Brussels Brief - October 6, 2006
October 6, 2006
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KEY DEVELOPMENTS
Trade: EU imposes shoe duties on China and Vietnam
James Arneill
The EU has agreed to impose anti-dumping duties on imports of shoes with leather uppers from China and Vietnam. The duties will last for a two year period, and will come into force on 7 October 2006. A five-year proposal tabled by Trade Commissioner Peter Mandelson was rejected. A tariff of 16.5 per cent will be imposed on shoes from China, with a tariff of 10 per cent being imposed on shoes from Vietnam. The vote was categorised by a typical north/south divide, with the southern Member States, led by Italy, pulling together. Nine Member States voted in favour, with four abstaining, abstentions counting as a "yes" vote. China had previously stated that it would launch a case against the EU at the WTO if the duties were imposed. The vote came on the same day as Peter Mandelson unveiled a review of the effectiveness of trade defence instruments.
Competition: Commission Proposes Amendments to Leniency Notice
Andrea Hamilton
The European Commission has published draft amendments to its 2002 Notice on Immunity from Fines and Reduction of Fines in Cartel Cases (Leniency Notice). The draft amendments propose several specific changes, including clarification of the conditions to obtain and maintain leniency. The draft amendments align Leniency Notice with the recently announced Model Leniency Programme of the European Competition Network (ECN). This initiative is followed by the heads of Member States’ competition authorities who also have agreed to align their national leniency policies with the ECN Model. The Commission expects that the harmonisation of Community and national leniency policies will create a “one stop leniency shop” that will streamline the process for companies seeking immunity from fines through the programme. Interested parties are invited to comment on the draft amendments by 27 October 2006.
Mergers : Public Consultation on Commission’s draft Notice on Jurisdiction
Yannis Virvilis
The European Commission has published a draft Notice on jurisdictional issues relating to EC Merger Control, and invites third parties to submit their comments by 1 December 2006. This Notice is basically a consolidation of four existing notices on: (i) The concept of Concentration, (ii) The Concept of full-function Joint Ventures, (iii) The concept of undertakings concerned, and (iv) Calculation of turnover. These four notices were adopted in 1998. The new draft Notice reflects the changes that were made to EC merger control in the light of the new EC Merger Regulation, which entered into force in 2004, recent case-law of the European Courts and the Commission’s recent merger decisions.
Competition: Commission to extend the probe into Microsoft’s Vista
Michal Cieplinski
The European Commission has widened its investigation into Microsoft’s Vista operating system, following complaints concerning the encryption and handwriting recognition software which is to be included in the product. This software will be available free of charge in the Vista premium editions. Several software security companies have informed the Commission that Microsoft is withholding vital information which would enable them to run their own security software on the new system. Also, according to the security software industry, Microsoft’s built-in features cannot be disabled even if the customer decides to purchase and use different security software. Finally, Adobe Systems has expressed concerns over Microsoft's decision to include a free XPS format reader in its Vista operating system, which could reduce Adobe’s sales of its Acrobat software.
Agriculture: Member States To Be Fined For Milk Overproduction
Alexandra Rogers
The Commission calculates that ten EU Member States face EUR 377 million in fines for exceeding milk production quotas this year (2005/06). Over 90 per cent of the fine is attributable to Italy, Poland and Germany. Poland, however, is likely to be able to reduce its fine, currently EUR 91 million, by using an arrangement whereby it can convert unallocated direct sales quota to delivery quota. Quotas are used in the marketing of cows’ milk in the EU to ensure a balance between supply and demand. Each State is allocated two reference quotas, one for deliveries to dairies and one for direct sales to consumers. Where a State surpasses its quota, a levy is payable by the producers who caused the overrun. The current rate of the fine is EUR 0.3091/kg. Although the fines appear to be reducing the overproduction problem, they are unpopular with several Member States and are likely to be phased out in 2014/15.
Air transport: EU-US negotiations on transfer of passenger data
Melanie Bruneau
The EU and US have still not reached agreement on new arrangements for the transfer of passengers’ personal data between their respective territories. The deadline set for reaching a new agreement was 1 October 2006, the date when the former agreement was effectively terminated following an ECJ ruling in May 2006. The Commission and the US have agreed that negotiations will continue. Until a new deal is reached, airlines will have to make their own arrangements with the US authorities regarding the transfer of data if they want to avoid heavy fines. The US has warned that it could take steps, including fining airlines EUR 4,700 per passenger or revoking landing rights, if the required data are not handed over. A draft agreement, communicated on 30 September by the US to the Commission, should be discussed during the 6 October meeting of the Council of Justice and Home Affairs Ministers in Luxembourg in the hope of reaching agreement the same day.
Competition: Commission revises Block Exemption for IATA passenger tariff conferences
Maria Scimemi
The European Commission has revised certain exemptions from competition rules granted to passenger tariff conferences organised within the International Air Transport Association (IATA). Since 1993, these exemptions have allowed air carriers to agree on prices for "interlining", i.e. journeys where passengers buy and use one ticket to travel with two or more airlines. The Commission considers that such price agreements appear to facilitate interlining on routes to third countries, but do not benefit passengers on routes within the EU. The exemption to agree prices for interlining within the EU will therefore be withdrawn with effect from 1 January 2007. The Commission has also decided to revoke the exemption from competition rules for IATA slots and scheduling conferences with effect from the same date. Regarding prices on interlining on routes between the EU and non-EU countries, the exemption is maintained for now, but the effects of this exemption will be monitored and re-assessed before the end of 2007.
State aid: Commission against French post guarantees
Geert Dierickx
The Commission recommended that France end the unlimited state guarantee it provides to the French Post Office (La Poste) by 2008. The Commission examined the guarantee under which the state is responsible for liabilities entered into by La Poste. The fact that the guarantee is unlimited allows La Poste to obtain finance on more favourable terms. This gives La Poste an unfair advantage over private sector competitors and distorts competition on a market which is in the liberalization process. France has one month to respond to the Commission's recommendation.
NEXT WEEK’S EVENTS
Monday 9 October – Friday 13 October 2006
COUNCIL MEETINGS
Economic and Financial Affairs Council (ECOFIN) (10 October 2006)
Transport, Telecommunications and Energy Council (12 October 2006)
COURT OF JUSTICE
No judgments or opinions scheduled for next week
COURT OF FIRST INSTANCE
Judgments
Intellectual property
T-302/03 PTV v OHMI (map&guide)
T-172/05 Armacell v OHMI - nmc ( ARMAFOAM)
