COMMISSION STAFF WORKING DOCUMENT Accompanying the document 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 2017
Date: 2018-06-18
Institutions: Directorate-General for Competition, European Commission
Subjects: EU competition policy, State aid, anti-trust legislation, control of State aid, control of restrictive practices, digital single market, merger control, restriction on competition

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 18.6.2018  SWD(2018) 349 final  COMMISSION STAFF WORKING DOCUMENT Accompanying the document 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 2017 {COM(2018) 482 final}  
 
 
TABLE OF CONTENTS 

I. 

LEGISLATION AND POLICY DEVELOPMENTS ................................................................................... 3 

Antitrust and cartels ......................................................................................................................... 3 

1. Guidance in antitrust and cartel proceedings ......................................................................... 4 

2. Significant judgments by the European Union Courts in antitrust and cartels .................. 5 

3. The fight against cartels remains a top priority ................................................................... 15 

4. Continuing close cooperation within the European Competition Network (ECN) and with 
national courts ............................................................................................................................. 18 

Merger control ................................................................................................................................. 20 

1. Recent enforcement trends ..................................................................................................... 21 

State aid control ............................................................................................................................... 25 

1. Uptake of the State Aid Modernisation ................................................................................. 26 

2. State Aid Modernisation continues ........................................................................................ 33 

3. Monitoring, recovery and cooperation with national courts ............................................... 34 

4. Significant judgments by the European Union Courts in the State aid area ..................... 37 

Developing the international dimension of EU competition policy ............................................. 43 

1. Bilateral relations .................................................................................................................... 43 

2. Multilateral cooperation ......................................................................................................... 44 

External Communication ................................................................................................................ 45 

II. SECTORAL OVERVIEW ........................................................................................................................ 47 

1. ENERGY & ENVIRONMENT .............................................................................................................. 47 

2. INFORMATION AND COMMUNICATION TECHNOLOGIES AND MEDIA ........................................... 52 

5.   BASIC INDUSTRIES AND MANUFACTURING ................................................................................. 73 

6. AGRI-FOOD INDUSTRY ..................................................................................................................... 76 

7. PHARMACEUTICAL AND HEALTH SERVICES SECTOR ..................................................................... 80 

8. TRANSPORT AND POSTAL SERVICES ............................................................................................... 82 

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I. 

LEGISLATION AND POLICY DEVELOPMENTS 

Competition policy empowering citizens and businesses for the benefit of all 

The European Union remains the largest economic and trading area in the world, with more 
than  half  a  billion  consumers  and  20  million  companies  forming  its  strongest  lever  –  the 
internal  market.  The  on-going  process  of  improving  and  expanding  the  functioning  of  the 
single market goes hand in hand with competition policy enforcement. The ultimate goal of 
EU competition policy is making markets function better for the benefit of consumers – both 
households  and  businesses  –  and  the  society  as  a  whole,  as  well  as  fostering  a  competition 
culture in the EU and worldwide.  

This is achieved by giving individuals a wide choice of products at prices they can afford, as 
well  as  by  encouraging  and  enabling  companies  –  big  or  small  –  to  innovate,  invest,  and 
compete  on  equal  terms  on  the  market.  Equally,  enforcement  of  competition  policy 
contributes  towards  an  open  and  fair  single  market  in  which  businesses  and  individual 
consumers  can  directly  obtain,  or  lawfully  claim,  their  fair  share  of  the  benefits  of  growth. 
Taken together, competition policy actions in the antitrust area, under the merger control and 
State aid control can make a real difference towards the benefit of European  consumers and 
businesses.  By  stimulating  innovation,  preventing  abuses  from  dominant  players,  helping 
achieve a connected Digital Single Market, an integrated and climate-friendly Energy Union, 
supporting  competition-friendly  regulation,  and  fostering  a  global  competition  culture, 
competition policy actions contribute to the right conditions for economic growth. 

The  present  Staff  Working  Document  is  composed  of  two  parts,  one  presenting  the  2017 
policy  and  legislative  developments  across  the  three  competition  instruments  (antitrust  and 
cartels,  mergers,  and  State  aid),  while  specific  actions  are  detailed  in  the  sectoral  overview 
part. 

Antitrust and cartels 

Articles 101, 102 and 106 TFEU  

According  to Article  101  TFEU,  anti-competitive  agreements  are  prohibited as  incompatible with  the  internal 
market.  Article  101  TFEU  prohibits  agreements  with  an  anti-competitive  object  or  effects  where  companies 
coordinate  their  behaviour  instead  of  competing  independently.  However,  even  if  a  horizontal  or  a  vertical 
agreement  could  be  viewed  as  restrictive  (for  example  by  combining  the  production  of  two  competing 
companies) it might be allowed under Article 101(3) TFEU if it ultimately fosters competition (for example by 
promoting technical progress or by improving distribution).  

Article 102 TFEU prohibits abuse of a dominant position. It is not in itself illegal for an undertaking to be in a 
dominant position or to acquire such a position. Dominant undertakings, as any other undertaking in the market, 
are entitled to compete on the merits. However, Article 102 TFEU prohibits the abusive behaviour by dominant 
undertakings that, for example, prevent new entry into the market or squeeze competitors out of the market. Such 
practices hamper competition and negatively affect incentives for innovation and growth, as well as consumer 
welfare.  

Finally, Article 106 TFEU prevents Member States from enacting or maintaining in force measures contrary to 
the  Treaty  rules  regarding  public  undertakings  and  undertakings  to  which  Member  States  grant  special  or 
exclusive rights (privileged undertakings). 

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1. Guidance in antitrust and cartel proceedings 

In  2017,  the  Commission  introduced  a  new  whistleblower  tool  that  gives  an  opportunity  to 
individuals who have knowledge of the existence or functioning of a cartel or other types of 
antitrust  violations  to  help  end  such  practices.  Moreover,  the  Commission  continued  to 
encourage  cooperation  by  parties  also  in  non-cartel  antitrust  cases  and  worked  on  the 
interaction between competition policy, algorithms and data issues. 

To  further  increase  its  ability  to  detect  secret  cartels  and  other  antitrust  violations,  the 
Commission launched a new whistleblower tool to make it easier for individuals to alert the 
Commission about such infringements while maintaining their anonymity1. The new system 
increases the likelihood of detection and prosecution for undertakings and, as such, stands to 
further deter businesses from entering or  remaining  in  cartels or  carrying out  other  types  of 
illegal  anti-competitive  behaviour.  For  these  reasons,  it  complements  and  reinforces  the 
effectiveness of the Commission's leniency programme. The new tool protects the anonymity 
of whistleblowers through a specifically-designed encrypted messaging system that allows for 
two  way  communication.  The  service  is  run  by  a  specialised  external  service  provider  that 
acts  as  an  intermediary,  and  which  relays  only  the  content  of  received  messages  without 
forwarding  any  metadata  that  could  be  used  to  identify  the  individual  providing  the 
information.  Individuals  that  are  willing  to  reveal  their  identity  can  instead  contact  the 
Commission's competition department directly through a dedicated phone number and e-mail 
address. 

The  Commission  continued  to  encourage  cooperation  by  parties  also  in  non-cartel  antitrust 
cases  (as  is  already  the  well-established  practice  in  cartel  cases  through  the  cartel-specific 
framework  of  leniency  and  settlement).  In  addition  to  acknowledging  liability  for  an 
infringement,  companies  can  further  cooperate  by  voluntarily  disclosing  (or  clarifying) 
evidence,  or  by  helping  in  the  design  and  implementation  of  remedies.  As  a  reward  for 
genuine  and  meaningful  cooperation  by  parties,  the  Commission  may  decide  to  reduce  the 

1 For further information see http://ec.europa.eu/competition/cartels/whistleblower/index.html. 

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fines  for  an  infringement2.  The  possible  level  of  fines  reduction  depends  on  the  extent  and 
timing of the cooperation in the specific case and the resulting benefits in terms of efficient 
procedure and effective enforcement.  

The  Commission  also  continued  to  actively  work  on  the  interaction  between  competition 
policy,  algorithms,  and  data  issues.  In  March,  Commissioner  Vestager  set  out  a  number  of 
issues relating to algorithms and automated systems, and how these can reinforce or lead to 
restrictions of competition3: a key message was that companies cannot shield themselves from 
antitrust liability by arguing that an algorithm was responsible for their pricing, and what is 
illegal offline is likely to be illegal when carried out through algorithms as well. In June, DG 
Competition  made  a  written  contribution  to  the  OECD  roundtable  on  competition  and 
algorithms4. And in October, Director-General Laitenberger delivered a speech that also dealt 
with the competition implications of data and algorithms5.  

2. Significant judgments by the European Union Courts in antitrust and cartels 

Article 101 TFEU 

Restriction of competition by object 

In  Telefónica6,  the European  Court  of Justice confirmed the Commission's  decision7 that  an 
agreement  between  Telefónica  and  Portugal  Telecom  (now  PT)  not  to  compete  with  each 
other  on  the  Iberian  telecommunications  markets  was  contrary  to  Article  101  TFEU.  In  its 
decision,  the  Commission  had  found  that  the  relevant  clause  amounted  to  a  market-sharing 
agreement with the object of restricting competition and it imposed fines on both Telefónica 
and PT. The European Cout of Justice confirmed the General  Court's finding8 that  the  non-
compete  clause  was  unlawful  under  Article  101  TFEU  and  that  the  clause  constituted  a 
restriction of competition by object. 

Setting of minimum fees by professional organizations 

The  preliminary  ruling  in  joined  cases  CHEZ  Elektro  Bulgaria  and  FrontEx  International9 
concerned the application of Article 101(1) TFEU, read in conjunction with Article 4(3) TEU, 
in  relation  to  minimum  legal  fees  established  by  the  Bulgarian  professional  association  of 
lawyers.  The European Court  of Justice  held  that national legislation, which does  not  allow 
for a lawyer and client to agree on a remuneration below the minimum amount established by 
the  association,  and  does  not  authorise  courts  to  order  reimbursement  of  fees  in  an  amount 
below this minimum level, is capable of restricting competition in the internal market within 
the meaning of Article 101(1) TFEU. The European Court of Justice, however, also recalled 
that  account  must  be  taken  of  the  overall  context  and  the  objectives  of  the  decision  of  the 

2 This was done, for the first time under Regulation No 1/2003, in Case AT.39759 ARA foreclosure. For further 
information  see  IP/16/3116  of  20  September  2016  available  at  http://europa.eu/rapid/press-release_IP-16-
3116_en.htm. 
3 For further information see https://ec.europa.eu/commission/commissioners/2014-
2019/vestager/announcements/bundeskartellamt-18th-conference-competition-berlin-16-march-2017_en. 
4 For further information see http://www.oecd.org/daf/competition/algorithms-and-collusion.htm. 
5 For further information see http://ec.europa.eu/competition/speeches/text/sp2017_15_en.pdf. 
6  Case  C-487/16,  Telefónica  SA  v  European  Commission,  Judgment  of  the  European  Court  of  Justice  of  13 
December 2017, ECLI:EU:C:2017:961.  
7 Commission Decision C(2013) 306 final of 23 January 2013 relating to a proceeding under Article 101 TFEU 
and Article 53 of the EEA Agreement (Case COMP/39.839 – Telefónica/Portugal Telecom). 
8 Case T-216/13 Telefónica v Commission, judgment of the General Court of 28 June 2016, EU:T:2016:369.   
9 Joined Cases C-427/16 and C-428/16, CHEZ Elektro Bulgaria AD v. Yordan Kotsev and FrontEx International 
EAD v Emil Yanakiev, judgment of the European Court of Justice of 23 November 2017, ECLI:EU:C:2017:890. 

5 

 
                                                            
professional  association  and  it  has  to  be  considered  whether  the  consequential  effects  are 
inherent in the pursuit of those objectives. 

Selective distribution and platform bans 

In Coty10, a preliminary ruling concerning a prohibition on a reseller of luxury cosmetics not 
to  sell  the  contract  goods  on  third  party  online  platforms  (Amazon.de  in  this  case),  the 
European  Court  of  Justice  clarified  that  a  platform  ban  neither  constitutes  a  restriction  of 
customers under Article 4 b) nor a restriction of passive sales to end users under Article 4 c) of 
the Vertical Block Exemption Regulation11. The European Court of Justice also confirmed that 
a  selective  distribution  system  for  luxury  goods,  designed  primarily  to  preserve  the  luxury 
image of those goods can comply with Article 101(1) TFEU provided that the so-called "Metro 
criteria" are met (e.g. resellers are chosen on the basis of objective criteria, laid down uniformly 
for all resellers, not applied in a discriminatory fashion and the criteria do not go beyond what is 
necessary). In its response to the question of the referring court, the European Court of Justice 
also  held  that  a  contractual  clause  which  prohibits  authorised  distributors  in  a  selective 
distribution system for luxury goods to use visible third party platforms for online sales may be 
compatible with Article 101(1) TFEU insofar as the clause has the objective of preserving the 
luxury  image  (which  is  a  legitimate  aim),  is  laid  down  uniformly,  is  not  applied  in  a 
discriminatory fashion and is proportionate in the light of the objective pursued. 

Competition rules in the agricultural sector 

In a preliminary ruling in Endives12, the European Court of Justice clarified the application of 
competition  rules  in  the  agricultural  sector.  While  recalling  that  that  Article  42  TFEU 
recognises  that  the  common  agricultural  policy  takes  precedence  over  the  objectives  of  the 
Treaty  in  the  field  of  competition  and  recognising  the  EU  legislature’s  power  to  decide  to 
what extent the rules on competition are to be applied in the agricultural sector, the European 
Court  of  Justice  also  recalled  that  competition  is  one  of  the  objectives  of  the  Common 
Agricultural Policy. The European Court of Justice ruled that price fixing, volume limitations 
and  exchange  of  commercially  sensitive  information  between  producer  organisations  and 
associations of producer organisations are prohibited under Article 101 TFEU. Furthermore, 
the European Court of Justice clarified that under certain conditions Article 101 TFEU may 
not  be  applicable  to  some  of  these  practices  when  they  are  carried  out  within  a  producer 
organisation:  first,  if  the  producer  organisation  or  association  of  producer  organisations  is 
formally recognised by a Member State; and, second, if these practices are strictly necessary 
and proportional for carrying out specific objectives assigned to them by EU legislation. 

Article 102 TFEU 

Exclusivity rebates  

In Intel13 the European Court of Justice set aside the General Court's ruling that had found that 
Intel's  exclusivity  rebates  were  anticompetitive  in  nature,  and  referred  the  case  back  to  the 
General Court for further examination.  

10  Case  C-230/16,  Coty  Germany  GmbH  v  Parfümerie  Akzente  GmbH,  judgment  of  the  European  Court  of 
Justice of 6 December 2017, ECLI:EU:C:2017:941. 
11 Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty 
on the Functioning of the European Union to categories of vertical agreements and concerted practices. 
12  C-671/15,  Président  de  l’Autorité  de  la  concurrence  v  Association  des  producteurs  vendeurs  d’endives 
(APVE) and Others, Judgment of the European Court of Justice of 14 November 2017, ECLI:EU:C:2017:860. 
13  C-413/14  P  Intel  v  Commission,  judgment  of  the  European  Court  of  Justice  of  6  September  2017, 
ECLI:EU:C:2017:632. 

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The European Court of Justice held that previous case law on exclusivity rebates needed to be 
clarified.  To  this  effect  the  European  Court  of  Justice  made  clear  that  the  presumption  of 
illegality of exclusivity rebates can  be rebutted if the  dominant  undertaking submits,  during 
the  administrative  procedure,  on  the  basis  of  supporting  evidence,  that  its  conduct  was  not 
capable of producing the alleged foreclosure effects. In the latter case the European Court of 
Justice  held  that  the  Commission  "is  not  only  required  to  analyse,  first,  the  extent  of  the 
undertaking’s  dominant  position  on  the  relevant  market  and,  secondly,  the  share  of  the 
market  covered  by  the  challenged  practice,  as  well  as  the  conditions  and  arrangements  for 
granting the rebates in question, their duration and their amount; it is also required to assess 
the possible existence of a strategy aiming to exclude competitors that are at least as efficient 
as the dominant undertaking from the market".  

The  European  Court  of  Justice  then  observed  that,  while  in  the  particular  case  at  hand  the 
Commission  had  emphasised  that  the  exclusivity  rebates  at  issue  were  by  their  very  nature 
capable of restricting competition, it nevertheless had carried out an in-depth examination of 
the capability of those rebates to restrict competition, including by conducting an "as efficient 
competitior" test. As that test played an important role in the Commission’s assessment, the 
European Court of Justice held that the General Court was required to examine all of Intel’s 
arguments concerning that test, which the General Court had failed to do. The European Court 
of Justice therefore referred the case back to the General Court so that it may examine, in the 
light  of  the  arguments  put  forward  by  Intel,  whether  the  rebates  at  issue  were  capable  of 
restricting competition. 

Although the European Court of Justice found no procedural irregularities that affected Intel's 
right  of  defence,  it  stressed  that  "the  Commission  is  required  to  record,  in  a  form  of  its 
choosing,  any  interview  which  it  conducts,  under  Article  19  of  Regulation  1/2003,  for  the 
purpose  of  collecting  information  relating  to  the  subject  matter  of  an  investigation". 
Moreover,  the  European  Court  of  Justice  also  rejected  Intel’s  argument  alleging  that  the 
Commission  lacked  territorial  jurisdiction  to  penalise  the  abuse  and  confirmed  that  conduct 
made outside of Europe falls within the scope of EU antitrust rules, if it has substantial effects 
on European markets. 

Excessive prices  

On  a  preliminary  ruling  in  Latvijas  Autoru  apvienība14,  the  European  Court  of  Justice 
clarified a number of questions related to  the assessment of  excessive prices. The questions 
were referred to it by the Latvian Supreme Court in the context of a review of the legality of 
rates  applied  by  the  national  copyright  management  society  to  shops  and  other  commercial 
premises  for  playing  copyrighted  music.  The  European  Court  of  Justice  held  that  for  the 
purposes  of  examining  whether  a  copyright  management  organisation  applies  unfair  prices 
within  the  meaning  of  Article  102(a)  TFEU,  it  is  appropriate  and  sufficient  to  compare  its 
rates with those applicable in neighbouring Member States as well as with those applicable in 
other Member States adjusted in accordance with the purchasing power parity index, provided 
that the reference Member States have been selected in accordance with objective, appropriate 
and verifiable criteria and that the comparisons are made on a consistent basis. The European 
Court of Justice clarified that the difference between the rates compared must be regarded as 
appreciable, and thus indicative of an abuse, if that difference is significant and persistent. It 
is then for the copyright management organisation to show that its prices are fair by reference 
to objective factors that have an impact on management expenses or the remuneration of right 

14 Case C-177/16 Biedrība "Autortiesību un komunicēšanās konsultāciju aģentūra - Latvijas Autoru apvienība" 
Konkurences padome, judgment of the European Court of Justice of 14 September 2017, ECLI:EU:C:2017:689.  

7 

 
                                                            
holders. 

Procedural issues 

Fines and inability to pay  

The European Court of Justice handed down judgments on 14 appeals15 against the General 
Court's judgments relating to the Commission's cartel decision in the Bathroom Fixtures and 
Fittings case16. This case concerned a long-lasting cartel (1992-2004) in the bathroom fittings 
and  fixtures  sector,  involving  17  manufacturers  that  coordinated  price  increases,  both 
annually  and  linked  to  specific  events,  across  six  Member  States  (Germany,  Austria,  Italy, 
France,  Belgium  and  the  Netherlands).  In  its  2010  decision,  the  Commission  had  imposed 
fines totalling more than EUR 622 million on the participants.  

The European Court of Justice dismissed the appeals of the majority of the applicants. In the 
appeal  submitted by  Laufen  Austria17, the European  Court  of Justice  set aside the judgment 
under appeal in so far as the General Court held that the Commission had not made an error in 
taking  the  turnover  of  the  Roca  Group  into  account  for  the  purpose  of  applying  the  10% 
ceiling in respect of the period for which Laufen Austria was held solely responsible for the 
infringement.  The  European  Court  of  Justice  observed  that  the  Commission  must,  for  the 
purpose of calculating the 10% ceiling for the period for which it was held solely liable, take 
account  only  of  the  subsidiary’s  own  turnover, and  must  take  as  a  basis  the  turnover  in  the 
business  year  preceding  the  year  in  which  the  fining  decision  was  adopted.  The  European 
Court  of  Justice  referred  the  case  back  to  the  General  Court,  which  reduced  the  fine  for 
Laufen Austria by EUR 9 511 999, to a final total of EUR 4 788 00118. 

The  inclusion  by  the  Commission  of  direct  EEA  sales  through  transformed  products  in 
calculating the fine 

In  LG  Electronics  Inc.  (LGE)  and  Koninklijke  Philips  Electronics  NV.19  (television  and 
computer  monitor  tubes),  the  European  Court  of  Justice  confirmed  that,  for  fine  calculation 
purposes, the "value of sales" in the EEA includes sales of finished products incorporating the 
cartelised components in the EEA, when those components were first sold intra-group to non-

15 Judgements of 26 January of the European Court of Justice in cases C-604/13 P Aloys F. Dornbracht GmbH & 
Co. KG v Commission, EU:C:2017:45; C-609/13 P Duravit AG, Duravit SA and Duravit BeLux SPRL/BVBA v 
Commission,  EU:C:2017:46;  C-611/13  P  Hansa  Metallwerke  AG,  Hansa  Nederland  BV,  Hansa  Italiana  Srl, 
Hansa  Belgium,  Hansa  Austria  GmbH  v  Commission,  EU:C:2017:47;  C-613/13  P  Commission  v  Keramag 
Keramische  Werke  GmbH,  Koralle  Sanitärprodukte  GmbH,  Koninklijke  Sphinx  BV,  Allia  SAS,  Produits 
Céramiques  de  Touraine  SA,  Pozzi  Ginori  SpA  and  Sanitec  Europe  Oy,  EU:C:2017:49;  C-614/13  P  Masco 
Corp.,  Hansgrohe  AG,  Hansgrohe  Deutschland  Vertriebs  GmbH,  Hansgrohe  Handelsgesellschaft  mbH, 
Hansgrohe  SA/NV,  Hansgrohe  BV,  Hansgrohe  SARL,  Hansgrohe  Srl,  Hüppe  GmbH,  Hüppe  GesmbH,  Hüppe 
Belgium  SA/NV  and  Hüppe  BV  v  Commission,  EU:C:2017:63;  C-618/13  P  Zucchetti  Rubinetteria  SpA  v 
Commission, EU:C:2017:48;  C-619/13  P  Mamoli  Robinetteria  SpA  v Commission, EU:C:2017:50;  C-625/13 P 
Villeroy & Boch AG v Commission, EU:C:2017:52; C-626/13 P Villeroy & Boch Austria GmbH v Commission, 
EU:C:2017:54; C-636/13 P Roca Sanitario SA v Commission, EU:C:2017:56; C-637/13 P Laufen Austria AG v 
Commission,  EU:C:2017:51;  C-638/13  P  Roca  SARL  v  Commission,  EU:C:2017:53;  C-642/13  P  Villeroy  & 
Boch  Belgium  SA  v  Commission,  EU:C:2017:58;  C-644/13  P  Villeroy  &  Boch  SAS  v  Commission, 
EU:C:2017:59. 
16 Commission Decision C(2010) 4185 final of 23 June 2010 relating to a proceeding under Article 101 TFEU 
and Article 53 of the EEA Agreement (Case COMP/39092 - Bathroom Fittings and Fixtures). 
17 Case C-637/13 P Laufen Austria AG v Commission, EU:C:2017:51. 
18 Case T-411/10 RENV, judgement of 12 September 2017 of the General Court, EU:T:2017:598. 
19  Joined  cases  C  588/15  P  and  C  622/15  P  LG  Electronics  Inc.  and  Koninklijke  Philips  Electronics  NV  v 
Commission,  judgment of the Court of 14 September 2017, ECLI:EU:C:2017:679. 

8 

 
                                                            
EEA entities. In particular, the Court found that although the concept of the ‘value of sales’ 
(point 13 of the Fines Guidelines) does not include sales made by the undertaking that do not 
come within the scope of the infringement, it would be contrary to the objective pursued by 
Article  23(2)  of  Regulation  No  1/2003  if  vertically  integrated  participants  in  a  cartel  could 
expect  to  have  the  value  of  those  goods  excluded  from  the  calculation  of  the  fine,  solely 
because  they  incorporated  the  goods  forming  the  subject  matter  of  the  infringement  into 
products finished outside the EEA20. Given that the LPD group (a joint venture between LGE 
and Philips) intervened in the product market affected by the infringement (TV and computer 
monitor tubes), while LGE and Philips were active in the market for the transformed goods in 
which those products were incorporated (TV and computer monitors), the LPD group and its 
parent  companies  did  form  a  vertically  integrated  undertaking  within  the  meaning  of  the 
aforementioned judgment.  

Therefore,  the  European  Court  of  Justice  held  that  "the  Commission  was  entitled  to  include 
direct  EEA  sales  through  transformed  products  by  the  economic  unit  formed  by  the  LPD 
group and its parent companies when calculating the basic amount of the fine imposed on the 
appellants".  

Investigative Powers and use of evidence  

Admissibility of  evidence  transmitted by a National  Authority to the Commission other than 
the National competition authorities 

In FSL Holdings21 (exotic fruit), the European Court of Justice confirmed the findings of the 
General  Court22  that  the  European  Commission  can  use  in  a  cartel  investigation  evidence 
transmitted  by  a  national  authority  other  than  a  Member  State  competition  authority.  In 
particular,  "the  lawfulness  of  the  transmission  to  the  Commission  by  a  prosecutor  or  the 
authorities  competent  in  competition  matters  of  information  obtained  in  application  of 
national criminal law is a question governed by national law and second that the Courts of 
the  European  Union  have  no  jurisdiction  to  rule  on  the  lawfulness,  as  a  matter  of  national 
law, of a measure adopted by a national authority"23. The reason is the general principle of 
EU law that evidence must be freely adduced. The European Court of Justice also confirmed 
the  findings  of  the  General  Court  that  the  rules  of  Article  12  of  Regulation  1/2003  (whose 
objective is  to  facilitate  the  exchange  of  information  within  competition  authorities)  are  not 
applicable in this case.  

Parental liability  

The Toshiba24 case (television and computer monitor tubes) has clarified that the parents of a 
joint venture may be held liable under EU competition law for anti-competitive activities of 
that joint venture. The General Court had previously held that the Commission was right to 
find that both parents of a joint venture exercised joint control as both parents had veto rights 
"with  respect  to  matters  of  strategic  importance  which  were  essential  for  the  pursuit  of  the 

20 Case C 231/14 P InnoLux Corp. v Commission, judgment of the Court of 9 July 2015, ECLI:EU:C:2015:451. 
21  Case  C-469/15  P  FSL  Holdings  and  Others  v  Commission,  judgment  of  the  Court  of  27  April  2017, 
ECLI:EU:C:2017:308. 
22 Case T-655/11 – FSL Holdings and Others v Commission, judgment of the General Court of 16 June 2015, 
ECLI:EU:T:2015:383. 
23  See  also  Case  C-407/04  P  Dalmine  v  Commission,  judgment  of  the  Court  of  25  January  2007, 
ECLI:EU:C:2007:53. 
24  Case  T-104/13  Toshiba  Corp.  v  Commission,  judgment  of  the  General  Court  of  9  September  2015, 
ECLI:EU:T:2015:610. 

9 

 
                                                            
joint  venture's  activity".  The  holding  of  such  veto  rights  is  in  itself  sufficient  for  it  to  be 
considered  that  the  parent  exercised  decisive  control  over  the  joint  venture.  The  question 
whether such rights were actually exercised is irrelevant. This was confirmed by the European 
Court of Justice25, which stated that, contrary to Toshiba’s assertions, the General Court was 
not  required  to  determine  whether  Toshiba  had  actually  influenced  the  joint  venture’s 
operational  management  in  order  to  conclude  that  those  two  companies  formed  part  of  a 
single economic unit.  

To sum up, although a "full-function" joint venture under the EU Merger Regulation can be 
economically autonomous from an operational point of view, this does not mean that it also 
enjoys  full  autonomy  with  regard  to  the  adoption  of  strategic  commercial  decisions. 
Moreover, even if a parent company has only "negative power" (such as veto rights) to block 
certain decisions of the joint venture and was unable to impose any decisions on it, it can be 
still considered as having decisive influence over it. 

The Akzo Nobel NV and others26 case (heat stabilisers), has clarified the rules concerning the 
liability  of  parent  companies  for  the  unlawful  conduct  of  their  subsidiaries  as  regards 
limitation periods. The European Court of Justice has upheld  the General  Court's judgment, 
which confirmed that the Commission is not prevented from holding a parent company liable 
for  infringements  committed  by  two  of  its  subsidiaries  where  the  fines  imposed  on  the  two 
subsidiaries have been annulled due to prescription and the limitation period is not exceeded 
for the parent company. In particular, the European Court of Justice held that: "[…] factors 
specific to the parent company may justify assessing the parent company’s liability and that of 
its subsidiary differently, even if the liability of the former is based exclusively on the unlawful 
conduct of the latter".  

Cartel settlements 

The  Commission  is  not  bound  by  the  proposals  made  during  settlement  proceedings  if  the 
undertaking  decides  not  to  settle.  The  parallel  "hybrid"  procedure  is  fully  confirmed  as 
lawful. 

"Hybrid"  cartel  cases  are  those  in  which  not  all  cartel  participants  chose  to  participate  in  a 
settlement  procedure.  Therefore,  in  hybrid  cases,  there  are  two  infringement  decisions  –  a 
settlement decision, and an ordinary decision for the parties that chose not to settle.   

In Timab Industries and Compagnie financière et de participations Roullier/CFPR 27(animal 
feed),  the  European  Court  of  Justice  upheld  the  earlier  findings  of  the  General  Court  in  the 
Animal Feed cartel case, in which the General Court fully endorsed the first "hybrid" decision 
adopted against Timab, a company that opted out of the settlement and was fined under the 
normal procedure (Timab). The decision against Timab was adopted at the same time as the  
settlement decision. It was thus a parallel "hybrid" case. The European Court of Justice agreed 
that, as long as the equal treatment principle is respected, there are no legitimate expectations 
that  the  scope  of  the  case  or  the  contemplated  fine  for  the  company  that  opted  out  of  the 
settlement would remain the same as discussed and disclosed during the settlement procedure. 
Therefore, the settlement discussions do not  necessarily  determine the scope and amount  of 

25  Case  C-623/15  P,  Toshiba  Corp.  v  Commission,  judgment  of  the  Court  of  18  January  2017, 
ECLI:EU:C:2017:21. 
26  Case  C-516/15P  Akzo  Nobel  NV  and  Others  v  Commission,  judgment  of  the  Court  of  27  April  2017, 
ECLI:EU:C:2017:314. 
27  Case  C-411/15  P  Timab  Industries  and  CFPR  v  Commission,  judgment  of  the  Court  of  12  January  2017, 
ECLI:EU:C:2017:11. 

10 

 
                                                            
the fine in the ordinary decision. 

In  particular,  the  European  Court  of  Justice's  review  confirmed  that  the  General  Court 
correctly  verified  the  validity  of  the  Commission's  analysis.  Under  that  analysis,  the 
Commission  was justified in  ultimately imposing a higher fine on Timab (CFPR)  under the 
standard  administrative  procedure  than  the  amount  proposed  earlier  during  the  settlement 
procedure.  In  this  respect,  the  European  Court  of  Justice  agreed  with  the  General  Court  in 
finding  that  the  Commission  had  to  take  into  account,  during  the  standard  procedure,  new 
information requiring it to review the file, to redefine the duration of the cartel and to adjust 
the  fine  by  not  applying  reductions  it  had  proposed  during  the  settlement  procedure,  thus 
rejecting any arguments of legitimate expectations and equal treatment. 

ICAP – restriction by object, facilitation, staggered hybrid procedure 

The Commission adopted in 2013 a first settlement decision against six banks and one broker, 
while a decision against the non-settling party, the broker ICAP, was adopted at a later stage 
in 2015. The judgement of the General Court28 is a staggered hybrid case and it is important 
for several reasons.  

Firstly,  the  General  Court  agreed  with  the  Commission's  assessment  of  the  cartel 
infringements  in  the  Japanese  yen  interest  rate  derivatives  sector  as  a  restriction  of 
competition by object. The banks' manipulation of the interest rate benchmark was recognised 
as  being  similar  to  a  "classic"  price-fixing  agreement  despite  the  particularities  of  the 
derivative  product  and  the  fact  that  the  manipulation  of  the  benchmark  could  be  either 
upwards or downwards.  

Secondly,  the  conduct  of  ICAP  qualified  as  cartel  facilitation,  because  ICAP  intentionally 
contributed  to  the  common  objective  of  the  cartel  and  was  not  a  peripheral,  outside  service 
provider.  The  judgement  confirms  that  competition  rules  apply  to  both  undertakings  on  the 
cartelised market and facilitators that are not present on that market. Moreover, the concept of 
facilitation is not limited to secretarial work, as it was the situation in the previous facilitation 
case upheld by the European Court of Justice (AC Treuhand)29. In particular, ICAP served as 
a  communication  channel  between  cartelists,  contacted  other  banks  not  participating  the 
infringement, with the aim of influencing their behaviour, and spread misleading information. 

Finally, the judgment confirms the legality of the staggered hybrid procedure provided that it 
complies  with  the  presumption  of  innocence  of  the  non-settling  parties.  Staggered 
proceedings  take  place  when  the  settlement  decision,  and  the  ordinary  decision  against  the 
parties that chose not to settle, are not adopted at the same time.  

At the same time, the General Court judgement partially annuls the Commission decision.  

Firstly, the General Court has found that the Commission has not succeeded in proving that 
ICAP participated as a facilitator in one of the six infringements described in its decision (it is 
not  proven  that  ICAP  was  aware  of  one  of  the  banks'  role  in  that  infringement).  Moreover, 
The  General  Court  has  found  that  the  duration  of  ICAP’s  participation  in  four  other 
infringements was shorter than the duration found by the Commission. The General Court has 
applied  a  so-called  "comprehensive"  standard  of  review  which  involves  a  document-by-
document assessment of the evidence. 

28 Case T-180/15 ICAP. v Commission, judgment of the General Court of 10 November 2015. 
29 Case C-194/14 P AC Treuhand v Commission, judgment of the European Court of Justice of 22 October 2015. 

11 

 
                                                            
Secondly,  the  General  Court  has  annulled  the  fines  in  full  because  it  considered  that  the 
Commission failed to provide sufficient reasoning regarding the methodology for calculating 
the  fines.  The  General  Court  followed  its  own  case  law  (Printeos30)  in  requesting  the 
Commission a detailed reasoning when it imposes a fine, the calculation of which was based 
on point 37 of the 2006 Fines Guidelines. On this aspect, the Commission has appealed the 
judgment and submitted that the General Court incorrectly applied the case law of the Court 
of Justice on the statement of reasons required when imposing fines31. 

Finally,  the  General  Court  also  held  that  the  Commission  has  infringed  the  presumption  of 
ICAP’s innocence when adopting the 2013 settlement decision because ICAP is mentioned as 
a facilitator in that decision. However, after analysis, the General Court concluded that such 
breach  did  not  have  in  this  case  a  direct  impact  on  the  legality  of  the  ICAP  decision  and 
therefore ICAP's plea for annulment of the decision on that basis was rejected. 

Commitment decisions 

In Gasorba v Repsol32, the European Court of Justice confirmed in a preliminary ruling that a 
national  court  may  still  review  agreements  that were  the  subject  of  a  commitment  decision 
adopted by the Commission. The European Court of Justice found that commitment decisions 
adopted by the Commission under Article 9(1) of Council Regulation (EC) No 1/2003 do not 
prevent  a  national  court  from  finding  that  an  infringement  of Article  101  TFEU has  been 
committed and, if necessary, declare the agreements in question void pursuant to Art. 101(2) 
TFEU.  At  the  same  time,  the  European  Court  of  Justice  observed  that  both  the  principle  of 
sincere  cooperation  laid  down  in  Article 4(3)  TEU  and  the  objective  of  applying  EU 
competition law effectively and uniformly require the national court to take into account the 
preliminary  assessment carried out by the Commission  and regard  it as an indication, if not 
prima  facie evidence, of the anticompetitive nature of the agreement at issue in  the light  of 
Article 101(1) TFEU. 

Publications  

Issues regarding publication and Confidentiality under the Leniency Program and the scope 
of powers of the Hearing Officer (especially under Article 8 of the Terms of Reference) 

In Evonik Degussa33 (hydrogen peroxide) the European Court of Justice set aside, in part, the 
General  Court's  judgment  insofar  as  the  General  Court  held  that  the  Commission’s  Hearing 
Officer  was  correct  to  decline  competence  to  answer  the  objections  regarding  the breach  of 
the  principles  of  equal  treatment  and  protection  of  legitimate  expectations  to  the  proposed 
publication  of  a  detailed,  non-confidential  version  of  the  Commission’s  decision.  The 
European Court of Justice, after giving an overview of the scope of the powers of the Hearing 
Officer  (under  Article  8  of  Decision  2011/695  concerning  the  Terms  of  Reference  for  the 
Hearing Officer) held that the Hearing Officer has the mandate and competence to review any 
objection  based  on  a  ground,  arising  from  rules  or  principles  of  EU  law  relied  on  by  the 
interested  person  in  order  to  claim  protection  of  the  confidentiality  of  the  contested 
information.  

30  Case  T-95/15  Printeos  and  others  v  Commission,  jundgment  of  the  General  Court  of  13  December  2016, 
ECLI:EU:T:2016:722.  
31 Case C-39/18 P Commission v Icap and Others. 
32 Case C-547/16, Gasorba SL and others v Repsol Commercial de Productos Petrolíferos SA, judgment of the 
European Court of Justice of 23 November 2017, ECLI:EU:C:2017:891. 
33  Case  C-162/15  Evonik  Degussa  v  Commission, 
ECLI:EU:C:2017:205. 

the  Court  of  14  March  2017, 

judgment  of 

12 

 
                                                            
The European Court of Justice thereafter dismissed the remaining grounds of appeal, with the 
most  notable  being  the claim  that  the  General  Court  wrongfully  drew  a  distinction  between 
the  publication  of  documents  communicated  by  applicants  for  leniency,  which  would 
generally  be  unlawful,  and  the  publication  of  information  from  those  documents,  such  as 
extracts from the statements made by those applicants, which would be lawful. In particular, 
the  European  Court  of  Justice  held  that  "In  that  regard,  it  must  be  pointed  out  that  the 
publication, in the form of verbatim quotations, of information from the documents provided 
by  an  undertaking  to  the  Commission  in  support  of  a  statement  made  in  order  to  obtain 
leniency  differs  from  the  publication  of  verbatim  quotations  from  that  statement  itself. 
Whereas  the  first  type  of  publication  should  be  authorised,  subject  to  compliance  with  the 
protection  owed,  in  particular,  to  business  secrets,  professional  secrecy  and  other 
in  any 
confidential 
circumstances". 

type  of  publication 

is  not  permitted 

information, 

the  second 

Rejection of complaints 

In  Confédération  européenne  des  associations  d'horlogers-réparateurs  (CEAHR)34  the 
General  Court  upheld  the  Commission’s  decision  rejecting  a  complaint  lodged  by  the 
European Confederation of Watch and Clock Repairers' Association's ("CEAHR").  

CEAHR's  complaint,  lodged  in  2004,  alleged  that  manufacturers  of  prestige/luxury  watches 
infringed  EU  competition  law  by  refusing  to  continue  to  supply  spare  parts  to  independent 
repairers.35  The  2008  Commission  rejection  decision  of  the  complaint  was  annulled  by  the 
General  Court  for  errors  of  assessment  and  insufficient  motivation  of  some  of  the 
conclusions.36 After a thorough re-assessment of the case, the Commission again rejected the 
complaint  in  2014.  The  General  Court  fully  upheld  this  second  rejection  decision.  The 
General  Court  held  that  the  Commission  did  not  err  in  law  by  considering  that  a  selective 
distribution system, and, by analogy, a selective repair system, was in conformity with Article 
101 TFEU provided that it was objectively justified, non-discriminatory and proportionate.  

The General Court then held that the Commission, when exercising its discretion, was correct 
in considering that if a selective distribution system falls outside the scope of Article 101(1) 
TFEU,  this  is  an  indication  that  the  system  is  unlikely  to  have  the  effect  of  eliminating  all 
competition  within  the  meaning  of  the  case-law  relating  to  Article  102  TFEU.  The  General 
Court  also  upheld  the  Commission's  position  that  it  is  only  in  certain  circumstances  that  a 
refusal to supply can constitute an abuse within the meaning of Article 102 TFEU, and that 
for  an  abuse  to  be  established  there  must  be  a  risk  of  all  effective  competition  being 
eliminated.  

In Agria Polska37, the General Court upheld the Commission's decision rejecting a complaint 
claiming  a  vexatious  administrative  and  criminal  law  campaign  pursued  by  major 
agrochemical  complainants  allegedly  seeking  to  exclude  Agria  Polska  from  markets  for  the 
supply  of  plant  protection  products.  The  General  Court  made  clear  that  the  Commission's 
refusal to pursue a case that could not be pursued by a national competition authority, due to 
the limitation period under national law, does not deprive Articles 101 and 102 TFEU of their 

34 Case T-712/14 Confédération européenne des associations d'horlogers-réparateurs (CEAHR) v Commission, 
judgment of the General Court of 23 October 2017, EU:T:2017:748.  
35 Case AT.39097 Watch Repair, for further information see  
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39097. 
36  Case T-427/08 CEAHR v Commission, judgment of the General Court of 15 December 2010, EU:T:2010:517. 
37  Case  T-480/15  Agria  Polska  and  Others  v  Commission,  judgment  of  the  General  Court  of  16  May  2017, 
ECLI:EU:T:2017:339. 

13 

 
                                                            
effectiveness. In this context, the General Court recalled that private actions for damages can 
contribute to the effective enforcement of these provisions in particular when the Commission 
does not pursue the case. The General Court also pointed out that the fact that the allegedly 
anticompetitive  conduct  took  place  in  several  Member  States  had  to  be  treated  as  merely 
indicating that an action at EU level could be more effective than various actions at national 
level.  However,  such  evidence  would  not,  in  itself,  suffice  to  justify  opening  of  an 
investigation by the Commission. The General Court's ruling has been appealed.38 

In Topps39, the General Court upheld the Commission decision rejecting a complaint alleging 
inter  alia  that  the  manner  in  which  certain  football  bodies  and  associations  licensed 
intellectual  property  rights,  for  the  purpose  of  producing  collectibles  related  to  major 
international football tournaments (stickers and trading cards), was in breach of Articles 101 
and 102 TFEU.  

The  General  Court,  while  reconfirming  that  Article  8(1)  of  Regulation  773/200440  provides 
for a limited access to file that entitles complainants to receive all the documents on which the 
Commission bases its provisional assessment of the complaint, stressed that this applies even 
if  the  Commission  subsequently  decides  to  no  longer  rely  on  those  documents  in  the  final 
decision rejecting the complaint. After careful examination of these documents, the General 
Court found no procedural error on the part of the Commission. The General Court also held 
that the Commission did not commit a manifest error of assessment in relying solely on the 
limited likelihood of establishing an infringement of Article 101 and Article 102 and on the 
disproportionate nature of the investigative measures required, nor had it made an error in the 
assessment of the low likelihood of finding infringements of the two provisions.  

In  VIMC41  the  General  Court  upheld  a  Commission  decision42  rejecting  a  complaint  by 
Vienna  International  Medical  Clinic  GmbH  ("VIMC")  on  the  basis  of  Article  13(1)  of 
Regulation 1/2003. The General Court recalled that for the application of Article 13(1), only 
two conditions need to be satisfied: that a Member State "is dealing with" the case before it 
and that the case concerns the "same agreement, decision of an association or practice". The 
General  Court  was  satisfied  with  the  evidence  showing  that  the  Austrian  competition 
authority (Bundeswettbewerbsbehörde, "BWB") was actively dealing with the case, namely, 
the  BWB's  confirmation  to  the  Commission  that  it  had  started  an  investigation  and  was 
dealing with the case. The fact that the BWB was dealing with the complaint against the same 
practice  was  also  confirmed  by  documents  showing  that  the  BWB  had  informed  the 
complainant of the on-going proceedings and had invited the complainant to a meeting. 

The General Court took the opportunity to recall that national competition authorities and the 
Commission have parallel powers and that a complainant has no right for its case to be dealt 
with by the Commission, even if the Commission were particularly well placed to deal with 
its case. 

38 Appeal Case before the European Court of Justice C-373/17 P. 
39  Case  T-699/14  Topps  Europe  v  Commission,  judgment  of  the  General  Court  of  11  January  2017, 
ECLI:EU:T:2017:2. 
40  Commission  Regulation  (EC)  No  773/2004  of  7  April  2004  relating  to  the  conduct  of  proceedings  by  the 
Commission pursuant to Articles 81 and 82 of the EC Treaty, OJ L 123 , 27.04.2004, pp.18-24. 
41 Case T-431/16, VIMC – Vienna International Medical Clinic GmbH v Commission, Judgment of the General 
Court of 26 October 2017, ECLI:EU:T:2017:755. 
42 Commission Decision C(2016) 3351 final of 27 May 2016 (Case COMP/AT.40231 – VIMC/WK&FGB). 

14 

 
 
 
                                                            
3. The fight against cartels remains a top priority 

Cartels are secret agreements between sellers or buyers of the same product or service. They 
are  made  with  the  objective  of  fixing  prices,  limiting  output  or  allocating  clients  and 
suppliers. Cartels harm the consumers at all levels of the value chain and the economy as a 
whole.  Cartelists  charge  inflated  prices,  limit  the  choice  of  the  consumers  and  block 
innovation.  Only  undistorted  competition  guarantees  that  scarce  resources  are  used  in  the 
most  efficient  way.  The  Commission's  action  to  stop  hard  core  cartels  prevents  companies 
from  continuing  to  profit  from  illegal  overcharges  and  thereby  contributes  to  fair  and 
balanced business relationships. The significant sanctions imposed by the Commission deter 
companies from entering into cartels or from remaining in cartels, sending a clear signal that 
operating a cartel will ultimately not pay off.  

The  Commission's  cartel  enforcement  allows  the  consumers  to  benefit  of  an  economy  that 
works well for them. The Commission's strong enforcement record against hard core cartels 
continued  in  2017.  As  in  preceding  years,  the  Commission  adopted  cartel  decisions  in 
important  sectors  for  innovation  and  investment,  such  as  the  circular  economy  and  the 
automotive industry. The settlement procedure remains an efficient tool regularly used by the 
Commission in its fight against cartels. 

The car parts investigations 

The  Commission  has  been  conducting  a  number  of  investigations  in  the  car  parts  sector.  Since  2013  the 
Commission adopted 8 cartel decisions covering around 30 different car parts and sanctioned the undertakings 
involved  in  these  cartels  with  a  total  amount  of  fines  of  around  EUR  1.6  billion.  Several  other  competition 
authorities have sanctioned a number of cases and /or are in the process of adopting further decisions concerning 
these cartels. 

On 8 March, the Commission imposed a total fine of EUR 155 million on six car  air conditioning and engine 
cooling43  suppliers  for  taking  part  in  one  or  more  of  four  cartels  concerning  supplies  of  components  to  car 
manufacturers in the EEA between 2004 and 2009. All six suppliers (Behr, Calsonic, Denso, Panasonic, Sanden 
and Valeo) acknowledged their involvement in the cartels and agreed to settle the case. Denso was not fined for 
three  of  the  cartels  as  it  revealed  their  existence  to  the  Commission.  Panasonic  was  not  fined  for  one  of  the 
cartels as it revealed its existence to the Commission. All other parties co-operated with the Commission under 
the leniency program and benefitted accordingly from fine reductions. Since all six undertakings agreed to settle 
the case with the Commission, they benefited from a further reduction of fines by 10%. 

The Commission fined EUR 27 million three companies which, for more than three years, coordinated prices and 
other trading conditions for the supply of vehicle lighting systems44, across the European Economic Area (EEA). 
Vehicle  lighting  systems  include  parts  such  as  headlamps  or  daytime  running  lights.  The  cartel  concerned  the 
supply  of  these  spare  parts  to  manufacturers  of  passenger  and  commercial  vehicles  after  the  end  of  mass 
production  of  a  car  model.  All  three  suppliers  (Valeo,  Automotive  Lighting  and  Hella)  acknowledged  their 
involvement  in  the  cartel  and  agreed  to  settle  the  case.  Valeo  was  not  fined  for  the  cartel  as  it  revealed  its 
existence to the Commission. Since the 3 companies agreed to settle the case with the Commission, their fines 
were further reduced by 10%. 

The  Commission  imposed  a  total  fine  of  EUR  34  million  for  four  different  infringements  on  five  Occupant 
Safety  Systems45  suppliers,  which  for  several  years  coordinated  prices  or  markets  and  exchanged  sensitive 

43 Case AT.4000 Thermal Systems, Commission decision of 8 March 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39960. See also 
http://europa.eu/rapid/press-release_IP-17-501_en.htm  
44  Case AT.40013 Lighting systems, Commission decision of  21 June 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_40013. See also 
http://europa.eu/rapid/press-release_IP-17-1741_en.htm   
45 Case AT.39881 Occupant Safety Systems, Commission decision of 22 November 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39881. See also 
http://europa.eu/rapid/press-release_IP-17-4844_en.htm  

15 

 
                                                            
information  for  the  supply  of  seatbelts,  airbags  and  steering  wheels  to  Japanese  car  manufacturers  (Toyota, 
Suzuki,  and  Honda)  in  the  European  Economic  Area  (EEA).  All  companies  (Tokai  Rika,  Takata,  Autoliv, 
Toyoda  Gosei,  and  Marutaka)  acknowledged  their  involvement  in  the  cartels  and  agreed  to  settle  the  case. 
Consequently, their fines were further reduced by 10%. Tokai Rika and Takata were not fined for one and three 
infringements respectively, as they revealed their existence to the Commission.  

These  three  cases  bring  the  total  number  of  settlement  decisions  adopted  since  2010  to  25.  During  the  same 
period, around 54% of the total amount of the fines imposed by the Commission was via settlement decisions. 

The  Commission  completed  its  investigation  in  one  "hybrid"  case  in  14  months  after  the 
settlement  decision.  In  "hybrid"  cases,  decisions  are  adopted  both  under  the  ordinary  and 
under the settlement procedure in the same case. In these cases, all but a limited number of 
parties  (generally  one)  were  willing  to  settle  and  the  Commission  decided  to  adopt  a 
settlement decision for the ones willing to settle which represented a large majority. For the 
parties  which  did  not  wish  to  follow  the  settlement  route,  the  Commission  subsequently 
adopted the decision under the normal procedure.  

The  Commission's  investigation  against  Scania  was  carried  out  under  the  standard  cartel 
procedure  after  Scania  decided  not  to  settle  the  Trucks  cartel  case,  unlike  the  other  five 
participants  in  the  cartel.  In  July  2016,  the  Commission  had  reached  a  settlement  decision 
concerning  the  trucks  cartel  with  MAN,  DAF,  Daimler,  Iveco  and  Volvo/Renault.  The 
Commission's  investigation  revealed  that  Scania  coordinated  prices  at  "gross  list"  level  for 
medium  and  heavy  trucks  in  the  European  Economic  Area  (EEA),  the  timing  for  the 
introduction  of  emission  technologies  for  medium  and  heavy  trucks  to  comply  with  the 
increasingly strict European emissions standards and the passing on to customers of the costs 
for  the  emissions  technologies.  The  infringement  lasted  14  years  from  1997  to  2011.  The 
Commission imposed a fine of EUR 880 523 000 to Scania its decision of 27 September46. 

Ordinary  procedures  remain  significant  because  not  all  investigations  may  be  suitable  for 
settlement discussions. Relevant factors for screening cases in order to determine whether a 
settlement  procedure  seeems  appropriate  include  the  number  of  parties,  the  proportion  of 
leniency  applicants  in  relation  to  the  total  number  of  parties,  the  degree  of  contestation, 
conflicting  positions  between  the  parties  and  the  existence  of  novel  features  or  aggravating 
circumstances  in  the  investigated  practices.  When  the  right  circumstances  are  not  met,  the 
Commission will apply the ordinary procedure.  

The first cartel case in the circular economy 

On 8 February, the Commission imposed a total fine of EUR 68 million on four European recycling companies47 
for  having  participated,  between  2009  and  2012,  in  a  cartel  to  fix  the  purchase  prices  of  scrap  automotive 
batteries in Belgium, France, Germany, and the Netherlands. The cartel concerned the purchases of scrap lead-
acid automotive batteries. The four companies – Campine, Eco-Bat Technologies, Johnson Controls and Recylex 
–  colluded  in  order  to  reduce  purchase  prices  of  waste  batteries  or  prevent  their  increase.  Johnson  Controls 
benefited from immunity under the Commission’s 2006 Leniency Notice for revealing the existence of the cartel 
to the Commission. This was the first purchase price-fixing cartel to be sanctioned under the 2006 Guidelines on 
Fines and also the first European cartel case in a sector of the ‘circular economy’.  

46 Case AT.39824 Trucks, Commission decision of  27 September 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39824. See also 
http://europa.eu/rapid/press-release_IP-17-3502_en.htm  
47  Case 40018 Car battery recycling, Commission decision of 8 February 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_40018.  See also 
http://europa.eu/rapid/press-release_IP-17-245_en.htm  

16 

 
                                                            
The Commission re-adopted two decisions annulled by the EU's General Court on procedural 
grounds in order not to let cartels unsanctioned and maintain deterrence. 

In 2010, the Commission imposed fines of nearly €800 million on 11 air cargo carriers who 
participated in a price-fixing cartel, in the airfreight services market covering flights from, to 
and within the European Economic Area (a 12th cartel member received full immunity from 
fines). All but one of the 12 air cargo carriers that were the addressees of the 2010 decision 
challenged  the  decision  before  the  General  Court.  In  December  2015,  the  General  Court 
annulled the Commission's decision against the 11 air cargo carriers that appealed, concluding 
that  there  had  been  a  procedural  error.  In  the  re-adoption  decision48,  the  Commission 
addressed the procedural error identified by the General Court while keeping exactly the same 
anticompetitive behaviour previously targeted by the Commission.  

The  Commission  readopted  a  cartel  settlement  decision  against  the  envelopes  manufacturer 
Printeos and imposed a fine of nearly EUR 4,7 million for its participation in a price fixing 
cartel. Printeos and four other manufacturers agreed to settle the case in December 2014. In 
December 2016, the General Court annulled the fine against Printeos due to lack of sufficient 
reasoning  concerning  discretionary fine  reductions.  The  judgment  did  not  question  Printeos' 
liability  for  the  cartel,  which  the  company  had  itself  acknowledged  in  the  settlement 
procedure. The re-adoption decision49 addresses the procedural error identified by the General 
Court and re-imposes an identical fine on Printeos.  

The  Commission  remains  committed  to  pursuing  all  cartels  across  all  sectors  where  it  has 
sufficient  evidence  of  an  infringement  detected  through  its  leniency  programme  or  its  ex-
officio action (more information on the cartel decisions is available in the sectoral overview). 
As part of  the enhancement of its ex-officio activities, the anonymous whistleblower tool was 
launched  in  March50.  Whistleblowers  can  contact  the  Commission  by  phone,  e-mail  or  on 
fully anonymous basis through a dedicated online tool. Following the launch, the Commission 
received information through all three communication channels.   

The Commission's cartel enforcement record in 2017 remains strong with seven decisions and 
fines  totalling  approximately  EUR  1,945  billion,  coupled  with  solid  work  for  further 
enforcement in the years to come. 

48 Case 39258 Airfreight, Commission decision of 17 March 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39258. See also 
http://europa.eu/rapid/press-release_IP-17-661_en.htm   
49 Case 39780 Envelopes, Commission decision of 16 June 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39780  
50 For further information see http://ec.europa.eu/competition/cartels/whistleblower/index.html  

17 

 
 
 
                                                            
Case name 

Adoption 
date 

Fine imposed 
EUR 

Undertakings 
concerned  

Prohibition 
Procedure 

Car battery recycling 

08/02/2017 

67 609 000 

Thermal systems 

08/03/2017 

155 575 000 

Airfreight (readoption) 

17/03/2017 

776 465 000 

Envelopes (readoption)  

16/06/2017 

4 729 000 

Lighting Systems 

21/06/2017 

26 744 000 

Trucks (Scania) 

27/09/2017 

880 523 000 

Occupant Safety Systems 

22/11/2017 

34 011 000 

4 

6 

11 

1 

3 

1 

5 

Prohibition 

Settlement 

Prohibition 

Settlement 

Settlement 

Hybrid* 

Settlement 

* normal procedure part of a hybrid case with a settlement decision in July 2016 

Antitrust and cartel output:  

14 

14 

1 

14 
1 
1 

12 

8 

2 

4 

7 

4 

1 
1 

6 

5 

1 

5 

6 

1 

8 

3 

1 
1 

2 

1 

11 
1 

5 

1 

4 

12 

3 

1 
1 

4 

3 

16 

8 

2 

2 

4 

Cartel Other*

11 

Cartel Prohibition
(Settlement)

10 

Cartel Prohibition (Hybrid)

8 

2 

1 

2 

1 

2 

3 

3 

3 

1 

4 

1 

2 

1 

3 

Cartel Prohibition (Normal)

Antitrust Other**

Antitrust Commitment

Antitrust Prohibition

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

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

4. Continuing close cooperation within the European Competition Network (ECN) 
and with national courts  

The national competition authorities (NCAs) play a key role in applying the EU competition 
rules alongside the Commission. Action by NCAs accounts for 85% of public enforcement of 
the EU antitrust rules. This is a significant contribution to further drive economic growth and 
to make sure that markets work well, empowering consumers and businesses alike.  

However, there is room for improvement. NCAs often  lack the means and  instruments  they 
need to be truly effective enforcers. If NCAs cannot realise their full potential, this weakens 
one of the main facets of the single market namely, ensuring that competition is not distorted 
in Europe. 

18 

 
 
The  2014  Commission  Communication  on  Ten  Years  of  Regulation  1/200351  identified  a 
number of areas of action to make enforcement by the NCAs more effective, in particular that 
they have effective enforcement powers and fining tools, and have adequate resources and are 
sufficiently  independent  when  enforcing  EU  competition  law.  By  way  of  follow-up,  the 
Commission carried out a public consultation52 between November 2015 and February 2016 
and  sounded  out  options  for  concrete  action  with  both  the  NCAs  and  the  Member  State 
ministries. 

Support for empowering NCAs to become more effective enforcers 

On  22  March,  the  Commission  adopted  a  proposal  for  a  Directive  to  empower  NCAs  to  be  more  effective 
enforcers53. The proposal follows on from the public consultation launched in November 2015, in which 80% of 
stakeholders  thought  that  action  should  be  taken  to  ensure  that  NCAs  have  the  means  and  instruments  they 
need54. The proposal aims to ensure that the NCAs have the necessary minimum guarantees that they can take 
decisions  independently  and  have  the  resources  and  tools  they  need  to  stop  and  sanction  infringements.  This 
includes having effective leniency programmes that encourage companies across Europe to come forward with 
evidence of illegal cartels. The proposal takes the form of a Directive to ensure due respect of national traditions 
and specificities. The importance of companies' fundamental rights is underlined: appropriate safeguards must be 
in  place  for  the  exercise  of  NCAs'  powers,  in  accordance  with  the  EU  Charter  of  Fundamental  Rights  and 
general principles of EU law. 

Cooperation with national courts 

Effective  overall  enforcement  of  antitrust  rules  in  the  EU,  for  the  benefit  of  for  both  EU 
households  and  businesses,  requires  interplay  between  public  and  private  enforcement.  In 
addition to its cooperation with NCAs in the context of the European Competition Network 
(ECN),  the  Commission  also  continued  its  cooperation  with  national  courts  (NCs)  under 
Article 15 of Regulation 1/2003. The Commission helps NCs to enforce the EU competition 
rules in an effective and coherent manner by providing case-related information or an opinion 
on matters of substance or by intervening as amicus curiae in proceedings pending before the 
NCs. 

Following  approval  from  the  concerned  courts,  the  Commission  publishes  its  opinions  and 
amicus curiae observations on its website55. 

Private enforcement 

Directive 2014/104/EU on antitrust damages actions (Damages Directive)56 aims at ensuring 
that anyone harmed by infringements of the EU competition rules can effectively avail itself 
of the right to compensation before national courts. The deadline to implement the Damages 
Directive  in  Member  States'  legal  systems  expired  on  27  December  2016.  On  18  January 
2017,  the  Commission  sent  Letters  of  Formal  Notice  opening  infringement  procedures  for 

51 Communication from the Commission of 9 July 2014, Ten Years Of Antitrust Enforcement Under Regulation 
1/2003:  Achievements  And  Future  Perspectives,  COM/2014/0453  available  at  http://ec.europa.eu/competition/ 
antitrust/legislation/antitrust_enforcement_10_years_en.pdf. 
52 For further information see 
http://ec.europa.eu/competition/consultations/2015_effective_enforcers/index_en.html. 
53 For further information see http://ec.europa.eu/competition/antitrust/nca.html.  
54 For further information see IP/15/5998 of 4 November 2015 available at  
http://europa.eu/rapid/press-release_IP-15-5998_en.htm and 
http://ec.europa.eu/competition/consultations/2015_effective_enforcers/index_en.html.  
55 For further information see http://ec.europa.eu/competition/court/overview_en.html.  
56 Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules 
governing  actions  for  damages  under  national  law  for  infringements  of  the  competition  law  provisions  of  the 
Member States and of the European Union, OJ L 349, 5.12.2014, pp. 1-19. 

19 

 
                                                            
non-communication  of  transposing  measures  by  the  deadline  against  21  Member  States.  Of 
those,  18  Member  States  fully  transposed  the  Directive  in  2017  and  the  respective 
infringements  proceedings  were  closed.  Bulgaria,  Greece  and  Portugal  adopted  transposing 
measures in the first months of 2018 and the completeness of their transposing measures will 
be  assessed  before  the  closure  of  the  infringement  proceedings.  The  Commission  will  also 
proceed to the conformity check of all the 28 national transpositions.  

Merger control 

EU merger control  

The purpose of EU merger control is to ensure that market structures remain competitive while enabling smooth 
restructuring of the industry. This applies not only to EU-based companies, but also to any company active on 
the EU markets. Industry restructuring is an important way of fostering efficient allocation of production assets. 
However, there are also situations where industry consolidation can give rise to harmful effects on competition, 
taking  into  account  the  merging  companies'  degree  of  market  power  and  other  market  features.  EU  merger 
control ensures that changes in the market structure which lead to harmful effects on competition do not occur.  

EU merger control seeks to maintain open and competitive markets, which is the best way to 
ensure  that  businesses  and  final  consumers  obtain  fair  outcomes.  It  strives  to  protect  all 
aspects of competition: as a result, it helps to ensure market structures, in which companies 
compete  not  only  on  price,  but  also  on  innovation  in  order  to  attract  customers.  The 
Commission's merger enforcement practice in 2017, for example, in the agro-chemical57 and 
pharmaceutical58 sectors, shows that the Commission considers innovation and investments as 
important  aspects  of  competition.  The  Commission  will  continue  to  assess  the  effects  on 
innovation  in  the  ongoing  investigations,  where  relevant,  for  example  in  the  proposed 
acquisition by Bayer of Monsanto.  

By  protecting  all  these  aspects  of  competition,  EU  merger  control  contributes  to  the 
achievement  of  fairer  market  structures  and  a  level  playing  field.  Those  transactions  which 
may potentially bring discriminatory results by distorting the parameters for competition are 
subject  to  close  scrutiny  by  the  Commission,  which  is  committed  to  protect  consumers  by 
requesting the necessary commitments to dispel these concerns or, if necessary, by prohibiting 
the transaction. For example, in 2017 the merger between Deutsche Börse and London Stock 
Exchange59  and  the  acquisition  of  Cemex  Croatia  by  its  rivals  HeidelbergCement  and 
Schwenk60 were ultimately blocked to protect consumers and prevent unfair results. 

EU merger control also takes into account efficiencies brought about by mergers which bring 
positive effects on price, innovation and other aspects, provided they are verifiable, merger-
specific and likely to be passed on to consumers.  

As  highlighted  in  previous  reports  on  competition  policy,  the  Commission  continuously 
evaluates the substantive and procedural rules that make up the legal framework in force for 
merger control. Such reflections are conducted both internally, based on collected experience, 

57 Case M.7932 Dow/ DuPont, Commission decision of 27 March 2017. For further information see IP/17/722 
available at http://europa.eu/rapid/press-release_IP-17-772_en.htm. 
58  Case  M.8401  J&J/  Actelion,  Commission  decision  of  9  June  2017.  For  further  information  see  IP/17/1582 
available at http://europa.eu/rapid/press-release_IP-17-1582_en.htm. 
59 Case M.7995 Deutsche Börse/ London Stock Exchange Group, Commission decision of 29 March 2017. For 
further information see IP/17/789 available at http://europa.eu/rapid/press-release_IP-17-789_en.htm.  
60 Case M.7878 HeidelbergCement/ Schwenk/ Cemex Hungary/ Cemex Croatia, Commission decision of 5 April 
2017. For further information see IP/17/883 available at http://europa.eu/rapid/press-release_IP-17-883_en.htm.  

20 

 
 
                                                            
and following external input. In this context, the Commission regularly assesses concerns and 
suggestions  for  further  improvement  voiced  by  stakeholders,  evaluates  the  need  for  reform 
and  policy  changes  in  specific  areas  which  give  rise  to  new  debates,  and  checks  that  its 
policies and enforcement practices do not unduly create red-tape for companies and thereby 
hamper innovation and investment.   

1. Recent enforcement trends  

In  2017,  380  mergers  were  notified  to  the  Commission,  the  second  highest  number  in  the 
history  of  EU  merger  control.  This  continues  to  represent  a  substantial  increase  compared 
with  preceding years: in the period 2010-2016 the average number of notifications was 306 
per  year61.  Each  year  since  2013  there  has  been  a  steady  upward  trend  in  the  number  of 
merger  notifications.  Among  the  notifications  received  in  2017,  28  were  reasoned  pre-
notification  submissions  by  the  notifying  parties  to  request  the  referral  of  a  case  from  the 
Commission to a Member State or vice versa. 

Like  in  the  previous  years,  most  of  the  notified  mergers  have  not  raised  any  competition 
concerns  and  could  be  notified  and  processed  speedily:  around  73%  of  all  notified 
transactions in 2017 were dealt with under the simplified procedure. This reflects the impact 
of the simplification package adopted by the Commission in December 2013: the proportion 
of simplified cases in the period 2004-2013 was significantly lower, amounting to 59%. 

Nevertheless, 2017 involved intensive work by the Commission both due to the large number 
of  notified  transactions  and  the  complexity  of  a  significant  number  of  cases.  An  increasing 
number  of  notified  transactions  related  to  industries  already  characterised  by  significant 
concentration. This required the Commission to cast a particularly close look at their potential 
impact  on  competition,  employing  sophisticated  quantitative  techniques  and  comprehensive 
qualitative investigations. 

In 2017, in seven cases the Commission opened in-depth investigations (second phase). These 
cases  concerned  various  sectors,  including  agro-chemicals  and  seeds,  semiconductors,  steel, 
eyewear, cellulose derivatives, titanium dioxide, and commercial vehicles components.  

The  Commission  took  375  final  decisions  in  merger  cases  in  201762.  The  number  of  24 
interventions was somewhat higher compared with the average of the last seven years, which 
amounted to around 20 interventions per year63. In 2017, 18 mergers were cleared subject to 
commitments  in  the  first  phase  and  two  in  the  second  phase.  In  two  cases,  the  parties 
abandoned  a  transaction  during  the  in-depth  investigation64.  Moreover,  in  two  cases  the 
Commission had to adopt prohibition decisions65.   

In enforcing control over mergers, the Commission continued to apply well-established legal 
and economic principles.  

61 The total number of notifications received in 2017 is 5% higher than in 2016 and 13% higher than in 2015.  
62  For  the  purposes  of  this  report,  decisions  based  on  Articles  6(1)(a),  6(1)b,  6(1)b  in  combination  with  6(2), 
8(1), 8(2) and 8(3) of the Merger Regulation are considered as final decisions. 
63  Commission  interventions  in  merger  cases  include  prohibition  decisions  and  mergers  cleared  subject  to 
commitments, as well as withdrawals during second phase in-depth investigation. 
64 Case M.7095 SOCAR/DESFA, notified to the Commission on 1 October 2014 and the notification withdrawn 
on 2 February 2017. Case M.8222 Knorr-Bremse/ Haldex, notified to the Commission on 1 June 2017 and the 
notification withdrawn on 19 September 2017. 
65 Case M.7995 Deutsche Börse/ London Stock Exchange Group, Commission decision of 29 March 2017 and 
case  M.7878  HeidelbergCement/  Schwenk/  Cemex  Hungary/  Cemex  Croatia,  Commission  decision  of  5  April 
2017.  

21 

 
                                                            
To  frame  its  competitive  analysis,  as  an  initial  step,  the  Commission  traditionally  defines 
relevant  markets  taking  into  account  all  effective  alternative  sources  of  supply  available  to 
customers. The definition of relevant markets is case-specific and based on market realities. 
The Commission's approach is in line with the international best practices and well-founded 
economic principles, as confirmed, for example, by the 2016 independent report of professors 
B.  Lyons  and  A.  Fletcher  of  the  University  of  East  Anglia66.  In  its  merger  assessments  in 
2017, the Commission continued to apply those principles. Also, even when some sources of 
competition,  such  as  imports,  did  not  lead  to  a  widening  of  the  geographic  market,  the 
Commission took them into account, where relevant, as part of the substantive assessment67. 
However,  the  Commission  did  not  artificially  expand  market  definition  –  while  this  may 
allow  for  the  creation  of  larger  European  Economic  Area  players,  competition  may  suffer. 
And it is the exposure to continuous competition, from within the European Economic Area 
and  abroad,  which  makes  European  companies  stronger  on  the  European  and  international 
arena in the long run. 

When  reviewing  proposed  concentrations,  the  Commission  assesses  their  impact  on  all 
aspects  of  competition.  In  2017,  the  Commission  had  to  intervene  into  several  proposed 
concentrations, which, in addition to price, quality and choice, risked to significantly hinder 
innovation.  Hence,  in  Dow/  DuPont68  the  Commission  identified  concerns  with  respect  to, 
among other areas, the likely negative impact of the merger on innovation in pesticides. The 
Commission  approved  this  transaction  only  after  the  parties  offered  a  comprehensive  set  of 
remedies,  including  the  divestiture  of  the  pesticide  R&D  assets,  which  should  allow  a  new 
competitor to emerge and farmers to continue benefiting from innovative and safer products. 
Similarly,  the  Commission  intervened  and  acceped  a  remedy  in  J&J/  Actellion69,  where  the 
transaction risked impeding the development of a novel promising drug for the treatment of 
insomnia,  potentially  affecting  millions  of  patients.  These  examples  show  that  the 
Commission is not only focussing on the impact of mergers on price, but it is also carefully 
examining dynamic effects on innovation, such as a reduction in new products in the future, 
which would potentially bring greater harm to consumers.    

Most  of  the  remedies  accepted  by  the  Commission  in  2017  to  approve  the  problematic 
transactions consisted of divestitures of tangible or intangible assets.70 This is in line with the 
Commission’s general preference in mergers for structural remedies as best suited to address, 
in a durable manner, competition concerns arising from a concentration. In a handful of cases 
in  2017,  the  Commission  accepted  non-divestiture  remedies71,  where  they  were  proven  to 
solve effectively the underlying competition concern. 

66 Amelia Fletcher and Bruce Lyons, Geographic Market Definition in European Commission Merger Control, A 
Study for DG Competition, January 2016 available at 
http://ec.europa.eu/competition/publications/reports/study_gmd.pdf. 
67  For  instance,  in  Case  M.8348  RAG  Stiftung/  Evonik  Industries/  Huber  Silica,  for  some  types  of  silica  –  a 
chemical  product  used  in  a  wide  range  of  products  such  as  toothpaste  –  the  Commission  took  into  account 
imports from Chinese and Indian suppliers, while for other types of silica such imports did not constitute a valid 
alternative and hence remedies were required. 
68 Case M.7932 Dow/ DuPont, Commission decision of 27 March 2017. For further information see IP/17/722 
available at http://europa.eu/rapid/press-release_IP-17-772_en.htm. 
69  Case  M.8401  J&J/  Actelion,  Commission  decision  of  9  June  2017.  For  further  information  see  IP/17/1582 
available at http://europa.eu/rapid/press-release_IP-17-1582_en.htm.  
70 See, for example, Case M.7962 ChemChina/ Syngenta, Commission decision of 5 April 2017; Case M.8059 
Investindustrial/ Black Diamond/ Polynt/ Reichhold, Commission decision of 12 May 2017; Case M.8454 KKR/ 
Pelican Rouge, Commission decision of 25 August 2017. 
71  See,  for  example,  Case  M.8242  Rolls  Royce/  ITP,  Commission  decision  of  19  April  2017;  Case  M.8314 
Broadcom/ Brocade, Commission decision of 12 May 2017. 

22 

 
                                                            
Apart from the substantive merger enforcement, 2017 was marked by significant efforts of the 
Commission  to  enforce  procedural  obligations  of  companies  under  the  EU  Merger 
Regulation72.  

In May, the Commission adopted a decision imposing a fine of EUR 110 million on Facebook 
for providing misleading information during the review of its acquisition of WhatsApp73. In 
May  and  July,  the  Commission  also  sent  four  Statements  of  Objections  alleging  procedural 
merger  infringements:  to  Altice  and  Canon  regarding  their  alleged  implementation  of 
notifiable  acquisitions  before  their  notification  or  approval  by  the  Commission  (so-called 
"gun-jumping"), and to Merck GmbH and General Electric concerning their alleged provision 
of incorrect or misleading information during the Commission's merger review proceedings. 
These  Commission  actions  are  aimed  at  ensuring  that  companies  respect  their  procedural 
obligations  under  the  EU  Merger  Regulation.  The  Commission  is  only  able  to  conduct 
detailed and accurate assessment of mergers within the strict legal deadlines of the EU Merger 
Regulation  and  before  any  harm  to  consumers  materialises  provided  that  companies  submit 
full and correct information and do not implement their concentrations before receiving final 
approval from the Commission. 

Merger decisions:  

398 

25 

5 

130 

343 
27 

9 

117 

311 
8 

4 

108 

272  269 
17 

15 

1 

83 

2 

86 

270 
16 

1 

110 

243 
18 

82 

377 
24 

73 

355 
27 

1 

81 

299  320 
17 
1 

22 

2 

75 

73 

238 

190 

143 

143 

191 

171 

166 

207 

222 

280 

246 

Interventions*

2nd Phase Clearance
without remedies

1st Phase Clearance
(Non-simplified Procedure)

1st Phase Clearance
(Simplified Procedure)

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

* Interventions in merger cases include prohibition decisions and mergers cleared subject to remedies, as well as withdrawals 
in Phase II;  
Prohibition decisions: one in 2007, 2011, 2012 and 2016. Two in 2013 and 2017;  

2. The ongoing evaluation of selected procedural and jurisdictional aspects of EU 
mergers 

In  October  2016,  the  Commission  launched  a  public  consultation  in  the  context  of  the 
evaluation  of  selected  procedural  and  jurisdictional  aspects  of  EU  merger  control.  This 
evaluation builds notably upon the results of the 2014 public consultation on the White Paper 

72  Council  Regulation  (EC)  No  139/2004  of  20  January  2004  on  the  control  of  concentrations  between 
undertakings (the EC Merger Regulation), OJ L 24, 29.1.2004, pp. 1-22. 
73  Case  M.8228  Facebook/  WhatsApp  (Art  14.1  proc.),  Commission  decision  of  17  May  2017.  For  further 
information see IP/17/1369 available at http://europa.eu/rapid/press-release_IP-17-1369_en.htm.  

23 

 
 
                                                            
"Towards  more  effective  EU  merger  control"74.  The  evaluation  focusses  on  four  topics, 
namely  (i)  possible  further  simplification  of  EU  merger  control,  (ii)  the  functioning  of  the 
jurisdictional thresholds, (iii) the functioning of the referral system, and (iv) specific technical 
aspects.  

The  public  consultation  was  open  until  mid-February  2017  and  attracted  wide  interest.  The 
Commission  received  more  than  90  submissions  from  public  and  private  stakeholders, 
including national competition authorities, other public bodies, associations, companies, law 
firms,  research  institutes  and  private  individuals.  A  summary  of  the  submissions  received 
during the public consultation, together with their non-confidential versions, were published 
on the Commission's Competition website on 28 July75. 

The  replies  to  the  public  consultation  imply  that  the  EU  merger  control  system  works  well 
overall and that there is no need for a fundamental overhaul.  

With  respect  to  simplification,  there  was  a  general  recognition  of  significant  efforts  already 
undertaken  by  the  Commission  at  the  time  of  the  adoption  of  the  2013  Simplification 
Package76.  Nevertheless,  some  private  stakeholders  expressed  concerns  that  a  number  of 
burdens  still  persist  when  notifying  transactions  under  the  simplified  procedure.  Public 
stakeholders voiced a more cautious view on furhter simplification, in particular with respect 
to any legistlative changes to the European Union Merger Regulation.  

Regarding jurisdictional  thresholds, the  replies to  the consultation  concluded  that there  may 
be  some  high-valued  transactions  that  are  not  subject  to  EU  merger  control  due  to  a  low 
turnover realised by the target company. It was submitted that such transactions could occur 
in  the  digital  sector,  but  also  in  other  sectors,  such  as  pharmaceuticals  and  biotechnology. 
Certain stakeholders expressed support for the introduction of a complementary jurisdictional 
threshold based on transaction value to close this possible enforcement gap. However, many 
other  stakeholders  perceived  that  there  was  no  significant  gap  and/or  the  EU  Merger 
Regulation  referral  mechanisms  combined  with  national  merger  review  systems  in  the 
Member  States  were  sufficient  to  ensure  that  cases  without  EU  dimension  were  reviewed 
either at national or European Economic Area level. 

The Commission is currently reflecting - taking into account among other things the replies to 
the  public  consultation  -  whether  potential  improvements  merit  proposing  any  legislative  or 
non-legislative changes to the EU Merger Regulation. The evaluation is however ongoing. 

3. Significant judgments by the European Union Courts in mergers 

In 2017, the EU Courts handed down four judgments in the field of merger control. 

On  7  March,  the  General  Court  annulled77  the  Commission  decision  of  January  2013 
prohibiting the acquisition of the Dutch courier delivery company TNT Express by the US-
based  competitor  UPS.78  The  General  Court  based  its  annulment  on  a  procedural  ground, 
namely  that  the  Commission  had  not  communicated  to  UPS  the  final  version  of  the 
econometric model used in the contested decision, thus infringing UPS' rights of defence. The 

further 

summary  of 

information  on 

the  2014  public 

74  For 
http://ec.europa.eu/competition/consultations/2014_merger_control/index_en.html.  
75  The 
http://ec.europa.eu/competition/consultations/2016_merger_control/index_en.html.  
76 For further information, see http://europa.eu/rapid/press-release_MEMO-13-1098_en.htm.  
77 Case T-194/13 UPS v Commission, judgment of the General Court of 7 March 2017.  
78 Case M.6570 UPS/ TNT Express, Commission decision of 30 January 2013.  

submissions  and 

consultation  on 

the 

their  non-confidential  versions  are  available  at 

the  White  Paper, 

see 

24 

 
                                                            
Commission  takes  due  process  in  competition  proceedings  very  seriously.  After  a  careful 
analysis,  it  considered  however  that  the  General  Court  erred  in  assessing  several  points  of 
law. Therefore, on 16 May  the Commission  lodged an appeal. It now looks forward for the 
European Court of Justice to definitively clarify those points.   

On  7  September,  the  European  Court  of  Justice  issued  its  preliminary  ruling  on  a  question 
referred  to  it  by  the  Austrian  Supreme  Court.79  In  that  judgment,  the  European  Court  of 
Justice  clarified  that  a  change  from  sole  to  joint  control  over  an  existing  undertaking  is  a 
notifiable concentration under the Merger Regulation only if the resulting joint  venture will 
be  “full  function”,  that is    performing  on  a  lasting  basis  all  the  functions  of  an  autonomous 
economic entity. This judgment provides a welcome clarification for the assessment of joint 
ventures / acquisitions of joint control in the future. 

On  26  October,  the  General  Court  annulled80  the  Commission  decision  of  14  March  2014 
clearing the acquisition by the international cable operator Liberty Global of the Dutch cable 
operator  Ziggo  subject  to  commitments.81  The  General  Court  based  its  annulment  on  one 
procedural ground, namely that the Commission did not explain in its decision the reasons for 
not  raising  competition  concerns  in  relation  to  Premium  Pay  TV  sports  channels,  thus 
breaching its duty to state reasons. The General Court's ruling underscores the importance for 
the Commission to provide sufficient reasoning in its merger decisions. 

On  26  October,  the  General  Court  dismissed82  the  action  for  annulment  brought  by  Marine 
Harvest against the Commission decision of 23 July 2014 imposing a fine of EUR 20 million 
on  Marine  Harvest  for  acquiring  its  rival  salmon  producer  Morpol  ASA  before  receiving  a 
Commission's approval under the EU Merger Regulation83. The judgment provides a reminder 
to companies of their duty not to implement concentrations of EU dimension before notifying 
and  receiving  Commission's  approval.  The  General  Court  also  confirmed  the  Commission's 
approach when setting the level of the fine.   

State aid control 

State aid control is an integral part of EU competition policy and a necessary safeguard to preserve effective 
competition and free trade in the single market. 

The Treaty establishes the principle that State aid which distorts or threatens to distort competition is prohibited 
in so far as it affects trade between Member States (Article 107(1) TFEU). However, State aid, which contributes 
to well-defined objectives of common interest without unduly distorting competition between undertakings and 
trade  between  Member  States,  may  be  considered  compatible  with  the  internal  market  (under  Article  107(3) 
TFEU).  

The objectives of the Commission's control of State aid are to ensure that aid is growth-enhancing, efficient and 
effective, and better targeted in times of budgetary constraints that aid does not restrict competition but addresses 
market  failures  for  the  benefit  of  society  as  a  whole.  In  addition  to  this,  the  Commission  acts  to  prevent  and 
recover State aid which is incompatible with the Single market. 

79  Case  C-248/16  Austria  Asphalt  GmbH  &  Co  OG  v  Bundeskartellanwalt,  judgment  of  the  Court  of  7 
September 2017.  
80 Case T-394/15 – KPN BV v Commission, judgment of the General Court of 26 October 2017.  
81 Case M.7000 Liberty Global/ Ziggo, Commission decision of 14 March 2014.  
82 Case T-704/14 – Marine Harvest v Commission, judgment of the General Court of 26 October 2017.  
83 Case M.7184 Marine Harvest/ Morpol (Art 14.2 proc.), Commission decision of 23 July 2014.  

25 

 
 
 
 
                                                            
1. Uptake of the State Aid Modernisation  

Since 2014, as part of the State Aid Modernisation (SAM), there has been a surge in State aid 
granted without prior notification to the Commission, indicating an important reduction in red 
tape. Based on the 2017 State Aid Scoreboard84, this trend has continued to improve. This is 
possible due to the General Block Exemption Regulation (GBER)85 adopted in the context of 
the  State  aid  reform,  which  simplifies  the  aid  granting  procedure  for  Member  States  by 
authorising  -  without  prior  notification  -  a  wide  range  of  measures  fulfilling  certain  criteria 
and specific EU objectives which are in the common interest. For the aid categories covered 
by the GBER, only cases with the biggest potential to distort competition in the single market 
will still face ex ante assessment and therefore require a notification.  

As  shown  by  the  graph  below86,  since  2015,  more  than  97%  of  new  measures,  for  which 
expenditure  was  reported  for  the  first  time,  were  covered  by  the  GBER,  which  entails  an 
increase  of  about  25  percentage  points  compared  to  2013.  About  80%  of  all  measures  for 
which  expenditure  was  reported  (i.e.  not  only  new  measures),  took  the  form  of  block 
exempted  measures  in  2016.  On  average,  total  spending  on  GBER  measures  in  the  EU 
represented about 47% of total State aid expenditure (excluding agricultural aid) in 2016, i.e. 
an increase of about 12 percentage points compared to 2014.  

The  2014  GBER  introduced  new  categories  of  aid87  and  to  a  large  extent,  the  reported 

6(1) 

pursuant 

to  Article 

of  Commission  Regulation 

84 The 2017 State Aid Scoreboard comprises aid expenditure made by Member States before 31 December 2016 
and which falls under the scope of Article 107(1) TFEU. The data is based on the annual reporting by Member 
States 
at 
http://ec.europa.eu/competition/state_aid/scoreboard/index_en.html.  
85  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 on the Functioning of the European 
Union (TFEU), OJ L 187, 26.6.2014, p.1. 
86 Figures from the 2017 State Aid Scoreboard. For further information, see 
http://ec.europa.eu/competition/state_aid/scoreboard/index_en.html.  
87  Aid  to  innovation  clusters  and  aid  to  process  and  organisational  innovation,  aid  schemes  to  make  good  the 
damage  caused  by  natural  disasters,  social  aid  for  transport  residents  of  remote  regions,  aid  for  broadband 
infrastructure, aid  for  culture  and  heritage conservation,  including  aid  schemes  for  audio-visual  works,  aid  for 
sport  multifunctional  recreational  infrastructures,  as  well  as  investment  aid  for  local  infrastructure;  the  new 
GBER also broadened categories of aid already covered by the previous (2008) GBER. 

794/2004 

available 

(EC) 

26 

 
 
                                                            
increase in expenditure on GBER measures already reflects the impact of the new Regulation. 
In  2016,  as  compared  to  2014,  total  GBER  spending  for  aid  to  culture  and  heritage 
conservation, for broadband and for local infrastructure has increased about fivefold, while it 
doubled  for  SMEs,  including  risk  finance.  Increases  were  also  recorded  for  environmental 
protection  and  energy  savings  (+68%),  for  aid  to  compensate  damages  caused  by  natural 
disasters  (+30%),  and  for  research,  development  and  innovation  (+8%).  The  GBER  was 
further extended in 2017, especially as regards aid to ports and airports (see section 2 below – 
State  aid  modernization  continues).  It  is  therefore  to  be  expected  that  the  share  of  block-
exempted  aid  among  total  aid  granted  by  Member  States  will  increase  even  further  in  the 
coming years. 

State  aid  enforcement  (Commission  decisions,  monitoring  and  Member  States' 
Evaluation Plans) 2007-2017 

1000

900

800

24 

700

12 

27 

363 

8 

34 

600

500

400

300

200

100

0

18 

3 

54 

44 

282 

275 

21 
26 

18 

296 

119 

11 
112 

17 
90 

290 

281 

27 
50 

30 
52 

19 
40 

346  357 

13 
26 

21 
37 

23 
48 

492 

335  367 

342  306  290 

422 

326 

260 

69 

15 
34 

115 

16 

32 

5 
59 

125 

36 
25 

10 

207  191  189 

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

27 

Evaluation Plan

Decided/closed Monitoring
of approved cases

Decided/closed Market
Information

Decided/closed Complaints

Non-aid decisions

Final decisions

Decision not to raise
objections

 
 
 
 
Partnership with Member States 

To facilitate the implementation of SAM, the Commission supports Member States in various 
ways  in  the  framework  of  a  multilateral  partnership.  The  Working  Group  on  SAM 
implementation (SAM WG) is a forum for Member States to exchange best practices on their 
systems  for  State  aid  control,  creating  an  effective  network  for  the  informal  discussion  of 
State  aid  issues  among  Member  States  and  with  the  Commission.  Other  dedicated  working 
groups or workshops deal with specific aspects of SAM implementation, in particular the new 
requirements for transparency and evaluation (see respective sections below) or issues related 
to State aid to infrastructure. Once a year, the SAM WG reports to a High Level Forum (HLF) 
which in turn provides guidance on the future work of the Partnership.  

The  SAM  WG  met  three  times  in  2017,  under  the  Chair  of  France,  and  addressed  several 
policy and compliance issues related to SAM implementation. It reported on the main topics 
discussed  in  the  Working  Group  during  the  past  year  and  on  the  follow-up  to 
recommendations from past Chairs (Finland, Sweden and the United Kingdom)  to the HLF 
held  on  28  June,  in  Brussels.  On  this  occasion  it  was  agreed  to  extend  the  mandate  of  the 
Working Group in order to include issues related to the interpretation and implementation of 
State aid rules, in addition to national practices for complying with these rules. The HLF also 
endorsed the work plan submitted by the Chair for the period 2017-2018.  

In  2017,  the  Commission  also  continued  its  bilateral  cooperation  with  Member  States. 
Launched  in  2015,  the  overall  objective  of  this  process  is  to  achieve  both  good  State  aid 
policy  and  effective  State  aid  control  at  the  national  level.  Three  structured  cooperation 
processes  are  on-going  with  Italy,  Bulgaria  and  Romania.  Based  on  practical  work 
programmes,  these  cooperation  processes  are  dealing  with  governance  issues,  issues 
concerning State-owned enterprises, as well as cases in problematic sectors. More tailor-made 
bilateral cooperation has been developed with nine Member States (Belgium, Croatia, Greece, 
Hungary, the Netherlands, Poland, Portugal, Slovenia and Spain), with a view to addressing 
country-specific compliance and implementation issues. Work is on-going towards deepening 
cooperation with additional Member States  

Transparency Award Module 

The transparency provisions currently part of SAM are in force since 1 July 2016 and require 
Member  States  to  publish  information  about  the  beneficiaries  of  aid  awards  above  EUR 
500 00088. Member States have six months starting from the date of granting to provide the 
required aid awards' data, with the exception of awards in the form of fiscal aid for which the 
information needs to be provided within one year from the date of granting. The Commission 
services  facilitated  compliance  with  this  requirement  by  developing,  in  cooperation  with 
Member  States,  the  Transparency  Award  Module  (TAM)  –  a  new  informatics  tool  for 
submission and publication of data required under the transparency provisions.89  

The  TAM  ensures  that  information  submitted  by  granting  authorities  is  consistent  and 
comparable across Member States. In addition, the associated transparency public search page 
provides all stakeholders, i.a. citizens, competitors and researchers, with a single entry point 
allowing  them  to  make  comparable  extractions  and  analysis.  For  these  reasons,  the 
Commission  pursues  efforts  to  improve  the  user  friendliness  and  the  interoperability 

88 For further information see the Competition Policy Brief 4/2016 available at  
http://ec.europa.eu/competition/publications/cpb/2016/2016_004_en.pdf.  
89 For further information see the Transparency Award Module (TAM) available at  
https://webgate.ec.europa.eu/competition/transparency/public/search/chooseLanguage.  

28 

 
                                                            
capabilities of the tools, to incentivise those Member States already having National State Aid 
Registries in place to use the TAM as well. For example, the Commission has developed a so-
called machine-to-machine interface to transfer directly the relevant information to the TAM, 
in  view  of  reducing  administrative  burden  and  promoting  the  use  of  information  and 
communication technologies applying the "only once" principle. 

As of end October 2017, 24 Member States have joined the TAM. Approximately 15000 aid 
awards have been published by 22 Member States. The Commission services have supported 
the  implementation  of  this  new  requirement  by  facilitating,  together  with  Member  States' 
representatives, the Transparency Steering Group (two meetings in 2017) and by organising 
dedicated trainings upon request. 

Evaluation 

Evaluation of aid schemes is another requirement introduced by SAM. The aim is to gather 
the necessary evidence to better identify impacts, both positive and negative, of the aid and 
inform future policy-making by Member States and the Commission.  

Since 1 July 2014, evaluation is required for large GBER schemes in certain aid categories90 
as  well  as  for  a  selection  of  notified  schemes  under  the  new  generation  of  State  aid 
guidelines91.  

By the end of December  2017, the Commission  had approved evaluation plans covering  37 
State aid schemes submitted by 13 Member States92. Most of these decisions concerned either 
large  regional  or  R&D&I  aid  schemes  under  the  GBER  or  notified  energy  and  broadband 
schemes.  These  schemes  account,  in  total,  for  about  EUR  48  billion  of  annual  State  aid 
budget. The first evaluation report has been submitted in January 2018.  

The Commission services have continued to accompany the implementation of the evaluation 
requirement  by  publishing  policy  briefs93  and  by  organising  dedicated  workshops  with 
Member States' representatives and evaluation experts.  

Aid for research, development and innovation  

While one of the headline targets of the Europe 2020 Strategy94 is for Research, Development 
and Innovation (R&D&I) investments in the EU to reach 3 % of EU GDP, R&D&I spending 
in  the EU has  been  lagging  behind  major  global competitors, mainly  due to  lower levels of 
private investment.  

The State aid rules for R&D&I help ensure that public funding goes to research projects that 
would not otherwise be realised due to market failures, i.e. projects that truly go beyond the 

90 Schemes with an average annual State aid budget above EUR 150 million in the fields of regional aid, aid for 
SMEs and access to finance, aid for research and development and innovation, energy and environmental aid and 
aid for broadband infrastructures. 
91 Evaluation might apply to notified aid schemes with large budgets, containing novel characteristics or when 
significant market, technology or regulatory changes are foreseen.  
92 The Czech Republic, Germany, Spain, France, Hungary, Italy, Lithuania, Austria, Poland, Portugal, Finland, 
Sweden and the United Kingdom.  
93 
information 
http://ec.europa.eu/competition/publications/cpb/2014/007_en.pdf 
http://ec.europa.eu/competition/publications/cpb/2016/2016_003_en.pdf. 
94 Communication of 3 March 2010 from the Commission, Europe 2020 A Strategy For Smart, Sustainable And 
Inclusive  Growth,  COM(2010)  2020  final  available  at  http://eur-lex.europa.eu/legal-content/EN/TXT/?qid= 
1427303331326&uri=CELEX:52010DC2020.  

the  Competition 

Policy  Briefs 

available 

available 

3/2016 

7/2014 

further 

at 
at 

and 

For 

see 

29 

 
                                                            
state of the art and which bring innovative products and services to the market and ultimately 
to consumers. The rules, using flexible and simple criteria for assessing the compatibility of 
State aid, facilitate the implementation of support for R&D&I projects by Member States.  

In 2017, the Commission ensured that aid schemes and individual measures notified under the 
R&D&I  rules  were  well  targeted  to  projects  enabling  ground-breaking  research  and 
innovation activities. Its State aid control activities covered a variety of sectors including the 
automated/connected driving, e-mobility, aeronautic, and microelectronic sectors. 

In one case95, the Commission found that public support by France and Germany for jointly 
developing a new, innovative heavy duty helicopter was compatible with the internal market 
under  the  R&D&I  Framework  as  it  contributed  to  a  well-defined  objective  of  common 
interest without unduly distorting competition on the market of the civil helicopters. 

Moreover,  the  Commission  cooperated  with  a  number  of  Member  States  with  a  view  to 
enabling them to adjust certain envisaged R&D&I measures and bring them in line with the 
GBER. This way, aid measures could be granted swiftly without having to be notified to the 
Commission, thereby speeding up public support for R&D&I. 

The ongoing discussions with a group of Member States on an important project of common 
European  interest  (IPCEI)  in  the  area  of  microelectronics  is  a  good  example  of  the 
Commission's policy to encourage intra-EU R&D&I cooperation and coordination in the area 
of Key Enabling Technologies, including first industrial deployment.   

Aid to risk finance  

SMEs  across  the  EU  remain  heavily  dependent  on  traditional  bank  lending,  which  is  still 
limited by banks' refinancing capacity, risk appetite and capital adequacy. The financial crisis 
has  exacerbated  the  problem  with  a  large  number  of  SMEs still  being  unable to  receive the 
necessary finance in recent years. Given the pivotal importance of SMEs and midcaps for the 
whole  EU  economy,  the  situation  has  a  significant  negative  impact  on  growth  and  job 
creation.  The  current  Risk  Finance  rules  aim  to  offer  better  incentives  for  private  sector 
investors - including institutional ones – to increase their funding activities in the critical area 
of  SME  and  midcaps  financing.  The  rules  also  mirror  other  EU  initiatives  designed  to 
promote wider use of financial instruments in the context of new support programmes such as 
Horizon  2020  or  COSME  (the  Programme  for  the  Competitiveness  of  Enterprise  and 
SMEs)96. 

The current Risk Finance Guidelines97 and the corresponding parts of the GBER, provide the 
framework  for  seamless  support  for  new  ventures  from  their  creation  to  their  development 
into  global  players.  The  aim  is  to  help  new  ventures  to  get  past  the  critical  stages  where 
private financing is either unavailable or not available in the necessary amount or form. 

(Airbus  Helicopters),  Commission  decision  of  19 

95  Case  SA.45183  (2017/N),  Avance  remboursable  pour  le  programme  de  recherche  et  développement  de 
l'hélicoptère  X6 
June  2017,  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_45183. 
96  An  overview  on  the  EU  programme  for  the  Competitiveness  of  Enterprises  and  Small  and  Medium-sized 
Enterprises is available at http://ec.europa.eu/growth/smes/cosme_en.  
97 Communication from the Commission, Guidelines on State aid to promote risk finance investments, OJ C 19, 
22.01.2014, p. 4 available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52014XC0122(04).  

30 

 
 
 
                                                            
Aid measures encouraging investment and innovation in SMEs 

In 2017, under the Risk Finance Guidelines, the Commission dealt with notified schemes aimed at encouraging 
investment in innovative SMEs and midcaps. In particular, it approved the prolongation of an amended scheme 
in Italy granting fiscal incentives for investments in innovative start-ups.  

Moreover, the Commission cooperated with a number of Member States with a view to enable them to adjust 
certain envisaged risk finance measures and bring them in line with the current GBER. This way, aid measures 
could be granted swiftly without having to be notified to the Commission, thereby speeding up public support to 
innovative SMEs.  

In all these cases, the Commission took the view that the measures at issue covered a real gap in the market, and 
worked together with the Member States on solutions to limit the impact on competition in the single market. In 
particular,  the  Commission  considered  that  the  risks  inherent  to  the  activities  of  these  young  firms  and 
innovative  companies  (i.e.  products/technologies  not  yet  proven  to  be  economically  viable)  and  the  lack  of 
financial  guarantees  limited  their  capacity  to  access  funding  and  that  the  aid  was  necessary  to  stimulate 
investment that, if unprompted, would not have been provided by the market. 

Regional aid  

Regional aid is an important instrument in the EU's toolbox to promote greater economic and 
social cohesion. The 2014-2020 regional aid framework has been in place since July 2014. 

In 2017, the Commission reviewed the regional aid provisions in the GBER. Three important 
changes were introduced. A first one relates to operating aid for outermost regions (widening 
of the sectoral scope of these provisions and a significant increase in the operating aid ceilings 
applicable  to  these  regions).  The  second  modification  concerns  operating  aid  for companies 
conducting business in very sparsely populated regions. Finally, the Commission modified the 
anti-relocation  provisions  by  requiring  a  notification  of  the  investment  aid  if  it    involves  a 
transfer of the underlying economic activity from other Member States.  

In 2017, the Commission continued advising Member States' authorities on how to interpret 
and implement the regional aid provisions of the GBER, thus helping them to make a success 
of the reforms introduced under SAM to the benefit of both consumers and businesses. 

Regional aid cases 

The Commission also adopted several decisions on notified regional investment aid measures 
under the Regional aid Guidelines. It approved the Octroi de Mer scheme providing regional 
operating  aid  for  companies  located  in  the  French  Outermost  regions98.  It  also  adopted 
positive decisions on regional investment aid for two large investment projects, namely aid to 
Mondi  (paper  and  paper  products,  Slovakia)99  and  aid  to  MOL  Petrolkémia  (petrochemical 
plant in Hungary)100. The Commission initiated a formal investigation procedure in relation to 
a regional investment aid to Jaguar Land Rover in Slovakia (cars)101. In addition, it approved 

98 Case SA.46899 (2016/N), Operating aid scheme for outermost regions providing reductions on the Octroi de 
Mer Tax, Commission decision of 15 March 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46899  
99 Case SA.45584 (2016/N), Investment aid to Mondi, Commission decision of 13 July 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_45584   
100  Case  SA.48382  (2017/N),  Regional  investment  aid  to  MOL  Petrolkémia  Zrt,  Commission  decision  of  25 
October 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48382  
101 Case SA.45359 (2016/N), Regional investment aid to Jaguar Land Rover Jaguar, Commission decision of 24 
May 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_45359  

31 

 
                                                            
a  Polish  regional  aid  scheme  targeting  the  shipbuilding  sector102  and  an  amendment  of  the 
French Regional aid map103.  

Finally,  the  Commission  adopted  two  decisions  approving  evaluation  plans  for  Italy  on  a 
SME investment aid scheme for purchase of new machinery and equipment104 and on an aid 
scheme for large investment projects "Contratti di Sviluppo"105. 

Infrastructure 

In 2017, the Commission continued providing guidance to the Member States' authorities by 
way of so-called "analytical grids" on the application of State aid rules to the public financing 
of infrastructure projects, which were revised in the light of the adoption of the Commission 
Notice on the notion of State aid in 2016106and the adoption of the revised GBER in 2017107. 

In  2017,  the  Commission  adopted  several  positive  decisions  on  aid  for  the  development  of 
infrastructures  having  an  economic  use,  notably  aid  for  the  development  of  the  Charles  De 
Gaulle  Express108,  aid  for  the  development  of  a  logistics  centre  in  the  Port  of  Pitea109,  a 
scheme to provide aid for investment in transhipment facilities for combined transport110, aid 
for the revitalisation of the Hamburg Congress Centre111, aid to the construction and operation 
of  the  Bratislava  national  football  stadium112  and  aid  for  the  construction  of  the  Ice  Hokey 
Arena in Tampere, Finland113. 

of 

12 

2017, 

October 

decision 

Commission 

102  Case  SA.47690  (2017/N),  State  aid  scheme  for  regional  investments  of  SMEs  in  the  shipbuilding  sector, 
Commission decision of 15 January 2018, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47690  
103  Case  SA.47094  (2016/N),  Amendment  of  the  Regional  aid  map  2014-2020  –  Second  use  of  the  population 
reserve, Commission decision of 10 February 2017, available at 
 http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47094  
104  Case  SA.47180  (2017/EV),  SME  investment  aid  scheme  for  purchase  of  new  machinery  and  equipment, 
Commission decision of 15 June 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47180  
105  Case  SA.48248  (2017/EV),  Evaluation  plan  of  the  aid  scheme  for  large  investment  projects  "Contratti  di 
at 
Sviluppo", 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48248  
106 OJ C 262, 19.7.2016 p. 1 
107 OJ  L 156, 20.6.2017, p. 1. 
108  Case  SA.45997  (2017/N),  Liaison  express  directe  entre  l’aéroport  Charles-de-Gaulle  et  la  Gare  de  l’Est, 
Commission  decision  of  26  June  2017.  The  public  version  of  this  decision  will  become  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_45997  
109  Case  SA.46749  (2016/N),  Investment  aid  for  the  Haraholmen  logistics  centre  in  the  Port  of  Pitea, 
Commission decision of 19 April 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46749  
110  Case  SA.46341  (2016/N),  Scheme  on  funding  for  transhipment  facilities  for  combined  transport  of  non-
federal  companies,  Commission  decision  of  4  January  2017.  The  public  version  of  this  decision  will  become 
available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46341  
111 Case SA.42545 (2015/N), Revitalisation of the Hamburg Congress Centre (CCH), Commission decision of 7 
April 2017, available at: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_42545  
112 Case SA.46530 (2016/N), Construction and operation of Bratislava national football stadium, Commission 
decision of 24 May 2017, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46530  
113 Case SA.47683 (2017/N), Tampere Arena, Commission decision of 31 July 2017. The public version of this 
decision will become available at: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47683  

available 

32 

 
 
 
                                                            
2. State Aid Modernisation continues  

Notion of aid: comprehensive clarification including public funding of infrastructure 

Since 2016, the Commission took several steps to further clarify the notion of State aid with 
the aim of helping public authorities and companies to identify when public support measures 
can  be  granted  outside  the  remit  of  State  aid  control  and  approval  by  the  European 
Commission114, in particular with the adoption of the Notice on the notion of State aid115. This 
Notice  gives  guidance  on  all  aspects  of  the  definition  of  the  notion  of  State  aid  by 
systematically  summarising  the  case  law  of  the  EU  Courts  and  the  Commission's  decision 
making practice.  

Furthermore, the Commission services continue updating the analytical grids on the financing 
of infrastructure projects originally adopted in 2015. A first part of these updated grids were 
presented  to  and  discussed  with  Member  States  in  a  dedicated  working  group  on 
infrastructures  in  November  2016.  A  second  part  was  published  on  the  Directorate-General 
for Competition's website in November 2017. These Commission services documents set out, 
sector by sector, when, in view of the Commission services, public funding does not involve 
State  aid  and  when  a  notification  for  State  aid  clearance  is  needed.  The  grids  also  contain 
references to the most relevant Commission decisions relating to the sector concerned. 

Together, these different measures further clarify the notion of State aid and, thus, the scope 
of  EU  State  aid  rules,  reducing  the  administrative  burden  for  public  authorities  and 
companies,  avoiding  lengthy  procedures,  and  increasing  legal  certainty  for  aid  beneficiaries 
and competitors.  

Further extension of the scope of the GBER 

The scope of the General Block Exemption Regulation (GBER) was extended significantly in 
2014  compared  to  the  previous  GBER,  by  including  provisions  for  a  large  variety  of  aid 
measures in many different sectors. However, the 2014 GBER did not cover investments in 
ports and airports, as at the time of its adoption, the Commission considered it did not have 
sufficient  case  experience  in  these  areas.  Notwithstanding,  recital  1  of  the  2014  GBER 
announced that the Commission planned to propose criteria for exempting ports and airports 
infrastructure provided that sufficient case experience were to be developed.  

In  the  years  following  the  entry  into  force  of  the  2014  GBER,  the  Commission  adopted 
numerous  State  aid  decisions  in  the  area  of  ports  and  airports.  This  case  practice  fully 
supports the extension of the scope of the GBER to facilitate the grant of aid in unproblematic 
cases. 

On the basis of this acquired experience and to fulfil the commitment announced in recital 1 
of the 2014 GBER, the Commission  in  2016 published two drafts for consultation and held 
two meetings with the State aid advisory committee of Member States on an extension of the 
GBER.  After  revisions  of  the  two  drafts  on  the  basis  of  the  numerous  replies  received  by 
Member States and stakeholders, the extension of the GBER was adopted on 14 June 2017116. 

114 For further information see IP/16/1782 of 19 May 2016 available at  http://europa.eu/rapid/press-release_IP-
16-1782_en.htm  
115 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, C/2016/2946, OJ C 262, 19.7.2016, pp. 1-50.  
116 Commission Regulation (EU) 2017/1084 of 14 June 2017 amending Regulation (EU) No 651/2014 as regards 
aid for port and airport infrastructure, notification thresholds for aid for culture and heritage conservation and for 

33 

 
                                                            
It  provides  a  major  simplification  for  unproblematic  investments  in  ports  and  airports. 
Member  States  can  implement  State  aid  measures  in  these  areas  without  the  need  to  notify 
them  before  to  the  Commission,  as  long  as  they  have  checked  that  they  comply  with  the 
conditions of the Regulation. The revision also addresses some other technical issues beyond 
ports  and  airports.  In  particular  it  makes  it  easier  for  public  authorities  to  compensate 
companies  for  the  additional  costs  they  face  in  the  EU's  outermost  regions.  In  addition,  the 
extension further increases the maximum amount of aid allowed under the GBER for culture 
projects (under the rare circumstances that public funding for culture actually constitutes State 
aid) and for multi-purpose sports arenas.  

By doing so, the extension of the GBER further contributes to the objectives of the State Aid 
Modernisation  launched  by  the  Commission  in  2012,  in  the  sense  that  it  minimises 
administrative burdens and make it easier for national, regional and local authorities to grant 
aid that contributes to a more dynamic and competitive internal market. It further focuses the 
Commission's State aid scrutiny to larger cases, by block exempting additional unproblematic 
cases. 

Revision of the Simplified Procedure Notice and Best Practices Code 

In 2016, the Commission launched a review of the Simplified Procedure Notice117 and of the 
Best  Practices  Code118  in  order  to  reflect,  on  the  one  hand,  the  amendments  brought  to  the 
State aid framework within the State Aid Modernisation initiative and, on the other hand, to 
take account of the experience gained by the Commission with its implementation.  

In the light of the comments received from the public consultations119, the Commission will 
review these texts with the objective to ensure coherence and consistency in the application of 
the various instruments of the State aid framework.  

3. Monitoring, recovery and cooperation with national courts  

Increased monitoring of existing State aid to ensure a level playing field 

Over the years, the architecture of State aid control has evolved. Today, a substantial part of 
aid  is  granted  under  block-exempted  schemes  which  are  not  examined  by  the  Commission 
before entering into force. Overall, roughly 85% of aid is granted on the basis of previously 
approved aid schemes or Block Exemption Regulations. In that context, it is essential for the 
Commission to verify that Member States apply State aid rules for the schemes correctly and 

aid for sport and multifunctional recreational infrastructures, and regional operating aid schemes for outermost 
regions and amending Regulation (EU) No 702/2014 as regards the calculation of eligible costs – available at  
http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1497952641554&uri=CELEX:32017R1084.  
117  Commission  notice  on  a  simplified  procedure  for  the  treatment  of  certain  types  of  State  aid,  OJ  C  136, 
16.06.2009,  pp.  3-12,  http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52009XC0616(01).  It  sets 
out the conditions under which the Commission usually adopts short-form decisions declaring certain types of 
State support measures compatible with the internal market. The Commission launched a public consultation on 
this notice from January to April 2016. 
118  Commission  notice  on  a  Best  Practices  Code  on  the  conduct  of  State  aid  control  proceedings, 
http://ec.europa.eu/competition/state_aid/legislation/best_practices_code_en.pdf  .  It  provides  guidance  on  the 
day-to-day conduct of State aid procedures and exchange of information between the Commission and Member 
States.  The  Commission  launched  a  public  consultation  in  November  2016  in  order  to  gather  on  its 
implementation over the past seven years. 
119  Consultation  on  the  Code  of  Best  Practice  on  the  conduct  of  State  aid  control  proceedings,  see 
http://ec.europa.eu/competition/consultations/2016_cbp/index_en.html;  and  Consultation  on  the  Notice  on  a 
Simplified 
see  
Types 
http://ec.europa.eu/competition/consultations/2016_simplified_procedure/index_en.html. 

Treatment 

Procedure 

Certain 

Aid, 

the 

for 

of 

of 

34 

 
                                                                                                                                                                                          
that they only grant aid when all required conditions are met.  

To that end, the Commission introduced in 2006 a regular, ex post, sample-based control of 
existing aid schemes ("monitoring"). After a modest start covering about 20 schemes and ten 
Member  States  in  each  monitoring  cycle,  the  Commission  has  considerably  stepped  up 
monitoring  since  2011.  Building  on  the  Court  of  Auditors  recommendations120,  the 
Commission  has  substantially  increased  the  size  of  the  monitoring  sample  in  the  last  three 
annual cycles to more than 50 schemes per year. It also extended the scope of its control.  

The 2017 cycle covered most Member States121 and all main types of aid approved as well as 
block-exempted  schemes.  Furthermore,  the  sample  included  block-exempted  schemes 
implemented  under  the  new  GBER122.  Also,  the  Commission  continued  on  targeted 
monitoring where it examined whether Member States correctly applied the criterion on the 
incentive effect.  

The  Commission  follows  up  on  irregularities  and  uses  the  means  at  its  disposal,  as 
appropriate, to address the competition distortions that these may have caused. In some cases, 
Member  States  offer  to  voluntarily  redress  the  problems  detected,  for  example  to  amend 
national legislation or to recover the excess aid granted. In other cases, the Commission may 
need to take formal action.  

Restoring competition through recovery of State aid granted in breach of the rules 

To ensure the integrity of the single market, the Commission has the power and the duty to 
request that Member States recover unlawful and incompatible aid which has unduly distorted 
competition and trade between Member States. In 2017, further progress was made to ensure 
that recovery decisions are enforced effectively and immediately. 

By  31  December,  the  sum  of  illegal  and  incompatible  aid  recovered  from  beneficiaries 
amounted to EUR 13.3 billion123. At the same time, the outstanding amount pending recovery 
was EUR 18.4 billion.  

In  2017,  the  Commission  adopted  six  new  recovery  decisions  and  EUR  261.4  million  was 
recovered by the Member States. As of the end of December, the Commission had 44 pending 
recovery cases.  

Recovery decisions adopted in 2017 

Amount recovered in 2017 (EUR million) 

Pending recovery cases on 31 December 2017 

6 

261.4 

44 

As a guardian of the Treaty, the Commission may use all legal means at its disposal to ensure 
that  Member  States  implement  their  recovery  obligations,  including  launching  infringement 
procedures. In  2017, the Commission  filed  one action to the European Courts under  Article 

120 In its 2011 report on the efficiency of State aid procedures, the Court of Auditors considered that, in view of 
the  importance  of  aids  granted  under  existing  aid  schemes,  the  Commission's  monitoring  activity  should  be 
reinforced. For further information see the recommendation n° 1 of the Court of Auditors Report recital 96, p. 41 
available at http://eca.europa.eu/portal/pls/portal/docs/1/10952771.PDF. 
121 Except Cyprus and Estonia. 
122  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 TFEU, OJ L 187, 26.6.2014, p. 1. 
123 The reference period is 1 January 1999 to 31 December 2017. 

35 

 
                                                            
108(2) TFEU124 for failure to implement recovery in the Apple case125. 

Cooperation with national courts to ensure the effectiveness of State aid rules  

The Commission continued its cooperation with national courts and tribunals under Article 29 
of  the  Procedural  Regulation126.  This  cooperation  includes  direct  case-related  assistance  to 
national  courts  when  they  apply  EU  State  aid  law.  The  courts  and  tribunals  can  ask  the 
Commission to provide case related information, or to provide an opinion on the application 
of  State  aid  rules.  The  Commission  may  also  submit  amicus  curiae  observations  at  its  own 
initiative.  

In 2017, the Commission responded to one request for information. The request was issued by 
the Supreme Administrative Court of Finland and enquired on the status of the investigation 
in a complaint.   

The  Commission's  possibility  to  submit  amicus  curiae  observations  on  its  own  initiative 
before national courts  is a novelty  brought about  by the 2013 amendment  to  the Procedural 
Regulation. In that respect, Article 29 of the Procedural Regulation mirrors Article 15(3) of 
Regulation 1/2003 in the field of antitrust.  

In  2017,  the  Commission  submitted  written  observations  for  six  court  cases  and  also  made 
oral observations for two of these cases127. All the cases concern the Micula decision.128 

To  make  its  views  publicly  known,  in  June  2017  the  Commission  started  to  publish  its 
opinions and amicus curiae observations, as well as observations to others, on its website129.  

In  2017,  the  Commission  also  continued  its  advocacy  efforts.  It  was  actively  involved  in 
evaluating  the  financing  of  training  programmes  for  national  judges  and  in  assessing  their 
needs. The Commission staff also provided training during workshops and conferences130. 

124 Consolidated version of the TFEU, OJ C 115, 9.5.2008, p.47. 
125 C-678/17, registered on 5 December 2017 at the European Court of Justice concering the recovery decision in 
SA.38373 Aid to Apple, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38373. 
126 Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 
108 TFEU, OJ L 248 of 24.9.2015, pp. 9-29. 
127  In  particular,  the  Commission  presented  its  written  observations  in  front  of  the  President  of  the  Tribunal 
d'Arrondissement  of  Luxembourg  on  16  March  2017  and  participated  to  the  hearing  of  20  March  2017  in  the 
case  Romania  against  Viorel  Micula  (n°  rôle  179517)  challenging  the  execution  of  the  arbitral  award  (case 
ARB/05/20) in Luxembourg. On 26 October 2017 the Commission submitted its written observations in front of 
the Nacka District Court of Sweden in the case Ioan Micula against Romania (réf. A 2550/17) for the execution 
of  the  arbitral  award  (case  ARB/05/20).  Finally,  the  Commission  submitted  its  written  observations  and 
requested  for  permission  to  participate  in  the  oral  hearing  of  the  appeals  of  Viorel  Micula  and  others  against 
Romania  (Court  of  Appeal  refs  A3/2017/1855  and  A3/2017/1853)  and  of  Ioan  Micula  and  others  against 
Romania (Court of Appeal refs: A3/2017/1856 and A3/2017/1903) against the orders of Mr Justice Blair of 20 
January  2017  and  of  15  June  staying  the  enforcement  of  the  arbitral  award  (case  ARB/05/20)  in  the  United 
Kingdom pending the judgement of the General Court of the European Union. The Commission also appeared at 
the hearing before Mr Justice Blair on 24 May 2017. 
128 Case SA.38517 (2014/NN; 2014/C), Micula v Romania (ICSID arbitration award), Commission decisions of 
26 May and 1 October 2014, and 30 March and 24 July 2015 respectively, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38517.  
129 For further information see http://ec.europa.eu/competition/court/overview_en.html. 
130  See  also  the  dedicated  section  Cooperation  with  national  courts,  Antitrust  and  Cartels  Section,  see  I. 
Antitrust, chapter 4. 

36 

 
 
 
                                                            
4. Significant judgments by the European Union Courts in the State aid area  

In 2017, the EU Courts adopted a number of important judgments in the State aid area. The 
following overview is based on a selection of court judgments.  

State resources 

In its preliminary ruling in ENEA131, the European Court of Justice confirmed that a national 
measure placing an obligation on both private and public undertakings to purchase electricity 
produced  by  cogeneration  does  not  constitute  an  intervention  by  the  State  or  through  State 
resources  when  the  extra  costs  resulting  from  that  purchase  obligation  cannot  be  passed  on 
entirely to end users and are not financed by a compulsory contribution imposed by the State 
or by a full offset mechanism. In the case at stake, the supply undertakings were not appointed 
by the State to manage a State resource, but were funding a purchase obligation imposed on 
them by having recourse to their own financial resources.  

The ruling further clarifies that the mere fact that the majority of the undertakings having the 
purchase  obligations  were  public  companies  could  not  lead  to  conclude  that  State  resources 
were involved if it is not in addition demonstrated that the State exercised dominant influence 
over public undertakings to direct the use of their resources in order to finance advantages to 
the benefit of other undertakings.  

The issue of State resources is also central in the TV2/Danmark judgment132, which put an end 
to  the  State  aid  assessment  of  the  public  financing  of  the  Danish  public  broadcaster 
TV2/Danmark, started in 2003. In 2004, the Commission adopted a decision stating that the 
aid  granted  between  1995  and  2002  to  TV2  in  the  form  of  licence  fee  resources  was 
compatible, with the exception of an overcompensation for an amount of DKK 628.2 million 
(approximately EUR 85 million) for which the Commission ordered recovery.  

Upon annulment by the General Court in 2008 of that decision133, the Commission adopted a 
second  decision  in  2011  declaring  the  public  financing  of  TV2  between  1995  and  2002  to 
constitute  in  its  entirety  compatible  aid.  In  2015,  the  General  Court  annulled  that  second 
decision134 in so far as the Commission had found that during 1995 and 1996 the advertising 
revenues generated by TV2 by broadcasting commercials constituted State resources because 
they  were  channelled  through  a  Government-controlled  fund.  The  General  Court  found  that 
the  fact  that  the  revenues  were  channelled  through  a  public  entity  would  not  render  the 
commercial nature of the income a State resource, even if the State had the possibility to fix 
the amounts to be channelled to TV2. The advertising revenues would keep their character as 
income generated by commercial activities of TV2. 

In TV2/Danmark the European Court of Justice set aside the judgment of the General Court. It 
considered  decisive  for  the  question  whether  TV2’s  advertising  revenues  constituted  State 
resources that the State effectively had control over these funds before they were paid to the 
beneficiary.  In  particular,  the  European  Court  of  Justice  considered  that  the  General  Court 
was  wrong  to  hold  that  resources  originating  with  third  parties  that  are  managed  by  public 

131 Case C-329/15 ENEA S.A. v Prezes Urzędu Regulacji Energetyki, judgment of the  European Court of Justice 
of 13 September 2017, EU:C:2017:671. 
132 Case C-656/15 P Commission v TV2/Danmark A/S, judgment of the European Court of Justice of 9 November 
2017, EU:C:2017:836. 
133  Joined  cases  T-309/04,  T-317/04,  T-329/04  and  T-336/04  TV2/Danmark  A/S  and  others  v  Commission 
Judgment of the Court of First Instance of 22 October 2008, ECLI:EU:T:2008:457. 
134  Case  T-674/11  TV2/Danmark  A/S  v  Commission,  Judgment  of  the  General  Court  of  24  September  2015, 
ECLI:EU:T:2015:684. 

37 

 
                                                            
undertakings  can  constitute  State  resources  only  when  they  are  voluntarily  placed  at  the 
disposal  of  the  State  by their  owners  or  abandoned  by  their  owners  and  when  the  State  has 
assumed  the  management  of  those  resources.  The  European  Court  of  Justice  also 
differentiated this case from PreussenElektra by stating that the latter case related to private 
undertakings that had not been appointed by the State to administer a State resource, but were 
bound by an obligation to purchase by means of their own financial resources. Further, in that 
case,  the  funds  at  issue  were  at  no  time  under  public  control.  By  contrast,  the  present  case 
concerns  public  undertakings,  namely  TV2  Reklame  and  the  TV2  Fund,  that  were  created, 
owned and appointed by the Danish State to administer the revenue produced by the sale of 
advertising space of another public undertaking, namely TV2/Danmark, and as a consequence 
that revenue was under the control and at the disposal of the Danish State. 

Economic v non-economic activity 

The  preliminary  ruling  in  Congregación  de  Escuelas  Pías135  related  to  an  exemption  of  a 
Catholic  school  from  a  municipal  real  estate  tax  in  Spain  granted  in  respect  of  work  to 
buildings  intended  to  be  used  for  educational  activities  that  do  not  have  a  strictly  religious 
purpose.  

In  its  judgment,  the  European  Court  of  Justice  noted  that  the  school  was  engaged  in  three 
types  of  activities:  (i)  strictly  religious  activities,  which  are  non-economic;  (ii)  educational 
activities  subsidised  by  the  State,  which  cannot  be  classified  as  economic;  and  (iii)  non-
compulsory educational activities receiving no financial support from the State, which can be 
regarded  as  economic.  The  European  Court  of  Justice  held  that  the  tax  exemption  may 
constitute  State  aid  if  and  to  the  extent  to  which  the  activities  carried  on  in  the  premises  in 
question are economic activities, a matter which is for the national court to determine. On this 
basis,  the  European  Court  of  Justice  concluded  that  the  prohibition  in  Article  107(1)  TFEU 
can  only  apply  to  the  tax  exemption  if  (i)  at  least  some  of  the  activities  carried  on  at  the 
school can be classified as economic activities and (ii) the premises in question are used, at 
least in part, for such economic activities.  

The European Court of Justice also held that the tax exemption, if classified as aid, should not 
be regarded as existing aid but as new aid. In the European Court of Justice's view, while the 
agreement between Spain and the Holy See (the basis for the tax exemption at issue) predated 
Spain’s  accession  to  the  EU,  the  tax  exemption  as  such  was  introduced  into  Spanish 
legislation only after accession. 

Another relevant judgment as regards the definition of non-economic activity is the one of the 
General Court on TenderNed136, an electronic government platform for information on public 
tenders  in  the  Netherlands.  In  2014,  upon  complaint  of  several  commercial  players,  the 
Commission  adopted  a  decision137  declaring  that  the  financing  of  TenderNed  by  the  Dutch 
authorities  did  not  amount  to  State  aid.  In  its  judgment,  the  General  Court  comes  to  the 
conclusion  that  the  activities  of  TenderNed  (data  collection  and  publication)  provide  the 
means  to comply  with  statutory  obligations  and  as  such  form  part  of  the  exercise  of public 
powers and are non-economic. 

135 Case C-74/16 Congregación de Escuelas Pías Provincia Betania v Ayuntamiento de Getafe, judgment of the 
Court of 27 June 2017, EU:C:2017:496. 
136  Case  T-183/15  Aanbestedingskalender  BV  and  others  v  Commission,  judgment  of  the  General  Court  of  28 
September 2017, EU:T:2017:675. 
137  Commission  Decision  of  18  December  2014  on  State  aid  case  SA.34646  (2014/NN)  (ex  2012/CP)  –  The 
Netherlands – E-procurement platform TenderNed, OJ C 422, 8.12.2017, p. 2. 

38 

 
                                                            
In order to reach this conclusion, the General Court first noted that all the functionalities of 
TenderNed  must  be  understood  as  linked  to  each  other,  all  being  indispensable  for  e-
procurement and forming different facets of the same activity, and therefore not independent 
of each other. Next, the General Court looked at whether the activities of TenderNed, taken as 
a whole, may be connected with the exercise of public powers. It came to the view that when 
contracting authorities initiate a procurement procedure and comply with procurement rules, 
they  are  acting  as  public  authorities.  The  nature  and  purpose  of  TenderNed's  activities  are 
closely linked to this activity and are therefore connected with the exercise of public powers. 
The fact that TenderNed provides its services free of charge is not sufficient in and by itself to 
determine whether an activity is economic or not although is nevertheless a relevant factor. 

The General Court also noted that the question whether or not the creation of a centralised e-
procurement  system  was  provided  for  by  the  EU  procurement  directives,  and  whether 
provision  is  made  for  penalties  in  the  event  of  breach  of  the  obligations  imposed  by  those 
directives, is not decisive for the purpose of determining the nature of TenderNed's activities. 
The  General  Court  also  stated  that  the  coexistence  of  commercial  platforms  does  not 
automatically make the activities of TenderNed economic. 

Selectivity 

The Retegal138 judgment relates to the Spanish plans to facilitate the transition from analogue 
to digital broadcasting for the entire territory of Spain (with the exception of the Autonomous 
Community of Castilla-La Mancha). In particular, the Spanish authorities set up a system of 
public financing to facilitate the digitisation of the so-called Area II, i.e. semi-remote and less 
urbanized  areas  with  only  2.5%  of  the  Spanish  population,  where  the  broadcasters  had  no 
economic interest to invest in digitisation.  

In May 2009, the Commission received a complaint from a satellite operator alleging that the 
various regional schemes  to  facilitate the digitisation of Area II constituted non-notified aid 
which distorted competition between terrestrial and satellite broadcasting platforms, since the 
parameters  of  the  tenders  made  satellite  operators  ineligible.  The  Commission  adopted  a 
decision in 2013 finding that the support granted to terrestrial operators in Area II amounted 
to  incompatible  State  aid  as  it  distorted  competition  between  satellite  and  terrestrial 
broadcasting platforms. In 2015, the General Court entirely dismissed the actions brought by 
Spain,  certain  Autonomous  Communities  and  other  interested  parties  seeking  annulment  of 
the decision139.  

On appeal140, the European Court of Justice rejected the arguments of the appellants with just 
one  exception  in  Retegal.  By  that  judgment,  the  European  Court  of  Justice  set  aside  the 
judgment of the General Court and moreover annulled the Commission decision for failure to 
state  reasons.  According  to  the  European  Court  of  Justice,  the  Commission  had  not 
sufficiently  motivated  why  the  measure  under  assessment  was  selective  and  dismissed  the 

138 Case C-70/16 P Comunidad Autónoma de Galicia and Retegal v Commission and SES Astra SA, judgment of 
the Court of 20 December 2017, EU:C:2017:1002. 
139  Cases  T-461/13  Spain  v  Commission;  T-462/13  Comunidad  Autónoma  del  País  Vasco  and  Itelazpi  v 
Commission; Joined Cases T-463/13 and T-464/13 Comunidad Autónoma de Galicia v Commission and Retegal 
v Commission; Cases T-465/13 Comunidad Autónoma de Cataluña and CTTI v Commission; T-487/13 Navarra 
de Servicios y Tecnologías v Commission; and T-541/13 Abertis Telecom and Retevisión I v Commission. 
140  Joined  Cases  C-66/16  P  Comunidad  Autónoma  del  País  Vasco  and  Itelazpi  v  Commission,  C-67/16  P 
Comunidad Autónoma de Cataluña and CTTI v Commission,  C-68/16 P Navarra de Servicios y Tecnologías v 
Commission,  and  C-69/16  P  Cellnex  Telecom  and  Retevisión  I  v  Commission.  Cases  C-70/16  P  Comunidad 
Autónoma de Galicia and Retegal v Commission, and C-81/16 P Spain v Commission. 

39 

 
                                                            
Commission’s  argument  that  no  additional  reasoning  was  necessary  since  the  selectivity 
condition  is  automatically  satisfied  if  a  measure  applies  exclusively  to  a  specific  economic 
sector  or  to  undertakings  in  a  particular  geographic  area.  Instead,  the  European  Court  of 
Justice  argued,  by  making  reference  to  Lübeck  Airport141,  that  the  decision  contained  no 
indication  of  the  reasons  why  undertakings  active  in  the  broadcasting  sector  should  be 
regarded as being in a factual and legal situation comparable to that of undertakings active in 
other  sectors  or  why  undertakings  using  digital  terrestrial  technology  should  be  regarded  as 
being  in  a  factual  and  legal  situation  comparable  to  that  of  undertakings  using  other 
technologies.  However,  other  recent  judgments  did  not  require  such  a  detailed reasoning  on 
selectivity142. 

Advantage  

The  most  relevant  judgment  as  regards  advantage  is  Frucona143.  In  2004,  the  beverage 
producer Frucona Košice became insolvent mainly due to accumulated tax debts amounting to 
SKK 640.4 million (approximately EUR 16.9 million). The company asked its creditors for an 
arrangement  under  the  applicable  insolvency  legislation  and  in  July  2004,  the  tax  office 
agreed to write off 65% of its debt. Following a complaint, the Commission took in 2006 a 
decision  concluding  that  the  debt  write-off  was  not  consistent  with  the  market  economy 
creditor principle (MECP) and constituted unlawful and incompatible State aid.  

In  2010,  the  General  Court  fully  confirmed  the  decision  (case  T-11/07).  However,  the 
European  Court  of  Justice  concluded  in  2013  (case  C-  73/11  P)  that  the  Commission  had 
committed a manifest error of assessment by not taking into account in its MECP assessment 
the likely duration of the bankruptcy procedure. As a result, the European Court of Justice set 
aside the judgment of the General Court and referred back the case.  

The Commission decided to replace its  2006 decision and to adopt a new negative decision 
with  recovery  in  October 2013. Frucona  Košice brought an action  for annulment before the 
General Court who in 2016 annulled the 2013 decision (case T-103/14), in particular because 
the  Commission  had  not  proven  to  the  sufficient  legal  standard  the  existence  of  State  aid, 
since  the  evidence  on  the  file  was,  according  to  the  General  Court,  not  capable  of 
substantiating  that  a  private  creditor  would  have  preferred  alternative  scenarios  to  the 
proposed arrangement.  

On  appeal  in  Frucona,  the  European  Court  of  Justice  fully  confirmed  the  judgment  of  the 
General Court. It stressed that the MECP test is intended to determine whether the recipient 
undertaking would manifestly not have obtained comparable facilities from a private creditor 
in  a  situation  as  close  as  possible  to  the  public  creditor.  As  a  result,  the  European  Court  of 
Justice  came  to  the  view  that  the  Commission’s  assessment  cannot  be  limited  to  just  the 
options  that  the  competent  authority  actually  took  into  consideration  but  must  cover  all  the 
options that a private creditor would reasonably have envisaged in such a situation. It is for 
the  Commission  to  ask  the  Member  State  concerned  to  provide  it  with  all  the  relevant 
information  for  such  overall  assessment.  This  must  include  all  information  liable  to  have  a 
significant influence on the decision-making of a normally prudent and diligent creditor at the 
time the measure was granted. At the same time, in a series of recent judgements, which rely 

141  Case  C-524/14  P  Commission  v  Hansestadt  Lübeck,  judgment  of  the  Court  of  21  December  2016, 
EU:C:2016:971. 
142 Such as cases C-323/16 P Eurallumina SpA v Commission and T-314/15 Hellenic Republic v Commission. 
143  Case  C-300/16  P  Commission  v  Frucona  Košice  a.s.,  judgment  of  the  Court  of  20  September  2017, 
EU:C:2017:706. 

40 

 
                                                            
rather on C 124/10 P Commission v EDF, the Union Courts have rather emphasised that the 
Market Economy Operator  Principle (MEOP)  test  is not applicable if the Member State did 
not  base  its  investment  decision  on  preliminary  economic  evaluations,  as  a  private  investor 
would have done144. When a Member State invoked the MEOP, it had to show these in order 
to prove its claim. 

Existing aid vs new aid 

By  its  judgments  in  Dutch  social  housing145,  the  European  Court  of  Justice  set  aside  two 
orders  of  the  General  Court  of  12  May  2015146  upholding  a  Commission  decision  of  15 
December 2009147. 

The European Court of Justice concluded that when the Commission adopts a decision under 
Article 19(1), in conjunction with Article 18, of Regulation 659/1999 (now Articles 23(1) and 
22 of Regulation 2015/1589), and accepts the commitments of the Member State, it concludes 
the  examination  process  provided  for  in  Article  108(1)  TFEU.  Such  decision  necessarily 
presupposes that the Commission had first assessed in its letter under Article 17 of Regulation 
659/1999  (now  Article  21  of  Regulation  2015/1589)  whether  the  existing  aid  scheme  was 
compatible  with  the  internal  market,  and  that  it  had  concluded  that  the  existing  aid  scheme 
was not (or no longer was) compatible. Therefore, the conclusion that the Commission drew 
in its decision (i.e. that appropriate measures were needed) results from that first preliminary 
finding of incompatibility registered in the Article 17 letter (now Article 21 letter). According 
to  the  European  Court  of  Justice,  such  first  assessment  cannot  be  excluded  from  judicial 
review  without  undermining  the  right  to  effective  judicial  review.  Therefore,  in  the  original 
appeal against the Article 19(1) decision, the General Court should have assessed the question 
of  whether  the  existing  aid  scheme  (before  the  commitments  of  the  Member  State)  was 
compatible with the internal market.  

The European Court of Justice also concluded that, irrespective of the respective roles of the 
Commission and the Member States in the procedure leading to the adoption of appropriate 
measures  under  Article  19(1)  (now  Article  23(1),  it  is  the  Commission's  decision  recording 
the  proposals  of  the  Member  State  that  renders  those  proposals  binding.  As  a  result,  the 
European  Court  of  Justice  ruled  that  the  General  Court  had  erred  in  law  by  rejecting  as 
manifestly unfounded the appellants’ arguments that (i) the Commission had erred in law and 
abused  its  powers  by  requiring  the  Dutch  authorities  to  provide  a  new  definition  of  "social 
housing" and (ii) the Commission had incorrectly interpreted the 2005 SGEI Decision. 

As a result, the cases were referred back to the General Court. 

Services of General Economic Interest (SGEI) 

The  judgments  of  the  General  Court  in  Société  nationale  maritime  Corse  Méditerranée 

144 See, for example, cases  T-1/15 SNCM v Commission, C-472/15 P Servizi assicurativi del commercio estero 
SpA  (SACE)  and  Sace  BT  SpA  v  Commission,  T-747/15  Électricité  de  France  (EDF)  v  Commission,  and  T-
423/14 Larko Geniki Metalleftiki kai Metallourgiki AE v Commission. 
145 Case T-202/10 RENV Stichting Woonlinie and others v Commission, order of the General Court of 12 May 
2015,  EU:T:2015:287,  and  case  T-203/10  RENV  Stichting  Woonpunt  and  others  v  Commission,  order  of  the 
General Court of 12 May 2015, EU:T:2015:286. 
146 Case C-414/15 P Stichting Woonlinie and others v Commission, judgment of the Court  of 15 March 2017, 
EU:C:2017:215, and case C-415/15 P Stichting Woonpunt and others v Commission, judgment of the Court  of 
15 March 2017, EU:C:2017:216. 
147  Commission  Decision  of  15  December  2009  on  State  aid  cases  No  E  2/2005  and  N  642/2009  –  The 
Netherlands – Existing and special project aid to housing corporations, OJ C 31, 9.2.2010, p.6. 

41 

 
                                                            
(SNCM)148  are  relevant  inter  alia  because  they  confirm  the  necessary  link  between  the 
demonstration of a market failure and the discretion left to a Member State to define a public 
service obligation (PSO) in a given market. 

These  two  judgments  relate  to  a  2013  Commission  Decision149  concerning  the  award  of  a 
public service contract to the French shipping company SNCM for the period 2007-2013. The 
Commission  concluded  that  the  aid  granted  to  SNCM  for  the  additional  service  needed  to 
cover peak periods during the holiday seasons did not compensate a real public service need 
(since the market could provide such services) and that it was incompatible. 

By its judgments, the General Court dismissed the actions of France and SNCM seeking the 
annulment  of  the  Decision.  The  General  Court  first  clarified  that  the  Commission,  in  its 
assessment of a possible manifest error in the definition of a PSO in the case of an SGEI may 
rely  on  non-State  aid  related  EU  legislation  (such  as  the  Maritime  Cabotage  Regulation), 
which may limit the discretionary power enjoyed by Member States. The General Court also 
confirmed that the definition of the PSO must meet a real need for public service and that its 
scope must be necessary and proportionate to that need. In particular, where a Member State 
has the choice between a PSO scheme open to all operators and a public service delegation 
entrusted to one or few operators, it must opt for the solution that will least distort the good 
functioning of the internal market. 

In  cases  relating  to  SGEI/public  service  compensation,  the  General  Court  in  T-220/14 
Saremar - Sardegna Regionale Marittima SpA recalled that the Member States' discretion on 
the  definition  of  SGEIs  cannot  preclude  the  Commission  from  verifying  that  the  SGEI 
derogation has been properly applied.  

Autonomy of State aid rules 

The  autonomous  and  separate  nature  of  State  aid  rules  as  opposed  to  legislation  relating  to 
excise duties (and other tax rules) was confirmed definitively in the C-323/16 P Eurallumina 
case. 

Regulatory acts in the sense of the third limb of Article 263(4) TFEU 

The  C-640/16  P  Greenpeace  Energy  case  gave  further  support  to  the  position  that  State  aid 
decisions  are  not  regulatory  acts  in  the  sense  of  the  third  limb  of  Article  263(4)  TFEU, 
although the Union Courts still have not explicitly stated this in cases relating to aid schemes.  

Rights of complainants 

On the rights  of complainants (i) the C-228/16 P  Dimosia Epicheirisi Ilektrismou AE (DEI) 
judgment  reinforced  these  rights  because  the  European  Court  of  Justice  considered  that  a 
formal  decision  can  validly  replace  an  illegal  previous  services'  letter  rejecting  a  complaint 
only if that decision explicitly states the illegality of the previous services' letter; (ii) the T-
841/16 Alex SCI case confirmed that a services' letter may constitute a challengeable act if it 
is worded in categorical terms.  

148 Case T-366/13 France v Commission, judgment of the General Court of 1 March 2017, EU:T:2017:135, and 
case T-.454/13 Société nationale maritime Corse Méditerranée (SNCM) v Commission, judgment of the General 
Court of 1 March 2017, EU:T:2017:134. 
149 Commission Decision of 2 May 2013 on State aid case SA.22843 (2012/C) (ex 2012/NN) implemented by 
France in favour of Société Nationale Maritime Corse-Méditerranée, OJ L 220, 17.8.2013, p. 20. 

42 

 
 
                                                            
Developing the international dimension of EU competition policy 

The Commission aims at fostering a level playing field as regards market access and promotes 
the values of EU competition enforcement, including State aid control, across the world. The 
progressive globalisation of trade and the spread of competition regulatory systems around the 
world  call  for  convergence  of  competition  rules  and  the  coordinated  enforcement  of  these 
rules.  Companies  need  a  transparent,  stable  and  reliable  competition  enforcement  wherever 
they do business. This will also benefit consumers in the long-term run. And this is why the 
Commission seeks to reinforce the role of competition policy in international negotiations, in 
international organisations and cooperates with competition agencies globally.  

1. Bilateral relations 

The Commission is holding negotiations on Free Trade Agreements (FTAs) with the aim to 
include  competition  and  State  aid  provisions  in  such  agreements.  In  2017,  the  European 
Union concluded the negotiations with Japan and Armenia. The Commission continued FTA 
negotiations with Mexico, Mercosur and Indonesia, and opened negotiations with Chile and 
Azerbaijan.  

The Commission also continued negotiations with the People's Republic of China regarding 
an Investment Agreement. The agreement aims at establishing a level playing field between 
EU  and  Chinese  investors,  including  State  owned  enterprises,  through  inter  alia  enhanced 
provisions on transparency as regards subsidies.  

In  June,  a  Memorandum  of  Understanding  was  signed  with  the  National  Development  and 
Reform  Commission  of  the  Peoples’  Republic  of  China  to  create  a  permanent  forum  for 
dialogue  on  the  enhancement  of  an  effective,  transparent  and  non-discriminatory  state  aid 
control and fair competition review.  

Negotiations between the Commission and its Canadian counterparts to include provisions on 
the  exchange  of  evidence  into  the  existing  EU-Canada  Cooperation  agreement  have  been 
completed at working level. The updated draft agreement (the so-called "Second Generation 
Agreement") with Canada will allow the Commission and the Canadian Competition Bureau 
to exchange evidence collected in the course of their respective proceedings. The possibility 
to exchange such evidence would improve cooperation between both competition authorities 
in all competition cases which affect both markets and would lead to more effective and more 
efficient competition law enforcement. In July 2017, the European Court of Justice issued its 
Opinion  on  another  agreement,  the  envisaged  EU-Canada  Passenger  Name  Record 
Agreement, clarifying the standards for private data protection. The Commission is analysing 
the impact of the Court's Opinion on the draft Second Generation Agreement. 

The  Commission  is  also  negotiating  a  similar  agreement  with  Japan  to  update  the  existing 
cooperation agreement from 2003. The Council's authorisation for negotiations was received 
in April and negotiations started in October.  

Another key area of Commission activity is technical cooperation with main trading partners 
that  are  developing  their  competition  policy  and  enforcement  regimes  and  with  which  the 
Commission has signed Memoranda of Understanding (MoUs). The Commission has signed 
MoUs  with  all  the  BRICS150  countries  in  recent  years,  and  has  engaged  in  technical 

150 BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, 
China and South Africa. 

43 

 
                                                            
cooperation with  these countries to varying degrees. In the same  vein, the  Commission  will 
soon  start  negotiating  an  Administrative  Arrangement  with  Mexico.  The  Commission  also 
assists  in  the  implementation  of  the  competition  provisions  included  in  recent  FTAs  with 
neighbouring countries. It is involved in negotiating the necessary implementing rules to this 
effect with Tunisia, as well as monitoring the implementation of the EU competition acquis in 
countries such as Ukraine and Moldova.  

In  the  accession  negotiations  with  candidate  countries,  the  Commission's  main  policy 
objective, in addition to fostering a competition culture, is to further help candidate countries 
and  potential  candidate  countries  to  build  up  a  legislative  framework  with  well-functioning 
competition authorities and an efficient enforcement practice in order to meet the conditions 
for EU accession in the competition policy field. The Commission is continuously monitoring 
compliance  of  candidate  countries  with  their  commitments  under  the  Stabilisation  and 
Association agreements. 

2. Multilateral cooperation 

The  Commission  continued  its  active  engagement  in  competition-related  international  fora 
such  as  the  Competition  Committee  of  the  Organisation  for  Economic  Co-operation  and 
Development  (OECD),  the  International  Competition  Network  (ICN),  the  World  Bank  and 
United Nations Conference on Trade and Development (UNCTAD).  

In  OECD  in  June,  the  Commission  contributed  to  the  discussions  on  methodologies  for 
conducting  market  studies151,  use  of  traditional  antitrust  enforcements  tools  in  multi-sided 
markets152,  algorithms  and  collusion153,  and  competition  issues  in  aftermarkets154.  Likewise, 
during the OECD  Competition Committee's  meeting in  June, the Commission  presented, its 
proposal for a EU Directive to empower national competition authorities to be more effective 
enforcers  (the  ECN+  initiative),  and  the  key  findings  of  the  e-commerce  sector  inquiry.  In 
December, the Commission contributed to the OECD's discussions on judicial perspectives of 
competition law155, the challenges related to the imposition of extraterritorial remedies156, the 
cooperation between competition agencies and regulators in the financial market157 and safe 
harbours, presumptions of illegality and standards in competition law158. 

In  the  ICN,  following  the  Porto  Annual  Conference  which  took  place  in  May,  the 
Commission continued co-chairing the Cartel Working Group and contributed to updating the 
ICN 2008 report on "Setting Fines for Cartels in ICN Jurisdictions"159 and the "Anti-Cartel 
Enforcement  Manual"160.  The  Commission  is  also  an  active  member  of  the  Merger  and 

151 For further information see http://www.oecd.org/daf/competition/market-study-methodologies-for-
competition-authorities.htm. 
152 For further information see http://www.oecd.org/daf/competition/rethinking-antitrust-enforcement-tools-in-
multi-sided-markets.htm. 
153 For further information see http://www.oecd.org/daf/competition/algorithms-and-collusion.htm. 
154 For further information see http://www.oecd.org/daf/competition/aftermarkets-competition-issues.htm. 
155 For further information see http://www.oecd.org/daf/competition/judicial-perspectives-competition-law.htm. 
156 For further information see http://www.oecd.org/daf/competition/extraterritorial-reach-of-competition-
remedies.htm. 
157 For further information see http://www.oecd.org/daf/competition/cooperation-between-competition-agencies-
and-regulators-in-the-financial-sector.htm. 
158  For  further  information  see  http://www.oecd.org/daf/competition/safe-harbours-and-legal-presumptions-in-
competition-law.htm. 
159 For further information see http://www.internationalcompetitionnetwork.org/uploads/library/doc1127.pdf. 
160 For further information see https://icn2017.concorrencia.pt/downloads/materials/CWG-Compliation-of-Good-
Practices.pdf.  

44 

 
                                                            
Unilateral Conduct Working Groups where it contributes to the various projects carried out by 
these  groups,  such  as  the  development  of  the  Unilateral  Conduct  Workbook161  and  the 
revision  of  the  ICN  Recommended  Practices  for  Merger  Notification  and  Review 
Procedures162 and the ICN Recommended Practices for Merger Analysis163.  

The  Commission  also  participated  in  the  16th  meeting  of  the  UNCTAD  Intergovernmental 
Group of Experts (IGE) on Competition Law and Policy (CLP), which was held in Geneva in 
July  2017.  The  conference  included  discussions  on  the  capacity-building  and  technical 
assistance in the area  of competition law and policy, enhancing international cooperation in 
the investigation of competition cross-border cases and challenges faced by young and small 
competition authorities in the design of merger control.  

External Communication 

The Directorate-General for Competition's external communication is largely based on the use 
of  mass  media  to  reach  a  variety  of  audiences,  including  businesses,  lawyers,  researchers, 
academics,  students  and 
the 
Commissioner's  press  conferences,  press  releases  and  speeches,  as  well  as  social  media.  In 
addition,  the  Directorate-General  issues  newsletters  and  other  publications  aimed  at 
stakeholders  and  the  general  public,  as  well  as  participation  by  staff  in  stakeholder 
conferences. 

is  achieved  principally  via 

the  general  public.  This 

The  mass  media  are  by  far  the  most  cost-effective  channel  to  reach  a  wide  audience.  
According  to  a  2014  Eurobarometer  on  "Citizens’  Perception  about  Competition  Policy", 
people's  two  main  sources  of  information  about  competition  policies  were  television  (62%) 
and newspapers or magazines, including online (60%). These were followed by internet-based 
media (38%) and radio (34%). 

The Directorate-General for Competition produced 518 press releases related to competition 
cases during 2017. Of these, 127 were longer, multilingual, press releases while a further 391 
were shorter and monolingual.  Media coverage of some of the cases was worldwide, reaching 
tens of millions of people, for example, the Google Shopping and Qualcomm antitrust cases 
and the Apple and Amazon state aid cases. All of these cases were covered by TV, radio, print 
and internet media around the globe. 

Throughout  2017,  Commissioner  Vestager  delivered  around  70  speeches  to  a  variety  of 
audiences, including a TED Talk, the video of which was viewed over 1 million times.  The 
Director-General delivered 25 speeches at a variety of international events. 

On social media, the Directorate General for Competition was active on Twitter during 2017. 
Throughout  the  year,  Over  1000  tweets  from  the  Directorate-General’s  account  achieved 
more than 3 million impressions (i.e. the number of times a tweet appears in someone's feed). 
Topics  achieving  high  traffic  included  the  Dow/Dupont,  Bayer/Monsanto  and  Morpho 
Detection/Smiths mergers, the Apple and Amazon State aid cases, and the Google Shopping, 
International  Skating  Union  and  Aspen  Pharma  antitrust  cases.  Followers  of 
the 
DirectorateGeneral's twitter account rose to 10,000 during the year. 

161 For further information see http://www.internationalcompetitionnetwork.org/working-
groups/current/unilateral/ucworkbook.aspx.  
162 For further information see http://www.internationalcompetitionnetwork.org/uploads/library/doc1108.pdf. 
163 For further information see http://www.internationalcompetitionnetwork.org/uploads/library/doc1107.pdf. 

45 

 
                                                            
The  DirectorateGeneral's  electronic  newsletters  had  over  20,000  subscribers  in  2017  while 
paper publications in the EU Bookshop were downloaded 5000 times. 

46 

 
 
 
II. SECTORAL OVERVIEW 

The  Commission's  competition  policy  actions  in  2017  focused  on  a  wide  range  of  policy 
areas,  helping  make  markets  work  more  fairly.  At  the  same  time,  EU  competition  policy 
supported  several  key  EU  policies  and  initiatives,  including  a  connected  Digital  Single 
Market, an integrated and climate friendly Energy Union, a deeper and fairer internal market 
and  taking  actions  against  selective  tax  advantages.  This  section  provides  an  overview  of 
competition policy developments and enforcement activities that the Commission particularly 
focused on in 2017.  

1. ENERGY & ENVIRONMENT 

Overview of key challenges in the sector 

Competition policy plays a key role in making the Energy Union, one of the Commission's ten 
priorities, function properly by opening markets, avoiding discrimination and creating a level 
playing  field  between  all  market  players,  regardless  of  their  nationality.  Competition 
enforcement  ensures  that  gas  and  electricity  flow  freely  across  borders  between  Member 
States,  promotes  interconnectivity  and  avoides  territorial  restrictions  or  artificial  market 
partitioning  within  the  EU.  It  ultimately  empowers  consumers  –  whether  energy-intensive 
users, such as big manufacturing plants, small companies or citizens – to demand a fair deal, 
and gives them the trust that the EU markets are working well. This ensures that Europe has 
secure, affordable and green energy.  

Competition policy is also key in the area of the environment for achieving the EU's climate 
targets  in  particular  regarding  the  shift  in  the  transport  sector  from  polluting  fossil  fuels  to 
alternative  fuels  in  accordance  with  the  Commission's  mobility  policy  (e-mobility  from 
renewable sources, use of hydrogen and natural gas for low emission vehicles) as well as the 
introduction of the necessary infrastructure to enable this shift. To this end aid measures aim 
to  address  market  failures  and  stimulate  demand  for  low  emission  vehicles  both  in  public 
transport as well as for the acquisition of low emission vehicles by consumers. 

Contribution of EU competition policy to tackling the challenges 

The scope of competition law enforcement in the energy sector is to strengthen and integrate 
the  principles  outlined  in  sector-specific  regulation  in  order  to  create  a  well-functioning 
unified  market,  where  energy  can  be  exchanged  freely  and  securely  across  Europe  and  all 
related  services  are  provided  at  competitive  levels.  For  instance,  by  making  sure  that 
dominant positions by incumbent operators are not abused, that suppliers compete effectively 
and fairly, that State intervention is limited only to those areas in which is really needed and 
that renewables can compete in the market, competition policy helps keeping overall energy 
costs under control and at the same time allows for a sustainable economic growth in the EU.  

Competition policy in 2017 has focused mainly on the four areas, as presented below:  

First,  the  Commission  acted  against  (privately  or  State-owned)  companies'  attempts  to 
artificially  segment or  partition the internal energy market. In  particular, the Commission is 
concerned that limiting the free flow of gas and electricity between Member States constitutes 
an obstacle to the Energy Union. For this reason, the Commission has enforced competition 
rules against territorial restrictions unduly limiting the possibility for customers to deliver or 
re-deliver  energy  where  needed.  Discriminatory  conduct  against  foreign  energy  or  any 
limitations of imports/exports within the EU have also been under closer scrutiny.  

47 

 
 
The second important focus was on ensuring that competitors could compete on fair terms and 
incumbent  operators  were  not  allowed  to  unduly  exploit  their  dominant  position,  whether 
gained legitimately on the market, conceded by the State or favoured by national legislation. 
In fact, the Commission has showed that it is ready to intervene when national rules create or 
facilitate an infringement of competition law.  

Third,  the  Commission  enforced  the  State  aid  rules  ensuring  public  support  results  in  a 
positive  balance  between  the  objectives  achieved  and  the  potential  negative  effects  of  State 
intervention  on  the  European  energy  market.  In  this  context,  the  Commission  pays  special 
attention to any market distortions that may arise as a result of public financing, such as the 
crowding  out  of  investment,  negative  effects  on  upstream  or  downstream  markets  and 
excessive profits which may lead to strengthened market positions, deterrence of new entrants 
and ultimately market foreclosure. By the effective enforcement of State aid rules in 2017 the 
Commission has ensured that the risk of such distortions is limited to the minimum. This has 
been  achieved  by  promoting 
implementation  of  more  marketoriented  capacity 
mechanisms,  new  support  schems  to  renewable  energy  producers,  who  receive  aid  under  a 
clear, transparent and equitable set  of rules.  Ensuring that technology providers compete  on 
equal  grounds.  In  addition,  the  Commission  ensured  that  technology  providers  compete  on 
equal  grounds,  for  example  when  assessing  the  restructing  aid  to  the  nuclear  technology 
provider Areva (Areva changed its name to Oreno as of January 2018).  

the 

Fourth, the Commission swiftly approved aid measures in support of the introduction of the 
necessary  infrastructure  for  low-emission  mobility  (networks  of  charging  stations  for  e-
mobility  and  for  the  use  of  other  alternative  fuels)  and  worked  together  with  a  number  of 
Member States to ensure that shemes promoting the acquisition of low/zero emission vehicles 
would not create competition concerns. 

Reaping the benefits of a pro-competitive gas, oil and other fuel sectors in the EU 

The purpose of antitrust enforcement in the gas sector is to achieve more competitive markets 
in Europe, thereby offering citizens and businesses arbitrage opportunities and greater choice 
at lower prices. 

The Gazprom case164 is a good example of the efforts made by the Commission to facilitate 
cross-border flows of energy between the Member States. In its Statement of Objections, the 
Commission considered that Gazprom may have abused its dominant position by pursuing an 
overall  strategy  to  partition  the  Central  and  Eastern  European  gas  markets.  This  may  have 
enabled  Gazprom  to  charge  unfair  prices  in  certain  Member  States.  The  Commission  also 
considered  that  Gazprom  may  have  abused  its  dominant  market  position  by  making  the 
supply  of  gas  dependent  on  obtaining  unrelated  commitments  from  wholesalers  concerning 
the gas transport infrastructure.  

Gazprom offered commitments to address the Commission's competition concerns and ensure 
the  free  flow  of  gas  at  competitive  prices  across  the  Central  and  Eastern  European  gas 
markets.  

164  Case  AT.39816,  Upstream  gas  supplies  in  Central  and  Eastern  Europe.  For  further  information  see  
 IP/15/4828 of 22 April 2015 available at http://europa.eu/rapid/press-release_IP-15-4828_en.htm.  

48 

 
 
 
                                                            
The commitments offered by Gazprom 

In  order  to  ensure  cross-border  flows  of  gas  across  the  investigated  Central  and  Eastern  European  Member 
States, Gazprom has offered to remove all contractual barriers to the free flow of gas in Central and Eastern 
European gas markets (including clauses which merely reduce customers' incentive to re-sell gas). In addition, 
Gazprom has committed to take active steps to enable better integration of these markets. First, Gazprom has 
offered  to  facilitate  market  interconnections  between  Bulgaria  and  its  EU  neighbours,  by  committing  to 
introduce changes to its contracts that are necessary for the conclusion of interconnection agreements between 
Bulgaria and other EU Member States. Second, Gazprom offered to overcome the isolation of the Bulgarian and 
Baltic gas markets, caused by the lack of gas connecting infrastructure, by creating additional opportunities for 
gas flows through swap-like operations between, on the one hand, the Baltic and Bulgarian gas markets and, 
on the other hand, other parts of Central and Eastern Europe. 

Gazprom has also committed to introduce a number of important changes to its contractual price revision clauses 
to ensure competitive gas prices in the five Member States (Bulgaria, Estonia, Latvia, Lithuania and Poland) in 
which Gazprom had been preliminary found to charge unfair prices. In essence, Gazprom's customers would be 
able to ask for a price renegotiation when prices diverge from Western European price benchmarks, including 
prices at competitive and liquid European gas hubs. The level of the new prices would have to take account of 
these benchmarks. In case of disagreement between Gazprom and its customer, the matter could be referred to 
binding arbitration, which would revise prices in line with the same competitive benchmarks. Finally, contractual 
price  revisions  would  also  become  more  frequent  and  their  timing  streamlined  as  compared  to  current  price 
revision clauses. 

Finally, as regards South Stream, Gazprom has committed not to seek any damages from its Bulgarian partners 
following the termination of the South Stream project.  

In March, the Commission decided to submit Gazprom's commitments to a market test.165 In 
response to the market test, the Commission has received a significant number of comments 
and  submissions  from  various  market  players  and  interested  parties.  The  Commission  has 
subsequently discussed with Gazprom how the commitments would need to be improved in 
the light of the comments received in the market test.  

In 2017, the Commission also continued its investigation into the possible foreclosure of gas 
markets  in  Bulgaria  by  Bulgarian  Energy  Holding  (BEH)166.  State-owned  and  vertically 
integrated Bulgarian Energy Holding was being investigated for hindering competitors' access 
to  key  gas  infrastructures  in  Bulgaria  and  the  import  pipeline  brining  gas  to  Bulgaria.  The 
company is not only active in the gas supply market but also owns or controls the Bulgarian 
gas  transmission  network,  the  only  gas  storage  facility  in  Bulgaria  and  the  capacity  on  the 
main gas import pipeline into the country. The aim of the case is to ensure a competitive gas 
market in Bulgaria and foster the integration of the Bulgarian gas market with neighbouring 
markets. 

In  June,  the  Commission  opened  formal  proceedings  against  the  Romanian  Transmission 
System Operator of natural gas (Transgaz)167 to investigate whether it might be hindering the 
free  flows  of  natural  gas  from  Romania  to  neighbouring  Member  States.  The  aim  of  the 
investigation  is  to  ensure  the  free  flow  of  the  natural  gas  from  Romania  to  neighbouring 
countries and to improve integration of Romania into the European gas network.  

Whilst the Commission primarily focuses on the gas sector, it also monitors other fuel sectors, 
such  as  ethanol,  a  biofuel.  Oil  and  biofuel  prices  are  important  to  Europe's  citizens  and 

165 Case AT.39816 Upstream gas supplies in Central and Eastern Europe. For further information see IP/17/555 
of 13 March 2017 available at http://europa.eu/rapid/press-release_IP-08-386_en.htm.  
166  Case  AT.39849  BEH  Gas.  For  further  information  see  IP/15/4651  of  23  March  2015  available  at 
http://europa.eu/rapid/press-release_IP-15-4651_en.htm. 
167  Case  AT.40335  Romanian  gas  interconnectors.  For  further  information  see  IP/17/1501  of  1  June  2017 
available at http://europa.eu/rapid/press-release_IP-17-1501_en.htm.  

49 

 
                                                            
businesses.  In  2017,  the  Commission  continued  its  investigation  into  potential  collusion 
practices between three ethanol producers,  Abengoa SA of Spain, Alcogroup SA of Belgium 
and  Lantmännen  ek  för  of  Sweden,  in  relation  to  the  ethanol  price  formation  mechanism  at 
wholesale level.168 If confirmed, these practices would increase prices for renewable energy, 
in  this  case  biofuels  used  for  transport,  and  would  be  therefore  harming  competition  and 
undermining EU energy objectives.  

The Greek Lignite169 case shows the Commission's willingness to tackle also anticompetitive 
behaviours created or facilitated by national legislation. During 2017 the Commission has re-
opened the case after the judgments by the General Court170 in December 2016, upholding the 
2008  Commission  decision.  In  the  2008  Commission  decision  it  was  established  that  the 
Hellenic Republic granted in violation of Article 106 TFEU together with Article 102 TFEU 
to the State-controlled dominant electricity operator PPC special rights for the exploitation of 
lignite  in  Greece.  Those  special  rights  created  inequality  of  opportunities  for  PPC's 
competitors  and  enabled  PPC  to  maintain  its  dominant  position  on  the  Greek  wholesale 
electricity market. To remedy this imbalance around 40% of lignite-fired generation capacity 
had to be divested by PPC to third parties. At the end of 2017 the Hellenic Republic submitted 
a divestment package proposal.  

Benefits of properly functioning and interconnected electricity markets 

Electricity transmission networks in various countries and/or regions are interconnected, and 
therefore  electricity  transmission  system  operators  from  various  areas  also  manage 
interconnections with other networks. Where a transmission system operator resolves network 
congestion  problems  by  limiting  cross-border  transmission  capacity,  this  may  constitute 
discrimination  against  cross-border  flows  of  electricity  as  compared  to  internal  flows  and 
could impede consumers from reaping the benefits of the EU's single market for energy. It can 
also  distort  prices,  leading  to  inefficient  electricity  production  and  the  wrong  investment 
signals. 

State aid measures to ensure security of energy supply for European citizens and businesses  

In  2017,  the  Commission  started  its  enforcement  actions  based  on  the  findings  of  the 
Commission's 2016 sector inquiry into capacity mechanism, which has formed the basis for a 
close cooperation between the Commission and the EU Member States to ensure that capacity 
mechanisms  are  well-designed  and  fit  for  purpose.  In  2017,  the  Commission  took  a  final 
decision on a capacity mechanism in France171 and approved the joint capacity mechanism for 
Ireland  and  Northern  Ireland172.  The  joint  capacity  mechanism  for  Ireland  and  Northern 
Ireland is open to all potential types of capacity providers, including the demand response, in 
the 'all-island market'. The power plants and other capacity providers will be paid for being 

168 Case AT.40054 Ethanol Benchmarks. For further information see IP/15/6259 of 7 December 2015 available 
at http://europa.eu/rapid/press-release_IP-15-6259_en.htm. 
169 Case AT.38700 Greek Lignite and electricity markets. For further information see IP/08/386 of 5 March 2008 
available at http://europa.eu/rapid/press-release_IP-08-386_en.htm?locale=fr.  
170 Judgments of the General Court T-169/08 RENV and T-421/09 RENV of 15 December 2016. 
171 Case SA.40454 Tender for additional capacity in Brittany, for further information see IP/17/1325 of 15 May 
2017 available at http://europa.eu/rapid/press-release_IP-17-1325_en.htm.  
172 Case SA.44464 Irish Capacity Mechanism: reliability option scheme, Commission decision of 24 November 
2017  available  at  http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_44464,  and 
SA.44465 Northern Irish Capacity Mechanism: reliability option scheme, Commission decision of 24 November 
2017  available  at  http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_44465.  For 
further information see IP/17/4944 of 24 November 2017 available at http://europa.eu/rapid/press-release_IP-17-
4944_en.htm. 

50 

 
                                                            
available to generate electricity, and the demand response operators for being ready to reduce 
their  electricity  consumption  to  help  balancing  the  demand  with  supply.  The  capacity 
contracts  are  allocated  through  regular,  competitive  auctions.  When  the  electricity  prices 
reach  very  high  levels  (i.e.  more  than  €500  per  MWh),  the  capacity  mechanism  triggers  an 
obligation  for  power  plants  selected  in  the  auctions  to  pay  back  some  of  the  State  aid 
received. They can finance this payback obligation from the revenues they generate from the 
sale of electricity. This ensures that the capacity is available, and encourages power plants to 
use this capacity to offer their electricity on the market when there is scarcity. 

Commission continued to ensure that six further capacity mechanisms173 in Belgium, France, 
Germany,  Greece,  Italy  and  Poland  -  which  concern  more  than  half  of  EU  population  -  are 
well-designed  and  meet  the  strict  criteria  under  EU  State  aid  rules,  in  particular  the 
Commission's 2014 Guidelines on State Aid for Environmental Protection and Energy.174 

Sustainability, Competitiveness and State aid 

Promotion of renewable energy and energy efficiency increases the sustainability of the EU 
energy sector and contributes to environmental protection. In 2017 the Commission adopted 
22 decisions on new support schemes to renewable energy producers. Currently almost every 
Member State has an approved renewable energy support scheme. That ensures not only that 
Europe  becomes  greener,  but  also  provides  certainty  for  investors,  who  receive  aid  under  a 
clear, transparent and equitable set of rules.  

A  recently  approved  State  aid  scheme  provides  support  to  landlords  in  Germany175  who  are 
willing  to  install  solar  panels  on  the  roof  of  the  rented  buildings  and  sell  this  electricity  to 
their tenants. The scheme is a new feature of the already approved EEG 2017176. It will allow 
new investments in a segment of the solar market that is currently under developed, and will 
tap on the potential of rented buildings for the production of renewable electricity.  

Ensuring that technology providers compete on equal grounds 

In  2017  the  Commission  authorised  restructuring  aid  in  form  of  a  capital  injection  to  the 
nuclear  technology  provider  Areva177(Oreno)  in  exchange  for  commitments  aimed  at 
minimising competition distortions in the markets of nuclear fuel. For instance, Areva is not 
allowed  to  increase  its  production  capacity  of  enriched  nuclear  fuel  and  acquire  companies 
during the time of its restructuring.  

Merger control 

In  the  field  of  merger  control,  as  in  the  previous  years,  a  number  of  companies  invested  in 

173 See IP/18/682 of 7 February 2018 available at http://europa.eu/rapid/press-release_IP-18-682_en.htm.  
174 See IP/14/400 of 9 April 2014 available at http://europa.eu/rapid/press-release_IP-14-400_en.htm.  
175 Case SA.48327 Support for PV installations on appartment buildings (Mieterstrom), Commission decision of 
20 November 2017 available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48327. 
176  Case SA. 45461  EEG 2017 Reform of the Renewable Energy Law, Commission decision of 20 December 
2016    available  at  http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_45461.  For 
further information see IP/16/4471 of 20 December 2016 available at http://europa.eu/rapid/press-release_IP-16-
4471_en.htm. 
177   Case  SA.  44727  Restructuring  aid  to  Areva,  Commission  decision  of  10  January  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_44727.  For  further  information 
see IP/17/36 of 10 January 2017 available at http://europa.eu/rapid/press-release_IP-17-36_en.htm. 

51 

 
                                                            
development and production from renewable sources,178 in particular in wind parks.179 

In 2017 the Commission also analysed two acquisitions in the industry for the production of 
wind  turbines:  the  acquisition  of  Gamesa  by  Siemens180  and  of  LM  Wind  by  GE181.  In  both 
cases,  the  analysis  carried  out  by  the  Commission  revealed  that  competition  in  the  industry 
will not be negatively affected and that developers and operators of wind parks will continue 
to  have  sufficient  choice  of  wind  turbines  manufacturers  and  that  prices  will  remain 
competitive. 

Following  extensive  review,  the  proposed  acquisition  of  the  Greek  gas  transmission  system 
operator  DESFA  by  the  State  Oil  Company  of  Azerbaijan  Republic  (SOCAR)182  has  been 
abandoned  by  the  parties.  The  new  tender  issued  by  the  Greek  authorities  included  an 
unbundling requirement, addressing the concerns raised by the Commission when opening the 
in depth investigation. 

In 2017, the Commission analysed and authorised the acquisition of Areva's nuclear reactors 
business  by  EDF.183  The  acquisition  was  part  of  the  restructuring  plan  to  restore  Areva's 
competitiveness.  

The  Commission  also  analysed  the  acquisition  of  Baker  Hughes  by  GE184  in  the  oilfield 
services industry and concluded that it will not negatively affect competition in that industry. 

2. INFORMATION AND COMMUNICATION TECHNOLOGIES AND MEDIA  

Overview of key challenges in the sector 

In 2017, competition policy and enforcement continued to contribute to the implementation of 
the  Digital  Single  Market  Strategy185,  one  of  the  priorities  of  the  Commission.  In  particular 

of 

28 

Case 

August 

decision 

decision 

Commission 

Commission 

178   Case  M.8508  Engie/Cdc/Solairecorsica  1-2-3,  Commission  decision  of  4  July  2017  available  at 
M.8413 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8508; 
Engie/Omnes  Capital/Predica/Engie  Pv  Besse/Engie  Pv  Sanguinet,  Commission  decision  of  10  April  2017 
available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8413. 
179   Case  M.8635  Sojitz/Kepco/Luricawne/Fixarra/Evalair/Plum,  Commission  decision  of  25  October  2017 
available  at  http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8635;  Case  M.8608 
Engie/La  Caisse  Des  Depots  Et  Consignations/Ceolfalram76,  Commission  decision  of  18  October  2016 
available  at  http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8608;  Case  M.8595 
GE/Macquarie/Mett, 
at 
M.8592 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8595; 
at 
Centerbridge/Egph/JV, 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8592; 
M.8346 
Macquarie/Ussl/Osw  Assets  Of  UK  Gib,  Commission  decision  of  22  May  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8346. 
180   Case  M.8134  Siemens/Gamesa,  Commission  decision  of  13  March  2017 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8134. 
181   Case  M.8283  GE/LM  Wind  Power  Holding,  Commission  decision  of  20  March  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8283. 
182   Case M.7095 SOCAR/DESFA, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7095. 
183  Case  M.7764  EDF/Areva  Reactor  Business,  Commission  decision  of  29  May  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7764. For further information see 
IP/17/1466 of 29 May 2017 available at http://europa.eu/rapid/press-release_IP-17-1466_en.htm. 
184  Case  M.8297  GE/Baker  Hughes,  Commission  decision  of  31  May  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8297. 
185 Communication of 6 May 2015 from the Commission to the European Parliament, the Council, the European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions,  A  Digital  Single  Market  Strategy  for 

September 

available 

available 

available 

2017 

2017 

of 

at 

4 

52 

 
 
                                                            
the  Commission  completed  its  sector  inquiry  into  e-commerce  and  carried  out  a  number  of 
investigations in the information, communication and media sectors. 

Contribution of EU competition policy to tackling the challenges 

Completing the e-commerce sector inquiry 

On 10 May, the Commission adopted the final report186 on the e-commerce sector inquiry.187 
The  objective  of  the  sector  inquiry  was  to  gather  market  information  in  order  to  better 
understand the nature, prevalence and effects of barriers to online trade erected by companies, 
and to assess them in light of EU Competition rules.  

The  report  confirms  that  the  growth  of  e-commerce  over  the  last  decade  and,  in  particular, 
increased  online  price  transparency  and  price  competition,  had  a  significant  impact  on 
companies’ distribution strategies and consumer behaviour.  

The final results of the e-commerce sector inquiry highlight the following major market trends: 

 

 

 

a large proportion of manufacturers decided over the last ten years to sell their products directly to consumer 
through their own online retail shops, thereby competing increasingly with their distributors; 

increased  use  of  selective  distribution  systems,  where  the  products  can  only  be  sold  by  pre-selected 
authorised sellers, allows manufacturers to better control their distribution networks, in particular in terms of 
the quality of distribution but also price;  

increased  use  of  contractual  restrictions  to  better  control  product  distribution  -  depending  on  the  business 
model  and  strategy,  such  restrictions  may  take  various  forms,  such  as  pricing  restrictions  (resale  price 
maintenance), marketplace (platform) bans, restrictions on the use of price comparison tools and exclusion 
of pure online players from distribution networks. 

Some  of  these  practices  may  be  justified,  for  example  in  order  to  improve  the  quality  of 
product distribution, others may unduly prevent consumers from benefiting of greater product 
choices and lower prices in e-commerce.  

With respect to digital content, the results of the sector inquiry confirm that the availability of 
licences  from  content  copyright  holders  is  essential  for  digital  content  providers  and  a  key 
factor  that  determines  the  level  of  competition  in  the  market.  The  report  points  to  certain 
licensing  practices  which  may  make  it  more  difficult  for  new  online  business  models  and 
services  to  emerge.  Any  assessment  of  such  licensing  practices  under  the  EU  competition 
rules  has  however  to  consider  the  characteristics  of  the  content  industry.  One  of  the  key 
findings of the sector inquiry is that almost 60% of digital content providers who participated 
in  the  inquiry  have  contractually  agreed  with  right  holders  to  "geo-block".  Geo-blocking 
prevents  consumers  from  purchasing  consumer  goods  and  accessing  digital  content  online 
from other EU Member States.  

final 

COM(2015)192 

Europe, 
at 
content/EN/TXT/?qid=1447773803386&uri=CELEX%3A52015DC0192.  
186 Report of 10 May 2017 from the Commission to the Council and the European Parliament on the Final report 
the  E-commerce  Sector  Inquiry  (SWD(2017)  154  final),  COM(2017)  229  final  available  at 
on 
http://ec.europa.eu/competition/antitrust/sector_inquiry_final_report_en.pdf. 
187 
inquiry 
http://ec.europa.eu/competition/antitrust/sector_inquiries_e_commerce.html. 

http://eur-lex.europa.eu/legal-

information 

available 

available 

website 

further 

sector 

For 

see 

at 

53 

 
 
 
                                                                                                                                                                                          
In light of the results of the e-commerce sector inquiry, the Commission is:  

 

 

targeting  enforcement  of  the  EU  competition  rules  at  the  most  widespread  business  practices  that  have 
emerged  or  evolved  as a  result of  the  growth of  e-commerce  and  that  may negatively impact  competition 
and cross-border trade and hence the functioning of a Digital Single Market; and  

broadening the dialogue with national competition authorities within the European competition network on 
e-commerce-related  enforcement  to  contribute  to  a  consistent  application  of  the  EU  competition  rules  as 
regards e-commerce-related business practices. 

Furthermore, the sector inquiry has prompted companies to review their commercial practices 
on  their  own  initiative.  This  can  help  consumers  to  purchase  products  more  easily  cross-
border and benefit from lower prices and a wider choice of retailers.  

Addressing restrictions to cross-border and online sale of goods  

On 2 February, the Commission has launched three separate investigations to assess if certain 
online sales practices mandated by vertical agreement among companies prevent, in breach of 
EU  antitrust  rules,  consumers  from  enjoying  cross-border  choice  and  being  able  to  buy 
consumer electronics188, video games189 and hotel accommodation190 at competitive prices. 

With respect to consumer electronics, the Commission is investigating whether Asus, Denon 
&  Marantz,  Philips  and  Pioneer191  have  breached  EU  competition  rules  by  restricting  the 
ability  of  online  retailers  to  set  their  own  prices  for  widely  used  consumer  electronics 
products  such  as  household  appliances,  notebooks  and  hi-fi  products.  The  effect  of  these 
suspected  price  restrictions  may  be  aggravated  due  to  the  use  by  many  online  retailers  of 
pricing software that automatically adapts retail prices to those of leading competitors. As a 
result, the alleged behaviour may have had a broader impact on overall online prices for the 
respective consumer electronics products. 

Concerning  video  games,  the  Commission  is  investigating  bilateral  agreements  concluded 
between  Valve  Corporation,  owner  of  the  Steam  game  distribution  platform,  and  five  PC 
video game publishers, Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax.192 
The investigation concerns geo-blocking practices, where companies prevent consumers from 
purchasing digital content, in this case PC video games, because of the consumer's location or 
country of residence. After the purchase of certain PC video games users need to confirm that 
their copy of the game is not pirated to be able to play it. This is done with an "activation key" 
on  Valve's  game  distribution  platform,  Steam.  This  system  is  applied  for  a  wide  range  of 
games, including sports, simulation and action games. The investigation focuses on whether 
the agreements in question require or have required the use of activation keys for the purpose 

further 

information 

188 Cases AT.40465 Asus, AT.40469 Denon & Marantz, AT.40181 Philips and AT.40182 Pioneer. For further 
information  see  IP/17/201  of  2  February  2017  available  at  http://europa.eu/rapid/press-release_IP-17-
201_en.htm. 
189 Cases AT.40413 Focus Home, AT.40414 Koch Media, AT.40420 ZeniMax, AT.40422  Bandai Namco, and 
AT.40424  Capcom.  For 
IP/17/201  of  2  February  2017  available  at 
see 
http://europa.eu/rapid/press-release_IP-17-201_en.htm. 
190  Case  AT.40308  Holiday  pricing.  For  further  information  see  IP/17/201  of  2  February  2017  available  at 
http://europa.eu/rapid/press-release_IP-17-201_en.htm. 
191 Cases AT.40465 Asus, AT.40469 Denon & Marantz, AT.40181 Philips and AT.40182 Pioneer. For further 
information  see  IP/17/201  of  2  February  2017  available  at  http://europa.eu/rapid/press-release_IP-17-
201_en.htm. 
192  Cases  AT.40413  Focus  Home,  AT.40414  Koch  Media,  AT.40420  ZeniMax,  AT.40422  Bandai  Namco  and 
AT.40424  Capcom.  For 
IP/17/201  of  2  February  2017  available  at 
see 
http://europa.eu/rapid/press-release_IP-17-201_en.htm. 

information 

further 

54 

 
                                                            
of geo-blocking. In particular, an "activation key" can grant access to a purchased game only 
to consumers in a particular EU Member State (for example the Czech Republic or Poland). 
This may amount to a breach of EU competition rules by reducing cross-border competition 
as  a  result  of  restricting  so-called  "parallel  trade"  within  the  Single  Market  and  preventing 
consumers from buying cheaper games that may be available in other Member States. 

On 6 June,  the Commission  has  opened  a formal antitrust investigation into the distribution 
agreements  and  practices  of  clothing  manufacturer  and  retailer  Guess193.  The  Commission 
investigates information indicating that Guess' distribution agreements may restrict authorised 
retailers  from  selling  online  to  consumers  or  to  retailers  in  other  Member  States.  They  may 
also restrict wholesalers from selling to retailers in other Member States. 

On 14 June, the Commission opened three formal antitrust investigations against Nike, Sanrio 
and  Universal  Studios194  respectively  to  investigate  potential  barriers  to  online  and  offline 
cross-border  trade  stemming  from  licensing  practices  implemented  by  the  companies 
concerned. Nike, Sanrio and Universal Studios license the rights for some of the world's most 
well-known  brands.  Sports  apparel  manufacturer  Nike  is  responsible  for  licensing  of  rights 
for, in particular, Fútbol Club Barcelona's merchandise. Sanrio is a licensor of rights for, in 
particular, Hello Kitty. Universal Studios is a licensor of rights for, in particular, the Minions 
and  Despicable  Me.  The  investigated  merchandising  products  are  of  a  varied  nature  (mugs, 
bags, clothing, shoes, toys, etc.), but all carry one or more logos or images from a licensor.  

The three investigations aim to ascertain whether certain licensing and distribution practices 
of  these  companies  illegally  restrict  traders  from  selling  licensed  merchandise  cross-border 
and online within the EEA.  

Defending innovation in the e-books market 

On  4  May,  the  Commission  adopted  a  decision  rendering  legally  binding  a  set  of 
commitments  offered  by  Amazon195  to  increase  competition  in  e-books  distribution.  In 
essence, the commitments ban Amazon from enforcing or putting in place any non-price and 
price-parity clauses in the whole of the EEA for a period of 5 years.  

The Amazon Case 

This e-book investigation had been opened on 11 June 2015 to examine whether Amazon may have abused its 
dominant  position  in  the  distribution  of  English  and  German  language  e-books  to  consumers  in  the  EEA  by 
imposing  a  number  of  parity  provisions  (so-called  Most  Favoured  Nation  or  MFN  clauses).  These  provisions 
required e-books publishers to notify Amazon of more favourable or alternative non-price and price terms and 
conditions they offer elsewhere and/or to make available to Amazon those more favourable or alternative terms 
and conditions.  

During  its  investigation,  the  Commission  reached  the  preliminary  conclusion  that  these  MFNs  were  reducing 
publishers'  incentives  to  support  and  invest  in  differentiated  offers  with  Amazon's  competitors.  They  also 
reduced Amazon's competitors' ability and incentives to develop and differentiate their offerings, thus deterring 
their entry and/or expansion. The binding commitments offered by Amazon and made legally binding apply for 
five years to all e-book distribution agreements in the EEA and cover the following points: 

information  see  IP/17/1549  of  6  June  2017  available  at 

193  Case  AT.40428  Guess.  For  further 
http://europa.eu/rapid/press-release_IP-17-1549_en.htm. 
194  Case  AT.40432  Licensed  merchandise  –  Sanrio,  Case  AT.40433  Licensed  merchandise  Universal  Studios, 
and  Case  AT.40436  Licensed  merchandise  –  Nike.  For  further  information  see  IP/17/1646  of  14  June  2017, 
http://europa.eu/rapid/press-release_IP-17-1646_en.htm.   
195 Case AT.40153 MFNs and related matters. For further information see IP/17/1223 of 4 May 2017 available 
at http://europa.eu/rapid/press-release_IP-17-1223_en.htm.   

55 

 
                                                            
  Amazon will not enforce clauses requiring publishers to offer Amazon (or inform it about) similar terms and 

conditions as those offered to Amazon's competitors; 

  Publishers whose e-book contracts with Amazon contain a clause linking discount possibilities for e-books 
to  the  retail price  of  a  given e-book  on  a  competing  platform  (so-called Discount  Pool Provision)  will  be 
offered the possibility to terminate such contracts; and 

  Amazon  will  not  include  in  any  new  e-book  agreement  any  of  the  MFN  clauses  mentioned,  including 

Discount Pool Provisions. 196 

A Monitoring Trustee is in charge of monitoring the application of the commitments throughout their duration. 
Third parties who have queries in relation to the Commitments may contact the Trustee as provided for in the 
Commission's Decision.197 

Ensuring pro-competitive telecoms framework  

One  of  the  key  actions  under  the  second  pillar  of  the  Digital  Single  Market  strategy  is  the 
review  of  the  telecoms  regulatory  framework.  On  14  September  2016  the  Commission 
adopted  three  legislative  proposals:  a  proposal  for  a  Directive  establishing  the  European 
Electronic  Communications  Code198,  which  recasts  the  existing  directives,  a  proposal  for  a 
Regulation  establishing  the  Body  of  European  Regulators  for  Electronic  Communications 
(BEREC)199, which enhances the role of BEREC and of national regulatory authorities and a 
proposal for a Regulation on the promotion of Internet connectivity in local communities and 
public  spaces  (WiFi4EU)200.  They  are  accompanied  by  two  Communications:  Connectivity 
for  a  European  Gigabit  society:  Laying  the  foundations  for  a  competitive  Digital  Single 
Market201, which establishes a set of connectivity objectives for 2025, and 5G for Europe: An 
Action  Plan202,  which  sets  out  targeted  actions  with  the  aim  of  fostering  5G  deployment  in 
Europe.  

The  Commission  proposals  introduce  a  new  connectivity  (i.e.  investment)  objective  as  an 
additional  policy  objective,  alongside  the  other  objectives  of  the  framework,  namely 
safeguarding  competition,  internal  market  and  consumer  protection.  Indeed,  stimulating 
competition  not  only  drives  investments  but  also  results  in  lower  prices,  better  quality  and 

see 

for 

For 

and 

590 

final 

Case 

Code, 

further 

related 

matters. 

available 

Electronic 

information 

COM(2016) 

AT.40153  MFNs 

196  For  further  information  see  IP/17/1223  of  4  May  2017,  http://europa.eu/rapid/press-release_IP-17-
1223_en.htm. 
197 
http://ec.europa.eu/competition/antitrust/cases/dec_docs/40153/40153_4447_3.pdf.  
198 Proposal for a Directive of the European Parliament and of the Council establishing the European Electronic 
at 
Communications 
https://ec.europa.eu/transparency/regdoc/rep/1/2016/EN/1-2016-590-EN-F1-1.PDF.  
199 Proposal for a Regulation of the European Parliament and of the Council establishing the Body of European 
Regulators 
http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52016PC0591&from=EN.  
200 Proposal for a Regulation amending Regulations No 1316/2013 and No 283/2014 as regards the promotion of 
Internet 
http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52016PC0589&from=EN.  
201 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions, Connectivity for a Competitive Digital Single Market - 
Towards a European Gigabit Society, COM(2016)587 and Staff Working Document SWD(2016)300 available 
at https://ec.europa.eu/digital-single-market/en/news/communication-connectivity-competitive-digital-single-
market-towards-european-gigabit-society.   
202 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions, 5G for Europe: An Action Plan, COM(2016)588 and Staff 
Working Document SWD(2016) 306 available at https://ec.europa.eu/digital-single-
market/en/news/communication-5g-europe-action-plan-and-accompanying-staff-working-document .    

Communications 

communities 

connectivity 

local 

in 

56 

 
                                                            
  
more choice. At the same time, investment is not an end in itself, as investment as such does 
not  directly  benefit  consumers.  It  is  the  impact  of  investment  on  parameters  of  competition 
such as lower prices, better quality of service or greater adoption that translates into consumer 
benefits. 

Operators with Significant Market Power (SMP) will continue to be obliged to provide access 
to  their networks to  other operators, where this is necessary  for effective  retail competition. 
De-regulation is possible only when competition is effective in a given telecoms market. The 
proposal  contains  new  elements  which  aim  at  stimulating  investments,  while  safeguarding 
effective  competition.  For  example  access  to  civil  infrastructure  is  incentivized  and  a 
framework  rewarding  co-investment  in  very  high  capacity  networks  is  set  up,  encouraging 
fibre deployments from both incumbents and access seekers.    

Communication  services  provided  by  Over-the-Top  providers  (OTTs)  such  as  Skype  and 
WhatsApp    would  fall  within  the  proposed  scope  of  the  new  Electronic  Communications 
Code  under  the  new  heading  of  interpersonal  communications  service.  OTTs  are  typically 
present at different levels of the value chain, as telcos own network infrastructure and OTTs 
do  not.  Regarding  spectrum,  the  Commission  proposals  contain  measures  to  enhance 
investment certainty (a minimum licence duration of 25 years, timely availability of spectrum 
in the market and enhanced co-ordination of spectrum authorisation) and promote competition 
(such  as  a  possibility  to  apply  spectrum  caps,  spectrum  reservation  for  new  entrants  or 
wholesale access obligations). The proposals also reinforce the role of national regulators and 
of BEREC, to ensure the consistent and predictable application of the telecoms rules. 

The  legislative  proposals  are  in  their  final  stages  of  negotiations  between  the  European 
Parliament  and  the  Council.  Political  agreement  is  envisaged  in  2018,  during  the  Bulgarian 
Presidency203.  

The Commission Guidelines on Significant Market Power (SMP Guidelines)204 are also part 
of the telecoms framework. They were adopted in 2002 on the basis of Article 15(2) of the 
Framework Directive to provide guidance to national regulatory authorities for the analysis of 
markets and effective competition under the regulatory framework. After 15 years, there is a 
need to review the SMP Guidelines to bring more clarity, in particular, on the criteria for the 
finding  of  joint  dominance,  in  accordance  with  the  European  Courts'  jurisprudence.  The 
Commission  is  working  towards  the adoption  of  new  SMP  Guidelines  before  the  entry  into 
force of the European Electronic Communications Code.205   

Antitrust enforcement in the telecoms sector 

In 2017 the Commission continued its investigation into a mobile network sharing agreement 
between the two largest operators in the Czech Republic, O2 CZ /CETIN and T-Mobile CZ.206 
The  Commission  investigates  in  particular  whether  the  cooperation  between  O2  CZ/CETIN 

203  For  further  information  see  http://www.consilium.europa.eu/en/press/press-releases/2017/10/11/new-eu-
telecoms-rules/.  
204 European Commission guidelines on market analysis and the assessment of significant market power under 
the  Community  regulatory  framework  for  electronic  communications  networks  and  services,  OJ  C  165, 
11.7.2002, p.6. 
205  Additional  information  on  the  public  consultation  on  the  review  of  SMP  Guidelines  is  available  at 
https://ec.europa.eu/digital-single-market/en/news/commission-reports-public-consultation-smp-guidelines.  The 
text  of  the  new  SMP  Guidelines,  adopted  on  26  April  2018,  is  available  at  https://ec.europa.eu/digital-single-
market/en/news/communication-smp-guidelines. 
206 AT. 40305 - Network sharing - Czech Republic . For further information see IP/16/3539 of 25 October 2016 
available at http://europa.eu/rapid/press-release_IP-16-3539_en.htm.  

57 

 
                                                            
and  T-Mobile  CZ  risks  slowing  down  quality  improvements  in  existing  infrastructure,  and 
delaying  or  hindering  the  deployment  of  new  technologies,  such  as  4G/LTE  and  future 
technologies, and new services based on them, in particular in densely populated areas.  

In  the  area  of  baseband  chipsets,  which  process  the  core  communication  functions  in 
smartphones,  tablets  and  other  mobile  broadband  devices,  the  Commission  continued  the 
investigations  in  the  Qualcomm  cases207  as  regards  Qualcomm's  payments  to  a  major 
customer  conditional  on  exclusivity  and  potential  "predatory  pricing"  by  charging  prices 
below costs with a view to forcing Qualcomm's competition out of the market.  

Antitrust enforcement in technology markets 

The  Commission's  actions  in  technology  markets  aim  to  keep  markets  competitive,  and 
maximise incentives to innovate.  

On  27  June,  the  Commission  fined  Google  EUR  2.42  billion  for  breaching  EU  antitrust 
rules.208  The  Commission  found  that  Google  has  abused  its  market  dominance  as  a  search 
engine  by  giving  an  illegal  advantage  to  another  Google  product,  its  comparison  shopping 
service. 

The Google case 

In its decision, the Commission concluded that Google is dominant in general internet search markets throughout 
the EEA. The Commission based its finding on the fact that Google's search engine has held very high market 
shares  in  all  EEA  countries,  exceeding  90%  in  most,  and  on  the  presence  of  high  barriers  to  entry  in  these 
markets,  in  part  because  of  network  effects:  the  more  consumers  use  a  search  engine,  the  more  attractive  it 
becomes to advertisers. 

The  Commission  found  that  Google  abused  its  market  dominance  by  giving  its  own  comparison  shopping 
service an illegal advantage, notably through the more favourable positioning and display, in its general search 
results pages, of its own comparison shopping service compared to competing comparison shopping services. As 
such,  Google  leveraged  its  dominant  position  in  the  market  for  general  search  into  the  adjacent  market  for 
comparison  shopping.  Google's  service  is  positioned  prominently  and  not  subject  to  dedicated  algorithms  that 
make  competing  comparison  shopping  services  prone  to  having  their  ranking  reduced,  thus  affecting  their 
visibility  in  Google's  general  search  pages.  Furthermore,  Google’s  own  comparison  shopping  service  is 
displayed with enhanced features (e.g. product pictures) at or near the top of the first general search page, while 
such features are not available to its rivals.  

The Google decision is based on a detailed effects-based analysis:  

First, to show that Google's conduct diverts traffic from competing comparison shopping services, the decision 
analyses the influence of visibility of generic search results on user behaviour and the actual evolution of traffic 
to  competing  comparison  shopping  services  and  to  Google's  own  comparison  shopping  service  (short-term 
impact on click-through rates, visibility data and long-term evolution of traffic).  

207  AT.  39711  Qualcomm  (predation)  and  AT.40220  Qualcomm  (exclusivity  payments).  Statements  of 
Objections  were  sent  to  the  company  on  8  December  2015.  For  further  information  see  IP/16/6271  of  8 
December  2015,  available  at  http://europa.eu/rapid/press-release_IP-15-6271_en.htm.  On  24  January  2018,  the 
Commission  adopted  a  prohibition  decision  in  case  AT.40220  Qualcomm  (exclusivity  payments)  and  fined 
Qualcomm  EUR  997  million  for  abusing  its  market  dominance  in  LTE  baseband  chipsets.  For  further 
information  see  IP/18/421  of  24  January  2018,  available  at  http://europa.eu/rapid/press-release_IP-18-
421_en.htm. 
208  Case  AT.39740  Google  Search  (Shopping),  Commission  decision  of  27  June  2017  available  at 
http://ec.europa.eu/competition/antitrust/cases/dec_docs/39740/39740_14996_3.pdf.  For  further  information  see 
IP/17/1784  of  27  June  2017  available  at  http://europa.eu/rapid/press-release_IP-17-1784_en.htm  and 
MEMO/17/1785 of 27 June 2017 available at http://europa.eu/rapid/press-release_MEMO-17-1785_en.htm. 

58 

 
 
                                                            
Second,  the  decision  shows  that  generic  search  traffic  from  Google's  general search  results  pages  represents  a 
large proportion of competing comparison shopping services' traffic and cannot be replaced effectively through 
alternative sources of traffic, such as AdWords, mobile applications and direct traffic.  

Third,  the  decision  shows  that  Google's  conduct  had  a  number  of  potential  anti-competitive  effects:  (i) 
foreclosure  of  competing  comparison  shopping  services,  which  may  lead  to  higher  fees  for  merchants,  higher 
prices for consumers, and less innovation; (ii) likelihood to reduce the ability of consumers to access the most 
relevant comparison shopping services.  

Google's  conduct  would  also have  potential  anti-competitive  effects  even  if  comparison  shopping  services  did 
not  constitute  a  distinct  relevant  product  market,  but  rather  a  segment  of  a  possible  broader  relevant  product 
market comprising both comparison shopping services and merchant platforms. 

The Commission concluded that Google's behaviour stifled competition on the merits in comparison shopping 
markets and ordered Google to bring the abuse to an end within 90 days of the decision and to refrain from any 
measure that has the same or an equivalent object or effect. In particular, the Decision orders Google to comply 
with the simple principle of giving equal treatment to rival comparison shopping services and its own service, 
meaning  that  Google  has  to  apply  the  same  processes  and  methods  to  position  and  display  rival  comparison 
shopping services in Google's search results pages as it gives to its own comparison shopping service. 

It is Google's sole responsibility to ensure compliance, and the Commission is monitoring Google's compliance 
closely. 

Antitrust enforcement in sports market 

On 8 December, the Commission decided that the International Skating Union's (ISU) rules 
imposing severe penalties on athletes participating in speed skating competitions that were not 
authorised by the ISU were in breach of EU antitrust law.209 

The ISU case 

In October 2015 following a complaint by two Dutch professional speed skaters the Commission opened formal 
proceedings into ISU's rules under which athletes would face severe penalties for participation in unauthorised 
speed skating events.  210 The ISU, made up of national ice-skating associations, is the sole body recognised by 
the  International  Olympic  Committee  to  administer  the  sports  of  figure  skating  and  speed  skating  on  ice.  The 
ISU  and  its  members  organise  and  generate  revenues  from  speed  skating  competitions,  including  from  major 
international competitions such as the Winter Olympic Games and the World and European championships. 

The  Commission's  investigation  found  that  under  the  ISU  eligibility  rules,  in  place  since  1998,  speed  skaters 
participating in competitions that were not approved by the ISU faced severe penalties up to a lifetime ban from 
all major international speed skating events. The ISU could impose these penalties at its own discretion, even if 
the independent competitions posed no risk to legitimate sports objectives, such as the protection of the integrity 
and  proper  conduct  of  sport,  or  the  health  and  safety  of  athletes.  By  imposing  such  restrictions,  the  ISU 
eligibility  rules  restricted  competition  and  enabled  the  ISU  to  pursue  its  own  commercial  interests  to  the 
detriment of athletes and organisers of competing events. In particular, the Commission considered that the ISU 
eligibility  rules  restricted  the  commercial  freedom  of  athletes  who  were  prevented  from  participating  in 
independent  skating  events.  As  a  result  of  the  ISU  eligibility  rules,  athletes  were  not  allowed  to  offer  their 
services to organisers of competing skating events and could be deprived of additional sources of income during 
their  relatively  short  speed  skating  careers.  The  ISU  eligibility  rules  made  it  more  difficult  for  independent 
organisers from putting together their own speed skating competitions because they were unable to attract top 
athletes. This has limited the development of alternative and innovative speed skating competitions. 

209 Case AT.40208 International Skating Union’s Eligibility rules. For further information see IP/17/5184 of 8 
December 2017 available at http://europa.eu/rapid/press-release_IP-17-5184_en.htm. 
210 
Eligibility 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_40208.   

International 

AT.40208 

available 

Union’s 

Skating 

rules 

Case 

at 

59 

 
 
 
                                                            
The ISU introduced certain changes to its eligibility rules in June 2016. The Commission, however, found that 
the 2016 rules still did not allow for equality of opportunity for third party organisers and that the penalties set 
by the eligibility rules remained disproportionately punitive. Therefore, the Commission concluded that the ISU 

 eligibility rules were anticompetitive and had breached Article 101 TFEU since 1998. 

Merger review in ICT and media  

In  the  telecommunications  sector,  the  Commission  cleared  in  July  the  creation  of  a  joint 
venture  that  will  provide  mobile  payment  services  to  businesses  and  consumers  in 
Lithuania.211  The  parents  of  the  JV,  Bitė,  Tele2  and  Telia  are  all  retail  mobile 
telecommunications services providers, while Telia also provides colocation services, hosting 
other companies' servers in its data centers. The Commission approved the transaction since it 
raised  no  competition  concerns  on  the  nascent  market  for  mobile  payment  services  in 
Lithuania and there was no risk that the joint venture's parents would shut out rivals, which 
have alternative means to securely store information and to authenticate users. 

In the IT sector, the Commission conditionally approved in April the acquisition of smart card 
maker Morpho by Advent International212, a private equity firm already controlling smart card 
and  digital  security  provider  Oberthur.  Smart  cards  are  widely  used  in  the  banking  sector 
(payment cards), in the telecommunications sector (SIM cards) and in the identity document 
sector  (e-passports,  e-ID  cards,  e-health  cards).  The  Commission  was  concerned  that  the 
proposed transaction would have significantly reduced competition for payment smart cards 
in  France,  a  particularly  difficult  market  for  suppliers  to  enter.  To  address  these  concerns, 
Morpho  offered  to  divest  its  French  subsidiary  CPS  and  ultimately  the Commission  cleared 
the transaction. 

In May, the Commission cleared the acquisition of networking products supplier Brocade by 
semiconductor  manufacturer  Broadcom,  subject  to  conditions.213  The  Commission  had 
concerns that confidential information from competitors could be used by the merged entity to 
favour  its  own  products  in  markets  for  Fibre  Channel  Storage  Area  Network  products.  In 
addition, there was a risk that the merged entity could degrade the interoperability between its 
own Fibre Channel switches and the Host Bus Adaptor (HBA) cards of competing vendors to 
favour its own HBA cards. The transaction was cleared subject to remedies which ensure that 
Broadcom will cooperate closely and in a timely manner with competing HBA cards suppliers 
to  achieve  the  same  level  of  interoperability  as  that  of  its  own  HBA  cards  and  that  it  will 
protect third party confidential information. 

In January 2018, the Commission cleared, subject to conditions, the proposed acquisition of 
NXP by Qualcomm, two of the leading players in the semiconductor industry.214 In June 2017, 
the  Commission  had  opened  an  in-depth  investigation  based  on  concerns  that  the  merger 
could  lead  to  higher  prices,  less  choice  and  reduced  innovation  in  chipset  products  used  in 
mobile  devices,  such  as  smartphones.  The  Commission  also  had  concerns  that  the 
combination of the two companies' IP Portfolio related to Near Field Communication (NFC) 
chips would enable the merged entity to disproportionately improve its bargaining power and 

211  Case  M.8251  Bitė/Tele2/Telia  Lietuva/JV,  Commission  decision  of  19  July  2017,  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8251.  
212  Case  M.8258  Advent  International/Morpho,  Commission  decision  of  19  April  2017,  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8258. 
213  Case  M.8314  Broadcom/Brocade,  Commission  decision  of  12  May  2017, 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8314. 
214  Case  M.8306  Qualcomm/NXP  Semiconductors,  Commission  decision  of  18  January  2018,  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8306.  

available 

at 

60 

 
                                                            
allow it to charge significantly higher royalties for the NFC patents  than the Parties charge 
currently  for  the  same  patents.  Ultimately,  the  Commission  considered  that  the  IP 
commitments,  the  product-related  commitments  and  the  MIFARE215  commitments  proposed 
by  Qualcomm  (interoperability  between  third  party  products  and  the  parties'  baseband 
chipsets and NFC products, third party access to NXP's MIFARE technology and carve-out 
and  licensing  and  non-assert  obligations  in  relation  to  the  NXP's  NFC  portfolio)  fully 
addressed its concerns and cleared the transaction.   

In  the  media  sector,  in  April  the  Commission  cleared  21st  Century  Fox's  (Fox)  proposed 
acquisition of Sky216, the leading pay-tv operator in Austria, Germany, Ireland, Italy and the 
United  Kingdom.  Fox  is  a  diversified  global  media  company  and  one  of  the  six  major 
Hollywood film studios (20th Century Fox), as well as a TV channel operator (Fox, National 
Geographic).  The  Commission  found  that  the  transaction  would  lead  to  only  a  limited 
increase in Sky's existing share of the markets for the acquisition of TV content as well as in 
the market for the wholesale supply of TV channels in the relevant Member States. 

The Commission approved the acquisition of Telecom Italia by Vivendi, subject to conditions, 
in  May.217  Telecom  Italia  provides  voice  and  data  services  through  mobile  and  fixed 
technologies, digital content services and IT services to enterprises in Italy. Vivendi is active 
in the music, TV, cinema, video sharing and games businesses and advertising. Both Telecom 
Italia  and  Vivendi  also  hold  a  significant  share,  through  their  respective  shareholdings  in 
Persidera and Mediaset, in the market for the wholesale access to digital terrestrial networks 
for the broadcast of TV channels. The Commission was concerned that Vivendi would raise 
prices  charged  to  TV  channels  in  that  market  as  other  players  did  not  constitute  a  viable 
alternative for TV channels, making it more expensive for them to reach audiences in Italy. 
The  Commission  ultimately  cleared  the  transaction  subject  to  the  divestment  of  Telecom 
Italia's stake in Persidera. 

State aid enforcement in ICT and media 

The  achievement  of  the  European  broadband  targets218,  despite  substantial  progress, 

at 

of 

2017, 

decision 

available 

7  April 

Fox/Sky,  Commission 

Italia,  Commission  decision  of  30  May  2017,  available  at 

215 MIFARE is NXP's proprietary technology used mainly for public transit and hospitality. 
216  Case  M.8354 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8354.   
217  Case  M.8465  Vivendi/Telecom 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8465.   
218 In its Communication "Connectivity for a Competitive Digital Single Market - Towards a European Gigabit 
Society"  of  14  September  2016 
(COM/2016/587,  available  at  https://ec.europa.eu/digital-single-
market/en/news/communication-connectivity-competitive-digital-single-market-towards-european-gigabit-
society), the Commission confirmed the importance of Internet connectivity for the Digital Single Market and, 
building  on  the  Digital  Agenda  for  Europe  goals  for  2020,  set  out  a  strategy  for  a  European  Gigabit  society 
operationalised through three strategic objectives for 2025: 
- Gigabit connectivity for all main socio-economic drivers such as schools, transport hubs and main providers of 
public services as well as digitally intensive enterprises.  
- All urban areas and all major terrestrial transport paths to have uninterrupted 5G coverage.  
-  All  European  households,  rural  or  urban,  will  have  access  to  Internet  connectivity offering  a  downlink  of  at 
least 100 Mbps, upgradable to Gigabit speed.   
As indicated in the Communication, the Commission will reflect the foreseeable evolution of long-term demand 
when  applying  the  "step  change"  approach  of  the  Broadband  State  Aid  Guidelines  in  conjunction  with  the 
strategic  objectives  set  in  this  Communication,  and  will  consider  favourably  efficient  blended  financing  that 
contributes to lower the aid intensity and to reduce risks of distorting competition, as part of its assessment of 
State aid interventions. 

61 

 
                                                            
represents  a  significant  challenge,  in  particular  for  the  deployment  of  ultrafast  networks219. 
Reaching the Digital Single Market connectivity objectives for 2020 and 2025 is estimated to 
require  an  overall  investment  of  around  EUR  500  billion  over  the  coming  decade, 
representing an additional EUR 155 billion over and above a simple continuation of the trend 
of current network investment and modernisation efforts of the connectivity providers220.  

Most  of  the  financing  for  the  upgrade  and  deployment  of  next-generation  networks  in  the 
broadband sector comes from private companies. Private companies tend to invest mostly in 
urban,  highly  populated  areas  which  can  assure  rapid  return  on  investment.  As  a  result,  in 
certain  areas  -  in  particular  rural  -  public  funds  support  the  deployment  of  broadband 
networks,  within  the  broader  objectives  of  inclusion  and  economic  development.  State  aid 
control  seeks  to  ensure that  where  a  market  failure  arises  and  publicly funded  networks  are 
needed, these do not crowd out private investments.  

Pro-competitive principles for public funding to support the deployment of broadband networks 

Where Member States provide funding or have discretion in the spending of European funds, a number of pro-
competitive principles apply, based on the State aid rules: 

i)  Public  support  must  be  based  on  an  identified  need  of  investment,  based  on  appropriate  mapping  and 
market consultation, to avoid a crowding out of private initiatives (defining the market failure); 

ii) different technologies should be allowed to bid for the objective connectivity targets set;  

iii) a competitive selection process has to take place to ensure the best offer for the best price and;  

iv) to avoid a 'subsidy to monopoly', publicly funded projects have to be open to all users at fair, reasonable 
and appropriate.  

These principles are also embedded in the General Block Exemption Regulation221 (GBER) which is intended 
particularly  for  underserved  areas  and  allows  Member  States  to  deploy  broadband  networks  without  State  aid 
notification.  In  assessing  notified  measures,  Member  States  and  selected  operators  must  fulfil  a  number  of 
conditions as specified in the Broadband State Aid Guidelines222. 

All  Member  States  have  adopted  and/or  updated  their  national  and/or  regional  broadband 
strategies223.  As  proposed  in  the  Commission  Communication  of  14  September  2016224, 

at 

219  According  to  Europe’s  digital  progress  report  2017,  available  at  https://ec.europa.eu/digital-single-
market/en/news/europes-digital-progress-report-2017,  Next  Generation  Access  (NGA)  networks  coverage 
continues  to  improve.  At  the  end  of  2016,  NGA  networks  were  available  to  76  %  of  EU  homes.  Despite  a 
persistent gap with urban areas, NGA networks rollout is catching up in rural areas, covering 40% of homes in 
2016 compared with just 30% a year before.  
220 Based on the study by Analysys Mason "Costing the new potential connectivity needs" (SMART 2015/0068, 
available 
https://publications.europa.eu/en/publication-detail/-/publication/e81ae17f-9d27-4b68-8560-
7cd45dbe21d8) and the Commission's estimates.  
221 The General Block Exemption Regulation (GBER) frees categories of State aid, deemed to bring benefits to 
society, that outweigh the possible distortions of competition in the Single Market triggered by public funding 
from  the  requirement  of  prior  notification  to  the  Commission.  Consequently,  Member  States  may  implement 
measures which fulfil the condition of the GBER without prior scrutiny by the Commission. 
222 Communication from the Commission, EU Guidelines for the application of State aid rules in relation to the 
rapid  deployment  of  broadband  networks,  OJ  C  25,  26.1.2013,  p.1;  available  at  http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:025:0001:0026:EN:PDF.   
223  Even  though  a  few  Member  States  do  not  yet  have  a  single  document  that  can  be  regarded  as  a  national 
broadband  plan,  all  of  them  have  at  least  an  overall  strategic  approach  for  the  deployment  of  next  generation 
access networks that is implemented in practice.  
224  Commission  Communication  COM/2016/587  "Connectivity  for  a  Competitive  Digital  Single  Market  - 
Towards  a  European  Gigabit  Society"  of  14  September  2016,  available  at  https://ec.europa.eu/digital-single-

62 

 
                                                            
Member States have initiated a process to adapt their National Boadband Strategies to the new 
2025  connectivity  strategic  objectives  proposed  by  the  Commission.  Extensive  national  and 
regional  broadband  schemes  have  been  approved  by  the  Commission  during  2017,  in 
particular  for  Lithuania225,  Croatia226,  Austria227,  Germany228and  Poland229.  Some  Member 
States  completed  or  modified  former  broadband  schemes  with  additional  investment  in  the 
roll out of Next Generation Access networks. For instance, Austria supported the roll out of a 
passive  broadband  infrastructure  in  rural  areas  of  Lower  Austria  operated  by  an  operator 
selected  trhough  a  tender  to  provide  only  wholesale  services.  During  the  period  2009-2017, 
the Commission approved State aid for broadband amounting to EUR 38 billion. The Member 
states effectively spent 30% of this amount, often with a co-financing from European funds230 
amounting  to  roughly  EUR  3  billion.  During  the  same  period,  ber  States  adopted  85 
broadband State aid measures benefitting from the GBER.  

During the period 2009-2017, the Commission approved State aid for broadband amouting to 
EUR  38  billion.  Despite  the  approval  of  this  amount  of  State  aid  by  the  Commission,  the 
Member States only effectively spent around 30% of this amount, often with a co-financing 
from European funds231 amounting to around EUR 3 billion. During the same period, Member 
States adopted 85 broadband State aid measures benefitting from the GBER.  

In  the  media  and  broadcasting  markets  State  aid  support  measures  may  also  be  justified  to 
overcome  market  failures  and  fulfil  public  service  missions.  In  this  area,  the  Commission 
relies  on 
the  Broadcasting 
Communication233  to  ensure  that  support  is  well-designed  in  order  to  meet  the  underlying 
objectives of common interest while limiting negative effects on competition. 

the  Cinema  Communication232  and 

the  guidance  of 

4 

6 

3 

of 

of 

of 

July 

June 

2017 

2017 

April 

decision 

decision 

decision 

available 

available 

market/en/news/communication-connectivity-competitive-digital-single-market-towards-european-gigabit-
society. 
225  State  aid  case  SA.46372  -  Lithuania  -  NGA  broadband  deployment  in  rural  areas  of  Lithuania  (PRIP  2), 
Commission 
at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46372. 
226  State  aid  case  SA.41065  -  Croatia  -  National  Programme  for  broadband  aggregation  infrastructure, 
Commission 
at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_41065.  For  further  information 
see IP/17/1545 of 6 June 2017 available at http://europa.eu/rapid/press-release_IP-17-1545_en.htm. 
227 State aid case SA.46731 – Austria – Aid to fast broadband infrastructure in rural areas in Niederösterreich, 
Commission 
at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46731.  
228  State  aid  case  SA.46805  –  Germany  –  Follow  up  German  NGA/Vula  product,  Commission  decision  of  11 
August 2017 available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46805. 
For  further  information  see  IP/17/2502  of  11  August 2017  available  at  http://europa.eu/rapid/press-release_IP-
17-2502_en.htm.   
229  State  aid  case  SA.46203  –  Poland  –  Modifications  in  the  aid  scheme  the  Broadband  network  project  in 
at 
of 
Eastern 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46203.  Further 
information 
available under http://europa.eu/rapid/midday-express-21-12-2017.htm. 
230 See State aide case SA.46805 – Germany – Follow up German NGA/Vula product. For further information 
see http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46805.  
231  European  funds  mostly  used  by  Member  States  for  the  financing  of  their  broadband  programmes  are  the 
European  Regional  Development  Fund,  the  European  Agricultural  Fund  for  Rural  Development  and  to  a  less 
extent the Cohesion Fund.  
232 Communication from the Commission on State aid for films and other audio-visual works (2013/C 332/01), 
available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:332:0001:0011:EN:PDF. 
233 Communication from the Commission on the application of State aid rules to public service broadcasting, OJ 
C 257 of 27.10.2009, p.1 to 14, available at  
http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52009XC1027(01)&from=EN.  

Commission 

December 

available 

available 

decision 

Poland, 

2017 

2017 

21 

63 

 
                                                                                                                                                                                          
In  2017,  the  Commission  notably  approved  aid  schemes  designed  by  Germany234  and 
Denmark235  to  favour  the  development  and  the  promotion  of  educational  and  culturally 
valuable video games which would have not subsisted under normal market conditions.  

3. FINANCIAL SERVICES 

Overview of the key challenges in the sector 

Financial services provide the lifeblood of the European economy. Banks, payment operators, 
insurance companies, stock exchanges and trading platforms and other financial infrastructure 
providers are crucial for economic growth. Free and equal access to financial services is key 
because it empowers citizens and business alike to participate in and benefit from economic 
opportunities. This is why the Commission is committed to equip the EU with a strong and 
effective  Banking  Union  and  Capital  Markets  Union  to  which  competition  policy  provides 
decisive contributions. 

While the new institutions in charge of supervision and resolution of banks236 have assumed 
their responsibilities under the new Banking Union framework, competition policy continues 
to play an important role to ensure that financial markets remain competitive. 2017 has shown 
good  examples  of  close  cooperation  with  the  new  supervisory  and  resolution  authorities  as 
well  as  very  effective  collaboration  across  instruments.  While  State  aid  rules  ensure  that 
public money is not used to keep non-viable banks artificially alive, merger rules ensure that 
the  takeover  of  assets  or  full  institutions  as  part  of  a  recovery  scheme  do  not  result  in  less 
competition  which  would  harm  citizens  and  businesses  that  depend  on  competitive  services 
provided  by  banks.  Competition  enforcement  by  the  Commission  has  played  an  important 
role in restructuring the sector for financial services across the single market. 

The importance of well-functioning financial markets that are based on fair competition and 
enable equal access to finances is not restricted to banks. The whole economy benefits when 
businesses  can  raise  money  also  on  competitive  financial  markets  for  which  exchange 
operators create the necessary infrastructure. Because the proposed merger between Deutsche 
Börse  and  London  Stock  Exchange237  would  have  significantly  reduced  competition  by 
creating a de facto monopoly in the crucial area of clearing of fixed income instruments, and 
no  sufficient  remedies  were  offered,  it  had  to  be  prohibited  by  the  Commission  in  March 
2017. 

From  an  antitrust  perspective,  the  Commission  also  continues  to  closely  monitor  regulatory 
developments  on  EU  capital  markets  to  ensure  that  new  rules  are  implemented  in  a 
procompetitive way. The same is true for payment systems, an area that is undergoing rapid 
technological change and where competition policy plays a crucial role to ensure that new as 
well  as  existing  technology  is  applied  to  the  benefit  of  the  consumer.  The  Commission  is 
actively enforcing competition rules in this sector along with regulatory action, in particular 

234  State  aid  cases  SA.46572  –  Germany  -  Bavarian  games  support  measure,  Commission  decision  of  
4 September 2017 available at 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=3.  
235  Case  SA.45735  –  Denmark  -  Scheme  for  the  development,  production  and  promotion  of  cultural  and 
educational 
at 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=3.  
236 In particular the Single Supervisory Mechanism (SSM),and the Single Resolution Mechanism (SRM). 
237 
available 
Deutsche 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result. 

Börse/London 

Commission 

12  May 

Exchange 

available 

decision 

M.7995 

games, 

digital 

Stock 

2017 

Case 

of 

at 

64 

 
  
                                                            
the  implementation  of  the  Interchange  Fee  Regulation238  and  the  new  Payment  Services 
Directive239. Last but not least, close monitoring has been taking place in the insurance sector, 
notably retail insurance, to make sure that citizens are not disadvantaged by anticompetitive 
practices. 

As in previous years, the Commission has been very active in the financial services sector to 
promote  effective  and  undistorted  competition.  It  continued  its  role  in  State  aid  and  merger 
control as well as in antitrust enforcement to combat anticompetitive behaviour and empower 
citizens and businesses. In 2017 it has been able to show significant progress in all three areas 
by ensuring that the Singel market for financial services remains competitive for the benefit of 
all. 

Contribution of EU competition policy to tackling the challenges  

Contribution of EU competition policy to innovation and fairness in payments 

The  Commission  continues  to  monitor  the  implementation  of  the  Interchange  Fee 
Regulation240  (IFR).  On  4  October,  the  Commission  adopted  the  Regulatory  Technical 
Standards241  (RTS)  under  the  Interchange  Fee  Regulation,  which  establish  the  requirements 
for  payment  card  schemes  and  processing  entities  to  ensure  independence  in  terms  of 
accounting,  organisation  and  decision  making  processes.  The  RTS  gives  guidance  for 
implementation  of  the  IFR  requirement  on  independence  of  card  schemes  and  processing 
entities.  The  requirement  on  independence  aims  at  making  the  processing  of  card  payments 
more  competitive  by  allowing  banks  and  retailers  to  choose  processors  for  their  card-based 
payment transactions.  

In  most  Member  States  credit  cards  are  the  main  means  of  internet  payment.  But  card 
payments  over  the  internet  can  be  cumbersome,  expensive  to  merchants  and  insecure  with 
high levels of fraud242. Moreover, only 60 % of EU citizens possess such cards. The Payment 
Services Directive243 (PSD II) takes account of and regulates third-party players (bank-owned 
and  non-bank  owned)  who  offer  alternative  means  of  internet  payments  (e.g.  through  credit 
transfers  via  the  consumer's  bank's  website,  including  most  importantly  the  Single  Euro 

238  European  Parliament  and  Council  Regulation  (EU)  No  2015/751  of  29  April  2015  on  interchange  fees  for 
card-based  payment  transactions,  OJ  L  123,  19.5.2015,  p.1  available  at  http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv:OJ.L_. 
239 European Parliament and Council Directive (EU) 2015/2366 of 25 November 2015 on payment services in 
the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 
repealing  Directive  2007/64/EC,  OJ  L  337,  23.12.2015,  p.  35  available  at 
1093/2010,  and 
://ec.europa.eu/finance/payments/framework/index_en.htm#151008.  
240  European  Parliament  and  Council  Regulation  (EU)  No  2015/751  of  29  April  2015  on  interchange  fees  for 
card-based  payment  transactions,  OJ  L  123,  19.5.2015,  p.1  available  at  http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=celex:32015R0751. 
241  Commission  delegated  Regulation  (EU)  2018/72  of  4  October  2017  supplementing  Regulation  (EU) 
2015/751  of  the  European  Parliament  and  of  the  Council  on  interchange  fees  for  card-based  payment 
transactions with regard to regulatory technical standards establishing the requirements to be complied with by 
payment card schemes and processing entities to ensure the application of independence requirements in terms of 
accounting,  organisation  and  decision-making  process,  OJ  L13,  18.1.  2018,  p.  1  available  at  http://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2018:013:TOC.  
242 Estimated by the European Central Bank (ECB) to represent about two-thirds of total card fraud in the EU 
worth EUR 800 million in 2014. 
243 European Parliament and Council Directive (EU) 2015/2366 of 25 November 2015 on payment services in 
the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 
1093/2010,  and 
repealing  Directive  2007/64/EC,  OJ  L  337,  23.12.2015,  p.  35  available  at 
http://ec.europa.eu/finance/payments/framework/index_en.htm#151008. 

65 

 
                                                            
Payment Area (SEPA) Credit Transfer system) or allow consumers to have a global view on 
their financial situation and spending patterns across all their bank accounts.  

Implementation of the IFR and PSD II opens the door for more competition and innovation in 
the payments sector, to the benefit of consumers and merchants.  

Antitrust and cartel investigations in the financial services sector 

In 2017, the Commission continued its antitrust investigations in the financial sector, one of 
the Commission's priority areas to achieve a fairer and more integrated internal market. The 
Commission also continued to monitore the competition in the capital markets, in particular it 
focussed on the markets for equity data and equity trading where high fees/prices persist. In 
the field of motor insurance, the Commission carried out inspections in July 2017 in view of 
allegations of breaches of Articles 101 and 102 TFEU in the market of Ireland.  

In 2017, the Commission continued its antitrust investigations into MasterCard's, Visa Inc.'s 
and Visa International's244 multilateral interchange fees ("MIFs") for transactions in the EEA 
made  with  cards  issued  outside  the  EEA  ("inter-regional  transactions"). Inter-regional  MIFs 
are  not  capped  by  the  Interchange  Fee  Regulation.  Those  fees  still  represent  a  significant 
burden to European merchants and increase retail prices for all consumers. The Commission 
has  also  continued  the  investigation  into  MasterCard's  rules  with  respect  to  cross-border 
acquiring, which allegedly have prevented merchants in countries with high interchange fees 
for  acquiring  services  to  seek  lower  priced  services  from  acquirers  established  in  other 
Member States. The Comission issued a Supplementary Statement of Objections to Visa Inc 
and  Visa  International  on  inter-regional  MIFs  in  August245.  In  the  MasterCard  case  the 
Statement  of  Objections  was  issued  in  July  2015246,  and  an  oral  hearing  was  held  in  May 
2016.  

As technology allows new services to emerge, such as electronic and mobile payments, with 
significant  potential  benefits  for  consumers  and  businesses  notably  in  the  Digital  Single 
Market,  the  Commission  has  continued  to  monitor  developments  in  the  new  payments 
services and in October it carried out inspections investigating allegations that online access 
to  bank  account  information  by  competing  non-bank  owned  service  providers  may  be 
prevented  in  order  to  exclude  such  service  providers  from  the  market.247  It  is  important  to 
ensure that new and innovative services have a fair chance to develop and that incumbents do 
not  exclude  new  market  entrants  or  attempt  to  secure  substantive  parts  of  markets  for 
themselves. 

Merger investigations in the financial sector 

The  Commission  continued  to  ensure  that  concentrations  in  the  financial  services  sector  do 
not lead to consumers paying higher prices or being offered less choice. 2017 did not show a 
major consolidation trend but several important cases where reviewed. 

of 

26 

decision 

244 These proceedings were closed as regards Visa Europe following its commitments, Case AT.39398 VISA MIF, 
at 
2014 
Commission 
http://ec.europa.eu/competition/antitrust/cases/dec_docs/39398/39398_9728_3.pdf. 
245 Case AT.39398 Visa MIF. For further information see European Commission daily news of 3 August 2017 
available at http://europa.eu/rapid/press-release_MEX-17-2341_en.htm. 
246  Case  AT.40049  MasterCard  II.  For  further  information  see  IP/15/5323  of  9  July  2015  available  at  
http://europa.eu/rapid/press-release_IP-15-5323_en.htm. 
247  For  further  information  see  MEMO/17/3761  available  at  http://europa.eu/rapid/press-release_MEMO-17-
3761_en.htm.   

available 

February 

66 

 
                                                            
In March, the Commission prohibited the merger between Deutsche Börse and London Stock 
Exchange248 because the merger would have led to a de facto monopoly in clearing of fixed 
income instruments (bonds and repurchase agreements) in Europe. This monopoly in clearing 
fixed income instruments would also have had a knock-on effect on the downstream markets 
for  settlement,  custody  and  collateral  management.  The  remedies  proposed  by  the  parties 
were not sufficient to solve the competition concerns as was revealed in the market test so that 
the Commission could not clear the transaction. 

In  June,  the  Commission  conditionally  approved  the  acquisition  of  Intrum  Justitia  active  in 
credit  management  services  by  Nordic  Capital.249  The  decision  is  conditional  on  the 
divestment  of  the  companies'  overlapping  debt  collection  and  debt  purchasing  activities  in 
Denmark, Estonia, Finland, Norway and Sweden. The remedies imposed by the Commission 
ensure that competition in the relevant markets is not affected because it will lead to a new 
competitor  entering  the  market  for  the  benefit  of  customers  and  businesses  active  in  the 
relevant areas. 

In addition, several smaller cases were cleared in the banking and insurance sector that did not 
negatively  impact  competition.  This  included  the  acquisition  of  Banco  Popular  by  Banco 
Santander250 in Spain and the acquisition of Novo Banco of Portugal by Lone Star Funds251 
which  both  showed  the  well-functioning  cooperation  of  the  EU  bank  recovery  procedures, 
state  aid  rules  and  merger  review  processes  to  ensure  that  the  orderly  restructuring  of  the 
banking  sector  does  not  impede  effective  competition  for  the  benefit  of  customers  and 
businesses in Europe. 

State aid investigations in the financial sector 

In 2017, the Directorate-General for Competition continued exercising State aid control in the 
financial sector, within the framework of the Banking Union. While the  Bank Recovery and 
Resolution  Directive  ("BRRD")252  is  fully  in  force  since  2016,  its  application  does  not 
prejudge the application of State aid rules.  

Since the 2013 Banking Communication253, the application of State aid rules for the financial 
sector  has  been  resting  on  three  pillars:  (1)  Restoring  long-term  viability  of  aided  financial 
institutions  or  orderly  market  exit  otherwise,  (2)  burden  sharing  by  shareholders  and 
subordinated  creditors  in  the  cost  of  ailing  banks,  (3)  Minimisation  of  distortions  of 
competition from the aid. 

In  this  vein,  the  rules  make  a  basic  distinction  between  ailing  banks  for  which  a  return  to 
viability  can  be  demonstrated  and  non-viable  banks.  The  most  distortive  type  of  support, 
especially  at  a  time  where  banks  are  overall  carrying  out  deep  adjustments  to  reduce 
overcapacities, is keeping artificially alive banks with a business that is not viable anymore in 
the new economic, technological and regulatory environment. Under State aid rules, banks are 
required  to  present  a  restructuring  plan  that  demonstrates  the  return  to  viability  in  the  long 

248 For more details see http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7995. 
249 For more details see http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8287. 
250 For more details see http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8553. 
251 For more details see http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8487.    
252 Directive 2014/59/EU of the European Pariament and of the Council of 15 May 2014 available at http://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014L0059. 
253 Communication from the Commission on the Application of State aid rules to support measures in favour of 
banks  in  the  context  of  the  financial  crisis  (Banking  Communication),  OJ  C  216,  30.7.2013,  p.1  available  at 
http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52013XC0730%2801%29&from=EN .  

67 

 
                                                            
term, otherwise they need to exit the market in an orderly manner. Last but not least, State aid 
rules  ensure  that  the  cost  to  taxpayers  is  reduced  by  burden  sharing  from  shareholders  and 
holders of subordinated debt. 

In  2017 a series of decisions were adopted – both, related to some “legacy” cases preceding 
the entry into force of the BRRD, but also some cases where the interaction of State aid rules 
with the BRRD was tested.  

In April and June, the Commission approved the sale of the four Italian bridge banks, which 
were created by the Italian Resolution Authority in 2015 in the resolution of Banca Marche, 
Banca Etruria, Carichieti and Carife, to Unione di Banche Italiane (UBI Banca) and BPER 
Banca, respectively.254 All bridge banks will be fully integrated into the respective acquirer's 
operations, so as to turn around their loss-making operations to viability. This will also avoid 
undue distortions of competition.  

In June, the Commission approved State support by Italy to facilitate the liquidation of Banca 
Popolare di Vicenza and Veneto Banca under national insolvency law following the European 
Central Bank declaration that the banks were failing or likely to fail and the Single Resolution 
Board decision that resolution action was not in the public interest.255 These non-viable banks 
were  not  artificially  kept  alive  but  exited  the  market.  At  the  same  time,  State  aid  has 
cushioned  repercussions  on  the  real  economy,  in  particular  of  the  regions  in  which  these 
banks  mainly  operated.  The  aid  granted  facilitated  the  transfer  of  some  activities  of  the 
liquidated banks, with full integration and downsizing by the acquiring bank. Nonetheless, the 
aid  was  limited  under  State  aid  rules  by  full  burden  sharing  from  shareholders  and 
subordinated creditors.  

In  July,  Banca  Monte  dei  Paschi  di  Siena256  (MPS)  was  recapitalised  by  the  Italian 
government. To ensure MPS's long-term viability, the bank will re-focus its business model 
and  move  more than €26 billion in non-performing  loans  off its  balance sheet. As the bank 
met the conditions for compatible aid qualifying as “precautionary recapitalisation” under the 
BRRD (i.e. the recapitalisation is of temporary nature, injected into a solvent institution and is 
not used to offset losses the institution has incurred or is likely to incur in the near future), this 
capital  injection  could  only  be  approved  after  junior  bondholders  and  shareholders  have 
contributed to the costs of restructuring, in line with "burden-sharing" requirements under the 
State aid rules. 

In  October,  the  Commission  approved  Portuguese  aid  in  the  context  of  the  sale  of  Novo 
Banco257,  the  bridge  bank  that  Portugal  had  created  in  2014  in  the  resolution  of  Banco 
Espirito Santo (BES), prior to the entry into force of the BRRD. The aid approval was based 
on the viability of the sold entity ensured through a plan proposed by the buyer, which also 

– 

– 

of 

29 

june 

2017 

decision 

available 

SA.41925 

SA.45664 

Italy,  Commission 

254  Case 
at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_41925.  And  State  aid  cases 
SA.39543,  SA.  41134,  SA.  43547 
  –  Italy,  Commission  decision  of  30  April  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_39543. 
255  Case 
at 
June 
Italy,  Commission 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_45664.  For  further  information 
see IP/17/1791 of 25 June 2017 available at http://europa.eu/rapid/press-release_IP-17-1791_en.htm.  
256  Case  SA.47677  –  Italy,  Commission  decision  Commission  decision  of  4  July  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47677.  For  further  information 
see IP/17/1905 of 4 July 2017 available at http://europa.eu/rapid/press-release_IP-17-1905_en.htm. 
257  State  aid  case  SA.49275  –  Portugal,  Commission  decision  of  11  October  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49275.  For  further  information 
see IP/17/3865 of 11 October 2017 available at http://europa.eu/rapid/press-release_IP-17-3865_en.htm. 

available 

decision 

2017 

25 

of 

68 

 
                                                            
contained measures to limit distortions of competition.  

Finally,  there  have  been  cases  where  the  Member  State  intervened  in  a  market-conform 
manner and where the Commission found that such measure therefore did not constitute aid. 
In  March  2017  Caixa  Geral  de  Depósitos258  (CGD)  was  recapitalised  by  the  Portuguese 
government  on  market  investor  terms.  The  industrial  plan  running  until  end-2020  presented 
by Portugal foresees a structural transformation of CGD and should enable the bank return to 
profitability in 2018.  

In September, the Commission approved the prolongation of the Italian guarantee scheme to 
facilitate  the  securitisation  of  non-performing  loans259  (GACS),  initially  approved  in 
February 2016. Under the scheme, Italian banks, meeting certain conditions, will continue to 
be  able  to  request  a  State  guarantee  on  the  lower-risk  senior  notes  issued  by  private 
securitisation vehicles which help to finance the purchase of non-performing loan portfolios 
from them. The GACS mechanism is set up such to ensure that State guarantees on the senior 
notes  will  be  remunerated  at  market  terms  according  to  the  risk  taken,  i.e.  in  a  manner 
acceptable for a private operator under market conditions. 

In all these cases State aid control has been important to make sure that public support is kept 
to the necessary minimum and that adequate measures are taken to ensure return to viability 
and  minimise  distortions  of  competition,  to  preserve  equality  of  treatment  among  Member 
States  and  to  maintain  the  integrity  of  the  internal  market.  Fair  competition  in  the  banking 
sector  means  that  banks  with  sound  business  models,  lending  practices  and  cost-efficient 
structures  can  indeed  play  their  role  in  supporting  jobs  and  growth  in  the  economy  and  put 
their customers' funds into viable projects.    

4. TAXATION AND STATE AID 

Overview of key challenges on tax evasion and avoidance and fiscal aid 

The  focus  the  Commission  has  put  on  fighting  tax  evasion  and  tax  avoidance  echoes  the 
priorities set by President Juncker in his Political Guidelines and which are also reflected in 
his  Mission  Letter  to  Commissioner  Vestager.  That  is  also  in  line  with  efforts  at  the 
international  level,  namely  by  the  OECD,  to  tackle  tax  base  erosion  and  profit  shifting  to 
better  align  the  right  to  tax  with  economic  activity260.  State  aid  investigations  into  Member 
States' tax ruling practices, which began in 2013, before the Luxleaks revelations, are one of 
the tools the Commission has at its disposal to ensure that companies pay the taxes they owe 
in the Member States where they generate economic value. 

Tax evasion and avoidance can be the result of aggressive tax planning strategies, in so far as 
they  shift  profits  to  low  or  no-tax  locations  where  there  is  little  or  no  economic  activity, 
resulting  in  little  or  no  overall  corporate  tax  being  paid.  Aggressive  tax  planning  can  be 
pursued  by  making  use  of  preferential  tax  schemes,  or  by  requesting  individual  tax  rulings. 
They all have in common that they result in a loss of tax revenue in the Member State where 
economic  value  is  generated  but  not  taxed,  and  in  Europe  as  a  whole  because  the  tax 
eventually paid is less than it would have been if the profits had not been shifted. 

258  State  aid  case  SA.47178  – 
Italy,  Commission  decision  of  10  March  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47178.  For  further  information 
see IP/17/556 of 10.03.2017 available at http://europa.eu/rapid/press-release_IP-17-556_en.htm. 
259  Case  SA.48416 
2017 
6  September 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48416.  
260 OECD (2013) Action Plan on Base Erosion and Profit Shifting, OECD Publishing, Paris. 

Italy,  Commission 

available 

decision 

of 

at 

– 

69 

 
                                                            
The side effects of aggressive tax planning for the EU are particularly negative: first, it results 
in  undue  tax  reliefs  that  distort  competition  by  granting  advantages  only  to  selected 
companies;  second,  it  involves  an  issue  of  social  equity  as  the  revenues  foregone  from 
untaxed multinationals need to be compensated, which normally shifts the burden to the less 
mobile  income  of  SMEs  and  labour  and  third,  from  the  perspective  of  the  dislocation  of 
activities, aggressive tax planning can present a threat to the sustainable growth of the internal 
market if some Member States were to offer exit points for European profits of multinationals 
in exchange for creating jobs on their territory and a limited tax payment. 

The  Commission's  State  aid  decision  of  4  October,  requiring  Luxembourg  to  recover  a 
selective  tax  advantage  granted  to  Amazon  in  Luxembourg  of  up  to  EUR  250  million,  was 
another step forward in the Commission´s overall strategy to ensure fair taxation261.  

Both collecting taxes and combating tax avoidance and evasion are normally competences of 
the  Member  States.  However,  even  in  this  area  where  the  Member  States  enjoy  fiscal 
autonomy, any national tax measures adopted have to comply with internal market rules and, 
amongst others, abide by competition law262. 

Contribution of EU competition policy to tackling the challenges 

State aid investigations and decisions concerning aggressive tax planning 

Since  2013,  the  Commission  has  been  looking  into  tax  planning  practices  via  its  dedicated 
Task Force, which was turned into a regular administrative unit in 2016. 

Throughout 2014-2017, the Commission has continued to gather information on tax planning 
practices,  enquiring  into  the  tax  rulings  practice  and  possible  fiscal  aid  schemes  of  all 
Member States. The enquiry is aimed at clarifying allegations that tax rulings may constitute 
State  aid  and  to  allow  the  Commission  to  take  an  informed  view  of  the  practices  of  all 
Member States. Overall the Commission has looked into more than 1 000 rulings. 

Financing companies provide financial services intra-group and their profit is the remuneration 
for their financing activities. This remuneration has to be in line with the arm's length principle. 
This  issue  has  been  one  of  Directorate-General  for  Competition's  key  areas  since  it  started 
looking into the tax ruling practices of Member States. The Working Paper published as part of 

261 President Juncker stressed in his State of the Union speech of 14 September 2016 that the decision previously 
taken with respect to the granting of State aid by Apple in Ireland shows that "every company, big or small, has 
to pay its taxes where it makes its profits. This goes for giants like Apple too, even if their market value is higher 
than  the  GDP  of  165  countries  in  the  world.  In  Europe  we  do  not  accept  powerful  companies  getting  illegal 
backroom  deals  on  their  taxes"  available  at  http://ec.europa.eu/priorities/state-union-2016_en  .  For  further 
information  on  the  decision  of  4  October  see  IP/  of  4  October  201717/3701,  http://europa.eu/rapid/press-
release_IP-17-3701_en.htm. 
262 The Commission work in the area of tax rulings was closely followed by the European Parliament's Special 
Committee on Tax Rulings and Measures Similar in Nature or Effect (TAXE). On 25 November 2016, European 
Parliament adopted a Report on tax rulings and other measures similar in nature or effect prepared by the TAXE 
Committee,  which  viewed  positively  the  contribution  of  State  aid  control  to  tax  fairness  in  Europe.  In  fact,  it 
"strongly welcomes and supports the key role of the Commission as the competent competition authority in the 
ongoing State aid inquiries dealing with tax rulings" (para. 130). On 25 November 2016, the Committee issued a 
report  which 
at 
on  State 
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P8-TA-2015-
0408+0+DOC+XML+V0//EN.   

the  Commissions 

approach 

endorsed 

available 

broadly 

aid 

70 

 
                                                            
this  review  in  June  2016  indicated  concerns  that  some  tax  rulings  for  financing  companies 
endorse very low margins and a low taxable base.263  

The Directorate-General for Competition supported Luxembourg and Cyprus to amend their tax 
rules  in  order  to  avoid  undue  advantages  to  financing  companies.  Luxembourg  amended  its 
rules on financing companies at the end of 2016, by way of an administrative circular264. These 
rules  entered  into  effect  as  of  1  January  2017.  Similarly,  with  a  circular  dated  30  June  2017, 
Cyprus introduced changes to their national rules to make them more stringent as regards the 
tax treatment of financing companies. 

Specific cases 

On  4  October,  the  Commission  decided  to  require  Luxembourg  to  recover  a  selective  tax 
advantage granted in 2003 to Amazon265 by way of tax ruling amounting up to up to EUR 250 
million.  

Luxembourg – The Amazon decision  

The ruling was prolonged in 2011 and remained valid until mid-2014. The tax ruling agreed to a calculation of the 
tax base of Amazon's Luxembourg based subsidiary Amazon EU, which records all the sales of Amazon in the EU. 
Following  the  application  of  the  calculation  method  endorsed  by  the  ruling,  Amazon  EU  paid  a  tax  deductible 
royalty to its parent, also established in Luxembourg, but which is not subject to corporate tax in Luxembourg. As a 
result, around 75% of the European sales profits of Amazon were shifted to the parent and were not taxed. 

The  Commission  concluded  that  the  level  of  royalty  could  not  be  justified  for  two  reasons:  First,  the  parent 
company was  an empty shell with no employees and no business  activities. Therefore, it did not, and could not, 
develop,  enhance  or  manage  these  rights  so  as  to  justify  the  level  of  royalties  received.  Second,  the  operating 
company was the only entity which managed and added value to the IP and actively took decisions and carried out 
activities  related  to  Amazon's  European  retail  business.  It  was  therefore  entitled  to  higher  profits  than  those 
established by the ruling. 

This  incorrect  determination  of  the  royalty,  leading  to  a  very  low  tax  base  for  Amazon  EU,  gave  Amazon  a 
selective  advantage  over  other  businesses  that  are  subject  to  taxation  rules  in  Luxembourg.  The  Commission 
estimates  that  this  unfair  tax  advantage  amounts  to  up  to  EUR  250  million  for  the  period  2006-2014,  which 
Luxembourg has to recover from Amazon.   

On  26  October,  the  Commission  opened  an  in-depth  investigation  into  the  United  Kingdom 
scheme that exempts certain transactions by multinational groups from the application of United 
Kingdom rules targeting tax avoidance.266  

3 

to 

June 

2016 

on  State  Aid  of 

the  High  Level  Forum 

263  Directorate-General  for  Competition  working  paper  on  state  aid  and  tax  rulings,  Internal  Working  Paper  – 
at 
Background 
http://ec.europa.eu/competition/state_aid/legislation/working_paper_tax_rulings.pdf.  
264  Circular  of  the  Director  of  Contributions,  L.I.R.  n°  56/1  –  56bis/1  of  27  December  2016  available  at 
http://www.impotsdirects.public.lu/content/dam/acd/fr/legislation/legi16/circulairelir561-56bis1-27122016.pdf.   
265  Case  SA.38944  –  Luxembourg  –  Aid  to  Amazon,  Commission  decision  of  4  October  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=1,2,3&case_title=
amazon.  For  further  information  see  IP/17/3701  of  4  October  2017  available  at  http://europa.eu/rapid/press-
release_IP-17-3701_en.htm. 
266  Case  SA.44896  –  United  Kingdom  –  Potential  State  aid  scheme  regarding  United  Kingdom  CFC  group 
is  available  at 
financing  exmeption,  Commission  decision  of  26  October  2017, 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=1,2,3&case_title=
cfc.  For  further  information  see  IP/17/4201  of  26  October  2017  available  at  http://europa.eu/rapid/press-
release_IP-17-4201_en.htm. 

available 

letter 

the 

71 

 
 
 
 
                                                            
United Kingdom – The CFC Group financing examption 

The scheme is an exemption from the United Kingdom’s Controlled Foreign Company (CFC) rules. The purpose of 
these rules is to prevent United Kingdom companies from using a subsidiary, based in a low or no tax jurisdiction, 
to  avoid  taxation  in  the  United  Kingdom.  Under  the  CFC  rules  such  profits  artificially  shifted  to  an  offshore 
subsidiary are reallocated back to the United Kingdom parent company, where it is taxed accordingly. However, in 
2013 the United Kingdom introduced an exception from CFC rules  

for certain financing income (i.e. interest payments received from loans)  – the Group Financing Exemption. The 
United  Kingdom's  Group  Financing  Exemption  exempts  from  reallocation  of  the  CFC  income  financing  income 
received by the offshore subsidiary from another foreign group company.  

At  this  stage,  the  Commission  has  doubts  whether  this  exemption  is  consistent  with  the  overall  objective  of  the 
United  Kingdom  CFC  rules,  which  is  to  reallocate  income  artificially  shifted  to  offshore  subsidiaries  of  United 
Kingdom parent companies to the United Kingdom for taxation. The Commission does at this stage consider that 
the United Kingdom should apply the anti-abuse rule to all companies which artificially divert income, including 
those earning group financing income, since they all are in a comparable factual and legal situation with regard to 
the objective of that measure. The case law of the EU Courts confirms that an exemption from an anti-avoidance 
provision can amount to State aid.  

On  18  December,  the  European  Commission  opened  an  in-depth  investigation  into  the 
Netherlands' tax treatment of Inter IKEA, one of the two groups operating the IKEA business.267 

Netherlands – The Inter IKEA investigation 

Inter IKEA Systems, a Dutch entity part of the Inter IKEA group, records all revenues from franchise fees paid by 
IKEA  shops  worlwide.  The  Commission's  investigation  concerns  two  tax  rulings,  granted  by  the  Dutch  tax 
authorities  in  2006  and  2011,  which  have  significantly  reduced  Inter  IKEA  Systems'  taxable  profits  in  the 
Netherlands. 

The  2006  tax  ruling  endorsed  a  method  to  calculate  an  annual  licence  fee  to  be  paid  by  Inter  IKEA  Systems  to 
another  company  of  the  Inter  IKEA  group  based  in  Luxembourg.  The  annual  licence  fee,  which  represents  a 
significant part of Inter IKEA Systems' revenue, remained untaxed in Luxembourg due to a special regime.  

In 2011, simultaneously to the repeal of the special regime in Luxembourg as requested by a Commission decision 
of 2006 which concluded that it was illegal and incompatible268, the Inter IKEA group amended its structure and 
Inter  IKEA  Systems  acquired  the  intellectual  property  rights  located  in  the  past  in  Luxembourg.  The  Dutch 
authorities issued a second tax ruling, which endorsed the price paid by Inter IKEA Systems for the acquisition of 
the intellectual property and thus the deduction of the interests of the inter-company loan granted to finance  this 
acquisition. 

The Commission considers at this stage that the treatment endorsed in the two tax rulings may have resulted in a 
selective advantage in favour of Inter IKEA Systems, which was not available to other companies subject to the 
same national taxation rules in the Netherlands. 

Fight against discriminatory tax schemes and measures sheltering national companies from 
competition in the internal market  

Beyond the cases involving tax rulings, the Commission remains vigilant to ensure that Member 
States  do  not  use  fiscal  tools  to  unduly  favour  certain  companies/sectors  and  shelter  national 
companies from competition in the internal market. 

In  2016,  Poland  introduced  a  tax  on  the  retail  sector.  Subject  to  the  tax  were  undertakings 

public 

version 

267 Case SA.46470 – Netherlands – Potential State aid to Inter Ikea, Commission decision of 18 December 2017. 
The 
at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46470.  For  further  information 
see IP/17/5343 of 18 December 2017 available at http://europa.eu/rapid/press-release_IP-17-5343_en.htm. 
268 The so called "1929 billionaire scheme", for further information see IP/06/1021 of 19 July 2006 available at 
http://europa.eu/rapid/press-release_IP-06-1021_en.htm. 

available 

decision 

become 

will 

this 

of 

72 

 
                                                            
operating  in  Poland  in  the  retail  sector.  The  tax  had  progressive  rates,  increasing  with  the 
turnover in a way that it would result to a disproportionate burden for big  companies. On 30 
June 2017 the Commission adopted a negative decision considering that the progressivity of the 
tax  rates  granted  a  selective  advantage  to  undertakings  with  low  turnover  (mainly  national 
companies) and constituted State aid which was not compatible with the internal market.269 This 
case  is  similar  to  previous  cases  of  Hungarian  progressive  turnover-based  taxes  in  which  the 
Commission adopted three final negative decisions in 2016.270  

With regard to the investigation into fiscal aid to ports, further to the negative decision on the 
corporate tax exemption for Dutch public companies, including seaports of January 2016271, 
the  Commission  took  two  further  negative  decisions  in  July  2017  requiring  France272  and 
Belgium273 to abolish the corporate tax exemptions for their ports and continues to assess the 
taxation  of  ports  in  other  Member  States  to  ensure  fair  competition  in  the  sector  across  the 
EU.  The  Commission's  action  is  consistent  with  the  need  to  ensure  that  all  companies  pay 
their  fair  share  of  taxes  and  that  no  sector  or  company  of  a  certain  type  unduly  receives  a 
more  favourable  corporate  tax  treatment.  Ports  are  essential  to  the  EU  economy  and  the 
Commission does not prevent Member States from providing aid to their ports, for instance 
when  this  is  necessary  to  develop  port  infrastructure.  However,  corporate  tax  exemptions 
provide  a  bigger  advantage  to  those  beneficiaries  who  are most  profitable.  They  are  neither 
transparent, nor limited or targeted at financing activities or investments which are necessary 
and justified by objectives of common interest.  

5.   BASIC INDUSTRIES AND MANUFACTURING 

Overview of key challenges in the sector 

The  European  manufacturing  sector  is  currently  facing  important  challenges  related  to 
globalisation,  the  "forth  industrial  revolution"  and  digitisation  of  the  industry,  as  well  as 
decarbonisation.  Manufacturing  accounts  for  over  80%  of  Europe's  exports  and  private 
research  and  innovation.  However,  over  the  last  forty  years,  the  relative  contribution  of 
industry to the EU economy has declined and its productivity growth has been lagging behind 
that  of  other  OECD  countries.  Moreover,  certain  sectors  such  as  steel  are  characterised  by 
structural overcapacities.  

Basic  industries  and  manufacturing  are  key  to  the  European  economy.  In  2017  the 
Commission  expended  significant  resources  on  competition  policy  actions  in  these  sectors, 
which  range  widely  from  consumer  products  such  as  cars  and  musical  instruments,  to 
manufactured  goods,  intermediary  products  such  as  coolants  and  solar  panels,  to  industry 
inputs  such  as  chemicals  and  outputs  such  as  plastics.  To  ensure  that  manufacturers, 

inspection 

food  chain 

269  Case  SA.44361  Polish  tax  on  retail  sector  with  progressive  rates,  Commission  decision  of  30  June  2017 
available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_44351. 
270  Cases  SA.39235  Hungarian  advertisement  tax,  Commission  decision  of  4  November  2016  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_39235; SA.40018 Amendment to 
fee,  Commission  decision  of  4  July  2016  available  at 
the  Hungarian 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_40018; 
SA.41187 
Hungarian health contribution of tobacco industry businesses, Commission decision of 4 July 2016 available at 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result.  
271  Case  SA.25398  Corporate  tax  exemption  of  Dutch  public  enterprises,  Commission  decision  of  21  January 
2016 available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_25338.  
272  Case  SA.38398  Ports  taxation  in  France,  Commission  decision  of  27  July  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38398. 
273  Case  SA.38393  Ports  taxation  in  Belgium,  Commission  decision  of  27  July  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38393.  

and 

73 

 
 
                                                            
distributors  and  consumers  alike  reap  a  fair  share  of  the  benefits  of  a  modern  specialised 
economy and society, the entire value chain of such products is subject to scrutiny under EU 
competition rules. Where unfair restrictions on the manufacturing or the distribution of these 
products  to  certain  customers  or  in  certain  areas  within  the  EU  lead  to  a  reduction  in 
efficiency and to an unfair accrual of the benefits to one particular part of the value chain, to 
the detriment of consumers in particular, the role of the Commission is to remove these unfair 
restrictions to the benefit of all.  

Contribution of EU competition policy to tackling the challenges 

Competition  enforcement  in  manufacturing  is  aimed  at  addressing  these  challenges,  in 
particular by boosting the competitiveness of European manufacturers and by maintaining a 
level  playing  field  in  the  internal  market,  where  companies  can  compete  on  the  merits. 
Competition enforcement supports the efficient functioning of markets and ensures that public 
funding  is  steered  towards  objectives  of  common  interest,  such  as  reducing  pollution  by 
promoting environment-friendly means of transport, providing affordable food and medicines 
or fostering sustainable growth and jobs.  

Healthy  and  vigorous  competition  is  of  fundamental  importance  to  a  fair  EU  economy  and 
society. Anti-competitive practices stifle innovation, introduce rigidities, push prices up, and 
reduce  the  competitiveness  of  EU  companies  and  the  real  income  of  EU  consumers.  The 
Commission  must  therefore  be  vigilant  to  ensure  that  the  fairness  of  business  dealings  in 
Europe is not jeopardised by such practices.  

Antitrust investigations in basic industries 

Basic manufacturing and consumer goods industries continue to represent a significant share 
of  the  Commission's  enforcement  practice.  In  2017,  the  Commission  continued  its  lines  of 
action  (including  individual  case  work,  market  surveillance  and  advocacy)  in  these  sectors. 
The  EU's  high  value-added  manufacturing  industry  requires  access  to  basic  materials  at 
affordable prices that reflect international cost conditions. In 2017, the Commission actively 
monitored the markets for these inputs to ensure that firms have adequate access in a healthy 
and competitive environment.  

Merger investigations in basic industries 

Over the past year, there have been several merger investigations in the basic industries and 
manufacturing sectors. The Commission intervened in some of those cases in order to avoid a 
significant loss of competition to the detriment of customers.  

As regards the cement industry, the Commission prohibited the joint acquisition by German 
cement  manufacturers  HeidelbergCement  and  Schwenk  of  the  operations  of  Mexican-based 
Cemex  in  Hungary  and  Croatia.  The  Commission  concluded  that  the  takeover  would  have 
significantly reduced competition in grey cement markets in Croatia.  This decision followed 
previous conditional clearances in the cement industry where the Commission had approved 
the  acquisition  of  Italian  cement  company  Italcementi  by  HeidelbergCement  subject  to  the 
divestment of Italcementi’s cement plant in Belgium (in 2016) and the acquisition of Lafarge 
by Holcim subject to the divestment over several cement plants across Europe (in 2015). 

As regards other basic industries, the Commission investigated in particular two transactions 
in  the  refractories  industry.  In  June  2017,  the  Commission  cleared  the  acquisition  of 
Magnesita  Refratários  by  RHI  subject  to  the  divestment  of  the  two  companies’  overlapping 
businesses  in  certain  dolomite-based  and  magnesite-based  refractories.    In  June  2017,  the 

74 

 
Commission  cleared  the  acquisition  of  specialty  cement  manufacturer  Kerneos  by  French 
minerals and refractories producer Imerys unconditionally. The Commission also continues to 
investigate  transactions  in  the  aerospace  sector  where  the  Commission  approved  Rolls 
Royce’s acquisition of ITP subject to the condition that Rolls-Royce eliminates a conflict of 
interest concerning the EPI engine consortium. As regards consumer goods, the Commission 
opened an in-depth investigation into the proposed merger of Italian manufacturer of frames 
and  sunglasses  Luxottica  with  the  French  manufacturer  of  ophthalmic  lenses  in  September 
2017. 

In  2017,  the  Commission  analysed  the  acquisition  of  Haldex,  a  manufacturer  of  various 
brake-related  systems  and  components  for  commercial  vehicles  by  a  competitor,  Knorr-
Bremse.  The  transaction  had  the  potential  to  severely  negatively  affect  this  concentrated 
market, however. the transaction was ultimately abandoned during the Commission's Phase 2 
market investigation.274 

In  the  automotive  sector,  the  Commission  closely  scrutinised  a  number  of  transactions 
concerning both the manufacture and supply of vehicles (Peugeot/Opel) and the manufacture 
of  automotive  components.  In  Valeo/FTE,  for  example,  the  Commission  intervened  as  the 
acquisition would have reduced the supplier base of passive hydraulic actuators from 3 to 2, 
leading  to  potential  price  increases  and  reduces  choice  in  the  EEA.  The  Commission  will 
continue to closely monitor the ongoing concentration in the automotive industry. 

State aid investigations in basic industries 

Economic  growth  is  only  possible  where  efficient  and  innovative  companies  have  room  to 
expand. To make this happen, less efficient companies with outdated products have to leave 
the  market.  Subsidising  inefficient  companies  interferes  with  this  process  and  may 
significantly  slow  down  economic  growth.  The  State  aid  rules  on  industrial  restructuring 
ensure that  public  funding  goes  to  companies  that  are  addressing  their problems  in  order  to 
become viable on their own.  

In 2017, the Commission has continued its in-depth investigation into the restructuring of the 
Romanian  petrochemical  company  Oltchim275.  After  years  of  loss-making,  the  state-owned 
company  is  being  privatised  with  the  aim  of  restructuring  its  business  model  with  a  new 
industrial  partner  and  paying  existing  debts  from  the  sales  proceeds.  The  Commission's 
inquiry is aimed at ensuring that the privatisation will enable the company to become viable 
in the long term and that debt waivers by Oltchim's public creditors do not result in giving the 
company an unfair advantage over its competitors.  

In  order  to  address the particular  challenges  of  Europe's  steel  sector,  the  EU  State  aid  rules 
focus public support in this area on measures aimed at improving long-term competitiveness 
and  efficiency  (research  and  development,  training,  energy  and  environment)  for  viable 
companies.  That's  why  no  rescue  and  restructuring  aid  can  be  granted  to  steel  companies. 
Keeping  ailing  companies  afloat  with  public  money  would  only  aggravate  the  structural 
problems of the steel sector and lead to subsidy races between Member States. Since the mid-
90s, the Commission has therefore consistently prohibited such aid.  

274 Case M.8222 Knorr-Bremse / Haldex  available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8222. 
275  Case  SA.36086  Potential  aid  to  Oltchim,  Commission  decision  of  8  April  2016  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_36086.  For  further  information 
see IP/16/1321 available at http://europa.eu/rapid/press-release_IP-16-1321_en.htm.  

75 

 
                                                            
In  line  with  these  principles,  the  Commission  has  concluded  that  two  measures  granted  by 
Italy in favour of the Italian steel maker ILVA276 gave the company an undue advantage over 
competitors. In particular, this concerns the pricing conditions of a State guarantee on a €400 
million loan and a €300 million public loan. These served to finance ILVA's liquidity needs 
for its commercial activity and not for any environmental clean-up carried out at the site. Both 
were  granted  on  terms  below  market  conditions  and  placed  ILVA  in  a  better  situation  than 
other  EU  steelmakers,  which  have  to  finance  their  operations  and  restructure  at  their  own 
expense. ILVA has to pay back the undue advantage of around €84 million, consisting in the 
difference between the rates. ILVA would have had to pay to raise the funding on the market 
and the price at which the company actually received the money.  

6. AGRI-FOOD INDUSTRY 

Overview of key challenges in the food sector  

While many undertakings in the European food sector are able to grasp the full benefits from 
operating  in  a  broad  common  European  market  place,  some  others  seem  to  face  challenges 
operating  in  the  EU  Internal  Market  and  in  a  globalised  world.  European  farmers,  food 
manufacturers  and  retailers  can  get  more  out  of  their  ability  to  buy  and  sell  across  national 
borders and their access to a wide common market in a pro-competitive way. 

Challenges for European farmers operating in the Internal Market  

Farmers  are  particularly  vulnerable  to  the  challenges  raised  by  globalisation  and  their 
functioning  in  a  larger  internal  market  for  a  number  of  reasons.  European  farmers  are 
increasingly facing (1) more competition from other farmers inside as well as outside Europe, 
(2) higher demands from end consumers in terms of quality, variety and traceability, and (3) 
higher  investments  needs  linked  to  initiatives  to  come  to  a  greener  and  more  sustainable 
agriculture.  

The European agricultural sector still has some structural characteristics which make it harder 
to cope with these challenges. First, agricultural producers are still the least concentrated level 
in the food supply chain in Europe. The most common situation across sectors and Member 
States is that agricultural producers remain atomised or grouped into small cooperatives and 
other  producer  organisations.  In  contrast,  their  input  suppliers  and  customers  (processors, 
wholesalers  and  retailers)  are  often  much  larger  and  more  concentrated,  giving  them  more 
bargaining power in their negotiations with farmers. Second, unforeseeable natural elements 
(such as adverse weather conditions and diseases) can significantly alter production, resulting 
in volatility of production and therefore volatility of prices and revenues.  

European  farmers  operating  in  a  globalised  world  and  in  the  Internal  Market  can  manage 
these challenges better by their integration in larger organisations where these organisations 
aggregate supply (both in terms of volumes and variety of products), offer supporting services 
and add value through processing. Such integration can provide more stability, scale to reach 
more customers, flexibility, more value and more bargaining power. 

Opportunities and challenges posed by increased retail concentration in the Internal Market 

Chains of retailers have developed sophisticated distribution systems and varied store formats 

276  Case  SA.38613  –  Italy  –  Aid  to  Ilva,  Commission  decision  of  21  December  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38613.  For  further  information 
see IP/17/5401 available at http://europa.eu/rapid/press-release_IP-17-5401_en.htm.  

76 

 
 
                                                            
that  supply  wide  arrays  of  products  to  customers.  Using  the  characteristics  (scalability, 
economies of scale, etc.) of their business model, chains of retailers seem to take the benefits 
of  operating  in  a  global  world  and  an  EU  Internal  Market.  Many  such  chains  have  opened 
shops  in  other  Member  States  than  their  home  market,  hereby  bringing  a  different  business 
model and more competition to other markets. Indeed the number of shops of retail chains has 
increased very significantly since 2000. Consumers often value the offer of different products, 
a wider choice and variety coming from other markets, especially when this goes along with 
lower  prices.  On  the  other  hand,  the  increasing  concentration  of  retailers  (through  internal 
growth,  mergers/acquisitions  and/or  the  formation  of  buying  alliances)  continues  to  worry 
certain  trading  partners,  especially  smaller  operators.  In  particular,  they  question  whether 
large retail chains have obtained too much bargaining power (in the bilateral negotiations with 
their suppliers) and buyer power (in the market overall) thanks to their dual role of customers 
and competitors (through private labels) of their suppliers. 

Challenges to the optimal functioning of the EU Internal Market itself 

There are challenges to the EU Internal Market itself, restricting competition at all levels of 
the food supply chain.  

Operators  in  some  national  markets  sometimes  agree  on  excluding  operators  from  other 
Member States  and give preference to  domestic products even though this  preference  is not 
based on objective criteria (quality, specific traits, etc.) of the products. These discriminations 
based on nationality are hurting the fundamental principle of the EU to give a fair chance to 
all producers inside the EU independently of their origin.  

Further,  international  food  manufacturers,  for  years  already  present  with  equal  or  similar 
brands  in  different  Member  States  reportedly  (try  to)  segment  the  Internal  Market  by 
preventing  or  hindering  retailers  from  bringing  products  from  lower-priced  markets  into 
higher-priced markets.  

Contribution of EU competition policy to make the Internal Market work better  

Making farmers more competitive in the EU Internal Market 

In  previous  years,  several  legislative  initiatives  were  launched  in  order  to  help  European 
farmers  better  cope  with  the  challenges  posed  by  the  Internal  market  and  globalisation,  to 
increase  the  competitiveness  of  the  EU  agricultural  sector  and  to  strengthen  the  bargaining 
power  of  smaller  agricultural  producers.  Several  derogations  from  competition  rules  were 
granted to the EU agricultural sector through the CMO Regulation: for instance, the reform of 
the  Common  Agricultural  Policy  in  2013  set  out  derogations  to  antitrust  rules  for  certain 
agricultural sectors (olive oil, beef and veal, and arable crops (cereals, oilseeds, etc.))277. The 
sector-specific  derogations  have  been  deleted  in  2017  when  the  Council  and  the  European 
Parliament  amended  the  application  of  the  competition  rules  to  the  agricultural  sector  by 
creating  a  horizontal  provision  which  allows  recognised  producer  organisations  and  their 
associations to engage in practices such as production planning and contractual negotiations, 
in derogation from Article 101 TFEU. 

In  2017,  the  co-legislators  decided  to  amend  competition  rules  to  the  agricultural  sector  by 

277  The  CMO  Regulation  is  the  European  Parliament  and  Council  Regulation  (EU)  No  1308/2013  of  17 
December  2013  establishing  a  common  organisation  of  the  markets  in  agricultural  products  and  repealing 
Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 available 
at http://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX:32013R1308.  

77 

 
                                                            
amending the Omnibus legislative proposal made by the Commission for a different purpose, 
i.e. the simplification of financial regulations.  

The  Commission  confirms  its  commitment  to  maintain  effective  competition  in  the 
agricultural sector, and give full effect to the objectives of the CAP laid down in Article 39 
TFEU. In this context, the Commission noted in an accompanying statement to the Omnibus 
Regulation that the amendments agreed by the co-legislators foresee only a very limited role 
for both the Commission and the national competition authorities to act to preserve effective 
competition.  The  Commission  noted  that  the  legal  text  must  be  interpreted  in  a  manner 
consistent with the Treaty, notably as regards the possibility for the Commission and national 
competition authorities to intervene if a producer organisation, which covers a large share of 
the market, seeks to restrict the freedom of action of its members. 

Tackling  the  challenges  of  increased  retail  concentration  and  unequal  bargaining  power  in 
the EU Internal Market 

Supply Chain Initiative - In parallel with the Omnibus legislative proposal and as a follow-up 
to the AMTF Report,278 the Commission has published an Inception Impact Assessment (IIA) 
to improve the functioning of the food supply chain.279 The IIA covers three areas which have 
a bearing on the functioning of the food supply chain in respect of agri-food products and the 
bargaining  position  of  operators  in  the  chain:  (i)  unfair  trading  practices  (UTPs)280  in 
Business-to-Business  relationships,  (ii)  market  transparency  and  (iii)  producer  cooperation 
through value sharing agreements.281 

Preventing  market  segmentation  and  trade  restrictions  by  food  manufacturers  in  the  EU 
Internal Market 

In  November, the Commission sent a Statement of Objections to AB InBev282 outlining its 
preliminary  view  that  AB  InBev  pursued  a  deliberate  strategy  to  prevent  supermarkets  and 
wholesalers  from  buying  its  most  popular  beer  brands  in  Belgium,  at  lower  prices  in  the 
Netherlands and France and from importing them into Belgium.283 AB InBev practices, which 
prevent the free trade of goods in the EU Internal Market, may result in a violation of Article 
102 TFEU.  

The Commission's objections concern Jupiler and Leffe, two brands that are long established 
in Belgium, France and the Netherlands, and relate to different practices put in place by AB 
InBev: 

   AB InBev apparently changed the packaging of Jupiler and Leffe beer cans to prevent 

imports;  

   AB InBev seems to have required a supermarket in the Netherlands with retail outlets 
in Belgium to buy certain Jupiler products in Belgium instead of importing these from 
the Netherlands; 

278  For  further  information  see  https://ec.europa.eu/agriculture/agri-markets-task-force_en  and  the  Annual 
Competition Report 2016: http://ec.europa.eu/competition/publications/annual_report/2016/part2_en.pdf.  
279 For further information see http://ec.europa.eu/info/law/better-regulation/initiatives/ares-2017-3735471_en. 
280 UTPs are defined as “practices which grossly deviate from good commercial conduct, are contrary to good 
faith and fair dealing and are unilaterally imposed by one trading partner on its counterparty. 
281  Value  sharing  agreements  have  in  the  meantime  been  addressed  by  the  Omnibus  Regulation  through 
amendments by the European Parliament.  
282 Case AT.40134 AB InBev (previously Limes). For further information see IP/17/5041 of 30 November 2017 
available at http://europa.eu/rapid/press-release_IP-17-5041_en.htm. 
283 For further information see http://europa.eu/rapid/press-release_IP-17-5041_en.htm.  

78 

 
                                                            
   AB InBev apparently capped the quantities of Jupiler products sold to a wholesaler in 

the Netherlands; 

   AB InBev seemingly did not offer certain Jupiler products and/or certain day-to-day 

Jupiler promotions to supermarkets in the Netherlands. 

Further competition enforcement in the EU Internal Market 

The  Commission  is  looking  into  an  alleged  infringement  of  EU  antitrust  rules  that  prohibit 
agreements between undertakings (Article 101 TFEU) by some supermarket chains and some 
alliances  of  supermarket  chains.  The  Commission,  accompanied  by  national  competition 
authorities, carried out inspections at the premises of several supermarket chains and alliances 
of supermarket chains, in France and Belgium.  

The  Commission's  investigation  concerns  possible  competition  issues  linked  to  the  general 
commercial  strategies  of  some  supermarket  chains  and  to  the  procurement  by  some 
supermarket  chains  and  alliances  of  supermarket  chains  of  a  large  range  of  everyday 
consumer goods. 

Merger investigations in the agri-food industry  

In 2017, the trend of consolidation in the agrochemical industry continued. The Commission 
ensures effective competition also in this sector so that farmers can have access to innovative 
products, better quality and competitive prices, as seeds and pesticide products are essential 
for farmers and ultimately consumers. 

In  August,  the  Commission  opened  an  in-depth  investigation  to  assess  the  proposed 
acquisition of Monsanto (US) by Bayer (Germany) under the EU Merger Regulation284. The 
Commission had preliminary concerns that the proposed acquisition could reduce competition 
in a number of different markets resulting in higher prices, lower quality, less choice and less 
innovation. In particular, the initial market investigation identified preliminary concerns in the 
areas of pesticides, seeds and traits. The Commission also investigated whether competitors' 
access to distributors and farmers could become more difficult if Bayer and Monsanto were to 
bundle  or  tie  their  sales  of  pesticide  products  and  seeds,  notably  with  the  advent  of  digital 
agriculture. Digital agriculture consists in the collection of data and information about farms 
with  the  aim  of  providing  tailored  advice  or  aggregated  data  to  farmers.  Both  Bayer  and 
Monsanto are currently investing in this emerging technology. 

Given  the  worldwide  scope  of  Bayer  and  Monsanto's  activities,  the  Commission  has 
cooperated closely with other competition authorities, notably with the Department of Justice 
in the US and the antitrust authorities of Australia, Brazil, Canada and South Africa. 

In the same market, the Commission also assessed under the EU Merger Regulation the recent 
mergers  between  Dow  and  Dupont  and  between  Syngenta  and  ChemChina.  Both  decisions 
followed an in-depth review of the proposed transactions. 

In March, the Commission approved the merger between US-based chemical companies Dow 
and  DuPont,  subject  to  conditions  on  the  divestiture  of  major  parts  of  DuPont's  global 
pesticide  business,  including  its  global  Research  &  Development  organisation285.  The 

284 Case M.8084 Bayer / Monsanto, see IP/17/2762 of 22 August 2017, available at http://europa.eu/rapid/press-
release_IP-17-2762_en.htm. 
285  Case  M.7932  Dow  /  DuPont,  Commission  decision  of  27  March  2017,  available  at  http://ec.europa.eu/ 
competition/elojade/isef/case_details.cfm?proc_code=2_M_7932. 

79 

 
 
                                                            
Commission  had  concerns  that  the  merger  as  notified  would  have  reduced  competition  on 
price  and  choice  in  a  number  of  markets  for  existing  pesticides.  Furthermore,  the  merger 
would have reduced innovation. The commitments submitted by Dow and DuPont addressed 
these concerns in full. 

In April the Commission cleared ChemChina acquisition of Syngenta (based, respectively, in 
China  and  Switzerland),  subject  to  conditions286.  The  Commission  had  concerns  that  the 
transaction  as  notified  would  have  reduced  competition  in  a  number  of  existing  markets  for 
pesticides.  Furthermore,  the  Commission  had  concerns  that  the  transaction  could  reduce 
competition  for  plant  growth  regulators.  The  approval  was  therefore  conditional  on  the 
divestiture of significant parts of ChemChina's European pesticide and plant growth regulator 
business.  The  Commission's  investigation  focused  on  competition  for  existing  pesticides, 
since  ChemChina  does  not  compete  with  Syngenta  for  the  development  of  new  and 
innovative pesticides. 

7. PHARMACEUTICAL AND HEALTH SERVICES SECTOR  

Overview of key challenges in the sector  

Ensuring access to high quality healthcare and medicines at competitive prices is an important 
objective  in  competition  law  enforcement  in  pharmaceutial  and  health  services  sector. 
Competition law enforcement can complement regulation that exists in this sector. 

Taking into account the sensitive balance between ensuring innovation, on the one hand, and 
more  affordable  medicines,  on  the  other,  the  Commission's  antitrust  enforcement  will 
continue to promote open and competitive markets in the sector and, in particular, access to 
affordable medecines for European citizens, whilst safeguarding the incentives for innovation, 
research and development. 

Contribution of EU competition policy to tackling the challenges  

On 15 May, the Commission initiated formal antitrust proceedings against Aspen Pharma for 
a suspected abuse of market dominance under Article 102 TFEU.287 The Commission intends 
to investigate information that Aspen has imposed unfair and excessive prices in the form of 
significant  price  increases  for  medicinal  products  containing  the  active  pharmaceutical 
ingredients  chlorambucil,  melphalan,  mercaptopurine,  busulfan  and  tioguanine  in  the  EEA 
Member States except Italy288. 

In its pay-for-delay investigation in relation to the market entry of generic modafinil (sleeping 
disorder  medicine),  on  17  July,  the  Commission  sent  a  Statement  of  Objections  to  Teva 
regarding an agreement with Cephalon whereby Teva would undertake not to sell its generic 
modafinil  products  in  the  EEA  until  October  2012.289  In  exchange,  Teva  received  a 
substantial  transfer  of  value  from  Cephalon  through  a  series  of  cash  payments  and  various 
other agreements. The Commission's preliminary view is that the transferred value served as a 

286 Case M.7962 ChemChina / Syngenta, Commission decision of  5 April 2017, available at http://ec.europa.eu/ 
competition/elojade/isef/case_details.cfm?proc_code=2_M_7962. 
287  Case  AT.40394  Aspen.  For  further  information  see  IP/17/1323  of  15  May  2017  available  at 
http://europa.eu/rapid/press-release_IP-17-1323_en.htm 
at 
opening 
http://ec.europa.eu/competition/antitrust/cases/dec_docs/40394/40394_235_3.pdf.   
288 The Italian competition authority already adopted an infringement decision against Aspen on 29 September 
2016. 
289 Case AT.39686 Cephalon. For further information see IP/17/2063 of 17 July 2017 available at 
http://europa.eu/rapid/press-release_IP-17-2063_en.htm. 

proceedings 

and 

the 

of 

80 

 
 
                                                            
significant  pay-for-delay  inducement  for  Teva  not  to  compete  with  Cephalon's  modafinil 
worldwide,  including  in  the  European  Economic  Area.  The  Statement  of  Objections  argues 
that  the  agreement  between  Cephalon  and  Teva  may  have  caused  substantial  harm  to  EU 
patients  and  health  service  budgets.  This  is  because  they  may  have  delayed  the  entry  of  a 
cheaper  generic  medicine,  leading  to  higher  prices  for  modafinil.  This  behaviour,  if 
confirmed, would infringe Article 101 TFEU that prohibits restrictive business practices.  

The  Commission  continued  monitoring  patent  settlements  between  originator  and  generic 
companies. The 2017 report (on the eighth monitoring exercise covering the year 2016) shows 
that the number of settlements that might merit closer scrutiny by competition authorities has 
progressively decreased since the 2009 Pharmaceutical Sector Inquiry and has stabilized at a 
low level (around 10%).290 

Merger review in the pharmaceutical sector  

Merger activity in the pharmaceutical sector continued to be sustained in the course of 2017, 
with the Commission taking a leading role in ensuring that concentration would not result in  
reduced competition or innovation to the detriment of patients and health systems. 

In  June,  the  Commission  approved  the  acquisition  of  Actelion  by  Johnson  &  Johnson291, 
subject to remedies. While the activities of the two companies were largely complementary, 
they  were  both  working  on  a  treatment  for  insomnia,  based  on  a  novel  way  to  cure  this 
condition.  The  Commission’s  market  investigation  indicated  that  the  transaction  as  notified 
would give Johnson & Johnson the ability and incentive to rationalise its competing insomnia 
research  and  development  programmes  by  either  delaying  or  discontinuing  one  of  them.  In 
order  to  address  these  competition  concerns  Johnson  &  Johnson  offered  remedies  to  ensure 
that it cannot influence negatively the development of either insomnia research programme. 

State aid actions in the health services sector 

The  Commission's  State  aid  actions  in  the  health  services  sector  mainly  concern  hospitals, 
related services (e.g., ambulance transport) and health insurance. The Commission decision of 
20 December 2011 (based  on Article  106(2)  TFEU292)  specifies the conditions under which 
compensation to companies for providing public services is compatible with the EU State aid 
rules and does not have to be notified to the Commission in advance. Compensation granted 
to  hospitals,  including  emergency  services  and  ancillary  services,  for  services  of  general 
economic  interest,  benefits  from  the  decision  irrespective  of  the amounts  involved  provided 
that  the  conditions  are  met.  Accordingly,  the  Commission  very  rarely  takes  decisions  on 
financing covered by this exemption decision. 

During  2017,  the  Commission  continued  examining  and/or  decided  on  a  number  of 
complaints lodged by private health service providers about their allegedly unfair treatment or 
potentially  excessive  compensation  of  publicly-owned  hospitals.  Those  complaints  usually 
came  from  operators  in  Member  States  with  healthcare  markets  more  open  to  competition 
(e.g. France and Germany).  

290 More information is available on the Commission's competition website, in the pharmaceuticals section. 
291 Case M.84401 J&J/Actelion. For further information, see  
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8401. 
292 Commission decision of 20 December on the application of Article 106(2) of the Treaty on the Functioning of 
the  European  Union  to  State  aid  in  the  form  of  public  service  compensation  granted  to  certain  undertakings 
entrusted the with operation of services of general economic interest, OJ L 7, 11.1.2012, p.3. 

81 

 
                                                            
8. TRANSPORT AND POSTAL SERVICES 

Overview of key challenges in the sector 

The transport and postal services sectors account for about 5.0 % of the EU economy293, and 
their  performance  can  have  many  beneficial  effects  for  other  sectors  of  the  European 
economy. Transport is the key to both an integrated internal market and to an open economy 
integrated  into  the  world  economy.  In  the  postal  sector  parcel  services  are  supplied  by 
competitive  transnational  suppliers  while  other  services  are  mostly  in  the  hands  of  national 
postal operators often depending on compensation from their government294.  

In 2017, the Commission used its competition tools to keep the transport and postal markets 
open  and  competitive,  and  to  facilitate  entry.  It  also  continued  to  facilitate  State  aid  that 
enabled  interoperability  between  different  modes  of  transport  as  well  as  on  State  aid  for 
modern infrastructure.  

Contribution of EU competition policy to tackling the challenges 

Merger review in air transport 

The  air  transport  sector  is  still  very  fragmented.  In  the  EU  there  are  more  than  150 airlines 
offering  scheduled  air  passenger  transport.  The  five  largest  airlines  in  the  EU,  comprising 
Lufthansa, Air France / KLM and the International Consolidated Airlines Group ("IAG" is the 
parent company of Aer Lingus, British Airways, Iberia, and Vueling), Ryanair, and easyJet,  
account for around 50 % of the EU market. In contrast, in the United States, the three legacy 
carrier  groups  American  Airlines,  Delta  and  United  together  with  the  low  cost  carrier 
Southwest jointly control more than 80 % of the United States market. The need for further 
consolidation was underpinned by the insolvency of three major airlines: Alitalia, Air Berlin 
and Monarch Airlines.  

In  this  context,  the  Commission  reviewed  the  acquisition  of  certain  Air  Berlin  assets  by 
Lufthansa295  and  easyJet.296    Lufthansa  initially  notified  the  Commission  of  its  intention  to 
acquire  two  of  Air  Berlin's  susbsidiaries,  NIKI  and  LGW,  as  well  as  a  collection  of  Air 
Berlin's  aircraft,  crew  and  slots.  Following  a  comprehensive  market  investigation  and  a 
market  test  of  the  commitments  proposed  by  Lufthansa,  the  Commission  shared  its 
preliminary  views  with  Lufthansa,  indicating  that  the  acquisition  of  NIKI  would  lead  to  a 
significant  number  of  routes  where  the  merged  entity  would  hold  very  high  market  shares, 
and  that  barriers  to  entry  for  competitors  would  increase  significantly.  While  the 
Commission's  investigation  was  still  on-going,  Lufthansa  decided  to  rescind  the  NIKI 
transaction  on  13  December,  leading  to  NIKI  filing  for  insolvency  on  the  same  day.297  The 

293  For  further  information  see  EU  transport  in  figures  Statistical  pocketbook  (2017)  available  at 
http://ec.europa.eu/transport/facts-fundings/statistics/doc/2017/pocketbook2017.pdf,  p.19;  prepared  by 
the 
Commission  with  around  EUR  651  billion  in  Gross  Value  Added  (GVA)  at  basic  prices,  the  transport  and 
storage services sector (including postal and courier activities) accounted for about 5.0 % of total GVA in the 
EU-28 in 2015 (or 4.5 % excluding postal and courier services). 
294  It  should  be  noted  however,  that  the  third  postal  Directive  (2008/6/EC)  introduced  full  opening  of  the 
Member States' postal markets, allowing new operators and services. 
295 Case M.8633 Lufthansa/certain Air Berlin assets. Further inforamtation available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8633. 
296 Case M.8672 easyJet/ certain Air Berlin assets. Further information available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8672. 
297  Following  a  decision  of  NIKI's  creditors  committee,  the  assets  of  NIKI  were  sold  in  January  2018  to  its 
founder, Mr Niki Lauda, and rebranded as Laudamotion. 

82 

 
                                                            
Commission eventually approved the remaining part of the transaction between Lufthansa and 
Air Berlin on 21 December.298 

This decision followed the approval granted on 12 December to easyJet for the acquisition of 
Air  Berlin's  operations  at  Berlin  Tegel  airport.299  In  both  cases,  the  Commission's 
investigation  focused  on  airport  dominance,  in  order  to  adapt  the  framework  of  the 
competitive assessment to two specific facts. First, with the exception of NIKI and LGW, Air 
Berlin's fleet had been grounded by the time of the notification of the transactions; therefore, 
Air Berlin was not actively competing anymore on the routes that it used to operate. Second, 
Air Berlin's assets were key to getting access to highly demanded and increasingly congested 
European airports. In this context, the Commission assessed whether the slot portfolio to be 
acquired  by  easyJet  and  Lufthansa  at  different  airports  would  allow  them  to  prevent 
competitors from entering or expanding their presence in the markets for passenger air travel 
to and from these airports. While the Commission found that the easyJet transaction was not 
likely  to  bring  anti-competitive  effects  at  any  airport,  it  raised  serious  doubts  about  the 
compatibility  of  the  Luftahnsa  transaction  with  the  internal  market  as  a  result  of  the 
reinforcement of Lufthansa's slot holding position at Düsseldorf airport. Lufthansa remedied 
the  Commission's  doubts  by    amending  its  sale  and  purchase  agreement  with  Air  Berlin  to 
reduce the scope of the transfer of slots at Düsseldorf airport. 

The Lufthansa/Air Berlin case – an example of the application of merger control rules to an insolvent air 
carrier 

Lufthansa's  failed  attempt  to  acquire  NIKI  examplifies  two  elements  of  the  application  of  EU  merger  control 
rules to transactions occuring in the framework of an air carrier's insolvency proceedings.   

Firstly, it is important that the risk that a transaction may not be implemented on regulatory grounds (including, 
but  not  limited  to,  State  aid  and  merger  control  rules)  is  not  underestimated  by  creditors'  committees  and 
insolvency administrators. In this regard, the Commission had informed Air Berlin's insolvency administrator of 
the problems that may be entailed by the proposed takeover of parts of Air Berlin, Germany's second largest air 
carrier, by Lufthansa ahead of the designation of the latter as preferred bidder.  

Secondly, the potential acquirer of the insolvent company may take interim measures to preserve the viability of 
the latter, subject to compliance with the Merger Regulation. Following the initiation of Air Berlin's insolvency 
proceedings in August 2017, its financial situation quickly deteriorated, to the extent that it became clear that the 
rescue  aid granted  by  Germany  in  order  to  ensure  an  orderly  liquidation of  the  company would  not  suffice to 
maintain  Air  Berlin's  operations  until  the  completion  of  the  Commission's  merger  control  procedures.  On  27 
October 2017, the Commission granted Lufthansa a derogation from the standstill obligation, as allowed under 
Article 7(3) of the EU Merger Regulation.300 Lufthansa was notably authorised to lease or purchase aircraft for 
use  by  LGW  and  NIKI  and  to  wetlease  them  from  LGW  and  NIKI.  These  measures  aimed  at  ensuring  the 
continuity  of  LGW's  and  NIKI's  operations,  thus  limiting  the  seat  capacity  shortage  and  disturbance  brought 
about by Air Berlin's insolvency. Considering the prima facie competition concerns raised by the transaction, the 
Commission attached clear conditions to its authorisation.    

In  2017,  in  the  framework  of  commitments  attached  to  previous  clearance  decisions,  a 

298  Case  M.8633  Lufthansa/certain  Air  Berlin  assets,  Commission  decision  of  21  December  2017  pursuant  to 
Article  6(1)(b)  in  conjunction  with  Article  6(2)  of  Council  Regulation  No  139/2004  and  Article  57  of  the 
Agreement  on 
the  European  Economic  Area,  available  at  http://europa.eu/rapid/press-release_IP-17-
5402_en.htm.  
299  Case  M.8672  easyJet/certain  Air  Berlin  assets,  Commission  decision  of  12  December  2017  pursuant  to 
Article  6(1)(b)  in  conjunction  with  Article  6(2)  of  Council  Regulation  No  139/2004  and  Article  57  of  the 
Agreement on the European Economic Area, available at 
http://ec.europa.eu/competition/mergers/cases/decisions/m8672_673_5.pdf.  
300   Case  M.8633  Lufthansa/Certain  Air  Berlin  Assets,  Commission  decision  of  27  October  2017  pursuant  to 
Article  7(3)  of  Council  Regulation  (EC)  No.  139/2004  and  Article  57  of  the  Agreement  on  the  European 
Economic Area, available at http://ec.europa.eu/competition/mergers/cases/decisions/m8633_1376_4.pdf.  

83 

 
                                                            
number  of  new  applications  highlighted  increased  interest  in  slots  made  available  under  the 
Commission  commitments.  The  Commission  approved  the  acquisition  of  British  Midlands 
Limited (bmi) by IAG in 2012 subject to among others slot commitments. The Commission 
received requests for additonal slots by Aeroflot on the London Heathrow – Moscow routeand 
by  Flybe  on  two  routes  connecting  London  Heathrow  to  Aberdeen  and  Edinburgh.301   
Furthermore,  Transavia requested additional slots at Ibiza for the city pair Pairs-Ibiza under 
the commitments given by Iberia in the framework of the Commission clearance decision of 
Iberia's takeovoer of Clickair and Vueling.302  

State aid to airports and airlines 

On  14  June,  the  Commission  has  simplified  the  State  aid  rules  for  smaller  airports  by 
including  them  in  the  GBER.303  The  revised  GBER  introduces  a  block  exemption  for 
investment  aid  for  airports  with  less  than  3  million  passengers.  This  implies  that  for  such 
airports an individual approval by the Commission of State aid is no longer needed provided 
the  conditions  set  out  in  the  GBER  are  met  (in  particular,  avoiding  financing  airport 
infrastructure  which  unnecessarily  duplicates  existing  infrastructure  and  ensuring  aid  is 
limited  to  what  is  necessary  to  trigger  the  investment).  The  revised  GBER  also  foresees 
simplified and less demanding rules for investment and operating aid for very small airports  
(below  200  000  passengers),  compared  to  the  substantive  rules  laid  down  in  the  2014 
Aviation  Guidelines304.  The  Commission's  experience  has  shown  that  it  can  be  difficult  for 
very  small  airports  to  comply  with  the  rules  in  the  Aviation  Guidelines.  In  addition,  many 
small  airports  are  dependent  on  public  funding  for  their  survival.  On  the  other  hand,  the 
impact of aid to such airports on competition is very limited, of a local nature and therefore 
does not warrant an EU scrutiny. Airports under 200 000 passengers represent almost half of 
all airports in Europe, but less than 1% of the traffic at EU level.  

In addtion, the Commission continued to apply the Aviation Guidelines adopted in 2014. In 
2017, several decisions were adopted, closing long-standing investigations into aid to airports 
and airlines.  

In  the  Brussels  airport  case305,  the  Commission  conducted  an  in-depth  investigation  of  the 
public  support  granted  by  Belgium  to  three  airlines  flying  from  Brussels  Airport.  After 
discussions with the Commission, the Belgian government abolished the scheme and ordered 
the  beneficiary  airlines  to  reimburse  the  aid  already  received,  with  interest,  whilst  the 

301   Case M.6447 IAG/bmi, Commission decision of 30 October 2017 concerning the assessment of the viability 
of Applicants and evaluation of their formal bids pursuant to Clause 1.4.9 of the Commitments attached to the 
Commission decision of 30 March 2012 in case M.6447 IAG/bmi following the Monitoring Trustee's opinion of 
19 October 2017, available at http://ec.europ.eu/competition/mergers/cases/decisions/m6447_5764_7.pdf. 
302   Case M. 5364 Iberia/Clickair/Vueling, Commission decision of 31 October 2017 concerning the Assessment 
of the viability of Applicants and evaluation of their formal bids pursuant to Clause 1.4.9 of the commitments 
attached  to  the  Commission  decision  of  9  January  2009  in  case  M.  5364  Iberia/Clickair/Vueling  available  at 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=2 . 
303 Commission Regulation (EU) 2017/1084 of 14 June 2017 amending Regulation (EU) No 651/2014 as regards 
aid for port and airport infrastructure, notification thresholds for aid for culture and heritage conservation and for 
aid for sport and multifunctional recreational infrastructures, and regional operating aid schemes for outermost 
regions  and  amending  Regulation  (EU)  No  702/2014  as  regards  the  calculation  of  eligible  costs.  OJ  L  156, 
20.6.2017, pp. 1–18 available at  
http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1497952641554&uri=CELEX:32017R1084.  
304   Communication from the Commission, Guidelines on State aid to airports and airlines, OJ C 99, 4.4.2014, 
p. 3 available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2014.099.01.0003.01. ENG.  
305 Commission decision of 18 July 2017, SA.38105 (2014/C (ex 2014/NN))  - Belgium - Subside en faveur de 
certaines compagnies aériennes opérant à l’aéroport de Bruxelles-National. For further information see Daily 
News (MEX/17/2071) of 18 July 2017 available at http://europa.eu/rapid/press-release_MEX-17-2071_en.htm. 

84 

 
                                                            
investigation was still pending. As the competitive harm caused by the aid has already been 
remedied  before  the  end  of  the  Commission's  investigation,  the  decision  did  not  order 
recovery of the illegal aid, found to be incompatible with the internal market.  

In  the  Irish  Air  Travel  Tax  case306,  the  Commission  examined  whether  the  exemption  for 
transfer and transit passengers from the Irish air travel tax was in line with EU State aid rules. 
The  in-depth  investigation  confirmed  that  the  exemption  did  not  selectively  favour  certain 
airlines and therefore involved no State aid.  

The  Commission's  decision307  on  Lübeck  airport  closed  its  formal  investigations  opened  in 
2007  and  2012.  The  Commission  found  that  FLG  and  the  city  of  Lübeck  had  both  acted 
according  to  the  Market  Economy  Operator  Principle  (MEOP)  and  therefore  no  advantage 
had  been  granted  to  Ryanair  and  to  Infratil,  respectively.  Two  airport  service  agreements 
concluded between FLG and Ryanair in 2010 will be assessed in a separate decision. 

Furthermore,  the  Commission  adopted  several  decisions  in  cases  involving  start-up  aid  to 
airlines308 and cases involving operating and/or investment aid to airports309.  

The Commission has also authorised a temporary EUR 150 million bridging loan granted by 
Germany in favour of AirBerlin310. The airline filed for insolvency in August, after its main 
shareholder  Etihad  withdrew  its  financial  backing  for  the  loss-making  company.  The 
Commission found that the measure would help to protect the interests of air passengers and 
to maintain temporarily air passenger services. At the same time, the strict conditions attached 
to the loan, its short duration and the fact that Air Berlin was expected to cease operations at 
the end of the process, would reduce the distortion of competition, potentially triggered by the 
state support, to a minimum.  

airport 

available 

Limburg), 

(Provincie 

306 Commission decision of 14 July 2017, SA.29064 (2011/C) (ex 2011/NN)  - Ireland -Non-application of the 
Air Travel Tax to transit and transfer passengers. For further information see Daily News (MEX/17/2042) of 14 
July 2017 available at http://europa.eu/rapid/press-release_MEX-17-2042_en.htm. 
307 Commission decision of 7 February 2017, SA.21877, SA.27585, SA.31149 - Germany - Alleged State aid to 
Flughafen Lübeck GmbH, Infratil Limited, Ryanair and other airlines using the airport,  available at http://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2017:339:FULL&from=EN. 
308   See  for  example  Commission  decision  of  4  August  2017  SA.47746  -  Netherlands  -  Start-up  aid  to 
Maastricht-Aachen 
at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47746; Commission decision of 
27  March  2017,  SA.46709  -  Italy  -  Start-up  aid  for  new  routes  from/to  airports  in  the  Region  of  Calabria, 
available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46709 .  
309   See for example Commission decision of 25 September 2017, SA.42413 - France – Aide à l'investissement 
pour 
http://ec.europa.eu/competition/elojade/isef/ 
case_details.cfm?proc_code=3_SA_42413;  Commission decision of 7 September 2017, SA.43787 - Germany - 
Investment 
http://ec.europa.eu/competition/ 
elojade/isef/case_details.cfm?proc_code=3_SA_43787; Commission decision of 13 February 2017, SA.44058 - 
Germany 
http://ec.europa.eu/competition/elojade/isef/ 
case_details.cfm?proc_code=3_SA_44058;  Commission  decision  of  9  August  2017,  SA.44377  -  Denmark    - 
at 
and 
Aarhus 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_44377;  Commission  decision  of 
7  April  2017,  SA.47969 
to  Frankfurt-Hahn  Airport,  available  at 
-  Operating  aid 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47969.  
310   Case SA.48937 – Germany – Rescue aid in favour of Air Berlin PLC & Co. Luftverkehrs KG, Commission 
decision 
at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48937.  For  further  information 
see IP/17/3083 available at http://europa.eu/rapid/press-release_IP-17-3083_en.htm. 

Saarbrücken 

-  Germany 

Memmingen 

Investment 

September 

Operating 

l'aéroport 

available 

available 

available 

available 

available 

Airport, 

airport, 

Tarbes, 

Airport 

2017 

Aid, 

aid 

de 

of 

to 

at 

at 

at 

4 

- 

- 

85 

 
 
                                                            
Merger review in maritime transport 

The  global  container  shipping  industry  is  undergoing  a  period  of  change,  in  reaction  to  the 
challenges  it  has  been  facing  in  recent  years.  The  sector  is  characterised  by  overcapacity, 
resulting from several carriers' expansion and investment in ultra-large vessels in recent years, 
and  a  slow  recovery  of  demand  following  the  economic  crisis.  Also  as  a  means  to  improve 
their  efficiency  and  reduce  their  operating  costs,  container  shipping  companies  do  not  only 
provide services individually, but they have also put in place operational agreements, such as 
consortia or alliances, with other shipping companies that allow them to combine their vessels 
and offer a joint service.  

2017 saw a significant change in the alliances landscape, with the termination of three of the 
previously  four  global  alliances,  namely  CKYHE,  G6  and  the  Ocean  Alliance,  and  their 
replacement by only two, The Alliance and the Ocean Alliance, by 1 April. Together with the 
enlarged  2M,  there  are  now  only  three  global  alliances.  Moreover,  a  wave  of  consolidation 
can  be  observed,  which  started  in  2014  with  the  merger  of  Hapag-Lloyd  and  CSAV311  and 
intensified in 2016 and 2017. Like the year before,312 there were three major mergers in the 
industry.  

On  10  April,  the  Commission cleared  the  acquisition  of  Hamburg  Süd  by  Maersk Line,  the 
Danish world market leader.313  

The Acquisition of Hamburg Süd by Maersk Line 

As initially notified, the transaction would have created new links between previously unconnected consortia to 
which the two companies belonged (Maersk is a founding member of the 2M Alliance whereas Hamburg Süd 
was a member of certain route specific consortia).  

The Commission had concerns that these potential new links would have resulted in anti-competitive effects on 
five  trade  routes,  notably between Northern Europe  and  (i)  Central  America/Caribbean,  (ii) West  Coast South 
America and (iii) Middle East as well as between the Mediterranean and (iv) West Coast South America and (v) 
East Coast South America. On these routes, competition from liner shippers which have no connection with the 
merged  entity  or  its  alliance  partners  would  have  been  insufficient.  As  a  result,  the  transaction  could  have 
enabled  the  merged  entity,  through  the  consortia  that  the  two  companies  belong  to,  to  influence  capacity  and 
therefore prices to the detriment of shippers and consumers for a very large part of those markets.  

Maersk offered to terminate the participation of Hamburg Süd in the five consortia (Eurosal 1/SAWC, Eurosal 
2/SAWC,  EPIC  2,  CCWM/MEDANDES  and  MESA)  which  entirely  removes  the  problematic  links  between 
Maersk Line and HSDG's consortia that would have been created by the transaction. 

The  Commission  also  cleared  the  combination  of  the  global  container  liner  shipping  and 
container  terminal  business  (excluding  terminals  in  Japan)  of  the  Japanese  carriers  MOL, 
NYK and  K-Line  in  a joint venture.314 As MOL,  NYK and  K-Line  were, since 1 April  and 
therefore prior to the merger, already members of the same global alliance, the Alliance, no 

311   Case  M.7268  CSAV/HGV/Kühne  Maritime/Hapag-LLoyd,  Commission  decision  of  11  September  2014 
available at http://ec.europa.eu/competition/mergers/cases/decisions/m7268_1503_2.pdf.  
312   Case  M.7908  CMA  CGM 
/  NOL,  Commission  decision  of  29  April  2016  available  at 
/ 
http://ec.europa.eu/competition/mergers/cases/decisions/m7908_1366_3.pdf;  Case  M.8120  Hapag-Lloyd 
United Arab Shipping Company (UASC). For further information see IP/16/2942 of 23 November 2016 available 
at http://europa.eu/rapid/press-release_IP-16-3942_en.htm, and the merger between the two Chinese state-owned 
enterprises Cosco and CSCL. 
313 Case M.8330 Maersk / Hamburg Süd, Commission decision of 10 April 2017 available at 
http://europa.eu/rapid/press-release_IP-17-904_en.htm 
314 Case M.8472 NYK, MOL and K Line, Commission decision of 28 June 2017 available at  
http://ec.europa.eu/competition/mergers/cases/decisions/m8472_128_3.pdf 

86 

 
                                                            
new  links  between  previously  unconnected  consortia  were  created.  Since  also  the  market 
positon of the merged entity, including its consortia partners in the Alliance, would be rather 
moderate, the Commission cleared the merger unconditionally. 

The last merger dealt with by the Commission in 2017 was the takeover of Hong Kong-based  
OOCL  by  the  Chinese  state-owned  firm  Cosco315  which  created  the  third  largest  container 
shipping company in the world. The Commission found that the combination of the Parties' 
activities would not raise competition concerns. despite very high combined market shares of 
COSCO and OOIL and their consortia partners on the Northern Europe-North America trade 
route, since on that route (a) the link between the consortia the two firms were members of 
was  pre-existing  (b)  there  would  still  be  significant  competitors  left  post-merger,  (c)  the 
companies were not close competitors and (d) COSCO position was marginal. 

State aid enforcement in the maritime transport sector 

In  2017,  the  Commission  continued  to  ensure  compliance  with  the  Maritime  State  aid 
Guidelines316.  The  aim  of  those  Guidelines  is  to  maintain  the  European  maritime  sector's 
competitiveness and to avoid flagging out to "flags of convenience" for which environmental 
and  security  standards  might  be  low.  The  Commission  is  determined  to  ensure  consistency 
and equal treatment throughout the EU whilst at the same time making sure that the beneficial 
tonnage tax regimes do not contravene internal market rules.  

For  example,  on  6  November,  the  Commission  approved  under  the  EU  State  aid  rules  the 
prolongation  until  end  2022  of  the  Belgium  tonnage  tax  scheme.317  The  Belgian  authorities 
have committed to extend the benefit of the scheme to all eligible ships that fly an EEA flag 
and  thus  prevent  any  discrimination  between  shipping  companies  and  registries  of  different 
EEA  States.  Furthermore,  the  Commission  took  a  decision  concerning  the  prolongation  and 
modification  of  the  Lithuanian  tonnage  tax  scheme318.  In  December,  the  Commission 
approved the Maltese tonnage tax scheme subject to commitments319. The Commission's in-
depth  investigation  found  certain  features  of  the  original  scheme,  such  as  tax  exemptions 
applied  to  Maltese  residents  and  the  broad  scope  of  the  scheme  extending  to  vessels  not 
carrying out maritime transport activities, to be in breach of EU State aid rules. As a result, 
Malta  has  committed  to  introduce  a  number  of  changes  to  its  scheme  to  prevent  any 
discrimination between shipping companies and to avoid undue competition distortions.  

315 Case M.8594 Cosco Shipping/OOIL, Commission decision of  5 December 2017 available at  
http://europa.eu/rapid/press-release_MEX-17-5149_en.htm 
316 Communication from the Commission, Community guidelines on State aid to maritime transport, OJ C 13, 
17.01.2004, p. 3, available at http://eur-lex.europa.eu/legalcontent/EN/ALL/?uri=CELEX:52004XC0117(01). 
317 Case SA.41330 Prolongation du régime de taxe au tonnage Belgique, Commission decision of  6 November 
2017 available at 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=1,2,3&case_num
ber=41330. For further information see IP/17/4382 of 6 November 2017 available at http://europa.eu/rapid/press-
release_IP-17-4382_en.htm. 
318 Case SA.45764 Lithuania – State aid in favour of maritime transport Prolongation and modification of the 
tonnage tax scheme, Commission decision of 16 June 2017 available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_45764.  
319 Case SA. 33829, Maltese tonnage tax scheme and other State measures in favour of shipping companies and 
their shareholders, Commission Decision of 19 December 2017, not yet published. For further information see 
IP/17/5361 of 19 December 2017 available at http://europa.eu/rapid/press-release_IP-17-5361_en.htm.  

87 

 
 
 
                                                            
Antitrust enforcement in the rail sector 

On 2 October, the Commission fined Lithuanian Railways320 (Lietuvos geležinkeliai, LG321) 
for  abusing  its  dominant  position  in  the  management  of  rail  infrastructure  in  Lithuania  by 
removing  a  rail  track  connecting  Lithuania  and  Latvia  an  amount  of  €27.9  million.  The 
Commission also orderred LG to bring the infringement to an end.  

The Lithuanian Railways (LG) Case 

The infringement started in 2008 when Orlen, the only oil refinery in the Baltic states and a major commercial 
customer of LG, considered redirecting its freight from Lithuania to Latvia by using the services of another rail 
operator from Latvia. In October 2008, LG dismantled a 19km long section of track connecting Lithuania and 
Latvia, close to Orlen's refinery. The removal of the track meant that Orlen would need to use a much longer 
route to reach Latvia. Since then the dismantled track has not been rebuilt. 

The  Commission's  investigation  found  that  these  actions  hindered  competition  on  the  rail  freight  market  by 
preventing  a  major  customer  of  LG  from  using  the  services  of  another  rail  operator.  LG  failed  to  show  any 
objective justification for the removal of the track. The EU's rail freight market was liberalised in 2007. Since 
then, the Commission has been working to complete the single market for rail services, including by ensuring the 
independent  management  of  rail  infrastructure  and  fostering  investment  in  tracks  that  interconnect  Member 
States. In this context, the enforcement of EU competition rules is important to ensure that regulatory barriers are 
not  replaced  by  anti-competitive  behaviour  of  dominant  rail  companies  that  would  prevent  the  EU  from 
achieving its ultimate goals for rail transport. 

Rail and intermodal State aid enforcement  

In  2017,  the  Commission  approved  a  number  of  schemes  supporting  rail  and  intermodal 
transport,  which  aim  to  support  the  transfer  of  cargo  from  the  road  to  the  safer  and  more 
environmentally  friendly  rail  transport  modes322,  including  support  for  systems  ensuring 

combinato, 

320 Case AT.39813 Baltic Rail, Commission decision of 2 October 2017. Summary of the decision was published 
in OJ C 308, 14.11.2017, p. 7.  
321 LG is the incumbent state-owned rail company in Lithuania. The company is vertically integrated, meaning 
that  it  is  responsible  for  both  railway  infrastructure  and  rail  transport.  It  enjoys  a  statutory  monopoly  of  the 
management of the rail infrastructure in Lithuania and a de facto monoply in the provision of both passenger and 
freight rail services in Lithuania. 
322  Commission  decision  of  25  July  2017,  SA.  46806  -  Italy  -  Aid  for  combined  transport  in  the  Province  of 
Trento,  available  at  http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46806;  
Commission decision of 14 June 2017, SA.47779 - Italy - Friuli Venezia Giulia - Interventi per lo sviluppo del 
at 
trasporto 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47779;  Commission decision of 
6 June 2017, SA.47109 - Belgium - Prolongation du régime de promotion du transport combiné ferroviaire et du 
trafic 
at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47109;  Commission decision of 
25  October  2017,  SA.  48759  -  Italy  -  Prolongation  of  rail  freight  transport  scheme,  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48759;  Commission decision of 
25 October 2017, SA.48390 - Austria - Aid scheme supporting rail freight transport in certain production forms 
2018  –  2022,  for  further  information  see  Daily  News  (MEX/17/4163)  of  25  October  2017  available  at 
http://europa.eu/rapid/press-release_MEX-17-4163_en.htm;  Commission  decision  of  15  September  2017,  
SA.48485 - Austria - BMVIT - Prolongation of a programme supporting the development of connecting railways 
and 
at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48485;  Commission  decision  of 
12 October 2017, SA.48634 - Denmark - Subsidy Scheme Rail Freight, for further information see Daily News 
(MEX/17/3924)  of  12  October  2017  available  at  http://europa.eu/rapid/press-release_MEX-17-3924_en.htm; 
Commission  decision  of  30 October  2017,  SA.48093  -  Poland  -  Intermodal  transport,  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48093.  

2017-2020, 

intermodal 

terminals 

transport 

available 

available 

available 

transfer 

2022, 

diffus 

2018 

pour 

in 

- 

88 

 
                                                            
interoperability323.  

In  August,  the  Commission  also  approved  EUR  96  million  of  State  aid  for  the  building  of 
light maintenance workshops for passenger trains in Slovakia.324 This will further help to shift 
transport from road to rail in Slovakia, fostering environmental protection and decongestion 
of  roads.  The  Commission  has  made  sure  that  the  aid  will  not  hinder  the  development  of 
competition  on  the  Slovak  rail  transport  market  with  respect  to  access  to  light  maintenance 
facilities.  While  the  workshops  will  initially  be  operated  by  the  Slovak  incumbent  rail 
operator,  in  the  future,  its  operation  can  be  transferred  to  other  rail  transport  companies,  if 
they win new tenders for rail transport services under public service contracts. In addition, an 
equal and non-discriminatory access for other train operators is safeguarded.  

Moreover, the Commission  has  examined the restructuring of  the Bulgarian publicly-owned 
railway  incumbent  BDZ325.    As  BDZ  is  the  only  provider  of  railway  passenger  transport  in 
Bulgaria,  it  is  of  crucial  importance  to  the  country's  connectivity  and  economy.  The 
Commission  concluded  that  certain  debt  write-offs  granted  by  Bulgaria  were  necessary  and 
proportionate  to  support  BDZ's  operation  and  did  not  prevent  effective  competition  in  the 
market.  Another  investigation  in  the  rail  sector  related  to  the  restructuring  of  OSE326,  the 
Greek national rail infrastructure manager, and TRAINOSE327, the passenger and freight rail 
transport operator. The restructuring measures will ensure that rail services continue operating 
in Greece, thus avoiding a serious disturbance of the Greek economy. For the aid measures to 
OSE  and  TRAINOSE  that  the  Commission  found  to  be  in  line  with  EU  state  aid  rules,  the 
Commission  took  into  particular  account  the  difficulties  the  Greek  railway  sector  is  facing 
and  the  importance  of  a  well-functioning  railway  service  for  the  population.  The  measures 
have the legitimate objective of avoiding a serious disturbance of the Greek economy, without 
unduly distorting competition in the Single Market. 

State aid review in the road sector 

The  Commission  continued  to  enforce  Regulation  (EC)  No  1370/2007  on  public  passenger 
transport services328. On 23 August, the Commission took a negative decision with recovery 
on the shadow toll compensation granted by Poland to the A2 motorway concessionnaire to 

323  Commission  decision  of  10  July  2017,  SA.38283  -  Denmark  -  ERTMS  funding  for  Danish  rail  freight 
operators.  For  further  information  see  IP/17/1961  of  11  July  2017  available  at  http://europa.eu/rapid/press-
release_IP-17-1961_en.htm. 
324 State aid case SA.42525 – Slovakia – Workshops for light maintenance of trains, Commission decision of 23 
August 2017 available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_42525. 
325  Case  SA.31250  –  Bulgaria  –  Measure  implemented  by  Bulgaria  in  favour  of  BDZ  Holding  EAD  SA,  BDZ 
Passenger  EOOD  and  BDZ  Cargo  EOOD,  Commission  decision  of  16  June  2017  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_31250.  For  further  information 
see IP/17/1659. 
326  Case  SA.32543  –  Greece  –  Measures  in  favour  of  OSE  group,  Commission  decision  of  16  June  2017 
available  at  http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_32543.  For  further 
information see IP/17/1661. 
327  Case  SA.32544  –  Greece  –  Restructuring  of  the  Greek  Railway  Group  -  TRAINOSE  S.A.,  Commission 
decision 
at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_32544.  For  further  information 
see IP/17/1661. 
328 Regulation (EC) No 1370/2007 of the European Parliament and the Council of 23 October 2007 on public 
passenger  transport  services  by  rail  and  by  road  and  repealing  Council  Regulations  (EEC)  Nos.  1191/69  and 
1107/70, OJ L 315, 3.12.2007, p. 1. 

available 

2017 

June 

16 

of 

89 

 
                                                            
compensate for a legislative change329.  

State aid review in the postal services sector 

The postal sector continues to evolve and traditional letter delivery, against the backdrop of 
electronic  substitution,  remains  on  a  declining  trajectory.  Nevertheless,  postal  services  have 
retained  a  very  significant  economic  and  social  value.  In  a  shrinking  market  of  traditional 
letter  delivery,  many  postal  incumbents  are  being  forced  to  diversify  the  portfolio  of  their 
activities and innovate in order to stay competitive. At the same time, the explosive growth of 
e-commerce necessitates a well-functioning parcel delivery market linking buyers and sellers. 
Efficient postal services are thus a key factor in allowing e-commerce to realise its potential in 
propelling growth and creating jobs.  

Through State aid control in the postal sector, the Commission pursues multiple related goals. 
State aid control ensures that where a postal service provider – typically a postal incumbent – 
is  entrusted  with  a  costly  public  service  obligation,  any  compensation  paid  to  the  provider 
does not undermine a level playing field between postal incumbents and new entrants. State 
aid should not shield the recipients from competitive pressures and market developments, but 
should incentivise efficiency, innovation and investment.  

In 2017 the Commission continued its investigation in the Correos case, on which it opened 
the formal investigation procedure in 2016.330 The investigation focusses on whether Correos 
had been overcompensated between 2004 and 2010 for the provision of the universal postal 
service given that profitability levels achieved by Correos with the public funding seemed to 
exceed  the  level  of  reasonable  profit  allowed  under  EU  State  aid  rules  on  public  service 
compensation.  The  Commission  is  also  investigating  other  measures  granted  by  Spain  to 
Correos  since  2004,  notably  tax  exemptions,  capital  increases  and  compensation  for  the 
distribution of electoral material.  

available 

329  Commission  decision  of  25  August  2017,  SA.35356  -  Aid  to  Autostrada  Wielkopolska  -  Shadow  toll 
compensation, 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code= 
3_SA_35356. 
330 Case SA.37977 Complaint regarding unlawful State aid in favour of Sociedad Estatal Correos y Telégrafos, 
S.A.  For  further  information  see  IP/16/284  of  11  February  2016  available  at  http://europa.eu/rapid/press-
release_IP-16-284_en.htm  

at 

90 

 
 
 
                                                            
ANNEX  

Banking State aid cases: Decisions adopted by the Commission in 2017 

By country 

Member State  

Case number/Title 

Type of Decision 

Date of 
adoption 

Austria 

Austria 

Belgium 

Croatia 

Denmark 

Denmark 

France 

France 

SA.32745 (2017/NN-2) – Sale of parts of 
Kommunalkredit Austria AG 

No aid decision 

17/03/2017 

SA.46205 (2016/N) - Amendment of the 
methodology of AWS GmbH to calculate the 
aid element of guarantees 

SA.49039 (2017/N) - Plan de conversion des 
actions préférentielles de Dexia en actions 
ordinaires 

SA.48287 (2017/N) - Prolongation of the 
resolution scheme for small credit 
institutions with total assets below EUR 1.5 
billion 

No objection 
decision 

21/04/2017 

No objection 
decision 

19/09/2017 

No objection 
decision 

23/06/2017 

SA.34720 (2015/C) - Aid for the 
restructuring of Vestjysk Bank 

Final decision 

18/07/2017 

SA.44031 (2015/N) - Denmark-Winding-up 
scheme for small banks 

No objection 
decision 

02/08/2017 

SA.49039 (2017/N) - Plan de conversion des 
actions préférentielles de Dexia en actions 
ordinaires 

SA.41147 (2017/NN) - Service d'intérêt 
économique général (SIEG) d'accessibilité 
bancaire du Livret A de La Banque Postale – 
prolongation 2015-2020 

No objection 
decision 

19/09/2017 

No objection 
decision 

24/10/2017 

Greece 

HT.4524 - STEC - 2017 Greece 

Communication 

29/06/2017 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

Greece 

SA.48400 (2017/N) - Prolongation of the 
Greek State Guarantee Scheme for banks 
(Art. 2 law 3723/2008) 

No objection 
decision 

03/07/2017 

11 

Greece 

SA.49459 (2017/N) – Exchange of Eurobank 
State preference shares for Tier 2 bonds 

12 

Greece 

SA.49583 (2017/N) - Prolongation of the 
Greek State Guarantee Scheme for banks  

13 

Ireland 

SA.48099 (2017/N) - Fifth prolongation of 
the Credit Union restructuring and 
stabilisation Scheme 

No objection 
decision 

No objection 
decision 

No objection 
decision 

24/11/2017 

06/12/2017 

17/05/2017 

91 

 
 
Member State  

Case number/Title 

Type of Decision 

Date of 
adoption 

14 

Ireland 

15 

Ireland 

16 

Ireland 

17 

18 

19 

20 

Italy 

Italy 

Italy 

Italy 

21 

Italy 

22 

Italy 

SA.48337 (2017/N) - 11th prolongation of 
the Credit Union Resolution Scheme H2 
2017 

SA.49194 (2017/N) - Sixth prolongation of 
the Credit Union restructuring and 
stabilisation scheme  

SA.49274 (2017/N) - 12th prolongation of 
the Credit Union Resolution Scheme2017-
2018 

SA.47149 (2016/N) - Liquidity support to 
Banca Popolare di Vicenza 

SA.47150 (2016/N) - Liquidity support to 
Veneto Banca 

SA.47940 (2017/N) - Additional liquidity 
support to Banca Popolare di Vicenza 

SA.47941 (2017/N) - Additional liquidity 
support to Veneto Banca 

SA.39543 (2017/N-2), SA.41134  
(2017/N-2), SA.43547 (2017/N-2) – Italy – 
Sale of the bridge banks Marche, Etruria and 
Carichieti to UBI Banca (third amendment to 
the resolution of the banks Marche, Etruria 
and Carichieti) 

SA.45664 (2017/N) - Orderly liquidation of 
Banca Popolare di Vicenza and Veneto 
Banca - Liquidation aid 

No objection 
decision 

05/07/2017 

No objection 
decision 

25/10/2017 

No objection 
decision 

No objection 
decision 

No objection 
decision 

No objection 
decision 

No objection 
decision 

15/11/2017 

18/01/2017 

18/01/2017 

12/04/2017 

12/04/2017 

No objection 
decision 

30/04/2017 

No objection 
decision 

25/06/2017 

23 

Italy 

SA.41925 (2017/N-2) - Sale of Cassa di 
risparmio di Ferrara S.p.A   

No objection 
decision 

29/06/2017 

SA.47677 (2017/N) - New aid and amended 
restructuring plan of Banca Monte dei Paschi 
di Siena 

No objection 
decision 

04/07/2017 

24 

Italy 

25 

Italy 

SA.48416 (2017/N) - Prolongation of the 
Italian guarantee scheme for the 
securitisation of non-performing loans 

26 

Latvia 

SA.47233 (2017/N) – Latvia Short-term 
export-credit Scheme 

27 

Lithuania 

SA.48920 (2017/N) - Recapitalisation of 
Lithuanian Central Credit Union 

92 

No aid decision 

06/09/2017 

No objection 
decision 

No objection 
decision 

30/03/2017 

18/12/2017 

 
 
Member State  

Case number/Title 

Type of Decision 

28 

Netherlands 

SA.47416 (2017/N) - Guarantee scheme for 
Energy Transition (ETFF) 

No objection 
decision 

Date of 
adoption 

17/07/2017 

29 

Netherlands 

SA.46664 (2017/N) - State guarantee on 
senior debt funding for loans to shipping 
companies 

No aid decision 

04/08/2017 

30 

Poland 

31 

Poland 

32 

Poland 

33 

Poland 

34 

Poland 

SA.46982 (2016/N) - Sixth prolongation of 
the Credit Unions Orderly Liquidation 
Scheme – H1 2017 

SA.48227 (2017/N) - Sixteenth prolongation 
of the Polish bank guarantee scheme – H2 
2017 

SA.48256 (2017/N) - Seventh Prolongation 
of Credit Unions Orderly Liquidation 
Scheme - H2 2017 - H1 2018 

SA.48302 (2017/N) - Prolongation of the 
resolution scheme for cooperative banks and 
small commercial banks 

SA.49404 (2017/N) - Seventeenth 
prolongation of the Polish bank guarantee 
scheme  

No objection 
decision 

02/03/2017 

No objection 
decision 

05/07/2017 

No objection 
decision 

02/08/2017 

No objection 
decision 

02/08/2017 

No objection 
decision 

07/12/2017 

35 

Portugal 

SA.47164 (2016/N) - Seventh Prolongation 
of the Portuguese Guarantee Scheme on EIB 
lending. 

No objection 
decision 

17/02/2017 

36 

Portugal 

SA.47168 (2016/N) - 15th Extension of the 
Portuguese Guarantee Scheme 

No objection 
decision 

17/02/2017 

37 

Portugal 

SA.47178 (2017/NN) - Recapitalização da 
Caixa Geral de Depósitos, S.A. 

No aid decision 

10/03/2017 

38 

Portugal 

39 

Portugal 

SA.49275 (2017/N) - Sale of Novo Banco 
with additional aid in the in the context of 
the 2014 Resolution of Banco Espírito 
Santo, S.A. 

SA.48549 (2017/N) Eighth Prolongation of 
the Portuguese Guarantee Scheme on EIB 
lending 

40 

Portugal 

SA.48550 (2017/N)  16th Extension of the 
Portuguese Guarantee Scheme 

No objection 
decision 

11/10/2017 

No objection 
decision 

No objection 
decision 

07/11/2017 

07/11/2017 

41 

Romania 

SA.46974 (2016/N) - Prolongation of the 
Romanian short-term export-credit scheme 

No objection 
decision 

08/02/2017 

93 

 
 
Member State  

Case number/Title 

Type of Decision 

42 

Romania 

SA.46974 (2016/N) - Prolongation of the 
Romanian short-term export-credit scheme 
COR 

No objection 
decision   
Corrigendum 

Date of 
adoption 

08/03/2017 

43 

Slovenia 

SA.37316 (2015/FC) - Complaint 
concerning alleged unlawful State Aid for T-
2 

No aid decision 

27/04/2017 

44 

Slovenia 

SA.33229 (2017/N-2) - Restructuring of 
NLB - Slovenia 

No objection 
decision 

11/05/2017 

45 

Spain 

46  United Kingdom 

SA.47174 (2016/N) - Amendment of the 
Restructuring of Banco CEISS through 
integration with Unicaja Banco - 
Amendment to the restructuring plan of 
Banco CEISS 

SA.47702 (2017/N) - Alternative package to 
replace the commitment for the Royal Bank 
of Scotland to divest the Rainbow business  

No objection 
decision 

27/01/2017 

  Decision to 
initiate the 
formal 
investigation 
procedure 

04/04/2017 

47  United Kingdom 

SA.47702 (2017/C) - Alternative package to 
replace the commitment for the Royal Bank 
of Scotland to divest the Rainbow business  

Final decision 

18/09/2017 

94