Changes at the European Commission
On Feb. 9, 2010, the new group of European Commissioners was approved by the
European Parliament, and took office on Feb. 10. They will remain in office
until Oct. 31, 2014.
The new European Commissioner for Competition (responsible for the
Directorate General for Competition (DG COMP), the part of the Commission
responsible for enforcing competition policy in the EU), is Joaquín Almunia from
Spain. He will work with a new Director-General for Competition, or day-to-day
functional head of DG COMP, Alexander Italianer from the Netherlands. In
addition to these senior personnel changes, the groups of Commission officials
dealing with state aid in the transport and energy sectors have been moved to DG
COMP from, respectively, the Directorate-Generals for Transport and Energy.
Almunia has spoken about his policy direction during his term of office. He
will "focus on fighting against cartels, preventing dominant companies from
abusing their market power in any sector or any country in Europe, and
maintaining a rigorous scrutiny of proposed mergers." This has been very much
the focus of recent Commissioners for Competition and reflects orthodox
competition policy in most jurisdictions, as well as EU law. In particular, it
is clear that fines for cartel infringements will remain high, despite the
economic crisis, and that economic analysis will continue to underpin
competition law decisions in the EU.
So far as concerns EU-specific issues, Almunia has indicated he will consider
whether there should be EU legislation on rules governing damages actions for
infringements of competition law in the EU. Proposed legislation on this issue
has been held up pending the installation of the new Commissioner, and it will
be interesting to see how Almunia takes it forward. However, in the absence of
EU harmonization, competition litigation is developing in the EU anyway, with
the UK in particular now a forum for numerous claims.
So far as concerns state aid, Almunia has indicated that the "most pressing
issue is to manage the financial crisis and its impact." Bailed-out banks will
be required to restructure, and Almunia has indicated it is important to ensure
a level playing field and avoid the "moral hazard" effect.
More generally, Almunia has indicated that companies must assume responsibility for their
behavior and take the necessary measures to prevent unlawful conduct. This is
yet another reminder that companies operating in the EU are expected to have
competition law compliance programs in place.
Several New EU "Block Exemptions" to Appear in 2010
EU "block exemptions" automatically exempt certain types of agreements from
the basic prohibition on anti-competitive agreements contained in Article 101 of
the Treaty on the Functioning of the European Union (TFEU). There will be
several developments in the area of block exemptions during 2010, that are
important for day-to-day business operations in the EU.
The most high-profile change will be the introduction of the new Vertical
Agreements Block Exemption (VABE), replacing the existing version that expires
May 31, 2010. It is likely that the changes will be evolutionary rather than
revolutionary, with the key change being the introduction of a buyer market
share threshold. This would mean the VABE will only apply if the market shares
of the buyer and seller on their respective markets are below 30%. Related
guidelines will also be produced.
Two more block exemptions expire at the end of 2010 – those relating to R&D
and specialization agreements. A review of these block exemptions and the
Commission's general guidelines relating to horizontal agreements has been
undertaken. The result is expected soon, and the guidelines in particular,
covering a range of horizontal cooperative arrangements, will be an important
document. There are also two specialist block exemptions that must be renewed
during the first half of 2010. These relate to vertical agreements in the motor
vehicle sector and certain types of agreements in the insurance sector.
Another Successful Appeal against a Regulator's Decision in the UK
On Feb. 11, 2010, the UK Competition Appeal Tribunal (CAT), by agreement with
the UK Competition Commission (CC) and third-party appellant CTS Eventim,
quashed the CC's report into the Ticketmaster/Live Nation merger. This followed
an appeal lodged by CTS Eventim on grounds of procedural fairness.
The CC cleared the merger in its report but CTS Eventim, which had, prior to
the merger announcement, reached an agreement with Live Nation to provide
ticketing services for the latter's live music events and venues in the UK,
brought an appeal to the CC on various grounds. One of the grounds was that it
had been denied a fair hearing. The CC, having considered the grounds, took the
view that the challenge based on lack of a fair hearing was arguable in the
circumstances of the case, and that it would not be efficient to argue this
issue before the CAT. It therefore asked the CAT to quash the report, so that
the CC would immediately be able to reconsider the case and report again.
This CAT proceeding is just one of a number of recent appeals to the CAT
against decisions of UK regulators in relation to mergers and market
investigations. Another high-profile example concerned the CC's report on the
British Airports Authority (BAA) airports market investigation. The CAT upheld
an appeal by BAA that the investigation was tainted by apparent bias on the part
of one of the members of the investigating team, and partially quashed the report. The CC
is seeking to appeal to the UK Court of Appeal.
In addition to victories in the CTS Eventim and BAA cases, third parties have
had recent successes in several other cases on appeal. It is therefore clear
that the authorities in the UK can successfully be challenged in relation to
merger and market investigation (as well as general competition law) decisions
and that possible grounds of appeal are wide. There is no doubt this will only
encourage others to try their hand.
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