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 2018
Date: 2019-07-15
Institutions: Directorate-General for Competition, European Commission
Subjects: EU competition policy, State aid, anti-trust legislation, competitiveness, control of State aid, control of restrictive practices, merger control, restriction on competition, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 15.7.2019  SWD(2019) 297 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 2018 {COM(2019) 339 final}  
 
 
TABLE OF CONTENTS 

I. 

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

1.  ANTITRUST AND CARTELS ............................................................................................................. 3 

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

1.2 Important judgments by the European Union Courts ......................................................... 6 

1.3 The fight against cartels remains a top priority ................................................................. 16 

1.4 Continuing close cooperation within the European Competition Network and with 
national courts ............................................................................................................................. 18 

2.  MERGER CONTROL ...................................................................................................................... 19 

2.1 Recent enforcement trends ................................................................................................... 20 

2.2 The ongoing evaluation of EU merger control .................................................................... 22 

2.3 Significant judgments by the European Union courts in merger control ........................ 23 

3.  STATE AID CONTROL .................................................................................................................... 24 

3.1 Uptake of the State Aid Modernisation ............................................................................... 24 

3.2 State Aid Modernisation continues ...................................................................................... 34 

3.3 Monitoring, recovery, evaluation and cooperation with national courts ......................... 35 

3.4 Significant judgments by the European Union Courts in the State aid area ................... 38 

4.  DEVELOPING THE INTERNATIONAL DIMENSION OF EU COMPETITION POLICY ...................... 44 

5.  EXTERNAL COMMUNICATION ..................................................................................................... 46 

6.  THE SINGLE MARKET PROGRAMME .......................................................................................... 48 

II. SECTORAL OVERVIEW ........................................................................................................................ 49 

1. ENERGY & ENVIRONMENT .............................................................................................................. 49 

2. INFORMATION AND COMMUNICATION TECHNOLOGIES AND MEDIA ........................................... 54 

3. FINANCIAL SERVICES ....................................................................................................................... 67 

4. TAXATION AND STATE AID .............................................................................................................. 71 

5. BASIC INDUSTRIES AND MANUFACTURING ..................................................................................... 75 

6. AGRI-FOOD INDUSTRY ..................................................................................................................... 78 

7. PHARMACEUTICAL AND HEALTH SERVICES SECTOR ..................................................................... 83 

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8. TRANSPORT AND POSTAL SERVICES................................................................................................ 84 

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I. 

LEGISLATION AND POLICY DEVELOPMENTS 

Competition policy empowering citizens and businesses for the benefit of all 

With more than half a billion consumers and 24.5 million companies, the internal market is 
one of the EU’s greatest achievements and its greatest asset. EU competition policy goes hand 
in  hand  with  the  development  of  a  deeper  and  fairer  internal  market.  Enforcing  EU 
competition rules makes markets function better for the benefit of consumers - households as 
well as businesses - and for society as a whole. Competitive markets play an important role 
supporting  the  Commission's  efforts  to  achieve  a  strong  and  prosperous  EU.  Moreover,  EU 
competition policy aims at fostering a competition culture both within the EU, for instance by 
promoting competition-friendly regulation, and worldwide.  

DG Competition's competition policy actions in 2018 targeted a wide range of sectors in the 
EU  economy,  thereby  promoting  open  and  efficient  markets  so  that  both  businesses  and 
citizens can get  a fair share of the benefits  of economic growth.  Moreover, EU competition 
policy  continued  to  support  key  political  priorities  of  the  Commission,  in  particular  the 
Deeper  and  Fairer  Internal  Market,  the  Digital  Single  Market,  the  Energy  Union,  the  fight 
against  tax  evasion,  and  climate  action  as  set  out  in  the  Commission  President's  Political 
Guidelines and the Commission Work Programme 2018.   

The  present  Staff  Working  Document  is  composed  of  two  parts,  one  presents  the  main 
legislative  and  policy  developments  in  2018  across  the  three  competition  instruments 
(antitrust, including cartels, mergers and State aid), while specific actions are detailed in the 
sectoral overview part. 

1.  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 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,  directly  or  indirectly  impose  unfair  purchase-  or  selling  prices  or  other  unfair 
trading conditions.  

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. 

3 

 
 
Antitrust and cartel decisions 2010-2018 

1.1 Guidance in antitrust and cartel proceedings 

During 2018, the Commission continued streamlining the procedures in competition cases to 
enhance the timeliness and effectiveness of EU competition rules.  

Following the established and successful framework for rewarding cooperation by companies 
investigated  in  the  area  of  cartels1  and  a  first  non-cartel  cooperation  case  in  2016,2  the 
Commission  pursued  five  antitrust  cases  on  the  basis  of  cooperation  in  return  for  reduced 
fines.3  In  these  cases,  the  investigated  firms  acknowledged  that  they  had  infringed  the 
competition  rules  before  the  Commission  issued  a  Statement  of  Objections.  All  five 
companies  provided  evidence  that  added  significant  value  to  the  investigation  and 
complemented  evidence  already  on  the  Commission's  file  at  the  time  when  the  voluntary 
submissions  were made. Moreover, in one of the cases  – Guess - the investigated company 
revealed  an  infringement  of  the  EU  competition  rules  which  was  not  yet  known  to  the 
Commission.  In  addition,  all  companies  waived  certain  procedural  rights,  resulting  in 
administrative  efficiencies.  The  individual  reductions  granted,  ranging  between  40%  and 
50%,  reflected  the  timing  of  the  cooperation  (both  in  terms  of  the  acknowledgement  of 
liability  and  the  evidence)  as  well  as  the  extent  to  which  the  evidence  strengthened  the 
Commission's case. On 17 December 2018, DG Competition published a fact-sheet setting out 
the framework for cooperation cases in the antitrust field.4 

1   This  framework  allows  the  Commission  to  reduce  the  fine  if  a  company  has  provided  so-called  self-
incriminating  evidence  (see  Commission  Notice  on  Immunity  from  fines  and  reduction  of  fines  in  cartel 
cases)  and/or  if  a  company  admits  the  infringement  and  agrees  to  follow  a  more  streamlined  and  shorter 
procedure  (see  Commission  Notice  on  the  conduct  of  settlement  procedures  in  cartel  cases).  See: 
http://ec.europa.eu/competition/cartels/legislation/leniency_legislation.html, 
and 
http://ec.europa.eu/competition/cartels/legislation/settlements.html.  

2   Case AT.39759 - ARA foreclosure, See: http://europa.eu/rapid/press-release_IP-16-3116_en.htm.  
3   Cases AT.40181 – Philips, AT.40182 - Pioneer, AT.40465 - Asus and AT.40469 - Denon & Marantz.  
(see: 
  http://europa.eu/rapid/press-release_IP-18-4601_en.htm),  and  Case  AT.40428  –  Guess 
http://europa.eu/rapid/press-release_IP-18-6844_en.htm).  
4   See: http://ec.europa.eu/competition/publications/data/factsheet_guess.pdf.  

(see: 

4 

4642195124711162442231215113433231382333113151412231201020112012201320142015201620172018Cartel Prohibition (Normal)Cartel Prohibition (Hybrid)Cartel Prohibition (Settlement)Antitrust ProhibitionAntitrust Prohibition (Cooperation)Antitrust CommitmentProcedural decisionsRejection of ComplaintRe-adoption decisions are included in the graph: one in 2010, one in 2012 and two in 2017.Source: Directorate-General for Competition192115221235141414 
 
                                                           
On 12 December 2018,  updated guidance on  confidentiality claims in  access  to  file and the 
use  of  voluntary  confidentiality  rings  was  published  by  DG  Competition.5  The  guidance 
explains  how companies involved in  antitrust  investigations should identify business  secrets 
and other confidential information in documents submitted to the Commission. Moreover, the 
guidelines  explain  how  non-confidential  versions  of  documents  should  be  prepared.  In 
addition,  the  guidance  explains  the  benefits  and  the  functioning  of  the  confidentiality-ring 
procedure for access to file in pending antitrust investigations. By means of a confidentiality 
ring,  documents  in  the  Commission's  file  are  made  accessible  to  the  addressee(s)  of  a 
Statement of Objections in a restricted manner. Similar to a data room, the number of persons 
having access to and who may use the information is restricted to  what is strictly necessary 
for  the  rights  of  defence.  The  guidance  include  a  template  for  a  non-disclosure  agreement 
between the addressee(s) of a Statement of Objections and the information providers.  

In 2018, the Commission started a reflection process how competition policy can best serve 
European  consumers  in  a  fast-changing  world.  To  this  end,  the  Commission  appointed, 
Professors  Heike  Schweitzer,  Jacques  Crémer  and  Assistant  Professor  Yves-Alexandre  de 
Montjoye as Special Advisers on the future challenges of digitisation for competition policy.6 
The  Special  Advisers’  Report  “Competition  Policy  for  the  Digital  Era”  was  published  on  4 
April  2019.7  In  their  report,  the  Special  Advisers  (i)  identify  what  they  see  as  the  main 
specific  features of digital  markets; (ii) provide their views on the  goals  of EU competition 
law in the digital era; and (iii) discuss the application of competition rules to digital platforms 
and data, as well as the role of merger control in preserving competition and innovation.   

On 11 October 2018, DG Competition Director-General Johannes Leitenberger gave a speech 
which addressed current challenges for competition policy and enforcement, including digital 
platforms, algorithms and the relevance of data.8  

In  October  2018,  the  Commission  launched  the  review  of  the  Vertical  Block  Exemption 
Regulation (VBER) which will expire in May 2022.9 The review is carried out in line with the 
Commission’s  Better  Regulation  requirements.  The  purpose  of  the  evaluation  exercise  is  to 
allow the Commission to decide whether to let the VBER-rules lapse, prolong their duration 
or  revise  them.  An  evaluation  roadmap  for  stakeholder  comments  was  published  on  8 
November 2018.10 Stakeholders will be able to provide further comments at subsequent stages 
of  the  review  process.  In  addition  to  stakeholder  contributions,  the  review  will  take  into 
account information gathered by the Commission in the E-commerce Sector Inquiry and the 
experience  gained  through  the  2018  antitrust  decisions  against  four  consumer-electronics 
manufacturers  for  fixing  online  resale  prices.11  Moreover,  the  evaluation  will  draw  on  the 
national competition authorities’ (NCAs) experience from enforcing the EU competition rules 
in this area.  

5   See: http://ec.europa.eu/competition/antitrust/conf_rings.pdf.   
6   See: https://ec.europa.eu/commission/commissioners/2014-2019/vestager/announcements/commission-

appoints-professors-heike-schweitzer-jacques-cremer-and-assistant-professor-yves_en and 
http://ec.europa.eu/competition/scp19/.  

7   See: http://ec.europa.eu/competition/publications/reports/kd0419345enn.pdf. 
8   See: http://ec.europa.eu/competition/speeches/text/sp2018_14_en.pdf.  
9   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, OJ L 102, 23.4.2010, p. 1. 

10   See: https://ec.europa.eu/info/law/better-regulation/initiatives/ares-2018-5068981_en.  
11   Cases  AT.40181  –  Philips,  AT.40182  -  Pioneer,  AT.40465  -  Asus  and  AT.40469  -  Denon  &  Marantz 

(vertical restraints), available at http://europa.eu/rapid/press-release_IP-18-4601_en.htm. 

5 

 
 
                                                           
1.2 Important judgments by the European Union Courts 

Preliminary rulings 

Dissemination of misleading information 

In  Hoffmann-La  Roche  Ltd  and  Others  v  Autorità  Garante  della  Concorrenza  e  del 
Mercato,12 the Court of Justice stated that an arrangement between competing undertakings to 
disseminate misleading information13 about adverse reactions resulting from the off-label use 
of  a  medicine14  sold  by  one  of  the  undertakings  to  reduce  the  competitive  pressure  on  the 
other,  may  constitute  a  restriction  of  competition  by  object  within  the  meaning  of  Article 
101(1)  TFEU.15  The  Court  of  Justice  considered  that  such  an  arrangement  cannot  be 
considered  ancillary  to  the  licensing  agreement  that  the  two  undertakings  had  concluded 
several years before the arrangement in question, nor can it be justified under Article 101(3) 
TFEU.  This  is  the  first  time  that  the  Court  of  Justice  reviewed  the  spreading  of  misleading 
information  ("disparagement")  and  found  it  anticompetitive.16  In  the  ruling  the  Court  of 
Justice concluded that, in so far as a pharmaceutical product used on-label is substitutable by 
another product used off-label (for the same therapeutic indications), they can be included in 
the same product market. 

Meaning of competitive disadvantage 

In  MEO,17  the  Court  of  Justice  gave  guidance  on  the  interpretation  of  the  concept  of 
competitive  disadvantage  in  Article  102(c)  TFEU  which  precludes  dominant  undertakings 
from  "applying  dissimilar  conditions  to  equivalent  transactions  with  other  trading  parties, 
thereby placing them at a competitive disadvantage". The Court of Justice held that the mere 
presence  of  an  immediate  disadvantage  affecting  trading  partners,  who  were  charged  more, 
compared  to  their  competitors  for  an  equivalent  service,  does  not  mean  that  competition  is 
distorted  or  is  capable  of  being  distorted.  Instead,  a  finding  of  a  competitive  disadvantage 
must  be  based  on  an  analysis  of  all  the  relevant  circumstances  of  the  case  leading  to  the 
conclusion that the behaviour at issue has or is capable of having an effect on the costs, profits 
or  any  other  relevant  interest  of  one  or  more  of  those  partners.  While  this  finding  does  not 
require proof of actual quantifiable deterioration in the competitive situation, it does require 
showing  that  the  conduct  is  capable  of  affecting  that  situation.  Furthermore,  the  Court  of 
Justice  concluded  that  the  seriousness  of  a  possible  competitive  disadvantage  is  not  a 
requirement  for  finding  an  infringement  of  Article  102(c)  TFEU  given  that  there  is  no 
appreciability (de minimis) threshold for the application of Article 102 TFEU. 

12   Case C-179/16 Hoffmann - La Roche Ltd and Others v Autorità Garante della Concorrenza e del Mercato, 
Judgment of the European Court of Justice (Grand Chamber) of 23 January 2018, ECLI:EU:C:2018:25. 

13   To regulators, medical professionals and the general public. 
14   The term "off label" refers to the intentional prescription of an authorised medicine for a purpose that is not 

covered by the terms of its marketing authorisation. 

15   The  two  medical  products  -  Avastin  and  Lucentis  -  were  developed  by  the  same  company,  Genetech. 
However,  Avastin  was  commercialised  by  Genetech's  parent  company  Roche,  while  the  commercial 
exploitation  of  Lucentis  was  entrusted  to  Novartis  group  via  licensing  agreement.  The  arrangement  to 
disseminate  misleading  information  between  Roche  and  Novartis  concerned  the  use  of  Avastin  and  was 
designed to reduce its use and render more profitable the exploitation by Novartis of the technology rights 
over Lucentis.  

16   The ruling follows a series of four decisions by NCAs upheld by national courts, three by the French NCA 

and one by the Italian NCA. The latter case gave rise to this preliminary ruling. 

17   Case C-525/16 Meo - Serviços de Comunicações e Multimédia, Judgment of the Court of Justice of 18 April 

2018, ECLI:EU:C:2018:270. 

6 

 
 
                                                           
Actions for damages 

In Apple Sales International,18 a preliminary ruling concerning the interpretation of Council 
Regulation No 44/2001 ("Brussels Regulation"),19 the Court of Justice concluded that, in the 
context  of  an  action  for  damages  for  an  infringement  of  Article  102  TFEU,  brought  by  a 
distributor  against  its  supplier,  the  application  of  a  contractual  jurisdiction  clause  is  not 
excluded  on  the  sole  ground  that  it  does  not  expressly  refer  to  disputes  relating  to  liability 
incurred  as  a  result  of  an  infringement  of  competition  law.  The  Court  of  Justice  thus  made 
clear  that  in  Article  102  TFEU  cases  where  an  anticompetitive  behaviour  is  related  to  a 
contractual  relationship,  jurisdictional  clauses  in  the  agreement  governing  the  commercial 
relationship between the parties will also affect any related antitrust damages claims. 

Review of decisions finding an infringement 

“Pay for delay” and market definition 

In eight judgments20 the General Court confirmed large parts of the Commission’s decisions 
finding that a number of companies producing generic pharmaceuticals which had concluded 
anticompetitive “pay-for-delay” agreements.21  

In line with its previous ruling in  Lundbeck,22 the General Court confirmed in  Servier23 that 
patent  settlements  involving  payments  from  the  originator  to  the  generics  producer  can 
constitute  pay-for-delay  agreements  having  an  anticompetitive  object.  The  General  Court  
therefore upheld the Commission's finding that the agreements concluded by Servier with five 
generic  companies  had  such  an  object  in  breach  of  Article  101  TFEU.  The  General  Court 
considered  that  it  was  the  inducement  (that  is  to  say  the  reverse  payment),  and  not  a 
recognition of the validity of the patent, that led the generics producers to agree to withdraw 
from the markets.  

Moreover,  the  General  Court  ruled  that  while  in  principle,  side  deals  similar  to  direct 
payments  can  induce  generics  producers  to  withdraw  from  competition,  not  all  side  deals 
constitute an anticompetitive inducement. In particular, the General Court was not convinced 
that the license provided to  Krka24 constituted an inducement for Krka’s withdrawal  from  a 
number of markets and therefore rejected the Commission’s finding that the Krka agreement 

18   Case C-595/17 Apple Sales International and Others v MJA, Judgment of the European Court of Justice of 

24 October 2018, ECLI:EU:C:2018:854. 

19   Council  Regulation  (EC)  No  44/2001  of  22  December  2000  on  jurisdiction  and  the  recognition  and 

enforcement of judgments in civil and commercial matters (OJ 2001 L 12, p. 1). 

20   Case T-677/14 Biogaran v Commission, Case T-679/14 Teva UK and Others v Commission, judgment of 12 
December  2018,  ECLI:EU:T:2018:910;,  Case  T-680/14  Lupin  v  Commission,  judgment  of  12  December 
2018; ECLI:EU:T:2018:908; Case T-682/14 Mylan Laboratories and Mylan v Commission, judgment of 12 
December 2018, ECLI:EU:T:2018:907; Case T-684/14 Krka v Commission, judgment of 12 December 2018,  
ECLI:EU:T:2018:918;  Case  T-701/14  Niche  Generics  v  Commission  judgment  of  12  December  2018, 
ECLI:EU:T:2018:92; Case  T-705/14 Unichem Laboratories v Commission judgment of 12 December 2018; 
ECLI:EU:T:2018:915;  Case  T-691/14  Servier  and  Others  v  Commission,  judgment  of  12  December  2018 
ECLI:EU:T:2018:922. 

21   Pay for delay agreements are settlement agreements that  may restrict generic  market entry in exchange  for 
benefits  transferred  from  an  originator  firm  to  a  company  intending  to  introduce  a  generic  version  of  a 
medicine. Such agreements result in delayed market entry of cheaper generic medicines, to the detriment of 
patients and taxpayers financing the health systems. 

22   Case T-472/13 Lundbeck v Commission, judgment of 8 September 2016, ECLI:EU:T:2016:449. 
23 Case T-691/14 Servier and Others v Commission, judgment of 12 December 2018, ECLI:EU:T:2018:922. 

24   Case T-684/14 Krka v Commission, judgment of 12 December 2018,  ECLI:EU:T:2018:918. 

7 

 
                                                           
restricted  competition  by  object.  Moreover,  the  General  Court  found  that  the  Commission 
decision  did  not  prove  that  the  Krka  agreement  had  restrictive  effects  under  Article  101 
TFEU.  The  General  Court  took  the  view  that,  considering  that  the  agreement  had  been 
implemented, the Commission should have assessed actual, and not only potential effects on 
competition, taking into account also factual developments occurring after the agreement had 
been concluded. 

Finally,  the  General  Court  annulled  the  Commission’s  finding  that  Servier  had  abused  its 
dominant  position  on  the  market  for  perindopril,  a  medicine  used  to  treat  hypertension  and 
heart  failure.  The  General  Court  held  that  the  Commission  failed  to  show  that  the  relevant 
product market was limited to the perindopril molecule alone. The General Court found that 
the  Commission  had  made  an  incorrect  assessment  of  the  therapeutic  substitution  of 
perindropil  with  other  medicines  in  the  same  therapeutic  class.  Moreover,  the  Commission 
had relied excessively on price-related factors. The General Court therefore concluded that the 
Commission  erred in  finding Servier in  a dominant position in  accordance with  Article 102 
TFEU.  

8 

 
 
 
Cartel participation and single and continuous infringement 

In Power Cables,25 the General Court referred to the necessary conditions for holding a cartel 
participant  liable  for  a  single  and  continuous  infringement  depending  on  the  form  of  its 
participation. The General Court confirmed that even if a participant is unaware of, but could 
reasonably have foreseen the unlawful conduct planned and was prepared to take the risk, the 
cartel  participant’s  potential  lack  of  knowledge  of  some  forms  of  that  conduct  does  not 
exempt  it  from  liability.26  Moreover,  the  General  Court  held  that  when  an  undertaking  has 
infringed  Article 101  TFEU,  it  cannot  escape  being  penalised  on  the  ground  that  another 
cartel participant has not been fined.  

Constructive refusal to deal and margin squeeze 

With  its  rulings  in  Deutsche  Telekom27  and  Slovak  Telekom28  the  General  Court  largely 
upheld  the  Commission  decision  finding  that  Slovak  Telekom,  a  subsidiary  of  Deutsche 
Telekom,  had  abused  its  dominant  position  by  refusing  access  to  its  local  loop  and  by 
engaging  in  margin  squeeze  practices.  The  General  Court  noted  that  the  relevant  regulatory 
framework  had  imposed  on  Slovak  Telekom  an obligation  to  grant  unbundled  access  to  the 
local  loop.  Moreover, the General  Court acknowledged the need  for alternative operators to 
access  the  local  loop  to  allow  the  development  of  effective  competition.  Therefore,  the 
General Court concluded that the Commission was not required to demonstrate that access to 
Slovak  Telekom's  local  loop  was  indispensable  for  potential  competitors.  While  largely 
upholding  the  Commission's  finding  of  margin  squeeze,  the  General  Court  held  that  the 
Commission  had  failed  to  show  exclusionary  effects  for  a  period  of  four  months  when  the 
margins were positive according to the "year-by-year" assessment method. Accordingly, the 
General Court reduced the amount of the fine.  

25  
In  the  Power  Cables  judgments,  the  General  Court  dismissed  all  the  appeals  brought  against  the 
Commission’s decisions in their entirety. For the sake of clarity, the various aspects covered by the  Power 
Cables  judgements  are  dealt  with  thematically  in  the  sections  that  follow  below.  The  15  cases  are  the 
following: T-419/14 The Goldman Sachs Group v Commission, judgment of the General Court 12 July 2018, 
ECLI:EU:T:2018:445; T-422/14 Viscas Corp. v Commission, judgment of the General Court of 12 July 2018, 
ECLI:EU:T:2018:446; T-438/14 Silec Cable SAS and General Cable Corporation v Commission, judgment 
of  the  General  Court  of  12  July  2018,  ECLI:EU:T:2018:447;  T-439/14  LS  Cable  &  System  Ltd  v 
Commission, judgment of the General Court of 12 July 2018, ECLI:EU:T:2018:451; T-441/14 Brugg Kabel 
AG  and  Kabelwerke  Brugg  AG  Holding  v  Commission,  judgment  of  the  General  Court  of  12  July  2018, 
ECLI:EU:T:2018:453; T-444/14 Furukawa Electric Co. Ltd v Commission, judgment of the General Court of 
12 July 2018, ECLI:EU:T:2018:454; T-445/14 ABB v Commission, judgment of the General Court of 12 July 
2018, ECLI:EU:T:2018:449; T-446/14 Taihan Electric Wire Co. Ltd v Commission, judgment of the General 
Court  of  12  July  2018,  ECLI:EU:T:2018:444;  T-447/14  NKT  Verwaltungs  and  NKT  Holding  A/S  v 
Commission,  judgment  of  the  General  Court  of  12  July  2018,  ECLI:EU:T:2018:443;  T-448/14  Hitachi 
Metals, Ltd v Commission, Judgment of the General Court of 12 July 2018, ECLI:EU:T:2018:442; T-449/14 
Nexans  France  SAS  and  Nexans  SA  v  Commission,  judgment  of  the  General  Court  of  12  July  2018, 
ECLI:EU:T:2018:456;  T-450/14  Sumitomo  Electric  Industries  Ltd  and  J-Power  Systems  Corporation  v 
Commission, judgment of the General Court of 12 July 2018, ECLI:EU:T:2018:455; T-451/14 Fujikura Ltd v 
Commission, judgment of the General Court of 12 July 2018, ECLI:EU:T:2018:452; T-455/14 Pirelli  & C. 
SpA  v  Commission,  judgment  of  the  General  Court  of  12  July  2018,  ECLI:EU:T:2018:450;  T-475/14 
Prysmian  SpA  and  Prysmian  Cavi  e  Sistemi  Srl  v  Commission,  judgment  of  the  General  Court  of  12  July 
2018,  ECLI:EU:T:2018:448.  See  also:  https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-
07/cp180107en.pdf. 

26   Case  T-448/14  Hitachi  Metals,  Ltd  v  Commission,  Judgment  of  the  General  Court  of  12  July  2018, 

ECLI:EU:T:2018:442. 

27  Case T-827/14, Deutsche Telekom AG v European Commission, Judgment of the General Court of 13 

December 2018, ECLI:EU:T:2018:930. 

28   Case  T-851/14,    Slovak  Telekom  a.s.  v  European  Commission,  Judgment  of  the  General  Court  of  13 

December 2018, ECLI:EU:T:2018:929. 

9 

 
                                                           
Parental liability 

In  Deutsche Telekom,29 the General  Court upheld  Deutsche Telekom's parental liability for 
the infringement, but found that Deutsche Telekom’s turnover did not reflect the company’s 
individual  conduct  in  the  infringement.  Deutsche  Telekom’s  turnover  could  therefore  not 
serve  as  a  basis  for  a  calculation  of  an  additional  fine  to  be  imposed  on  the  company.  The 
General Court consequently reduced the amount of the fine. 

In  Power  Cables,30  the  General  Court  confirmed  the  line  taken  by  the  Commission  and 
concluded that the fact that an undertaking is a ‘pure financial investor’ does not constitute a 
legal  criterion  for  the  non-imputation  of  liability  for  the  parent  company.  Therefore,  a 
financial  investor  is  to  be  treated  like  any  other  parent.  In  the  case  in  question,  the  parent 
company  had  to  assume  parental  liability  based  on  100%  voting  rights,  even  if  its 
shareholding was as low as 33%.31  

Territorial jurisdiction 

In  Power  Cables,32  the  General  Court  confirmed  the  Commission's  practice  as  regards 
territorial  jurisdiction.  The  General  Court  held  that  the  Commission  is  entitled  to  penalise 
practices implemented outside the EEA, when it is foreseeable that the practices in question 
will have an immediate and substantial effect in the internal market. 

Review of investigatory powers - inspections 

The  General  Court  rendered  two  rulings  on  the  actions  for  annulment  brought  by  České 

29   Case  T-827/14,  Deutsche  Telekom  AG  v  European  Commission,  Judgment  of  the  General  Court  of  13 

December 2018, ECLI:EU:T:2018:930. 

30   Cases  T-441/14  Brugg  Kabel  AG  and  Kabelwerke  Brugg  AG  Holding  v  Commission,  judgment  of  the 
General Court of 12 July 2018, ECLI:EU:T:2018:453; T-447/14 NKT Verwaltungs and NKT Holding A/S v 
Commission, judgment of the General Court of 12 July 2018, ECLI:EU:T:2018:443. 

31  Additional objective circumstances supported the conclusion that the undertaking in question exercised 

decisive influence. 

32   Cases  T-419/14  The  Goldman  Sachs  Group  v  Commission,  judgment  of  the  General  Court  12  July  2018, 
ECLI:EU:T:2018:445; T-422/14 Viscas Corp. v Commission, judgment of the General Court of 12 July 2018, 
ECLI:EU:T:2018:446; T-438/14 Silec Cable SAS and General Cable Corporation v Commission, judgment 
of  the  General  Court  of  12  July  2018,  ECLI:EU:T:2018:447;  T-439/14  LS  Cable  &  System  Ltd  v 
Commission, judgment of the General Court of 12 July 2018, ECLI:EU:T:2018:451; T-441/14 Brugg Kabel 
AG  and  Kabelwerke  Brugg  AG  Holding  v  Commission,  judgment  of  the  General  Court  of  12  July  2018, 
ECLI:EU:T:2018:453; T-444/14 Furukawa Electric Co. Ltd v Commission, judgment of the General Court of 
12 July 2018, ECLI:EU:T:2018:454; T-445/14 ABB v Commission, judgment of the General Court of 12 July 
2018, ECLI:EU:T:2018:449; T-446/14 Taihan Electric Wire Co. Ltd v Commission, judgment of the General 
Court  of  12  July  2018,  ECLI:EU:T:2018:444;  T-447/14  NKT  Verwaltungs  and  NKT  Holding  A/S  v 
Commission,  judgment  of  the  General  Court  of  12  July  2018,  ECLI:EU:T:2018:443;  T-448/14  Hitachi 
Metals, Ltd v Commission, Judgment of the General Court of 12 July 2018, ECLI:EU:T:2018:442; T-449/14 
Nexans  France  SAS  and  Nexans  SA  v  Commission,  judgment  of  the  General  Court  of  12  July  2018, 
ECLI:EU:T:2018:456;  T-450/14  Sumitomo  Electric  Industries  Ltd  and  J-Power  Systems  Corporation  v 
Commission, judgment of the General Court of 12 July 2018, ECLI:EU:T:2018:455; T-451/14 Fujikura Ltd v 
Commission, judgment of the General Court of 12 July 2018, ECLI:EU:T:2018:452; T-455/14 Pirelli  & C. 
SpA  v  Commission,  judgment  of  the  General  Court  of  12  July  2018,  ECLI:EU:T:2018:450;  T-475/14 
Prysmian  SpA  and  Prysmian  Cavi  e  Sistemi  Srl  v  Commission,  judgment  of  the  General  Court  of  12  July 
2018, 
release: 
https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-07/cp180107en.pdf. 

ECLI:EU:T:2018:448. 

Court 

press 

also 

See 

10 

 
                                                           
dráhy,33 concerning two Commission inspection decisions.34  

In  the  first  ruling,  which  partially  upheld  the  Commission  inspection  decision,  the  General 
Court assessed whether the Commission had reasonable grounds to suspect an infringement of 
the  competition  rules  and  whether  the  inspections  powers  circumscribed  by  the  inspection 
decision  were  restricted  to  the  suspected  infringement.  The  General  Court  found  that  the 
Commission had reasonable grounds to suspect an infringement of Article 102 TFEU by way 
of  predatory  pricing  on  the  railway  route  Praha  –  Ostrava.  However,  the  General  Court 
concluded  that  the  Commission  had  no  grounds  to  suspect  other  types  of  anticompetitive 
conduct under Article 102 TFEU on the Praha – Ostrava route or on other routes. The General 
Court dismissed the other grounds for annulment put forward by České dráhy. In doing so, the 
General Court confirmed that parallel inspections by the Commission and NCAs, cannot give 
rise  to  legitimate  expectations  that  the  Commission  would  refrain  from  intervening  in  the 
case. The General Court also made clear that the fact that the route under investigation was 
domestic does not preclude the Commission from considering that the potential infringement 
could have an effect on trade between Member States.  

In  the  second  ruling,  the  General  Court  upheld  the  second  Commission  inspection  decision 
addressed  to  České  dráhy.  The  second  inspection  decision  concerned  a  suspected 
infringement  of Article  101 TFEU based on documents obtained during the first  inspection. 
The  General  Court's  review  focused  on  whether  the  underlying  evidence  for  the  second 
inspection decision had been lawfully obtained during the first inspection. The General Court 
explored  whether  the  documents  that  served  as  a  basis  for  the  second  inspection  decision 
concerning a suspected infringement of Article 101 TFEU were related to possible predatory 
pricing (the subject-matter of the first inspection under Article 102 TFEU). The General Court 
confirmed that the indications contained in these documents, albeit imprecise, were related to 
the  costs  of  České  dráhy  and  therefore  relevant  for  the  assessment  of  an  alleged  predatory 
pricing  strategy  on  the  Praha-Ostrava  route.  The  documents  were  therefore  found  to  have 
been lawfully obtained.  

The  judgment  of  the  General  Court  in  the  Bio-ethanol35  case  declared  as  inadmissible  all 
claims  that  the  Commission  had  violated,  through  its  methodology  for  electronic  searches 
during  the  inspection,  the  principles  of  protection  of  legal  and  professional  communication. 
Such claims are subject to Court review only in the context of a final Commission decision. It 
follows  that  companies  cannot  use  arguments  that  the  inspection  was  carried  out  in  an 
unlawful manner to support claims for annulment of the inspection decision itself. Moreover, 
the  General  Court  stated  that  any  prior  letter  from  the  Commission  refusing  to  suspend  its 
investigation  based  on  such  claims  is  not  an  act  that  can  be  challenged  in  Court  before  the 
conclusion of the investigation.   

33   Cases T-325/16 České dráhy a.s. v European Commission, judgement of the General Court of 20 June 2018, 
ECLI:EU:T:2018:368  and  T-621/16  České  dráhy  a.s.  v  European  Commission,  judgement  of  the  General 
Court of 20 June 2018, ECLI:EU:T:2018:367. 

34   For the Commission’s powers of inspection, see Articles 20 and 21 of Council Regulation (EC) No 1/2003 of 
16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the 
Treaty, OJ L 1, 04.01.2003, pp.1-25. 

35   Case  T-274/15  Alcogroup  and  Alcodis  v  Commission,  judgment  of  the  General  Court  of  10  April  2018, 

ECLI:EU:T:2018:179. Judgement currently under appeal with case reference C-386/15 P(R).  

11 

 
                                                           
In  Power  Cables,36  the  General  Court  reviewed  the  continued  inspection  procedure.  If  the 
document  review  has  not  been  concluded  at  the  envisaged  end  of  the  on-site  inspection,  a 
copy  of  the  dataset  still  to  be  searched  may  be  sealed  and  brought  to  the  Commission’s 
premises, where the inspection is continued within a reasonable time limit. The General Court 
found that Article 20(2)(b) of Regulation No 1/2003 does not prescribe that the examination 
of  business  records  must  be  carried  out  exclusively  at  the  inspected  company’s  premises. 
However,  when  examining  documents  at  its  own  premises,  the  Commission  must  offer  the 
same  guarantees  as  those  given  when  the  examination  takes  place  at  the  inspected 
undertaking’s  premises.  Finally,  the  General  Court  considered  that  the  intermediate  step  of 
copying or copy-imaging documents as a part of the forensic IT analysis falls within the scope 
of the powers provided for in Article 20(2)(b) and (c) of Regulation No 1/2003.  

Review of fines 

The  judgments  of  the  Court  of  Justice  in  the  Freight  Forwarding37  cases  confirm  several 
policy  points  crucial  for  the  Commission's  decision-making  practice,  that  is  to  say  the 
leniency  regime,  the  Commission’s  discretionary  powers  in  choosing  the  entities  to  be 
addressed and its fining methodology. As regards fining, the Court of Justice affirmed that the 
cartelised  services  were  international  airfreight  forwarding  and  not  solely  the  various 
components  of  such  services  on  which  the  parties  colluded.  Consequently,  the  Court  of 
Justice considered that "since the sales falling within the sphere of the infringements at issue 
were made on that market"  the Commission set the fines correctly based on the entire sales 
value of the overall market for international air freight forwarding services. 

The judgment of the General Court in the North Sea Shrimps38 case confirmed the existence 
and  scope  of  the  cartel  and  the  company  Stührk's  participation  in  it.  However,  the  General 
Court  reminded  the  Commission  of  the  fact  that  it  must  properly  justify  and  explain  the 
calculation  of  its  fine,  in  particular  when  deviating  from  its  own  Fining  Guidelines,39  even 
when it does so in favour of the parties.40 On this basis, the fine was annulled.   

In Power Cables,41 the General Court confirmed the use of Point 18 of the Fining Guidelines 
to re-distribute the value of sales (in this case the sales within the EEA) amongst all the cartel 

36   Cases T-449/14 Nexans France SAS and Nexans SA v Commission, judgment of the General Court of 12 July 
2018, ECLI:EU:T:2018:456  and  T-475/14  Prysmian  SpA  and  Prysmian  Cavi  e  Sistemi  Srl  v  Commission,, 
judgment of the General Court of 12 July 2018, ECLI:EU:T:2018:448.  

37   Cases  C-271/16  P  Panalpina  v  Commission,  judgement  of  the  Court  of  Justice  of  1  February  2018, 
ECLI:EU:C:2018:59;  C-264/16  P  Deutsche  Bahn  /  Schenker  v  Commission,  judgement  of  the  Court  of 
Justice of 1 February 2018, ECLI:EU:C:2018:60; C-263/16 P Schenker Ltd. (successor of BAX Global UK) v 
Commission,  judgement  of  the  Court  of  Justice  of  1  February  2018,  ECLI:EU:C:2018:58  and  C-261/16  P 
Kuehne & Nagel v Commission, judgement of the Court of Justice of 1 February 2018, ECLI:EU:C:2018:56. 
See 
https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-
also 
02/cp180009en.pdf. 

release: 

court 

press 

38   Case T-58/14, Stuehrk Delikatessen Import v Commission. Judgment of the General Court of 13 July 2018, 

ECLI:EU:T:2018:474.     

39   Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003, OJ 

2006/C 210/02) See: https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52006XC0901(01)&from=EN. 

40   See also: case AT.39780 – Envelopes, decision of 10 December 2014. Annulled by the General Court, in case 

T-95-15, Printeos and Others v Commission, ECLI:EU:T:2016:722. 

41   Cases  T-422/14  Viscas  Corp.  v  Commission,  judgment  of  the  General  Court  of  12  July  2018, 
ECLI:EU:T:2018:446; T-439/14 LS Cable & System Ltd v Commission, judgment of the General Court of 12 
July  2018,  ECLI:EU:T:2018:451;  T-444/14  Furukawa  Electric  Co.  Ltd  v  Commission,  judgment  of  the 
General Court of 12 July 2018, ECLI:EU:T:2018:454; T-446/14 Taihan Electric Wire Co. Ltd v Commission, 
judgment  of  the  General  Court  of  12  July  2018,  ECLI:EU:T:2018:444  and  T-451/14  Fujikura  Ltd  v 

12 

 
                                                           
participants. In this case, the undertakings active in the EEA reserved the EEA for themselves 
while  the  Asian  undertakings  committed  to  stay  out  of  the  EEA.  The  cartel  participants 
allocated  projects  between  themselves  according  to  the  geographic  region  or  customer.  In 
particular, the companies active in the EEA agreed to allocate projects within the EEA. 

In this case, a direct application of point 13 of the Fining Guidelines (where the Commission 
uses  the  value  of  sales  of  each  undertaking  in  the  EEA)  would  result  in  zero  sales  (and 
therefore  zero  fines)  for  the  Asian  undertakings,  because  they  had  no  sales  in  the  EEA.  By 
applying  Point  18  of  the  Fining  Guidelines,  the  sales  achieved  in  the  EEA  amongst  all  the 
cartelists  (regardless  of  activity  within  the  EEA)  were  re-distributed  in  proportion  with  the 
market  shares  that  the  cartelists  have  in  the  entire  geographic  area  covered  by  the 
infringement. 

Regarding  gravity  and  mitigating  circumstances  for  the  fines  set  by  the  Commission,  the 
General  Court  confirmed  the  Commission's  approach  that  less  active  participation  in  the 
infringement  of  an  undertaking  was  correctly  taken  into  account  when  the  Commission 
assessed the mitigating circumstances.42  

Moreover,  the General  Court held  that the Commission did  not  have to allocate the internal 
shares of the overall fine imposed on those held jointly and severally liable. According to the 
General Court, such an allocation would harm the objective of the joint and several liability 
mechanisms,  the  purpose  of  which  is  to  provide  an  additional  legal  device  available  to  the 
Commission  to  strengthen  both  the  effectiveness  of  the  recovery  of  fines  imposed  and  the 
objective of deterrence pursued generally by competition law.  

In  the  Heat  stabiliser43  judgement,  the  General  Court  annulled  the  Commission's  decision 
amending  the  attribution  of  joint  and  several  liability,  finding  an  infringement  of  the  equal 
treatment  principle  when  determining  the  joint  and  several  liability  for  the  fine.  The  issue 
arose  on  the  facts  that  -  at  the  time  of  the  infringement  -  three  entities  were  part  of  the 
undertaking, one (ACW) directly participating throughout the infringement, one (GEA) being 
the ultimate parent throughout the infringement and one being intermediate parent for part of 
the infringement (Chemson). After the infringement, but before the adoption of the decision, 
GEA  sold  ACW  and  Chemson.  ACW’s  fine  was  capped  due  to  the  application  of  the  10% 
ceiling. The General Court found that this fine reduction for one party (ACW) breached the 
principle of equal treatment, and should have been attributed proportionately between the two 
other parties (GEA and Chemson). 

In  Orange  Polska,44  the  Court  of  Justice  dismissed  the  appeal  by  Orange  Polska  against  a 

Commission,  judgment  of  the  General  Court  of  12  July  2018,  ECLI:EU:T:2018:452.  See  also  Court  press 
release: https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-02/cp180009en.pdf. 

42   In addition, the General Court confirmed the line of the Commission that an ‘exclusively passive or follow-
the-leader’  position  in  the  infringement  implies,  by  definition,  that  the  undertaking  concerned  will  keep  a 
‘low profile’, that is to say not actively participate in the creation of any anticompetitive agreements and that 
this  role  can  be  shown  by  a  significantly  more  sporadic  participation  in  cartel  meetings  than  that  of  the 
ordinary  members  of  the  cartel  and  also  by  an  express  declaration  regarding  the  role  played  by  that 
undertaking  in  the  cartel  made  by  a  representative  of  another  undertaking  which  has  participated  in  the 
infringement.  

43   Case  T-640/16  GEA  Group  AG  v  Commission,  judgment  of  the  General  Court  of  18  October  2018, 

ECLI:EU:T:2018:700. 

44   Case  C-123/16  P  Orange  Polska  v  Commission,  judgment  of  the  Court  of  Justice  of  25  July  2018, 

ECLI:EU:C:2018:590. 

13 

 
                                                                                                                                                                                     
General  Court  judgment45  which  upheld  the  European  Commission's  decision46  fining 
Telekomunikacja  Polska  (now  Orange  Polska)  for  abusing  its  dominant  position  on  Polish 
broadband  markets.  The  Court  of  Justice  ruling  confirms  that,  when  imposing  a  fine  for  an 
infringement  that  has  ended,  the  Commission  is  not  obliged  to  justify  in  its  decision  the 
existence  of  a  legitimate  interest  in  finding  that  infringement.  The  Court  of  Justice  also 
confirmed that in assessing the gravity of the infringement for the purpose of calculating the 
fine,  the  Commission  is  not  required  to  take  into  account  the  actual  or  likely  effects  of  the 
infringement committed.   

Review of commitment decisions 

In  Canal+47  the  General  Court  dismissed  the  application  for  annulment  brought  by  Canal+ 
against  the  Commission  decision  making  binding  the  commitments  offered  by  Paramount 
Pictures  Ltd  (“Paramount”).  The  commitments  addressed  the  Commission’s  concerns  that 
clauses in Paramount’s pay-tv film licensing agreement with Sky UK prevented cross-border 
passive  sales  and  therefore  amounted  to  absolute  territorial  protection  eliminating  all  cross-
border  competition  between pay-tv  broadcasters.  In its  commitments, Paramount committed 
not to enforce and not to honour contractual restrictions on passive sales for a period of five 
years  throughout  the  EEA.  Canal+  challenged  the  commitment  decision  as  a  third  party, 
claiming that the contested clauses are not restrictive of competition and that the Commission 
decision breaches the principle of proportionality.   

The  General  Court  examined  the  legal  and  economic  context  of  the  contested  clauses  and 
confirmed  the  Commission's  concerns  that  the  contested  clauses  amounted  to  absolute 
territorial protection and have as their object the elimination of all cross-border competition 
between  pay-tv  broadcasters.  According  to  the  General  Court,  this  finding  applies  to  the 
licensed work, whether it is copyright-protected or not. In addition, the General Court noted 
that  the  clauses  imposed  restrictions  that  went  beyond  what  was  indispensable  for  the 
improvement of the production and distribution of copyright-protected works. 

As  regards  the  principle  of  proportionality,  the  General  Court  stated  that,  where  a 
commitment  consists  of  the  non-implementation  of  a  contractual  clause,  a  Commission 
commitment  decision  will  make  binding  such  a  commitment  only  on  the  undertakings  that 
offered them, and not on third parties that could see their rights affected by the commitment. 
Third  parties  have  the  possibility  to  protect  their  legal  rights  before  national  courts.  The 
General  Court  also  confirmed  that  the  Commission  was  entitled  to,  without  breaching  the 
principle of proportionality, accept Paramount's commitment not to implement the contested 
clauses in its contract with Sky UK for the United Kingdom and Ireland (countries where the 
Commission had expressed concerns), but also in license agreements with other broadcasters 
in the EEA for different national territories. 

Review of decisions rejecting complaints 

In Agria Polska,48 the Court of Justice dismissed an appeal against the General Court's ruling 
upholding  the  Commission  decision  rejecting  a  complaint  due  to  lack  of  EU  interest.  The 

45   Case  T-486/11  Orange  Polska  v  Commission,  judgment  of  the  General  Court  of  17  December  2015, 

ECLI:EU:T:2015:1002. 

46   Commission Decision C(2011) 4378 final of 22 June 2011. 
47  Case  T-873/16,  Groupe  Canal  +  v  European  Commission,  judgment  of  the  General  Court  of  12  December 

2018, ECLI:EU:T:2018:904. 

48   Case C-373/17 P Agria Polska and Others v European Commission, judgment of the Court of Justice of 20 

September 2018, ECLI:EU:C:2018:756. 

14 

 
                                                           
Court  of  Justice  found  that  the  scope  and  cost  of  an  investigation  sought  by  a  complainant 
cannot be regarded as decisive criteria for finding EU interest,  even where the investigation 
would cover several Member States. Moreover, the Court of Justice dismissed the argument 
that  the  Commission  should  open  an  investigation  to  ensure  the  effectiveness  of  the 
competition  rules  if  the  complainant  faces  procedural  or  institutional  obstacles  to  bring  an 
action before national courts. The Commission has no obligation to compensate shortcomings 
in  judicial protection at  national  level  by opening an investigation.  It  is  the Member States’ 
responsibility to ensure effective judicial protection for individual parties, the Court of Justice 
concluded. 

In EAEPC,49 the General Court fully upheld a Commission decision rejecting the complaint of 
the  European  Association  of  Euro-Pharmaceutical  Companies  (EAEPC)  alleging  that 
GlaxoSmithKline (GSK) had violated Article 101 TFEU by applying a dual pricing scheme. 
GSK  had  notified  the  scheme  to  the  Commission  in  1998  under  the  previous  authorisation 
regime of Regulation 17/196250 and EAEPC had filed its original complaint in 1999. Acting 
on the EAEPC complaint, the Commission adopted in 2001 a decision finding that the dual 
pricing  scheme  was  a  restriction  by  object  and  refused  to  exempt  it.  In  2006,  the  General 
Court annulled the Commission decision because the Commission had incorrectly found that 
the  practice  in  question  restricted  competition  by  object  and  had  failed  to  carry  out  an 
adequate  assessment  under  Article  101(3)  TFEU.  In  2009,  the  Court  of  Justice  partially 
overturned  the  General  Court’s  judgment.  The  Court  of  Justice  upheld  the  Commission’s 
conclusion  that  the  practice  was  a  restriction  by  object  but  confirmed  the  General  Court’s 
finding  that  the  Commission  had  failed  to  conduct  a  full  examination  under  Article  101(3) 
TFEU. Following the Court of Justice judgment, GSK formally withdrew the application for 
an individual exemption of the practice under Article 101(3) TFEU. However, the EAEPC did 
not withdraw its complaint against GSK. In 2013, the EAEPC required that the Commission 
adopt  a  decision  on  the  complaint.  The  Commission  rejected  the  complaint  for  lack  of  EU 
interest considering among other things that the conduct at issue took place many years ago, 
was only in operation for a very short period, did not produce any persisting effects, and that 
the case could be brought before national authorities.   
Review of publication decisions 

EU  Courts  reaffirmed  the  Commission’s  publication  policy  in  competition  cases  with  two 
orders rejecting applications for interim measures.  

In Power Cables,51 the Vice-President of the Court of Justice issued an order upholding the 
order by the General Court President, refusing interim measures against the Hearing Officer’s 
decision  to  publish  a  non-confidential  version  of  the  Power  Cables  decision,  with  minor 
amendments.  The  order  by  the  Court  of  Justice  confirms  that  the  Commission  has  no 
obligation to wait for a final judgment on the substance of its decision before publishing. The 
Vice-President  of  the  Court  of  Justice  stated  that  the  applicants’  rights  to  be  heard  and  to 
obtain redress in the main case would not be affected by the publication. Finally, the Court of 

49   Case  T-574/14  EAEPC  v  Commission,  judgment  of  the  General  Court  of  26  September  2018, 

ECLI:EU:T:2018:605. 

50   Council  Regulation  No  17  of  6  February  1962,  implementing  Articles  85  and  86  of  the  EC  Treaty,  OJ 

English Special Edition 1959-62, p. 87. 
51   Case  C-65/18  P(R)-R  Order  of  the  Vice-President  of  the  Court  of  2  February  2018  -  Appeal  – 
Application for suspension of operation and other interim measures under Articles 278 and 279 TFEU and 
Article 160(7) of the Rules of Procedure of the  Court,  ECLI:EU:C:2018:62 Case T-449/14  Nexans France 
SAS and Nexans SA v Commission, judgment of the General Court of 12 July 2018, ECLI:EU:T:2018:456. 

15 

 
                                                           
Justice Vice-President concluded that the publication would not infringe the applicants’ rights 
to an effective remedy in the main case. 

The orders of the President of the General Court in Euribor52 stipulated that the publication of 
a  Commission  decision  under  Article  101  TFEU  cannot  be  stopped  because  the  decision  is 
being challenged in Court. The applicants’ argument that the presumption of innocence would 
preclude  the  Commission  from  publishing  a  decision  with  the  parties’  names  and  details  of 
the  behaviour  found  to  be  anticompetitive,  was  rejected  since  the  parties  can  submit  an 
application for annulment of the decision in question. In Power Cables,53 the Vice President 
of  the  Court  of  Justice  confirmed  the  Order  of  the  President  of  the  General  Court  which 
rejected  the  claim  that  the  information  included  in  the  decision  should  be  covered  by 
professional secrecy because of an ongoing appeal against that decision.    

1.3 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 strong enforcement record against hard core cartels continued in 2018. As 
in  preceding  years,  the  Commission  adopted  cartel  decisions  in  important  sectors  for 
innovation  and  investment,  such  as  the  electronic  components  market  and  the  automotive 
industry.  The  settlement  procedure  remains  an  efficient  tool  regularly  used  by  the 
Commission in its fight against cartels as shown by the fact that the procedure accounted for 
75% of the decisions adopted this year.  

The  Commission  fined  eight  producers  of  capacitors  -  Elna,  Hitachi  Chemical,  Holy  Stone, 
Matsuo,  NEC  Tokin,  Nichicon,  Nippon  Chemi-Con,  Rubycon  (Sanyo  received  immunity)  – 
EUR  254  million  for  participating  in  a  cartel  between  1998  and  2012.54  Capacitors  are 
electrical components that store energy electrostatically in an electric field and are used in a 
wide variety  of electronic products. As these products  included smart phones, appliances in 
homes and electronic systems in cars the cartel operated at the expense of both manufacturers 
and consumers. Although the meetings and contacts took place outside the EU, the cartel was 
implemented on a  global scale including  in  the EEA. This  decision, in  contrast  to  the other 
cartel infringements in 2018, was conducted under the ordinary procedure.  

52   Cases T-419/18, Crédit agricole and Crédit agricole Corporate and Investment Bank v Commission, Order 
by the President of the General Court of 25 October 2018, ECLI:EU:T:2018:726 and T-420/18, JPMorgan 
Chase and others v Commission, Order by the President of the General Court of 25 October 2018, not yet 
published.   

53   Case  C-65/18  –  Nexans  France  and  Nexans  v  European  Commission,  Order  of  the  Vice  President  of  the 

Court of Justice of 2 February 2018, ECLI:EU:C:2018:426. 

54  See: http://europa.eu/rapid/press-release_IP-18-2281_en.htm, and: https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX:52018XC1211(01). 

16 

 
 
                                                           
Ordinary  procedures  remain  significant  because  not  all  investigations  may  be  eligible  for 
settlement  discussions.  Relevant  factors  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, as the 
Capacitors case shows, the Commission will apply the ordinary procedure.  

The Commission continued its work against cartels in the maritime transport services and the 
automotive  sectors.  With  regard  to  the  maritime  transport  sector,  it  fined  four  maritime  car 
carriers – CSAV, "K" Line, NYK and WWL-EUKOR (MOL received immunity)55 - EUR 395 
million for taking part in a cartel. For almost 6 years, from October 2006 to September 2012, 
the five carriers formed a cartel in the market for deep sea transport of new cars, trucks and 
other  large  vehicles  such  as  combine  harvesters  and  tractors,  on  various  routes  between 
Europe  and  other  continents.  The  cartel  affected  both  European  car  importers  and  final 
customers,  as  imported  vehicles  were  sold  within  the  EEA,  and  European  vehicle 
manufacturers,  as  their  vehicles  were  exported  outside  the  EEA.  In  2016,  some  3.4  million 
motor vehicles were imported from non-EU countries, while the EU exported more than 6.3 
million vehicles to non-EU countries in 2016. Almost half of these vehicles were transported 
by the carriers that were fined by the Commission. During its investigation, the Commission 
cooperated  with  several  competition  authorities  around  the  world,  including  in  Australia, 
Canada, Japan and the US. 

With regard to  the automotive sector, two further cartels  were sanctioned. The Commission 
also fined two suppliers of spark plugs (automotive electric devices) - Bosch and NGK - EUR 
76 million for participating in a cartel with immunity applicant Denso. The Commission also 
found  two  cartels  relating  to  braking  systems.  The  first  concerned  the  supply  of  hydraulic 
braking  systems  and  involved  TRW  (immunity  applicant;  now  ZF  TRW),  Bosch  and 
Continental.  The  second  cartel  concerned  the  supply  of  electronic  braking  systems  and 
involved  Bosch  and  Continental  (immunity  applicant)  with  the  Commission  imposing  total 
fines of EUR 75 million.  

The  Commission  remains  committed  to  pursuing  all  cartels  across  all  sectors  where  it  has 
sufficient evidence of an infringement detected either through its leniency programme or its 
ex  officio  action  (more  information  on  the  cartel  decisions  is  available  in  the  sectoral 
overview). The Commission's cartel enforcement was effective, with four decisions imposing 
fines in excess of EUR 800 million, and customer savings of approximately EUR 1.6 billion 
(or three euro per EU citizen).56 Enforcement is expected to remain effective also in the future 
due to solid enforcement work in 2018. 

Case name 

Adoption date  Fine imposed 

Maritime Car 
Carriers 
Braking systems 

21/02/2018 

EUR 
395 288 000 

21/02/2018 

75 426 000 

Spark plugs 

21/02/2018 

76 099 000 

Undertakings 
concerned 
4 

Prohibition 
Procedure 
Settlement 

3 

3 

Settlement 

Settlement 

55   See: http://europa.eu/rapid/press-release_IP-18-962_en.htm., and: https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX:52018XC0906(01).  

56   DG Competition 2018 Annual Activity Report. To be published here: 
https://ec.europa.eu/info/publications/annual-activity-reports_en.  

17 

 
                                                           
Capacitors 

21/03/2018 

253 935 000 

9 

Prohibition 

1.4 Continuing close cooperation within the European Competition Network and 
with national courts  

The NCAs play a key role in applying the EU competition rules alongside the Commission. 
Action by the 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.  The  2014  Commission  Communication  on  Ten 
Years of Regulation 1/200357 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  consultation58 
between November 2015 and February 2016 and sounded out options for concrete action with 
both  the  NCAs  and  the  Member  State  ministries.  In  the  public  consultation,  80%  of 
stakeholders considered that action should be taken to ensure that NCAs have the means and 
instruments  they  need.59  On  22  March  2017,  the  Commission  proposed  a  Directive  to 
empower NCAs to be more effective enforcers.60 The co-legislators adopted the Directive on 
11  December  2018,  and  it  was  published  in  the  Official  Journal  on  14  January  2019.61 
Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative  provisions 
necessary to comply with this Directive by 4 February 2021.  

Empowering NCAs to become more effective enforcers 

Once  transposed  by  Member  States  into  national  law,  the  Directive  to  empower  NCAs  to  be  more  effective 
enforcers will ensure that all NCAs: 

• 

• 

• 

• 

• 

• 

benefit from the guarantees of independence when applying EU competition rules; 

have the basic guarantee of the human and financial resources they need to perform their tasks; 

have an effective investigative and decision-making toolbox, including to gather digital evidence stored 
on mobile devices; 

be able to impose deterrent fines, for example companies can no longer escape fines by restructuring; 

have effective leniency programmes in place  which encourage companies to report cartels throughout 
the EU; 

 provide each other with mutual assistance so that, for example companies with assets in other Member 
States cannot escape from paying fines. 

The  importance  of  companies'  fundamental  rights  is  underlined.  Appropriate  safeguards  will  be  put  in  when 
NCAs exercise their powers, in accordance with the EU Charter of Fundamental Rights and general principles of 
EU law. 

57   Communication from the Commission of 9 July 2014, Ten Years of Antitrust Enforcement under Regulation 
See: 

1/2003: 
http://ec.europa.eu/competition/antitrust/legislation/antitrust_enforcement_10_years_en.pdf. 
58   See: http://ec.europa.eu/competition/consultations/2015_effective_enforcers/index_en.html. 
59   See: http://europa.eu/rapid/press-release_IP-15-5998_en.htm and 

COM/2014/0453 

Achievements 

Perspectives, 

Future 

and 

http://ec.europa.eu/competition/consultations/2015_effective_enforcers/index_en.html.  

60   See: http://ec.europa.eu/competition/antitrust/nca.html.  
61   Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the 
competition  authorities  of  the  Member  States  to  be  more  effective  enforcers  and  to  ensure  the  proper 
functioning of the internal market (Text with EEA relevance.) OJ L 11, 14.1.2019, p. 3–33. 

18 

 
 
 
                                                           
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 under Article 15 
of Regulation 1/2003. The Commission helps national courts 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 
national courts. 

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

Private enforcement 

Directive 2014/104/EU on antitrust damages actions (Damages Directive)62 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.  Seven  Member 
States  transposed  it  before  the  deadline  expired.  On  18  January  2017,  the  Commission  sent 
Letters  of  Formal  Notice  opening  infringement  procedures  for  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 half of 2018 
The Commission  is  finalising the completeness  checks of their transposing measures before 
the  closure  of  the  respective  three  infringement  proceedings.  The  Commission  is  also 
proceeding to the conformity check of all the 28 national transpositions.  

In  addition,  following  the  publication  of  a  “Study  on  quantifying  passing-on  effects  in 
antitrust damages actions” in October 2016, the Commission launched in July 2018 a targeted 
public consultation on draft guidelines in order to estimate the share of the overcharge passed 
on to indirect customers. The Commission intends to adopt a final version in 2019.63 64  

2.  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 

62   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. 

63   European Commission Study on the Passing-On of Overcharges. See:  

www.ec.europa.eu/competition/publications/reports/KD0216916ENN.pdf.    

64   As foreseen in Article 16 of the Antitrust Damages Directive. 

19 

 
 
                                                           
aspects  of  competition.  As  a  result,  merger  control  helps  to  preserve  market  structures,  in 
which companies compete not only on price, but also on other competitive parameters such as 
innovation.  The  Commission's  merger  enforcement  practice  in  2018,  in  the  agri-chemical,65 
pharmaceutical66  and  oxygen  systems67  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 future cases. 

EU merger control ensures that all firms active in EU markets can compete on fair and equal 
terms.  Proposed transactions  which may distort  competition  are subject  to  close scrutiny by 
the Commission. If necessary to protect competition, the Commission can give merging firms 
the  possibility  to  dispel  competition  concerns  by  offering  commitments.  If  sufficient 
commitments cannot be found or agreed upon, the Commission may prohibit the transaction.  

In its assessments, the Commission takes into account efficiencies possibly brought about by 
mergers.  Efficiencies  may  have  positive  effects  on  costs  and  innovation,  for  example, 
provided that 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 for merger 
control.  Such  reflections  are  conducted  both  internally,  based  on  experience,  and  by  using 
external  input.  In  this  context,  the  Commission  regularly  assesses  concerns  and  suggestions 
for  further  improvements  expressed  by  stakeholders.  It  evaluates  the  need  for  reform  and 
policy changes in specific areas, and checks that its policies and enforcement practices do not 
create  unduly  high  compliance  costs  for  merging  companies,  thereby  hampering  investment 
and innovation. 

2.1 Recent enforcement trends  

In 2018, 414 mergers were notified to the Commission, the highest number in the history of 
EU  merger  control.  This  number  represents  a  substantial  increase  compared  with  preceding 
years.  The  total  number  of  notifications  received  in  2018  was  9%  higher  than  in  2017  and 
almost  50%  higher  than  in  2013.  Moreover,  the  Commission  received  23  reasoned  pre-
notification submissions  by notifying parties,  requesting  referral  of  a proposed merger from 
the Commission to a national competition authority or vice versa. 

Like previous  years, most notified mergers did  not  raise competition  concerns and could  be 
processed speedily. The simplified procedure was used in 75% of all notified transactions in 
2018,  showing  the  impact  of  the  simplification  package  adopted  by  the  Commission  in 
December 2013. The proportion of simplified cases in the period 2004-2013 was substantially 
lower, at 59%. 

The  year  2018  required  intensive  work  by  the  Commission,  due  to  the  large  number  of 
notified transactions as well as the complexity of a large number of the cases. An increasing 
number  of  notified  transactions  concerned  already  concentrated  industries,  such  as  the  agri-
chemical and steel sectors. This development required the Commission to carefully assess the 
proposed  mergers’  potential  impact  on  competition,  employing  sophisticated  quantitative 
techniques and carrying out comprehensive qualitative investigations. 

65   Case  M.8084  Bayer/Monsanto,  Commission  decision  of  21  March  2018.  See:  http://europa.eu/rapid/press-
release_IP-17-772_en.htm. See also Case M.8851 - BASF / Bayer divestment business, Commission decision 
of 30 April 2018. See: http://europa.eu/rapid/press-release_IP-18-3622_en.htm.  

66   Case M.8955 - Takeda/Shire. See: http://europa.eu/rapid/press-release_IP-18-6497_en.htm. 
67   Case M.8658 - UTC/Rockwell. See: http://europa.eu/rapid/press-release_IP-18-3682_en.htm.  

20 

 
                                                           
In  2018,  the  Commission  opened  in-depth  investigations  (second  phase)  in  twelve  cases. 
These  cases  concerned  sectors  such  as  telecommunications,  steel,  industrial  gases  and, 
railway transport. 

The  Commission  adopted  393  merger  decisions  in  2018,68  and  intervened  in  25  cases, 
resulting in customer savings of approximately EUR 20 billion (or EUR 39 per EU citizen).69 
The number of interventions was somewhat higher compared to the average of the last seven 
years,  with  approximately  20  interventions  per  year.70  In  2018,  17  mergers  were  cleared 
subject  to  commitments in  the first  phase, four were cleared without remedies  after second- 
phase investigations, and six were cleared with remedies after second phase investigations. In 
two  cases,  the  parties  abandoned  the  transaction  during  the  in-depth  investigation.71  The 
Commission did not prohibit any transactions in 2018.  

intervened 

the  Commission 

When  reviewing  proposed  concentrations,  the  Commission  assesses  their  impact  on  all 
aspects  of  competition.  In  2018, 
in  several  proposed 
concentrations,  which,  in  addition  to  price,  quality  and  choice  concerns,  risked  impeding 
innovation.  In  Bayer/Monsanto72  and  BASF/Bayer  divestment  business73  the  Commission 
identified  concerns  related  to  innovation.  The  Commission  approved  the  Bayer/Monsanto 
transaction  after  the  parties  submitted  an  extensive  divestiture  package  comprising  in 
particular Bayer's global vegetable seed business and broadacre crop seed and trait business 
(including  R&D),  its  glufosinate  business,  and  its  digital  agriculture  activities.  These 
divestitures addressed all competition concerns identified by the Commission, including those 
related to innovation. The divestiture businesses were sold to BASF. The acquisitions would 
allow  the  company  to  compete  and  innovate  as  actively  and  effectively  against  the  merged 
firms, for the benefit of European farmers and consumers.  

Most  remedies  accepted  by  the  Commission  in  2018  were  divestitures  of  tangible  or 
intangible  assets.74  This  is  in  line  with  the  Commission’s  general  preference  for  structural 
remedies in merger cases. In a few cases in 2018, the Commission accepted non-divestiture 
remedies,75 where they were considered to solve the underlying competition concerns. 

Moreover,  in  2018  the  Commission  continued  to  make  significant  efforts  to  enforce 
procedural  obligations  under  the  EU  Merger  Regulation.76  Following  the  fine  of  EUR  110 
million imposed on Facebook in 2017 for providing misleading information during the review 
of  its  acquisition  of  WhatsApp77,  the  Commission  imposed  in  2018  a  fine  of  EUR  124.5 

68   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. 

69  DG Competition 2018 Annual Activity Report. To be published here: 
https://ec.europa.eu/info/publications/annual-activity-reports_en. 

70   Commission  interventions  in  merger  cases  include  prohibition  decisions  and  mergers  cleared  subject  to 

commitments, as well as withdrawals during second phase in-depth investigation. 

71   Case M.8547 - CELANESE / BLACKSTONE  / JV, notified to the Commission on 12 September 2017 and 
the  notification  withdrawn  on  19  march  2018  and  case  M.8907  -  APERAM  /  VDM,  notified  to  the 
Commission on 23 October 2018 and the notification withdrawn on 21 December 2018. 
72   Case M.8084 - Bayer/Monsanto. See: http://europa.eu/rapid/press-release_IP-17-772_en.htm. 
73   Case  M.8851  -  BASF  /  Bayer  divestment  business.  See:  http://europa.eu/rapid/press-release_IP-18-

3622_en.htm. 

74   Case M.8084 - Bayer/Monsanto, Commission decision of 21 March 2018; Case M.8444 -  Arcelormittal/Ilva, 
Commission decision of 7 May 2018; Case M.8480 - Praxair/Linde, Commission decision of 20 August 201. 
75   Case M.8306  - Qualcomm/NXP semiconductors, Commission decision of 18 January 2018; Case M.7000  - 

Libery Global/Ziggo, Commission decision of 30 May 2018. 

76   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. 

77   Case M.8228 - Facebook/ WhatsApp. See: http://europa.eu/rapid/press-release_IP-17-1369_en.htm.  

21 

 
                                                           
million  on  Altice78  for    implementing  its  acquisition  of  the  Portuguese  telecommunications 
operator  PT  Portugal  before  notification  or  approval  by  the  Commission  (so-called  gun 
jumping).  Three  other  procedural  infringement  cases  were  under  investigation  in  2018;  two 
against  General  Electric  and  Merck  GmbH  (including  Sigma-Aldrich)  concerning  their 
alleged provision of incorrect and/or misleading information during the Commission's merger 
review.  Moreover,  the  Comission  is  pursuing  a  case  against  Canon  for  allegedly 
implementing a merger before notification and clearance.  

Merger decisions 2010-2018:  

2.2 The ongoing evaluation of EU merger controlselected procedural and 
jurisdictional aspects of EU mergers 

In 2016, the Commission launched a public consultation concerning an evaluation of selected 
procedural and jurisdictional aspects of EU merger control. The evaluation builds  upon the 
results  of  the  public  consultation  on  the  2014  Commission  white  paper  "Towards  more 
effective EU  merger  control".79 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.  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  July 
2017.80  The  Commission  is  carrying  out  further  research  on  the  topics  covered  by  the 
evaluation and will reflect on whether further action would be required. 

78   See: http://europa.eu/rapid/press-release_IP-18-3522_en.htm. 
79   See: http://ec.europa.eu/competition/consultations/2014_merger_control/index_en.html.  
80   For the summary of the submissions and their non-confidential versions, see: 

http://ec.europa.eu/competition/consultations/2016_merger_control/index_en.html.  

22 

143191171166207222246280302110108838673758173641412211416817151722272425201020112012201320142015201620172018Interventions*2nd Phase Clearance withoutremedies1st Phase Clearance(Non-simplified Procedure)1st Phase Clearance(Simplified Procedure)311269270* Interventions in merger cases include prohibition decisions and mergers cleared subject to remedies, as well as withdrawals in Phase II; Prohibition decisions: one in 2011, 2012 and 2016; two in 2013 and 2017.Source: Directorate-General for Competition272299320355377395 
 
                                                           
2.3 Significant judgments by the European Union courts in merger control  

In 2018, the EU Courts adopted five judgments in the field of merger control. 

In  its  judgement  of  16  May  2018,81  the  General  Court  partially  annulled  the  Commission 
decision  of  25  July  2016,82  which  rejected  Lufthansa’s  request  for  a  waiver  of  the 
commitments made binding by the Commission in its 2005 decision  Lufthansa/Swiss.83 The 
General Court annulled the Commission’s decision to reject the request for a waiver for the 
Zürich-Stockholm route. The General Court considered that the Commission made a manifest 
error  of  assessment  by  failing  to  take  into  account  and  carefully  examine  all  relevant 
information. The General Court concluded that the Commission has no obligation to review 
long-term commitments on its own initiative. It is for the parties bound by the commitments 
to make a waiver request and to provide the necessary evidence. However, the Commission 
must  supplement  or  refute  such  evidence  by  way  of  an  investigation.  According  the  the 
General  Court,  the  Commission  had  not  adequately  investigated  the  change  in  competitive 
conditions  that  had  occurred  on  this  route  since  the  adoption  of  its  decision.  However,  the 
General Court dismissed the appeal in relation to the Zürich-Warsaw route. 

On 31 May 2018, the  European Court of Justice issued its preliminary  ruling on a question 
referred  to  it  by  a  Danish  Court  concerning  the  interpreation  of  Article  7(1)  of  the  Merger 
Regulation,  which  prohibits  companies  from  implementing  a  concentration  before  the 
Commission has cleared it.84 The issue at stake in the national proceedings was whether the 
termination  by  KPMG  of  its  cooperation  agreement  with  the  KPMG  international  network 
prior to the approval of its merger with Ernst & Young by the Danish Competition Authority 
amounted to gun jumping or not. In its judgment, the Court of Justice concluded that Article 
7(1)  of  the  Merger  Regulation  must  be  interpreted  in  such  a  way  that  a  concentration  is 
considered to be implemented only by a transaction which, in whole or in part, in fact or in 
law,  contributes  to  the  change  in  control  of  the  target  undertaking.  The  Court  of  Justice 
applied this test  to  the specific circumstances in  the Danish  proceedings  and concluded that 
the termination of the cooperation agreement does not constitute gun-jumping, even if it had a 
conditional  link  with  the  concentration  and  was  likely  to  be  of  ancillary  and  preparatory 
nature. 

On 9 October 2018, the General Court delivered judgements in three cases85 concerning the 
implementation  of  remedies  in  the  case  Telefónica  Deutschland/  E-Plus86  that  had  been 
cleared conditionally in 2014. Each of the three applicants 1&1 Telecom, Mass Response and 
Multiconnect  claimed  that  the  Commission  incorrectly  interpreted  the  scope  of  Telefónica's 
obligations under its commitments. The General Court declared the appeals inadmissible.  

81   Case T-712/16 - Deutsche Lufthansa AG v Commission, judgment of the General Court of 18 May 2018. 
82   Commission Decision C(2016) 4964 final of 25 July 2016, see: 

http://ec.europa.eu/competition/mergers/cases/decisions/m3770_373_3.pdf.   

83   Case M.3770 – Lufthansa/Swiss, decision of 4 July 2005, see: 

http://ec.europa.eu/competition/mergers/cases/decisions/m3770_373_3.pdf.    

84   Case C-633/16 Ernst & Young vs C-633/16 Ernst & Young vs Konkurrencerådet, judgment of 31 May 2018.  
85   General Court judgements in cases T-43/16, T-884/16 and T-885/16.  
86  Case M.7018  -  Telefonica Deutschland/E-Plus. See:  

http://ec.europa.eu/competition/mergers/cases/decisions/m7018_6053_3.pdf. 

23 

 
 
 
                                                           
3.  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 internal market. 

3.1 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.  The  2018  State  Aid  Scoreboard87  confirms  that  modernisation  has  lead  to  quicker 
implementation  of  public  support  by  Member  States.  This  is  possible  due  to  the  General 
Block Exemption Regulation (GBER)88, 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 in 
the common interest. For the aid categories covered by the GBER, only cases with the largest 
potential to distort competition in the single market have to be notified.  

As  shown  in  the  graph  below,89  since  2015  more  than  96%  of  new  measures  for  which 
expenditure was reported for the first time were covered by the GBER, entailing an increase 
of  some  28  percentage  points  compared  to  2013.  Approximately  82%  of  all  measures  with 
reported expenditure (that is to say not only new measures), fell under the block exemption in 
2017. Total spending on measures covered by the GBER represented approximately 47% of 
total  State aid  expenditure (excluding agricultural  aid) in  2017, that is  to say  an increase of 
some 13 percentage points compared to 2013.  

87   The  2018  State  Aid  Scoreboard  comprises  aid  expenditure  made  by  Member  States  before  31  December 
2017 and which falls under the scope of Article 107(1) TFEU. The data is based on the annual reporting by 
Member  States  pursuant 
(EC)  794/2004.  See: 
http://ec.europa.eu/competition/state_aid/scoreboard/index_en.html.  

to  Article  6(1)  of  Commission  Regulation 

88   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 TFEU, OJ L 187, 26.6.2014, p.1. 

89   The 2018 State Aid Scoreboard figures: http://ec.europa.eu/competition/state_aid/scoreboard/index_en.html.  

24 

 
 
                                                           
The 2014 GBER introduced new aid categories90 and to a large extent, the reported increase 
in  expenditure  of  GBER  measures  reflects  the  impact  of  the  new  Regulation.  In  2017,  as 
compared  to  2014,  total  GBER  spending  for  aid  to  culture  and  heritage  conservation,  for 
broadband and for local infrastructure has increased dramatically, while it more than doubled 
for  SMEs,  including  risk  finance.  Large  increases  were  also  recorded  for  environmental 
protection and energy savings (+80%), for research, development and innovation (+69%) and 
for  aid  to  compensate  damages  caused  by  natural  disasters  (+50%).  The  GBER  was  further 
extended  in  2017,  especially  as  regards  aid  to  ports  and  airports.91  It  is  therefore  to  be 
expected  that  block-exempted  aid  as  a  share  of  total  aid  granted  by  Member  States  will 
increase even further in the coming years.  

90   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. 

91   In 2017, Member States reported more than 50 million EUR of State aid spending under Articles 56a and 56b 
of  the  GBER,  of  which  7  million  EUR  for  inland  ports,  39  million  EUR  for  maritime  ports  and  6  million 
EUR for regional airports, respectively. 

25 

 
 
                                                           
The  growing  share  of  spending  falling  under  the  GBER  implies  that  on  average  State  aid 
measures registered by the Commission are implemented much more quickly than in the past 
by  Member  States.  Compared  to  2013,  the  average  time  to  implement  State  aid  measures 
decreased by 15%. However, notified measures that are still subject to scrutiny tend to cover 
bigger budgets  and spending than in  the past,  in line with  the Commission's approach to  be 
'big  on  big  things  and  small  on  small  things'.92  In  2017,  the  average  annual  budget  of 
implemented  notified  measures  was  some  EUR  230  million,  an  absolute  increase  of 
approximately 126% compared to 2013. 

State  aid  enforcement  (Commission  decisions,  monitoring  and  Member  States' 
Evaluation Plans) 2010-2018 

92   Speech by European Commission President-elect on 10 September 2014, available at 

http://europa.eu/rapid/press-release_SPEECH-14-585_en.htm. 

26 

3423062904223262061911891542637482692343225121321232117161610193053202312332501951123625691249983444185611911160723209530100200300400500600700800201020112012201320142015201620172018Evaluation PlanDecided/closed Monitoring ofapproved casesDecided/closed MarketInformationDecided/closed ComplaintsNon-aid decisionsFinal decisionsDecision not to raise objectionsSource: Directorate-General for Competition 
 
 
                                                           
Cooperation 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 
issues  concerning the implementation  of State aid  rules among Member  States and with  the 
Commission.  Other  dedicated  working  groups  or  workshops  deal  with  specific  aspects  of 
SAM  implementation,  in  particular  the  requirements  for  transparency  and  evaluation  (see 
respective  sections  infra)  or  issues  related  to  international  subsidy  policy  and  State  aid  to 
infrastructure.  Once  a  year,  all  these  working  groups  report  to  a  High  Level  Forum,  which 
takes place in Brussels. The High Level Forum provides guidance on the future work of the 
SAM WG and is  also the occasion  for the Commission  and Member States to  discuss State 
aid policy more generally.   

The  SAM  WG  met  three  times  in  2018,  under  the  Chairmanship  of  France,  and  addressed 
several policy and compliance topics related to SAM implementation, such as specific aspects 
of  the  notion  of  aid  and  the  interplay  between  State  aid  rules  and  Structural  Funds 
implementation.  It  reported  on  the  main  topics  discussed  during  the  past  year  and  on  the 
follow-up to recommendations from past Chairs (Finland, Sweden and the United Kingdom) 
to the High Level Forum held on 19 June, in Brussels. On this occasion the High Level Forum 
also endorsed the work plan submitted by the Chair for the period 2018-2019.  

In  2018,  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.  Tailored  to  each  Member  State's 
specific  needs,  bilateral  cooperations  have  taken  a  variety  of  dimensions,  from  structured 
cooperation processes (with Italy, Bulgaria and Romania), to more bespoke informal bilateral 
interactions  (with  Belgium,  Croatia,  Greece,  Hungary,  the  Netherlands,  Poland,  Portugal, 
Slovenia  and  Spain).  These  various  cooperation  processes  generally  deal  with  horizontal 
cross-cutting State aid issues, such as country-specific compliance and implementation issues, 
governance  issues  and  issues  concerning  State-owned  enterprises,  as  well  as  cases  in 
problematic sectors. Each Member State also has a dedicated State Aid Country Coordinator 
at the Commission, who acts as a first entry point for this Member State's horizontal State Aid 
questions.  After  several  years  of  operation,  work  is  on-going  towards  refining  the  various 
bilateral cooperation processes with all 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 
500 000.93 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) – an informatics tool for submission 
and publication of data required under the transparency provisions.94  

93   Competition Policy Brief 4/2016: http://ec.europa.eu/competition/publications/cpb/2016/2016_004_en.pdf.  
94   See the Transparency Award Module (TAM): 

https://webgate.ec.europa.eu/competition/transparency/public/search/chooseLanguage.  

27 

 
                                                           
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 
capabilities of the tools, to incentivise those Member States already having National State Aid 
Registries in place to use the TAM as well.  

At  the  end  of  2018,  25  Member  States  have  joined  the  TAM  and  more  than  43  000  aid 
grantings  have been published by 25 Member States and  Iceland. The Commission  services 
support  the  implementation  of  the  TAM  by  facilitating,  together  with  Member  States' 
representatives,  the  Transparency  Steering  Group  (one  meeting  in  2018)  and  by  organising 
dedicated  training  courses  upon  request.  In  addition,  the  Commission  conducted  the  first 
compliance checks in early 2018 to verify the completeness and accuracy of the information 
published by Member States under the transparency requirements through either the TAM or 
National  State  Aid  Registries.  This  first  round  of  compliance  checks  proved  to  be  very 
effective  in  improving  compliance  with  the  transparency  obligations.  The  scopoe  of  the 
compliance checks will be substantially extended in 2019. 

Evaluation of aid schemes 

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 to 
provide input for future policy-making by the Member States and the Commission.  

Since 1 July 2014, evaluation is required for large GBER schemes in certain aid categories95 
as  well  as  for  a  selection  of  notified  schemes  under  the  new  generation  of  State  aid 
guidelines.96  

By  the  end  of  2018,  the  Commission  had  approved  evaluation  plans  covering  40  State  aid 
schemes. Five additional schemes are currently under analysis, covering a total of 15 Member 
States.97 Most of these decisions concerned either large regional aid projects or R&D&I aid 
schemes under the GBER or notified energy and broadband schemes. These schemes account, 
in total, for over EUR 50 billion of annual State aid budget. The first evaluation report was 
submitted in January 2018.  

The Commission services have continued to accompany the implementation of the evaluation 
requirement  by  publishing  policy  briefs98  and  by  organising  dedicated  workshops  with 
Member  States'  representatives  and  evaluation  experts.  The  current  priorities  of  the 
Commission  services  are:  (i.)  to  enlarge  the  scope  of  the  evaluation  initiative  to  additional 
Member  States,  including  through  bilateral  contacts;  and  (ii.)  to  prepare  the  ground  for  a 
comprehensive  assessment  of  evaluation  reports,  both  intermediate  and  final,  to  provide 
appropriate  feedback  to  Member  States  and  make  sure  that  results  are  effectively  used  for 

95   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. 

96   Evaluation  can  apply  to  notified  aid  schemes  with  large  budgets,  containing  novel  characteristics  or  when 

significant market, technology or regulatory changes are foreseen.  

97   Czechia,  Germany,  Greece,  Spain,  France,  Hungary,  Ireland,  Italy,  Lithuania,  Austria,  Poland,  Portugal, 

Finland, Sweden and the United Kingdom.  

98   Competition  Policy  Briefs  7/2014:  http://ec.europa.eu/competition/publications/cpb/2014/007_en.pdf; 
and 3/2016: http://ec.europa.eu/competition/publications/cpb/2016/2016_003_en.pdf. 

28 

 
                                                           
better policy-making. 

Aid for research, development and innovation  

While one of the headline targets of the Europe 2020 Strategy99 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.  To  achieve  the  greatest  possible  impact  with  the  available  budgets 
R&D&I  aid  measures  should  not  replace  or  crowd  out  private  financing.  On  the  contrary, 
efforts  should  be  directed  at  encouraging  more  private  investments.  The  very  purpose  of 
R&D&I aid is that it should bring added value where markets and companies do not deliver 
the investments for promising but highly risky innovative projects.  

Therefore,  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, that is to say projects that 
truly go beyond the 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 2018, the Commission ensured that aid schemes and individual measures notified or pre-
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,  space,  microelectronic 
sectors as well as virtual research infrastructures and innovation clusters. 

Moreover,  in  a  significant  number  cases  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.  It  is  noteworthy  that  following  the  State  Aid  Modernisation  in  2014,  95%  of  all 
R&D&I measures (70% in value terms) in the Union are implemented under the GBER. 

Aid  enabling  Member  States  jointly  to  support  important  projects  of  common  European 
interest  

In June 2014, the Commission adopted a Communication on Important Projects of Common 
European  Interest  (IPCEI)100,  aiming  to  encourage  Member  States  to  support  projects  that 
make a clear contribution to economic growth, jobs and the competitiveness of Europe. The 
IPCEI  framework  complements  other  State  aid  rules  such  as  the  General  Block  Exemption 
Regulation101  and  the  Research,  Development  and  Innovation  Framework102,  which  allows 
supporting  innovative  projects  whilst  ensuring  that  potential  competition  distortions  are 
limited.  The  rules  thus  enable  ground-breaking  research  and  innovation  and  sharing  of  the 

99   Communication of 3 March 2010 from the Commission, Europe 2020 A Strategy For Smart, Sustainable And 
final.  See:http://eur-lex.europa.eu/legal-content/EN/TXT/?qid= 

Inclusive  Growth,  COM(2010)  2020 
1427303331326&uri=CELEX:52010DC2020.  

100  Communication from the Commission - Criteria for the analysis of the compatibility with the internal market 
of  State  aid  to  promote  the  execution  of  important  projects  of  common  European  interest,  OJ  C  188, 
20.6.2014, pp. 4–12. 

101  See http://ec.europa.eu/competition/state_aid/legislation/block.html#gber.  
102  Communication  from  the  Commission  -  Framework  for  State  aid  for  research  and  development  and 

innovation, OJ C 198, 27.6.2014, pp. 1–29. 

29 

 
                                                           
results  widely,  whilst  ensuring  that  the  support  by  taxpayer  money  truly  serves  European 
citizens. 

In  December  2018,  the  Commission  found  that  an  integrated  project  jointly  notified  by 
France103,  Germany104,  Italy105  and  the  United  Kingdom106  for  research  and  innovation  in 
microelectronics  is  in  line  with  EU  State  aid  rules  and  contributes  to  a  common  European 
interest.  The  Commission  has  identified  micro-  and  nano-electronics  as  one  of  six  Key 
Enabling Technologies deemed to be crucial for future industrial development.107 

This first case in the area of R&D&I of an Important Project of Common European Interest 
(IPCEI)  demonstrates  that  the  instrument  can  deliver  intra-EU  R&D&I  cooperation  and 
coordination  for  Key  Enabling  Technologies,  including  investment  into  first  industrial 
deployment.  

During  2018,  in  line  with  the  Commission's  battery  alliance  initiative,  discussions  with  a 
group of Member States and companies for a possible important project of common European 
interest  (IPCEI)  in  the  area  of  batteries  for  e-mobility  and  energy  storage  have  intensified. 
This  is  in  line  with  the  Commission's  policy  for  a  shift  from  the  use  of  environmentally 
harmful fossil fuels to alternative fuel technologies. 

Regional aid  

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

In 2018, 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. 

In  2018,  the  Commission  adopted  a  decision  under  the  Regional  Aid  Guidelines  for  2014-
2020 approving a regional investment aid  for a large investment project to  BorsodChem.  108 
The investment has the objective to increase the vertical integration of BorsodChem’s existing 
Hungarian methylene diphenyl diisosyanate (MDI) manufacturing plant in Kazincbarcika by 
adding a facility for the production of aniline.The Commission found that without the public 
funding,  the  project  would  not  have  been  carried  out  in  Hungary  or  another  EU  Member 
State, as it would be cheaper for the beneficiary to continue importing aniline from existing 
production  plants  outside  EU.  The  investment  project  contributes  to  the  economic 
development of a disadvantaged region and creates direct jobs. It also leads to the reduction of 
environmental  risks  associated  with  long  distance  transportation  of  aniline  which  is  a  toxic 
material.  

103  Case SA.46705 IPCEI on Microelectronics – France, see: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46705. 

104  Case SA.46578 IPCEI on Microelectronics - Germany, see:  

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46578. 

105  Case SA.46595 IPCEI on Microelectronics - Italy, see: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46595. 

106  Case SA.46590 IPCEI on Microelectronics - UK, see: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46590. 
  See: https://ec.europa.eu/growth/industry/policy/key-enabling-technologies/description_en. 

107
108  Case  SA.49580  (2017/N),  Large  Investment  Project  (LIP)  –  Regional  aid  investment  aid  to  BorsodChem, 
Commission  decision  of  28  of  September  2018.  The  public  version  will  become  available  at: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49580.  

30 

 
                                                           
The Commission also adopted a positive decision on regional investment aid to Jaguar Land 
Rover109 in Slovakia (car manufacturing). The Commission's formal investigation established 
that without the investment aid, the project would not have been carried out in Europe. It also 
showed that the aid was limited to the minimum necessary to trigger the decision by Jaguar 
Land  Rover  to  carry  out  the  investment  in  Slovakia.  The  Commission  found  that  the 
investment aid contributes to job creation as well as to the economic development and to the 
competitiveness  of  a  disadvantaged  region.  Finally,  the  Commission  established,  after  a 
careful  examination  of  all  facts,  that  there  was  no  causal  link  between  the  aid  granted  by 
Slovakia and the closure of activities elsewhere in Europe.  Therefore, the positive effects of 
the  project  on  regional  development  clearly  outweigh  any  distortion  of  competition  brought 
about  by  the  State  aid.  The  Commission  also  found  that  certain  infrastructure  measures 
financed  by  the  Slovak  state  and  carried  out  to  develop  the  industrial  estate  where  the  new 
Jaguar Land Rover plant is located will not only benefit Jaguar Land Rover, but also all other 
companies  located  in  the  industrial  estate  and  more  generally  in  the  Nitra  region.  These 
measures should for that reason not qualify as State aid. Finally, the Commission found that 
the transfer by the Slovak state to Jaguar Land Rover of the land plot, where the car plant is 
being built, was carried out at market price. 

Finally,  the  Commission  adopted  two  decisions  approving  evaluation  plans  relating  to 
regional  aid  schemes  for  Hungary  ('Investment  incentives')110  and  for  Greece  ('General 
Entrepreneurship'  scheme111).  The  first  decision  concerns  the  evaluation  plan  of  an 
investment  aid  scheme  intended  to  address  the  low  level  of  employment  and  investment  in 
Central  Hungary's  “c”  areas  and  in  the  less  developed  regions  of  Hungary  ("a"  regions).  It 
also aims to facilitate the development of new technical and technological solutions, facilitate 
the  development  of  exports  and  increase  the  competitiveness  of  products  manufactured  and 
services provided in compliance with the GBER. The second Commission decision concerns 
the  evaluation  plan  of  a  regional  aid  scheme  aiming  to  boost  the  economy  and  increase  of 
employment in Greece. The aid is directed towards enterprises of all sizes in all regions and to 
manufacturing and internationally traded services and products allowed by the GBER. 

Disaster aid  (promotion of economic development in areas affected by a natural disaster of 
an exceptional nature) 

In  2018,  the  Commission  approved  under  Article  107(3)(c)  TFEU  an  Italian  aid  scheme  to 
support investments in regions affected by earthquakes in 2016 and 2017.112 The notified aid 
scheme aims at mitigating the economic and social damages in central Italy which have been 
affected by abnormal seismic activity. The aid takes the form of a tax credit for all companies 
making initial investments in the area. Support to large companies is limited to aid for setting 
up  a  new  company,  diversifying  a  company's  activity  or  acquiring  the  assets  of  a  company 
that  has  closed  down.  The  Commission  found  that  the  aid  scheme  contributes  in  a 

109  Case SA.45359 (2017/C), Regional aid investment to Jaguar Land Rover – Large Investment Project – 

Slovakia, Commission decision of 4 October 2018. See: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_45359.  

110  Case  SA.48680  (2017/EV),  Evaluation  plan  regarding  the  Government  decree  210/2014  (VIII.27.) 
incentives,  Commission  decision  of  1  June  2018.  See: 

concerning 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48680. 

the  use  of 

investment 

111  Case  SA.47412 (2017/EV),  Evaluation plan of the aid scheme 'General Entrepreneurship'  of Development 
See: 
decision 

Law 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47412. 

Commission 

4399/2016, 

2018. 

July 

112   Case  SA.48571  (2018/N),  Italy  -  Tax  credit  for  productive  investments  in  the  regions  of  Lazio,  Umbria, 
Marche  and  Abruzzo  affected  by  the  2016-2017  earthquakes,  Commission  decision  of  6  April  2018.  See: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48571.  

of 

6 

31 

 
                                                           
proportionate  manner  to  the  promotion  of  economic  development  and  recovery  in  areas 
affected by a natural disaster of an exceptional nature. 

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).113 

The current Risk Finance Guidelines114 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. 

Aid measures encouraging investment and innovation in SMEs 

In 2018, 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  (that  is  to  say  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. 

Infrastructure 

In 2018, the Commission continued providing guidance to the Member States' authorities by 
using  analytical  grids  on  the  application  of  State  aid  rules  to  the  public  financing  of 
infrastructure projects. The applicable provisions were revised in the light of the adoption of 
the Commission Notice on the notion of State aid in 2016,115 and the adoption of the revised 
GBER  in  2017.116  The Comission continued advising Member States' authorities on how to 
interpret and implement the State aid provisions of the GBER on infrastructure projects, thus 

113  An  overview  on  the  EU  programme  for  the  Competitiveness  of  Enterprises  and  Small  and  Medium-sized 

Enterprises. See: http://ec.europa.eu/growth/smes/cosme_en.  

114   Communication from the Commission, Guidelines on State aid to promote risk finance investments, OJ C 19, 

22.01.2014, p. 4. See: http://eur-lex.europa.eu/legal-ontent/EN/TXT/?uri=CELEX:52014XC0122(04).  

115   OJ C 262, 19.7.2016 p. 1. 
116  OJ L 156, 20.6.2017, p. 1. 

32 

 
 
                                                           
helping them to ensure legal certainty regarding the public funding of infrastructure. 

The Commission also adopted three decisions on State aid for the development of motorways, 
notably by the approval  of an investment  plan for  Italian motorways,117  the approval  of the 
prolongation of the existing concession agreement  for the  Istrian Y motorway in  Croatia,118 
and  the  construction  of  the  southern  section  of  the  Central  Greece  Motorway  (E65 
concession).119 

Italian motorways plan: The Commission  approved under EU State aid  rules on services of 
general economic interest the Italian plans to prolong two motorway concessions and impose 
a cap on the tolls imposed on users. The Italian motorways plan involves the prolongation of 
major motorway concessions held by Autostrade per l'Italia (ASPI) and by Società Iniziative 
Autostradali e Servizi (SIAS). These concessions include a cap on potential toll increases at a 
sustainable level for motorway users. At the same time, the prolongation of the concessions 
provide  ASPI  and  SIAS  with  sufficient  revenues  to  finance  significant  investments  on  the 
concessions  concerned.  The approved plan is  also  accompanied by  a series of safeguards to 
avoid  that  ASPI  and  SIAS  are  overcompensated  and  to  limit  competition  distortions, 
including:  (i)  a  cap  on  the  amount  that  ASPI  and  SIAS  could  receive  at  the  end  of  the 
concession from a sale of the assets; (ii) a mechanism to avoid overcompensation, and (iii) a 
series of detailed requirements to tender out the majority of infrastructure works downstream 
in  order  to  limit  distortions  of  competition.  The  Commission  found  that  the  measures  will 
promote  growth  and  unlock  investment,  while  limiting  the  impact  on  motorway  users.  The 
limited  prolongation  of  concessions  and  the  safeguard  measures  minimises  distortions  of 
competition in line with the State aid rules. 

Croatian Istrian Y motorway: The Commission approved under EU State aid rules on services 
of  general  economic  interest  the  Croatian  plan  to  prolong  the  existing  Istrian  Y  motorway 
concession  agreement.  The  positive  decision  allows  new  investments  to  go  ahead,  while 
limiting distortions of competition.The Commission found that the Croatian plan to  prolong 
the Istrian Y motorway concession agreement does not overcompensated the concessionaire. 
It also found that the prolongation of the motorway concession is proportionate to the amount 
needed to finance the works required for building a second stretch of the carriageway on the 
north-eastern  side  of  the  motorway.  The  measure  promotes  growth  and  unlock  investment, 
while limiting the impact on motorway users, in line with EU State aid rules.  

Greek  E65  motorway  concession:  The  Commission  approved  approved  under  Article  
107  3(c)  TFEU  Greek  public  funding  for  the  construction  of  the  southern  section  of  the 
Central  Greece  Motorway  (E65)  in  line  with  earlier  decisions  on  the  same  road.120  The 
Commission found the support  measure necessary  and proportionate for the implementation 
of the project insofar as Greece has demonstrated that (i) the public financing corresponds to 

117  Case  SA.49335  (2017/N),  Motorways  investment  plan  for  Società  Asti  Cuneo  and  Satap  A4  and  case  SA. 
49336  (2017/N),  Motorways  investment  plan  for  Autostrade  per  l'Italia  Spa,  Commission  decision  of  
27  April  2018.  See:  http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49335 
and http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49336. 

118  Case SA.48472 (2018/N), Amended Concession Agreement relating to the Istrian Y motorway, Commission 

decision of 14 June 2018. See: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48472. 

119  Case  SA.  50233  (2018/N),  State  aid  for  the  construction  of  Lamia-Xiniada  section  of  the  E65  Motorway, 
Commission  decision  of  19  October  2018.  The  public  version  will  become  available  at: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_50233. 

120  Case N565/2007 – Greece – Road infrastructure – Public financing of the Central Greece Motorway (E65) 
See: 

project, 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N565_2007. 

Commission 

decision 

January 

2008. 

30 

of 

33 

 
                                                           
the  inflation  adjusted  construction  costs  and  that  (ii)  the  concessionaire  will  assume  the 
operation and maintenance costs of the project, and any excessive revenues will be returned to 
the  State  via  a  claw-back  mechanism.  The  project  will  also  not  receive  any  cross-subsidies 
from  other  concessions  Furthermore,  the  approved  project  contributes  to  objectives  of 
common EU interest and in particular to EU transport policy, as it will support the completion 
of a key Trans-European Road Network and improve transport links for Greek citizens living 
in the Sterea Ellada region, without causing undue distortions of competition. 

3.2 State Aid Modernisation continues  

State aid modernisation started in 2012, culminating in a comprehensive review of the main 
State  aid  guidelines  as  well  as  the  adoption  of  the  General  Block  Exemption  Regulation  in 
2014. The General Block Exemption Regulation enables Member States to implement a wide 
range of State aid measures without prior Commission approval because they are unlikely to 
distort  competition  to  an  extent  that  is  contrary  to  the  common  interest.  As  a  result, 
approximately 95% of State aid measures implemented by Member States are now exempted.  
In 2017 the Commission extended the scope of this Regulation to ports and airports. 

Further extension of the scope of the GBER 

The efforts to focus and modernise EU State aid rules and improve the Commission's working 
methods  are  continuing.  In  the  context  of  the  Multiannual  Financial  Framework 2021-
2027, the Commission has  proposed  to  simplify  co-investment  involving  both  EU  funding 
and  Member  State  investment,  through  a  revision  of  the  EU  State  aid  Enabling  Regulation, 
which is the legal basis for adopting the GBER.  A revised GBER could also cover national 
financing combined with the InvestEU Fund, a single set of rules for all financial instruments 
and budgetary guarantees in the next EU budget. The Commission would have an important 
role  in  the  selection  and  evaluation  of  the  supported  projects  and  schemes.  Member  State 
funds channelled through InvestEU could in the future be exempted from prior notification to 
the Commission under State aid rules.  

Launch of the Fitness check of the 2012 State aid modernisation package, railways guidelines 
and short term export credit insurance 

In  2018,  the  Commision  launched  in  line  with  Commission's  Better  Regulation  Guidelines, 
the evaluation of State aid rules, which were adopted as part of the State Aid Modernisation, 
the  railways  guidelines  and  the  short  term  export  credit  insurance.  The  evaluation  takes  the 
form of a “fitness check” to verify whether the rules have actually worked in the way intended 
and are fit for purpose.121 It will provide a basis for decisions, to be taken by the Commission 
in the future, about whether to further prolong or possibly update the rules. 122 

121  A fitness check is an evaluation of a group of EU interventions which have a relationship with each other  - 
normally a joint set of objectives – which justify a joint analysis. A fitness check assesses the performance of 
the relevant framework with respect to its policy objectives. A fitness check should pay particular attention to 
identifying  and  trying  to  quantify  any  synergies  (e.g.  improved  performance,  simplification,  lower  costs, 
reduced  burdens)  or  inefficiencies  (e.g.  excessive  burdens,  overlaps,  gaps,  inconsistencies,  implementation 
problems and/or obsolete measures)  within the group of interventions which may have appeared over time, 
and  help  to  identify  the  cumulative  impact  of  the  interventions,  covering  both  costs  and  benefits.  See: 
https://ec.europa.eu/info/sites/info/files/better-regulation-guidelines-evaluation-fitness-checks.pdf. 

122  The  current  fitness  check  will  cover  the  General  Block  Exemption  Regulation  (GBER),  De  minimis 
Regulation,  Regional  aid  Guidelines,  Research,  Development  and  Innovation  (RDI)  Framework, 
Communication on State aid for important projects of common European interest (IPCEI Communication), 
Risk finance,  Airport and aviation Guidelines,  Energy and Environmental  Aid Guidelines (EEAG), Rescue 
and  restructuring  Guidelines  but  also  the  Railways  Guidelines  as  well  as  the  Short  term  export  credit 
Communication (the two latter that have not been included in the 2012 SAM package). 

34 

 
                                                           
Launch of the review of the Emissions trading scheme State aid guidelines (ETS Guidelines) 

In  line  with  Commission’s  Better  Regulation  Guidelines,  the  review  of  the  ETS  Guidelines  
has  been  launched.  Under  the  ETS  Guidelines  the  Member  States  can  compensate  some 
electro-intensive users, for part of the higher electricity costs resulting from the EU Emissions 
Trading  Scheme.  The  objective  of  such  compensation  is  to  minimise  carbon  leakage  risk, 
which  materialises  when  emission  costs  cause  relocation  from  the  EU  to  third  countries 
without comparable constraints. The existing rules allowing for compensation will be revised 
to  ensure  that  they  are  adapted  to  the  new  Emissions  Trading  Scheme  for  the  period  2021-
2030. 

Prolongation of the Export Credit Insurance State aid rules until 2020 

On 17 December 2018, the Commisison adopted a Communication prolonging the State aid 
rules for export credit insurance until 2020.123 The Export Credit Insurance State aid rules set 
criteria under which EU governments can provide financial support to buyers of exports from 
their country, in the form of short-term credit insurance. If there is a viable private market for 
insuring the risk that sellers will not be paid, public export credit agencies may only provide 
insurance at market rates.  

Prolongation of the Regulation on de minimis aid to undertakings providing services of 
general economic interest (SGEI) until 31 December 2020 

On  7  December  2018,  the  Commission  adopted  the  prolongation  of  the  Commission 
Regulation on de minimis aid to undertakings providing services of general economic interest 
until  31  December  2020.124  The  prolongation  will  reduce  the  administrative  burden  and 
provide legal  certainty  for compensation measures which do not  exceed  EUR 500 000 over 
any period of three fiscal years granted to undertakings providing such a service and therefore 
shall be deemed not to affect trade between Member States and/or not to distort competition. 

Revision of the Simplified Procedure Notice and Best Practices Code 

A  new  Best  Practices  Code125  was  adopted  in  July  2018  and  replaces  and  combines  the 
previous Simplified Procedure Notice and Best Practices Code. The Best Practices Code for 
State  aid  control  gives  guidance  on  how  the  Commission,  Member  States  and  other 
stakeholders work together in State aid procedures. This covers, for example, how to ensure 
that complex State aid cases are handled most effectively, how complaints about State aid are 
followed up, and monitoring of how Member States implement State aid measures in practice. 
The Best Practices Code explains how State aid procedures are carried out, and sets out the 
steps the Commission is taking to increase the speed, transparency and predictability of these 
procedures.  

3.3 Monitoring, recovery, evaluation and cooperation with national courts  

Increased monitoring of existing State aid to ensure competition on fair and equal terms 

123  Communication  from  the  Commission  concerning  the  prolongation  of  the  Communication  from  the 
Commission  to  the  Member  States  on  the  application  of  Articles  107  and  108  of  the  Treaty  on  the 
Functioning of the European Union to short-term export-credit insurance, Official Journal C457, 19.12.2018, 
p.9. See: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52018XC1219(01)&from=EN.  
124  Commission  Regulation  (EU)  2018/1923 of  7  December  2018  amending  Regulation  (EU)  No 360/2012  as 
regards  its  period  of  application,  Official  Journal  L  313  of  10.12.2018,  p.  2–3.  See:  https://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018R1923&from=EN.  

125  See: http://ec.europa.eu/competition/state_aid/reform/best_practise/en.pdf. 

35 

 
                                                           
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 80% of aid is granted on the basis of previously 
approved aid schemes or block exemption regulations.126 In that context, it is essential for the 
Commission to verify that Member States apply State aid rules for the schemes correctly and 
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 some 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  recommendations,127  the 
Commission has substantially increased the size of the monitoring sample and is monitoring 
approximately 50 schemes per  year.  It  also  extended the scope of its control beyond block-
exempted  and  authorised  aid  schemes,  for  example  schemes  falling  under  the  SGEI 
Decision.128  

The 2018 cycle covered most Member States129 and all main types of aid approved as well as 
block-exempted schemes. Since the reporting of individual aid exceeding EUR 500 000 have 
to  be  encoded  for  the  first  time  by  Member  States  and  is  subsequently  published  in  the 
TAM,130 the Commission verified the reporting for the schemes monitored.  

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 2018, further progress was made to ensure 
that recovery decisions are enforced effectively and immediately. 

By 31 December 2018, the sum of illegal and incompatible aid recovered from beneficiaries 
amounted to EUR 26.6 billion.131 At the same point in time, the outstanding amount pending 
recovery was EUR 5 billion.  

In  2018,  the  Commission  adopted  seven  new  recovery  decisions  and  an  amount  of 
EUR 13.3 billion  was  recovered  by  the  Member  States.  As  of  the  end  of  December,  the 
Commission had 43 pending recovery cases. 

126  State Aid Scoreboard 2017:  http://ec.europa.eu/competition/state_aid/scoreboard/index_en.html.   
127   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.  See  recommendation  n°  1  of  the  Court  of  Auditors  Report  recital  96,  p.  41.  See: 
http://eca.europa.eu/portal/pls/portal/docs/1/10952771.PDF. 

128  OJ L 7, 11.1.2012, p. 3. 
129 Except Bulgaria, Cyprus, Denmark, Estonia and Slovakia. 
130   See: https://webgate.ec.europa.eu/competition/transparency/public/search/home/. 
131 The reference period is 1 January 1999 to 31 December 2018. 

36 

 
 
                                                           
 Recovery decisions adopted in 2018 

Amount recovered in 2018 (EUR billion) 

Pending recovery cases on 31 December 2017 

7 

13.3 

43 

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 2018, the Commission decided to file one infringement action to the European 
Courts under Article 108(2) TFEU.132  

An in-depth  review of the 2007 Commission's recovery notice133  was initiated in  2018 with 
the  aim  to  consolidate  into  the  text  the  case  law  developments  established  since.  The  new 
notice  will  also  include  more  information  on  the  infringement  procedures,  both  Articles 
108(2) TFEU and 260 TFEU, as well as established new practices in the cooperation between 
the Commission and the Member State concerned by a recovery decision. 

132 Consolidated version of the TFEU, OJ C 115, 9.5.2008, p.47. 
133  Notice  from  the  Commission:  Towards  an  effective  implementation  of  Commission  decisions  ordering 
Member States to recover unlawful and incompatible State aid; C 272, 15.11.2007, p. 1. 

37 

 
 
 
                                                           
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  Regulation.134  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 2018, the Commission responded to two requests for information. In one instance, a district 
court  in  the  Netherlands  enquired  on  the  state  of  play  in  an  investigation;  the  other  request 
forwarded by a French administrative appeal court enquired on certain information which the 
Commission might have in the case file of a closed investigation. 

The  possibility  for  the  Commission  to  submit  amicus  curiae  observations  before  national 
courts  on  its  own  initiative  was  introduced  in  the  2013  amendment  to  the  Procedural 
Regulation.  In this respect,  Article 29 of the Procedural  Regulation  mirrors Article 15(3) of 
Regulation  1/2003  in  the  field  of  antitrust.  In  2018,  the  Commission  intervened  in 
proceedings  before  the  courts  in  six Member  States  and  in  arbitral  proceedings  where  State 
aid issues were considered.135 To make its views publicly known, the Commission publishes 
its  opinions  and  amicus  curiae  observations,  as  well  as  observations  to  others,  on  its 
website.136  

In  2018,  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 conferences.137 

Finally, in 2018 the Commission commissioned a study on the application of the cooperation 
tools by national courts to analyse in greater depth the State aid rulings of courts in the 28 EU 
Member States. 

3.4 Significant judgments by the European Union Courts in the State aid area  

In 2018, 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, notably on issues related to the 
concept  of  advantage,  selectivity,  compatibility  assessment  and  on  a  number  of  procedural 
points.  

134  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. 

135  The  Commission  submitted  written  submissions  in  two  cases  before  the  Italian  courts,  one  case  before  a 
Polish  court  and  submitted  written  and/or  oral  submissions  in  four  cases  concerning  the  impact  of 
Commission decision of 30  March 2015 in  Case SA.38517 (2014/NN; 2014/C)  Micula v Romania (ICSID 
arbitration award) on the recognition and enforcement of an arbitral award before the Courts of the Belgium, 
Luxembourg, Sweden and the United Kingdom. In addition, the Commission participated as a non-disputing 
party before the ICSID Arbitral Tribunal and submitted its written observations in case ARB/16/20 Iskandar 
and Akram  Safa against Hellenic Republic on 5 October 2018. The Commission also submitted an amicus 
curiae  brief  in  recognition  and  enforcement  proceedings  before  the  U.S.  District  Court  of  the  District  of 
Columbia in the Micula case. 

136  See: http://ec.europa.eu/competition/court/overview_en.html. 
137  See  also  the  dedicated  section  Cooperation  with  national  courts,  Antitrust  and  Cartels  Section,  see  I. 

Antitrust, chapter 4. 

38 

 
 
                                                           
 
Advantage  

The most relevant judgments as regards advantage are FIH138 and EDF.139  

In  FIH,  the  Court  of  Justice  overturned  the  General  Court  judgement  and  upheld  the 
Commission 2014 decision. The case concerned two successive State aid measures declared 
compatible  by  the  Commission  (in  2009  and  2014)  and  the  applicability/application  of  the 
MEOP to the second one, in its declination as market economy investor test (as argued by the 
Commission) or market economy creditor test (as held by the General Court). 

The Court of Justice first confirmed that the Market Economy Operator Principle (“MEOP”) 
is  applicable  to  the  case  of  FIH.  The  Court  of  Justice  first  noted  that  in  order  to  apply  the 
MEOP  only  the  benefits  and  obligations  linked  to  the  situation  of  the  State  as  a  private 
operator, to the exclusion of those linked to its situation as a public authority, are to be taken 
into account. In this regard, in line with the Land Burgenland case law,140 the Court of Justice 
reiterated that by granting aid, a Member State pursues by definition objectives other than that 
of  making  profits:  the  risks  resulting  from  that  State  aid  are  not  among  the  factors  that  a 
private  operator  under  normal  market  conditions  would  have  taken  into  account  in  its 
economic  calculations.  Since  the  2009  measures  were  clearly  State  aid  under  Article  107 
TFEU,  the  Court  of  Justice  concluded  that  the  General  Court  had  wrongly  required  the 
Commission to assess the economic rationale of the second measure from the point of view of 
a private creditor rather than a private investor. 

important 

judgement  related 

the 
Another 
applicability/application of the MEOP is EDF. In its judgment, the General Court fully upheld 
the  Commission’s  decision  of  22  July  2015  and,  accordingly,  the  obligation  for  France  to 
recover approximately EUR 1.37 billion from EDF. 

the  existence  of  an  advantage  and 

to 

The General Court stated that the applicability of the MEOP test (in its declination as Market 
Economy  Investor  Principle,  “MEIP”,  in  this  case)  ultimately  depends  on  the  State  having 
conferred,  in  its  capacity  as  shareholder  and  not  in  its  capacity  as  public  authority,  an 
economic  advantage  to  an  undertaking  belonging  to  it.  It  is  for  the  Member  State  to 
demonstrate that before or at the same time as conferring the advantage, it took the decision to 
make an investment in that undertaking in line with what a private investor would have done. 
In  order  to  establish  the  economic  rationale  of  its  decision,  the  Member  State  can  submit 
elements showing that the decision was based on economic evaluations comparable to those 
that  a  private  investor  would  have  made  before  implementing  the  measure  at  issue  for  the 
purposes  of  determining  its  future  profitability.  The  elements  taken  into  account  must  be 
contemporaneous  to  the measure and cannot  result from  ex post studies. The General  Court  
noted that in the case of EDF this had not occurred and upheld the Commission decision. 

Selectivity 

In 2018, the EU courts delivered a number of judgements dealing with the selective nature of 
State measures. 

138  Case C-579/16P European Commission v FIH Holding A/S and FIH Erhvervsbank A/S - EU:C:2018:159. 
139  Case T-747/15 Électricité de France (EDF) v European Commission - EU:T:2018:6. 
140  Joined  Cases  C214/12  P,  C215/12  P  and  C223/12  P    Land  Burgenland  v  European  Commission  - 

EU:C:2013:682.  

39 

 
 
                                                           
The three-step test 

On selectivity issues, it is worth noting firstly the preliminary ruling in the A-Brauerei case.141 
The  case  concerns  an  exemption  from  the  German  tax  on  real  property  transfers 
(Grunderwerbsteuergesetz)  in  certain  cases  -  transfers  of  properties  in  the  context  of 
transformations  within  groups  -  and  in  particular  whether  such  an  exemption  constitutes  a 
selective advantage and thus State aid. The Court of Justice confirmed that the selectivity of a 
fiscal measure has to be assessed using the methodology of the three-step test.142 The Court of 
Justice  ruled  that  the  tax  exemption  at  stake  constitutes  a  prima  facie  selective  advantage 
since it differentiates between  companies which  are in  the same situation, in  the light  of its 
objective (taxing any change in ownership of real property). However, it also considered that 
this difference in treatment could be justified (in certain circumstances) by a guiding principle 
of the tax system, namely the principle to avoid double taxation, thereby potentially escaping 
the qualification as State aid.  

Another important judgement on the application of the three-step test is Sanierungklausel,143 
where  the  Court  of  Justice  overturned  the  General  Court  judgements144  and  annulled  the 
Commission's  decision  of  26  January  2011.145  In  substance,  the  cases  deal  with  the 
application of State aid rules to an exception from an exception in  the corporate tax system. 
The German system of loss carry-forward allows companies to offset losses in a given  year 
against  taxes  on  profits  in  future  years,  except  when  there  has  been  a  significant  change  in 
ownership. The latter rule is aimed at preventing abuses, such as acquiring failed companies 
for  the  sole  purpose  of  tax  avoidance.  A  third  rule,  the  so-called  "Sanierungsklausel"  or 
reorganisation  clause,  authorises  the  loss  carry-forward  for  companies  that  are  illiquid  or 
over-indebted,  despite  a  change  in  ownership,  if  the  change  serves  the  purpose  of 
restructuring.  The  Commission's  decision  (confirmed  by  the  General  Court)  concluded  that 
this  clause  was  incompatible  aid  because  it  departed  from  the  general  rule  preventing  the 
carry-forward  of  losses  after  a  significant  change  in  ownership  and  procured  a  selective 
advantage to companies in difficulty. The Court of Justice, however, overturned the General 
Court's  judgements  and  annulled  the  decision,  taking  the  view  that  the  Commission  had 
wrongly  defined  the  reference  framework.  First,  the  Court  of  Justice  pointed  out  that  the 
selectivity of a tax rule does not depend on whether it is an exception to a general rule or not. 
This is only relevant when it leads to treating differently two groups of persons which, in light 
of the objective of the measure, are in a comparable legal and factual situation. The Court of 
Justice then held that the prohibition to carry forward losses in case of a significant change in 
ownership  was  clearly  an  exception  to  the  general  rule  of  loss  carry-forward.  The  Court  of 
Justice considered that the General Court erred when it accepted that the Commission, while 
noting  the  existence  of  a  more  general  loss  carry-forward  rule,  determined  the  reference 
framework to  be the rule governing the forfeiture of losses in  case of change of ownership. 
Because  the  incorrect  definition  of  the  reference  system  corrupts  the  entire  selectivity 

141  Case C-374/17 Finanzamt B v A-Brauerei - EU:C:2018:1024. 
142  According  to  that  test,  the  Commission  first  has  to  identify  the  “system  of  reference”  (normal  rules  of 
taxation), then (second step) it assesses whether a given measure constitutes a derogation from that system 
insofar as it differentiates between economic operators who, in light of the objectives intrinsic to the system, 
are  in  a  comparable  factual  and  legal  situation.  In  the  third  step,  a  prima  facie  selective  measure  can  be 
regarded as justified by the nature or the general scheme of the tax system, and can thus fall outside the scope 
of State aid rules. 

143  Case C-203/16P Dirk Andres v European Commission - EU:C:2018:505. 
144 Cases T-287/11 and T-620/11.  
145  2011/527/EU: Commission Decision of 26 January 2011 on State aid C 7/10 (ex CP 250/09 and NN 5/10) 
implemented  by  Germany  —  Scheme  for  the  carry-forward  of  tax  losses  in  the  case  of  restructuring  of 
companies in difficulty (Sanierungsklausel).  

40 

 
                                                           
analysis, the Court of Justice annulled the decision. 

Special purpose levies 

A further important judgement in the field of selectivity (and in particular for the assessment 
of selectivity of special purpose levies with a parafiscal objective) is the preliminary ruling in 
ANGED.146  The  case  concerns  (regional)  taxes  on  large  retail  operators.  The  objectives 
assigned to the retail taxes are environmental protection and town and country planning, that 
is to say the need to develop urban infrastructure and to take into account the pollution created 
by customers using private cars to go shopping. 

The taxes are calculated on the basis of the surface of the retail establishment, as a proxy for 
the  adverse  effects  caused  mainly  by  the  use  of  private  cars  by  customers.  The  most 
prominent features of the measures are (i) an exemption for individual retail outlets below a 
given surface threshold; (ii) exemptions/reduction for certain specialised retail outlets (garden 
centres,  establishments  selling  vehicles,  construction  materials,  machinery  or  industrial 
supplies,  furniture,  doors  and  windows,  and  do-it-yourself  stores);  and  (iii)  a  de  facto 
exemption  of  large  collective  establishments  (that  is  to  say  shopping  malls)  in  Catalonia, 
because the individual outlets of the mall are below the surface threshold. 

After having recalled the Member States’ competence to design their  fiscal measures, in the 
absence  of  EU  rules  governing  the  matter,  the  Court  of  Justice  noted  that  the  tax  at  stake 
pursues objectives of environmental protection and town and country planning and carries out 
the selectivity assessment  (especially the  comparability test) in  the light  of these objectives, 
noting  that  it  is  not  disputed  that  the  environmental  impact  of  retail  establishments  largely 
depends on their size. 

As regards the exemption of individual outlets below the threshold, the Court of Justice held 
that  smaller  establishments  are  not  in  a  similar  legal  and  factual  situation  as  larger 
establishments subject to the taxes in particular in light of their environmental objective.  

With  regard  to  the  exemption  for  specialised  shops,  the  Court  of  Justice  accepted  the 
argument that such an exemption would be justified if these retail outlets, which require very 
large areas, do not have a significant adverse effect on environment and on town and country 
planning as the others. The Court of Justice  accepted the justification in principle, but leaves 
this to be checked by the referring national court. 

Finally,  with  regard  to  the  de  facto  exemption  of  large  collective  establishments  (that  is  to 
say) in Catalonia, the Court of Justice held that they are objectively in a comparable situation 
to large retail outlets considering the objectives of the measures. As a result, the exemption of 
collective establishments from the tax was held to be selective and to constitute State aid. 

Compatibility 

In its judgement in Hinkley Point C,147 the General Court upheld the Commission decision of 
8 October 2014 approving the aid in favour of the construction of the Hinkley Point C nuclear 
power station in the UK. 

The  General  Court  stated  that  to  be  compatible  with  Article  107(3)(c)  TFEU  an  aid  should 

146  Cases  C-233/16  to  C-237/16  Asociación  Nacional  de  Grandes  Empresas  de  Distribución  (ANGED)  v 

Generalitat de Catalunya - EU:C:2018:280. 

147  Case T-356/15 Republic of Austria v European Commission - EU:T:2018:439. 

41 

 
                                                           
relate to a public interest objective, be appropriate, necessary and proportionate. Concerning 
the objective of public interest, the General Court referred to the narrower concept of public 
interest  rather  than  to  common  interest.148  The  General  Court  noted  that  the  objective  of 
promoting the creation of new nuclear energy is related to the Euratom Community's goal of 
facilitating investment in the nuclear field. Furthermore, it follows from the TFEU that each 
Member State has the right to  choose its own energy mix. Consequently, the General Court 
held that the Commission did not err in taking the view that the UK was entitled to define the 
development of nuclear energy as being a public-interest objective, even though that objective 
is not shared by all Member States. 

The General Cour also confirmed that Article 107(3)(c) TFEU does not require the existence 
of a “market  failure”. The relevant question is  whether the pursued public interest objective 
would be attained without the Member State's intervention, even if, as such, the market cannot 
be  considered  to  be  failing.  In  this  regard,  the  General  Court  held  that  given  the  lack  of 
market-based financial instruments and other types of hedging contracts, the Commission was 
correct  to  conclude  that State  intervention  was  necessary  in  order  to  develop,  in  good  time, 
new nuclear energy generation. 

Concerning the proportionality of the aid,  the General Court concluded that  Austria did not 
demonstrate that the Commission made a manifest error when it balanced the positive effects 
of the measure against its negative effects. The General Court indicated that the Commission 
was entitled to take into account all positive effects of the new nuclear capacity, including on 
security of supply and low carbon policy. 

The General Gourt concluded that operating aid is not per se incompatible. It can be declared 
compatible  if  it  fulfils  all  the  requirement  of  Article  107(3)(c)  TFEU,  notably  when  the 
operating aid promotes new investment as in the present case. At the same time, the General 
Court notes that an operating aid solely intended to maintain the status quo and covering the 
operating  expenditure  of  a  normal  business  activity  cannot  be  considered  to  pursue  an 
objective of public interest. 

In its judgment Rittinger and Others of 13 December 2018,149 the Court of Justice confirmed 
that the German broadcasting contribution is compatible with EU law and that Germany did 
not  have  to  notify  the  Commission  of  an  alteration  to  existing  state  aid.  In  2007  the 
Commission  found  that  the  broadcasting  fee  in  Germany  was  to  be  classified  as  existing 
aid.150  In  2013  Germany  modified  the  basis  for  calculating  the  broadcasting  fee.  This 
modification was challenged before the Landgericht Tübingen, which made a referral to the 
Court of Justice for a preliminary ruling.  

The Court of Justice found that the replacement of the broadcasting fee (which was payable 
on the basis of possession of a broadcast receiving device) with the broadcasting contribution 
(which  is  payable  among  other  things  on  the  basis  of  occupation  of  a  dwelling  or  business 

148   A public interest objective of a Member State contrasts with the private interest of the beneficiary of the aid 
and it does not need to be in the interest of all Member States or even of a majority of Member States. This is 
different from the common interest that the  Commission  needs to take  into account  when it carries out the 
balancing test. 

149  Judgment of the Court of Justice in Case C-492/17, Rittinger and Others. See: 

http://curia.europa.eu/juris/document/document.jsf?text=&docid=208961&pageIndex=0&doclang=EN&mod
e=lst&dir=&occ=first&part=1&cid=12230735. 

150  Commission  Decision  of  24  April  2007  (C(2007)  1761  final  –  State  aid  E  3/2005  (ex  CP  2/2003,  CP 
232/2002,  CP  43/2003,  CP  243/2004  and  CP  195/2004)  –  Financing  of  public  service  broadcasters  in 
Germany (ARD/ZDF). 

42 

 
 
                                                           
premises)  does  not  constitute  a  substantial  alteration  to  the  system  of  financing  public 
broadcasting in Germany. Therefore, it was not necessary to notify it to the Commission as an 
alteration to existing state aid. 

The  replacement  of  the  broadcasting  fee  by  the  broadcasting  contribution  was  made    to  
simplify  the  levying  of  the  broadcasting  contribution,  in  a  context  of  evolving  technologies 
for receiving the public broadcasters’ programmes. Moreover, that simplification did not lead 
to a substantial increase in the compensation received by the public broadcasters to cover the 
costs associated with the public service tasks entrusted to them.  

Procedural issues 

In 2018, the EU courts delivered a number of relevant judgements on procedural points. 

In its judgement in Dutch Seaports,151 the General Court dismissed the appeal by the Dutch 
public seaports (supported by the Netherlands), and upheld a 2016 Commission decision. The 
Commission had found that the Dutch corporate tax exemption for public seaports amounted 
to incompatible aid. Since the aid was existing, the Commission had asked the Netherlands to 
abolish it at the latest by 1 January 2017. The main focus of the judgement is the application 
of  the  principle  of  equal  treatment  by  the  Commission.  The  applicants  criticised  the 
Commission  for  not  completing  the  investigations  on  similar  measures  implemented  by 
Belgium, France and Germany the same time as the Dutch one.  

The General Court first concluded that the Commission had sufficiently motivated its decision 
and  that  it  had  clearly  explained  why  it  considered  that  the  situation  of  competing  seaports 
was  not  relevant.  On  this  basis,  it  was  normal  for  the  Commission  not  to  give  further 
explanations  as  to  the  investigations  it  was  conducting  on  those  competing  seaports.  The 
General  Court  then  reiterated  that  a  possible  breach  by  a  Member  State  of  an  obligation 
incumbent  on it under the Treaty, in particular  Article 107(1) TFEU, cannot  be justified by 
the fact that other Member States could  also be in breach of this obligation and that several 
distortions of competition do not neutralize each other but, on the contrary, have a cumulative 
effect.  

The General Court moreover noted that the respect for the principle of equal treatment must 
be  reconciled  with  the  principle  of  legality,  which  means  that  a  person  may  not  rely,  in 
support  of  his  claim,  on  an  unlawful  act  committed  in  favour  of  a  third  party.  Since  the 
Commission had found that the Dutch corporate tax exemption as incompatible aid and that it 
had to be abolished, the applicants could not derive from the principle of equal treatment the 
right to continue to benefit from that incompatible aid. 

Another  important  judgement  procedure-wise  is  the  General  Court  ruling  in  Tempus 
Energy.152 The General Court annulled a 2014 Commission decision which declared a State 
aid  for  a  UK  capacity  mechanism  compatible  with  the  internal  market.  The  annulment  is 
based on the General Court consideration that the Commission should have opened the formal 
investigation  procedure  under  Article  108(2)  TFEU,  in  light  of  the  circumstances  of  the 
preliminary  investigation  and  the  characteristics  of  the  measure.  In  particular,  the  General 
Court  held  that  the  Commission  should  have  open  the  formal  investigation  in  light  of  the 
length of the pre-notification phase (approximately 18 months), the complexity and novelty of 
the  case  (it  was  the  first  decision  approving  a  capacity  mechanism  under  the  then  new 

151  Case T-160/16 Groningen Seaports NV and Others v European Commission - EU:T:2018:317. 
152  Case  T-793/14  Tempus  Energy  Ltd  and  Tempus  Energy  Technology  Ltd  v  European  Commission  - 

EU:T:2018:790.  

43 

 
                                                           
Guidelines  on  State  aid  for  environmental  protection  and  energy  2014-2020,153  and  its 
significance in terms of high aid amounts. 

In the Øresund case154 the General Court partially annulled the Commission’s 2014 decision 
approving State guarantees granted by Denmark and Sweden to support the construction and 
operation  of  the  Øresund  Fixed  Link  (a  16-kilometre  long  toll-funded  tunnel  and  bridge 
infrastrucuture  linking  the  two  countries).  The  Commission  decision  declared  the  State  aid 
compatible  under  Article  107(3)(b)  TFEU  as  funding  for  an  important  project  of    common 
European interest (IPCEI). The General Court upheld the decision insofar as it found that the 
State funding for the “hinterland” rail infrastructure connecting the Fixed Link to the national 
rail  networks  did  not  constitute  State  aid  since  there  is  no  market  for  the  operation  of  the 
national  rail  networks  in  Denmark  or  Sweden.  However,  the  General  Court  found  that  the 
Commission had encountered serious difficulties in establishing the compatibility of the State 
aid  to  the  Fixed  Link  on  several  points,  in  particular  as  regards  the  necessity  and 
proportionalty  of  the  State  guarantees  which  were  not  clearly  quantified  in  view  of  their 
undefined amount and duration.  The Commission should consequently have opened a formal 
investigation pursuant to Article 108(2) TFEU. 

Finally, the judgement in Montessori155 is noteworthy. The case related to an exemption from 
the  municipal  real  estate  tax  in  Italy  for  religious  entities  and  non-for-profit  organisations 
since  2006.  The  Commission  found  that  such  an  exemption  (from  2006  until  2011)  was 
unlawful and incompatible aid but did not order Italy to recover the aid from the beneficiaries, 
accepting the arguments raised by the Member States as regards the absolute impossibility of 
recovery.  The  judgment  is  important  for  two  procedure-related  reasons,  namely  the 
admissibility of  actions  for annulment  under the third limb  of Article 263(4) TFEU and the 
principles  underlying  absolute  impossibility  of  recovery  of  unlawful  and  incompatible  aid. 
First, the Court of Justice confirmed for the first time that a State aid decision declaring an aid 
scheme  incompatible  (without  ordering  recovery)  can  be  considered  a  regulatory  act  that  is 
subject to appeal under the third limb of Article 263(4) TFEU. Second, the Court of Justice, 
while  confirming  that  the  Commission  can  in  principle  accept  arguments  on  absolute 
impossibility  of  recovery  before  the  final  decision,  stressed  that  the  condition  of  absolute 
impossibility  cannot  be  satisfied  when  the  Member  State  alleges  mere  internal  difficulties. 
The Court of Justice held that recovery of unlawful and incompatible aid may be considered 
objectively  and  absolutely  impossible  when  (i)  the  difficulties  relied  upon  by  the  Member 
States are real, and (ii) there are no alternative methods of recovery. 

4.  DEVELOPING THE INTERNATIONAL DIMENSION OF EU COMPETITION POLICY 

The main objective of the Commission's international activities in the competition field  is to 
advocate a global competition culture, promoting competition conditions allowing  companies 
to compete on the merits on fair and equal terms across the world. This endeavour includes 
subsidies. The Commission’s strategy has a multilateral as well as a bilateral component.   

4.1. Multilateral relations 

In 2018, the Commission continued its endeavours to improve multilateral rules for subsidies. 

153   OJ C200/1 of 28.6.2014. 
154  Case  T-68/15  HH  Ferries  I/S,  formerly  Scandlines  Øresund  I/S  and  Others  v  European  Commission  - 

EU:T:2018:563. 

155   Joined  cases  C-622/16  P  Scuola  Elementare  Maria  Montessori  Srl  v  European  Commission  - 

EU:C:2018:873. 

44 

 
                                                           
Reforming the subsidy rules is one of the EU’s main priorities for the modernisation of WTO 
trade  rules.  Moreover,  in  2018  the  Commission  was  engaged  in  several  sectoral  initiatives 
addressing subsidies in the international context, for example the G20 Global Forum on steel 
excess  capacity,156  the  development  of  regional  support  guidelines  for  the  semiconductor 
industry  in  the  Government/authorities  meeting  on  semiconductors  (GAMS),157  and  for 
shipbuilding within the OECD. Finally, the Commission worked with EU Member States in 
the  International  Subsidy  Policy  Group,  gathering  information  on  subsidies  granted  by 
countries  outside  the  EU,  exchanging  views  and  coordinating  initiatives  concerning 
international subsidy policies at multilateral and bilateral level.158  

In 2018, the Commission continued its active engagement in competition-related international 
fora  such  as  the  OECD  Competition  Committee,  the  International  Competition  Network 
(ICN),  the  World  Bank,  and  United  Nations  Conference  on  Trade  and  Development 
(UNCTAD).  

At the OECD Competition Committee meeting in June 2018, the Commission contributed to 
the discussions on leniency progammes,159 non-price effects of mergers,160 implications of e-
commerce  for  competition  policy161  and  market  concentration.162  In  December  2018,  the 
Commission  contributed  to  the  Competition  Committee’s  deliberations  on  the  treatment  of 
legally  privileged  information  in  competition  proceedings,163  gun  jumping  and  suspensory 
effects  of  merger  notifications,164  excessive  pricing  in  pharmaceuticals,165  personalised 
pricing in the digital era,166 quality considerations in the zero-price economy,167 benefits and 
challenges of regional competition agreements,168 and investigative powers in practice.169 

In  March  2018,  the  Commission  participated  in  the  Annual  Conference  of  the  ICN  in  New 
Dehli. Throughout the year, the Commission co-chaired the ICN Cartel Working Group and 
contributed  to  several  projects  such  as  the  survey  on  the  “Key  elements  for  efficient  and 
effective leniency programme and its application” and the new chapter of the ICN Anti-Cartel 
Enforcement Manual on Private Enforcement. The Commission is also an active member in 
the other ICN Working Groups; the Merger Working Group, the Unilateral Conduct Working 
Group, the Advocacy Working Group, and the Agency Effectiveness Working Group.  

The Commission participated in the 17th meeting of the UNCTAD Intergovernmental Group 
of  Experts  on  Competition  Law  and  Policy,  held  in  Geneva  in  July  2018.  The  conference 
included discussions  on policy challenges faced by developing countries  in  competition  and 
regulation in the maritime transport sector, capacity building in competition law and policy, 

156  See: http://europa.eu/rapid/press-release_IP-18-5865_en.htm. 
157  The members of GAMS are China, Chinese Taipei, the European Union, Japan, Korea and the United States.  
158  See: https://ec.europa.eu/commission/commissioners/2014-2019/vestager/announcements/state-aid-rules-fair-

competition_en. 

159  See: http://www.oecd.org/daf/competition/rethinking-antitrust-enforcement-tools-in-multi-sided-

markets.htm. 

160   See:  http://www.oecd.org/daf/competition/non-price-effects-of-mergers.htm. 
161   See:  http://www.oecd.org/daf/competition/e-commerce-implications-for-competition-policy.htm. 
162  See: http://www.oecd.org/daf/competition/market-concentration.htm. 
163 See: http://www.oecd.org/daf/competition/treatment-of-legally-privileged-information-in-competition-

proceedings.htm. 

164  See: http://www.oecd.org/daf/competition/gun-jumping-and-suspensory-effects-of-merger-notifications.htm. 
165   See: http://www.oecd.org/daf/competition/excessive-pricing-in-pharmaceuticals.htm. 
166  See: http://www.oecd.org/daf/competition/personalised-pricing-in-the-digital-era.htm. 
167   See: http://www.oecd.org/daf/competition/quality-considerations-in-the-zero-price-economy.htm. 
168   See: http://www.oecd.org/daf/competition/benefits-and-challenges-of-regional-competition-agreements.htm. 
169   See: http://www.oecd.org/competition/globalforum/investigative-powers-in-practice.htm. 

45 

 
 
                                                           
and  competition  issues  in  the  sale  of  audio-visual  rights  for  major  sporting  events.170 
Moreover, in 2018 contributed to a UNCTAD proposal to develop a Toolkit on International 
Cooperation within the UNCTAD Discussion Group for International Cooperation.171  

4.2. Bilateral relations 

At bilateral level, the Commission aims at including provisions on competition and State aid 
control when negotiating Free Trade Agreements (FTAs). In 2018, the Commission continued 
FTA  negotiations  with  Chile,  Mexico,  Mercosur,  Azerbaijan,  Tunisia  and  Indonesia,  and 
opened negotiations with Australia, New Zealand, Kyrgyzstan and Uzbekistan. At the end of  
2018, the European Union and Switzerland agreed on the text of an Institutional Framework 
Agreement,  which  also  includes  State  aid  control  rules.  The  draft  agreement  is  currently  in 
consultation with Swiss stakeholders. 

The Commission's negotiations on an Investment Agreement with China are still ongoing.  

As  regards  the  draft  Second  Generation  Agreement  between  the  Commission  and  the 
Competition Bureau Canada, the Commission analysed the impact which the Opinion of the 
Court of Justice on the 2014 EU Canada Passenger Name Record Agreement172 would have 
on the Second Generation Agreement. Moreover, the Commission continued the negotiations 
with Japan on a Second Generation Agreement with a view to update the existing cooperation 
agreement from 2003.173   

Another  key  area  of  the  Commission’s  activities  is  technical  cooperation  on  competition 
policy  and  enforcement  with  the  European  Union’s  main  trading  partners.  To  frame  this 
cooperation, the Commission has signed a number of Memoranda of Understanding (MoUs). 
The  Commission  has  signed  MoUs  with  the  BRICS174  countries,  and  it  has  engaged  in 
technical  cooperation  with  these  countries  to  varying  degrees.  With  the  same  objective,  the 
Commission signed an Administrative Arrangement with Mexico in June 2018.175  

The  Commission  also  assists  neighbouring  countries  when  they  implement  the  competition 
provisions  included  in  FTAs.  For  example,  in  2018  the  Commission  was  involved  in 
negotiating the FTA implementing rules with Tunisia and in monitoring the implementation 
of the EU competition acquis in countries such as Ukraine.  

In negotiations with candidate countries and potential candiadate countries, the Commission's 
main  policy  objective  -  in  addition  to  advocating  a  competition  culture  -  is  to  help  these  
countries to  create legislative frameworks with  well-functioning competition authorities and 
to  build  up  a  solid  enforcement  record.  To  meet  the  conditions  for  EU  accession  in  the 
competition  policy  field,  these  requirements  must  be  fulfilled.  In  2018  the  Commission 
continued  to  monitor  candidate  countries’  compliance  with  their  commitments  under  the 
Stabilisation and Association agreements. 

170   See: https://unctad.org/en/Pages/MeetingDetails.aspx?meetingid=1675. 
171  See: https://unctad.org/en/Pages/MeetingDetails.aspx?meetingid=1675. 
172  See: http://curia.europa.eu/juris/liste.jsf?pro=AVIS&num=C-1/15. 
173  See: https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:22003A0722(01). 
174   BRICS is an acronym commonly used to denote the countries Brazil, Russia, India, China and South Africa. 
175  See: http://ec.europa.eu/competition/international/bilateral/mexico_mou_2018_en.pdf. 

46 

 
 
                                                           
 
5.  EXTERNAL COMMUNICATION 

DG  Competition's  external  communication  is  focused  on  the  use  of  mass  media  to  reach  a 
variety of audiences, including businesses, lawyers, researchers, academics, students and the 
general public. This is achieved principally via 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. 

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 results of a Eurobarometer survey conducted in January 
2019 show that newspapers or magazines and television remain the main information sources 
(both 58%), followed by radio and websites (both 33%), and online social networks (24%, an 
increase of 10% since 2014). 

DG  Competition  produced  560  press  releases  related  to  competition  cases  during  2018.  Of 
these,  140  were  longer,  multilingual,  press  releases  while  a  further  420  were  shorter  and 
monolingual. Media coverage of some of the cases was worldwide, reaching tens of millions 
of people, for example, of the Google Android and Qualcomm antitrust decisions. All of these 
cases were covered by TV, radio, print and internet media around the globe. 

Throughout 2018, Commissioner Vestager delivered 102 speeches to a variety of audiences. 
The Director-General delivered 16 speeches176 at a number of international events. 

On social media, the Directorate-General for Competition was active on Twitter during 2018. 
Throughout  the  year,  more  than  1,200  tweets  from  the  Directorate-General’s  account 
generated  more  than  3.6  million  impressions.177  The  most  popular  tweets  related  to  the 
Google Android and Qualcomm decisions, the consumer electronics  cartel decisions as well 
as the tweets concerning the investigation into possible collusion between car manufacturers 
about clean emission technology. Followers of the Directorate General's Twitter account rose 
to nearly 12 000 during the year. 

The number of subscribers to DG Competition's electronic newsletters rose to over 21 000 in 
2018,  while  its  paper  publications  in  the  EU  Bookshop  were  viewed  or  downloaded  6  000 
times. 

176   The number of speeches published on the DG Competition web-site: 

ec.europa.eu/competition/speeches/index_2018.html. 

177  The number of impressions means the number of times a tweet appears in Instagram users’ feed. 

47 

 
 
 
                                                           
6.  THE SINGLE MARKET PROGRAMME 

Adapting to an increasingly digital environment is a major challenge for the enforcement of 
EU  competition  policy.  New  sophisticated  IT  tools  and  algorithms  used  by  economic 
operators  combined  with  an  exponential  increase  in  electronic  communications,  quantity  of 
data  and  the  number  of  documents  on  case  files  make  many  competition  investigations 
increasingly complex and burdensome. The Commission's proposals for the next Multiannual 
Financial  Framework  (2021-2027)  adopted  in  June  2018    included  –  for  the  first  time  -  a 
Single  Market  Programme.  If  adopted,  the  Single  Market  Programme  would  enable  the 
Commission to directly support competition policy development with an indicative budget of 
EUR 140 million dedicated to a Competition Programme. 

The funds allocated to the Competition Programme would help the Commission to detect and 
investigate  infringements  in  an  increasingly  paperless  world  where  the  use  of  algorithms 
becomes more and more widespread. Moreover, these funds would increase the Commission's 
ability to manage case files containing ever growing  data volumes. If adopted as part of the 
Single  Market  Programme,  the  Competition  Programme  would  enable  the  Commission  to 
modernise  EU  competition  policy  enforcement  by  investing  in  state-of-the-art  IT  tools, 
knowledge  and  expertise,  as  well  as  strengthen  cooperation  between  the  Commission  and 
Member  States’  competition  authorities  in  all  areas  of  EU  competition  law.  Finally,  the 
Competition  Programme  could  be  used  to  raise  stakeholder  awareness  of  EU  competition 
policy.178  

652/2014 

(EU)  No 

178  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  establishing  the  Programme  for 
single market, competitiveness of enterprises, including small and medium-sized enterprises, and European 
statistics  and  repealing  Regulations  (EU)  No  99/2013,  (EU)  No  1287/2013,  (EU)  No  254/2014,  (EU)  No 
https://eur-lex.europa.eu/legal-
258/2014, 
content/EN/TXT/?qid=1540389031742&uri=CELEX%3A52018PC0441. 
Commission  Staff  Working  Document  Impact  Assessment  accompanying  the  document  Proposal  for  a 
Regulation  of  the  European  Parliament  and  of  the  Council  establishing  the  Programme  for  single  market, 
competitiveness  of  enterprises,  including  small  and  medium-sized  enterprises,  and  European  statistics  and 
repealing Regulations (EU) No 99/2013, (EU) No 1287/2013, (EU) No 254/2014, (EU) No 258/2014, (EU) 
No 
https://eur-lex.europa.eu/legal-
See: 
(EU) 
content/EN/TXT/?qid=1540389285918&uri=CELEX%3A52018SC0320. 

2017/826. 

2017/826. 

652/2014 

(EU) 

See: 

and 

and 

No 

48 

 
 
 
                                                           
II. SECTORAL OVERVIEW 

The Commission's competition policy actions in 2018 focused on a wide range of areas, with 
the  common  objective  of  making  markets  work  better.  Morever,  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 
as  well  as  taking  action  against  selective  tax  advantages.  This  section  provides  a  sector-by-
sector  overview  of  competition  policy  developments  and  enforcement  activities  that  the 
Commission focused on in 2018.  

1. ENERGY & ENVIRONMENT 

Overview of key challenges in the sector 

Completing the Single Market in the energy sector will bring significant benefits to Europe's 
consumers,  businesses  as  well  as  the  environment.  Competition  law  enforcement  in  the 
energy  sector  plays  a  key  role  in  removing  obstacles  to  the  free  flow  of  gas  and  electricity 
across  Member  States,  enabling  decarbonisation,  promoting  interconnectivity  and  avoiding 
artificial  market  partitioning.  Applying  the  competition  rules  contributes  to  market  opening 
and safeguards that all market players can compete on fair and equal terms, regardless of their 
nationality. In other words, competition policy is essential to make the Energy Union function 
properly. 

In addition, competition policy contributes to fulfilling the EU's climate targets, including the 
decarbonisation of the power sector and the shift in the transport sector from polluting fossil 
fuels to alternative fuels in accordance with the Commission's mobility policy.179 To this end, 
the Commission  authorises aid  measures compatible with  the internal  market  promoting the 
deployment of renewables, improve energy efficiency and stimulate demand for low emission 
vehicles for public and private transport. 

Promoting  competition  in  the  energy  sector  means,  ultimately,  empowering  consumers, 
whether  energy-intensive  users  such  as  big  manufacturing  plants,  small  companies  or 
households. They can demand a fair deal and it gives energy consumers the confidence that 
the  EU  energy  markets  are  working  well.  In  addition,  consumers  throughout  the  EU  will 
benefit from an integrated European Energy market that guarantees security of energy supply 
at affordable prices and a cleaner environment.  

Effective competition in the green economy 

By means of the EU Emissions Trading System (ETS), State aid rules also play a key role in 
delivering on climate objectives by lowering the indirect costs of the EU’s carbon market for 
the most electricity-intensive industries. The core principle of the ETS is that polluters should 
pay  for  their  carbon  emissions.  However,  outside  of  the  EU,  not  all  countries  apply  this 
principle. If enterprises were to delocalise some of their production outside the EU as a result 
of  carbon  costs,  this  would  result  in  an  increase  of  global  carbon  emissions.  Because 
electricity  generators  do  not  receive  free  allowances,  they  have  to  buy  them,  thereby 

179  “E-mobility” means using energy 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.  See: 
https://ec.europa.eu/transport. 

49 

 
 
 
                                                           
 
increasing  the  electricity  price  for  consumers.  To  this  end,  Member  States  may  partially 
compensate electricity-intensive consumers for the indirect costs resulting from the ETS.  

In  2012,  the  Commission  adopted  Guidelines  setting  the  conditions  under  which  Member 
States  can grant  such partial compensation regarded as constituting State aid  for the trading 
period 2012-2020. On 14 March 2018, the Council and the Parliament adopted a revised ETS 
Directive for the period 2021-2030. It underlines that Member States should seek to limit their 
compensation to 25% of their ETS auction revenues. The Commission therefore launched on 
20 December 2018 the revision process of the ETS State aid Guidelines.  

On  18  December  2018,  a  political  agreement  was  reached  on  the  Clean  Energy  for  All 
Europeans Package.180 When adopted, the Package will constitute an important step towards 
the  decarbonisation  of  the  European  energy  system.  Future  capacity  mechanisms  will 
incorporate new caps regarding the carbon emissions of fossil fuel origin. Thus, the Package 
introduces a new market design to create the right investment incentives and to enable further 
development of renewables in the electricity sector. 

In  2018,  the  enforcement  of  State  aid  rules  in  the  renewable  energy  and  energy  efficiency 
fields  remained  high.  The  Commission  approved  21  renewables  and  combined  heat  and 
power support schemes.  As a result,  almost  all  Member States have now received State  aid 
clearance  for  their  renewables  and  combined  heat  and  power  support  schemes  and  brought 
them in line with the 2014 Guidelines on State aid for environmental protection and energy. 
In particular, an increasing number of Member States are granting support for the production 
of  renewable  energy  through  competitive  and  technology  neutral  tenders  and  integrating 
renewables  installations  in  the  electricity  market.  This  has  resulted  in  lower  cost  for 
consumers  in  the  electricity  system  as  a  whole.  As  an  example,  the  first  technologically 
neutral  tender  in  Denmark  held  under  the  scheme  approved  in  2018  delivered  record  low 
prices, with both solar and on-shore wind projects winning support. 

In  2018  the  Commission  approved  a  scheme  to  support  the  acquisition  of  low  emission 
battery electric and hybrid public transport buses in Germany,181 and a budget increase for a 
similar  Portuguese  scheme  approved  in  2016.182  Both  measures  include  support  for  the 
infrastructure  necessary  to  operate  the  buses.  In  addition,  it  approved  a  German  scheme  to 
incentivise  the  retrofitting  of  diesel  buses  used  in  public  transport  with  devices  that 
significantly reduce their nitrogen oxides emissions.183 

Effective competition in electricity markets 

To address concerns about the free flow of electricity, on 7 December 2018 the Commission 
adopted a decision rendering legally binding commitments offered by German grid operator 
TenneT184 to increase cross-border flows of electricity between Denmark and Germany. The 
Commission  was  concerned  that  TenneT  may  have  infringed  EU  antitrust  rules  by 
systematically limiting southward capacity at the electricity interconnector between Western 
Denmark  and  Germany.  This  conduct  prevented  the  export  of  cheap  electricity  from  the 
Nordic countries, where it is largely generated from renewable energy sources (mostly wind 

180  

See: https://ec.europa.eu/energy/en/topics/energy-strategy-and-energy-union/clean-energy-all-

europeans. 

181   See: http://ec.europa.eu/competition/state_aid/cases/269473/269473_1980325_81_2.pdf. 
182   See: http://europa.eu/rapid/press-release_IP-16-3521_en.htm. 
183   See:  http://europa.eu/rapid/press-release_IP-18-6414_en.htm. 
184   Case AT.40461 – TenneT. See: http://europa.eu/rapid/press-release_IP-18-6722_en.htm. 

50 

 
 
                                                           
 
and  hydro)  to  Germany,  leading  to  less  competition  between  electricity  producers  on  the 
German  wholesale  market  and  thus  higher  electricity  prices.  Following  a  market  test,  the 
Commission accepted commitments, proposed by TenneT, and made them legally binding: 

  TenneT has committed to make available the maximum capacity compatible with the 
safe  operation  of  the  interconnector  and,  in  any  event,  will  guarantee  a  minimum 
hourly  capacity  of  1,300 megawatts  on  the  interconnector  (around  75%  of  its 
technical  capacity).  Following  expansion  of  the  interconnector  between  Western 
Denmark and Germany, TenneT will increase the guaranteed hourly capacity.  

  TenneT can reduce the capacity offered below the minimum guaranteed level only in 
a very limited number of exceptional circumstances, when no other option is available 
to ensure the security of the high-voltage electricity network.  

The  commitments  will  remain  in  force  for  nine  years  and  a  trustee  will  be  in  charge  of 
monitoring TenneT's compliance with the commitments.185 

Moreover,  on  17  April  2018  the  Commission  made  legally  binding  measures  submitted  by 
Greece  to  ensure  fair  access  to  lignite-fired  power  generation  for  the  competitors  of  Public 
Power  Corporation  (PPC)186  the  incumbent  electricity  operator.  In  2008  the  Commission 
found  that  Greece  had  infringed  competition  rules  by  giving  the  state-owned  electricity 
incumbent, PPC, privileged access rights to lignite, and called on Greece to propose measures 
to correct the anti-competitive effects of that infringement. Due to appeals at both the General 
Court  and  the  Court  of  Justice,  such  corrective  measures  had  not  been  implemented  so  far. 
With  the  2018  decision,  the  Commission  concluded  that  the  amended  final  version  of  the 
remedies submitted by Greece on 19 January 2018 fully addressed the infringement identified 
by  the  Commission  in  its  2008  Decision,  while  also  taking  into  account  Greece's 
environmental objectives and current market circumstances. The remedies should remove the 
privileges  created  by  the  special  access  rights  granted  to  PPC.  In  particular,  the  remedies 
provide  that  PPC  will  divest  the  lignite-fired  units  of  Meliti  (including  the  licensed  unit  of 
Meliti  2)  and  Megalopoli  3  and  4.  The  assets  to  be  divested  will  allow  the  purchasers  to 
compete immediately and more effectively in the Greek wholesale electricity market. PPC has 
launched  a  tender  procedure  for  the  divestment  of  the  plants  which  should  be  completed  in 
2019. 

In  2018  the  Commission  analysed  several  mergers  in  the  electricity  sector.  For  example,  it 
approved the Fortum/Uniper merger.187 The Transaction mainly concerned the generation and 
wholesale  of  electricity  in  the  Nordic  countries,  in  particular  through  hydro  power.  The 
Commission  also  assessed  various  energy-related  activities,  such  as  the  financial  trading, 
retail supply of electricity and district heating, as well as energy production-related services. 
In  this  case,  the  analysis  carried  out  by  the  Commission  revealed  that  competition  in  those 
countries  is  healthy,  also  as  a  result  of  the  high  level  of  interconnectivity  between  different 
countries in the Nordic area. 

Ensuring reliable electricity supplies 

Capacity mechanisms are measures taken by Member States to ensure that electricity supply 
can  match  demand  in  the  medium  and  long  term.  Capacity  mechanisms  are  designed  to 
support investment to fill the expected capacity gap and ensure security of supply. Typically, 

185   See: http://europa.eu/rapid/press-release_IP-18-6722_en.htm.  
186  See: http://europa.eu/rapid/press-release_IP-18-3401_en.htm. 
187  See: http://ec.europa.eu/competition/mergers/cases/decisions/m8660_525_3.pdf. 

51 

 
                                                           
capacity  mechanisms  offer  additional  rewards  to  capacity  providers,  on  top  of  income 
obtained  by  selling  electricity  on  the  market  in  return  for  maintaining  existing  capacity  or 
investing  in  new  capacity  needed  to  guarantee  security  of  electricity  supplies.  However, 
capacity  mechanisms  cannot  substitute  electricity  market  reforms  at  national  and  European 
levels.  In  parallel,  Member  States  must  implement  market  reforms  to  address  regulatory 
failures  that  undermine  the  incentive  for  energy  operators  to  invest  in  energy  capacity  in 
accordance with the decarbonisation objectives of the EU.  

In  its  2016  report  of  the  Sector  Inquiry  on  Capacity  Mechanisms,188  the  Commission 
concluded that capacity  mechanisms can affect  the generation mix and in particular interact 
with  instruments  aimed  at  fostering  decarbonisation.  To  promote  non-fossil  based  capacity, 
the Commission recommended that eligibility or allocation criteria for capacity mechanisms 
allow renewables and demand-side operators to compete alongside other capacity. Otherwise, 
capacity mechanisms may risk jeopardising decarbonisation objectives while pushing up the 
price for security of supply. 

In  2018,  the  Commission  approved  seven  electricity  capacity  mechanisms  (in  Belgium, 
France,  Germany,  Greece,  Italy  and  Poland).189  In  its  assessment,  the  Commission  verified 
that  the  capacity  mechanisms  met  strict  criteria  under  EU  State  aid  rules,  in  particular  the 
Commission’s  2014  Guidelines  on  State  aid  for  environmental  protection  and  energy.190  In 
parallel,  Member  States  must  implement  market  reforms  to  address  regulatory  failures  that 
undermine the incentive for energy operators to invest in electricity capacity.   

Effective competition in gas and oil markets  

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  case  concerning  Central  and  Eastern  European  gas  markets  is  a  good  example  of  the 
efforts made by the Commission to facilitate cross-border flows of energy between Member 
States.  On  24  May  2018,  the  Commission  adopted  a  decision  rendering  legally  binding  on 
Gazprom  commitments  that  address  the  Commission's  competition  concerns  and  enable  the 
free  flow  of  gas  at  competitive  prices  in  Central  and  Eastern  European  gas  markets,  to  the 
benefit  of  European  consumers  and  businesses.  Gazprom  appears  to  be  the  dominant  gas 
supplier  in  a  number  of  Central  and  Eastern  European  countries.  The  Commission  was 
concerned that Gazprom may have breached EU antitrust rules by pursuing an overall strategy 
to partition gas markets along national borders in eight Member States (Bulgaria, the Czech 
Republic,  Estonia,  Hungary,  Latvia,  Lithuania,  Poland  and  Slovakia)  and  that  this  strategy 
may  have  enabled  Gazprom  to  charge  higher  gas  prices  in  five  of  these  Member  States 
(Bulgaria,  Estonia,  Latvia,  Lithuania  and  Poland).  The  Commission  decision  put  an  end  to 
this behaviour by Gazprom. Furthermore, it imposed on Gazprom a detailed set of rules that 
will  significantly  change  the  way  Gazprom  operates  in  Central  and  Eastern  European  gas 
markets: 

188  
189  See: http://europa.eu/rapid/press-release_IP-18-682_en.htm., and 

See http://ec.europa.eu/competition/sectors/energy/capacity_mechanisms_final_report_en.pdf 

http://ec.europa.eu/competition/sectors/energy/state_aid_to_secure_electricity_supply_en.html. 

  190  See: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52014XC0628(01). 

52 

 
 
                                                           
  No  more  contractual  barriers  to  the  free  flow  of  gas:  Gazprom  has  to  remove  any 

restrictions placed on customers to re-sell gas cross-border. 

  Obligation to facilitate gas flows to and from isolated markets:  Gazprom  will enable 
gas flows to and from parts of Central and Eastern Europe that are still isolated from 
other Member States due to the lack of interconnectors, namely the Baltic States and 
Bulgaria. 

  Structured process to ensure competitive gas prices: Relevant Gazprom customers are 
given  an  effective  tool  to  make  sure  their  gas  price  reflects  the  price  level  in 
competitive Western European gas markets, especially at liquid gas hubs. 

  No  leveraging  of  dominance  in  gas  supply:  Gazprom  cannot  act  on  any  advantages 
concerning gas infrastructure, which it may have obtained from customers by having 
leveraged its market position in gas supply. 

Combined, these obligations address the Commission's competition concerns and achieve its 
objectives  of  enabling  the  free  flow  of  gas  in  Central  and  Eastern  Europe  at  competitive 
prices. If Gazprom breaks any of these obligations, the Commission can impose a fine of up 
to 10% of the company's worldwide turnover, without having to prove an infringement of EU 
antitrust rules.191 

On 17 December 2018, the Commission fined Bulgarian Energy Holding (BEH),192 its gas 
supply  subsidiary  Bulgargaz  and  its  gas  infrastructure  subsidiary  Bulgartransgaz  (the  BEH 
group) EUR 78 million for blocking competitors' access to key gas infrastructure in Bulgaria. 
BEH  is  the  incumbent  state-owned  energy  company  in  Bulgaria.  It  is  vertically  integrated 
meaning that BEH supplies gas and its subsidiaries own or control key gas infrastructure in 
Bulgaria.  The  Commission  found  that  the  BEH  group  was  dominant  in  the  Bulgarian  gas 
supply  and  gas  infrastructure  markets  and  that,  between  2010  and  2015,  the  BEH  Group 
blocked the access to key gas infrastructure, which it owned or controlled. This infrastructure 
is indispensable for supplying gas on the Bulgarian wholesale gas market and consists of:  

  The domestic Bulgarian gas transmission network,  

  The only gas storage facility in Bulgaria and  

  The only import pipeline bringing gas into Bulgaria, which was fully booked by BEH.  

Without access to this essential infrastructure, it was impossible for potential competitors to 
enter the Bulgarian wholesale gas market, and they were therefore prevented from competing 
with  BEH,  which  was  ensured  of  a  monopoly  in  gas  supply  in  Bulgaria.  The  Commission 
concluded  that  this  behaviour  by  the  BEH  group  infringed  Article  102  (TFEU),  which 
prohibits the abuse of a dominant market position.  

To  address  concerns  that  Transgaz,193  the  gas  network  operator  in  Romania,  might  be 
hindering  the  free  flows  of  gas  from  Romania,  on  21  September  2018  the  Commission 
launched a market  test on draft commitments submitted by Transgaz. The commitments are 
intended  to  enable  natural  gas  exports  from  Romania  to  other  Member  States,  in  particular 
Hungary  and  Bulgaria.  The  Commission  was  concerned  that  Transgaz  may  have  restricted 
exports  from  Romania  and  breached  EU  competition  rules  that  prohibit  the  abuse  of  a 

191   See: http://europa.eu/rapid/press-release_IP-18-3921_en.htm. 
192   See: http://europa.eu/rapid/press-release_IP-18-6846_en.htm.  
193  Case AT.40335 - Romanian gas interconnectors. See: http://europa.eu/rapid/press-release_IP-18-

5861_en.htm. 

53 

 
 
                                                           
dominant  market  position.  To  address  the  Commission's  concerns,  Transgaz  offered 
commitments that would allow commercially meaningful export capacities from Romania to 
be made available for the first time. The Commission has received the replies to the market 
test and is currently considering them.  

Finally,  concerning  mergers  in  the  gas  sector,  following  the  abandonment  of  the  proposed 
acquisition of the Greek gas transmission system operator DESFA by the State Oil Company 
of  Azerbaijan  Republic  (SOCAR)194  by  the  Parties  to  that  transaction,  the  Greek  authorities 
issued a new tender which included an unbundling requirement, thus addressing the concerns 
raised  by  the  Commission  when  opening  the  in  depth  investigation  in  SOCAR/DESFA.  The 
tender was won by Italian company SNAM and the Commission reviewed and approved the 
acquisition of DESFA by SNAM. 

2. INFORMATION AND COMMUNICATION TECHNOLOGIES AND MEDIA  

Overview of key challenges in the sector 

In 2018, competition policy and enforcement continued to contribute to the implementation of 
the Digital Single Market Strategy,195 one of the priorities of the Commission, by means of a 
number of investigations in the information, communication and media sectors. 

Contribution of EU competition policy to tackling the challenges  

Addressing restrictions to cross-border and online sale of goods and digital products 

As announced in the Final Report of the e-commerce sector inquiry adopted in May 2017,196 
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. 

On  24  July  2018,  the  Commission  fined,  in  four  separate  decisions,  consumer  electronics 
manufacturers  Asus,  Denon  &  Marantz,  Philips  and  Pioneer197  for  imposing  fixed  or 
minimum resale prices ("resale price maintenance”) on their online retailers for widely used 
consumer electronics products such as kitchen appliances, notebooks and hi-fi products.  

The  four  manufacturers  intervened  particularly  with  online  retailers,  who  offered  their 
products at low prices. If those retailers did not follow the prices requested by manufacturers, 
they  faced  threats  or  sanctions  such  as  blocking  of  supplies.  Many,  including  the  biggest 
online  retailers,  use  pricing  algorithms  which  automatically  adapt  retail  prices  to  those  of 
competitors.  In  this  way,  the  pricing  restrictions  imposed  on  low  pricing  online  retailers 
typically had a broader impact on overall online prices for the respective consumer electronics 

194  Case M.7095 – Soca /Desfa (notification withdrawn). See: 

http://ec.europa.eu/competition/mergers/cases/decisions/m8953_141_3.pdf. 

195  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 
Europe, COM(2015)192 final. See: http://eur-lex.europa.eu/legal-
ontent/EN/TXT/?qid=1447773803386&uri=CELEX%3A52015DC0192.  

196  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.  See: 

on 
http://ec.europa.eu/competition/antitrust/sector_inquiry_final_report_en.pdf. 

197  Cases AT.40465 - Asus, AT.40469 - Denon & Marantz, AT.40181 - Philips and AT.40182 - Pioneer. See: 

http://europa.eu/rapid/press-release_IP-18-4601_en.htm. 

54 

 
 
 
 
                                                           
products.  Moreover,  the  use  of  sophisticated  monitoring  tools  allowed  the  manufacturers  to 
effectively  track  resale  price  setting  in  the  distribution  network  and  to  intervene  swiftly  in 
case  of  price  decreases.  The  price  interventions  limited  effective  price  competition  between 
retailers and led to higher prices with an immediate effect on consumers. In addition, Pioneer 
limited the ability of its retailers to sell cross-border to consumers in other Member States in 
order to maintain different resale prices in different Member States, for example by blocking 
orders of retailers who sold cross-border. 

All four companies cooperated with the Commission by providing evidence with significant 
added  value  and  by  expressly  acknowledging  the  facts  and  the  infringements  of  EU 
competition  rules.  The  fines  totalling  over  EUR  111  million  were  in  all  four  cases  reduced 
due to the companies' cooperation with the Commission. 

On 17 December 2018, the Commission  imposed a fine of EUR 40 million  on  Guess,198  a 
US-based clothing manufacturer and retailer. The Commission found that Guess' distribution 
agreements  restricted  authorised  retailers  from  (i)  using  the  Guess  brand  names  and 
trademarks for the purposes of online search advertising; and (ii) selling online without a prior 
specific authorisation by Guess. The company had full discretion for this authorisation, which 
was  not  based  on  any  specified  quality  criteria.  Moreover,  the  distribution  agreements 
restricted  authorised  retailers  from  (iii)  selling  to  consumers  located  outside  the  authorised 
retailers’ allocated territories;  (iv) cross-selling among authorised wholesalers and retailers; 
and (v) independently deciding on the retail price at which they sell Guess products. Selective 
distribution  systems  must  comply  with  the  EU  competition  rules.  In  particular,  consumers 
must  be  free  to  purchase  from  any  retailer  authorised  by  a  manufacturer,  including  across 
national  borders.  At  the  same  time,  authorised  retailers  must  be  free  to  offer  the  products 
covered by the distribution contract online, to advertise and sell them across borders, and to 
set their resale prices. 

The  Commission  granted  Guess  a  50%  fine  reduction  in  return  for  its  cooperation.  Guess 
cooperated  with  the  Commission  beyond  its  legal  obligation  to  do  so,  in  particular  by 
revealing  an  infringement  of  EU  competition  rules  not  yet  known  to  the  Commission  (the 
prohibition  to  use  Guess  brand  names  and  trademarks  for  the  purposes  of  online  search 
advertising).  The  company  also  provided  evidence  with  significant  added  value  and 
acknowledged the facts and the infringements of the EU competition rules. 

The  Commission  continued  its  investigation  into  Valve  Corporation,  owner  of  the  Steam 
game  distribution  platform,  and  five  PC  video  game  publishers,  Bandai  Namco,  Capcom, 
Focus Home, Koch Media and ZeniMax199 concerning potentially illegal bilateral agreements. 
The investigation focuses on whether the agreements in question require or have required the 
use of technology to (so-called activation keys) for the purpose of geo-blocking. In particular, 
an activation key can be devised to limit access to a purchased game only to consumers in a 
particular EU Member State. This practice may breach of EU competition rules by reducing 
parallel trade within the Single Market and preventing consumers from buying cheaper games 
available in other Member States. 

In  2018,  the  Commission  continued  three  separate  antitrust  investigations  against  Nike, 

198  Case AT.40428 - Guess. See http://europa.eu/rapid/press-release_IP-18-6844_en.htm. 
199  Cases AT.40413 - Focus Home, AT.40414 - Koch Media, AT.40420 - ZeniMax, AT.40422 - Bandai Namco 

and AT.40424 - Capcom. See: http://europa.eu/rapid/press-release_IP-17-201_en.htm. 

55 

 
 
 
                                                           
Sanrio and Universal Studios200 regarding 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  merchandising  products  concerned  by  the  investigations  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. 

The  pay-TV  investigation,  opened  in  2014,  continued  in  2018.  The  investigation  relates  to 
certain  contractual  clauses  in  the  licensing  agreements  concluded  between  Sky  UK  and  six 
major  film  studios  (Disney,  Fox,  Paramount,  NBCUniversal,  Sony  and  Warner  Bros).  In  a 
statement  of  objections,  addressed  to  Sky  and  the  six  Hollywood  film  studios  in  2015,  the 
Commission  took  the  preliminary  view  that  such  clauses  restricted  Sky  UK's  (and  in  some 
cases  other  broadcasters')  ability  to  accept  unsolicited  requests  from  consumers  located 
outside the UK and Ireland and, therefore, violate EU antitrust rules.  

In 2016, Paramount offered commitments, which the Commission accepted and made legally 
binding in the same year. The commitments provide that throughout the EEA Paramount shall 
remove  the  contractual  restrictions  from  existing  pay-TV  licensing  agreements  and  not 
(re)introduce them for a period of at least five  years. Canal+, a French pay-TV broadcaster, 
brought  an  appeal  against  this  decision.  In  December  2018,  the  General  Court201  dismissed 
the  appeal  and  held,  among  other  things,  that  the  Commission  acted  within  the  limits  of 
Article 9 Regulation 1/2003 and that, in particular, the Commission’s decision respected the 
principle  of  proportionality.  Furthermore,  the  General  Court  held  that  the  passive  sales 
restrictions  in  Paramount’s  licensing  agreements  at  issue  represented  restrictions  by  object. 
According to  the judgment,  the  removal of these restrictions is  consistent  with  the essential 
objective of the Treaty to establish a market without internal borders. 

In November and December 2018, Sky UK and four US film studios, namely Disney, NBC 
Universal,  Sony, and Warner  Bros., also  offered commitments to  address  the Commission’s 
concerns.  Like  in  the  Paramount  commitments,  the  five  companies  offered  to  remove 
throughout  the  EEA  the  contractual  restrictions  from  existing  pay-TV  licensing  agreements 
and not to (re)introduce them for a period of five years. The proposed commitments cover all 
future and current subsidiaries of the companies concerned.202 To verify the appropriateness 
of  the  proposed  commitments,  the  Commission  consulted  market  participants  in  November 
and  December  2018.203  In  the  light  of  the  results  of  the  market  test,  the  Commission 
considered that the commitments addressed its concerns in a satisfactory way.204 

200  Case AT.40432 - Licensed merchandise – Sanrio, Case AT.40433 - Licensed merchandise Universal Studios, 
and  Case  AT.40436  -  Licensed  merchandise  –  Nike.  See:  IP/17/1646  of  14  June  2017.  See: 
http://europa.eu/rapid/press-release_IP-17-1646_en.htm. 

201  Case T-873/16 Groupe Canal+ v Commission.  
202  Notably,  Disney's  commitments  cover  its  future  subsidiary  Fox.  The  Commission  approved  Disney's 

acquisition of Fox on 6 November 2018. See: http://europa.eu/rapid/press-release_IP-18-6312_en.htm. 

203  See IP/18/6346 http://europa.eu/rapid/press-release_IP-18-6346_en.htm and IP/18/6894 

http://europa.eu/rapid/press-release_IP-18-6894_en.htm.  

204  On  7  March  2019,  the  Commission  adopted  a  decision  making  the  commitments  offered  by  Sky,  Disney, 
rules.  See: 

NBC  Universal,  Sony,  and  Warner  Bros., 

legally  binding  under  EU  antitrust 

56 

 
                                                           
Antitrust enforcement in technology markets 

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

On  24  January  2018,  the  Commission  fined  Qualcomm205  EUR  997  million  for  abusing  its 
market dominance in  LTE baseband chipsets. The decision found that Qualcomm prevented 
rivals  from  competing  in  the  market  by  making  significant  payments  to  a  key  customer, 
Apple,  on  condition  that  it  would  not  buy  from  rivals.  This  meant  that  Qualcomm's  rivals 
were denied the possibility to compete effectively for Apple's significant business, no matter 
how  good  their  products  were.  They  were  also  denied  business  opportunities  with  other 
customers that could have followed from securing Apple as a customer. 

The  Commission  also  continued  its  investigations  against  Qualcomm  for  charging  prices 
below  costs  with  a  view  to  forcing  competitors  out  of  the  market  ("predatory  pricing")  and 
issued a Supplementary Statement of Objections.206  

On 18 July 2108, the Commission fined Google EUR 4.34 billion for breaching EU antitrust 
rules.207  The  Commission  found  that  Google  had  imposed  illegal  restrictions  on  Android 
device  manufacturers  and  mobile  network  operators  to  cement  its  dominant  position  in 
general internet search. 

The Google Android case 

In its decision the Commission concluded that Google is dominant in: 

◦  the  national  markets  for  general  internet  search  services  throughout  the  EEA.  The  Commission  based  its 
finding  on  the  fact  that  Google  has  shares  of  more  than  90%  in  most  EEA  Member  States  and  there  are  high 
barriers to enter these markets; 

◦  the  worldwide  market  (excluding  China)  for  licensable  smart  mobile  operating  systems.  The  Commission 
based its finding on the fact that Google has a market share of more than 95%, there are high barriers to entry  
and  that  significant  resources  are  required  to  develop  a  successful  licensable  smart  mobile  operating  system. 
Android  is  different  from  operating  systems  exclusively  used  by  vertically  integrated  developers  (like  Apple 
iOS)  which  are  not  part  of  the  same  market  because  they  are  not  available  for  licence  by  third  party  device 
manufacturers; and 

◦  the  worldwide  market  (excluding  China)  for  app  stores  for  the  Android  mobile  operating  system.  The 
Commission based its finding on the fact that Google's app store, the Play Store, accounts for more than 90% of 
apps downloaded on Android devices and that this market is characterised by high barriers to entry. Google's app 
store dominance is not constrained by Apple's App Store, which is only available on iOS devices. 

The  Commission  found  that  Google  abused  its  market  dominance  by  engaging  in  three  separate  types  of 
practices, which all had the aim of cementing Google's dominant position in general internet search: 

◦  Illegal  tying  of  the  Google  Search  app  and  Google  Chrome  browser:  Google  offered  its  mobile  apps  and 
services to device manufacturers as a bundle, which included the Google Play Store, the Google Search app and 
the  Google  Chrome  browser.  In  this  way,  Google  ensured  that  its  Google  Search  app  and  its  mobile  browser 
were pre-installed on practically all Android devices sold in the EEA. The Decision outlined a range of evidence 
that for search and browser, pre-installation constitutes a significant commercial advantage that cannot be offset 

http://europa.eu/rapid/press-release_IP-19-1590_en.htm.  Following  the  completion  of  Fox’s  acquisition  by 
Disney, on 20 March 2019, the commitments are binding on Fox as well. 

205  Case AT.40220 - Qualcomm (exclusivity payments). See: http://europa.eu/rapid/press-release_IP-18-

421_en.htm. 

206  Case AT. 39711 - Qualcomm (predation). See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39711.  

207  Case AT.40099 - Google Android. See: http://europa.eu/rapid/press-release_IP-18-4581_en.htm. 

57 

 
                                                                                                                                                                                     
through other means. 

◦  Illegal  payments  conditional  on  exclusive  pre-installation  of  Google  Search:  Google  granted  significant 
financial  incentives  to  some  of  the  largest  device  manufacturers  as  well  as  mobile  network  operators  on 
condition that they exclusively pre-installed Google Search across their entire portfolio of Android devices. The 
Decision outlined a range of evidence on how this significantly reduced the commercial possibilities for the pre-
installation or rival search providers.  

◦ Illegal obstruction of development and distribution of competing Android operating systems: Google prevented 
device manufacturers from using any alternative version of Android that was not approved by Google (Android 
forks). To pre-install Google's proprietary apps on their devices, manufacturers had to have prior agreement from 
Google to run a device on an Android fork. This significantly reduced the commercial opportunity for devices 
running on Android forks to be developed and sold. 

Google's  practices  denied  rival  general  internet  search  services  the  possibility  to  compete  on  the  merits.  The 
tying  practices  ensured  the  pre-installation  of  Google's  search  service  and  browser  on  practically  all  Google 
Android  devices  and  the  exclusivity  payments  strongly  reduced  the  incentive  to  pre-install  competing  search 
engines. Google also obstructed the  development of  Android forks,  which could have provided a platform  for 
rival search engines to gain traffic.  

The Decision requires Google to bring its illegal conduct to an end in an effective manner within 90 days of the 
decision.  At  a  minimum,  Google  has  to  stop  and  to  not  re-engage  in  any  of  the  three  types  of  practices.  The 
Decision also requires Google to refrain from any measure that has the same or an equivalent object or effect as 
these practices. It is Google's sole responsibility to ensure compliance. The Commission is monitoring Google's 
compliance closely to make sure that the remedy is effective and does indeed comply with the Decision. 

Ensuring a 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  Code,208  which  recasts  the  existing  directives,  a  proposal  for  a 
Regulation  establishing  the  Body  of  European  Regulators  for  Electronic  Communications 
(BEREC),209 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).210 They were accompanied by two Communications: Connectivity 
for  a  European  Gigabit  society:  Laying  the  foundations  for  a  competitive  Digital  Single 
Market,211 which establishes a set of connectivity objectives for 2025, and 5G for Europe: An 
Action  Plan,212  which  sets  out  targeted  actions  with  the  aim  of  fostering  5G  deployment  in 

208  Proposal for a Directive of the European Parliament and of the Council establishing the European Electronic 
See:  

Communications 
https://ec.europa.eu/transparency/regdoc/rep/1/2016/EN/1-2016-590-EN-F1-1.PDF. 

(2016) 

Code, 

COM 

final. 

590 

209  Proposal for a Regulation of the European Parliament and of the Council establishing the Body of European 

Regulators for Electronic Communications. See: http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52016PC0591&from=EN. 

210  Proposal for a Regulation amending Regulations No 1316/2013 and No 283/2014 as regards the promotion of 

Internet connectivity in local communities. See: http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52016PC0589&from=EN.  

211  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. See:  
https://ec.europa.eu/digital-single-market/en/news/communication-connectivity-competitive-digital-single-
market-towards-european-gigabit-society. 

212     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 
https://ec.europa.eu/digital-single-
(2016) 
market/en/news/communication-5g-europe-action-plan-and-accompanying-staff-working-document. 

Document 

SWD 

306. 

See: 

58 

 
                                                           
Europe.  

Political  agreement  on  the  proposals  for  the  Electronic  Communications  Code  and  the 
Regulation establishing BEREC was reached in June 2018. The legal acts were adopted on 11 
December 2018.213 

The  agreed  text  of  the  Electronic  Communications  Code  introduces  a  new  objective  of 
connectivity (that is to say investment) of very high capacity networks 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 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 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 when competition is effective in a given telecoms market. The proposal 
also  contains  new  elements  which  aim  at  stimulating  investments,  while  safeguarding 
effective  competition.  For  example  access  to  civil  infrastructure  is  incentivised  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  agreed  draft  Electronic  Communications  Code  contains 
measures  to  enhance  investment  certainty  (the  co-legislators  agreed  on  a  minimum  licence 
duration of at least 20 years, timely availability of spectrum in the market and enhanced co-
ordination of spectrum authorisation between regulators) and promote competition (such as a 
possibility to apply spectrum caps, spectrum reservation for new entrants or wholesale access 
obligations). The agreed text also maintains the role of national regulators and of BEREC, to 
ensure the consistent and predictable application of the telecoms rules. 

The Commission also adopted new Guidelines on Significant Market Power214 as part of the 
telecoms framework. They replace the previous ones 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.215 After 15 
years, there was 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' 

213  Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing 
the  European  Electronic  Communications  Code,  OJ  L  321,  17.12.2018,  p.  36–214;  Regulation  (EU) 
2018/1971  of  the  European  Parliament  and  of  the  Council  of  11  December  2018  establishing  the  Body  of 
European  Regulators  for  Electronic  Communications  (BEREC)  and  the  Agency  for  Support  for  BEREC 
(BEREC Office), amending Regulation (EU) 2015/2120 and repealing Regulation (EC) No 1211/2009, OJ L 
321, 17.12.2018, pp. 1–35. 

214  Guidelines  on  market  analysis  and  the  assessment  of  significant  market  power  under  the  EU  regulatory 
framework for electronic communications network and services (2018 SMP Guidelines), OJ C 159, 7.5.2018, 
p. 1. 

215  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. 

59 

 
                                                           
jurisprudence.  

Antitrust enforcement in the telecommunications sector 

In 2018 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.216 
The  Commission  investigates  in  particular  whether  the  cooperation  between  O2  CZ/CETIN 
and  T-Mobile  CZ  risks  slowing  down  quality  improvements  in  existing  infrastructure,  and 
delaying or hindering the deployment of new technologies, such as 4G/LTE and new services 
based on them, in particular in densely populated areas.  

Merger review in ICT and media  

In  the  telecommunications  sector,  the  Commission  reapproved  in  May,  following  a  new 
investigation, the acquisition of Ziggo by Liberty Global, subject to conditions.217 Before the 
transaction,  Ziggo  and  Liberty  Global  were  separate  cable  TV  operators  providing  mainly 
fixed  telecommunications  services,  operating  in  different  parts  of  the  Netherlands.  The 
Commission first approved this merger in 2014, subject to conditions, but the General Court 
annulled  the  approval  in  October  2017  on  the  ground  that  the  Commission  did  not  fully 
explain  why  the  merger  would  not  lead  to  vertical  anti-competitive  effects  on  the  potential 
market for premium pay TV sports channels. The Commission reassessed the merger and its 
investigation  confirmed  the  concern  it  had  in  2014  that  the  merger  would  have  increased 
Liberty Global's negotiating power vis-à-vis TV channel broadcasters, hindering innovation in 
the  delivery  of  audio-visual  content  over  the  internet  (the  so-called  over-the-top  or  "OTT" 
services).  The  renewed  approval  is  again  conditional  upon  the  implementation  of  a 
commitments  package.  The  reassessment  also  confirmed  that  there  are  no  concerns  for 
premium pay TV sports channels and this is fully motivated in the decision. 

Furthermore, the Commission  unconditionally approved two mergers between a fixed and a 
mobile telecommunications services operator in Austria (T-Mobile Austria / UPC Austria)218 
and Sweden (Tele2 / Com Hem Holding).219 The impact of these transactions on the fixed and 
mobile  telecommunications  markets  in  Austria  and  Sweden  was  very  limited.  In  particular, 
while both T-Mobile and UPC are active in Austria in the provision of internet access services 
for  residential  customers,  UPC's  fixed  internet  access  products  differ  considerably  from  T-
Mobile's mobile broadband products. Similarly, although both Tele2 and Com Hem are active 
in Sweden in the provision of retail mobile telecommunications services, retail fixed internet 
access services and multiple play services, Com Hem has a marginal role in the provision of 
mobile services and Tele2's fixed telecommunication activities are limited. The Commission 
also  found  that  each  of  the  merged  entities  would  continue  to  face  significant  competition 
from other players in Austria (such as A1 Telekom Austria and Hutchison Drei Austria) and 
Sweden  (such  as  Telia,  Telenor  and  Tre).  Additionally,  both  in  Austria  and  Sweden,  the 
merged  entities  would  not  be  able  to  use  their  market  power  to  shut  out  or  marginalise  its 
fixed or mobile competitors by bundling fixed and mobile products. 

216  Case  AT.  40305  -  Network  sharing  -  Czech  Republic.  See:  http://europa.eu/rapid/press-release_IP-16-

3539_en.htm. 

217  Case M.7000 - Liberty Global / Ziggo, Commission decision of 30 May 2018. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_7000. 
218  Case M. 8808 - T-Mobile Austria / UPC Austria, Commission decision of 9 July 2018 See: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8808. 

219  Case M. 8842 - Tele2 / Com Hem, Commission decision of 8 October 2018. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8842. 

60 

 
                                                           
After  an  in-depth  investigation,220  the  Commission  authorised  on  27  November  2018  the 
merger between mobile network operators T-Mobile NL and Tele2 NL in the Netherlands.221 
On 11 December 2018, the European Commission opened an in-depth investigation to assess 
Vodafone's proposed acquisition of Liberty Global's business in Czechia, Germany, Hungary 
and  Romania  under  the  EU  Merger  Regulation.  The  Commission  is  concerned  the  takeover 
may reduce competition in Germany and Czechia.222  

In the IT sector, the Commission cleared in September 2018 Apple's acquisition of Shazam.223 
The  merging  firms  offer  mainly  complementary  services,  with  Apple  operating  "Apple 
Music", the second largest music streaming service in Europe and Shazam offering a leading 
music recognition application. The Commission had opened an in-depth investigation in April 
based  on  the  concern  that  Apple  would  obtain  access  to  commercially  sensitive  data  about 
customers of Apple Music's competitors and to investigate whether those competitors would 
be  harmed  if  Apple  were  to  discontinue  referrals  from  the  Shazam  app  to  them.  The 
investigation  showed  that  the  merged  entity  would  not  be  able  to  shut  out  competing 
providers of digital music streaming services. Access to Shazam's data would not materially 
increase  Apple's  ability  to  target  music  enthusiasts  and  any  conduct  aimed  at  making 
customers switch would only have a negligible impact. In addition, Shazam's application has 
a  limited  importance  as  an  entry  point  to  the  music  streaming  services  of  Apple  Music's 
competitors. Moreover, the integration of Shazam's and Apple's datasets on user data would 
not  confer  a  unique  advantage  to  the  merged  entity  in  the  markets  on  which  it  operates 
because Shazam's data is not unique and Apple's competitors would still have the opportunity 
to access and use similar databases. While the transaction did not meet the turnover thresholds 
of the EU Merger Regulation, the Commission assessed the transaction after acceptance of a 
referral request from Austria, France, Iceland, Italy, Norway, Spain and Sweden.  

On  11  December  2018  the  Commission  approved,  subject  to  conditions,  the  proposed 
acquisition  of  Gemalto  by  Thales,224  which  combines  the  two  largest  suppliers  of  general 
purpose hardware security modules (GP HSM) used for enterprise key management solutions, 
both in the European Economic Area (EEA) and at global level. HSM is a dedicated hardware 
appliance  running  on  encryption  software  to  generate,  protect,  and  manage  encryption  keys 
used to protect data in a secure tamper-resistant module. In July, the Commission had opened 
an in-depth  investigation based on concerns that  the merger could  lead to  higher prices  and 
reduce choice and innovation for customers of hardware security modules. The Commission 
found that the proposed  merger would lead to  very high combined market  shares in  the GP 
HSM  market  and  would  eliminate  the  competitive  constraints  that  Thales  and  Gemalto 
exercised  on  each  other.  The  Commission  also  found  that  cloud  service  providers  offering 
cloud-based HSMs did not provide a strong competitive constraint and were not expected to 
do so in the near future.  The approval is conditional on the divestment of Thales' GP HSM 
business. 

In  October,  the  Commission  unconditionally  approved  the  acquisition  by  Microsoft  of 
GitHub225 a company active in the supply of tools used for developing and releasing software 

220  See:  http://europa.eu/rapid/press-release_IP-18-4141_en.htm. 
221   See:  http://europa.eu/rapid/press-release_IP-18-6588_en.htm. 
222  See:  http://europa.eu/rapid/press-release_IP-18-6772_en.htm. 
223  Case M. 8788 - Apple / Shazam, Commission decision of 6 September 2018. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8788. 
224  Case M. 8797 - Thales / Gemalto, Commission decision of 11 December 2018. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8797.  

225   Case M. 8994 - Microsoft / Github, Commission decision of 19 October 2018. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8994. 

61 

 
                                                           
("DevOps  tools").  Both  Microsoft  and  GitHub  provide  access  to  platforms  for  software 
development  and  both  provide  code  editors  (computer  programs  designed  specifically  for 
editing  source  code)  and  integrated  development  environments  (applications  consisting  of  a 
code  editor,  as  well  as  additional  features  such  as  intelligent  code  completion).  The 
Commission found that the merged entity would continue to face significant competition from 
other players on both markets. The Commission also assessed whether there would be a risk 
of weakened competition, if Microsoft were to leverage the popularity of GitHub's software 
development platform to boost its own sales of DevOps tools and cloud services, but  found 
that Microsoft  would not  have the incentive to  undermine the open nature of GitHub to  the 
detriment  of  competing  DevOps  tools  and  cloud  services  as  this  would  reduce  the  value  of 
GitHub for developers, who are willing and able to switch to other platforms. 

In  the  media  sector,  in  February  2018  the  Commission  conditionally  approved  Discovery's 
acquisition of Scripps,226 both providers of basic pay-tv channels to TV distributors. Scripps 
is particularly active in the UK, where it operates UKTV jointly with the BBC, and in Poland, 
via TVN.  The companies' activities gave rise to only a limited overlap  in the UK. However, 
there was a risk that Discovery's bargaining power vis-à-vis TV distributors in Poland would 
increase,  because  it  would  acquire  channels  that  are  particularly  important  in  distributors' 
basic pay-tv channel packages, in particular TVN24, TVN's flagship news channel. Discovery 
would therefore have been able to impose the licensing of its whole TV channel portfolio and 
to increase its licensing fees to the detriment of Polish consumers and competition. To address 
these  concerns,  Discovery  committed  to  making  TVN24  available  to  TV  distributors  in 
Poland for a reasonable fee determined by reference to comparable agreements for a period of 
seven  years. In parallel, the Commission rejected a request to refer the merger to the Polish 
competition  authority,  as  the  Commission  was  better  placed  to  deal  with  this  case  and  any 
competition concerns were fully addressed by the commitments. 

In October, the Commission unconditionally cleared the proposed acquisition by Sony of sole 
control  and  ownership  over  EMI  Music  Publishing  (EMI  MP).227  Sony  already  had  joint 
control (together with Mubadala) of EMI MP since 2012 and therefore the transaction would 
not lead to any increase in market share in any of the markets where Sony and EMI MP are 
active.  The  Commission  examined  whether  Mubadala  had  acted  as  a  constraint  on  Sony's 
ability to leverage across both recording music and music publishing rights and, in particular, 
into  the  potential  impact  of  the  removal  of  this  constraint.  Because  Sony/ATV  already 
administers EMI MP's catalogue, the transaction does not change the competitive position of 
EMI  MP.  Moreover,  the  transaction  would  not  materially  increase  Sony's  bargaining  power 
vis-à-vis online music platforms. 

In  November  2018,  the  Commission  approved,  subject  to  conditions,  the  acquisition  by 
Disney of the film and television studios and cable and international television businesses of 
Fox.228 These companies  constituted two of the six major Hollywood film  studios and were 
also providers of TV channels. In relation to production and distribution of films for release in 
movie theatres and distribution of content for home entertainment and licensing of films and 
other  TV  content,  the  Commission  found  that  the  merged  entity  would  continue  to  face 
significant  competition  from  other  players,  such  as  Universal,  Warner  Bros  and  Sony. 

226  Case M. 8665 - Discovery / Scripps, Commission decision of 6 February 2018. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8665.  

227  Case M. 8989 - Sony / EMI Music Publishing, Commission decision of 26 October 2018. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8989.  

228  Case M. 8785 - The Walt Disney Company / Twenty-First Century Fox, Commission decision of 6 November 

2018. See: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8785.  

62 

 
                                                           
However, the Commission found that the proposed transaction would raise competition issues 
in the market for the wholesale supply of "factual channels" (which broadcast documentaries, 
drama  and  scientific-themed  entertainment  programmes),  such  as  National  Geographic, 
because the transaction  would have eliminated  competition  between two  strong suppliers of 
such channels. Disney committed to divest its interest in the channels History, H2 and Crime 
& Investigation it controls in the EEA thereby fully removing the overlap between Disney's 
and Fox's activities in the wholesale supply of factual channels in the EEA. 

In a separate decision of June 2018, the Commission had already cleared Comcast's proposed 
acquisition of Sky.229 Comcast and Sky competed with each other only to a limited extent in 
Austria,  Germany,  Ireland,  Italy,  the  UK  and  Spain.  The  Commission  found  that  pay-tv 
distributors will continue to have access to content from Comcast's competitors and multiple 
alternative  channels  with  comparable  programming  and  audiences  in  the  relevant  Member 
States. It is also unlikely that Sky would have the incentive to cease purchasing content from 
Comcast's  competitors  as  it  would  reduce  the  quality  of  Sky's  product  offering.  The 
Commission  also  rejected  concerns  that  Sky  could  prevent  competing  channels  from 
accessing its platform. 

State aid enforcement in ICT and media 

Broadband deployment 

The  achievement  of  the  European  broadband  targets,230  despite  substantial  progress, 
represents  a  significant  challenge,  in  particular  for  the  deployment  of  ultrafast  networks.231 
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 providers.232  

229  Case M. 8861 - Comcast / Sky, Commission decision of 15 June 2018. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8861.  

230  In its Communication "Connectivity for a Competitive Digital Single Market - Towards a European Gigabit 

Society" of 14 September 2016 (COM/2016/587 See: 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. 

to  Europe’s  digital  progress 

report  2017.  See:  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.  

231    According 

232    Based  on  the  study  by  Analysys  Mason  "Costing  the  new  potential  connectivity  needs"  (SMART 
https://publications.europa.eu/en/publication-detail/-/publication/e81ae17f-9d27-4b68-

2015/0068).  See: 
8560-7cd45dbe21d8 and the Commission's estimates.  

63 

 
                                                           
Most  of  the  financing  for  the  upgrade  and  deployment  of  next-generation  networks  in  the 
broadband sector comes from private companies. These tend to invest mostly in urban, highly 
populated  areas  which  can  assure  rapid  return  on  investment.  As  a  result,  in  certain 
underserved, mostly rural areas public funds support the deployment of broadband networks, 
within the broader objectives of inclusion and economic development. State aid control seeks 
to  ensure  that  such  investments  do  not  crowd  out  (planned)  private  investments  and  that 
downstream compatition remains possible over the subsidised network. 

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, resulting from an appropriate mapping of 
infrastructure  and  market  consultation,  to  avoid  a  crowding  out  of  private  initiatives  (definition  of  the  market 
failure). 

ii)  Different  technologies  should  be  allowed  to  bid  for  the  objective  connectivity  targets  set  (technological 
neutrality principle).  

iii) A competitive selection process has to take place to ensure the best offer for the best price.  

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

These principles are also embedded in the  General Block  Exemption Regulation233 (GBER)  which is intended 
particularly for fully underserved areas ('white' areas) and allows Member States to deploy broadband networks 
without State aid notification. In assessing measures which do require notification, Member States and selected 
operators must fulfil a number of conditions as specified in the Broadband State Aid Guidelines.234 

All  Member  States  have  adopted  and/or  updated  their  national  and/or  regional  broadband 
strategies.235  As  proposed  in  the  Commission  Communication  of  14  September  2016,236 
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  2018,  in 
particular for Lithuania,237 the Netherlands238 and Austria.239 Some Member States completed 

233  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. 
234   Communication from the Commission, EU Guidelines for the application of State aid rules in relation to the 
http://eur-
networks,  OJ  C 

rapid 
26.1.2013, 
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:025:0001:0026:EN:PDF. 

deployment 

p.1.  See: 

broadband 

25, 

235  Despite  the  fact  that  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.  

of 

236  Commission Communication COM/2016/587 "Connectivity for a Competitive Digital Single Market - 
Towards a European Gigabit Society" of 14 September 2016. See: https://ec.europa.eu/digital-single-
market/en/news/communication-connectivity-competitive-digital-single-market-towards-european-gigabit-
society. 

237   State aid case SA.49614 - Lithuania - Development of Next Generation Access Infrastructure – RAIN 3, 

Commission decision of 12 October 2018. See: 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=3. 

238   State aid case SA.46613 – The Netherlands - Broadband Rivierenland Region, Commission decision of 10 

April 2018. See: 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=3. 

64 

 
                                                           
or  modified  former  broadband  schemes  with  additional  investment  in  the  roll-out  of  Next 
Generation Access networks, in particular in Germany240 and the UK.241  

State aid for gigabit infrastructure – the Bavarian gigabit pilot project242 

Building on the EU's existing 2020 broadband targets, the Commission identified in its Gigabit Communication 
of 2016 the connectivity needs to build a European Gigabit society,  where very high capacity networks enable 
the widespread use and development of products, services and applications in the Digital Single Market. 

In  this  context,  in  2018,  the  European  Commission  approved  under  EU  State  aid  rules  a  Bavarian  project  to 
deploy  very  high  capacity  networks  in  six  municipalities.  This  was  the  first  time  the  Commission  looked  at  a 
support measure as envisaged in the objectives of the Gigabit Communication. The aid aims to bring very fast 
broadband access to customers in areas where the market has not provided them, in line with the EU broadband 
connectivity goals. The project represented a first step towards a future larger roll-out of such infrastructure in 
Germany. 

The new network will be capable of offering speeds of 200 megabits per second (Mbps) for households and 1 
gigabit per second (Gbps) for companies and public institutions. These  transmission speeds are far above those 
that  users  have  had  so  far  in  the  target  areas.  The  new  networks  will  therefore  bring  about  a  significant 
improvement in line with the strategic objectives of the Gigabit Communication. 

In  the  period  2009-2018,  the  Commission  approved  State  aid  for  broadband  amounting  to 
EUR  39  billion.  The  Member  states  effectively  spent  30%  of  this  amount,  often  with  a  co-
financing from  European funds243  amounting  to  roughly EUR 3 billion.  In  the same period, 
Member States adopted 126 broadband State aid measures benefitting from the GBER. 

Media, culture and broadcasting 

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 
Communication245 to ensure that support is well-designed to meet the underlying objectives of 
common interest while limiting negative effects on competition. 

the  Cinema  Communication244  and 

the  guidance  of 

In 2018, the Commission adopted nine decisions concerning media and cultural activities. The 

239   State aid case SA.50844 - Austria - Broadband Styria, Commission decision of 8 November 2018, not 
published yet and State aid case SA.48325 – Austria - NGA-Broadband project in Upper Austria, 
Commission decision of 26 July 2018. See: 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=3. 

240   State aid case SA.50847 – Germany - Prolongation of NGA Bayern Abänderung (SA.38690), Commission 

decision of 4 June 2018. See: 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=3. 

241   State aid case SA.49445 – UK - Modification of the National Broadband Scheme for the UK for 2016-2020 

(BDUK - SA 40720), Commission decision of 15 January 2018. See: 
http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=3. 
242  State aid case SA.48418 - Germany- Bayerisches Gigabit Pilotprojekt (Bavarian gigabit pilot project), 

Commission decision of 18 December 2018. See: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48418. 

243  State aid case SA.46805 – Germany – Follow up German NGA/Vula product. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46805. 

244  Communication from the Commission on State aid for films and other audio-visual works (2013/C 332/01). 

See: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:332:0001:0011:EN:PDF. 

245  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. See: http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52009XC1027(01)&from=EN.  

65 

 
                                                                                                                                                                                     
Commission  notably  approved  an  aid  scheme  designed  by  Sweden246  to  support  its  media 
sector  and  aid  schemes  for  Belgium,247  France248  and  Germany249  to  stimulate  the 
development  and  the  promotion  of  educational  and  culturally  valuable  video  games  which 
would  not  have  subsisted  under  normal  market  conditions.  Video  games  have  become  a 
vibrant and successful commercial product. In this sector, the presence of market failure has 
to  be  assessed  carefully,  because  the  potential  to  distort  competition  in  a  well-functioning 
market  is  higher.  As  aid  for  video  games  is  approved  as  cultural  aid,  the  Commission 
undertakes a more particular assessment of the cultural characteristics of the games than for 
feature films.  

Since the inclusion of projects  promoting culture  and heritage conservation in  the GBER  in 
2014,  Member  States  have  taken  the  opportunity  offered  by  the  Exemption  Regulation.  In 
2018, 466 schemes were covered by Article 53 GBER related to aid for culture and heritage 
conservation  and  77  schemes  by  Article  54  GBER  related  to  aid  schemes  for  audio-visual 
works.250 

Spectrum migration of broadcasters  

In 2018 the Commission approved, under the EU State aid rules, German plans to compensate 
the direct costs incurred by operators of terrestrial television services to migrate from the 694-
790 MHz frequency band (the "700 MHz band") to lower frequencies. This migration follows 
a 2017 Decision251 by the European Parliament and the Council that imposed the availability 
of  the  700  MHz  band  for  the  deployment  of  wireless  broadband  services  by  June  2020, 
therefore  compelling  the  current  users  -  among  them  the  terrestrial  television  service 
providers  -  to  liberate  the  frequency  band.  However,  the  Decision  provides  that  Member 
States  should  ensure  the  availability  of  the  sub-700  MHz  band  for  terrestrial  television 
services  until  2030.  It  also  allows  for  the  possibility  to  compensate  certain  direct  costs 
incurred  by  terrestrial  television  operators  for  the  spectrum  migration.  The  Commission 
assessed  the  aid  measure  and  found  that  the  aid  is  limited  to  the  costs  that  are  strictly 
necessary  for  the  migration,  and  has  no  significant  impact  on  trade  and  competition. 
Furthermore,  the  measure  will  contribute  to  the  EU's  objective  of  introducing  5G  mobile 
services, while keeping terrestrial television services available for consumers.  

3. FINANCIAL SERVICES 

Overview of key challenges in the sector 

The  financial  services  sector  has  continued  to  stabilise.  Generally,  EU  banks  have  reduced 
their legacy assets and are equipped with higher capital buffers. Banks have also limited their 

246   State aid case SA.49405 – Sweden - Media Aid, Commission decision of 22 October 2018. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49405.  

247  State  aid  case  SA.49947  –  Belgium  -  Funds  for  videogames  –  Flanders,  Commission  decision  of  28  May 
2018. See: http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=3. 
248   State aid case SA.50512 – France - Fonds d'aide aux jeux video, Commission decision of 21 August 2018. 

See: http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&policy_area_id=3. 
249  State Aid case A.51820 – Germany - Video games support – North Rhine Westphalia, Commission decision 

of 10 December 2018.See: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_51820. 

250  There  might be some overlap between the  figures as schemes could be informed both under article 53 and 

article 54 (and potentially other articles of the GBER as well).  

251   Decision (EU) 2017/899 of the European Parliament and of the Council of 17 May 2017 on the use of the 

470-790 MHz frequency band in the Union. See: https://eur-lex.europa.eu/legal-
content/en/TXT/?uri=CELEX%3A32017D0899. 

66 

 
 
                                                           
exposures  to  market  risks,  primarily  by  reducing  their  bond  and  derivative  portfolios.  As  a 
consequence, they are more resilient in case of adverse conditions. The minimum requirement 
for  own  funds  and  eligible  liabilities  (MREL)  as  currently  set  with  binding  targets  by  the 
competent resolution authorities for the banks within their remit, will add to that resilience.  

However,  challenges  remain.  The  level  of  non-performing  loans  is  still  too  high  for  certain 
banks  in  some  Member  States.    There  is  still  pressure  on  the  banks'  profitability  due  to  the 
low-interest  environment  and  tight  interest  margins.  Also  the  insurance  sector,  in  particular 
the life insurance sector, is affected by these conditions.  

The  current  legislative  framework  of  the  Banking  Union,  notably  the  Bank  Recovery  and 
Resolution Directive (BRRD),252 has been fully in force for two years. Although State support 
for banks and, consequently, the number of State aid cases have been reduced, there are still 
some legacy situations where support from the public budget for banks to exit the market or 
as a temporary buffer is necessary.  

Moreover, there is growing pressure from new types of financial institutions, as well as from 
so-called  FinTech  companies,  re-shaping  the  interaction  with  customers  in  areas  such  as 
payments,  lending  and  brokerage  platforms.  The  financial  sector  is  currently  undergoing 
restructuring efforts with a higher focus on digital services. 

EU competition policy with its three enforcement instruments – antitrust, merger and state aid 
control  -  plays  an  important  role  in  ensuring  that  competition  takes  place  on  fair  and  equal 
terms throughout the sector. The enforcement of the competition rules remains key to ensure 
fair competition that benefits consumers.  

This  applies,  for instance, to  the area of payments,  where the  Commission  closely monitors  
the ongoing technological change and the emergence of new financial service providers. The 
Commission  intervenes,  as  in  other  areas,  when  it  detects  anti-competitive  behaviour. 
Similarly, the Commission has continued to use its merger control instrument to ensure that 
mergers or joint ventures do not significantly impede effective competion. Finally, State aid 
control  tackles  cases  of  public  support  for  financial  service  companies  with  a  view  to  limit 
distortions of competition  and to  ensure, for instance, that  non-viable banks exit the market 
and are not kept alive artificially.  

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 
Regulation253 (IFR).  The Commission  contracted a  study which was launched in  September 
2018.  The  purpose  of  the  study  is  to  collect  and  analyse  key  qualitative  and  quantitative 
market information from all Member States on application of the Interchange Fee Regulation. 
The  study  is  intended  to  inform  the  European  Commission  when  preparing  a  Report  to  the 
European Parliament and to the Council on the application of the IFR. 

252   European Parliament and  Council Directive  2014/59/EU of 15 May 2014 establishing a framework  for the 
recovery  and  resolution  of  credit  institutions  and  investment  firms  and  amending  Council  Directive 
82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 
2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European 
Parliament and of the Council Text with EEA relevance, OJ L 173, 12.6.2014 p. 190–348. 

253   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. See: http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=celex:32015R0751.  

67 

 
                                                           
On  18  January  2018,  the  Commission  published  Regulatory  Technical  Standards254  (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 became applicable from 7 February 2018. The RTS 
relate  to  the  implementation  of  the  IFR  requirement  on  independence  of  card  schemes  and 
processing entities.  

On  7  February  2018,  the  General  Court  issued  a  ruling  in  the  American  Express  case.255 
regarding  the  application  of  the  Interchange  Fee  Regulation  to  three-party  schemes.  The 
General Court clarified that a three-party scheme that issues a payment instrument with a co-
branding  partner  or  agent  is  considered  to  be  a  four-party  scheme  and  thus  subject  to  the 
relevant provions of the IFR irrespective of whether the co-branding partner or agent acts as 
an issuer.  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  fraud.256  Moreover,  only  60  %  of  EU  citizens  possess  such  cards.  The 
Payment  Services  Directive257  (PSD  II)  takes  account  of  and  regulates  third-party  providers 
(bank-owned  and  non-bank  owned)  which  offer  alternative  means  of  internet  payments  (for 
example through credit transfers via the website of the consumer's bank, including the Single 
Euro  Payment  Area  Credit  Transfer  system)  or  allow  consumers  to  have  a  overall  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 2018, 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 monitor competition in capital markets, in particular focussing 
on the markets for equity data and equity trading where high fees/prices persist. In the field of 
motor insurance, the Commission continued to investigate  allegations of breaches of Articles 
101  and  102  TFEU  in  the  Irish  market.  Moreover,  the  Commission  progressed  with  its 
investigation  into  Mastercard's  cross-border  acquiring  rules,  which  allegedly  prevent 
merchants located in countries with high interchange fees to seek lower-priced services from 
acquirers established in Member States with lower interchange fees.  

In  addition,  the  Commission  continued  its  antitrust  investigations  into  Mastercard's,  Visa 
Inc.'s  and Visa International's258 multilateral  interchange  fees (MIFs) for transactions in  the 

254  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 L 13, 18.1.2018, p. 1–7. 

255   See: http://curia.europa.eu/juris/liste.jsf?language=en&td=ALL&num=C-304/16.  
256  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. 

257   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. See: 
http://ec.europa.eu/finance/payments/framework/index_en.htm#151008. 

258  These proceedings were closed as regards Visa Europe following its commitments, Case AT.39398 - VISA 

MIF, Commission decision of 26 February 2014. See: 
http://ec.europa.eu/competition/antitrust/cases/dec_docs/39398/39398_9728_3.pdf. 

68 

 
                                                           
EEA made with cards issued outside the EEA (inter-regional MIFs). 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 Comission issued a 
Supplementary Statement  of Objections to  Visa  Inc and Visa  International  on inter-regional 
MIFs in August 2017259 and the oral hearing was held in February 2018.  

In  November 2018 Mastercard and  Visa offered  commitments to  address  the Commission’s 
competition concerns. Both card-schemes offered to reduce the current level of inter-regional 
MIFs to or below binding  caps. Moreover, Mastercard and Visa agreed to  publish all inter-
regional  MIFs  covered  by  the  commitments  in  a  clearly  visible  manner  on  their  respective 
websites.  To  verify  the  appropriateness  of  the  proposed  commitments,  the  Commission 
consulted market participants on 5 December 2018.260 

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  the  Commission  continued  antitrust  investigation  concerning  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.261  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. 

259  Case AT.39398 - Visa MIF. See: http://europa.eu/rapid/press-release_MEX-17-2341_en.htm. 
260   See: http://europa.eu/rapid/press-release_IP-18-6655_en.htm. 
261   See: MEMO/17/3761 http://europa.eu/rapid/press-release_MEMO-17-3761_en.htm.  

69 

 
 
 
                                                           
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.  In  2018,  the 
Commission  dealt  with  a  number  of  cases  in  the  sector,  in  particular  involving  activities  in 
insurance,  banking  and  payments,  which  did  not  pose  a  competitive  threat  and  could  be 
approved without requiring remedies.262  

State aid investigations in the financial sector 

The general stabilisation of the financial sector has resulted in a reduction of State aid cases. 
Moreover,  the  Commission  could  close  the  monitoring  of  further  ten  banks  with  respect  to 
commitment  obligations  resulting  from  previous  State  aid  decisions.  Despite  this  overall 
positive  development,  the  EU  banking  sector  still  faces  some  challenges,  and  also  in  2018 
banks asked for public support.  

In 2018, the Commission continued to apply the EU State aid rules for banks, in particular the 
2013 Banking Communication263 while ensuring close coordination with the authorities which 
are in charge of banking supervision and relate with the framework of the Banking Union264 
As  regards  ailing  banks,  the  State  aid  rules  distinguish  those  that  can  be  restructured  and 
return to viability from non-viable banks that have to exit the market.  

One  of  the  current  main  concerns  is  the  still  high  level  of  non-performing  loans  (NPLs)  in 
some Member States. High NPL ratios weaken banks that are burdened by legacy losses and 
high provisions and render their attempts to generate sufficient income almost impossible. At 
the  same  time,  it  is  often  very  difficult  for  the  affected  banks  to  raise  new  capital  on  the 
market. 

Banks  that  are  troubled  by  high  NPLs  ratios  have,  therefore,  asked  for  aid  to  support  their 
restructuring efforts, for instance, by hiving off NPLs. To limit distortions of competition, the 
Commission could, however, only approve support for a non-viable bank under the condition 
that it will exit the market. In 2018, for example, the Commission approved State aid for the 
sale of Cyprus' second largest bank, the Cyprus Cooperative Bank, and the winding down of 
the residual entity as liquidation aid.265 This allowed for the orderly market exit of the bank 
that had already received State support twice in the past.  

Further  progress  has  also  been  made  regarding  guarantee  schemes  of  some  Member  States. 
For example, the Italian guarantee scheme to facilitate the securitisation of non-performing 
loans (GACS), initially approved in  February 2016,  was prolonged for a second time on 31 
August 2018.266 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 

262  See for example M.8764 - Sedgwick /Cunningham Lindsey and M.9056 - Generali CEE /AS. 
263  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.  See: 
http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52013XC0730%2801%29&from=EN.  
264  In  particular,  the  Single  Resolution  Board  (SRB)  under  the  Single  Resolution  Mechanism  (SRM)  and  the 

European Central Bank (ECB) under the Single Supervisory Mechanism (SSM). 

265  Case  SA.35334  –  Cyprus,  Commission  decisions  of  19  June  2018  and  28  August  2018.  See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_35334. 

266  Case 

SA.51026(2018/N) 

– 

Italy,  Commission 

decision 

of 

31  August 

2018. 

See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_51026.  

70 

 
                                                           
notes continue to be remunerated at market terms according to the risk taken, that is to say in 
a manner acceptable for a private operator under market conditions. Since its entry into force 
until  mid-November  2018,  the  scheme  has  been  accessed  17  times,  removing  ca.  EUR  51 
billion  (gross  book  value)  of  non-performing  loans  from  the  Italian  banking  system,  which 
corresponds to  over 60% of the total  reduction  of non-performing loans in  Italy  during that 
period. 

As in previous years, State aid control in 2018 included legacy cases which preceded the entry 
into  force  of  the  BRRD.  The  Commission  monitored  the  Member  States'  compliance  with 
their commitments given in the context of previous decisions. When an additional  assessment 
was required, the Commission  adopted an additional decision. This  happened in  the case of 
the  German  HSH  Nordbank  where  the  Commission  in  2016  approved  the  bank's  guarantee 
ceiling - which was re-increased in 2013 back to the level of 2011 – but adopted an additional 
decision  assessing  Germany's  compliance  with  its  commitment  to  split  the  bank  and  either 
privatise  the  operational  subsidiary  or,  in  case  of  a  failed  sale,  to  cease  new  business  and 
divest its assets.267 

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  activity.268  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. 

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. 

Tax legislation and tax collection are competences of the Member States. However, even in 
this area where the Member States enjoy fiscal autonomy, any national tax measures adopted 

267  Case SA.52288 – Germany, Commission decision of 23 November 2018, See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_52288.   
268  OECD (2013) Action Plan on Base Erosion and Profit Shifting, OECD Publishing, Paris. 

71 

 
 
                                                           
have to comply with internal market rules and, amongst others, abide by competition law.269 

Contribution of EU competition policy to tackling the challenges 

State aid investigations and decisions concerning aggressive tax planning 

Throughout 2014-2018, 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  the  key  areas  since  the  Commission  started  looking  into  the  tax 
ruling practices of Member States. The Working Paper published as part of this review in June 
2016  indicated  concerns  that  some  tax  rulings  for  financing  companies  endorse  very  low 
margins and a low taxable base.270  

In this context, the Commission 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  circular.271  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. Additional  changes  were made by  Cyprus on 3 September 
2018  on  the  rules  on  non-return  capital  contributions.  On  21  December  2018,  Luxembourg 
addressed certain issues with regard to Art. 22bis LIR272 and Art. 16 StAnpG.273  

Important cases 

On  20  June  2018,  the  Commission  adopted  a  decision  requiring  Luxembourg  to  recover  a 
selective tax advantage granted to Engie274 by way of several tax rulings amounting to more 
than EUR 120 million. 

269  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 broadly endorsed the Commissions approach on State 
aid. See: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P8-TA-2015-
0408+0+DOC+XML+V0//EN.   

270  Directorate-General for Competition working paper on state aid and tax rulings, Internal Working Paper – 

Background to the High Level Forum on State Aid of 3 June 2016. See:  
http://ec.europa.eu/competition/state_aid/legislation/working_paper_tax_rulings.pdf.  

271  Circular of the Director of Contributions, L.I.R. n° 56/1 – 56bis/1 of 27 December 2016. See:  

http://www.impotsdirects.public.lu/content/dam/acd/fr/legislation/legi16/circulairelir561-56bis1-
27122016.pdf  

272  Luxembourg  now  forbids  the  tax-free  exchange  or  conversion  of  a  convertible  loan  for  participations  or 

equity. A similar issue was the subject of the Commission investigation in the case SA.44888 – Engie. 

273  Luxembourg  now  requires  a  taxpayer  to  prove  that  the  other  state  is  also  recognizing  a  permanent 
establishment before granting an exemption based on the applicable double tax treaty. A similar issue was the 
subject of the Commission investigation in the case SA.38945 – McDonalds. 

274  Case SA.44888 – Luxembourg – Aid implemented by Luxembourg in favour of ENGIE, Commission decision of 
20 June 2018. See: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_44888. 

72 

 
                                                           
Luxembourg – The Engie decision  

In  2008  and  2010,  respectively,  Engie  implemented  two  complex  intra-group  financing  structures  in 
Luxembourg.  These  involved  triangular  financing  transactions  where  two  holdings  of  the  Engie  group  would 
provide  financing  via  intermediary  companies  to  two  subsidiaires,  Engie  LNG  Supply  and  Engie  Treasury 
Management, in the form of highly complex convertible loans. 

Subsequent tax rulings issued by the Luxembourg tax administration from 2008 endorsed a tax treatment where 
the  same  financing  transaction  was  treated  as  debt  at  the  level  of  Engie  LNG  Supply  and  Engie  Treasury 
Management and equity at the level of the holdings. According to the tax rulings, Engie LNG Supply and Engie 
Treasury Management are allowed to deduct annually from their tax base the interest related to the convertible 
loans,  which  in  practice  amounted  to  more  than  99%  of  their  profit.  That  interest  is  however  paid  only  at 
conversion and in the  form of shares to the intermediaries, that  would pass on the  shares to the holdings. The 
holdings  would  then  cancel  the  shares  to  cash  the  profit  made  by  Engie  LNG  Supply  and  Engie  Treasury 
Management,  which  would remain tax-exempt in application of the participation exemption. The result is that 
Engie did not pay any tax on more than 99% of the profit generated by Engie LNG Supply and Engie Treasury 
Management in Luxembourg. 

The  Commission  concluded  that  the  tax  rulings  endorsed  an  inconsistent  tax  reatment  of  the  same  financing 
transaction  leading  to  non-taxation  at  all  levels.  This  is  a  more  favourable  treatment  than  under  the  standard 
Luxembourg  tax  rules,  which  exempt  from  taxation  income  received  by  a  shareholder  from  its  subsidiary, 
provided that income is  in  general taxed at  the level of the subsidiary. Luxembourg did  not provide any valid 
justification for this derogation. Therefore, the tax treament granted to Engie constitutes a selective advantage.  

The Commission estimates that this unfair tax advantage amounted to up to EUR 120 million corresponding to 
the profit generated by Engie LNG Supply in the period between 2009 and 2014 and exempted at the level of the 
holding after the partial conversion of the convertible loan in 2014. As regards Engie Treasury Management, its 
profits will have to be taxed in line with standard Luxembourg tax rules, as soon as the loan is converted. 

On 19 September 2018, the Commission decided that the non-taxation of certain McDonald's275 
profits in Luxembourg did not lead to illegal State aid, as it was in line with national tax laws 
and the Luxembourg-United States Double Taxation Treaty. 

Luxembourg – The McDonald’s decision  

McDonald's  Europe  Franchising  is  a  subsidiary  of  McDonald's  Corporation,  based  in  the  United  States.  The 
company  is  tax  resident  in  Luxembourg  and  has  two  branches,  one  in  the  United  States  and  the  other  in 
Switzerland. In 2009, McDonald's Europe Franchising acquired a number of McDonald's franchise rights from 
McDonald's Corporation in the United States, which it subsequently allocated internally to the US branch of the 
company.  As  a  result,  McDonald's  Europe  Franchising  received  royalties  from  franchisees  operating 
McDonald’s fast food outlets in Europe, Ukraine and Russia for the right to use the McDonald's brand.  

McDonald's Europe Franchising also set up a Swiss branch responsible for the licensing of the franchise rights to 
franchisors  and  through  which  royalty  payments  flowed  from  Luxembourg  to  the  US  branch  of  the  company. 
The  tax  rulings  given  by  the  Luxembourg  authorities  confirmed  that  McDonald's  Europe  Franchising  was  not 
due to pay corporate tax in Luxembourg on the grounds that the profits were to be attributed to the branch in the 
US. This was justified by reference to the Luxembourg-US Double Taxation Treaty, despite the fact that the US 
did not recognise the US branch of McDonald's as a taxable entity. 

Following  an  in-depth  investigation  and  after  having  thoroughly  considered  the  Luxembourg  authorities'  and 
McDonald's arguments in response to the opening decision, in particular as regards the correct application of the 
Luxembourg  – US Double Taxation Treaty by the  Luxembourg tax authorities, the Commission  found that its 
concerns under EU State aid rules raised in the opening decision were unfounded. In particular, the Commission 
concluded  that  Luxembourg  had  not  misapplied  the  Luxembourg  –  US  Double  Taxation  Treaty  and  that  the 
contested tax rulings therefore did not selectively favour McDonald's Europe over other companies that are in a 
similar legal and factual situation.  

275  Case  SA.38945  -  Alleged  aid  to  McDonald’s,  Commission  Decision  of  19  September  2018.  See: 

http://europa.eu/rapid/press-release_IP-18-5831_en.htm.   

73 

 
                                                           
In  addition,  the  Commission  adopted  on  19  December  2018276  a  final  decision  on  the 
corporate income tax regime (including the tax ruling practice) in Gibraltar. The Commission 
found that the exemption for interest and royalties (between 2011 and 2013) under the 2010 
Corporate  Tax  Act  was  designed  to  attract  multinationals  and  it  effectively  reduced  the  tax 
bill  of  a  limited  number  of  companies  belonging  to  multinational  groups.  In  addition,  the 
investigation also  confirmed that five rulings granted in 2011 and 2012 by the Gibraltar tax 
authorities  to  large  multinationals  involve  illegal  state  aid,  as  they  continued  to  exempt 
interest  and  royalties  from  taxation  even  after  Gibraltar  adopted  legislative  amendments  to 
bring these types of income within the scope of taxation. With its decision, the Commission 
confirmed that these measures involve illegal  and incompatible aid  and  ordered  recovery of 
the tax foregone. 

In the context of that case, the Commission also supported Gibraltar in taking steps to provide 
clarification  and  guidance  on  their  tax  rules  in  order  to  mitigate  risks  of  cross-border  tax 
avoidance and prevent that potential discretion exercised by the tax authorities in granting tax 
rulings  results  to  undue  State  aid.  To  this  end,  in  October  2018,  the  Gibraltar  authorities 
introduced changes to their Income Tax Act277 and adopted Guidance notes on territoriality278 
and the tax ruling procedure.279 

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. 

With  regard  to  the  investigation  into  fiscal  aid  to  ports,  further  to  the  negative  decisions 
adopted in January 2016280 (Dutch seaports) and July 2017 (Belgian281 and French282 ports), 
the Commission initiated in April 2018 the cooperation procedure with regard to the corporate 
tax  exemptions  benefitting  ports  in  Spain  and  Italy.  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.  

276   Case SA.34914 - Gibraltar Corporate Tax regime (ITA 2010), Commission Decision of 19 December 2018. 

See: http://europa.eu/rapid/press-release_IP-18-6889_en.htm.  

277   The Income Tax (Tax Rulings) Rules 2018, of 25 October 2018, see: 

http://www.gibraltarlaws.gov.gi/articles/2018s227.pdf; and The Income Tax (Amendment) Regulations 
2018, of 25 October 2018, see: http://www.gibraltarlaws.gov.gi/articles/2018=228.pdf. 

278  The Guidance Notes on Accrued and Derived, of 25 October 2018. See: 

https://www.gibraltar.gov.gi/new/downloads-ito. 

279  The Guidance Notes on the Tax Rulings Procedure, of 25 October 2018. See: 

https://www.gibraltar.gov.gi/new/downloads-ito.  

280  Case  SA.25398  Corporate  tax  exemption  of  Dutch  public enterprises,  Commission  decision  of  21  January 

2016. See: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_25338.   

281  Case SA.38393 Ports taxation in Belgium, Commission decision of 27 July 2017. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38393.  

282  Case SA.38398 Ports taxation in France, Commission decision of 27 July 2017. See: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38398.  

74 

 
                                                           
More  generally,  thoughout  2018,  the Commission  provided  guidance  to  Member  States  and 
helped  them  designing  tax  measures  that  comply  with  State  aid  rules,  for  example  health 
related taxes283 or real estate taxes.284 

5. BASIC INDUSTRIES AND MANUFACTURING 

Overview of key challenges in the sector 

Manufacturing is important to the EU economy as a driver of growth and employment. Close 
to 30 million people, that is, more than 20% of the European workforce is active in the sector. 
Substantial  advancements  in  automatisation  and  the  growing  widespread  use  of  robotics  in 
many industries in the past decades have led to significant restructuring and job losses across 
Europe. The manufacturing sector faces additional challenges, due to the relocation of jobs to 
countries with lower labour costs and the rise of global supply chains with producers located 
outside the EU. Moreover, high energy prices and low productivity growth as compared to the 
OECD  average  are  hampering  the  competitiveness  of  European  companies.  While  new 
technologies and digitisation help to increase efficiencies and reduce costs, these techniques 
are also available to competing economies. 

The EU’s renewed industrial policy strategy285 aims to address these challenges by boosting 
investment in a smart, innovative and sustainable industry. Enforcing the competition rules in 
the manufacturing sector contributes to these objectives, in particular by  ensuring that firms 
can compete on fair and equal terms in the internal market. In addition the State aid rules are 
used to steer public funding towards research, training and energy efficiency. Only innovative 
companies  with  a  sustainable  business  plan  can  deliver  smart  goods  and  services  at 
competitive prices for European consumers and businesses. Improving companies’ efficiency 
and  long-term  competitiveness  at  home  also  makes  them  fit  for  competing  in  the  global 
market place. 

Contribution of EU competition policy to tackling the challenges 

Antitrust investigations in basic industries 

Basic manufacturing and consumer goods industries continue to represent a significant share 
of  the  Commission's  enforcement  practice.  In  2018,  the  Commission  continued  its  lines  of 
action  (including  individual  case  work,  market  surveillance  and  advocacy)  in  these  sectors, 
including for example, those in the motor vehicle and consumer goods sectors. The EU's high 
value-added manufacturing industry requires access to basic materials at affordable prices that 
reflect international cost conditions. In 2018, the Commission actively monitored the markets 
for  these  inputs  to  ensure  that  firms  have  adequate  access  in  a  healthy  and  competitive 
environment.  

283  Case SA.45862 NL_BZK_CSDO_LB – the Netherlands. See: http://europa.eu/rapid/press-release_IP-18-

3521_en.htm. 

284   See:  https://www.mf.gov.pl/en/news/-/asset_publisher/X7ac/content/arrangements-with-the-eu-commission-

on-the-minimum-income-tax-from-commercial-buildings. 

285  Communication from the Commission to the European Parliament, the European Council, the European 
Economic and Social Committee, the Committee of the regions and the European Investment Bank of 
13.9.2017 “Investing in a smart, innovative and sustainable Industry”. See: https://eur-
lex.europa.eu/resource.html?uri=cellar:c8b9aac5-9861-11e7-b92d-
01aa75ed71a1.0001.02/DOC_1&format=PDF. 

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Merger investigations in basic industries and manufacturing 

The Commision’s main merger investigations in basic industries concerned notably the steel 
sector, as well as a broad range of other sectors, including the manufacture of machinery and 
components  for  aircrafts,  robotic  cleaners  for  swimming  pools,  construction  material,  paper 
and paperborad, as well as pet food. 

Amongst  those  investigations,  most  noteworthy  is  the  one  into  the  acquisition  of  Ilva  by 
ArcelorMittal.286 The merger combined ArcelorMittal, the largest producer of flat carbon steel 
in Europe and worldwide, with the main assets of Ilva, notably its steel plant in Taranto, Italy, 
which  is  Europe's  largest  single-site  integrated  flat  carbon  steel  plant.  Both  companies  are 
significant  producers  in  Europe  of  hot  rolled,  cold  rolled  and  galvanised  flat  carbon  steel. 
ArcelorMittal has a wide production network across the EEA and Ilva has major production 
assets in Italy.  

After  an  in-depth  investigation,  where  the  Commission  identified  competition  concerns,  it 
made the clearance decision conditional on the divestiture, proposed by ArcelorMittal, of an 
extensive remedy package to preserve effective competition on European steel markets to the 
benefit of consumers and businesses. 

Steel  is  a  critical  input  for  many  EU  industries  and  for  products  used  every  day.  The 
Commission’s intervention ensured that ArcelorMittal's acquisition of Ilva, creating the by far 
largest  steelmaker  in  Europe,  does  not  result  in  higher  steel  prices  –  at  the  expense  of 
European industries, the people they employ and consumers. ArcelorMittal proposed to sell a 
number  of  steel  plants  throughout  Europe  to  one  or  more  buyers,  who  will  run  them  to 
compete  with  ArcelorMittal  on  a  lasting  basis.  This  will  preserve  effective  competition  on 
European steel markets. It goes hand in hand with decisive EU action to protect the European 
steel industry from unfair trade distortions from third countries. 

On  13  July  2018,  the  Commission  opened  an  in-depth  investigation  of  the  proposed 
acquisition of Alstom by Siemens, under the EU Merger Regulation.287 The mobility division 
of  Siemens  offers  a  broad  portfolio  of  trains  (rolling  stock),  rail  automation  and  signalling 
equipment,  as  well  as  rail  electrification  systems.  Alstom  is  active  worldwide  in  the  rail 
transport  industry,  offering  a  wide  range  of  rolling  stock  (from  high-speed  trains  to  metros 
and  trams)  as  well  as  signalling  and  rail  electrification  systems.  On  6  February  2019,  the 
Commission  prohibited  the  proposed  transaction  under  the  EU  Merger  Regulation.288  The 
proposed transaction would have combined the two largest suppliers of trains and signalling 
solutions in the EEA, not only in terms of size of the combined operations, but also in terms 
of  their  geographic  footprint.  The  Commission  considered  that  the  merger  would  have 
reduced  competition  in  the  supply  of  several  types  of  trains  and  signalling  systems  in  the 
EEA. 

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 

286  See: http://europa.eu/rapid/press-release_IP-18-3721_en.htm. 
287   Case M.8677 - Siemens /Alstom. See: http://europa.eu/rapid/press-release_IP-18-4527_en.htm. 
288 Case M.8677 – Siemens / Alstom.  Decision of 6 February 2019. Not yet published. See: 

http://europa.eu/rapid/press-release_IP-19-881_en.htm. 

76 

 
                                                           
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  2018,  the  Commission  concluded  its  in-depth  investigation  into  the  restructuring  of  the 
Romanian petrochemical company Oltchim.289 The Commission found that Oltchim received 
around  EUR  335  million  of  incompatible  aid  from  Romania  since  the  company’s  failed 
privatisation in September 2012. This gave the company an unfair economic advantage over 
competitors, who have to  work  without such subsidies. Oltchim  now needs to  pay  back the 
money to the Romanian State to make up for the distortion of competition created by the aid. 
At the same time, the Commission made sure that the sale of Oltchim’s assets was carried out 
at market conditions and thus none of the past aid was passed on to the buyers. Indeed, After 
the Commission opened its in-depth investigation in April 2016, Romania amended the terms 
of  sale,  in  particular  allowing  interested  investors  to  bid  for  any  one  of  nine  asset  bundles. 
This increased the likelihood of a successful sale as well as the proceeds from the asset sale 
and dispelled the Commission’s initial doubts.    

In May 2018, the Commission also opened an in-depth investigation into the restructuring of 
CNU290, a Romanian company active in the mining of uranium and its processing into nuclear 
fuel.  After  a  rescue  loan  of  around  EUR  13  million  to  keep  the  company  afloat,  which  the 
Commission temporarily approved in 2016, Romania intends to grant around EUR 95 million 
of restructuring support to CNU. The Commission’s investigation aims to ensure in particular 
that the company addresses the problems that caused its difficulties and becomes viable in the 
long-term without continued State support.  

Moreover, in November 2018, the Commission requested Romania to recover around EUR 60 
million  of  from  the  State-owned  electricity  and  heat  producer  CE  Hunedoara.291  The 
company was incorporated in November 2012 with assets of other failed and dissolved State-
owned  companies  and  had  in  turn  been  in  financial  difficulties  as  from  2013.  Following 
rescue  aid  approved  in  April  2014  and  not  reimbursed  after  a  six-month  period,  the 
Commission  found  that  CE  Hunedoara’s  restructuring  plan  was  not  capable  of  making  the 
company viable without continued State support after the restructuring period. CE Hunedoara 
had  also  received  three  other  State  loans  that  it  could  not  have  obtained  on  the  market. 
Moreover,  Hunedoara  was  not  sufficiently  contributing  with  market-based  revenues  or 
finance  to  the  cost  of  restructuring  and  no  measures  to  limit  the  distortions  of  competition 
caused by the aid were put in place. The Commission therefore concluded that the State aid 
through  public  loans  did  not  meet  the  compatibility  conditions  under  the  Rescue  and 
Restructuring Guidelines.  

289  Case  SA.36086  Potential  aid 

to  Oltchim,  Commission  decision  of  17  December  2018,  see: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_36086;  and  IP/18/6845,  see: 
http://europa.eu/rapid/press-release_IP-18-6845_en.htm. 

290   Case SA.48394 Restructuring of National Uranium Company (Companiei Nationale a Uraniului CNU), see: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48394;  and  IP/18/3733,  see: 
http://europa.eu/rapid/press-release_IP-18-3733_en.htm. 
291  See: http://europa.eu/rapid/press-release_IP-18-6341_en.htm. 

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6. AGRI-FOOD INDUSTRY  

Overview of key challenges in the sector 

While  most  firms  in  the  European  food  sector  benefit  from  operating  in  the  EU  internal  
market, others face challenges operating in this market and in a globalised world. EU farmers, 
food manufacturers and retailers should get more out of their access to the internal market and 
the  ensuing  possibility  ability  to  buy  and  sell  produce  across  EU  borders.  EU  competition 
policy contributes to this process. 

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 facing 
(i) more competition from other farmers inside as well as outside Europe, (ii) higher demands 
from end consumers in terms of quality, variety and traceability, and (iii) higher investments 
needs linked to initiatives towards a greener and more sustainable agriculture. 

The  European  agricultural  sector  has  certain  structural  characteristics  which  make  it  more 
difficult to cope with these challenges. First, agricultural producers are the least concentrated 
level  of  the  food  supply  chain  in  the  EU.  They  are  mostly  small  or  grouped  into  small 
cooperatives and other types of 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.292 
Second, unforeseeable natural elements (such as adverse weather conditions and diseases) can 
significantly alter production, resulting in volatility of production and prices. 

European farmers can manage these challenges better by their integration into larger producer 
organisations  where  these  organisations  aggregate  supply  (in  terms  of  both  volumes  and 
variety  of  products),  offer  supporting  services  and  add  value  through  processing.  Such 
integration can provide more stability and risk-management, 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 that supply wide arrays of products  to  customers. 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. On the one hand, 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). 

292  There are approximately 11 million farms in the European Union which produce agricultural products for 
processing by about 300 000 enterprises in the food and drink industry. The food processors sell their 
products through some 2.8 million enterprises within the food distribution and food service industry, 
delivering food to the EU's 500 million consumers. See: https://ec.europa.eu/info/sites/info/files/food-
farming-fisheries/farming/documents/factsheet-food-supply-chain_march2017_en.pdf. 

78 

 
 
 
                                                           
Challenges for the optimal functioning of the EU internal market 

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  types  of 
discrimination 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 compartmentalise 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 aimed to help European farmers to 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  have  been  introduced.  Several  derogations  from  the 
competition rules were granted to the EU agricultural sector through the CMO Regulation.293 
For instance, the reform of the Common Agricultural Policy in 2013 introduced derogations 
to antitrust rules for certain agricultural sectors (olive oil, beef and veal, and arable crops) and 
to manage crisis situations. These sector-specific derogations were deleted in 2018 when the 
Council and the European Parliament amended the application of the competition rules to the 
agricultural  sector  through  the  “Omnibus  Regulation”294  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 June 2018 the Commission published proposals for the CAP 2020 reform. These proposals 
do  not  contain  any  possible  modifications  of  the  competition  rules  applicable  in  the 
agricultural sector.295  

Analysis and reporting  

a) 

Study on producer organisations and their activities in the olive oil, beef and 
veal and arable crops sectors 

In order to understand better the challenges of farmers in the supply chain and to help them to 

293  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. See: 
http://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX:32013R1308. 

294  Regulation  No.  Regulation  (EU)  2017/2393  of  13  December  2017.  See:  https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=uriserv:OJ.L_.2017.350.01.0015.01.ENG.  
295   See: http://europa.eu/rapid/press-release_MEMO-18-3974_en.htm. 

79 

 
 
 
 
 
 
                                                           
become  more  efficient,  the  Commission  launched  an  external  study.  In  June  2018  the 
Commission  published  the  Study  on  producer  organisations  and  their  activities  in  the  olive 
oil, beef and veal and arable crops sectors.296 In these sectors there are overall five times more 
unrecognised  producer  organisations/associations  of  producer  organisations  than  those 
formally recognised by Member States under EU legislation.  

The  study  revealed  that  the  main  motivating  factors  for  farmers  to  set  up  a  producer 
organisation or an association of producer organisations are (i) to improve access to markets 
due to  an increased volume and (ii) to  improve the position of the members in  negotiations 
with buyers. Furthermore, according to the study the main benefits for members in a Producer 
Organisation/an  Association  of  producer  organisations  are  (i)  improved  market  access  and 
price stability and (ii) reduced costs and economies of scale. 

The study also shows that two-thirds of producer organisations and associations of producer 
organisations carry out contractual negotiations and other commercialisation-related activities 
(commercialisation strategies and the planning of quantities). More than 90% of the entities 
that  carry  out  these  commercialisation-related  activities  also  carry  out  common  efficiency-
enhancing activities, such as quality control, distribution/transport, and procurement of inputs, 
as was foreseen by the sector-specific derogations from competition rules for these sectors. 

Most  producer  organisations  carry  out  these  efficiency-enhancing  activities  because  they 
consider that they improve their position in negotiations with buyers and because they reduce 
the costs of the members.  

296  

See: http://ec.europa.eu/competition/publications/reports/kd0218732enn.pdf. 

80 

 
 
 
 
 
                                                           
b) 

Report on the application of competition rules in the agricultural sector 

In  October  2018,  the  Commission  published  the  Report  on  the  application  of  competition 
rules in the agricultural sector.297 

EU  competition  authorities  have  carried  out  around  170  investigations  in  the  agricultural 
sector.  More  than  a  third  of  these  concerned  processors  of  agricultural  products.  The  report 
found that the enforcement work of EU competition authorities benefitted farmers with better 
deals  for  their  products.  In  particular,  the  report  identifies  several  instances  of  European 
competition  authorities  stopping  and  sanctioning  practices  employed  by  large  buyers  that 
aimed  at  reducing  prices  paid  to  farmers.  Furthermore,  the  work  of  EU  competition 
authorities also helped farmers improve their conditions with cooperatives. 

One of the key findings of the report is a new trend of national initiatives to restrict imports of 
specific  agricultural  products  from  other  Member  States.  Several  NCAs  (as  well  as  the 
Commission  in  its  2015-2016  enquiry  into  the  dairy  sector  in  several  Member  States)  have 
investigated and stopped a number of collective agreements, where for instance farmers in a 
given Member State attempt to hinder sales by farmers from other Member States.  

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

On  30  April  2019,  the  Directive  on  unfair  trading  practices  in  business-to-business 
relationships  in  the  food  supply  chain  entered  into  force.  The  Directive  is  based  on  a  2018 
Commission  proposal  aiming  to  tackle  at  EU  level  the  imbalances  of  bargaining  power 
throughout  the  food  supply  chain  by  banning  the  most  damaging  unfair  trading  practices 
imposed  by  buyers  with  strong  bargaining  power  on  small  suppliers,  in  particular  small 
farmers. 298 

The list of unfair trading practices in the Commission proposal was carefully tailored based 
on  input  from  DG  Competition’s  Chief  Economist,  in  order  not  to  prevent  trading  partners 
from  engaging  in  efficiency-enhancing  agreements  or  trading  conditions.299  The  scope  of 
protection was designed to avoid protecting businesses that have sufficient bargaining power 
to fend for themselves. Protecting businesses with bargaining power in the food supply chain 
through rules on unfair trading practices would not benefit farmers. 

Member  States  will  be  able  to  maintain  or  introduce  stricter  national  rules  as  the  proposed 
Directive only introduces minimum harmonisation at EU level. 

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

297  See: http://ec.europa.eu/competition/sectors/agriculture/report_on_competition_rules_application.pdf. 
298  See:  http://europa.eu/rapid/press-release_IP-18-2702_en.htm., and https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A52018PC0173. 

299   See: Annex H to the Commission Impact Assessment: Economic impact of unfair trading practices 

regulations in the food supply chain, p. 260, see: https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52018SC0092&from=EN. 

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Following the adoption of the Statement of Objections in November 2017,300 the Commission 
continued  in  2018  its  investigation  of  AB  InBev’s  apparent  strategy  to  allegedly  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.  AB  InBev’s 
practices, which may prevent the free trade of goods in the EU Internal Market, may result in 
a violation of Article 102 TFEU. 

Merger investigations in the agri-food industry  

In 2018, the agri-food sector was characterised by the continuation of the consolidation wave 
of  agro-chemical  players.  Following  the  conditional  clearances  of  Dow/Dupont  and 
ChemChina/  Syngenta  in  2017,  the  Commission  took  again  a  rigorous  stance  in  the 
assessment  of  the  proposed  acquisition  of  Monsanto  by  Bayer,301  thereby  ensuring  that 
farmers in Europe continue to benefit from innovative inputs at competitive prices.  

Bayer is a German company, active in pharmaceuticals, consumer health, agriculture (through 
its Bayer Crop Science division) and animal health. Monsanto was a US agriculture company 
that  produced  seeds  for  broad  acre  crops,  fruits  and  vegetables.  It  also  produced  plant 
biotechnology  traits  and  supplied  pesticides.  Monsanto  was  perhaps  most  known  for  its 
glyphosate  herbicide,  sold  under  the  "Roundup"  brand,  and  the  development  of  genetically 
modified crops. There was a degree of complementarity between  Bayer,  a leading player in 
crop protection, particularly in Europe, and the Monsanto businesses, the world’s leading seed 
supplier,  with  its  main  markets  in  the  Americas.  The  acquisition  of  Monsanto  by  Bayer 
created the biggest integrated agrochemical, trait and seed player worldwide and was viewed 
by some commentators and interested observers as transformative for the industry. 

After  a  comprehensive  in-depth  investigation,  the  Commission  identified  likely  harmful 
effects  of  the  concentration  on  product  and  innovation  competition  in  several  seeds,  traits, 
pesticides  and  digital  agricultural  markets.  Bayer  offered  far  reaching  remedies  comprising 
the  divestiture  of  its  entire  seeds  and  traits  business,  its  glufosinate  business  and  its  digital 
agriculture  efforts,  which  addressed  all  competition  concerns  including  those  related  to 
innovation.  This  remedy  package  was  sold  to  BASF,  which  the  Commission  approved  as  a 
suitable  buyer.  In  the  review  of  the  Bayer/Monsanto  transaction,  the  Commission  closely 
cooperated with many competition authorities around the world. 

300  Case  AT.40134  -  AB  InBev  beer  trade  restrictions  (previously  Limes).  See:  http://europa.eu/rapid/press-

release IP-17-5041 en.htm. 

301  See: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8084. 

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7. PHARMACEUTICAL AND HEALTH SERVICES SECTOR  

Overview of key challenges in the sector  

The  pharmaceutical  sector  and  the  health  sector  are  of  particular  societal  and  economic 
importance. Health and access to effective and affordable medicines are key concerns for the 
general  public.  The  economic  crisis,  demographic  evolution  and  changes  in  the  types  of 
diseases  affecting  EU  citizens  have  put  significant  constraints  on  public  health  budgets. 
Public spending on healthcare overall has over past decades increased to  between 5.7% and 
11.3% of GDP in the different Member States,302 and is expected to grow further. Spending 
on pharmaceuticals constitutes a significant share of government spending on healthcare.303  

together 

for  affordable  and 

On  28  January  2019,  the  Commission  published  a  report  to  the  Council  and  the  European 
Parliament  entitled  “Competition  enforcement  in  the  pharmaceutical  sector  (2009-2017)  - 
European  competition  authorities  working 
innovative 
medicines".304  This  report  provides  an  overview  and  examples  of  how  the  Commission  and 
the national competition authorities of the 28 Member States have enforced the EU antitrust 
and merger rules in the pharmaceutical sector over the period 2009-2017. The pharmaceutical 
sector  requires  close  competition  law  scrutiny.  The  report  explains,  in  response  to  concerns 
expressed  by  the  Council  and  the  European  Parliament,  how  enforcing  competition  law 
specifically  helps  to  safeguard  EU  patients’  access  to  affordable  and  innovative  medicines. 
Since  the  conclusion  of  the  Commission  inquiry  into  the  pharmaceutical  sector  in  2009,  
NCAs  have  adopted  a  wide  range  of  antitrust  decisions  against  pharmaceutical  companies. 
These imposed sanctions (fines over EUR 1 billion in total) and made binding commitments 
to  remedy  anti-competitive behaviour.  In its  task of overseeing that pharmaceutical  markets 
do not get overly concentrated due to mergers, the Commission in this period reviewed more 
than  80  transactions.  In  19  cases  competition  concerns  were  detected,  and  the  Commission 
cleared these mergers only after the companies offered to address concerns and to modify the 
transaction.   

Ensuring access to innovative, high quality healthcare and medicines at competitive prices is 
an  important  objective  in  competition  law  enforcement  in  the  pharmaceutical  and  health 
services sectors. Innovation can lead to increased healthcare benefits flowing from R&D into 
novel treatments and more efficient technologies which may reduce the cost of treatments, for 
example, by developing production processes that make it viable for cheaper medicines to be 
commercially  produced.  Competition  law  enforcement  can  complement  the  regulatory 
framework that exists in this sector. 

The  Commission’s  competition  enforcement  on  pharmaceutical  and  health  markets  fosters 
both  dynamic  competition,  which  leads  to  more  innovative  medicines,  and  effective  price 
competition, which contributes to more affordable medicines and treatments.  

302  The spending was 5.7% in Latvia and 11.3% in Germany in 2016. Source: OECD (2017), Health at a Glance 
2017: OECD Indicators, OECD Publishing, Paris, pp. 134-135. See: http://dx.doi.org/10.1787/health_glance-
2017-en. 

303  Pharmaceuticals sold in retail represented 16% of health expenditure on average across OECD countries in 
2015 (or the nearest year); this figure does not yet include expenditure on pharmaceuticals in hospitals. See: 
https://www.oecd-ilibrary.org/docserver/health_glance-2017-68-
en.pdf?expires=1551708629&id=id&accname=oid031827&checksum=EC3C51C8A5CC457130B602AD5C
A1F827. 

304   See: http://ec.europa.eu/competition/sectors/pharmaceuticals/report2019/index.html. 

83 

 
 
 
 
                                                           
  
Contribution of EU competition policy to tackling the challenges  

Antitrust enforcement in the pharmaceutical sector 

The Commission is actively monitoring and screening markets for diverse competition issues 
concerning  pharmaceuticals.  In  2018,  the  Commission  initiated  proceedings  in  two  cases 
where  it  is  investigating  firms  suspected  of  preventing  or  reducing    consumers’  access  to 
effective, innovative and affordable medicines.  

The  first  case  concerns  the  Commission's  formal  antitrust  proceedings  against  Aspen 
Pharma305  for  a  suspected  abuse  of  a  dominant  position  infringing  Article  102  TFEU.  The 
Commission  investigates  allegations  that  Aspen  may  have  imposed  unfair  and  excessive 
prices for a range of cancer medicines in all countries in the EEA except Italy.306 

The  second  case  concerns  the  Commission's  investigation  into  so-called  pay-for-delay 
practices  for  the  market  entry  of  generic  modafinil  (a  sleeping  disorder  medicine).  A 
Statement of Objections was sent to Teva regarding an agreement with Cephalon. According 
to the agreement, Teva undertook not to sell its generic modafinil products in the EEA.307 The 
Commission is in the process of concluding its investigation in the course of 2019. 

Merger review in the pharmaceutical sector 

The  Commission  continued  its  careful  review  of  mergers  in  the  pharmaceutical  sector,  to 
ensure  availability  of  affordable  medicines  to  patients  across  Europe,  and  to  protect 
innovation and choice for consumers. On 20 November 2018, the Commission approved the 
acquisition of Shire by  Takeda Pharmaceutical  Company308, subject to the divestment of a 
biologic treatment product under development by Shire to treat inflammatory bowel disease. 
The  Commission  had  identified  the  risk  that  that  Takeda  would  be  unlikely  to  continue 
developing Shire's new drug, causing a serious loss of innovation on a market where patients 
currently have few treatment options available to them.   

State aid actions in the health services sector 

The Commission  did  not adopt  any State  aid  decisions in  the field  of healthcare services in 
2018. In February 2018, however, the General Court annulled a Commission Decision from 
2014  concerning  funding  measures  to  public  health  insurance  companies  in  Slovakia.309 
Although the General Court confirmed the Commission’s finding that the Slovak compulsory 
health  insurance  system  had  predominant  social,  solidarity  and  regulatory  features,  the 
General  Court  nevertheless  rejected  the  Commission’s  conclusion  that  the  insurance 
companies  in  question did  not  constitute undertakings within the meaning of Article 107(1) 
TFEU on the ground that their activities were not economic in nature. The Commission has 
appealed the judgment before the Court of Justice (pending case C-262/18 P).  

305  Case AT.40394 Aspen. See: IP/17/1323 of 15 May 2017: http://europa.eu/rapid/press-release_IP-17-
1323_en.htm and http://ec.europa.eu/competition/antitrust/cases/dec_docs/40394/40394_235_3.pdf. 

306   The Italian competition authority already adopted an infringement decision against Aspen on 29 September 

2016. 

307   Case AT.39686 Cephalon, see: IP/17/2063 of 17 July 2017: http://europa.eu/rapid/press-release_IP-17-

2063_en.htm. 

308  M. 8955 - Takeda/Shire, See: http://europa.eu/rapid/press-release_IP-18-6497_en.htm. 
309  Case  T-216/15  Dôvera  zdravotná  poist’ovňa  v  Commission,  Judgment  of  the  General  Court  of  5  February 

2018, see: http://curia.europa.eu/juris/liste.jsf?language=en&num=T-216/15.  

84 

 
 
                                                           
8. TRANSPORT AND POSTAL SERVICES 

Overview of key challenges in the sector 

The  transport  and  postal  services  sectors  account  for  approximately  5%  of  the  EU 
economy,310 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 government.311  

In 2018, 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  and  a  modal  shift  to  more 
environmentally-friendly modes of transport, as well as 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 financial difficulties encoutered by two medium-sized 
European airlines, WOW and Flybe, which were looking for a strong partner to continue their 
development.  

In this context, the Commission reviewed the acquisition of sole control over LaudaMotion by 
the  air  carrier  Ryanair.312  LaudaMotion  is  the  company  through  which  Mr  Niki  Lauda  re-
acquired  in  January  2018  the  assets  of  NIKI,  the  leisure  air  carrier  he  founded  in  2003  and 
which was then later integrated into Air Berlin. The assets of NIKI were for sale because in 
December  2017  Lufthansa  decided  not  to  acquire  NIKI  and  NIKI  immediately  filed  for 
insolvency.  As  for  the  two  mergers  involving  Air  Berlin's  assets  that  the  Commission 
reviewed  in  2017,313  the  Commission  investigated  the  impact  of  the  transaction  from  two 
angles.  First,  the  Commission  assessed  the  effects  of  the  transaction  on  the  market  for  air 
transport  of  passengers,  more  specifically  on  the  routes  from  German,  Austrian  and  Swiss 
airports to leisure destinations in the Mediterranean and Canary Islands, where the activities 
of  Ryanair  and  LaudaMotion  overlap.  Second,  the  Commission  examined  whether 
LaudaMotion's portfolio of airport slots to be acquired by Ryanair at different airports would 

310  See  EU  transport  in  figures  Statistical  pocketbook  (2017).  See:  http://ec.europa.eu/transport/facts-
fundings/statistics/doc/2017/pocketbook2017.pdf, p.19; prepared by the Commission  with around EUR 664 
billion  in  Gross  Value  Added  (GVA)  at  basic  prices,  the  transport  and  storage  services  sector  (including 
postal and courier activities) accounted for approximately 5 % of total GVA in the EU-28 in 2016 (or 4.5 % 
excluding postal and courier services). 

311  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. 

312  Case M.8869 Ryanair/LaudaMotion, see: 

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8869.  

313  Cases M.8633 Lufthansa/Certain Air Berlin assets and M.8672 easyJet/Certain Air Berlin assets. 

85 

 
 
                                                           
allow  Ryanair  to  prevent  competitors  from  entering  or  expanding  their  presence  at  these 
airports. Control over a large slot portfolio at congested airports can result in higher barriers 
to entry for airlines wanting to operate to and from these airports, which in turn could result in 
higher fares for passengers. As no serious doubts arose either on the overlap routes or through 
the acquried slots, the Commission cleared the takeover unconditionally.   

In  2018,  in  the  framework  of  commitments  attached  to  previous  clearance  decisions,  a 
number of new applications highlighted increased interest  in  slots made  available under the 
Commission  commitments.  In  particular,  the  Commission  received  requests  for  additional 
slots by Flybe on the route connecting London Heathrow to Edinburgh,314 and by easyJet  on 
two  routes  connecting  London  Gatwick  to  Belfast  and  Dublin.315  Furthermore,  Transavia 
requested additional slots at  Ibiza for the city pair Paris-Ibiza under the commitments given 
by  Iberia  in  the  framework  of  the  Commission  clearance  decision  of  Iberia's  takeover  of 
Clickair and Vueling.316  

Antitrust enforcement in the aviation sector 

On 23 November 2018, the Commission opened proceedings under Article 101 TFEU against 
computerised reservation systems317 providers Amadeus and Sabre. The Commission suspects 
that  certain  terms  in  Amadeus'  and  Sabre's  agreements  with  airlines  and  travel  agents  may 
restrict competition for the provision of ticket distribution services, by limiting the ability of 
airlines and travel agents to use alternative suppliers of these services. 

On  30  October  2018,  the  Commission  decided  to  close  its  antitrust  investigation  into  a 
codeshare  agreement  between  Brussels  Airlines  and  TAP  Air  Portugal  relating  to  the 
Brussels-Lisbon route. Following a thorough analysis of all relevant evidence, including the 
parties'  responses  to  the  Commission's  statement  of  objections,  the  Commission  concluded 
that there were insufficient grounds to confirm its initial concerns. 

In early 2018, the Commission received an application from the airline  Norwegian for take-
off  and  landing  slots  at  Amsterdam  Schiphol  and  New  York  JFK  airports,  pursuant  to  the 
Commission's 2015 commitments decision relating to the Skyteam transatlantic joint venture. 
The Commission decided that Norwegian satisfied the conditions for the award of slots, and 
the Skyteam joint venture parties accordingly released three weekly slots at these two airports, 
enabling Norwegian to provide a daily service between Amsterdam Schiphol and New York 
JFK.  

314  Case  M.6447  IAG/bmi,  Commission  decision  of  12  November  2018  concerning  the  assessment  of  the 
viability  of  the  Applicant  and  evaluation  of  its  formal  bid  pursuant  to  Clause  1.4.9  of  the  Commitments 
attached to the Commission decision of 30 March 2012 in case M.6447 – IAG/bmi.  

315   Case M.7541 IAG/Aer Lingus, Commission decision of 12 November 2018 concerning the assessment of the 
viability  of  the  applicant  and  evaluation  of  its  formal  bid  pursuant  to  Clause  2.26  of  the  Commitments 
attached to the Commission decision of 14 July 2015 in case M.7541 – IAG/Aer Lingus.  

316  Case  M.  5364  Iberia/Clickair/Vueling,  Commission  decision  of  12  November  2018  concerning  the 
Assessment of the viability of Applicants and evaluation of their formal bids pursuant to Clause 1.4.9 of the 
commitments  attached 
-  
Iberia/Clickair/Vueling.   

the  Commission  decision  of  9  January  2009 

in  case  M.  5364 

to 

317  Computerised Reservation Systems ("CRS"), also known as Global Distribution Systems ("GDS") provide a 
technical  interface  between,  on  one  side,  airlines  and  other  travel  service  providers,  such  as  rail  operators, 
and, on the other side, travel agents (both online and brick-and-mortar). The CRSs aggregate fare, schedule 
and  availability  information  provided  by  the  airlines  and  supply  it  to  the  travel  agents,  enabling  them  to 
search for, compare, reserve and book flights, The CRSs give travel agents access to the services of hundreds 
of  airlines  worldwide  and  provide  airlines  with  a  distribution  channel  to  thousands  of  travel  agents 
worldwide. 

86 

 
                                                           
State aid to airports and airlines 

On 10 December 2018, the Commission adopted a communication prolonging until 2024 the 
specific regime for operating  aid  for  airports  with up to  700 000 passengers per  year in  the 
Aviation Guidelines adopted in 2014. The prolongation will provide legal certainty to airports 
with less than 700 000 passengers per year, and will align the period concerning operating aid 
for all airports.318  

In addition,  the Commission  continued to  apply  the 2014 Aviation  Guidelines.  In 2018, the 
Commission adopted several  decisions in  cases  involving operating aid  to  airports,319 or the 
operation  of  an  airport  as  a  service  of  general  economic  interest.320  The  Commission  also 
opened  proceedings  in  relation  to  marketing  agreements  at  Montpellier  airport,321  and  in 
relation to marketing agreements and potential aid to the airport at Frankfurt-Hahn.322  

The  Commission  intervened  in  many  occasions  to  support  Member  States  to  ensure  that 
investments  or  changes  in  concessions  they  are  planning  at  public  airports  are  market 
conform.  These  interventions  generally  require  in-depth  business  and/or  legal  analyses,  but 
are not necessarily the object of a Commission's decision. They are thus less publicized than 
cases  subject  to  a  decision.  Nevertheless  they  contribute  substantially  to  the  promotion  of 
market-conform practices. 

On  12  December  2018,  the  Commission  adopted  a  decision  finding  that  the  twenty-year 
extension of the concession for Athens International Airport 323 does not constitute State aid. 

In  April  2018,  following  complaints,  the  Commission  also  opened  a  formal  investigation 
procedure into a EUR 900 million bridging loan granted by Italy to its flag carrier Alitalia.324 
The company has been in financial difficulties for several  years and is currently looking for 
an investor. The investigation aims to establish whether the loan was granted on market terms 
or whether it involves State aid within the meaning of the EU rules. In the latter case, the loan 
needs to be in line with EU rules on the rescue and restructuring of companies in difficulty, to 
ensure that inefficient companies are not artificially kept alive with continued State support.  

Antitrust enforcement in maritime transport  

The Commission began a review of Commission Regulation 906/2009 ("the Consortia Block 

318  See: http://ec.europa.eu/transparency/regdoc/index.cfm?fuseaction=list&coteId=3&documentType 

=COMMUNICATION_FROM_COMMISSION&version=ALL. 

319   Case SA.46945 Erfurt-Weimar Airport, Commission decision of 15 November 2018, see:  

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_46945; Case SA.49709, 
Rostock Airport, Commission decision of 13 September 2018, see: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49709. 

320  Case SA.49482 Highlands and Island Airports Limited - Sumburgh Airport, Commission decision of 25 May 
2018, see: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49482. Case 
SA.49331 SGEI compensation for Bornholm Airport,  Commission decision of 16 April 2018, see: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49331; Case SA.49203 SGEI 
Compensation for Bacau Airport, Commission decision of 6 September 2018, see: 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49203. 

321   Case SA.47867 Aide présumée en faveur de Ryanair à l'aéroport de Montpellier, Commission decision of 5 
July 2018, see : http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_47867. 
322  Case  SA.43260  Alleged  aid  to  Frankfurt  Hahn  Airport  and  Ryanair,  Commission  decision  of  26  October 

2018, see: http://europa.eu/rapid/press-release_IP-18-6222_en.htm. 

323  See:  http://europa.eu/rapid/press-release_IP-18-6785_en.htm.  
324  Case  SA.48171  Complaints  against  alleged  State  aid  in  favour  of  Alitalia,  Commission  decision  of 
23/04/2018,  see:  at  http://ec.europa.eu/competition/state_aid/cases/274312/274312_1991247_21_2.pdf;  and 
IP/18/3501, see: http://europa.eu/rapid/press-release_IP-18-3501_en.htm.   

87 

 
                                                           
Exemption  Regulation"),325  with  a  view  to  informing  its  decision  on  the  future  of  the 
Regulation  in  view  of  its  statutory  expiration  on  25  April  2020.326  On  7  May  2018,  the 
Commission invited the public to comment on the evaluation Roadmap and on 27 September 
2018 the Commission launched a 12-week public consultation on the Regulation, inviting the 
public  to  respond  to  a  questionnaire  or  otherwise  make  its  views  known.327  In  addition, 
targeted  questionnaires  were  sent  to  groups  of  major  stakeholders  (shipping  companies, 
customers  and  ports)  and  the  Competition  authorities  of  the  Member  States  were  invited  to 
contribute.  

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.  

A wave of consolidation can be observed, which started in 2014 with the merger of  Hapag-
Lloyd and CSAV328 and intensified in 2016 and 2017. In 2018, the Commission assessed the 
acquisition of control over Container Finance Ltd Oy, of Finland, by the French group CMA 
CGM.329  Both  CMA  CGM  and  Container  Finance  provide  intra-European  door-to-door 
multimodal transport services and, to  a lesser extent, container terminal services and freight 
forwarding  services.  Due  to  its  limited  structural  impact  on  these  services  in  the  EEA,  the 
Commission cleared the merger without conditions.  

Moreover,  the  Commission  investigated  the  (reverse)  vertical  integration  of  Unifeeder,  of 
Denmark, into the DP World group, based in the United Arab Emirates.330 Unifeeder is active 
in the provision of maritime transportation services for containerised goods including feeder 
services (transport of cargo between hub ports and out-ports) and short sea services (transport 
of  cargo  from  point  to  point).  Unifeeder  operates  primarily  in  Northern  Europe  and  the 
Mediterranean. DP World is a global marine terminals operator. 

The Commission analysed whether the vertically integrated entity would have the ability and 

325  Council Regulation 246/2009 provides that, in accordance with the provisions of Article 101(3) TFEU, the 
Commission may, by way of Regulation, exempt consortia agreements from the application of Article 101(1) 
TFEU  for  a  period  limited  to  five  years  with  the  possibility  of  prolongation.  Accordingly,  in  2009  the 
Commission  adopted  the  Consortia  Block  Exemption  Regulation  which  sets  the  specific  conditions  for  the 
exemption  of  consortia  agreements.  These  conditions  notably  aim  at  ensuring  that  customers  enjoy  a  fair 
share of the resulting benefits. 

326   Liner shipping services consist of the provision of regular, scheduled maritime cargo transport on a specific 
route. They require significant levels of investment and therefore are regularly provided by several shipping 
companies  cooperating  in  "consortia"  agreements.  Consortia  can  lead  to  economies  of  scale  and  better 
utilisation of the space of the vessels. 

327   For 

the  Roadmap,  consultation  documents  and 

further 

information  on 

the  evaluation,  see: 

http://ec.europa.eu/competition/consultations/2018_consortia/index_en.html.  

328  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.  

329  Case  M.9016  CMA  CGM/Container  Finance,  Commission  decision  of  22  October  2018,  will  become 

available at: http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_merger_by_date. 

330   Case M.9093 DP WORLD INVESTMENTS / UNIFEEDER, Commission decision of 4 December 2018, will 

become available at http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_merger_by_date.  

88 

 
                                                           
incentive to foreclose customers. The Commission considered that, even if Unifeeder's feeder 
volumes  were  re-routed  to  DP  World's  terminals  in  Belgium,  France,  the  Netherlands,  the 
United Kingdom, or Cyprus, this would only have a limited impact on the capacity utilisation 
of  DP  World's  rivals  for  terminal  services.  The  majority  of  the  respondents  to  the 
Commission’s  market  investigation  did  not  foresee  any  significant  negative  impact  on  their 
companies due to the proposed transaction. For these reasons, the Commission concluded that 
the implementation of a customer foreclosure strategy by Unifeeder in Belgium, France, the 
Netherlands,  the  United  Kingdom,  or  Cyprus  would  be  unlikely  to  have  overall  negative 
effects on effective competition. The transaction was cleared without conditions. 

State aid enforcement in the maritime transport sector 

In  2018,  the  Commission  continued  to  ensure  compliance  with  the  Maritime  State  aid 
Guidelines.331  The  aim  of  those  Guidelines  is  to  maintain  the  European  maritime  sector's 
competitiveness.  The  Commission  is  determined  to  ensure  consistency  and  equal  treatment 
throughout the EU while at the same time making sure that the beneficial tonnage tax regimes 
do not contravene internal market rules.  

In  order  to  support  that  objective  and  ensure  compliance  with  the  Commission's  current 
interpretation of the Maritime State aid Guidelines, the Commission organized two technical 
meetings on the enforcement of the 2004 Guidelines on State aid to Maritime Transport with 
the Member States and sector representatives (both ship owners and seafarer representatives) 
on  13  and  21  June  2018  respectively.  In  these  meetings,  the  Commission  described  the 
technical  standards  that  it  had  progressively  developed  to  ensure  compliance  with  the 
objectives  of  the  Maritime  Guidelines  and  with  the  internal  market  rules  as  a  response  to 
questions of interpretation which arose over time regarding certain provisions of the guidelines.  

Moreover,  on  6  April  2018,  the  Commission  approved  the  first  tonnage  tax  and  seafarer 
scheme put in place by Portugal.332 The Commission found that the scheme would encourage 
ship registration in Europe and contribute to the competitiveness of maritime transport while 
preserving employment in the sector and promoting high environmental standards.  

On 12 July 2018, the Commission also approved State aid to five ferry connections between 
Croatian islands and the mainland to be operated as  services of general economic interest.333 
The aid will be granted to maritime companies selected through public tenders and will cover 
the  difference  between  revenues  from  ferry  tickets  and  the  cost  of  operating  the  ferries 
regularly so as to allow the islands' inhabitants to commute daily to work or study, as well as 
to transport vehicles and supplies to and from the islands. The Commission found that the aid 
is necessary to ensure operation of the routes with adequate frequencies over the whole year, 
since  ticket  revenues  exceed  the  cost  of  the  ferry  operations  only  during  the  summer  peak 
season. 

331  Communication from the Commission, Community guidelines on State aid to maritime transport, OJ C 13, 
17.01.2004, p. 3. See: http://eur-lex.europa.eu/legalcontent/EN/ALL/?uri=CELEX:52004XC0117(01). 
332  Case SA.48929 (2018/N) - Portugal - Tonnage Tax and Seafarer Scheme. See: http://europa.eu/rapid/press-

release_IP-18-2842_en.htm. 

333 Cases SA.48119 (2017/N) and SA.49523 (2017/N) – Croatia –SGEI – scheduled coastal maritime public 

transport on the ferry routes Nos 431, 432, 632 and 635. See:  
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48119. 
and http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49523.  

89 

 
                                                           
On 12 October 2018, the Commission approved the extension of an existing Danish tonnage 
tax scheme to new types of vessels334 (guard vessels, vessels servicing off-shore installations, 
and vessels for raising, repairing and dismantling wind turbines). The Commission considered 
that these types of vessels are involved in maritime activities that are subject to the same legal 
requirements  and  competitive  conditions  as  maritime  transport.  The  Commission  also  took 
into account commitments from Denmark to amend certain aspects of its existing tonnage tax 
scheme  to  align  it  with  the  Commission's  current  interpretation  of  the  Maritime  Guidelines 
(notably regarding ancillary services and bareboat chartering out activities). 

Furthermore,  the  Commission  approved  the  prolongation  of  the  Dutch  scheme335  and  the 
prolongation and extension of the French scheme336 for the reduction of social contributions 
for seafarers subject to the commitment by the Netherlands and France to open their schemes 
to all EEA-flagged vessels. 

Antitrust enforcement in the rail sector 

On 25 September 2018 the Commission adopted a Statement of Objections against the Slovak 
rail company ZSSK337 for obstruction of a Commission inspection. The Commission carried 
out  inspections  at  the  ZSSK  premises  in  June  2016.  The  inspection  focussed  on  whether  
ZSSK had entered into anti-competitive agreements aimed at excluding its competitors on the 
rail passenger market, in breach of EU antitrust rules.  

In  the  Statement  of  Objections,  the  Commission  took  the  preliminary  view  that  ZSSK  may 
have  obstructed  the  inspection  by  providing  incorrect  information  about  the  location  of  the 
laptop  of  one  of  its  employees  and  by  failing  to  provide  requested  data  from  this laptop  by 
allowing its re-installation. Therefore, ZSSK may not have fulfilled its obligation to comply 
with the inspectors’ requests under Regulation 1/2003. 

Rail and intermodal State aid enforcement  

In  2018,  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 modes.338 

334  Case SA.45300 - Denmark - Amendment of the Danish Tonnage Tax scheme (Extension of the tonnage tax 
scheme  to  cover  a  number  of  specialized  vessels).  See:  http://europa.eu/rapid/press-release_IP-18-
6107_en.pdf.    

335   Case SA. 46727 – The Netherlands - Prolongation of the extension of reduced remittances for maritime 
navigation to commercial cruising vessels, Commission decision of 7 November 2018, OJ C 462 of 21 
December 2018, p.1.  

336   Case SA. 46309 – France – Modification du régime d’allègement des charges sociales patronales des 

entreprises d’armement maritime, Commission decision of 20 December 2018. See: 
http://europa.eu/rapid/midday-express-20-12-2018.htm.   

337  Case AT.40565 ZSSK procedural case. See: IP/18/5905 of 25 September 2018 http://europa.eu/rapid/press-

release_IP-18-5905_en.htm.  

338   Case SA.49153 - Czechia - Aid for intermodal transport units, Commission decision of 15 May 2018, 

available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49153; Case  
SA.49518 - United Kingdom - Freight Facilities Grant, Commission decision of 15 October 2018, available 
at  http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49518; Case SA.49749 - 
Sweden - Environmental compensation for rail freight transport, Commission decision of 20 April 2018, 
available at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_49749; Case 
SA.50165  - Germany - Support for the promotion of energy efficiency in rail transport, Commission 

90 

 
 
 
 
 
                                                           
Moreover,  the  Commission  continued  its  investigation  into  State  measures  in  favour  of  the 
ailing  state-owned  Romanian  rail  freight  operator  CFR  Marfa,  opened  in  December  2017 
following  a  complaint  by  the  Association  of  Romanian  Private  Rail  Freight  Operators.339 
Since  the  liberalisation  of  the  Romanian  rail  freight  transport  market  in  2007,  numerous 
private  operators  have  successfully  entered  the  market,  which  is  highly  competitive.  It  is 
therefore  particularly  important  that  public  interventions  do  not  relieve  selected  companies 
from  normal  business  costs  that  their  competitors  have  to  bear.  The  Commission’s 
investigation focuses on a debt-to-equity swap of around EUR 360 million as well as the non-
collection  of  social  security  debts,  taxes  and  debts  towards  the  public  rail  infrastructure 
manager  CFR  Infrastructure.  The  Commission  will  examine  whether  these  measures  have 
procured CFR Marfa an unfair economic advantage over its competitors.   

In  January  2018,  the  Commission  opened  an  in-depth  investigation  into the  restructuring  of 
Polish  Regional  Railways.340  the  largest  passenger  regional  rail  operator  in  Poland.  The 
company  has  been  in  financial  difficulties  for  some  time.  In  2015,  Poland  notified 
restructuring  aid  of  around  EUR  188  million  in  favour  of  the  company.  Under  EU  rules, 
companies in difficulty  can receive restructuring aid only once in ten  years (the “one-time / 
last-time”  principle).  This  is  to  avoid  that  ailing  firms  rely  on  public  funding  to  stay  in 
business,  instead  of  improving  their  business  performance  and  competing  on  the  merits. 
During  its  investigation,  the  Commission  found  that  Polish  Regional  Railways  had  already 
received  State  support  in  the  past.  The  Commission  now  has  to  determine,  in  particular, 
whether this past aid qualifies as restructuring aid and whether the 2015 restructuring support 
is in line with the one-time/last-time principle.  

State aid review in the road sector 

The  Commission  continued  to  enforce  Regulation  (EC)  No  1370/2007  on  public  passenger 
transport services.341  

Recent  case  law342  has  confirmed  the  Commission  approach  on  the  application  rationae 
temporis  of  the  application  of  the  above-mentioned  Regulation.  More  specifically,  these 

decision of 26 July 2018, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_50165; Case SA.50217 - 
Sweden - Swedish Eco-bonus scheme for short sea shipping and inland waterway transport, Commission 
decision of 9 November 2018, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_50217; Case SA.50395 - 
Germany - Offshore-surcharge reduction for railway undertakings in Germany, Commission decision of 27 
March 2018, available at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_50395; Case  SA.50584 - 
Belgium - Structural aid measure reducing the cost disadvantage of bundling volumes transported by 
rail/inland waterways to and from Flemish seaports in order to promote a modal shift Commission decision 
of 24 October 2018, available at  
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_50584.  

339  Case  SA.43549  -  Alleged  aid  to  CFR  Marfa,  Commission  decision  of  18  December  2017,  available  at 
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_43549;  and  IP/17/5345,  see: 
http://europa.eu/rapid/press-release_IP-17-5345_en.htm. 

340  Case  SA.43127  Restructuring  of  the  Polish  Regional  Railways,  Commission  decision  of  23  January  2018, 
see:  http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_43127;  and  IP/18/394, 
see: http://europa.eu/rapid/press-release_IP-18-394_en.htm. 

341   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. 

342  Judgement T720/16 Arfea v Commission and Judgements T185/15 Buonotourist v Commission and T186/15 

CSTP v Commission. 

91 

 
                                                                                                                                                                                     
judgments  confirmed  that  the  compatibility  of  public  measures  adopted  in  the  past  but 
continuing having effects (i.e. they continue to provide aid), are assessed not on the basis of 
old  rules  but  on the basis  of the rules which are  applicable at  the moment  the aid  measures 
produce  effects  that  fall  within  the  scope  of  the  new  rules,  unless  the  new  rules  explicitly 
exclude them from their scope. 

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 distort competition 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  February 2018, the Commission  approved in  two decisions two sets  of compensations in 
favour of Czech Post: the first one amounting to CZK 2.6 billion (around EUR 97 million) for 
the delivery of the universal postal service over 2013-2017343 and the second one amounting 
to  CZK2.3  billion  (around  EUR  86  million)  for  the  provision  of  a  Data  Boxes  Information 
System over the period 2018-2022.344 

In  May  2018,  the  Commission  also  approved  compensations  in  favour  of  Post  Denmark 
amounting  to  DKK  1.2  billion  (around  EUR  160  million)  for  the  delivery  of  the  universal 
postal service over 2017-2019.345 

Finally, in July 2018, the Commission concluded its investigation in the Correos346 case with a 
negative  decision  with  recovery.  The  Commission  found  that  Correos,  the  publicly-owned 
Spanish postal operator, was overcompensated for the delivery of its universal postal service 
obligation between 2004 and 2010, and also benefited from incompatible tax exemptions. The 
recovery amounted to EUR 167 million.  

Anti-trust Enforcement in Legal Services 

In early 2018, the Commission raised concerns about the compatibility with the competition 
rules  of  the  Cyprus  Bar  Association’s347  minimum  fees  scale  for  out-of-court  work.  In  this 

343  Case  SA.45281  (2017/N)  and  State  Aid  SA.44859  (2016/FC)  –  Czech  Republic  –  State  compensations 

granted to Czech Post for the provision of the universal postal service over the period 2013-2017. 

344  Case SA.47293 (2017/N) – Czech Republic – State compensations granted to Czech Post for the provision of 

the Data Boxes Information System over the period 2018-2022. 

345   Case SA.47707 SA.47707(2018/N) – Denmark – State compensations granted to PostNord for the provision 

of the universal postal service. See: http://europa.eu/rapid/press-release_IP-18-3965_en.htm.  

346   Case SA.37977 Complaint regarding unlawful State aid in favour of Sociedad Estatal Correos y Telégrafos, 

S.A. See: http://europa.eu/rapid/press-release_IP-18-4444_en.htm.   
347  See: http://europa.eu/rapid/press-release_MEMO-18-6247_en.htm. 

92 

 
                                                           
context  out-of-court  work  includes  for  instance  the  drawing  up  of  wills  and  contracts,  the 
administration of estates and the registration of companies.  

The  relevant  minimum  fees  for  out-of-court  work  had  been  adopted  by  the  Cyprus  Bar 
Association  pursuant  to  legislation  adopted  by  the  Cypriot  State  (the  Advocates’  Law). 
Member  States  are  required  under  Article  4  (3)  TEU  to  sincerely  cooperate  in  applying  the 
competition  rules.  The  Commission  took  the  preliminary  view  that  the  Cypriot  State,  by 
empowering  the  Cypriot  Bar  Association  to  adopt  the  minimum  fee  scale,  had  failed  in  its 
duty  to  sincerely  cooperate  in  applying  the  competition  rules.  Moreover,  the  Commission  
raised  concerns  with  the  Cypriot  authorities  that  certain  provisions  of  the  Advocates’  Law 
were  incompatible  with  EU  competition  rules.  In  response  to  the  concerns  raised,  Cyprus 
amended  the  legislation  in  question  by  removing  the  specific  provision  empowering  the 
Cyprus  Bar  Association  to  set  these  fees.  In  response  to  the  Commission’s  concerns,  the 
Cyprus Bar Association abrogated the minimum fee scale, and the Commission could close its 
antitrust investigation in November 2018.   

93 

 
ANNEX  

Banking State aid cases: Decisions adopted by the Commission in 2018 

By country 

Member States 

Case Number/Title 

Type of Decision 

Date of 
Adoption 

1 

2 

3 

4 

5 

Austria 

SA.48840(2018/N) -  

Austrian Risk Capital Premium 
Scheme 

Decision not to raise 
objections 

11/07/2018 

Cyprus 

SA.35334(2018/N-2) - 

Liquidation aid for the orderly market 
exit of Cyprus Cooperative Bank Ltd 

Decision not to raise 
objections 

19/06/2018 

Cyprus 

SA.35334(2018/N-3) - 

Liquidation aid for the orderly market 
exit of Cyprus Cooperative Bank Ltd 

Decision not to raise 
objections 

28/08/2018 

Denmark 

SA.51200(2018/N) - 

Prolongation of the winding-up scheme 
for small banks 

Decision not to raise 
objections 

31/08/2018 

Greece 

SA.51087(2018/N) - 

Prolongation of the Greek State 
Guarantee Scheme for banks (Art. 2 
law 3723/2008) 

Decision not to raise 
objections 

07/06/2018 

6 

Ireland 

SA.52132(2018/N) - 

Eighth prolongation of the Credit Union 
restructuring and stabilisation scheme 

Decision not to raise 
objections 

08/11/2018 

7 

8 

Ireland 

SA.50953(2018/N) - 

13th prolongation of the Credit Union 
Resolution Scheme 2018 

Decision not to raise 
objections 

25/05/2018 

Ireland 

SA.50692(2018/N) - 

Seventh prolongation of the Credit 
Union restructuring and stabilisation 
scheme  

Decision not to raise 
objections 

30/04/2018 

9 

Italy 

SA.51026(2018/N) - 

Prolongation of the Italian guarantee 
scheme for the securitisation  of non-
performing loans 

Decision not to raise 
objections 

31/08/2018 

10 

Italy 

SA.50640(2018/N) - 

Italy - liquidation scheme for small 
banks 

Decision not to raise 
objections 

13/04/2018 

11 

Netherlands 

SA.48350(2017/N) -  Uitgebreide groeifaciliteit – 

Nederlandse garantieregeling voor 
middelgrote en grote ondernemingen 
met een aanzienlijk groeipotentieel – 
Nederland 

Decision not to raise 
objections 

26/03/2018 

12 

Netherlands 

SA.48197(2018/N) - 

Groeifaciliteit 

No aid decision 

09/07/2018 

13 

Poland 

SA.51482(2018/N) -  

Eighth prolongation of the Credit 
Unions Orderly Liquidation Scheme 

Decision not to raise 
objections 

31/08/2018 

2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
14 

Poland 

SA.51403(2018/N) -  

Second prolongation of the resolution 
scheme for cooperative banks and 
small commercial banks 

Decision not to raise 
objections 

10/08/2018 

15 

Poland 

SA.51235(2018/N) -  

Eighteenth prolongation of the Polish 
bank guarantee scheme 

Decision not to raise 
objections 

11/07/2018 

16 

Portugal 

SA.51042(2018/N) -  

17th Extension of the Portuguese 
Guarantee Scheme 

Decision not to raise 
objections 

09/08/2018 

17 

Portugal 

SA.51041(2018/N) -  

Ninth Prolongation of the Portuguese 
Guarantee Scheme on EIB lending 

Decision not to raise 
objections 

09/08/2018 

18 

Slovenia 

SA.33229(2017/N-3) -  

19 

Slovenia 

SA.33229(2018/N-4) -  

20 

United 
Kingdom 

SA.49923(2018/N) -  

Amendment of the restructuring 
commitments of Nova Ljubljanska 
Banka d.d. 

Amendment of the restructuring 
commitments of Nova Ljubljanska 
Banka d.d. 

Amendments to the existing aid 
scheme "Enterprise Investment 
Scheme" and "Venture Capital Trust 
scheme" 

Positive final decision 

10/08/2018 

Decision not to raise 
objections 

10/08/2018 

Decision not to raise 
objections 

05/07/2018 

3