competition policy newsletter · cartel secrets qui ont été adoptées en 2001 (6), imposant des...

c o m p e t i t i o n p o l i c yNEWSLETTER

Published three times a year by the Competition Directorate-General of the European Commission

Also available online: http://europa.eu.int/comm/competition/publications/cpn/

2002Number 1February

Inside:

La lutte contre les Cartels atteint sa vitesse de croisière en 2001

EU enlargment and competition policy: where are we now?

The restructuring of the Italian banking sector: State aid cannot assistmergers

Competition in the maritime transport sector: a new era

Minority shareholdings, interlocking directorships and the EC CompetitionRules — Recent Commission practice

The Creation of an International Competition Network

Competition policy makes it into the Doha Agenda

Green Paper on the Review of the Merger Regulation

European Competition Day

Main developments on:

Antitrust — Merger control — State aid control

ECCOMPETITIONPOLICYNEWSLETTER

Editors:Bernhard FriessNicola Pesaresi

Address:European Commission,J-70, 00/123Brussel B-1049 BruxellesTel.: (32-2) 295 76 20Fax: (32-2) 295 54 37

World Wide Web:http://europa.eu.int/comm/competition/index_en.html

ISSN1025-2266

Contents

Articles

1 La lutte contre les Cartels atteint sa vitesse de croisière en 2001 par Alexander SCHAUB3 EU enlargment and competition policy: where are we now? by Youri DEVUYST, Janne KÄNKÄNEN, Patrick

LINDBERG, Irina ORSSICH and Georg ROEBLING6 The restructuring of the Italian banking sector: State aid cannot assist mergers by Sandro SANTAMATO10 Competition in the maritime transport sector: a new era by Jean-François PONS and Eric FITZGERALD15 Minority shareholdings, interlocking directorships and the EC Competition Rules — Recent Commission practice

by Enzo MOAVERO-MILANESI and Alexander WINTERSTEIN

Opinions and comments

19 The SNELPD Decision in the light of the previous Article 86(3) Decisions of the Commission by Christian HOCEPIED

24 European Competition Day news by Ansgar HELD

International cooperation

25 The creation of an International Competition Network by Yves DEVELLENNES and Georgios KIRIAZIS27 Competition policy makes it into the Doha Agenda by Yves DEVELLENNES and Georgios KIRIAZIS

Cartels

29 Commission adopts eight new decisions imposing fines on hard-core cartels by François ARBAULT, Sari SUURNÄKKI,Francisco PEIRÓ, Barbara NIJS, Paul BRIDGELAND, Gerald BERGER, Maarit LINDROOS and Erwan MARTEIL

Antitrust

45 New Notice on agreements of minor importance (de minimis Notice) by Luc PEEPERKORN47 Review of the block exemption Regulation on technology transfer agreements by Paolo CESARINI and Luc

PEEPERKORN50 Commission confirms its policy line in respect of horizontal agreements on energy efficiency of domestic appliances

by Manuel MARTÍNEZ LÓPEZ53 Commission clears the creation of three B2B e-marketplaces: ‘Covisint’, ‘Eutilia’ and ‘Endorsia’ by Elodie CLERC

and John CLARK56 The fourth prohibition decision in the area of car distribution in four years: This time it's Mercedes' turn by Hubert

GAMBS and Konrad SCHUMM59 Commission publishes a study on the future of motor vehicle distribution by Lazaros TSORAKLIDIS61 Commission exceptionally orders the licensing of a copyright to safeguard competition in the German pharmaceutical

sales reports market by Graham ZEBEDEE and Corinne DUSSART-LEFRET

Merger control

65 Green Paper on the review of the Merger Regulation by Anna PAPAIOANNOU, Ulrich DIEZ, Stephen RYAN and DanSJÖBLOM

69 Main developments between 1 September and 31 December 2001 by Neil MARSHALL and Carina JOERGENSEN77 Investigation into possible collective dominance in the publication paper industry by Valérie RABASSA, Stephan

SIMON and Thibaut KLEINER

State aid

81 Politique des aides d'état: La Commission contribue à plus de sécurité juridique pour le financement des Servicesd'intérêt économique général par Alain ALEXIS

85 Aides fiscales: la Commission procède à l'examen approfondi du critère de la sélectivité dans le domaine de lafiscalité directe des entreprises par Mehdi HOCINE

87 Waste treatment, recycling and state aid by Anne Theo SEINEN90 Main developments between 1 September and 31 December 2001 by Paula ICARDI, Riccardo VUILLERMOZ,

Madeleine INFELDT, Brice ALLIBERT and Anne FORT

Information section

101 Organigramme — Direction générale Concurrence103 New documentation105 Press releases on competition110 Court of Justice/Court of First Instance112 Index of cases covered in this issue of the Competition Policy Newsletter

La lutte contre les Cartels atteint sa vitesse de croisière en 2001

Alexander SCHAUB, Directeur Général de la Direction GénéraleConcurrence

L’année 2001 restera comme une année remar-quable pour l’activité de la Commission euro-péenne en matière de lutte anti-cartels. Remar-quable, par le nombre de décisions adoptées;remarquable, par l’importance des pratiques sanc-tionnées; remarquable par le montant des amendesimposées. Remarquable enfin, et peut-être surtout,en ce qu’elle marque les premiers résultats positifsdes efforts entrepris par la Direction Générale de laConcurrence depuis quelques années, pour intensi-fier sa lutte contre les cartels.

Bien entendu, la détection, la poursuite et la sanc-tion des accords secrets de cartels constituentautant d’éléments centraux de la politique deconcurrence menée par la Commission euro-péenne depuis son origine. La Commission ad’ailleurs adopté, ces dernières années, plusieursdécisions importantes en matière de cartel, notam-ment dans les cas «Poutrelles» (1), «Carton» (2) et«Ciment» (3) et plus récemment encore dans lesaffaires «Pre-insulated pipes» en 1998 (4), «Steeltubes» et Lysine en 1999 (5).

Pour autant, l’opinion était largement répanduedans le monde économique, comme au sein mêmede la Commission, que l’intensité de la lutte anti-cartels menée par la Commission européenne,n’était pas à la hauteur du défi que pose àl’économie européenne la persistance de pratiquessecrètes de cartels. En effet, ces pratiques figurentparmi les restrictions de concurrence les plusgraves, se traduisent par des augmentations de prixet une réduction du choix offert aux consomma-teurs comme à l’ensemble des clients industrielseuropéens et dégradent ainsi la compétitivitéglobale de l’industrie européenne.

Pour l’ensemble de ces raisons, mais aussi dans laperspective de l’entrée en vigueur du futur règle-ment du Conseil visant à remplacer le règlement17, la Direction Générale de la Concurrence donne

depuis 1998, une priorité accrue à la lutte contreles cartels. Cette priorité a pris notamment laforme de la création en 1998, d’une unité spécia-lisée dans les cartels, puis du renforcement, chaqueannée, des moyens humains et matériels de cetteunité. Elle a également pris la forme d’une sensibi-lisation accrue des autres unités opérationnellesantitrust de la Direction Générale de la Concur-rence, à la lutte anti-cartels.

Les dix décisions sanctionnant des accords decartel secrets qui ont été adoptées en 2001 (6),imposant des amendes à 56 entreprises pour unmontant total de i 1 836 millions constituent lespremiers résultats de cet effort. Il convient d’yajouter les 5 cas de cartels dans le secteur bancaireliés à l’introduction de l’Euro (7) qui ont étéclôturés par voie de «settlements».

Quelques enseignements généraux me paraissentpouvoir en être tirés: Tout d’abord, les secteursconcernés démontrent par leur variété (transportsaériens, services bancaires, produits alimentaires,chimie, biens industriels), combien les accords decartels restent répandus dans de nombreuxsecteurs de l’économie européenne, mais aussi del’économie mondiale. Ensuite la taille des entre-prises impliquées met en évidence que ces prati-ques sont aussi bien le fait de géants mondiaux qued’entreprises de taille modeste essentiellementactives sur des marchés nationaux. Enfin, la natureet les modalités de mise en œuvre des pratiquessanctionnées montrent que les entreprises fontpreuve d’une sophistication sans cesse croissantepour éviter d’être détectées et sanctionnées.

Tout indique donc qu’au-delà du réel succès queconstitue le bilan d’activité 2001 en matière decartels, il faut maintenant aller plus loin en stabili-sant ces bons résultats sur la durée et en intensi-fiant encore la lutte contre les cartels que mène laCommission.

Number 1 — February 2002 1

Competition Policy Newsletter

(1) (1994) OJ L 116, p. 1(2) (1994) OJ L 243, p. 1.(3) (1994) OJ L 343, p. 1.(4) (1999) OJ L 24, p.1(5) Non publié(6) Deux d’entre elles ont été adoptées avant l’été et ont fait l’objet d’articles dans le numéro précédent de la Newsletter. Les huit

autres sont détaillées dans cette édition de la Newsletter.(7) Voir communiqués de presse IP/01/554 du 11.4.2001, IP/01/634 du 3.5.2001, IP/01/635 du 3.5.2001, IP/01/650 du 7.5.2001, IP/

01/690 du 14.5.2001 et IP/01/1159 du 31.7.2001.

Car trop souvent par le passé, l’activité anti-cartelsde la Commission a revêtu un caractère cyclique,des périodes fastes, marquées par de remarquablessuccès, alternant avec des périodes plus creuses.Nous voulons rompre avec cette alternancecyclique qu’aucun facteur économique ne justifie.La Commission devra démontrer en 2002 et dansles années qui suivront qu’elle est à même demaintenir, sur longue durée, un niveau d’activitécomparable à celui de 2001.

De la même manière, le traitement des cas decartels, par les services de la Commission, a tradi-tionnellement été caractérisé par des délaisd’instruction très longs et sans doute trop longs.Les décisions adoptées cette année concernent desaffaires qui étaient à l’instruction depuis 5 ans pourles plus anciennes et 3 ans pour les plus récentes.Là encore, l’amélioration des délais de traitementdevra être confirmée en 2002 et dans les années quisuivront, avec pour objectif à terme, qu’ils restent,en règle générale, inférieurs à trois ans.

La Communication de la Commission sur la réduc-tion ou la non-imposition d’amendes, dite commu-nication «Leniency», s’est avérée être un outild’enquête efficace, les entreprises mises en causeen ayant invoqué les dispositions dans une vastemajorité des cas décidés en 2001. La réforme duprogramme «Leniency» de la Commission, initiéeen juillet 2001 et qui devrait se conclure parl’adoption d’une nouvelle communication audébut de cette année, devrait encore renforcer cetteefficacité. Toutefois, pour que cet outil rénovéconserve toute son efficacité sur le long terme, laCommission européenne devra accroître sa capa-cité de détection par ses propres moyens, des prati-ques de cartels. Par une meilleure connaissancedes marchés, par un traitement plus efficace desplaintes, mais aussi par une coopération entreautorités de concurrence accrue, tant avec noscollègues de Etats membres, qu’avec les autresautorités de concurrence.

Meilleure détection des cartels, plus grande régu-larité de l’activité anti-cartels, réduction accruedes délais de traitement, intensification de lacoopération internationale: tels sont les défis quela Commission devra relever dans les années àvenir, pour confirmer et amplifier les bons résul-tats de 2001. Chacun de ces éléments est essentielpour bâtir une politique anti-cartels efficace etcrédible. Démontrer que la lutte anti-cartels estactive et constante, que les chances d’être décou-

vert sont grandes, et que les sanctions sont élevées;rapprocher la date de la sanction de celle de ladécouverte des infractions; apporter une réponsecoordonnée à des pratiques qui se globalisent:c’est à ce prix que nous serons à même d’exercerun véritable effet de dissuasion et de voir enfindiminuer la fréquence de ces pratiques dans la vieéconomique.

Beaucoup a été fait depuis 1998. Les moyens mis àla disposition de la lutte anti-cartels se sont accrusconsidérablement, la productivité a augmenté, lenombre de cas activement traité est plus grand etles délais de traitement sont plus courts, tout enconservant le haut niveau de qualité que requièrentdes décisions négatives avec amendes. Les résul-tats enregistrés en 2001 constituent les premiersfruits tangibles de ces efforts. Mais beaucoup resteà faire pour consolider ces bons résultats, lesinscrire dans la durée et en faire une base de départpour aller plus loin. C’est pourquoi la DirectionGénérale de la Concurrence accroîtra encore cetteannée, les moyens humains et matériels dédiés à lalutte contre les cartels et intensifiera les efforts deformation de ses personnels, d’ores et déjà entre-pris dans ce domaine.

J’attache à ce dernier point, qui me paraît essentielà la pérennisation du succès de notre lutte anti-cartels, une attention toute particulière. Les effortsde formation spécifique à la détection des cartels etaux techniques d’enquête devront être accrus,notamment en ce qui concerne l’utilisation desNouvelles technologies de l’Information et de laCommunication (NTIC). La Direction Générale dela Concurrence a d’ores et déjà formulé des propo-sitions pour que ces formations soient communes àl’ensemble des autorités de concurrence euro-péennes, afin de promouvoir une culture communeen matière de lutte anti-cartels et de bénéficier del’échanges des meilleures pratiques développéespar chacun d’entre nous. Dans le même esprit, descontacts ont également été pris avec diverses auto-rités de concurrence non-européennes, notammentdans le domaine de l’utilisation des NTIC.

J’ai confiance que l’ensemble des mesures prises,en matière de renforcement des moyens, d’amélio-ration de la gestion des dossiers, de formation et decollaboration internationale, permettra à laCommission de relever, avec succès, le nouveaudéfi que constitue la pérennisation des bons résul-tats enregistrés en 2001 et cela dès cette année.

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2 Number 1 — February 2002

EU enlargment and competition policy: where are we now?

Youri DEVUYST, Janne KÄNKÄNEN, Patrick LINDBERG, Irina ORSSICHand Georg ROEBLING, Directorate-General Competition, unit A-4

The year 2001 was a landmark for the accessionnegotiations on competition. Following the impor-tant progress that has been achieved by the Candi-date Countries in the adoption and enforcement ofthe Community’s competition acquis, it has beenpossible to conclude the competition negotiationswith Estonia, Latvia, Lithuania and Slovenia, andto clearly identify the remaining steps to be takenin the other Candidate Countries. The continuedprogress in the competition field is, therefore,actively bringing forward the accession process,while also helping to achieve a level playing fieldthroughout Europe.

The enlargement process

The European Union is currently engaged inenlargement negotiations with twelve CandidateCountries. Following the Luxembourg EuropeanCouncil of December 1997, accession negotiationswere opened with Cyprus, the Czech Republic,Estonia, Hungary, Poland and Slovenia (‘Luxem-bourg group’). Following the Helsinki EuropeanCouncil of December 1999, accession negotiationswere also opened with Bulgaria, Latvia, Lithuania,Malta, Romania and Slovakia (“Helsinki group”).While the Helsinki European Council recognisedTurkey as a Candidate Country, the conditions forstarting accession negotiations have not yet beenachieved.

The negotiations are guided by the principle ofdifferentiation, which means that each CandidateCountry is assessed on its own merits. This enablesCandidate Countries that began negotiations at alater stage to catch up. As regards the timing of theaccession process, the recent Laeken EuropeanCouncil reconfirmed the line taken by the Euro-pean Council of Göteborg in June 2001 indeclaring that the ‘European Union is determinedto bring the accession negotiations with the candi-date countries that are ready to a successfulconclusion in 2002, so that those countries cantake part in the European Parliament elections in2004 as members’.

The competition dimension of theenlargement process

In practice, the accession negotiations have beensub-divided into 31 topical chapters. Chapter 6concerns competition policy. The specific negotia-tions on the competition chapter started in 1998 forthe Candidate Countries in the ‘Luxembourggroup’ and in 2000 for the Candidate Countries inthe ‘Helsinki group’, with the exception ofBulgaria for which the competition chapter wasopened in March 2001.

In preparation for each important step in the nego-tiations, the Commission proposes so-called ‘DraftCommon Positions’ for approval by the MemberStates in Council. Once agreed by the MemberStates, a Draft Common Position becomes an ‘EUCommon Position’ that can be transmitted to theCandidate Country in question. Such CommonPositions deal with one Candidate Country andone negotiating chapter at the time.

In its Enlargement Strategy Paper of November2000, the Commission had committed itself topresent revised Draft Common Positions on thecompetition chapter to the Council during thesecond half of 2001. This resulted, in late October2001, in a presentation to the Council of twelveDraft Common Positions, containing an assess-ment of the competition situation in each Candi-date Country. The Commission’s assessmentaimed at determining whether the conditions werepresent that could allow for the completion of thecompetition negotiations.

The Council agreed with the Commission’sproposal in favour of the provisional (1) closure ofthe competition negotiations with Estonia, Latvia,Lithuania and Slovenia. With Bulgaria, Cyprus,the Czech Republic, Hungary, Malta, Slovakia,Poland and Romania, the competition negotiationsare continuing. This was confirmed by the on-going Accession Conferences that convened atministerial level on 11-12 December 2001. TheAccession Conference is composed of all MemberStates and the Candidate Country concerned.



(1) The negotiations are based on a principle that nothing is formally finalised before an overall conclusion on the negotiations hasbeen reached. Moreover, provisionally closed chapters are subject to continued monitoring and can under certain circumstances bereopened on request of either side during the negotiation process.

The requirements for closure of thecompetition chapter

The requirements for the provisional closure of thecompetition chapter are derived from the conclu-sions of the Copenhagen European Council in June1993. At Copenhagen, the European Councildefined the criteria which applicants have to meetbefore they can join the EU. In the economicsphere, these criteria require the existence of afunctioning market economy as well as thecapacity to cope with competitive pressure andmarket forces within the European Union.

The competition negotiations take place in thecontext of this ‘economic criterion’. In this frame-work, the EU has consistently taken the view thatthe Candidate Countries can be regarded to beready for accession only if their companies andpublic authorities have become accustomed to acompetition discipline similar to that of theCommunity well before the date of accession. Thisis necessary to ensure that the economic actors inthe Candidate Countries are able to withstand thecompetitive pressures of the internal marketresulting from the full and direct application of thecompetition acquis upon accession.

Consequently, the requirement of adapting to acompetition discipline well before accession stemsboth from the need to preserve the internal marketdiscipline after enlargement, and from the difficul-ties that would arise in Candidate Countries if theywere to adapt to the application of the acquis fromone day to the next. In order to avoid such foresee-able consequences of an abrupt application of thecompetition rules, a solid pre-accession prepara-tion is essential. Companies (including publicundertakings) need to adjust to operating in accor-dance with antitrust rules and without distortiveforms of State aid, the authorities and the judiciaryneed to grow accustomed to enforcing these rules,and public bodies involved in the granting of aidhave to get used to State aid discipline, includingex ante notification procedures.

In translating these principles into concreterequirements, the EU has put forward threeelements that must be in place in a CandidateCountry before the competition negotiations canbe closed:

(1) the necessary legislative framework withrespect to antitrust and State aid;

(2) an adequate administrative capacity (in parti-cular, a well-functioning competition autho-rity); and

(3) a credible enforcement record of the acquis inall areas of competition policy.

To evaluate whether these conditions are met, DGCompetition has carried out an in-depth assess-ment, including the examination of cases that thecompetition offices of the Candidate Countrieshave handled, both in the state aid and antitrustarea. This has enabled the Commission and theCouncil to assess the degree to which the competi-tion discipline is already being enforced in theCandidate Countries.

The results of the assessment

The decision to provisionally close the competi-tion negotiations with Estonia, Latvia, Lithuaniaand Slovenia reflects the important progress thatwas made in the course of 2001 in these four appli-cant countries. In other countries, good progresshas been achieved, but important shortcomingsstill remain.

In summary form, the situation in the anti-trustfield looks reasonably satisfactory in most Candi-date Countries. The adoption and alignment ofnational antitrust legislation is reaching itscompletion, containing all the main principles ofthe Community acquis. Furthermore, competitionauthorities are generally fully functioning andactively enforcing the antitrust disciplines. Thebilateral pre-accession Association (‘Europe’)Agreements, which the EU has concluded withmost of the Candidate Countries, contain explicitclauses obliging the countries concerned to applythe same substantive antitrust and State aid rules asin the Community. In accordance with the EuropeAgreements, and their implementing rules, theCandidate Countries’ competition authorities havebeen specifically charged with ensuring the appli-cation of antitrust rules within their respectivecountries, and actively cooperate with theCommission in doing so. Companies with activi-ties in Candidate Countries will also find thatprocedures for notifying mergers, agreements andother practices, as well as the filing of complaints,largely follows the Community model.

Naturally, work needs to continue in the antitrustfield, not least in view of preparing for theCommission’s proposed procedural reform, whichwould more directly involve the (present andfuture) Member States in the application ofCommunity rules. All Candidate Countries, there-fore, need to continue their efforts to concentratetheir resources on preventing the most seriousdistortions of competition, and to follow a moredeterrent sanctioning policy. In some countries,most notably Cyprus and Malta, also other impor-tant work remains to be done: in Cyprus, the anti-trust enforcement record has not yet fully devel-oped and a much more pro-active approach to

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maintaining the anti-trust discipline is needed,whereas in Malta, the application of competitionlaw still has to be extended to all companies,including public undertakings.

In the area of State aid, progress has previouslybeen much slower than in the antitrust field, and itis only more recently that a real State aid disciplinehas begun to emerge. As in the antitrust field, theCandidate Countries have now adopted nationallegislation, based on the Community acquis, andhave set up State aid monitoring authoritiescharged with enforcing the rules. However, thedegree to which a full and proper State aid disci-pline is enforced still varies considerably fromcountry to country.

As to the accession negotiation requirements in theState aid field, a broad distinction can be madebetween three groups of Candidate Countries.First, there are the four Candidate Countries forwhich the EU has decided to provisionally closethe negotiations. In these countries, State aid rulesare being enforced and incompatible aid measureshave been duly amended. The Czech Republic andHungary form a second category. Their State aidenforcement record is, in general, satisfactory.However, a number of specific shortcomings haveso far prevented the Commission from proposingthe closure of the negotiations. Hungary needs tobring all fiscal aid under State aid control and fullyalign it with Community rules. In the Czech case,the need for a more effective State aid control inthe steel and banking sectors has so far preventedthe closure of the negotiations. Finally, in the othersix Candidate Countries, more general problems ofState aid discipline remain.

Main remaining State aid issues

As to the main issues that remain to be resolved inthe State aid field, there are two particular prob-lems that deserve to be highlighted.

Firstly, it is of particular concern, that some Candi-date Countries continue to operate incompatiblefiscal aid regimes, such as tax holidays, tax breaks,and tax credits intended to attract foreign invest-ments. This is considered a major obstaclepreventing the EU from concluding the competitionnegotiations with these countries. A credibleenforcement record requires that also these kind ofinvestment incentives are classified as incompatibleState aid and are aligned with the acquis well beforeaccession. Incompatible aid measures cannotcontinue after accession and are in fact alreadyviolating the pre-accession ‘Europe Agreements’.In this context, the Commission is actively helpingthe Candidate Countries in converting incompatible

State aid into permissible aid arrangements. It isalso important to note that Candidate Countries thatalign their investment incentives can offer legalcertainty to investors, which is of crucial impor-tance for attracting long-term investments.

Secondly, there is also a problem of aid regimesused to prop up ailing industries. Such aid,consisting of e.g. tax arrears or loan guarantees,risks jeopardising the successful restructuring ofseveral key sectors of the Candidate Countries’economies. As such, these aid measures also delaythe preparation of the Candidate Countries fortheir full integration in the internal market. In thisrespect, effective State aid control is a necessity toget the badly needed viable restructuring of certainsectors properly up and running. This problem isparticularly acute in the steel sector.

It must, however, be noted that respecting Commu-nity State aid rules does not mean that the CandidateCountries cannot grant any State aid to attract inves-tors or to help restructure their economies. On thecontrary, there remains considerable scope for Stateaid in the Candidate Countries, as long as it isexplicitly recognised as such, and provided properattention is paid to its compatibility with the rules ofthe Community acquis. The Community State aid‘tool box’ is sufficiently flexible to cater for thespecific needs of the Candidate Countries. Forexample, most of the Candidate Countries qualifyas areas where regional aid is permitted, and highmaximum aid ceilings apply, since the ‘standard ofliving is abnormally low or there is serious under-employment’ — in the meaning of the provisionson regional aid of the EC Treaty. To allow for thecorrect application of the regional aid rules in theCandidate Countries, the Commission, togetherwith the countries, prepares regional aid maps thatare in line with the Community’s Guidelines onnational regional aid. Hence, equal treatment isensured both between the Candidate Countries andthe Member States, as well as between the Candi-date Countries themselves.

Conclusion

In looking at the enlargement process from a histor-ical perspective, impressive progress has beenachieved in legislative approximation and in thesetting up of a competition discipline in all Candi-date Countries. While there are remaining problemareas, most notably in the field of State aid, one canalso notice a real desire and determination to findsolutions to these lingering problems. Many in theCandidate Countries fully understand that competi-tion policy, including State aid control is a key partin creating a well-functioning economy, as well as alevel playing field.



The restructuring of the Italian banking sector:State aid cannot assist mergers

Sandro SANTAMATO, Directorate-General Competition, unit H-3

Introduction

On 11 December 2001, the European Commissiondecided that the tax measures for banks introducedby Italian Law n° 461/98 of 23 December 1998and the related Legislative Decree n° 153/99 of 17May 1999, are incompatible with the State Aidrules of the EC Treaty. The measures in questionprovide a discriminatory competitive advantage tothe banks that participate in the operations that arebeing favoured. Italy must now recover theamounts that the banks, benefiting from taxexemptions, avoided having to pay. (1)

Law 461/98 and Decree 153/99 introduced taxadvantages for the consolidation of the bankingsector. The main aspect consisted in the reductionto 12.5% of the rate of income tax (IRPEG) forbanks that merge or engage in similar restruc-turing. (2) In addition, the law established that afixed fee would replace the indirect taxes normallydue in connection with mergers and that the opera-tions would be exempted from the local tax on theincrease in the value of property, due at the time ofchange in ownership. (3)

The tax benefits concerned merger and restruc-turing operations carried out in the years 1998 to2004 inclusive. On the basis of the sole operationsthat had taken place until 2000, the maximumtheoretical benefits that all the banks concernedtaken together could have derived over the entireperiod for which the measures were intended, isestimated at around i 2.8 billion. However, afterthe Commission had begun investigating thesemeasures, the Italian authorities informed theCommission in April 2000 that they hadsuspended their implementation. It is thereforelikely that the actual tax savings made by the banksare substantially lower than the above figure.

Position of the Italian authorities

In its answer to the initiation of the procedure theItalian government presented several observa-tions, some of which raised interesting issues of ageneral nature.

It was argued that the Italian banking system hadbeen subject since 1936 to a strict public controland direct government intervention in the manage-ment of a large majority of banks. Banks had beendivided into different institutional categories, withdifferent operational limits (‘specialisation prin-ciple’). This had negatively affected the efficiencyand competitiveness of the system. For this reasonthe authorities took several steps, since the begin-ning of the ‘80s, to abandon the specialisationprinciple, privatise State-owned banks andencourage an increase in the average dimension ofItalian banks. Law 461/98 and Decree 153/99should be seen as part of this long-term processaimed at modernising the banking sector ratherthan a derogation from the normal tax rules.

It was also observed that rules on State aid couldnot hinder an improvement in the general fairnessand consistency of the system where it could bedemonstrated that the initial situation was penal-ising certain undertakings or sectors. Data showsthat banks contribute 20% of overall company taxrevenues while contributing only 5% to the coun-try’s value added. Other figures support the claimthat the banking sector is subject to higher imposi-tion. While a reduction of the tax burden couldhave been achieved by granting banks the sametaxation rules as other sectors, the governmentdecided to rather offer incentives for the consoli-dation of the sector.

The Italian authorities also argued that themeasures were to be considered of a generalnature. All banks, including branches of foreignbanks, could benefit from the tax breaks. As for thedifference in treatment with respect to other

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(1) This decision closed one part of the investigation opened on 25 October 2000 on the legislative measures addressed to the Italianbanking system. The Commission’s investigation into State Aid to banking foundations (as distinct from banks themselves)continues, since the status of these measures still needs to be defined.

(2) The reduction applies for five years after the operation, provided that the proceeds are placed in a special reserve, which may not bedistributed for a period of three years. The proceeds that may be placed in the special reserve cannot exceed 1.2 % of the differencebetween the sum of credits and debits of the post-merger bank and the sum of credits and debits of the largest pre-merger bank.

(3) Further measures, concerning the transfer of assets between banks and banking foundations, which represent a more specificaspect of the case, are not discussed in the present article.

sectors, this was justified by the nature or generalscheme of the system. The banking sector issubject to a very specific regulation, which makebanks a peculiar category of taxpayers. Banks aresubject to many additional obligations with respectto other undertakings. As a result, a difference intax treatment is objectively justified and is typicalof this sector. It was therefore legitimate for theItalian legislator to seek to adapt the tax system tothe peculiarity of the banking sector.

Another observation was that the measures did notinvolve use of State resources. The tax advantagewas not automatic, but subordinated to the imple-mentation of specific operations. Where thoseoperations would have involved a tax burden, it isunlikely that they would have taken place in theabsence of the tax benefit. In any event, the tempo-rary reduction in company tax would have beencompensated in the long term by the likelyincrease in profitability – and taxation thereof – ofthe interested banks.

It was further claimed that if the Commission didnot accept the general arguments in favour ofcompatibility of the measures with the Treaty, itthen had to verify case by case, i.e. by looking ateach individual operation benefiting from themeasures, whether the conditions for exemptionwere in place.

Finally, in case of a finding of incompatible aid,the recovery of the aid should be excluded as itwould be against the proportionality principle.Merger operations had been carried out on thebasis of the tax incentive; recovery could producefinancial instability of the beneficiaries and wouldalter the conditions on which they had based theirmerging decisions.

General issues raised by the case

As it can be the seen from this partial account ofthe observations of the Italian authorities, anumber of general issues were raised in the contextof the case:

(1) To what extent a tax measure grants an advan-tage to certain undertakings or productions byderogating from the nature or general schemeof the system, as opposed to representing alegitimate adaptation to the peculiarity of aspecific activity?

(2) Does a measure accessible to all operators in asector distort competition?

(3) To what extent a policy measure designed toimprove the economic performance of a sectormay be hindered by the application of State aidrules?

(4) Can the favourable fiscal treatment of specificoperations compensate a generally highertaxation burden imposed on the sector?

(5) Is there an effect on trade when operators ofother Member States have access to the samebenefits?

(6) Is there use of State resources when a loweringin tax rates may have the effect of enlargingthe tax base and eventually earn more reve-nues?

(7) To what extent single operations that havebenefited from a scheme have to be assessedindividually?

(8) Does the recovery of an aid infringe theproportionality principle when the aid hasdetermined economic choices that are hardlyreversible?

The Commission’s assessment of the aid

The decision addressed the above questions in away that is obviously related to the specificcircumstances of the case. It can, nevertheless,provide some useful insight into the elements rele-vant to their assessment.

1) Nature or general scheme of the system

In the decision it is acknowledged that the peculiarnature of an activity could, in principle, justify theintroduction of specific tax rules for the sector.However, the measures under analysis did notrepresent an adaptation of the general system to thedistinctive features of banking activity, but ratheran ad hoc aid having the effect of improving thecompetitiveness of certain undertakings – i.e. themerging banks – and only in relation to certainoperations. The fact that the banking sector mighthave been in need of restructuring in a particularhistorical period was an extrinsic element, bearingno relation with the normal operation of the fiscalsystem in the banking sector. It is not in the logic ofthe taxation system that banking activity shouldbenefit from more favourable rules on mergers.For these reasons, it could not be accepted that themeasures in question were justified by the natureor general scheme of the system.

2) Selectivity

The circumstance that a measure be accessible to alloperators of a sector is, in principle, not sufficient torule out its selective nature, also within the sectoritself: the mechanism through which the aid oper-ates needs to be assessed. In this case the measure



was selective vis à vis banks within the sector, sinceit was limited to only those companies involved inmerger or consolidation operations. These are notoperations that are currently performed by marketparticipants, so that the aid is bound to favour only afew of them. Moreover, the aid measure describedwas not neutral with respect to the relative size ofthe companies involved and may have placedsmaller operators at a disadvantage. (1)

3) Improvement of sector performance

The decision follows the established view that theimprovement of the economic performance of asector is not a sufficient justification for thegranting of sectoral aid. Sectoral aid alters the allo-cation of resources and discriminates betweenfirms that compete for those. Because of overlap-ping in upstream and downstream markets,competition in other sectors is rarely undistorted.More importantly, aid to a sector would typicallyfavour national firms over firms of other MemberStates. The circumstances of the case confirmedthese worries.

The measures allowed banks a cheaper acquisitionof shares in other companies, when these wereowned by other banks involved in the assistedoperations. Mergers and acquisitions could alsoconcern different companies – e .g. financial orinsurance companies – although the tax breakswere only attributed to the banks involved and inproportion of the banking business. More gener-ally, merging operations having the same expectedprofitability might not have been carried out inother sectors not benefiting from the aid.

In addition, to the extent that smaller buyers wereplaced at a disadvantage and since the tax benefitapplied to Community banks only as regards thebranches established in Italy – which tend to berather limited in size – there may have been anelement of distortion also between foreign and Italianbanks. The circumstance that the aid was availablealso to branches of other Member States’ banks didnot seem sufficient to eliminate this kind of bias infavour of mergers between Italian operators.

4) Compensation with other measures

The circumstance that the banking sector is gener-ally subject to a heavier tax burden does not

warrant the introduction of sectoral aid. If the biasin the tax system is justified by the nature of thebusiness, it does not call for compensation, other-wise it is the bias itself that should be corrected. Aselective measure might be justified by the speci-ficity of the activity to which it is addressed, butnot by the presence of other selective measures.

5) Effect on trade

An aid that benefits undertakings in a sectorexposed to cross-border trade, would be consid-ered as affecting that trade. The Court of Justicehas observed: ‘when state financial aidstrengthens the position of an undertakingcompared with other undertakings competing inintra-community trade the latter must be regardedas affected by that aid‘. (2) In this respect, there isno doubt that for many years financial services,providers and consumers of financial services, andcapital, have actually and potentially, directly andindirectly, crossed frontiers between MemberStates. Aid granted to credit undertakings, whichoffer financial services in competition with otherEuropean credit establishments, is certainly likelyto distort intra-Community trade. It should also beborne in mind that banks often encounter obstaclesto expansion abroad. Such obstacles are frequentlydue to the fact that local banks are well-estab-lished, which makes it more costly for foreigncompetitors to enter the market. As liberalisationwill increasingly offer banks the opportunity toprovide their services in other Member States, allaid granted to a bank, whether international ordomestic, is likely to hamper those possibilities.Aid aimed at enabling even local banks to survivewhich would otherwise have been forced out of themarket owing to their low profitability andcompetitive capacity is thus liable to distortcompetition in the Community as it makes it moredifficult for foreign banks to enter the Italianmarket.

6) State resources

The argument that the taxed operations would nothave taken place in the absence of the measures, sothat the aid actually increased State revenues,could not be accepted. First of all it could not beruled out that operations of the type covered by thescheme would have taken place anyway.

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(1) If, for simplicity, we consider an acquisition involving two banks, the fiscal benefits were directly proportional to the size (sum ofcredits and debts) of the smaller one. Accordingly, if the purchaser had a smaller size than the purchased, its fiscal advantagewould have been lower than the one accruing to a hypothetical larger buyer of the same bank. This might have placed smallerbuyers at a disadvantage with respect to larger ones.

(2) Judgment of the Court of Justice of 17 September 1980 in Case 730/79 Philip Morris Holland v Commission [1980] ECR 2671,paragraph 11.

Secondly, such an assertion would have impliedthat the normal tax rules, applying to mergers inother sectors, are designed to discourage mergeroperations rather than raise revenues. The fact that,on a global scale, an aid scheme increases thenumber or the amount of taxable operations andtherefore creates additional revenue for the State isnot relevant to the notion of State resources in thesense of Article 87 EC.

7) Individual assessment

The object of the Commission’s analysis was anaid scheme, that is an instrument by which theMember State offers fiscal advantages to anyfinancial institution that fulfils the conditions laiddown in the scheme. The Member State did notgrant advantages on an individual basis and did notnotify each individual case to the Commission.Consequently, the Commission was bound by thevery nature of the measure to make a general andabstract examination of the scheme, both on thequestion of aid and on the question of compati-bility.

The fact that the Italian authorities had requestedthe Commission to analyse each individual aid wasnot considered sufficient to oblige the Commis-sion to do so. Any such request would at least haveto be accompanied by all the information neces-sary for the Commission to conduct an assessmentof each individual case. That is, all the informationthat should normally be provided to the Commis-sion in the context of a complete notification of anindividual aid pursuant to Article 88(3) EC. If aMember State considers that some particular caseswithin an aid scheme, because of their specificfeatures, should be assessed on an individual basis,they are under a duty to inform the Commission ofthese features and to provide all the informationneeded for an individual assessment.

8) Legitimate expectations

The decision argues that the beneficiaries of theaid could not entertain a legitimate expectationthat the measures were compatible with thecommon market. Accordingly, in deciding to carryout the aided merger operation, a diligent operator

should have taken into account the possibility forthat aid to be declared incompatible. If the taxadvantage represented a condicio sine qua non forthe profitability of the merger, a prudent operatorwould not have carried out the operation. For thosereasons it cannot be claimed that the recovery ofthe aid would be against the proportionality prin-ciple, simply because the aid has determinedeconomic choices that are difficult to reverse.

Conclusions

The Commission’s decision on the Italian banks isto be seen in the context of an increasing enforce-ment of State aid rules in the banking sector. Sincethe beginning of the ‘90s, the Commission hasexamined various State Aid measures to banks indifferent Member States. The Commission firstfocused on rescue and restructuring cases of creditinstitutions. (1) More recently the Commission’saction has enlarged to either individual or hori-zontal support schemes. Last July the Commissionsecured a commitment from the German Govern-ment to eliminate the guarantees to the publicbanks in Germany. Early 2002, the Commissionconcluded its investigation into the aid scheme infavour of the French bank Crédit Mutuel for thedistribution of the saving book ‘Livret Bleu’.

The present decision, which follows an approachwell established in the Commission’s practice andin the case law, confirms that the banking sectorrepresents no exception to the general rule. On thecontrary, the liberalisation of financial servicesand the integration of the financial market havehad the effect of greatly increasing the sensitivityof intra-Community trade to distortions of compe-tition. This tendency is heightened by the introduc-tion of the single currency and the completeopening-up of markets, which increases competi-tive tension between Community countries. Bythis decision, the Commission takes the view thatthe introduction of national support schemes,which favour the consolidation of the sector,distort competition at the Community level and areobstacles to the development of a true singlemarket in financial services, which would be to theadvantage of consumers, savers and companiesalike.



(1) Inter alia, Crédit Lyonnais, Crédit Foncier de France, Société Marseillaise de Crédit, Westdeutsche Landesbank, Banco di Napoli,Banco di Sicilia…

Competition in the maritime transport sector: a new era

Jean-François PONS, Directorate-General Competition, Deputy Director-General, and Eric FITZGERALD, Directorate-General Competition, unit D-2

Maritime transport is of vital importance to theEuropean economy. Thus, in 1997, 69% of thetotal volume of all exported goods, (1) or 266million tonnes, was carried by sea. Imports by seain the same year amounted to 879 million tonnes,or 70% of the total. (2)

The implementation of European competitionpolicy in the liner shipping sector has been charac-terised by a long saga of Commission decisionsprohibiting various aspects of the way in whichliner shipping conferences (authorised by CouncilRegulation 4056/86) have sought to organise thetrades on which they operate. This article reflectsour belief that this long saga is drawing to a closeand that a new liner shipping era, based on compe-tition and innovation, is about to begin.

Council Regulation 4056/86, the main maritimecompetition regulation, is something of ananomaly amongst EC competition regulations. Notonly does it have a dual legal basis, Articles 80(2)(transport) and 83 (competition) EC, (3) but itprovides for a group exemption that is exception-ally generous when compared to those granted inother sectors. Article 3 of Regulation 4056/86 thuspermits a liner conference not only to fix acommon freight rate but also, inter alia, to regulatethe capacity offered by each member of the confer-ence. This exemption of collective price-fixingand supply regulation is said to be necessary inorder to ‘assure shippers of reliable [scheduled]services’. (4)

Not surprisingly, given its broad wording and thetradition of self-regulation in the liner shippingsector, the interpretation of Article 3 has given riseto conflict.

1. A brief history of a long saga

1.1. Commission decisions (1994-1998)

The interpretation of the exemption for rate-fixinghas been in issue in several cases. In its 1994 TAA (5)and FEFC (6) decisions, and again in the 1998TACA decision, (7) the Commission objected, interalia, to the collective fixing of tariffs for the inlandleg of multimodal transport operations. Relying onthe wording of Article 1(2) of Regulation 4056/86,which provides that the Regulation ‘shall applyonly to international maritime transport servicesfrom or to one or more Community ports’ theCommission argued that the scope of the exemptioncontained in Article 3 could not be wider than thescope of the Regulation itself. (8) The matter is nowbefore the Court of First Instance.

Secondly, in the TACA case the Commissionobjected to attempts by the conference to restrictthe availability to shippers of individual and confi-dential service contracts. In this respect, theCommission made clear that it considered that theexemption for conference rate-fixing coveredtariff arrangements only – it could not be inter-preted as encompassing the entirely differentconcept of contract carriage.

Finally, the Commission objected to capacityfreezes in the TAA and EATA cases, decided withthe obvious purpose of increasing freight rates bylimiting supply. In its TAA and EATA (9) decisionsthe Commission found that these capacity freezeswere not consonant with the aim of Article 3(d),which was the improvement of the scheduledtransport service(s) provided by the members ofthe conference.

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(1) I.e. exports to non-EU countries.(2) Source: EUROSTAT(3) Formerly 84(2) and 87.(4) Preamble to Regulation 4056/86, 8th

recital.

(5) Commission decision of 19 October 1994 in Case No IV/34.446 – Trans-Atlantic Agreement (OJ L 376, 31.12.1994)

(6) Commission decision of 21 December 1994 in Case No IV/33.218 – Far Eastern Freight Conference (OJ L 378, 31.12.1994)

(7) Commission decision of 16 September 1998 in Case No IV/35.134 – Trans-Atlantic Conference Agreement (OJ L 95, 9.4.1999)

(8) The Commission’s objection to inland price-fixing by conferences has on occasion been portrayed as a blanket prohibition againstany form of inland co-operation between carriers. This is incorrect: co-operation that meets the requirements of Article 5 ofCommission Regulation 1017/68 (inland transport) is permitted. If it could be demonstrated that an agreement on prices wasessential in order to achieve the benefits mentioned in Article 5, and did not lead to the elimination of competition on a substantialpart of the transport market concerned, it would presumably qualify for exemption.

(9) Commission decision of 30 April 1999 in Case No IV/34.250 – Europe-Asia Trades Agreement (OJ L 193, 26.7.1999)

1.2. Consortia

Consortium agreements in the liner shipping sector– in effect joint ventures between vessel operatingcarriers – are intended to improve the liner shippingservice by cutting costs and rationalising opera-tions. These agreements, which have developedrapidly in response to the demands placed oncarriers by the growth of containerisation, can bedistinguished from conference agreements by thefact that they do not provide for price-fixing.Commission Regulation 870/95, containing a blockexemption for liner shipping consortium agree-ments, expired in April 2000. As the Commission’sexperience of applying the Regulation had beenunequivocally positive (no consortium agreementhad ever been blocked), it was decided to renew theexemption for a further five years. The new Regula-tion, 823/2000, introduces some minor changes, themost important of which is the replacement of the‘trade share’ thresholds in Article 6 with a referenceto ‘market share’.

1.3. Court ruling in CEWAL (2000)

No description, however brief, of the backgroundto current EU liner shipping competition policywould be complete without some mention of theCEWAL case. This case, the first concerning theapplication of Regulation 4056/86 to have beendecided by the Community judicature, raised twofundamental points. In its ruling, (1) the ECJconfirmed, first, that the same practice may simul-taneously give rise to an infringement both ofArticle 81(1) EC and Article 82 EC. Secondly, theCourt found that a liner conference within themeaning of Regulation 4056/86, by its very natureand in the light of its objectives, could be describedas a collective entity presenting itself as such onthe market. A liner conference was thereforecapable of holding a dominant position within themeaning of Article 82 EC.

2. The end of the saga and beginning2. of a new era?

2.1. Discussions with carriers and2.1. shippers…

In conjunction with the TACA decision, Commis-sion officials entered into discussions with carriersand shippers with a view to breaking the sterilecycle of litigation and establishing a consensus on

the way forward. Out of these discussions came anindicative set of guiding principles for futureconference agreements. From the Commission’sperspective, the most important of these principleswas that conference members should be free toenter into confidential individual contracts withshippers. Other key principles included an under-taking on the part of carriers not to engage ininland price-fixing and the placing of strict limitson the type of information that could be exchangedby conference members.

2.2. …and new liner shipping legislation2.2. in the United States…

On 1 May 1999 the Ocean Shipping Reform Act(OSRA) entered into force, substantiallyamending the United States’ 1984 Shipping Actand bringing the US liner shipping competitionregime into closer alignment with its EC counter-part. Two changes in particular had a profoundimpact on competition: (1) carriers were no longerrequired to make public all essential terms ofservice contracts and (2) conferences could nolonger prohibit their members from entering intoindividual service contracts.

2.3. …produced competitive developments2.3. on the Transatlantic routes

In the Federal Maritime Commission’s (FMC)final report on the impact of OSRA, (2) the FMCfound that most containerised cargoes on trades toand from the United States were now carried underindividual service contracts and that this had led toa dramatic decline in the number and importanceof conferences. No more than ten percent ofTACA cargoes are now carried under the confer-ence tariff. The number of conference servicecontracts has decreased from 596 in 1998 to only 3in the year 2000. Further, the combined marketshare of the TACA parties has fallen from a high of80% in 1992 to approximately 50% in 2001. Thesedevelopments have led to a decline in the directimpact of the general rate increases decided by theTACA. The indirect impact of the general rateincreases would also appear to be quite limited: theFMC has found that service contract rates over theperiod 2000-2001 have increased only moderatelyin the westbound direction and have remainedvirtually unchanged eastbound.

Although the US and EU liner shipping competi-tion regimes are arguably more closely aligned



(1) Judgment of 16.3.2000 in Joined Cases C-395/96 P and 396/96 P, Compagnie Maritime Belge Transport and Others vCommission [2000] ECR I-1365.

(2) ‘The Impact of the Ocean Shipping Reform Act of 1998’, Federal Maritime Commission, September 2001.

now than ever before, points of divergence never-theless remain:

— While US legislation permits discussion agree-ments, the Commission has traditionally takenthe view that these agreements do not fallwithin the scope of the EU liner conferenceblock exemption and do not qualify for indi-vidual exemption;

— The US authorities permit conferences toestablish voluntary guidelines for all aspects oftheir members’ individual service contracts;the Commission has limited the scope of suchguidelines to purely technical matters;

— The US authorities permit inland price-fixingby conferences; the Commission does not.

It is however common ground between the US andEU authorities that the decline of the conferenceagreement has been accompanied by a commensu-rate increase in the number and scope of consor-tium agreements, mainly because the latter agree-ments provide clear benefits to carriers andshippers alike in the form of cost-savings andimproved services.

2.4. Revised TACA:2.4. the end of a long saga?

The revised Trans-Atlantic Conference Agreement(‘the revised TACA’) (Case COMP/37.396) is thefirst comprehensive attempt to put the guiding prin-ciples mentioned at 2.1 above into practice.Notified to the Commission in May 1999, the agree-ment comprises both inland and maritime aspects.The inland aspects were cleared by the Commissionin August 1999. The Commission did however raiseserious doubts about the maritime aspects of theagreement and in particular the arrangementsconcerning exchange of information.

On 29 November 2001 the Commission published anotice stating its intention to exempt the maritimeaspects of the revised TACA agreement and givingthird parties 30 days within which to comment.

In the period since the decision in August 1999 toraise serious doubts, the Commission’s investiga-tion has focused mainly on verifying that theprovisions for exchange of information betweenmembers of the conference are not such as to jeop-ardise the confidentiality of individual servicecontracts concluded between individual carriersand shippers. The free and widespread availabilityof such contracts is, in the Commission’s view, acrucial element in ensuring that the members of therevised TACA remain subject to effective compe-

tition. In considering whether this is indeed thecase, the Commission has taken due account of theabove finding of the FMC that no more thanapproximately ten percent of all cargo carried bythe members of the revised TACA is currentlycarried under the conference tariff. The remaining90 percent is carried under service contract.

In response to the Commission’s concerns, theTACA parties have made significant amendmentsto the conference arrangements concerning infor-mation exchange and have given certain undertak-ings. The Commission has taken the preliminaryview, pending comments from third parties, thatthese amendments and undertakings, in combina-tion with the clear evidence of substantial internaland external competition, are sufficient to addressthe serious doubts raised in August 1999.

The Commission’s decision in the revised TACAcase (1) will hopefully mark the end of the long sagaof conflict concerning the application of Regulation4056/86. Although a number of issues still remainto be settled by the Community judicature, the busi-ness climate and competitive conditions for linershipping have evolved to such an extent under thedual impetus of Commission action and the intro-duction of OSRA that there can be no turning back.However the revised TACA case should be seen forwhat it is; i.e. the concrete outcome of discussionsbetween the Commission and carriers on the appli-cation of existing legislation. A part of shippers’criticism is in effect a thinly veiled challenge to theprovisions of Regulation 4056/86, in particular tothe block exemption contained in Article 3, ratherthan to one or other specificity of the revised TACAconference arrangements.

The same error is committed by those carrier andgovernment representatives who argue in thecontext of the OECD regulatory reform debate thatthere is no need for a review of the EU liner ship-ping competition legislation because that reviewhas already been carried out within the frameworkof the revised TACA case. In dealing with that casethe Commission has not examined whether Regula-tion 4056/86 is adapted to current market conditionsor whether it is consistent with competition policyin other sectors and in other jurisdictions. In otherwords, the Commission has not carried out a review– it has merely applied the existing legislation.

2.5. Commission’s views on capacity2.5. management

The revised TACA case has also served to high-light the issue of capacity management. The

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(1) Expected for the first semester of 2002.

conference agreement contains a general provisionmodelled on Article 3(d) of Council Regulation4056/86, which allows a conference to regulate thecapacity offered by each of its members. Therevised TACA availed itself of this option over theChristmas and New Year low season of 2000/2001. The capacity programme, which covered aperiod of five weeks and was notified to theCommission, gave the latter the opportunity toclarify its view of the scope of Article 3(d). TheCommission thus considered inter alia that aconference capacity management programmecould not be used as an instrument to create an arti-ficial peak season and that capacity withdrawalcould not be combined with an increase in theconference tariff. The revised TACA partiesundertook to comply with these guidelines.

The scope of Article 3(d) was also at issue in a caseinvolving the Far Eastern Freight Conference (theFEFC). In October 2001, the FEFC parties decidedto implement a six-month co-ordinated vesselwithdrawal scheme. The scheme was intended todeal with the combined effects of a drastic fall indemand on the Europe – Far East trades and theintroduction of significant amounts of newcapacity. In a warning letter to the parties, theCommission indicated that it considered that theFEFC programme was not covered by Article 3(d),as interpreted by the Commission in its TAA andEATA decisions. In particular, the programme didnot, in the Commission’s view, have the permis-sible objective of addressing a short-term fluctua-tion in demand. Nor would the programme qualifyfor individual exemption, as any possible benefitto transport users would be more than outweighedby the negative impact of the programme on ship-pers’ transport costs. In response to the warningletter, the members of the FEFC immediatelyterminated their co-ordinated withdrawal scheme.

3. The OECD Liner Shipping3. Competition Policy Report:3. a basis for future work

3.1. The contents of the Report

As part of the OECD’s general Regulatory ReformProgramme, (1) the OECD Secretariat presented a‘Discussion document on regulatory reform ininternational maritime transport’ (2) in May 1999.The document recommended inter alia that agree-

ments to set common rates should no longerreceive automatic antitrust immunity or exemp-tion. It was then discussed at a joint workshop ofthe OECD’s Maritime Transport Committee andCompetition Law and Policy Committee in May2000, at the end of which the OECD Secretariatdecided to produce a draft report for discussion at asecond workshop in 2001.

In November 2001 the OECD Secretariat circu-lated a draft Liner Shipping Competition PolicyReport, (3) which makes, inter alia, the followingfindings of particular interest for EC maritimecompetition policy:

— The liner shipping industry is not ‘unique’ inthe sense that its cost structure does not differsubstantially from that of other transport indus-tries and shipping lines do not suffer fromexceptionally low returns on investment whencompared to other scheduled transportproviders. There is therefore no evidence thatthe industry needs to be protected from compe-tition by anti-trust immunity for price-fixingand rate discussions;

— There is no evidence that the conferencesystem (with anti-trust immunity or exemptionfor price-fixing) leads to more stable freightrates or more reliable shipping services thanwould be the case in a fully competitivemarket. On the contrary, the OECD findssupport for the view that the most competitivemarkets provide the greatest stability.

In the light of its findings, the draft Report came tothe conclusion that countries should:

— re-examine anti-trust exemptions for commonpricing and rate discussions, with the goal ofremoving them, except where specifically andexceptionally justified;

— have the discretion to retain exemptions forother operational arrangements so long as thesedid not result in excessive market power.

The draft Report also put forward a ‘second-best’solution which is essentially equivalent to thecurrent EU and US liner shipping regimes.

3.2. Commission reaction to3.2. the OECD Report

The Commission representatives welcomed theReport and noted its conclusion questioning the



(1) The Programme is a result of the request by Ministers in 1995 that the OECD should embark on a study of the reform of regulatoryregimes in OECD countries. The review of liner shipping has a parallel in a similar OECD review of air cargo transport.

(2) DSTI/DOT/MTC(99)8, 19.5.1999.(3) Available on the OECD website at http://www.oecd.org/pdf/M00020000/M00020755.pdf

existence of a causal relationship between exemp-tion and reliability of services, which is the verybasis of the EC block exemption for liner confer-ences. In agreement with the representatives of theEU Member States, they also announced that theywould study the general question of exemption forliner conferences further, using the draft OECDReport as a starting point, but focusing morenarrowly on those factual and legal issues that areof particular relevance for EC liner shippingcompetition policy.

Furthermore, nearly fifteen years have elapsedsince Council Regulation 4056/86 entered intoforce and with it the block exemption for linerconferences. However, Regulation 4056/86 doesnot provide for an automatic, periodic, review ofthe functioning of and justification for the blockexemption, which is granted for an unlimitedperiod. (1) The fact that no review has been under-taken in the last fifteen years might be thought tobe in itself sufficient to justify a review.

The great merit of the OECD’s initiative on linershipping competition policy is to have opened upthe debate on a topic that has long been taboo.Whatever the shortcomings, real or perceived, ofits various reports, the OECD Secretariat has

undoubtedly asked the right questions. The workof the OECD Secretariat will therefore be of greatassistance to the Commission when the latterundertakes its own examination into the justifica-tion for liner shipping exemptions in the currentcontext.

Given the global nature of liner shipping, it will beimportant to maintain close contact throughoutany review process with the EU’s main tradingpartners and in particular with the United States. Itwill also be important to ensure that carriers andtransport users have sufficient opportunity to makeknown their views and to provide relevantevidence.

** *

In the final years of the twentieth century thecompetitive environment of the maritime transportsector has been greatly improved, for a large partas a result of determined and continuous Commis-sion action. The OECD Report has just questionedthe justifications for the exemptions from normalrules of competition that this sector traditionallyenjoys. The work in front of us now is to re-assessthese justifications.

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(1) Cf. the consortium block exemption (reviewed every five years).

Minority shareholdings, interlocking directorships and the EC Compe-tition Rules – Recent Commission practice

Enzo MOAVERO MILANESI, Directorate-General Competition, Director, andAlexander WINTERSTEIN, Directorate-General Competition, unit D-1

Minority shareholdings and interlocking director-ships between competitors are, and have alwaysbeen, a widespread practice in certain industriessuch as banking and insurance. Given that suchlinks may influence the companies’ competitivebehaviour and thus the market outcome, they arebound to attract the attention of competitionauthorities (1). Indeed, the Commission’s recentdecisions in the Allianz/Dresdner (2) and Nord-banken/Postgirot (3) merger cases demonstrate theimportance of this element in its analysis, and theUS authorities appear to share the Commission’sconcerns (4).

The main competition concerns

The concept of workable competition presupposesand requires economic operators to act independ-ently from each other. Both minority share-holdings and interlocking directorships may jeop-ardise this essential requirement. In this respect,the main antitrust concerns can be grouped in thefollowing three categories:

(1) if X holds a significant share in competitor Y,their profit maximisation calculus may changeas they take each other’s business interests intoaccount. As a result, the economic incentivesto compete are modified in that X and Y maycompete less vigorously and adopt behaviourmore conducive to joint profit maximisation(‘non-aggression understanding’). This effect

will be even stronger in case of cross-sharehol-dings;

(2) if X holds significant shares in both Y andcompeting Z, X will try to further his interestsin both Y and Z, which is apt to lessen compe-tition between the latter two;

(3) interlocking directorships may act as a conduitfor anti-competitive transfer of price and stra-tegic information.

Framework of analysis and possibleremedies

The acquisition of a minority shareholding as suchdoes not amount to a restriction of competition.However, the ECJ held, in its first and so far onlyjudgement on this issue, that Article 81 applies tothe acquisition of minority shareholdings in acompetitor if it is apt to ‘serve as an instrument forinfluencing the commercial conduct of the compa-nies in question so as to restrict or distort competi-tion’ (5). The Court added that, in this respect,oligopolistic markets warrant particular antitrustscrutiny.

From this it follows that there is a ‘safe haven’ forminority shareholdings in competitive marketsand without accompanying voting/representationrights, interlocking directorships, special rights(such as share options) or post-transaction co-operation arrangements. However, Article 81 (1)



(1) For a fuller analysis of ECJ and Commission case-law and reasoning see Moavero Milanesi/Winterstein, Minderheits-beteiligungen und personelle Verflechtungen zwischen Wettbewerbern - Zur Anwendung von Artikel 81 und 82 EG-Vertrag, inRolfes/Fischer [ed.], Handbuch der Europäischen Finanzdienstleistungsindustrie, Fritz Knapp Verlag, Frankfurt a.M. [2001] 251;(available also under http://europa.eu.int/comm/competition/speeches/text/sp2001_026_de.pdf).

(2) M.2431, Decision of 19 July 2001 (press release IP/01/1040)(3) M.2567, Decision of 8 November 2001 (press release IP/01/1552)(4) see, e.g., Nannes (former Deputy Assistant Attorney General, DoJ Antitrust Division), The View from the Antitrust Trenches,

27 January 2000, available at http://www.usdoj.gov/atr/public/speeches/4086.pdf. For a discussion of DoJ and FTC practice aswell as the underlying economic and legal arguments see O’Brien/Salop, Competitive Effects of Partial Ownership: FinancialInterest and Corporate Control, 67 Antitrust L.J. 559 [2000] and Dubrow, Challenging the Economic Incentives Analysis ofCompetitive Effects in Acquisitions of Passive Minority Equity Interests, 69 Antitrust L.J. 113 [2001]. See also FTC/DoJ,Antitrust Guidelines for Collaborations Among Competitors [2000], at 3.34 (c).

(5) Joint Cases 142, 156/84, British American Tobacco Company Limited and R.J.Reynolds Industries Inc/Commission, ECR [1987]4487 (hereinafter ‘Philip Morris’). The Court mentioned a number of scenarios in which the test would be satisfied, i.e., if theagreement either results in control or gives the acquirer the possibility to take effective control at a later stage, creates a structurelikely to be used for commercial co-operation or necessarily leads the undertakings concerned to taking each others’ interest intoaccount when making commercial decisions. In addition, the Court ruled that Article 82 can be infringed if the shareholding‘results in effective control of the other company or at least in some influence on its commercial policy’.

may be applicable if and to the extent that theacquisition directly or indirectly influences theconduct of the undertakings concerned andthereby leads them to no longer act independentlyfrom each other.

The right and ability to exert influence willnormally arise from company law or from contrac-tual arrangements (1). However, even in theabsence of such rights particular market conditions– in particular the degree of concentration and theexistence of entry barriers – can be such as to leadto minority shareholdings (and even more cross-shareholdings) giving rise to the relevant degree ofinfluence (2). Particularly in oligopolistic marketswith high entry barriers such an operation maymodify the economic incentives of the companiesto compete or to deal with other companies (3). Insuch cases, therefore, the competition analysisshould arguably not be limited to examining the‘classic’ ways of exercising influence but shouldbe extended to analysing the parties’ incentives tocompete under the prevailing market conditions.

In the past, the Commission has addressed thesecompetition concerns by imposing either struc-tural remedies (i.e., divestiture of shareholdingsand/or severance of interlocking directorships) orbehavioural ones (e.g., setting-up of ‘Chinesewalls’). The following section gives some exam-ples.

Commission practice in antitrustcases…

In Enichem/ICI (4) – the first relevant decisionafter Philip Morris – the Commission exempted aproduction JV between Enichem and ICI only on

condition that neither the parents nor the JV shouldhold any participation in competitors which couldbe used to influence the economic behaviour ofsuch companies. In the same vein, there should beno interlocking directorships (5). Similarly, theCommission cleared the acquisition by BT of 20%in MCI, including interlocking directorships,because BT undertook not to attempt to influenceMCI’s business conduct and not to acquire morethan 20% within ten years following the transac-tion (6). In Olivetti/Digital (7), the Commissionapproved the acquisition by Digital of 8% inOlivetti, again including interlocking director-ships, due to the fact that Olivetti’s board – whereDigital was represented – had delegated all execu-tive powers to its chairman. Consequently, neitherco-ordination of business behaviour nor anti-competitive information flows were consideredlikely.

…and in merger proceedings

In Volvo/Renault, the Commission cleared themerger inter alia after Volvo undertook to sell itsminority stake in Scania (8). The same approachwas followed in AXA/GRE (9) where the Commis-sion took issue with GRE’s minority shareholdingin, and interlocking directorships with, its compet-itor Le Foyer. GRE undertook to sell its participa-tion in Le Foyer, whereupon the Commissioncleared the merger.

In the same vein, the Commission initiallyobjected to the proposed merger between Thyssenand Krupp because Krupp held a 10% stake in itscompetitor Kone. Connected to this minorityshareholding was a number of particular contrac-tual rights granted to Krupp, including an inter-

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(1) Such arrangements include rights relating to voting, to representation, to acquisition of additional stock, to the establishment ofinterlocking directorships or to post-transaction co-operation. Whether such rights lead to an appreciable restriction ofcompetition will depend – like in any other case – on an analysis of the legal and economic context.

(2) In this context, it should be noted that under Article 82, minority shareholdings and/or interlocking directorships may be a factorleading to a situation of joint dominance. Moreover, in cases where undertakings already are in a dominant position (eitherindividually or jointly), the acquisition of minority shareholdings and/or the establishment of interlocking directorships by suchundertaking(s) may itself infringe Article 82. This may be because of the operation’s detrimental effect on market structure, of theerection of an additional entry barrier or – in a vertical context – of the foreclosure of competitors on an up/downstream market; seeCommission Decision of 10 November 1992, Warner-Lambert/Gillette, BIC/Gillette, OJ [1993] No L 116/21.

(3) Indeed, the Court in Philip Morris assessed whether – in view of the oligopolistic structure of the cigarettes market – theparticipation of Morris in its competitor Rothmans would lead to a linking of profits, giving those two companies an incentive tocompete less vigorously. The Court concluded that Morris’s own commercial interests would outweigh its interest to protect itsinvestment in its competitor Rothmans. In this context, note that it is generally under oligopolistic market conditions that anexchange of competitive information will become problematic: see, e.g., Case C-7/95 P, John Deere Limited/Commission, ECR[1998] I-3111, at paragraph 67

(4) IV/31.846, Decision of 22 December 1987, OJ [1988] L 50/18(5) Given that ICI did indeed hold a minority shareholding in a competitor at the time of notification, the Commission in fact imposed

a structural remedy.(6) IV/34.857, BT/MCI, Decision of 27 July 1994, OJ [1994] L 223/36(7) IV/34.410, Decision of 11 November 1994, OJ [1994] L 309/24(8) IV/M.1980, Decision of 1 September 2000(9) IV/M.1453, Decision of 8 April 1999

locking directorship. In view, inter alia, of theoligopolistic structure of the product marketconcerned, the Commission feared that such hori-zontal links could dampen the post-merger compe-tition between the competitors Thyssen and Koneand cleared the operation only after Krupp under-took irrevocably to waive the exercise of its rightsas well as to sever the interlocking directorshipwith Kone (1).

Likewise, in Allianz/AGF (2) the Commission didnot accept the parties’ initial argument thatCoface, at the time being AGF’s delcredere insur-ance subsidiary in France, would turn into an inde-pendent competitor to AGF after AGF would havereduced its shareholding in Coface to 24.9%. Inreaching this conclusion, the Commission high-lighted both business links and interlocking direc-torships between the two companies. It was onlyafter AGF undertook to sever those interlocks (andto sell its stake in Coface) that the Commissioncleared the transaction – without prejudice, natu-rally, to the possible application of Article 81 tothe co-operation between AGF and Coface.

In Generali/INA (3), the Commission was initiallyconcerned, inter alia, about the fact that Generaliheld large stakes in its direct competitors and thatinterlocking directorships could, at least poten-tially, allow it to exert significant influence. Toease those concerns, the parties undertook, interalia, not to establish interlocking directorshipswith competitors in Italy. The Commissionconsidered that this commitment was likely toremove the risk of anti-competitive informationflows. In addition, certain existing interlocks weresevered, or announced to be severed, prior to clear-ance by the Commission. (4)

Finally, minority shareholdings and interlockingdirectorships played an important part in theCommission’s analysis of two recent merger oper-ations. In Allianz/Dresdner, the Commissionnoted the existence of significant cross-share-holdings between the merged entity and its mostimportant competitor in Germany, Munich Re/Ergo group. In particular, Allianz’ and Dresdner’scombined post-merger shareholding in Munich Reof 30-35% would, in view of the latter’s dispersedshareholder structure, in all likelihood haveafforded the merged entity with a majority inMunich Re’s general shareholders’ meetings.Moreover, the Commission found that the marketvalue of Munich Re’s shareholding in Allianz

equalled more than one third of Munich Re’s owntotal market value. Consequently, any change inthe market value of competing Allianz would havean immediate impact on Munich Re’s owneconomic situation.

In view of those circumstances, the Commissionwas initially concerned that, as a consequence ofthe transaction as notified, competition betweenthe two groups would be significantly reduced. Inorder to remove the Commission’s concerns,Allianz and Dresdner undertook to reduce to20.5% their joint holdings in Munich Re until theend of 2003, and to refrain from exercising theirvoting rights in excess of 20.5% already as of thedate of the Commission’s decision.

Finally, in Nordbanken/Postgirot the Commissionhad to assess the proposed acquisition byNordbanken, a large Swedish bank, of Postgirot, aSwedish company which owns and operates one ofSweden’s two giro payment systems – the secondsystem being Bankgirot, an entity owned by anumber of Swedish banks. Nordbanken held asignificant shareholding in Bankgirot and wasrepresented in the Bankgirot’s Board of Directors.Thus, following its acquisition of Postgirot,Nordbanken would have had access to confidentialbusiness information of the only competing girosystem and could have exerted significant influ-ence on strategic decisions by both systems. TheCommission took the initial view that such ascenario could seriously reduce competitionbetween the only two providers of giro paymentservices in Sweden.

In order to remove the Commission’s concerns,Nordbanken undertook to reduce its shareholdingin Bankgirot to no more than 10 % and to refrainfrom exercising any shareholder rights goingbeyond minority protection rights safeguardingthe financial value of its participation. In addition,Nordbanken would withdraw all its representa-tives in Bankgirot’s Board of Directors, workinggroups or other bodies, and no commercial infor-mation available to the Board, the working groupsand other bodies would be made available toNordbanken (5). In view of those commitments,the Commission cleared the transaction.

Outlook

This article has identified potential competitionproblems where there are shareholdings falling



(1) IV/M.1080, Decision of 2 June 1998(2) IV/M.1082, Decision of 8 May 1998(3) COMP/M.1712, Decision of 12 January 2000(4) See press release IP/00/29

short of sole or joint control. The question iswhether shareholdings, where they confer suffi-cient influence, alter the behavior of the compa-nies concerned in a way that restricts competitionunder Article 81(1).

As this is a question of economic appraisal, thereare no automatic thresholds above which concerns

will always be triggered or below which concernscan always be excluded. It will be necessary toanalyse each transaction in its specific legal andeconomic context. Similarly, whether the appro-priate remedy is structural or behavioral will alsovary depending on this context and the severity ofthe competition concern.

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(5) For other examples of similar arrangements required by the Commission see its decision in AT&T/BT (JV.15) of 30 March 1999and its comfort letter plus press release concerning Volbroker.com (IP/00/896). In both cases, the parties offered commitmentswith a view to avoid the exchange of sensitive business information.

The SNELPD Decision in the light of the previous Article 86(3) Deci-sions of the Commission

Christian HOCEPIED, Directorate-General Competition, unit C-1

Article 86(3) of the EEC Treaty entrusts theCommission with a specific surveillance duty ‘inthe case of public undertakings and undertakingsto which Member States grant special or exclusiverights’. The Commission must ‘where necessary,address appropriate directives or decisions toMember States’ which enact or ‘maintain in forceany measure contrary to the rules contained in theTreaty, in particular to those rules provided for inArticle 12 and Articles 81 to 89’.

The Commission adopted its first Article 86(3)Decision in 1985. Since then the Commissionadopted 16 decisions covering most of the areaswhere Member States granted special and exclu-sive rights: posts (4), mobile telecommunications(2), airports (4), ports and maritime transport (4),insurance (1) and broadcasting (1). In additioncomplaints were examined in other sectors, suchas horse betting (1), but without arriving at formaldecisions. As a matter of fact, Article 86(3) inves-tigations do not – contrary to Merger cases – allresult in a formal decision. Cases may appearunfounded or remedies may be found to solve theconcerns of the Commission in the course of theprocedure. In addition, the Commission adopted anumber of Directives under Article 86(3) to rendertransparent the financial relations between theMember States and their public companies and toliberalise the telecommunications markets.

The only two important sectors where the Commis-sion has until now refrained from intervening on thebasis of Article 86(3) are energy and railways,where the liberalisation process has just started.

In 2001 the Commission applied Article 86(3)applied once, when on 23 October 2001 itaddressed on 23 October 2001 a Decision toFrance subsequent to a complaint of the SNELPD– the trade association representing the majority ofthe French mail preparation firms.

1. The SNELPD Decision

Mail preparation encompasses a wide array ofservices ranging from the editing and printing of

postal items on behalf of large mail originators tothe handing-over to the offices of the Post of pre-sorted mailbags. In 1998, La Poste reviewed theconditions applied to the mail preparation firmsand SNELPD lodged a formal complaint againstthe French postal legislation.

In its Decision, the Commission takes the viewthat by granting a legal monopoly to La Poste forthe transport and delivery of certain mail items, theFrench Government creates a situation where LaPoste is induced to abuse its dominant position. Itcan indeed determine the scales of charges andtechnical conditions for access to its network bymail preparation firms in a discretionary way.Abuses are all the more likely given that La Poste,along with a number of its subsidiaries, likeDatapost and Mikros, are themselves active on themail preparation market.

The Commission Decision acknowledges that theFrench Government has some but limited surveil-lance powers over La Poste. In practice, it doeshowever not control most of the contractual rela-tionships between the latter and the mail prepara-tion firms.

In addition, the Commission Decision notes thatthis scrutiny is exercised by the Ministry of Finance,whose remit also encompasses the supervision ofthe financial interests of the State in the publicpostal operator. The Commission decision statesthat this might affect the impartiality of the Ministrywhile performing its control over La Poste and thatthe Ministry itself could be placed in a situation ofconflict of interest. In fact, the case presented adouble conflict of interest, namely within La Posteas being both a competitor and an unavoidablepartner of mail preparation firms, and within theMinistry as being both the watchdog of La Poste’scompetitive behaviour and its sole shareholder.

The Decision therefore concludes that the Frenchlegislation is contrary to Article 86(1), read inconjunction with Article 82 of the EC Treaty, tothe extent that it allows only limited scrutiny of thenon-discriminatory nature of the technical andfinancial conditions applied by La Poste to mail



(1) In November 1989, a company requested the Commission to take a decision relating to the French horsebetting legislation. Thecomplainant brought the Commission to the Court considering that it failed to do so. The Court upheld the position of theCommission. See Judgement of the Court of First Instance (Second Chamber) of 27 October 1994, Ladbroke Racing Ltd vCommission of the European Communities, Case T-32/93.E.C.R. 1994 p. II-1015

preparation firms, and to the extent that this partialscrutiny is furthermore carried out by a publicauthority that is insufficiently independent andneutral in relation to La Poste.

2. Article 86(3) Decisions2. in the postal sector

It is not fortuitous that the last two Article 86(3)Decisions adopted by the Commission bothconcern the postal Sector (1). Between 1990 (2) and2000, the Commission did not adopt any decisionconcerning the postal sector. This ‘abstention’corresponds to the (slow) adoption and subsequentimplementation of Parliament and Council Direc-tive 97/67/EC that has harmonised the scope of theservices which may be reserved to the universalpostal service providers in the Community.Pending the discussion of the Directive in Councilmost of the Member States did not amend theirPostal legislation and therefore did not enact new‘State measures’ in the sense of Article 86(1).Decision 2001/176/EC of 21 December 2000concerning the provision of certain new postalservices with a guaranteed day- or time-certaindelivery in Italy relates to a measure taken toimplement the Directive.

The SNELPD decision reflects in this regard ashift in the application of Article 86(3). It is notused, as the Italian Decision, to monitor theborderline between reserved and non-reservedarea in the Postal area, but to assess how effectivethe competitive safeguards are established by theMember State concerned.

The SNELPD decision furthermore applies Article86(3) in conjunction with Article 82 before there isevidence that an abuse in the sense of that provi-sion has actually occurred and although the Statemeasure leaves La Poste a margin of freedom. Inthe SNELPD decision, the Commission only statesthat in the relevant circumstances La Poste wouldbe induced to abuse its dominant position. TheCommission did not wait until abuses occurred tochallenge the failure of the State to take measures.In dynamic markets such as the liberalised postalservices, this would mean that the Commissionwould only intervene when the competition hasalready been distorted and market share hasalready been lost to the incumbent, which wouldmake no sense.

Monitoring the level playing field in the Postalsector where a market player enjoying a reservedservice competes with private operators willremain indispensable given the outcome of thereview of directive 97/67/EC. The Commissionproposal raised expectations for a strong limitationof the reserved area. However, Council and Parlia-ment weakened substantially the proposal made bythe Commission on 30 May 2000. As a result, asubstantial reserved service will be maintained atleast until 2009.

3. A decision which did not question3. a monopoly, but the monitoring of3. this monopoly by the Member State

Most of the Article 86 Decisions relate to Statemeasures granting exclusive rights incompatiblewith the Treaty. Initially the Commission onlyused this instrument to declare exclusive or specialrights contrary to the Treaty and to request theirabolition. However, if the power of the Commis-sion were limited to requesting the abolition ofState measures, the scope of Article 86(3) wouldbe quite limited.

3.1. Differences in comparison with3.1. previous Article 86(3) decisions and3.1. in particular the Italian port decision

The SNELPD Decision is based on the same legalargumentation as Commission Decision 97/744/EC of 21 October 1997 regarding the provisions ofthe Italian port legislation relating to employ-ment (3). In recital 30 of the latter Decision, theCommission stated that ‘if the Port Authoritylicenses only one undertaking to supply labour toother undertakings, the licensed undertaking isplaced in a situation of conflict of interest as itbecomes the sole supplier of its competitors. …The conflict of interest is inherently an abuse. It isnot necessary to wait until undertakings actuallycommit such abuses before action can be takenagainst them. It is sufficient for them to be legallyplaced in a position in which they are induced tocommit abuses if they have an interest in so doing’.The Italian Ports Decision was based on an estab-lished jurisprudence and in particular the Court ofJustice judgement of 13 December 1991 in Case



(1) The previous one was Decision 2001/176/EC of 21 December 2000 concerning the provision of certain new postal services with aguaranteed day- or time-certain delivery in Italy Official Journal L 63 , 3/3/2001 p. 59 -66

(2) Decision 90/16/EEC of 20 December 1989 concerning the provision in the Netherlands of express delivery services O. J. L 10 , 12/01/1990 p. 47 and Decision 90/456/EEC of 1 August 1990 concerning the provision in Spain of international express courierservices, O J L 233 , 28/08/1990 p. 19-23

(3) OJ L 301 , 05/11/1997, p. 7 - 26

C-18/88 GB-Inno BM (1), to which the SNELPDdecision also refers.

The main difference between the SNELPD Deci-sion and the Italian Ports Decision is that in thelatter the Commission requested the abolition ofthe ‘the monopoly for the supply of temporarylabour to other port undertakings’. The ItalianGovernment had argued that the monopoly wasnot infringing these provisions, ‘on the ground thatcompliance with the competition rules would inany event be closely monitored both by the PortAuthority and, if necessary, the Commission’. TheCommission nevertheless rejected this defencestating that while it ‘does not doubt the ability ofthe Port Authority to enforce compliance with thelaw. It is the law itself that is incompatible with theTreaty’. It held that a conflict of interest is inher-ently abusive.

In the SNELPD case, the Postal monopoly is obvi-ously not put in question. This monopoly is legalunder Directive 97/67/EC. The Commissionaccepts that an ‘a priori’ independent supervisionof the access conditions (in particular of the so-called ‘technical’ contracts) determined by LaPoste would be sufficient to allow for the continua-tion of the conflict of interest situation in which LaPoste is placed.

3.2. Similarities with previous Article 86(3)3.1. decisions and in particular the3.1. Italian GSM decision

Certain State measures by their nature cannot beabolished once implemented or, at least, their aboli-tion would create further distortions. The Commis-sion was for the first time confronted with such asituation in 1994 when assessing the procedureapplied by Italy for the granting of the second GSMlicence. The tender introduced competition in thearea of digital mobile telephony. However, certainconditions were found to be anti-competitive. If theCommission had asked the Italian Government toabolish the relevant tender condition, the wholetender procedure would have been threatened. Theconsortium whose bid had not been retained couldindeed have challenged the granting of the secondmobile licence under national law since the aboli-tion would have modified the original tender obli-

gations after the completion of the selection proce-dure. For this reason, Article 1 of Decision 95/489/EC requested the Italian Government ‘to take thesteps necessary to abolish the distortion of competi-tion resulting from the initial payment imposed onOmnitel Pronto Italia and to secure equal conditionsfor operators of GSM radiotelephony on the Italianmarket at the latest by (…). The measures defini-tively adopted may not impair the competitioncreated by the licensing of the second GSM oper-ator on 2 December 1994’.

The Member State concerned was not obliged toabstain from introducing certain measures (‘nonfacere’), but imposed an obligation to adoptcertain substantive measures (‘facere’). TheCommission even specified that the measuresshould only be implemented ‘after receiving theagreement of the Commission’.

The SNELPD decision confirms the view of theCommission that Article 86(1) not only requiresthe abolition of explicit measures but also requiresMember States to end failures to regulate indus-tries entrusted with a service of general economicinterest by active behaviour (‘facere’). The Deci-sion requires the French government to superviseprivate law contractual relations in areas outsidethe monopoly area, but where the universal postaloperator can leverage its monopoly position in thereserved area.

3.3. A new role for Article 86(3)?

Notwithstanding the partial liberalisation ofmonopolised sectors and the confirmation ofmonopolies in Parliament and Council Directives,Article 86 retains thus an important role to ensurethat relevant measures are in place to safeguard alevel playing field despite the presence of theprivileged market player entrusted with tasks ofgeneral economic interest. The preliminary rulingof 17 May 2001 in the Traco case – where theCourt left the issue open whether the stamp dutiesin favour of Poste were legal or not in the absenceof data on the financing of the service of generaleconomic interest (2) – illustrates the need to tackleabstentions from Member States to adopt clearrules regarding the operation and financing of therelevant tasks. Such abstention constitutes a Statemeasure (in the sense of ‘administrative silence’)



(1) Judgment of 13 December 1991, Case C-18/88 [1991] ECR I-5941(2) ‘It is apparent from the case-law of the Court that it is not necessary, in order for the conditions for the application of Article 90(2)

of the Treaty to be fulfilled, that the financial balance or economic viability of the undertaking entrusted with the operation of aservice of general economic interest should be threatened. It is sufficient that, in the absence of the rights at issue, it would not bepossible for the undertaking to perform the particular tasks entrusted to it, defined by reference to the obligations and constraints towhich it is subject, or that maintenance of those rights is necessary to enable the holder of them to perform tasks of generaleconomic interest which have been assigned to it under economically acceptable conditions (see, in particular, Case C-67/96Albany [1999] ECR I-5751, paragraph 107)’. (paragraph 54)

in the sense of Article 86(1). In a market economythis abstention creates uncertainties dissuadingmarket entry and investment and thus entrenchingthe dominant position of the incumbent under-taking. Competition law remedies are often notsufficient to deal with such situations. Theyprohibit excessive prices and/or discrimination butare for example not suited to set out a scheme toshare in a fair way the burden of public interestservices. There are certain methodological choicesthat only a Member State can take in this regard. Inaddition, market certainty requires that such deci-sions are made a priori, and cannot wait for compe-tition law decisions and the outcome of possibleappeals.

4. Conclusion

The SNELPD Decision reflects the new contextresulting from Article 16 EC, introduced by the

Amsterdam Treaty. According to the latter ‘giventhe place occupied by services of generaleconomic interest in the shared values of the Unionas well as their role in promoting social and territo-rial cohesion, the Community and the MemberStates, each within their respective powers andwithin the scope of application of this Treaty, shalltake care that such services operate on the basis ofprinciples and conditions which enable them tofulfil their missions’.

This Article requires both the Community and theMember States to explicit spell out the principlesand conditions under which the bodies entrustedwith services of general economic interest have tofulfil their mission and ‘to take care’ that they‘operate on the basis of these principles’. Thisimplies necessarily independent supervisionregarding over the undertakings they entrust withsuch tasks.





European Competition Day Madrid

The fifth European Competition Day takes place on 26 February in Madrid.

The main topics are

• Telecommunications: access to the local loop and the internet

• Sport broadcasting rights

• Competition and consumers

The conference will be hosted and organised by the Spanish competition authority in collaboration withDG Competition. There will be opening statements by the Spanish Minister of Economic Affairs,Mr Rato, Commissioner Monti and the chairman of the Economic and Monetary Affairs Committee ofthe European Parliament, Mrs Randzio-Plath.

Further information may be obtained on the website of the Spanish presidency (www.ue2002.es) – seethe calendar.


European Competition Day

European Competition Day, Antwerpen, 11.10.2001 – Competitionand the Consumer – The case of Pharmaceutical Products

Ansgar HELD, Directorate-General Competition, unit A-1

1. The fourth European Competition Day tookplace on 11 October 2001 in Antwerpen. Itfocused on the theme: Competition and theConsumer – The case of Pharmaceutical Prod-ucts. The approximately 200 participants of theconference organised by the Belgian Ministryof Economic Affairs were composed oflawyers, industry and consumer representa-tives, some University teachers, officials ofdifferent Belgian institutions and of the compe-tition authorities of several Member States. Theconference, which was chaired by KoenLenaerts, Judge at the Court of First Instance,was opened with statements of Minister CharlesPicqué, Commissioner Mario Monti and MEPChrista Randzio-Plath.

2. Minister Picqué underlined the importantrole of competition. The specific feature of theconference theme is the tension between the twoobjectives to ensure a high level of public healthand to maintain at the same time an appropriatelevel of competition.

Commissioner Monti demonstrated the benefi-cial effects of competition policy on theconsumers with the example of the car cases,the investigation into Euro currency conversionbank charges and into the Belgian beer cartel.Concerning pharmaceuticals, the Commis-sion’s focus would be on obstacles to paralleltrade and to abusive extension of the duration ofpatent rights.

Mrs Randzio-Plath also very much supportedcompetition in general but regretted that in thepharmaceutical sector consumers are not pricesensitive. Parallel trade could be enhanced byinternet trade. This would require that someMember States lift their ban on this form oftrade in pharmaceuticals. In her view healthpolicy would not be sustainable without genericproducts. Wrong developments in the area ofpatent protection should be countered.

3. The subsequent discussion panel wascomposed of François Bouvy, of the European

Federation of Pharmaceutical Industries, Jean-Philippe Ducart of Test-Achats, Luc Valade ofthe French competition authority and LucGyselen of DG Competition. Mr Bouvy under-lined the importance of R&D and the burden ofregulation and price control in Europe and criti-cised the ‘parallel import’ approach of theCommission. Mr Ducart and Mr Valadestressed the tendency of industry and doctors(advised by industry) to prescribe too many andtoo costly products and proposed to increase theuse of generics. Mr Gyselen defended theCommission’s position regarding parallelimport and referred to decisions of the Commis-sion to defend competition.

The subsequent discussion within the panel andwith the floor addressed issues like the need tosafeguard necessary incentive for industry toinvest in R&D, parallel import from third coun-tries and the need for price harmonisation.

4. In his concluding remark, Jean-FrançoisPons, Deputy Director General of DG Competi-tion, underlined the remarkable coherence ofthe Statements of the three EU institutions at thebeginning of the conference. All were in favourof a strong competition policy benefiting theconsumer, and of the project of modernisation.He also underlined that, despite disagreementbetween the participants of the secondroundtable, there were also some convergence:the specificity of the sector (health, R&D), theinterest in the increase of generics and in moreresponsibility for the consumer (preferablythrough their associations), and more generallya common wish of more European harmonisa-tion.

5. In conclusion, the competition day leftparticipants largely satisfied. Even if the publicwas mostly composed of representatives ofindustry and lawyers, the meeting contributedalso to raise the awareness of the consumers’representatives about the interest of an increaseof competition in this sector.

The creation of an International Competition Network

Yves DEVELLENNES, Directorate-General Competition, Head of unit A-4;Georgios KIRIAZIS, Directorate-General Competition, unit A-4

Introduction

The increasing internationalization of our econo-mies creates very important challenges for anti-trust authorities around the world; the response tothese challenges has been the development ofbilateral cooperation with the competition authori-ties of the EU’s major trading partners throughdifferent types of agreements, including regionalones (e.g. Mercosur).

There are over 90 countries today that haveenacted some form of competition law regime,many of which have only been introduced duringthe past decade – and more countries are in theprocess of adopting competition rules. Given theever-increasing integration of the world economy,and the consequent growing inter-dependence ofnational and regional economies, there is a clearneed to go beyond bilateralism and to reinforcemultilateral efforts to ensure convergence andcoordination between the growing number ofcompetition enforcement systems.

Given the need for enhanced governance mecha-nisms, many officials from competition authoritieshave voiced their support for the creation of a newand informal vehicle that will enable antitrustagencies in all parts of the world to work togetherin order to improve international antitrust coopera-tion and sound antitrust enforcement, in an attemptto forge as broad a world-wide consensus aspossible.

As a result of the above discussions and practicalefforts, the creation of an International Competi-tion Network (ICN) was announced publicly onThursday 25 October in New York, USA. (1)National Competition Authorities (NCAs) of EUMember States have been involved in this projectsince the beginning at a high level.

It is important to stress that it is the first time thatso many competition authorities take an autono-mous initiative designed to enable them to shareexperiences and exchange views on competitionissues deriving from an ever-increasing globalisa-tion of the world economy.

Mission and Activities of ICN

ICN will be a project-oriented, consensus-based,informal network of antitrust agencies from devel-oped and developing countries that will addressantitrust enforcement and policy issues ofcommon interest and formulate proposals forprocedural and substantive convergence through aresults-oriented agenda and structure. It willencourage the dissemination of antitrust experi-ence and best practices, promote the advocacy roleof antitrust agencies and seek to facilitate interna-tional cooperation.

Membership and organization

Any national or regional competition agency respon-sible for the enforcement of antitrust laws maybecome a member of the ICN. The network will alsoactively seek advice and contributions from theprivate sector and various non-governmental organi-zations, and will cooperate closely with thefollowing types of entities: international organiza-tions, such as OECD, WTO, and UNCTAD, industryand consumer associations, practitioners of antitrustlaw and/or economics and members of the academiccommunity. In particular, ICN will seek input fromthese non-governmental advisers, who are notmembers of the Network but who will providesupport in terms of identifying projects. ICN mayalso request that certain non-governmental advisersparticipate in working groups for designated projectsand contribute papers or participate in hearingsrelated to ICN projects.

As regards its organization, ICN is intended as avirtual structure without any permanent secre-tariat, flexibly organized around its projects,guided by a steering group which will identifyprojects and devise work plans for approval of theICN as a whole. The authority hosting the annualconference will cover for a year logistic and secre-tarial costs related to its organization.

Conferences and Meetings

There will be one ICN conference per year. TheConference will bring together heads of antitrust



(1) All available information on ICN activities can be consulted on-line at the new ICN website athttp://www.internationalcompetitionnetwork.org

agencies to commission new projects and reviewthe progress and recommendations of currentprojects. The conferences will provide a structureddialogue by focusing on a limited number ofprojects selected sufficiently in advance by ICN topermit meaningful participation by all members.

The ICN will concentrate its efforts on interna-tional antitrust issues that are difficult yet capableof resolution. Initially, the ICN will work on twoimportant issues in antitrust: the merger controlprocess in the multi-jurisdictional context and thecompetition advocacy role of antitrust agencies.This agenda will be later opened up to includeissues of particular relevance to transition anddeveloping economies.

The first official ICN conference will be hosted bythe Italian Antitrust Authority in Naples 28-29September 2002. Thereafter, annual conferenceswill be held in the following countries, in thisorder: Mexico (2003); Korea (2004); Germany(2005); and South Africa (2006).

Link with WTO and OECD GlobalForum

The community’s objectives in the WTO in thearea of Trade and Competition are currently aimedat putting in place a set of basic systemic guaran-tees coupled with certain minimum substantiverequirements, principally the prohibition of hard-core cartels. The Doha WTO Ministerial recentlyconfirmed that negotiations on these issues willtake place after the next session of the MinisterialConference. ICN is much more a venue designedto spread competition culture amongst competi-tion agencies in all parts of the world. ICN is there-fore not an alternative to the WTO efforts and thetwo avenues should be regarded as complementaryand should be pursued in parallel in order to bemutually reinforcing in achieving competitionpolicy objectives.

Similarly, there is a need and a role for both theICN as well as the newly launched Global Compe-tition Forum, OECD’s project for reaching-out andengaging in dialogue economies that are notmembers of the Paris based organisation. The twogroups will work closely with one another and willbe partners. ICN, however, will be open to allnational and regional competition agencies andwill focus on a select number of narrowly definedissues that it will seek to resolve in a relativelyshort period of time. In contrast, the OECD’sGlobal Competition Forum will bring a limitednumber of developed and developing countriestogether to share experiences on a broad range ofantitrust subjects.

Conclusion

The ICN complements the EU’s efforts bothwithin the framework of the existing bilateralagreements as well as in the multilateral level andin different fora (WTO, OECD, UNCTAD), toenhance cooperation in the area of competition andto provide technical assistance to emerging juris-dictions that seek now to build their knowledgebase, experience and institutional capacity neededto enforce domestic competition rules and nego-tiate multilateral ones.

The ICN will be a much valued and useful cooper-ation project, particularly since experience showsthat it takes a long time for competition authoritiesto be fully operational. Undoubtedly the adoptionof a competition law is a good starting point, butthis law needs to be complemented by reliablepublic enforcement. This informal initiative ofantitrust agencies around the world will betterharness globalization and will put in place muchneeded governance mechanisms for the globalmarkets.



Competition policy makes it into the Doha Agenda

Yves DEVELLENNES, Directorate-General Competition, Head of unit A-4;Georgios KIRIAZIS, Directorate-General Competition, unit A-4

The Commission has, since the Singapore Ministe-rial in 1996 and during the deliberations in theWTO Working Group on Trade and Competitionin Geneva, been at the forefront of efforts topersuade member countries of the merits of aWTO multilateral agreement on competition.The Declaration adopted on 14th November 2001by the 4th WTO Ministerial Conference in Dohaaddresses the ‘Interaction between Trade andCompetition policy’. (1)

The Declaration recognizes the case for a multilat-eral framework to enhance the contribution ofcompetition policy to international trade anddevelopment, and the need to step up efforts toprovide technical assistance and build the capacityof developing and least developed countries in thisarea. WTO Members agreed in Doha that there is avalid case for the WTO to negotiate and conclude aMultilateral Agreement on Trade and Competitionand that negotiations on trade and competition andother Singapore issues will take place after theFifth WTO Ministerial on the basis of a decision tobe taken, by explicit consensus, at that meeting onmodalities of negotiations.

The Declaration also recognizes the needs ofdeveloping and least-developed countries for morepolicy analysis so that they may better evaluate theimplications of closer multilateral cooperation fortheir development policies and objectives, andhuman and institutional development. To this end,it was decided in Doha to work in cooperation withother relevant intergovernmental organizations,including UNCTAD, and through appropriateregional and bilateral channels, to providestrengthened and adequately resourced assistanceto respond to these needs.

Finally, the Declaration mentions that in the perioduntil the Fifth Ministerial, further work in theGeneva-based Working Group on the Interactionbetween Trade and Competition Policy will focuson the clarification of: core principles, includingtransparency, non-discrimination and proceduralfairness, and provisions on hardcore cartels;modalities for voluntary cooperation; and supportfor progressive reinforcement of competition insti-

tutions in developing countries through capacitybuilding. It was also agreed to take fully intoaccount the needs of developing and least-devel-oped country participants and provide appropriateflexibility to address these needs.

This result is quite satisfactory for the followingreasons:

• first, all parties signing to the Doha declaration(including some of the countries that were ratherskeptical till now: certain developing countries,Hong Kong and India) recognize for the firsttime that negotiation and conclusion of a Multi-lateral Agreement on Trade and Competition isdesirable. Up to now even the principle ofhaving such an agreement at the WTO wascontroversial. The recognition of the importanceof developing such a framework and its rele-vance for international trade and development,will contribute towards the introduction andmore effective application of domestic competi-tion regimes and will be of considerable benefitto consumers world-wide, including those of thedeveloping countries.

• second, even if we must wait for the 5th Ministe-rial, in less than 2 years time, in order to enter theformal phase of negotiations on the multilateralagreement, there is now a clear commitment tolaunch such negotiations at a certain date and theissue will fall within the single undertaking. Wewill now enter a «preparatory phase» withinwhich we can do a lot of useful work to clarifywith our partners from developing and devel-oped countries the elements needed in such anagreement.

• third, our proposals on the basic elements forsuch an agreement have been widely accepted.The EC has been driving this issue for some timenow and can be quite satisfied that the Declara-tion focuses on the elements that it has high-lighted as items that need to be taken up first forclarification in the period until the Fifth Ministe-rial.

• finally, as the Working Group now shifts its atten-tion to the discussion on these elements, the



(1) Information on the Conference and the full texts of the declarations and other decisions are available at http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm (paragraphs 23 to 25 for competition)

Declaration opens up the scope for more focusedtechnical assistance and capacity buildingactivity that will help emerging and developingeconomies to better understand and appreciate thesignificance of these issues. In this processUNCTAD and other international institutions aswell as regional and bilateral arrangements willcertainly contribute and have an important role toplay in order for everybody to be perfectly readyto open negotiations in the next Ministerial.

At Doha we have taken a first step in an ambitiousand far reaching process of establishing a multilat-eral framework for competition rules at the WTO.The next step – that is to open formal negotiationsat the 5th Ministerial – will not be easy and it will bequite difficult to agree on a text with our partners

in the WTO. To improve our chances we willcontinue to work in order that in particular Indiaand the developing countries agree to launch thesenegotiations and that the US maintains asupportive stance. We will also now enter a newphase of discussions in Geneva. Members of theWorking Group will be able to go beyond theexamination of abstract principles and focus onthe drafting of a detailed negotiation agenda thatwill lead in the future to the adoption of rules of abinding nature. The envisaged multilateral ruleswill certainly influence both the legislative activityand the enforcement practice of many members ofthe WTO. We will finally work with DG Trade andDG Development to make sure that technicalassistance and capacity building in the area ofcompetition are given adequate priority.



Commission adopts eight new decisions imposing fineson hard-core cartels

Following-up on two Decisions adopted earlier in the year 2001 (Decisions SAS-Maersk and Graphiteelectrodes, both adopted on 18 July 2001: see Competition Newsletter 2001, Issue n°3), the Commissionadopted during the second semester of 2001 eight new Decisions under Article 81(1) of the Treaty and(in most cases) Article 53(1) of the EEA Agreement, imposing heavy fines on a string of hard corecartels. The products concerned by the illegal market-sharing and price-fixing agreements ranged fromvitamins and food additives (citric acid) to financial services (currency exchange charges) and frombeverage products (beer) to paper and chemicals (sodium gluconate, zinc phosphate).

In all, fines were imposed on 56 companies in 2001 (3 of which were fined twice), totalling a recordamount of i 1 836 million. In the Vitamins case the highest cumulative fine ever, totalling i 462 million,was imposed on the Swiss company F. Hoffmann-La Roche AG with regard to its simultaneous involve-ment in several cartels. In the Carbonless paper case, British company Arjo Wiggins Appleton Limited(AWA) received a fine of i184.27 million, the highest fine ever imposed on a company for a singleinfringement.

For the first time in 2001, the Commission applied section B of its Notice on the non-imposition orreduction of fines in cartel cases (hereafter: ‘the Leniency Notice’). Section B was applied in five cases(Sodium Gluconate, Vitamins, Citric Acid, Luxembourg Brewers, Carbonless paper). The reductionsgranted under this section ranged from 80% to 100% (total exemption from fine) according to thespecific circumstances of each case.

1. The sodium gluconate cartel

François ARBAULT (1), Sari SUURNÄKKI (1), Directorate-GeneralCompetition, unit E-1

On 2 October 2001, the Commission fined ArcherDaniels Midland Company Inc., Akzo Nobel N.V,Avebe B.A., Fujisawa Pharmaceutical CompanyLtd., Jungbunzlauer AG and Roquette Frères S.A.a total of i 57.53 million for fixing the price andsharing the market for sodium gluconate. For thefirst time, the Commission granted a reduction offine pursuant to Section B of its Leniency Notice:Fujisawa got a reduction of 80% of its fine.

Sodium gluconate is a chemical used to cleanmetal and glass, with applications such as bottlewashing, utensil cleaning, and paint removal. Theproduct is also used as a retarder and water reducerin concrete admixtures, as a paper and textilebleaching admixture, as well as as an additive infood and in various chemical applications.

Following an investigation which started in 1997,the Commission established that Archer DanielsMidland Company Inc. (‘ADM’); Avebe B.A.(‘Avebe’, as a parent of Glucona B.V.); AkzoNobel N.V. (‘Akzo’, as a former parent of GluconaB.V.); Fujisawa Pharmaceutical Company Ltd.(‘Fujisawa’); Jungbunzlauer AG (‘Jungbunz-

lauer’); and Roquette Frères S.A. (‘Roquette’)participated in a worldwide cartel between 1987and 1995, through which they fixed the price andshared out the market for sodium gluconate. Thecartel agreements were implemented throughdetailed sales monitoring, the holding of regularmulti- and bi-lateral meetings, and the enforce-ment of a pluri-annual compensation scheme.

At the material time, the quasi-totality of thesodium gluconate produced world-wide was in thehands of Fujisawa, Glucona B.V. (a 50/50 joint-venture between Akzo and Avebe), Jungbunzlauerand Roquette. After it entered the market in 1990,ADM also became a significant player, until itswithdrawal in the course of 1995. The EEA marketfor sodium gluconate was worth about i 20million in 1995.

From 1987 until June 1995, the companiesmentioned above held regular meetings, wherethey agreed on individual sales quotas, fixed ‘min-imum’ and ‘target’ prices and shared out specificcustomers. The Commission gathered evidence ofover 25 cartel meetings, held in places such as



(1) François Arbault and Sari Suurnäkki are now with unit Directorate-General Competition, unit A-1

Amsterdam, London, Paris, but also Hakone(Japan), Chicago, Vancouver or Zürich. Compli-ance with agreed sales quotas was carefully moni-tored, and the rule was that if a company had over-sold at the end of a given year, its sales quota forthe next year would be reduced accordingly.

The Commission characterised the companies’behaviour as a ‘very serious’ infringement of theCommunity and EEA competition rules, andadopted a Decision under Article 81(1) of theTreaty and Article 53(1) of the EEA Agreement,imposing heavy fines. The leader of the cartel,Jungbunzlauer, was finedi 20.4 million. As to theother cartel participants ADM, Akzo, Avebe,Fujisawa and Roquette, they were fined i 10.13million, i 9 million, i 3.6 million, i 3.6 millionand i 10.8 million respectively.

Calculation of fines and application ofthe Leniency Notice

In fixing the amount of the fines, the Commissiontook into account the gravity and duration of theinfringement, as well as the existence, as appro-priate, of aggravating and/or mitigating circum-stances. The role played by each undertaking wasassessed on an individual basis. The LeniencyNotice was applied.

All the undertakings concerned were found to havecommitted a very serious infringement. Withinthis category, the undertakings were divided intotwo groups according to their relative importancein the market concerned. Further upward adjust-ments were made in the case of two companies,with regard to their very large size and thus of theiroverall resources.

With the exception of ADM which committed aninfringement of medium duration, all other cartelparticipants committed an infringement of longduration (exceeding five years). The leadership ofthe infringement was retained as an aggravatingcircumstance against Jungbunzlauer, justifying anincreased of its fine by 50%.

Application of the Leniency Notice

The Commission granted for the first time a reduc-tion of fine pursuant to Section B of the Leniencynotice. Fujisawa benefited from a reduction of80% of the fine it would otherwise have received,on the ground that it was the first to adduce deci-sive evidence of the cartel’s existence, before theCommission had undertaken any investigationordered by Decision. The Commission did notgrant Fujisawa a 100% reduction of its fine, as itcould have done under section B of the notice,since Fujisawa approached the Commission onlyafter it had received a request for information. Thisreluctance to come forward spontaneously prior toany investigatory measure was taken into account.

All other parties were granted reductions of thefine that would otherwise have been imposedpursuant to Section D of the Leniency notice.

Before the Commission adopted its Statement ofObjections, ADM, Glucona, Jungbunzlauer andRoquette provided the Commission with informa-tion and documents which materially contributedto establishing the existence of the infringement.None of them substantially contested the facts onwhich the Commission based its Statement ofObjections.

Roquette provided documents that record the eventsand conclusions of the cartel meetings. These docu-ments were, however, given in Roquette’s response toa formal request for information from the Commis-sion. Moreover, Roquette and ADM described in theirstatements the cartel mechanics and the roles of theparticipants and gave details of some meetings.Together with Fujisawa’s statements, the documentsand statements provided by Roquette together withADM’s statements constituted the main sources ofevidence used by the Commission in the Decision.Consequently, Roquette and ADM were both granteda 40 % reduction of their fine. As for Glucona (i.e.Akzo and Avebe) and Jungbunzlauer, they did notprovide in their statements any information above andbeyond what was already in the Commission’spossession, but they corroborated part of that informa-tion. Therefore, the Commission considered that onlya reduction of 20 % was appropriate with regard totheir cooperation.

2. The vitamin cartels

Francisco PEIRÓ, Directorate-General Competition, unit E-1

On 21 November 2001, the Commission fined F.Hoffmann-La Roche AG, BASF AG, Aventis SA,

Solvay Pharmaceuticals BV, Merck KgaA, DaiichiPharmaceutical Co Ltd, Eisai Co Ltd and Takeda

Cartels


Chemical Industries Ltd a total of i 855.23 millionfor participating in eight distinct secret market-sharing and price-fixing cartels affecting vitaminproducts (vitamins A, E, B2, B5, C, D3, Beta Caro-tene and carotinoids). Each cartel had a specificnumber of participants and duration, although alloperated between September 1989 and February1999. Five other companies, Lonza AG, KongoChemical Co Ltd, Sumitomo Chemical Co Ltd,Sumika Fine Chemicals Ltd and Tanabe SaiyakuCo Ltd were not fined because the cartels in whichthey were involved – Vitamin H or Folic Acid –ended five years or more before the Commissionopened its investigation. Under EU law, prescrip-tion applies under these circumstances. Prescrip-tion also applied to cartels in vitamins B1 and B6.

Following the opening of an investigation in May1999, the European Commission found that thir-teen European and non-European companiesparticipated in cartels aimed at eliminating compe-tition in the vitamin A, E, B1, B2, B5, B6, C, D3,Biotin (H), Folic Acid, Beta Carotene andcarotinoids markets. A striking feature of thiscomplex of infringements was the central roleplayed by Hoffmann-La Roche and BASF, the twomain vitamin producers, in virtually each andevery cartel, whilst other players were involved inonly a limited number of vitamin products.

Vitamins are vital elements for human and animalnutrition and are essential for normal growth,development and maintenance of life. They areadded to both compound animal feeds and humanfood products. Vitamins for pharmaceuticalpurposes are marketed to the public as diet supple-ments in tablet or capsule form. In the cosmeticsindustry, vitamins are added to skin- and health-care products. The Commission estimates that theEuropean Economic Area (EEA) market for theproducts covered in the decision was worth aroundi 800 million 1998. This includes vitamin E,which in 1998 was worth approximately i 250million in the EEA and vitamin A, which repre-sented some i 150 million.

The participants in each of the cartels fixed pricesfor the different vitamin products, allocated salesquotas, agreed on and implemented price increasesand issued price announcements in accordancewith their agreements. They also set up amachinery to monitor and enforce their agree-ments and participated in regular meetings toimplement their plans.

The modus operandi of the different cartels wasessentially the same if not identical (‘target’ and‘minimum’ prices; maintenance of the status quoin market shares and compensation arrangements),in particular it included:

• the establishment of formal structure and hier-archy of different levels of management, oftenwith overlapping membership at the most seniorlevels to ensure the functioning of the cartels;

• the exchange of sales values, volumes of salesand pricing information on a quarterly ormonthly basis at regular meetings;

• in the case of the largest cartels, the preparation,agreement and implementation and monitoringof an annual ‘budget’ followed by the adjust-ment of actual sales achieved so as to complywith the quotas allocated;

The cartel arrangements generally followed thisscheme, pioneered in vitamins A and E, withcertain variants in other products. Hoffmann-LaRoche acted as the agent and representative of theEuropean producers in the meetings and negotia-tions held in Japan and the Far East.

The simultaneous existence of the collusivearrangements in the various vitamins was not aspontaneous or haphazard development, but wasconceived and directed by the same persons at themost senior levels of the undertakings concerned.

The prime mover and main beneficiary of theseschemes was Hoffmann-La Roche, the largestvitamin producer in the world, with some 50% ofthe overall market. The cartel arrangementscovered its full range of vitamin products. Theinvolvement of some of its most senior executivestends to confirm that the arrangements were part ofa strategic plan conceived at the highest levels tocontrol the world market in vitamins by illegalmeans.

BASF, the next largest vitamin producer world-wide, assumed a paramount role in followingHoffmann-La Roche’s lead. Both major Europeanproducers effectively formed a common front inconceiving and implementing the arrangementswith the Japanese producers concerned. Together,for example, they recruited Eisai to their «Club» invitamin E.

Takeda, as one of the main world producers ofbulk vitamins, was fully involved in the cartelarrangements for vitamins B1, B2, B6, C and FolicAcid. Takeda’s involvement in the arrangementsin each of these vitamin products was instrumentalto Hoffmann-La Roche’s designs to secure theillegal coordination of the vitamin markets it wasactive in, including those in the range of vitaminproducts it shared with Takeda. The other vitaminproducers were all active members of the cartelarrangements in the respective vitamin productmarkets in which they operated.



Calculation of the fines and applicationof the Leniency Notice

Given the continuity and similarity of method, theCommission considered it appropriate to treat inone and the same procedure the complex of agree-ments covering the different vitamins. TheCommission therefore covered several infringe-ments in a single decision.

When setting fines, the Commission takes intoaccount the gravity of the infringement, its dura-tion, any aggravating or mitigating circumstancesas well as the cooperation of a company. It alsotakes account of a company’s market share in theproduct market concerned and its overall size. Theupper limit of any fine is established at 10% of acompany’s total annual turnover.

The Commission considered that each cartel in thiscase represents a very serious infringement of EUcompetition law. Furthermore, most of the cartelparticipants committed infringements of longduration, i.e. more than five years (see tableabove).

Hoffmann-La Roche and BASF were the twoleaders of each of the cartels for which fines wereimposed in this Decision. This was thereforeretained as an aggravating factor to be taken intoaccount in the determination of the amount of thefines imposed on these companies, justifying an

increase of 50 % and 35 % in their respectivebasic amounts for each of the cartels they wereinvolved in.

The only attenuating circumstance identified in allof the cartels for which fines were imposed wasRhône-Poulenc’s passive role in the vitamin D3infringement. It did not attend any of the cartelmeetings and was not allocated an individualmarket share. This attenuating circumstance wastaken into account in the determination of theamount of the fines imposed on Aventis for itsinfringement affecting the vitamin D3 market.


The addressees of the Decision co-operated withthe Commission within the terms set by theLeniency Notice at different stages of the investi-gation and in relation to different vitamin productscovered by the investigation. The Decision appliesthe Leniency Notice as follows:

Aventis was the first undertaking to adduce deci-sive evidence of the existence of an internationalcartel affecting the EEA in the vitamin A andvitamin E markets before the Commission had anyknowledge of its existence. This decisive evidencewas provided in the Statements made by Aventison 19 and 25 May 1999. It also met all other condi-tions as set out in Section B of the Leniency Notice

Cartels


Participants, product, duration

Vitamin ParticipantsDuration (*)

From To

Vitamin A Roche, BASF, Rhône-Poulenc (Aventis) September 1989 February 1999

Vitamin E Roche, BASF, Rhône-Poulenc (Aventis), Eisai September 1989 February 1999

Vitamin B1 (Thiamine) Roche, Takeda, BASF January 1991 June 1994

Vitamin B2 (Riboflavin) Roche, BASF, Takeda January 1991 Sept. 1995

Vitamin B5 (Calpan) Roche, BASF, Daiichi January 1991 February 1999

Vitamin B6 Roche, Takeda, Daiichi January 1991 June 1994

Folic Acid (B) Roche, Takeda, Kongo, Sumika January 1991 June 1994

Vitamin C Roche, BASF, Takeda, Merck January 1991 August 1995

Vitamin D3 Roche, BASF, Solvay Pharm, Rhône-Poulenc(Aventis)

January 1994 June 1998

Vitamin H (Biotin) Roche, Merck, Lonza, Sumitomo, Tanabe, BASF October 1991 April 1994

Beta Carotene Roche, BASF September 1992 December 1998

Carotinioids Roche, BASF May 1993 December 1998

(*) The duration is not necessarily the same for all participants

in relation to its involvement in the cartels in vita-mins A and E. On these grounds, Aventis wasgranted a 100 % reduction of the fine that wouldhave been imposed with regard to its activities inthe vitamin A and vitamin E markets.

Roche and BASF, through the principal materialsubmitted to the Commission between 2 June 1999and 30 July 1999, were the first to provide theCommission with decisive evidence of the exis-tence of cartel arrangements affecting the vitaminB2, B5, C, D3, Beta Carotene and carotinoidsmarkets. The evidence submitted by both Rocheand BASF in relation to the cartels in vitamins Aand E was very substantial and was provided at anearly stage in the Commission’s procedure. That isto say, both companies contributed crucial infor-mation to establish and/or confirm essentialaspects of the infringements committed in each ofthe vitamin product markets they were involved in.

Nevertheless, Roche and BASF acted as instigatorsor played a determining role in the illegal activitiesaffecting the vitamin A, E, B2, B5, C, D3, BetaCarotene and carotinoids product markets. There-fore neither of them met condition (e) of Section Bof the Leniency Notice and could not benefit fromany reduction under Sections B or C of this Noticeeven if they were to meet the other conditions setout therein. Both Hoffmann La Roche and BASF

were granted a 50 % reduction of the fine thatwould have been imposed if they had not cooper-ated for each of the cartels in which they wereinvolved in.

Prior to the Commission’s Statement of Objec-tions (SO) Daiichi, Solvay, Takeda and Eisaiprovided the Commission with information anddocuments, in particular detailed corporate state-ments, which helped establish important aspects ofthe infringement committed in the vitamin B5(Daiichi), D3 (Solvay), B2 and C (Takeda) and C(Eisai) markets.

The documents provided by the companies gavedetails of the organisation and structure of thecartels. However, in the case of Eisai these wereonly forthcoming after three other participants inthe vitamin C cartel (Roche, BASF and Takeda)had submitted detailed evidence on the cartel.Daiichi, Solvay and Takeda were granted a 35 %reduction of the fine that would otherwise havebeen imposed and a 30 % reduction of the fine toEisai.

As to Merck and Aventis, with regard to thevitamin C and vitamin D3 cartels respectively,they only cooperated actively with the Commis-sion once they had received the SO. Merckprovided information concerning its participation



Fines imposed on participants by product (in millions of euro)

Vit A Vit E Vit B1 Vit B2 Vit B5 Vit B6FolicAcid

Vit C Vit D3 Vit HBeta

CaroteneCaroti-noids

Total

Roche 85.5 99.75 NA 42 54 NA NA 65.25 21 NA 48 46.5 462

BASF 46.17 89.78 NA 18.9 34.02 14.68 7.56 NA 43.2 41.85 296.16

Aventis 0 0 5.04 5.04

Lonza NA

Solvay Pharm 9.1 9.1

Merck 9.24 NA 9.24

Daiichi 23.4 NA 23.4

Eisai 13.23 13.23

Kongo NA

Sumika NA

Sumitomo NA

Takeda NA 8.78 NA NA 28.28 37.06

Tanabe NA

TOTAL 131.67 202.76 69.68 111.42 117.45 42.7 91.2 88.35 855.23

N.A.: Non applicable

in the vitamin C cartel in its written reply to theSO. Aventis, on the other hand, simply confirmedthat it did not substantially contest the facts onwhich the Commission had based the SO,including the section dealing with the vitamin D3cartel. Merck was granted a reduction of 15 % ofthe fine that would otherwise have been imposedand a reduction of 10 % of the fine in the case ofAventis.

‘This is the most damaging series of cartels theCommission has ever investigated due to the sheerrange of vitamins covered which are found in a

multitude of products from cereals, biscuits anddrinks to animal feed, pharmaceuticals andcosmetics’ said Competition Commissioner MarioMonti. ‘‘‘The companies’’ collusive behaviourenabled them to charge higher prices than if thefull forces of competition had been at play,damaging consumers and allowing the companiesto pocket illicit profits. It is particularly unaccept-able that this illegal behaviour concernedsubstances which are vital elements for nutritionand essential for normal growth and maintenanceof life’.

3. The citric acid cartel

François ARBAULT, Francisco PEIRÓ, Directorate-General Competition,unit E-1

On 5 December 2001, the Commission finedArcher Daniels Midland Co.; Cerestar Bio-products B.V.; Haarmann & Reimer Corp.; F.Hoffmann-La Roche AG and Jungbunzlauer AG atotal of i 135.22 million for fixing the price andsharing the market for citric acid, the world’s mostwidespread acidulent and preservative. TheCommission has gathered evidence that fromMarch 1991 to May 1995, the cartel participantsfixed market shares for citric acid, agreed on pricetargets for the product, agreed on price lists for theproduct, agreed to eliminate discounts on all butthe five largest customers and set up a machineryto monitor and enforce their agreements.

Citric acid is used primarily in the food/beverageindustry and is the most widely adopted acidulent/preservative world-wide. Citric acid is also used indetergents as well as in pharmaceutical andcosmetic products. The annual market value wasapproximately i 320 million (EEA) in 1995 (thelast year of the infringement).

After a careful investigation which started in 1997,the European Commission found that US compa-nies Archer Daniels Midland (ADM) andHaarmann & Reimer (H&R), the latter ultimatelyowned by Bayer AG, Dutch company CerestarBioproducts B.V., Hoffmann-La Roche andJungbunzlauer (JBL), both Swiss, participated in aworldwide cartel between 1991 and 1995, throughwhich they fixed the price and shared out themarket for citric acid.

The cartel started on 6 March 1991 at the HotelPlaza in Basle (Switzerland), as stated by thecompanies in documents submitted to the Commis-sion. There, and following on previous informal

contacts, the founding members ADM, H&R,Roche and JBL agreed on the main features of theirplan to eliminate competition between them.Cerestar joined the group in May 1992, shortly afterit entered the citric acid market. The cartelcontinued until May 1995 and pursued four mainobjectives, namely allocating specific sales quotasfor each member; fixing ‘target’ and ‘floor prices’for citric acid; exchanging specific customer infor-mation, and eliminating price discounts.

A limited exception was made to the last objectivein relation to the five major consumers of citricacid world-wide, since it was considered unreal-istic by the cartel members to expect them to paythe price published on the public price lists. It was,however, agreed that a discount of no more than3% would be offered to these larger consumers.

The companies held regular and frequent meet-ings, which were the hallmark of the cartel’sorganisation. After 1993 and in order to resolvecertain grievances and market “difficulties” addi-tional, more technically oriented, meetings wereorganised that become known as ‘Sherpa’ meet-ings in contrast to the more high-level and strategic‘Masters’ meetings.

A sophisticated monitoring system was estab-lished, whereby each company would report itsmonthly sales figures to a previously agreedmember, who would then ensure the distributionof the confidential information to all the others. Inorder to ensure that each player would stick to thequotas assigned, a compensation scheme wascreated, obliging any member that over-sold itsallocated quota to provide compensation to theothers.

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A further striking feature of the cartel was theconcerted action taken by the companies againstChinese manufacturers, who had increased theirexports to the European market as a result of thesignificant rise in prices for citric acid during thetime the cartel operated. The cartel participantstried to regain some of the customers lost to theChinese suppliers through a concerted and care-fully targeted price war. The list of the clients lostand targeted by the cartel for ‘recovery’ came to beknown as the ‘Serbia List’ and was regularly moni-tored during the ‘Sherpa’ meetings.

The Commission characterised the companies’behaviour as a ‘very serious’ infringement of theCommunity and EEA competition rules, andadopted a Decision under Article 81(1) of theTreaty and Article 53(1) of the EEA-Agreement,imposing heavy fines. The two leaders of thecartel, F. Hoffmann-La Roche AG and ADM werefined i 63.5 million and i 39.69 million respec-tively. As to the other cartel participants,Jungbunzlauer, Haarmann & Reimer and CerestarBioproducts, they were fined i 17.64 million, i14.22 million and i170,000 respectively.


In fixing the amount of the fines, the Commissiontook into account the gravity and duration of theinfringement, as well as the existence, as appro-priate, of aggravating and/or mitigating circum-stances. The role played by each undertaking wasassessed on an individual basis. The Notice on thenon-imposition or reduction of fines in cartel cases(‘the Leniency Notice’) was applied.

All the undertakings concerned were found to havecommitted a very serious infringement. Withinthis category, the undertakings were divided intothree groups according to their relative importancein the market concerned. Further upward adjust-ments were made in the case of three companies,with regard to their very large size (or the verylarge size of the group to which they belongaccording to a 100% ownership), and thus of theiroverall resources.

The cartel started in March 1991 and ended in May1995. Under the Guidelines on Fines, ADM,Haarmann & Reimer, Hoffmann-La Roche andJungbunzlauer committed a medium-term in-fringement (4 years). Cerestar Bioproducts alsocommitted a medium-term infringement (3 years).The respective basic amounts of the fines wereincreased accordingly.

Because they acted as co-leaders of the cartel – anaggravating factor, the basic fines on ADM andRoche were increased by 35 percent. This figure isbelow the level applied for a leadership role inprevious cartel cases, which is usually 50%, buttakes account of the fact that whilst these twocompanies clearly had an outstanding role in theinfringement, other members of the cartel alsocarried out activities usually associated with aleadership role (like chairing meetings or central-ising data distribution).

Application of the Leniency notice

Part of the evidence on the cartel was provided tothe Commission by the companies involved, underEU rules providing for full or partial immunityfrom fines for companies that co-operate with theCommission in cartel cases.

Cerestar Bioproducts was the first undertaking toprovide the Commission with decisive informa-tion. But because its application for Leniency wasnot entirely spontaneous, and since it approachedthe Commission only after it was fully aware thatthe citric acid cartel was the object of an on-goinginvestigation by the Commission, it was granted a90 % reduction of the fine rather than full immu-nity.

All the other participants co-operated in one wayor another with the Commission and were grantedappropriate reductions. ADM provided detailedinformation, which together with that obtainedfrom Cerestar Bioproducts was used to draftrequests for information that largely contributed totrigger the admission by H&R, Roche and JBL oftheir participation in the citric acid cartel. ADMwas able to provide the Commission with docu-ments contemporaneous to the infringement,including inter alia hand-written notes takenduring cartel meetings and price instructionsrelated to the decisions taken by the cartel. Onthese grounds, ADM was granted a 50 % reduc-tion.

Jungbunzlauer and Haarmann & Reimerconfirmed the vast majority of the meetings, theidentity of the participants, as well as the facts inquestion. Jungbunzlauer also submitted to theCommission a number of tables created contempo-raneously to the time of the infringement, indi-cating the quotas that were allocated to each of thecartel participants. Nevertheless, a large part of theinformation submitted by both companies wasprovided in reply to detailed requests for informa-tion and therefore fell within the ambit of an under-taking’s duty to fully reply to these requests as setout in Article 11 of Regulation 17. The Commis-



sion granted these two companies a reduction of40 % and 30 % of their respective fines.

Roche confirmed its participation in the cartel andthe purpose of the meetings related to it prior to the

receipt of the Commission’s Statement of Objec-tions, which was sent on March 28, 2000. TheCommission therefore granted Hoffmann-LaRoche a 20 % reduction of its fine.

4. Market-sharing and price-fixing cartels on the Belgian beer market (1)

Barbara NIJS, Directorate-General Competition, unit F-3

On 5 December 2001, the Commission finedInterbrew, Danone, Alken-Maes, Haacht andMartens a total of over i 91 million for partici-pating in cartels on the Belgian beer marketbetween 1993 and 1998. The infringementsincluded market sharing, price fixing and informa-tion exchange. They affected the horeca sector (i.e.hotels, restaurants and cafés) as well as the retailsector (i.e. supermarkets and other food shops),including the sale of private label beers.

In the course of 1999 the European Commissionundertook surprise inspections at the premises ofInterbrew, Alken-Maes and the Belgian brewersconfederation (CBB). These inspections led to aninvestigation which enabled the Commission tofind evidence of two distinct cartels in the Belgianmarket.

The first cartel involved Interbrew (by far thenumber one brewer in Belgium with a marketshare of around 55% and the number two brewer inthe world) and Alken-Maes (the number twoplayer in Belgium with a market share of around15%) as well as its then parent company Danone.This cartel covered a wide range of anti-competitive arrangements in the horeca sector (i.e.sales for away-from-home consumption in hotels,restaurants and cafés) as well as the retail sector(e.g. sales in supermarkets or smaller food shopsfor consumption at home).

The second cartel concerned specifically thesegment of so-called private label beers, i.e. beerswhich supermarkets order from brewers but sellunder their own brand name. Interbrew, Alken-Maes, Haacht and Martens (a brewer whoseproduction consists almost entirely of private labelbeer) participated in this second cartel.

Total fines were imposed on the companiesinvolved as follows: i 46.487.000 (2) for

Interbrew; i 44.628.000 (3) for Danone/Alken-Maes; i 270.000 for Haacht and i 270.000 forMartens.

The cartel between Interbrew andDanone/Alken-Maes

From early 1993 until the beginning of 1998, thetwo parties were involved in wide ranging cartelactivities on the Belgian beer market. Interbrewused the code name ‘Université de Lille’ or‘project Green’ for these activities. The cartelactivities encompassed a general non-aggressionpact and more specifically the limitation of invest-ments and advertising in the horeca sector, theallocation of horeca customers, price-fixing in theretail sector, a new tariff structure to be applied inthe horeca sector as well as in the retail sector andfinally a detailed monthly information exchangesystem concerning sales volumes in both sectors.

A striking feature of this cartel is that the CEO’sthemselves and other top management of thecompanies regularly met to initiate and monitorthe above mentioned arrangements. Anotherfeature worth mentioning is that Danone, whichwas Alken Maes’ parent company during the rele-vant period, was itself very actively involved inthese arrangements.

The cartel took off with a price fixing agreementfor the retail sector and an agreed limitation ofcommercial investments in the horeca sector. Aninternal Interbrew note from the spring of 1993showed that Interbrew’s and Danone’s topmanagement were already considering enteringinto a closer cooperation. However, the Interbrewpeople thought that Danone had more to gain fromthis. Moreover, they had antitrust concerns.

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(1) See also press release of 5 December 2001, IP/01/1739(2) i 45.675.000 for the cartel with Danone/Alken-Maes and i 812.000 for the private label cartel.(3) i 44.043.000 for Danone’s and Alken-Maes’ participation in the cartel with Interbrew and i 585.000 for Alken-Maes’

participation in the private label cartel.

In May 1994, contacts between the two companiesintensified. This was due to a threat from Danone:if Interbrew did not transfer 500.000 hl (roughly5% share of the Belgian market) to Alken-Maes inthe Belgian retail sector, it would make life diffi-cult for Interbrew-France. Evidence of this threatstems from declarations made by former Interbrewrepresentatives but also from an internal Heinekendocument. This document was found during aninspection at Heineken’s premises, concerninganother cartel investigation.

The threat eventually led to a ‘gentlemen’s agree-ment’ between the parties at the end of 1994. Theycommitted themselves generally to respect eachother’s market positions. They further agreed on anumber of specific points, including price-fixingin the retail sector, market sharing in the horeca(initially the classic outlets, later on also thenational accounts (1)), commercial investmentsand a new tariff structure in both sectors. In addi-tion, throughout this period the parties exchangedmonthly information about their sales volumes inboth sectors.

At the beginning of 1998, the parties noted thatthey had achieved a good deal of their objectives.

Calculation of the fines

The Commission considers that the price fixingand market sharing cartel between Interbrew andDanone/Alken-Maes represents a very seriousbreach of EU competition law. For such a breach,the likely amount of the fines is at least i 20million. Although Interbrew and Danone are bothbig, international companies, Interbrew’s startingamount for gravity is higher than Danone’s,because its market share on the Belgian beermarket is substantially larger than Danone’s.Furthermore, it is a cartel of medium duration (fiveyears). This led the Commission to increase thebasic fines for both companies by almost 50%.

For Danone there are two aggravating factorswhich led to a further increase of the fine by 50%.

First, Danone or as it was called at the timeBoussois-Souchon-Neuvesel (BSN) – has partici-pated in similar antitrust infringements alreadytwice before (in 1974 and 1984). (2) The circum-stance that these infringements occurred in adifferent sector (flat glass) is irrelevant. It is thenature of the infringement and the identity of thecompany that matter. Moreover, the Commissionnotes that for the entire period during which BSN,

later Danone, committed these infringements, thesame person acted as CEO of the company and thatsome flat glass managers at the time were active inDanone’s retail business during the period of thebeer cartel.

The second aggravating circumstance concernsDanone’s threat to make Interbrew’s life difficultin France if Interbrew did not meet its request tohave 500.000 hl of beer transferred to its subsid-iary Alken-Maes. As pointed out above, this threatled to an increase of the cartel activity.

As a mitigating circumstance, the Commissionrecognises that Alken-Maes ended the informationexchange with Interbrew. For this a reduction of10% is granted.


Both parties co-operated to a certain extent duringthe investigation by supplying information to theCommission. However, Interbrew’s cooperationwas more material than that of Danone/Alken-Maes. On this basis, Interbrew was granted areduction of 30% and Danone/Alken-Maes areduction of 10%.

The private label cartel

In the course of the on-going investigationregarding the cartel between Interbrew andDanone/Alken-Maes, Interbrew informed theCommission about a series of meetings in theperiod from October 1997 until July 1998 betweenitself, Alken-Maes, Haacht and Martens concern-ing the private label beer market in Belgium.

The discussions during these meetings aimed atavoiding a price war and at consolidating theexisting allocation of customers. This amounted toa concerted practice within the meaning of Art. 81EC Treaty. In addition, the parties agreed toexchange information about their clients in theprivate label segment.

Interbrew and Alken-Maes took the initiative oforganizing the four meetings. However, Haachtand Martens did not merely play a passive role inthe concerted practice. Both participated in allmeetings and actually exchanged informationabout sales volumes. Moreover, Martens at onepoint suggested inviting the Dutch private labelbeer producers to the meetings.



(1) Typical examples of national accounts are caterers, airports, large cinema complexes.(2) See Commission decisions of 15 May 1974 (O.J. L 160/1) and 23 July 1984 (O.J. L 212/13).


Since the cartel was limited to the small privatelabel beer segment in Belgium (roughly 5% of beerconsumption in Belgium), the Commissionconsiders the parties’ behaviour only as a seriousinfringement for which the likely amount of the fineis in principle between i1 million and i20 million.The cartel was of a short duration (nine months).

The fact that Interbrew and Alken-Maes took theinitiative for these meetings is an aggravatingfactor. This results in an increase of the fine by30% for both parties.


All parties co-operated with the Commissionduring the procedure. Interbrew even disclosed thecartel. Although it blew the whistle, it could not,however, benefit from full immunity under theCommission’s so-called Leniency Notice (1)because it was one of the instigators of the cartel.For its co-operation, it was granted a reduction of50%. The other brewers were granted a reductionof 10% for their co-operation.

5. Market sharing cartel on the Luxembourg beer market

Paul BRIDGELAND, Directorate-General Competition, unit F-3

On 5 December 2001, the Commission fined threeLuxembourg brewers: Brasserie Nationale-Boffer-ding, Brasserie de Wiltz and Brasserie Battin a totalof i 448 000 for their participation in a marketsharing cartel affecting the Luxembourg ‘horeca’or ‘on-trade’ sector (hotels, restaurants and cafés).The brewers agreed to guarantee each other’sexclusive purchasing arrangements with horecacustomers and to restrict penetration of the sectorby foreign brewers. A fourth cartel member, Bras-serie de Luxembourg Mousel-Diekirch (a subsid-iary of Interbrew), escaped any fine because itdisclosed the cartel to the Commission.

Following an investigation which began inFebruary 2000, the Commission found that all fourbrewers active in Luxembourg had participated ina market sharing cartel in the Luxembourg horecasector between 1985 and 2000.

The cartel consisted of a written agreement signed in1985 by which the parties agreed not to supply beerto any horeca outlet (hotels, restaurants, cafés andbeer wholesalers) which was tied to another party byan exclusive purchasing contract or ‘beer tie’. Thebeer tie guarantee extended to beer ties which wereinvalid or unenforceable in law, as well as to supplyarrangements where a brewer simply invested in adrinks outlet but did not impose an exclusivepurchasing contract. To this extent, the beer tie guar-antee was more restrictive than the beer ties them-selves. It therefore served to protect each party’sclientele. The beer tie guarantee was reinforced by aprior consultation mechanism, which obliged theparties to check with each other about the presence of

a beer tie before they supplied new customers. Finan-cial penalties were provided for non-compliancewith the guarantee or the consultation mechanism.

The cartel agreement also contained provisionsintended to keep foreign brewers out of theLuxembourg horeca sector. First, there was a jointdefensive mechanism whereby the parties agreedto consult each other in the event that a foreignbrewer attempted to negotiate a supply contractwith one of their tied outlets. Priority would thenbe allocated to one of the parties to attempt to keepthe outlet as a customer. If that party succeeded innegotiating a new contract with the outlet, it wasobliged to compensate the party which had lost theoutlet by transferring an equivalent outlet to it.Other provisions allowed for the exclusion fromthe cartel of any party which co-operated with aforeign brewer or distributed its beer.

The cartel agreement was signed for an unlimitedduration and required the parties to give twelvemonths’ notice to terminate. No party gave noticebefore Interbrew, the parent company of Brasseriede Luxembourg Mousel-Diekirch, disclosed thecartel to the Commission in February 2000.Furthermore, parts of the agreement had beenimplemented until 1998.


The Commission imposed a fine of EUR 400 000on Brasserie Nationale-Bofferding and fines of

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(1) OJ C 207 of 18 July 1996

EUR 24 000 each on Brasserie de Wiltz and Bras-serie Battin.

The Commission considered the gravity of theinfringement to be ‘serious’. Although marketsharing and attempts to impede trade betweenMember States are by nature very serious infringe-ments, the cartel was limited to the relatively smallLuxembourg horeca sector and it was not imple-mented in full. Within this category, the undertak-ings were divided into three groups according tothe volume of their sales in the sector concerned.

The infringement was of long duration: more thanfourteen years. This led the Commission to doublethe amount imposed for gravity.

As an attenuating circumstance, the Commissionrecognised that there was legal uncertainty about

the enforceability of beer ties in Luxembourg atthe time the cartel agreement was signed and thatthis may have led the parties to doubt whethercertain aspects of the beer tie guarantee constitutedan infringement. This merited a 20% reduction inthe fines.


Brasserie de Luxembourg Mousel-Diekirch wasgranted total exemption from the substantial finethat would otherwise have been imposed becauseit provided the Commission with decisiveevidence of the cartel before the Commission hadany knowledge of it and satisfied all the otherconditions of Section B of the Leniency Notice.

6. Commission fines five German banks for fixing the chargesfor the exchange of euro-zone currencies

Gerald BERGER, Directorate-General Competition, unit E-1

On 11 December 2001, the Commission finedCommerzbank, Dresdner Bank, Bayerische Hypo-und Vereinsbank, Deutsche Verkehrsbank andVereins- und Westbank a total of i 100.8 millionfor concluding an agreement on a commission ofabout 3% for the buying and selling of euro-zonebanknotes during the three-year transitionalperiod beginning 1 January 1999. The purposewas to recover about 90% of the ‘exchangemargin’ income after the abolition of the ‘spread’(i.e. buying and selling rates) on 1 January 1999.

Background of the case

Shortly after the introduction of the Europeansingle currency, the euro, on 1 January 1999, theCommission started an investigation into whetherbanks had collectively fixed charges for theexchange of euro-zone currencies. The Commis-sion thereafter concluded that it had sufficientevidence that banks and national associations inseven Member States namely Germany, Ireland,Portugal, Finland, Belgium, The Netherlands andAustria had colluded in setting bank charges forthe exchange of euro-zone banknotes.

However, between April and the summer of 2001,the vast majority of banks, including someGerman banks other than the addressees of thefinal Commission decision of 11 December 2001,unilaterally proposed to substantially reduce their

charges for the exchange of euro-zone currencies.The banks thereby abandoned their collusivebehaviour and recovered their freedom to setprices individually.

On the basis of these proposals the Commissiontook the view that it would be in the consumerinterest for it to secure an immediate and substan-tial reduction in the charges before the summerholiday period and that the free-of-chargeexchange of euro-zone currencies for account-holders towards the end of the year offered by thebanks in question would indeed facilitate thechangeover to the euro notes and coins.

The Commission thus ended cartel proceedingsagainst all Belgian, Finnish, Dutch, Irish andPortuguese banks following their acceptableproposals of reducing charges for the exchange ofeuro-zone currencies. The Austrian case has beenintegrated into the Lombard case and will be dealtwith therein.

The Commission’s unusual attitude was justifiedby the exceptional circumstances of the presentcase. The introduction of euro notes and coins on1 January 2002, replacing the national currenciesof the participating euro-zone countries, puts anautomatic end to the cartel behaviour.



The German cartel

In Germany several banks have come forward withacceptable proposals for reducing their charges forthe exchange of euro-zone currencies. TheCommission has ended proceedings against thesebanks. Commerzbank, Dresdner Bank, BayerischeHypo- und Vereinsbank, Vereins- und Westbankand Deutsche Verkehrsbank, which did notapproach the Commission with acceptableproposals with direct benefit for the consumers,were addressees of a decision with fines.

The Commission characterised the companies’behaviour as a serious infringement of the ECcompetition rules, and adopted a Decision underArticle 81(1) of the EC Treaty imposing thefollowing fines:

Commerzbank AG: i 28.0 millionDresdner Bank AG: i 28.0 millionBayerische Hypo- und

Vereinsbank AG: i 28.0 millionDeutsche Verkehrsbank AG: i 14.0 millionVereins- und Westbank AG: i 2.8 million


In fixing the amount of the fines, the Commissiontook into account the gravity and duration of theinfringement.

The Commission considered that the cartel enteredinto by the German banks represented a veryserious infringement of the EC competition rulesand justified heavy fines. However, because theeffect of the cartel was limited to Germany and theDutch border regions, the Commission categorisedthe case as a ‘serious infringement’ for the purposeof establishing the starting amount of the fines.

Within this category of a serious infringement, thebanks were divided into two groups according totheir relative importance in the market concerned.Being very big banks it was necessary to makefurther upward adjustments for Commerzbank,Dresdner Bank and Hypo- und Vereinsbank inorder to set their fine at a level which ensured thatit had a sufficiently deterrent effect.

The duration of the infringement committed byCommerzbank, Dresdner Bank, Bayerische Hypo-und Vereinsbank, Deutsche Verkehrsbank andVereins- und Westbank was four years and onemonth from the date of concluding the agreementuntil the present time. The starting amounts of thefines determined for gravity were thereforeincreased by 10% per year, i.e. by 40% in total.

In this case there were no aggravating and miti-gating circumstances applicable and as theaddressees of the decision have at no stage of theprocedure co-operated with the Commission theLeniency Notice was also not applicable.

7. The zinc phosphate market-sharing and price-fixing cartel

François ARBAULT, Maarit LINDROOS, Directorate-General Competition,unit E-1

On 11 December 2001, the Commission finedBritannia Alloys & Chemicals Ltd.; Dr HansHeubach GmbH & Co. KG; James M. Brown Ltd.;Société Nouvelle des Couleurs Zinciques S.A.;Trident Alloys Ltd. and Waardals KjemiskeFabrikker A/S a total of i 11.95 million for fixingthe price and sharing the market for zinc phos-phate, an anti-corrosion mineral pigment widelyused for the manufacture of industrial paints.

Following an investigation opened in May 1998,when on-the-spot investigations were carried outat the premises of several addressees of the deci-sion, the European Commission found that Britishcompanies Britannia Alloys & Chemicals Ltd,James M. Brown Ltd and Trident Alloys Ltd,Germany’s Dr Hans Heubach GmbH & Co. KG,France’s Société Nouvelle des Couleurs ZinciquesS.A (SNCZ) and Norwegian company Waardals

Kjemiske Fabrikker A/S participated in a Euro-pean-wide cartel between 1994 and 1998, throughwhich they fixed the price and shared out themarket for zinc phosphate.

In March 1997 the zinc phosphate activities ofBritannia Alloys took the name of Trident Alloys Ltdfollowing a management buy out. The new companycontinued its involvement in the illegal practice.Since Britannia Alloys still exists, as a 100-percentsubsidiary of M.I.M. Holdings, both it and TridentAlloys are the addressees of this decision.

Zinc phosphate is widely used as an anti-corrosionmineral pigment in protective coating systems.Paint manufacturers use it for the production ofanti-corrosive industrial paints for the automotive,aeronautic and marine sectors. During the infringe-ment period, the annual market was worth aroundi 16 million in the European Economic Area – the

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15 EU member states plus Norway, Iceland andLiechtenstein. Whilst the companies concerned areof a modest size, they accounted for over 90% of theEEA-wide market for zinc phosphate.

The cartel began on 24 March 1994 in London, atthe Holiday Inn Heathrow Airport Hotel. There,and following on previous informal contacts,Britannia Alloys, James Brown, Heubach, SNCZand Waardals decided to maintain the ‘status quo’on quantities of zinc phosphate supplied inEurope. It was decided to attribute to each memberof ‘the Club’ (as they called themselves) a refer-ence market share to be complied with.

The market shares were defined by reference to the1991-1993 sales figures in France, Germany, UKand Scandinavia. During subsequent cartel meet-ings, the cartel participants circulated lists of ‘rec-ommended’ minimum prices and shared outspecific customers. In order to ensure that marketshares were adhered to, a monitoring system wasalso set up.

From March 1994 until May 1998, ‘the Club’ heldregular cartel meetings, sixteen of which havebeen clearly identified by the Commission.

During the inspections carried out in May 1998,numerous hand-written notes and tables of thecartel meetings were collected. Whilst a meetingroom had already been booked for the forthcomingcartel meeting at Amsterdam’s Schiphol airport on22 July 1998, the event had to be cancelled due tothe Commission’s intervention.

The companies’ conduct was a very seriousinfringement of the competition rules, as set out inArticle 81 of the European Union Treaty andArticle 53 of the EEA-Agreement.

The following is a list of the individual fines (inmillion Euro):

Britannia Alloys & Chemicals Limited: 3.37Dr Hans Heubach GmbH & Co. KG: 3.78James M. Brown Limited: 0.94Société Nouvelle des Couleurs Zinciques S.A.: 1.53Trident Alloys Limited: 1.98Waardals Kjemiske Fabrikker A/S: 0.35


In fixing the amount of the fines, the Commissiontook into account the gravity and duration of theinfringement, as well as the existence, as appro-priate, of aggravating and/or mitigating circum-stances. The role played by each undertaking wasassessed on an individual basis. The Notice on the

non-imposition or reduction of fines in cartel cases(‘the Leniency Notice’) was applied.

All the undertakings concerned were found to havecommitted a very serious infringement. Withinthis category, the undertakings were divided intotwo groups according to their relative importancein the market concerned. Without prejudice to thevery serious nature of the infringement, theCommission had regard to the limited size of thezinc phosphate market when setting the appro-priate starting amounts.

The cartel was of medium duration (between oneand five years). The Commission did not identifyany ringleader, since the creation of the cartel,which followed various preliminary informalcontacts, was a joint initiative.

Application of the Leniency notice

Part of the evidence on the cartel was provided tothe Commission by the companies involved, underEU rules providing for full or partial immunityfrom fines for companies that co-operate with theCommission in cartel cases.

Waardals approached the Commission shortlyafter the surprise investigations were carried outand fully co-operated with the Commission, givingan account of the cartel which included, inter alia,a list of the cartel meetings held between 1994 and1998.

This allowed the Commission to establish a clearerpicture of the history and mechanisms of the cartel,and to more accurately interpret the documents inits possession.

The explanations provided by Waardals enabledthe Commission to address very detailed requestsfor information to the other cartel participants. Onthis basis, the Commission granted Waardals a50% reduction of its fine.

Trident began to co-operate only after it received arequest for information from the Commission. Thecompany subsequently provided the Commissionwith a written statement giving a detailed accountof the cartel, as well as a number of documentsrelevant to the case. On these grounds, Trident wasgranted a 40% reduction of its fine.

Britannia, Heubach and SNCZ did not substan-tially contest the facts as set out in the Statement ofObjections they received in August 2000. For thisreason, they were each granted a 10 % reduction oftheir fine.

James Brown was also granted a 10 % reduction ofits fine.



8. The carbonless paper cartel

Erwan MARTEIL, Sari SUURNÄKKI, Directorate-General Competition,unit E-1

On 20 December 2001, the Commission fined ArjoWiggins Appleton Limited and Carrs Paper Ltd(United Kingdom), Mitsubishi HiTech PaperBielefeld GmbH, Papierfabrik August Koehler AGand Zanders Feinpapiere AG (Germany), BolloréSA and Papeteries Mougeot SA (France), Distri-buidora Vizcaina de Papeles S.L, PapeleraGuipuzcoana de Zicuñaga SA and Torraspapel SA(Spain) a total of i 313.69 million for havingimplemented concerted price increases on thecarbonless paper market. Sappi Limited (SouthAfrica) was granted total immunity under the ruleson leniency laid down by the Commission in 1996as it was the first company to cooperate in theinvestigation and supplied decisive evidence of thecartel. This Decision, coming at the end of a yearin which the Commission has taken a long line ofdecisions against cartels, is another example ofthe Commission’s determination to uncover andpunish the most damaging of all anti-competitivepractices.

Carbonless paper, also known as self-copyingpaper, is intended for the multiple duplication ofdocuments and is made from a base paper to whichlayers of chemical products are applied. The prin-ciple behind carbonless paper thus involvesobtaining a copy by reaction between two comple-mentary layers under pressure of handwriting orthe impact of a computer printer or typewriter.Business forms (e.g. delivery slips, bank transferforms) have always been the single largest applica-tion for carbonless papers, accounting for over90% of total consumption. Other applications forcarbonless papers include roll converting.Carbonless paper is sold in reels (80%) and sheets(20%).

The size of the EU carbonless paper market wassome ECU 850 million in 1995 (last year of theinfringement). In the same year the estimated WestEuropean (EEA) production capacity ofcarbonless paper was 1 010 000 tonnes, of whichthe members of the Association of EuropeanManufacturers of Carbonless Paper (AEMCP)accounted for 890 000 tonnes (i.e. 88%). TheAEMCP members account together for 85-90% ofthe sales in the EEA.

After a detailed investigation the Commissiondiscovered that the following companies took partbetween 1992 and 1995 in a Europe-wide carteldesigned essentially to implement concerted price

increases: Arjo Wiggins Appleton Limited andCarrs Paper Ltd (United Kingdom), MitsubishiHiTech Paper Bielefeld GmbH, PapierfabrikAugust Koehler AG and Zanders Feinpapiere AG(Germany), Bolloré SA and Papeteries MougeotSA (France), Distribuidora Vizcaina de PapelesS.L (Divipa), Papelera Guipuzcoana de ZicuñagaSA and Torraspapel SA (Spain) and Sappi Limited(South Africa). All these companies weremembers of the AEMCP except Carrs, Divipa andZicuñaga.

The main objective of the cartel was to agree onprice increases and on the timetable for imple-menting them. The cartel members held meetingsat two separate levels: general meetings at Euro-pean level attended by chief executives, commer-cial directors or equivalent managers in thecarbonless paper industry, and national or regionalcartel meetings attended by national or regionalsales managers, often together with the aforemen-tioned senior managers. The Commission gatheredevidence on five general meetings and 20 nationalmeetings for France, the United Kingdom andIreland, Spain and Portugal. Several parties to thecartel also admitted that they attended meetings forGermany, Italy, Denmark, Finland, Norway andSweden.

The Commission uncovered evidence that, inorder to ensure implementation of the agreed priceincreases, a sales quota was allocated to thevarious participants and a market share was fixedfor each of them at certain national cartel meetings– for example, in autumn 1993 for the Spanish andFrench markets. To help reach agreement on priceincreases and sales quotas and to monitor compli-ance with the agreements, the carbonless paperproducers exchanged individual, confidential data(detailed information on their prices and salesvolumes).

Statements by Sappi show that there were contactsof a collusive nature between the European manu-facturers right from the foundation of their profes-sional body, AEMCP, in 1981 and in particularfrom the mid-1980s. More specifically, the infor-mation supplied by Sappi shows that cartel meet-ings were held from 1989 onwards. However, theCommission confined its examination of the caseto the period beginning in January 1992, the datefrom which it is in possession of convergent state-ments from cartel members and firm evidence of

Cartels


regular collusion between carbonless paperproducers.

Towards the end of the period, there are reasons tosuspect that at least some aspects of collusionpersisted after September 1995. When it sent itsstatement of objections to the companiesconcerned, the Commission argued that theinfringement had persisted until February orMarch 1997. However, all the parties, exceptAWA, Carrs and Sappi, deny that they continuedto take part in collusion after 1995. Moreover, thestatements made by AWA, Carrs and Sappidiverge considerably with regard to the nature anddates of collusive contacts and are not sufficientlydocumented or corroborated by conclusiveevidence for the Commission to establish that theconduct examined in this investigation persistedafter September 1995.

On a recommendation from the Hearing Officer(whose final report is attached to the decision), theCommission therefore confined its investigation tothe period up to September 1995, the period forwhich it has firm evidence of the cartel’s exis-tence.

The conduct of the companies concerned consti-tutes a very serious infringement of the competi-tion rules laid down in Article 81 of the EC Treatyand Article 53 of the EEA Agreement.

The individual fines imposed are as follows(i million): Arjo Wiggins Appleton Limited:184.27, Papierfabrik August Koehler AG: 33.07,Zanders Feinpapiere AG: 29.76, Bolloré SA:22.68, Mitsubishi HiTech Paper Bielefeld GmbH:21.24, Torraspapel SA: 14.17, Papeteries MougeotSA: 3.64 Distribuidora Vizcaina de Papeles S.L.:1.75, Carrs Paper Ltd: 1.57, Papelera Guipuzcoanade Zicuñaga SA: 1.54.

Calculation of fines and application ofthe Leniency Notice

In fixing the amount of the fines, the Commissiontook into account the gravity and duration of theinfringement, as well as the existence, as appro-priate, of aggravating and/or mitigating circum-stances. The role played by each undertaking wasassessed on an individual basis. The Notice of18 July 1996 on the non-imposition or reduction offines in cartel cases (‘the Leniency Notice’) wasapplied.

All the undertakings concerned were found to havecommitted a very serious infringement. Within

this category, the undertakings were divided intofive groups according to their relative importancein the market concerned. Further upward adjust-ments were made in the case of three companies(AWA, Bolloré and Sappi), with regard to theirvery large size and thus of their overall resources.

All cartel participants committed an infringementof medium duration (one to five years). The lead-ership of the infringement was retained as anaggravating circumstance against AWA. The basicamount of its fine was therefore increased by 50%,which is the Commission’s normal practice. Nomitigating circumstance was found applicable inthe present case.


Sappi has been granted total immunity pursuant toSection B of the Leniency notice. This is the thirdtime that the Commission has granted a 100%reduction in a fine (following Aventis S.A. in thevitamins A and E case, and Brasserie de Luxem-bourg Mousel-Diekirch in the Luxembourgbrewers case).

Some of the other parties were granted reductionsof the fine that would otherwise have beenimposed on them pursuant to Section D of theLeniency notice.

The Commission reduced the fine imposed onMougeot by 50%, on AWA by 35% and on Bolloréby 20% because these companies supplied infor-mation that helped to shed further light on theunlawful practice in question before the statementof objections was sent out.

The Commission also reduced the fines imposedon Carrs, MHTP and Zanders by 10% as thesecompanies did not dispute the facts set out in thestatement of objections.

Competition Commissioner Mario Monti said:

‘This new case comes at the end of a year in whichthe Commission has taken a long line of decisionsagainst cartels of all kinds. This unprecedentedlevel of activity shows two things: first that thesesecret practices are – unfortunately – widespread,but also that the Commission has given itself thewherewithal to detect and pursue such offencesand impose effective penalties. Today, I hopecompanies are fully aware of the risks they runwhen the collude. They should also know that theonly way of alleviating the legal and financialconsequences they face is to come and talk to us’.



New Notice on agreements of minor importance (de minimis Notice)

Luc PEEPERKORN, Directorate-General Competition, unit A-2

The Commission adopted on 20 December 2001 anew Notice on agreements of minor importancewhich do not appreciably restrict competition underArticle 81 (1) of the EC Treaty (‘de minimisNotice’). The new Notice replaces the previousNotice of 1997. (1) The revision of the ‘de minimis’notice is part of the Commission’s review of the ECcompetition rules. By defining when agreementsbetween companies are not prohibited by the Treaty,the Notice will reduce the compliance burden forcompanies, especially smaller companies. At thesame time the Commission will be better able toavoid examining cases which have no interest from acompetition policy point of view and will thus beable to concentrate on more important cases.

During the discussions leading to the adoption ofCouncil Regulations 1215/99 and 1216/99 (2) andCommission Block Exemption Regulation 2790/1999 (3) (the BER on vertical restraints) the MemberStates and the Commission discussed the need toreview the old de minimis Notice once the new ECcompetition rules for vertical restraints wereadopted. It was considered necessary to assure coher-ence between the new BER on vertical restraints andthe de minimis Notice. The review became evenmore necessary after at the end of 2000 also the newEC competition rules towards horizontal agreementswere adopted. (4) The Commission therefore adoptedon the 16th of May 2001 a draft new de minimisNotice inviting comments from industry, consumerorganisations and other interested third parties. (5)

The new Notice reflects an economic approachand has the following key features distinguishing itfrom the previous Notice:

1) It only deals with the question1) what is not an appreciable1) restriction of competition.

Article 81 (1) of the EC Treaty prohibits agree-ments which may affect trade between Member

States and which have as their object or effect theprevention, restriction or distortion of competitionwithin the common market. The Court of Justice ofthe European Communities has clarified that thisprovision is not applicable where the impact of theagreement on intra-community trade or on compe-tition is not appreciable. In the new Notice theCommission quantifies, with the help of marketshare thresholds, what is not an appreciablerestriction of competition and is thus not prohib-ited by Article 81(1) for that reason.

The previous de minimis Notice was somewhatambiguous. It referred both to what is not an appre-ciable restriction of competition and an appre-ciable effect on trade between Member Stateswithout separating the two. Like the new Notice, itused only market share thresholds to quantifyappreciability. However, market share thresholds,certainly of the level adopted in the new deminimis Notice, are useful to define what is not anappreciable restriction of competition but are not agood indicator of what is an appreciable effect ontrade between Member States. For the latter, whichis directly linked to market integration, a turnoverthreshold, possibly combined with a much lowermarket share threshold, could be a good indicator.Therefore, the new de-minimis Notice with highermarket share thresholds could no longer be linkedto the issue of effect on trade in the way it was doneunder the previous Notice.

Furthermore, in the discussion on the reform ofRegulation 17 an important aspect is the delinea-tion of the jurisdiction between EC law andnational law. In the proposed new Regulation 17this delineation is foreseen along the lines ofwhether trade between Member States is affectedor not. (6) In the light of the final outcome of thisdiscussion, it may be necessary to define in a sepa-rate notice what appreciable effect on trade means.This discussion can not and should not be pre-empted at this stage.



(1) OJ C 372, 9.12.1997, p. 13.(2) OJ L 148, 15.6.1999, p. 1 and p. 5.(3) OJ L 336, 29.12.1999, p. 21.(4) Commission Block Exemption Regulation 2658/2000 on specialisation agreements and Commission Block Exemption

Regulation 2659/2000 on R&D agreements, OJ L 304, 5.12.2000, p. 3 respectively p. 7, and Commission Guidelines on theapplicability of Article 81 of the EC Treaty to horizontal cooperation agreements, OJ C 3, 6.1.2001, p. 2.

(5) See Competition Policy Newsletter Number 2, June 2001, pages 4-6.(6) Article 3 of the Proposal for a Council Regulation on the implementation of the rules on competition laid down in Articles 81 and

82 of the Treaty, OJ C 365 E, 19.12.2000, p. 284 - 296.

However, in the new Notice it is made clear thatagreements between small and medium-sizedenterprises (SMEs) are rarely capable of appre-ciably affecting trade between Member States.Agreements between SMEs therefore generallyfall outside the scope of Article 81(1).

2) The ‘de minimis’ thresholds are1) raised to 10% market share for1) agreements between competitors and1) to 15% for agreements between1) non-competitors.

The previous Notice had fixed the ‘de minimis’thresholds at respectively 5% and 10% marketshare. The new Notice has raised these thresholdsto respectively 10% and 15%. (1) Competitionconcerns can in general not be expected whencompanies do not have a minimum degree ofmarket power. The new thresholds take account ofthis while at the same time staying low enough tobe applicable whatever the overall market struc-ture looks like. The difference between the twothresholds takes into account, as before, that agree-ments between competitors in general lead moreeasily to anti-competitive effects than agreementsbetween non-competitors.

3) The Notice specifies for the first time1) a market share threshold for1) networks of agreements producing1) a cumulative anti-competitive effect.

The previous de minimis Notice excluded from itsbenefit agreements operated on a market where‘competition is restricted by the cumulative effectsof parallel networks of similar agreements estab-lished by several manufacturers or dealers.’ Thismeant in practice that firms operating in sectorslike the beer and petrol sector could usually notbenefit from the de-minimis Notice. The newNotice introduces a special ‘de minimis’ market

share threshold of 5% for markets where thereexist such parallel networks of similar agreements.

4) The Notice contains the same list1) of hardcore restrictions1) as in the horizontal and vertical1) Block Exemption Regulations.

The new Notice defines in a clearer and moreconsistent way the hardcore restrictions, i.e. thoserestrictions, such as price fixing and marketsharing, which are normally always prohibitedirrespective of the market shares of the companiesconcerned. Hardcore restrictions can not benefitfrom the de minimis Notice. For agreementsbetween non-competitors the new Notice hastaken over the hardcore restrictions set out inBlock Exemption Regulation 2790/1999 forvertical agreements. (2) For agreements betweencompetitors the new Notice has taken over thehardcore restrictions set out in Block ExemptionRegulation 2658/2000 for specialisation agree-ments. (3)

In cases covered by the new Notice, the Commis-sion will not institute proceedings either uponapplication or on its own initiative. Where compa-nies assume in good faith that an agreement iscovered by the Notice, the Commission will notimpose fines. Although not binding on them, theNotice also intends to give guidance to the courtsand authorities of the Member States in their appli-cation of Article 81.

The new Notice on agreements of minor impor-tance is published in the Official Journal of theCommunities, C 368 of 22.12.2001, and is alsoavailable on the internet at the following address:

http://europa.eu.int/comm/competition/antitrust/deminimis/


Antitrust

(1) This does not imply that agreements between companies that exceed the thresholds set out in the Notice do appreciably restrictcompetition. Such agreements may still have only a negligible effect on competition within the common market, but this can onlybe assessed on a case-by-case basis. Such assessment is relevant in particular for agreements that are not covered by any of theblock exemption regulations of the Commission.

(2) Commission Block Exemption Regulation 2790/1999, OJ L 336, 29.12.1999, p. 21.(3) Commission Block Exemption Regulation 2658/2000, OJ L 304, 5.12.2000, p. 3.

Review of the block exemption Regulation on technology transferagreements

Paolo CESARINI and Luc PEEPERKORN, unit A-2

While the Block Exemption Regulation n° 240 ontransfer of technology (hereafter ‘TTBE’) isexpected to apply until 31 March 2006, Article 12requires the Commission to carry out regularassessments of the application of this Regulation.To this end, DG Comp has prepared an evaluationreport (hereafter the ‘Report’), which was adoptedby the Commission on the 21 December 2001 (1).

The Report provides a critical analysis of the appli-cation and the policy approach underpinning theTTBE. It discusses the problems arising in thecontext of licences of intellectual property rights(hereafter ‘IPRs’) and acknowledges the comple-mentary role of competition and innovation poli-cies. It also contains a comparison between thecompetition policy approach to licensing of IPRsin the Community and in the US. It stresses theneed to adapt the TTBE to ensure consistency withthe new Commission block exemptions concern-ing distribution agreements (2) as well as R&D andspecialisation agreements (3) that are based on amore economic approach. The Report raises alsomore specific issues such as the treatment of soft-ware licensing agreements and licensing poolswhich have become increasingly important for thedevelopment and dissemination of new technolo-gies.

Licensing agreements represent an important andcomplex policy area of Community antitrust. Infact, the economic development of the Communityand its ability to draw abreast of its competitors inthe rest of the world largely depends on thecapacity of industry to devise new technologiesand to disseminate them at a large scale. Competi-tion is one of the main driving forces of innovationand it is therefore important to find the rightbalance between protecting competition andprotecting intellectual property rights. In its Reportthe Commission is asking for comments on itscompetition policy approach to licensing agree-ments. After discussion on the Report withindustry, consumer associations and other inter-ested parties the Commission may propose newcompetition rules for the application of Article 81

to licensing agreements in the second half of theyear 2002.

Basic findings of the Report

Before adopting its Report, the Commissioncarried out a preliminary fact-finding that hasshown that industry would be favourable to areview of the TTBE and insists on the need toproceed with a simplification and clarification ofthe current rules.

The Report finds that by using criteria relatingmore to the form of the agreement than the actualeffects on the market, the TTBE entails four mainshortcomings:

— Firstly, the TTBE is too prescriptive and seemsto work as a straitjacket, which may discourageefficient transactions and hamper dissemina-tion of new technologies.

— Secondly, the TTBE only covers certain patentand know-how licensing agreements. Thisnarrow scope of application of the TTBEseems increasingly inadequate to deal with thecomplexity of modern licensing arrangements(e.g. pooling arrangements, software licensesinvolving copyright).

— Thirdly, a number of restraints are currentlypresumed illegal or excluded from the blockexemption without a good economic justifica-tion. This concerns in particular certain restric-tions extending beyond the scope of thelicensed IPR (e.g. non-compete obligations,tying). In terms of economic analysis, suchrestraints may be efficiency enhancing or anti-competitive depending on the competitive rela-tionship between the parties, the market struc-ture and the parties’ market power.

— Fourthly, by concentrating on the form of theagreement the TTBE extends the benefit of theblock exemption to situations which cannotalways be presumed to fulfil the conditions ofArticle 81(3), either because the contracting



(1) The Report is published as a COM document with the reference COM(2001) 786 and is also available on the internet at thefollowing address: http://europa.eu.int/comm/competition/antitrust/technology_transfer/

(2) Commission Block Exemption Regulation 2790/1999, OJ L 336, 29.12.1999, p. 21.

(3) Commission Block Exemption Regulations 2658/2000 and 2659/2000, OJ L 304, 5.12.2000, p. 3 respectively p.7.

parties are competitors or because they hold astrong position on the market. For instance, thegrant of an exclusive license can have seriousforeclosure effects when an exclusive license isgranted to a dominant producer which preventsother companies gaining access to technologythat might foster their market entry.

Some issues for discussion

The Report invites comments on a number ofissues:

— Should the scope of the TTBE, which onlyapplies to patents and know-how, be widenedto cover also copyright, design rights and trade-marks? This issue is of particular importancefor a number of sectors including the softwareindustry, which depends upon a chain of copy-right licences for manufacture and distribution.

— Should a revised block exemption also coverlicensing agreements between more than twocompanies such as licensing pools? Sucharrangements have become increasinglyimportant for industry, given the growingcomplexity of new technologies. In thisrespect, it can be observed that multipartylicences may be efficiency enhancing and pro-competitive, in particular where without all thepatents contributed to the pool the exploitationof the new technology would not be possible.However, multiparty licenses may also haveserious anti-competitive effects, especiallywhen the agreement covers competitive tech-nologies or where it requires the members togrant licences to each other for current andfuture technology at minimal cost or on anexclusive basis. In such circumstances, multi-party agreements may disguise a cartel, lead toforeclosure or reduce the parties’ incentives toengage in R&D thereby delaying innovation.

— Should a revised block exemption adopt a morelenient approach to licensing agreementsbetween non-competitors? Without excludingother possible options, the Report proposes aframework for a future regime where a cleardistinction would be made in respect oflicensing between competitors and betweennon-competitors. In fact, it is generallyacknowledged that if the parties to an agree-ment are in a vertical relationship, i.e. are notcompetitors, exclusive licences are generallyefficiency enhancing and pro-competitive. Forinstance, if the IPR holder does not have theassets for the production or distribution of thelicensed products, it is more efficient to licenseto someone who does have these assets. The

exclusivity may be necessary to protect thelicensee against free riding on his investmentsor to create the necessary incentives for bothparties to invest in further improvements.

In the light of this, it is proposed that, as far aslicensing between non-competitors isconcerned, the future block exemption couldcover restraints that do relate to the exploita-tion of the licensed IPR, such as territorial,customer and field of use restraints, subjectonly to a dominance threshold. Furthermore, itcould treat restraints that do not relate to theexploitation of the licensed IPR, such as non-compete and tying, in the same way as Regula-tion 2790/99. The block exemption wouldinclude a limited hardcore list, in particularconcerning pricing restrictions and possiblycertain territorial restraints. It may also containconditions which would exclude certainrestraints from the coverage of the blockexemption (severability). It should be under-lined that, for the restraints that do not relate tothe exploitation of the licensed IPR (e.g. non-compete obligations, tying), such a treatmentwould create coherence with Block ExemptionRegulation 2790/99.

Compared with the current TTBE, it wouldmean that certain restraints currently in theblack or grey lists would be exempted up to acertain market share threshold. For restraintsthat relate to the exploitation of the licensedIPR (e.g. exclusive licenses and territorialrestraints), the dominance threshold wouldonly apply in case the restrictions fall withinArticle 81(1) in the first place, for instance incase of foreclosure. Also, a more limited hard-core list would apply so that certain restraintswould no longer be per se illegal: this couldallow coverage of quantity restrictions, certaincustomer restrictions and maximum andrecommended prices. The hardcore list, whilebasing itself on Block Exemption Regulation2790/99, should take account of the specificcharacteristics of licence agreements.

— Should a future block exemption adopt a moreprudent approach to licensing agreementsbetween competitors? Agreements betweencompetitors may give rise to a number ofcompetition concerns if the licence preventscompetition that could have taken placebetween the licensor and the licensee absentthe licence. On the one hand, exclusivelicences will often lead to market sharingthrough the allocation of territories orcustomers, especially when the licence is recip-rocal or the exclusivity extends also into non-


Antitrust

licensed competing products. Productionquotas agreed in licensing agreements betweencompetitors may easily lead to a straightfor-ward output restriction. On the other hand,under certain conditions, in particular in thecase of licensing to a joint venture and in caseof non-reciprocal licensing, the exclusivitymay not only lead to a loss of inter-brandcompetition but also to efficiencies. To assesswhether the negative effects on competitionmay be outweighed by the efficiencies, themarket power of the parties and the structure ofthe markets affected by the agreement need tobe taken into account.

In the light of this, the Report proposes that, asfar as licensing between competitors isconcerned, the future block exemption couldbe limited by a market share threshold of up to25%. In addition, it would contain a hardcorelist for restrictions which directly or indirectlyfix prices, limit output or sales, or allocate terri-tories or customers and may have to contain alist of conditions which would exclude certain

restraints from the coverage of the blockexemption (severability). This would createcoherence with Block Exemption Regulation2659/2000. Compared with the TTBE thiswould mean a more nuanced approach forpooling arrangements, cross licensing agree-ments, licence agreements concerning jointventures and for restraints that do not concernthe exploitation of the IPR itself, such as non-compete and tying. These are restrictionswhich are presently either excluded from theTTBE or blacklisted. It would justifiablyprovide less protection to territorial restraintsbetween competitors in exclusive licensingagreements.

Above the mentioned thresholds, guidelineswould have to clarify competition policy, withappropriate references to the existing Guide-lines on Horizontal Co-operation and Guide-lines on Vertical Restraints.

Comments on the Report have to be sent to theCommission by 26 April 2002.



Commission confirms its policy line in respect of horizontal agreementson energy efficiency of domestic appliances

Manuel MARTÍNEZ-LÓPEZ, Directorate-General Competition, unit F-2

On 14 November 2001, the Competition Direc-torate-General closed its examination of twoagreements concluded under the aegis of and noti-fied by the Conseil Européen de la Constructiond’Appareils Domestiques (CECED) (1). Theseagreements aim at improving the energy efficiencyof, respectively, household dishwashers and waterheaters. In both cases, the agreements are enteredinto by competing manufacturers accounting for apredominant proportion of sales in the Communityand/or the Member States. Following the publica-tion of a notice in the OJ pursuant to Article 19(3)of Regulation 17 (2), the cases have been closed byadministrative letters.

These cases illustrate the way in which the recentCommission ‘Guidelines on the applicability ofArticle 81 of the EC Treaty to horizontal coopera-tion agreements’ (‘the guidelines’) are applied inthe case of agreements aiming at furthering envi-ronmental objectives (3). In particular, they showhow the benefits for consumers individuallyconcerned may be assessed under Article 81(3)when the agreement triggers general environ-mental advantages.

The agreements

Water heaters

The agreement between EC manufacturers of do-mestic electric storage water heaters (‘DESWH’) (4)covers three sets of objectives concerning: (i)production and imports of DESWH; (ii) monitoringand reporting; and (iii) promotion of technologicaldevelopment as well as consumer awareness. Theagreement will last until 31.12.2003. The partieshave mainly agreed the following:

Production and imports: following an under-taking to provide public declarations stating thestanding losses of their DESWH:

— after 31 December 2000 – each party stopsproducing for and importing into the commu-nity DESWH, the standing losses of which,expressed in kWh per 24 hours, exceed themaximum allowable values set forth in theagreement. Such values vary for small (volumeof 25 to 45 litres), vertical (45 to 220 litres),horizontal (45 to 220 litres) DESWH (5);

— by January 1, 2002 – each party undertakes toreduce the weighted average standing losses ofits production to certain thresholds for each ofthe above categories of DESWH, exceptvented DESWH in the UK, where these thresh-olds should be attained by the end of 2002 (6).

Monitoring and reporting: CECED will set upand maintain a database containing an analysis ofall models of DESWH placed on the communitymarket by all participants. It will be available tothe European Commission and national authori-ties. The fulfilment of the objectives of the agree-ment will be monitored by a notary who will reportannually to CECED and the Commission. Indi-vidual data will not be disclosed to other parties,including CECED members.

Consumer awareness and technologicaladvancement: the participants have agreed toenhance consumer and installer awareness aboutenergy savings and to develop insulation and othermethods to further reduce standing losses.


Antitrust

(1) See IP 01/1659 of 26.11.2001(2) OJ C 250 of 8.9.2001, p. 2 and 4.(3) OJ C 3 of 6.1.2001, p. 3, in particular, chapter 7, ‘Environmental Agreements’.(4) CECED members and other participants who have signed the agreement on water heaters include Atlantic Group, Baxi Spa, Bosch

Siemens Hausgeräte Gmbh, Electrolux Productline Home Comfort/AEG Hausgeräte GmbH/, Fagor Electrodomésticos S.Coop.Heatrae Sadia Heating Ltd., Lorenzi Vasco Spa, Merloni Termosanitary Spa, Siemens Heiztechnik, Société Thermique deValence, Stiebel Eltron Gmbh & Co KG, Technoterm Gmbh and Joh. Vaillant Gmbh & Co. All of them manufacture and sellvarious domestic appliances in several Member States.

(5) The maximum allowable values are as follows : a) small unvented: 0.1474 + 0.0719 x Volume ²/³, small vented: 0.1561 + 0.0802 xVolume ²/³, b) vertical unvented: 0.224 + 0.0663 x Volume ²/³, vertical vented: 0.236 + 0.074 x Volume ²/³ and c) horizontalunvented: 0.939 + 0.0104 x Volume, horizontal vented: 1.034 + 0.0116 x Volume.

(6) The thresholds are as follows: a) small: 0.13 + 0.0553 x Volume ²/³, b) vertical 0.2 + 0.051 x Volume ²/³ and c) horizontal: 0.75 +0.008 x Volume.

Dishwashers

The agreement between EC manufacturers of dish-washers (1) covers three sets of objectives concern-ing: (i) production and imports of domestic dish-washers; (ii) monitoring and reporting; and (iii)promotion of technological development as wellas consumer awareness. It is open to new partici-pants and remains valid until 31.12.2004. Theparties have mainly agreed the following:

Production and imports: pursuant to Commis-sion Directive 97/17/EC (2), household dish-washers sold in the EU are classified and labelledaccording to their energy efficiency. There areseven categories of energy efficiency ranging fromA to G. Pursuant to the agreement’s main objectiveof reducing the overall European productionweighted average energy consumption of dish-washers by 20% by the year 2002, the participantshave agreed to cease producing for and importinginto the EC the following categories of dish-washers:

— by 31 December 2000 – (the first step), dish-washers belonging to the energy efficiencyclasses E, F and G (for dishwashers with morethan 10 or just 10 place settings) and F and Gfor dishwashers with less than 10 placesettings.

— by 31 December 2003 – (the second step), dish-washers belonging to the energy efficiencyclass D (for dishwashers with 10 or more placesettings) or E (for dishwashers with less than10 place settings).

Monitoring and reporting: CECED will set upand maintain a database containing an analysis ofall models of dishwashers placed on the EC marketby all participants. It will be available to the Euro-pean Commission and national authorities. Theresults will be monitored by a notary who willreport annually to CECED and to the Commission.Individual data will not be disclosed to otherparties, including CECED members.

Consumer awareness and technologicaladvancement: the participants have agreed to

educate consumers on the environmentallyconscious use of dishwashers, to give more infor-mation in operating manuals about ways to saveenergy and water, to promote technologicaladvancement and to co-operate with nationalenergy authorities on common programmes topromote the efficient use of dishwashers.

Assessment under Article 81 (1)

Both agreements involve producers which, onaggregate, have a major share of sales in the EC orin Member States, namely close to 100% for dish-washers and more than 65% for DESWH. Asstressed in the Commission guidelines, marketshares, however high, are not a sufficient conditionfor a horizontal environmental agreement to beautomatically caught by Article 81(1) (3).

The key criteria for these and similar cases are theproportion of the total sales directly affected by theagreement for the parties as a whole and for eachindividual party, on the one hand and, on the otherhand, the relevance of the product characteristicaffected in influencing purchase decisions (4). Thatis, in essence, whether or not the environmentalaspect agreed upon is marginal as a productattribute and whether or not the agreement willaffect a non negligible amount of products in therelevant market(s) (5). For both dishwashers andDESWH, energy efficiency ranks high among thecriteria influencing purchase decisions. In bothcases as well, around a quarter of the appliancesmarketed before the agreements were concludedwill be affected, i.e. the equivalent of the marketsof the United Kingdom, Benelux and Spaincombined.

Finally, the economic and commercial relevanceof the agreement must be assessed in the light ofthe individual obligations placed upon each party.In past cases and in the guidelines, the Commis-sion has taken the view that loose commitments tocontribute to a sector-wide target may not berestrictive of competition (6). However, in the twocases at hand, each manufacturer undertakes indi-vidual obligations which appreciably restrict its



(1) CECED members and other participants who have signed the agreement include Antonio Merloni Spa, Arçelik A.T., BoschSiemens Hausgeräte GmbH, Brandt SA, Candy Elettrodomestici Srl, Electrolux Holdings Ltd, Fagor Electrodomésticos S.Coop,Gorenje d.d., Merloni Elettrodomestici Spa, Miele & Cie GmbH & Co, SMEG Spa and Whirlpool Europe Srl. All of themmanufacture and sell a wide range of domestic appliances under various brands in various Member States.

(2) Commission Directive 97/17/EC of 16 April 1997, implementing Council Directive 92/75 with regard to energy labelling ofhousehold dishwashers, OJ L 118, 7.5.1997, p.1.

(3) Guidelines, point 184.(4) See Commission Decision of 24 January 2000 in case 36 718 CECED, OJ L 187 of 26.7.2000, at points 30 to 37.(5) Guidelines, points 186 and 190.(6) See cases COMP/37.231 ACEA (IP 98/865 of 16.10.1998), 37.634 JAMA, 37.612 KAMA (IP 99/922 1.12.1999) and 37.775

CEMEP (IP/00/508 of 23.5.2000); see also guidelines, point 185.

freedom to produce and market its products, asthey stood prior to the agreement.

Conditions for an exemption underArticle 81(3)

In these circumstances, the Commission todayand, possibly, national authorities and jurisdic-tions in the future, must assess whether the condi-tions for an exemption under Article 81(3) arefulfilled. For both DESWH and dishwashers, thecontribution to technical and economic progress isclear. More energy-efficient appliances providethe same levels of service with reduced consump-tion of energy inputs.

A more difficult question to assess objectively,that is, quantitatively, is whether consumers deriveobjective benefits from an agreement whichreduces externalities which are not, by definition,integrated in the price system and whichconsumers are relevant for the assessment: eithersociety at large or the individual purchasers of theappliances. In these two cases a major proportionof individual purchasers facing potentially higherpurchase costs for more efficient appliances willbe likely to recoup such costs in reasonable time-frames during the operation of the appliance.

However, as financial savings depend on elec-tricity prices and frequency of use, it cannot bealways guaranteed that every individual purchaserwould recoup such costs. This is why it might beappropriate to take into account, for the sake ofcompleteness and secondary to the benefits of

individual consumers directly involved, the mostdefuse benefits which the society at large derivesfrom improved environmental conditions.Although the economic monetarisation of environ-mental benefits is no exact science, abundantresearch allows to quantify such benefits, whichneed to be weighed against the costs of implemen-tation, as stressed in the guidelines (1).

In presence of indisputable benefits which wouldnot be obtained otherwise, e.g. if the partiesadhered only to a general industry target, andabsent elimination of competition as to other keycharacteristics on which the parties will stillcompete, such as price, quality advertising andmarketing, the conditions for an exemptionpursuant to Article 81(3) may thus appear to befulfilled.

Conclusion

These two cases illustrate, if need be, that environ-mental protection and environmental agreementsdo not necessarily conflict with Article 81. A nonnegligible amount of experience in these andsimilar cases, complemented by the Commissionguidelines in this respect, show that such agree-ments can be handled in a system of decentralisedapplication of Article 81, provided that the argu-ments put forward by the parties are objective. Inrespect of (rebuttable) claims of efficiencies underArticle 81(3), environmental agreements do notpresent greater difficulties than other categories ofagreements.


Antitrust

(1) Guidelines, point 194.

Commission clears the creation of three B2B e-marketplaces:‘Covisint’, ‘Eutilia’ and ‘Endorsia’

Elodie CLERC, Directorate-General Competition, unit F-1 and John CLARK,Directorate-General Competition, unit F-2

Introduction

DG Competition has recently cleared the creationof three new B2B marketplace joint ventures:Covisint (car sector), Eutilia (electricity sector),and Endorsia (industrial goods and services).

B2B marketplaces are Internet-based electronicfora designed to allow business-to-businesscommunications and transactions. Participants caninclude suppliers, distributors, providers of busi-ness services, infrastructure providers and theircustomers. Such projects are becoming verycommon (1), and have a major impact on the way inwhich companies do business. In general, they areexpected to have major pro-competitive effects.They should create more transparency, therebyhelping to link more operators and to integratemarkets, and they may also create market efficien-cies by reducing search and information costs andimproving inventory management, leading ulti-mately to lower prices for the end consumer.

As with stock exchanges, the liquidity and effi-ciency of B2B electronic marketplaces will gener-ally increase as the number of users rises, and thepro-competitive effects of such exchanges shouldalso increase as more and more buyers andsuppliers are linked to the system. The fact thatthese exchanges try to sign up as many users aspossible therefore does not usually constitute acompetition problem in itself.

However, in certain circumstances, negativeeffects on competition may outweigh market effi-ciencies. This may in particular be the casewhere (2):

• Users of the exchange are able to exchange ordiscover market-sensitive information relatingto, for example, prices and quantities. Theirability to do so will usually be related to thedesign of the system, in particular as regards theusers’ ability to access each other’s data.

• Discrimination against certain classes of usersleads to foreclosure. Rules concerning theownership of the marketplace and its operationcould be used, for instance, to exclude certainparticipants from the most efficient marketplace,thereby putting them at a competitive disadvan-tage. Discrimination issues could arise if share-holders were to have exclusive access toinformation regarding transactions through themarketplace.

• Users can get together to ‘bundle’ buying orselling volumes, and can thereby co-ordinatetheir behaviour. This phenomenon is discussedextensively in the Guidelines on HorizontalRestraints.

The Notified Projects

None of the notified projects involved mergers,since the parent companies did not exercise joint orsole control over the JVs. The agreements there-fore fell to be examined under Article 81 ratherthan under the Merger Regulation.

Covisint

In August 2001, the Commission granted regula-tory approval to the creation of Covisint (3).Covisint was formed by the major motor manufac-turers Ford, DaimlerChrysler, General Motors,Renault and Nissan. A sixth carmaker, PSAPeugeot Citroën, later joined the project.

Covisint was the first major B2B exchange to beexamined under Article 81, and may thereforepotentially serve as a guide for the treatment ofother similar projects.

Covisint is a purchaser-managed ‘buy-side’ ex-change, unlike other exchanges such as SupplyOn,which are set up by the sellers of components. The



(1) A number have already been examined under the competition rules: M.2027 Deutsche Bank/SAP/JV; 38.866 Volbroker; M.1969UTC/Honeywell/i2/MyAircraft.com; M.2075 Jupiter/M&G/Scudder/JV; M.2138 Siemens/SAP/JV, M.2096 Bayer/DeutscheTelekom/Infraserv Hoechst; M.2172 Babcock Borsig/mg technologies/SAP Markets/ec4ec; M.2270 Babcock Borsig/SAPMarkets/ Deusche Bank/VA Tech/ec4ec; M.2398 Linde/Jungheinrich/JV; M.2374 Telenor/Ergogroup/DNB/Accenture/JV

(2) See Joachim Lücking, “B2b e-marketplaces and EC competition law: where do we stand” in Competition Policy Newsletter,October 2001, Number 3.

(3) See press release IP/01/1155 dated 31 July 2001

carmakers that intend to purchase through theexchange (including Covisint’s shareholders)account for about 63% of worldwide car produc-tion. Most major suppliers of automotive compo-nents have also indicated their willingness to usethe marketplace.

Covisint is intended to provide the automotiveindustry with procurement, collaborative productdevelopment and supply chain management tools.Procurement of a variety of goods and servicestakes place both through on-line auctions and cata-logue purchasing. The exchange also has a supply-chain management function. Individual users can«see» the current and future status of materialsupstream in their supply chain, and can therebybetter manage stock levels and predict capacityconstraints, leading to substantial cost savings.Covisint will also allow users located in differentparts of the world to work together on-line todesign car components, thereby speeding updevelopment times and encouraging innovation.

After examining the notified agreements and thereplies received to information requests, theCommission concluded that the agreementscontain adequate provisions to eliminate potentialcompetition concerns of the types discussedabove. In particular, the agreements showed thatCovisint is open to all firms in the industry on anon-discriminatory basis, is based on open stan-dards, allows both shareholders and other users toparticipate in other B2B exchanges, does not allowjoint purchasing between car manufacturers or forautomotive-specific products, and provides foradequate data protection, through the use of fire-walls and security rules.

Although, since no restriction of competition wasfound, it was not necessary to come to any conclu-sions as to the relevant product market definition,the investigation revealed that in the car sector,more traditional procurement methods such asletters, faxes, and telephones are no longersubstitutable for modern computerised systemssuch as B2B exchanges. However, for the timebeing at least, carmakers can still use ElectronicData Interchange systems (EDI) in parallel withthe new B2B technology.

The investigation also revealed that Covisint hasthe potential to alter the nature of the relationshipbetween the various actors in the automotivesupply chain fundamentally. In particular, variousinterested parties expressed concerns that sophisti-cated components could become commodities,

leading to competition on price alone rather thanon specification and quality levels.

For the near future at least, Covisint is likely to bethe only B2B exchange satisfying the procurementneeds of several different carmakers. It is thereforepossible that at some point in the future theCommission will be called upon to analyse theexchange under Article 82 of the Treaty.

Eutilia

On 26 February 2001, the Commission received anotification relating to the setting up of a jointventure known as Eutilia. The new company willrun a business to business marketplace providingservices for the procurement of goods for elec-tricity utilities.

The parent companies, eleven major Europeanelectricity companies (1), will each hold between8.5% and 9.8% of Eutilia’s shares.

Eutilia will offer auctions, catalogue purchasing,off-catalogue purchasing, buy/sell enquiries andsupplier database services. It may subsequentlyexpand the range of its activities by offeringvarious transaction support services (e.g. financialservices), supply chain integration services andhosting services. It will initially focus on theprocurement of goods and services to utilities inthe electricity sector but hopes to broaden its focusto goods and services for other utilities thereafter.

The notifying parties estimate that Eutilia willallow users (buyers and suppliers) to reduce trans-action costs by 20/25-50% (based on efficiencygains being realised in other B2B ventures).

The Commission concluded that there will be norestriction of competition as regards servicesprovided at the marketplace level for the followingreasons: (i) the notifying parties are not active inthe same market as the JV, (ii) the JV itself doesnot restrict or distort competition, but rather is pro-competitive in that it will create significant costefficiency benefits for users; (iii) the JV will facesignificant competition from a variety of procure-ment methods such as traditional methods (tele-phone, fax, etc), own company buy sites andcompeting marketplaces (2); (iv) barriers to entryin e-commerce are very low; (v) there will be noexclusivity or minimum use requirements.

Similarly, the JV has been structured to ensure thatthere will be no restriction of competition on the


Antitrust

(1) Electrabel SA, Electricité de France, Endesa Net Factory SL, Enel SPA, Iberdrola, National Grid Holdings Limited , NV Nuon ,RWE Systems AG, Scottish Power UK PLC, United Utilities BV and Vattenfall AB

(2) Achilles and Elettroclick are other platforms in the same sector.

downstream markets. There will be open access tothe marketplace, and appropriate protection ofconfidential information. Moreover, the JV willnot act as a buying club but as an intermediary.

Endorsia

The B2B marketplace Endorsia, a non-co-opera-tive joint venture notified to the Commission on5 March 2001, involves five manufacturers (1) ofmachines and industry components, which willeach acquire a 20% interest in the JV company.

Endorsia will support the buying and sellingrequirements of various manufacturers, distribu-tors and end-users for branded industrial goodsand services. Suppliers will be able to connect tocustomers and customers to their suppliers byusing one single electronic interface. Endorsiaitself does not engage in any buying or sellingactivities. Each of the sellers will maintain theirown separate “storefronts”, deciding, for example,their own selling and customer access rules, termsand conditions of sale, shipping policy and pricing.Thus, Endorsia will serve as a conduit betweenindividual sellers and their customers.

The Commission’s examination revealed there tobe no significant barriers to entry on the market forthe provision of sales support services for indus-trial products. Each participant will be free toparticipate in other B2B e-commerce ventures orto establish its own. New manufacturers that meetobjective criteria such as financial stability ordepth and breadth of product lines will have openaccess to the marketplace.

Endorsia has also established appropriate firewallsand procedures to prevent the exchange ofcommercially sensitive information among thecompanies transacting business on the website.Endorsia will not itself be involved in buying orselling activities.

Outcome

In each of the three cases, the Commissionconcluded that the project as notified did notcurrently restrict competition in the sense ofArticle 81(1) of the EC Treaty, and sent the partiesa comfort letter to this effect.



(1) Aktiebolaget SKF, Reliance Electric Industrial Company, The Timken Corporation, Industriewerk Schaeffler INA-Ingenieurdienst GmbH and Sandvik Finance B.V.

The fourth prohibition decision in the area of car distribution in fouryears: This time it’s Mercedes’ turn

Hubert GAMBS and Konrad SCHUMM, Directorate-General Competition,unit F-2

Introduction

The Commission decided on 10 October 2001 toimpose a fine of EUR 71.825 million on DaimlerChrysler AG for three types of infringements ofArticle 81 of the EC Treaty in the area of car distri-bution. (1) The decision concerns measuresadopted by DaimlerChrysler in order to impedeparallel trade in cars and limit competition in theleasing and sale of motor vehicles. This is thefourth Commission decision imposing a fineagainst a car manufacturer that does not respect ECcompetition rules. (2)

The Commission started the investigation con-cerning the distribution of motor vehicles of theMercedes-Benz make after receiving complaintsfrom consumers about restrictions on the export ofnew cars in various Member States. Inspectionswere carried out in undertakings in Germany,Belgium, the Netherlands and Spain. DaimlerChrysler AG is the parent company of the groupthat manufactures and distributes Mercedes cars.The Mercedes-Benz make holds a particularlystrong position in the market segments for execu-tive cars and for luxury cars.

Obstacles to parallel trade

The first infringement of the EC competition rulesconsisted of measures by DaimlerChrysler thatconstitute obstacles to parallel trade in the form ofexport restrictions from Germany. In this MemberState, the undertaking sells cars via wholly-ownedbranches and via agents. The destination of theparallel exports was mainly Belgium.

The export restrictions were twofold. Firstly, theundertaking instructed the members of its Germandistribution network for Mercedes passenger cars,in particular via circular letters, not to sell cars

outside their respective territory. In order to rein-force this measure, DaimlerChrysler warned themthat it would reduce deliveries of new E-class carswhere it found that the demand in any distributor’smarket area did not fully absorb the new cars allo-cated to the distributor. In a further circular letter,DaimlerChrysler informed its German distributorsthat it would now reduce the supplies of new E-class cars to its network. It also announced to repeatthis measure for other models if the parallel exportsfrom Germany to Belgium did not decrease.

Secondly, due to an instruction of DaimlerChrysler to its distributors foreign consumers wereobliged to pay a deposit of 15% to DaimlerChrysler when ordering a car in Germany. Thiswas not the case for German consumers, eventhough they might have been in a similar situation,for instance, being unknown to the seller, orderinga car with particular specifications, or living faraway from the seller.

Although Commission Regulation (EC) No 1475/95 of 28 June 1995 on the application of Article85(3) of the Treaty to certain categories of motorvehicle distribution and servicing agreements (3)foresees in Article 3 point 10 a) that a car manufac-turer can prohibit sales to independent (‘grey’)resellers (4), the measures adopted by DaimlerChrysler in Germany did not focus only on thesegrey exports, but were directed against all,including permissible, parallel exports to finalconsumers in other Member States.

The application of Article 81on restrictions of competition agreedwith agents

In principle, Article 81 is not applicable to restric-tions agreed between an undertaking and its


Antitrust

(1) See Commission Press Release IP/01/1394 of 10.10.2001.(2) Commission Decision of 28.1.1998 (Case IV/35.733 – VW, OJ L 124, 25.4.1998, p. 60); Commission Decision of 20.9.2000

(Case COMP/36.653 – Opel, OJ L 59, 28.2.2001, p. 1); Commission Decision of 29.6.2001 (Case COMP/36.693 – Volkswagen,OJ L 262, 2.10.2001, p. 14).

(3) OJ L 145, 29.6.1995, p. 25. This regulation will expire on 30.9.2002. The Commission adopted an evaluation report on theapplication of this regulation on 15.11.2000. This report is available on the website of DG Competition of the Commission:http://europa.eu.int/comm/competition/car_sector/distribution/eval_reg_1475_95/report/

(4) In a system of selective distribution, dealers are only authorised to sell to dealers of the same network or to final consumers (ortheir intermediaries), but not to independent resellers.

commercial agents. As commercial agents exer-cise an economic activity, they have to be consid-ered as undertakings within the meaning of the ECcompetition rules. But due to the fact that they acton behalf of another undertaking, they operate asauxiliary organs forming an integral part of theprincipal’s undertaking. The restrictions containedin agreements between the principal and itscommercial agents are, therefore, in general notconsidered as restrictions of competition withinthe meaning of Article 81.

But in the present case, the application of Article81 to the restrictions agreed between DaimlerChrysler and its German agents results from thefact that these agents have to bear considerablefinancial and commercial risks linked to theiractivity. From the point of view of EC competitionlaw, they had, therefore, to be treated not ascommercial agents but as dealers.

This result is based on the case-law of the Court ofJustice. (1) It is also in line with the CommissionGuidelines on vertical restraints (2) that explain thecriteria for a commercial agent to be submitted ornot to Article 81: According to these guidelines,the determining factor in assessing whether Article81(1) applies to the activity of a commercial agentis whether or not the agent has to bear a financial orcommercial risk linked to the sale of goods orservices he is involved in.

Sales of cars to leasing companies

In a second infringement of the competition rules,DaimlerChrysler limited the sales of cars byMercedes agents in Germany and Mercedesdealers in Spain to independent leasing companiesas long as these companies had not yet foundcustomers (‘lessees’) for the cars concerned. Aclause to this effect was included in the contractswith these dealers and agents. Consequently, theundertaking restricted the competition between itsown leasing companies and independent leasingcompanies because the latter were not able to putcars on stock or benefit from rebates which aregranted to fleet owners. Consequently, the inde-pendent leasing companies were not able to passon such favourable conditions, in particularconcerning the price and availability of cars, totheir clients. The behaviour of DaimlerChrysleraimed at avoiding that independent leasing compa-nies would offer leasing rates that undercut those

which the leasing companies belonging toDaimlerChrysler were prepared to offer.

It is important to note that sales of Mercedes carsto leasing companies represent a substantial part ofall sales of these cars. According to Article 10point 12 of Regulation No 1475/95, leasingcompanies have to be treated in the same way asfinal customers as long as the leasing contract doesnot provide for a transfer of ownership of themotor vehicle or an option to purchase prior to theexpiry of the contract. Distributors are, therefore,completely free to sell new cars to independentleasing companies.

Price fixing

As a third infringement, DaimlerChrysler partici-pated in a price fixing agreement in Belgium withthe aim of limiting the rebates granted toconsumers by its subsidiary Mercedes Belgium –which is the importer of Mercedes cars in thisMember State and sells them not only to dealersbut also directly to final consumers – and the otherBelgian Mercedes dealers. A ‘ghost shopper’investigated the sales policies of the dealers, andDaimlerChrysler agreed to enforce the agreementby reducing the supply with cars to dealers thatgranted higher rebates than the 3% that had beenagreed. This amounts to resale price maintenance,a practice that was already prohibited by theCommission in June 2001 in the VolkswagenDecision. Also under the general regime forvertical restraints, as it stands in CommissionRegulation (EC) No 2790/1999 of 22 December1999 on the application of Article 81(3) of theTreaty to categories of vertical agreements andconcerted practices (3) and is applicable in othereconomic sectors than motor vehicles, price fixingis considered as a hardcore restriction of competi-tion.

Article 81 and the block exemptionregulation for motor vehicledistribution

The described measures adopted by DaimlerChrysler infringe the provisions of Article 81(1),which prohibits all agreements between undertak-ings which may affect trade between MemberStates, and which have as their object or effect the



(1) See Case C-266/93 Bundeskartellamt v Volkswagen AG and VAG Leasing GmbH [1995] ECR I-3477, paragraph 19.(2) OJ C 291, 13.10.2000, p. 1. It is noted that these Guidelines are not applicable in this case as the infringement predates them.

Paragraphs 12 to 20 of the Guidelines replace the Notice on exclusive dealing contracts with commercial agents of 1962 (OJ 139,24.12.1962, p. 2921/62).

(3) OJ L 336, 29.12.1999, p. 21.

prevention, restriction or distortion of competitionwithin the Single Market.

Moreover, Regulation No 1475/95 prohibits carmanufacturers and their importers from restricting,either directly or indirectly, the freedom of finalconsumers to buy new motor vehicles in theMember State of their choice. It therefore assuresthat European consumers have the option ofbuying a car wherever it is most advantageous tothem, provided that they find a dealer willing tosell to them. The regulation furthermore states thatthe freedom of dealers to determine prices anddiscounts in reselling to final consumers must notbe restricted. This means that the sales prices andconditions must not be fixed by the manufacturer.They have to be determined independently by eachindividual dealer.

These restrictions of competition are restrictionsby object as they have the direct purpose ofrestricting competition between dealers in the saleor leasing of new cars. In the case of the first andthird infringement, they concern directly the intra-brand competition among dealers of Mercedescars. The second infringement, limiting supplies toleasing companies, restricts the competition onprices and delivery conditions for leasing compa-nies and concerns also the competition betweenthese companies in selling their services.

The fine

In accordance with the Commission Guidelines onthe method of setting fines imposed pursuant toArticle 15 (2) of Regulation No 17 and Article65(5) of the ECSC Treaty (1), the total amount ofthe fine had to take into account the gravity of eachof the three infringements and the duration of eachone. In addition, the fine had to have also a suffi-

ciently deterrent effect on DaimlerChrysler andother companies.

The first infringement, the obstruction of paralleltrade, is very serious because it is directly jeopar-dising the proper functioning of the Single Marketby partitioning national markets. This qualifica-tion is in line with the case-law of the Court of FirstInstance that identified restrictions to parallel tradeas an infringement designed to partition themarkets that is ‘by its very nature particularlyserious. It frustrates the most fundamental aims ofthe Community, particularly the attainment of asingle market’. (2) It constituted an infringement oflong duration. The restrictions imposed on the saleof cars to leasing companies were qualified as aserious infringement of medium duration. Finally,the resale price maintenance, which is by its naturea very serious infringement, was also qualified asserious because of specific circumstances in thiscase. (3) This infringement was of medium dura-tion.

Conclusion

This case shows once more that car manufacturersdo not always respect the current regulatoryregime, to the detriment of the Europeanconsumers. On the one hand, it includes infringe-ments of EC competition rules that were alreadythe subject of earlier prohibition decisions in thearea of car distribution (obstacles to parallel tradeconstituted infringements in the VW Decision of1998 and in the Opel Decision of 2000, pricefixing was identified as a violation of Article 81 inthe Volkswagen Decision of 2001). The Commis-sion services are still investigating possible casesagainst other car manufacturers that might lead tosimilar findings.


Antitrust

(1) OJ C 9, 14.1.1998, p. 3.(2) Case T-62/98 Volkswagen AG v Commission [2000] ECR II-2707, paragraph 336.(3) This qualification is in line with the Commission Decision of 29.6.2001 against Volkswagen.

Commission publishes a study on the future of motor vehicle distribution

Lazaros TSORAKLIDIS, Directorate-General Competition, unit F-2

Car Distribution at EC level is currently regulatedby Block Exemption Regulation 1475/95, whichexpires on 30 September 2002. On 15 November2000, the Commission adopted an evaluationreport (1) on the Block Exemption, as required bythe regulation. That report concluded that the 1995Block Exemption has only achieved some of theaims that the Commission had in mind when itrenewed its permission to use selective and exclu-sive distribution networks for the distribution ofmotor vehicles. It would also seem that some of theassumptions upon which the regulation was basedare now questionable. All interested partiesprovided written comments on the report.

Following the adoption of the evaluation report, ahearing was held on 13 and 14 February 2001 togive all interested parties the opportunity topresent their views orally on the current car distri-bution regime (2).

In the context of the reflections on a future regimefor motor vehicle distribution, it was consideredessential to determine the consequences on themarket of any possible legislative change.

After a public tender, the Commission asked anindependent consultant, Andersen, to analyse theeconomic impact of the implementation of fivedifferent legislative scenarios for motor vehicledistribution, using the current system as a bench-mark (3). The study should also examine severalspecific issues, which are considered to be vari-ables that may influence each scenario. Andersenhas carried out its analysis with regard to the find-ings of the evaluation report on Regulation 1475/95 and the comments received on those findings.

The five legislative scenarios analysed are:

1. A system in which independent car distributorshave the right to purchase new vehicles frommanufacturers or their official distributionnetworks (the so-called ‘free for all’ scenario).

2. An exclusive distribution system in which themanufacturer agrees to sell new vehicles onlyto a single distributor within a well-definedterritory.

3. A selective distribution system based only onqualitative criteria.

4. A selective distribution system based on quali-tative and quantitative criteria, with no territo-rial exclusivity.

5. A selective distribution system based on qualita-tive and quantitative criteria with limited territo-rial exclusivity in which active and passive salesin other territories are unrestrained.

The specific issues that may influence eachscenario are: the link between sales of new motorvehicles and after-sales services, multi-brandingfor sales and after-sales services, access to tech-nical information for independent repairers, distri-bution of original spare parts, dealer remuneration,allocation of vehicles (and particularly the ‘firstcome first served’ principle), direct sales by manu-facturers, the role of intermediaries, and the avail-ability clause (4).

The in-depth report that resulted from this study,for which an executive summary is available, willallow the Commission to obtain the informationthat it needs to assess the economic effects thatseveral alternative legislative regimes may haveon the competitive structure of the market andparticularly on all current market players, on newentrants (or would-be entrants) and on consumers.The study analyses the impact on four areas ofcompetition: competition between differentmakes, competition between players representingthe same make, competition in after-salesservicing and European market integration. (5)

This study is the third one carried out for theCommission in the field of car distribution. Thetwo previous studies are the study on car pricedifferentials, by consultants K.U. Leuven and



(1) See also press release IP/00/1306, 15.11.2000. The evaluation report can be consulted on the «car sector» page of the DirectorateGeneral Competition website: http://europa.eu.int/comm/competition/car_sector/distribution/eval_reg_1475_95/report/#studies

(2) See also press release IP/01/204, 14.2.2001. The presentations of all participants to the hearing can be consulted on the sameabove-mentioned website.

(3) The terms of reference of the study can be consulted on the same above mentioned website.(4) The availability clause in the current block exemption forces car manufacturers to supply their dealers with corresponding models

of the dealer’s current product range (for exemple, right hand drive cars on the Continent for British consumers.)(5) The study can be consulted on the Directorate-general for Competition website at: http://europa.eu.int/comm/competition/

car_sector/distribution

C.E.P.R., and the paper on the link between salesand after-sales by the consultancy firm Auto-polis (1).

The study does not contain any element that wouldamount to a proposal for any future regime. Thiscondition was a pre-requisite for the study and wasset out in the terms of reference. The study reflectsthe views of its authors. It has not been approvedby the Commission and should not therefore beperceived as a Commission statement.

This study should not be confused with anothereconomic impact study, commissioned fromAccenture by ACEA (the European motor vehicleassociation), that was made public by ACEA at theend of September 2001.

Although Accenture and Andersen both arose outof the break-up of the former Arthur AndersenConsulting, there are no links between the twocompanies, which are fully independent from eachother.


Antitrust

(1) http://europa.eu.int/comm/competition/car_sector/distribution/eval_reg_1475_95/report/

Commission exceptionally orders the licensing of a copyrightto safeguard competition in the German pharmaceutical sales reportsmarket

Graham ZEBEDEE and Corinne DUSSART-LEFRET, Directorate-GeneralCompetition, unit D-3

1. Introduction

On 3 July 2001 the Commission adopted aninterim measures Decision finding that IMSHealth (1), a US company selling pharmaceuticalsales reports, had infringed Article 82. IMS hadrefused to grant licences to a ‘brick structure’, acopyrighted map dividing Germany into 1 860segments used to present the data which form thereports. The Commission found that in the excep-tional circumstances of the case, it was notpossible to compete to sell such sales reportswithout using this structure.

Given the likelihood that IMS would gain a lastingmonopoly on the German market without urgentaction, the Commission considered that the onlypossible remedy was to order IMS to licence thiscopyright to its competitors, NDC Health (2) andAzyX (3).

On 26 October 2001 the President of the Court ofFirst Instance (CFI) suspended the Decision. Heconsidered that there was a ‘serious dispute’regarding the reasoning underlying the Decision,although a full examination of this reasoning couldonly be made by the CFI in the appeal case. ThePresident felt that the Decision might cause IMSserious damage which would go beyond the harmintrinsic to interim measures, and doubted if NDCand AzyX would be expelled from the market ifthe Decision were suspended.

2. Pharmaceutical sales reports

Pharmaceutical companies need to assess the salesof their products on a local basis, principally tomeasure the effectiveness of their sales representa-tives. To meet these needs, companies such as IMScollect raw data on sales by pharmaceutical whole-salers to pharmacists (as a proxy for pharmacists’own sales) and process them to create reportsanalysing drug sales, and describing trends.

To create the reports, raw sales data is grouped toshow sales to pharmacies in small geographicareas – ‘bricks’–- which are made up of one ormore postcode areas. Each brick contains at least 4pharmacies, for data protection law reasons. Themap showing which postcode is in which brick iscalled a brick structure. Once formatted in thisstructure, analyses are carried out on the data,according to the customer’s needs. Other featureswhich differentiate the reports are e.g. the speed,frequency and means of delivery of the data, itsquality, the means of classifying drugs andwhether they drugs returned to the wholesaler andcost rebates are shown.

3. The complaint

On 19 December 2000, NDC, also a US company,complained to the Commission that IMS abused itsdominant position when several weeks earlier ithad refused to grant NDC a licence to its copyrightin the 1860 structure. This copyright had beenrecognised in the Frankfurt Courts (though this isunder appeal), and all use of the structure andderivatives without IMS’ permission was prohib-ited. NDC then asked the Commission for interimmeasures, namely to order IMS to grant it a licenceto the 1860 brick structure and derivatives oncommercially reasonable terms. NDC said thatIMS’ refusal to licence meant no other firm couldcompete with IMS in Germany.

4. Effect of IMS’ refusal to licence

The Commission defined the relevant market asthat for German regional sales data services.Market share information showed IMS to be in aquasi-monopoly position and so clearly dominant.The Commission first considered whether therewas a prima facie breach of Article 82, the stan-dard required for interim measures.



(1) Intercontinental Marketing Services Health Inc.(2) National Data Corporation Health Information Services(3) AzyX Deutschland GmbH Geopharma Information Services

Obstacles to marketing alternativestructures

The Commission first considered whether otherfirms could in practice use - instead of the 1860structure or a compatible structure - another struc-ture which would not infringe IMS’ copyright.This depends in part whether there is a real possi-bility for customers of regional sales data to buydata formatted in another structure. To ascertainthis, the Commission asked 110 customers (thepharmaceutical companies) for information. Thesefirms accounted for 56% of drug sales in Germany.

The result was that the vast majority of respon-dents consider the 1860 brick structure (or compat-ible ones) to be an industry standard, and wouldnot consider receiving sales data in another struc-ture. The pharmaceutical companies had become‘locked in’ to this structure to such an extent that tobuy sales data in a structure incompatible with it,whilst theoretically possible, would be unviableeconomically. A major consideration was that thepharmaceutical companies themselves, through aworking group which represented the industry as awhole, had played a key role over the last 30 yearsin designing the 1860 structure so that now it meetstheir needs exactly. It is worth noting that sinceIMS’ 30-year monopoly in Germany ended, pricesof sales reports have fallen significantly.

Other key reasons why receiving data in anotherstructure was unviable were as follows: First, thecosts of modifying the many computer applicationsbased on the 1860 structure would be significant.Second, other information with which sales data isusually integrated, and sales data for earlier timeperiods (used to spot trends), are generally onlyavailable in the 1860 structure. Third, since salesterritories are based on bricks in a structure, a changein structure would imply breaking some doctor-salesrep relationships, which are very valuable to pharma-ceutical companies. The Commission’s interimconclusion was that the costs of switching from the1860 structure to buy reports presented in an alterna-tive structure would be unacceptably high, and so avery significant obstacle to their doing so.

Obstacles to creating alternativestructures

The Commission also found that there were tech-nical and legal constraints which made it, at theleast, unreasonably difficult to create another

structure in which regional data services could bepresented and marketed in Germany. The informa-tion needed to create brick structures, such asdoctors’ addresses, is publicly available, so intheory many structures are possible. However, theneed to, for example, create bricks from postcodeareas, to respect data protection law, made itimpossible to create a structure in which regionalsales data services could be marketed.

In addition, any structures even broadly similar tothe 1860 structure would be seen by pharmaceu-tical companies as being legally uncertain, becauseof possible copyright challenges by IMS, and socould not be used. This uncertainty affects NDCand AzyX’s sales of data services very badly. Thisis widely perceived in the industry as being aproblem – in April 2001 17 German drug compa-nies wrote to IMS asking it to licence the 1860structure, to allow competition in the market.

The Commission also noted that previous attemptsby NDC and AzyX to create alternative structuresfailed. Both companies found that only in a smallnumber of cases could the bricks in these ‘alterna-tive’ structures not be aggregated to form the 1860structure, which would make them subject to legaluncertainty.

No objective justification for the refusal

The reasons given for IMS’ refusal to licence NDCwere that NDC had infringed IMS’ copyright andwas still contesting the copyright’s validity, thatthe sum NDC offered for a licence was nominal,and that there were criminal allegations againstNDC employees for theft of information fromIMS. The Commission concluded that thesereasons, and those given to AzyX in response to itslicence request of 23 April 2001, were incapable ofobjective justification.

Conclusion

The Commission considered the above findingsagainst the conditions of the European Courts (1)for conduct relating to the exercise of a propertyright being an abuse of a dominant position,namely when:

— the refusal of access to the facility is likely toeliminate all competition in the relevantmarket;

— the facility itself is indispensable to carrying onbusiness, inasmuch as there is no actual or


Antitrust

(1) Particularly in the Magill, Ladbroke and Bronner judgements ( respectively, Joined Cases 76, 77 and 91/89 R RTE and Others vCommission [1989] ECR I-1141 (“Magill”) ; Case T-504/93 [1997] ECR II-923 ; and Case C-7/97 [1998] ECR I-7791 ). The threecriteria listed are from Bronner.

potential substitute in existence for thatfacility; and

— such refusal is not capable of being objectivelyjustified.

Overall, the Commission found a prima facie casethat use of the 1860 brick structure was indispens-able to compete on the German market, and thatIMS’ unjustified refusal to licence it was likely toexclude all competition from this market, and wasan abuse contrary to Article 82.

5. The need for interim measures

Case-law of the European Courts regardinginterim measures shows that taking such measuresrequires a reasonably strong prima facie caseestablishing an infringement; a likelihood ofserious and irreparable harm to those applying forinterim relief, or intolerable damage to the publicinterest, unless measures are ordered; and anurgent need for protective measures.

The Commission considered that the facts showedthat without a licence NDC’s German operationwould go out of business. As a result of IMS’behaviour NDC had lost many supply contracts andwas making unsustainably large losses in Germany.Without a licence to restore legal certainty to itsofferings, it risked defaulting on its currentcontracts, and in any event losing these customerswhen the contracts expired. AzyX is much smallerthan NDC and even more susceptible to going outof business without a licence. Moreover, the presentsituation risks the complete foreclosure of themarket for the foreseeable future, which was likelyto lead to intolerable damage to the public interest.The Commission therefore concluded that an urgentneed to prevent serious and irreparable harm alsoexisted, hence interim measures were required.

6. The remedy

The pressing need was to maintain the competitionstatus quo by permitting NDC and AzyX to continueto compete on the relevant market. The Commissiontherefore obliged IMS to licence the 1860 brickstructure on a non-discriminatory basis to thesefirms, for a reasonable fee. To ensure that thishappened rapidly, the Commission set the partiesdeadlines to reach amicable agreements on a fee.Failing that, the fee was to be set in a CommissionDecision following a report by independent experts.

7. Suspension of the Decision bythe President of the Court ofFirst Instance

On 6 August 2001 IMS lodged an appeal against theDecision, and asked for it to be suspended. After thePresident of the CFI had provisionally suspendedthe Decision on 10 August 2001 (1), he gave anOrder on 26 October (2) definitively suspending theDecision until the appeal against it had beendecided. In the Order, the President first stated thatexamining the questions raised by the Decision indetail was well beyond the scope of the suspensionproceedings and could only be done in the appeal tothe CFI. However, he did consider that a ‘seriousdispute’ existed regarding the correctness of theCommission’s view that a refusal to licence by adominant firm did not have to prevent the emer-gence of a new product in order to be abusive. Forthis reason, the President considered that IMS hadestablished a prima facie case against the Decision.

On the second criterion for ordering suspension,urgency, the President found that reducing a copy-right to merely the right to receive royalties is, inprinciple, likely to cause potentially serious andirreparable harm to the rightholder. He consideredit possible that if the Decision were implementedbut were later annulled, pharmaceutical companieswould, having become used to having threeproviders of sales reports on the market, avoid areturn to an IMS monopoly by accepting data in anon-1860 compatible format. The harm IMSwould suffer would therefore exceed the inevitableshort-term disadvantages inherent in an interimmeasures Decision.

Third, the President found the balance of intereststo be in IMS’ favour. He stated there was a ‘clearpublic interest’ underlying IMS’ efforts to enforceand profit from its copyright, and did not considerthat the risk of NDC going out of business to besignificantly greater than that faced by NDC fornot having a licence (with respect to AzyX, thePresident noted that it was not prevented fromcompeting on the relevant market). The Presidentalso gave weight to the fact that the Decisionwould have no impact on the final consumers ofpharmaceutical products.

On 12 December 2001 NDC appealed this Order tothe President of the ECJ (3), and a ruling from thePresident is anticipated in Spring 2002.



(1) Order T-184/01 R 1(2) T-184/01 R 2(3) Case C-481/01 P (R)

8. Further developments

Finally, on 22 October 2001 the ECJ beganproceedings (1) in response to a reference for apreliminary ruling from the Frankfurt Court in acase between NDC and IMS relating to the exis-

tence of copyright in the 1860 brick structure. Thequestions referred by the Frankfurt Court relate toissues in the Decision’s legal argument. Overall,one can state confidently that this case is far froman overall conclusion.


Antitrust

(1) Case C-418/01

Green Paper on the Review of the Merger Regulation

Anna PAPAIOANNOU, Ulrich DIEZ, Stephen RYAN, and Dan SJÖBLOM,Directorate-General Competition, unit B

On 11 December 2001, the Commission adopted aGreen Paper on the Review of Council Regulation(EEC) No 4064/89, the Merger Regulation. ThePaper calls for views on how the effectiveness ofthe legal framework for EU merger control mightbe improved, better adapting it to the realities of aglobalising economy, against the backdrop of anenlarging and increasingly integrated Community.

The ambition of the review

The Merger Regulation foresees a regular reviewof certain of its provisions, notably thoseconcerning the scope of the Commission’s compe-tence in merger control (1). In undertaking thecurrent review, however, the Commission hastaken the opportunity to look beyond mere adjust-ments in jurisdictional matters, and to make a morecomprehensive and forward-looking examinationof the functioning of the Regulation as a whole.

It must be underlined that the revision proposalsbuild on the Commission’s experience in applyingthe Merger Regulation over more than 11 years.Notwithstanding what is generally regarded as apositive track-record, there is some scope forimproving the Regulation’s effectiveness, and forbetter adapting it to the economic realities oftoday. Accordingly, the review is pursuing atwofold objective:

(i) to consolidate the successful features of theEU merger control system, notably its tightdeadlines and transparency;

(ii) to ensure the continuing effectiveness of theRegulation as an instrument of merger controlin an internationally globalising business envi-ronment and, more importantly, in an enlargedEU with an increasing degree of market andmonetary integration.

The Merger Regulation’s record so far– some scope for improvement

Economic globalisation, the dismantling ofinternal frontiers, as well as monetary and finan-cial integration, have strongly contributed to aprocess of corporate reorganisation in Europe. TheMerger Regulation has, since its entry into force in1990, successfully underpinned this process. Themerger control system ensures that the process ofcorporate reorganisation will not result in lastingdamage to competition between enterprises, andthat consumers should share in the resultingeconomic benefits. At the same time, by main-taining a competitive environment in their homemarkets, effective merger control contributes toenhancing the competitiveness of Europeancompanies worldwide.

The number of concentrations notified to theCommission has increased spectacularly duringthe 1990’s, to the point where the Commissionnow annually reviews more than five times asmany cases as in the early years. Only a limitedproportion of all notified transactions requiresintervention by the Commission. Outright prohibi-tions are relatively rare: the total of 18 such prohi-bitions since 1990 represents just under 1% (0.9%)of all notified transactions. Although there hasbeen some variation over the years, the ‘prohibi-tion rate’ has remained relatively consistent,reaching a peak in 1996 of 2.3%. The five prohibi-tion decisions taken in 2001 represented around1.5% of the year’s notifications, whereas theequivalent statistic for 2000 was 0.6%.

The ‘intervention rate’, extended to include notjust prohibitions but also transactions in whichremedies were accepted before clearance at theend of an in-depth (‘phase 2’) investigation, comesto some 3.8%, a rate which has likewise remainedstable over the years (2). If one then adds clear-ances conditional on the acceptance of remedies in»phase 1" to the latter figure, the total rate of inter-vention since the Merger Regulation entered intoforce comes to some 7.2%. Looking at individual



(1) In its Report of 28 June 2000 to the Council on the application of the Merger Regulation thresholds, the Commission concludedthat there were strong indications that the existing thresholds should be revised, so as to better cover all concentrations with aCommunity interest. It moreover set out a number of other jurisdictional, substantive and procedural issues that would merit amore in-depth discussion (see COM(2000) 399 final – 28.06.2000).

(2) In 2001, it was 4.5%.

years, the annual total intervention rate hasremained within ± 2% of this total figure, except in1992 (when it reached 11.7%) and in 2000 (when itreached 12.2%). In 2001, the total rate of interven-tion amounted to 8.4% (1).

The above statistics confirm the need for an effec-tive Merger Regulation, and for it to be rigorouslyapplied to prevent or rectify the small number oftransactions that would otherwise harm Europeanconsumers, is as present as ever. As for the manyharmless cases that are caught by its thresholds,the ambition must be to simplify the procedures asfar as possible. These are the principal objectivesof the current reform process.

On the international front, the increasingglobalisation of markets has led to a markedincrease in the number and scale of large trans-national mergers, with the result that such transac-tions have often to be scrutinised by numerouscompetition agencies worldwide. The Commis-sion is very conscious of this trend, and hassucceeded – over the past ten years – in building aclose relationship with foreign competitionauthorities (and notably with the US antitrustagencies), regarding the treatment of suchproposed mergers. Likewise, the Commissionrecognises the importance of ensuring interna-tional convergence in the competition analysis ofthe effects of these transactions, to the greatestextent possible within the scope of different juris-dictions’ respective legal frameworks. In thisregard, the Green Paper sets out some possibilitiesfor facilitating such co-operation and conver-gence.

The proposals

The Green Paper addresses issues of jurisdiction,substance and procedure. In certain areas, thepaper puts forward concrete proposals whereas, inothers, it simply outlines the issues and welcomescontributions. In all cases, the objective of thepaper is to launch a wide debate.

I. A simple and flexible system of caseI. allocation between the Commission andI. Member States

The system for allocating cases between theCommission and competent national authorities iscentral to the review exercise. The Merger Regula-

tion provides for the exclusive competence of theCommission to deal with concentrations that havea ‘Community dimension’ (Article 1 of the Regu-lation). It provides a ‘one-stop-shop’ within theEuropean Union for the examination and controlof such concentrations, which – as a result – nolonger have to be cleared at the national level. Acorrective mechanism is also foreseen allowing, inthe spirit of subsidiarity, cases to be referred, fromthe Commission back to Member States at therequest of the latter, or from Member States to theCommission (Articles 9 and 22 of the Regulation).

Ensuring that mergers with a Community interestare dealt with by the Commission

Surveys conducted by the Commission haverevealed that the ‘one-stop-shop’ model, at least inrecent years, is not being applied as widely as itcould. Roughly 10% of cases treated at nationallevel throughout the EU are the subject of notifica-tion in two or more national jurisdictions. Such‘multiple filings’ generally entail additional costsand delays for merging companies, and may resultin an inefficient employment of resources, both bythe companies and the authorities concerned. Moresignificantly, the fact that several EU jurisdictionsmust deal in parallel with a single case may indi-cate that concentrations with a Community interestmay be escaping the exclusive jurisdiction of theCommission.

The review proposed in this paper should be seenas more than a mere technical revision of thecurrent jurisdictional criteria. The forthcomingenlargement of the EU makes a discussion of theseissues both topical and urgent, as the case alloca-tion system within the EU needs to be re-balancedin order to ensure, also in an enlarged Community,a proper and efficient application of thesubsidiarity principle.

In a nutshell, what the Green Paper proposes is aconsiderable simplification of the provisions onjurisdictional thresholds, safeguarding a levelplaying field for merger control in Europe. Of theexisting set of jurisdictional thresholds, it isproposed to maintain the basic provision laid downin Article 1 (2) of the Merger Regulation whichattributes to the Commission’s jurisdiction caseswhich fulfil certain world- and EU-wide turnoverthresholds and other criteria. For the remainingcases, it is proposed to replace the test in Article1(3), the provision which was introduced in 1997


Merger control

(1) None of these ‘intervention rate’ figures extend to withdrawals of merger notifications, as such withdrawals are very often notattributable to the identification of competition concerns by the Commission. For the sake of completeness, however, the total rateof withdrawals since 1990 (as a percentage of all filings) amounts to some 3.6%, of which 2.9% occurred during phase 1investigations and 0.7% during phase 2 investigations.

in an attempt to stem the growth in multi-jurisdic-tional filings in the EU, by providing for automaticCommission competence whenever it is certifiedthat a merger would fall under the jurisdiction of atleast three Member States.

Simplifying work-sharing with nationalauthorities

The Green Paper also proposes simplifying therequirements that must be fulfilled before theCommission can refer a case to a national jurisdic-tion for treatment. This would mean allowingcases whose effects do not, de-facto, extendbeyond national borders, but which nonethelessfall under Commission jurisdiction, to be morereadily referred to Member States. It is expectedthat such simplification would also expediteprocedures. Similar amendments are suggested inorder to facilitate the referral of cases in the oppo-site direction, from one or more national jurisdic-tions to the Commission. Despite simplification ofthe system, it is envisaged that the Commissionwould maintain discretion in the process, and it iseven proposed that it could refer cases to nationaljurisdictions on its own initiative and without aspecific request by Member States in this respect.

The guiding criterion for designing and imple-menting these amendments in the future must bethe guarantee that the authority best placed to carryout the investigation should deal with the case.Where appropriate, this would allow Communityinterests to be taken into account in the assessmentof mergers. The system should guarantee thatcases with a significant impact beyond nationalborders, in terms of the type of markets they affector the type of barriers to entry they raise, should bedealt with by the Commission.

The Regulation’s definition of ‘a concentration’

The Green Paper also explores a number of poten-tial adjustments to the concept of a concentration,as defined in the Merger Regulation. In particular,it raises questions about the applicability of theMerger Regulation to acquisitions of minorityshareholdings, to strategic alliances, to differenttypes of multiple transactions, to partial functionproduction joint ventures, and to equity stakestaken by venture capital funds. The Paper alsoconsiders whether the group concept referred to inArticle 5 (4) of the Regulation should be harmo-nised with the concept of control referred to inArticle 3 (3).

II. Launching a debate on the merits ofthe competition test used for theassessment of concentrations

Now that the Merger Regulation has been in forcefor more than a decade, the Green Paper takes theopportunity of launching a wide public debate onthe merits of the substantive test enshrined in theRegulation, namely that a merger should not beallowed to proceed if it ‘creates or strengthens adominant position’. The Paper in particular invitesa discussion on how the effectiveness of this testcompares with that used in many other jurisdic-tions (and notably in the US), namely that mergersshould not be allowed to proceed if they engendera ‘substantial lessening of competition’. It is feltthat such a debate is particularly pertinent at thepresent time, given the desirability of ensuring thatthe main jurisdictions required to examine theincreasing number of large, cross-border transac-tions, should be adopting as convergent anapproach as possible.

There is moreover an ongoing debate on how, andthe extent to which, efficiencies should be takeninto account in competition analysis. Accordingly,and independently of the discussion on thesubstantive test, the Green Paper invites views asto the proper role and scope of efficiency consider-ations in the field of merger control.

III. Safeguarding due process

Launching a discussion on due process generally

On the broader issue of due process, the GreenPaper describes the system of ‘checks andbalances’ inherent in the current merger reviewprocess, and in particular the defence rightsaccorded to companies whose proposed merger isbeing challenged. Nonetheless, in the interest ofenriching the debate, the Green Paper recognisesthat some consider the current due process guaran-tees and possibilities for judicial review to beunsatisfactory and ineffective. The Paper accord-ingly invites views on how the system might beimproved. Constructive ideas from companies andpractitioners with experience of the system wouldbe particularly welcome (and in particular fromthose who have voiced critical remarks about thecurrent system). As this review is limited to theMerger Regulation itself, the Green Paper indi-cates a preference for any such suggestions to beaimed at reform within the general ambit of thepresent institutional and Treaty framework.



Amendment of the procedure for the proposaland evaluation of remedies

In this spirit, the Green Paper tables proposalsaimed at improving the opportunity for the meritsof merging companies’ remedy proposals to befully and properly considered by the Commission,by Member States, and by the relevant marketparticipants. Accordingly, the Commissionproposes possible adjustments to the time schedulefor the submission and discussion of commitmentsin the first and second phases of a merger investi-gation. Specifically, the paper suggests that theRegulation could provide for a ‘stop-the-clock’provision, which would operate at the parties’request, thereby avoiding any ex officio prolonga-tion of the procedure. This proposal takes intoaccount and strives to preserve the tight timeschedule which characterises EU merger assess-ment proceedings.

IV. Other administrative and proceduralIV. improvements

The paper points to the success of the recentlyintroduced simplified procedure for the treatmentof concentrations that do not raise competitionconcerns. Views are invited on a number of possi-bilities that are suggested for consolidating thispractice without compromising legal certainty.

The paper also includes, among others, ideasaimed at improving administrative efficiency, atrationalising the investigation timetable, and atfacilitating co-ordination with other non-EU juris-dictions. Regarding the latter, the relevant changeswould be to the timing and modalities of notifica-tions, as well as to the ‘standstill’ provisions. Thepaper considers the introduction of working daysfor the calculation of deadlines. It is moreover

suggested that the enforcement procedurescontained in the Regulation might be aligned withthe changes proposed by the Commission in rela-tion to the implementation of Articles 81 and 82 ofthe Treaty (“modernisation”). Finally, the possi-bility of enabling the Commission to possiblyintroduce a filing fee for notifications at somepoint in the future is also discussed.

A full and open debate is sought

The preparatory fact-finding that has led to theformulation of the Green Paper has beenconducted in a spirit of openness of mind. Allactors affected by merger control have beenencouraged to participate in the process and to putforward their views. A series of surveys and ques-tionnaires have been addressed to the businessworld, both here in Europe and more widely, andMember States have been consulted in a series ofinformal working groups bringing together theirexperts with the services of DG COMP. Both busi-ness and Member States have broadly endorsed theobjectives of the review and have already providedvaluable input.

The purpose of the Green Paper is to further stimu-late and intensify the discussion, in the same spiritof openness and transparency, by inviting viewsfrom across the board. Accordingly, the proposalsset out in the Green Paper are now the subject of awide public consultation (including of the otherCommunity institutions) which will last until theend of March 2002. Comments may be sent to theCommission by ordinary or electronic mail.

The full text of the Green Paper is available on thewebsite of DG Competition:

http://europa.eu.int/comm/competition/mergers/review/


Merger control

Merger Control: Main developments between 1st September 2001 and31st December 2001

Neil MARSHALL and Carina JOERGENSEN, Directorate GeneralCompetition, unit B

Recent cases – Introductory remark

Between September and December 2001, 90 caseswere notified to the Commission. This is fewerthat the number notified in the previous four-month period (118) and the number notified in thesame period in 2000 (114). Due to this reduction inthe number of cases notified to the Commission inthe final four-month period of 2001, the total forthe year (335) was also slightly lower than in2000 (345). The Commission took 116 final deci-sions, 10 of which followed in-depth investiga-tions (3 prohibitions, 2 clearances and 5 condi-tional clearances) and 4 of which were conditionalclearances at the end of an initial investigation(‘Phase 1’). In total the Commission cleared102 cases in Phase 1. In this period, 49% of theclearance decisions taken by the Commission weretaken in accordance to the simplified proceduresintroduced in September 2000. In addition, theCommission took three referral decisions pursuantto Article 9 of the Merger Regulation and openedin depth investigations in four cases. As at 31December 2001, three transactions were subject toongoing in-depth investigations.

A – Summaries of decisions taken underArticle 6(1)(b) and 6(2) whereundertakings have been given by the firmsinvolved

Pirelli/Edizione/Olivetti/TelecomItalia (1)

The Commission approved the joint acquisition byPirelli SpA and Edizione Holding SpA of theOlivetti SpA and indirectly of the undertakingscontrolled by the latter, namely Telecom Italia,which in turn owns the country’s largest mobilephone operator Telecom Italia Mobile (TIM).

The Commission’s investigation, which wascarried out in close co-operation with the ItalianAntitrust Authority (Autorità Garante dellaConcorrenza e del Mercato), unveiled serious

concerns in the markets for transmission capacityand for mobile telephony, both in Italy.

In the transmission capacity market, the operationwill eliminate Autostrade as an important compet-itor, therefore reinforcing Telecom Italia’s domi-nant position. The Commission was particularlyconcerned about the possibility that AutostradeTelecomunicazioni and Telecom Italia mightadopt a joint commercial strategy towards theirrespective customers in the transmission capacitymarket, reducing the degree of competition in themarket.

In the Italian market for mobile voice telephony,the investigation showed that the concentrationmight strengthen a possible dominant positionenjoyed by TIM. Besides TIM and Blu there areonly two second generation mobile operators inItaly, Omnitel and Wind, and barriers to entry arehigh given the need to obtain a licence.

To address these competition concerns, the partiesundertook to remove the overlap in the transmis-sion capacity market by transferring the exclusivecontrol of Autostrade Telecomunicazioni to one ormore independent third-parties, maintaining atmost a minority participation, which will besubject to Commission approval. Concerning themarket for mobile voice telephony, Edizioneundertook to sell its direct and indirectshareholdings in Blu. The implementation of thelatter commitment will ensure that Edizione willbe prevented from having a controlling position intwo of the four Italian second generation mobileoperators.

Nordbanken/Postgirot (2)

The Commission approved, subject to conditions,the acquisition by Scandinavian banking groupNordea of sole control of Sweden’s PostgirotBank AB, a financial services provider currentlyowned by Posten AB, the Swedish Post Office.Postgirot is a wholly owned subsidiary of state-owned Posten AB. It owns and operates an in-



(1) COMP/M.2574 – Pirelli/Edizione/Olivetti/Telecom Italia, 20.09.2001(2) COMP/M.2567 – Nordbanken/Postgirot, 08.11.2001

house giro payment system, which it uses tosupply distance payment services to retail andcorporate customers. Postgirot also provides giro-related technical services to other banks. Havingbeen awarded a banking licence in 1994, Postgirotprovides banking services to household and corpo-rate customers, including deposits, lending, inter-national payments, trade finance and card services.

In its original form, the transaction would havegiven Nordea full control of the Postgirot paymentsystem. In addition, Nordea already held a signifi-cant shareholding in the other main giro paymentsystem in Sweden – Bankgirot. Nordea would thushave had significant influence on both of the mainSwedish payment systems.

However, Nordea undertook to reduce its stake inBankgirot to 10%, a level which will no longergive it decisive influence over the company, and towithdraw from Privatgirot, a company whichcompetes with Postgirot in giro-related technicalservices. These undertakings enabled the Commis-sion to clear the deal.

Gerling/NCM (1)

The Commission approved the take-over of theDutch credit insurance company NCM HoldingN.V. (“NCM”) by German insurance companyGerling-Konzern Versicherungs-Beteiligungs AG(“Gerling”). The Commission’s review foundcompetition concerns in the Dutch and Danishcredit insurance markets but the divestmentsproposed by Gerling removed these concerns.Gerling is an insurance group specialised inservices to companies. NCM, the Dutch export-credit agency, is active in the receivable manage-ment business, mainly through credit insurance.The companies’ credit insurance activities arealmost equal in size and currently constitute thethird and fourth largest European credit insurersafter the German Allianz Group and the FrenchCoface Group. The merger of Gerling and NCMwill create Europe’s second largest credit insur-ance company ahead of Coface.

While the geographic scope of Gerling and NCM’sactivities is complementary in most areas ofEurope, the Commission identified serious compe-tition concerns in the Dutch credit insurancemarket. There the new entity would have likelybecome the dominant supplier given the inter-alia,marginal position of the remaining playerscompared to Gerling/NCM in the Netherlands.

Strong concerns were also raised with regard to theDanish market, where the NCM credit insurancearm is vertically integrated with two NCM subsid-iaries, Forenede Factors and BG Factoring. Theactivities of these two factoring banks togetherrepresent by far the leading Danish factoringcompanies. Factoring companies use credit insur-ance to cover their customers’ receivable risk andare consequently largely dependent on the condi-tions offered by the credit insurance companies. InDenmark Hermes-Euler is, apart from Gerling andNCM, the only established credit insurer. TheCommission was therefore concerned about thelikelihood that competitors of the NCM factoringcompanies would have had to face in the nearfuture a situation where they would have only onesingle alternative source of credit insurance toGerling/NCM, the parent company of the mainplayers on the Danish factoring market.

In order to remove the competition concerns raisedby the merger in the Netherlands and Denmark,Gerling undertook to divest its Dutch and Danishcredit insurance branch offices.

B – Summaries of decisions takenunder Article 8 of Council Regulation(EEC) No 4064/89

1 – Summaries of cases declaredcompatible with the common marketunder Article 8(2) of the ECMR withoutcommitments

UPM-Kymmene/Haindl and NorskeSkog/Parenco/Walsum (2)

Following a thorough investigation, the Commis-sion cleared the proposed take-over of Haindl, aGerman family-owned paper company, byFinland’s UPM-Kymmene and the subsequentsale of two of the Haindl mills to Norwegian papermanufacturer Norske Skog, Parenco in the Nether-lands and the Walsum mill in Germany. This caseis described in a special feature elsewhere in thisNewsletter (see ‘Collective dominance in thepublication paper industry’).


Merger control

(1) COMP/M.2602 – Gerling/NCM, 11.12.2001(2) COMP/M.2498 – UPM-Kymmene/Haindl, 21.11.2001 and COMP/M.2499 – Norske Skog/Parenco/Walsum, 21.11.2001

2 – Summaries of cases declaredcompatible with the common marketunder Article 8(2) of the ECMR withcommitments

Grupo Villar Mir/EnBW/Hidroeléctrica del Cantábrico (1)

The Commission authorised, subject to conditions,the acquisition of joint control over the Spanishelectricity company Hidroeléctrica del Cantábrico(Hidrocantábrico) by Spanish Grupo Villar Mirand Energie Baden-Württemberg (EnBW), aGerman company jointly controlled by Electricitéde France (EDF). As initially notified to theCommission, the operation would have led to thestrengthening of the existing collective dominantposition on the Spanish wholesale market for elec-tricity. To eliminate these concerns, EDF and theoperator of the French electricity grid, RTE,undertook to substantially increase the commer-cial capacity up to about 4000 MW on theinterconnector between France and Spain, therebycreating the conditions for greater electricity tradevolumes to and from Spain to the benefit ofSpanish customers.

The transaction consisted of the acquisition byFerroatlántica of a majority of the shares inHidrocantábrico, Spain’s fourth largest electricitycompany. Ferroatlántica was fully owned bySpain’s Grupo Villar Mir, but will be jointlycontrolled by Grupo Villar Mir and EnBW afterthe completion of the transaction.

The Commission started an in-depth investigationin June over concerns that the deal wouldstrengthen the existing collective dominant posi-tion on the Spanish wholesale market for elec-tricity held by Endesa and Iberdrola. The moredetailed probe confirmed these initial concerns.Having gained a foothold in Spain and with accessto Hidrocantabrico’s significant electricity genera-tion capacity, EDF would likely resist any increasein the commercial capacity of the interconnectorwhich transmits electricity across the Pyreneanchain. Commercial capacity on the French-Spanish interconnector is already scarce, creatinga barrier to Spanish electricity imports andresulting in the market’s isolation from othercontinental electricity markets to the detriment ofcustomers.

In order to solve the competition concerns identi-fied by the Commission, EDF and EDF/RTE

committed to take all the necessary steps in orderto increase the commercial capacity on theinterconnector at the French/Spanish border toabout 4000 MW from an existing 1100 MW. Thecapacity increase will take place gradually over ashort-/mid-term period. EDF/RTE, the FrenchElectricity Transport System Operator (Gestion-naire du Reseau de Transport d’Electricité), is adivision within EDF which operates the nationalelectricity grid and interconnectors with France’sneighbouring countries.

Mitsui/CVRD/Caemi (2)

The Commission cleared the proposed acquisitionof joint control of Brazilian iron ore miningcompany Caemi by CVRD, another Brazilian ironore producer, and Japanese trading companyMitsui, subject to conditions. Under the terms ofthe proposed transaction, Companhia Vale do RioDoce (CVRD) and Mitsui & Co. Ltd (Mitsui) willacquire joint control of Caemi Mineração eMetalurgia SA (Caemi). Caemi’s assets princi-pally consist of Brazilian iron ore mining companyMineração Brasilieras Reunidas (MBR) and a 50-percent stake in Canadian iron ore producerQuebec Cartier Mining Company (QCM).

The competitive impact of the merger wasassessed in relation to the supply of ‘seaborne’ ironore, as Western European steel producers – due toan absence of local supplies – depend almostexclusively on iron ore imported from mineslocated a long distance from Europe. Iron oretransported by ship represents about 45% of alltraded iron ore, and the main sources of seabornesupply are located in Brazil and Australia. Partici-pation in the seaborne trade requires access tospecific infrastructure such as dedicated railwayssuitable for the transportation of very largetonnages and deep water harbours. CVRD is theworld’s largest producer of seaborne sinter finesand pellet iron ore, followed by the Australian-based mining companies Rio Tinto and BHP.

The proposed transaction would have led to thecreation, if not the strengthening, of a dominantposition in the market for the seaborne supply ofiron ore pellets and the seaborne market for directreduction iron ore due to the high market sharesthat would have been held after the operation andthe likelihood that the remaining competitorswould have been unable to constrain Mitsui/CVRD/Caemi’s behaviour.



(1) COMP/M.2434 – Grupo Villar Mir/EnBW/ Hidroeléctrica del Cantábrico, 26.09.2001(2) COMP/M.2420 – Mitsui/CVRD/Caemi, 30.10.2001

On 5 October 2001, the parties offered a commit-ment designed to remove the competition concernsidentified by the Commission. This consisted in anoffer to divest Caemi’s 50% interest in QCM,thereby eliminating the «overlap» betweenCVRD’s and Caemi’s production of iron orepellets. As a result, the commitment removes theCommission’s competition concerns in relation tothe supply of these products, and in relation to thesupply of direct reduction ore.

Shell/DEA (1) and BP/E.ON (2)

On 21 December 2001 The Commission approvedthe acquisition of the German oil and petrochemi-cals company DEA, which belongs to the RWEgroup, by Royal Dutch/Shell (UK/NL), and thecombination of the petrochemicals businesses ofBritain’s BP Plc and German company Veba, asubsidiary of the E.ON group after conducting aparallel investigation into the two cases. The twooperations would have led to the creation of acollective dominant position of Shell/Dea and BP/Veba on the market for ethylene on the pipelinenetwork «ARG», which links the Netherlands,Belgium and Germany. The commitments offeredby all parties were, however, sufficient to rule outthese concerns.

The two transactions together lead to an importantrestructuring of the market for ethylene, which is acore basic petrochemical used for a variety ofapplications such as polyethylene (PE) and PVC.This market is already highly concentrated,making it all the more essential to protect theremaining competition for the benefit of ethyleneusers.

After carrying out an in-depth market investiga-tion, the Commission found that the combinationof the respective petrochemical activities of Shelland DEA, on the one hand, and of BP and E.ON,on the other hand, would result in the creation of acollective dominant position on the market for thesupply of ethylene on the pipeline network called«ARG». This pipeline network and its extensionslink various production sites, sea terminals andethylene consumers in Belgium, the Netherlandsand Western Germany.

Both transactions’ major impact is the eliminationof the only downstream non-integrated ethyleneproducers from the market, which are also themost important suppliers to the merchant market.This will leave independent ethylene buyers only

with suppliers which compete with their customersin the downstream markets.

Both merged entities will control a highly signifi-cant proportion of the ethylene market, will not beexposed to comparably strong competitors andwould have a unique position with regard to theARG pipeline. In particular, BP/Veba will have adecisive influence in the company operating ARG,whereas Shell owns one of the five import termi-nals at the North sea coast, which are the onlychannel for imports onto the ARG pipelinenetwork.

The Commission concluded that there is a highrisk that competition between the two new entitieswould lapse, and that ethylene buyers would nothave access to competitive sources of supply afterthe two mergers.

In order to address these competition concerns,Shell committed to grant third party access to itsimport terminal facilities at Moerdijk, Nether-lands, for a total aggregate ethylene volume of upto 250 kt per annum for a period of ten years. Thiswill strongly enhance the availability of ethyleneon the ARG market from competitive and inde-pendent sources and will enable third parties forthe first time to import ethylene on a long-term,structural basis for competitive prices. Thevolumes covered by the commitment are sufficientto prevent the two merged entities from stiflingcompetition. The amount of 250 kt equals theannual capacity of one whole smaller sizedethylene plant, and would enable an increase of thecurrent third party imports by nearly 400%. Theterms of access proposed by Shell will allow fornon-discriminatory, long term access to theterminal at competitive prices.

BP and E.ON committed to divest two of theirthree BP/Veba shareholdings in the ARG. For aninterim period, until the shareholdings aredivested, they commit not to exercise theirblocking rights, in particular with regard to deci-sions on third party access. BP/E.ON furthercommit that they will guarantee access to aconnection pipeline between the ARG networkand ethylene consumers located at Herne, westernGermany, which is currently controlled by Veba.The divestiture of two ARG shareholdings willentirely eliminate BP/Veba’s decisive influence inthe ARG company. The entering of new share-holders into the ARG company will also broadenthe different shareholders’ interests and guaranteethe common carrier character of the ARG, without


Merger control

(1) COMP/M.2389, 23.08.2001(2) COMP/M.2533, 06.09.2001

favouring any particular supplier’s or customer’sinterests.

The open access to the pipeline at competitive costwill allow existing suppliers to compete activelyfor customers over the whole of the ARG area andwill make Shell’s commitment to open the importinfrastructure fully effective as it assures that theadditional volumes can be transported economi-cally to locations all over the ARG.

BP/Veba’s commitment to provide access to ARGsupplies for the ethylene customers located atHerne removes the remaining bottleneck infra-structure which is under control of BP/Veba. Iteliminates any possibility that BP/Veba willremain protected from competitive constraintsoriginating from alternative ARG suppliers withregard to these customers. There are no other ARGconnection pipelines under the control of the twonew entities which could be used to cut offethylene consumers from competitive suppliesover the ARG.

The assessment of both deals’ impact on the down-stream oil products markets in Germany werereferred to the Bundeskartellamt. The decision torefer the BP/E.ON deal is described below. TheShell/DEA referral decision was described in theprevious edition of the Competition Policy News-letter (03/2001, page 60).

Südzucker/Saint Louis (1)

Also on 21 December 2001, the Commissionapproved the acquisition of Saint Louis Sucre SA,France’s second-largest sugar manufacturer, byGerman sugar market leader Südzucker AG.Südzucker’s acquisition of Saint Louis was thefirst major cross-border merger in the Europeansugar market, which is highly regulated at the EUlevel under the Common Agricultural Policy withproduction quotas and intervention, i.e. minimum,prices.

The Commission’s investigation revealed that theoperation would have strengthened Südzucker’salready dominant position in the markets forindustrial sugar and retail sugar in southernGermany and Belgium. This is because SaintLouis will cease to exist as an independent andcredible potential competitor to Südzucker in thesegeographical areas, which are close to France,Saint Louis’s home market.

The Commission was also concerned that bygaining a considerable foothold on the French

market, with direct access to the second largestproduction capacity, Südzucker would be able todeter other French producers from competing insouthern Germany and Belgium by threatening toretaliate in France. The effect of this would havebeen to perpetuate a partitioning of the Europeansugar market along national lines.

Furthermore, it would have given Südzucker,already dominant in southern Germany andBelgium and with a monopoly position in Austria,the ability to gain also a strong position in Franceby being able to offer ‘pan-European deals’ tolarge industrial customers, supplying them acrossnational borders.

In order to address these competition concerns,Südzucker offered to divest its majority (68%)shareholding in Belgium’s Suikerfabriek vanVeurne SA and to place 90 000 tonnes of sugar peryear at the disposal of an independent trader insouthern Germany. The divestiture of Südzucker’sstake in Veurne will reduce the Südzucker group’sBelgian sugar production quota by roughly 10%and will thus have a significant pro-competitiveeffect on the Belgian sugar market.

Similarly, the commitment to make up to 90 000tonnes a year of quota sugar available on the basisof EU intervention prices will place an inde-pendent trader in a position to effectively competein the southern German sugar market. Thistonnage roughly corresponds to 10% of sugarconsumed in southern Germany every year. Thefact that the independent trader will be charged theintervention price enables him to offer sugar at anattractive price, thus strengthening competition onthat market and sufficiently compensating for thedisappearance of Saint Louis as a potentialcompetitor.

3 – Summaries of cases declaredincompatible with the common marketunder Article 8(3) of the ECMR

Schneider/Legrand (2)

The proposed merger between Schneider Electricand Legrand, the two main French manufacturersof electrical equipment, was prohibited on 10October 2001. The Commission’s investigationshowed that there were substantial overlapsbetween the activities of Schneider and Legrand inthe markets for electrical switchboards (distribu-tion boards and final panelboards, together with



(1) COMP/M.2530, 21.12.2001(2) COMP/M.2283 – Schneider/Legrand, 10.10.2001

their components, where the combined marketshare would have been between 40% and 70%depending on the country); wiring accessories (inparticular, sockets and switches and fixing andconnecting equipment, where combined marketshares ranged from 40% to 90%); and certain prod-ucts for industrial use (industrial pushbuttons andlow-voltage transformers) or for more specificapplications (for example, emergency lighting).

In France, the merger gave rise to particularlyserious problems over virtually the whole range ofproducts concerned and would, in most cases, haveresulted in the strengthening of a dominant posi-tion. Schneider and Legrand are by far the largestplayers on the French market, and the Commis-sion’s investigation demonstrated clearly thatthere was little prospect of any significant devel-opment in the activity of foreign competitors in theshort and medium term. Furthermore, competitionproblems were also identified in Denmark, Spain,Greece, Italy, Portugal and the United Kingdom.

In an attempt to remedy these competition prob-lems, Schneider submitted an initial series ofundertakings to the Commission on 14 September2001, the deadline for presenting undertakings.However the market investigation carried out bythe Commission showed that these initial under-takings were not such as to restore the conditionsof effective competition.

Schneider submitted new undertakings on 24September, ten days after the deadline for submit-ting undertakings. These undertakings left seriousdoubts as to the competitive capacity of the entitiesto be sold off, notably as regards access to distribu-tion in France and the economic risks associatedwith the actual separation of these entities from therest of the group to which they belonged. In addi-tion Schneider’s proposals did not provide anyeffective solution as regards a number ofgeographic markets and/or product markets onwhich competition problems had been identified.

On 13 December 2001, Schneider launched anappeal in the Court of First Instance against theCommission’s decision (ref T-310/01,13.12.2001).

CVC/Lenzing (1)

The European Commission prohibited the plannedacquisition by CVC Capital Partners Group Ltd(CVC) of Lenzing AG, an Austrian man-madefibres manufacturer. CVC already controls

Acordis, Lenzing’s principal rival in Europe andonly rival in the United States.

The deal related to the fibres sector. There werefive relevant product markets taken into accountfor the competitive assessment, namely:commodity viscose, spundyed viscose, viscose fortampons, lyocell, and lyocell production andprocessing technology. The Commission consid-ered that all three viscose markets are Europe-wide, since imports into Europe are very low(considerably below 10%), and that the market forlyocell technology is worldwide. As regardslyocell production, it was not necessary to definethe geographical market.

The combined entity would have achieved veryhigh combined shares on all three viscose markets(more than 55% in commodity viscose and morethan 85% in spundyed viscose and viscose fortampons), and it would have led to a worldwidemonopoly on the lyocell production and tech-nology markets. The concentration would haveeliminated Acordis’ strongest competitor in theviscose market in the EEA and would have leftonly three smaller competitors: Sniace of Spain,Svenska Rayon of Sweden and Säteri of Finland.The Commission therefore concluded that theconcentration would have created a dominantposition in the commodity viscose and in thespundyed viscose markets.

As regards the viscose market for tampons, theCommission found that Acordis already holds adominant position. The merger would thereforehave strengthened this position, as the number ofmanufacturers in Europe would be reduced fromthree to two.

As regards lyocell, Lenzing and Acordis arecurrently the only producers of lyocell worldwideand the only two players in the market for lyocellproduction and processing technology currentlyable to offer «ready-to-operate» technology.Together, the parties hold the vast majority of allexisting patents for lyocell production and treat-ment, and market entry in this market is difficult.The Commission therefore concluded that theconcentration would create a dominant position inthe both lyocell production and technologymarkets.

During the second phase of the review the partiessubmitted the following commitments: (i) a non-exclusive licence with regard to lyocell; (ii) a toll-manufacturing arrangement whereby the partieswould produce lyocell for the licensee; (iii) a non-exclusive licence with regard to Galaxy tampon


Merger control

(1) COMP/M.2187 – CVC/Lenzing, 17.10.2001

fibre. The Commission took the view that thesecommitments were not adequate to eliminate theconcerns raised by the concentration.

This case was examined in close co-operation withthe United States FTC.

Tetra Laval/Sidel (1)

On 30.10.2001 the Commission prohibited theacquisition by Tetra Laval B.V., which belongs tothe Swiss-based Tetra Laval Group, the owner ofthe Tetra Pak packaging businesses, of the Frenchcompany Sidel SA. Tetra holds a dominant posi-tion for carton packaging with an overall marketshare in Europe of over 80 percent. Sidel is theleading manufacturer of plastic PET packagingequipment and in particular stretch blow-moulding (SBM) machines.

The Commission’s investigation showed that thecombination of the dominant company in cartonpackaging with the leading company in PET pack-aging equipment would lead to the creation of adominant position in the European Economic Area(EEA) in the market for PET packaging equip-ment, in particular, SBM machines used for sensi-tive products and to the strengthening of a domi-nant position in aseptic carton packagingequipment and aseptic cartons in the EEA.

The Commission found that, even though todaycarton and PET packaging equipment are distinctrelevant product markets, the two are closelyrelated neighbouring markets and belong in thesame industry sector : liquid food packaging. PETand carton are technical substitutes as PET can bean alternative packaging material for all productsthat are currently packaged in carton. Already PETand carton are used as packaging materials forcommon product segments (liquid dairy products,juices, fruit flavoured drinks and tea/coffeedrinks).

The combination of Tetra’s dominant position incarton packaging and Sidel’s leading position inPET packaging equipment would provide themerged entity with the ability and incentives toleverage its dominant position in carton to gain adominant position in PET packaging equipment.In addition, by eliminating Sidel as a competitor ina closely neighbouring market, Tetra’s existingdominant position in cartons would be strength-ened. The merged entity’s dominant positions intwo closely neighbouring markets was found to be

likely to further reinforce one another, raisebarriers to entry and reduce competition.

On 9 October 2001, Tetra proposed a number ofundertakings intended to address these concerns,but these undertakings were considered insuffi-cient. Given the serious competition concerns andthe fact that Tetra was unable to resolve them, theCommission had no other choice but to prohibitthe merger.

In view of the particular circumstances created bythe fact that Tetra Laval has already acquired virtu-ally the whole of Sidel’s shares, the Commission isprepared to examine the practical arrangements forrestoring effective competition.

C – Summaries of referral decisionstaken under Article 9 of the ECMR

BP/E.ON (2)

The Commission referred to the Bundeskartellamtthe examination of the impact in the downstreammarkets for refined oil products of a proposed jointventure between Deutsche BP and E.ON. Theproposed operation is for BP to acquire a 51-percent shareholding in Veba Oel AG, currently a100-pct subsidiary of E.ON active in the oil andpetrochemicals business, both upstream anddownstream (Veba and Aral brands). E.ON has theoption to sell the remaining shares to BP transfer-ring sole control over Veba Oel at a later stage.

On 20 August 2001, the Bundeskartellamt askedthe European Commission to refer part of theexamination in application of Article 9 of theMerger Regulation 4064/89. The Bundeskartell-amt argued that the proposed concentration threat-ened to create or strengthen a dominant position onthe market for motor fuels retailing and severalother oil product markets. In its analysis, theGerman authority took into account the proposedcombination of the downstream oil business ofShell and DEA (see discussion of case COMP/M.2389 above).

As a preliminary conclusion, the Bundeskartellamtfound that the present transaction risks creating acollectively dominant situation between the newentity, a combined Shell/DEA and the other oilmajors on the market for motor fuels retailing inGermany. The Commission’s findings in its first-phase investigation supported the preliminaryanalysis made by the German CompetitionAuthority.



(1) COMP/M.2416 – Tetra Laval/Sidel, 30.10.2001(2) COMP/M.2533 – BP/E.On, 06.09.2001

Haniel/Fels (1) and Haniel/Ytong (2)

On 17 October 2001 the Commission referred tothe Bundeskartellamt the examination of theimpact of part of the proposed acquisition byHaniel Baustoff-Industrie Zuschlagstoffe GmbHof Fels-Werke GmbH (‘Fels’), namely that in theGerman wall building materials markets. At thesame time, the Commission decided that the deal’seffect in the Dutch wall building materials sectorrequires further review and started an in-depthinvestigation.

In its request for referral of the Fels case, theBundeskartellamt had argued that the proposedconcentration threatened to create or strengthen adominant position on the German market for wallbuilding materials and asked the Commission torefer to them the examination of that aspect of thedeal. According to the Bundeskartellamt’s prelim-inary assessment, the transaction risked creating asituation where the new entity would hold a domi-nant position in particular in brick building mate-rials in several regional markets within Germany.

Shortly after the decisions were taken to open aPhase 2 investigation as well as to refer part of theHaniel/Fels case to the Bundeskartellamt, Hanielwas involved in a case with Ytong which involvedthe same combination of decisions. In this secondcase, the Commission referred that part of theproposed acquisition of the German cellularconcrete producer Ytong which relates to

Germany to the German Competition Authority,the Bundeskartellamt on 30.11.2001. On the samedate, the Commission decided that the deal’s effectin the Dutch wall building materials sectorrequired further review and opened an in-depthinvestigation.

In its request for referral, the Bundeskartellamtargued that the proposed concentration threatenedto create or strengthen a dominant position on theGerman market for wall building materials andasked the Commission to refer the examination ofthat aspect of the deal to Germany. According tothe Bundeskartellamt’s preliminary assessment,the transaction risks creating a situation where thenew entity would hold a dominant position inparticular in brickwork building materials inseveral regional markets within Germany. TheCommission’s findings in its first-phase investiga-tion are in line with the preliminary analysis madeby the Bundeskartellamt.

The Commission believed that the Bundeskartell-amt was best placed to assess the competitiveimpact of both these cases on the affected marketsin Germany, as this assessment will require theinvestigation of local (sub-) markets and supplyrelations. In addition, the Bundeskartellamt hasrecently investigated this sector in Germany. Arelevant factor in deciding to refer the Ytong caseto Germany was that the Bundeskartellamt wasalready investigating the proposed acquisition ofFels in the same sector.


Merger control

(1) COMP/M.2495 – Haniel/Fels, 17.10.2001(2) COMP/M.2568 – Haniel/Ytong, 30.11.2001

Investigation into possible collective dominance in the publicationpaper industry

Valérie RABASSA, Stephan SIMON, Thibaut KLEINER, Directorate-General Competition, unit B

1. On 20 June 2000, the Commission received anotification by which the Finnish firm UPM-Kymmene proposed to merge with theGerman company Haindl. On the same day,the Commission received a notification of asecond concentration which concerns theresale of two of the six Haindl mills, Parencoin the Netherlands and the Walsum mill inGermany, by UPM-Kymmene to the Norwe-gian paper manufacturer Norske Skog. Thetwo concentrations concerned the economicsectors of pulp and publication papers and inparticular in the production and sale of woodcontaining printing paper. The only affectedmarkets were the markets for newsprint andwood-containing magazine paper. After an in-depth investigation, the Commission clearedboth concentrations on 21 November 2001.

2. The market contains some global players,some medium-sized players and some verysmall players. Top suppliers in the newsprintmarket are UPM-Kymmene, Stora Enso, NorskeSkog, Haindl and Holmen; other companiesare principally SCA, M-Real/Myllykoski, andPalm. In the market for wood-containingmagazine paper, top suppliers are UPM-Kymmene, Stora Enso, Haindl, and M-Real/Myllykoski; the remaining players arecomprised of principally SCA, Burgo, Sappi,and Norske Skog. Note that M-Real/Mylly-koski and Norske Skog are considered eithertop supplier or fringe depending on the consi-dered market.

3. The Commission investigated whether the twoproposed concentrations would result in thecreation of a collective dominant position (1) inthe markets for newsprint and wood-contai-ning magazine paper by a subset of large firmscalled top suppliers. In particular, theCommission analysed:

1. The impact of the merger on competition;

2. Whether the characteristics of the marketmakes the market conducive to tacit co-ordination;

3. The sustainability of the co-ordination, thatis to say:

— whether any one of the top supplierswould have the ability and incentive todeviate from the co-ordinated outcome,considering the ability and incentives ofnon-deviators to retaliate;

— whether buyers/fringe players/newentrants have the ability and incentive tochallenge the top suppliers’ anti-competitive behaviour.

In addition, the Commission has examined thenature of past competition.

Market characteristics

4. The publication paper industry is characte-rised by long-run competition in capacity andshort-run competition on prices under capacityconstraints. That is to say that in these markets,the level of capacity and average demanddetermines the long-run average price levelwhereas short-run demand determines theshort-run price at a given capacity level. Thesecharacteristics are very similar in the marketfor newsprint and in the market for wood-containing magazine paper and can be summa-rised as follows: i) both newsprint and themain grades of wood-containing magazinepaper can be considered as homogeneousproducts, although some variations within thedifferent paper grades exist; ii) there has beensome degree of fluctuations in the marketshares of the top suppliers, in the markets fornewsprint and wood-containing magazinepaper respectively. These variations in termsof market share are limited for wood-contai-ning magazine and more pronounced fornewsprint; iii) there exists a high degree oftransparency on capacities, deliveries, onaverage prices but lack of transparency in rela-tion to investment decisions, iv) demand isinelastic and cyclical; v) there is some uncer-tainty to the degree of cost symmetry, espe-



(1) Collective dominance is usually associated with the joint exercise of market power through the tacit co-ordination of marketbehaviour of a group of firms.

cially in the newsprint market; vi) there is ahigh level of multi-market contacts and links;vii) buyer power is limited; viii) an up-to datetechnology is easily available; ix) the pulp &paper industry has the characteristics of a sunkcost industry (i.e. high entry barriers).

Assessment

Impact of the proposed operations on themarket structure

5. In the newsprint market, the Commission hasexamined whether the operations may have ledto the creation of a collective dominant positionby the four companies UPM-Kymmene/Haindl, Stora Enso, Norske Skog and Holmenresulting in a four-firm concentration ratio of[60-70%] in terms of sales. In terms of capaci-ties the four-firm concentration ratio would be[70-80%]. In the market for wood-containingmagazine paper, post-mergers, the top threesuppliers companies, UPM-Kymmene/Haindl,Stora Enso, M-Real/Myllykoski would stillaccount for of [60-70%] of the market in termsof capacity and of [60-70%] in terms of sales.The proposed transactions reduced the numberof the leading firms in this industry from five tofour in the newsprint market/ from four to threein the wood-containing magazine and elimi-nated a significant competitor from the market.Haindl’s cost structure is somewhat differentfrom the other top suppliers, especially in thenewsprint market, in the wood-containingmagazine paper market, Haindl has been parti-cularly active in the last five years as it accountsfor a large part of the total increase in capacity.

The characteristics of the markets andtheir conduciveness to collectivedominance

6. The operations would result in a relatively moretransparent and less uncertain market, which isreflected in the reduction from respectively fiveto four for the newsprint market, from four tothree for the wood-containing magazine papermarket. When examining market characteris-tics, the Commission found some elements thatmight have led to collective dominance andsome others that do not.

7. The Commission considered that among theelements that might have led to the creation ofa collective dominant position were the follo-wing market characteristics: products aresufficiently homogeneous, demand is highly

inelastic, buyer power is limited and barriersto entry are very high. However, and aftercarefully considering the parties’ reply, theCommission recognised that other elementswere not conducive to the creation of a collec-tive dominant position. In particular, thelimited stability of market shares, the lack oftransparency on capacity expansion projectsprior to a committed announcement and thelack of symmetry in cost structures with regardto the various components point in anotherdirection.

Possibility to co-ordinate

8. Co-ordination might have occurred throughtwo mechanisms:

• first through the co-ordination of investmentin new capacities, in order to limit capacityin the market place raising thus the level ofaverage prices in the long-run;

• second, through co-ordination of outputdowntimes to support short-run pricesduring a slowdown of demand (there is noneed to co-ordinate in the short-run in aperiod of a high level of demand).

9. Co-ordination of investment in new capacitiesmight have operated along a process of announ-cements and counter-announcements. Allmarket players have a series of potential invest-ment projects, that is to say prospective siteswhere they could build new paper machines.Investment decision-making usually involves anumber of parameters, and is ultimately relatedto return on investment. The Commission, afterexamining the elements brought forward by theparties, concluded that it was unlikely for oligo-polists to be able to use announcements to co-ordinate tacitly and that it is unlikely that theycould detect a potential deviator. In particular,the Commission considered that the oligopo-lists would require sufficient transparency inorder to judge whether a project would have therequired rate of return. Otherwise, announce-ments would not be taken seriously by the otherfirms and would not have any impact on theirinvestment decision-making.

10. Regarding co-ordination on down-times, theparties first argued that this mechanism had noimpact on prices. They then claimed that it isnot possible to either define or detect down-time, because of a lack of transparency. Theysustained that down-time may take so manyforms that it would not be possible for firms torecognise when to co-ordinate; it would alsobe very difficult to define an optimal operating


Merger control

rate at a given time. They also said that it is notpossible to detect a deviator. Consequently,there would be high incentives for the oligopo-lists to cheat, as soon as they have an opportu-nity to do so. Finally, they argued that thepunishment of a deviator from an agreementon downtime would be extremely costly andnot credible.

11. However, the Commission did not share theview of the parties that co-ordination of down-time was not a possible co-ordination mecha-nism in the newsprint and wood-containingmagazine paper markets respectively. First,the Commission did not find that downtimehas no impact on prices. Also, it was difficultto argue that down-time could be hidden frommarket players, since there was transparencyon downtime through various channels.Suppliers normally tell their customers aboutforthcoming downtime on machines whichsupply such a particular customer. This hasbeen confirmed by a submission of one of themajor competitors. Due to customers’ multi-sourcing policies, the oligopolists very oftendeliver the same clients. Moreover, there arestatistics available in the market about stocklevels and downtime levels.

12. Secondly, retaliation tools appeared credible.When a competitor deviates, the remaining topsuppliers can take aggressive actions withouthaving to change prices for all their remainingcustomers. This may induce some customersto switch all or part of their demand away fromthe deviator and to substitute supply from theother top suppliers, and may drive down theprice paid by important customers of thedeviator. Moreover, in a period of lowdemand, capacities are available if needed tosupport retaliation. These capacities may beused to target important customers of a

deviator without affecting the whole market.This is credible as the main customers of thetop suppliers are usually well-known by theother ones. Moreover, the number of swingmachines and their corresponding capacitiesare not marginal and export sales are notmainly based on long-term contracts. Both canbe used as potential sources of capacities andtherefore as a credible punishment device.

13. The Commission concluded that the mecha-nism identified above for the co-ordination ofinvestments would not sustain the creation of atacit co-ordination in the markets for news-print and wood-containing magazine paperrespectively. However, it maintains that tacitco-ordination of downtime is a possible co-ordination mechanism, which could supportthe creation of a collective dominant positionof the four (respectively three) top suppliers inthe newsprint market (respectively the marketfor wood-containing magazine paper).

14. However, any such co-ordination would likelybe undermined by action of fringe players.Indeed, the Commission believed that theremaining fringe players can play an activerole in their respective markets and make tacitco-ordination unsustainable. These fringeplayers are SCA, Abitibi, Sappi, Palm andBurgo. These players could break co-ordina-tion by investing when the oligopolists wouldtry to refrain investment to reach higher pricesand by increasing production when the oligo-polists would try to shut down their machinestemporarily – the definition of downtime).These firms would have the means to takeadvantage of the tacit co-ordination among topplayers, to improve their competitive positio-ning and increase their market shares.



Politique des aides d’État

La Commission contribue à plus de sécurité juridique pour lefinancement des Services d’intérêt économique général

Alain ALEXIS, Direction Générale Concurrence, unité A-3

Le Conseil européen de Nice des 7, 8 et 9 décem-bre 2000, avait demandé à la Commission de luiprésenter un rapport lors du Conseil européen deLaeken de décembre 2001, sur les actions entre-prises dans le domaine des Services d’intérêtgénéral (SIG). La demande du Conseil européenportait en particulier sur les moyens propres àassurer une plus grande prévisibilité et une sécuritéjuridique accrue dans l’application du droit de laconcurrence. Le Conseil européen avait notam-ment approuvé une déclaration du Conseil Marchéintérieur du 28 septembre 2000, demandant quesoit précisée l’articulation des modes de finance-ment des services d’intérêt général avec l’applica-tion des règles relatives aux aides d’Etat.

La Commission a adopté le 17 octobre 2001, sonrapport à l’intention du Conseil européen deLaeken (1). Il convient de souligner que celui-ci neremplace pas les Communications de la Commis-sion de 1996 et 2000 sur les Services d’intérêtGénéral (2), mais vise uniquement à les complétersur les aspects soulevés par le Conseil européen etle Conseil Marché intérieur du 28 septembre 2000.

L’importance des Services d’intérêtgénéral et la liberté des Etats membres

La Commission rappelle tout d’abord l’impor-tance qu’elle attache aux SIG, qui restent unecomposante essentielle du modèle de société euro-péen. Cette importance doit être soulignée nonseulement pour les citoyens des Etats membresactuels, mais également pour les citoyens des payscandidats à l’adhésion. Pour ces derniers, un bonfonctionnement des SIG est indispensable à l’inté-gration en douceur dans l’Union européenne.

Ce rôle fondamental des SIG a été consacré nonseulement par l’article 16 du traité CE, mais égale-ment par l’article 36 de la Charte des droits fonda-mentaux de l’Union européenne, qui dispose que«l’union reconnaît et respecte l’accès aux services

d’intérêt économique général tel qu’il est prévupar les législations et pratiques nationales, confor-mément au traité instituant la Communauté euro-péenne, afin de promouvoir la cohésion sociale etterritoriale de l’Union».

La Commission souligne par ailleurs dans sonrapport, la liberté importante dont disposent lesEtats membres. Liberté tout d’abord pour déciders’ils souhaitent assurer eux-mêmes les SIG, direc-tement ou indirectement via d’autres entités publi-ques, ou s’ils préfèrent confier cette tâche à destiers. Liberté également, en l’absence de disposi-tions communautaires pertinentes, pour définir lesSIG qu’ils souhaitent mettre en place. Il est en effetconstant que pour de nombreux SIG, les Etatsmembres ou les collectivités locales sont mieuxplacés que les autorités communautaires pourapprécier les besoins des citoyens au niveau local.

Les Services d’intérêt général soumisaux règles de concurrence

Les règles de concurrence du traité CE, qu’ils’agisse des règles antitrust ou des règles relativesaux aides d’Etat, ne s’appliquent qu’aux activitéséconomiques. Il est donc essentiel d’identifier lesServices d’intérêt économique général, pour les-quels les règles de concurrence sont d’application.

La Commission a été invitée à préciser les critèrespermettant de distinguer les activités économiqueset non économiques, et de fournir éventuellementune liste d’activités échappant à la qualificationd’activités économiques (3).

Dans son rapport au Conseil européen de Laeken,la Commission a rappelé que la notion d’activitééconomique a fait l’objet d’une jurisprudenceétoffée de la part du Tribunal de Première Instanceet de la Cour de Justice. D’une façon générale,constitue une activité économique, «toute activitéconsistant à offrir des biens ou des services sur un



(1) COM(2001)598 final. Disponible sur le site internet de la Commission(2) JO C 281 du 26/10/1996, p.3, et JO C 17 du 19/01/2001, p.4(3) Notamment Résolution du Parlement Européen du 13/11/2001 sur la Communication de la Commission sur les SIG de 2000, et

avis du Comité des Régions du 19/09/2001 sur la Communication susvisée.

marché donné» (1). L’Avocat Général Jacobs aprécisé à ce sujet que «la question essentielleconsiste dès lors à se demander si l’entité en causeexerce une activité qui serait, à tout le moins enprincipe, susceptible d’être celle d’une entreprisepoursuivant un but lucratif» (2). Dans ce cadre, lestatut de l’entité en cause est indifférent: il peuts’agir d’une société, mais également d’une asso-ciation, d’un club de sport…L’élément détermi-nant est l’activité poursuivie.

Ceci ne signifie bien sûr pas que toute activité soitde nature économique. Il résulte en particulier dela jurisprudence de la Cour, que l’article 87 dutraité n’est pas applicable lorsque l’Etat intervienten «exerçant l’autorité publique» (3), ou lorsquedes autorités émanant de l’Etat agissent «dans leurqualité d’autorités publiques» (4). On peut consi-dérer qu’un organisme agit en exerçant l’autoritépublique lorsque l’activité en cause «constitue unemission d’intérêt général qui relève des fonctionsessentielles de l’Etat», ou «par sa nature, son objetet les règles auxquelles elle est soumise, serattache à l’exercice de prérogatives…qui sonttypiquement des prérogatives de puissancepublique» (5). D’une façon générale, les activitésqui relèvent intrinsèquement des prérogatives del’Etat et qui sont prises en charge par l’Etat,comme par exemple la sécurité intérieure et exté-rieure, la justice, l’enseignement de base, ne cons-tituent pas des activités économiques au sens desrègles de concurrence.

Les règles de concurrence, ne sont pas non plusapplicables à des activités réalisées par des entitésqui n’offrent pas des biens ou des services sur unmarché donné, et qui ne seraient pas en principe,susceptibles d’être offertes par une entité poursui-vant un but lucratif. La Cour de Justice a ainsiconsidéré qu’une activité de gestion de sécuritésociale fondée sur le principe de la solidarité natio-nale, dépourvue de tout but lucratif, ne constituepas une activité économique (6).

Si la jurisprudence apporte des enseignementsutiles sur la notion d’activité économique, il appa-raît toutefois que l’établissement de critères défini-tifs, ou l’établissement d’une liste définitived’activités non économiques, n’est pas possible.La notion d’activité économique est évolutive, etson contenu dépend en partie de choix politiques

effectués par chaque Etat membre. L’établisse-ment d’une liste, outre le fait qu’elle serait soumiseà la censure éventuelle de la Cour de Justice, auraitpour effet de «geler» une situation, et ne prendraitpas en considération les évolutions souhaitées parcertains Etats membres.

Pour renforcer la transparence en matière de poli-tique de concurrence, la Commission s’est toute-fois engagée à consacrer dorénavant une partiespécifique de son rapport annuel sur la politique deconcurrence, aux SIEG, dans laquelle elle décriral’application des règles de concurrence à cesservices. Il convient par ailleurs de rappeler que cerapport annuel comporte un résumé de toutes lesdécisions adoptées par la Commission, et présentedonc de façon claire la doctrine suivie en lamatière.

Le financement des services d’intérêtéconomique général

De nombreux prestataires de SIEG bénéficientd’un soutien public à titre de compensation pourles obligations de service public qu’ils supportent.A la lumière de la jurisprudence du Tribunal dePremière Instance en vigueur lors de l’adoption durapport de la Commission, ces compensationspeuvent constituer des aides d’Etat au sens del’article 87 du traité CE (7). Toutefois, ces aidesd’Etat peuvent être déclarées compatibles avec letraité en application de l’article 86 paragraphe 2, sielles n’excèdent pas ce qui est nécessaire pourpermettre à l’entreprise d’exploiter son servicedans des conditions d’équilibre économique. Lemontant de l’aide qui dépasse ce qui est nécessaireconstitue une aide incompatible.

La Commission rappelle en particulier que lesEtats membres disposent d’une grande liberté pourassurer la compensation. Celle-ci peut prendre laforme de subventions annuelles, d’un traitementfiscal préférentiel, d’un allègement de cotisa-tions…L’élément décisif est que la valeur totale deces avantages ne doit pas excéder ce qui est néces-saire à l’entreprise en cause pour accomplir samission. A ce sujet, la Commission considère quelorsque le SIEG a été attribué à l’issue d’uneprocédure équitable, transparente et non discrimi-natoire, en ce qui concerne les services à fournir et


State aid

(1) Arrêt de la Cour dans l’affaire C-180-184/98 Pavel Pavlov. Rec 2000. I-6451(2) Conclusions jointes du 28/01/1999, aff C-67/96, C-115/97 à C-117/97, C-219/97, point 311.(3) Arrêt du 16 juin 1987 Commission contre Italie. Aff 118/85, points 7 et 8(4) Arrêt du 4/5/1988. Bodson. Aff 30/87, point 18(5) Arrêt du 19/01/1994 SAT Fluggesellschaft Aff C-364/92 point 30(6) Arrêt du 17/02/1993 Poucet et Pistre Aff C-159/91 et C-160/91(7) Arrêt du 27/02/1997, FFSA Aff T-106/95, et arrêt du 10/05/2000, SIC Aff T-46/97

le montant de la compensation, le montant decelle-ci est normalement jugé compatible avecl’article 86.2 dès lors que la procédure a été réelle-ment concurrentielle.

Ces aides d’Etat, même si elles remplissent lesconditions de l’article 86 paragraphe 2, doiventtoutefois faire l’objet d’une notification préalableà la Commission conformément aux dispositionsde l’article 88 paragraphe 3 du traité. Cette obliga-tion de notification préalable ne s’applique pasdans deux cas : d’une part lorsqu’il s’agit d’aides« de minimis » remplissant les conditions du règle-ment de la Commission n° 69/2001 du 12 janvier2001 (1), et d’autre part lorsqu’il s’agit de compen-sations accordées conformément aux dispositionsdu règlement du Conseil n° 1191/69 du 26 juin1969, relatif à l’action des Etats membres enmatière d’obligations inhérentes à la notion deservice public dans le domaine des transports parchemin de fer, par route et par voie navigable.

Indépendamment des questions de procédure liéesà la notification préalable, le droit communautairegarantit donc aux entreprises chargées d’exploiterles SIEG, les ressources dont elles ont effective-ment besoin pour accomplir leur mission. Parcontre, le droit communautaire s’oppose, en toutelogique, à ce que ces entreprises bénéficient deressources non nécessaires, en particulier lorsquecelles-ci sont susceptibles d’être utilisées pourintervenir sur des marchés ouverts à la concur-rence.

La Commission est toutefois consciente du fait quela sécurité juridique peut être améliorée au profitdes Etats membres et des entreprises chargéesd’exploiter des SIEG. C’est la raison pour laquelleelle envisage d’établir, courant 2002, en collabora-tion avec les Etats membres, un cadre communau-taire pour les aides d’Etat octroyées aux entre-prises chargées d’exploiter les SIEG. L’objet de cecadre sera de préciser les conditions dans les-quelles les compensations de service public sontcompatibles avec le droit communautaire. Cecadre devrait en particulier apporter des précisionssur les modalités de calcul de la compensation afind’éviter des surcompensations constitutivesd’aides incompatibles. A ce sujet, la Commissiondevrait encourager le recours à la procédure del’appel d’offres, qui permet de s’assurer que lemontant de la compensation correspond auxconditions du marché lors de son attribution.

Dans un deuxième temps, la Commission évalueral’expérience acquise par l’application de ce cadre,et si cela est nécessaire et justifié par l’expérience,pourrait adopter un règlement d’exemption parcatégorie pour les compensations de servicepublic. Le champ d’application de ce règlementreste à établir; celui-ci pourrait être limité àcertaines catégories de SIEG.

La Commission devra également évaluer la portéeet les conséquences de l’arrêt de la Cour de Justicedu 22 novembre 2001 dans l’affaire Ferring SA (2).Dans cette affaire relative au secteur particulier dela distribution en gros de médicaments, la Cour aconsidéré qu’une exonération de taxes au profit degrossistes répartiteurs chargés d’obligations deservice public, ne constitue une aide d’Etat au sensde l’article 87 paragraphe 1, que dans la mesure oùson montant excède les surcoûts liés aux obliga-tions de service public.

L’application des règlescommunautaires à la sélection desprestataires de SIEG

Dans son rapport, la Commission rappelle que lesEtats membres sont libres de choisir la manièredont le service doit être assuré: soit par eux-mêmes, soit par un tiers. Toutefois, dans la secondhypothèse, les règles communautaires relatives àla sélection du prestataire doivent être respectées.Ces règles sont issues du traité et de la jurispru-dence de la Cour (3), et s’appliquent même si lesdirectives communautaires relatives aux marchéspublics ne sont pas applicables. Les Etats membresdoivent en particulier respecter les principes rela-tifs à la libre prestation de services, à la libertéd’établissement, ainsi que les principes de transpa-rence, d’égalité de traitement, de proportionnalitéet de reconnaissance mutuelle. Le respect de cesprincipes implique en général, sauf circonstancesparticulières, que soit garanti en faveur de toutsoumissionnaire potentiel, un degré de publicitéadéquat permettant une ouverture du marché desservices à la concurrence.

La Commission estime que l’application de cesprincipes, outre le fait qu’elle permet de réduireconsidérablement les risques de conflit avec lesrègles de concurrence, ne peut que conférer desavantages aux usagers et aux opérateurs.



(1) JO L 10 du 13/1/2001. P.30(2) Aff C-53/00(3) Notamment arrêt Telaustria du 7/12/2000, Aff C-324/98

Conclusion

Le rapport de la Commission au Conseil européende Laeken n’a pas vocation à répondre à toutes lesquestions relatives au fonctionnement des SEIG. Ilpermet toutefois de réaffirmer que la réalisation duMarché intérieur et la libéralisation de certainssecteurs d’activités ne sont pas antinomiques avecle fonctionnement efficace des services d’intérêtéconomique général. Le droit communautairerequiert certes, plus de transparence et de rigueur

dans la mise en place et le fonctionnement de cesservices, mais ces exigences constituent des avan-tages et non des inconvénients pour les citoyens.Le fonctionnement des obligations de servicepublic dans le secteur du transport aérien offre à cepropos un bon exemple (1).

La Commission continuera à travailler selon lesorientations définies dans son rapport, comme leConseil européen de Laeken l’a invité à faire.


State aid

(1) Voir notamment en ce sens «Les obligations de service public dans les transports aériens», par Alexandra Subrémon. Revue duMarché commun et de l’Union européenne, n° 432, octobre 1999

Aides fiscales: la Commission procède à l’examen approfondidu critère de la sélectivité dans le domaine de la fiscalité directedes entreprises

Mehdi HOCINE, Direction Générale Concurrence, unité G-3

Dans sa communication du 11 novembre 1998 surl’application des règles en matière d’aides d’Étataux mesures relevant de la fiscalité directe desentreprises (1), la Commission s’est engagée,d’une part, à examiner les projets d’aides fiscaleset les aides illégalement mises en œuvre et, d’autrepart, à réexaminer les régimes fiscaux préalable-ment approuvés. Suite à cet engagement, laCommission adoptait le 11 juillet 2001 11 déci-sions ouvrant la procédure formelle d’examen et4 propositions de mesures utiles; ces 15 décisionsconcernent un total de 12 États membres (2).

L’examen des aides sous forme fiscale ne cons-titue cependant pas une innovation juridique. Eneffet, l’article 92 du traité CEE (devenu 87 CE) nedistingue pas selon les causes ou les objectifs desinterventions, mais les définit en fonction de leurseffets de telle sorte que ni le caractère fiscal, ni lebut social d’une mesure prise par un État membrene suffisent à écarter l’application des règles enmatière d’aides d’État (3). Les aides prenant laforme d’avantages fiscaux, ne sont donc pasfondamentalement différentes des aides distri-buées sous d’autres formes (subventions, garan-ties, etc).

Par ailleurs, la Commission dispose d’une longueexpérience dans le traitement des cas d’aides sousforme fiscale. Toutefois, force est de constater quela plupart des cas en la matière examinés par laCommission jusqu’à une période récente étaientcaractérisés par une sélectivité sectorielle ourégionale.

L’intérêt des 15 décisions adoptées par laCommission le 11 juillet 2001 réside dans le faitque si certaines d’entre elles s’appuient sur lescritères traditionnels de spécificité sectorielle etrégionale, d’autres critères sont également utilisés.En outre, la détermination de l’avantage dans lecadre de certains de 15 décisions précitées peutégalement résulter non pas d’exonérations fiscalesclassiques, mais de pratiques administratives

discrétionnaires voire de modalités alternatives dedétermination du bénéfice imposable.

En effet, si certaines mesures remplissent ousemblent remplir le critère de la spécificité régio-nale, certaines de leurs caractéristiques permettentd’appréhender d’autres éléments de spécificité liésà une typologie horizontale des activités économi-ques (commune à de nombreux secteurs: coordina-tion, gestion de trésorerie, etc) ou au contexte danslequel elles sont exercées (activité intra groupe,caractère multinational, activités offshore (4)).C’est notamment le cas de certains régimes fiscauxà Gibraltar (5) dont le bénéfice est limité aux seulesentreprises exerçant des activités offshore, et déte-nues par des non-résidents. C’est également le casdu régime fiscal du centre de Trieste qui prévoitquant à lui des exonérations fiscales uniquementen faveur des entreprises implantées à Trieste(spécificité régionale) et exerçant une activitéfinancière (spécificité sectorielle) dans les paysd’Europe centrale et orientale ou ceux issues del’ancienne Union soviétique (activités offshore).De même, le régime des sociétés d’assurance enSuède prévoyait un régime fiscal spécial enmatière de détermination du bénéfice imposablelimité aux seules entreprises d’assurance étran-gères (spécificité fondée sur la nationalité).

Certaines autres mesures sont limitées uniquementaux groupes de sociétés répondant par exemple àcertains critères en termes d’implantation géogra-phique internationale. Ainsi, le régime fiscal néer-landais des «activités de financement interna-tional» permet-il aux groupes de sociétés établisdans au moins quatre pays ou deux continents deconstituer certaines réserves en franchise d’impôt.Le fait que ce régime qui ne comporte certesaucune limitation sectorielle, ne soit pas accessibleaux sociétés ou groupes de sociétés ne répondantpas aux critères susmentionnés a amené laCommission à exprimer ses doutes quant à lacompatibilité avec l’article 87 CE de cette mesure.



(1) JO C 384 du 10.12.1998, p. 3.(2) IP/01/982.(3) Cf. Aff. 173/73.(4) Activité économique exercée hors du territoire de l’Etat qui offre le régime fiscal.(5) Il s’agit en l’occurrence des régimes fiscaux des exempt companies et qualifying companies.

L’analyse de la spécificité, tant en matière fiscaleque dans d’autres domaines, tend à être perçueavec de plus en plus de rigueur, et ceci sembleconforté par la jurisprudence récente de la Cour etdu Tribunal de première instance. Ainsi, dans sonarrêt Confederación Española de Transporte deMercancias (1) (CETM), le Tribunal de premièreinstance a estimé qu’une mesure s’appliquant àl’ensemble des entreprises d’un État membre àl’exception des grandes entreprises remplissait lecritère de la sélectivité, et dans son arrêt Adria-Wien Pipeline GmbH (2), la Cour a égalementestimé que la limitation du remboursement d’unetaxe sur l’énergie aux seules entreprises du secteurmanufacturier remplissait également ce critère. Lajurisprudence Maribel bis/ter (3) souligne quant àelle que «ni le nombre élevé d’entreprises bénéfi-ciaires, ni la diversité et l’importance des secteursauxquels ces entreprises appartiennent ne permet-tent de considérer une initiative étatique commeune mesure générale de politique économique»dès lors que certaines entreprises en sont exclues.

Enfin, si la détermination de l’avantage fiscal peutparaître évidente si celui-ci prend la formed’exonérations, d’abattements, tel n’est pas le cass’il résulte de l’application de méthodes alterna-tives de détermination de la base imposable dutype coût de revient majoré (cost plus). De tellesméthodes ne posent pas de problème de principedu point de vue des aides d’État. Elles sont parailleurs, dans un autre contexte, recommandéespar l’OCDE. Cependant, le recours à de telles

méthodes ne saurait avoir pour objectif de réduirela base imposable des entreprises assujetties parrapport aux entreprises soumises au régime fiscalgénéral. C’est parce que tous les coûts n’étaientpas inclus dans le calcul du cost plus de certainsrégimes de type «centre de coordination» ou«quartiers généraux» et/ou en raison des modalitésde l’exercice du pouvoir discrétionnaire de l’admi-nistration fiscale dans le cadre de ces régimes quela Commission a ouvert la procédure formelled’examen dans cinq cas répartis dans quatre Étatsmembres (France, Luxembourg, Allemagne,Espagne).

Naturellement, s’agissant des ouvertures de procé-dures, la Commission n’a, à ce stade, formulé quedes doutes et posé des questions tant sur laprésence d’aide que sur la compatibilité de cesmesures. Les procédures en cours permettrontdonc de répondre à ces questions.

En conclusion, si la nature de certaines activités oula taille de certains groupes nécessitent desméthodes particulières ou des régimes d’imposi-tion spéciaux, il est difficilement justifiable par lanature ou l’économie du système que ces régimesparticuliers donnent lieu à des avantages nonouverts aux autres entreprises soumises au régimefiscal général. La pratique de la Commission,confortée par la jurisprudence, va dans le sens d’unexamen toujours plus approfondi de la spécificité,notamment quant celle-ci à trait à la taille desentreprises.


State aid

(1) T-55/99(2) C143-99(3) C-75/97

Waste treatment, recycling and state aid

Anne Theo SEINEN, Directorate-General Competition, unit H-2

1. Introduction

Treatment and recycling of waste is a growingeconomic activity. National authorities, on theirown initiatives or in accordance with EuropeanDirectives, are implementing all kinds of systems toensure treatment and recycling of all kinds of mate-rials. There is substantial regulation in this area,both at the national and EU level. Such regulationconcerns not only environmental aspects, but alsothe rules on free circulation of goods and servicesand the rules on competition, both anti-trust (1) andState aid. The number of parties involved can behigh, which usually adds to the complexity.

As interesting as the rules in other areas are, thisarticle only deals with the State aid aspects. Itbuilds on recent experience, in particular the deci-sions on waste disposal systems in the Nether-lands, for PVC façade elements (N484/00), paperand cardboard (NN87/00) and car wrecks (C11/01), the waste oil collection system in Germany(N387/01) and a Dutch scheme for treatment ofsludge (N812/01) (2). At the moment of writing theCommission has not yet decided on this last case.

2. In which circumstances mayState aid arise?

The definition of State aid in Article 87(1) containsfour elements: there must be a selective advantagefinanced by State resources that affects tradebetween Member States and (threatens to) distortcompetition. In general, the Commission considersthat recycling systems affect trade between MemberStates and that they are capable of distorting compe-tition. Despite various restrictions, trade in wastegenerally exists and the companies involved mayhave international activities. The other elements inthe definition appear to be more complex.

Selective advantage, but to whom?

The leading principle for the Commission’sassessment is the ‘polluter pays principle’. In the

Dutch cases mentioned above, the polluters are thecompanies that sell or import the products that, at alater stage, turn into waste (‘producer responsibil-ity’). The consumer may be held responsible fordelivery of the waste at certain collection points(‘consumer responsibility’), but the cost of wastetreatment and/or recycling is to be considered as anormal company cost for the producers, in partic-ular when they are legally obliged (under nationalor European law) to bear such costs. Conse-quently, when producers (and importers) do notbear the costs, a selective advantage may exist.

Waste treatment and recycling systems may alsoprovide a selective advantage to the waste treat-ment and recycling companies. National authori-ties may award financial contributions that havethe effect of lowering the cost of these companies,enabling them to offer their services at lowerprices. Whether or not the advantage of such alower price is ‘passed on’ to the polluters, dependson the actual arrangements. This may not be thecase, in particular, when no polluter can be heldresponsible.

Waste treatment and recycling companies mayreceive a selective advantage also when a systemleads to contributions to these companies thatsurpass the market price (‘overcompensation’).Even if the service of treatment and recycling itselfis considered as an advantage to the polluters, theovercompensation may still constitute an advan-tage to the treatment and recycling companies.

State resources

Only if a selective advantage is financed by Stateresources, may it constitute State aid. Stateresources are clearly present when a governmentdirectly grants money to the polluters or to thetreatment or recycling companies. The situation isalso clear if such a grant is given to a fund ororganisation that takes care of the system. Morecomplicated is the case of a fund or organisationthat is being financed by contributions from the



(1) See e.g. ‘The Commission defines principles of competition for the packaging waste recovery markets’, by M. Gremminger, M.Laurila and G. Miersch, Competition Policy Newsletter No. 3, October 2001, p. 29.

(2) The decisions not to raise objections for the cases N484/00, NN87/00 and N387/01 are published in the authentic language on theCommission’s web site: http://europa.eu.int/comm/secretariat_general/sgb/state_aids. The decision to initiate the procedure ofArt. 88(2) in case C11/01 was published in OJ C111 of 12.4.2001, p.2. The final decision has not been published yet. Depending onthe outcome of the current discussion, the decision for the case N812/01 will be published on the web or in the Official Journal.

producers and importers. When the nationalauthorities make such a levy obligatory, it has thecharacteristics of a para-fiscal tax, of which theproceeds are normally to be considered as Stateresources. The use of such proceeds is normallyassessed separately from the payments.

However, in the specific situation of the Dutchrecycling systems, the Commission came to theconclusion that the effect of the obligatory levy andthe other arrangements is only to oblige theproducers and importers to internalise all of the trueenvironmental costs associated with their activities.The levies they pay correspond to the costs of treat-ment and recycling for which they are responsible.Taking these and other circumstances into account,the Commission concluded that there is no State aidin favour of the producers and importers.

3. Compatibility

In many cases aid for treatment or recycling willtake the form of operating aid. Section E.3.1 of theguidelines on environmental aid (1) contains therules applicable to such aid. The main require-ments are that such measures should be degressiveand temporary. However, as long as polluterscannot be identified or held legally responsible,treatment or recycling systems are likely not torespect these requirements.

In the case of sludge treatment, the Dutch authori-ties invoked Article 86(2), claiming that the contri-butions to the sludge treatment companies consti-tute a (partial) compensation for a service ofgeneral economic interest. They referred to aCourt decision in Case 209/98 that confirmed thatthe management of a waste might be considered asa service of general economic interest (2).However, the Commission may consider that theservice of sludge treatment does not have a generalcharacter as it is closely tied to the dredging. Thecontributions may have to be considered to benefitthe dredging parties in the first place, and in thatcase, as explained below, there will be no need toinvoke Article 86(2). Whatever the decision willbe, the Commission may accept the application ofArticle 86(2) in other cases when the service ofwaste treatment and recycling has a genuinegeneral character. (3) A necessary, but not suffi-cient, condition is the absence of polluters that canbe held responsible for the waste concerned.

4. Recent experience

In the Netherlands various systems are based on avoluntary agreement between the companiesinvolved, to pay a levy into a fund that is used forfinancing the cost of recycling, transport, sortingand dismantling, etc. in as far as these costs cannotbe recovered under normal market conditions. TheMinister of Environment declares these agree-ments generally binding on all companies in thesector, including those that did not subscribe theagreement, in order to ensure that all ‘polluters’pay the levy. As explained above, the Commissioncame to the conclusion that none of the notifiedsystems constituted State aid.

The German waste oil scheme is financed by directgrants from the government, therefore State aidwas involved. The aid was considered to favourthe waste oil regeneration companies. It was foundcompatible under the exemption of Article87(3)(c), as explained below.

The Dutch scheme for treatment of sludge(supporting treatment of contaminated sludgebeyond what is required by legal standards) is alsofinanced by direct grants from the government.However, the contributions may be considered tofavour the public and private authorities that areresponsible for the dredging, because the treatmentis closely tied to the procurement of the dredgingand treatment. Most of the dredging is done bypublic bodies under their public responsibilities,but such public bodies carry out economic activi-ties, the subsidies may still be considered as Stateaid. The advantages to private parties remainbelow the de minimis threshold. As indicated, theCommission has not yet come to a conclusion atthe time of writing.

The following considerations are worth mentioning:

• The contribution for recycling PVC façadeelements was established after an open tenderprocedure. The contributions for paper and card-board treatment and car dismantling were basedon studies on the actual costs of these compa-nies. Despite the absence of tender procedures,the Commission could view these contributionsas ‘market prices’. In the car wrecks case theCommission initially had doubts on this partic-ular issue, as the cost of dismantling variedsubstantially among car dismantling companies.


State aid

(1) OJ C37 of 3.2.2001, p. 3.(2) Court judgement of 23.5.2000, Sydhavnens Sten & Grus, C-209/98, ECR p. I-3743.(3) Court judgement of 22.11.2001, Ferring vs ACOSS, C-53/00 casts doubts on the issue whether or not a compensation for the cost

of providing a service of general economic interest constitutes State aid in the meaning of Article 87(1). If there is noovercompensation, there would be no advantage, and hence no State aid.

The Dutch authorities submitted detailed infor-mation before these doubts were allayed.

• Various Directives were concerned and thesecontained varying clauses on responsibility andcosts. Article 5(4) of the End-of-life vehiclesdirective (1) is most clear: producers and profes-sional importers have to bear all or a significantpart of the costs of the dismantling and recyclingin as far as it cannot be passed on to the lastowner or holder of the car. The directive onpackaging and packaging waste (2) is much lessclear. It refers in a general way to the polluterpays principle, but rather stresses close coopera-tion of all partners and shared responsibility.The directive on waste oils (3) mentions thepolluter pays principle, but Article 14 stipulatesthat Member States may grant indemnities tocollection and disposal undertakings for theservice rendered. For the German scheme forregeneration of waste oils it meant that theCommission could approve direct grants tocompensate for the losses, despite the fact thatthey do not fully comply with the criteria in theenvironmental aid guidelines (4). A similarreasoning would certainly not hold for similargrants in the car wrecks case.

• The Commission also took into account thepotential competition between the recycled and‘virgin’ material. In the Dutch cases it wasconcluded that the remuneration to recyclingand treatment companies did not allow for such adistortion of competition. In any event, anygeneral effect on producers of the virgin mate-

rials that might materialise would be no morethan a typical result of regulations requiring allenvironmental costs to be internalised by theindustry as a whole.

• The Commission normally requires thatimporters are exempted from para-fiscal chargesand that exports are taxed equally as domesticsales. However, imports do add to the domesticwaste problem, whereas exports do not. As theDutch systems focussed on the domestic waste,the Commission accepted that importers areobliged to pay the same charge as domesticproducers, whereas exports are exempted.

• The Commission can find aid compatible withthe common market provided that it does notinfringe other provisions in the Treaty (5). Ofparticular relevance may be national restrictionson trade in waste. If aid is dependent on suchrestrictions, the Commission may have to estab-lish whether these restrictions are compatiblewith the provisions on the free circulation ofgoods and services, before it can find aidcompatible with the common market.

5. Conclusions

National authorities and the private partiesinvolved should be well aware of State aid aspectswhen setting up systems for treatment and recy-cling of waste. Of course, in case of doubt as to theexistence of State aid, the golden rule is to notifythe system to the Commission.



(1) Directive 2000/53/EC of the European Parliament and the Council of 18.9.2000 concerning end-of life vehicles, OJ L 269 of21.10.2000, p.34.

(2) Directive 94/62/EC of the European Parliament and the Council of 20.12.1994 on packaging and packaging waste, OJ L 365 of31.22.1994, p. 10.

(3) Directive 87/101/EC of the Council of 22.12.1986 on the disposal of waste oils, OJ L 42 of 12.2.1987, p.43.(4) In the past the Commission considered similar schemes for waste oil not to constitute State aid, this based on a very specific Court

ruling. This approach was changed in the German case due to other Court rulings on public services. However, also the recentFerring ruling (see footnote above) may be relevant for this case.

(5) See e.g. Court judgment of 15.6.1993, in case C225/91, Matra vs Commission, ECR 1993, p. I-3203.

State aid:main developments between 1 September and 31 December 2001

Italie – les interventions en faveur de la régularisation de l’économiesouterraine constituent des mesures générales

Paola ICARDI et Riccardo VUILLERMOZ, Direction Générale Concurrence,unité G-1

Le 13 novembre 2001, la Commission européennea adopté une décision dans laquelle, après uneanalyse portant sur la notion d’aide d’Etat au sensde l’article 87, paragraphe 1er, du traité CE, qualifiede mesures générales les interventions italiennesen faveur de la régularisation de l’économiesouterraine.

Ces mesures visent à lutter contre un phénomène,celui de l’économie souterraine, qui est très diffi-cile à saisir. Ce phénomène, en effet, présente lacaractéristique fondamentale de concerner unepartie inconnue de l’économie, en ce sens qu’ellesort des données statistiques ordinaires et qu’ellen’est pas déclarée aux autorités fiscales. Il existenéanmoins des estimations, qui montrent qu’ils’agit d’un phénomène de grande ampleur.

La Communication de la Commission sur le travailnon déclaré du 7 avril 1999 (1) révèle qu’enmoyenne la taille de l’économie non déclarée del’Union européenne est comprise entre 7 et 16% duPIB de l’Union européenne. Si les estimations del’économie souterraine varient sensiblement selonla méthode utilisée, elles permettent néanmoins dedistinguer certains groupes de pays. Dans unpremier groupe, l’économie non déclarée avoisi-nerait le 5% du PIB (pays scandinaves, Irlande,Autriche et Pays-Bas). Dans un deuxième groupe(Italie et Grèce), elle est estimée à plus de 20%.Plus au moins à mi-chemin entre ces deuxextrêmes, il existe deux groupes intermédiaires:celui formé par le Royaume-Uni, l’Allemagne et laFrance et, un peu au-dessus, celui formé par laBelgique et l’Espagne.

Dans ce contexte, l’Italie est donc l’un des pays lesplus touchés par le phénomène de l’économiesouterraine. En 1999, le travail irrégulier a inté-ressé environ 3,5 millions d’unités de travail àtemps plein, c’est-à-dire 15% des emplois totaux.

Le nombre d’unités de travail irrégulier en 1999est augmenté de 349.000 unités (+11%) parrapport à l’année 1998, où le pourcentage dutravail irrégulier représentait 13,4% des emploistotaux. Certaines données montrent que dans lesecteur agricole le phénomène de l’économiesouterraine se manifeste avec une intensitéd’environ 30% des unités de travail. D’autressecteurs sont moins touchés par l’économiesouterraine: 17% dans le secteur des services, 16%dans les constructions et 6% dans l’industriestrictu sensu. Il s’agit toutefois d’un phénomènequi paraît intéresser tous les secteurs del’économie nationale, ce qui montre son caractèrehorizontal.

L’Italie avait déjà adopté deux régimes d’aidevisant à lutter contre l’économie souterraine, quiavaient fait l’objet d’une appréciation favorable dela part de la Commission (2). Dans son apprécia-tion la Commission avait qualifié ces mesuresd’aides au maintien de l’emploi, tout en estimantqu’elles étaient compatibles avec le marchécommun, en vertu de la dérogation prévue àl’article 87, paragraphe 3, point a), du traité CE. LaCommission a ainsi apprécié les deux régimes surla base des lignes directrices concernant les aides àl’emploi (3). Ces deux régimes d’aides concer-naient uniquement les régions du «Mezzogiorno»(sud de l’Italie), admises à la dérogation prévuepar la disposition précitée de l’article 87 du traitéCE. Les aides au maintien de l’emploi, en effet,s’apparentent à des aides au fonctionnement etpeuvent être autorisées, sous certaines conditions,dans les seules régions pouvant bénéficier de laditedérogation (4).

Les mesures italiennes approuvées par la Commis-sion le 13 novembre 2001 constituent une nouvelleapproche dans la lutte contre l’économie souter-raine, en ce sens qu’elles poursuivent les efforts


State aid

(1) Document COM(1998) 219.(2) Décisions de la Commission des 3 mars 1999 (aide d’Etat N 545/98) et 4 octobre 2000 (aide d’Etat N 236/A/2000).(3) JO C 334 du 12.12.1995.(4) Cf. point 22 des lignes directrices concernant les aides à l’emploi.

accomplis dans le passé mais en généralisant leurapplication, notamment, à tout le territoire italien.Elles prévoient des interventions principales etsubsidiaires en faveur des entreprises bénéfi-ciaires.

Les interventions principales comportent deuxvolets. Le premier porte sur un impôt de substitu-tion des prélèvements prévus par le régime de droitcommun sur les revenus des personnes physiqueset morales (IRPEF, IRPEG et IRAP), de l’ordre du10%, 15% et 20% respectivement pour la pre-mière, deuxième et troisième période d’impo-sition. Cet impôt s’applique uniquement àl’augmentation du revenu imposable déclaré parrapport à l’année précédente. La base imposable àtaux réduit est plafonnée à un montant égal autriple du coût du travail régularisé. Le deuxièmevolet comporte le versement d’une contribution desubstitution des charges sociales normalementdues par les entreprises, de l’ordre du 8%, 10% et12% respectivement pour la première, deuxième ettroisième période d’imposition.

Comme intervention subsidiaire, les mesuresprévoient notamment que la déclaration des entre-prises est également valable pour la déterminationdes taxes et des charges sociales non payées(«concordato tributario e previdenziale»), si elleest présentée avant les contrôles éventuellementeffectués. Cet accord comporte le payement, pourla période d’illégalité, d’un impôt de substitutionde l’IRPEF, de l’IRPEG, de l’IRAP, de la TVA etdes charges sociales de l’ordre du 8% du coût dutravail irrégulier utilisé et déclaré, sans applicationde sanctions et d’intérêts.

Enfin, les mesures prévoient des interventions enfaveur des travailleurs qui s’engagent dans leprogramme d’émersion. Il s’agit d’un impôt desubstitution des prélèvements normalement opéréssur les revenus des personnes physiques (IRPEF),se chiffrant à 6% pour la première année, 8% pourla deuxième année et 10% pour la troisième année;de l’exclusion des contributions sociales quigravent sur les travailleurs; de l’extinction desdettes fiscales et des charges sociales liées autravail irrégulier à travers le payement d’unecontribution de substitution.

Afin d’évaluer si les mesures constituent des aidesd’Etat au sens de l’article 87, paragraphe 1er, dutraité CE, la Commission a vérifié si elles procu-rent un avantage à ses bénéficiaires, en favorisantcertaines entreprises ou certaines productions, si

cet avantage découle d’aides accordées par l’Etatou au moyen de ressources d’Etat et si les mesuresen cause sont susceptibles d’affecter les échangesentre les Etats membres. Si l’un de ces critèresn’est pas rempli, la mesure ne peut pas êtrequalifiée d’aide d’Etat. Il s’agit d’une appréciationobjective que la Commission effectue avant de sepencher sur l’analyse de l’aide. Comme l’a préciséle Tribunal de première instance, «la notion d’aideest une notion objective et fonction de la seulequestion de savoir si une mesure étatique confèreou non un avantage à une ou certaines entre-prises» (1). Si les mesures notifiées par les Etatsmembres ne constituent pas des aides d’Etat auxsens de l’article 87, paragraphe 1er, en d’autrestermes, la Commission ne doit pas se pencher surleur compatibilité avec le marché commun.

Parmi les critères d’examen mentionnés, celui dela spécificité est à la base de la distinction entreaide d’Etat et mesure générale. En effet, au sensdudit article 87, afin d’être qualifiées d’aide d’Etatles interventions étatiques doivent favoriser«certaines entreprises ou certaines productions».C’est pourquoi la généralisation de l’intervention,notamment à tout le territoire italien, constitue unchangement fondamental par rapport aux régimesd’aides approuvés par la Commission en 1999 et2000 (2). Cela n’aurait toutefois pas suffit pourqualifier de générale les mesures notifiées parl’Italie.

La Communication de la Commission sur l’appli-cation des règles relatives aux aides d’Etat auxmesures relevant de la fiscalité directe des entre-prises précise la distinction entre les notions d’aided’Etat et de mesure générale: «les mesures fiscalesouvertes à tous les acteurs économiques opérantsur le territoire d’un Etat membre constituent enprincipe des mesures générales» (3). Ces mesuresdoivent être effectivement ouvertes à toutes lesentreprises sur la base d’une égalité d’accès et leurportée ne peut être de facto réduite, par exemple,par le pouvoir discrétionnaire de l’Etat dans leuroctroi ou par d’autres éléments qui restreignentleur effet pratique.

La spécificité peut être appréciée par référence àcertains éléments, tels que, la taille de l’entrepriseconcernée ou son secteur d’activité. Cette spécifi-cité peut aussi se manifester à différents niveaux:au niveau du dispositif même de la mesure,lorsqu’elle désigne certains bénéficiaires spécifi-ques; au niveau de l’application du dispositif,



(1) Arrêt du 27 janvier 1998, affaire T-67/94, Recueil p. II-1.(2) Cf. supra, note 2, p. 86.(3) Communication de la Commission sur l’application des règles relatives aux aides d’Etat aux mesures relevant de la fiscalité

directe des entreprises, point 13 (JO C 384 du 10.12.1998).

lorsque la mesure attribue aux autorités publiquesun pouvoir discrétionnaire; au niveau du résultat àatteindre par la mesure qui, bien que générale dansson dispositif, pourrait concentrer ses effets etavantager de fait certaines entreprises ou certainesproductions.

Les mesures approuvées par la Commission le 13novembre 2001 sont susceptibles de s’appliquer àtoutes les entreprises, dans tous les secteurs et surtout le territoire italien. Les pouvoirs publics nedisposent d’aucun pouvoir discrétionnaire dans samise en œuvre en dehors de la simple gestion d’un

budget selon des critères objectifs. Par ailleurs, cesmesures sont tout à fait atypiques, s’adressant à desbénéficiaires qui sont a priori complètementinconnus. Ainsi, elles n’établissent aucune discri-mination systématique ni au niveau du dispositif, endésignant des bénéficiaires spécifiques, ni auniveau de son application, en attribuant aux auto-rités publiques des pouvoirs discrétionnaires.

C’est alors sur la base de ces éléments que laCommission a considéré que les mesures ne cons-tituent pas des aides d’Etat et elle les a qualifiéesde mesures générales.


State aid

Denmark – Commission approves grants to large energy consumers

Madeleine INFELDT, Directorate-General Competition, unit G-2

On 6 June 2001 the Commission decided not toraise any objections to the extension of a schemecomprising measures in favour of companies withhigh energy consumption, and therefore a highCO2 and energy tax burden.

A brief description of the basic features of theDanish green tax scheme is necessary in order toplace the notified extension of the scheme in itscontext. The core of the green tax package is theimposition of a CO2 tax on energy products andelectricity. The tax rate is related to the carboncontent of the energy product. In the case of elec-tricity, the tax rate is related to the carbon contentof coal, since most power stations in Denmark arecoal-fired. When fuel is used for productionprocesses the CO2 tax rate is DKK 100 (abouti 13.40) per tonne CO2 emitted, and when fuel isconsumed for space heating and hot water, the sumof the CO2 tax and the energy tax due is DKK 780(about i 104.80) per tonne as from 1 January2002.

The Danish authorities have always consideredthat companies with particularly high energyconsumption need partial refunds of the CO2 tax inorder to maintain their international competitive-ness. These refunds are granted under a systembased on the concept of ‘heavy’ and ‘light’ produc-tion processes, referring to their energy inten-sity (1). There is an exhaustive process list annexedto the law containing all processes considered to be‘heavy’ (currently 35). The Danish authoritiesattempt to avoid distortions of competition sincecompeting products can be produced with more orless energy-intensive processes. Thus, certainprocesses are not included in the list, although theywould have met the criteria, and vice-versa. Theprocess list is revised annually to take account ofsuch effects and of technological developments.

All production processes not contained in theprocess list are considered to be light processes. Insome cases, space heating and hot water may beconsidered part of a light production process. Forlight processes the refund amounts to 10% of thetax. This refund is available to all VAT registeredcompanies and has been considered to constitute ageneral measure. For heavy processes the refund

amounts to 75% of the tax. This refund only bene-fits certain companies, and has therefore beenconsidered to be State aid.

The possibility to enter voluntary agreements withthe authorities is only available to companies withheavy processes and to the most energy-intensiveof those with light processes. Under such agree-ments, companies undertake to reduce their emis-sions by improving the energy efficiency of theirproduction processes. In return they receive anadditional refund of the CO2 tax, so that the totalrefunds cover 97% of the tax for companies withheavy processes, and 32% of the tax for companieswith light processes (the basic refund plus 22%).These refunds have also been considered to consti-tute State aid.

As a part of the green tax package implemented in1996, companies had to start paying a CO2 tax andan energy tax on fuels used for space heating andhot water. These taxes were phased in during a firstperiod running from 1996 to 1998. In 1998, theDanish authorities undertook a major adjustmentof the tax system, whereby the energy tax on elec-tricity and fuels used for space heating and hotwater was to be increased by 20% on average. Thephasing in of this increase began mid 1998 and wasto be completed by the end of 2001.

New voluntary agreements for spaceheating and hot water

An evaluation undertaken in 1998-1999 showedthat the actual tax burden on the energy-intensivecompanies that had entered voluntary agreementswas still considerably higher than expected. Themain cause was the tax burden resulting fromenergy consumption for space heating and hotwater, which was 50% higher than estimated. TheDanish authorities therefore proposed to allowcompanies to conclude additional voluntary agree-ments in order to receive grants covering 22% ofthe amount of CO2 and energy taxes due on fuelsused for space heating and hot water. The refundwould be available both to companies with lightprocesses and companies with heavy processes,although the criteria would be slightly different.



(1) The process list is drafted on the basis of a statistical assessment of energy-intensity of production processes. A production processis considered energy-intensive for the purpose of the list if a tax of DKK 50 per ton CO2 emitted implies a financial burden onproduction costs exceeding 3% of the value added and exceeding 1% of the production value.

As a counterpart, they would have to undertakeinvestments improving their energy efficiencywith regard to space heating and hot water use.

Assessment

The Commission assessed the Danish scheme onthe basis of the Community guidelines on state aidfor environmental protection (1), in particularsection E.3.2 which sets out the rules applicable toall operating aid in the form of tax reductions orexemptions. The Commission noted that therefunds to be granted in return for the voluntaryagreements for space heating and hot water relatednot only to the CO2 tax, but also to the energy tax,for which no refund had been granted before.Therefore, the fact that a refund was to be grantedfor the energy tax did not fulfil the requirementunder point 51.2 (b) of the guidelines, that the“derogation for the firms concerned must havebeen decided on when the tax was adopted”.However, point 52 of the guidelines states thatwhere an existing tax is increased significantly andwhere the Member State concerned takes the viewthat derogations are needed for certain firms, theconditions set out in point 51.1 are applicable byanalogy. In this case, the Danish authorities in1998 had decided to increase the energy tax ratessignificantly, namely by 20% on average.

The CO2 tax, being a tax for which refunds wereforeseen from the beginning, fulfilled the require-

ment in point 51.2 (b). The CO2 tax scheme hadbeen shown to have a positive environmentaleffect in the form of a 3.8 % reduction of emissionsas compared to the 1988 levels, and it thereforefulfilled the criterion on the environmental effectin point 51.2 (a).

Next, both refunds were assessed under point51.1 (a), and were found to comply with therequirements. The modification permitted compa-nies with high energy consumption for spaceheating and hot water to conclude voluntary agree-ments with the Energy Agency. The new voluntaryagreements would be subject to the same rulescurrently applicable to voluntary agreementslinked to energy consumption for productionprocesses. As a counterpart for the tax refundsgranted, companies would be under a strict obliga-tion to undertake investments to improve theirenergy efficiency. In addition, the Energy Agencyhas extensive powers to monitor the fulfilment ofthe obligation and to penalise companies that donot conform.

Since these measures in favour of companies withhigh energy consumption complied with theguidelines on State aid for environmental protec-tion, the Commission was able to grant the Danishscheme a 10-year exemption under Article87(3)(c) of the EC Treaty.


State aid

(1) OJ C 37, 3.2.2001, p. 10.

Ireland – Commission approves a support granted bythe Irish government to the Electricity Supply Board in compensationfor an obligation to generate electricity out of peat

Brice ALLIBERT, Directorate-General Competition, unit G-2

The European Commission decided on 30 Octoberto approve support granted by the Irish govern-ment to the Electricity Supply Board (ESB) tocompensate for the requirement imposed on ESBby the State to have in its possession a certainquantity of electricity generated from peat.

In order to ensure a level of security of electricitysupply in Ireland, the Irish Government plans toput an obligation on ESB to have at its disposal aspecific quantity of electricity from generatingstations which use peat as their primary energysource. This quantity will not exceed 15% of theoverall primary energy necessary to produce theelectricity consumed in Ireland on an annual basis.

ESB has examined a number of industrial optionsthat could allow it to fulfil this obligation in thenext years while meeting the Community and Irishsafety and environment regulations. It was decidedthat the most economical option was to acceleratethe closure of the six existing peat powered plantsand replace them by two new and more efficientones.

Although the new plants will be more efficient, thecost of the electricity that they will generate willstill be much above the average electricity marketprices, resulting in losses for ESB.

The support notified by the Irish authorities to theCommission aims at compensating the chargesincurred by ESB in relation to the fulfilling of the

obligation. The compensations are based on thedifference between the generation cost for elec-tricity out of peat and the mean electricity marketprice on the production market, as computed eachyear by the Irish electricity system regulator. In thecoming years, before the planned total openingmarket of the Irish electricity market, the meanmarket price benchmark will be replaced by anestimate of a best new entrant generated electricityprice. This price will be established annually underthe control of the Irish electricity system regulator.

The compensations will be financed through a levyon the connection to the electricity grid. The levywill vary depending on whether the holder of theconnection is a domestic or a commercialconsumer.

It was estimated by the Irish authorities thatcompensations should amount to a total of approx-imately 570 Mi for the 2001-2019 period, with anapproximate mean value of 30 Mi per year.

The Commission decided that in the event that thesystem constituted a State aid, it could be author-ised as a compensation for a service of generaleconomic interest as regards security of supplyaccording to Article 86(2) of the EC Treaty, in thelight of Articles 3(2) and 8(4) of Directive 96/92/EC of the European Parliament and of the Councilconcerning the common rules for the internalmarket for electricity.



United Kingdom – Commission approves UK government reimbursableadvance to Rolls-Royce for the development of two new engines

Brice ALLIBERT, Directorate-General Competition, unit G-2

The European Commission decided on 30 Octoberto approve the United Kingdom proposal to grantRolls-Royce plc a 250 million GBP reimbursableadvance for the development of two new largeaircraft engines, the TRENT 600 and TRENT 900.

These two engine projects are very challengingturbomachine programmes as they will have tocomply for instance with very strict pollutantemission, fuel consumption, safety and noise regu-lations, while keeping a reasonable weight.

The advance will be reimbursed by Rolls-Royce tothe United Kingdom Government in case of successof the programme, based on a levy reflecting enginedeliveries and maintenance and support activity.

The Commission has analysed the project in thelight of the community framework for State aid forresearch and development. It concluded in partic-ular that the project eligible costs were in line withthe framework criteria, that the aid intensity wascompatible with the threshold applicable to reim-bursable advances in relation to precompetitivedevelopment activity, and that the aid had a clearincentive effect, especially in view of the ambitionand the important technological challenges carriedby the programme. The Commission concludedthat the aid project was in line with the frameworkand could therefore be authorised in application ofArticle 87(3)c of the EC Treaty.


State aid

Germany – Commission takes two final partially negative decisionswith recovery obligation with regard to aid to two sawmills inMecklenburg-Vorpommern

Anne FORT, Directorate-General Competition, unit H-2

On 15 January 2002 the Commission decided toclose, with two partially negative decisions, theprocedures laid down in Article 88(2) EC withregard to aid to Pollmeier GmbH Malchow and aidto Klausner Nordic Timber GmbH & Co. KG.

In the course of 1999, the Commission receivedseveral complaints relating to aid in favour of theestablishment of new investments in the sawmillindustry in Germany. The complainants expressedtheir concern about the distortive effect due to thenew large capacities that threaten the structure ofthe sawmill sector, characterised mostly by SMEs.The complaints concerned in particular regionalaid in favour of the establishment of a new sawmillin Malchow by the company Pollmeier GmbHMalchow and the creation and the extension of asawmill in Wismar by the company KlausnerGmbH & Co. KG.

In both cases Germany has alleged that the invest-ment aid was granted on the basis of regional aidschemes approved by the Commission. Bothprojects have benefited from the bonus granted toSMEs and were granted aid with an intensityabove 35%. However the Commission had doubtswhether the aid complied with the conditions ofthe schemes and in particular whether the benefi-ciaries of the aid were genuine SMEs.

The issue at stake was the extent of the relevantundertaking beneficiary of the aid. For thepurposes of competition law, undertakings are tobe identified with ‘single economic units’ asdefined by the ECJ in its case-law (see ECJ Case of14.11.1984, Intermills/Commission, 323/82, ECR3808). The concept of an undertaking encom-passes every entity engaged in an economicactivity, regardless of the legal status of the entity.To define the relevant undertaking, it is necessaryto examine various factors such as theshareholding of the companies, the identity of themanaging directors and the degree of economicintegration.

The Commission therefore opened the formalinvestigation procedure of Article 88(2) EC withregard to aid to Pollmeier GmbH Malchow inMarch 2001 and with regard to Klausner NordicTimber GmbH & Co. KG in June 2001.

Pollmeier GmbH Malchow is a company of thePollmeier group. The Pollmeier group which wasestablished in the mid-80s in Rietberg is composedof several companies all linked through a commonmain shareholder, Ralf Pollmeier. The Commis-sion has considered that the beneficiary of the aidcould not be considered as being the sole legalentity Pollmeier GmbH Malchow. In view of theownership structure and the degree of economicintegration between the different companies of thegroup, the beneficiary was defined as comprisingthe European and the American sawmills of thegroup.

At the time of the granting of the aid in 1998, thebeneficiary did not have the SME status as definedby the Commission recommendation of 3 April1996 concerning the definition of small andmedium sized enterprises (OJ L 107 of 3.04.1996,p. 4). Therefore it was not entitled to benefit frommeasures with an aid intensity of 48.18% whichexceeds the maximum aid intensity allowed forbig companies in Mecklenburg-Vorpommernaccording to the German regional aid map. Conse-quently aid of i 3 650 860 (corresponding to theadditional aid intensity of 13.18% in excess of theregional aid ceiling of 35%) had to be assessed asnew aid. This aid could not be justified by anyregional problem since it exceeded the regional aidceiling; nor could it be justified on other grounds.Therefore the Commission concluded that the aidwas incompatible and closed the formal investiga-tion procedure with a partially negative decision. Italso decided that the aid had to be recovered fromits recipient.

Klausner Nordic Timber GmbH & Co. KG is acompany 100% owned by Fritz Klausner. In 1997it established a new sawmill plant in Wismar andextended the plant in 1998. Fritz Klausner alsoholds shares in other companies active in thewood-processing industry and in particular inKlausner Holz Thüringen GmbH & Co. KG whichoperates a sawmill in Friesau. The Commissionhas considered that the beneficiary of the aid couldnot be limited to the legal entity Klausner NordicTimber GmbH & Co. KG but also encompassesKlausner Holz Thüringen GmbH & Co. KG. Infor-mation from the web-sites of the companies aswell as information from competitors have shown



that both companies are linked through commonshareholders and managers and that they are actingon the market as one player.

In 1997 and 1998 when the different measures forthe creation of the sawmill in Wismar weregranted, the beneficiary as defined above had theSME status according to the Commission recom-mendation. Therefore the Commission concludedthat aid with an intensity of 43.2% (including theSME bonus) of eligible costs of i 22.4 millionwas covered by approved aid schemes and consti-tuted existing aid. The aid granted in 1998 for theextension project and representing an aid intensityof 48.58% of eligible costs of i 11.8 million wasalso covered by approved aid schemes.

In 1999 the beneficiary benefited from two furtheraid measures. At the time of award of thesemeasures, the beneficiary had lost its SME status.Therefore the Commission considered that theguarantee to secure a loan of i 29 750 000 with an

aid element of 0.5% was not covered by anapproved aid scheme and that it did not fulfil thecriteria to be considered compatible with thecommon market. The Commission also concludedthat part of an investment tax premium for 1999exceeding i 2 027 982 was not covered by anapproved aid scheme and did not fulfil the criteriato be considered compatible. Consequently theCommission closed the formal investigationprocedure with a partially negative decision andordered the recovery of the incompatible aid.

In both cases big enterprises were granted aidexceeding the maximum allowable aid for bigenterprises. These cases have to be seen inconjunction with other cases where the Commis-sion wants to ensure that legal arrangements inwhich separate legal units form an economic groupmuch stronger than an SME are not accepted inorder that only genuine SMEs benefit from morefavourable rules.


State aid

Information Section

Contents

101 Organigramme — Direction générale Concurrence

103 New documentationa) Speeches and articles — 26 September 2001-31 December 2001b) Publications (new or appearing shortly)

105 Press releases on competition — 1 October 2001-14 January 2002

110 Court of Justice/Court of First Instance —new competition cases before the Court - 24 September 2001-14 December 2001

112 Index of cases covered in this issue of the Competition Policy Newsletter


Organigramme — Direction générale Concurrence

Télécopieur central: 02 295 01 28

Directeur général Alexander SCHAUB 02 2952387/02 2958819

Directeur général adjointplus particulièrement chargé des Directions C et D Jean-François PONS 02 2994423/02 2995186

Directeur général adjointplus particulièrement chargé des Directions E et F Gianfranco ROCCA 02 2951152/02 2967819

Assistants du Directeur général Nicola PESARESI 02 2992906/02 2992132Bernhard FRIESS 02 2956038/02 2990008

Directement rattachés au Directeur général:1. Personnel, Budget, Administration, Information Stefaan DEPYPERE 02 2990713/02 29502102. Questions informatiques Javier Juan PUIG SAQUES 02 2968989/02 2965066

Auditeur interne Robert EVANS 02 2950811

DIRECTION APolitique de concurrence, Coordination, AffairesInternationales et relations avec les autres Institutions Kirtikumar MEHTA 02 2957389/02 2952871

Conseiller Juan RIVIÈRE MARTI 02 2951146/02 2960699Conseiller Georgios ROUNIS 02 2953404

1. Politique générale de la concurrence, aspectséconomiques et juridiques Bernd LANGEHEINE 02 2991855/02 2956667Chef adjoint d’unité Kris DEKEYSER 02 2954206

2. Projets législatifs et règlementaires; relationsavec les Etats membres Emil PAULIS 02 2965033/02 2995470Chef adjoint d’unité Paolo CESARINI 02 2951286

3. Politique et coordination des Aides d’Etat Robert HANKIN 02 2959773/02 29616354. Affaires internationales Yves DEVELLENNES 02 2951590/02 2995406

DIRECTION BTask Force ‘Contrôle des opérations de concentrationentre entreprises’ Götz DRAUZ 02 2958681/02 2996728

Télécopieur du Greffe Concentrations 02 2964301/02 2967244

1. Unité opérationnelle I Claude RAKOVSKY 02 2955389/02 29537312. Unité opérationnelle II Francisco Enrique GONZALEZ DIAZ 02 2965044/02 29653903. Unité opérationnelle III Dietrich KLEEMAN 02 2965031/02 29993924. Unité opérationnelle IV Paul MALRIC SMITH 02 2959675/02 29649035. Unité chargée du suivi de l’exécution Wolfgang MEDERER 02 2953584/02 2955169

DIRECTION CInformation, communication, multimédias Jürgen MENSCHING 02 2952224/02 2955893

1. Télécommunications et Postes,Coordination Société d’information Pierre BUIGUES 02 2994387/02 2954732— Cas relevant de l’Article 81/82 Suzanna SCHIFF 02 2957657/02 2996288— Directives de libéralisation, cas article 86 Christian HOCEPIED 02 2960427/02 2958316

2. Médias, éditions musicales Herbert UNGERER 02 2968623Chef adjoint d’unité David WOOD 02 2951461

3. Industries de l’information, électronique de divertissement Cecilio MADERO VILLAREJO 02 2960949/02 2965303



DIRECTION DServices Enzo MOAVERO MILANESI 02 2953427/02 2951490

1. Services financiers (banques, assurances) David WOOD 02 29514612. Transports et infrastructures des transports Joos STRAGIER 02 2952482/02 2995894

Chef adjoint d’unité Maria José BICHO 02 29626653. Commerce et autres services Lowri EVANS 02 2965029/02 2965036

DIRECTION ECartels, industries de base et énergie Angel TRADACETE 02 2952462/02 2950900

1. Cartels Georg DE BRONNET 02 2959268Chef adjoint d’unité Olivier GUERSENT 02 2965414

2. Industries de base Nicola ANNECCHINO 02 2961870/02 29564223. Energie, eau et acier Michael ALBERS 02 2961874/02 2960614

DIRECTION FIndustries des biens d’équipement et de consommation Sven NORBERG 02 2952178/02 2954592

1. Industries mécaniques et électriques et industries diverses Fin LOMHOLT 02 2955619/02 2957439Chef adjoint d’unité Carmelo MORELLO 02 2955132

2. Automobiles et autres moyens de transport et constructionmécanique connexe Eric VAN GINDERACHTER 02 2954427/02 2998634

3. Produits agricoles et alimentaires, produits pharmaceutiques Luc GYSELEN 02 2961523/02 2963781

DIRECTION GAides d’Etat I Loretta DORMAL-MARINO 02 2958603/02 2958440

1. Aides à finalité régionale Wouter PIEKE 02 2959824/02 2967267Chef adjoint d’unité Klaus-Otto JUNGINGER-DITTEL 02 2960376/02 2965071

2. Aides horizontales Jean-Louis COLSON 02 2960995/02 29625263. Transparence, contrôle, fiscalité directe des entreprises Reinhard WALTHER 02 2958434/02 2956661

DIRECTION HAides d’Etat II Humbert DRABBE 02 2950060/02 2952701

1. Acier, métaux non ferreux, mines, construction navale,automobiles et fibres synthétiques Maria REHBINDER 02 2990007/02 2963603

2. Textiles, papier, industrie chimique, pharmaceutiqueet électronique, construction mécanique et autressecteursmanufacturiers Jorma PIHLATIE 02 2953607/02 2955900

3. Entreprises publiques et services Ronald FELTKAMP 02 2954283/02 2960009

Conseiller auditeur Serge DURANDE 02 2957243Conseiller auditeur Karen WILLIAMS 02 2965575


Information section

New documentation

European CommissionDirectorate General Competition

This section contains details of recent speeches orarticles on competition policy given by Communityofficials. Copies of these are available fromCompetition DG’s home page on the World WideWeb at: http://europa.eu.int/comm/ competition/speeches/index_2001.html

Speeches by the Commissioner27 September 2001 – 31 December 2001

Does EC competition policy help or hinder theEuropean audiovisual industry? – Mario MONTI– British Screen Advisory Council – London –26.11.2001

Antitrust in the US and Europe: a History ofconvergence – Mario MONTI – General CounselRoundtable – American Bar Association – Wash-ington DC - 14.11.2001

Competition and Consumer: the case of Pharma-ceutical Products – Opening Speech – MarioMONTI – European Competition Day – Antwerp– 11.10.2001

Market definition as a cornerstone of EU Compe-tition Policy – Mario MONTI – Workshop onMarket Definition – Helsinki Fair Centre –Helsinki – 05.10.2001

Competition Policy and the Enlargement of theEuropean Union – Mario MONTI – FriedrichEbert Stiftung – Berlin – 27.09.2001

Speeches and articles,Directorate-General Competition staff,26 September 2001 – 31 December 2001

La politique européenne de concurrence dans lesecteur audiovisuel – Jean-François PONS –Conférence organisée par la présidence belge:L’audiovisuel public face aux phénomènes deconcentration et de diversification des services –Bruxelles – 15.11.2001

Collective Management and EU CompetitionLaw – David WOOD – Vth SGAE conference onintellectual property, competition and collectivemanagement – Madrid – 12.11.2001

La gestión colectiva y el Derecho de la compe-tencia comunitario – David WOOD – V confe-rencia de la SGAE sobre propiedad intelectual,competencia y gestion colectiva – Madrid –12.11.2001

Recent developments in commission policy andpractice – Maria REHBINDER – EC State AidConference – 02.11.2001

Network utilities – the EU institutions and theMember States – Pierre-André BUIGUES, OlivierGUERSENT, Jean-François PONS – Regulatingnetwork utilities: the European experience –Oxford University Press – 01.11.2001

Alternative models for future regulation – Pierre-André BUIGUES, Olivier GUERSENT, Jean-François PONS – Regulating network utilities: theEuropean experience – Oxford University Press –01.11.2001

Energy Liberalisation and EC Competition Law– Michael ALBERS – Fordham 28th AnnualConference of Antitrust Law and Policy – NewYork City – 26.10.2001

Continued focus on reform – Recent develop-ments in EC competition policy – AlexanderSCHAUB – Fordham Corporate Law Institute –Twenty-eighth Annual Conference On Interna-tional Antitrust Law and Policy – New York City –25.10.2001

How to Enforce & Promote competition in theGlobal Transport Market – Jean-François PONS– The 6th Annual European Shippers’ CouncilConference – Copenhagen – 24.10.2001

Sport et politique européenne de la concurrence:«règles du jeu» et exemples récents d’application– Jean-François PONS – Forum européen de laconcurrence – Bruxelles – 18.10.2001

Die Liberalisierung der Märkte für Gas undStrom und die Wettbewerbspolitik der Euro-päischen Kommission – Alexander SCHAUB –Düsseldorf – 10.10.2001

Les services d’intérêt économique général dansl’Union européenne: subsidiarité, contrôle etlibéralisation – Jean-François PONS – Paris –08.10.2001



Minderheitsbeteiligungen und personelle Ver-flechtungen zwischen Wettbewerbern – ZurAnwendung von Artikel 81 und 82 EG-Vertrag(Minority Shareholdings and Interlocking Direc-torships under Articles 81 and 82 EC) – AlexanderWINTERSTEIN/Enzo MOAVERO MILANESI –Rolfes/Fischer (Hrsg.), Handbuch der Euro-päischen Finanzdienstleistungsindustrie, FritzKnapp Verlag, Frankfurt a.M. – 01.10.2001

Europäisches Wettbewerbsrecht und anwalt-liches Berufsrecht (European competition rulesand professional rules of lawyers) – AlexanderSCHAUB – Parlamentarischen Abends desDeutschen Anwaltsvereins (DAV) – 26.09.2001

The Direction of Competition Policy: Recon-ciling National and International Objectives –Alexander SCHAUB – Annual Fall Conference onCompetition Law – Ottawa – 21.09.2001

Community Publications on Competition

New publications and publications coming upshortly

• XXX report on competition policy, 2000

• Competition policy newsletter, 2002, Number 2

Information about our other publications can befound on the on the DG Competition web site:http://europa.eu.int/comm/competition/publications

Except if otherwise indicated, these publicationsare available through the Office for Official Publi-cations of the European Communities or its salesoffices. Please refer to the catalogue number whenordering. Requests for free publications should beaddressed to the representations of the EuropeanCommission in the Member states or to the delega-tions of the European Commission in other coun-tries.

Some publications, including this newsletter, areavailable in PDF format on the web site.


Information section

Press releases1 October 2001 – 14 January 2002

All texts are available from the Commission’spress release database RAPID at: http://europa.eu.int/rapid/start/ Enter the reference(e.g. IP/02/14) in the ‘reference’ input box on theresearch form to retrieve the text of a pressrelease. Note: Language available vary fordifferent press releases.

ANTITRUST

IP/02/14 – Date: 07-01-2002Competition policy: Commission opens debate onblock exemption for licensing agreements

IP/02/13 – Date: 07-01-2002Competition policy: new Notice on agreements ofminor importance (de minimis Notice)

IP/01/1899 – Date: 21-12-2001High-speed Internet access: Commission suspectsWanadoo (France) of abusing its dominant posi-tion

IP/01/1898 – Date: 21-12-2001Rebalancing tariffs in Spain: Commission referscase to Court of Justice

IP/01/1892 – Date: 20-12-2001Commission fines ten companies for carbonlesspaper cartel

IP/01/1832 – Date: 14-12-2001Commission announces intention to clear partner-ship between Austrian Airlines and Lufthansa

IP/01/1797 – Date: 11-12-2001Commission fines six companies in zinc phos-phate cartel

IP/01/1796 – Date: 11-12-2001Commission fines five German banks for fixingthe price for the exchange of euro-zone currencies

IP/01/1781 – Date: 10-12-2001Commission publishes a study on the future of cardistribution

IP/01/1775 – Date: 10-12-2001Commission clears the creation of Eutilia andEndorsia electronic-marketplaces

IP/01/1743 – Date: 05-12-2001Commission fines five companies in citric acidcartel

IP/01/1740 – Date: 05-12-2001Commission fines Luxembourg brewers in marketsharing cartel

IP/01/1739 – Date: 05-12-2001The Commission fines brewers in market sharingand price fixing cartels on the Belgian market

IP/01/1738 – Date: 05-12-2001Antitrust decision against De Post – La Poste aimsto protect competitive postal service from themonopoly

IP/01/1713 – Date: 03-12-2001Commission proposes to approve the revisedTACA liner conference

IP/01/1659 – Date: 26-11-2001Commission approves agreements to reduceenergy consumption of dishwashers and waterheaters

IP/01/1641 – Date: 23-11-2001Commission settles Marathon case withThyssengas

IP/01/1625 – Date: 21-11-2001Commission imposes fines on vitamin cartels

IP/01/1529 – Date: 31-10-2001Commission names new Hearing Officer incompetition policy area

IP/01/1523 – Date: 30-10-2001Commission closes its investigation into FormulaOne and other four-wheel motor sports

IP/01/1476 – Date: 23-10-2001The Commission adopts a Decision on the moni-toring of relations between La Poste and mail-preparation firms in France

IP/01/1433 – Date: 19-10-2001IATA agrees to end the joint setting of cargo rateswithin the EEA

IP/01/1415 – Date: 15-10-2001Commission warns Deutsche Bahn about discrim-inating against a private competitor

IP/01/1394 – Date: 10-10-2001Commission imposes fine of nearly 72 million onDaimlerChrysler for infringing the EC competi-tion rules in the area of car distribution

IP/01/1387 – Date: 09-10-2001‘Competition and the Consumer – The Case ofPharmaceutical Products’ – European Competi-tion Day, Antwerp, 11 October



IP/01/1355 – Date: 02-10-2001Commission fines six companies in sodiumgluconate cartel

STATE AID

IP/01/1353 – Date: 02-10-2001Commission initiates formal investigation withrespect to proposed aid in favour of HamburgerAG.

IP/02/12 – Date: 07-01-2002Commission publishes second EU Scoreboard onState aid

IP/01/1884 – Date: 20-12-2001Scrapping of single hull oil tankers : Commissioninitiates investigation of proposed Italian State aid

IP/01/1883 – Date: 20-12-2001Airlines left without insurance following theattacks in the United States: the Commissionauthorises the aid measures introduced by Austria,Danmark, France, Germany and Spain

IP/01/1882 – Date: 20-12-2001Air transport: the Commission authorises rescueaid for the German air transport company LTU

IP/01/1879 – Date: 20-12-2001Commission approves substantial State aid toTechnologie Diesel Italia SpA

IP/01/1878 – Date: 20-12-2001Commission slightly reduces planned aid toDaimlerChrysler for new engine plant in Kölleda(Germany)

IP/01/1877 – Date: 20-12-2001Commission decides that asset sale of Gröditzer toGeorgsmarienhütte does not involve State aid

IP/01/1876 – Date: 20-12-2001Commission opens inquiry into Italian aid plannedfor Iveco’s Foggia plant.

IP/01/1875 – Date: 20-12-2001Commission decides three tax-aid schemes in theBasque provinces are incompatible with thecommon market

IP/01/1799 – Date: 11-12-2001Commission decides on reserves for nuclearpower plant decommissioning

IP/01/1798 – Date: 11-12-2001Commission rules that fiscal advantages to Italianbanks are incompatible with State aid rules

IP/01/1793 – Date: 11-12-2001Freight transport : Commission authorises Flemishfinancial support aiming at boosting the use ofinland waterways

IP/01/1792 – Date: 11-12-2001Commission authorises aid to the Spanish coalindustry

IP/01/1791 – Date: 11-12-2001Airlines without insurance after the events in theUS: Commission autorises aid put in place byBelgium and Sweden

IP/01/1672 – Date: 28-11-2001Commission extends state aid investigation intofurther restructuring of public shipyards in Spain.

IP/01/1682 – Date: 28-11-2001Airline insurance: the Commission authorises theemergency aid measures introduced by Portugaland Luxembourg following the attacks in theUnited States on 11 September

IP/01/1678 – Date: 28-11-2001The Commission opens investigation into UK aidschemes involving purchase and leasing of fishquotas

IP/01/1677 – Date: 28-11-2001Commission declares State aid to Telux Spezial-glas GmbH compatible with the EC Treaty

IP/01/1676 – Date: 28-11-2001Commission extends investigation of aid to porce-lain manufacturer Kahla in Thüringen

IP/01/1675 – Date: 28-11-2001Commission takes final positive decision on amanagement contract between GermanGeorgsmarienhütte and Gröditzer.

IP/01/1674 – Date: 28-11-2001Commission approves UK emission tradingscheme

IP/01/1673 – Date: 28-11-2001Commission initiates investigation with respect toproposed State aid in favour of Infineon Technol-ogies

IP/01/1627 – Date: 21-11-2001Commission decides that French tax aid scheme inthe form of tax exemptions for setting up branchesabroad is incompatible with ECSC Treaty

IP/01/1574 – Date: 13-11-2001Commission opens enquiry into Spanish aidplanned for Renaults’s Valladolid plant

IP/01/1575 – Date: 13-11-2001Commission calls for the tax discrimination infavour of French mutual and provident societies tobe brought to an end

IP/01/1573 – Date: 13-11-2001Commission opens investigation on ad-hoc aidgranted to the Portuguese public broadcaster RTP


Information section

IP/01/1572 – Date: 13-11-2001Commission rules that Italian measures for theregularisation of the underground economy do notinvolve state aid

IP/01/1558 – Date: 09-11-2001European Commission says DAT can use 125million Euro bridging loan granted to Sabena

IP/01/1554 – Date: 09-11-2001The Commission expresses its concerns regardingthe US support to its airlines and suggests adoptinga code of conduct

IP/01/1526 – Date: 30-10-2001BSE: Commission authorises aid measures forfarmers in Italy (Lombardia) and Germany(Hessen)

IP/01/1522 – Date: 30-10-2001Commission approves support granted by Irishgovernment to ESB in compensation for the obli-gation to use peat

IP/01/1521 – Date: 30-10-2001Commission approves Dutch grants of EURO 109million for two lithography projects calledFLUOR and EXTATIC

IP/01/1520 – Date: 30-10-2001Commission investigates exemptions from exciseduty on heavy oils used for alumina production inIreland, France and Italy

IP/01/1517 – Date: 30-10-2001Commission approves UK government loan toRolls-Royce for the development of two newengines

IP/01/1519 – Date: 30-10-2001Commission orders recovery of incompatible aidto German porcelain manufacturer Graf vonHenneberg

IP/01/1518 – Date: 30-10-2001Commission concludes that Dutch disposal systemfor car wrecks does not constitute State aid

IP/01/1473 – Date: 23-10-2001Airlines left without insurance following theattacks in the United States: the Commissionauthorises the United Kingdom to grant emer-gency aid measures

IP/01/1469 – Date: 23-10-2001Commission approves 1999 capital injection aswess as regional aid for Santana Motor(Andalucia)

IP/01/1432 – Date: 17-10-2001Green light to the bridging loan for SABENA inthe context of pre-bankruptcy proceedings

IP/01/1431 – Date: 17-10-2001The Commission authorises the United Kingdomto grant EURO 10 million to its coal industry

IP/01/1429 – Date: 17-10-2001Commission clarifies application of State aid rulesto Public Service Broadcasting

IP/01/1400 – Date: 10-10-2001Commission orders recovery of State aid fromZEMAG

IP/01/1358 – Date: 02-10-2001The Commission authorises aid to the Germancoal industry for 2002

MERGERS

IP/02/35 – Date: 11/01/2002Commission clears takeover of Birka Energi byFinland’s Fortum

IP/02/34 – Date: 11/01/2002Commission clears joint venture for the produc-tion and marketing of salt between K+S andSolvay

IP/02/22 – Date: 09/01/2002SEB/Moulinex: Commission refers Frenchaspects to France, approves deal for rest of Europesubject to conditions concerning nine countries

IP/02/4 – Date: 03/01/2002Commission approves the Eurex financial deriva-tives exchange

IP/01/1901 – Date: 21-12-2001Commission clears non-life insurance venturebetween Sampo, Varma-Sampo, Skandia andStorebrand

IP/01/1900 – Date: 21-12-2001Commission authorises EdF’s acquisition of partsof TXU Europe

IP/01/1893 – Date: 20-12-2001Commission clears the petrochemicals part of theShell/DEA and BP/E.ON transactions subject tocommitments

IP/01/1891 – Date: 20-12-2001Commission clears acquisition of Saint LouisSucre by Südzucker subject to commitments

IP/01/1881 – Date: 20-12-2001Commission clears Internet travel agency jointventure between Otto Versand and Sabre

IP/01/1845 – Date: 20-12-2001Commission clears Scandinavian digital satelliteTV broadcasting agreement between Nordic Satel-lite AB and Modern Times Group



IP/01/1846 – Date: 18-12-2001Commission clears take-over by Flextronics ofTelaris Södra

IP/01/1844 – Date: 17-12-2001Commission approves split-up of Concerttelecoms JV between British Telecommunicationsand AT&T

IP/01/1838 – Date: 17-12-2001Commission clears the acquisition of joint controlof Austrian utility STEWEAG by Verbund andESTAG.

IP/01/1805 – Date: 12-12-2001Commission clears acquisition of credit insurerNCM by Gerling

IP/01/1795 – Date: 11-12-2001Commission launches wide-ranging discussion onreform of merger control regime

IP/01/1767 – Date: 07-12-2001Commission clears Swedish joint venture betweenSaab and WM-Data for the provision of aerospaceand automotive consulting services

IP/01/1766 – Date: 07-12-2001Commission approves merger of French musicchannels Muzzik and Mezzo

IP/01/1753 – Date: 06-12-2001Commission clears joint venture between NorskHydro, and NutriSI in the field of specialty ferti-lisers

IP/01/1736 – Date: 05-12-2001Commission deepens probe into Bayer’s acquisi-tion of Aventis Crop Science

IP/01/1709 – Date: 30-11-2001Commission refers review of Haniel/Ytong deal inGerman building materials sector to Bundes-kartellamt, deepens probe into Dutch market

IP/01/1697 – Date: 29-11-2001Commission clears change from joint to solecontrol of ECT, subject to conditions

IP/01/1693 – Date: 29-11-2001Commission authorises creation of steel jointventure between Usinor, Duferco and Sogepa

IP/01/1692 – Date: 29-11-2001Commission authorises takeover of DMV byMannesmannröhren-Werke

IP/01/1691 – Date: 29-11-2001Commission clears Greek telecoms joint venturebetween electricity utility PPC (Greece) andItalian operator Wind

IP/01/1661 – Date: 26-11-2001Commission clears purchase of two DeutscheTelekom cable units by Blackstone and CDPQ

IP/01/1660 – Date: 26-11-2001Commission authorises the acquisition ofPowergen by German energy company E.ON

IP/01/1629 – Date: 21-11-2001Commission clears take-over of Haindl by UPM-Kymmene and Norske Skog

IP/01/1628 – Date: 21-11-2001Commission clears merger between steelproducers Usinor and Arbed/Aceralia, subject toundertakings

IP/01/1615 – Date: 20-11-2001Commission authorises acquisition by Enel ofEndesa’s subsidiary Viesgo.

IP/01/1609 – Date: 19-11-2001Commission approves takeover of MannesmannSachs by ZF Friedrichshafen.

IP/01/1592 – Date: 15-11-2001Commission clears «bancassurance» co-operationJV between Generali and Commerzbank inGermany

IP/01/1579 – Date:14-11-2001Commission clears sports rights venture betweenCanal+, RTL and Groupe Jean-Claude Darmon

IP/01/1578 – Date:13-11-2001Commission clears a joint venture between ICAAhold and Dansk Supermarked.

IP/01/1565 – Date: 13-11-2001Commission approves SCH’s acquisition of AKB

IP/01/1564 – Date: 13-11-2001Commission clears Flextronics buy of Xerox’soffice-equipment business

IP/01/1559 – Date: 13-11-2001Commission authorises Koch Industries to acquiresole control of KoSa

IP/01/1552 – Date: 08-11-2001Commission clears Nordea acquisition ofPostgirot

IP/01/1529 – Date: 31-10-2001Commission names new Hearing Officer incompetition policy area

IP/01/1516 – Date: 30-10-2001Commission prohibits acquisition of Sidel byTetra Laval Group

IP/01/1515 – Date: 30-10-2001Commission clears merger between Brazilian ironore producers subject to undertakings

IP/01/1511 – Date: 30-10-2001Commission authorises Cadbury Schweppesacquisition of Pernod Ricard’s soft drinks business


Information section

IP/01/1510 – Date: 29-10-2001The Commission authorises the takeover ofFiltrauto, a French manufacturer of automotivefilters, by its Italian rival Sogefi

IP/01/1509 – Date: 29-10-2001Commission clears HDPE joint venture betweenBP and Solvay and BP’s acquisition of Solvay’sPolypropylene business

IP/01/1499 – Date: 26-10-2001Commission clears acquisition of Beck’s byInterbrew

IP/01/1466 – Date: 24-10-2001Commission clears acquisition of Heller Financialby GE Capital

IP/01/1467 – Date: 23-10-2001Commission clears sale of Henkel’s Cognis toSchroder Ventures and Goldman Sachs

IP/01/1462 – Date: 22-10-2001Commission clears acquisition of Tempus by WPP

IP/01/1455 – Date: 19-10-2001Commission clears takeover of German industrialbearings maker FAG Kugelfischer by rival INA

IP/01/1438 – Date: 18-10-2001Commission refers to Bundeskartellamt review ofHaniel/Fels deal in German building materialssector, deepens probe into Dutch market

IP/01/1436 – Date: 17-10-2001Commission prohibits CVC’s acquisition ofAustrian fibre company LENZING

IP/01/1414 – Date: 12-10-2001Commission clears acquisition of UK magazinepublisher IPC by Time (AOL Time Warner)

IP/01/1393 – Date: 10-10-2001Commission prohibits acquisition of control ofLegrand by Schneider Electric

IP/01/1378 – Date: 08-10-2001Commission approves ferrous scrap joint venturebetween Scholz and ALBA

IP/01/1370 – Date: 05-10-2001Commission clears purchase of US medical devicemaker C.R. Bard by Tyco International

IP/01/1369 – Date: 05-10-2001Commission clears venture between TeleDanmark Mobile International and CMG WirelessData Solutions

IP/01/1347 – Date: 02-10-2001Commission clears purchase by Schmalbach-Lubeca of two beverage can plants of Rexam

IP/01/1346 – Date: 02-10-2001Commission clears joint venture between Norwe-gian companies Norske Skog and Peterson ingreaseproof paper

IP/01/1345 – Date: 02-10-2001Commission approves Telefonica/Ericsson jointventure



Court of Justice/Court of First InstanceNew cases before the Court

This information is extracted from the ‘New Cases’listing in the Proceedings of the Court of Justice andthe Court of First Instance. The proceedings can beconsulted on the website of the Court of Justice at:

Proceedings of the Court of Justice and the Courtof First Instance of the European Communities –New Cases:http://europa.eu.int/cj/en/act/index.htm

Please note: the listing is given in French, which isthe most up-to date version of the Proceedings. (Atthe time of going to press, the proceedings areavailable up to 14 December 2001).

For the French version of the proceedings of theCourt, see:

Les Activités de la Cour de justice et du Tribunalde première instance des Communautés Euro-péennes – Affaires introduites:http://europa.eu.int/cj/fr/act/index.htm

Affaires introduites devant la Couret le Tribunal dans le domainede la concurrence – 24 septembre au14 décembre 2001

Aff. C-287/01Commission / FranceManquement d’Etat – Défaut d’avoir mis envigueur, dans le délai prescrit, les dispositionsnécessaires pour se conformer à la directive 97/51/CE du Parlement européen et du Conseil, du 6octobre 1997, modifiant les directives 90/387/CEEet 92/44/CEE en vue de les adapter à unenvironnement concurrentiel dans le secteur destélécommunications

Aff. C-286/01Commission / FranceManquement d’Etat – Défaut d’avoir mis envigueur, dans le délai prescrit, la totalité des dispo-sitions nécessaires pour se conformer à la directive98/10/CE du Parlement européen et du Conseil, du26 février 1998, concernant l’application de lafourniture d’un réseau ouvert (ONP) à latéléphonie vocale et l’établissement d’un serviceuniversel des télécommunications dans unenvironnement concurrentiel

Aff. C-245/01RTL Television GmbH / NiedersächsischeLandesmedienanstalt für privaten RundfunkPréjudicielle – Niedersächsiches Oberver-

waltungsgericht – Interprétation de l’art. 11, par. 3,de la directive 89/552/CEE du Conseil, du 3octobre 1989, visant à la coordination de certainesdispositions législatives, réglementaires etadministratives des Etats membres relatives àl’exercice d’activités de radiodiffusion télé-visuelle, tel que modifié par la directive 97/36/CEdu Parlement européen et du Conseil, du 30 juin1997 – Publicité – Restrictions à l’interruption dela transmission de long métrages et films conçuspour la télévision – Finalité des restrictions(protection de la valeur artistique des films, ouautre finalité) – Critères à satisfaire pour échapperaux restrictions par la transmission de feuilletons

Aff. C-249/01Werner Hackermüller /Bundesimmobiliengesellschaft mbH (BIG) etWiener Entwicklungsgesellschaft mbH für denDonauraum AG (WED)Préjudicielle – Bundesvergabeamt – Interprétationde l’art. 1, par. 3, de la directive 89/665/CEE duConseil, du 21 décembre 1989, portant coordina-tion des dispositions législatives, réglementaires etadministratives relatives à l’application desprocédures de recours en matière de passation desmarchés publics de fournitures et de travaux –Personnes auxquelles des procédures de recourssont accessibles – Personnes ayant ou ayant eu unintérêt à obtenir un marché public – Personne dontl’offre aurait dû être mais n’a pas été écartée

Aff. C-252/01Commission / BelgiqueManquement d’Etat – Art. 11, par. 3 et 15, par. 2 dela directive 92/50/CEE du Conseil, du 18 juin1992, portant coordination des procédures depassation des marchés publics de services –Prolongation d’un contrat conclu entre legouvernement flammand et l’entreprise EurosenseBelfotop NV suite à une procédure négociée nonjustifiée – Observation de la Côte belge paraerotélédétection photographique

Aff. C-264/01AOK-Bundesverband e.a. / Ichthyol-Gesell-schaft Cordes, Hermani & Co.Préjudicielle – Oberlandesgericht Düsseldorf –Interprétation des art. 85 et suivants du traité CE(devenus art. 81 CE et suivants) et de l’art. 90 dutraité CE (devenu art. 86 CE) – Législationnationale autorisant les organismes de sécuritésociale et leurs associations à fixer des plafonds deremboursement pour les médicaments


Information section

Aff. C-269/01Flora Panepucci / Rina Iannarelli

Préjudicielle – Tribunale Civile e Penale dil’Aquila – Interprétation de l’art. 85, par. 1, dutraité CE (devenu art. 81 CE) – Fixation du tarif

minimum pour les prestations d’avocat – Aviscontraignant portant sur les honoraires d’avocatlors d’une demande de paiement par recours judi-ciaire d’injonction



Cases covered in this issue

Cartels

39 Commission fines five German banks forfixing the charges for the exchange ofeuro-zone currencies

36 Market-sharing and price-fixing cartels onthe Belgian beer market

38 Market sharing cartel on the Luxembourgbeer market

42 The carbonless paper cartel34 The citric acid cartel29 The sodium gluconate cartel30 The vitamin cartels40 The zinc phosphate market-sharing and

price-fixing cartel

Antitrust Rules

11 CEWAL (liner shipping)53 Covisint (car sector)56 DaimlerChrysler AG55 Endorsia (industrial goods and services16 Enichem/ICI54 Eutilia (electricity sector)61 IMS Health16 Olivetti/Digital19 SNELPD (postal sector)10 TACA (martime transport)

Mergers

16 AXA/GRE17 Allianz/AGF17 Allianz/Dresdner75 BP/E.ON74 CVC/Lenzing17 Generali/INA70 Gerling/NCM71 Grupo Villar Mir/EnBW/ Hidroeléctrica del

Cantábrico

76 Haniel/Fels and Haniel/Ytong71 Mitsui/CVRD/Caemi17, 69 Nordbanken/Postgirot69 Pirelli/Edizione/Olivetti/Telecom Italia73 Schneider/Legrand72 Shell/DEA and BP/E.ON73 Südzucker/Saint Louis75 Tetra Laval/Sidel16 Thyssen/Krupp70 UPM-Kymmene/Haindl and Norske Skog/

Parenco/Walsum16 Volvo/Renault

State Aid

93 Denmark – Commission approves grants tolarge energy consumers

97 Germany – Commission takes two finalpartially negative decisions with recoveryobligation with regard to aid to two sawmillsin Mecklenburg-Vorpommern

95 Ireland – Commission approves a supportgranted by the Irish government to theElectricity Supply Board in compensationfor an obligation to generate electricity outof peat

6 Italy – Banking sector: State aid cannot assistmergers

90 Italie – les interventions en faveur de larégularisation de l’économie souterraineconstituent des mesures générales

88 The Netherlands, Germany – Waste treatment,recycling and state aid

96 United Kingdom – Commission approvesUK government reimbursable advance toRolls-Royce for the development of twonew engines

© European Communities, 2002Reproduction is authorised, except for commercial purposes, provided the source is acknowledged.

Information section


BELGIQUE/BELGIË

Jean De LannoyAvenue du Roi 202/Koningslaan 202B-1190 Bruxelles/BrusselTél. (32-2) 538 43 08Fax (32-2) 538 08 41E-mail: [email protected]: http://www.jean-de-lannoy.be

La librairie européenne/De Europese BoekhandelRue de la Loi 244/Wetstraat 244B-1040 Bruxelles/BrusselTél. (32-2) 295 26 39Fax (32-2) 735 08 60E-mail: [email protected]: http://www.libeurop.be

Moniteur belge/Belgisch StaatsbladRue de Louvain 40-42/Leuvenseweg 40-42B-1000 Bruxelles/BrusselTél. (32-2) 552 22 11Fax (32-2) 511 01 84E-mail: [email protected]

DANMARK

J. H. Schultz Information A/SHerstedvang 12DK-2620 AlbertslundTlf. (45) 43 63 23 00Fax (45) 43 63 19 69E-mail: [email protected]: http://www.schultz.dk

DEUTSCHLAND

Bundesanzeiger Verlag GmbHVertriebsabteilungAmsterdamer Straße 192D-50735 KölnTel. (49-221) 97 66 80Fax (49-221) 97 66 82 78E-Mail: [email protected]: http://www.bundesanzeiger.de

ELLADA/GREECE

G. C. Eleftheroudakis SAInternational BookstorePanepistimiou 17GR-10564 AthinaTel. (30-1) 331 41 80/1/2/3/4/5Fax (30-1) 323 98 21E-mail: [email protected]: [email protected]

ESPAÑA

Boletín Oficial del EstadoTrafalgar, 27E-28071 MadridTel. (34) 915 38 21 11 (libros)Tel. (34) 913 84 17 15 (suscripción)Fax (34) 915 38 21 21 (libros),Fax (34) 913 84 17 14 (suscripción)E-mail: [email protected]: http://www.boe.es

Mundi Prensa Libros, SACastelló, 37E-28001 MadridTel. (34) 914 36 37 00Fax (34) 915 75 39 98E-mail: [email protected]: http://www.mundiprensa.com

FRANCE

Journal officielService des publications des CE26, rue DesaixF-75727 Paris Cedex 15Tél. (33) 140 58 77 31Fax (33) 140 58 77 00E-mail: [email protected]: http://www.journal-officiel.gouv.fr

IRELAND

Alan Hanna’s Bookshop270 Lower Rathmines RoadDublin 6Tel. (353-1) 496 73 98Fax (353-1) 496 02 28E-mail: [email protected]

ITALIA

Licosa SpAVia Duca di Calabria, 1/1Casella postale 552I-50125 FirenzeTel. (39) 055 64 83 1Fax (39) 055 64 12 57E-mail: [email protected]: http://www.licosa.com

LUXEMBOURG

Messageries du livre SARL5, rue RaiffeisenL-2411 LuxembourgTél. (352) 40 10 20Fax (352) 49 06 61E-mail: [email protected]: http://www.mdl.lu

NEDERLAND

SDU Servicecentrum UitgeversChristoffel Plantijnstraat 2Postbus 200142500 EA Den HaagTel. (31-70) 378 98 80Fax (31-70) 378 97 83E-mail: [email protected]: http://www.sdu.nl

ÖSTERREICH

Manz’sche Verlags- undUniversitätsbuchhandlung GmbHKohlmarkt 16A-1014 WienTel. (43-1) 53 16 11 00Fax (43-1) 53 16 11 67E-Mail: [email protected]: http://www.manz.at

PORTUGAL

Distribuidora de Livros Bertrand Ld.ªGrupo Bertrand, SARua das Terras dos Vales, 4-AApartado 60037P-2700 AmadoraTel. (351) 214 95 87 87Fax (351) 214 96 02 55E-mail: [email protected]

Imprensa Nacional-Casa da Moeda, SASector de Publicações OficiaisRua da Escola Politécnica, 135P-1250-100 Lisboa CodexTel. (351) 213 94 57 00Fax (351) 213 94 57 50E-mail: [email protected]: http://www.incm.pt

SUOMI/FINLAND

Akateeminen Kirjakauppa/Akademiska BokhandelnKeskuskatu 1/Centralgatan 1PL/PB 128FIN-00101 Helsinki/HelsingforsP./tfn (358-9) 121 44 18F./fax (358-9) 121 44 35Sähköposti: [email protected]: http://www.akateeminen.com

SVERIGE

BTJ ABTraktorvägen 11-13S-221 82 LundTlf. (46-46) 18 00 00Fax (46-46) 30 79 47E-post: [email protected]: http://www.btj.se

UNITED KINGDOM

The Stationery Office LtdCustomer ServicesPO Box 29Norwich NR3 1GNTel. (44) 870 60 05-522Fax (44) 870 60 05-533E-mail: [email protected]: http://www.itsofficial.net

ÍSLAND

Bokabud Larusar BlöndalSkólavördustig, 2IS-101 ReykjavikTel. (354) 552 55 40Fax (354) 552 55 60E-mail: [email protected]

NORGE

Swets Blackwell ASØstenjoveien 18Boks 6512 EtterstadN-0606 OsloTel. (47) 22 97 45 00Fax (47) 22 97 45 45E-mail: [email protected]

SCHWEIZ/SUISSE/SVIZZERA

Euro Info Center Schweizc/o OSECStampfenbachstraße 85PF 492CH-8035 ZürichTel. (41-1) 365 53 15Fax (41-1) 365 54 11E-mail: [email protected]: http://www.osec.ch/eics

B@LGARIJA

Europress Euromedia Ltd59, blvd VitoshaBG-1000 SofiaTel. (359-2) 980 37 66Fax (359-2) 980 42 30E-mail: [email protected]: http://www.europress.bg

|ESKÁ REPUBLIKA

ÚVISodd. PublikaciHavelkova 22CZ-130 00 Praha 3Tel. (420-2) 22 72 07 34Fax (420-2) 22 71 57 38URL: http://www.uvis.cz

CYPRUS

Cyprus Chamber of Commerce and IndustryPO Box 21455CY-1509 NicosiaTel. (357-2) 88 97 52Fax (357-2) 66 10 44E-mail: [email protected]

EESTI

Eesti Kaubandus-Tööstuskoda(Estonian Chamber of Commerce and Industry)Toom-Kooli 17EE-10130 TallinnTel. (372) 646 02 44Fax (372) 646 02 45E-mail: [email protected]: http://www.koda.ee

HRVATSKA

Mediatrade LtdPavla Hatza 1HR-10000 ZagrebTel. (385-1) 481 94 11Fax (385-1) 481 94 11

MAGYARORSZÁG

Euro Info ServiceSzt. István krt.12II emelet 1/APO Box 1039H-1137 BudapestTel. (36-1) 329 21 70Fax (36-1) 349 20 53E-mail: [email protected]: http://www.euroinfo.hu

MALTA

Miller Distributors LtdMalta International AirportPO Box 25Luqa LQA 05Tel. (356) 66 44 88Fax (356) 67 67 99E-mail: [email protected]

POLSKA

Ars PolonaKrakowskie Przedmiescie 7Skr. pocztowa 1001PL-00-950 WarszawaTel. (48-22) 826 12 01Fax (48-22) 826 62 40E-mail: [email protected]

ROMÂNIA

EuromediaStr.Dionisie Lupu nr. 65, sector 1RO-70184 BucurestiTel. (40-1) 315 44 03Fax (40-1) 312 96 46E-mail: [email protected]

SLOVAKIA

Centrum VTI SRNám. Slobody, 19SK-81223 BratislavaTel. (421-7) 54 41 83 64Fax (421-7) 54 41 83 64E-mail: [email protected]: http://www.sltk.stuba.sk

SLOVENIJA

Gospodarski VestnikDunajska cesta 5SLO-1000 LjubljanaTel. (386) 613 09 16 40Fax (386) 613 09 16 45E-mail: [email protected]: http://www.gvestnik.si

TÜRKIYE

Dünya Infotel AS100, Yil Mahallessi 34440TR-80050 Bagcilar-IstanbulTel. (90-212) 629 46 89Fax (90-212) 629 46 27E-mail: [email protected]

ARGENTINA

World Publications SAAv. Cordoba 1877C1120 AAA Buenos AiresTel. (54-11) 48 15 81 56Fax (54-11) 48 15 81 56E-mail: [email protected]: http://www.wpbooks.com.ar

AUSTRALIA

Hunter PublicationsPO Box 404Abbotsford, Victoria 3067Tel. (61-3) 94 17 53 61Fax (61-3) 94 19 71 54E-mail: [email protected]

BRESIL

Livraria CamõesRua Bittencourt da Silva, 12 CCEP20043-900 Rio de JaneiroTel. (55-21) 262 47 76Fax (55-21) 262 47 76E-mail: [email protected]: http://www.incm.com.br

CANADA

Les éditions La Liberté Inc.3020, chemin Sainte-FoySainte-Foy, Québec G1X 3V6Tel. (1-418) 658 37 63Fax (1-800) 567 54 49E-mail: [email protected]

Renouf Publishing Co. Ltd5369 Chemin Canotek Road, Unit 1Ottawa, Ontario K1J 9J3Tel. (1-613) 745 26 65Fax (1-613) 745 76 60E-mail: [email protected]: http://www.renoufbooks.com

EGYPT

The Middle East Observer41 Sherif StreetCairoTel. (20-2) 392 69 19Fax (20-2) 393 97 32E-mail: [email protected]: http://www.meobserver.com.eg

INDIA

EBIC India3rd Floor, Y. B. Chavan CentreGen. J. Bhosale Marg.Mumbai 400 021Tel. (91-22) 282 60 64Fax (91-22) 285 45 64E-mail: [email protected]: http://www.ebicindia.com

JAPAN

PSI-JapanAsahi Sanbancho Plaza #2067-1 Sanbancho, Chiyoda-kuTokyo 102Tel. (81-3) 32 34 69 21Fax (81-3) 32 34 69 15E-mail: [email protected]: http://www.psi-japan.co.jp

MALAYSIA

EBIC MalaysiaSuite 45.02, Level 45Plaza MBf (Letter Box 45)8 Jalan Yap Kwan Seng50450 Kuala LumpurTel. (60-3) 21 62 92 98Fax (60-3) 21 62 61 98E-mail: [email protected]

MÉXICO

Mundi Prensa México, SA de CVRío Pánuco, 141Colonia CuauhtémocMX-06500 México, DFTel. (52-5) 533 56 58Fax (52-5) 514 67 99E-mail: [email protected]

PHILIPPINES

EBIC Philippines19th Floor, PS Bank TowerSen. Gil J. Puyat Ave. cor. Tindalo St.Makati CityMetro ManillaTel. (63-2) 759 66 80Fax (63-2) 759 66 90E-mail: [email protected]: http://www.eccp.com

SOUTH AFRICA

Eurochamber of Commerce in South AfricaPO Box 7817382146 SandtonTel. (27-11) 884 39 52Fax (27-11) 883 55 73E-mail: [email protected]

SOUTH KOREA

The European Union Chamber ofCommerce in Korea5th FI, The Shilla Hotel202, Jangchung-dong 2 Ga, Chung-kuSeoul 100-392Tel. (82-2) 22 53-5631/4Fax (82-2) 22 53-5635/6E-mail: [email protected]: http://www.eucck.org

SRI LANKA

EBIC Sri LankaTrans Asia Hotel115 Sir ChittampalamA. Gardiner MawathaColombo 2Tel. (94-1) 074 71 50 78Fax (94-1) 44 87 79E-mail: [email protected]

UNITED STATES OF AMERICA

Bernan Associates4611-F Assembly DriveLanham MD 20706-4391Tel. (1-800) 274 44 47 (toll free telephone)Fax (1-800) 865 34 50 (toll free fax)E-mail: [email protected]: http://www.bernan.com

ANDERE LÄNDER/OTHER COUNTRIES/AUTRES PAYS

Bitte wenden Sie sich an ein Büro IhrerWahl/Please contact the sales office ofyour choice/Veuillez vous adresser aubureau de vente de votre choixOffice for Official Publications of the EuropeanCommunities2, rue MercierL-2985 LuxembourgTel. (352) 29 29-42455Fax (352) 29 29-42758E-mail: [email protected]: http://eur-op.eu.int

1/2001

Venta • Salg • Verkauf • Pvlèseiw • Sales • Vente • Vendita • Verkoop • Venda • Myynti • Försäljninghttp://eur-op.eu.int/general/en/s-ad.htm

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Competition DG's address on the world wide web:

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competition policy newsletter · cartel secrets qui ont été adoptées en 2001 (6), imposant des...

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