Brussels Brief - October 20, 2006
October 20, 2006
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KEY DEVELOPMENTS
Internal Market: Commission Proposes to Open Postal Services to Competition by 2009
Michal Cieplinski
The European Commission has adopted a proposal to open fully to competition EU postal markets to competition by 2009, in line with the agreed target date set out in the current EU Postal Directive. Full market opening will mean that national operators will no longer have a monopoly on mail weighing less than 50 grammes, known as the “reserved area”. The proposal maintains the current obligations on Member States to ensure a high-quality universal service comprising of at least one delivery and collection five days a week for every EU citizen. The obligation to ensure affordability of postal services is maintained in the proposal, as is the possibility for Member States to impose a uniform tariff for single piece items such as consumer mail. In the event that costs of providing a universal service need to be covered, Member States will be able to choose from a range of options, including State aid, public procurement, compensation funds and cost sharing.
Internal Market: Germany Taken to ECJ for Restricting Free Movement of Medicines
Elena Kostadinova
The European Commission has decided to issue proceedings against Germany before the European Court of Justice (ECJ) for restricting the free movement of medicines supplied to hospitals. According to the Commission, certain provisions in German law which regulate pharmacies indirectly preclude pharmacies established in other Member States from selling medicines to German hospitals. In particular, pursuant to this law, hospitals must conclude a contract with the pharmacies approved by the competent authorities, but the contract will only be approved if it contains certain clauses that oblige the pharmacy to: (i) supply medicines immediately in emergency situations; (ii) provide personal counselling when requested by the hospital; and (iii) appoint a representative for a member of the hospital’s medicines committee. According to the Commission, this combination of medicine supply with additional services makes it very difficult for pharmacies established in other Member States to compete on the German market. The Commission considers that such requirements are incompatible with the internal market.
Competition: Sweden Taken to ECJ over Digital Broadcasting Monopoly
Philip Torbøl
Following several warnings by the European Commission to Sweden that its maintenance of a monopoly in the distribution of digital television broadcasts infringes EC competition law, the Commission has decided to refer the matter to the European Court of Justice (ECJ). At the moment, Swedish consumers can only access these high-technology broadcasts, including pay-TV services, by using equipment provided by the State-owned company Boxer TV-Access AB. The monopoly is of particular concern to the Commission as the broadcasting technology using Digital Terrestrial Transmission has been implemented in most EU Member States while analogue broadcasts are being phased out.
Mergers: Commission Initiates Infringement Proceedings Against Spain for the Endesa/E.ON merger
Yannis Virvilis
The European Commission has sent a letter of formal notice to Spain for not lifting the conditions that were imposed by the Spanish Energy Regulator (“CNE”) following the clearance of the E.ON bid for the Spanish energy company Endesa. A formal notice is the first stage of infringement proceedings against a Member State. At the end of September, the Commission adopted a formal decision finding that Spain had breached the EC Merger Regulation. The breach of the EC Merger Regulation consisted of CNE (i) adopting a decision without prior communication to, and approval by, the Commission; and (ii) submitting the clearance of the merger to a number of conditions going against the principles of freedom of establishment and free movement of capital.
Internal Market: Germany Amends Plant Protection Products Legislation Following Infringement Proceedings
Alexandra Rogers
The European Commission has terminated infringement proceedings against Germany after Germany brought its legislation concerning the parallel importation of plant protection products into line with EU law. The Commission had brought proceedings before the European Court of Justice (ECJ) to put an end to the infringement. The Commission believed that by failing to grant parallel importers a reasonable period in which to liquidate their stocks following the withdrawal by the manufacturer of a licence to sell a plant protection product, Germany was infringing the EU principle of the free movement of goods. After the Commission’s opinion was confirmed by the ECJ, Germany amended its legislation to provide parallel importers with a one-year period in which to clear their stocks after revocation of the licence. Plant protection products include any substance intended for preventing, destroying or controlling any pest or disease during the production, storage, transport and distribution of food, agricultural commodities or animal feeds.
Internal Market: Infringement Proceedings Against Malta for Failure to Abolish Petroleum Products Monopoly
Maria Scimemi
The European Commission has opened infringement proceedings against Malta for its failure to abolish the existing monopoly for the importation, storage and wholesale of petroleum products. Under the Accession Treaty, Malta was required to undertake the liberalisation of the energy import and distribution markets by 1 January 2006. According to the Treaty, Member States are obliged to adjust any State monopolies of a commercial nature so as to ensure that no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of different Member States In order to comply with EU law, Malta should have ensured that petroleum products could be traded through a licensing system. However, trading licences are yet to be issued and Enemalta Corporation remains the only company authorised to import petroleum for the inland fuel market.
Taxation: Commission Initiates Second Infringement Action Against Spain
Andrea Hamilton
The European Commission has opened a second infringement action against Spain for failing to comply with a European Court of Justice (ECJ) decision on its capital gains tax legislation. The law at issue assessed a lower tax rate on capital gains earned on shares of companies traded on Spanish financial markets than on shares traded elsewhere. The ECJ ruled in 2004 that the legislation violated the principles of free provision of services and movement of capital. The Commission now contends that Spain has not complied with the ECJ decision, dismissing as insufficient Spain’s (i) amendments to the law; and (ii) claim that the law, as interpreted by Spain’s Tax Authority, now extends the domestic tax rate to all capital gains. Ultimately, Spain may be subject to a fine if it is found to be in non-compliance with the ECJ decision.
Taxation: Greece Requested to End Discriminatory Taxation of EU Dividends
Geert Dierickx
Dividends paid by Greek companies to individual shareholders are exempt from income tax in Greece. The aim of this exemption is to avoid double taxation of company profits. However, dividends paid by companies of other Member States to individual shareholders in Greece are taxed. According to the Commission, such a difference in treatment constitutes a restriction on the free movement of capital. Therefore, the Commission has requested Greece to abolish discriminatory taxation of dividends paid by companies of other Member States. If Greece does not reply satisfactorily to the Commission within two months, the Commission may refer the case to the European Court of Justice.
State Aid: Commission Requests Court to Fine Greece for Failure to Comply with 2002 Olympic Airways Decision
James Arneill
The European Commission has applied to the European Court of Justice (ECJ) to impose a lump sum penalty and a periodic penalty on Greece, for its failure to implement the Commission’s 2002 decision relating to the recovery of €160 million in State aid granted to Olympic Airways. The ECJ had already confirmed Greece's failure to comply with the decision in its judgment of 12 May 2005. The Commission has requested that the ECJ impose a lump sum penalty of €10,512 for each day since the 2005 ECJ ruling, until Greece effectively implements its 2002 decision. The Commission further requests that the ECJ impose a periodic payment of €53,611 per day on Greece, from the date of the second ECJ ruling, if the 2002 decision has not been implemented by that time. The Commission had authorised, in 1994, an initial restructuring plan for Olympic Airways, with two additional positive decisions in 1998 and 2000 allowing for amendments to the plan. However Greece’s implementation of the plan did not respect the commitments which it made at that time.
Monday 23 October – Friday 27 October 2006
COUNCIL MEETINGS
Environment Council (23 October 2006)
Agriculture and Fisheries Council (24 October 2006)
COURT OF JUSTICE
Judgments
Agriculture
C-248/04 Koninklijke Coöperatie Cosun
C-275/05 Kibler
C-206/05 Commission v Sweden
Approximation of laws
C-65/05 Commission v Greece
C-317/05 G. Pohl-Boskamp
Area of Freedom, Security and Justice
C-102/06 Commission v Austria
Citizenship of the Union
C-192/05 Tas-Hagen and Tas
Common Customs Tariff
C-250/05 Turbon International
Company law
C-302/05 Commission v Italy
Customs union
C-68/05 P Koninklijke Coöperatie Cosun v Commission
Environment and consumers
C-168/05 Mostaza Claro
C-239/04 Commission v Portugal
C-94/06 Commission v Austria
C-152/06 Commission v Finland
C-154/06 Commission v Finland
C-77/06 Commission v Luxembourg
C-159/06 Commission v Finland
External relations
C-4/05 Güzeli
Freedom of movement for persons
C-371/04 Commission v Italy
Intellectual property
C-36/05 Commission v Spain
C-198/05 Commission v Italy
Privileges and immunities
C-199/05 Communauté européenne
Taxation
C-345/05 Commission v Portugal
Opinions
Agriculture
C-441/05 Roquette Frères
Approximation of laws
C-391/04 Georgakis
C-246/05 Häupl
Common foreign and security policy
C-354/04 P Gestoras Pro Amnistía and Others v Council
C-355/04 P Segi and Others v Council
Economic policy
C-359/05 Estager
Intellectual property
C-29/05 P Office for Harmonisation in the Internal Market v Kaul
C-412/05 P Alcon v Office for Harmonisation in the Internal Market
COURT OF FIRST INSTANCE
Judgments
Commercial policy
T-274/02 Ritek and Prodisc Technology v Council
Intellectual property
T-13/05 Castell del Remei v OHMI - Bodegas Roda (ODA)
