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.

Table of contents

Enforcement & Cases

Legislation & Policy

Other issues of interest

ECN Members’ websites

ECN statistics

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ECN BriefECN Brief 01/2011

Welcome to the sixth issueof the

ECN Brief

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

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AUTHORITIES

o Belgium: Authority imposes Interim Measures on De Beers

o France: Fines for Cartel and Abuse of Dominant Position in Road Signs and Safety Equipments Sector

o Germany: Fines imposed on Chemical Wholesalers’ Cartel

o Italy:- Cartel in Personal Care Products Sector fined- Binding Commitments in Sicilian Power Prices Case

o Lithuania: Anticompetitive Insurance Pool Agreement fined

o The Netherlands: Fines for Insulated Glass Manufacturers’ Cartel

o Portugal: Authority prohibits RPM affecting Hospital Public Tenders

o Spain: - Opening of formal Proceedings in Telecom Abuse Case- Monitoring closed in Interchange Fees for Debit and Credit Cards Case

o Sweden: - No further Action after Commitments in Schneider Case- Cartel in Package Tour Sector

o United Kingdom: Decision in Loan Pricing Case

COURTS o European Commission:

Judgment of the EU General Court on E.ON Breach of Seals’ Case

ENFORCEMENT & CASES

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

Lithuania: Competition Council imposes Fines on 11 Producers of Orthopedic Products and their Association

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

The Netherlands: Competition Authority (NMa) imposes Fines for Cartel Agreements in Flour Industry

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

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o Bulgaria: Authority adopts Block Exemption for certain Categories of Agreements

o EFTA: Authority adopts Guidelines on Vertical Restraints

o Hungary: Hungarian Competition Act recently amended

o Italy: Opinion of the Authority on Draft Decree on the Postal Services Liberalization

o The Netherlands: Businesses factor in NMa’s Merger Control and Cartel Enforcement in their Conduct

o Portugal: Competition Authority aims at increasing Transparency and Legal Certainty in Antitrust Proceedings

o United Kingdom: Public Consultation on the Office of Fair Trading’s Annual Plan and Publication of Business Plan

o European Commission: Public Consultation on Collective Redress

LEGISLATION & POLICY

France: Autorité de la concurrence consults on Draft Guidance on its Method to set Fines for Antitrust Cases

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

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

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EVENTS

o Czech Republic: Meeting of the Heads of the Czech and Slovak Competition Authorities

o Slovakia: Seminar on Competition Protection and Competition Law

CONTACTS

ECN STATISTICS

Access to Commission Cases

Training of Judges in EU Competition Law

OTHER ISSUES OF INTEREST

© 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.

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

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

ECN members’ websites

Number of envisaged decisions by national competition authority; types of envisaged decisions etc.: http://ec.europa.eu/competition/ecn/statistics.html

Case search

• List of beneficiaries 2009• Call for Proposals 2011

Personalia

• Lithuania: New Chairman appointed

• Malta: Acting Director General of the Authority appointed

• Slovenia: Acting Director appointed at the Authority

• European Commission: New Chief Economist appointed

Annual Reports

Link to the Annual Reports of all ECN Members

• 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.

ENFORCEMENT & CASES

AUTHORITIES

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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 non-competitive 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),

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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 pers@nmanet.nl

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.

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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%20publicare_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%20BEERS_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

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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.

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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/463FF11B7E169832C125780F003E49F7.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.

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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/81E6CD0C6DA9DC12C1257815004BC2DE.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

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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 pers@nmanet.nl

• 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

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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:

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(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.

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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

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• 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/31f1360097ab4f6080257663003a6af0?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/7bdbace17723aeeb80257663003acb84?OpenDocument

More on the BIDS case:http://ec.europa.eu/competition/ecn/brief/01_2010/bids_irl.pdfhttp://ec.europa.eu/competition/ecn/brief/02_2010/ec_amicus.pdf

Press spokesperson Clodagh Coffey; Communications Officer, The Competition Authority

COURTS

• 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

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LEGISLATION & POLICY

• 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

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

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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/8BC0FF91095B67C8C125781D002FAF44.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,

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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%20Eindrapport_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 pers@nmanet.nl

• 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 Medium-Sized 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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• 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 ari.ahonen@kilpailuvirasto.fi

SECTOR INQUIRIES/MARKET STUDIES

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

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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

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• 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 non-discriminatory 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 brick-and-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

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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

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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 passed on to advertisers. A proportion of rebates are passed on to advertisers directly and all advertisers

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• 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 OECD-GVH 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.

OTHER ISSUES OF INTEREST

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

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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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• 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.

PERSONALIA

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.

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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.