections 

09  December  2008

N352/2009 - Prolongation 

MEX/09/0630 

30 June 2009 

N663/2009 - Second prolongation 

MEX/09/1217 

17 December 2009 

Austria 

N214/2008  -  Recapitalisation  of  Hypo 
Tirol 

Decision 
raise 
IP/09/928 

not 

to 
objections 

17 June 2009 

Austria 

N 640/2009 - BAWAG - capital injection  Decision 

not 

to  22 December 2009 

432 

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

EN 

128 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
                                                 
and asset guarantee 

raise 
IP/09/1989 

objections 

Austria 

C  16/2009  +  N698/2009  –  Emergency 
aid to Hypo Group Alpe Adria 

Belgium/France/ 
Luxembourg 

NN45-49-50/2008 - Guarantee on 
liabilities of Dexia 

Decision 
raise 
IP/09/1998 

not 

to 
objections 

Decision 
raise 
IP/08/1745 

not 

to 
objections 

23 December 2009 

19  November  2008

Prolongation 

IP/09/1662 

30 October 2009 

Belgium/France/ 
Luxembourg 

C9/2009  -  Guarantee  in  favour  of  Dexia 
on certain assets in FSA 

Belgium/Luxembourg/
Netherlands 

N574/2008  -  Measures  in  favour  of 
Fortis 

Belgium/Luxembourg/
Netherlands 

NN42-46-53A/2008  -  Restructuring  aid 
to  Fortis  Bank  and  Fortis  Bank 
Luxembourg 

Decision 
raise 
IP/09/399 

not 

to 
objections 

Decision 
raise 
IP/08/1746 

not 

to 
objections 

Decision 
raise 
IP/08/1884 

not 

to 
objections 

Belgium/Luxembourg 

Belgium 

Belgium 

Belgium 

Belgium 

Cyprus 

Denmark 

Denmark 

N255/2009  and  N274/2009  -  Additional 
aid  measures  in  favour  of  Fortis  Bank 
and Fortis Bank Luxembourg 

N602/2008 - Recapitalisation measure in 
favour of KBC 

NN57/2008 - Capital Injection for Ethias 
Group 

C18/2009  -  Recapitalisation  and  asset 
relief for KBC Group 

C18/2009 - Asset relief and restructuring 
package for KBC 

N511/2009  -  Cypriot  scheme  to  support 
credit institutions (guarantee) 

NN36/2008  -  Rescue  aid  to  Roskilde 
Bank 

Decision 
raise 
IP/09/743 

not 

to 
objections 

Decision 
raise 
IP/08/2033 

not 

to 
objections 

Decision 
raise 
IP/09/254 

not 

to 
objections 

Decision 
raise 
IP/09/1063 

not 

to 
objections 

conditional 
Final 
after 
decision 
formal investigation 
procedure 
IP/09/1730 

Decision 
raise 
IP/09/1569 

not 

to 
objections 

Decision 
raise 
(IP/08/1222) 

not 

to 
objections 

13 March 2009 

19 November 2008 

03 December 2008 

12 May 2009 

18 December 2008 

12 February 2009 

30 June 2009 

18 November 2009 

22 October 2009 

31 July 2008 

NN39/2008 - Liquidation aid to Roskilde 
bank 

Decision 
raise 

not 

to 
objections 

5 November 2008 

EN 

129 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denmark 

Denmark 

NN51/2008  -  Guarantee  scheme  for 
banks in Denmark 

N31a/2009  -  Recapitalisation  scheme 
and amendment of the guarantee scheme 

IP/08/1633 

Decision 
raise 
IP/08/1483 

not 

to 
objections 

Decision 
raise 
IP/09/206 

not 

to 
objections 

10 October 2008 

3 February 2009 

NN46/2009 - Prolongation 

MEX/09 /0817 

17 August 2009 

N628/2009 – Second prolongation 

MEX/09/1217 

17 December 2009 

Denmark 

NN23/2009 - Rescue aid for Fionia Bank  Decision 

not 

to 
objections 

raise 
IP/09/819 

Finland 

N567/2008 - Finnish guarantee scheme 

N44/2009 - Amendment to the guarantee 
scheme 

Decision 
raise 
IP/08/1705 

not 

to 
objections 

Decision 
raise 
IP/09/681 

not 

to 
objections 

20 May 2009 

13 November 2008 

5  February 

2009

- 

Prolongation 

and 

30 April 2009 

IP/09/681 

N239/2009 
modification 

N674/2009  –  Second  prolongation  and 
modification 

MEX/09/1217 

17 December 2009 

Finland 

NN2/2009  -  Guarantee  for  Kaupthing 
Bank Finland 

Decision 
raise 
IP/09/82 

not 

to 
objections 

21 January 2009 

Finland 

N329/2009 - Capital injection scheme 

France 

N548/2008 - Financial support measures 
to 
in  France 
(Refinancing) 

the  banking 

industry 

N251/2009 - Extension of the scheme 

Decision 
raise 
IP/09/1303 

not 

to 
objections 

Decision 
raise 
IP/08/1609 

not 

to 
objections 

Decision 
raise 
IP/09/750 

not 

to 
objections 

11 September 2009 

30 October 2008 

12 May 2009 

EN 

130 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
France 

N613/2008 - Financial support measures 
in  France 
the  banking 
to 
(Recapitalisation) 

industry 

Decision 
raise 
IP/08/1900 

not 

to 
objections 

08  December  2008

N29/2009 - Amendment to the Decision 

IP/09/158 

28 January 2009 

N164/2009 - Amendment to the Decision 

IP/09/461 

23 March 2009 

France 

Germany 

N249/2009 - Capital injection for Caisse 
d'Epargne and Banque Populaire 

C9/2008  -  Restructuring  aid  to  Sachsen 
LB 

Germany 

C10/2008 - Restructuring aid to IKB 

Germany 

NN44/2008  -  Rescue  aid  to  Hypo  Real 
Estate Holding 

Germany 

N512/2008  -  Aid  scheme  for  financial 
institutions 
(guarantees, 
in  Germany 
recapitalisations & other) 

Decision 
raise 
IP/09/722 

not 

to 
objections 

Conditional 
decision 
(after 
formal investigation 
procedure 
IP/08/849 

Conditional 
decision 
(after 
formal investigation 
procedure) 
IP/08/1557 

Decision 
raise 
IP/08/1453 

not 

to 
objections 

Decision 
raise 
IP/08/1589 

not 

to 
objections 

8 May 2009 

4 June 2008 

21 October 2008 

2 October 2008 

27 October 2008 

N625/2008 - Amendment to the Decision 

12 December 2008 

N330/2009 – Prolongation 

EXME09 / 22.06  

22 June 2009 

N665/2009 – Second prolongation 

MEX/09/1217 

Germany 

N615/2008 
recapitalisation for Bayern LB  

Guarantee 

- 

and 

Decision 
raise 
IP/08/2034 

not 

to 
objections 

17 December 2009 

18 December 2008 

Germany 

N655/2008 - Guarantee for NordLB 

Decision 
raise 

not 

to 
objections 

22 December 2008 

EN 

131 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
N412/2009 - Prolongation 

Germany 

N639/2008 - Guarantee for IKB 

Germany 

Germany 

Germany 

Germany 

Germany 

Germany 

-  Guarantee 

N17/2009 
Sicherungseinrichtungsgesellschaft 
deutscher Banken mbH 

for  SdB  – 

N244/2009 
injection 

-  Commerzbank  capital 

C43/2008  -  Aid  for  the  restructuring  of 
West LB 

N531/2009 - Temporary additional aid to 
West LB 

N264/2009  -  Recapitalisation  of  HSH 
Nordbank 

C17/2009  -  Recapitalisation  and  asset 
relief  for  LBBW  (Landesbank  Baden 
Württemberg) 

IP/08/2056 

MEX/09/0910 

Decision 
raise 
IP/08/2055 

not 

to 
objections 

Decision 
raise 
IP/09/114 

not 

to 
objections 

Decision 
raise 
IP/09/711 

not 

to 
objections 

Conditional 
decision 
(after 
formal investigation 
procedure) 
IP/09/741 

Decision 
raise 
IP/09/1434 

not 

to 
objections 

Decision 
raise 
IP/09/854 

not 

to 
objections 

Decision 
raise 
IP/09/1058 

not 

to 
objections 

Germany 

N314/2009 - German asset relief scheme  Decision 

not 

to 
objections 

raise 
IP/09/1216 

Germany 

N400/2009 - Additional aid (guarantees) 
for IKB 

Germany 

Export credit scheme 

Decision 
raise 
IP/09/1235 

not 

to 
objections 

Decision 
raise 
IP/09/1319 

not 

to 
objections 

Germany 

- 

Baden 
C17/2009 
Württemberg  "LBBW"  -  restructuring 
plan and impaired assets relief measure 

Landesbank 

Conditional 
decision 
(after 
formal investigation 
procedure 
IP/09/1927 

10 September 2009 

22 December 2008 

22 January 2009 

7 May 2009 

12 May 2009 

7 October 2009 

29 May 2009 

30 June 2009 

31 July 2009 

17 August 2009 

15 September 2009 

15 December 2009 

EN 

132 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Germany 

Germany 

Greece 

N694/2009  –  State  guarantees  for  Hypo 
Real Estate 

N555/2009 – Rescue aid for WestLB; in-
depth investigation into bad bank 

N560/2008 - Aid scheme to the banking 
industry 
(guarantees, 
in  Greece 
recapitalisation & other) 

Decision 
raise 
IP/09/1985 

not 

to 
objections 

Decision 
raise 
IP/09/1996 

not 

to 
objections 

Decision 
raise 
IP/081742 

not 

to 
objections 

Prolongation and modification 

MEX/09/0918 

Hungary 

N664/2008 - Financial support measures 
to  Hungarian  financial  industry  in  form 
of recapitalisation and guarantee scheme 

Decision 
raise 
IP/09/253 

not 

to 
objections 

21 December 2009 

22 December 2009 

19 November 2008 

18 September 2009 

12 February 2009 

N355/2009 
modification 

- 

Prolongation 

and 

MEX09 /0903 

3 September 2009 

N662/2009 – Second prolongation 

MEX/09/1217 

Hungary 

N  358/2009 
Support Scheme 

-  Hungarian  Mortgage 

17 December 2009 

13 July 2009 

24 November 2009 

13 October 2008 

Decision 
raise 
IP/09/1123 

not 

to 
objections 

Decision 
raise 
MEX 09/1124 

not 

to 
objections 

Decision 
raise 
IP/08/1497 

not 

to 
objections 

N603/2009 - Prolongation 

NN48/2008  -  Guarantee  scheme  for 
banks in Ireland 

N9/2009  -  Recapitalisation  of  Anglo 
Irish Bank 

Decision 
raise 
IP/09/50 

not 

to 
objections 

14 January 2009 

N356/2009  -  Recapitalisation  of  Anglo 
Irish Bank 

N61/2009  -  Change  of  ownership  of 
Anglo Irish Bank 

Decision 
raise 
IP/09/1045 

not 

to 
objections 

Decision 
raise 
IP/09/271 

not 

to 
objections 

26 June 2009 

17 February 2009 

Ireland 

Ireland 

Ireland 

Ireland 

EN 

133 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ireland 

Ireland 

Ireland 

Italy 

N149/2009 - Recapitalisation of Bank of 
Ireland 

N241/2009  -  Recapitalisation  of  Allied 
Irish Bank 

N349/2009  -  revised  Irish  guarantee 
scheme for financial institutions 

N520a/2008  -  Guarantee  scheme  for 
Italian banks 

Decision 
raise 
IP/09/483 

not 

to 
objections 

Decision 
raise 
IP/09/744 

not 

to 
objections 

Decision 
raise 
IP/09/1787 

not 

to 
objections 

Decision 
raise 
IP/08/1706 

not 

to 
objections 

26 March 2009 

12 May 2009 

20 November 2009 

14  November  2008

N328/2009 - Prolongation 

IP/09/929 

16 June 2009 

Italy 

N648/2008 - Recapitalisation scheme 

Decision 
raise 
IP/08/2059 

not 

to 
objections 

23 December 2008 

N97/2009 - Amendment 

20 February 2009 

N 466/2009 - Prolongation 

MEX/09/1006 

Latvia 

NN68/2008 - Public support measures to 
Parex Banka  

NN3/2009 - Amendment to the Decision 

Decision 
raise 
IP/08/1766 

not 

to 
objections 

6 October 2009 

24 November 2008 

11 February 2009 

N189/2009 - Amendment to the Decision 

IP/09/732 

11 May 2009 

Latvia 

N638/2008  -  Guarantee  scheme  for 
banks 

Decision 
raise 
IP/08/2054 

not 

to 
objections 

22  December  2008

N326/2009 – Prolongation 

MEX/09/0630 

30 June 2009 

N664/2009 – Second prolongation 

MEX/09/1217 

17 December 2009 

Latvia 

-  Capital 
NN60/2009 
Mortgage Bank of Latvia  

injection 

for 

Decision 
raise 

not 

to 
objections 

19 November 2009 

EN 

134 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Luxembourg 

N344/2009&N380/2009  -  Restructuring 
aid for Kaupthing Bank Luxembourg 

Netherlands 

N524/2008  -  Guarantee  scheme  for 
Dutch financial institutions 

IP/09/1742 

Decision 
raise 
IP/09/1107 

not 

to 
objections 

Decision 
raise 
IP/08/1610 

not 

to 
objections 

9 July 2009 

30  October  2008

N379/2009 
modification 

- 

Prolongation 

and 

MEX/09/0707 

7 July 2009 

N669/2009 – Second prolongation 

MEX/09/1217 

Netherlands 

N528/2008 - Measure in favour of ING 

Netherlands 

N569/2008  -  Measure 
Aegon 

in  favour  of 

Netherlands 

N611/2008  -  SNS  Reaal/New  capital 
injection by Dutch authorities 

Netherlands 

C10/2009 - ING Illiquid asset facility 

Decision 
raise 
IP/08/1699 

not 

to 
objections 

Decision 
raise 
IP/08/1822 

not 

to 
objections 

Decision 
raise 
IP/08/1951 

not 

to 
objections 

Decision 
raise 
IP/09/514 

not 

to 
objections 

Netherlands 

C10/2009  -  ING  restructuring  plan  and 
illiquid asset back-up facility 

conditional 
Final 
decision 
after 
formal investigation 
procedure 
IP/09/1729 

Poland 

Poland 

Portugal 

Portugal 

Portugal 

N208/2009  -  Polish  support  scheme  for 
financial 
(guarantee  and 
liquidity support) 

institutions 

N302/2009 – Polish bank recapitalisation 
scheme 

NN60/2008  -  Guarantee  scheme  for 
credit institutions in Portugal 

NN71/2008  -  State  guarantee  for  Banco 
Privado Português 

Decision 
raise 
IP/09/1360 

not 

to 
objections 

Decision 
raise 
IP/09/1979 

not 

to 
objections 

Decision 
raise 
IP/08/1601 

not 

to 
objections 

Decision 
raise 
IP/09/400 

not 

to 
objections 

N556/2008 
scheme 

-  Bank 

recapitalisation 

Decision 
raise 

not 

to 
objections 

20 May 2009 

17 December 2009 

13 November 2008 

27 November 2008 

10 December 2008 

31 March 2009 

18 November 2009 

25 September 2009 

21 December 2009 

29 October 2008 

13 March 2009 

EN 

135 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Slovakia 

Slovenia 

N392/2009 
scheme 

-  Slovak  bank  support 

N531/2008 - Guarantee scheme for credit 
Slovenia
in 
institutions 

IP/09/818 

Decision 
raise 
IP/09/1889 

not 

to 
objections 

Decision 
raise 
IP/08/1964 

not 

to 
objections 

8 December 2009 

12  December  2008

N331/2009 - Prolongation 

EXME09 / 22.06  

22 June 2009 

N651/2009 – Second prolongation 

MEX/09/1217 

17 December 2009 

Slovenia 

N637/2008 
financial 

-  Liquidity  scheme 

for 
sector

Decision 
raise 
IP/09/452 

not 

to 
objections 

20  March 

2009

N510/2009 – Prolongation 

MEX09/1910 

19 October 2009 

Spain 

NN54a/2008  -  Fund  for  the  Acquisition 
Spain
of 

Financial  Assets 

in 

Decision 
raise 
IP/08/1630 

not 

to 
objections 

4  November  2008

Modification 

Decision 
not 
raise objections 

to 

8 

April 

2009

N337/2009 - Prolongation 

Spain 

NN54b/2008 - Spanish guarantee scheme 
for credit institutions 

Prolongation 

N588/2009 - Second prolongation 

Decision 
raise 
MEX09/0807 

not 

to 
objections 

Decision 
raise 
IP/08/2049 

not 

to 
objections 

not 

Decision 
raise 
MEX09 / 0625  

to 
objections 

not 

Decision 
raise 
MEX/09/1201 

to 
objections 

7 August 2009 

22  December  2008

25 June 2009 

1 December 2009 

Sweden 

N533/2008  -  Support  measures  for  the 
Sweden
banking 

industry 

in 

Decision 
raise 

not 

to 
objections 

29  October  2008

EN 

136 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IP/08/1600 

N26/2009 - Amendment to the decision 

IP/09/186 

28 January 2009 

N154/2009 
prolongation 

- 

Amendment 

and 

IP/09/652 

28 April 2009 

N544/2009 - Prolongation 

MEX/09/1026  

Sweden 

- 

NN64/2008 
rescue 
measures regarding Carnegie Investment 
Bank 

Emergency 

Sweden 

N69/2009 

-  Recapitalisation  scheme

N436/2009 - Prolongation 

United Kingdom 

NN41/2008 - Rescue aid to Bradford and 
Bingley 

United Kingdom 

N507/2008 - Aid scheme to the banking 
industry 
(guarantees, 
the  UK 
in 
recapitalisation & other) 

Decision 
raise 
IP/08/1977 

not 

to 
objections 

Decision 
raise 
IP/09/241 

not 

to 
objections 

not 

Decision 
raise 
MEX09 / 0805 

to 
objections 

Decision 
raise 
IP/08/1437 

not 

to 
objections 

Decision 
raise 
IP/08/1496 

not 

to 
objections 

26 October 2009 

15 December 2008 

11 February 2009 

5 August 2009 

1 October 2008 

13 October 2008 

N650/2008 - Amendment to the Decision 

23 December 2008 

N193/2009 – Prolongation 

Decision 
raise 
IP/09/586 

not 

to 
objections 

15 April 2009 

N537/2009 – Prolongation 

MEX/10/13 

13 October 2009 

N677/2009 - Prolongation 

MEX/09/1217 

17 December 2009 

EN 

137 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
United Kingdom 

N111/2009  -  Working  capital  guarantee 
scheme 

United Kingdom 

UK  Asset  backed  Securities  guarantee 
scheme 

Decision 
raise 
IP/09/471 

not 

to 
objections 

Decision 
raise 
IP/09/613 

not 

to 
objections 

24 March 2009 

21 April 2009 

Prolongation 

MEX/09/1027 

27 October 2009 

United Kingdom 

C14/2008  -  Restructuring  package  for 
Northern Rock 

28 October 2009 

conditional 
Final 
decision 
after 
formal investigation 
procedure 
IP/09/1600 

United Kingdom 

N428/2009 
Lloyds Banking Group 

-  Restructuring  plan  of 

United Kingdom 

N422/2009 and N621/2009 - Royal Bank 
of  Scotland, 
relief 
measure and restructuring plan 

impaired  asset 

Decision 
raise 
IP/09/1728 

not 

to 
objections 

Decision 
raise 
IP/09/1915 

not 

to 
objections 

18 November 2009 

14 December 2009 

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

Country 

Type of measure / Beneficiary 

Date  of  decision 
regarding 
the 
opening  of  formal 
investigation  

Belgium/France/Luxembourg 

C9/2009 - Restructuring of Dexia 

13  March  2009 
(IP/09/399) 

Case 
assessment 

under 

Germany 

C15/2009 - Aid package for Hypo 
Real Estate (restructuring) 

7  May 
IP/09/712 

2009 

Case 
assessment 

under 

Extension and temporary approval 
of capital injections 

13 November 2009 
IP/09/1708 

Germany, Austria 

-  Aid  package 

for 
C16/2009 
Bayern  LB  and 
its  Austrian 
subsidiary  Hypo  Group  Alpe 
Adria 

12  May 
IP/09/742 

2009 

Case 
assessment 

under 

Extension 

23  December  2009 

EN 

138 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Germany 

Germany 

Germany 

Latvia 

Netherlands 

IP/09/1998 

C29/2009 - Aid package for HSH 
Nordbank AG 

22  October  2009 
IP/09/1577 

Case 
assessment 

under 

C32/2009  -  Support  measures  for 
German  savings  bank  Sparkasse 
KölnBonn 

5  November  2009 
IP/09/1670 

Case 
assessment 

under 

C43/2009  –  WestLB: 
investigation into bad bank 

in-depth 

22  December  2009 
IP/09/1996 

Case 
assessment 

under 

C26/2009  -  Aid  package  for  JSC 
Parex Banka 

29 
July 
IP/09/1203 

2009 

Case 
assessment 

under 

C11/B/2008  -  State  measures  in 
favour  of  Fortis  Bank  Nederland 
(FBN)  and  the  activities  of  ABN 
Amro 

8 
April 
IP/09/565 

2009 

Case 
assessment 

under 

Portugal 

C33/2009  -  State  guarantee  for 
Banco Privado Português 

10  November  2009 
IP/09/1691 

Case 
assessment 

under 

EN 

139 

   EN