Brussels Brief - June 23, 2006
June 23, 2006
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KEY DEVELOPMENTS
Air Transport: Transfer of Passenger Data
Philip Torbøl
The European Commission has asked the Council to terminate the EU-US agreement on the transfer of passenger data by European airlines to United States customs authorities. According to a recent judgment of the European Court of Justice, the Internal Market provisions of the EC Treaty were not an appropriate legal basis for the agreement (see Brussels Brief of 2 June 2006). In addition to termination of the agreement, the Commission has asked the Council for a mandate to begin negotiations with the US on a new agreement incorporating the same content as the existing agreement, but based upon the EU Treaty's provisions on security and criminal law. The Council is expected to decide upon the Commission’s proposals within the next few weeks.
Intellectual Property: EU-US Action Programme to Tackle Global Piracy
Elena Kostadinova
At a Summit in Vienna on 21 June the EU and US launched a joint action programme to combat counterfeiting. This programme provides for closer cooperation between EU and US customs officials, including joint border enforcement actions. In addition, the EU and US will aim at joint enforcement of IP rights in third countries through the creation of teams of EU and US diplomats in third country embassies who will be specially assigned with data and intelligence sharing, and have joint surveillance responsibilities. EU and US officials also undertook to intensify their collaboration with the private sector. The focus will be to make best use of existing legislation. Initial efforts will be directed at China and Russia and later expanded to Asia, Latin America and the Middle East.
Mergers: Commission Approves Acquisition of Dow SAP Business by Degussa
Yannis Virvilis
The European Commission has cleared the acquisition by German company Degussa of the superabsorber polymer (SAP) business of US company Dow. SAPs have the characteristic of absorbing and retaining large volumes of fluids and are used mainly in hygiene and personal care products such as baby nappies, feminine hygiene products and incontinence pads. The Commission’s investigation found that, even if the present acquisition resulted in Degussa becoming the leading provider of SAPs worldwide, effective competition in the market would still not be affected due to the existence of: (i) global SAP producers such as BASF and Nippon Shokubai; and (ii) customers with significant countervailing market power such as Procter & Gamble and Kimberly Clark.
Mergers: In-Depth Investigation Opened into Gaz de France and Suez Group Merger
Andrea Hamilton
The European Commission has opened an in-depth inquiry into the planned merger of Gaz de France (GDF) and Suez Group. The transaction would create the world’s fourth largest energy company, combining French State-owned GDF, with Suez, a provider of energy, water, and environmental services. Both companies are primarily active in the French, Belgian, and UK energy markets. The Commission has expressed concerns that the transaction could adversely affect competition in Belgium’s gas and electricity markets and France’s gas market. The French Government had previously announced that GDF would be privatised by merging with Suez, thwarting a potential bid from rival Italian energy group Enel. Following the Commission’s announcement, Suez reported that its merger with GDF was still on track, although the French Government reportedly announced that GDF’s privatisation would be delayed until autumn.
Competition: Commission Sends Statement of Objections to Members of SkyTeam
Michal Cieplinski
The European Commission has confirmed that it has issued a Statement of Objections to members of the SkyTeam airline alliance. The Commission informed the alliance that it has concerns about a number of routes upon which the SkyTeam cooperation may have a negative effect on competition and infringe Article 81 of the EC Treaty. The Commission is especially concerned about routes between the EU and US, between the EU and other third countries, and within the EU. SkyTeam carriers do not face any significant competition pressure on those routes from carriers outside the alliance. On the other hand, the Commission has already approved in earlier proceedings the intra-EU agreements on routes between France and the Netherlands, and between France and Italy.
Telecommunications: More Effective Competition Regulation in Germany
Maria Scimemi
In order to enhance competition and consumer protection against excessive pricing by Deutsche Telekom (DT), the Commission has invited the German regulator, Bundesnetzagentur (BNetzA), to ensure increased effectiveness of the regulatory measures it proposed concerning the access market and the market for national calls. These measures were the result of BNetzA’s findings in December 2005 on DT’s significant market power on the retail access market and on the market for local and national calls. In line with EU telecom rules, BNetzA is reminded that carrier (pre-)selection services, which allow the end-user to select a carrier of its choice for certain calls, must be provided at a price based on actual costs. Moreover, direct charges to subscribers must not act as a disincentive for the use of such facilities, and accounting separation requirements should also be imposed on DT.
External Relations: Chinese Government to Consider Anti-Monopoly Law
Lara Kuehl
European Commissioner Neelie Kroes recently met Ma Xiuhong, the Chinese Vice-Minister in charge of Competition, to discuss the draft Anti-Monopoly Law approved by the Chinese State Council on 7 June 2006. The draft is the result of the formal EU-China Competition Policy Dialogue which began in 2004. It is aimed at preventing multi-national corporations from gaining monopoly status through foreign investment, mergers or acquisitions. This could affect companies such as Microsoft and TetraPac, both of which hold large market shares in China (approaching 95 per cent). Neelie Kroes congratulated the Chinese Government, saying that the proposed new law would benefit Chinese and foreign companies alike, and that it was an important step towards effective competition. The draft law will be submitted to the National People's Congress for possible adoption by the end of 2006 or early 2007.
Consumer Protection: Alternatives to Animal Testing
Philip Bentley QC
European consumers want to see a reduction in the number of animal tests carried out to meet the high safety standards in areas such as pharmaceuticals, chemicals, cosmetics, biotechnology and food. The challenge is to develop alternative methods that provide at least the same level of consumer safety as animal tests. The new European Partnership on Alternatives to Animal Testing published its action programme this week aimed at refining, reducing and replacing the use of animal testing. Also this week, the Commission published guidelines for labelling cosmetics as “not tested on animals”, setting out common criteria to ensure that such claims do not mislead the consumer or lead to unfair competition.
NEXT WEEK’S EVENTS
Monday 26 June – Friday 30 June 2006
COUNCIL MEETINGS
Environment Council (26 – 27 June 2006)
Special Meeting General Affairs and External Relations Council (Session on External Relations) (29 June 2006)
COURT OF JUSTICE
Judgments
Agriculture
C-487/04 Commission v Italy
Area of Freedom, Security and Justice
C-540/03 Parliament v Council
Competition
C-289/04 P Showa Denko v Commission
C-301/04 P Commission v SGL Carbon AG
C-308/04 P SGL Carbon v Commission
Environment and consumers
C-191/05 Commission v Portugal
Opinions
Competition
C-238/05 ASNEF-EQUIFAX
Freedom of establishment
C-524/04 Test Claimants in the Thin Cap Group Litigation
Intellectual property
C-36/05 Commission v Spain
Privileges and immunities
C-437/04 Commission v Belgium
COURT OF FIRST INSTANCE
Judgments
Competition
T-177/04 easyJet v Commission
T-304/02 Hoek Loos v Commission
