Brussels Brief - June 13, 2008
June 13, 2008
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KEY DEVELOPMENTS
Competition: Commission Fines Chemical Producers EUR 79 Million for Cartel Activities
Mélanie Bruneau
The European Commission has imposed on eight companies fines totalling EUR 79 million for the allocation of sales volumes and price fixing for sodium chlorate in violation of Article 81 of the EC Treaty. According to the Commission, these companies fixed prices and allocated markets between late 1994 and 2000 through a series of meetings and other illicit contacts. One company and its subsidiary were first to provide information about the cartel and received full immunity from the fines. Another company’s fine was reduced by 50 per cent because it cooperated with the Commission during the investigation. The fine imposed on another company was increased by 90 per cent as the company had been condemned for involvement in three previous cartels before this one.
Mergers: Commission Investigates Proposed Merger in Tractor Equipment Industry
Geert Dierickx
The European Commission has opened a second phase in-depth investigation under the EU Merger Regulation into the planned acquisition of the French company, Mailleux, by Swedish company, Alö. Both companies produce equipment for agricultural tractors. The Commission’s initial market investigation found that there were serious doubts concerning compatibility with the Single Market for both companies’ tractor front loader businesses, which overlap significantly. Front loaders are devices that can be attached to the front end of tractors to handle/lift various kinds of materials. The provisional deadline for the Commission to reach a decision is 15 October 2008.
State Aid: Commission Requests that Hungary End Long Term Electricity Agreements
Juan Gutiérrez
The European Commission has requested that Hungary end its long term electricity power purchase agreements (PPAs). Around two thirds of the electricity generated in Hungary is sold under PPAs to the State-owned Magyar Villamos Muvek (MVM). The Commission considers that the PPAs concluded between MVM and ten power generators between 1995 and 2001 conferred State aid on the generators that was unlawful and incompatible as of Hungary’s accession to the European Union on 1 May 2004. The PPAs should be terminated before the end of 2008. In addition, Hungary must recover the aid granted to the generators since 1 May 2004.
State Aid: Commission Opens In-Depth Investigation into EUR 300 Million Loan to Alitalia
Daniel Kelly
The European Commission has opened an in-depth investigation into a EUR 300 million loan granted to Alitalia by the Italian State to enable Alitalia to cope with its financial problems. This loan was followed by a Decree-Law on 27 May 2008 that allowed Alitalia to incorporate that sum into its equity capital, thereby making it possible for Alitalia to maintain the value of its capital and avoid bankruptcy proceedings. This measure in favour of Alitalia could be seen as State aid, which is incompatible with the Community rules in force and gives the company an unjustified advantage over its competitors. Furthermore, as Alitalia has already benefited from rescue and restructuring aid, Italy cannot, in principle, grant it any more aid. The Commission has up to 18 months to carry out the investigation.
Internal Market: Sweden Abolishes Exclusive Right in Digital Broadcasting Services
Benoît Keane
The European Commission has withdrawn from the European Court of Justice its case against Sweden for breach of the Electronic Communications Directive following Sweden’s recent amendment of its media law. The Electronic Communications Directive required EU Member States to abolish by July 2003 all exclusive rights for the provision of electronic communications including the encryption of broadcasting programmes. However, Swedish legislation provided that access to all digital broadcasting programming and services should be controlled by a single open system for the entire network. A semi-State company called Boxer was granted the right to construct, install and maintain the encryption system and be responsible for distributing the common access card. The Commission considered that this effectively gave Boxer control over the Swedish digital TV market. Sweden’s agreement to amend its law enables new entrants to have access to the market.
Internal Market: Commission Recommends Limiting Auditors’ Liability
Andrea Hamilton
The European Commission has issued a Recommendation to limit auditors’ civil liability with the objective of promoting the market entry of auditing firms that would otherwise be deterred by the threat of unlimited liability. By encouraging new market entries, the Commission hopes that its Recommendation will protect European capital markets by ensuring that sufficient auditing capacity exists to perform statutory audits of EU-listed companies. This Recommendation is based on a mandate contained in the 2006 Directive on Statutory Audit, and reportedly also on an increasing trend of litigation and issues concerning insurance coverage in the auditing sector. Member States are free to decide on the appropriate method for limiting liability and set caps for liability if they wish.
Technology: EU to Double Investment in Robotics
Jonathan Aitken
The European Commission has announced that as part of its Seventh Framework Programme on Information and Communication Technologies, it will invest EUR 400 million in European robotics research by 2010 in order to ensure that Europe remains competitive with Asia and avoids strategic dependencies on other regions of the world. The Commission's investment is primarily aimed at forging stronger links between academia and industry, enabling European research labs to use industrial strength robots for large scale experiments. Viviane Reding, EU Commissioner for Information Society and Media, announced that there was a clear window of opportunity for automation industries in Europe to grow further and to move higher up the value chain. The European Commission noted that manufacturing will only be maintained in higher wage regions such as Europe through automation, which also plays a key role in ensuring sustainable production and minimising wasteful use of resources.
Social and Labour Law: Agreement Reached on Directives for Workers’ Rights
Daniel Kelly
The Employment and Social Affairs Council, following a meeting in Luxembourg on 10 June 2008, has adopted a Common Position on both the Working Time Directive and the Temporary Agency Workers Directive. The agreement on the Working Time Directive only became possible after Spain and other countries overcame objections to an opt-out that allows an increase in the weekly cap to 60 working hours. A distinction was also drawn between “active” and “inactive” on-call time, allowing greater flexibility for doctors struggling to keep average weekly working hours below the agreed limit. Agreement on the Temporary Agency Workers Directive was reached after, inter alia, Member States were given the option of derogating from the requirement of equal treatment as of day one for temporary agency workers in terms of pay, maternity leave and annual leave. The Council Common Positions will now be sent to the European Parliament for a second opinion. If they are passed, they will return to the Council of Ministers for a second round of approvals, at which stage they will become EU Law.
NEXT WEEK’S EVENTS
Monday 16 June – Friday 20 June 2008
COUNCIL MEETINGS
European Council (19 – 20 June 2008)
General Affairs and External Relations Council (16 – 17 June 2008)
COURT OF JUSTICE
Judgments
Company law
C-454/06 Pressetext Nachrichtenagentur
Environment and consumers
C-219/07 Nationale Raad van Dierenkwekers en Liefhebbers and Andibel
Freedom to provide services
C-319/06 Commission v Luxembourg
Industrial Policy
C-220/07 Commission v France
State aid
C-39/06 Commission v Germany
Opinions
Approximation of laws
C-140/07 Hecht-Pharma
Social policy
C-306/07 Ruben Andersen
Taxation
C-291/07 Kollektivavtalsstiftelsen TRR Trygghetsrådet
COURT OF FIRST INSTANCE
Judgments
Competition
T-410/03 Hoechst v Commission
T-93/06 Mülhens v OHMI - Spa Monopole (MINERAL SPA)
Intellectual property
T-420/03 El Corte Inglés v OHMI - Abril Sánchez and Ricote Saugar (BOOMERANG)
T-175/06 Coca-Cola v OHMI - San Polo (MEZZOPANE)
