REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Report on Competition Policy 2015
Date: 2016-06-15
Institutions: Directorate-General for Competition, European Commission
Subjects: EU competition policy, State aid, competition law, electronic commerce, energy policy, mass media, research and development, restriction on competition, single market, telecommunications

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 15.6.2016  COM(2016) 393 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Report on Competition Policy 2015 {SWD(2016) 198 final}  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE 
COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE 
COMMITTEE OF THE REGIONS 

Report on Competition Policy 2015 

I.  Introduction 

Strong and effective EU competition  policy  has  always been  a cornerstone of the European 
project. Now that sustaining the recovery and boosting economic growth are at the top of EU 
agenda, competition policy is more important than ever. 

Competition policy keeps markets efficient and open. For European consumers, this translates 
into  better  market  outcomes  such  as  lower  prices,  better  quality  products  and  services,  and 
greater choice. In addition, healthy competition gives companies fair chances to do business 
and  to  achieve  their  commercial  goals,  which  in  turn  encourages  growth,  job  creation  and 
prosperity.  When  companies  are  able  to  compete  on  their  own  merits,  businesses  and 
households  benefit  from  a  wide  range  of  good  quality,  innovative  products  and  services  at 
competitive  prices.  Increased  competition  also  drives  companies  to  invest  and  to  become 
more efficient. These efficiency gains are then passed on to the wider economy. The ultimate 
aim of competition  policy is  to  make markets  work better  –  to  the advantage of households 
and businesses. 

At  the  beginning  of  his  mandate,  the  President  of  the  European  Commission,  Jean-Claude 
Juncker, said that his Commission will focus on the key challenges facing European society 
and  the  economy.  Competition  policy  has  an  important  role  to  play  in  tackling  those 
challenges.  The  work  carried  out  in  the  field  of  competition  in  2015  made  a  significant 
contribution  to  a  number  of  Commission’s  key  political  priorities,  namely  boosting  jobs, 
growth  and  investment,  and  creating  a  connected  Digital  Single  Market,  a  resilient  Energy 
Union, and a deeper and fairer single market. 

The Commission  is  also committed to  fostering  a competition  culture –  both  in  the EU and 
beyond  –  by  promoting  closer  dialogue  with  Member  States1  and  with  the  other  EU 
institutions, as well as extensive international cooperation. 

The guiding principles of competition enforcement are to safeguard impartiality, enforce the 
rule  of  law  and  serve  the  common  European  interest.  EU  competition  policy  also  centres 
around the values of fairness, political independence, transparency and due process. 

II.  Competition policy boosts innovation and investment across the EU 

Europe’s economy is slowly turning  a corner after the recent economic and financial crisis. In 
order to  build a sound basis for sustainable  growth  and the creation of quality jobs,  the EU 
needs  to  restore  its  investment  levels,  especially  in  strategic  areas  such  as  research, 
development  and  innovation.  Europe’s  future  should,  in  particular,  be  based  on  innovation. 
Competition  policy  can  help  achieve  this  by  creating  an  environment  that  encourages 
investment and innovation. 

1 See for example Competition Policy Brief Issue 2015-05, Improving competition in the Member States to boost 
growth. 

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Competitive  pressure  creates  incentives  for  firms  to  invest,  becoming  more  efficient, 
developing  new  technologies  and  creating  better  products.  Enabling  more  effective 
competition helps stimulate investment by keeping markets open and ensuring that action is 
taken  if  a  market  leader  abuses  its  position  to  prevent  its  competitors  from  growing  and 
innovating.  Econometric  model  simulations  show  that  the  Commission’s  merger  and  cartel 
decisions lead to a 0.7 % increase investment after five years.2 In addition, EU State aid rules 
steer  public  resources  towards  mobilising  new  investment,  ensuring  that  public  funding 
incentivises private investments which would not have been made otherwise. 

The Investment Plan for Europe3 was launched in November 2014 with the aim of boosting 
investment.  A  key  part  of  the  plan  is  the  European  Fund  for  Strategic  Investment4  (EFSI), 
which  became  operational  in  late  2015.  With  the  help  of  the  European  Investment  Bank 
(EIB),  EFSI  provides  financing  backed  by  an  EU  budget  guarantee,  unlocking  strategic 
investments which the market could not finance alone. 

EFSI-supported  project  funding  provided  by  the  EIB  does  not  fall  under  State  aid  rules. 
However,  projects  may  also  receive  financial  support  (‘co-financing’)  from  the  Member 
States (including from the European structural and investment funds) which is subject to State 
aid rules. This funding must be approved by the Commission unless it is granted on market 
terms. To support the EFSI, the Commission assesses the co-financing from Member State as 
a  matter  of  priority.  State  aid  rules  go  hand  in  hand  with  the  Investment  Plan’s  aim  of 
addressing  market  failures  and  mobilising  private  investment.  State  aid  control  ensure  that 
public  investment  projects  address  real  needs,  keep  costs  under  control  and  guarantee  that 
public money is genuinely needed to get projects off the ground. 

Revamped State aid rules to encourage growth-enhancing aid measures 

State  aid  rules  have  been  overhauled  in  the  context  of  the  State  aid  modernisation  (SAM) 
initiative.5 The initiative helps Member States to better target aid measures towards economic 
growth, job creation and social cohesion. As part of SAM, the Commission is reinforcing its 
partnership with the Member States on the implementation of the new rules, as they have now 
increased responsibility to grant aid without prior notification to the Commission. 

This  strengthened  partnership  approach  aims  to  ensure  that  greater  flexibility  for  Member 
States to grant aid is balanced by better cooperation, diligent national controls and increased 
transparency.  The  Commission  will  support  strategic  investments  by  working  with  Member 
States on how to design growth-enhancing aid measures that promote a strong, integrated and 
dynamic single market. 

The  new  State  aid  framework  will  ensure  that  public  funding  helps  mobilise  private 
investment  to  contribute  to  important  objectives  of  common  interest,  without  distorting 
competition. In this respect, in addition to the rules in the expanded General Block Exemption 
Regulation (GBER) adopted in 2014,6 three areas are especially important to boost innovation 

2 Dierx A.,  Ilzkovitz, F., Pataracchia, B., Ratto, M., Thum-Thysen, A.,Varga, J., ‘Distributional macroeconomic 
effects of EU competition policy – a general equilibrium analysis’, Competition Policy and Shared Prosperity 
(forthcoming), World Bank. 
3 See http://ec.europa.eu/priorities/jobs-growth-investment/plan/index_en.htm.  
4 See http://ec.europa.eu/priorities/jobs-growth-investment/plan/efsi/index_en.htm.  
5 See http://ec.europa.eu/competition/state_aid/modernisation/index_en.html.  
6 Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with 
the internal market in application of Articles 107 and 108 of the Treaty, OJ L 187, 26.6.2014, available at 
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.187.01.0001.01.ENG  

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and  investment  across  the  EU.  The  Research,  Development  and  Innovation  (R&D&I) 
framework7 facilitates the granting of aid measures for research, development and innovation 
activities,  to  complement  private  funding.  The  Risk  Finance  State  aid  guidelines8  permit  a 
more  rapid  and  generous  distribution  of  risk  finance  aid  to  innovative  and  growth-oriented 
small  and  medium-sized  businesses  (SMEs)  and  mid-caps.  The  Broadband  Guidelines9 
support  Member  States  in  tackling  funding  gaps  and  market  failures  when  it  comes  to 
providing adequate broadband coverage, especially in rural areas. 

Aid measures enabling ground-breaking research 

State  aid  rules  help  to  encourage  and  spread  innovation  in  the  EU,  by  supporting  cutting-edge  projects  in  the 
most advanced technological fields. 

In April, for example, the Commission assessed a GBP 50 million (around EUR 71 million) grant that the UK 
authorities intended to provide for designing a SABRE space launcher engine, and found it was in line with EU 
state  aid  rules.  SABRE  is  a  research  and  development  project  carried  out  by  UK  company  Reaction  Engines 
Limited, which aims to develop an engine that would significantly reduce the cost of launching satellites into a 
low Earth orbit. The Commission assessed the project under its R&D&I State aid framework, and concluded that 
the funding raised from private equity sources would not be enough to complete the project. Research in this area 
could lead to significant technological advances that would benefit consumers using products and services that 
derive from low Earth orbiting satellites, such as mobile communications. 

III.  Seizing the opportunities of the Digital Single Market 

Turning the Digital Single Market into a reality has been a Commission priority since the start 
of  its  mandate.  The  expansion  of  the  digital  economy,  besides  transforming  our  world  and 
way  of  living,  is  one  of  the  main  drivers  of  economic  growth.  A  thriving  Digital  Single 
Market would fuel innovation, create new jobs and also build new opportunities for European 
start-ups and small and medium-sized businesses (SMEs) to reach out to a market of over 500 
million  people. The Commission  has estimated that creating a EU Digital  Single Market  by 
breaking  down  regulatory  barriers,  as  well  as  moving  from  28  national  markets  to  a  single 
one,  could  contribute  EUR  415  billion  per  year  to  our  economy  and  create  hundreds  of 
thousands of new jobs10. 

In  May  2015,  the  Commission  adopted  its  Digital  Single  Market  Strategy.11  The  strategy 
includes a set of 16 targeted actions, built around three pillars: (1) better access for consumers 
and businesses to digital goods and services across Europe; (2) creating the right  conditions 
and  a  level  playing  field  for  digital  networks  and  innovative  services  to  flourish;  (3) 
maximising the growth potential of the digital economy. 

7 Communication from the Commission, Framework for State aid for research and development and innovation, 
OJ C 198, 27.6.2014, available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv: 
OJ.C_.2014.198.01.0001.01.ENG 
8 Communication from the Commission, Guidelines on State aid to promote risk finance investments, OJ C 19, 
22.1.2014, available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52014XC0122(04). 
9 Communication from the Commission, EU Guidelines for the application of State aid rules in relation to the 
rapid deployment of broadband networks, OJ 2013 C 25, 26.1.2013, available at http://eur-lex.europa.eu/ 
LexUriServ/LexUriServ.do?uri=OJ:C:2013:025:0001:0026:en:PDF. 
10 See http://ec.europa.eu/priorities/digital-single-market_en.  
11 Communication of 6 May 2015 from the Commission to the European Parliament, the Council, the European 
Economic and Social Committee and the Committee of Regions, A Digital Single Market Strategy for Europe, 
COM(2015) 192 final, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=celex%3A52015DC0192. . 

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Digital markets are also a main priority in the competition policy field. Open and fair digital 
markets  will  boost  innovation  and  bring  benefits  to  both  consumers  and  businesses.  The 
Digital  Single Market  must  be a place where  all players  — large and small  — can develop 
innovative  products  and  compete  on  their  merits.  In  addition,  competition  policy  tackles 
existing barriers online which are limiting the investment horizons of internet companies and 
start-ups,  and  preventing  businesses,  citizens  and  governments  to  fully  benefit  from  digital 
tools. 

Ensuring  undistorted  competition  on  the  web:  Tackling  online  barriers  and  obstacles  to 
innovation 

Rapid developments in the digital economy pose several challenges for policymakers, but do 
not  require  an  overhaul  of  competition  law  and  tools:  competition  policy  instruments  are 
adapting quickly to the specific features of the digital markets.12 

The e-commerce sector inquiry – deepening market knowledge to tackle cross-border barriers 

In  May  2015,  the  Commission  launched  an  antitrust  sector  inquiry  into  the  e-commerce  sector  in  the  EU.  In 
2014,  around  half  of  all  EU  consumers  shopped  online,  but  only  around  15  %  of  them  bought  online  from  a 
seller based in another EU Member State. This suggests that significant cross-border barriers to e-commerce still 
exist within the EU. The sector inquiry will focus in particular on potential barriers created by companies to the 
cross-border  online  trade  in  goods  and  services  where  e-commerce  is  most  widespread,  such  as  electronics, 
clothing and shoes, and digital content. 

The sector inquiry will support the measures that the Commission and EU national competition authorities take 
against  restrictions  on  online  sales.  Knowledge  gained  from  the  sector  inquiry  will  contribute  to  better 
enforcement of competition law in the e-commerce sector. 

One of the primary aims of competition enforcement is to encourage all industry participants 
to innovate, whether they are start-ups or have a dominant market share. The aim is to ensure 
that  European  consumers  have  as  wide  a  choice  as  possible  of  innovative  products.  For 
example, in the online search market, the Commission is conducting an antitrust investigation 
into Google’s practices.  

In April, the Commission sent a Statement of Objections to Google, alleging that the company 
has  abused  its  dominant  position  in  the  market  for  online  search  services  in  the  European 
Economic  Area  by  systematically  favouring  its  own  comparison  shopping  product  in  its 
general search results.13 The Commission is concerned that the search results users receive are 
not  always  the  most  relevant  to  their  queries.  The  Commission’s  preliminary  view  is  that 
Google’s  behaviour  infringes  EU  antitrust  rules  because  it  stifles  competition  and  therefore 
harms consumers. 

The  Commission  has  previously  outlined  four  concerns  about  Google’s  conduct,  and  the 
Statement  of  Objections  described  above  relates  to  the  first  of  those  concerns  (comparison 
shopping). The Commission is also actively investigating Google’s conduct in relation to the 
other  three  concerns:  copying  of  rivals’  web  content,  advertising  exclusivity,  and  undue 
restrictions  on  advertisers.  The  Statement  of  Objections  in  relation  to  comparison  shopping 
does not in any way prejudge the outcome of the Commission’s investigation into the other 
three concerns. 

12 See recent study from the European Parliament at: 
http://www.europarl.europa.eu/RegData/etudes/STUD/2015/542235/IPOL_STU%282015%29542235_EN.pdf  
13 Case AT.39740 Google search, see IP/15/4780 of 15 April 2015 available at http://europa.eu/rapid/press-
release_IP-15-4780_en.htm.   

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Another investigation in the digital sector concerns Amazon. In June, the Commission opened 
a formal antitrust investigation into some of Amazon’s business practices in the distribution of 
e-books.14  In  particular,  the  investigation  is  focusing  on  clauses  which  appear  to  protect 
Amazon from competition from other e-book distributors, for example clauses granting it the 
right to be informed of more favourable or alternative terms offered to its competitors, and/or 
the right to terms and conditions at least as good as those offered to its competitors. 

The  Commission  has  concerns  that  such  clauses  may  disrupt  the  level  playing  field  and 
potentially decrease competition in the market to the detriment of consumers, making it more 
difficult  for  other  e-book  distributors  to  compete  with  Amazon  by  developing  new  and 
innovative  products  and  services.  Such  behaviour,  if  confirmed,  would  violate  EU  antitrust 
rules that prohibit abuses of a dominant market position and restrictive business practices. The 
Commission’s goal is to ensure healthy inter-platform competition and make sure that market 
players do not abuse their position to obtain contractual terms and conditions that may act as 
an obstacle to innovation in the market. 

Promoting a wider choice in access to media for EU citizens 

A strong and swift competition enforcement is a key tool in effectively addressing issues that 
arise  in  the  new  and  rapidly  evolving  sectors  of  the  digital  economy.  However,  ensuring 
vibrant  competition  in  more  traditional  markets,  such  as  broadcast  television,  is  equally 
important  for  European  citizens.  The  Commission  is  keen  to  ensure  that  consumers  can 
choose between TV distributors who are competing on a fair and equal footing.15  

Protecting innovation incentives in the media sector 

In February 2015, the Commission cleared, under the EU Merger Regulation, Liberty Global’s acquisition of a 
stake  in  the  Belgian  media  company  De  Vijver  Media  NV  (‘De  Vijver’),  subject  to  commitments.  The 
Commission’s decision followed an in-depth investigation. 

The Commission had concerns that, after the transaction, De Vijver would refuse to license its channels to TV 
distributors  that  are  in  competition  with  Telenet,  a  cable  company  controlled  by  Liberty  Global.  The 
commitments  address  these  concerns  by  obliging  De  Vijver  to  license  its  channels  –  Vier,  Vijf  and  any  other 
similar  channel  it  may  launch  –  to  TV  distributors  in  Belgium  under  fair,  reasonable  and  non-discriminatory 
terms.  Without  these  commitments,  the  transaction  could  have  translated  in  less  competition  in  the  TV 
distribution market and ultimately higher prices and less innovation for consumers. 

In addition, the Commission authorised in April the proposed acquisition of the Portuguese telecommunications 
operator  PT  Portugal  by  the  multinational  cable  and  telecommunications  company  Altice.  The  decision  is 
conditional on Altice's committment to sell its two subsidiaries in Portugal. 

PT  Portugal  is  a  telecommunications  and  multimedia  operator  with  activities  extending  across  all 
telecommunications segments in Portugal. The Commission was concerned that the merger, as initially notified, 
would  have  reduced  competition  in  a  number  of  telecommunications  markets  in  Portugal.  The  merger  would 
have  removed  a  strong  competitor  from  these  markets,  and  this  may  have  led  to  higher  prices  and  less 
competition for Portuguese consumers. In order to remove these concerns, Altice offered to remove the overlap 
between the activities of Altice and PT Portugal by selling its Portuguese businesses Cabovisão and ONI. The 
Commission worked closely with the Portuguese competition authority when assessing the proposed transaction. 

14 Case AT.40153 E-book MFNs and related matters, see IP/15/5166 of 11 June 2015 available at 
http://europa.eu/rapid/press-release_IP-15-5166_en.htm.  
15 See Cases M.7194 Liberty Global / Corelio / W&W / De Vijver Media, Commission Decision of 24 February 
2015, available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7194, and 
M.7499 Altice / PT Portugal, Commission decision of 20 April 2015, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7499. . 

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Another antitrust investigation concerns the cross-border provision of pay-TV services in the 
United Kingdom and Ireland. In July, the Commission sent a Statement of Objections to Sky 
UK  and  six  major  US  film  studios:  Disney,  NBC  Universal,  Paramount  Pictures,  Sony, 
Twentieth  Century  Fox  and  Warner  Bros.16  The  Commission’s  investigation,  which  was 
opened  in  January  2014,  identified  clauses  in  licensing  agreements  between  the  six  film 
studios and Sky UK which require Sky UK to block access to films through its online pay-TV 
services  or  through  its  satellite  pay-TV  services  to  consumers  outside  its  licensed  territory 
(UK and Ireland). Certain agreements also contain clauses requiring the film studios to ensure 
that,  in  their  licensing  agreements  with  broadcasters  other  than  Sky  UK,  these  broadcasters 
are  prevented  from  making  their  pay-TV  services  available  in  the  United  Kingdom  and 
Ireland. 

This situation affects European consumers who want to watch the pay-TV channels of their 
choice, regardless of where they live or travel in the EU. The Commission’s preliminary view 
is that, in the absence of convincing justification, such clauses would constitute a violation of 
EU rules that prohibit anticompetitive agreements. 

Improving the functioning of innovative markets – mobile devices 

Mobile devices, such as smartphones and tablet computers, are now part of the everyday life 
of  the  majority  of  European  citizens.  2015  was  a  milestone  for  European  mobile 
communication  users  – 
adopted 
Regulation (EU) 2015/2120,17  which  will  put  an  end  to  roaming  charges  in  the  EU  from 
15 June  2017.  The  aim  of  antitrust  enforcement,  together  with  legislation,  is  to  protect 
competition  in  the  area  of  mobile  devices  to  ensure  continued  innovation  to  the  benefit  of 
European consumers.   

the  European  Parliament 

the  Council 

and 

Following the opening of two separate antitrust investigations in December, the Commission 
sent  two  Statements  of  Objections  to  Qualcomm,  the  world’s  largest  supplier  of  baseband 
chipsets,  which  are  used  in  consumer  electronic  devices.  Baseband  chipsets  process 
communication functions in smartphones, tablets and other mobile broadband devices. They 
are used for both voice and data transmission. 

The Commission’s preliminary view is that the company has abused its dominant position in 
the  worldwide  markets  for  3G  (UMTS)  and  4G  (LTE)  baseband  chipsets,  in  breach  of  EU 
antitrust  rules.18  The  first  investigation  is  examining  whether  Qualcomm  has  abused  its 
dominant  market  position  by  offering  financial  incentives  to  a  major  smartphone  and  tablet 
manufacturer  on  condition  that  it  exclusively  use  Qualcomm  baseband  chipsets  in  its 
smartphones and tablets. Such conduct would have reduced the manufacturer’s incentives to 
source  chipsets  from  Qualcomm’s  competitors,  harming  competition  and  innovation  in  the 
markets  for  UMTS  and  LTE  baseband  chipsets.  The  second  investigation  is  looking  into 
whether Qualcomm engaged in predatory pricing by charging prices below cost with a view 
to forcing its competition out of the market. 

16 Case AT.40023 Cross-border access to pay-TV content, see IP/15/5432 of 23 July 2015 available at 
http://europa.eu/rapid/press-release_IP-15-5432_en.htm. . 
17 Regulation (EU) 2015/2120 of the European Parliament and of the Council of 25 November 2015 laying down 
measures concerning open internet access and amending Directive 2002/22/EC on universal service and users’ 
rights relating to electronic communications networks and services and Regulation (EU) No 531/2012 on 
roaming on public mobile communications networks within the Union, OJ L 310, 26.11.2015, pp. 1-18, available 
at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32015R2120.  
18 Cases AT.40220 Qualcomm (exclusivity payments) and AT.39711 Qualcomm (predation), see IP/15/6271 of 
8 December 2015 available at http://europa.eu/rapid/press-release_IP-15-6271_en.htm.   

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The market for the supply of hardware, however, is only one side of the coin – the software 
running  on  smartphones  and  tablets  must  also  be  subject  to  undistorted  competition.  The 
mobile applications and services on smartphones, tablets and other mobile devices are based 
on the device’s operating system. Google Android has become the leading operating system 
for smart mobile devices in the European Economic Area, to the extent that Android is now 
used on the majority of smart mobile devices in Europe. 

In  April,  the  Commission  opened  formal  proceedings  against  Google  to  investigate  into 
whether  the  company’s  conduct  in  relation  to  Android  may  have  breached  EU  antitrust 
rules.19  Android  is  an  open-source  mobile  operating  system  which  is  predominantly 
developed by Google. In principle, anyone can freely use and further develop Android. The 
majority of smartphone and tablet manufacturers, however, use the Android operating system 
in combination with a range of Google’s proprietary applications and services, and therefore 
need to enter into certain agreements with Google. 

The  Commission  is  assessing  if,  by  entering  into  anticompetitive  agreements  and/or  by 
abusing  a  possible  dominant  position,  Google  has  illegally  hindered  the  development  and 
market  access  of  rival  mobile  operating  systems,  mobile  communication  applications  and 
services in the European Economic Area. This investigation is distinct and separate from the 
Commission’s investigation into Google’s behaviour in relation to internet searches. 

Effective merger control to safeguard investment in the telecoms sector 

Effective competition in the telecoms sector is a key driver of investment and better market 
outcomes for consumers and businesses. Competition is the driving force that will attract the 
investment  to  develop  the  high-speed  broadband  networks  that  Europeans  need.  Consumers 
do not benefit from investment as such – they benefit from the impact of investment on the 
parameters of competition such as choice, quality and price. 

Besides keeping the telecoms market open and competitive, competition enforcement remains 
a key tool in tackling market fragmentation in the EU.20 Competition policy also complements 
the review of the telecoms regulatory framework, one of the main measures planned under the 
Digital Single Market Strategy. 

In addition, merger control in this area plays a crucial role, by assessing whether a proposed 
merger would lead to increased investment to the benefit of consumers, for example in terms 
of increased network coverage. 

In  May,  the  Commission  approved,  under  the  EU  Merger  Regulation,  the  proposed 
acquisition of Jazztel, a telecommunications company registered in the UK but mainly active 
in  Spain,  by  rival  Orange  SA  of  France.21  The  approval  is  conditional  upon  the  full 
implementation by Orange of a number of commitments that will ensure effective competition 
in the fixed internet access services markets after the takeover. 

The Commission had concerns that the takeover, as initially notified, could have led to higher 
prices  for  fixed  internet  access  services  for  consumers  in  Spain.  To  address  these  concerns, 

19 Case AT.40099 Google Android, see MEMO/15/4782 of 15 April 2015, available at 
http://europa.eu/rapid/press-release_MEMO-15-4782_en.htm.  . 
20 See for example Slovak Telecom decision (case AT.39523) of 15 October 2014, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39523. . 
21 Case M.7421 Orange / Jazztel, Commission decision of 19 May 2015, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7421. . 

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Orange  submitted  commitments  to  ensure  that  a  new  player  may  enter  the  retail  market  for 
fixed  internet  access  services,  and  compete  as  strongly  as  Orange  and  Jazztel.  The 
commitments remove the Commission’s initial concerns. 

The  Commission  has  also  opened  two  in-depth  investigations  into  mergers  in  the  telecoms 
sector. First, it is looking into the proposed acquisition of Telefónica UK by Hutchison,22 to 
assess  whether  the  transaction  would  harm  competition.  The  Commission  is  concerned  that 
the transaction could lead to higher prices, less choice and reduced innovation for customers 
of  mobile  telecommunications  services  in  the  United  Kingdom.  The  Commission  has  also 
conducted an in-depth investigation into the takeover of BASE Belgium by Liberty Global23 
to make sure that consumers in Belgium do not suffer higher prices and reduced choice as a 
result of the proposed transaction. 

Furthermore,  the  Commission  reviewed  the  proposed  merger  of  the  Danish  businesses 
Telenor and TeliaSonera.24 The Commission had concerns that the merger would have created 
the  largest  mobile  network  operator  in  Denmark  and  would  have  resulted  in  a  highly 
concentrated  market  structure,  leading  to  price  increases  for  customers  and  reduced 
investment incentives. In September 2015, after submitting two sets of remedies that appeared 
to be insufficient to address the competition concerns, the parties abandoned the transaction. 

IV. Building an integrated and climate-friendly European Energy Union 

The  creation  of  an  Energy  Union  is  a  big  step  towards  an  integrated,  interconnected  and 
resilient  energy  market,  to  the  benefit  of  consumers,  companies  and  the  environment. 
Businesses and households, which are at the core of the Energy Union, should be able to pay 
affordable and competitive prices. At the same time, EU energy policy is based on the three 
pillars  of  sustainability,  competitiveness  and  security  of  supply.  Creating  a  strong  Energy 
Union with an ambitious climate policy will require a fundamental transformation of Europe’s 
energy system. In 2015, the Commission began delivering on this key priority. 

In February, the Commission unveiled its Framework Strategy for a Resilient Energy Union 
with a Forward-Looking Climate Change Policy.25 The Framework Strategy sets out, in five 
interrelated  policy  dimensions  (‘Energy  security,  solidarity  and  trust’,  ‘Fully  integrated 
European  energy  market’,  ‘Energy  efficiency  contributing  to  moderation  of  demand’, 
‘Decarbonisation  of  the  economy’,  and  ‘Research,  Innovation  and  Competitiveness’),  the 
goals of Energy Union – and the steps the Commission will take to achieve it. 

The EU needs to move away from an economy driven by fossil fuels, which is reliant on old 
technologies and outdated business models. The current fragmented system, characterised by 
uncoordinated national policies, market barriers and energy-isolated areas, must be overcome. 
Empowering consumers, by giving them information and choice, is also crucial. 

22 Case M.7612 Hutchison 3G UK / Telefónica UK, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7612. 
23 Case M.7637 Liberty Global / BASE Belgium, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7637. 
24 Case M.7419 TeliaSonera / Telenor / JV, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7419. . 
25 Communication of 25 February 2015 from the Commission to the European Parliament, the Council, the 
Economic and Social Committee, the Committee of the Regions and the European Investment Bank, A 
Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy, COM(2015) 
080 final, available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2015 %3A80 %3AFIN. . 
9 

 
 
                                                           
Integrating  energy  markets  is  a  key  objective  of  the  Energy  Union.  If  gas  and  electricity 
flowed freely around the EU, this would be more economically sustainable, environmentally 
friendly, and socially inclusive. 

Antitrust enforcement to make energy more secure, affordable and sustainable. 

Antitrust enforcement plays a key role in fostering market integration in the Energy Union by 
tackling  market  distortions  originating  from  the  behaviour  of  dominant  market  players.  The 
antitrust  investigation  into  Gazprom’s  conduct  in  central  and  eastern  Europe  is  a  prime 
example of this.26 

Ensuring that dominant gas suppliers play by the rules – the Gazprom investigation 

In April, the Commission sent a Statement of Objections to Gazprom stating that some of its business practices 
in central and eastern European gas markets may constitute an abuse of its dominant market position, in breach 
of EU antitrust rules. Gas is an essential commodity in the daily life of most EU citizen, and the Commission’s 
preliminary view is that Gazprom may be hindering competition in the gas supply markets in eight central and 
eastern  European  Member  States  (Bulgaria,  the  Czech  Republic,  Estonia,  Hungary,  Latvia,  Lithuania,  Poland 
and Slovakia). Gazprom is the dominant natural gas supplier in those countries, with market shares well above 
50 % in most, and in some cases up to 100 %. 

On  the  basis  of  its  investigation,  the  Commission’s  preliminary  view  is  that  Gazprom  may  be  breaking  EU 
antitrust rules by pursuing an overall strategy to partition central and eastern European gas markets, for example 
by  reducing  its  customers’  ability  to  resell  the  gas  cross-border.  This  may  have  enabled  Gazprom  to  charge 
unfair prices in certain Member States. Gazprom may also have abused its dominant market position by making 
the  supply  of  gas  dependent  on  obtaining  unrelated  commitments  from  wholesalers  concerning  gas  transport 
infrastructure. 

Antitrust enforcement supports the creation of a single market for energy, also by breaking up 
anticompetitive market sharing agreements27 and by keeping infrastructure accessible. Access 
to  infrastructure  is  important  for  preventing  market  foreclosure  and  maintaining  investment 
incentives. Important actions in this area include the Statement of Objections sent in March to 
Bulgarian  Energy  Holding  (BEH),  its  gas  supply  subsidiary,  Bulgargaz  and  its  gas 
infrastructure subsidiary, Bulgartransgaz.28  

BEH  is  the  incumbent  state-owned  energy  company  in  Bulgaria.  It  is  vertically  integrated, 
meaning that BEH supplies gas and its subsidiaries own or control the domestic Bulgarian gas 
transmission network, the only gas storage facility in Bulgaria, and the capacity on the main 
gas  import  pipeline  into  Bulgaria.  The  Commission  has  concerns  that  BEH  and  its 
subsidiaries may be abusing their dominant market position on the Bulgarian gas market, by 
preventing  competitors  from  gaining  access  to  the  infrastructure  they  need  in  order  to 
successfully  compete  on  the  country’s  gas  supply  market.  Such  conduct  would  violate  EU 
antitrust rules, and result in less competition in the market and poorer market outcomes for the 
affected consumers. 

The Commission has also concluded a separate antitrust investigation into BEH’s behaviour 
on  the  non-regulated  wholesale  electricity  market  in  Bulgaria.29  The  Commission  had 

26 Case AT.39816 Upstream gas supplies in Central and Eastern Europe, see IP/15/4828 of 22 April 2015 
available at http://europa.eu/rapid/press-release_IP-15-4828_en.htm.  
27 See for example case AT.39952 Power Exchanges, Commission decision of 5 March 2014, see IP/14/215 
available at http://europa.eu/rapid/press-release_IP-14-215_en.htm  
28 Case AT.39849 BEH gas, see IP/15/4651 available at http://europa.eu/rapid/press-release_IP-15-4651_en.htm.   
29 Case AT.39767 BEH Electricity, see IP/15/6289 of 10 December 2015 available at 
http://europa.eu/rapid/press-release_IP-15-6289_en.htm  

10 

 
 
                                                           
concerns that BEH had set up artificial barriers between national markets. In particular, BEH 
had been selling electricity to traders using contracts which prohibited them from reselling the 
electricity outside Bulgaria. BEH offered to address the Commission’s concerns by setting up 
an  independent  power  exchange  in  Bulgaria,  through  which  electricity  can  be  traded 
anonymously  with  no possibility of checking  where it is  resold. On 10 December 2015, the 
Commission made the commitments offered by BEH legally binding. 

State  aid  control  to  ensure  a  climate-friendly  and  resilient  energy  market  without  undue 
competition distortions 

To  accompany  the  transition  to  a  green  economy,  another  important  focus  of  competition 
policy  is  ensuring  that  markets  work  properly  and  that  government  support  –  including 
support to facilitate the drive towards renewable energy sources – does not create imbalances. 

Through its Energy and Environmental State Aid Guidelines,30 the Commission is promoting 
the  integration  of  renewable  energy  sources  into  the  market  to  avoid  distortions  to 
competition. From 2016, generators using renewables have to sell their electricity directly on 
the market. Public support may only be granted as a premium on top of the market price. In 
addition,  from  2017,  Member  States  will  have  to  grant  operating  aid  through  a  competitive 
bidding process.  

Furthermore,  the  guidelines  have  been  designed  to  contribute  to  bringing  innovative  low-
carbon energy technologies to market, allowing State aid to be granted in cases where market 
failures are present. The guidelines also encourage EU Member States to cooperate with each 
other and take into account the electricity supply from other Member States.  

In  addition,  State  aid  control  is  helping  to  create  a  connected,  integrated  and  secure  energy 
market  in  Europe  by  assessing  national  measures  to  ensure  electricity  supply  (known  as 
‘capacity mechanisms’). 

The capacity mechanisms sector inquiry – delivering on the Energy Union objectives 

In  April,  the  Commission  launched  a  State  aid  sector  inquiry  to  gather  information  on  existing  or  planned 
capacity mechanisms, i.e. measures taken by Member States to ensure that electricity supply can match demand 
in the medium and long term. The sector inquiry aim at examining, in particular, whether such measures ensure 
security  of  electricity  supply  without  distorting  competition  between  electricity  suppliers  or  hindering  cross-
border trade. 

This sector inquiry is the first under EU State aid rules and covers a representative sample of Member States that 
have  capacity  mechanisms  in  place  or  are  considering  them,  namely:  Belgium,  Croatia,  Denmark,  France, 
Germany, Ireland, Italy, Poland, Portugal, Spain and Sweden. While governments have a legitimate interest in 
ensuring that there is sufficient electricity supply to avoid blackouts, competition policy should make sure that 
public  measures  underpin  investments  in  electricity  supplies,  are  consistent  with  policy  instruments  aimed  at 
fostering decarbonisation, and do not unduly favour particular producers or technologies. 

Keeping Europe an attractive place for investment – merger control in the energy sector 

For  network  industries  such  as  the  energy  sector,  it  is  essential  to  prevent  the  creation  of 
market structures which could impede effective competition, thereby reducing the incentives 
to  invest  and innovate.  EU merger control  continued to  be  an effective tool  for keeping  the 

30 Communication from the Commission, Guidelines on State aid for environmental protection and energy 2014-
2020, OJ C 200, 28.6.2014, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX:52014XC0628%2801%29.  
11 

 
 
                                                           
EU energy market open and ensuring that investment translates into better market outcomes 
for EU businesses and households. 

Following  an  in-depth  review  and  very  close  cooperation  with  the  Antitrust  Division  of  the 
US Department of Justice, the Commission approved, under the EU Merger Regulation, the 
proposed  acquisition  of  the  energy  businesses  of  Alstom  of  France  by  US-based  General 
Electric  (GE).31  The  transaction  is  a  good  example  of  how  EU-based  technology  can  thrive 
and attract foreign investment. 

The  approval  is  conditional  on  the  divestiture  of  central  parts  of  Alstom’s  heavy  duty  gas 
turbine  business,  which  are  mainly  used  in  gas-fired  power  plants,  to  Ansaldo  of  Italy.  The 
Commission  had  concerns  that  the  transaction  would  have  eliminated  one  of  GE’s  main 
global competitors in the heavy duty gas turbines market, in which GE is the world’s largest 
manufacturer  and  Alstom  is  one  of  the  global  top  players.  This  would  have  led  to  less 
innovation  and  higher  prices.  The  commitments  offered  by  GE  address  these  concerns. 
Furthermore, advanced heavy duty gas turbine technology is especially important for meeting 
climate change goals and modernising the EU’s energy supply. 

V.  Towards a deeper and fairer EU Single Market 

In  times  of  increasing  globalisation,  a  deeper  and  fairer  single  market  is  a  central  asset  for 
building  a  stronger  EU  economy  that  drives  jobs  and  growth.  This  is  the  reason  why 
advancing the integration of the single market remains at the top of the Commission’s agenda. 
The  Commission's  goal  is  to  open  up  new  opportunities  for  citizens  and  businesses  by 
allowing people, goods, services and capital  to move more freely within the single market’s 
borders. 

Enhancing tax transparency and ensuring a fair tax burden for all 

A  fully  functioning  single  market  requires  that  all  market  players  –  whether  large  or  small, 
local  or global  –  pay their fair share of  tax. Therefore, the fight  against tax evasion  and tax 
fraud is one of the main priorities of the Juncker Commission, and one of the most important 
initiatives for advancing the completion of the EU single market. 

In  March,  the  Commission  unveiled  a  Tax  Transparency  Package,32  aimed  at  ensuring  that 
Member  States  are  equipped  with  the  information  they  need  to  protect  their  tax  bases  and 
effectively  target  companies  that  try  to  avoid  paying  their  fair  share  of  tax.  In  June,  the 
package  was  followed  by  the  Commission’s  Action  Plan  for  Fair  and  Effective  Taxation.33 
The  action  plan  sets  out  a  series  of  initiatives  to  tackle  tax  avoidance,  secure  sustainable 
revenues  and  strengthen  the  single  market  for  businesses.  Collectively,  these  measures  will 
significantly improve the corporate tax environment in the EU, making it fairer, more efficient 
and more growth-friendly. 

Competition  policy  plays  a  key  role  in  tackling  this  challenge.  Following  in-depth 
investigations  which  were  launched  in  June  2014,  the  Commission  concluded  that 
Luxembourg  and  the  Netherlands  have  granted  selective  tax  advantages  (illegal  under  EU 

31 Case M.7278 General Electric / Alstom (Thermal power – Renewable power & Grid Business), Commission 
decision of 8 September 2015, available at 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result.   
32 See IP/15/4610 of 18 March 2015, available at http://europa.eu/rapid/press-release_IP-15-4610_en.htm. 
33 See IP/15/5188 of 17 June 2015, available at http://europa.eu/rapid/press-release_IP-15-5188_en.htm. 

12 

 
 
                                                           
State aid rules) to Fiat Finance and Trade34 and Starbucks.35 For each of these companies, a 
tax ruling issued by the respective national tax authority artificially lowered the tax paid by 
the  company.36  Under  EU  State  aid  rules,  tax  rulings  cannot  use  methods,  no  matter  how 
complex,  to  establish  transfer  prices  with  no  economic  justification  and  which  unduly  shift 
profits  to  reduce  the  taxes  paid  by  the  company.  Such  practices  would  give  the  company 
concerned  an  unfair  competitive  advantage  over  other  companies,  typically  SMEs  that  are 
taxed on their actual profits because they pay market prices for the goods and services they 
use. 

Tackling unfair tax advantages – The Starbucks and Fiat Finance & Trade decisions 

Tax rulings as such are perfectly legal. In the Starbucks and Fiat Finance & Trade cases, however, the two tax 
rulings  under  investigation  endorsed  artificial  and  complex  methods  to  establish  taxable  profits  for  the 
companies. Such  methods set prices for goods and services sold between companies in  the Fiat and Starbucks 
groups  (so-called  ‘transfer  prices’)  that  did  not  correspond  to  market  conditions  and  thus  did  not  reflect  the 
economic reality. 

EU  State  aid  rules  require  that  incompatible  State  aid  is  recovered  in  order  to  reduce  the  distortion  of 
competition created by the aid. In its two decisions, the Commission has set out the methodology for calculating 
the value of the undue competitive advantage enjoyed by Fiat and Starbucks, i.e. the difference between what the 
company paid and what it would have paid without the tax ruling. This amount ranges from around EUR 20 30 
million for each of Fiat and Starbucks, but the precise amounts of tax to be recovered will be determined by the 
Luxembourg and Dutch tax authorities on the basis of the methodology established in the Commission decisions. 
In  addition,  the  companies  will  no  longer  benefit  from  the  advantageous  tax  treatment  granted  by  these  tax 
rulings. 

In  December,  the  Commission  opened  a  formal  probe  into  Luxembourg’s  tax  treatment  of 
McDonald’s.37  The  Commission’s  preliminary  view  is  that  a  tax  ruling  granted  by 
Luxembourg may have selectively derogated from the provisions of its national tax law and 
the Luxembourg-US double taxation treaty, granting McDonald’s an advantage not available 
to other companies in a comparable factual and legal situation. 

The Commission also raised concerns that tax rulings may entail State aid issues in relation to 
Apple  in  Ireland38  and  Amazon  in  Luxembourg.39  An  additional  in-depth  investigation  into 
the  Belgian  ‘excess  profit’  ruling  system  was  launched  in  February  2015.40  On  11 January 
2016, the Commission issued a negative decision with recovery, concluding that selective tax 
advantages granted by Belgium under its ‘excess profit’ tax scheme are illegal under EU State 

34 Case SA.38375 Alleged aid to FFT- Luxembourg, Commission decision of 21 October 2015, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38375.  
35 Case SA.38374 Alleged aid to Starbucks, Commission decision of 21 October 2015, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38374.  
36 See IP/15/5880 of 21 October 2015, available at http://europa.eu/rapid/press-release_IP-15-5880_en.htm. 
37 Case SA.38945 Alleged aid to Mc Donald's – Luxembourg, Commission decision to initiate formal 
investigation procedure of 3 December 2015, see IP/15/6221 available at http://europa.eu/rapid/press-release_IP-
15-6221_en.htm.  
38 Case SA.38373 Alleged aid to Apple, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38373.  
39 Case SA.38944 Alleged aid to Amazon, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38944.  
40 Case SA.37667 Excess Profit exemption in Belgium, Commission decision to initiate the formal investigation 
procedure of 3 February 2015, see IP/15/4080 available at http://europa.eu/rapid/press-release_IP-15-
4080_en.htm.  

13 

 
 
                                                           
aid rules and ordering their recovery.41 At the same time, the Commission continues to pursue 
its inquiry into tax rulings practices in all EU Member States.42  

Enabling EU national competition authorities to be more effective enforcers 

Another essential aspect for creating a truly level playing field for companies across the single 
market  is  making  sure  that  businesses  can  rely  on  the  consistent  application  of  EU 
competition rules, regardless of the Member State in which they operate. In this respect, the 
role of national competition authorities is crucial. The entry into force of Regulation 1/200343 
in  2004  transformed  the  competition  enforcement  landscape,  giving  national  competition 
authorities  and  national  courts  a  key  role  in  enforcing  EU  antitrust  rules  alongside  the 
Commission.  EU  competition  rules  are  now  being  applied  on  a  scale  that  the  Commission 
could never have achieved on its own, and in a more thorough and effective way than would 
otherwise have been possible. 

The  2014  Commission  Communication  on  Ten  Years  of  Regulation  1/200344  identified  a 
number of concrete areas of action to boost the enforcement powers of national competition 
authorities  and  increase  convergence  between  national  systems.  The  Commission  is  now 
reflecting on whether the toolbox available to national competition authorities can be further 
improved.  In  November  2015,  the  Commission  launched  a  dedicated  public  consultation, 
inviting  general  public  and  stakeholders  to  share  their  experience  and  provide  feedback  on 
potential EU legislative action to further strengthen the enforcement and sanctioning tools of 
national competition authorities. 

Empowering EU consumers by breaking up cartels 

Keeping the single market fair, transparent, and open is good for EU businesses and Member 
States’  economies,  but  first  and  foremost  it  is  important  for  European  citizens.  A  clear 
example  is  the  Commission’s  work  on  anti-cartel  enforcement.  In  a  well-functioning  single 
market,  companies  are  encouraged  to  be  more  efficient  and  inventive  than  their  rivals,  and 
this ends up benefiting EU consumers through better products and lower prices. Cartels harm 
consumers and the economy as a whole, when companies set prices instead of the market. 

In  June,  the  Commission  fined  eight  manufacturers  and  two  distributors  of  retail  food 
packaging trays a total of over EUR 115 million for having participated in at least one of five 
separate cartels.45 The eight manufacturers were Huhtamäki of Finland, Nespak and Vitembal 
of  France,  Silver  Plastics  of  Germany,  Coopbox,  Magic  Pack  and  Sirap-Gema  of  Italy  and 
Linpac of the UK. The two distributors were Ovarpack of Portugal and Propack of the UK. 

Rather than competing on their merits, the companies fixed prices and allocated customers of 
polystyrene  foam  or  polypropylene  rigid  trays,  in  breach  of  EU  antitrust  rules,  affecting 
millions of consumers buying food. Polystyrene foam and polypropylene rigid trays are used 

41 See IP/16/42 of 11 January 2016, available at http://europa.eu/rapid/press-release_IP-16-42_en.htm. 
42 See IP/14/2742 of 17 December 2014, available at http://europa.eu/rapid/press-release_IP-14-2742_en.htm. 
43  Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition 
laid down in Articles 81 and 82 of the Treaty, OJ L 1, 4.1.2003, available at http://eur-lex.europa.eu/legal-
content/EN/ALL/?uri=celex%3A32003R0001.  
44 Communication of 9 July 2014 from the Commission to the European Parliament and the Council, Ten Years 
of Antitrust Enforcement under Regulation 1/2003: Achievements and Future Perspectives, COM(2014) 453, 
available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52014DC0453. 
45 Case AT.39563 Retail Food Packaging, Commission decision of 24 June 2015, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39563.  

14 

 
 
                                                           
for packaging food sold in shops or supermarkets, for products such as cheese, meat, fish or 
cakes. 

The Commission also fined eight optical disc drive suppliers a total of EUR 116 million for 
having  coordinated  their  behaviour  in  relation  to  procurement  tenders  organised  by  two 
computer  manufacturers,  Dell  and  Hewlett  Packard.46  The  suppliers  on  which  a  fine  was 
imposed  were  Philips,  Lite-On,  their  joint  venture  Philips  &  Lite-On  Digital  Solutions, 
Hitachi-LG  Data  Storage,  Toshiba  Samsung  Storage  Technology,  Sony,  Sony  Optiarc  and 
Quanta  Storage.  Although  the  cartel  contacts  took  place  outside  of  the  European  Economic 
Area (EEA), they were implemented on a worldwide basis including in the EEA. 

Optical disc drives are used, for example, in personal computers, CD and DVD players and 
video games consoles to read or record data stored on optical  discs, such as CDs, DVDs or 
Blu-ray discs. The cartel concerned optical disc drives for desktops and laptops. Making sure 
these types of markets remain competitive is especially important to guarantee fair prices for 
today’s consumers, and innovative products for the consumers of the future. 

Dismantling cartels is like repealing a hidden tax that millions of unsuspecting consumers in 
Europe were forced to pay. Moreover, cartels remove the incentives for business to innovate, 
severely hampering EU dynamism and future growth. 

Making  financial  services  markets  work  better  –  competition  policy  developments  in  the 
financial and payment sectors 

The  Commission  also  adopted  a  cartel  decision  in  the  financial  sector,  one  of  the 
Commission’s  priority  areas  for  achieving  a  fairer  and  more  integrated  single  market.  In 
February,  the  Commission  fined  the  UK-based  broker,  ICAP,  around  EUR  15 million  for 
having breached EU antitrust rules by facilitating several cartels in the sector of yen interest 
rate derivatives (YIRD).47 In this respect, in December 2013, fines were imposed on a number 
of major banks following the adoption of a settlement decision. 

The  YIRD  investigation  is  just  one  example  of  the  Commission’s  efforts  to  fight 
anticompetitive practices in the financial markets. The payment sector offers another relevant 
example.  In  July  2015,  the  Commission  sent  a  Statement  of  Objections  to  MasterCard,  for 
having allegedly raised the costs of card payments, thereby harming consumers and retailers 
in  the  EU.48  Payments  by  card  play  a  key  role  in  the  single  market,  both  for  domestic  and 
cross-border purchases, including online purchases. European consumers and businesses carry 
out over 40 % of their non-cash payments each year using payment cards. 

The Statement of Objections outlines the Commission’s preliminary view that MasterCard’s 
rules prevent banks from offering lower interchange fees to retailers based in another country 
in the European Economic Area, where interchange fees may be higher. As a result, retailers 
cannot  benefit  from  lower  fees  elsewhere  and  cross-border  competition  between  banks  may 
be restricted, in breach of European antitrust rules. The Statement of Objections also alleges 
that MasterCard’s interchange fees for transactions in the EU using MasterCard cards issued 

46 Case AT.39639 Optical Disc Drives, Commission decision of 21 October 2015, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39639.  
47 Case AT.39861 Yen Interest Rate Derivatives (YIRD), Commission decision of 4 December 2013, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39861.  
48 Case AT.40049 Mastercard II, see IP/15/5323 of 9 July 2015 available at http://europa.eu/rapid/press-
release_IP-15-5323_en.htm. 

15 

 
 
                                                           
in  other  regions  of  the  world  breach  European  antitrust  rules  by  setting  an  artificially  high 
minimum price for processing these transactions. 

One of the two issues in the current investigation concerns inter-regional transactions, which 
are not covered by the Interchange Fee Regulation49 that was adopted in April 2015. Building 
on almost ten years of antitrust case-law in the payment sector, the Regulation has put a cap 
on interchange fees for cards issued and used in the EU, benefiting consumers and businesses 
and encouraging growth and innovation. As cards are the most widely used method of online 
payment, the Regulation is also an important building block for completing the Digital Single 
Market. 

State  aid  rules  in  the  banking  sector  –  supporting  the  economic  recovery  and  minimising 
distortions of competition 

In  the  banking  sector,  State  aid  control  continued  to  limit  distortions  of  competition  and 
ensure a level playing field, while at the same time reducing the use of taxpayers’ money to 
the  minimum  necessary.  In  addition,  in  January  2015  the  Bank  Resolution  and  Recovery 
Directive  (BRRD)50  entered  into  force,  setting  out  the  rules  for  the  resolution  of  banks  and 
large  investment  firms  in  all  Member  States.  State  aid  to  failing  banks  notified  to  the 
Commission  after  1 January  2015  can  only  be  granted  if  the  bank  is  put  into  resolution,  in 
compliance with the provisions of the BRRD in addition to EU State aid rules. 

In  November,  the  Commission  found  the  resolution  plans  of  Banca  delle  Marche,    Banca 
Popolare dell’Etruria e del Lazio, Cassa di Risparmio di Ferrara and Cassa di Risparmio della 
Provincia di Chieti (combined market share of about 1 % in Italy) to be in line with EU State 
aid rules.51 The four banks, all of which had already been under special administration, were 
put into resolution by the Bank of Italy in line with the BRRD. The Commission found that 
Italy’s  plans  to  use  the  national  resolution  fund  minimised  the  use  of  public  funds  and  any 
distortions to competition resulting from the measures, while preserving financial stability. 

In addition, State aid rules played a key role in supporting the efforts of the four largest Greek 
banks to address capital shortfalls identified by the European banking supervisor.52 Between 
November  and  December, 
the 
recapitalisations of Piraeus Bank53 and the National Bank of Greece.54 The banks submitted 

the  Commission  approved  State  aid  measures  for 

49 Regulation (EU) 2015/751 of the European Parliament and of the Council of 29 April 2015 on interchange 
fees for card-based payment transactions, OJ L 123, 19.5.2015, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.L_.2015.123.01.0001.01.ENG.  
50 European Parliament and Council Directive 2014/59/EU of 15 May 2014 establishing a framework for the 
recovery and resolution of credit institutions and investment firms, OJ L 173, 12.6.2014, available at  
http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1427289116879&uri=CELEX:32014L0059. 
51 Cases SA.39543 Resolution of Banca delle Marche S.p.A, Commission decision of 22 November 2015, 
available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_39543; SA.41134 
Resolution of Banca Popolare dell’Etruria e del Lazio - Soc. Coop., Commission decision of 22 November 
2015, available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_41134; 
SA.41925 Resolution of Cassa di risparmio di Ferrara S.p.A, Commission decision of 22 November 2015, 
available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_41925; and 
SA.43547 Resolution of Cassa di risparmio della Provincia di Chieti S.p.A., Commission decision of 
22 November 2015, available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_ 
SA_43547. 
52 See https://www.bankingsupervision.europa.eu/press/pr/date/2015/html/sr151031.en.html.    
53 Case SA.43364 2015 additional restructuring aid to Piraeus Bank, Commission decision of 29 November 
2015, available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_43364.     

16 

 
 
                                                           
restructuring  plans  aimed  at  ensuring  their  long-term  viability,  which  would  allow  them  to 
refocus on lending to Greek businesses and support the recovery of the Greek economy. 

The Commission is also ensuring the consistent application of State aid rules to the banking 
sector  under  the  Economic  Adjustment  Programme  in  Cyprus.  In  particular,  in  December 
2015 the Commission found a capital injection of EUR 175 million in favour of the Cypriot 
Cooperative Central Bank Ltd and its subsidiaries to be in line with EU State aid rules.55 The 
Commission  concluded  that  the  restructuring  measures  that  the  bank  committed  to 
implementing would minimise competition distortions while ensuring that the bank becomes 
viable in the long-term. 

In  the  post-programme  context  in  Portugal,56  the  Commission  approved  under  EU  State  aid 
rules  a  prolongation  of  Portuguese  state  guarantees  on  bonds  issued  by  Novo  Banco,57  and 
State  aid  measures  to  cover  the  funding  gap  in  the  resolution  of  Banif.58  The  proposed  aid 
measures  aimed,  respectively,  to  ensure  the  maintenance  of  adequate  liquidity  for  Novo 
Banco  and  enable  Banif’s  orderly  exit  from  the  market,  helping  to  underpin  the  financial 
stability of the Portuguese banking sector. 

VI. Promoting 

fruitful 

international  cooperation  and  a  constructive 

inter-

institutional dialogue in the competition area 

The Commission, and in particular the Commissioner for Competition, Margrethe Vestager, is 
fully  committed  to  an  open  and  constructive  exchange  on  competition  issues  globally  and 
with other EU institutions. 

Stepping up international cooperation with traditional and emerging economic players 

The progressive integration of the world economies has important implications on the work of 
competition  enforcers –  globalisation is  mainly about  interdependence.  In the past  25  years, 
the  number  of  competition  regimes  around  the  world  has  increased  dramatically  from 
around 20  at  the  beginning  of  the  1990s  to  around  130  in  2015,  embracing  85 %  of  the 
world’s  population.  While  the  increase  in  the  number  of  antitrust  agencies  is  a  sign  that 
competition culture is further developing around the world, the Commission’s efforts are also 
addressing the challenges that come with it. 

To this end, the Commission is actively engaging in international cooperation on competition 
matters,  both  bilaterally  and  multilaterally  in  competition  fora  such  as  the  Competition 
Committee  of  the  OECD,  the  United  Nations  Conference  on  Trade  and  Development 
(UNCTAD) and the International Competition Network (ICN). 

54 Case SA.43365 2015 additional restructuring aid to National Bank of Greece (NBG), Commission decision of 
4 December 2015, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_43365.    
55 Case SA.43367 2015 additional restructuring aid to the Cooperative Central Bank, Commission decision of 
18 December 2015, available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_ 
SA_43367.  
56 Portugal successfully exited its three years Economic Adjustment Programme in June 2014. 
57 Case SA.43976 Amendment of the 2014 Resolution of Banco Espirito Santo S.A. (Novo Banco S.A.), 
Commission decision of 19 December 2015, available at http://ec.europa.eu/competition/elojade/isef/case_ 
details.cfm?proc_code=3_SA_43976.  
58 Case SA.43977 Resolution of Banif - Banco Internacional do Funchal, S.A., Commission decision of 21 
December 2015, available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_ 
SA_43977. 

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As  co-chair  of  the  ICN  Merger  Working  Group,  the  Commission  contributed  to  developing 
the  Practical  Guide  to  International  Enforcement  Cooperation  in  Mergers,  adopted  in  2015. 
The  Practical  Guide  provides  direct  and  case-based  guidance  for  ICN  members  on  how 
agencies  can  align  timetables,  share  information  and  cooperate,  both  on  substance  and  on 
remedies so to avoid inconsistencies. 

Successful  cooperation  in  merger  control  in  2015  also  encompassed  bilateral  relations.  In 
October, the Commission and the Ministry of Commerce of the People’s Republic of China 
(MOFCOM) signed a Practical  Guidance  for Cooperation on Reviewing  Merger Cases. The 
Practical  Guidance  will  allow  for  greater  transparency  on  the  timing  and  content  of 
discussions  between  the  Commission  and  MOFCOM,  leading  to  more  efficient,  consistent 
and non-conflicting reviews where a merger is to be assessed by both authorities. It represents 
a  further  element  of  cooperation  between  the  EU  and  China,  in  addition  to  the  technical 
cooperation  activities  currently  being  developed  as  part  of  a  dedicated  cooperation 
programme (EUCTP II59). 

The Commission is continuing its work on including competition and State aid provisions in 
the negotiations  on Free Trade Agreements (FTAs).  In 2015, significant progress  was made 
on competition provisions in the FTAs with Japan and Vietnam. The Commission also made 
progress on its negotiations with the US on a Transatlantic Trade and Investment Partnership 
Agreement (TTIP), which will include a competition chapter.  

Structured dialogue with the European Parliament 

In  2015,  the  Commission  continued  its  successful  working  relationship  with  the  European 
Parliament, in particular the Economic and Monetary Affairs (ECON) Committee. 

As part of her structured dialogue with Parliament, Commissioner Vestager visited the ECON 
Committee  in  July  and  November.  She  welcomed  the  opportunity  to  attend  the  Committee 
and engage with the members of Parliament on a constructive debate on competition policy.   

Commissioner  Vestager  also  attended  the  Competition  Working  Group  of  the  ECON 
Committee in April and the Special Committee on Tax Rulings and Other Measures Similar 
in Nature or Effect (TAXE) in May and September. In June, she attended the Agriculture and 
Rural Development (AGRI) Committee to discuss the draft Guidelines for joint selling in the 
beef and veal, olive oil, and arable crops sectors. 

Boosting Parliament’s involvement in competition policy initiatives 

Following  its  ‘Communication  on  Ten  Years  of  Council  Regulation  1/2003’,  the  Commission  is  reflecting  on 
how to empower the National Competition Authorities to be more effective enforcers of EU antitrust rules. The 
ECON  Committee  was  informed  about  the  public  consultation  launched  in  November  2015,  with  a  view  to 
obtaining  feedback  from  a  wide  range  of  stakeholders.  Furthermore,  Commissioner  Vestager  committed  to 
encouraging Parliament's full involvement in this initiative, to the extent the concrete content of the proposal will 
allow for it. 

Continuing to improve DG Competition’s communication with the European Parliament 

DG  Competition’s  regular  briefing  seminar  for  assistants  and  political  advisers  from  the 
ECON Committee covering the main themes in the 2014 Report on Competition Policy took 

59 EU-China Trade Project II. 

18 

 
 
                                                           
place  in  July  2015.  Similarly,  DG Competition  provided  background  briefings  on  State  aid 
policy and procedures for members of TAXE and associated staff.  

DG Competition worked with the Competition Working Group to prepare a workshop in May 
2015  on  international  cooperation  in  competition  enforcement  and  EU-US  relations  in  this 
area. Moreover, DG Competition’s newly appointed Director-General, Johannes Laitenberger, 
became  the  first  Director-General  to  attend  Parliament’s  Working  Group  on  Competition 
Policy in December 2015. 

DG  Competition  was  the  lead  DG  for  331  written  Parliamentary  questions  and  7  petitions 
prepared by Commission services. 

DG  Competition’s  engagement  with  the  European  Economic  and  Social  Committee  (EESC) 
and the Committee of the Regions (CoR) 

The  Commission  informed  the  EESC  and  the  CoR  about  major  policy  initiatives  and 
participated in study groups and section meetings. Accordingly, the former Director-General 
of  DG  Competition,  Alexander  Italianer,  attended  the  EESC  Single  Market,  Production  and 
Consumption Section meeting on 14 July. In turn, the EESC issued opinions on ‘State aid to 
firms: is it effective and efficient’ (own-initiative opinion) on 16 September and on the 2014 
Report  on  Competition  Policy  on  9  December.  The  CoR  issued  an  opinion  on  financial 
instruments in support of territorial development on 14 October. 

19