ECN Brief
ECN Brief 01/2011
Table of contents
Enforcement & Cases
Legislation & Policy
Other issues of interest
ECN Members’ websites
ECN statistics
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Welcome to the sixth issue
of the
ECN Brief
Dear Reader,
Having closed the first year of the ECN Brief with the Special
Issue “A look inside the ECN”, we are happy to open the
second year of publication with news from December 2010
to February 2011. As in 2010, our objective is to inform
you about the activities of the ECN and its members and
to reflect the richness of antitrust enforcement actions
and policy within the Network.
In the present issue, next to important cases and other
developments, we report about sector inquiries and
market studies in many sectors directly relevant for the
consumers such as the Food Retail sector (Germany and
Italy), Energy (Czech Republic, Germany and Portugal),
Medicine prices (Latvia), Advertising (France and UK) and
Online Gambling (France). A survey on sectoral regulation
and competition in various sectors of the economy in
Finland is also presented.
The picture of the activities in the Network would not
be complete without mentioning the several public
consultations which have been recently opened giving
stakeholders the opportunity to make their views known
on policy initiatives.
The next issue of the ECN Brief will be published mid-May
2011. In the meantime, we wish you interesting reading.
DISCLAIMER:
This publication is a compilation of contributions from national competition authorities of the European Union and the Competition Directorate
General of the European Commission (“the Authorities”). Information provided in this publication is for information purposes only and does not
constitute professional or legal advice. The content of this publication is not binding and does not reflect the official position of any Authority.
Neither any Authority nor any person acting on its behalf is responsible for the use which might be made of information contained in this
publication. ISSN 1831-6107
KD-AH-11-001-EN-N
ENFORCEMENT & CASES
AUTHORITIES
oo Belgium: Authority imposes
Interim Measures on De
Beers
oo France: Fines for Cartel and
Abuse of Dominant Position
in Road Signs and Safety
Equipments Sector
oo Germany: Fines imposed on
Chemical Wholesalers’ Cartel
Greece: Technical Chamber of Greece (TEE) fined
for adopting a “minimum Cost for Construction
Projects”
On 22 December 2010, the Hellenic Competition Commission
found that the TEE’s conduct raised minimum fees for
architects and engineers, and it imposed a fine of € 60 000.
Read more
oo Italy:
Lithuania: Competition Council imposes Fines on 11
Producers of Orthopedic Products and their Association
oo Lithuania: Anticompetitive
Fines were imposed on 20 January 2011 for anticompetitive
agreements concerning prices, quantities of production, and
the sharing of funds received from the Compulsory Health
Insurance Fund between 2006 and 2010.
Read more
oo The Netherlands: Fines
The Netherlands: Competition Authority (NMa)
imposes Fines for Cartel Agreements in Flour Industry
- Cartel in Personal Care
Products Sector fined
- Binding Commitments in
Sicilian Power Prices Case
Insurance Pool Agreement
fined
for Insulated Glass
Manufacturers’ Cartel
oo Portugal: Authority prohibits
RPM affecting Hospital Public
Tenders
oo Spain:
- Opening of formal
Proceedings in Telecom Abuse
Case
- Monitoring closed in
Interchange Fees for Debit
and Credit Cards Case
oo Sweden:
- No further Action after
Commitments in Schneider
Case
- Cartel in Package Tour
Sector
oo United Kingdom: Decision in
Loan Pricing Case
COURTS
oo European Commission:
Judgment of the EU General
Court on E.ON Breach of
Seals’ Case
On 22 December 2010, 15 flour producers in the Netherlands,
Belgium and Germany were imposed fines totalling more
than € 80 000 000 for having participated in a cartel lasting
from 2001 to 2007.
Read more
Romania: Competition Council sanctions Romanian
Post for Abuse of Dominant Position
On 17 December 2010, the Romanian Post was fined
€ 26 000 000 for granting discriminatory tariff rebates in
respect of several postal services. The investigation was
initiated following complaints lodged at the Competition
Council.
Read more
Ireland: Competition Authority wins Beef Industry
(BIDS) Case
On 26 January 2011, after a long running saga involving one
High Court trial, one Supreme Court judgment, a judgment
from the European Court of Justice and the intervention of
the European Commission as amicus curiae, the Competition
Authority won the BIDS proceedings on the compatibility
with EU and Irish competition law of an agreement between
competitors to reduce capacity in the Irish beef processing
industry.
Read more
2
LEGISLATION & POLICY
oo Bulgaria: Authority adopts
France: Autorité de la concurrence consults on Draft
Guidance on its Method to set Fines for Antitrust Cases
oo EFTA: Authority adopts
The document is intended to foster transparency by stating
the different steps and elements according to which the
Autorité sets the fines on a case-by-case basis. The public
consultation is opened until 11 March 2011.
Read more
Block Exemption for certain
Categories of Agreements
Guidelines on Vertical
Restraints
oo Hungary: Hungarian
Competition Act recently
amended
oo Italy: Opinion of the
Authority on Draft Decree
on the Postal Services
Liberalization
oo The Netherlands:
Businesses factor in NMa’s
Merger Control and Cartel
Enforcement in their Conduct
oo Portugal: Competition
Authority aims at increasing
Transparency and Legal
Certainty in Antitrust
Proceedings
oo United Kingdom: Public
Consultation on the Office of
Fair Trading’s Annual Plan and
Publication of Business Plan
oo European Commission:
Public Consultation on
Collective Redress
Germany: Bundeskartellamt and Federal Network
Agency publish Joint Guidelines on the Award of Gas
and Electricity Concessions and Transfer of Network
Use
The publication of those Guidelines on 15 December 2010
offers guidance to energy companies and municipalities in a
sector where it is estimated that 20 000 concession contracts
awarded across Germany are currently expiring or will expire
in the coming years.
Read more
Romania: Competition Council adopts Guidelines on
Commitments Procedure
The guidelines enable undertakings which are parties to an
investigation to make voluntary commitments in order to
address issues which might constitute violations of Romanian
and EU competition law. In this context, the Authority
launched a market test on commitments on the joint selling
of commercial rights for football broadcasting.
Read more
Sector Inquiries/Market Studies
• Czech Republic: Energy Sector Inquiry about to be launched
• Finland: Second Competition Survey published
• France:
- Conclusions of Sector Inquiry into Online Advertising: Autorité identifies Dominant Positions
- Conclusions of Sector Inquiry into Online Gambling: Autorité makes Recommendations to Public Authorities
• Germany:
- Conclusions of Sector Inquiry into Electricity Generation and Wholesale: no Abuse
revealed
- Sector Inquiry launched into the Food Retail Market
• Italy: Sector Inquiry into the Food Retail Market currently ongoing
• Latvia: Conclusions of Sector Inquiry into Pricing System in the Medicine Market
• Portugal: Study on Motor Fuels sold in Motorways currently ongoing
• United Kingdom: Results of Market Study on Outdoor Advertising Industry published
3
OTHER ISSUES OF INTEREST
EVENTS
oo Czech Republic: Meeting
of the Heads of the Czech
and Slovak Competition
Authorities
oo Slovakia: Seminar on
Competition Protection and
Competition Law
Personalia
•Lithuania:
appointed
New
Chairman
•Malta: Acting Director General
of the Authority appointed
•Slovenia:
Acting
Director
appointed at the Authority
•European Commission: New
Chief Economist appointed
Bulgaria: Competition Authority (CPC) celebrates its
20th Anniversary in 2011
This milestone in the history of competition protection
in Bulgaria will be marked by a series of events organised
throughout the year. The culmination of the celebrations will
be the Jubilee Competition Day to be held in November 2011
on “Current Trends and Priorities of Competition Policy”.
Read more
Finland: Competition Authority’s Stakeholders
comment on the Agency’s Expertise and
Trustworthiness
A stakeholder survey on the Finnish Competition Authority
(FCA) carried out at the end of 2010 revealed that the agency
is generally considered competent, reliable and professional.
The study also provides ratings in relation to the performance
targets of the FCA. A similar study was conducted twice in the
past.
Read more
Poland: Seminar on Vertical Restraints in Warsaw on 5
April 2011
Annual Reports
Link to the Annual Reports of
all ECN Members
The seminar will include two discussion panels: “Analysis of
the effects on the market of vertical restraints” followed by
“Vertical restraints – A practitioner’s experience”.
Read more
CONTACTS
ECN members’ websites
ECN STATISTICS
Number of envisaged decisions by national competition
authority; types of envisaged decisions etc.:
http://ec.europa.eu/competition/ecn/statistics.html
Access to Commission
Cases
Case search
Training of Judges in EU
Competition Law
• List of beneficiaries 2009
• Call for Proposals 2011
© European Union, 2011. Reproduction is authorised provided the source is acknowledged.
This publication may contain links to other websites. Linked information is subject to use conditions, disclaimers, copyright and any other conditions
and limitations governing linked websites or otherwise applicable.
4
ENFORCEMENT & CASES
AUTHORITIES
• Greece: The Hellenic Competition Commission imposes € 60 000 in Fines on the Technical
Chamber of Greece for adopting a “minimum cost for construction projects”
On 22 December 2010, the Hellenic Competition Commission (HCC) fined the Technical Chamber of
Greece (TEE) € 60 000 for adopting a “minimum cost for construction projects”, thus, having the object
and the effect of increasing minimum fees for architects and engineers.
The HCC found that TEE, which is an “association of undertakings” in the sense of the competition
provisions, through decisions of its governing bodies, substituted the role of the State, without having
any regulatory power, by adopting a “minimum cost for construction projects”, which is used for the
calculation of architects’ and engineers’ fees.
The State has the right to regulate the minimum fees of civil engineers and architects for all private
construction projects. According to the relevant legislation two different methods are used for the
calculation of engineers’ fees. According to the first method, the fees are calculated on the basis of
the actual analytical cost/budget of the project which is in turn calculated on the basis of the prices for
each construction work as set by the State. According to the second method the budget of the project
is calculated on the basis of a so-called “Common Starting Price” per square metre set by the State by
Ministerial Decrees (“conventional budget”). Following two decisions of the Council of State issued in
2000 annulling the Ministerial Decrees setting the “Common Starting Price”, the State refrained from
adopting new Ministerial Decrees adjusting the “Common Starting Price”. In 2006 the TEE adopted a
decision setting a “presumed minimum construction cost” per square metre used to calculate the budget
of each private construction project, thus de facto replacing the above Ministerial Decrees setting the
“Common Starting Price”. After the adoption of the TEE decisions in 2006 and 2007, the “Common
Starting Price” of € 44 was increased to € 105 Euros for 2007, € 110 for 2008, € 115 for 2009 and € 118 for
2010, increasing thus accordingly the architects’ fee. Compliance with the TEE’s decisions was controlled
through a TEE electronic system for the calculation of architects’ and engineers’ fees .
The HCC considered that in such a context, TEE’s conduct aimed at, and resulted in, raising minimum
fees for architects’ and engineers’ fees. The HCC considered that such actions constitute very serious
infringements of the national and European competition rules in the market for services offered by
architects and engineers for private projects.
In addition to the aforementioned fine the HCC has also imposed on TEE several obligations, including
informing its members and the public about the HCC Decision and modifying its electronic system, so
that requests for the calculation of fees are accepted by the system, independently of the amount of the
declared cost per square metre.
See further: Press release (in English): http://www.epant.gr/news_details.php?Lang=en&id=89&nid=332
Text of the decision (in Greek): http://www.epant.gr/apofasi_details.php?Lang=gr&id=312&nid=627
• Lithuania: The Competition Council imposes Fines totalling € 854 205 on Producers of
Orthopedic Products and their Association
On 20 January 2011, the Lithuanian Competition Council fined 11 producers of orthopedic products –
UAB Actualis, UAB Idemus, UAB Ortobatas, UAB Ortopagalba, UAB Ortopedijos centras, UAB Ortopedijos
klinika, UAB Ortopedijos projektai, AB Ortopedijos technika, A. Astrauskas firm Pirmas žingsnis, SE
Vilnius University Child Hospital, SE Vilties žiedas – and the Association of Providers of Orthopedic and
Rehabilitation Services for concluding prohibited agreements in the market of orthopedic products.
5
The Competition Council found that the undertakings had concluded agreements concerning prices
of orthopedic products, quantities of production and had been sharing funds to be received from the
Compulsory Health Insurance Fund (CHIF) to compensate insured customers for expenditures related to
the acquisition of recoverable orthopedic products. These agreements, which lasted from 2006 to 2010,
were found to infringe Article 5 of the Law on Competition and Article 101 TFEU.
The agreements caused the distortion and restriction of competition in the market of recoverable
orthopedic products compensated for the benefit of the insured by the budget of the CHIF. The agreements
concerned inflicted damage upon the State budget, as the participants thereto have been applying noncompetitive prices, which further led to an inefficient use of the budget funds; therefore the National
Health Insurance Fund (NHIF), which operates under the aegis of the Ministry of Health, and has limited
resources, could provide services to much fewer patients. The agreements also incurred direct damage
to patients, as the companies supplying orthopedic products and acting in concert did not compete and
thereby induced higher prices and poorer quality of the products.
The investigation was triggered by information brought to the attention of the Competition Council by one
of the agreements’ participant (UAB Baltic Orthoservice), in return for immunity under the Competition
Council’s leniency program. The said company was found not liable and the investigation was terminated
in respect of it.
The Competition Council considered the infringement to be very serious due to its nature. In fixing the
fines, the Competition Council took into account the gravity of the infringement, its duration, mitigating
or aggravating circumstances, the role played by the undertakings in the infringement and their overall
size. The Competition Council considered as a mitigating circumstance the fact that the market of
recoverable orthopedic products falls under a special regulatory framework, and that this, to a certain
extent, determined the behaviour of the companies; fines for all undertakings were thus reduced by 20 %.
As a result the Competition Council imposed the following fines: Association of Providers of Orthopedic
and Rehabilitation Services € 289, UAB Actualis € 260, UAB Idemus € 71 825, UAB Ortobatas € 16 392,
UAB Ortopagalba € 15 465, UAB Ortopedijos centras € 65 685, UAB Ortopedijos klinika € 56 041, UAB
Ortopedijos projektai € 48 337, AB Ortopedijos technika € 476 280, A. Astrauskas firm Pirmas žingsnis €
98 963, SE Vilnius University Child Hospital € 1 534, SE Vilties žiedas € 3 417.
See further: Full text of the Competition Council’s decision (in Lithuanian)
• The Netherlands: The Competition Authority (NMa) imposes Fines totalling more than
€ 80 000 000 for Cartel in Flour Industry
On 22 December 2010, the NMa has imposed fines totalling € 81 600 000 on flour producers in the
Netherlands, Belgium and Germany. Fifteen undertakings gathering in different constellations have
shared the market among themselves or have concluded agreements in order to restrict competition.
These undertakings are responsible for the lion’s share of the Dutch market. The NMa takes strong action
against these cartel agreements, because they directly hurt consumers.
The flour market has long ceased to grow, because consumers have not increased their bread consumption.
However, the investigation has shown that in order for each to remain assured of a certain market share,
various flour producers shared the market between 2001 and 2007. This led to an agreement not to take
over each other’s customers, making it harder for those customers to negotiate better prices. In addition,
a competitor that did not take part in the cartel agreements was bought by the cartelists and removed
from the market. It also appeared that another competitor, which participated in the agreements, was
compensated for revenue losses on condition that he would not destabilise the cartel. Furthermore, a
complete flour mill in the south of the Netherlands was bought by a “middle man” or “agent”, and was
subsequently dismantled in order to prevent any new competitor from opening a new flour business on
those premises.
The following Dutch participants were involved in the cartel agreements: Meneba (fined € 9 000 000),
Ranks (fined € 13 100 000), Krijger (fined € 71 000 000) and Koopmans. The latter was not fined because
of prescription issues. The following Belgian participants were involved: Dossche (€ 22 .800 000), Ceres
(€ 12 900 000) and Brabomills (€ 4 600 000). The following German participants were also involved:
Werhahn (€ 3 900 000), Grain Millers (€ 2 800 000), Flechtorfer (€ 908 000), Gebr. Engelke (€ 7 700 000),
6
VK Mühlen (€ 2 300 000), Okermühle, Milser Mühle and Saalemühle (€ 392 000 each). Meneba, Werhahn
and Grain Millers applied for leniency with the NMa.
During the investigation, the NMa closely cooperated with other European competition authorities. The
Dutch, Belgian and German competition authorities assisted each other interviewing key players in their
countries and exchanged information obtained in the course of their respective investigations.
See further:
http://www.nmanet.nl/nederlands/home/Besluiten/Besluiten_2010/6306BLD.asp (in Dutch)
Press spokespersons: Ms. Barbara van der Rest-Roest at +31-70-330-3362 or +31-6-22793063 (outside
office hours), or Ms. Pauline Gras at +31-70-330-5068 or +31-6-54715245 (outside office hours).
Alternatively, you can send an email to the NMa press office at [email protected]
Corrigendum: this article has been corrected after publication in as much as it stated that Meneba, Werhahn and Grain Millers benefitted
from immunity. It should have read: “Meneba, Werhahn and Grain Millers applied for leniency with the NMa”.
• Romania: The Competition Council sanctions the Romanian Post with € 26 000 000 Fine for
Abuse of Dominant Position
On 17 December 2010, the Competition Council sanctioned the Romanian Post for the infringement of
Article 6 of the Competition Law no.21/1996 as amended and Article 102 TFEU and imposed a fine of €
26 000 000 as well as appropriate remedies in order to restore competition on the market.
The Competition Council’s investigation concerned the Romanian Post’s policy of granting tariff rebates in
respect of certain postal services. The investigation showed that between 2005 and 2009, the Romanian
Post has granted to one of its clients, Infopress Group SA, preferential treatment on the market of the
standard postal service of direct mail (also called Infadres service). This abusive behaviour extended
also to the market of the postal service for commercial correspondence. At the same time, Romanian
Post has granted discriminatory tariff rebates to intermediaries for the standard postal commercial
correspondence and Infadres services. The Competition Council concluded on the existence of an abuse
of dominance on the relevant markets analysed.
The remedies imposed by the RCC on the Romanian Post foresee on the one hand, an obligation of non
discrimination i.e. the application of equivalent contractual conditions for the provision of equivalent
services and on the other hand, an obligation of transparency providing for the publication of all the
offers of services supplied by the Romanian Post on the relevant market so that all the beneficiaries and
potential clients are informed. The decision includes monitoring clauses by RCC.
Specifically, the postal service for commercial correspondence is the service of deferred domestic delivery
of correspondence (delivered at the address written by the sender on the envelope), presented at the
post offices by intermediaries and other companies. The postal service Infadres concerns the domestic
delivery of direct mail.
The Competition Council initiated between 2005 and 2009 four investigations, subsequently joined in a
single investigation, concerning alleged abusive behavior by the Romanian Post.
In 2005, following a complaint filed by seven undertakings, the Competition Council launched an
investigation into the alleged abuse of dominant position by the Romanian Post on the market of
direct mail postal services – Infadres. The complainants were four direct marketing companies (Direct
Marketing Group SRL, Hit Mail Romania SRL, Mailers Serv SRL, Open Public Service SRL), two publishing
houses (Editura Reader’s Digest, Rentrop & Straton Grup de Editură şi Consultanţă în Afaceri SRL) and one
advertising company (Leo Burnett & Target SA).
After the launch of this investigation, in the same year, a new complaint concerning the abusive behaviour
of the Romanian Post was filed with the Competition Council by ten companies (the seven companies
that had signed the first complaint were joined by the publishing houses Eurocor IECC Srl, International
Masters Publishers SRL, Prietenii Cărţii SRL). The second complaint concerned behaviour similar to those
covered by the first investigation.
7
In 2006, SC Mailers Serv SRL filed a complaint to the Competition Council on the alleged abuse of
dominant position by the Romanian Post, by having offered to SC Infopress SA (a competitor of Mailers)
more favourable contractual conditions for equivalent services rendered.
In 2009, the Competition Authority opened an ex-officio investigation into the alleged abuse of dominant
position by the Romanian Post on the market of Infadres services and on the market of the postal service
for commercial correspondence, by the application between 2008 and 2009 of a discriminatory policy of
granting tariff rebates.
See further: http://www.consiliulconcurentei.ro/documente/Decizia%20nr52%20din%2016122010%20
publicare_19441ro.pdf
• Belgium: The Competition Authority imposes Interim Measures on De Beers
In a decision of 25 November 2010, the President of the Competition Council ordered De Beers to supply
rough diamonds to Antwerp trader Spira. The decision follows a request for interim measures filed by
Spira, awaiting the outcome of its complaint lodged with the Belgian Competition Authority in 2009.
When De Beers, a producer of rough diamonds, introduced its Supplier of Choice distribution system in
2003, Spira, who had been a distributor of De Beers’ rough diamonds since 1935, was no longer selected
as a distributor. According to Spira, the Supplier of Choice distribution system amounts to a cartel and
an abuse of a dominant position, mainly because of its exclusionary effects. Spira had initially filed a
complaint with the European Commission alleging violations of Articles 101 and 102 TFEU in relation to
this distribution system. The Commission rejected the complaint by means of two rejection decisions
in 2007 and 2008 for lack of Community interest. The Commission found there was a low likelihood of
finding an infringement, which would not justify carrying out a complex enquiry. Spira lodged appeals
against these rejection decisions, which are currently pending before the General Court of the European
Union (case T-354/08 and case T-108/07).
After having complained to the European Commission but before addressing itself to the Belgian
Competition Council and its President, Spira had obtained successive orders by the President of the
Commercial Court in Antwerp and by the Court of Appeal in Antwerp (both courts of general jurisdiction
having the power to order interim measures) obliging De Beers to continue deliveries of rough diamonds
to Spira temporarily. These orders expired in 2008.
In its 2009 complaint and request for interim measures, Spira requested to receive the same delivery
of rough diamonds by De Beers as before, pending the investigation of its complaint on the merits. The
decision of the President orders measures similar to those previously ordered by the courts. The decision
states that Spira risks suffering severe, immediate and irreparable damage as a result of the Supplier of
Choice distribution system and its exclusion as a distributor. The other condition for ordering interim
measures is an apparent (prima facie) infringement of competition law. In view of the risk incurred by
Spira, and in balancing the interests of Spira and De Beers, the President applied a low threshold for
establishing a possible infringement by De Beers of the prohibition of abuse of a dominant position
(Article 102 TFEU).
The interim measures ordered by the President of the Competition Council are valid until the General
Court of the European Union rejects the appeals against the decisions of the European Commission of
2007 and 2008, or until the College of Competition Prosecutors rejects Spira’s complaint on the merits.
See further: Decision (in Dutch): http://economie.fgov.be/nl/binaries/47_2010VM47_SPIRA%20DE%20
BEERS_Pub_tcm325-115721.pdf
• France: The Autorité de la concurrence imposes Fines totalling € 55 000 000 for Cartel and
Abuse of a Dominant Position in the Road Signs and Safety Equipment Sector
On 22 December 2010, the Autorité de la concurrence (the Autorité) fined eight undertakings € 52 700
000 for having engaged in cartel behaviour prohibited under Article 101 TFUE and the national equivalent
provisions in the road sign market. Moreover, the Autorité found that two other undertakings abused
8
their respective dominant positions in the road safety equipment sector by refusing to supply road signs
manufacturers with key inputs or applying to some of the latter discriminatory terms and conditions. The
Autorité imposed on those two undertakings fines totalling € 2 700 000 for having abused their dominant
position.
Pursuant to an ex officio inquiry opened in 2007, the Autorité first found that the eight undertakings
colluded to share markets in the road signs sector and subsequently agreed on prices for public bids.
These bid-rigging activities consisted of, inter alia, the undertakings concerned meeting physically on a
very regular basis in order to precisely allocate between themselves public tenders organized by local
authorities, following predefined allocation rules that were previously agreed upon, and to openly
share prices and discounts that were intended to be granted to clients. These practices, that lasted for a
very long period of time (nearly 10 years), were complemented with policy discipline mechanisms and
compensation schemes, that were systematically enforced, and covered the whole French territory. Taking
into account, among other elements, the significant impact of this behaviour on taxpayers’ money, the
very serious nature of the infringement and the individual situation of each undertaking concerned (most
of which were small SMEs, while a few belonged to wider groups), the Autorité imposed a proportionate
fine, in order to deter such kind of very harmful conduct for the future.
In the course of its investigation, the Autorité also concluded that two undertakings abused their
respective dominant positions on the markets of key inputs to manufacture and supply road signs (plastic
beacons and self-reflective plastic films). In the first case, the dominant undertaking refused to supply
plastic beacons, which is an indispensable feature to sell road signs to clients. The second undertaking
applied unnecessarily blurred terms and conditions and very differentiated discounts among customers,
that amounted, according to the Autorité, to discriminatory practices with regard to Article 102 TFEU and
the national equivalent provisions.
See further: http://www.autoritedelaconcurrence.fr/user/standard.php?id_rub=368&id_article=1522
• Germany: The Bundeskartellamt imposes first multi-million Fines on Chemical Wholesalers
for six regional Cartels – Investigation continues with regards to other Regions
On 26 November 2010, the Bundeskartellamt imposed fines totalling € 15 110 000 on 12 undertakings
in the chemical wholesale sector. The undertakings concerned are: BÜFA Chemikalien GmbH & Co. KG,
Oldenburg, CG Chemikalien GmbH & Co. KG, Laatzen, Hanke & Seidel GmbH & Co. KG, Steinhagen, Reher
& Ramsden Nachflg. (GmbH & Co.), Hamburg, Solvadis GmbH, Frankfurt am Main, Stockmeier Chemie
GmbH & Co. KG, Bielefeld, Stockmeier Chemie Dillenburg GmbH & Co. KG, Dillenburg, Stockmeier Chemie
Eilenburg GmbH & Co. KG, Eilenburg, Julius Hoesch GmbH & Co. KG, Düren, H. Möller GmbH & Co. KG,
Steinfurt, Gebr. Overlack Chemische Fabrik GmbH, Mönchengladbach, Overlack GmbH, Leipzig.
The investigation showed that the undertakings had concluded anticompetitive agreements for a duration
of between several years up to four decades. Representatives of the companies had agreed prices and
supply quotas for standardised industrial chemicals (so-called commodities); they also had concluded
customer-sharing agreements. However, direct supplies from chemical producers were not affected by
the agreements.
The proceedings were initiated in late 2006 following an application for leniency filed by Brenntag AG.
Inspections took place in the chemical industries in spring 2007: they were one of the biggest of the
Bundeskartellamt so far. All the undertakings involved in the procedure decided to cooperate with the
Bundeskartellamt in the investigation. This was taken into account as a mitigating factor when calculating
the fine.
The fines imposed cover a total of six different regional cartels. All the undertakings involved agreed to
end the proceedings by settlement. The fines decisions have become final.
The Bundeskartellamt ended the first part of the proceedings with these fines decisions. In the second
part which is still ongoing, the Bundeskartellamt is especially focussing its investigations on four other
regional cartels in which 11 undertakings are involved.
9
The summary of the case is available at:
http://www.bundeskartellamt.de/wDeutsch/download/pdf/Kartell/Kartell10/Fallberichte/B12-013-08_
Chemiegrosshandel.pdf?navid=41
An English press release is available at:
http://www.bundeskartellamt.de/wEnglisch/News/Archiv/ArchivNews2010/2010_12_07.php
• Italy: The Italian Competition Authority (ICA) fines Personal Care Products Cartel
On 15 December 2010, the ICA fined 16 producers of personal care products (i.e. soap, detergent,
perfume, cream, toothpaste) a total of € 81 181 335 for operating a cartel in Italy between 2000 and
2007 which infringed both national and European competition rules.
The investigation, which was opened following a leniency application, showed that from 2000 up to
2007, 16 of the biggest undertakings operating in the manufacturing and retailing of cosmetic products
(Unilever Italia Holdings, Colgate-Palmolive, Procter&Gamble, Reckitt-Benckiser Holdings (Italia), Sara Lee
Household & Body Care Italy, L’Oreal Italia, Società Italo Britannica L.Manetti-H.Roberts & Co, Beiersdorf,
Johnson & Johnson, Mirato, Paglieri Profumi, Ludovico Martelli, Weruska&Joel, Glaxosmithkline Consumer
Healthcare, Sunstar Suisse) coordinated their actions as regards the wholesale prices of such products.
The ICA’s investigation found that the companies participating in the cartel achieved a general alignment
of price increases for personal care products, which was above the inflation rate and was unrelated
to increases in production costs. An important role in the cooperation between the cartel participants
was played by the Italian Association of Branded Products Industries - Centromarca (Associazione
Italiana dell’Industria di Marca) which provided its continuous support to its members by facilitating the
widespread and detailed exchange of information.
Henkel, which reported the cartel to the ICA under its leniency program, was exempted from penalties.
Colgate-Palmolive and Procter & Gamble, who cooperated with the ICA’s investigation and provided
important information, benefitted from fine reductions of 50 and 40 %.respectively.
See further: http://www.agcm.it/concorrenza/intese-e-abusi/open/41256297003874BD/463FF11B7E16
9832C125780F003E49F7.html
• Italy: The Italian Competition Authority (ICA) accepts Commitments and closes Investigations
into Sicilian Power Prices
On 10 January 2011, the ICA decided to close two different investigations into the major electricity
companies operating in Sicily. The investigations concerned the electricity wholesale short-term prices in
Sicily, which were very high as compared with the rest of Italy, in the years 2008 and 2009.
The proceedings were opened on the basis of a report of the Italian Electricity and Gas Regulator (AEEG)
focusing on the evolution of the wholesale electricity prices in the Day-ahead auction at the Italian Power
exchange in Sicily. According to the AEEG, the price dynamics were not completely explained by market
conditions. The AEEG’s report pointed out several conducts of Edipower’s tollers (Edipower’s industrial
partners) showing evidence of capacity withholding (both economic and physical) aiming at raising the
electricity zonal price in Sicily.
On 27 January 2010, the ICA opened proceedings for an alleged infringement of Article 101 TFEU against
Edipower S.pA, its tollers, Edison Trading S.p.A., A2A Trading S.r.l, Iride Mercato S.p.A (now Iren S.p.A.)
and Alpiq Energia Italia S.p.A, as well as their parent companies- Edison S.p.A., A2A S.p.A, Iride S.p.A (now
Iren S.p.A.), and Alpiq Holding S.A.. The ICA alleged that the companies had coordinated their bidding
strategies for peak hours, relying on the indispensability of the San Fillippo del Mela power plant.
Simultaneously, the ICA opened proceedings against ENEL Produzione SpA and its parent ENEL SpA for
the alleged violation of Article 102 TFEU on the same relevant market. In this second investigation, the ICA
investigated whether ENEL SpA and its subsidiary Enel Produzione SpA abused their dominant position in
the wholesale supply of electricity in Sicily to inflate peak prices.
10
In the framework of the first proceedings, the parties offered the following commitments:
i) to exclude the San Filippo del Mela power plant from the Tolling Agreement and leave its management
to Edipower,
ii) to abide by a regulatory regime according to which the generation capacity of the San Filippo del Mela
will be offered at the following conditions: a) in the Day-ahead auction at either its variable or zero cost,
on the basis of Terna’s instructions and b) in the market for dispatching services, at the zonal price set in
the Day-ahead auction.
These commitments will last until the end of 2013. It should be considered that, by the end of 2013 a new
1000 MW interconnection between Sicily and the continent is expected to be effective, allowing a greater
amount of electricity import into Sicily, which should be able to crowd out oil plants, like the San Filippo
del Mela power plant, throughout most of the hours.
In the parallel proceedings, ENEL undertakes to set a cap on the price at which it will bid its capacity on
the Day-ahead auction, from 1 January 2011 to the end of 2013. The bid cap is set to 190 €/MWh for the
year 2011 and will be indexed to the variation of Brent prices for the following two years.
The ICA decided to make the commitments binding and terminate the proceedings without ascertaining
the alleged violations. The combination of the two sets of commitments should prevent the tollers from
coordinating their bidding strategies and should reduce the gap between the wholesale price in Sicily and
that in mainland Italy.
See further:
case I/721 : http://www.agcm.it/concorrenza/intese-e-abusi/open/41256297003874BD/81E6CD0C6DA
9DC12C1257815004BC2DE.html
case A/423 : http://www.agcm.it/concorrenza/intese-e-abusi/open/41256297003874BD/
CC66F5EADB7FB81BC1257815004BC2DB.html
• Lithuania: The Competition Council imposes Fines totalling € 153 817 on two Insurance
Companies for the Conclusion of a prohibited Agreement
On 23 December 2010, the Lithuanian Competition Council imposed on AB Lietuvos draudimas and UAB
DK PZU Lietuva fines totalling € 153 817 for concluding an anticompetitive agreement in the market of
compulsory insurance for the civil liability of building designer and in the market of compulsory insurance
for the civil liability of constructor.
The Competition Council found that the two biggest Lithuanian insurance companies AB Lietuvos
Draudimas (international RSA group) and UAB DK PZU Lietuva (international PZU group) had concluded
an insurance pool agreement which restricted competition and hence infringed Article 5 of the Law on
Competition and Article 101 TFEU. By this agreement the parties agreed not only to share the risk but
also to set a particular pricing method according to which the final price for consumers is calculated.
The parties also concluded a number of implementing agreements, including: guarantee insurance,
cooperation, administration of contracts for compulsory insurance of the civil liability of building designers
and contractors, etc.
In its decision, the Competition Council observed that insurance pool agreements of this nature are
not necessarily prohibited as such. The facts at hand show however that the agreement did restrict
competition, in light of the overall circumstances of the case including the market situation and structure;
the fact that the parties were two main insurance companies with very large market shares; the terms of
the agreement and its very long duration and impact. In particular, it was found that the agreement could
have led to foreclosure of the market. Moreover, the Competition Council found that by the agreement
the parties had in fact agreed not to compete on the markets concerned.
The Competition Council concluded that this agreement which led to a restriction of competition in the
markets of compulsory insurance for the civil liability of building designers and constructors. In 2003, this
type of insurance was made compulsory by law in Lithuania and the construction market was growing
11
rapidly at this time. Therefore, the respective insurance services then faced significant demand.
In fixing the fine, the Competition Council took into account the gravity of the infringement, its duration
and the fact that AB Lietuvos Draudimas had been sanctioned in 2002 for the infringement of Article 5 of
the Law on Competition. As a result, the Competition Council imposed the following fines: € 115 934 on
AB Lietuvos Draudimas and € 37 882 on UAB DK PZU Lietuva.
See further: Full text of the Competition Council’s decision (in Lithuanian)
• The Netherlands: The Competition Authority (NMa) fines Insulated Glass Manufacturers’
Cartel more than € 17 000 000
On 29 December 2010, the NMa fined a cartel of four manufacturers of insulated glass for having concluded
price-fixing agreements. The fines, totalling € 17 746 000, were imposed on Koninklijke Saint-Gobain
Glass Nederland N.V., Scheuten Glas Nederland B.V. and Pilkington Benelux B.V. One manufacturer, AGC
Flat Glass Nederland B.V, was not fined, since it had confessed to the cartel to the NMa by filing a leniency
application. Saint-Gobain also filed a leniency application, but only after AGC had filed its application and
therefore benefitted from a 30% reduction in its fine.
The NMa considers proven that the cartel participants concluded illegal price-fixing agreements concerning
the sale of insulated glass to customers for a period of one year and four months (from 18 May 2004
through 15 September 2005). Buyers of insulated glass include glaziers and wholesalers in glass products.
The investigation showed that the cartel participants had agreed to raise insulated-glass prices by 10
to 12% and to introduce minimum prices which were aimed at bigger clients in particular, who would
not accept the price increases. The cartel participants have sat down together on numerous occasions
to discuss the price levels of insulated glass. The cartel consisted of the four largest manufacturers of
insulated glass in the Netherlands.
The breakdown of the fines is as follows: Koninklijke Saint-Gobain Glass Nederland N.V. € 8 034 000,
Scheuten Glas Nederland B.V. € 2 252 000 and Pilkington Benelux B.V. € 7 460 000.
These three undertakings have lodged an appeal against the decision.
Press spokespersons: Ms. Barbara van der Rest-Roest at +31-70-330-3362 or +31-6-22793063 (outside
office hours), or Ms. Pauline Gras at +31-70-330-5068 or +31-6-54715245 (outside office hours).
Alternatively, you can send an email to the NMa press office at [email protected]
• Portugal: The Competition Authority punishes Resale Price Maintenance affecting Hospitals’
Public Tenders
On 10 December 2010, the Portuguese Competition Authority (PCA) issued a prohibition decision
concerning a retail price fixing agreement (RPM) established between a supplier and a retailer of hospital
equipment (automated medicine dispenser), in breach of Article 101 TFEU and Article 4 of the Portuguese
Competition Act. The agreement eliminated price competition between the two companies in public
tenders for hospital equipment.
The investigation showed that the two undertakings involved concluded a supply contract for automated
medicine dispensers used in hospital pharmacies, according to which the buyer would apply the retail
price set in the agreement. This equipment is sold mostly to hospitals and through public tenders.
Simultaneously, the supplier of the equipment also participated in the public tenders promoted by the
hospitals, thus competing with its buyer.
Following the investigation launched in 2006, the PCA concluded that, by fixing the retail price in the
supply agreement, intra-brand competition was reduced and price transparency increased. Therefore,
the parties to the vertical agreement, who were competitors at the retail level, eliminated pressure to
12
lower prices.
The PCA decided to impose fines on both undertakings, totalling € 530 768,01, as well as the publication
of an extract of the decision in the official journal and in a national newspaper. In setting the fine, the
PCA considered the cooperation of the buyer with the investigation (even though this was outside the
scope of the leniency program), as well as the fact that the buyer ended the contract, as attenuating
circumstances.
The decision was appealed to the Lisbon Commercial Court.
• Spain: The National Competition Commission (CNC) opens formal Proceedings against
Telefónica Móviles, Vodafone and Orange
After a confidential probe carried out of its own motion, the Investigations Division of the CNC opened
formal proceedings on 17 January 2011 against Telefónica Móviles de España, S.A.U., Vodafone España,
S.A.U. and France Telecom España, S.A. for a possible abuse of a dominant position, prohibited by Article
2 of the Spanish Competition Act and Article 102 TFEU.
The information on the case file provides prima facie evidence that the operators concerned may have
engaged in a practice consisting of applying excessive prices for wholesale origination and termination
services for short SMS and MMS messages in the national territory on their mobile telephony networks.
Wholesale origination services are interconnection services that mobile operators with their own access
network (OMR) provide to virtual mobile operators (OMV) to which they offer host operator services.
Through these services the OMV are sent the short messages generated by their clients’ terminals on the
access network of the host operator.
The wholesale short messages termination service is an interconnection service offered by each of the
mobile operators that allows the termination of short messages sent to their clients which originated on
the networks of other operators.
The opening of proceedings does not prejudge the final outcome of the investigation. There is now a
maximum period of 18 months for the investigation of the case and its resolution by the Council of the
CNC.
See further: http://www.cncompetencia.es/Default.aspx?TabId=105&Contentid=291068&Pag=1
• Spain: The National Competition Commission (CNC) closes Monitoring of Termination by
Commitments Agreement (TCA) in Interchange Fees for Transactions by Debit and Credit Cards
Case
On 20 December 2010, the CNC Council declared the monitoring of the Termination by Commitments
Agreement (TCA) which had been concluded with SERVIRED, SISTEMA 4B and EURO 6000 closed to
the extent that it expired on 31 December 2010. The parties are from then on free to determine the
interchange fees applicable to transactions using debit and credit cards to be applied from 1 January
2011, provided that they do so with complete respect for the provisions of Act 15/2007, in particular
Article 1, and Article 101 TFEU.
On 25 April 2005, the former Competition Service had opened formal proceedings in relation to an
agreement to fix intersystem interchange fees between SERVIRED, SISTEMA 4B and EURO 6000, following
a complaint received from the associations of traders and tourist businesses (ANGED, CAAVE, CEC, FEH
and FEHR).
On 16 November 2006, the Competition Service entered into a Termination by Commitments Agreement
(TCA) with SERVIRED, SISTEMA 4B and EURO 6000 and the trade associations, which involved a series of
commitments in relation to the interchange fees applicable to intersystem and intrasystem transactions
using debit and credit cards. The TCA was based on compliance with the following concurrent principles:
13
(i) costs-based objectivity, (ii) transparency and differentiation between operations with credit and debit
cards and (iii) express commitment to an effective reduction in the levels of interchange fees, applicable
immediately and progressively. The TCA appeared to be the best possible solution at that time. However,
the TCA was approved at a time when the European Commission was considering changing its approach
to interchange fees and therefore, would have to be modified by reference to those changes.
In order to give effect to the agreed terms, the TCA provided for the presentation of certain costs studies
that would serve as the basis for the calculation of the interchange fees to be applied from 1 January
2009. However, in accordance with the principle of having an effective and immediate reduction in the
levels of interchange fees, the Agreement provided for the application of certain maximum limits for the
interchange fees on a transitional basis until 31 December 2008. These limits differentiated between
the volume of the transaction and between credit and debit operations and decreased in the course of
2006, 2007 and 2008. In addition, clause seven of the TCA provided that the transitional limits “shall be
extended, if necessary, until 2010, as long as the effective application of the maximum limit deriving from
the costs study has yet to take place”. In fact, such maximum limits for the 2009/2010 period are fixed in
the Agreement (the so-called “column four” of the table).
In 2009, various reasons led the now Council of the CNC to conclude that it would not be appropriate
to apply the maximum limits deriving from the costs studies to the intrasystem interchange fees.
Fundamentally, the maximum limits that would result from the application of the costs studies presented
by the parties would have been higher than the transitional maximum limits provided for in the TCA,
contravening the express commitment to an effective reduction of the levels of interchange fees, which
formed the basis of the TCA. In addition, the Council indicated that the assessment of interchange fees
carried out by the European Commission and several National Competition Authorities was no longer
based on the costs method.
In light of this, in its Resolution of 29 July 2009, the CNC Council resolved that it would not be appropriate
to apply the maximum limits deriving from the costs studies presented by each payment system to the
Investigations Division in the course of its monitoring of the case to the intrasystem exchange rates, and
urged that the intrasystem interchange fees provided for in column four of the TCA should be applied
until 31 December 2010 (end of the TCA monitoring period).
The CNC Council has declared the monitoring of the TCA closed to the extent that it expired on 31
December 2010.
See further:
http://www.cncompetencia.es/Inicio/Noticias/tabid/105/Default.aspx?Contentid=287318&Pag=1
• Sweden: The Swedish Competition Authority follows up previous Commitments and decides
not to take further Action against Schneider
Five years ago, Schneider Electric Sverige AB (Schneider) committed to make certain changes to its
discount and bonus system on the market of sale of electrical installation materials to wholesalers. After
having investigated whether the undertaking has fulfilled its commitments, the Swedish Competition
Authority has decided on 17 December 2010 not to take any further action in the matter.
Investigations conducted by the Swedish Competition Authority regarding potential restrictions of
competition may result in companies submitting voluntary commitments to take various measures. After
a company has committed to take measures to improve competition, the Swedish Competition Authority
may in certain cases decide to accept the commitments and not to intervene.
In 2005, the Swedish Competition Authority examined the discount and bonus system used by Schneider.
In connection with this investigation, Schneider submitted voluntary commitments to make certain
changes to its individually designed discount and bonus system for wholesalers. As a result of the
company’s commitments to change the discount and bonus system, there were no longer any grounds
for the Swedish Competition Authority to intervene. The Swedish Competition Authority’s decision of 17
December 2010 to accept the commitments was made subject to a fine of SEK 3 000 000 (approximately
€ 340 000) to be paid in the event of a failure by Schneider of respecting its commitments.
14
The Swedish Competition Authority has now conducted a new investigation to follow up and to ensure
Schneider’s fulfillment of its commitments. This review shows that there is no ground to conclude that
Schneider has failed to comply with its commitments. The Swedish Competition Authority has therefore
decided not to take any further action in the matter.
See further: http://www.kkv.se/t/NewsPage____6972.aspx
• Sweden: The Swedish Competition Authority institutes Proceedings against Bus Company
Cartel in Package Tour Sector
According to the Swedish Competition Authority, two bus companies -Ölvemarks and Scandorama have infringed both national and European competition provisions by having colluded on prices. On 8
December 2010, the Authority instituted proceedings regarding the imposition of fines totalling over SEK
13 million (approximately € 1 460 000).
During its investigation the Swedish Competition Authority found that the companies agreed on prices
for package tours on coaches between 2007 and 2009. They also agreed to restrict the supply of tours,
and also to divide the market between themselves.
According to the summons application now lodged by the Swedish Competition Authority to the Stockholm
City Court, the Authority is requesting that the Court decides that the companies must pay SEK 13 200 000
in fines (administrative fines). A request of SEK 9 200 000 (approx. € 1 033 000) has been made against
Ölvemarks Holiday Aktiebolag and a request of SEK 4 000 000 (approx. € 449 000) against Scandorama
AB. Both companies concede the material facts of the case, but consider that this cooperation was not
unauthorised. The companies have cooperated with the Swedish Competition Authority throughout the
entire investigation. It remains for the court to decide how the companies’ agreements are to be judged
as being illegal.
“Reaching an agreement on prices is not permitted according to the rules on competition. This kind
of agreement results in consumers incurring higher prices and a poorer range of products,” says Dan
Sjöblom, Director-General of the Swedish Competition Authority. “It is important to give clear signs that
competitors should not make deals on prices and other terms of sale. I look forward to a decision by the
City Court in this respect.”
See further: http://www.kkv.se/t/NewsPage____6937.aspx
• United Kingdom: The Office of Fair Trading (OFT) adopts Decision in Loan Pricing Case
On 20 January 2011, the OFT issued a decision that the Royal Bank of Scotland (RBS)and Barclays Bank
engaged in anticompetitive practices in relation to the pricing of loan products to large professional
services firms, imposing a fine of £28 590 000 (about € 24 200 000) on RBS. The case involved the
disclosure of confidential and commercially sensitive future pricing information by RBS to Barclays.
As mentioned in the last edition of ECN Brief, the case followed an early resolution procedure with RBS
admitting to competition breaches in order to receive a reduced fine.
See further: Press Release
15
COURTS
• Ireland: The Competition Authority wins Beef Industry Case
On 26 January 2011, the Competition Authority has won court proceedings in which it challenged the
compatibility with EU and Irish competition provisions of an agreement between competitors to reduce
capacity in the Irish beef processing industry.
The structure of the proposed scheme (which was never implemented) involved the establishment by the
principal participants in the beef processing sector of a corporate vehicle, the Beef Industry Development
Society Limited (BIDS). Under the scheme, the major players in the industry agreed to pay those players
who would voluntarily leave the industry. In return for that payment, the players leaving agreed to
decommission their plants, refrain from using the associated lands for processing beef for a period of five
years and sign a two-year non-compete clause with regard to processing anywhere in Ireland.
The Authority took the view that the scheme was incompatible with both section 4(1) of the Competition
Act, 2002 and Article 101(1) TFEU and initiated proceedings against the scheme before the Irish High
Court in 2003. The case has been a long-running saga involving one High Court trial, one Supreme Court
judgment and a judgment from the European Court of Justice (ECJ).
In July 2006, the Irish High Court ruled that the agreement did not have the object of restricting competition.
The Authority appealed this decision to the Irish Supreme Court. In March 2007, the Supreme Court
sought a preliminary ruling from the ECJ on the question as to whether such an agreement, providing
for a restructuring of an entire industry by agreement between the competitors in that industry, has the
object of restricting competition. In November 2008, the ECJ held that such an agreement did, indeed,
have such an object.
Following the ruling by the ECJ that an agreement with features such as the BIDS agreement has as its
object the prevention, restriction or distortion of competition within the meaning of Article 81(1) EC (now
Art. 101 TFEU), the Supreme Court held that the BIDS agreement had infringed Article 101(1) TFEU and
remitted the case to the High Court to allow BIDS the opportunity to argue that the agreement should be
exempt from the prohibition in Article 101(1) on the grounds that it satisfied the conditions for exemption
set out in Article 101(3). During the High Court proceedings in 2010, the Commission intervened as
amicus curiae in this case and submitted written observations pursuant to Council Regulation 1/2003 on
the assessment of industrial restructuring agreement under Article 101(3) TFEU.
In January 2011, BIDS decided not to implement the agreement and withdrew its claim for exemption
under Article 101(3) TFEU with the effect that the High Court did not have the opportunity to reach any
decision on the application of Article 101(3) TFEU to the BIDS agreement.
See further:
- Majority decision stating for the case to be remitted to the High Court:
http://www.supremecourt.ie/Judgments.nsf/1b0757edc371032e802572ea0061450e/31f1360097ab4f6
080257663003a6af0?OpenDocument
- Additional judgment specifying some of the issues that the High Court must consider in its 101(3)
analysis:
http://www.supremecourt.ie/Judgments.nsf/1b0757edc371032e802572ea0061450e/7bdbace17723ae
eb80257663003acb84?OpenDocument
More on the BIDS case:
http://ec.europa.eu/competition/ecn/brief/01_2010/bids_irl.pdf
http://ec.europa.eu/competition/ecn/brief/02_2010/ec_amicus.pdf
Press spokesperson Clodagh Coffey; Communications Officer, The Competition Authority
16
• European Commission: Judgment of the General Court in E.ON Breach of Seals Case
In its judgment of 15 December 2010 in case T-141/08, the EU General Court (the Court) has rejected
E.ON Energy AG (E.ON)’s appeal against the European Commission (the Commission)’s decision imposing
a € 38 000 000 fine for the breach of a seal during an inspection. In doing so, the judgement sends a clear
signal to companies that any steps, be they intentional or negligent, that undermine the integrity and
effectiveness of inspections will not be tolerated.
The Court has upheld a fine which the Commission had imposed on E.ON in 2008 because a seal affixed by
Commission inspectors to secure documents was broken during an inspection carried out at the premises
of E.ON in May 2006. E.ON denied breaking the seal, but could not explain the reason for the broken seal.
The Court clarified that the Commission was right to assume at the very least a negligent breach of
the seal in the present case, and that it is not necessary for the Commission to prove how the seal was
actually broken or that evidence had actually been manipulated after the breach of the seal to impose
a fine. It also stressed that the level of the fine was not disproportionate, taking into account the size of
the company and the importance of the deterring effect of fines for procedural obstructions in antitrust
cases.
The Commission welcomes the Court’s findings, because obstructions of the Commission’s investigations
can severely undermine competition enforcement. The judgment makes clear that the Commission is
entitled to impose appropriate and deterrent sanctions for companies’ attempts to destroy evidence in
order to escape fines for antitrust infringements.
Two other cases concerning possible obstructions during antitrust inspections are currently investigated
by the Commission (see IP/10/1748 and IP/10/691).
It is the Commission’s practice to seal rooms when carrying out unannounced inspections, to make sure
that no documents can be removed during the inspection team’s absence (e.g. at night). The objective of
the use of seals is to prevent the effectiveness of inspections from being undermined. Breaches of seals
are therefore serious infringements of EU competition law.
Under the antitrust Regulation 1/2003, the Commission can impose a fine of up to 1% of the company’s
total turnover for a seal broken intentionally or negligently. When fixing the amount of the fine for E.ON,
the Commission took into account the fact that it was the first time that a seal has been broken by a
company subject to an inspection and that a fine would be imposed for obstruction or interference with
a Commission antitrust investigation.
See further: Judgment of the General Court
Press release on Commission’s decision imposing the fine on E.ON
LEGISLATION & POLICY
• France: The French Competition Authority consults on Draft Guidance on its Method to set
Fines for Antitrust Infringements
On 17 January 2011, Bruno Lasserre, President of the Autorité de la concurrence (the Autorité), launched
a public consultation on a draft guidance document setting out the method followed by the Autorité
when setting of fines for antitrust infringements (cartels, bid-rigging, other anticompetitive agreements
and abuses of dominant position).
The public consultation is open for a two-months period and will be closed on 11 March 2010. It will be
followed by a public roundtable, organized by the Autorité on 30 March 2011, before the publication
of a final document. Both written and oral public consultations are intended to allow all stakeholders
(companies, legal counsel, academics, consumers, public stakeholders, but also any Competition Authority
17
interested in the process, etc.) to express their views and help achieve the best possible document.
The document on antitrust fines is intended to foster transparency, by stating the different steps and
elements according to which the Autorité sets fine on a case-by-case basis. It builds on the methods
developed by the Autorité in its prior decisional practice, as well as on the best practices shared by other
European Competition Authorities (notably the ECA principles for convergence), in compliance with the
need to ensure the consistent and effective implementation of the EU competition rules.
See further: http://www.autoritedelaconcurrence.fr/user/standard.php?id_rub=389&id_article=1532
• Germany: The Bundeskartellamt and the Federal Network Agency publish Joint Guidelines on
the Award of Gas and Electricity Concessions and Transfer of Network Use
Together with the national regulator, the Bundeskartellamt (BKartA) has outlined guidelines on the award
of gas and electricity concessions on 15 December 2010. The guidelines offer energy companies and
municipalities an orientation guide to key issues in this area. The topic is of great interest to the sector
as many of the estimated 20 000 concession contracts awarded across Germany are currently expiring
or will expire in the coming years. Electricity and gas concessions must be newly awarded every 20 years
at the latest.
At present, a tendency towards remunicipalisation can be detected whereby local authorities increasingly
award concessions to municipality owned utilities. In awarding concessions, the municipality bears a
special responsibility to ensure competition in the bidding process as well as in the end consumer markets.
The section of the guidelines dealing with competition law focuses in particular on the selection of
companies by the respective municipality. Although public procurement law does not apply in this case,
each municipality has a dominant position in the award of local public rights of way, which it is not
allowed to abuse. A possible example of abuse is given, for instance, if the municipality gives preference
to individual bidders, especially to undertakings associated with the municipality, without any objective
justification. The municipality also has to provide the network-relevant data necessary for an appropriate
preparation of bids. It also acts abusively if it demands or accepts considerations in return, which are
inconsistent with the Regulation on Concession Fees.
The section of the guidelines referring to energy law deals primarily with the phase of transfer of network
use in the event of change of a concession holder. An area of conflict which regularly arises between
the former and new concession holder is whether a transfer of ownership of the network facilities is
necessary or whether transfer of their usage by means of a lease agreement is sufficient.
The guidelines are available on the Bundeskartellamt’s website in German:
http://www.bundeskartellamt.de/wDeutsch/download/pdf/Diskussionsbeitraege/101215_Leitfaden_
Konzessionsrecht_BNetzA-BKartA.PDF
An English press release is available at:
http://www.bundeskartellamt.de/wEnglisch/News/Archiv/ArchivNews2010/2010_12_15.php
• Romania: The Competition Council adopts Guidelines on Commitments Procedure and
launches Market Test on Commitments on the Joint Selling of Commercial Rights for Football
Broadcasting
On 5 January 2011, guidelines on commitments procedure were published in the Official Gazette no. 11.
The legal framework for the adoption the new guidelines is the Romanian Competition Law no. 21/1996,
as amended.
The commitments procedure enables parties to an investigation to make voluntary commitments to
address issues which might constitute violations of provisions of national and EU law on anti-competitive
practices, such as agreements and concerted practices or abuse of dominant position. The initiative
belongs exclusively to the undertakings to formulate commitments to the Competition Council (RCC) in
18
the framework of an ongoing investigation into possible violation of the competition law.
The closure of an investigation by a decision accepting commitments is seen as an exceptional situation
and therefore, it is limited to certain cases in which the implementation of the commitments has real
potential to restore competition faster and more effectively on the market than it would be achieved by
the adoption of a decision imposing fines and/or imposing corrective measures.
In case the commitments proposed are considered acceptable in a prima facie assessment, the summary
of the case and the relevant part of commitments proposed by parties will be published on the RCC’s
website in order to give the possibility to third parties to comment on them. The Competition Council’s
commitments decision is legally binding upon parties and specifies the period during which the
undertakings will implement the commitments monitored by the Competition Council.
Failure to fulfill the commitments may lead to penalties (between 0.5 and 10% of the turnover of the
previous year), fines in case of late implementation of the commitments (up to 5% of average daily
turnover of the previous year) and it may also lead to the reopening of the investigation.
In this context, the Competition Council has, in February 2011, published the commitments proposed
by the Romanian Football Federation (FRF) and the Professional Football League (LPF) in the framework
of the ongoing investigation on Article 5 of the Competition Law no.21/1996 as amended, and Article
101 TFEU, on the joint selling agreement of commercial rights of football matches. By publishing the
proposed commitments, the Competition Council intends to conduct a market test in order to verify
whether the proposed commitments are the solution for meeting the competition concerns at the source
of the investigation. The summary of the case and the essential content of the commitments proposed
by the FRF and LPF are posted on the internet address of the Romanian Competition Council. It is the first
time that a market test is launched based on the new guidelines.
See further: http://www.consiliulconcurentei.ro/?pag=59&com=19394&year=2011&coms=0&month=0
• Bulgaria: The Commission for the Protection of Competition (CPC) adopts a Decision for Block
Exemption of certain Categories of Agreements from the Prohibition under Article 15 LPC
On 20 January 2011, the CPC adopted a Decision block exempting certain categories of agreements,
decisions or concerted practices from the prohibition under Article 15 of the Law on Protection of
Competition (LPC). The aim is to reflect the recent changes in EU legislation on the application of Article
101(3) TFEU to certain categories of agreements and concerted practices and to ensure adequate legal
certainty for the undertakings.
The decision applies to certain categories of agreements of undertakings and association of undertakings
(within the meaning of Article 15, Par. 1 of LPC), which carry out their activities within the territory
of Bulgaria, and applies where the agreement does not affect trade between EU Member States. The
categories of agreements covered by the Block Exemption Decision are certain categories of vertical
agreements, research and development agreements, specialization agreements, agreements in the
insurance and motor vehicle sectors and technology transfer agreements.
The adopted conditions are in accordance with the revised competition rules contained in the new
European Block Exemption Regulations. The only remaining difference is in terms of vertical agreements
and aims to reflect national specificities. The block exemption shall apply only if the members of the
association are retailers of goods and if no individual member of the association, together with its
connected undertakings, has a total annual turnover exceeding BGN 7 000 000 (€ 3 580 000), instead of €
50 000 000, as provided for in the European Vertical Block Exemption Regulation. The turnover limitation,
the non-exemption of certain categories of agreements and the conditions provided for in this Decision
aim to ensure that the agreements to which the block exemption applies do not enable the participating
undertakings to prevent, restrict or distort competition with respect to a substantial part of the products
in question.
The Decision allows the CPC to withdraw the benefits of the block exemption in respect of certain
categories of agreements or revoke them in each individual case. In order to guarantee the legal certainty
of the undertakings, transitional periods are introduced. The block exemption decisions previously
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adopted by the CPC (regarding vertical, research and development, specialization agreements as well as
agreements in the motor vehicle sector) have been repealed by this Decision. The Decision shall apply
until 31 May 2023 and is subject to amendment by the CPC.
See further: http://www.cpc.bg/General/Legislation.aspx
• EFTA: The EFTA Surveillance Authority (ESA) adopts new Guidelines on Vertical Restraints
On 15 December 2010, the ESA adopted new Guidelines on the application of Article 53 EEA to vertical
agreements. These Guidelines entered into force on the day of their adoption.
A revised Block Exemption Regulation for vertical agreements adopted by the European Commission
(Commission Regulation (EU) No 330/2010) entered into force on 1 June 2010. That act has been
incorporated into the EEA Agreement. With the adoption of the Authority’s new Guidelines on vertical
restraints the revision of the regime for supply and distribution agreements in EEA competition law is
now complete.
The Authority’s new Guidelines have been adapted to the EEA context but are substantively identical
to the Commission’s Guidelines on vertical restraints. They set out the principles and rules that the
Authority will follow when applying Article 53 EEA to vertical agreements in the future. The Guidelines
will ensure uniform interpretation and application of the competition rules throughout the European
Economic Area, which includes all the EU Member States as well as the EFTA States Iceland, Liechtenstein
and Norway.
One interesting feature of the new Guidelines relates to online sales. It is made clear that a supplier
cannot impose an outright ban on its distributors preventing them from using the internet to sell its
products. This would amount to a “hardcore” restriction of passive sales which is presumed to fall within
Article 53(1) EEA and not to fulfil the conditions of Article 53(3) EEA. Detailed examples are given of
restrictions on the use of the internet which entail a restriction of passive sales. There are also examples
of when the use of the internet would amount to active selling which a supplier may have legitimate
reasons for restricting in order to maintain the quality of its exclusive distribution system.
The Block Exemption Regulation, as incorporated into the EEA Agreement, differs from the rules in the
EU with regard to the withdrawal mechanism which may be applied when parallel networks of similar
vertical restraints cover more than 50 % of a relevant market. In such cases, the European Commission
is empowered to disapply the EU Block Exemption Regulation by means of a regulation which will
have binding effects in all EU Member States. The EFTA Surveillance Authority, however, will adopt a
recommendation which only will produce binding legal effects when incorporated into the national legal
order of the EFTA States.
More details on this special adaptation, which is based on the specific institutional set-up of the EEA
Agreement, are set out in the Guidelines.
The Guidelines are available at the Authority’s website:
http://www.eftasurv.int/competition/notices-and-guidelines/
• Hungary: Competition Act recently amended
From 1 January 2011, some of the procedural rules applied by the Gazdasági Versenyhivatal (GVH –
Hungarian Competition Authority) have been modified.
This is the consequence of several amendments to different laws adopted by the Hungarian Parliament,
which have also affected the Hungarian Competition Act.
Indeed, since the procedural rules on public administration are applied by the GVH in its competition
proceedings, Act CLII of 2010 on the Amendment of Regulations with regard to the Deadline Calculation
in Calendar Days has consequently introduced some novelties in the procedural rules of the GVH. For
instance, as from 1 January 2011, the procedural deadlines are calculated in calendar days and not in
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working days. Moreover, the first day taken into account for the calculation of the deadline is not the day
of receipt of the legal documents but the following day. In addition, as regards informal complaints, the
novelty is that from 1 January 2011, the GVH is not compelled to start conducting its investigations within
a certain time limit, since the obligation to react within a determined period of time has been abolished
by the new rules.
With regard to mergers, Act CLXXIII of 2010 on the Amendment of Acts Concerning Public Health Services
introduced a new provision in relation to merger regulation in the pharmacy sector. This amendment
prohibits certain types of concentrations from 1 January 2011. For instance, transactions which would
lead to direct or indirect control over more than four pharmacies are now prohibited. Additionally, no
one is allowed to directly or indirectly merge more than three pharmacies in certain territories in Hungary
(cities, municipalities) where the number of inhabitants is less than 20 000.
• Italy: The Competition Authority (ICA) adopts an Opinion on the Draft Decree on the
Liberalization of Postal services
On 15 January 2011, the ICA notified to the Government and the Parliament, pursuant to Section 22 of
the Competition act, the existence of some inconsistencies between the rules contained in the Draft
Decree on Postal Services (Draft Decree) approved by the Government and the EU existing regulatory
framework.
In the ICA’s opinion, the Draft Decree presented to the Parliament for its opinion, fails to properly address
the issue of the creation of a fully independent and unbiased regulator. Consequently, the liberalization
process in Italy could be severely hampered. The ICA considers that the independence and the impartiality
of the regulatory body are necessary conditions to promote competition in postal markets. This is why
the ICA believes that entrusting regulatory powers to an Agency rather than to an independent Authority
would be in breach of the EU’s current regulatory framework.
The Agency model designed by the Draft Decree might not grant the necessary independence from
market’s operators. As a matter of fact, the regulator will operate under the supervision and direction of
the Ministry that will define the function, the organizational structure and the financing of the Agency.
Moreover, Poste Italiane is a publicly owned company as well as the incumbent universal postal service’s
provider, having an uncontested dominant position on a large part of the Italian postal markets. In
addition, the Agency entrusted with the implementation of the liberalization process will be subject to the
same corporate control as the incumbent operator, because the Draft Decree fails to grant a separation
between the regulatory and operational functions in the postal services.
In its opinion, the ICA also underlines the lack of basic provisions ensuring a competitive outcome in
the postal sector. Indeed the decree does not provide for provisions such as auction procedures for the
selection of the universal service provider, the progressive reduction in the size of the reserved area or
the suppression of the reserved area.
The Parliament is currently discussing the draft and, although the ICA’s opinions are not binding, the
positions expressed in it will be examined before the final decision.
See further: http://www.agcm.it/segnalazioni/segnalazioni-e-pareri/open/C12563290035806C/8BC0FF
91095B67C8C125781D002FAF44.html
• The Netherlands: Businesses factor in the NMa’s Merger Control and Cartel Enforcement in
their Conduct
On 24 January 2011, the Netherlands Competition Authority (NMa) published the conclusions of a study,
commissioned by the NMa, into the anticipatory effects of merger control and cartel enforcement. This
study was carried out by Dutch research firm SEO.
According to the study, for every cartel that the Netherlands Competition Authority (NMa) fines, there
are five cases in which undertakings adjust or dissolve their cartels as a preemptive move against
possible NMa investigations. In addition, for every 100 merger notifications that the NMa processes,
21
18 concentration plans are either adjusted or cancelled. When it comes to concentration plans or illegal
agreements with competitors, undertakings and their advisors appear to take into account the NMa’s
anticipated reaction.
The mere presence of the NMa as regulatory and enforcement body apparently acts as an incentive for
undertakings themselves to verify whether they operate within the boundaries of the Dutch Competition
Act.
This new study constitutes the second time the NMa has investigated the effects of its merger control
activities. The first study was carried out in 2005. New elements in this second study include looking into
the effects of the NMa’s cartel oversight activities, as well as the inclusion of larger firms (with a staff
of 100 people and more) as interviewees, next to (legal) advisors. More than 500 firms and almost 100
advisors have been interviewed by SEO.
See further:
http://www.nmanet.nl/Images/Anticipatie%20op%20kartel-%20en%20concentratietoezicht%20
Eindrapport_tcm16-142926.pdf (in Dutch, translation in English will follow mid March 2011)
Press spokespersons: Ms. Barbara van der Rest-Roest at +31-70-330-3362 or +31-6-22793063 (outside
office hours), or Ms. Pauline Gras at +31-70-330-5068 or +31-6-54715245 (outside office hours).
Alternatively, you can send an email to the NMa press office at [email protected]
• Portugal: The Competition Authority aims at increasing Transparency and Legal Certainty in
Antitrust Proceedings
On 28 December 2010, the Portuguese Competition Authority published draft Guidelines on antitrust
procedures and consulted the public on this document.
The Guidelines aim to increase transparency, efficiency and timeliness, as well as legal certainty in the
antitrust procedures of the PCA.
Although primarily focusing on the application of the Portuguese Competition Act, the Guidelines will
also be applicable in cases where national and European competition law are applied in parallel, albeit
with some adaptations where necessary.
The draft Guidelines focus on the main procedural steps in antitrust investigations, including sections on
the opening of proceedings, investigative measures, interim measures, statement of objections, rights of
defence, final decision, commitments, access to file and the publication of decisions.
The period of public consultation ended on 31 January 2011.
See further: http://www.concorrencia.pt/Conteudo.asp?ID=1878
• United Kingdom: Consultation on the Office of Fair Trading (OFT) Annual Plan and Publication
of Business Plan
On 10 December 2011, the OFT began a consultation on its draft Annual Plan 2011-2012. It seeks views
on its priorities going forward as resources are reduced. In particular it expresses its commitment to
high impact enforcement, and it proposes to focus on areas important for the UK economy, citing
infrastructure sectors and online, high innovation and public sector markets. The consultation was closed
on 18 February 2011.
The OFT has also published its business plan for 2011 to 2015, which is in line with Government
commitments to transparency, setting out priorities, performance indicators and planned expenditure.
See further: Consultation Annual Plan; business plan
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• European Commission: Towards a coherent Approach to Collective Redress
On 4 February 2011, the European Commission launched a public consultation aimed at identifying
common principles for a coherent European approach to collective redress. The public consultation follows
a Joint Information Note (“Towards a Coherent European Approach to Collective Redress: Next Steps”,
Document SEC(2010) 1192 of 5 October 2010) of Vice-Presidents Almunia (Commissioner responsible for
Competition) and Reding (Justice, Fundamental Rights and Citizenship) and Commissioner Dalli (Health
and Consumer Policy) on the same topic.
The Europe 2020 Strategy aims at ensuring that citizens and businesses, in particular Small and MediumSized Enterprises (SMEs) can use in practice the opportunities offered to them by the Single Market.
When substantive EU rights are infringed, citizens and businesses must be able to enforce the rights
granted to them by EU legislation. Where the same breach of EU law harms a large group of citizens and
businesses, individual lawsuits are often not effective to stop unlawful practices or to obtain compensation
for the harm they caused, particularly where the individual loss is small in comparison to the costs of
litigation (and although the aggregate harm is very significant). In these circumstances, collective redress
mechanisms may be crucial to foster effective enforcement of the EU citizens’ rights and to secure an
increased legal certainty across the EU.
In the field of antitrust, a 2008 White Paper (“White Paper on damages actions for breach of the EC
antitrust rules”, COM (2008) 165, 2 April 2008) suggested collective redress as a means to empower
victims of antitrust infringements to effectively obtain compensation for the harm they suffered. Collective
redress is only one of a bundle of suggested measures that touch upon several aspects of substantive and
procedural law such as access to evidence held by other parties, probative effect of decisions of national
competition authorities, limitation periods and the passing-on defence. The consideration of collective
redress mechanisms in this context was widely debated by stakeholders, and encouraged by the European
Parliament (see in particular European Parliament resolution of 26 March 2009 on the White Paper
on damages actions for breach of the EC Antitrust Rules, 2008/2154(INI) paragraph 6, and European
Parliament resolution of 20 January 2011 on the Report on Competition Policy 2009, 2010/2137(INI),
paragraph 15, both available here). However, the potential relevance of collective redress in other areas
of competence of the European Union (see for instance Green Paper on Consumer Collective Redress,
COM(2008) 794 final) has made it necessary to develop a general coherent framework under which
initiatives on collective redress could be adopted in the future.
Against this background, the public consultation will be the opportunity for stakeholders to express
their views on a number of principles for a coherent approach to collective redress in Europe. One of
these principles is the need for effective and efficient redress for EU citizens, in line with the Charter of
Fundamental Rights of the European Union, which establishes a right to an effective remedy for everyone
whose rights and freedoms guaranteed by EU law are violated. Collective redress should allow savings
for claimants and defendants alike (e.g. by avoiding repeated re-litigation and the risk of conflicting
outcomes) while increasing efficiency of judicial systems. The need for effective redress mechanisms also
inspires the principle that effective access to justice should not be limited because of limited financial
resources. This problem particularly affects consumers and SMEs, and requires further reflexion on
adequate systems of financing for collective redress, by which meritorious claims could be funded.
At the same time, the Commission is concerned that effective redress must be fostered while avoiding
incentives for abusive litigation. Any European approach to collective redress should avoid such risks, by
defining appropriate safeguards.
Mechanisms of consensual dispute resolution are also considered important by the Commission in this
context. In particular, parties should have the possibility to resolve their collective dispute out of court,
as this may constitute a faster and more efficient means of settling the claims involved. However, in order
to provide the parties with appropriate incentives to reach a fair outcome, it is crucial to ensure that a
credible judicial alternative is available.
Finally, the consultation document invites stakeholders to reflect upon the efficient working of rules on
European civil procedural law and on applicable law, and the enforceability of judgments throughout the
EU. Specific challenges relating to these issues may have to be taken into account, especially in view of
the current divergence of national legal systems as regards compensatory collective redress, the need for
effective cross-border enforcement and the need to avoid abusive litigation via “forum shopping”.
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The public consultation will run until 30 April 2011.
For more information on the public consultation and on how comments may be submitted:
http://ec.europa.eu/competition/consultations/2011_collective_redress/index_en.html
For more information on antitrust damages actions :
http://ec.europa.eu/competition/antitrust/actionsdamages/index.html
SECTOR INQUIRIES/MARKET STUDIES
• Czech Republic: Energy Sector Inquiry about to be launched
On 17 February 2011, the Office for the Protection of Competition of the Czech Republic (the Office)
decided to launch an inquiry into the energy sector (the Energy Sector Inquiry). The Energy Sector Inquiry
will be carried out in two steps. The first step regarding electricity and lignite markets will be started
within the next two months. The second step, focusing on natural gas, central heating and black coal
markets is intended to be carried out next year.
The main aim of the Energy Sector Inquiry is to obtain a better understanding of the Czech energy markets,
their structure, their interdependence and the role of key players on those markets. Detailed examination
of electricity production, wholesale and retail electricity markets and their possible differentiation,
electricity transmission and distribution will be carried out in the first step of the inquiry. Since the
generation of electricity in the Czech Republic largely depends on coal plants, the Czech lignite markets
will also be investigated at the first stage.
The Office intends to send out its first requests for information in March or April 2011.
• Finland: Competition Authority publishes Second Competition Survey
On 14 February 2011, the Finnish Competition Authority (FCA) published a Second Competition Survey
entitled “Smart Regulation – Workable Markets”. In the report, the existing volume and impact of sectoral
regulation is assessed in 11 industries. The survey covers the following sectors and industries: postal
services, telecom/broadband, banking, construction, waste management, taxis, employees’ pension
schemes, land use planning (especially in relation to retail trade), national public service broadcasting,
district heating and business activity of municipalities.
The FCA considers that redesigning the current regulatory framework could facilitate new entry in
many of the sectors covered by the report. This would pave the way for more competition, efficiency
and innovation. The FCA also calls attention to deficient regulation, for instance due to lack of adequate
regulatory impact assessment, which may sometimes generate even more serious competition restraints
than the ones caused by the behaviours of private companies.
This is the second time when the FCA publishes its Competition Report. The previous report was issued
in 2008.
See further: Survey (in Finnish): http://www.kilpailuvirasto.fi/tiedostot/Kilpailukatsaus-2.pdf
An English summary of the survey will be available shortly on the FCA’s web page at http://www.
kilpailuvirasto.fi/cgi-bin/english.cgi?
Press spokesperson: Ari Ahonen at +358 97314 3368 or [email protected]
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• France: Sector Inquiry into Online Advertising: The Autorité issues the Results of its Sector
Inquiry and identifies two Dominant Positions in relevant sub-Markets, including Google’s, and
recommends a targeted Legislative Amendment
In February 2010, the Autorité launched a sector inquiry into the online advertising sector focusing on
whether or not some search engines, in particular Google, might foreclose some markets or carry out
discriminatory practices.
The Autorité issued the results of this sector inquiry on 14 December2010, in which it has delineated the
relevant markets and sub-markets and has identified two operators that hold a dominant position: Google,
in the advertising linked to search engines market; and Pages Jaunes, in the online directory market.
The Autorité has also established an analytical framework of prohibited practices and has recommended
targeted responses, in particular a legislative amendment to the so-called “Sapin law” (http://www.
legifrance.gouv.fr/affichTexte.do?cidTexte=LEGITEXT000006080988&dateTexte=vig, refer to Articles 20
to 29) that regulates all forms of advertising. While performing its inquiry, the Autorité as it has taken into
consideration various antitrust investigations throughout the European Union, and referred to the future
results of other sector inquiries or investigations where appropriate, e.g. as regards the ranking system of
natural online search engines, which is currently examined by the European Commission. Unlike decisions
issued in individual cases, the results of the Autorité’s sector inquiry bear no legal consequences.
The Autorité has found that advertising market linked to search engines was a relevant sub-market of the
online advertising market, notably because it allows for very fine-tuned targeting, and because no other
equivalent alternative offer exists in the eyes of advertisers, and that Google holds a dominant position
in this specific market based on a number of criteria. The Autorité noted that the market share of the
operator, the prices and margins it sets, the nature of its relations with customers, the entry barriers due
to its own investment in algorithms and indexing, as well as to network effects, converged and showed
that Google behaves independently from its customers. The Autorité stressed that such a dominant
position resulted from Google’s own strengths and was not reprehensible in itself, but recalled that due
to this position it had to exercise certain responsibilities.
The Autorité has therefore listed several possible concerns for competition, such as exclusivity clauses of
particularly long duration or scope (such as in the digitization process of the Lyon’s national library), the
setting up of technical obstacles, possibly discriminatory terms or conditions, or the opacity of certain
contractual relations with editors. It has also recalled that the European Commission and some other
NCAs were also examining such practices.
The Autorité also examined the relations between Google and the French press sector. It has found that
one of the main reasons for publishers’ dissatisfaction was the absence of any audit or data certification
provided by Google, notably the net revenues on the basis of which the remittance owed to partners is
calculated within the AdSense services. The Autorité has therefore called on the legislator to complement
the “Sapin” French law so as to provide for minimum “reporting” obligations and third-party audit
mechanisms. It also referred to the Italian commitment procedure, which was then under way, and took
note that Google committed to apply the same practices in the French territory as soon as the procedure
would be finalized in Italy.
The Autorité has also analysed another market, that of the indexation on online directories. Following
on from the Google/Double Click decision of the European Commission (COMP/M.4731, Decision of
11 March 2008), it has also delineated this sub-market in view of the specific ways advertisements and
keywords are selected, prices are set and the way customers use this service. The Autorité found that
Pages jaunes holds a dominant position on this market in France, but Google has begun entering this
market by offering local search results, and may therefore exercise a competition constraint in the future.
Last, the Autorité has welcomed initiatives of press editors to pool their resources and set up fee-based
digital kiosks and it has set out the conditions under which these projects could comply with competition
rules.
See further: http://www.autoritedelaconcurrence.fr/pdf/avis/10a29.pdf
25
• France: Sector Inquiry into Online Gambling: The Autorité makes Recommendations to Public
Authorities and the Sectoral Regulator to prevent Distortions of Competition between ex
Monopolies and new Entrants
After launching ex officio a sector inquiry into online gambling on 15 September 2010, the Autorité has
issued on 20 January 2011 its results.
The analysis of the competition issues in the sector appeared necessary in the wake of the law of 12 May
2010 opening online gambling to competition (law n° 2010-476 of 12 May 2010, http://www.legifrance.
gouv.fr/affichTexte.do?cidTexte=JORFTEXT000022204510). This law has indeed left untouched some
exclusive and special rights (laws of 21 May 1836, 2 June 1891 and 12 July 1983): the first category of
such rights had been historically attributed to the Française des Jeux for lotteries and sports bets sold in
brick-and-mortar outlets and to PMU for horse-race bets made in such outlets. PMU also enjoys special
rights as it is the sole vertically integrated operator authorized to organize both horse racing competitions
and online bets; it competes with different kinds of operators on these different segments of the market.
In the above mentioned legislation, the legislator sought to prevent manipulation of sports events
while keeping the historic role of PMU. With regard to this new legal framework, the Autorité has made
recommendations to prevent distortions of competition between ex monopolies and new entrants.
In the course of the investigation by the Autorité, some alternative operators such as Betclic, Beturf,
Bwin and Unibet have complained about the conditions imposed by PMU to have access to horse racing
data (racing listings, departing horses and jockeys, official results…) which are necessary to organize
bets on such events. So as to avoid an exclusion of alternative operators, the Autorité recommends
that public authorities reinforce the already existing legal provisions to guarantee transparent and nondiscriminatory access to such data. The Autorité also recommends that the sectoral regulator should
ensure that such mechanisms are actually implemented.
In addition, the Autorité points out risks of cross subsidies between activities which are still under a
monopoly and those which are now open to competition. It therefore invites operators which enjoy
special and exclusive rights to implement a legal and functional separation of their different activities.
Last, the Autorité notes that the huge amount of bets that the PMU is capable of collecting from brickand-mortar outlets allows it to offer very complex bets, which are very attractive as they offer higher
absolute rewards. To address this possible distortion of competition, the Autorité suggests to allow
licensed operators to use the money which has not been distributed to winners to fund bets on future
horse races and to set up a financial unbundling between brick-and-mortar and online bets within the
PMU.
See further: http://www.autoritedelaconcurrence.fr/pdf/avis/11a02.pdf
• Germany: Sector Inquiry into Electricity Generation and Wholesale reveals no Abuse
The Bundeskartellamt (BKartA) has presented the final report of the sector inquiry into electricity
production and wholesale to the public on 13 January 2011. The study examines the competition situation
and pricing on the German electricity generation and wholesale market for the years 2007 and 2008. All
parties concerned are invited to submit comments on the report by 15 March 2011.
The sector inquiry was triggered in March 2009 after numerous complaints about the alleged
manipulation of wholesale prices for electricity. The allegations raised concerns whether the major
producers of electricity had abusively withheld generation capacities in order to force up prices on the
energy exchange. The BKartA undertook an in-depth investigation into supply behaviour on the exchange
market and the operational management of more than 340 power station blocks (equivalent to more
than 90 % of the total German generation of electricity). To analyse the more than 300 000 000 sets of
data gathered, the BKartA developed a database, which served as the basis for a calculation model to
identify possible abusive conducts on the market for the production of energy.
The results show that the German market for the first-time sale of electricity is still dominated by the four
major producers (RWE, E.ON, Vattenfall, EnBW) with a combined market share over 80 %. Each of them
26
has a dominant position as each of the producers was indispensable for covering electricity demand
over a significant number of hours in 2007 and 2008. The empirical analysis, however, revealed that no
substantial production capacities had been systematically withheld by the producers. At the same time,
the producers do have incentives and possibilities to influence the electricity price by abusively holding
back capacities. Therefore, a whole range of issues require further discussion and will be investigated by
the BKartA in communication with the electricity providers.
The developed analytical framework including the own calculation model enables the BKartA to closely
monitor the future conduct of electricity producers and the price development at the exchange. Such
issues can be best addressed under a market transparency scheme with prompt and direct access to
the necessary data. The BKartA therefore strongly supports the launch of such a market transparency
scheme as currently planned by the Federal Government.
The results of the sector inquiry are available on the Bundeskartellamt’s website in German:
http://www.bundeskartellamt.de/wDeutsch/publikationen/SektoruntersuchungW3DnavidW2668.php
An English press release is also available: http://www.bundeskartellamt.de/wEnglisch/download/pdf/
Presse/2011/110113_PM__SU-Stromgrosshandel_-E_.pdf
• Germany: Sector Inquiry into the Food Retail Market launched
On 16 February 2011, the Bundeskartellamt has initiated a sector inquiry under Section 32 e of the
ARC [Act against Restraints of Competition] into the food retail market. The investigation focuses on the
competitive conditions in the purchasing markets for food and beverages.
Four major food retailers – Edeka, Schwarz-Gruppe (Lidl and Kaufland), Rewe und Aldi – dominate the
German food sales market with a total market share close to 85%. Therefore, every merger in this sector
is observed closely by the Bundeskartellamt and clearance has in recent cases only been granted subject
to conditions. In merger cases the Bundeskartellamt investigates the competitive conditions on the
retail side – food retailer to consumer – in a number of regional markets and analyses alternative buying
options for consumers. In addition, the Bundeskartellamt investigates the situation on the procurement
markets– food retailer to supplier – and more specifically the effects of the merger on small retailers and
suppliers.
Joint purchasing agreements between the main food retailers also raise concerns regarding the competitive
conditions on the procurement market. By the means of the sector inquiry the Bundeskartellamt intends
to deepen its analyses in the procurement markets.
The inquiry is limited to several issues. It is mainly focused on the question of the market position of the
food retailer including its partners in joint purchasing agreements regarding different product groups.
The investigation will especially be based on chosen products to determine whether and if so, to what
extent, any competitive advantages of the main food retailers as compared to their competitors exist.
The Bundeskartellamt will also examine the effects of those advantages on the retail markets.
A press release in EN is available:
http://www.bundeskartellamt.de/wEnglisch/News/press/2011_02_16.php
• Italy: Sector Inquiry into large Food Retail Distribution currently ongoing in Italy
Given the importance of the evolving competitive dynamics of the food retail sector on the food supply
chain and consumer price formation the Italian Competition Authority (ICA) launched on 27 October
2010 a general sector inquiry on large food retail distribution aimed at analysing; i) the competitive
relationships among operators grouped in the various alliances, ii) the behaviour of retailers in the
negotiation process with suppliers, and its implication both in the retail market and in the food products
markets.
The first step of the analysis intends to better understand the competitive problems possibly arising
from contractual practices that are commonly applied by large retailers in their food purchasing policies.
In December 2010 and January 2011, the ICA sent a questionnaire to the more representative Food
27
Producer and Processor Associations (Federalimentare e Unionalimentare), in order to collect relevant
information on their associates’ contractual relationships with the main retailers’ chains. Following this
general consultation, to be concluded by the end of March, a smaller sample of producers will be selected,
in order to investigate more in depth on the effective relevance and competitive effects of practices of
large retailers to request the food suppliers to contribute to distribution costs, often without a clear
connection of these payments (upfront access payments like slotting allowances, pay to stay fees, listing
fees etc.) with services provided (such as products’ layout, promotion, etc.); the competition impact of
the growing development of retailer’s private labels is also under analysis.
At the same time, the ICA is analysing some structural aspects of the market for food retail services,
based on interviews and requests for information both to the sector Association (Federdistribuzione) and
to the main italian retail chains (COOP, CONAD, Auchan, Carrefour, Esselunga, ecc..).
First results of the inquiry show how the development of large retail food distribution in Italy induced
a gradual evolution in the way in which retailers interact among them and with their suppliers. On one
hand, the modernisation of the retail sector led to a significant increase of the degree of concentration
as well as to the constitution of weaker aggregation forms, such as cooperatives, associations, franchises,
buying alliances and so forth. As a result of this process, the horizontal market competition shifted from
individual companies to groups of companies, variously integrated, often linked by a mere contractual
relationship. On the other hand, as regards the vertical relationships with suppliers, the importance of
joint purchasing agreements has considerably increased, thus reducing the small producers bargaining
power. Moreover, the spreading out of private label transformed the retailers in direct competitors of
producers.
This evolution may have important implications for competition, both in the retail market and in the
upstream market of food products. In this respect, relevant issues are: 1) at the horizontal level, the impact
of agreements and alliances by companies to undertake joined business functions such as purchasing,
logistics, trade marks, promotions, development strategies and so on; 2) at the vertical level, the role
of private labels in defining the contractual relationships with the suppliers, and the practice of large
retailers to request the suppliers to contribute to distribution costs, often without a clear connection
between these payments and services provided (such as products’ layout, promotion, etc.).
See further: http://www.agcm.it/indagini-conoscitive-db/open/C12564CE0049D161/
E09E068FBAA154F2C12577DC003E772C.html
• Latvia: The Competition Council concludes that existing Regulation impedes Price Competition
in Medicine Market
On 1 February 2011, the Competition Council of Latvia (CC) published its conclusions of the Sector
Inquiry into the pricing system in medicine market in Latvia. In its report, the CC draws attention to the
existing problems in this market and explores opportunities to reduce prices by means of competition
and appropriate regulation.
The main recommendations made by the CC are the following:
• Instead of referring to product names, prescriptions should only refer to the active ingredients of the
particular medicine. Price competition between producers could therefore be strengthened and the
medicine distributors’ competition for the doctors’ choice (that might not be motivated by the price of
equivalent medicine) could be eliminated;
• To eliminate the situation where it is more profitable to sell more expensive medicines, the system of
markup calculation that is regulated by government should be reviewed: it should not be based on the
producers’ price, but rather on fixed expenses e.g. expenses for storage and delivery of the medicines
concerned;
• Restrictions to parallel imports and to the distribution of generic medicines should be removed as they
benefit producers of more expensive drugs;
• Discounts at the level of producers or wholesalers that can not be included in the markup calculation
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(e.g. volume discounts) should be prohibited;
• As the upper limit of permissible markup is fixed both at the wholesale and retail level, undertakings
which own medicine wholesale companies and pharmacies should use different methods for the
calculation of mark-up and not include expenses that do not exist in such vertically integrated structures;
• Situations where pharmacies purchase medicines directly from producers should be encouraged thus
diminishing the market power of wholesale companies;
• The existing restrictions regarding the opening of new pharmacies should also be revised, eliminating
those who impede free competition between pharmacies in areas where it is advisable, e.g. in larger
cities.
See further: Market Surveillance of CC (in Latvian):
http://www.kp.gov.lv/uploaded_files/KPPP082ZaluUzraudziba.pdf
• Portugal: The Competition Authority conducts Study on Motor Fuels sold on Motorways
The Portuguese Competition Authority (PCA) is currently carrying out a Study to assess the impact of
fuel price information panels, placed along the motorways, that display average retail prices charged on
those motorways.
The use of information panels was established by Decree-Law No. 170/2005 of 10 October 2005, following
the PCA’s Recommendation No. 3/2004 on the fuel market presented to the Government. The installation
of the panels took place in particular during April and May 2009.
The price information panels aim at increasing transparency and information for consumers, so as to
allow them to compare prices and choose the fuel station in advance, when driving on motorways, thus
promoting price competition between fuel retailers.
Two years after the implementation of the information panels, the PCA’s study assesses the impact of
the panels on fuel retail price of Gasoline IO95 and road diesel charged by the different fuel stations that
operate on motorways.
The study is expected to be concluded in the first semester of 2011. It follows three in-depth reports on
the functioning of fuel markets and recommendations issued by the PCA. The PCA closely follows this
market and publishes a Quarterly Newsletter and a Monthly Bulletin on Liquid Fuel Statistics.
See further:
PCA’s Recommendation No. 3/2004: http://www.concorrencia.pt/Download/recomendation2004_03.
pdf
Final Report “Detailed analysis of the liquid fuel and bottled gas sectors in Portugal”:
http://www.concorrencia.pt/download/Final_Report_on_Liquid_and_Gas_Fuels_March_2009_English_
version.pdf
Monthly Bulletins:
http://www.concorrencia.pt/Publicacoes/Autoridade.asp
http://ec.europa.eu/competition/ecn/brief/01_2010/fuel_pt.pdf
Quarterly Newsletters: http://www.concorrencia.pt/Publicacoes/Newsletter.asp
• United Kingdom: The Office of Fair Trading (OFT) publishes Market Study on Outdoor
Advertising
On 3 February 2011, the OFT published its market study report on the outdoor advertising industry in
the UK.
As part of the study, the OFT looked at whether the payment of volume rebates by outdoor media
owners to specialist buyers could affect incentives and worsen the deals offered to advertisers. It found
that competition between buyers and between agencies ensured that the majority of these rebates are 29
passed on to advertisers. A proportion of rebates are passed on to advertisers directly and all advertisers
may benefit indirectly through lower commission rates charged by media agencies.
However, the OFT found some potential for rebates to distort how campaigns are booked and increase
the price that advertisers pay. It concluded that this can be tackled most effectively by advertisers
themselves. Advertisers should consider negotiating contracts that explicitly set out how rebates are to
be treated. In addition, advertisers can take steps such as using media auditors to monitor campaigns to
ensure agencies and specialist buyers act in the advertiser’s best interests.
The study also looked at potential barriers to entry and expansion for media owners. As a result, the OFT
has opened an investigation into contracts entered into by each of two media owners, Clear Channel and
JCDecaux, with some local authorities relating to advertising on street furniture such as bus shelters and
information panels. In particular, the OFT will consider the long duration and potentially restrictive terms
of these agreements. The OFT’s investigation is at a very early stage and no assumption should be made
that any of the agreements infringes competition, within the meaning of the Competition Act 1998 and/
or Article 101 TFEU.
See Press Release 12/11 on: www.oft.gov.uk
OTHER ISSUES OF INTEREST
• Bulgaria: The Competition Authority (CPC) celebrates its 20th Anniversary in 2011
This year, the Bulgarian Commission for the Protection of Competition is celebrating its 20th anniversary.
The year 2011 marks a milestone in the history of competition protection in Bulgaria. Over the past two
decades, Bulgaria underwent a challenging transition from a planned to a market economy which is
governed by the principles of free competition. The Law on Protection of Competition (LPC) had to be
adapted to economic realities and was gradually transformed, resulting in the adoption in 2008 of a new
LPC, which is fully in line with EU competition acquis.
In order to raise the awareness of Bulgarian society about the importance of competition rules and the
enhanced role of the CPC as the national authority responsible for promoting and enforcing competition
law, the commission is organizing a series of events throughout the year.
The culmination of the celebrations will be a Jubilee Competition Day to be held in November 2011
in Sofia with the theme “Current Trends and Priorities of Competition Policy”. At the event, heads of
competition authorities, influential academics, lawyers, judges and business representatives will engage
in vigorous dialogue and exchange of viewpoints on internationally relevant issues of competition law
and policy. The conference will strive to provide a truly educational experience for companies, law firms,
regulators, the judiciary and other stakeholders.
Another highlight of the celebrations will be the seminar organized with the financial support of the OECDGVH Regional Centre for Competition in Budapest (Hungary). The seminar will focus on anticompetitive
conduct within associations of undertakings and will be held on 7 – 9 June in Sofia. The target group of
the event will be experts from competition enforcement agencies from the Southeast, East and Central
European region.
Moreover, on 25 February, the CPC will participate in a seminar with business representatives and lawyers,
organized jointly with Boyanov Law Office. The focus of discussion will be the new regime for block
exempting certain categories of agreements prohibited under EU and national law; cartel agreements
and unfair competition.
The Commission will announce a national essay contest with the aim of attracting students with analytical
and creative thinking, willing to share their vision for the future development of competition law and its
place in the modern economic reality.
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Finally, for the first time, the CPC will host Open Door Days. Visitors will have the opportunity to get
acquainted with the work of the CPC through a thematic interactive walk through the corridors of the
Commission.
• Finland: The Competition Authority’s (FCA’s) Stakeholders comment on the Agency’s Expertise
and Trustworthiness
A stakeholder survey on the FCA carried out at the end of 2010 revealed that the agency is generally
considered competent, reliable and professional. At the same time, the stakeholders find that there is
room for improvement as regards interaction with the stakeholders and creativeness. Also, it was felt
that investigation and decision-making takes a long time and thus briskness could be increased. A similar
study has been conducted twice in the past, and the same qualities were underlined on those occasions
as well.
According to the stakeholders, the FCA has achieved its performance targets relatively well. The FCA’s
activities in all areas are not however known to the public and the best ratings were provided on the
targets which were visible (in particular, cartel surveillance). The estimates on the performance targets
which produce no impressive public results were weaker.
The stakeholders also consider that the FCA has adopted high-quality decisions with the appropriate
content, but that the reasoning of the decisions should be brought out even more. The FCA is also urged
to raise citizens’ debate and discussion with the public. Additionally, it should be clearly stated in public
discussions why the promotion of competition is so important.
The most useful methods of interaction are considered to be meetings with the FCA’s directors and
experts. The FCA’s web pages are also found useful.
The survey was conducted by Infor Oy and the stakeholders included political decision-makers (such as
ministers and members of Parliament) representatives of the economy (namely businesses, employers’
organizations and trade unions), the public administration, competition lawyers, representatives of
research institutes, and reporters. A total of 191 stakeholders provided input to the survey.
• Poland: Seminar on Vertical Restraints in Warsaw
The series of international events planned for 2011 by the Polish Office of Competition and Consumer
Protection (UOKiK) will be inaugurated by the seminar on vertical restraints to be held on 5 April 2011
in Warsaw. The topic of this seminar fits in the context of the adoption of the 2010 block exemptions on
Vertical Restraints and accompanying guidelines by the European Commission.
Two discussion panels will be held: “Analysis of the effects on the market of vertical restraints” followed
by “Vertical restraints – A practitioner’s experience” which are intended to bring together experienced
lawyers and economists. The participants will focus on issues such as positive and negative aspects of
vertical restraints in the context of EU block exemptions and guidelines, resale price maintenance or
practical problems stemming from distribution agreements and franchising. Each panel will be completed
by a “questions and answers” session. The international audience will include government officials,
practitioners, academics, as well as business representatives.
The event is organized within the Central European Competition Initiative (CECI), a forum for cooperation
established by National Competition Authorities from Czech Republic, Hungary, Poland, Slovakia, Slovenia
and Austria. CECI aims at promoting the exchange of experience and good practices between its members
in the field of competition protection. Its goal is also to encourage the organization of common initiatives
such as conferences and training. Until now, the UOKiK has hosted four CECI seminars in Poland.
• Czech Republic: Meeting of the Heads of Czech and Slovak Competition Authorities
On 7 December 2010, Ms Danica Paroulkova (Antimonopoly Office, Slovak Republic) and Mr Petr Rafaj
(Office for the Protection of Competition, Czech Republic) met in Brno to discuss current topics concerning
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competition, public procurement and legislative issues .
Both Ms Paroulkova and Mr Rafaj confirmed that they had agreed on holding regular meetings, and
exchanging information and experience from the area of competition as well as public procurement (e.g.
the current trend of the interconnection between competition enforcement and public procurement
control in combating bid rigging). More particularly the heads of agencies discussed questions of
application of national legislation in the context of European competition rules, due process with
regard to the respective national administrative frameworks, the relations of competition authorities
with stakeholders, cooperation in sector inquiries (with regards to the energy sector and network
industries) and future cooperation in organising seminars and conferences. Both heads of Czech and
Slovak competition authorities shared their opinions on the future direction of the competition policy
and agreed that an emphasis on consumer welfare was inevitable for future priority setting.
• Slovakia: Seminar on Competition Protection and Competition Law
On 7 December 2010, the Faculty of Law of the Trnava University in Trnava (FLTU) organized, in
cooperation with the Antimonopoly Office of the Slovak Republic (AMO) and the law firm PRK Partners,
a seminar dedicated to current topics of competition protection and competition law in Slovakia and in
European Union. Apart from speakers from AMO, FLTU and PRK Partners also a representative of the
DG Competition, Mr. Andrej Kralik introduced a topic on Settlements – experience and praxis of the
European Commission. Four employees of the AMO made presentations on the following topics:
the European Commission as amicus curiae in proceedings before the Slovak court; selected judgments
of the Slovak courts in competition matters; present trends in the European competition law and Selected
competition issues in public procurement.
PERSONALIA
• Lithuania: New Chairman appointed at the Authority
On 24 January 2011, the President of Lithuania, Dalia Grybauskaitė signed a Decree by which Mr. Šarūnas
Keserauskas, lawyer, has been appointed as Chairman of the Competition Council of the Republic of
Lithuania for the tenure of six years. Mr. Keserauskas will get into office on 4 April 2011. By another
Decree Ms. Jūratė Šovienė, a Member of the Competition Council has been appointed as the acting
chairperson for the period from 1 February to 1 April.
Mr. Jonas Rasimas, the former Chairman left the office of Chairman of the Competition Council for the
position of Director in DG Competition, in charge of Energy and Environment.
Press release (in Lithuanian): http://www.konkuren.lt/index.php?show=news_view&pr_id=816
• Malta: Acting Director General and Acting Director appointed at the Consumer and
Competition Department
On 1 January 2011, Godwin Mangion was appointed as Acting Director General of the Consumer and
Competition Department of which the Office for Fair Competition is part: he will hold such position until
the Malta Competition and Consumer Affairs Authority is established as expected in the next months.
Mr. Mangion has previously occupied the post of Director of Operations within the same department.
On 1 January 2011, Joseph Callus was appointed as Acting Director at the Office for Fair Competition.
Mr. Callus had previously occupied the post of a technical Assistant Director (Policy & Regulatory) and
will serve as an acting director until the envisaged Malta Competition and Consumer Affairs Authority is
established.
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• Slovenia: Acting Director appointed at the Authority
The Government of the Republic of Slovenia appointed Mr. Damjan Matičič as acting Director of the
Slovenian Competition Authority from 1 February 2011, based on the nomination made by the Minister
of Economy. This follows the resignation on 6 January 2011 of the former director of the Slovenian
Competition Authority Mr. Jani Soršak with effect from 31 January 2011.
In an earlier period of his career Mr. Matičič was employed by the Ministry of the Interior in the Police
Department. In 2008, he joined the Competition Protection Office and was nominated as Head of
investigations and legal affairs unit till 31.1.2011. The acting director is appointed for a six-month period
or until the regular nomination procedure has been completed.
• European Commission: New Chief Economist apppointed
On 1 May 2011, Professor Kai Uwe Kühn will start his three-year mandate as new chief economist of the
Directorate General for Competition. Professor Kühn will be the third competition chief economist since
the post was created in 2003, in order to reinforce economic analysis in EU competition matters. He
follows Lars-Hendrik Roeller and current jobholder Damien Neven.
Professor Kühn holds a doctorate in economics from Oxford University and is currently an Associate
Professor at the University of Michigan. He has advised clients on a number of competition cases
brought before the Commission, in particular the Microsoft antitrust investigation and the GE/Honeywell
merger. Since 1992, he has held teaching positions at Princeton University, the autonomous University
of Barcelona and others. In recent years, his work has focused on antitrust economics, with a particular
interest on collusion and vertical integration.
The Chief Economist assists in evaluating the economic impact of the Commission’s actions in the
competition field and provides independent guidance on methodological issues of economics and
econometrics in the application of EU competition rules. He contributes to competition cases, in particular
those involving complex economic issues and quantitative analysis and to the development of general
policy instruments.
See further: Press release.
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