COMMISSION STAFF WORKING PAPER Accompanying the REPORT FROM THE COMMISSION on Competition Policy 2011
Date: 2012-05-30
Institutions: European Commission
Subjects: cartel, competition policy, competitiveness, consumer protection, control of State aid, economic recession, energy industry, interinstitutional cooperation (EU), job creation, pharmaceutical industry, rail transport, security of supply, sustainable development, technology

EUROPEAN COMMISSION 

Brussels, 30.5.2012  
SWD(2012) 141 final 

COMMISSION STAFF WORKING PAPER 

Accompanying the  

REPORT FROM THE COMMISSION  

on Competition Policy 2011 

{COM(2012) 253 final} 

EN 

   EN 

 
 
 
 
 
 
 
 
Table of contents 

I. 
LEGISLATION AND POLICY DEVELOPMENTS.................................................. 3 
State aid ...................................................................................................................................... 3 
Developments in State aid in times of crisis ................................................................ 3 
1. 

2. 

3. 

4. 

SGEI – a main policy project ....................................................................................... 5 

State aid contributing to Europe 2020 objectives ........................................................ 6 

The Commission's monitoring and recovery efforts in relation to State aid................ 8 

Antitrust & Cartel enforcement................................................................................................ 10 
A sound framework for enforcement of competition rules........................................ 10 
1. 

2. 

3. 

4. 

5. 

6. 

7. 

Improving procedures, enhancing transparency, safeguarding efficiency................. 11 

Private enforcement of EU competition law.............................................................. 11 

Technology Transfer Agreements: forthcoming policy review in light of Europe 
2020 objectives........................................................................................................... 12 

An on-going firm stance against cartels..................................................................... 13 

Effective cooperation within the European Competition Network and with National 
Courts ......................................................................................................................... 15 

The international dimension....................................................................................... 16 

Merger control.......................................................................................................................... 17 
Increased cooperation among Member States and internationally ............................ 17 
1. 

2. 

II. 
1. 

2. 

3. 

4. 

Rebound of merger notifications and increase in complexity of the cases ................ 17 

SECTORAL OVERVIEW......................................................................................... 18 
Energy & Environment .............................................................................................. 18 

Information and Communication Technologies (ICT) and Media ............................ 22 

Rail transport.............................................................................................................. 26 

The Pharmaceutical and health services sector.......................................................... 28 

III. 
IV. 

COMPETITION DIALOGUE WITH OTHER INSTITUTIONS............................. 30 
ANNEXES ................................................................................................................. 34 

2

 
 
 
I. 

LEGISLATION AND POLICY DEVELOPMENTS 

The wider context of competition policy and enforcement 

EU competition policy aims at achieving three main objectives: i) protecting competition on 
the  market  as  a  means  of  enhancing  consumer  welfare,  ii)  supporting  growth,  jobs  and  the 
competitiveness of the EU economy and iii) fostering a competition culture. 

Those  objectives  are  an  important  part  of  the  wider  general  objectives  of  the  Europe  2020 
Strategy for smart, sustainable and inclusive growth. The Strategy sets out concrete targets to 
be achieved within the next decade in areas such as employment, education, energy use and 
innovation,  in  order  to  overcome  the  impact  of  the  financial  crisis  and  put  Europe  back  on 
track for economic growth. Enforcement actions and advocacy efforts by the Commission and 
the  Member  States  have  to  be  considered  together  for  the  overall  achievement  of  those 
objectives. 

A  weaker  competition  framework  would  have  a  negative  impact  on  growth.  Strong 
competition  policy  and  enforcement  through  all  instruments  –  the  control  of  State  aid, 
antitrust and merger control – are essential to rebuilding the economy. In times of economic 
hardship,  there  may  be  calls  to  relax  the  competition  rules  to  accommodate  short-term 
concerns encountered by businesses. Such relaxation would have prevented healthy recovery. 
So  it  is  essential  that  competition  rules  be  fully  maintained,  even  in  the  current  economic 
context. 

Competition stimulates entrepreneurship, improves efficiency and creates the best conditions 
for  innovation.  In  other  words,  everyone  is  better  off  when  markets  are  competitive  - 
consumers,  taxpayers,  citizens  and  businesses.  To  increase  awareness,  the  Commission  has 
undertaken various communication initiatives explaining the benefits of competition policy to 
European citizens1. 

STATE AID 

1.  Developments in State aid in times of crisis 

Prevailing uncertainties in financial markets required prolongation of the extraordinary State 
aid  crisis  rules  2011.  On  1  December,  the  Commission  decided  to  prolong  the  special  rules 
applicable  to  financial  institutions  in  the  context  of  the  crisis2.  The  prolongation  included 
some modifications on the remuneration requirements for guarantees and recapitalisation. The 
rules will apply as long as required by market conditions. 

Through those rules, State aid control continued to ensure a consistent policy response to the 
financial  crisis  throughout  the  EU,  and  contributed  significantly  to  limiting  distortions  of 
competition  between  beneficiary  financial  institutions  within  the  Single  Market.  A  detailed 
assessment  of  State  aid  control  during  the  financial  crisis  can  be  found  in  the  Commission 
Staff Working Paper "The effects of temporary State aid rules adopted in the context of the 

1 Available at http://ec.europa.eu/competition/consumers/why_en.html  
2 Communication from the Commission on the application, from 1 January 2012, of State aid rules to support 
measures in favour of banks in the context of the financial crisis, OJ C 356, 6.12.2011, p. 7-10. 

3

 
 
 
 
                                                 
financial  and  economic  crisis"3,  published  by  the  Commission  as  a  response  to  the 
Parliament's request. 

The Commission confirmed its approach to failing banks in a number of important decisions 
throughout the year. Institutions which have no realistic prospect of returning to viability must 
exit the market and not be kept artificially afloat by repeated state support. The troubled Irish 
lender Anglo Irish Bank is a good example. The Commission approved the plan submitted by 
the Irish authorities, which foresees a joint wind-down of Anglo Irish Bank together with Irish 
Nationwide  Building  Society  over  a  period  of  ten  years.  Another  prominent  example  is  the 
case  of  long-time  ailing  German  Landesbank  WestLB,  which  will  ultimately  be  split  up. 
Remaining assets and liabilities will be transferred to a bad bank in order to be wound down. 
By 30 June 2012 WestLB is to stop its banking activities and henceforth only provide asset 
management services. Only the small part of WestLB’s most conservative business activities - 
the services it provides to small local savings banks - will stay in the market, but taken over 
by Helaba. 

On the other hand, some banks relied heavily on State aid but parts of their activities have a 
realistic prospect to return to viability. Those institutions can be allowed to stay on the market 
provided  that  they  considerably  reduce  their  size  and  substantially  change  their  business 
model  to  focus  only  on  these  viable  activities.  That  approach  is  well  illustrated  by  the 
approval of the restructuring of the German bank Hypo Real Estate, which is to reduce to 15% 
of  its  pre-crisis  balance  sheet  and  phase  out  a  number  of  business  fields.  Similarly,  the 
Commission approached restructuring aid to another German bank HSH Nordbank in the light 
of  a  commitment  to  reduce  its  balance  sheet  size  by  61%  compared  to  pre-crisis  levels  by 
exiting  certain  business  lines.  Such  deep  restructuring  tackling  the  root  of  past  failure  and 
avoiding aid being used to undercut competitors ensure that distortions of competition created 
by  massive  State  support  is  minimised.  The  Commission  also  applied  this  approach  in  the 
context of smaller banks. For instance Eik bank4 in Denmark was split into a bad bank put in 
liquidation,  while  the  good  part  of  the  bank  was  subject  to  a  sale  via  a  bidding  process.  A 
similar line was taken for the Austrian bank Kommunalkredit5 which had to be nationalised in 
a  rescue  operation.  The  bank's  business  was  split  into  non-strategic  activities  (to  be  wound 
down)  and  strategic  activities  (corresponding  to  approximately  40%  of  the  balance  sheet) 
which will be re-privatized. 

In the case of ABN Amro Bank6, the need for State aid stemmed primarily from the specific 
separation  context:  separation  of  the  Dutch  bank  activities  from  the  ailing  Fortis  group  and 
from  the  previously  existing  ABN  Amro  Group.  The  two  businesses  were  left  with 
insufficient  capital  to  face  the  crisis  and  finance  their  merger.  The  Commission  took  into 
account that the bank did not need aid primarily because of mismanagement or excessive risk 
taking at its level and therefore only requested behavioural safeguards (i.e. it did not seek any 
divestment of businesses). 

3 See http://ec.europa.eu/competition/publications/reports/temporary_stateaid_rules_en.html  
4 Case SA.31945 Aid for the liquidation of Eik Banki P/F and Eik Bank Denmark A/S, decision of 6 June 2011, 
OJ C 274 17.9.2011, p. 3-6; IP/11/677. 
5 Case SA.32745, Restructuring of Kommunalkredit Austria AG, decision of 23 June 2011, OJ C 239, 17.8.2011, 
p. 1-3; IP/11/389. 
6 Case SA.26674 Restructuring aid to ABN AMRO, decision of 5 April 2011, OJ L 133, 20.5.2011, p.1-46; 
IP/11/406. 

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In  October,  the  ECOFIN  Council  concluded  that  the  EU  State  Aid  Framework  should 
continue  as  the  sole  EU  level  co-ordination  tool  and  that  –  in  the  short-/medium-term  –  no 
further frameworks are required. 

The Competition DG started work developing new guidelines for the rescue and restructuring 
of financial institutions in a post-crisis regime, as well as on the new rescue and restructuring 
rules for the real economy. Work on those rules will continue in 2012. 

2.  SGEI – a main policy project 

Beyond the actions taken in the context of the financial and economic turmoil, the revision of 
the  State  aid  rules  for  services  of  general  economic  interest  (SGEI)  constituted  the  main 
policy project in the area of State aid. 

After extensive public consultations and valuable contributions received from Member States, 
European  institutions  and  stakeholders,  the  Commission  adopted  on  20  December  a  revised 
package  of  EU  State  aid  rules  for  the  assessment  of  public  compensation  SGEI.  The  new 
package  clarifies  key  State  aid  principles  and  introduces  a  diversified  and  proportionate 
approach  with  simpler  rules  for  SGEIs  that  are  small,  local  in  scope  or  pursue  a  social 
objective, while better taking account of competition considerations for large cases. 

The  new  SGEI  package7  provides  Member  States  with  a  simpler,  clearer  and  more  flexible 
framework  for  supporting  the  delivery  of  high-quality  public  services  to  citizens.  Member 
States  are  largely  free  to  define  which  services  are  of  general  interest,  but  the  Commission 
must  ensure  that  public  funding  granted  to  provide  such  services  does  not  unduly  distort 
competition in the internal market. 

All  social  services  are  now  exempt  from  the  obligation  of  notification  to  the  Commission,  regardless  of  the 
amount  of  the  compensation  received.  The  services  must  meet  "social  needs  as  regards  health  and  long  term 
care,  childcare,  access  to  and  reintegration  in  the  labour  market,  social  housing  and  the  care  and  social 
inclusion of vulnerable groups". Previously only hospitals and social housing were exempted. Other SGEIs are 
exempted provided the compensation is less than €15 million a year. 

On  the  other  hand,  there  will  be  a  greater  scrutiny  of  other  SGEIs  involving  compensation  of  more  than  €15 
million  a  year  and  where  the  potential  for  distortions  of  competition  within  the  single  market  is  higher.  In  its 
assessment the Commission will also check whether public procurement rules have been complied with, thereby 
ensuring more convergence between the two sets of rules. 

The new rules, which replace the so-called "Monti-Kroes" Package of July 2005, clarify basic 
notions such as "economic activity" to help national and also regional or local governments 
apply the rules. The new package consists of four instruments: (i) a Communication clarifying 
basic  concepts  of  State  aid  relevant  to  SGEI;  (ii)  a  revised  Decision,  exempting  Member 
States from the obligation to notify public service compensation for certain SGEI-categories 
to  the  Commission;  (iii)  a  revised  Framework  for  assessing  large  compensation  amounts 

7 Communication from the Commission on the application of the European Union State aid rules to 
compensation granted for the provision of services of general economic interest, OJ C 8, 11.1.2012, p. 4-14. 
Commission Decision of 20 December 2011 on the application of Article 106(2) of the Treaty on the 
Functioning of the European Union 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 
C(2011) 9380), OJ L 7, 11.1.2012, p. 3-10. 
Communication from the Commission – European Union framework for State aid in the form of public service 
compensation (2011), OJ C 8, 11.1.2012, p. 15-22.  
Available at: http://ec.europa.eu/competition/state_aid/legislation/sgei.html  

5

 
 
 
                                                 
granted  to  operators  outside  the  social  services  field  and  (iv)  a  proposal  for  a  de  minimis 
Regulation, providing that compensation below a certain threshold (EUR 500,000 over three 
years)  does  not  fall  under  State  aid  scrutiny,  thus  cutting  red  tape  for  small  SGEIs.  The 
proposal is scheduled for adoption in the spring 2012. 

In  its  reform  of  the  State  aid  rules  for  SGEI,  the  Commission  involved  the European 
Parliament at an early stage. Vice-President Almunia and his services participated in meetings 
of the Public Services Intergroup on SGEI in the months preceding the launch of the public 
consultation. Following the adoption of the Communication, the Vice-President presented the 
Commission's  initial  thinking  to  the  Economic  Affairs  (ECON)  Committee  of  the  European 
Parliament on 22 March, and reported back to the committee in July and again in November, 
when he stated that he would be able to take into account a number of the concerns raised by 
Parliament in its Resolution on the SIMON report8. 

The final adopted version of the SGEI Package takes into account comments received in the 
consultation  process,  including  from  the  Parliament.  For  example,  the  initial  proposal  was 
amended so as to cut red tape for compensation for social services, thus making it easier to 
provide  those  services  in  particular  for  the  elderly  and  for  people  with  disabilities,  as  also 
requested  by  the  Parliament.  The  Communication  was  also  modified  to  provide  further 
clarification  on  the  so-called  fourth  Altmark  criterion9  (either  the  beneficiary  is  chosen  in  a 
public  tender  or  compensation  does  not  exceed  the  costs  of  a  well-run  undertaking  that  is 
adequately equipped with the means to provide the public service). In addition, the proposal 
for  a  de  minimis  regulation  for  SGEI  was  amended  substantially  to  provide  further 
simplification: the condition on the number of inhabitants represented by the public authority 
granting the aid was removed and a three-year threshold was set. 

3.  State aid contributing to Europe 2020 objectives 

The  Commission's  Europe  2020  strategy  aims  at  enhancing  economic  growth,  sustainability 
and competitiveness in the European Union. State aid control has an important role to play in 
that process. 

In  line  with  the  objective  of  supporting  sustainable  growth  and  achieving  the  20/20/20 
climate/energy  target,  the  Commission  services  have  started  to  prepare  guidelines  for  the 
treatment of State aid connected to the Emissions Trading System (ETS) and have launched a 
public  consultation  on  the  draft  Commission  Communication  (State  aid  Guidelines).  That 
draft  Communication  defines  the  compatibility  criteria  of  four  new  State  aid  measures  with 
the  internal  market  (i.e.  aid  to  compensate  increases  in  electricity  prices  resulting  from  the 
inclusion of the costs of greenhouse gas emissions due to EU ETS; investment aid to highly 
efficient  power  plants;  optional  transitional  free  allocation  in  the  electricity  sector  in  some 
Member States; and the exclusion of certain small installations from the EU ETS, subject to 
certain conditions). 

The  ETS  was  introduced  to  reduce  CO2  emissions  and  moderate  climate  change.  Directive 
2003/87/EC established a scheme for greenhouse gas emission allowance trading within the 
Union (the EU ETS), which was improved and extended as from 1 January 2013 by Directive 

8 Texts adopted: P7_TA(2011)0494 Available at 
http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&reference=A7-2011-0371&language=EN  
9 Case C-280/00 Altmark Trans GmbH, Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft Altmark 
GmbH, judgment of 24 July 2003, [2003] ECR I-7747.  

6

 
 
                                                 
2009/29/EC  (the  ETS  Directive).  The  ETS  Directive  is  part  of  a  legislative  package 
containing measures to fight climate change and promote renewable and low-carbon energy. 
That package was mainly designed to achieve the Union’s overall environmental target of a 
20% reduction in greenhouse gas emissions compared to 1990 and a 20% share of renewable 
energy in the  Union’s total energy consumption  by  2020.  The  new  rules  are  expected  to  be 
adopted by the Commission in the course of 2012. 

The Europe 2020 Strategy also underlined the importance of broadband deployment to create 
a  true  single  digital  market  and  foster  cohesion  and  competitiveness  in  the  EU  and  set 
ambitious  targets  for  broadband  development.  One  of  its  flagship  initiatives,  the  Digital 
Agenda for Europe (DAE)10, aims to deliver sustainable economic and social benefits from a 
digital single market based on broadband networks and sets out ambitious coverage targets11. 
Investments  in  that  sector  will  come  primarily  from  commercial  operators;  however,  public 
intervention is essential to achieve the DAE objectives in areas where the business case for 
broadband is weak. 

The  Commission's  approach  to  State  aid  in  this  sector  is  represented  by  the  Broadband 
Guidelines12, which are due for review by September 2012. In 2011 the Commission started 
the revision by launching a fact-finding exercise, including a public consultation of Member 
States and other stakeholders in the sector and drafting an expert report to highlight the main 
technological, market and regulatory developments.  

Sustainability  and  competitiveness  of  the  European  economy  can  be  further  enhanced  by 
innovative  financial  instruments,  as  they  enable  Member  States  to  deliver  policy  objectives 
with  less  and  better  targeted  State  aid.  State  aid  control  focuses  on  enhanced  financial 
leverage,  investment  risk  mitigation  and  the  involvement  of  professional  intermediaries. 
Potential  risks  include,  in  particular,  the  risk  of  crowding  out  other  potential  sources  of 
funding  and  transferring  all  the  financial  risks  to  the  public  investor,  rather  than  mitigating 
them.  Such  developments  would  create  inefficient  market  structures  and  potential  market 
distortions, which need to be addressed by competition policy. 

Innovative financial instruments refer to public interventions other than grant funding. They cover a broad range 
of  repayable  instruments,  such  as  loans,  equity  and  guarantees.  There  has  been  an  increasing  use  of  financial 
instruments by  Member  States  and  the  Commission,  which  reflects  a  policy  shift from  a traditional  grant 
approach to repayable investments, with an emphasis on financial sustainability and leverage funding, as well as 
the  involvement  of  professional  investment  intermediaries.  That  trend  is  expected  to  continue  in  the  current 
environment of budgetary constraints. 

In 2011, Member States continued to develop a variety of innovative financial instruments, often financed from 
Structural Funds. There are two notable examples: (i) JEREMIE, which focuses on improving access to finance 
for SMEs, and (ii) JESSICA, which promotes sustainable urban development13. The Commission, building on its 
recent  experience,  has  placed  innovative  financial  instruments  at  the  heart  of  the  Europe  2020  Strategy. To 
ensure a coherent approach and sound financial management, the Commission has proposed common rules and 

10 A Digital Agenda for Europe, COM(2010) 245 final/2, 26.8.2010. 
11 (i) To bring basic broadband to all Europeans by 2013 and (ii) ensure that by 2020 all Europeans have access 
to much higher internet speeds of above 30 Mbps and 50% or more of European households should subscribe to 
internet connections above 100 Mbps. 
12 Guidelines for the application of State aid rules in relation to rapid deployment of broadband networks, OJ C 
235, 30.9.2009, p. 7. 
13 Available at http://ec.europa.eu/regional_policy/thefunds/instruments/index_en.cfm   

7

 
 
 
                                                 
guidance  for  innovative  financial  instruments  which  make  use  of  equity  or  debt,  the  so-called equity  and  debt 
platforms14 implemented in cooperation with the EIB (European Investment Bank). 

In that context, the Commission continued its competition advocacy efforts vis-à-vis Member 
States and other external stakeholders by shaping the design of financial instruments in order 
to  ensure  their  alignment  with  State  aid  policy.  Moreover,  recognising  the  limitations  of 
existing  State  aid  instruments,  the  Commission  has  developed  a  coherent  compatibility 
approach to innovative financial instruments through its decision-making practice. In 2011 the 
Commission also took two important decisions on JESSICA funds established in the United 
Kingdom and Spain, approved directly under Art 107(3)(c) TFEU15. 

Under that new approach, the decisions approving the funding set out detailed compatibility 
principles. To avoid crowding out and ensure an incentive effect, financial instruments must 
aim  at  addressing  market  failures  and/or  enhancing  socio-economic  cohesion  in  pursuit  of 
objectives of common interest. To avoid over-compensation and limit potential distortions of 
competition,  any form of  asymmetric risk sharing  between  public  and  private  investor  must 
not exceed what is necessary to generate a fair rate of return on investment in favour of the 
latter.  That  approach  avoids  the  need  to  assess  separately  each  individual  project  under  a 
JESSICA  measure,  possibly  under  different  guidelines,  and  hence  considerably  reduces  red 
tape. 

The  decisions  provide  detailed  guidance  to  Member  States  on  operating  conditions  and 
the  JESSICA 
governance  principles  for 
framework. Moreover, the experience in the context of JESSICA provides important input for 
future State aid policy developments in the field of financial instruments, including the next 
generation of innovative financial instruments under the new financial framework 2014-2020.  

intermediaries  operating  under 

investment 

4.  The Commission's monitoring and recovery efforts in relation to 

State aid 

To  ensure  the  effective  enforcement  of  the  State  aid  rules  as  regards  approved  aid,  the 
Commission has, since 2006, launched regular ex post monitoring exercises for non-notified 
aid measures granted under the GBER16 or under approved schemes. 

The  2010-2011  exercise  included  the  ex  post  monitoring  of  30  approved  aid  schemes  or 
measures  exempted  of  notification  in  18  Member  States.    It  targeted  measures  where  the 
biggest budgets are spent overall (regional aid, environmental aid and R&D&I aid), but also 
sectoral  schemes,  aid  in  the  form  of  risk  capital,  and  aid  in  the  broadband  area.  The  results 
showed that generally the part of the existing State aid architecture allowing the approval of 
aid schemes and enabling Member States to implement aid measures under the General Block 
Exemption  Regulation  (GBER)  and  Block  Exemption  Regulations  (BERs)  functions 
reasonably  well.  In  fact,  out  of  the  30  cases  in  the  2011  sample,  20  did  not  raise  specific 
concerns. However, compared to previous years' samples, substantive problems or procedural 
issues  (such  as  transparency,  reporting,  speed  and  quality  of  answers)  were  identified  in  a 

14 The Communication of 19 October 2011 on "A new framework for the next generation of innovative financial 
instruments – the EU equity and debt platforms" (COM(2011)622 final).  
15 Case SA.32835 Northwest Urban Investment Fund (JESSICA), decision of 13 July 2011, OJ C 281 24.9.2011, 
p. 6-8; IP/11/876 and Case SA.32147 Andalucía Jessica Holding Fund, decision of 19 October 2011, OJ C 79, 
17.3.2012, p. 1.  
16 Commission Regulation (EC) No 800/2008 of 6 August 2008 declaring certain categories of aid compatible 
with the common market in application of Article 87 and 88 of the Treaty (General Block Exemption 
Regulation), OJ L 214, 9.8.2008, p. 3. 

8

 
 
                                                 
growing  minority  of  cases.  That  indicator  may  point  to  issues  of  administrative  capacity  or 
lack  of  knowledge  of  the  State  aid  rules  at  Member  State  level.  The  cases  in  which  no 
appropriate solution was identified are still being investigated. 

The volume of aid granted through approved or block-exempted schemes has increased over 
time,  and  now  represents  more  than  80%  of  the  total  volume  of  aid17.  To  ensure  effective 
enforcement  of  the  State  aid  rules,  the  Commission  decided  that  the  2011-2012  exercise, 
launched  in  October,  would  include  a  significantly  larger  number  of  cases  (i.e.  52  in  total) 
covering  all  Member  States.  They  would  cover  33%  of  the  aid  amount  granted  in  the  EU, 
through approved aid schemes or block exempted measures. 

Fostering a competition culture at national level includes the Commission's powers to ask the 
granting  Member  State  to  recover  unlawful  aid  which  has  been  declared  incompatible.  In 
2011,  further  progress  was  made  to  ensure  that  those  recovery  decisions  are  enforced 
effectively and immediately. By 31 December 2011, the amount of illegal and incompatible 
aid  recovered  had  increased  from  EUR  2.3  billion  in  December  2004  to  EUR  12.3  billion 
(resulting  in  a  decrease  from  75%  to  around  13.6%  of  the  percentage  of  illegal  and 
incompatible aid still to be recovered as of 31 December 2011). 

Recovery decisions adopted in 2011 
Amount recovered in 2011 (in € million) 
Pending active recovery cases on 
31.12.2011 

6

230

43

When  a  Member  State  does  not  comply  with  a  recovery  decision  and  has  not  been  able  to 
demonstrate  the  existence  of  absolute  impossibility,  the  Commission  has,  over  the  past  few 
years,  strengthened  its  practice  of  launching  infringement  procedures18  in  accordance  with 
Article 108(2) TFEU19 or Article 260(2) TFEU20.  

Court rulings in 2011 for failure to implement a recovery decision 

Court rulings in 2011 for failure to implement a previous ruling 
Commission's launching of judicial actions for failure to recover in 2011 

4 

1 

6 

Infringement procedures have indeed proved to be efficient in ensuring better enforcement of 
recovery decisions. This year, five cases were closed after judicial actions before the Court of 
Justice, while 29 out the 45 open cases are still subject to litigation. 

In addition, in the follow-up to the Notice on the Enforcement of State Aid Law by National 
Courts21,  advocacy  efforts  have  intensified.  An  information  package  was  published  on 
the Competition DG's website22 and a booklet23 to assist judges in their daily work was widely 
distributed. Specific training for national judges was also organised24. 

17 Available at http://ec.europa.eu/competition/state_aid/studies_reports/2011_autumn_en.pdf  
18  Section  4,  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, p. 4. 
19 Actions under Article 108(2) are aimed at condemning a Member State for non-implementation of a State aid 
recovery decision. 
20  Actions  under  Article  260(2)  are  infringement  actions  aimed  at  condemning  a  Member  State  for  non-
implementation of a Court judgment, and may include the payment of fines. 
21 Commission Notice on the enforcement of State aid law by National courts, OJ 85, 9.4.2009, p. 1. 
22 http://ec.europa.eu/competition/court/state_aid.html  

9

 
 
                                                 
Finally,  in  2011,  some  Member  States  notified  a  general  framework  for  aid  (also  called  ex 
ante scheme) in the interest of the efficiency of the procedure. Such schemes make good the 
damages in future occurrences of one or more specific types of natural disasters, without the 
need  for  separate  notification  of  the  aid  granted  for  each  occurrence.  The  Commission  has 
accepted ex ante schemes for four categories of natural disasters25: earthquakes, avalanches, 
landslides  and  floods  (four  types  of  disasters  which  are  also  explicitly  recognized  as 
constituting  natural  disasters  in  the  State  aid  guidelines  for  the  agriculture  sector26).  That 
approach  allows  swifter  implementation  of  the  aid  measures.  It  still  gives  the  Commission 
sufficient information to check compliance with the scheme and, in case of non-compliance, 
to start an investigation of possible unlawful aid measures and order recovery of incompatible 
aid. 

ANTITRUST & CARTEL ENFORCEMENT 

1.  A sound framework for enforcement of competition rules 

The  year  2011  was  an  important  year  for  issues  of  due  process  concerning  the  EU's 
institutional  framework  for  the  enforcement  of  competition  law.  Indeed,  the  past  years 
witnessed a debate surrounding the set-up of the Commission's enforcement system in view of 
the right to a fair trial under the ECHR and the respect of due process principles. Rulings in 
2011  by  the  European  Court  of  Human  Rights  (ECtHR)  in  Menarini,27  and  the  Court  of 
Justice in its Copper Industrial Tubes28 and Copper Plumbing Tubes judgments,29 confirmed 
that  the  institutional  framework  for  the  enforcement  of  competition  law,  by  which  and 
administrative  organ  as  the  Commission  takes  decisions  which  are  subject  to  full  judicial 
review, ensures an adequate protection of the fundamental rights of the persons concerned by 
those decisions. 

In Menarini, the ECtHR confirmed its case law in respect of the right to a fair trial30. The judgment concerned a 
case in which the Italian competition authority imposed a fine in relation to an antitrust infringement regarding 
medical  equipment.  The  Italian  competition  authority  (like  the  European  Commission)  has  the  power  both  to 
investigate  and  to  find  infringements  by  imposing  fines,  subject  to  two-tier  judicial  review.  While  every 
institutional set-up has its particularities, the system in Italy is similar to the EU system for the enforcement of 
competition law. The ECtHR ruled that the system respects the f guarantees flowing from the right to a fair trial 
laid  down  in  Article  6  ECHR  in  particular  because  (i)  decisions  of  the  competition  authority  are  subject  to 
judicial review on questions of fact and law (ii) the courts can verify the proportionality of the sanction imposed 
and have the power to change that sanction.  

23 http://ec.europa.eu/competition/publications/state_aid/national_courts_booklet_en.pdf  
24 Through the contact point, ec-amicus-state-aid@ec.europa.eu several requests for information and opinions by 
national judges have been dealt with. 
25 Cases SA.31151 (N 274b/2010) Germany Disaster Aid Scheme "Bayerischer Härtefonds Finanzhilfen" 
(beneficiaries in manufacturing and other sectors); Commission decision of 23 November 2011 on State aid case 
SA.33425 Framework Scheme Disaster Aid Saxony (manufacturing and other sectors) decision of 23 November 
2011, OJ C 2, 5.1.2012, p. 7-9. 
26 Commission Community guidelines for State aid in the agriculture and forestry sector 2007 to 2013, OJ C 319, 
27.12.2006, p. 1-33. 
27 Judgment of the ECtHR of 27 September 2011, A. Menarini Diagnostics S.R.L. v. Italy, Application No 
43509/08, paras. 57-67.  
28 Case C-272/09 P KME Germany AG v Commission, judgment of 8 December 2011. 
29 Cases C-386/10 P Chalkor AE Epexergasias Metallon v Commission and C-389/10 P KME Germany AG and 
Others v Commission, judgments of 8 December 2011. 
30 Judgment of 21 May 2003, Janosevic v Sweden, Application No 34619/97, para. 81.  

10

 
 
 
                                                                                                                                                         
The  Court  of  Justice  has  come  to  a  similar  conclusion  in  its  Copper  Industrial  Tubes  and  Copper  Plumbing 
Tubes  judgments  where  it  considered  that  the  judicial  review  carried  out  by  the  General  Court  in  respect  of 
Commission decisions imposing fines in competition matters fulfils the guarantees flowing from the principle of 
effective judicial protection as laid down in the Charter of Fundamental Rights of the European Union. 

2.  Improving procedures, enhancing transparency, safeguarding 

efficiency 

The  Commission  has  taken  measures  to  reform  and  to  increase  transparency  of  its  antitrust 
and  merger  procedures.  These  measures  were  based  on  an  initiative  launched  in  2010,  and 
followed  extensive  dialogue  with  stakeholders,  of  which  the  European  Parliament  was  kept 
informed.  With  these  measures  the  Commission  has  given  a  comprehensive  response  to  the 
concerns and suggestions by stakeholders with regard to the conduct of antitrust and merger 
procedures. 

The package, adopted in October, consists of the following documents: 

•  a Commission Notice on Best Practices for the Conduct of Proceedings under 

Article 101 and 102 TFEU31 and 

•  a  Staff  Paper  on  Best  Practices  for  the  Submission  of  Economic  Evidence  in 

antitrust and merger cases32. 

As  part  of  this  package,  the  President  of  the  Commission  also  adopted  new  Terms  of 
Reference  for  the  Hearing  Officers33.  The  new  terms  of  reference  include  extended 
possibilities for the parties to call on the hearing officers in order to safeguard the effective 
exercise  of  their  procedural  rights,  not  only  after  a  Statement  of  Objections  is  issued,  but 
throughout the investigative phase as well.  

In order to further safeguard the efficiency of its antitrust investigations, the Commission is 
also  pursuing  a  number  of  cases  for  violation  of  rules  concerning  the  Commission's 
investigations.  In  that  regard,  on  24  May,  a  fine  of  EUR  8  million  was  imposed  on  Suez 
Environment  for  breach  of  a  seal  affixed  by  the  Commission  during  an  inspection  in  April 
201034. 

3.  Private enforcement of EU competition law 

In 2011, the Commission continued its initiatives to ensure that those who have been harmed 
by infringements of the EU competition rules have effective remedies in order to obtain the 
compensation  to  which  they  are  entitled  under  EU  law.  Following  on  from  its  2008  White 
Paper  on  Damages  Actions35,  the  main  initiatives  in  this  field  in  2011  concerned  the 
quantification  of  harm  and  collective  civil  redress.  The  Competition  DG  launched  a  public 

31 Commission Notice on Best Practices for the conduct of proceedings concerning Articles 101 and 102 TFEU, 
OJ C 308, 20.10.2011, p.6-32. 
32 Best Practices for the submission of economic evidence and data collection in cases concerning the application 
of Articles 101 and 102 TFEU and in merger cases, available at 
http://ec.europa.eu/competition/antitrust/legislation/legislation.html 
33 Decision of the President of the European Commission of 13 October 2011 on the function and terms of 
reference of the Hearing Officer in certain competition proceedings, OJ L275, 20.10.2011, p.69. 
34 Case COMP/39796 Suez Environnement breach of seal, decision on procedural fines of 27 August 2011; 
IP/11/632. 
35 White Paper on Damages actions for breach of the EC antitrust rules of 2.4.2008 (COM(2008)165 final), 
together with Commission Staff Working Paper (SEC(2008) 404). 

11

 
 
                                                 
consultation  on  a  draft  Guidance  Paper  on  the  quantification  of  harm  in  antitrust  damages 
actions36,  aiming  at  providing  guidance  to  courts  to  overcome  difficulties  associated  with 
quantifying  harm  in  antitrust  damages  cases.  A  final  version  of  the  Guidance  Paper  will  be 
published in 2012. 

Following  a  request  by  the  European  Parliament37,  the  Commission  also  launched  a  public 
consultation 'Towards a coherent European approach to collective redress'38. As a follow-up, 
the Commission intends to define general principles of collective redress at EU level, with a 
view to possibly proposing legislation. Such legislation would aim at ensuring that victims of 
EU  antitrust  law  infringements  have  access  in  all  Member  States  to  truly  effective 
mechanisms  for  obtaining  full  compensation  for  the  harm  they  suffered,  while  taking  into 
account confidentiality and the protection of leniency programs. 

Private  enforcement  of  the  EU  antitrust  rules  before  national  courts  is  also  an  essential 
complement  to  strong  public  enforcement  by  the  Commission  and  National  Competition 
Authorities  (NCAs).  As  regards  the  interaction  of  public  and  private  enforcement,  the 
question  arises  whether  and  under  which  conditions  information  voluntary  submitted  to  a 
competition  authority  by  undertakings  in  the  framework  of  a  leniency  programme  be 
disclosed to claimants in actions for damages that relate to a previous finding of a competition 
law infringement by a competition authority. 

In  its  judgment  in  Pfleiderer39,  the  Court  of  Justice  held  that  it  is  for  the  national  courts  to 
determine, according to national law and on a case-by case basis, the conditions under which 
access  to  documents  relating  to  a  leniency  programme  must  be  permitted  or  refused  by 
weighing the respective interests in favour of disclosure of the information and in favour of 
the protection of that information provided voluntarily by the applicant for leniency". Against 
this  background,  the  Commission  submitted  observations  as  amicus  curiae  under  Article 
15(3)  of  Regulation  1/2003  to  the  High  Court  of  England  and  Wales  in  the  National  Grid 
case. 

4.  Technology Transfer Agreements: forthcoming policy review in 

light of Europe 2020 objectives 

The  Europe  2020  Agenda  of  the  Commission  has  identified  innovation  policy  as  one  of  its 
major pillars requiring further development. Innovation, i.e. improved or new technologies or 
organisational  innovation,  results  in  productivity  increases.  It  is  acknowledged  that 
competition is one of the main drivers of innovation and therefore of productivity as a source 
of  growth.  By  improving  –  either  incrementally  or  in  breakthrough  fashion  –  on  existing 
technologies  and  methods  of  production,  competition  policy  can  make  a  significant 
contribution to innovation, efficiency and be a driver for growth.  

Licensing is an important part of the innovation process, as it facilitates dissemination of new 
products  and  technologies  and  allows  companies  to  integrate  and  use  complementary 

36 The text of this document, together with the written responses received and material from a workshop with 
economists can be accessed at http://ec.europa.eu/competition/antitrust/actionsdamages/index.html  
37 European Parliament resolution of 26 March 2009 on the White Paper on damages actions for breach of the 
EC antitrust rules (2008/2154(INI)). Texts adopted: P6_TA(2009)0187. 
38 Commission Staff Working Document Public Consultation: Towards a Coherent European Approach to 
Collective Redress, 4 February 2011, SEC(2011)173 final; IP/11/132. Available at: 
http://ec.europa.eu/competition/consultations/2011_collective_redress/index_en.html 
39 Case C-360/09 Pfleiderer AG v Bundeskartellamt, judgment of 14 June 2011. 

12

 
 
                                                 
technologies.  Licensing  is  therefore  vital  for  economic  development  and  consumer  welfare. 
However,  in  some  circumstances  licensing  agreements  can  also  have  a  stifling  effect  on 
competition.  This  can  be  the  case,  for  instance,  when  two  competitors  use  a  licensing 
agreement  with  the  aim  of  dividing  markets  between  them  or  when  an  important  licensor 
excludes  competing  technologies  from  the  market  through  conditions  in  its  licensing 
agreements.  How  intellectual  property  right  holders  license  their  rights  to  other  market 
participants  is  crucial  for  achieving  the  right  balance  between  stimulating  innovation  and 
preserving a level playing field in the internal market. 

In  this  context  the  Commission  announced,  on  6  December,  a  review  of  the  existing 
guidelines and the block exemption regulation for technology transfer agreements (TTBER)40. 
The purpose of the revision is to prepare the regime to be applied to technology transfer (i.e. 
patent,  know-how  and  software  licensing)  after  30  April  2014.  It  should  ensure  that  it  both 
reflects  current  market  realities  and  provides  for  the  possibility  of  non-competitors  and 
competitors to enter into technology transfer agreements where these contribute to economic 
welfare, without posing a risk to competition. Through a questionnaire, the Commission has 
invited  stakeholders  to  present  their  views  on  their  practical  experience  in  applying  the 
TTBER  and  the  accompanying  Guidelines.  Feedback  from  stakeholders,  received  in  early 
2012, is a key element of the review. 

5.  An on-going firm stance against cartels 

Cartels are known for their harmful effects on consumers and the economy in general as they 
result in higher prices and less choice, as compared to a situation where companies compete 
fairly and on the merits. Therefore, the Commission continued its vigorous and relentless fight 
against cartels throughout 2011. It adopted four cartel decisions imposing fines totalling over 
EUR 614 million on 14 undertakings41 and concerning products of importance for consumers. 
It  also  launched  a  number  of  new  investigations  into  different  sectors,  including  financial 
services (derivatives) and car parts. 

Despite  the unfavourable  economic  context,  there  was  a decrease  in  the number of  requests for fine reduction 
due to inability to pay (ITP). Under this concept, in exceptional cases, the Commission may, upon request, take 
account  of  an  undertaking's  inability  to  pay  in  a  specific  social  and  economic  context.  The  purpose  of  this 
provision is to prevent the Commission's fines from driving financially distressed undertakings out of the market 
and causing adverse social and economic consequences. In 2011 the Commission granted a reduction of the fine 
for inability to pay to one undertaking in the refrigeration compressors case. 

Furthermore,  the  Commission’s  efforts  focused  on  improving  the  efficiency  of  the  cartel 
proceedings  through  use  of  the  settlement  procedure.  Once  the  investigation  is  at  a 
sufficiently  advanced  stage,  cartel  cases  are  routinely  screened  as  to  their  suitability  for  a 
settlement. In 2011, three out of the four cartel decisions adopted were settlement decisions. 
This  brings  to  five  the  total  number  of  settlement  cases  adopted  since  the  procedure  was 
introduced  in  2008.  In  the  three  2011  cases,  settlement  allowed  the  Commission  to  proceed 
more swiftly and efficiently compared to a normal cartel case. Settlements also bring benefits 
in  terms  of  savings  of  both  time  and  resources,  but  as  experience  has  shown,  a  smooth 

40 Regulation (EC) No 772/2004 on the application of Article 81(3) of the Treaty [now Article 101(3) TFEU], OJ 
L 123, 27.4.2004, p. 11-17 and Commission Notice Guidelines on the applicability of Article 81 of the EC 
Treaty to technology transfer agreements., OJ C 101, 27.4.2004, p. 2-42.  
41 Cases COMP/39579 Consumer Detergents, decision of 13 April 2011, OJ C 193, 2.7.2011, p 14-16, 
COMP/39482 Exotic Fruit, decision of 12 October 2011, COMP/39605 CRT Glass, decision of 19 October 
2011; IP/11/1214 and COMP/39600 Refrigeration compressors, decision of 7 December 2011. 

13

 
 
                                                 
settlement  process  also  requires  the  trust  and  the  cooperation  of  the  parties  and  their  legal 
advisors. In addition to the procedural benefits, settlements also contribute to increasing the 
deterrent  effect  of  the  Commission's  enforcement  actions  in  cartels,  as  it  frees  up  resources 
more quickly for other cartel cases. Such efficiency-enhancing measures have been welcomed 
by many stakeholders, including the European Parliament. 

For  example,  the  efficiencies  produced  by  the  settlement  procedure  in  the  Consumer 
Detergents case are particularly significant, as it took only 10 months from the first settlement 
meeting to the adoption of the Commission’s Decision in which it fined the three producers of 
washing powder a total of EUR 315.2 million for participating in a cartel aimed at stabilising 
market  positions  and  coordinating  prices  in  the  period  from  7  January  2002  until  8  March 
2005, in eight Member States (Belgium, France, Germany, Greece, Italy, Portugal, Spain and 
the  Netherlands).  One  supplier  of  washing  powder  received  immunity  from  fines  and  two 
others reduction of fines under the Commission’s Leniency policy.  

Cartel Decisions 2011 

€ million 

Settlement 

Consumer Detergents 
Exotic fruit (Bananas Southern Europe) 
CRT Glass 
Refrigeration compressors 

315,2 
9,9 
128 
161 

1
0
1
1

Total 

614,1 

3 

Furthermore,  in  2011  the  European  Courts  have  confirmed  and  clarified  a  number  of 
important policy issues through an unusually high number of judgments in cartel cases42. The 
General  Court  has  confirmed  the  legality  and  the  main  novel  principles  of  the  current  2006 
Fining Guidelines43 and has reiterated that the Commission must be able to adapt the level of 
fines to the needs of its enforcement policy, at any time. In another landmark case, the Court 
confirmed that the Commission is entitled to ensure that only genuine, sincere and continuous 
cooperation  is  rewarded  under  its  leniency  program44.  The  Court  of  Justice  has  also  fully 
upheld the existence of a rebuttable presumption that anti-competitive conduct by a wholly-
owned or virtually wholly-owned subsidiary can be attributed to a parent company albeit that 
the  Commission  must  provide  sufficient  reasoning,  which  will  depend  on  the  nature  and 
content of the situation, to justify the rejection of rebuttal attempts by companies45.  

The Court also held that since there is no provision of EU law that would justify a refusal to 
grant access to leniency material to victims of competition law violations, it is for the national 
courts to weigh the interest of protecting leniency programmes against the interest of victims 
to  obtain  compensation  for  damages,  in  deciding  whether  to  grant  access  or  not46.  While 
observant of this judgment, the Commission remains fully determined to protect its leniency 

42 The European Court of Justice and the General Court during 2011 rendered more than 80 judgments 
concerning almost 20 different cartel decisions.  
43 Cases T-343/08 Arkema France v European Commission and T-299/08 Elf Aquitaine v European Commission, 
judgments of 17 May 2011, Case T-348/08 Aragonesas Industrias y Energia v European Commission, judgment 
of 25 October 2011 and Cases T-211/08 Putters International NV v European Commission, joined cases T-
208/08 Gosselin Group NV and T-209/08 Stichting Administratiekantoor Portielje v European Commission, T-
204/08 Team Relocations NV and T-212/08 Amertranseuro International Holdings Ltd, Trans Euro Ltd et Team 
Relocations Ltd v European Commission, judgments of 16 June 2011. 
44 T-12/06 Deltafina v European Commission, judgment of 9 September 2011.  
45 Case C-404/11 P Elf Aquitaine v European  Commission, order of the Court of 2 February 2012,; Cases T-
185/06 Air Liquide v European Commission, judgment of 16 June 2011 and T-196/06 Edison v European 
Commission, judgment of 16 June 2011. 
46 Case C-360/09 P Pfleiderer AG v Bundeskartellamt, judgment of 14 June 2011.  

14

 
 
                                                 
programme.  This  may  include  legislating  on  the  interaction  between  private  and  public 
enforcement  of  the  EU  competition  law,  in  order  to  clarify  the  status  of  information 
voluntarily submitted by undertakings in the framework of a leniency programme. 

13

14

14

1

7

1

4

1

8

2

4

7

4

1

1

14

1

1

5

6

1

11

6

4

1

8

3

1

1

2

1

10

5

1

2

2

Cartel Other*

Cartel Settlement

Cartel Hybrid

Cartel Prohibition

Antitrust Other**

Antitrust Commitment

Antitrust Prohibition

2005

2006

2007

2008

2009

2010

2011

* Rejection of complaint   ** Rejection of complaint, procedural infringement, penalty payment
Source: Directorate-General for Competition

6.  Effective cooperation within the European Competition Network 

and with National Courts 

Both the Commission and the Member States contribute to ensuring well-functioning markets 
through  the  enforcement  of  European  and  national  competition  law.  All  27  Member  States 
have  functioning  competition  agencies,  with  which  the  Commission  has  coordinated  its 
actions in numerous cases. In 2011, no fewer than 88 cases were submitted by the Member 
States to the Commission for consultation, increasing the total number of cases brought since 
May 2004 to 555. 

Informal means of cooperation exist for policy development, both regarding industry sectors 
and common horizontal issues in competition enforcement. Topics are discussed in different 
fora  within  the  European  Competition  Network  (ECN),  ranging  from  Director-General 
meetings to working groups and subgroups.  Horizontal ECN working  groups  discuss  policy 
aspects  of  competition  enforcement,  such  as  the  operation  of  the  ECN  Model  Leniency 
programme  or  common  (technical)  standards  for  optimising  the  investigative  capacity  of 
competition  authorities.  In  addition,  industry  sector  subgroups  serve  as  active  platforms  of 
discussion for enforcement practices. Subgroups active in 2011 included sectors such as food, 
financial services and pharmaceuticals. 

In  the  framework  of  its  support  to  national  courts  applying  EU  competition  law,  the 
Commission submitted three further amicus curiae observations on different matters to courts 
in Austria47, France48 and England and Wales49, bringing to nine the number of this type of 

47  In  its  observations,  the  Commission  argued  that  the  effective  enforcement  of  Article  101  TFEU  would  be 
hindered if a judgment would have as its subject matter solely national law and be entirely silent on the (non)-
applicability of EU law, as this could be deemed as an assurance for undertakings that a cartel does not infringe 
Article 101(1) TFEU. 

15

 
 
 
                                                 
intervention since the entry into force of Regulation 1/2003. Cooperation with national courts 
has  been  further  supported  by  continued  funding  by  the  Commission  of  a  specific  training 
program for national judges, in the area of competition law50. 

7.  The international dimension 

The globalisation of the economy calls for closer cooperation among competition authorities 
not  only  in  Europe,  but  also  across  the  globe.  Such  cooperation  is  essential  to  ensure 
consistency  in  the  outcome  of  enforcement  activities  of  different  authorities,  to  enhance  the 
effectiveness of their investigations, and to secure a level playing field for EU businesses in 
world  markets.  As  in  the  past,  and  as  encouraged  by  the  European  Parliament,  the 
Commission  has  engaged  in  a  policy  dialogue  with  the  authorities  in  other  jurisdictions  at 
both  multilateral  and  bilateral  level  to  promote  convergence  on  both  substantive  and 
procedural competition rules. The Commission has also continued to cooperate closely with 
many competition agencies in concrete enforcement activities. 

In  2011,  the  Commission  hosted  the  International  Competition  Network  (ICN)  Cartel 
Workshop, held in Bruges (BE) from 10 to13 October. Attendees from around 70 jurisdictions 
explored  possibilities  to  coordinate  investigations  and  evidence  gathering  and  exchanged 
views on leniency policy and settlements, with a view to making the fight against cartels more 
effective and efficient. 

The EU has concluded agreements with the United States, Canada, Japan and Korea on cooperation between their 
respective competition agencies. These agreements include provisions on the notification of enforcement activities 
to the other side, coordination of investigations (for example coordinating the timing of dawn raids), positive and 
negative  comity,  and  the  establishment  of  a  dialogue  on  policy  issues.  These  agreements  also  specify  that  the 
competition agencies cannot exchange confidential information which is protected under their respective laws. The 
inability  to  exchange  confidential  information  severely  limits  the  scope  of  cooperation  between  the  European 
Commission  and  foreign  competition  agencies.  This  limitation  can  undermine  the  effectiveness  of  the 
Commission's  competition  enforcement  activities,  especially  in  investigations  of  competition  cases  that  have  an 
international dimension, such as international cartels. This is why the Commission is trying to move beyond these 
"first generation" agreements and negotiate cooperation agreements which would also include provisions allowing 
the parties' competition agencies to exchange, under certain conditions, information which is protected under their 
respective rules on confidentiality. It is currently negotiating two such "second generation" agreements, one with 
Switzerland  and  one  with  Canada.  If  these  negotiations  were  concluded  successfully,  these  agreements  would 
enhance further the efficiency and effectiveness of enforcement cooperation activities. 
To mark the 20th anniversary of its first cooperation agreement with the US, the Commission, 
the  US  Federal  Trade  Commission  and  the  US  Department  of  Justice  adopted  revised  Best 
Practices  on  cooperation  in  merger  investigations  to  further  optimise  cooperation  in  merger 
investigations. 

A  second  priority  for  the  Commission’s  bilateral  relations  is  to  foster  closer  relations  with 
competition authorities in the major emerging economies. Apart from its extensive technical 
cooperation  programme  with  the  Chinese  competition  authorities,  the  Commission  signed  a 
Memorandum of Understanding with FAS, the competition authority of Russia. Furthermore, 

48 The Commission's observations relate to the interpretation of the Guidelines on the effect on trade concept and 
the  way  in  which  the  appreciable  effect  on  trade  between  Member  States  principle  is  applied  when  conduct 
affects trade only in part of a Member State. 
49 In its observations the Commission outlined its policy for securing both the integrity of leniency programs and 
the effectiveness of damages actions. 
50 In 2011, the Commission funded 24 training programs. 

16

 
 
                                                                                                                                                         
the  Commission  concluded  negotiations  on  the  competition  chapter  with  Croatia,  which  is 
scheduled to join the EU in 2013. 

MERGER CONTROL 

1.  Increased cooperation among Member States and internationally 
Merger  control  is  essential  in  protecting  consumer  welfare  by  preventing  market  structures 
that could lead to unjustified price increases or reduction of choice, quality or innovation. EU 
merger  control  continues  to  be  a  key  instrument  for  keeping  (European)  markets  open  and 
competitive, also in times of economic and financial crisis. 

Enforcement under the EU Merger Regulation (EUMR) has reached a high degree of maturity 
and  procedural  stability.  The  Commission  and  NCAs  form  the  two  pillars  of  EU  merger 
enforcement.  The  difference  from  antitrust  is  that  there  is  no  single  set  of  substantive  rules 
being applied. While NCAs deal with national cases, mergers reaching the turnover thresholds 
of the EUMR are examined by the Commission, ensuring a "one-stop-shop" for such cases51. 

The creation of an EU Merger Working Group in 2010 was an important step forward towards 
more  EU  cooperation  and  further  "soft"  convergence.  Drawing  on  agency  practices  and 
experience, the group explores possible solutions to common problems, focusing on what is 
feasible within the existing legal framework. In 2011, the group made a major contribution to 
this  objective,  adopting  a  set  of  Best  Practices  on  Cooperation  between  EU  National 
Competition  Authorities  in  Merger  Review.  The  Best  Practices  are  intended  to  facilitate 
cooperation among NCAs regarding those mergers that do not benefit from the Commission's 
"one-stop shop review" and require clearance in several Member States. 

Cooperation  also  proved  important  with  non-EU  countries.  Two  merger  cases52  involved 
intense  cooperation  with  various  competition  authorities  around  the  world.  In  both  cases 
cooperation was particularly close with the authorities in the United States, while for one of 
them  the  Commission  also,  for  the  first  time,  worked  together  with  China's  merger  control 
authorities. 

Going forward, the Commission will continue to promote international cooperation in merger 
control,  which  is  becoming  increasingly  relevant  in  the  context  of  globalised  markets  and 
mergers that are reviewed by several authorities. Ultimately, international cooperation should 
help to reduce the burden for merging companies by harmonising the review of international 
mergers, while maintaining effective merger control in the participating countries. 

2.  Rebound of merger notifications and increase in complexity of the 

cases 

In 2011, mergers and acquisitions were on the rise again and with it the Commission's activity 
of reviewing mergers under the EUMR. 309 cases were notified to the Commission in 2011, 

51 A comprehensive review of this aspect was carried out by the Commission in 2009. See Communication from 
the Commission to the Council, Report from the Commission to the Council on the operation of Regulation No 
139/2004, 18 June 2009, COM(2009)281 final. 
52 Cases COMP/M.6203 Western Digital Ireland, Ltd/Viviti Technologies, decision of 23 November 2011; 
IP/11/1395 and COMP/M.5984 INTEL / MCAFEE, decision of 26 January 2011, OJ C 98, 30.3.2011, p. 1; 
IP/11/70. 

17

 
 
                                                 
representing an increase of 13% as compared to 2010, slightly above the 10 year average of 
305 mergers per year. 

An important feature is that - in practice - notified mergers appeared to be more complex, as 
in 2011 the Commission opened in-depth investigations in eight cases in several sectors such 
as  air  transport,  food,  consumer  goods,  basic  industries,  IT,  financial  services  and 
pharmaceuticals. It also concluded a prohibition in a case that had been notified in 201053. 

398

25

5

130

348

21

4

112

343

27

9

117

303

8

4

108

270
16

1

110

243
18

82

211

238

190

191

143

143

299

21

2

107

169

2005

2006

2007

2008

2009

2010

2011

* Includes one prohibition in 2007
Source: Directorate-General for Competition

Interventions*

2nd Phase Clearance

1st Phase Clearance
(Non-simplified Procedure)

1st Phase Clearance
(Simplified Procedure)

II. 

SECTORAL OVERVIEW 

This  section  provides  an  overview  of  policy  developments  and  enforcement  actions  in  a 
number of selected sectors where the Commission's work in the field of competition has been 
relevant  throughout  2011.  The  actions  undertaken  in  the  energy  and  environment,  ICT  and 
media, rail transport and pharmaceutical industry sectors are presented here. 

An overview of the Commission's actions in relation to competition in three sectors where it 
has been particularly active in 2011, namely the financial services, airline and food sectors is 
set out in the Commission Communication to which this Staff Working Document is annexed. 

1.  Energy & Environment 

The European Energy policy is built around three pillars: sustainability, security of supply and competitiveness. 
Reducing green house gas emissions is vital to combating climate change. European consumers 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. The "Energy 2020 - A strategy for competitive, sustainable 
and secure energy" Commission Communication calls for action in areas where new challenges are emerging. 
These areas are energy efficiency, infrastructure, choice and security for consumers, energy technology and the 
external  dimension  of  the  internal  energy  market.  Competition  enforcement  and  advocacy,  along  with  sector-

53 Case COMP/M.5830 Olympic/Aegean Airlines, decision of 26 January 2011; IP/11/68. 

18

 
 
 
 
                                                 
specific  legislative  proposals,  constitute  the  main  tools  the  Commission  has  at  is  disposal  in  order  to  achieve 
these goals and creating a single European energy market by the 2020 target date. Given the strategic importance 
of the energy sector, the European Parliament,  in its Resolution on the 2010 report on competition policy (the 
Schwab report)54 requested that the Commission actively monitors the degree of competition on the market.  

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

2011  has  seen  world  events  affecting  the  energy  and  environment  sector  such  as  the 
Fukushima nuclear incident in Japan. Coupled with the long-term trend of rising fuel prices 
and the high cost of renewable energy, these have added to the challenges faced by Member 
States to meet the Europe 2020 Strategy and EU energy policy objectives. Strengthening and 
building partnerships with key partners to the EU is also in strategic interest for secure, safe, 
sustainable  and  competitive  energy.  International  cooperation  with  industrialised  and  fast 
growing  economies  is  necessary  to  maintain  Europe's  position  in  energy  research  and 
innovation. 

Competitiveness 

Competition  enforcement  and  advocacy  contribute  to  competitiveness  by  opening  markets, 
preventing  incumbents  from  reinforcing  their  dominant  positions,  and  creating  a  framework 
for investment that avoids distortions and ensures the efficient allocation of public resources. 

With the aim of opening up national markets and preventing incumbents from abusing their 
dominant  position  in  several  Member  States,  2011  saw  the  implementation  of  remedies  in 
several of the antitrust cases that arose from the 2007 Energy sector inquiry. The competition 
concerns  that  were  remedied  in  2011  include  foreclosure  (ENI55,  E.On  gas56,  GDF57  and 
RWE58 gas), customer tying through long-term contracts for large electricity customers (EDF 
in  France59),  and  restrictions  on  export  capacity  (SVK60  in  Sweden).  The  Commission  also 
market  tested  measures  proposed  by  Greece  to  remedy  the  advantage  enjoyed  by  the  State-
owned electricity company Public Power Corporation by reason of its access to lignite, which 
is the cheapest source of electricity generation in Greece61. 

Consolidation  appeared  to  be  the  major  feature  in  energy  and  environment-related  industry. 
The Commission received an increasing number of notifications for mergers in the sector, out 
of  which  six62  related  to  the  manufacture  of  equipment  to  produce  electricity  (from  small 

54 Texts adopted: P7_TA(2012)0031 available at 
http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&reference=A7-2011-0424&language=EN  
55 Case COMP/39315 ENI, decision of 29 September 2010, OJ C 352, 23.12.2010, p. 8-10; IP/10/1197. 
56 Case COMP/39317 E.ON gas foreclosure, decision of 4 May 2010, OJ C 278, 15.10.2010, p. 9-10; IP/10/494. 
57 Case COMP/39316 GDF foreclosure, decision of 3 December 2009, OJ C 57, 9.3.2010, p. 13-14; IP/09/1872. 
58 Case COMP/39402 RWE gas foreclosure, decision of 18 March 2009, OJ C 133, 12.6.2009, p. 10-11; 
IP/09/410. 
59 Case COMP/39386 Long term electricity contracts in France, decision of 17 March 2010, OJ C 133, 
22.5.2010, p. 5-6; IP/10/290. 
60 Case COMP/39351 Swedish Interconnectors, decision of 14 April 2010, OJ C 142, 1.6.2010, p. 28-29. 
61 Case COMP/38700 Greek lignite and electricity markets; IP/11/34, 14.1.2011. 
62 Cases COMP/M.6039 GE/Dresser, decision of 4 January 2011, OJ C 29, 29.1.2011, p. 7; IP/11/5, 

COMP/M.6106 Caterpillar/MWM, decision of 19 October 2011; IP/11/1212 , COMP/M.6172 Daimler/Rolls 
Royce/Tognum/Bergen, decision of 25 July 2011, OJ C 275, 20.9.2011, p. 2; IP/11/924, COMP/M.6222 GE 

19

 
 
 
 
                                                 
mobile  generating  sets63  to  the  construction  of  complete  combined  cycle  power  plants64  or 
major components of such plants65). 

In its role of preserving the internal market and controlling whether Member States use their 
public resources in a non-distortive manner, the Commission opened a formal investigation in 
the field of environmental taxation66 and approved reduction of the UK Climate Change Levy 
(an  energy  tax,  for  aluminium  and  steel  recycling  processes)  as  being  compatible  with  the 
2008 Environmental Aid Guidelines67. 

Sustainability 

Sustainable development is the long term use of resources which aims to meet human needs 
for energy, while preserving the environment. Sustainability was at the heart of the measures 
reviewed under State aid control rules, authorising aid that supports renewable energy sources 
and environmentally friendly businesses. State aid can indeed correct market failures caused 
by negative external factors where environmental costs for society cannot yet be reflected in 
the production costs borne by companies. 

According  to  the  latest  available  figures68,  only  18%  of  electricity  was  generated  by 
renewable  energy  sources  in  the  EU,  with  different  values  across  Member  States,  varying 
from approximately 5% in Latvia to 68% in Austria. Within that context, special attention was 
given  to  State  measures  in  support  of  energy  from  renewable  sources  under  the  horizontal 
Environmental Aid Guidelines69 (such as in Finland70, Romania71 and France72) while at the 
same time several Member States aimed at promoting environmentally friendly cars and green 
products  (Denmark73,  United  Kingdom74,  France  and  Germany75).  Reflecting  the  growing 
demand  for  meeting  energy  requirements  from  sustainable  sources,  the  Commission 

Energy/Converteam, decision of 25 July 2011, OJ C 255, 31.8.2011, p. 2; IP/11/922, COMP/M.6350 
Siemens/NEM Holding, decision of 28 October 2011, OJ C 23, 28.01.2012, p. 10; IP/11/1300 and  
COMP/M.6356 GE/IR/UEC/JV, decision of 27 October 2011, OJ C 321, 4.11.2011, p. 1. 
63 COMP/M.6039 GE/Dresser, decision of 4 January 2011, OJ C 29, 29.1.2011, p. 7; IP/11/5. 
64 COMP/M.6356 GE/IR/UEC/JV, decision of 27 October 2011, OJ C 321, 4.11.2011, p. 1. 
65 COMP/M.6350 Siemens/NEM Holding, decision of 28 October 2011, OJ C 23, 28.01.2012, p. 10; IP/11/1300. 
66 Case SA.18859 — 11/C (ex NN 65/10) Relief from aggregates levy in Northern Ireland (ex N 2/04), OJ C 
245, 24.8.2011, p. 10 with corrigendum published in OJ C 328, 11.11.2011, p. 11. 
67  Case  SA.31349  (N1/2011)  Climate  Change  Levy  reduction  for  metal  recycling  activities,  decision  of  23 
November 2011. 
68 Market Observatory for Energy, June 2011. 
69 Community guidelines on State aid for environmental protection, OJ C 82, 1.4.2008, p.1-33. 
70 Cases SA.31204 Operating aid for small wood fired CHP-plants and forest chips fired power plants, decision 
of 22 March 2011, OJ C153, 24.05.2011, p.1, SA.31107 Operating aid for wind power and bio gas electricity, 
decision of 15 March 2011, OJ C 180, 21.6.2011, p. 1-4, SA.32470 Forest chips, wind power, hydro power 
and bio gas electricity, decision of 22 March 2011, OJ C 180, 21.06.2011, p. 1and SA.32470 Fixed operating 
aid for power plants using renewable energy sources, decision of 22 March 2011, OJ C 189, 29.06.2011, p.1. 

71 Case SA 33134 Romania's green certificates scheme, OJ C 244, 23.08.2011, p. 2. 
72 Case SA 30113 Geothermal heat boiler for the industrial site of Beinheim. 
73 Case SA.31527 (N 386/2010) Pilot schemes for the purchase of electric vehicles, decision of 8 March 2011,OJ 
C 149, 20.05.2011, p. 3; IP/11/266. 
74 Case SA.30741 Aid to purchase of  ultra low-emission vehicles, decision of 19 October 2011. 
75 Cases SA.32206 Prolongation du régime temporaire de prêts bonifiés pour les entreprises fabriquant des 
produits verts, decision of 12 October 2011, OJ C 330, 12.11.2011, p. 1 and SA.32029 Extension for 2011 of the 
French and German aid schemes providing support for green products, decision of 3 October 2011, OJ C 361, 
10.12.2011, p. 1-5. 

20

 
 
 
                                                                                                                                                         
authorised, under the EUMR, four cases76 involving joint ventures in the solar power sector 
(both  thermal  and  photo-voltaic)  and  a  further  four  cases77  for  the  development  of  wind 
power.  

With  the  aim  of  better  preserving  the  environment  and  available  resources,  and  within  the 
broader  objective  of  achieving  the  shift  to  a  low-carbon  economy,  the  Commission  ordered 
both  Italy78  and  Austria79  not  to  implement  aid  earmarked  for  energy-intensive  businesses. 
The Commission also adopted a number of decisions to facilitate the closure of uncompetitive 
coal mines80, some solely concerning aid for exceptional costs (Slovenia81 and Poland82). The 
Commission adopted also other decisions for the closure of uncompetitive coal mines relating 
to  aid  covering  production  costs83.  In  the  latter  case,  a  mitigation  plan  addressing  the 
environmental and climate impact had to be provided. 

Waste  treatment  and  recycling  also  remain  important  areas  of  activity,  as  reflected  in  the 
number  of  cases  concerned  with  water  and  waste  management84.  A  similar  trend  can  be 
observed in the antitrust field, where the Commission is looking into conduct in sectors such 
as waste collection, and the supply of water and waste water services85. 

Security of supply 

The EU energy sector is characterised by a high dependency on imports, as the EU produces 
only  48%  of  its  energy  needs86.  Energy  dependency  differs  greatly  among  Member  States; 
Denmark  appears  to  be  the  only  net  energy  exporter  within  the  EU27,  while  the  Baltic 
countries  rely  on  a  single  source  for  their  gas  imports.  The  EU  energy  sector  is  also 
characterized  by  a  significant  need  for  investments  –  for  instance  in  electricity  generation, 

76 COMP/M.6112 Good Energies/NEIF/Newco, decision of 13 April 2011, OJ C 122, 20.4.2011, p.6 , 

COMP/M.6238 RREEF/SMAG/OHL/Arenales, decision of 10 August 2011, OJ C 255, 31.8.2011, p. 1, 
COMP/M.6303 Antin/RREEF/Andasol 1&2, decision of 22 August 2011, OJ C 253, 30.8.2011, p.1, 
COMP/M.6273 Samsung/Korea Development Bank/KNS Solar, decision of 3 August 2011, OJ C 236, 
12.8.2011, p. 6. 

77 COMP/M.6233 FOEW/Dong Energy/Novasion/Aalborg Universitet/Universal Foundation, decision of 27 July 

2011, OJ C 228, 03.08.2011, p. 4, COMP/M.6176 Mitsubishi Corp/Barclays Bank/ Walney Topco 
I&II/SheringhamsShoal Topco, decision of 29 August 2011, OJ C 261, 03.09.2011, p. 1, COMP/M.6155 
GEM/DEME/Electrawinds Offshore/SRIWE/Z-Kracht/Power@sea/Rent a Port Energy, decision of 6 June 
2011, COMP/M.6206 Iberdrola/Caja Rural de Navarra/Renovables de la Ribera, decision of 30 June 2011, 
OJ C 198, 06.07.2011, p. 1. 

78 Cases C38/B/2004 (ex NN58/2004) Preferential electricity tariffs for the benefit of three energy-intensive 

businesses located in Sardinia and C13/2006 (ex N587/2005) and Green Electricity Act, OJ L 309, 
24.11.2011, p.1. 

79 Case C24/2009 (ex N446/2008) State aid for energy-intensive businesses under the Green Electricity Act in 
Austria, OJ L 235, 10.09.2011, p. 42. 
80As provided for by Council Decision No 2010/787/EU of 10 December 2010 on State aid to facilitate the 
closure of uncompetitive coal mines, OJ L 336, 21.12.2010, p. 24. 
81 Case SA.30907 (N175/2010) Closure of mine Trbovlje Hrastnik Ltd until 2015, OJ C 294, 6.10.2011, p. 3. 
82 Case SA.33013 Coal plan for the period 2011-2015, decision of 23 November 2011. 
83 See German case SA.24642 (N708/2007) Coal mine closure plan 2008-2018, decision of 7 December 2011 
and Romanian case SA.33033 National Hard Coal Company Petroşan, decision of 22 February 2012; IP/12/157. 
84 Cases COMP/M.6088 HIG Capital/Der Grune Punkt-Duales System Deutschland, decision of 7 February 
2011, OJ C 43, 11.2.2011, p. 2, COMP/M.6105 Veolia/EDF:SEEG, decision of 24 January 2011, OJ C 26, 
28.1.2011, p. 1, Case COMP/M.6345 Cheung Kong/Northumbrian Water Group, decision of 22 September 
2011, OJ C 285, 29.9.2011, p. 1, COMP/M.6253 Talis International Holdings/ Raphael Valves Industries, 
decision of 12 July 2011, OJ C 209, 15.7.2011, p. 16.  

85 For example, proceedings were opened against ARA in Austria and an investigation into conduct by French 
water companies continued throughout 2011.  
86 Market Observatory for Energy, June 2011. 

21

 
 
 
                                                 
where there is a trend for gas and renewables to contribute more to electricity generation in 
the EU. 

The  Commission's  antitrust  enforcement  action  in  the  energy  sector  can  contribute  to 
resolving  security  of  supply  issues  by  facilitating  access  to  the  market  and  encouraging 
investment.  In 2011, the Commission opened proceedings against ČEZ in relation to possible 
abuses of dominance on the Czech electricity market through the hindrance of  the entry of 
competitors. The Commission also carried out unannounced inspections at the premises of gas 
companies in Central and Eastern Europe, investigating the existence of behaviour that might 
potentially  exclude  competitors  from  providing  alternative  sources  of  gas,  or  that  might 
involve the exploitation of a dominant position in the supply of gas, for instance by charging 
excessive prices. 

Other  tools  of  competition  policy,  such  as  State  aid  control,  can  also  contribute  to  the 
completion of the EU internal market for gas. Authorisation of measures aiming at increasing 
security  of  gas  supply  in  Poland  and  construction  of  an  interconnection  and  cross-border 
power line between Poland and Lithuania87 are two good examples. 

2.  Information and Communication Technologies (ICT) and Media 
As  recognized  in  the  Digital  Agenda  for  Europe  (DAE)88,  Information  and  Communication 
Technologies  (ICT)  play  a  key  enabling  role  for  Europe  to  achieve  its  competitiveness 
ambitions for 2020. The ICT industry is directly responsible for 5% of European GDP, with a 
market  value  of  EUR  660  billion  annually.  It  also  employs  over  eight  million  people 
representing  3.7%  of  total  employment  in  the  EU89.  At  the  same  time,  ICT  contributes  far 
more to overall productivity growth, because of the dynamism and innovation inherent to the 
sector, and the enabling role it plays in changing the way other sectors do business. The roll-
out of high speed broadband is a particularly important factor in this regard. 

Latest available figures indicate that the cultural and creative industries encompassing media 
accounted  for  4.5%  of  the  EU's  GDP  in  2008,  employing  some  3.8%  of  its  workforce90. 
Europe's  cultural  and  creative  industries  are  one  of  the  most  dynamic  economic  sectors 
making  a  real  contribution  to  the  Europe  2020  strategy  and  some  of  its  flagship  initiatives 
such as the Innovation Union, the Digital Agenda, the Agenda for new skills and new jobs or 
an industrial policy for the globalisation era91.Creative content is also an essential input into 
the digital economy and a key driver of consumer demand for digital services. 

The  ICT  and  media  sectors  are  characterised  by  rapid  technological  developments.  The 
expansion of high-speed networks and the shift from the physical to the digital are having a 
revolutionary impact on ways of doing business. 

87 Cases SA.31953 Construction of a LNG Terminal in Swinoujsciu, decision of 5 October 2011, OJ C 361, 
10.12.2011, p. 1-5 and SA.30980 (N 542/2010) Construction of interconnection and cross-border power line 
between Poland and Lithuania, decision of 6 January 2011, OJ C 79, 12.03.2011, p.1 with corrigendum in OJ 
C 92, 24.03.2011, p.22. 
88 A Digital Agenda for Europe, COM(2010) 245 final/2. 
89The 2011 Report on R&D in ICT in the European Union, European Commission’s Joint Research Centre - Institute for 
Prospective Technological Studies (JRC 65175 EUR 24842 EN). 
90 Building a Digital Economy: The importance of saving jobs in the EU’s creative industries, TERA 
Consultants, March 2010. 
91 Commission Green Paper Unlocking the potential of cultural and creative industries. 27 April 2010, 
COM(2010)183. 

22

 
 
                                                 
Increasing use of cloud computing is creating the need to connect different products and applications throughout 
the  industry.  Services  offered  in  this  sector  will  become  ever  more  networked  and  inter-dependent.  The  ICT 
sector is also characterized by network and scale effects which tend to enforce the market positions of leading 
players.  The  Commission  considers  that  ensuring  interoperability  in  order  to  avoid  anti-competitive  customer 
lock-in and to preserve the opportunity for innovative firms to compete is critical for competition in the sector92. 
Intellectual  Property  Rights  (IPRs)  and  standards  are  also  likely  to  remain  key  issues  for  competition  going 
forward. In  this  context,  the competitive  impact  of  the growing  strategic use of  IPRs,  especially  patents,  is  an 
area the Commission intends to focus on. Open standards remain an important way to support interoperability. 
With the rise of cloud computing questions of interoperability, data portability and standards will again be at the 
forefront of the regulatory issues to be tackled. 

The  ongoing  transition  to  next  generation  access  networks  (NGAs)  with  much  faster  access 
speeds has the potential to drive growth and stimulate prosperity. The move from traditional 
copper  networks  to  NGAs  should  not  however  be  exploited  to  re-monopolize  markets  and 
reverse  the  competitive  dynamics  achieved  as  a  result  of  liberalisation  of  the  e-
communications sector. Companies must therefore ensure that co-investment and cooperation 
agreements for the deployment of NGAs respect both sector regulation and competition law. 
The same has to be said as regards the practices of companies in a dominant position, which 
should not result in the anti-competitive foreclosure of competitors. 

Too  many  barriers  still  block  the  free  flow  of  online  services  and  entertainment  across  national  borders. 
Protecting  the  Single  Market  remains  one  of  the  Commission's  top  priorities  when  applying  competition  law 
within the context of the digital economy. In 2011, the European Court of Justice took a strong stance against the 
artificial  partitioning  of  the  Single  Market  in  relation  to  media  content.  In  its  judgment  in  the  Premier 
League/Murphy case93, the Court ruled that the contractual restrictions which deprived consumers from access to 
cross-border broadcasts of Premier League football matches are restrictions of competition by object, contrary to 
Article 101 TFEU. Such absolute territorial protection enjoyed by broadcasters cannot be justified where right 
holders could have obtained appropriate remuneration without prohibiting or limiting cross-border access to their 
content.  

The Commission has continued to use its enforcement tools to ensure unrestricted competition 
and  growth  in  the  ICT  and  media  sectors,  to  the  benefit  of  consumers  and  to  support  the  
objectives of the DAE. 

State  aid  policy  is  growing  in  importance  for  the  ICT  and  media  sectors.  On  20  June,  the 
Commission  launched  a  public  consultation  on  new  rules  on  the  State  aid  assessment  of 
support for producing films and audiovisual works94. In May, an issues paper was published to 
initiate a first round of public consultation, where 110 comments were received and published 
in October. The publication of a draft Communication for public consultation is foreseen for 
the first quarter of 2012. 

The  Commission  is  also  reviewing  the  Broadband  Guidelines95  in  the  field  of  State  aid  for 
broadband networks. A public consultation was launched in April 2011, and more than  100 
comments  received  from  stakeholders  were  published  in  October.  A  further  public 
consultation on new draft guidelines is expected to take place in the first quarter of 2012. 

92 Cf. Case COMP/37792 Microsoft (OJ L 32, 6.2.2007, p. 23); see judgment T-201/04, Microsoft Corp. v. Commission 
[2007] E.C.R. II-3601. 
93 Joined Cases C-403/08 and C-429/08 Football Association Premier League and Others v QC Leisure and 
Others Karen Murphy v Media Protection Services Ltd., judgment of 4 October 2011. 
94 To review the assessment criteria set out in the Commission communication on certain legal aspects relating to 
cinematographic and other audiovisual works (Cinema Communication) of 26 September 2001, OJ C 43, 
16.2.2002, p. 6. See also the Issues Paper available at 
http://ec.europa.eu/competition/consultations/2011_state_aid_films/issues_paper_en.pdf  
95 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. 

23

 
 
                                                 
Access to networks and related digital services 

As voiced by the European Parliament in the Schwab report and by other stakeholders, access 
to  networks  remains  a  major  concern  element  for  achieving  a  competitive  market  with 
effective  development  of  the  Internet  and  of  the  digital  economy.  In  June,  the  Commission 
imposed  a  fine  exceeding  EUR  127.5  million    on  the  Polish  incumbent  telecoms  operator 
Telekomunikacja  Polska  S.A.  (TP)  for  abusing  its  dominant  position  in  the  period  of  2005-
2009. by deliberately seeking to limit competition on broadband markets in Poland by placing 
obstacles in the way of alternative operators, even if there was a change in the approach of TP 
further to the Agreement signed in October 2009 with the NRA. The Commission opened the 
case  on  its  own  initiative  in  2009  after  having  observed  that  Poland  had  one  of  the  lowest 
broadband penetration rates in Europe, that consumers suffered from lower connection speeds 
and  that  monthly  prices  per  advertised  Mbit/s  were  much  higher  than  the  prices  in  other 
Member States (and among the highest in the OECD). 

State aid control  has  an important role to  play in accelerating the deployment  of  broadband 
networks in Europe. Pro-competitive aid measures, which complement private investments in 
areas which are not profitable on commercial terms, are necessary to achieve the objectives of 
the  DAE.  The  volume  of  State  aid  approved  by  the  Commission  under  the  State  aid 
Broadband  Guidelines96  amounted  to  almost  EUR  2  billion  in  2011.  The  Commission 
authorized aid though 18 Commission decisions, covering countries such as France, Poland, 
Greece or Portugal. A similar amount of aid was approved in 2010. 

An open and fully integrated internal market 

Cross-border  market  sharing  agreements  that  include  non-compete  clauses  are  one  of  the 
clearest violations of competition law. They put in danger the full integration of the market, 
artificially  compartmentalising  it  along  national  borders.  On  these  grounds,    in  October  the 
Commission sent a statement of objections to Telefónica and to Portugal Telecom, regarding 
their agreement not to compete on the Iberian telecommunications markets. 

The development of the internet has a direct effect on the competitive development of related 
services,  such  as  search  engines  and  online  advertising  platforms.  The  Commission  is 
currently investigating allegations that Google may be abusing a dominant position in online 
search,  online  search  advertising  and  online  search  advertising  intermediation.  It  is  alleged 
that Google is lowering the ranking of search results of competing services (which specialise 
in providing users with specific  online  content such as  price  comparisons, so-called vertical 
search services) and accorded preferential placement to the results of its own vertical search 
services.  In  addition  the  Commission  is  investigating  allegations  that  Google  imposes 
exclusivity obligations on advertising partners, preventing them from placing certain types of 
competing  ads  on  their  web  sites.  Finally,  the  Commission  is  investigating  suspected 
restrictions  on  the  portability  of  online  advertising  campaign  data  to  competing  online 
advertising platforms97. 

The  markets  for  telecommunications  and  digital  contents  are  not  the  only  areas  where  the 
Commission  has  focused  its  antitrust  actions  in  2011.  The  market  for  computer  mainframe 
maintenance services has also been under scrutiny. In July 2010, the Commission initiated a 
formal investigation against IBM with regard to an alleged abuse of a dominant position by 

96 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. 
97 Case COMP/39740 Foundem/Google and related cases. 

24

 
 
 
 
                                                 
foreclosing  competing  providers  of  mainframe  maintenance  services.  As  a  result  of  the 
investigation, IBM submitted formal commitments to ensure the availability of certain spare 
parts and technical information on reasonable and non-discriminatory terms over five years. 
These  commitments  were  made  binding  by  the  Commission  in  a  decision  adopted  on  13 
December. 

2011 has been a year for further consolidation in the IT hardware sector, where the number of 
global players in the Hard Disk Drives (HDDs) sector has been reduced to three. In May, the 
Commission  initiated  in-depth  investigations  into  two  parallel  transactions  in  this  sector, 
namely  the  acquisition  by  Seagate  of  Samsung's  HDD  business  and  the  acquisition  by 
Western  Digital  of  Viviti  Technologies  -  formerly  known  as  Hitachi  Global  Storage 
Technologies  (HGST).  On  19  October,  the  Commission  cleared  the  Seagate/Samsung 
transaction98 and on 23 November, the Commission adopted a conditional clearance decision 
in the Western Digital/HGST case99. The parties to the latter proceedings submitted remedies 
to address competition concerns in several product markets, in particular the 3.5-inch desktop 
market  where  the  proposed  merger  would  have  led  to  a  duopoly  between  the  merged  entity 
and  Seagate.  The  parties  committed  to  an  upfront  divestment  to  a  suitable  purchaser  to  be 
approved by the Commission of HGST's 3.5-inch business (as well as some assets of Western 
Digital) in order to ensure the continued presence of a third supplier on these markets. 

The impact of digitization on content sectors 

The  transition  from  analogue  to  digital  broadcasting  using  Digital  Terrestrial  Television 
technologies by 2012 and the resulting digital dividend (i.e. the freed spectrum) should lead to 
new  entry  and  broader  viewer  choice.  EU  law100  requires  that  such  dividend  be  allocated 
subject  to  specific  criteria  and  procedures  (e.g.  open,  transparent,  non-discriminatory,  etc.). 
The Commission has intervened against Italy, France and Bulgaria for failing to comply with 
those requirements. As a result of these interventions, Italy organised a beauty contest for new 
digital frequencies (multiplexes), while France and Bulgaria took legislative steps to address 
the breaches. 

As  the  digital  economy  develops,  so  do  the  markets  for  digital  content  products,  such  as  e-
books. In December, the Commission initiated a formal investigation into possible restrictive 
agreements  or  practices  affecting  the  sale  of  e-books  in  the  EU.  The  Commission's 
investigation concerns possible restrictive agreements or practices between five international 
publishers (Hachette, Harper Collins, Simon & Schuster, Penguin and Georg von Holzbrinck) 
and  Apple,  as  well  as  the  character  and  terms  of  the  agency  agreements  for  the  sale  of  e-
books. 

Ensuring interoperability 

The  ICT  sector  is  characterised  by  digital  convergence  and  the  concomitant  growing 
importance of interoperability and standards. In view of network effects that often prevail in 
this  sector,  interoperability  is  an  important  feature  for  competition  to  take  place  in  these 
markets.  Although  personal  computers  are  considered  to  be  the  main  gateway  to  the  digital 
world,  users  are  increasingly  accessing  data  through  other  devices  such  as  smart  mobile 

98 Case COMP/M.6214 Seagate Technology / the HDD business of Samsung Electronics, decision of 19 October 
2011; IP/11/1213. 
99 COMP/M.6203 Western Digital Ireland / Viviti Technologies, decision of 23 November 2011, IP/11/1395,. 
100 Including Commission Directive 2002/77/EC of 16 September 2002 on competition in the markets for 
electronic communications networks and services, OJ L 249, 17.9.2002, p. 21-26. 

25

 
 
 
 
                                                 
phones,  which  are  able  to  communicate  with  each  other  and  with  computing  devices.  This 
reinforces the need for interoperability between software products and devices. 

One example of the Commission's approach was the Intel/McAfee case. The Commission was 
concerned  that  rival  IT  security  products  would  be  excluded  from  the  market  given  Intel's 
strong presence in computer chips and chipsets. The merger was therefore approved subject to 
commitments  from  Intel  aiming  at  ensuring  interoperability  of  the  merged  entity's  products 
with those of its competitors101. 

Another  example  is  the  clearance  of  Microsoft's  acquisition  of  Skype102.  The  Commission 
concluded that it was unlikely that Microsoft would degrade Skype's interoperability, or tie its 
leading  Windows  operating  system  with  Skype,  thereby  limiting  other  players'  ability  to 
compete  with  the  merged  entity.  The  Commission  also  concluded  that  Microsoft  would  not 
have  an  incentive  to  degrade  Skype's  current  level  of  interoperability  as  it  needs  Skype's 
services  to  remain  available  on  as  many  platforms  as  possible,  so  as  to  enhance  the  Skype 
brand. 

Through  its  review  under  the  EUMR,  the  Commission  ensures  that  the  ICT  and  media 
markets  remain  open  for  new  entrants  and  that  access  to  key  elements  (whether  content, 
technology  or  interconnection)  is  not  denied.  The  Commission  also  aims  at  ensuring  that 
consumers do not suffer from higher prices, less choice, poorer quality and limited innovation 
as a result of mergers in that sector. 

3.  Rail transport 

The transport sector is important for EU growth and employment. In 2009103, the value added 
by  the  transport  sector  reached  EUR  437  billion  or  3.7%  of  EU  GDP.  Around  11  million 
people were employed in the transport and storage sector, which corresponds to 5.1% of total 
EU  employment.  However,  no  less  than  13%  of  household  expenditure  was  devoted  to 
transport  services.  Within  transport,  the  largest  subsectors  are  transport  support  activities 
(such as the operation of warehouses and terminals) and road freight transport. Rail transport 
represents  around  6%  of  the  value  added  in  the  transport  sector  as  a  whole.  It  nevertheless 
delivers significant inputs to many other sectors of the economy, while at the same time being 
close to the end consumer. 

In  the  last  20  years  the  Commission  has  been  active  in  supporting  the  restructuring  of  the 
European  rail  transport  market  and  strengthening  the  position  of  railways  vis-à-vis  other 
transport modes. The Commission's efforts have concentrated on three major areas, which are 
crucial for developing a strong and competitive rail transport industry: (1) opening of the rail 
transport  market  to  competition,  (2)  improving  the  interoperability  and  safety  of  national 
networks, and (3) developing rail transport infrastructure. 

Opening up national freight and passenger markets to cross-border competition is a major step 
towards  the  creation  of  an  integrated  European  railway  area  and  of  a  genuine  EU  internal 
market for rail. Greater technical harmonization of rail systems and the development of key 

101 COMP/M.5984 INTEL / MCAFEE, decision of 26 January 2011, OJ C 98, 30.3.2011, p. 1; IP/11/70. 
102 Case COMP/M.6281, Microsoft / Skype, decision of 7 October 2011, OJ C 341, 22.11.2011, p. 2; IP/11/1164. 
103 Most data at the sectoral level is available up until 2009 only. Where possible, reference is made to 

developments in the following years. 

26

 
 
                                                 
cross-border  rail  routes  are  also  helping  to  break  down  barriers  to  a  more  competitive  rail 
sector, along with better connections between EU and neighboring markets. 

Greater  competition  makes  for  a  more  efficient  and  customer-responsive  industry.  EU  rail  legislation  has 
consistently  encouraged  competitiveness  and  market  opening,  with  the  first  major  law  in  that  direction  dating 
back to 1991. The legislation is based on a distinction between infrastructure managers who run the network and 
the railway companies that use it for transporting passengers or goods. Different organizational entities must be 
set up for transport operations on the one hand and infrastructure management on the other. Essential functions 
such  as  allocation  of  rail  capacity  (the  “train  paths”  that  companies  need  to  be  able  to  operate  trains  on  the 
network), infrastructure charging and licensing must be separated from the operation of transport services and 
performed in a neutral fashion to give new rail operators fair access to the market. 

Rail  freight  transport  has  been  completely  liberalised  in  the  EU  since  the  start  of  2007,  for  both  national  and 
international  services.  Therefore  any  licensed  EU  railway  company  with  the  necessary  safety  certification  can 
apply for capacity and offer national and international freight services by rail throughout the EU. 

The  market  for  international  rail  passenger services  has  been  liberalised  in  the  EU  from  1  January  2010.  Any 
licensed, certified rail company established in the EU is able to offer such services, and in doing so has the right 
to pick up and set down passengers at any station along the international route.  

Towards a competitive and resource efficient transport system 

In  March  2011,  the  Commission  adopted  a  comprehensive  strategy  setting  out  a  roadmap 
towards  a  competitive  and  resource  efficient  transport  system104.  The  roadmap  contains  40 
concrete initiatives aimed at increasing mobility while reducing carbon emissions in transport 
by 60% by 2050. Some of those initiatives are specifically targeted at increasing competition 
in rail transport. 

As  mentioned  above,  rail  freight  transport  has  been  completely  liberalised  since  the  start  of 
2007,  while  the  market  for  international  rail  passenger  services  has  been  liberalised  from  1 
January 2010 on. The Commission initiated court actions against several Member States that 
have  improperly  implemented  EU  Directives  for  the  liberalisation  of  rail  freight  and 
international  passenger  transport.  The  Commission  roadmap  also  foresees  the  extension  of 
market opening to domestic rail passenger traffic. Currently, domestic rail passenger transport 
markets  have  been  opened  up  to  competition  in  some  Member  States  (including  Germany, 
Italy and the UK), but not in others. 

Effective competition in the rail sector is still weak as reflected in the high market shares of 
incumbents and the limited penetration of new entrants. Market entry has so far mainly taken 
the form of acquisitions of market players in one Member State by operators in other Member 
States. However, it remains difficult for new entrants to provide competitive rail services, in 
particular  because  of  the  difficulty  of  gaining  fair  and  non-discriminatory  access  to  the  rail 
network and rail-related services. The Commission's proposal on the recasting of the first rail 
package105  aims  to  address  such  concerns.  Discussions  in  2011  in  Parliament  and  Council 
focused  on  provisions  concerning  the  separation  of  infrastructure  and  service  facility 
operators  from  railway  undertakings.  In  addition,  the  Commission  has  started  to  use  its 
antitrust policy tools to ensure equal access to the rail infrastructure network. 

Finally, the Commission is seeking to ensure that companies delivering public rail services do 
not  receive  inappropriate  compensation.  The  Commission  regularly  verifies  that  such 

104   Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport 

system, European Commission White Paper, COM(2011)144 final, 28.3.2011. 

105   Directive establishing a single European railway area (Recast), European Commission Proposal, 

COM(2010) 475 final, 17.9.2010. 

27

 
 
 
 
 
                                                 
companies are not overcompensated for services delivered and so given an unfair advantage 
in the market place. 

Favouring market entry 

Increasing  competition  through  market  entry  in  the  rail  freight  and  passenger  transport 
markets  has  been  the  main  objective  of  the  Commission's  activities  in  relation  to  merger 
control and antitrust investigations in 2011. 

Because  of  the  Commission's  action,  there  is  scope  for  a  new  high-speed  service  in 
competition  with  the  existing  monopoly  service  on  the  Paris-Milan  route,  following  the 
approval  of  the  joint  venture  between  Veolia  Transport  and  Trenitalia106.  An  alternative 
service on the Vienna-Salzburg route may also see the light, as the Commission cleared the 
proposed joint venture between SNCF and two Austrian investment firms107. 

In addition, the Commission has started investigations to verify whether vertically integrated 
incumbents (such as Deutsche Bahn108 and Lietuvos gelezinkeliai109) are in a position to abuse 
their  monopoly  over  essential  rail  infrastructure  for  the  benefit  of  their  own  rail  transport 
operations and to the detriment of new entrants. 

Since  the  start  of  the  liberalisation  process  for  freight  and  passenger  rail  transport,  the 
Commission has examined the incumbents' restructuring plans in several Member States. In 
2011, the Commission opened formal investigation procedures on restructuring aid provided 
to  the  Greek  and  Bulgarian  railway  companies  Trainose110  and  BDZ111.  The  Commission 
investigation  of  Trainose  also  covers  the  public  service  contract  concluded  with  the  Greek 
government. The BDZ restructuring plan was notified in May 2011, following the approval of 
rescue aid by the Commission in December 2010112. 

4.  The Pharmaceutical and health services sector 

Health care remains an important economic sector, representing about 9% of GDP in the EU, 
with the pharmaceutical sector for prescription and non-prescription medicines accounting for 
close to 2% of EU GDP and the health services113 accounting for 6.5% of EU GDP114. Most 
health costs are borne by the Member States, with patients' direct contributions amounting to 
about 11% of the costs, equivalent to EUR 122 billion annually. The recent economic crisis 
and  an  ageing  population  have  put  Member  States  under  more  pressure  to  scrutinise  public 
spending, including the health budget. 

106   Case COMP/M.6150 Veolia Transport/Trenitalia/JV, decision of 20 July 2011, OJ C 249, 26.8.2011, 

p.3;IP/11/917. 

107   Case COMP/M.6269 SNCF/HFPS/Wehinger GmbH/Rail Holding, decision of 20 July 2011, OJ C 222, 

28.7.2011, p. 1. 

108   See MEMO/11/208, 31.3.2011. 
109   See MEMO/11/152, 10.3.2011. 
110   Case SA.32544, Restructuring of the Greek Railway Group - TRAINOSE S.A., decision of 13 July 

2011;IP/11/866. 

111   Case SA.31250, Restructuring aid to BDZ, decision of 9 November 2011; IP/11/1321. 
112   Case N402/2010, Rescue aid for the Bulgarian State Railways BDZ EAD (BDZ), decision of 15 December 

2010, OJ C 187, 28.6.2011, p. 6-9; IP/10/1733. 

113Excluding medicines, government investment on education, health prevention and other therapeutical 
appliances. 
114All figures in this section are Competition DG estimates based on data from the OECD 2008 Health database. 

28

 
 
 
                                                 
Both  the  pharmaceutical  and  health  services  sectors  display  a  number  of  common 
characteristics:  those  prescribing  the  goods  or  services  in  question  (e.g.  physicians)  are 
different from the consumers (patients). The same applies to those who pay for the goods or 
services,  which  are  usually  sickness  insurance  funds  in  the  Member  States.  Prescribers  and 
consumers are therefore less price sensitive than in other markets. Furthermore, both sectors 
are  fragmented  by  national  regulations  regarding  authorisation,  pricing  and  reimbursement 
status  of  the  goods  or  services.  In  both  areas  similar  competition  issues  arise,  including 
artificial barriers to entry. Keeping prices at a competitive level is of key importance. 

Looking  at  pharmaceuticals  specifically,  on  average  EUR  430  were  spent  on  medicines  in 
2007 for each European citizen115, a figure expected to rise in the future, particularly in view 
of  Europe's  aging  populations.  The  pharmaceutical  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  successful  R&D  activities.  Upon  loss  of  exclusivity  generic  companies 
can  enter  the  market  with  bio-equivalent  versions  of  the  originator  products,  but  at  much 
lower  prices,  thereby  contributing  to  the  control  of  public  budgets  and  giving  originator 
companies incentives to continue their R&D for new and innovative proprietary medicines. 

The competitive importance of generic products and innovative medicines 

The main issues of concern under competition law are practices which, for instance, unduly 
delay  or  block  generic  entry  or  the  development  and  launch  of  innovative  medicines.  The 
existence of such practices was analysed in general terms in the sector inquiry and highlighted 
in  the  final  report  in  2009116.  They  include  the  potential  misuse  of  patent  rights  and  patent 
settlement  agreements.  The  Commission  particularly  addressed  these  issues  via  antitrust 
enforcement action. These enforcement actions complement the Commission's recent work on 
the  possible  revision  of  Council  Directive  89/10/EEC  (also  known  as  the  Transparency 
Directive)117,  which  was  also  triggered  by  the  results  of  the  sector  inquiry,  when  additional 
reasons for market entry delay of medicines were identified within the regulatory framework. 

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 or services on the market118, the provision of health care goods or services is 
subject  to  EU  competition  rules,  as  emphasised  by  the  2010  Commission  antitrust  decision 
sanctioning the French Association of Pharmacists (ONP)119. 

115  See Commission Communication on the final report on the pharmaceutical Sector Inquiry, p.1, and Final 
Report (technical annex), available at the website of DG Competition: 
http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html  
116 See the Competition DG's website: 
http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html 
117 Council Directive 89/105/EEC of 21 December 1988 relating to the transparency of measures regulating the 
prices of medicinal products for human use and their inclusion in the scope of public health insurance systems, 
OJ L 40, 11.2.1989, p.8-11. 
118Cases C-118/85 Commission v Italy [1987] ECR 2599, paragraph 7; C-35/96, Commission v Italy [1998] ECR 
I-3851, paragraph 36; Joined Cases C-180/98 to C-184/98 Pavlov, [2000] ECR I-6451. 
119 Case COMP/39510Ordre National des Pharmaciens, decision of 8 December 2010; IP/10/1683. 

29

 
 
 
                                                 
Competition-related actions taken to improve the functioning of the market 

Within the pharmaceutical sector, the delay of generic market entry (through agreements and 
contractual arrangements) is the focus of the two cases opened during the year, Cephalon120 
and  Fentanyl121.  In  addition,  the  Commission  is  currently  conducting  a  number  of 
investigations into cases of generic delay where cases have not yet been formally opened122. 

Further, the Commission continues to monitor the market and obstacles to generic entry with 
particular emphasis on patent settlements. In 2011, it undertook a second monitoring exercise 
which  showed  a  significant  decrease  in  the  number  of  potentially  problematic  patent 
settlements. In fact the overall number of settlements decreased to 3% in the period of 2010, 
compared  to  10%  in  the  period  between  July  2008  and  December  2009  (first  monitoring 
exercise) and 22% in the period between January 2000 and June 2008 (sector inquiry)123. At 
the same time, the Commission saw a generalised increase in the use of unproblematic patent 
settlements. The Commission will continue monitoring patent settlements in 2012. 

The Commission also closed an investigation into an alleged misuse of the patent system (i.e. 
alleged application for unmeritous patents) as regards innovative medicines in the Boehringer 
case. This case was closed, as the undertakings concerned had reached an agreement, which 
also  addressed  the  Commission's  competition  concerns124.  In  the  agreement,  Boehringer 
removed  its  blocking  positions,  thereby  lifting  the  obstacles  for  its  competitor,  Almirall,  to 
launch its innovative medicine. 

The  Commission  continues  to  monitor  activities  in  the  health  care  markets.  The  decision 
against the French ONP of December 2010, sanctioning ONP for its attempts to fix minimum 
prices  in  the  French  clinical  laboratory  testing  services  market  as  well  as  for  restricting  the 
development of groups of laboratories in the market, was appealed before the General Court 
in February 2011. Further, the French Parliament adopted a new statute on 13 July 2011 that 
would  have  led,  inter  alia,  to  limiting  the  creation  of  groups  of  clinical  laboratories  in  the 
French market, thus going against the purpose of the Commission's Decision. The problematic 
sections  of  the  statute  were,  however,  subsequently  declared  invalid  by  the  French 
Constitutional Council, on procedural grounds125. 

III.  COMPETITION DIALOGUE WITH OTHER INSTITUTIONS 

Structured dialogue with the European Parliament 

While the Commission has full competence for the enforcement of the EU competition rules, 
subject  to  the  control  of  the  European  courts,  the  Commissioner  for  Competition  and  his 
services hold a continuous dialogue on competition issues with the European Parliament. The 
Commission  appreciates  Parliament's  timely  contribution  to  debates  on  competition  policy 
and regularly informs it about competition policy initiatives. 

120 Case COMP/39686 Cephalon; IP/11/511,opening of proceedings on 19.04.2011.  
121 Case COMP/39685 Fentanyl; IP/11/1228. opening of proceedings on 18.10.2011.    
122  MEMO/10/647 of 3 December 2010;  MEMO/09/435 of 6 October 2009.   
123 For further information on patent settlement monitoring see: 
http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html  
124 Case COMP/39246 Boehringer, closure of proceedings of 6 July 2011; IP/11/842. 
125 Conseil Constitutionnel − Décision n° 2011−640 DC du 04 août 2011. 

30

 
 
 
 
 
                                                 
In addition to the presence of Commissioner for Competition at meetings and hearings of the 
ECON  committee,  the  Competition  DG  keeps  Parliament  informed  about  upcoming  and 
announced  public  consultations,  gives  briefing  sessions  to  MEPs  and  staff  on  a  range  of 
current issues, and holds numerous bilateral meetings and discussions on specific topics. 

The  Commissioner  for  Competition  visited  the  ECON  committee  for  a  structured  dialogue 
three times in 2011; in March to present the Commission Work Programme for 2011 in July 
to  present  the  Annual  Report  on  Competition  Policy;  and  in  November  to  present  the 
Commission Work Programme for 2012. He also attended a hearing on collective redress and 
a meeting with the competition working group. 

The Commissioner for Competition chose to launch the Commission's public consultation on 
SGEIs  in  a  speech  to  ECON,  underlining  the  importance  he  attaches  to  Parliament's 
involvement in that dossier, and specifically asking for Parliament's input. 

Follow-up to Parliament's Resolution on the 2009 Report on Competition Policy 

Parliament  adopted  its  Resolution  on  the  2009  report  on  competition  policy  on  20  January 
2011. In a letter to the ECON Chair on 15 March 2011, the Commissioner for Competition 
responded to key points made in the Resolution. Parliament was particularly interested in the 
Commission's  activities  linked  to  the  financial  and  economic  crisis,  and  asked  the 
Commission to carry out an evaluation of the temporary State aid measures introduced during 
the crisis. 

In response, the Competition DG prepared a Staff Working Document on the temporary State 
aid rules during the financial and economic crisis126 which the Commissioner for Competition 
sent  to  the  Chair  of  ECON  on  28  September  2011.  The  Working  Document  was  more 
extensive  than  the  Parliament's  study  on  the  same  topic,  although  both  reached  similar 
conclusions: the aid granted to the financial sector had been justified and helped stabilise the 
financial markets and maintain credit flows to the real economy. One important aspect of the 
Commission's action, which was not mentioned in the Parliament report, was the restructuring 
conditions resulting from the Commission's decisions for all the major beneficiaries of State 
aid.  That  restructuring  minimised  the  distortions  of  competition  that  the  aid  could  have 
created, and ensured burden-sharing among stakeholders. 

In  its  Resolution,  Parliament  recalled  its  2007  and  2009  Resolutions  calling  for  the 
Commission to propose legislation to facilitate individual and collective claims for effective 
compensation  for  damages  resulting  from  breaches  of  antitrust  law.  In  response  to 
Parliament's  call  in  the  2009  Resolution  for  a  coherent  approach  across  sectors,  the 
Commission  launched  a  public  consultation  on  collective  redress  in  March  2011.  The  2012 
Commission  Work  Programme  lists  a  proposal  on  antitrust  damages  actions,  which  the 
Commissioner for Competition hopes to present to the College in 2012. 

In addition to the official response by the Commission to Parliament's Resolution, in March 
the  Competition  DG  also  sent  the  ECON  committee  a  detailed  response  to  all  of  the  points 
made  in  the  Eppink  report127.  Competition  DG  officials  also  met  members  of  the  ECON 

126 SEC(2011)1126 final (5.10.2011):  Commission Staff Working Paper on the effects of temporary State aid 
rules adopted in the context of the financial and economic crisis economic crisis. 
127 Texts adopted: P7_TA(2011)0023, available at 
http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&reference=A7-2010-0374&language=EN  

31

 
 
 
                                                 
committee  who  had  expressed  an  interest  in  specific  areas,  for  example  tax  competition, 
fining policy, financial services and the investigations into the CDS market. 

Taking Parliament's views into account 

Competition DG engagement with Parliament's ECON committee 

The  Competition  DG  organised  two  seminars  for  ECON  assistants  and  political  advisers  of 
the  members  of  the  ECON  committee  in  2011.  The  first,  in  February,  covered  the  main 
themes  in  the  2011  Competition  Work  Programme  (SGEIs;  the  Rescue  and  Restructuring 
Guidelines; the Commission's public consultation on Collective Redress) and on fines, given 
Parliament's  interest  in  this  subject.  The  seminar  gave  staff  the  opportunity  to  ask  detailed 
questions to Competition DG desk officer experts. 

A second seminar was organised to coincide with the presentation by the Commissioner for 
Competition of the 2010 Annual Competition Report, in July 2011. A follow-up briefing for 
members  of  the  ECON  competition  working  group  was  offered  for  September  by  the 
Competition DG. 

The Director-General of the Competition DG spoke at an Open Coordinators meeting of the 
ECON  committee  in  May.  Senior  Competition  DG  officials  also  had  a  number  of  bilateral 
meetings with MEPs from ECON and other committees in 2011, on a range of subjects. 

Information on Competition DG activities 

All  information  on  current  and  previous  public  consultations  and  Impact  Assessments  are 
published on the Competition DG's website128. The Competition DG also sends information 
on  the  launch  of  public  consultations  to  the  secretariat  of  the  ECON  committee.  All  timely 
contributions  to  those  consultations  by  the  European  Parliament  are  welcomed,  and 
Competition DG staff can brief MEPs on aspects of particular interest. 

All responses to public consultations are published on the internet, as well as any background 
studies  commissioned,  together  with  the  Commission's  Impact  Assessment,  and  any  related 
Staff  Working  Papers.  It  is  not  common  practice  to  summarise  the  results  of  public 
consultations. 

Services of General Economic Interest 

The Commissioner for Competition and Competition DG officials participated in meetings of 
the Public Services Intergroup on SGEI in the months before the launch of the March 2011 
public  consultation.  The  Commissioner  for  Competition  presented  the  Commission's  initial 
thinking  to  ECON  on  22  March,  and  reported  back  to  the  committee  in  July  and  again  in 
November, at which time he stated that he would be able to take into account a number of the 
concerns raised by Parliament in its Resolution on the SIMON report.  

Other subjects of interest to Parliament 

Fines 

128 Available at http://ec.europa.eu/competition/index_en.html  

32

 
 
 
                                                 
Members  of  the  ECON  committee  have  expressed  a  range  of  concerns  about  the 
Commission's fining policy. The services have explained the fining methodology in seminars, 
and in a detailed reply to an MEP letter, and was pleased to participate in a short seminar on 
fines  in  November  2011.  The  Competition  DG  also  published  a  factsheet  on  fines,  which 
seeks to explain the reasons for fines and how they are calculated. 

Compliance  is  another  theme  raised  by  Parliament.  The  Schwab  report  on  the  2010 
Commission's Report on Competition mentioned the importance of encouraging compliance, 
as  well  as  ensuring  effective  deterrence.  The  Competition  DG  published  a  brochure  on 
compliance  for  companies  in  November  2011,  which  directly  addresses  both  points129.  It 
helps companies to develop a proactive compliance strategy, summarises the key competition 
rules companies should respect and generally sets out basic methods to help companies ensure 
compliance  with  EU  competition  rules,  particularly  small  and  medium-sized  companies.    . 
The  brochure  also  confirms  the  Commission's  position  that  implementing  a  compliance 
programme does not have any negative implications for companies, nor will it be recognised 
as a mitigating factor when calculating the level of fines. 

The  Commission  published  its  revised  Best  Practices  package  in  October  2011.  As  well  as 
strengthening  the role  of  the Hearing Officer,  and  clarifying the  role  of  economic  evidence, 
that  package  outlined  measures  to  improve  the  experience  of  parties  to  an  antitrust 
investigation.  In  particular,  statements  of  objection,  which  set  out  the  Commission's 
arguments at an early stage in the case, and to which parties can respond in detail, will include 
an indication of the parameters of any future fine.  

Cases and investigative work 

MEPs  often  ask  the  Commission  questions  about  individual  ongoing  competition  cases,  to 
which  the  Commission  is  unable  to  reply  due  to  the  confidentiality  requirement  of  the 
investigative  procedures.  However,  Competition  DG  staff  regularly  meet  MEPs  at  their 
request, to explain the procedural steps in an investigation, and to have a general discussion 
on a particular sector, as far as is possible. 

The Commission has a range of tools at its disposal for the enforcement of EU competition 
rules. They include investigations in individual cases, sector inquiries, and working with other 
Directorates-General on regulatory measures. The Parliament has repeatedly called for sector 
inquiries in a number of areas, which the Commission  has noted. However, sector inquiries 
are very resource-intensive, and sometimes the same objectives can be achieved as effectively 
through other types of investigation. 

Competition DG contact with Parliament in other policy areas 

A  number  of  committees  follow  issues  relating  to  competition  policy.  Competition  DG 
officials  at  all  levels  have  held  a  series  of  bilateral  meetings  with  MEPs  from  other 
Parliamentary  committees,  including  IMCO,  ITRE  (where  the  mid-term  review  on  R&D&I 
was presented), TRAN, LIBE, JURI, and BUDG. Two files were of particular interest to the 
Competition DG in 2011. 

Regulation 1049 – Access to documents 

129 Available at http://ec.europa.eu/competition/antitrust/compliance/index_en.html    

33

 
 
 
                                                 
The  report  of  the  committee  on  Civil  Liberties  (LIBE)  on  access  to  documents  proposes  to 
delete  the  Commission's  proposed  exemption  for  documents  in  the  area  of  competition 
enforcement  (investigations).  The  Competition  DG  is  concerned  that  unrestricted  access  to 
documents  could  be  damaging  to  its  enforcement  activity,  particularly  in  the  context  of  the 
protection  of  its  leniency  programme.  The  Commission  will  continue  to  follow  that  matter 
closely through Council and during trilogue discussions. 

Competition  DG  engagement  with  the  European  Economic  and  Social 
Committee 

The Commission also keeps the European Economic and Social Committee (EESC) informed 
about major policy initiatives, and participates in study group and section meetings.Moreover, 
on 4 October the Commissioner for Competition attended the Section for the Single Market, 
Production  and  Consumption,  where  he  presented  the  Staff  Working  Document  on  the 
temporary State aid rules during the financial and economic crisis. On 7 December, the EESC 
adopted an opinion on the Report on Competition Policy 2010130. 

IV.  ANNEXES 

(1) 

List of Competition DG initiatives adopted under CWP 2011 

(2) 

List of Banking cases (State aid) 

130 Opinion of the European Economic and Social Committee on the 'Report from the Commission – Report on 
Competition Policy 2010', 7 December 2011, OJ C 43, 15.2.2012, p. 25 – 29. Available at 
http://www.eesc.europa.eu/?i=portal.en.int-opinions.19680  
INT/594 – CESE 1850/2011. 

34

 
 
 
 
                                                 
ANNEX 1: List of Competition DG initiatives adopted under CWP 2011 

•  Communication on the Reform of State Aid Rules on Services of General Economic 

Interest – COM(2011) 146 final 

•  Report on Competition Policy  2010 – COM(2011) 328 final* 

•  State aid Scoreboard: Spring 2011 update – COM(2011) 356 final* 

•  Best practices in Antitrust proceedings*: 

–  Commission notice on best practices for the conduct of proceedings concerning 

Articles 101 and 102 TFEU (2011/C 308/06) 

–  Decision of the President of the European Commission of 13 October 2011 on 
the function and terms of reference of the hearing officer in certain competition 
proceedings (2011/695/EU) 

–  Best practices for the submission of economic evidence and data collection in 
cases concerning the application of Articles 101 and 102 TFEU and in merger 
cases (Staff Working Paper) 

•  State aid Scoreboard: Autumn 2011 update – COM(2011) 848 final* 

•  Communication on the application, from 1 January 2012, of State aid rules to support 
measures in favour of banks in the context of the financial crisis – C(2011) 8744 final 

•  Review of the Framework on State aid to shipbuilding – (2011/C 364/06) 

•  SGEI package: 

–  Commission  Decision  of  20  December  2011  on  the  application  of  Article 
106(2) TFEU to State aid in the form of public service compensation granted to 
certain  undertakings  entrusted  with  the  operation  of  services  of  general 
economic interest - C(2011) 9380 

–  Communication  from  the  Commission  on  the  application  of  the  European 
Union State aid rules to compensation granted for the provision of services of 
general economic interest - (2012/C 8/02) 

–  Communication on the European Union framework for State aid in the form of 

public service compensation (2011) – (2012/C 8/03) 

* relates to other measures not included in the CWP 2011 

ANNEX 2: List of State aid banking cases 

State aid cases - situation – 31/12/2011 

Decisions adopted by the Commission in 2011 

AUSTRIA 

Type of measure / Beneficiary 

Type of Decision 

Date of adoption 

SA.32745 – Restructuring of Kommunalkredit 

Decision not to raise objections 
IP/11/389 

31 March 2011 

35

 
 
 
SA.32172 and SA.32554 – Temporary approval of 
aid for Hypo Group Alpe Adria 
[decision replaced – see below] 
SA.32172 and SA.32554 – Replacement decision: 
Temporary approval of aid for Hypo Group Alpe 
Adria 
SA.31883 – Restructuring of Österreichische 
Volksbanken AG 

SA.31189 – BAWAG Amendment Decision 

Decision not to raise objections 
IP/11/636 

24 May 2011 

Decision not to raise objections 

19 July 2011 

Decision to open an in-depth 
procedure 
IP/11/1522 
Decision not to raise objections 
- 

9 December 2011 

19 December 2011 

BELGIUM 

Belgium 

SA.29833 – Monitoring of KBC: Amendment of 
certain measures in the Restructuring Plan 
SA.30962 – Monitoring of Ethias 
SA.33751 – Temporary approval of rescue aid for 
Dexia Bank Belgium 
SA.29833 – Monitoring of KBC: extension of the 
target date of certain divestments by KBC and 
amendment of restructuring commitments 

Belgium/France/Luxembourg 

IP/11/1203 

- 

27 July 2011 

12 September 2011 
17 October 2011 

22 December 2011 

SA.33760, SA.33763, SA.33764 – Temporary 
approval of guarantees on the refinancing of Dexia 
and DCL and opening of in-depth investigation 

Opening decision 
IP/11/1592 

21 December 2011 

DENMARK 

SA.31867 – Amendments to liquidation aid for 
Roskilde bank 
SA.33001 – Prolongation 
SA.33001 – Amendment of winding-up scheme for 
credit institutions in Denmark 
SA. 33757 – Extension of the winding-up scheme for 
credit institutions in Denmark 
SA.32634 – Temporary approval of rescue aid for 
Amagerbanken 
SA.31945 – Liquidation aid for Eik Banken 

SA.33117 – Aid for the liquidation of Fionia Bank - 
revised commitments 
SA.33639 – Temporary approval of rescue aid for 
Max Bank 

GERMANY 

Decision not to raise objections 
EXME 11 / 24.05 
EXME/11/28.06 
Decision not to raise objections 
EXME/11/01.08 
Decision not to raise objections 
IP/11/1523 
Decision not to raise objections 
IP/11/676 
Decision not to raise objections 
IP/11/677 
- 

24 May 2011 

28 June 2011 
1 August 2011 

9 December 2011 

6 June 2011 

6 June 2011 

18 July 2011 

IP/11/1172 

10 October 2011 

MC 15/2009 – Landesbank Baden Württemberg 
"LBBW" – Deka divestment 
SA.31646 – Monitoring of Sparkasse Köln-Bonn - 
Prolongation of the deadline for certain divestments 
SA.28264 (C15/2009) – Restructuring aid for Hypo 

- 

- 

Final decision 

14 January 2011 

30 March 2011 

18 July 2011 

36

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate 
SA.29338 (C29/2009) – Restructuring of HSH 
Nordbank 
SA.29590 (C40/2009) – Approval of split-up of 
WestLB 
SA.33571 – Temporary approval of the 
recapitalisation of NordLB 

IP/11/898 
Final conditional decision 
IP/11/1047 
Final decision 
IP/11/1576 
Decision not to raise objections 
EXME/11/22.12 

GREECE 

SA.32767 – Amendment  
SA.33153 – Prolongation 
SA.33154 – Prolongation  
SA.31154 – Restructuring of Agricultural Bank of 
Greece (ATE) 
SA.34064 – Temporary approval of second rescue 
recapitalisation of National Bank of Greece under the 
Greek recapitalisation scheme 

EXME 11/04.04 
EXME 11/27.06 
EXME 11/27.06 
Decision not to raise objections 
IP/11/626 
Decision not to raise objections 
EXME/11/22.12 

20 September 2011 

20 December 2011 

22 December 2011 

4 April 2011 
27 June 2011 
27 June 2011 
23 May 2011 

22 December 2011 

HUNGARY 

SA.32995 – Prolongation 
SA.32993 – Prolongation  
SA.32994 – Prolongation 

IRELAND 

EXME/11/23.06 
EXME 11/09.06 
EXME/11/23.06 

23 June 2011 
9 June 2011 
23 June 2011 

SA.33006 – Prolongation (including guarantees on 
short-term liabilities) 
SA.33740 – Prolongation (including guarantees on 
short-term liabilities) 
SA.29907 and SA.32504 - Resolution of Anglo Irish 
Banks and Irish Nationwide Building Society 
SA.33216 – Second rescue recapitalisation of Bank 
of Ireland 
SA.33144 – Temporary approval of rescue aid for 
merged entity Allied Irish Banks/Educational 
Building Society 
SA.33311 – Temporary approval of rescue aid for 
Irish Life & Permanent Group Holdings 
SA.33023 – Restructuring of Quinn Insurance 
Limited 
SA.33443 – Second Restructuring Plan of Bank of 
Ireland 
SA.33170 – Resolution scheme for credit unions in 
Ireland 

Decision not to raise objections 
IP/11/673 
Decision not to raise objections 
EXME/11/08.12 
Final Decision 
IP/11/801 
Decision not to raise objections 
IP/11/854 
Decision not to raise objections 
IP/11/892 

Decision not to raise objections 
IP/11/913 
Decision not to raise objections 
IP/11/1187 
Decision not to raise objections 
IP/11/1572 
Decision not to raise objections 
IP/11/1574 

ITALY 

1 June 2011 

8 December 2011 

29 June 2011 

11 July 2011 

15 July 2011 

20 July 2011 

12 October 2011 

20 December 2011 

20 December 2011 

SA.34032 – Reintroduction of the Italian Guarantee 
scheme 

EXME/11/15.12 

15 December 2011 

LATVIA 

SA.30704 – Temporary approval of support to 
Latvian Mortgage and Land Bank and opening of in-

Opening decision 
IP/12/77 

26 January 2011 

37

 
 
 
 
 
 
 
 
 
 
 
 
depth procedure into the measures for the bank's 
transformation 

LITHUANIA 

SA.32188 – Extension 
SA.33135 – Prolongation 

NETHERLANDS 

EXME/11/21.1 
EXME 11/27.06 

21 January 2011 
27 June 2011 

SA.26674 – Restructuring of ABN Amro Group 

SA.33303 – Additional commitments by SNS Reaal to 
ensure proper remuneration of a capital injection 

Final conditional decision 
IP/11/406 
Decision not to raise objections 
EXME/11/19.12 

5 April 2011 

19 December 2011 

POLAND 

SA.33008 and 32946 – Prolongation 
SA.33007 – Prolongation  

EXME/11/28.6 
EXME/11/28.6 

28 June 2011 
28 June 2011 

PORTUGAL 

SA.32158 – Third prolongation 
SA.33178 – Fourth prolongation 
SA.34034 – Amendment 
SA.32157 – Third extension 
SA.33177 – Fourth prolongation 
SA.26909 – Banco Português de Negócios – opening 
of in-depth procedure 

EXME/11/21.1 
EXME/11/30.06 
EXME/11/21.12 
EXME/11/21.1 
EXME/11/30.06 
Opening decision 
IP/11/1235 

SLOVENIA 

21 January 2011 
30 June 2011 
21 December 2011 
21 January 2011 
30 June 2011 
24 October 2011 

SA.32261 – Temporary approval of rescue 
recapitalisation of Nova Ljubljanska Banka 

IP/11/264 

7 March 2011 

SPAIN 

SA.32990 – Prolongation 
SA.33402 – Capital injection for Caja de Ahorros de 
Mediterraneo (CAM) 
SA.33096 – Temporary approval of rescue aid for 
NCG Banco 
SA.33095 – Temporary approval of rescue aid for 
Unnim Banc 
SA.33103 – Temporary approval of rescue aid for 
Catalunya Banc 
SA.33917 (2011/N) – Temporary approval of the 
recapitalisation and liquidity support for Banco de 
Valencia 

IP/11/673 
Decision not to raise objections 
EXME 11/25.07 
Decision not to raise objections 
IP/11/1143 
Decision not to raise objections 
IP/11/1143 
Decision not to raise objections 
IP/11/1143 
Decision not to raise objections 
IP/11/1388 

1 June 2011 
24 July 2011 

30 September 2011 

30 September 2011 

30 September 2011 

21 November 2011 

38