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 2016
Date: 2017-05-31
Institutions: Directorate-General for Competition, European Commission
Subjects: EU competition policy, State aid, competition law, electronic commerce, energy policy, innovation, restriction on competition, single market, telecommunications, waste recycling

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 31.5.2017  COM(2017) 285 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 2016 {SWD(2017) 175 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 2016 

1. Introduction 

Competition policy is based on legal and economic principles, and it is often associated with 
those two very important aspects. But this is just a part of what competition policy is about: 
competition  policy  has  a  direct  impact  on  people's  lives,  and  one  of  its  key  features  is 
promoting open markets so that everyone – businesses and citizens – can get a fair share of 
the benefits of growth.  

In  his  2016  State  of  the  Union  speech,  the  President  of  the  European  Commission  Jean-
Claude Juncker recalled that "(a) fair playing field also means that in Europe, consumers are 
protected  against  cartels  and  abuses  by  powerful  companies.  (…)  The  Commission  watches 
over this fairness. This is the social side of competition law. And this is what Europe stands 
for"1. Competition enforcement sends the message that everyone, however rich or powerful, 
has to play by the rules. 

Competition policy cannot shape a fairer economy on its own, but it can make an important 
difference:  enforcing  competition  law  ensures  that  there  is  a  voice  for  the  consumers. 
Competition  policy  contributes  towards  a  society  that  gives  people  choice,  stimulates 
innovation, prevents abuses by dominant players, and drives companies to make the most of 
scarce resources thus contributing to addressing global challenges like climate change.  

In  addition,  all  decisions  taken  by  Europe’s  competition  enforcers  –  the  Commission  and 
national competition authorities – affirm that the EU is a community based on the rule of law. 
They  also  demonstrate  to  civil  society  that  the  system  can  work  for  the  common  good  and 
deliver concrete benefits to citizens. 

Commission's  competition  policy  actions  in  2016  focused  on  a  wide  range  of  policy  areas, 
helping  make  markets work more fairly for everyone. At the same time, competition policy 
continued  supporting  the  Commission's  efforts  to  deliver  on  key  political  priorities,  in 
particular  a  connected  Digital  Single  Market,  a  deeper  and  fairer  internal  market,  and  an 
integrated and climate-friendly Energy Union.  

The  globalised  economy  also  requires  a  global  competition  culture.  This  is  why  the 
Commission is strongly engaging with other EU institutions, international organisations and 
competition enforcers all over the world. Working together helps to multiply and spread the 
benefits of fair competition, in Europe and worldwide. 

2.  Ensuring  a  true  level  playing  field  for  all:  how  State  aid  control  helps  tackle  the 
challenge 

One  of  the  key  duties  of  the  Commission,  and  in  particular  of  the  Commissioner  for 
Competition, is to make sure that EU rules apply in a fair manner to any company that does 
business in the EU's single market - regardless of size, sector or nationality. This is the only 

1 State of the Union 2016, available at http://ec.europa.eu/priorities/state-union-2016_en  

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way  to  ensure  a  true  level  playing  field  and  it  is  the  reason  why  the  Commission  has  been 
enforcing State aid rules over the past decades. 

Taking actions against selective tax advantages  

This approach applies to fiscal aid too: if a few selected companies can avoid tax, it makes it 
hard  for  companies  that  do  pay  their  share  of  taxes  to  compete  on  equal  terms.  Giving  a 
specific  tax  treatment  to  a  particular  company  gives  that  company  a  benefit  comparable  to 
receiving cash. For that reason, the State aid rules apply to tax exemptions just as much as to 
any  other  type  of  aid.  The  Commission  has  been  very  active  in  tackling  illegal  State  aid 
granted  by  means  of  tax  rulings2.  In  August  2016,  the  Commission  concluded  that  Ireland 
granted undue tax benefits, illegal under EU State aid rules, to Apple3. 

How tax rulings can involve State aid: The Apple decision 

The  Commission  found  that  two  tax  rulings  issued  by  Ireland  to  Apple  substantially  and  artificially 
lowered the tax paid by Apple in Ireland since 1991. The rulings endorsed a method to establish the 
taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and 
Apple Operations Europe) in Ireland, which did not correspond to economic reality: almost all profit 
from sales recorded by the two companies were internally attributed outside Ireland to a "head office" 
that existed only on paper since it had no physical presence and no employees anywhere in the world, 
and that could never have generated those profits. As a result of the profit attribution method endorsed 
in  the  tax  rulings,  Apple  paid  substantially  less  tax  than  other  businesses  in  Ireland  over  its  trading 
profits: this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its 
European profits in 2003 down to 0.005 per cent in 2014.   

The  selective  tax  treatment  of  Apple  in  Ireland  is  illegal  under  EU  state  aid  rules,  because  it  gives 
Apple  a  significant  advantage  over  companies  that  are  subject  to  the  regular  national  taxation  rules. 
The  Commission  can  order  recovery  of  illegal  state  aid  for  a  ten-year  period  preceding  the 
Commission's  first  request  for  information  in  2013.  Ireland  must  now  recover  the  unpaid  taxes  in 
Ireland from Apple for the years 2003 to 2014 of up to EUR 13 billion, plus interest. 

As a matter of principle, EU State aid rules require that incompatible State aid is recovered in 
order to remove the distortion of competition created by the aid. There are no fines under EU 
State  aid  rules  and  recovery  does  not  penalise  the  company  in  question.  It  simply  restores 
equal treatment with other companies. Furthermore, all Commission decisions are subject to 
scrutiny  by  the  EU  Courts.  If  a  Member  State  decides  to  appeal  a  Commission  decision,  it 
must  still  recover  the  illegal  State  aid  unless  it  requests  and  successfully  obtains  interim 
measures ordering suspension of recovery from the EU Court. To fulfil its recovery obligation 
pending the outcome of the EC Court procedures, the Member State may, for example, place 
the recovered amount in an escrow account.   

In September, the Commission also opened an in-depth investigation into Luxembourg's tax 
treatment of  the GDF Suez  group  (now Engie)4. The Commission has concerns that several 

2 See 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; 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; Case SA.37667 Excess Profit exemption in Belgium, 
Commission decision of 11 January 2016, available at http://ec.europa.eu/competition/elojade/isef/case_details. 
cfm?proc_code=3_SA_37667  
3 Case SA.38373 Alleged aid to Apple, Commission decision of 30 August 2016, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38373 
4 Case SA.44888 Potential aid to GDF Suez, Commission decision to initiate the formal investigation procedure 
of 19 September 2016, available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_ 
SA_44888  

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tax rulings issued by Luxembourg may have given GDF Suez an unfair advantage over other 
companies, in breach of EU State aid rules5. The Commission also pursued the investigation 
into tax rulings granted by Luxembourg to McDonald's6, and the investigation into a transfer 
pricing arrangement granted by Luxembourg to Amazon7.  

To  effectively  complement  its  enforcement  activities,  the  Commission  has  also  proposed  a 
coordinated  EU  wide  response  to  corporate  tax  avoidance,  following  the  global  standards 
developed by the OECD in autumn 2015. To that effect, in January the Commission adopted 
an  ambitious  Anti-Tax  Avoidance  Package8,  to  help  Member  States  take  strong  and 
coordinated action against tax avoidance and ensure that companies pay taxes wherever they 
make their profits in the EU.  

In addition, in April the Commission adopted a proposal for a Directive which imposes on EU 
and  non-EU  multinational  groups  the  publication  of  country-by-country  reporting  on  the 
profit and tax paid as well as other information9. This type of reports will enable citizens to 
assess  the  tax  strategies  and  the  contribution  to  welfare  by  multinationals,  leading  the  way 
towards greater corporate tax transparency. 

Increased  transparency  and  legal  certainty  with  the  completion  of  the  State  Aid 
Modernisation initiative 

Transparency is important because it promotes the good use of taxpayers' money, and it has 
been a key pillar also of the State Aid Modernisation initiative, launched in 2012 in order to 
provide  legal  certainty  and  cut  red  tape  for  public  authorities  and  companies10.  A  way  to 
promote  transparency  is  giving  market  participants  relevant  information  about  State  aid 
measures granted by the Member States. 

According  to  the  new  rules,  granting  authorities  at  all  levels  are  required  to  provide 
information  for  each  individual  aid  award  exceeding  EUR  500,000.  As  of  July  2016  and 
starting from the date of the grant, the authorities have six months to publish, in a searchable 
database,  information  on  the  identity  of  the  individual  beneficiaries  and  on  the  received 
awards11.  Transparency  goes  hand-in-hand  with  the  simplified  application  of  State  aid  rules 
that makes it easier for Member States to grant aid measures without the need to notify them 
to the Commission in advance. 

To  help  public  authorities  and  companies  identify  when  public  spending  falls  within,  and 
outside, the scope of EU State aid control, in May the Commission published the Notice on 
the notion of aid as one of the last building blocks of its State Aid Modernisation initiative12. 

5 For additional information, please see the Staff Working Document accompanying this Report. 
6 Case SA.38945 Alleged aid to Mc Donald's – Luxembourg, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38945  
7 Case SA.38944 Alleged aid to Amazon, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38944 
8 See http://ec.europa.eu/taxation_customs/business/company-tax/anti-tax-avoidance-package_en  
9 Proposal for a Directive of the European Parliament and of the Council amending Directive 2013/34/EU as 
regards disclosure of income tax information by certain undertakings and branches, COM/2016/0198 final, 
available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016PC0198  
10 See http://ec.europa.eu/competition/state_aid/modernisation/index_en.html  
11 The list of beneficiaries and other details about aid awards can be found at: 
https://webgate.ec.europa.eu/competition/transparency/public/search/home/ 
12 Commission Notice on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning 
of the European Union, OJ C 262, 19.7.2016, p. 1–50, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv:OJ.C_.2016.262.01.0001.01.ENG&toc=OJ:C:2016:262:TOC  

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The Notice gives clear guidance on all aspects of the definition of State aid. It is particularly 
important  to  facilitate  public  investment,  as  it  helps  Member  States  and  companies  design 
public  funding  in  ways  which  do  not  risk  distorting  the  level  playing  field  in  the  Single 
Market or crowding out private investment. This will help maximise the effect of investments 
on economic growth and jobs, in line with the Commission's Investment Plan for Europe13.  

3. Boosting competition and innovation across the Digital Single Market 

The  market  for  digital  services  has  quickly  become  one  of  the  areas  that  matter  most  for 
European  consumers.  Digital  technology  can  provide  low  prices,  wide  choice,  rapid 
innovation,  but  whether  consumers  actually  get  those  benefits  depends  on  how  the  market 
works. The aim of competition policy is to ensure that consumers are treated fairly and that 
powerful  businesses  are  prevented  from  striking  deals  that  raise  prices,  or  suppress 
innovation, or deny people the freedom to choose the products they want.  

In this way the Digital Single Market is about much more than just making the economy more 
efficient.  It  is  a  way  to  give  everyone  a  fair  chance  to  reap  the  benefits  of  technological 
development. And it is a way to put consumers in control.  

E-commerce is a case in point: the majority of adults in the EU have ordered consumer goods 
or services online in 2015, with the figure rising in some Member States to more than eight in 
ten  people.  E-commerce  has  become  an  important  driver  of  price  transparency  and  price 
competition,  increasing  consumers'  choice  and  their  ability  to  find  the  best  deals,  thus 
spurring competition and innovation. While it also creates new opportunities for businesses, 
dealing with a fast changing e-commerce marketplace may not be always easy. All companies 
active  online,  such  as  retailers  and  distributors  but  also  manufacturers  as  well  as  content 
creators, are now faced with novel and significant challenges. The e-commerce sector inquiry 
launched  by  the  Commission  in  2015,  as  part  of  its  Digital  Single  Market  Strategy, 
contributes to a better understanding of those challenges and opportunities14.  

The e-commerce sector inquiry: First results and follow-up 

In  September  2016,  the  Commission  published  the  initial  findings  of  the  sector  inquiry.  During  the 
inquiry the Commission gathered evidence from nearly 1,800 companies operating in e-commerce of 
consumer goods and digital content, and analysed around 8,000 distribution contracts. The Preliminary 
Report confirms the growing significance of e-commerce but also identifies certain business practices 
that  may  limit  this  online  competition,  in  particular  concerning  online  sales  of  consumer  goods  and 
copyright  licensing  agreements.  The  Commission  may  open  case  specific  investigations  on  business 
practices  that  may  raise  competition  concerns.  The  Preliminary  Report  was  subject  to  a  public 
consultation which ended on 18 November 2016. 

In March, the Commission published its initial findings on geo-blocking, which found that the practice 
is  widespread  in  e-commerce  throughout  the  EU,  especially  for  digital  content.  Almost  60%  of 
responding digital content providers has contractually agreed with right holders to geo-block. If geo-
blocking 
it  may  restrict 
competition  in the Single Market in breach  of EU antitrust rules. Like any competition  enforcement 
activity,  investigations  regarding  geo-blocking  require  legal  and  economic  assessment,  which  also 
includes an analysis of potential justifications for restrictions that have been identified. 

the  result  of  agreements  between  suppliers  and  distributors, 

is 

Most  geo-blocking  by  retailers  is  based  on  unilateral  business  decisions  not  to  sell  cross-
border, i.e. independently from agreements with or commercial pressure of any supplier, and 
falls  outside  the  scope  of  the  EU  competition  rules.  In  the  framework  of  the  Digital  Single 

13 See https://ec.europa.eu/priorities/jobs-growth-and-investment/investment-plan_en  
14 See http://ec.europa.eu/competition/antitrust/sector_inquiries_e_commerce.html  

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Market  Strategy,  in  May  2016  the  Commission  also  adopted  a  proposal  for  a  Regulation 
aiming  at  addressing  geo-blocking  and  other  forms  of  discrimination  based  on  customers' 
nationality,  place  of  residence  or  place  of  establishment,  identifying  those  situations  where 
different treatment of customers due to their location cannot be in any case justified15. 

Preserving innovation when faced with online dominant players 

Certain  business  practices  may  limit  consumer  choice,  but  there  is  an  even  bigger  problem 
when new products are prevented from reaching the market. Antitrust enforcement is essential 
to  ensure  that  dominant  companies  do  not  deny  others  a  chance  to  come  up  with  the  next 
generation of innovative ideas. 

Search engines have a key role in guiding consumers across the digital environment, and the 
Commission  considers  this  market  as  one  of  its  enforcement  priorities.  In  July,  two 
Statements  of  Objections  were  sent  to  Google  and  its  parent  company,  Alphabet16.  The 
Commission  reinforced,  in  a  supplementary  Statement  of  Objections  that  follows  the  one 
issued in the same case in April 2015, its preliminary conclusion that Google has abused its 
dominant position by systematically favouring its comparison shopping service in its search 
result pages. The Commission is concerned that users do not necessarily see the most relevant 
results in response to queries, which would be to the detriment of consumers and innovation 
in  the  market.  By  sending  a  supplementary  Statement  of  Objections,  the  Commission 
reinforced  its  preliminary  conclusion  whilst  at  the  same  time  protecting  Google's  rights  of 
defence by giving it an opportunity to respond formally to the additional evidence. On-going 
investigation by the Commission is always without prejudice to the final decision to be taken 
by the Commission in the case.  

Separately, the Commission also sent a Statement of Objections to Google on restrictions that 
the  company  has  placed  on  the  ability  of  certain  third  party  websites  to  display  search 
advertisements from Google's competitors17. Google places search ads directly on the Google 
search  website  but  also  as  an  intermediary  on  third  party  websites,  such  as  online  retailers, 
telecoms  operators  and  newspapers,  through  its  "AdSense  for  Search"  platform.  The 
Commission's  preliminary  view  is  that  these  practices  have  enabled  Google  to  prevent 
existing  and  potential  competitors,  including  other  search  providers  and  online  advertising 
platforms, from entering and growing in this commercially important area.  

Smartphones and tablets account for more than half of global internet traffic, and are expected 
to  account  for  even  more  in  the  future.  A  competitive  mobile  internet sector  is  increasingly 
important for consumers and businesses in  Europe and the Commission  has  been  extremely 
vigilant to promote fair and vibrant competition in this area.  

In April, the Commission sent a Statement of Objections informing Google of its preliminary 
view  that  the  company  has,  in  breach  of  EU  antitrust  rules,  abused  its  dominant  position 

15 Proposal for a Regulation of the European Parliament and of the Council on addressing geo-blocking and other 
forms of discrimination based on customers' nationality, place of residence or place of establishment within the 
internal market and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC, COM/2016/0289 final 
- 2016/0152 (COD), available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52016PC0289  
16 Case AT.39740 Google search, see IP/16/2532 of 14 July 2016, available at http://europa.eu/rapid/press-
release_IP-16-2532_en.htm  
17 Case AT.40411 Google Search (AdSense), see IP/16/2532 of 14 July 2016, available at 
http://europa.eu/rapid/press-release_IP-16-2532_en.htm  

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through  restrictive  terms  in  agreement  with  Android  device  manufacturers  and  mobile 
network operators18.  

The Commission's preliminary findings indicate that, as a consequence of Google's behaviour, 
rival search engines, mobile operating systems and web browsers may have not been able to 
compete  on  their  merits,  but  rather  been  artificially  excluded  from  certain  business 
opportunities. At the same time, consumers may have been denied a wider choice of mobile 
apps, online services and innovative platforms, in breach of EU antitrust rules.  

The  Commission  has  also  continued  pursuing  the  antitrust  investigation  opened  in  2015 
against  Amazon,  the  biggest  e-book  distributor  in  Europe19.  The  Commission  has  concerns 
that  Amazon's  arrangements  with  publishers  may  make  it  more  difficult  for  other  e-book 
distributors  to  compete  with  Amazon  by  developing  new  and  innovative  products  and 
services.  

Towards a borderless market for digital content: the pay-tv case 

A true Digital Single Market means that EU consumers should be able to watch the pay-TV 
channels of their choice regardless of where they live or travel in the EU. The Commission is 
looking at whether the licensing agreements between six major EU film studios and Sky UK, 
preventing consumers in other EU countries to access Sky’s UK and Irish pay-TV services, 
may be in breach of EU competition rules20. 

In  April,  Paramount  offered  commitments  to  address  the  Commission's  concerns  regarding 
certain clauses in film licensing contracts for pay-TV between Paramount and Sky UK. The 
Commission then consulted market participants to verify the appropriateness of the proposed 
commitments  and,  in  the  light  of  the  results  of  this  market  test,  considered  that  the 
commitments,  as  clarified  by  Paramount,  addressed  its  concerns.  In  July,  the  Commission 
adopted a decision to make the commitments offered by Paramount legally binding under EU 
antitrust rules21. The Commission's investigation continues regarding the conduct of Disney, 
NBCUniversal, Sony, Twentieth Century Fox, Warner Bros and Sky. 

An open and competitive telecoms framework, to the benefit of European consumers 

Consumers would not be able to enjoy new digital service without a good, affordable internet 
connection. That means that affordable mobile networks are essential, and so is competition: 
competition keeps prices down, and drives mobile operators to invest in better networks. To 
promote  a  genuine  Digital  Single  Market,  the  Commission  cannot  leave  any  room  for 
anticompetitive  agreements  or  mergers  that  harm  competition,  and  raise  prices  for 
consumers22. 

18 Case AT.40099 Google Android, see IP/16/1492 of 20 April 2016, available at http://europa.eu/rapid/press-
release_IP-16-1492_en.htm  
19 Case AT.40153 E-book MFNs and related matters, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_40153  
20 Case AT.40023 Cross-border access to pay-TV content, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_40023  
21 See IP/16/2645, available at http://europa.eu/rapid/press-release_IP-16-2645_en.htm  
22 See Case M.7612 Hutchison 3G UK   / Telefónica UK, Commission decision of 11 May 2016, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7612 and Case M.7758 
Hutchison 3G Italy   / Wind   / JV, Commission decision of 1 September 2016, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7758 

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Two important merger control decisions in the telecoms sector 

Conditions  today  vary  significantly  from  one  national  telecoms  market  to  another.  There  is  no  "one 
size fits all", and the Commission always takes the different specificities into account in its analysis. 

Following  an  in-depth  investigation,  in  May  the  Commission  blocked  under  the  EU  Merger 
Regulation  the  proposed  acquisition  of  Telefónica  UK's  "O2"  by  Hutchison  3G  UK's  "Three",  that 
would  have  created  a  new  market  leader  in  the  mobile  market  in  the  United  Kingdom.  The 
Commission had strong concerns that the significantly reduced competition in the market would have 
resulted in higher prices and less choice for consumers in the United Kingdom. The takeover would 
also  likely  have  hampered  innovation  and  the  development  of  network  infrastructure  in  the  United 
Kingdom, which is a serious concern especially for fast moving markets. The remedies proposed by 
Hutchison failed to adequately address the concerns raised by the takeover. 

the  Commission  approved  under 

In  September, 
the  EU  Merger  Regulation  a  proposed 
telecommunications joint venture between Hutchison and VimpelCom in Italy, subject to conditions. 
Following  an  in-depth  review,  the  Commission  concluded  that  the  structural  remedies  offered  by 
Hutchison and VimpelCom fully addressed the Commission's competition concerns. The parties will 
ensure the market entry of French telecom operator Iliad as a new mobile network operator in Italy. 
This  means  that  the  two  operators  can  grow  and  reap  the  benefits  of  combining  their  assets,  whilst 
Italian mobile customers will continue to profit from innovative mobile services at fair prices and on 
high  quality  networks.  The  case  shows  that  telecom  companies  in  Europe  can  grow  both  within  the 
same country and cross-border, provided effective competition is preserved.  

In  October,  the  Commission  opened  an  investigation  into  a  network  sharing  agreement 
between two Czech operators of mobile telephony, O2 CZ/CETIN and T-Mobile CZ23. O2 CZ 
and T-Mobile CZ are both major telecoms operators in the Czech Republic, and together they 
serve  approximately  three  quarters  of  the  Czech  retail  mobile  telecommunications  market. 
The  Commission  is  investigating  in  particular  whether  the  cooperation  between  O2 
CZ/CETIN  and  T-Mobile  CZ  risks  slowing  down  quality  improvements  in  existing 
infrastructure, and delaying or hindering the deployment of new technologies and services, in 
particular  in  densely  populated  areas.  The  Commission  will  also  investigate  the  impact  of 
potential  efficiencies  that  could  be  brought  about  by  the  network  sharing.  Based  on  this 
assessment,  the  Commission  will  establish  whether  the  cooperation  violates  Article  101 
TFEU that prohibits anticompetitive business practices. 

To  ensure  a  pro-competitive  telecoms  framework,  in  September  2016  the  Commission 
presented  a  proposal  for  a  Directive  establishing  the  "European  Electronic  Communications 
Code",  and  a  proposal  for  a  Regulation  establishing  the  Body  of  European  Regulators  for 
Electronic Communications (BEREC).  

Promoting inclusive access to high speed broadband networks 

In  order  to  seize  all  the  opportunities  of  the  digital  work,  Europe  also  needs  a  first-class 
telecoms infrastructure. A key priority of the Digital Single Market strategy24 is ensuring that 
EU citizens and companies, in particular small and medium sized ones, can access high speed 
broadband  networks.  Public  funding  is  often  needed  to  attain  this  objective  while  ensuring 
inclusion, particularly as concerns rural areas that are less attractive for private investors. 

23 Case AT.40305 Network sharing between O2 CZ / CETIN and T-Mobile CZ in the Czech Republic, see 
IP/16/3539 of 25 October 2016, available at http://europa.eu/rapid/press-release_IP-16-3539_en.htm  
24 In its Communication "Connectivity for a Competitive Digital Single Market - Towards a European Gigabit" 
(COM/2016/587),  the  Commission  confirmed  the  importance  of  Internet  connectivity  for  the  Digital  Single 
Market  and, building  on  the Digital  Agenda  for  Europe goals,  set  out  a vision  for  a  European Gigabit society 
operationalised through three strategic objectives for 2025. 

8 

 
 
                                                            
The Commission approved under EU State aid rules the UK National Broadband Scheme for 
2016-202025, Italy's ultra-broadband plan for 2016-202226 and the French broadband scheme 
"Plan Très Haut Débit"27. Each scheme was also accompanied by a detailed evaluation plan to 
assess its impact, the results of which will be submitted to the Commission. 

The  Commission's  State  aid  assessment  is  based  on  the  2013  Broadband  Guidelines28.  The 
goal  is  to  avoid  that  public  funding  takes  the  place  of  private  investment,  and  to  promote 
effective  competition  by  ensuring  that  other  service  providers  can  use  the  publicly  funded 
infrastructure on a non-discriminatory basis. 

4. Delivering a Single Market that empowers EU citizens and businesses 

By creating a deeper and fairer Single Market, competition policy has a very concrete impact 
on people's life: EU citizens and business deal with the market every single day. Building a 
society that treats everyone fairly means that the market should work in a way that empowers 
consumers  and  ensures  that  their  voices  are  heard.  Competition  enforcement  steps  in  when, 
for  instance  because  of  a  cartel,  consumers  pay  more  than  they  should  or  have  troubles 
finding the product they look for. Merger control is also essential to ensure that mergers do 
not harm the competitive structure of the markets and thus consumers and the wider economy. 

In order for the Single Market to reach its full potential, the Commission has recently stepped 
up  its  efforts  on  the  effective  enforcement  of  European  rules  across  all  policy  areas.  In 
December  2016  the  Commission  adopted  a  Communication  on  "EU  law:  Better  results 
through better application"29 to make the application, implementation and enforcement of EU 
law more strategic and more focused, for the benefit of citizens, consumers and businesses.  

Achieving an efficient and sustainable transport sector across the EU  

The transport sector represents a key sector for European households: transport-related goods 
and services are the second biggest household budget item after house-related expenditure30. 
Competitive prices for transport services are directly important for millions of Europeans.  

In  October,  the  Commission  sent  a  Statement  of  Objections  to  Brussels  Airlines  and  TAP 
Portugal on their codeshare cooperation on passenger services between Brussels and Lisbon31. 
A  codeshare  agreement  is  a  commercial  agreement  whereby  the  airline  operating  a  flight 
allows another airline to market the flight and issue tickets for it, as if it were operating the 
flight  itself.  Codeshare  partners  also  agree  on  how  they  will  compensate  each  other  for  the 
seats  they  sell  on  their  partner's  flights.  Codesharing  can  bring  benefits  for  passengers  in 
terms  of  wider  network  coverage  and  better  connections.  However,  the  Commission  has 
concerns that in this particular case Brussels Airlines and TAP Portugal may have used their 

25 Case SA.40720 National Broadband Scheme for the UK for 2016-2020, Commission decision of 26 May 
2016, available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_40720  
26 Case SA.41647 Italy - Strategia Banda Ultra Larga, Commission decision of 30 June 2016, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_41647   
27 Case SA.37183 Plan France Très Haut Débit, Commission decision of 7 November 2016, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_37183  
28 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 
29 See https://ec.europa.eu/info/law/law-making-process/overview-law-making-process/applying-eu-law_en  
30 Source: Eurostat. See http://ec.europa.eu/eurostat/statistics-explained/index.php/Archive:Household_ 
consumption_expenditure_-_national_accounts  
31 Case AT.39860 Brussels Airlines/TAP Air Portugal, see IP/16/3563 of 27 October 2016, available at 
http://europa.eu/rapid/press-release_IP-16-3563_en.htm  

9 

 
 
 
                                                            
codesharing to restrict competition and harm passengers' interests on the Brussels to Lisbon 
route. 

The  Commission  also  opened  in  November  an  investigation  to  assess  whether  the  Czech 
railway incumbent České dráhy, a.s. (ČD) charged prices below costs with the aim of shutting 
out  competition  in  rail  passenger  transport  services,  in  breach  of  EU  antitrust  rules32. 
Competition is essential to drive prices down and service quality up, especially in previously 
monopolised  markets.  The  Commission  will  take  a  close  look  at  České  dráhy's  business 
practices  to  make  sure  it  does  not  push  competitors  out  of  the  market  to  the  detriment  of 
passengers. The opening of proceedings does not prejudge the outcome of the investigation. 

Railway  incumbents  have  often  been  subject  to  competition  scrutiny.  In  April,  the 
Commission relieved Deutsche Bahn ahead of schedule from commitments made binding in 
December 2013, as several competitors have now entered the German railway traction current 
market, thereby addressing the Commission's competition concerns. The growth in the level 
of  competition  in  the  German  railway  power  supply  market  confirms  that  the  commitments 
were successful at remedying Commission's competition concerns. This is a good example of 
how  commitment  decisions  can  quickly  and  effectively  open  up  markets,  ensure  a  level 
playing field and lead to more competition and lower prices for consumers and businesses. 

Transport  is  also  an  important  area  for  growth,  due  to  its  specific  function  in  servicing  the 
other sectors of the economy. Road haulage, in particular, is an essential part of the European 
Single Market: there are over 30 million trucks on European roads, which account for around 
three  quarters  of  inland  transport  of  goods  in  Europe.  The  competitiveness  of  the  sector  is 
contingent on the prices of the vehicles used by transporters. 

In July, the Commission found that MAN, Volvo/Renault, Daimler, Iveco and DAF broke EU 
antitrust rules, and imposed a record fine of EUR 2.9 billion33.  

A landmark decision in the road transport sector: The trucks cartel case 

The  Commission's  decision  relates  specifically  to  the  market  for  the  manufacturing  of  medium 
(weighing  between  6  to  16  tons)  and  heavy  trucks  (weighing  over  16  tons).  MAN,  Volvo/Renault, 
Daimler,  Iveco  and  DAF  together  account  for  around  9  of  every  10  medium  and  heavy  trucks 
produced in Europe.  

Instead of competing with each other, the companies colluded on pricing for over 14 years, from 1997 
to 2011, until the Commission carried  out unannounced inspections of the firms. Over the years the 
discussions between the companies covered the same topics, namely the respective "gross list" price 
increases,  the  timing  for  the  introduction  of  new  emissions  technologies  and  the  passing  on  to 
customers of the costs for the emissions technologies. All companies acknowledged their involvement 
and agreed to settle the case. 

Proceedings  were  also  opened  with  regard  to  Scania,  which  was  not  part  of  the  settlement  decision. 
Therefore,  for  this  company  the  investigation  continues  under  the  standard  (non-settlement)  cartel 
procedure. 

This  decision  is  also  important  to  stress  the  importance  of  a  functioning  competitive  market  in 
fostering the development and dissemination of cost-efficient low-emission technologies, which is one 
of the elements of the European Strategy for low-emission mobility. 

32 See IP/16/3656 of 10 November 2016, available at http://europa.eu/rapid/press-release_IP-16-3656_en.htm  
33 Case AT.39824 Trucks, Commission decision of 19 July 2016, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39824.  

10 

 
 
                                                            
Protecting competition in concentrated markets 

The role of Commission's merger control is very important to protect fair competition across 
all  sectors  and  industries,  but  it  may  be  even  more  relevant  in  sectors  that  are  already 
relatively concentrated. The Commission needs to make sure that powerful companies do not 
misuse their power in a way that benefits them, but harms their customers and the rest of the 
economy. 

For example, the Commission has been particularly vigilant in the crop protection market, to 
ensure  that  the  market  structures  resulting  from  mergers  do  not  end  up  negatively  affecting 
European  farmers,  whose  livelihood  depends  on  access  to  seeds  and  crop  protection  at 
competitive  prices.  In  2016,  the  Commission  opened  two  in-depth  investigations  into 
proposed mergers in this area. 

The first proposed transaction concerns Dow and DuPont, two US firms, and would create the 
world's  largest  integrated  crop  protection  and  seeds  company34.  It  would  combine  two 
competitors with leading herbicides and insecticides portfolios and with a strong track record 
of bringing innovative crop protection and seeds products to the market. The second proposed 
merger is between Syngenta of Switzerland, one of the main global seeds and crop protection 
companies, and ChemChina of China, which controls Adama, the largest supplier of generic 
crop protection products in Europe35. Their products are used for the cultivation of several of 
the main crops grown in Europe, including cereals, cotton, corn, fruits and vegetables, oilseed 
rape, soybean, sugarbeet and sunflowers. The in-depth investigations will look at whether the 
proposed mergers could lead to higher prices or less innovation for these products. 

A fairer financial sector to underpin the real economy 

Financial  markets  provide  an  essential  function  for  the  European  economy,  and  in  order  to 
support the ongoing economic recovery they need to be stable, open and competitive. Since 
the onset of the crisis, competition policy has been playing a key role in achieving a more fair 
and transparent financial sector in the EU.  

In June 2016, all elements of the Interchange Fee Regulation became fully applicable36. The 
new rules make the costs of payments with debit or credit cards more transparent to retailers 
and consumers and allow them to make efficient choices. In the past, the fees charged by the 
banks  for  these  card  payments  were  largely  kept  in  the  dark  even  though  the  costs  were 
ultimately  paid  by  consumers.  The  Interchange  Fee  Regulation  capped  these  fees,  thus 
lowering costs to the benefit of millions of European consumers and retailers. 

In parallel, the Commission continued its antitrust investigation into MasterCard's and Visa's 
inter-bank  fees  in  relation  to  payments  made  by  cardholders  from  non-EEA  (European 
Economic Area) countries, which are not part of the Interchange Fee Regulation and are still a 
burden for European merchants37. The Commission has also continued the investigation into 

34 Case M.7932 Dow / DuPont, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7932    
35 Case M.7962 Chemchina / Syngenta, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7962  
36 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. 
37 Case AT.40049 Mastercard II, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_40049 and AT.39398 Visa MIF, 
available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39398. 

11 

 
 
                                                            
MasterCard's  rules  with  respect  to  cross-border  acquiring,  which  limit  the  possibility  for  a 
merchant  to  benefit  from  better  conditions  offered  by  banks  established  elsewhere  in  the 
internal market. 

Businesses  and  households  need  sound  financial  intermediaries  –  typically  banks  –  to 
underpin  investment  and  consumption  decisions.  The  crisis  showed  that  when  banks  in 
Europe have problems, the effects can reach far beyond the immediate threat to depositors and 
shareholders.  It  can  severely  affect  a  country’s  financial  stability,  and  almost  inevitably  has 
spillover effects on other Member States and even beyond the EU. In this context, State aid 
control remained an essential tool to ensure a safer and sounder banking sector in the EU.  

State  aid  rules  are  an  integral  part  of  the  Banking  Union,  guaranteeing  equal  treatment 
between the Member States that are in the Banking Union and those that are not. The role of 
State aid control is to ensure that the choices made by the national government do not unduly 
burden the public purse or distort the level playing field in the EU. In 2016 the Commission 
took several decisions to help stabilise the banking sectors in various Member States38. 

The  Commission  has  also  opened  an  in-depth  investigation  to  assess,  under  the  EU  Merger 
Regulation,  whether  the  proposed  merger  between  Deutsche  Börse  AG  (DB)  and  London 
Stock  Exchange  Group  (LSE)  would  reduce  competition  in  several  financial  market 
infrastructure areas39. The proposed merger would combine the activities of DB and LSE. By 
combining the exchanges of Germany, the United Kingdom and Italy, as well as several of the 
largest  European  clearing  houses,  it  would  create  by  far  the  largest  European  exchange 
operator. 

Enhancing  transparency  in  the  area  of  financial  derivatives  has  also  been  a  Commission 
priority.  In  July,  the  Commission  accepted  the  commitments  offered  by  the  International 
Swaps  and  Derivatives  Association  Inc.  (ISDA)  and  information  service  provider  Markit, 
concerning the licensing of intellectual property that is needed to offer trading services on the 
market for credit default swaps (CDS)40. A CDS is a contract designed to transfer the credit 
risk,  or  risk  of  default,  linked  to  a  debt  obligation  such  as  government  or  corporate  bonds. 
CDS are used by investors both to hedge risks and as investments.  

The  Commission  had  market  tested  the  draft  commitments  in  April  and  the  outcome  was 
positive.  In  the  light  of  the  results  of  the  market  test,  Markit  proposed  minor  modifications 
and  clarifications  to  the  initial  commitments.  The  final  commitments  address  the 
Commission's  concerns  as  they  will  make  it  easier  to  trade  CDS  on  exchanges,  while 
improving  transparency.  The  Commission's  decision  ensures  that  all  trading  venues  can 
benefit from fair, reasonable and non-discriminatory access to data and intellectual property 
owned  by  ISDA  and  Markit  to  offer  all-to-all  trading  of  credit  derivatives.  This  increases 
market stability and also translates into more choice and lower transaction costs for investors. 
The commitments thereby contribute to the aim of the MifiD 241 and of the Banking Union42.  

38 For additional information, please see the Annex of the Staff Working Document accompanying this Report. 
39 Case M.7995 Deutsche Börse / London Stock Exchange Group, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7995  
40 Case AT.39745 CDS - Information market, Commission decision of 20 July 2016, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39745  
41 Markets in Financial Instruments Directive. See http://ec.europa.eu/finance/securities/isd/mifid2/ 
index_en.htm  
42 For additional information on the Banking Union, see http://ec.europa.eu/finance/general-policy/banking-
union/index_en.htm.  

12 

 
 
                                                            
Furthermore,  in  December  the  Commission  fined  Crédit  Agricole,  HSBC  and  JPMorgan 
Chase  a  total  of  EUR  485  million,  for  participating  in  a  cartel  in  euro  interest  rate 
derivatives43. Barclays, Deutsche Bank, RBS and Société Générale reached a settlement with 
the  Commission  on  the  same  cartel  case  in  December  2013.  Given  that  Crédit  Agricole, 
HSBC  and  JPMorgan  Chase  chose  not  to  settle,  the  investigation  continued  under  the 
Commission's  standard  cartel  procedure.  This  decision  marks  the  end  of  the  first  of  several 
cartels detected and punished in the financial services sector. 

Enforcing competition rules in the world of sport   

The  scope  of  competition  law  has  of  course  some  limitations,  but  when  competition 
enforcement is the right tool, it is important that the Commission takes timely action to restore 
fairness in a specific area of the economy. Some sectors have a long tradition of competition 
policy  decisions,  but  this  may  not  always  be  the  case  for  other  sectors.  Sport  is  a  recent 
example. 

In  September  2016,  the  Commission  informed  the  International  Skating  Union  (ISU)  of  its 
preliminary  view  that  the  ISU  rules  under  which  athletes  face  severe  penalties  for 
participation in unauthorised speed skating events may be in breach of EU antitrust rules44. 

Competition law and sport federations: The International Skating Union investigation 

The ISU is the sole body recognised by the International Olympic Committee to administer the sports 
of figure skating and speed skating on ice. Its members are national ice-skating associations. Sporting 
rules are subject to EU antitrust rules when the body setting the rules or the companies and persons 
affected by the rules are engaged in an economic activity. 

International sports governing bodies play a unique role in setting the rules of the game and ensuring 
uniform standards of conduct. According to the rules established by the ISU, if an athlete participates 
in an unauthorised event, the athlete faces  a range of penalties leading  potentially to a life-time ban 
from all key international speed skating competitions. The Commission has concerns that the penalties 
set  out  in  the  ISU  rules  restrict  the  commercial  freedom  of  athletes  and  prevent  new  organisers  of 
international  speed  skating  events  from  entering  the  market  because  they  are  unable  to  attract  top 
athletes. 

The  Commission  has  decided  to  pursue  this  investigation  because  it  raises  specific  allegations  of 
breaches  of  competition  law  at  the  international  level,  rather  than  wider  issues  related  to  the 
governance of sport.  

Besides, State aid control plays a role in preserving the level playing field in sports. Following 
three  separate  in-depth  investigations,  in  July  2016  the  Commission  concluded  that  public 
support  measures  granted  by  Spain  to  seven  professional  football  clubs gave  those  clubs an 
unfair advantage over other clubs, in breach of EU State aid rules45. EU State aid rules apply 
to  public  interventions  in  the  market  to  ensure  that  they  do  not  distort  competition  by 
selectively  favouring  one  market  participant  over  another.  Professional  football  is  a 
commercial activity, and public money in this area must comply with fair competition rules. 

43 Case AT.39914 Euro Interest Rate Derivatives, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39914  
44 Case AT.40208 International Skating Union’s Eligibility rules, see IP/16/3201of  27 September 2016, 
available at http://europa.eu/rapid/press-release_IP-16-3201_en.htm  
45 Cases SA.29769 Aid to certain Spanish football clubs (tax privileges for Real Madrid CF, FC Barcelona, 
Athletic Club Bilbao, Club Atlético Osasuna), SA.33754 Aid to Real Madrid, and SA.36387 Aid to Valencia 
football clubs  (Valencia, Hercules and Elche), see IP/16/2401 of 4 July 2016, available at 
http://europa.eu/rapid/press-release_IP-16-2401_en.htm  

13 

 
 
                                                            
This  is  especially  important  for  the  majority  of  professional  clubs  which  have  to  operate 
without subsidies. 

5. Unlocking the potential of the European Energy Union and Circular Economy 

Consumers are active and central players on the energy markets of the future. Pushing for a 
truly  competitive  European  energy  market  has  the  potential  to  impact  the  energy  bills  of 
European  businesses  and  households:  building  an  integrated  and  climate-friendly  European 
Energy Union, free from technical or regulatory barriers, will give consumers across the EU a 
better choice of supply and the best energy deals.  

In November, the Commission presented a package of measures to keep the EU energy sector 
competitive  and  boost  the  clean  energy  transition46.  The  "Clean  Energy  for  All  Europeans" 
package has three main goals: putting energy efficiency first, achieving global leadership in 
renewable energies, and providing a fair deal for consumers. The legislative proposals cover 
energy  efficiency,  renewable  energy,  the  design  of  the  electricity  market,  security  of 
electricity  supply  and  governance  rules  for  the  Energy  Union.  The  package  also  contains  a 
number of measures aimed at protecting the most vulnerable consumers.  

Along  with  the  package,  the  Commission  published  the  final  report  of  its  State  aid  sector 
inquiry  into  national  measures  to  ensure  that  adequate  capacity  to  produce  electricity  is 
available at all times (so-called "capacity mechanisms")47.  

Helping design better aid measures to secure electricity supplies 

The purpose of the State aid sector inquiry on capacity mechanisms,  which covered over 120 market 
participants in eleven Member States, was to gather information on capacity mechanisms to examine, 
in particular, whether they ensure sufficient electricity supply without distorting competition or trade 
in the EU Single Market. 

Capacity mechanisms are very important as they can help reduce the risk of  black-outs for European 
consumers  and  companies.  At  the  same  time,  unnecessary  and  badly  designed  capacity  mechanisms 
can distort competition, hamper necessary market reforms, hinder electricity flows across borders,lead 
to  consumers  overpaying  for  electricity  and  risk  contradicting  decarbonisation  objectives.  The  final 
report concludes that Member States need to better assess the need for such mechanisms, and provides 
indications on how to deliver on security of supply while minimising competition distortions.  

Working for a pro-competitive oil and gas sector in the EU 

The exploration and production of oil and gas are key sectors in ensuring competitive energy 
prices for consumers and companies across the EU. They are also particularly important for 
the efficient use of available gas resources within the EU, a key element of the Energy Union 
strategy in terms of ensuring security of supply. 

In this area, the Commission opened an in-depth investigation into the acquisition of oilfield 
service provider Baker Hughes by Halliburton in January48. In May, the parties abandoned the 
proposed  merger,  following  competition  concerns  against  that  transaction  expressed  by  a 
number  of  competition  agencies  across  the  world,  including  the  Commission.  Based  on  the 
Commission's analysis, the proposed transaction raised competition concerns on a very large 
number  of  markets  related  to  oilfield  services  provided  to  oil  and  gas  exploration  and 

46 See IP/16/4009 of 30 November 2016, available at http://europa.eu/rapid/press-release_IP-16-4009_en.htm  
47 See http://ec.europa.eu/competition/sectors/energy/state_aid_to_secure_electricity_supply_en.html#2  
48 Case M.7477 Halliburton  / Baker Hughes, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7477  

14 

 
 
                                                            
in 

the  European  Economic  Area  (EEA).  The  Commission's 
production  companies 
investigation  was  carried  out  in  close  cooperation  with  a  number  of  competition  agencies 
across  the  world  such  as  the  US  Department  of  Justice,  the  Brazilian  competition  authority 
(CADE) and the Australian Competition and Consumer Commission.  

The Commission also continued its investigations into the potential abuse by Gazprom of its 
dominant  position  in  the  supply  of  natural  gas  in  Central  and  Eastern  Europe49,  and  the 
possible  foreclosure  of  gas  markets  in  Bulgaria  by  the  Bulgarian  incumbent  BEH50.  The 
purpose of antitrust enforcement in this sector is to achieve more competitive gas markets in 
Europe and facilitate market integration as well as the exchanges of energy between Member 
States. 

Supporting recycling and renewable energy sources 

The transition towards a circular economy is a key block of the strategy for achieving a more 
sustainable Europe. "Closing the loop" of product lifecycles through greater recycling and re-
use  brings benefits  for both  the environment and the economy. Effective competition in  the 
waste  management  sector  contributes  to  tackling  the  challenge  by  making  recycling 
affordable for consumers. 

In  September,  the  Commission  fined  Altstoff  Recycling  Austria  (ARA)  EUR  6  million  for 
blocking  competitors  from  entering  the  Austrian  market  for  management  of  household 
packaging waste from 2008 to 2012, in breach of Article 102 TFEU which prohibits the abuse 
of a dominant market position51.  

Antitrust enforcement in the waste management sector 

In Austria, producers of goods are obliged to take back packaging waste that results from the use of 
their products. They may transfer this task to a company that takes care of the collection and recycling 
for them against a licence fee paid by goods' producers. The Commission found that competitors who 
wanted to enter or expand in the waste management market were dependent on receiving access to the 
nationwide  collection  infrastructure,  partly  controlled  and  partly  owned  by  ARA.  The  investigation 
also found that between March 2008 and April 2012 ARA refused to give access to this infrastructure, 
so that competitors were excluded from the market and competition eliminated.  

After the Commission started its investigation, Austria adopted a new waste law in September 2013 
and ARA began granting access to its household waste collection infrastructure. Several competitors 
have  entered  the  market  since  then.  ARA  acknowledged  the  infringement,  ensured  that  the  decision 
could  benefit  from  administrative  efficiencies,  and  proposed  a  structural  remedy;  the  fine  was 
therefore reduced by 30% due to ARA's cooperation with the Commission. 

While the parties cooperate with the Commission in commitment decisions and cartel settlement cases, 
the cooperation procedure was used in the context of a non-cartel antitrust prohibition decision for the 
first  time  since  the  entry  into  force  of  Regulation  1/2003.  Cooperation  in  non-cartel  antitrust 
proceedings  may  help  strengthen  the  effectiveness  of  the  Commission’s  enforcement  actions,  and  it 
could be applied to other cases in the future. 

Boosting  recycling is  only  part  of  the  path  towards  a  more  sustainable  Europe:  investing  in 
low-carbon  and  clean  energy  technologies  is  also  a  priority.  Renewables  are  the  energy 

49 Case AT.39816 Upstream gas supplies in Central and Eastern Europe, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39816  
50 Case AT.39849 BEH gas, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39849  
51 Case AT.39759 ARA foreclosure, Commission decision of 20 September 2016, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39759  

15 

 
 
                                                            
sources  of  the  future,  and  over  the  past  few  years  almost  every  Member  State  adopted  a 
renewable energy support scheme. In 2016, the Commission adopted under State aid rules 15 
decisions on new support schemes to renewable energy producers, contributing to increase the 
sustainability of the EU energy sector as well as environmental protection.  

7. Shaping a European and global competition culture 

In  order  to  make  a  real  difference  in  making  the  economy  work  more  fairly  for  everyone, 
competition rules have to be applied evenly for all Europeans, regardless of the Member State 
where  they  live,  work  or  shop.  This  is  why  the  Commission  has  been  looking  at  whether 
national competition authorities have all the powers, the resources and the independence they 
need to effectively enforce EU competition law. 

Stronger national competition authorities to effectively apply EU competition rules 

Enforcement of the EU competition rules is now taking place on a scale which the Commission could 
never have achieved on its own. Since 2004, the Commission and the national competition authorities 
took over 1000 enforcement decisions, with the national competition authorities being responsible for 
around 85% of the total. Action by a multiplicity of enforcers is a much stronger, more effective and 
better deterrent for companies that may be tempted to breach the EU competition rules. 

Building on the Communication on Ten Years of Regulation 1/200352, the Commission has reflected 
on whether the toolbox available to national competition authorities can be further improved. In 2016 
the Commission received and collected feedback on these issues from a wide range of stakeholders, 
including businesses and consumer groups, national competition authorities, national governments and 
members of the European Parliament. 

A  public  consultation  held  between  November  2015  and  February  2016  showed  that  approximately 
75%  of  respondents  considered  that  the  effectiveness  of  national  competition  authorities  could  be 
further  enhanced.  Also,  80%  of  replies  supported  taking  action  at  EU  level  to  ensure  that  national 
competition authorities have the means and instruments they need53.  

Furthermore,  a  Public  Hearing  was  co-organised  with  the  European  Parliament  on  19  April  2016  to 
gather additional views54. Given the overall support for empowering national competition authorities 
to be more effective enforcers, the Commission has started developing the way forward, in the form of 
a proposal for an EU legislative initiative. 

Keeping up with globalisation – Competition cooperation across the world    

With companies increasingly operating across national borders, a growing number of merger 
transactions, cartels and other anti-competitive practices have an international dimension and 
affect markets in several countries, and often different continents. As companies go global, so 
must  competition  enforcers:  therefore,  finding  better  ways  to  work  together  is  a  priority  for 
competition authorities around the world.  

52 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. 
53 Public consultation on "Empowering the national competition authorities to be more effective enforcers of the 
EU competition rules", available at http://ec.europa.eu/competition/consultations/2015_effective_enforcers/ 
index_en.html. 
54 Public Hearing co-organised by the Committee on Economic and Monetary Affairs (ECON) of the European 
Parliament and DG Competition of the European Commission of 19 April 2016, available at 
http://www.europarl.europa.eu/ep-live/en/committees/video?event=20160419-0900-COMMITTEE-ECON 

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Cooperation  among  competition  authorities  helps  promote  consistent  outcomes,  increases 
investigative efficiency by reducing unnecessary duplication of work, and encourages mutual 
understanding  between  agencies,  while  reducing  costs  for  companies.  In  2016  the 
Commission confirmed its commitment in this area, by actively participating in competition-
related  international  bodies  such  as  the  Competition  Committee  of  the  OECD,  the  World 
Bank  and  the  United  Nations  Conference  on  Trade  and  Development  (UNCTAD).  The 
Commission  is  also  a  leading  member  of  the  International  Competition  Network  (ICN),  the 
main  global  forum  of  competition  agencies  with  132  members.  Important  results  of  this 
multilateral  engagement  are  the  Merger  Remedies  Guide  and  the  Cartel  Working  group's 
Catalogue on Investigative Powers, both adopted by the International Competition Network in 
2016. 

At  bilateral  level,  in  2016  the  Commission  started  Free  Trade  Agreements  (FTAs) 
negotiations  with  Armenia,  Mexico,  Indonesia  and  Philippines,  re-opened  negotiations  with 
Mercosur,  and  made  progress  in  the  negotiations  with  Japan.  The  Commission's  efforts  on 
FTA negotiations in the competition area focus on the inclusion of competition and State aid 
provisions,  with  the  aim  of  promoting  convergence  of  competition  policy  instruments  and 
practices across jurisdictions, as well as protecting the global level playing field. 

In  June  2016,  the  Commission  submitted  to  the  Council  a  draft  agreement  to  include 
provisions on the exchange of information collected in the course of competition proceedings 
into  the  existing  EU-Canada  Cooperation  agreement.  The  possibility  to  exchange  evidence 
would improve cooperation between the Commission and the Canadian Competition Bureau, 
leading  to  enhanced  competition  law  enforcement.  In  addition,  the  Commissioner  for 
Competition Margrethe Vestager agreed with Chairman Sugimoto, the Head of the Japan Fair 
Trade Commission, to start negotiations to upgrade also the EU-Japan cooperation agreement 
with provisions for the exchange of evidence. 

The Commission is also actively engaged in technical cooperation with emerging economies 
that  are  developing  their  competition  policy  and  enforcement  regimes.  In  June,  the 
Commission signed a Memorandum of Understanding (MoU) with South-Africa, which adds 
to the MoUs signed with all other BRICS55 countries in recent years. 

Upholding a fruitful inter-institutional dialogue  

The  European  Parliament,  the  Council  and  the  consultative  committees,  with  their  specific 
roles vis-à-vis European citizens and stakeholders, are important partners in the dialogue on 
competition policy. 

As in previous years, the Parliament adopted a resolution on the Commission's annual report 
on  competition  policy.  The  Commission  welcomes  the  Parliament's  support  for  competition 
policy  as  a  cornerstone  of  the  European  project.  The  Commission  agrees  that  competition 
empowers  consumers,  drives  economic  growth  and  keeps  markets  open  for  business, 
including  SMEs.  In  this  sense,  competition  policy  makes  markets  fairer  for  everyone.  The 
Commission  agrees  with  Parliament  that  competition  enforcement  is  essential  to  prevent 
abuses of economic power and to ensure that every company and entrepreneur has a fair share 
of the benefits of growth. 

The Commission welcomes the Parliament's engagement in the fight against tax evasion and 
tax avoidance. In April 2016, Commissioner Vestager exchanged views with the Parliament´s 

55 Brazil, Russia, India, China, South Africa. 

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second Special Committee on Taxes. In 2016, the Commission undertook important actions in 
this  area56.  The  Commission  also  obtained  evidence  on  tax  rulings  from  all  Member  States 
and is taking a systematic approach to analysing that evidence. In June 2016, the Commission 
published a Working Paper on State aid and tax rulings and organised a High Level Forum to 
give clarity to Member States on the application of the State aid rules to tax rulings.   

The  Parliament  reiterated  its  request  to  end  the  State  aid  crisis  regime  for  banks.  The 
Commission  takes  the  view  that  current  State  aid  rules  are  needed  to  preserve  financial 
stability  and  minimise  the  cost  to  taxpayers,  and  to  ensure  that  restructured  banks  return  to 
lend to companies and households, thus contributing to the completion of the Banking Union. 
The State aid rules also preserve a level playing field between banks that receive State aid and 
banks  that  do  not.  In  February  2016,  Commissioner  Vestager  participated  in  an  open 
exchange  of  views  with  MEPs  to  explain  the  Commission's  approach  under  the  State  aid 
rules. 

Other  recommendations  from  the  Parliament  are  reflected  in  this  Report,  namely  the 
contribution  that  an  independent  enforcement  of  the  competition  rules  makes  to  the 
Commission's political priorities to deepen the Digital Single Market and the Energy Union, 
and  to  guarantee  the  competitiveness  of  the  European  industry  in  a  globalised  world.  This 
Report  lists  the  actions  that  the  Commission  took  this  year  to  safeguard  competition  in 
important sectors of the European economy. In May and August 2016, DG Competition also 
participated  in  workshops  and  debates  in  the  Parliament  to  discuss  the  contribution  that 
competition enforcement can make to improve the functioning of the food supply chain. 

The  Commission  welcomes  the  Parliament's  call  on  the  Commission  to  further  a  true 
competition culture in the Member States. In April 2016, the Commission and the Parliament 
organised a hearing on the Commission's initiative to allow national competition authorities to 
reach  their  full  potential  as  effective  enforcers  of  the  European  competition  rules. 
Commissioner  Vestager  participated  in  the  hearing.  As  part  of  her  structured  dialogue  with 
Parliament,  Commissioner  Vestager  also  had  an  exchange  with  the  ECON  committee  in 
October 2016. 

The Commission welcomes the interest of the European Economic and Social Committee and 
the Committee of the Regions on competition policy and is willing to engage in constructive 
exchanges.  Commissioner  Vestager  participated  in  the  debate  on  "European  Competition 
Policy" at the plenary meeting of the Economic and Social Committee on 14 July 2016. In the 
Committee  of  the  Regions,  the  Commission  explained  its  approach  to  services  of  general 
economic interest in the EU. 

56 For detailed information, see Chapter 2 of this Report. 

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