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Dear Reader,

The ECN Brief is completing its third year of publication: with already 15 issues, it reflects the richness of antitrust enforcement actions and advocacy by the authorities that form the European Competition Network (ECN).

The creation of the ECN was part of the implementation of Council Regulation (EC) No 1/2003 (Regulation 1/2003) which was adopted 10 years ago. It marked the beginning of a new era for the enforcement of the EU competition rules in which the competition authorities of the EU Member States became much more active players in this field.

Enforcement & Cases Legislation & Policy Other issues of interest 10th Anniversary of Regulation 1/2003

Most contributions of the ECN members in this Extended Issue show how Regulation 1/2003 has impacted on national competition laws and to what extent it has served as a source of inspiration for convergence in this area. Other articles illustrate the practical use of the cooperation tools put in place by the Regulation, such as the power to take investigatory measures on behalf of other network members. Moreover, the structure of the competition authorities forming the network continues to evolve and we see examples of major structural reforms reported in this issue.

The Extended Issue further highlights the recent endorsement of a strengthened ECN Model Leniency Programme (MLP) that ECN competition authorities have jointly drawn up, and around which they align their leniency procedures. Leniency programmes are a key tool for the detection of secret cartels for virtually all ECN members. The MLP is an achievement of the network of these last ten years. The Extended Issue also gives a prominent place to the ECN Reports on investigative and decision-making powers which provide an overview of the enforcement procedures in the ECN. These reports give insight into the degree of convergence achieved to date and can serve as a basis for informed debate about the need for further procedural convergence within the ECN.

Since the adoption of Regulation 1/2003, EU competition rules are more and more important to the practice of the national competition authorities. Cooperation within the ECN continuously stimulates the development and exploration of new paths. The ECN Brief will help you to remain informed.

Season’s greetings,

Alexander ItalianerDirector General for Competition, European Commission

ECN BriefExtended Issue

ECN Brief 05/2012

ISSN 1831-6107 KD-AH-12-005-EN-N

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AUTHORITIES

o Austria: First Decisions in Building Insulation Case

o Belgium: No Grounds for Action against Belgacom for Launch of Happy Time Tariff Plan for fixed Telephony Services

o Bulgaria: Authority to investigate the Union of Bulgarian Millers

o Germany: - Fines imposed on Manufacturers of Power Transformers for collusive Tendering - Joint Venture in Chemicals Trading Sector prohibited

o Italy: Fines imposed on Cartel in Road Barriers Sector

o The Netherlands: Notaries to adjust their Code of Conduct

o Spain: - Authority fines Paper Envelope Exporters’ Cartel - Cartel in Maritime Transport between Spain and Morocco fined - Authority fines Car Distributor

o Sweden: Interim Order granted in Boycott of Sweden Ice Hockey League against NHL Players

COURTS o European Courts:

Court of Justice upholds Commission Decision on Breach of Seal during Inspection

ENFORCEMENT & CASES

Bulgaria: Fines imposed on Members of Distribution Network for Hyundai Motor VehiclesThe undertakings were found to have participated in prohibited agreements to fix the resale prices of new Hyundai motor vehicles, original spare parts and out-of-warranty repair and maintenance services, to have illegally agreed to territorial restrictions on the active sales of new motor vehicles to end users, as well as to restrict cross-supplies between dealers and between distributors operating at a different level of trade between 2008 and 2012.Read more

Greece: Authority accepts Commitments from Dominant Greek incumbent Gas CompanyThe commitments which were accepted with a view to speeding up the liberalisation of the Greek gas supply market, evolve around four main axes: a) the unbundling of gas supply from gas transportation services, b) providing for a higher degree of customer mobility and increase of liquidity in the market of natural gas, c) the introduction of fair, transparent and non-discriminatory contractual terms and d) the gradual opening of reserved capacity in the natural gas transmission network. Read more

Romania: Fines imposed on Bid-Rigging Cartel in Natural Gas Pipelines SectorThe Romanian Competition Council (RCC) found that four undertakings had taken part in bid rigging in the framework of two public procurement procedures organised by Transgaz: the first concerned a tender for the natural gas connection for the gas-supply of a cogeneration power plant, and the second related to a gas transport pipeline tender procedure. Based on its findings, the RCC sanctioned the undertakings concerned with fines totalling € 5 600 000.Read more

European Commission: Producers of TV and Computer Monitor Tubes fined for two ten year-long CartelsOn 5 December 2012, the Commission fined seven international groups of companies a total of € 1 470 515 000 for participating in either one or both of two distinct cartels in the sector of cathode ray tubes. It established that for almost ten years, these companies fixed prices, shared markets, allocated customers between themselves and restricted their output. Read more

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o Denmark: Untertakings strive to comply with Competition and Consumer Protection Legislations

o Finland: Finnish Government’s Programme for Promoting Healthy Competition proposes the Amendment of Finnish Competition Act

o France: New Law on economic Regulation in overseas Departments vests Autorité with specific Injunctive Powers

o Germany: - Launch of Sector Inquiry into Oil Refineries and Oil Wholesalers - Publication of final Report on Sector Inquiry into Rolled Asphalt Industry

o Italy: Authority issues Report on Liberalisation

o Latvia: Competition Council creates Knowledge Network to fight Bid-Rigging

o Poland: Authority launches another Edition of the Campaign ‘Entrepreneur, don’t collude!’

o Spain: Authority publishes Report on Competition in Dairy and Olive Oil Sectors

o United Kingdom: - OFT calls for Information about Online Personalised Pricing Practices - OFT refers Private Motor Insurance Market to Competition Commission

LEGISLATION & POLICY

Finland: New Competition and Consumer Authority to commence Operations on 1 January 2013The purpose of the merger between the Finnish Competition Authority and the Consumer Agency is to enhance the importance of consumer and competition affairs in society and to streamline administration (see also ECN Brief 3/2012). The current statutory duties of the authorities involved are not to be changed. The Competition and Consumer Agency is to have separate divisions for competition affairs and consumer affairs. The President of the Finnish Republic confirmed the pertinent acts on 30 November 2012. Read more

Italy: Authority requests Modifications in Legislation in Field of Leniency and Merger ReviewIn its Report on Liberalisation issued at the beginning of October, the Italian Competition Authority (ICA) stated that efforts to promote competition need to be supplemented by the vigorous enforcement of competition policy. For this reason, the ICA requests legislative changes that would strengthen its effectiveness in fighting cartels and reviewing mergers. Read more

Poland: Council of Ministers accepts Proposal for Draft Amendment of Polish Competition LawThe changes will concern the merger procedure, the creation of a Leniency Plus programme, the introduction of liability of individuals in case of an infringement of competition law as well as the introduction of a settlement procedure to simplify and shorten antitrust proceedings. The competition authority will draft the new provisions along the lines of what has been accepted by the Council of Ministers. Read more

United Kingdom: OFT launches revised Competition Act Procedures GuidanceOn 16 October 2012, the Office of Fair Trading (OFT) set out new decision-making processes and procedural enhancements to boost the speed and robustness of Competition Act 1998 investigations and increase engagement with parties involved. It updates the OFT’s guidance by providing for collective decision-making, the ability for parties to make representations on key elements of the penalty calculation ahead of the final decision, more interactive oral hearings and measures to improve transparency of ongoing investigations. Read more Annual Reports

Romania: Fourth Report on Competition launched

Link to the Annual Reports of all ECN Members

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EVENTS

o Austria: First Competition Talks organised in October and November 2012

o Bulgaria: Report on Sofia Competition Forum

o Czech Republic: Report on Saint Martin Conference 2012

o France: Report on first ICN Advocacy Workshop in Paris

o Germany: Report on Meeting of Working Group on Competition Law in Bonn

o Malta: Conference held on EU Competition Law and its Application in Malta

o Poland: - Authority hosts Conference on Bid-Rigging - Report on Economics Seminar

o Slovakia: Report on Workshop on Protection of Leniency Documents vs. Defence Rights

CONTACTS

ECN STATISTICS

Access to Commission Cases

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. Nei-ther any Authority nor any person acting on its behalf is responsible for the use which might be made of information contained in this publication. © 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.

OTHER ISSUES OF INTEREST

Hungary: Upcoming Programmes of OECD-GVH Regional Centre for Competition in BudapestHaving organized several highly memorable events on competition issues in 2012, the OECD-GVH Regional Centre for Competition at the Hungarian Competition Authority (GVH) in Budapest proposes for 2013 three standard events relating to exclusionary and discriminatory practices, analysis and procedures of mergers and intellectual property rights, as well as one special event on cartel investigation procedures and two workshops for judges. Read more

European Commission: European Competition Forum on 28 February 2013Joaquín Almunia, Vice-President of the European Commission, hosts the second European Competition Forum on 28 February 2013 in Brussels. On the agenda will be three main topics: the role of the state in the global economy; competition, innovation and the Single Market, as well as competition policy and the Single Market for financial services. Distinguished guests include Mario Monti, Prime Minister of Italy and Joaquín Almunia as well as representatives of governments and competition enforcement agencies, the business world, and the legal and economic communities. 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

Personalia

• France: New Vice-President at the Autorité

• United Kingdom: New Executive Director at the Office of Fair Trading

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10 years of Adoption of Council Regulation 1/2003

o Austria:

How Regulation 1/2003 influenced the Development of National Competition Law ...........................................Read more

o Bulgaria:

Modernisation of Competition Law after Regulation 1/2003 ...........................................Read more

o Cyprus:

A small Authority’s Perspective on Regulation 1/2003 and the ECN ...........................................Read more

o Denmark and Sweden:

Success Stories of Cooperation within the ECN - Assistance in carrying out Investigations pursuant to Article 22 of Regulation 1/2003 ...........................................Read more

o France:

ECN Work on Leniency ...........................................Read more

o Finland:

Reforms of Competition Law lead to increased Convergence ............................................Read more

10th Anniversary of Regulation 1/2003:Convergence and Cooperation in the ECN

• European Competition Network refines its Model Leniency Programme On 22 November 2012, the European Competition Network (ECN) published a refined Model Leniency Programme (MLP), around which ECN competition authorities align their own leniency procedures. The MLP was adopted in 2006 to make it easier for companies to apply for leniency, in particular where it is not clear which competition authority will take the case forward. The ECN has now, in particular, clarified and simplified the information that must be provided by companies that are applying for leniency with several different authorities in the EU.

Read more

• ECN: Publication of Reports on Investigative and Decision-Making Powers In November 2012, ECN Reports on investigative and decision-making powers were published which, for the first time, provide an overview of the enforcement procedures in the ECN.

Read more

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Food & Retail News

o Germany:

Ten Years after the Adoption of Regulation 1/2003 - the Road to further Convergence ...........................................Read more

o Hungary:

The Hungarian Perspective on 10th Anniversary of Regulation 1/2003 ...........................................Read more

o Ireland:

Courts as Competition Authorities - Reflections on Ireland’s Implementation of Regulation 1/2003 ...........................................Read more

o Italy:

The Italian Mastercard Case as an Example of Consistency of Decisions adopted by NCAs and the European Commission ...........................................Read more

o Latvia:

Development of National Competition Law ...........................................Read more

o Malta:

Amendments to Competition Rules leading to increased convergence with Regulation 1/2003 ...........................................Read more

10th Anniversary of Regulation 1/2003:Convergence and Cooperation in the ECN

o Poland:

Implementation of Regulation 1/2003 - the Polish Perspective ...........................................Read more

o Portugal:

Regulation 1/2003 and Competition Enforcement in Portugal ...........................................Read more

o Romania:

Overall Activity of Competition Council towards Enforcement of Regulation 1/2003 ...........................................Read more

o Slovakia:

The Application of Article 15(3) of Regulation 1/2003 in Proceedings before Slovak Courts ...........................................Read more

o Spain:

Draft Bill creating National Markets and Competition Commission ...........................................Read more

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ENFORCEMENT & CASES

AUTHORITIES

• Bulgaria: The Commission on Protection of Competition fines Members of Distribution Network for Hyundai Motor VehiclesOn 6 November 2012, the Bulgarian Commission on Protection of Competition (CPC) imposed fines amounting to approximately € 8 000 000 on the authorised importer of Hyundai motor vehicles (‘Industrial Commerce’ Ltd.) and five members of its authorised dealer network in Bulgaria (‘Alexiev’ Ltd., ‘Technocar’ Ltd., ‘Carmobil’ Ltd., ‘Kabi Car’ Ltd. and ‘Mototechnika Hristov’ Sole Trader) for infringements of both national and EU competition law between April 2008 and October 2012.

The undertakings were found to have participated in prohibited agreements to fix the resale prices of new Hyundai motor vehicles, original spare parts and out-of-warranty repair and maintenance services. As members of a selective distribution network the undertakings were also found to have illegally agreed to territorial restrictions on the active sales of new motor vehicles to end users, as well as to restrict cross-supplies between dealers and between distributors operating at a different level of trade. It was also established that the undertakings had concluded agreements to prohibit dealers from selling competing brands of new motor vehicles, as well as the use of spare parts of matching quality for out-of-warranty repairs of Hyundai motor vehicles.

The investigation of the CPC into the prohibited agreements was initiated in 2011 following the identification of indications of the prohibited agreements, which were included as clauses in the framework dealer contracts concluded between the importer and dealers.

As part of the investigation, the CPC has carried out unannounced inspections in the premises of “Industrial Commerce” Ltd. and sent information requests to dealers.

Due to the long duration of the infringement and other aggravating circumstances (e.g. obstruction of the investigation by some dealers) the individual amount of each fine corresponds to the legal maximum of the fine according to national competition law, i.e. 10% of the turnover for the preceding business year.

The full non-confidential text of the Decision (in Bulgarian) is available at the Competition Authority’s website.

• Greece: The Hellenic Competition Commission accepts Commitments from dominant Greek incumbent Gas CompanyIn a landmark decision of 12 November 2012, the Hellenic Competition Commission (HCC) accepted commitments offered by DEPA, the Greek incumbent gas supplier, with a view to speeding up the liberalisation of the Greek gas supply market. DEPA is dominant in the market of natural gas supply and the secondary market of natural gas transmission.

The commitments evolve around four main axes: a) the unbundling of gas supply from gas transportation services, b) providing for a higher degree of customer mobility and increase of liquidity in the market of natural gas, c) the introduction of fair, transparent and non-discriminatory contractual terms and d) the gradual opening of reserved capacity in the natural gas transmission network.

The details of the commitments are as follows:

Α. The unbundling of supply from transport is addressed through DEPA’s obligation to untie contractually the two products/services by offering to its clients – starting from 30 November 2012 – a gas supply

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contract, not including transportation services. The price of supply of natural gas will be the same in both types of contracts.

Β. A higher degree of customers’ mobility is achieved, firstly, through the renegotiation of annual contractual gas quantities (ACQs). In particular, DEPA had to inform all its clients by 30 November 2012 that they may re-assess (without any limit as to quantities declared) their ACQ for 2013. Moreover, each year the customers may augment or decrease their ACQs for the next year by a percentage varying from 5 to 20% of the previous year ACQ (depending on their annual gas consumption from DEPA), while at the same time still enjoying the flexibility of 80 to 110% of ACQ provided for already, by the “take or pay” provisions of the contracts in force. Furthermore, regarding new contracts or in case of renewal of existing contracts DEPA: a) will inform its clients that they may opt for a one-year duration contract and b) will not enter into contracts of a duration longer than two years with customers that purchase more than 75% of their actual gas supply needs from DEPA.

In addition, an auction system shall increase liquidity in the market of natural gas supply. DEPA committed to auction each year 10% of its yearly gas supply to customers. The quantities to be offered per auction will be split to 1000 parts, thus allowing even “small” customers to cover their needs through the said channel. The first auction has taken place on 11 December 2012.

C. With a view to enhancing contractual transparency and to ensuring the use of FRAND terms, DEPA committed a) to adopt model contracts to be approved by the Regulatory Authority for Energy (RAE) and published on DEPA’s website for: i) the sale and storage of Liquified Natural Gas (LNG) and ii) the transfer of transmission capacity at the network exit points and b) to model a pricing system for peak gas based on the consumption profiles of each customer and the cost actually incurred by DEPA.

D. Finally, the HCC accepted commitments leading to the opening of sufficient capacity at the entry points of the transmission network for third importers and customers, in order to enable capacity acquisition at the primary market of gas transmission and thus the possibility to find alternative sources of supply. Firstly, DEPA is obliged to offer without due delay and free of charge (to the extent that it has not paid any charge) any unused transportation capacity allocated to it at the gas network entry points. Moreover, until DEPA’s reserved transport capacity is reduced to 55% per network entry point, DEPA commits to transfer free of charge to its clients, following a declaration on their part that it will not purchase gas from DEPA for a certain period of time, up to 20% of its total capacity per network entry point.

Secondly, DEPA will reduce significantly its capacity rights to 55% of the total capacity per entry point: a) at the entry point Kipoi, 3 months after the installation of a capacity compressor (expected to take place within the next three months) and b) at the entry point of Sidirokastro, until 30 June 2017. Finally, DEPA will not reserve on a yearly basis more than 40% of the total capacity at the LNG entry point.

The above commitments were offered by DEPA following a Statement of Objections issued by the HCC in July 2012 against both DEPA and DESFA, the dominant Greek operator of the gas transmission system. According to the Statement of Objections, DEPA abused its dominant position by foreclosing its clients and competitors from accessing the gas network and imposing de facto exclusivity contracts, thus preventing clients from purchasing gas from other suppliers. DESFA is also accused of abusing its dominant position in the primary market of natural gas transmission by way of denying access to the gas transmission network (an essential facility) to DEPA’s clients. Given that DESFA did not offer commitments to address the HCC’s competition concerns regarding the above practices, proceedings continue under the standard procedure and a decision is expected within the next few months.

• Romania: Fines imposed on Bid Rigging Cartel in Natural Gas Pipelines SectorOn 17 October 2012, the Romanian Competition Authority (RCC) found that four undertakings had taken part in bid rigging in the framework of two public procurement procedures organised by Transgaz. It was established that Condmag and Inspet rigged their bids in the tender for the “Butimanu-Brazi natural gas connection for the gas-supply of Brazi cogeneration power plant”, while Moldocor and T.M.U.C.B. participated with rigged bids in the “Giurgiu Ruse 20’’ gas transport pipeline tender procedure. Based on its findings, the RCC sanctioned the undertakings concerned with fines totalling € 5 600 000.

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Between 2009-2011, Transgaz, the Romanian state owned operator organized public procurement procedures in order to allocate contracts on the market for the construction, repair and maintenance of natural gas pipelines. In Romania, Transgaz developed and rehabilitated the national gas transmission system benefitting from an integrated management system. Its main activities regard the gas transmission, international transit, natural gas dispatching as well as research and development. Condmag, Inspet, Moldocor and T.M.U.C.B. are active in the sector for construction of utility projects.

In 2011, the RCC opened an ex - officio investigation with respect to the above mentioned practices based on an alleged infringement of Article 101 TFEU and Article 5 of the amended Competition Law no.21/1996. During the investigation procedure, several inspections were carried out on 30 September and on 2 November 2011. The evidence collected during those inspections showed that the parties concerned exchanged sensitive information and coordinated their conduct on the market.

These practices were found by the RCC to have affected competition during the two public procurement procedures mentioned above and to have diminished the uncertainty regarding the competitive future behaviour of the undertakings concerned. It was established that those undertakings behaved with the common intention to increase the chances of winning, to the detriment of the other competitors.

The RCC concluded that Condmag, Inspet, Moldocor and T.M.U.C.B. rigged their bids at the two public procurement procedures, thereby taking part in horizontal cartel agreements that distort competition by object. In line with the consistent application of EU law, bid rigging which has as object the restriction of competition is considered hard core restrictions.

See press release (in Romanian)

• European Commission: Producers of TV and Computer Monitor Tubes fined for two ten year-long CartelsOn 5 December 2012, the European Commission (the Commission) has fined seven international groups of companies a total of € 1 470 515 000 for participating in either one or both of two distinct cartels in the sector of cathode ray tubes (‘CRT’).

The Commission established that for almost ten years, between 1996 and 2006, these companies fixed prices, shared markets, allocated customers between themselves and restricted their output. One cartel concerned colour picture tubes used for televisions and the other one colour display tubes used in computer monitors. The cartels operated worldwide. The infringements found by the Commission therefore cover the entire European Economic Area (EEA). Chunghwa, LG Electronics, Philips and Samsung SDI participated in both cartels, while Panasonic, Toshiba, MTPD (currently a Panasonic subsidiary) and Technicolor (formerly Thomson) participated only in the cartel for television tubes. Chunghwa received full immunity from fines under the Commission’s 2006 Leniency Notice for the two cartels, as it was the first to reveal their existence to the Commission. Other companies received reductions of their fines for their cooperation in the investigation under the Commission’s leniency programme.

The two CRT cartels are among the most organised cartels that the Commission has investigated. For almost 10 years, the cartelists carried out the most harmful anti-competitive practices including price fixing, market sharing, customer allocation, capacity and output coordination and exchanges of commercial sensitive information. The cartelists also monitored the implementation, including auditing compliance with the capacity restrictions by plant visits in the case of the computer monitor tubes cartel.

Top management level meetings, dubbed ‘green(s) meetings’ by the cartelists themselves because they were often followed by a golf game, designed the orientations for the two cartels. Preparation and implementation were carried out through lower level meetings, often referred to as ‘glass meetings’, on a quarterly, monthly, sometimes even weekly basis. Meetings were held in various locations in Asia (Taiwan, Korea, Japan, Malaysia, Indonesia, Thailand, Hong Kong, etc.) and Europe (Amsterdam, Budapest, Glasgow, Paris, Rome). The cartels operated worldwide.

Multilateral meetings usually started with a review of demand, production, sales and capacity in the main

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sales areas, including Europe; then prices were discussed, including for individual customers, i.e. TV and computer manufacturers. They had therefore a direct impact on customers in the European Economic Area (EEA), ultimately harming final consumers. The cartelists were trying to address the decline of the CRT market in a collusive way, to the detriment of consumers. For example, one document recording the cartel discussions spells out clearly: ‘producers need to avoid price competition through controlling their production capacity’.

The investigation also revealed that the companies were well aware they were breaking the law. For instance, in a document found during the Commission’s inspections, a warning goes as follows: “Everybody is requested to keep it as secret as it would be serious damage if it is open to customers or European Commission”. The participants were therefore taking precautions to avoid being in possession of anticompetitive documents. Some documents spelled out, for example: ‘Please dispose the following document after reading it’.

The fines were set on the basis of the Commission’s 2006 Guidelines on fines (see IP/06/857 and MEMO/06/256). In setting the level of fines, the Commission took into account the companies’ sales of the products concerned in the EEA, the very serious nature of the infringement, its geographic scope, its implementation and its duration. Total fines in this case amounted to € 1 470 515 000, of which € 1 142 328 000 was for the TV tubes cartel and 328 187 000 for the computer tubes cartel. Chunghwa received full immunity, whereas Samsung SDI, Philips and Technicolor received reductions of fines ranging from 10 to 40% for their cooperation under the Commission’s leniency programme. The reductions reflect the timing of their cooperation and the extent to which the evidence they provided helped the Commission to prove the respective cartels. One of the companies invoked its inability to pay the fine. The Commission assessed this claim under point 35 of the 2006 fines Guidelines and granted a reduction of the fine.

A Cathode Ray Tube (‘CRT’) is an evacuated glass envelope containing an electron gun and a fluorescent screen. Two distinct types of CRTs are relevant for the cartels sanctioned in today’s decisions: (i) colour display tubes (CDT) used in computer monitors and (ii) colour picture tubes (CPT) used for colour televisions. The CRT was gradually replaced by alternative techniques such as LCD and plasma displays.

The Commission’s investigation started with unannounced inspections in November 2007 (see MEMO/07/453). A statement of objections was issued in November 2009 (see MEMO/09/525) on which the companies had the opportunity to comment and to be heard. A supplementary statement of objections concerning corporate liability was issued in June 2012 against two companies.

More information on this case will be available under the case number 39437 in the Commission’s public case register on the competition website, once confidentiality issues have been dealt with. For more in-formation on the Commission’s action against cartels, see its cartels website.

• Austria: First Decisions in Building Insulation CaseFines have been imposed between July and November 2012 by the Cartel Court on three retailers of building products in the DYI sector for their participation in agreements on resale price maintenance infringing Article 1 of the Cartel Act and Article 101 TFEU. Further proceedings are on-going.

In 2011, the Federal Competition Authority (FCA) was provided with information regarding anticompetitive agreements in the building insulation sector. The alleged practices included (horizontal) price fixing on the manufacturers’ level as well as (vertical) resale price maintenance agreements with retailers.

In August 2011 the FCA conducted inspections at the premises of several manufacturers. The documents seized during those inspections largely corroborated the allegations and led to a further round of inspections in autumn 2011 and spring 2012, this time at several retailers’ premises.

Based on the findings of those investigations the FCA lodged a number of individual cases, applying for the imposition of fines, to the Cartel Court at the end of 2011 and 2012. These proceedings focused on the vertical relationship of one producer of EPS insulation material and several of its retailers.

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The first of these proceedings which have now been closed by the three decisions rendered by the Cartel Court resulted in fines being imposed totalling € 435 000.

When setting the fines it has been taken into account that all the companies concerned cooperated with the FCA, in one case in the context of the leniency programme. Furthermore, the FCA in its application to the Cartel Court granted a reduction of the fines by 20% for the acknowledgement of the FCA’s factual findings and legal assessment by the concerned retailers. The decisions of the Cartel Court have already become final.

Proceedings against one manufacturer and a number of retailers are still pending before the FCA and the court. Further applications of the FCA to the Cartel Court in this matter are under preparation.

See press release (in German)

• Belgium: No Grounds for Action against Belgacom for Launch of Happy Time Tariff Plan for fixed Telephony ServicesOn 29 November 2012, the Competition Council (the Council) concluded that on the basis of the information in its possession there are no grounds for action against Belgacom for the launch of Happy Time.

Happy Time, a tariff plan launched by Belgacom in June 2005, offers free national voice telephony calls between 5pm and 8am during weekdays as well as during weekends and holidays and calls priced at a fixed amount per call between 8am and 5 pm during weekdays. Tele2, a CPS (Carrier Pre select) operator, lodged a complaint against Belgacom on the basis of Article 102 TFEU alleging a margin squeeze. On 29 September 2009, the competition prosecutor filed a report (Statement of Objections) concluding that Belgacom has abused its dominant position in the market of fixed voice telephony services. According to the Statement of Objections, the alleged practice involved a price squeeze between the wholesale interconnection prices charged by Belgacom to its competitors on the retail market and the Happy Time retail tariff, making it impossible for Tele2 to replicate that offer whilst covering its commercial costs.

The decision of the Council, which does not follow the prosecutor’s report, clarifies a set of methodological issues surrounding the margin squeeze tests.

The first one concerns the appropriate margin squeeze test to apply in competition law cases. Whilst the prosecutor chose to apply an “alternative competitor” (ACO) test, namely a test based on information supplied by the complainant for estimating the downstream (commercial) costs as well as part of the upstream costs, the Council concludes that, following the case law, the appropriate test is in principle an ‘equally efficient operator’ (EEO) test, namely a test based exclusively on the dominant firm’s prices and costs. Fixed interconnection costs between networks which are not supported by the dominant firm for its on-net voice traffic are in this case not taken into account. The Council also considers, on the basis of the same case law, that an alternative test based on the assumption of fixed interconnection costs for 100% off net traffic, is appropriate for testing the ability of pure CPS operators to replicate the Happy Time offer.

The second methodological issue which has been dealt with in the Council’s decision concerns the appropriate cost standard for estimating the downstream commercial costs related to the Happy Time tariff plan. The Council considers that the Activity Based Cost (ABC) model that establishes the causality between activities and costs developed by Belgacom and used by the sectorial regulator in his evaluation of the cost-orientation of the Happy Time tariff plan gives appropriate information for estimating the long run average incremental costs (LRAIC) of Belgacom’s voice telephony traffic.

The third methodological issue concerns the aggregation level at which the test has to be performed: the Council examines whether it should be performed at the level of the relevant downstream market, which is consistent with a new entrant assessing the profitability of its investment by considering the complete range of products that it is able to offer in that market, or at the level of the Happy Time tariff plan only.

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Following the case law, the test is performed at the level of the relevant downstream market (‘aggregated approach’). However, as stated in the Telefónica Decision of the European Commission, a test at the level of each individual offer might be appropriate in the case of a new offer giving rise to a margin squeeze, which is currently subsidized by other profitable offers but whose volumes could increase substantially and lead to an overall negative margin in the future. Considering the large success of the Happy Time tariff plan, the Council considers appropriate to also apply the test at the level of the Happy Time offer.

These considerations led the Council to perform four margin squeeze tests in the present case: two tests based exclusively on information relevant for the incumbent firm, one at the level of the fixed voice telephony traffic and the other at the level of the Happy Time offer and two tests based on an assumption of 100% off-net traffic and hence taking into account fixed interconnection costs for the whole traffic, once more subsequently both at the level of the fixed voice telephony traffic and at the level of the Happy Time offer.

These tests have been applied over the period 2005 to 2008. None of these tests have led the Council to conclude that the Happy Time offer was not replicable by a pure CPS operator over the relevant period. On this basis, the Council decided that there are no grounds for action.

See decision of the Council (in Dutch)

• Bulgaria: The Commission on Protection of Competition to investigate the Union of Bulgarian MillersOn 18 September 2012, the Commission on Protection of Competition (CPC) initiated proceedings against the Union of Bulgarian millers (the Union) for an alleged breach of Article 15 of the LPC and Article 101 TFEU. On 21 September 2012, the CPC raided the offices of the Union and seized documents and forensic evidence.

The proceedings were initiated on the basis of the CPC’s findings following the sector inquiry carried out into the markets for the supply chain wheat – flour – bread during the period 2010 – 2011 (see ECN Brief 2/2011). The CPC approved the results of the sector inquiry by decision of 2 October 2012 after having inspected the offices of the Union.

The economic analyses done in the framework of the inquiry, which were based on a top-down approach, focused on price dynamics and established a discrepancy between prices of wheat and flour. Further analyses of monthly price variations in wholesale wheat and flour prices showed an asymmetric price transmission in the period between July and September 2010. According to the CPC, the sharp increase in flour prices did not reflect the wheat price variations and could not be explained by objective economic conditions on the market. The data for the analyses was provided by a market research agency and the most significant undertakings on the wheat processing market. Most of them are members of the Union. The established asymmetric price transmission gave the CPC reasonable grounds to suspect anti-competitive behaviour on the part of the Union and/or its members.

• Germany: The Bundeskartellamt imposes Fines on Manufacturers of Power Transformers on account of collusive TenderingOn 20 September 2012, the Bundeskartellamt (BKartA) imposed fines totalling € 24 300 000 on four manufacturers of power transformers for an infringement of the national and EU competition rules.

Further to its investigation, the BKartA established that between the spring of 1999 and March 2004, the companies ABB AG, Alstom Grid GmbH, Siemens AG and Starkstrom-Gerätebau GmbH concluded agreements on quotas and collusive tendering for medium sized power transformers. The cartel members usually met in official meetings of the Central Association of the German Electronic Industry. The official meeting was followed, or preceded, by an unofficial part during which project-related discussions took place. The cartel members´ agreements were based on a division of labour: While strategic decisions and decisions concerning market share quotas for power transformers were made at CEO level, the meetings

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at sales manager level dealt with agreements regarding specific projects and tenders.

The proceedings were initiated in August 2008 following an inspection carried out by the European Commission in 2007. The BKartA brought proceedings against the national cartel in Germany, whereas the European Commission investigated territorial protection agreements between European and Japanese manufacturers.

In the course of the proceedings brought by the BKartA, all four companies involved filed leniency applications and therefore were granted a reduction of fine.

The orders imposing the fines have not yet become final. However, all companies agreed to have the proceedings terminated by settlement.

See press release (in English)

• Germany: The Bundeskartellamt prohibits Joint Venture in Chemicals Trading SectorOn 21 November 2012, the Bundeskartellamt (BKartA) issued a prohibition decision concerning a joint venture of two chemicals trading companies.

The joint venture in question, CVH Chemie-Vertrieb GmbH & Co KG (CVH), is active in the trading of chemicals. Its parent companies are Brenntag Germany Holding GmbH (Brenntag) and CG Chemikalien GmbH & Co Holding KG (CG). CVH, Brenntag and CG are active in the same sector. The parties’ activities also overlap geographically. In some regions, they have market shares in chemicals trading of up to 70%.

In the present decision, the BKartA considers that the joint operation of CVH leads to an extensive exchange of information between Brenntag and CG, which is detrimental to competition between them. Moreover, Brenntag and CG have - due to their joint operation of CVH - a considerable incentive to coordinate their commercial behaviour. This results in a finding that the operation of CVH by Brenntag and CG in its current form infringes Article 101 TFEU and Section 1 ARC.

As a consequence, the BKartA has ordered Brenntag and CG to bring their joint activities in chemicals trading in line with competition law within a suitable period of time.

The case had been initiated after the BKartA gained information about the corporate links between CVH, Brenntag and CG in the course of proceedings against a chemical traders’ cartel in which all three companies participated. These proceedings were concluded by a fining decision in December 2010 (see ECN Brief 1/2011).

See press release (in English)

• Italy: The Italian Competition Authority fines Cartel in Road Barriers MarketOn 27 September 2012, the Italian Competition Authority (ICA) concluded an investigation in the market for safety metal devices for roads and motorways. The investigation had been opened ex officio by the ICA after receiving documents collected by the Guardia di Finanza (financial police) in the context of a criminal investigation. Fines totalling more than € 37 000 000 have been imposed on the undertakings concerned.

The established violation of Article 101 TFEU concerned an agreement among the main players in the relevant market aimed at allocating clients (including within public procurement procedures) as well as fixing prices in Italy. The ICA found that the cartel was set up within a consortium of the parties (Consorzio Manufatti Stradali Metallici – Comast), which ceased in 2007 after the Guardia di Finanza had started its investigation in the criminal context.

The main market players had been coordinating their commercial strategies for several years (from 2003 to 2007) by means of the said consortium Comast which implemented the quota mechanism agreed by

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the undertakings concerned in order to allocate clients among them. In particular, the anti-competitive mechanism first entailed the notification of the existence of a request for supply introduced by customers interested in purchasing the barriers (guardrails) through public tendering, followed by the precise division of sales and the simultaneous sharing of reference prices.

The seven undertakings taking part in the Consortium, representing around 95% of the relevant market, have been imposed fines ranging from € 33 174 to € 11 865 217. When setting the fines, the ICA – in the light of the European Commission’s Fining Guidelines - took into consideration the degree of gravity of the infringement and its duration.

See decision and press release (both in Italian) as well as press release in English

• The Netherlands: Notaries to adjust their Code of ConductThe Royal Dutch Notarial Society (KNB) recently dropped the prohibition on directly recruiting potential clients, the requirement to ‘advertise objectively,’ as well as the prohibition on charging rates below cost price. In addition, the KNB adjusted and clarified a number of rules of conduct, including the ban on commissions, which has been worked out in greater detail in the new Policy Rule on Commissions. According to the Netherlands Competition Authority (NMa), competition between notaries is expected to get a boost, while, at the same time, respecting the notaries’ core values of independence and impartiality.

The adjustments are the result of a follow up investigation by the NMa to the 2007 Report on Professional Services that identified eight competition concerns in the self-regulation of notaries. This concerned rules that require 1) a mutual relationship between notaries that is benevolent and trust based, 2) notaries not to approach potential customers directly, 3) unbiased advertising, 4) fees above cost-price, 5) publication of integral and minimum tariffs, 6) fees not to be result based, 7) notaries not to pay commissions for intermediaries and 8) limited ability of notaries to work with intermediaries.

The adjustments to the code of conduct are intended to lead to a better understanding of the services notaries offer, to more options for clients, and possibly to a better price-quality ratio for consumers. The NMa had approached the trade association about potentially anticompetitive effects of some of its rules of conduct with which the KNB members, all notaries in the Netherlands, must comply. The adjustments to the code of conduct are the result of that intervention.

Since 2004, the NMa has looked into self-regulation by various professional groups. In 2006, the trade associations for architects, BNA and BNSP, adjusted their self-regulation policies. In June 2007, the NMa published its final report on the self-regulation of accountants. In 2011, the Netherlands Order of Accountants and Administration Consultants (NOvAA) adjusted its code of conduct.

Press spokesperson: Ms. Barbara van der Rest-Roest at +31-70-330-3362 or +31-6-22793063 (outside office hours). Alternatively, you can send an email to the NMa press office at pers@nmanet.nl

• Spain: The Comisión de la Competencia fines six Companies in Paper Envelopes Export CartelIn its Resolution of 15 October 2012, the Comisión Nacional de la Competencia (CNC) Council considered it proven that an infringement of Article 1 of the Spanish Competition Act and Article 101 TFEU had been committed, consisting in an envelope export agreement between competitors that had continuously been in force between 1981 and April 2011.

The aim of this agreement between competitors was to fix prices and to share between themselves the market for the export of paper envelopes to specific countries. The companies concerned would meet and coordinate their action through a company created for that purpose, Hispapel S.A. (Hispapel). The CNC Council found that the Executive Committee of Hispapel, which included the main competitors in the market, was the place where sensitive information was exchanged and agreements adopted.

Accordingly, the Council of the CNC decided to fix the following fines: € 677 717 on Antalis Envelopes

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Manufacturing, S.L.; € 2 013 468 on Unipapel, S.A. (Adveo Group International, S.A.); € 629 845 on Manufacturas Tompla, S.A.; € 122 902 on Pacsa, Papelera Del Carrion, S.L. (its parent company, Manufacturas Tompla, S.A., is held jointly and severally liable for the amount of € 122 186); € 274 028 on Sociedad Anonima De Talleres De Manipulacion Del Papel (SAM) (its parent company, Manufacturas Tompla, S.A., is held jointly and severally liable for the amount of € 270 664) and € 50 000 on Manipulados Plana, S.A.

The CNC Council decided to reduce the amount of fine imposed on Antalis Envelopes Manufacturing, S.L. to € 406 630 as it met the requirements set forth in Article 66 of the Spanish Competition Act, having provided information with significant added value for the purposes of proving the existence of the cartel.

The Investigations Division of the CNC had initiated, on the basis of certain information received regarding possible anti-competitive conduct in the market for the manufacture and sale of paper envelopes, a reserved information procedure (first step of the procedure) in order to determine whether circumstances existed to support the opening of formal proceedings. In the course of that confidential probe, it was decided to carry out inspections on 19 October 2010 at the head offices of the main companies operating in the industry in Spain. As a result of the reserved information procedure, on 16 March 2011 the Investigations Division of the CNC opened formal proceedings against Antalis Envelopes Manufacturing, S.L., Hispapel, S.A., Manipulados Plana, S.A., Manufacturas Tompla, S.A., PACSA, Papelera del Carrión, S.L., Sociedad Anónima de Talleres de Manipulación de Papel and Unipapel, S.A. (since May 2012, the company Unipapel, S.A. has operated under the name Adveo Group International, S.A.), for anti-competitive practices involving price fixing and market sharing for the export of paper envelopes to third countries (mainly in the Middle East) and certain EU countries.

See proceedings S/0318/10 (in Spanish)

• Spain: The Comisión Nacional de la Competencia fines six Shipping Groups for Cartel in Maritime Transport between Spanish Peninsula and MoroccoIn its Resolution of 7 November 2012, the Council of the Comisión Nacional de la Competencia (CNC) found that six shipping companies active in the passenger and cargo maritime transport lines linking the Spanish peninsula and Morocco had infringed Article 1 of the Spanish Competition Act 15/2007 of 3 July 2007 (Ley de Defensa de la Competencia or LDC) and Article 101 TFEU. Based on the documentation collected during the inspections as well as the statements from the leniency applicants, the CNC Council established that those shipping companies took part in several meetings and exchanged information, reached agreements on prices, fees, commercial conditions and timetables for the passenger and cargo maritime transport lines mentioned above.

It was found that between 2002 and 2010, the cartel fulfilled the common objective of obtaining (from the maritime transport services between the Spanish Peninsula and Morocco) higher profits than would have been the case had all operators involved respected the functioning of the market and competed in it, to the detriment of consumers and customers. In order to achieve their goal, over the years, the cartel participants prepared and implemented a series of coordinated actions related to their individual production resources, their presence on each line and the services they provided. As a result, each of the practices engaged in at any given time distorted competition with respect to all routes and services concerned, whether passenger, transport or both. The accumulation of those practices led to there being no competition in the maritime transport service market between the Spanish Peninsula and Morocco for at least nine years.

In calculating the amount of the fines, the Council of the CNC considered that the seriousness of the conduct, its prolonged duration, the fact that the practices extended across virtually the entire market, as well as the intensity of the measures used to implement the practices were seriously detrimental to the public interest, thereby justifying the imposition of fines totalling to an amount equivalent to 15% of turnover in the market affected by the infringement.

Furthermore, the CNC Council found that the aggravating circumstance of recidivism (pursuant to Article 64.2.a) LDC) was to be applied with respect to a number of the companies concerned and raised their fines by 5% as follows. Transmediterránea and Europa Ferrys had been fined on three previous occasions

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for similar conduct: in June 2003 in case 543/02, June 2004 in case 555/03 and May 2004 in case 561/03, all of the fines being final. This aggravating circumstance was also found to exist in relation to LME, Comarit and Comanav S.A., each of which had been fined on two previous occasions: in June 2004 in case 555/03 and May 2004 in case 561/03, all of the fines being final.

Accordingly, the Council of the CNC decided to impose the following fines: € 2 223 464 on Balearia Eurolíneas Marítimas, SA, and Euromaroc 2000, SL.; € 25 516 377 on Compañía Trasmediterránea, SA and Europa Ferrys, SA.; € 11 106 809 on Förde Reederei Seetouristik Iberia, SL and Förde Reederei Seetouristik Maroc, SARL; € 8 153 453 on International Maritime Transport Corporation, SA (IMTC); € 27 753 647 on Compagnie Maritime Marocco-Norvegiènne, SA (COMARIT, SA), Líneas Marítimas Europeas, SA and Comanav Ferry, SA, the last of which is jointly and severally liable up to € 10 708 564; €13 834 519 on CMA-CGM, SA, Comanav, SA, and Comanav Ferry, SA, the last of which is jointly and severally liable up to €2 905 401.

Under the leniency programme, the CNC Council reduced the fine that would have been imposed on Balearia Eurolíneas Marítimas, SA and its subsidiary Euromaroc 2000 SL by 40%, leading to a fine of €1 334 079, for having provided information with significant added value for the purposes of proving the existence of the cartel.

On 15 March 2011, the Investigations Division of the CNC, opened formal proceedings against Compañía Trasmediterránea, SA, Europa Ferrys SA, Cenargo España, SLU, Ferrimaroc, SA, Balearia Eurolíneas Marítimas, SA, Euromaroc 2000, SL, Förde Reederei Seetouristik Iberia, SL (FRS Iberia, SL), Förde Reederei Seetouristik Maroc SARL (FRS Maroc, SARL), International Maritime Transport Corporation, SA (IMTC), Compagnie Maritime Marocco-Norvegiènne, S.A.R.L. (COMARIT), Líneas Marítimas Europeas, SA, Comanav Ferry SA, CMA-CGM, SA and Comanav, SA for possible anti-competitive conduct of the kind prohibited by Article 1 of the Spanish Competition Act 15/2007 of 3 July 2007 (Ley de Defensa de la Competencia or LDC) and Article 101 TFEU. The conduct consisted in an agreement to share the market and fix prices and/or commercial terms with respect to services for the transport of passengers and vehicles by sea between the Spanish Peninsula and Morocco. The investigation into the conduct arose from information contained in certain documents collected during the inspections carried out by the CNC on 11 and 12 May 2010 at the head offices of several shipping companies.

On 25 May 2011, the Investigations Division of the CNC carried out further inspections in Algeciras at the head offices of Compañía Trasmediterránea, SA and its subsidiary Europa Ferrys, SA, of STA, subsidiary of IMTC, and Comarit España SL and LME SA, subsidiaries of COMARIT. As a result of those inspections, on 25 November 2011 the CNC’s Investigations Division extended the proceeding to Compañía Trasmediterránea, SA, Europa Ferrys SA, Cenargo España, SLU, Ferrimaroc, SA, IMTC, COMARIT, Líneas Marítimas Europeas, SA, Comanav Ferry SA, CMA-CGM, SA and Comanav, SA on the ground that there was prima facie evidence of collusion in order to share the market and fix commercial and service terms in the sector for the maritime transport of cargo between the Spanish Peninsula and Morocco.

See proceedings S/0331/11 (in Spanish)

• Spain: The Comisión Nacional de la Competencia fines Mazda Automóviles de EspañaIn its Resolution of 16 November 2012, the Council of the Comisión Nacional de la Competencia (CNC) established that Mazda Automóviles de España, SA (Mazda) concluded agreements and put practices into place with its network of authorised services which restricted the repair and maintenance of Mazda vehicles by independent workshops in Spain.

The Council found that the conduct constituted a single continued infringement of Article 1.1 of the Spanish Competition Act and Article 101(1) TFEU which was capable of restricting competition from independent workshops in the market for the provision of repair and maintenance services for Mazda vehicles during the term of the manufacturer’s warranty, mainly by limiting vehicle owners’ freedom to choose a workshop.

This infringement, which started at least in 2005, comprised a set of clauses and practices arising from concerted action. Even though such clauses and practices were essentially different and affected different

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types of conduct engaged in by Mazda, the CNC Council considered that, as a whole and from an objective standpoint, they were capable of restricting competition from independent workshops in the provision of repair and maintenance services for Mazda vehicles under warranty. The CNC Council therefore fined Mazda € 181 856.

On 11 April 2011, the Investigations Division of the CNC had opened formal proceedings against Mazda for possible anti-competitive conduct arising from explicit and implicit agreements between the latter and its network of authorised services which could restrict the repair and maintenance of Mazda vehicles by independent workshops in Spain. The investigation arose from a complaint filed by an individual alleging a possible infringement of competition rules resulting from a refusal to recognise the warranty on his vehicle for a repair, after the vehicle had previously been maintained by an independent workshop.

See proceedings S/0300/10 (in Spanish)

• Sweden: Interim order granted in Boycott Case of Sweden Ice Hockey League against NHL PlayersOn 20 September 2012, the Swedish Competition Authority (SCA) issued an interim order prohibiting Svenska Hockeyligan AB (Hockeyligan), Sweden’s elite ice hockey league, from boycotting players from North America’s National Hockey League (NHL). The interim order applies pending the SCA’s investigation of the conduct at issue.

The 2012/2013 NHL season, which was due to start on 11 October 2012, is currently suspended while negotiations on a new collective bargaining agreement between the league and the players’ union are stalled. On 15 October 2012, the NHL took industrial action by announcing a lock-out of all players.

Hockeyligan, is a league association affiliating the clubs competing in Sweden’s elite ice hockey league. In anticipation of the NHL lock-out, Hockeyligan’s board, consisting of representatives from the 12 clubs, decided on 21 August 2012 that no club would engage locked-out players on short-term contracts while the NHL conflict was on-going.

Following news reports of Hockeyligan’s decision, the SCA opened an ex-officio investigation into the conduct on 6 September 2012, issuing a request for information to Hockeyligan.

On 20 September 2012, the SCA issued an interim order in this case. The SCA considered there was prima facie evidence that Hockeyligan’s decision amounts to an infringement of Article 101 TFEU and its equivalent in the Swedish Competition Act. The clubs are undertakings for the purposes of competition law and Hockeyligan an association of undertakings. Hockeyligan’s decision limits the clubs’ upstream investments (in ice hockey players) and, consequently, their output in the downstream markets where they are competitors.

Since the Swedish league season started on 13 September 2012, the SCA considered that the agreement was already producing effects which are harmful to competition and that such effects could not be remedied if the agreement was allowed to stand pending the SCA’s investigation. The SCA therefore ordered Hockeyligan not to implement its decision while the SCA’s investigation is on-going, or face a penalty of approximately € 2 300 000 (SEK 20 million).

Hockeyligan has appealed SCA’s interim order to the Swedish Market Court. A decision is expected late December 2012. Meanwhile, the SCA’s investigation into the alleged infringement continues.

Interim order (in Swedish)

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• Italy: The Italian Competition Authority requests Modifications in Legislation in Field of Leniency Policy and Merger ReviewIn the report issued at the beginning of October 2012 (see this ECN Brief), the Italian Competition Authority (ICA) stated that efforts to promote competition need to be supplemented by the vigorous enforcement of competition policy. For this reason, the ICA seized the opportunity offered by the Report to ask for legislative modifications that would strengthen its effectiveness in fighting cartels and reviewing mergers.

Cartels are a priority of the ICA’s enforcement policy but they prove more and more difficult to tackle. In this respect, leniency programmes play a crucial role. The ICA has achieved some results through the use of its leniency programme but improvements are needed. In particular, the ICA has recently identified bid rigging - which is a criminal violation in Italy - as being a problematic area. Indeed, it appears that the

LEGISLATION & POLICY

• European Courts: Court of Justice upholds Commission Decision on Breach of Seal during an InspectionOn 22 November 2012, the Court of Justice of the European Union (ECJ) ruled on an appeal against a General Court (GC) judgment that had upheld the Commission decision of 2008 fining E.ON for the breach of a seal during an antitrust inspection. The ECJ entirely upheld the GC judgment and confirmed the Commission’s decision.

On 30 January 2008, the European Commission (the Commission) had imposed a fine of € 38 000 000 on E.ON Energie AG (‘E.ON’) for the breach of a Commission seal in E.ON’s premises during an inspection. The seal had been affixed to secure documents collected in the course of an unannounced inspection in May 2006 (see MEMO/06/220). When the Commission came back the next day, the seal was broken. E.ON denied breaking the seal and brought forward several arguments referring to the quality of the seal as well as to circumstances beyond its control.

The inspection formed part of the Commission’s enforcement activities against allegations of anticom-petitive practices on the German energy markets.

When fixing the amount of the fine, the Commission had taken 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 has been imposed under the provisions of Regulation No 1/2003 concerning obstruction or interference with a Commission anti-trust investigation.

It is the Commission’s practice to seal rooms when carrying out surprise inspections in order to make sure that no documents can be removed by the company when the inspection team is absent (e.g. at night). The power to seal premises was introduced by Article 20(2)d of Council Regulation (EC) No 1/2003 of 16 December 2002.

See further: ECJ judgment ; GC judgment; Memo/06/220 and Press release IP/08/108

COURTS

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risk of being exposed to criminal proceedings might have frightened off cartels participants from filing for leniency. This is a relevant issue in Italy given that the ICA has the duty to inform the public prosecutor of any criminal offence and the public prosecutor can ask the ICA for all the documentation of the case, including documents obtained under the leniency programme.

Therefore, the ICA advocated for an enhanced interplay between criminal and civil proceedings, namely to grant to the first applicant under the Italian leniency program full immunity from criminal actions and partial immunity in follow-on actions for damages, such as the abolition of joint liability with the other participants to the cartel.

In addition, the ICA proposed to introduce some changes to the national rules on merger review in order to align them with the European merger review system. The current differences concern, in particular, the substantive test for merger review and the assessment of joint ventures.

The ICA considers it appropriate that the national regulatory framework is as consistent as possible with the rules adopted by the European Commission and by the large majority of EU Member States, in particular to avoid inconsistent outcomes in multi-jurisdictional mergers. The ICA therefore proposed to replace the current “dominance test” by the SIEC (significant impediment of effective competition) test that would allow it to assess the impact of the merger on effective competition and to take into account efficiencies. As for the review of joint ventures, the ICA proposed a modification of the current legal framework that would allow it, in line with the rules adopted in most European countries, to assess a joint venture as a merger, irrespective of its concentrative or cooperative nature.

See press release (in Italian)

• Poland: The Council of Ministers accepts Proposal for Draft Amendment of Polish Competition LawOn 20 November 2012, the Council of Ministers accepted the proposal for the draft amendment of the Act of 16 February 2007 on Competition and Consumer Protection (the Act). UOKiK will start drafting the provisions amending the Act.

In 2011, the Office of Competition and Consumer Protection (UOKiK) began working on the amendment of the Polish Competition Law. The proposition of UOKiK provides inter alia for improvements in the merger control procedure, so as to adjust the duration of the proceedings to the level of the complexity of cases. The current procedure consists of a single phase which lasts for two months. UOKiK’s proposition would be to handle merger cases in two phases. Cases which do not raise any doubts as far as the potential impediment of competition is concerned would be concluded within a month, whereas a second phase of four months would be opened for more complex and questionable cases. Furthermore, UOKiK intends to introduce the notion of competition concern. In cases where exists a reasoned probability that competition will be significantly impeded by the transaction, undertakings would be informed of UOKiK’s reservations. Parties would thus gain awareness of UOKiK’s concerns and be entitled to formulate comments before UOKiK issues its decision.

In addition, UOKiK proposes changes aimed at further creating incentives for undertakings as regards the Leniency programme, by introducing so-called “Leniency plus”. This programme would target cartel members which cannot be granted full immunity in the framework of the present Leniency programme because they do not fulfill the necessary requirements. According to the new law, they would be able to obtain an additional fine reduction in exchange for information and evidence on any other cartel infringe-ment.

Another foreseen measure against anti-competitive practices, which would be of both a preventive and at the same time repressive nature, is the introduction of the liability of individuals in case of an infringement of competition law committed by them.

The list of novelties would also include the possibility for the President of UOKiK to conclude antimonopoly (antitrust and merger) proceedings with decisions indicating measures to be taken in order to eliminate the negative effects of infringement or the discontinuation of the prohibited practice. The modernized

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competition law would contain a non-exhaustive list of possible remedies. UOKiK also plans to introduce a settlement procedure to simplify and shorten antimonopoly proceedings.

See press release (in Polish)

• United Kingdom: The Office of Fair Trading launches revised Competition Act Procedures GuidanceOn 16 October 2012, the Office of Fair Trading (OFT) set out new decision-making processes and procedural enhancements to boost the speed and robustness of Competition Act 1998 (CA98) investigations and increase engagement with parties involved. The new procedures now apply to all on-going and future cases, with the limited exception that, for those existing cases in which a Statement of Objections was issued prior to 18 July 2012, the previous decision-making model will continue to apply.

The updated guidance on CA98 procedures follows a consultation process launched in March 2012 (see ECN Brief 2/2012). It updates the OFT’s guidance originally published in March 2011 (see ECN Brief 2/2011), including by providing for:

• Collective decision-making, with final decisions on infringement and penalty to be taken by a three person ‘case decision group’.

• In cases where the OFT is considering finding an infringement and imposing a financial penalty, the ability for parties to make representations on key elements of the OFT’s proposed penalty calculation, after they have made representations on matters of substance, but ahead of the final decision being taken.

• More interactive oral hearings, to provide greater opportunity for direct dialogue between parties to an investigation and the decision-makers on the case, as well as additional ‘state of play’ meetings.

• Publishing case opening notices and case-specific administrative timetables on the OFT’s website to improve transparency of ongoing CA98 investigations.

As part of the follow up from its March consultation, the OFT is also extending the trial of its Procedural Adjudicator role until the OFT’s CA98 enforcement powers transfer to the Competition and Markets Authority (CMA) in April 2014. It believes that its trial of a Procedural Adjudicator role, which started in March 2011 (see ECN Brief 2/2011), has been a success to date, resolving disputes in relation to certain procedural issues in a swift, efficient and cost-effective manner.

See press release

• Denmark: Undertakings strive to comply with Competition and Consumer LegislationsThe purpose of the Danish Competition Act (konkurrenceloven – Competition Act) and Danish consumer legislation is to prevent the restriction of efficient competition, to create a level playing field for undertakings and to protect consumers.

The Danish Competition and Consumer Authority has interviewed just over 1 800 Danish undertakings about their efforts to comply with the competition and consumer legislation. A report has been made public on 26 October 2012.

Most of the 1800 undertakings interviewed declared that they comply with the Competition Act and the consumer legislation. Approximately nine out of ten undertakings state that ethics is a factor which influences their compliance with the rules. The undertakings state that the commercial benefit from compliance is also a decisive factor. Especially, the risk of a customer backlash and the resulting loss of earnings deter undertakings from breaking the law. The risk of being fined by the authorities or facing civil proceedings/claims for damages is also taken into account.

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71% of undertakings have initiated measures to ensure compliance with the consumer legislation. As regards the Competition Act, this applies to 41% of the undertakings interviewed. Most undertakings use external advisers. Undertakings that have not initiated such measures state that they rely solely on their common sense.The undertakings’ legislative knowledge may also affect their compliance behaviour. 53% of undertakings declare that they have a very good or fair knowledge of the consumer legislation, including the marketing rules. As regards the Competition Act, this figure is 31%. A test of the undertakings’ knowledge about different types of breaches of competition law, including cartels, reveals an overall good understanding of the concepts of price fixing, market sharing and limitations of output. The test shows less understanding of the consumer legislation but this may be due to the fact that the test questions on the consumer legislation were more detailed than the questions regarding the Competition Act.

Finally, 43% of undertakings have declared they believe that other undertakings in their industry are currently breaching the Competition Act by participating in cartels. Within the past five years, 16% of undertakings have experience of illegal price agreements. Almost 20% of undertakings think that undertakings in their industry often or very often fail to comply with the consumer legislation.

See full text (in Danish only) and summary (in English)

Press spokesperson: Hanne Arentoft, e-mail: har@kfst.dk

• Finland: The Finnish Government’s Programme for Promoting Healthy Competition proposes amending the Finnish Competition ActIn spring 2012, the Finnish Government launched a programme for promoting healthy competition. The aim of the programme is to increase competition in the domestic market. The programme will include measures to increase competition in the consumer goods retail sector, safeguard a level playing field for private and public sector businesses and reduce legislative obstacles for competition in various fields. The added value of the targeted sectors is approximately € 50 billion, which equals almost one fourth of Finland’s GDP.

As a part of the programme, the Ministry of Employment and the Economy launched on 20 September 2012 a consultation on its proposal to amend the Finnish Competition Act with a new provision concern-ing dominant market position in the consumer goods retail sector. According to the new provision, an operator in the Finnish consumer goods retail sector holds a dominant market position if its market share exceeds 30 %.

According to the proposal, a dominant market position would be confirmed directly solely on the basis of the market share held. Based on their current market shares, this would mean that two major operators in Finland, the K and S Groups, would need to take into consideration the provision on the abuse of dominant market position in their activities.

For further information please see the press release (in English) by the Ministry of Employment and the Economy.

• France: New Law on economic Regulation in overseas Departments vests the Autorité de la concurrence with specific Injunctive PowersOn 21 November 2012, the law relating to economic regulation in France’s overseas departments was published in the French Official Journal. It aims at addressing the structural basis of the cost of living in France’s overseas departments, where retail prices are between 30% and 50% higher than in mainland France. These structural handicaps such as insularity, high barriers to entry, oligopolies, and a lack of commercial integration within the direct regional environment, are not sufficient to explain such a large difference in prices alone.

The Autorité de la concurrence (the Autorité) has been very active in France’s overseas to date, it adopted 9 opinions in key sectors, 11 antitrust decisions and cleared 12 mergers (half of which were subject to

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remedies).

The Autorité assessed in particular specific dysfunctions in overseas departments in two opinions: the first one on fuel prices (Opinion 09-A-21 of 29 June 2009) and the second one on maritime freight and mass retail distribution (Opinion No 09-A-45 of 8 September 2009).

In both opinions, the Autorité recommended strengthening the upstream price regulations in an effort to better supervise monopolies or taking measures to facilitate competition at the upstream level in order to guarantee, in the end, the procurement of goods and services to consumers at the best price on retail markets.

Among the measures voted, the Parliament gave specific powers of intervention to the Autorité.

The law provides that the Government may adopt decrees to regulate supply and wholesale markets in all sectors after an opinion of the Autorité. These decrees will give the Autorité injunctive power in case of violation of these regulatory measures that could lead to supervise upstream prices of essential facilities, to pool equipment or, in some cases, to impose a legal or functional unbundling in the case, for example, of an undertaking combining the management of essential facilities with distribution activities. In case of breach of injunctions, the Autorité may impose fines.

The law also gives the Autorité a new power of structural injunction inspired from that of the UK Competition Commission, but this is limited to retail distribution. Since 2008, the Autorité has theoretically, over the entire national territory, the power to take structural injunctions, i.e. to order the divestment of assets in the retail trade so as to guarantee effective competition. But this power has never been implemented due to very strict conditions; the Autorité may use it only if an abuse of dominance has been detected and in case of recidivism of abuse.

On 11 January 2012, the Autorité had issued a report following its sector inquiry into the food retail dis-tribution market in inner Paris, which was found to be extremely concentrated (See ECN Brief 1/2012). In this framework, taking inspiration from the United Kingdom and Greece, the Autorité suggested to the legislator to empower it to issue structural injunctions where a sector inquiry finds that there is dysfunc-tional competition in a catchment area due to a high level of concentration.

Taking inspiration from this opinion, the new law, which applies only to overseas territories, relaxes the two above-mentioned legal conditions and allows for a cooperative procedure if companies, after receiving competition concerns, submit commitments to meet these concerns. If no commitment(s) are submitted or if those are not apt to put an end to competition concerns, the Autorité may, by a reasoned decision, impose a modification of its contracts or behavior, and when these measures are not sufficient to restore effective competition, impose the sale of assets. The final decision would be issued after an adversarial proceeding (hearing of the parties and the conduct of a market test).

See the new law (in French)

• Germany: Launch of Sector Inquiry into Oil Refineries and Oil WholesalersOn 27 September 2012, the Bundeskartellamt (BKartA) has launched a second sector inquiry into the market for oil to make an assessment of the competitive situation at the manufacturing and the wholesale level.

The first oil sector inquiry had been carried out in 2011 at the retail level. Its main focus was on petrol pricing strategies by petrol stations. The results of this sector inquiry were instrumental in proving the existence of an oligopoly of the major oil companies in the retail market for petrol and in enhancing the understanding of the market for petrol (see ECN Brief 3/2011). Following the sector inquiry, proceedings against five large oil companies forming an oligopoly on the petrol market were initiated in April 2012. The five companies which supply oil to independent petrol stations in Germany are suspected of abusive behaviour in the form of margin squeezes.

The aim of the second sector inquiry is to determine the degree of competition and to uncover possible

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competition problems among oil refineries and wholesalers: the subject of investigation concerns thus the upstream markets of petrol stations. Two issues will be assessed in particular: the existence of corporate interlocks between oil companies engaging in the manufacture, transport and storage of oil and contractual practices in the trade of oil at the wholesale level. An additional focus will be placed on oil refining costs, as well as the interrelation between raw oil prices, wholesale oil prices and prices set by petrol stations.

After having completed the evaluation of the structural and quantitative inquiries a report presenting the findings will be published: this report is also meant to be a basis for public debate.

See press release (in English)

• Germany: Final Report on Sector Inquiry into rolled Asphalt IndustryOn 1 October 2012 the Bundeskartellamt (BKartA) published its final report on the sector inquiry it has conducted into the industry for rolled asphalt, which is the asphalt type primarily used in road construction. The study reveals that corporate interlocks in the industry are a cause for competition concerns.

The corporate structure of the German market for rolled asphalt is characterized by a large number of asphalt mixing plants (around 550), half of which are operated by joint ventures. More than two thirds of these mixing plants are owned or jointly held by the four major asphalt suppliers: Werhahn, Strabag, Eurovia and Kemna. All four major companies participate in a number of joint ventures together. Furthermore the joint ventures themselves participate in other joint ventures operating in the rolled asphalt industry. This specific market structure was the principal object of scrutiny of the sector inquiry. The survey undertaken revealed indeed, that there is a wide and opaque chain of joint ventures, which are likely to allow the major four asphalt companies to influence the behaviour and strategy of a majority of asphalt mixing plants on the market.

According to the case law of the German Supreme Court, there exists a rebuttable presumption of anti-competitive behaviour in violation of § 1 GWB / Article 101 TFEU when two undertakings participating in a joint venture and the joint venture itself operate in the same geographical and product market. The sector inquiry revealed that in almost 60 % of the joint ventures existing in the market for rolled asphalt, this rebuttable presumption is fulfilled. In the case of another 20% of the existing joint ventures, the existence of anti-competitive behaviour, which does not fall per se into the category of the rebuttable presumption, is likely.

According to the results of the sector inquiry, a change in the corporate structure of the rolled asphalt market is necessary. The final report gives an overview of the next steps that will be taken by the BKartA. The BKartA has invited the undertakings to primarily conduct the dissolution of anti-competitive joint ventures on their own. If necessary, the BKartA will initiate proceedings in view of speeding up the break-up of problematic corporate interlocks.

See press release (in English)

• Italy: The Italian Competition Authority issues Report on LiberalizationAt the beginning of October 2012, the Italian Competition Authority (ICA) issued a new Report addressing a wide range of sectors and issues where further intervention is needed in order to promote competition. The Report pointed out that despite important liberalization measures introduced in recent years and the great efforts made by the Government and the Parliament in the current legislature to remove constraints and barriers that still hamper competition, the liberalization process is still incomplete.

Liberalization remains an on-going process and the ICA therefore welcomed the invitation of the Italian Government to contribute to the formulation of the annual Law on Competition and to select the most important issues to ensure the promotion of competition. The ICA also took the opportunity of this Report to request some legislative changes in order to strengthen its effectiveness in fighting cartels and

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merger review (see this ECN Brief).

In the Report, the ICA underlines that implementation of pro-competitive reforms plays a crucial role and indicates where further intervention might be needed. The ICA points out that regional and local administrations have often undermined the implementation of pro-competitive reforms adopted at national level. The ICA often observed resistance at local level, to the opening of markets to competition or a tendency to reintroduce restrictions that had been removed at national level. The ICA underlines that this is a crucial element that has to be addressed to ensure the success of the reforms. It proposed the simplification and reorganization of the institutional framework of central and local powers, so as to ensure more consistency to the reforms and to the liberalization process.

Another challenge that ICA faces is the persistence of regulatory and administrative constraints on the freedom of economic initiative. To address this obstacle the first option would be, whenever possible, the total removal of constraints and restrictions; and only when this is not possible, restrictions should be maintained to the extent necessary for the pursuit of public interest objectives, while ensuring that these constraints respect the principle of proportionality, namely that it is not possible to achieve the same objectives in a less restrictive manner. To this end, the ICA proposed to give immediate effect to the provisions that already foresee the elimination or, alternatively, the simplification of authorization and licensing procedures and the introduction of new measures aimed at reducing the administrative burden for businesses.

The ICA’s Report identified a number of proposals concerning specific sectors, in some instances requiring new interventions, in other advocating the effective implementation of measures already taken. In the sector of Local Public services, a significant part of the services concessions is still granted without any competitive tendering. A referendum and the decision of the Constitutional Court have eliminated the obligation to have competitive tendering. In order to overcome resistance, the ICA has suggested a sectoral approach. In particular, for local transport services and waste management services, the ICA proposed that when local administrations opt for in-house management, a preliminary and binding opinion of the ICA is required in order to assess whether more competitive alternatives are inconsistent with the general interest.

In the Energy sector, measures have been suggested in order to ease the authorisation procedures to create infrastructure and promote competitive tendering in the local gas distribution markets. In the Postal sector, the ICA suggested interventions that, through a clear identification and limitation of the services that are included in the universal service obligations, would extend the scope of services that are open to competition. In the Transport sector, the ICA has advocated that the newly established Transport Authority whose role is to promote competition and efficiency should be made operational as soon as possible. This is crucial in order to achieve the opening of transport and railway services to competition.

See press release (in Italian)

• Latvia: The Competition Council creates Knowledge Network to Fight Bid RiggingOn 29 October 2012, the Competition Council (CC) held a seminar dedicated to organisers of public procurement procedures and the City council members of Daugavpils, which is the second largest city in Latvia. This educational activity is part of the wide range of activities undertaken by the CC to inform and involve public officials in ensuring a level playing field and more lawfulness in the area of public procurements. During the past few years bid rigging has been one of the most frequently detected infringements of the Competition Law in Latvia. Such cases have been investigated in various markets and in times of economic recession every case was seen as especially harmful, as organisers of public procurements who were already suffering from budget cuts were misled by market participants and forced to overpay.

Under these circumstances, the Competition Council set the fight against bid rigging as its priority. A priority that more than any other activity of a competition authority requires effective cooperation with other public bodies. Thus, to ensure that its actions in this priority field are targeted and efficient, the Competition Council has identified allies who have immediate access to information that can indicate

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possible infringements such as organisers of public procurements and two supervisory institutions, namely, the Procurement Monitoring Bureau and the Corruption Prevention and Combating Bureau.

As a result, the Competition Council has established effective and mutually beneficial cooperation with the Procurement Monitoring Bureau and the Corruption Prevention and Combating Bureau, the latter being important as bid rigging often goes hand in hand with corruption when fraudulent actions of market participants are supported by corrupt officials.

Cooperation with the Procurement Monitoring Bureau has led not only to fruitful exchange of information, but also to the elaboration and implementation of amendments to the Public Procurement Law, that provides for the disqualification of participants in bid rigging from public procurement procedures for a year after the cartel has been proven. Such rule strengthens the deterrent effect of the existing regulation, as participants in bid rigging not only risk being fined but also being excluded from the procurement market.

However, officials who have the most immediate access to evidences of bid rigging are organisers of public procurement procedures. To raise awareness and to strengthen cooperation with this group, the Competition Council, in addition to publishing informative materials, has organised training sessions on bid rigging for procurement specialists from local municipalities and state-owned undertakings.

The above described activities have led to the existence of a knowledge network – a common understanding of the involved parties that paves the way to a more effective fight against bid rigging.

• Poland: UOKiK launches another Edition of Campaign ‘Entrepreneur, don’t collude!’In November 2012, the Office of Competition and Consumer Protection (UOKiK) launched another edition of the advocacy campaign entitled: “Entrepreneur, don’t collude!”. This time the advocacy efforts of UOKiK are directed towards students graduating in economics and management.

The education of these students in the field of competition law is very important from the perspective of UOKiK because they are likely to be the ones to make business decisions in the future which may have an impact on competition on the Polish and European markets.

In November and December 2012, UOKiK organized a number of workshops where UOKiK experts presented the issues arising from the conclusion of anticompetitive agreements. The representatives of UOKiK introduced the decisional practice of UOKiK in dealing with collusive agreements, the detection tools at the disposal of UOKiK, as well as the sanctions imposed on entrepreneurs participating in such agreements.

At the beginning of 2012, UOKiK started an educational campaign intended to raise awareness among entrepreneurs of the anticompetitive effects of collusive agreements. The goal of this initiative was to explain through radio broadcasts, films and press articles, what exactly is prohibited and allowed by the law, as well as what sanctions undertakings can expect for participating in collusive behaviour. These broadcasts and films were uploaded on the website of UOKiK. Furthermore, UOKiK experts in antitrust law prepared a series of articles which were published in the newspaper “Gazeta Prawna Daily” and were made available on the newspaper’s internet portal.

See press release (in Polish)

• Spain: The Comisión de la Competencia analyses Collaboration Protocol in Dairy Sector and Collaboration Agreement on Olive OilIn October 2012, the Comisión Nacional de la Competencia (CNC) adopted two reports analysing the Collaboration Protocol and Agreement in the Dairy (link in Spanish) and in Olive Oil (link in Spanish) sectors. Those reports are adopted as part of the exercise of the CNC’s advisory competences regarding matters affecting competition, and in particular the ability of Public departments to consult the CNC, in accordance with Article 25 of the Spanish Competition Act.

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First, the CNC adopted on 10 October 2012, a report on the Collaboration Protocol in the Dairy sector signed between the Spanish Association of Distributors, Association of Spanish Supermarkets (ACES), the National Federation of Dairy Industries (phenyl), Agrifood Cooperatives (CA), the Young Farmers Agricultural Association (BDA) and the Ministry of Agriculture, Food and Environment (the signatories) in view of improving the efficiency of value chains and marketing of milk and milk products. The CNC report analyses the implications of the Collaboration Protocol from the point of view of effective competition on the relevant markets.

The CNC notes that the Collaboration Protocol in the dairy sector follows the excessive compressed margins in all links of the value dairy sector chain, the deterioration of farmers’ profits. The difficult economic situation experienced by the dairy sector justifies various steps being taken to support the sector which seeks to involve all the agents in the dairy sector chain.

For its part, the Collaboration Agreement on olive oil follows the downward trend of income generated by this sector, the need to improve the competitiveness of the sector and the need to enhance product quality and its market presence. The report analysing the Collaboration Agreement on Olive Oil sector was issued by CNC on 24 October 2012.

According to the CNC, both reports foresee four main work areas.

- The first area concerns the strengthening of actions aimed at ensuring the quality of the products. Such actions include the implementation of quality standard self-control systems, the revision of the regulations regarding the achievement of higher quality in the sector and the reinforcement of quality control for milk and dairy products, as well as olive oil, through technical studies.

- The second area concerns the improvement of implementation of the regulation and of the structure and management of the value chains. The actions planned in this area are intended to raise awareness of the signatories of the rules governing the dairy sector and of the competition rules, to improve the monitoring of income and expenditure data provided by the Price Observatory Food, and to promote commercial contractual arrangements.

- The third area seeks to increase collaboration in the field of consumer information and promotional activity.

- The fourth area sets collaborative measures in view of promoting internationalization, establishing monitoring systems and seeks to improve the position of Spanish products in international markets through information and promotional activities.

The CNC has issued an overall positive assessment in the case of the dairy sector Collaboration Protocol, but issued specific recommendations concerning some issues which that are still open to improvement in competition terms.

- Safeguards designed to prevent information sharing should be further strengthened;

- In addition, it is considered that the Protocol should not induce or engage operators to develop behaviour that allows discrimination towards potential competitors In particular, it draws attention to the following references:

• Encourage the presence of a group of products protected by quality regional designations.

• Access to retailers and consumers by measures to improve design, packaging and shelf position.

Regarding the Collaboration Agreement on olive oil, the CNC issued no specific comments as it followed all the specific observations the CNC made in relation to the collaboration protocol in the dairy sector.

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• United Kingdom: The Office of Fair Trading calls for Information about Online Personalised Pricing Practices On 14 November 2012, the Office of Fair Trading (OFT) launched a call for information to explore the extent to which businesses are monitoring online shoppers and using the data to target them with personalised prices, and whether any action is necessary under the OFT’s powers.

Some businesses monitor consumer behaviour online, collecting and recording information about individual shoppers’ purchasing habits, websites they have visited and the items and services they have looked at, as well as the type of device or internet browser they use. The OFT will look at how businesses use such consumer information, including whether they change the prices they offer individual shoppers as a result.

The OFT will consider business and technological developments in the online shopping market, consumers’ understanding of how their information is used and whether they are being treated unfairly in law as a result of any firms using this practice.

As part of its work, the OFT will be consulting with a number of its international counterparts, including the US Federal Trade Commission on commercial uses of consumer data.

See further information

• United Kingdom: The Office of Fair Trading refers Private Motor Insurance Market to Competition CommissionOn 28 September 2012, the Office of Fair Trading (OFT) referred the UK’s private motor insurance market to the Competition Commission for further investigation amid concerns that the market is not working well for motorists.

The OFT provisionally decided to refer the market to the Competition Commission in May 2012 after a market study gave it reasonable grounds for suspecting that there are features of the market that prevent, restrict or distort competition (see ECN Brief 3/2012).

The OFT’s market study provisionally found that the insurers of drivers responsible for an accident (‘at-fault’ drivers) appear to have little control over the way repairs and replacement vehicles are provided to the ‘not-at-fault’ driver. This may enable the insurers of not-at-fault drivers, and others such as insurance brokers, credit hire organisations and repairers, to engage in practices which appear to result in the costs of replacement vehicles and vehicle repairs provided to not-at-fault drivers being higher than they might otherwise be.

Having considered the responses submitted during a public consultation process, the OFT continues to hold the view that a market investigation reference to the Competition Commission is warranted.

See further information

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• Hungary: Recent and upcoming Programme of the OECD-GVH Regional Centre for Competition in Budapest The OECD-GVH Regional Centre for Competition in Budapest (Hungary) (the RCC) was established by the Organisation for Economic Co-operation and Development (OECD) and the Gazdasági Versenyhivatal (GVH – Hungarian Competition Authority) on 16 February 2005. The main objective of the RCC is to foster the development of competition policy, competition law and competition culture in the East, South-East and Central Europe, and thereby to contribute to economic growth and prosperity in the region. Over the past few years, the RCC has acquired an important role in capacity building in the region. Since 2005, the RCC has organised over 69 events for more than 2000 participants with 415 expert speakers from the OECD, its Member Countries, as well as other countries, including 12 seminars for judges on competition law, which have been attended by more than 500 judges from several EU Member States.

The RCC organised highly memorable events in 2012, such as seminars on competition issues in the payment card services sector, litigation of competition cases before the courts, vertical restraints, innovative remedies and merger analysis, economic analysis tools in cartel investigations, and the following two events:

OTHER ISSUES OF INTEREST

• Romania: The Competition Council launches the Fourth Report on Competition regarding Developments in essential Sectors of the Economy On 1 November 2012, the Romanian Competition Council (RCC) launched the fourth Report on ‘Competition in Essential Sectors of the National Economy’, in the framework of a conference organized in Bucharest which was presided by Mr Bogdan Chiritoiu, President of the RCC. Participants in the conference included Mr Bogdan Olteanu from the National Bank of Romania, Mr Francois Rantrua from the World Bank, Mr Mircea Vasile Popescu from the Romanian Court of Accounts and Mr Steven Van Groningen from the Romanian Council for Foreign Investors. The launch of the report was followed up by a working session on ‘Competition policy in telecom sector’ with lectures from the Minister for Communications and Information Society, Mr Dan Nica, the National Telecoms Regulator, Mr Catalin Marinescu, Mr Fabien Pappe from the Bundeskartellamt, as well as the coordinators of the conference from the RCC, Mr Valentin Mircea, Vicepresident and Mr Dan Ionescu, Counselor.

As mentioned previously (see ECN Brief 4/2011), the RCC gained new powers in the field of unfair competition and surveillance of railway transport, in addition to its responsibility for the enforcement of the antitrust, merger and state aid rules.

The above mentioned report targets the state of competition in key economic sectors: banking and insurance, rail freight, energy, telecoms and food retail. In order to facilitate the monitoring and assessment of competition in various economic sectors, the RCC developed certain methodologies and indicators for evaluating competition. Thus, the current report presents an evaluation of competition on different markets, in the light of the latest economic developments.

See also further information on the presentations delivered at the conference as well as Report on Com-petition (in Romanian).

ANNUAL REPORTS

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Firstly, a seminar for European competition law judges on recent developments in European and national abuse of dominance cases which took place on 23-24 November in Budapest. The seminar took into consideration in particular the influence of economic concepts on case analysis, and debated about policy goals and their impact on case outcomes, and private enforcement before national courts. The event was open to all judges at national courts and prosecutors in the EU Member States, Croatia, and the FYR of Macedonia.

Secondly, a workshop took place on 11-13 December in Budapest and was focusing on the issue of price abuse. The workshop consisted of a series of presentations on the topic of pricing-related abuses of dominance, including excessive pricing and predatory pricing, along with anticompetitive price discrimination, for instance via ‘margin squeeze’. Presentations covered the economic theory relevant to such cases, general policy approaches, and specific practical examples through the presentation of case studies. The topics were addressed and discussed in lectures by competition experts from OECD Member Countries, and in case studies presented by the participants.

In 2013 the RCC will organise three standard programmes in the framework of its core activity: an intermediate workshop on exclusionary and discriminatory practices in March, and two advanced level workshops, one on analysis and procedures of complex mergers in May, and one on intellectual property rights and competition law in December.

In addition, three special events are planned in 2013: A seminar taking place outside Hungary, which will be hosted by Croatia, and will cover cartel investigation procedures. The RCC-FAS Russia joint seminar for CIS countries is planned to be held on 1-3 October. In addition to that, the RCC will organise two workshops for European judges in February and November 2013.

The programme of the RCC for the year 2013 is available at the RCC’s website.

• European Commission: Vice-President Almunia hosts European Competition Forum in February 2013 On 28 February 2013, Joaquín Almunia, Vice-President of the European Commission and member responsible for Competition, will welcome participants from governments and competition enforcement agencies, the business world, and the legal and economic communities in Brussels, for a debate about EU competition policy in the context of wider economic issues for the EU.

The Forum will be opened by Vice-President Almunia. Mario Monti, Prime Minister of Italy, will deliver the keynote speech.

Distinguished panellists will exchange ideas about three topics:

• The state in the global economy The focus here will be on growth and competitiveness, looking at the role of the state in promoting

growth from a global perspective, and how regulation and state invention can help or hinder growth.

• Competition, innovation and the Single Market Panellists will examine how competition policy can spur innovation and deepen the Single Market, in

particular looking at areas such as internet products and services, and areas where the Single Market remains incomplete.

• The Single Market for financial services and competition policyThe panel will look at the lessons learned for the future of the financial system at European level. Discussions will cover banking stability and supervision, lessons from State aid control during the financial crisis, and financial services trading and the European economy in the post-crisis world.

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The event will be closed with an address by Alexander Italianer, Director-General of the Competition DG of the European Commission.

Further information is available on the ECF 2013 website

• Austria: Federal Competition Authority organizes ‘Competition Talks’ on 23 October and 27 November 2012On 23 October 2012, the first ‘Competition Talk’ was launched by the Austrian Federal Competition Authority (BWB). This Lunch Debate Event will take place every second month dealing with hot topics in competition matters. Theodor Thanner, Director General of the BWB, stated that the debates are meant to attract company managers in order to raise awareness of competition offences.

The first Competition Talk dealt with the amendment of the competition law, which is at the moment being reviewed by the Austrian Parliament. Michael Losch, Head of Department in the Ministry of Economy presented the most important envisaged changes to the Austrian cartel law. He emphasized the enhancement of provisions against abuse of collective dominance, the reversal of the burden of proof for undertakings with market power, the revision of the provisions concerning de minimis-cartels and the strengthening of the powers of the BWB. Peter Matousek, Deputy Director General of the BWB, explained in more detail the new competences of the authority, such as, e.g. the power to enforce requests for information and to seal premises during an inspection. About forty participants discussed the new law. The meeting was considered a great success.

The second Competition Talk took place on 27 November and dealt with the BWB´s Best Practices for inspections. From the side of the Authority, Director General Thanner gave a summary of the authority’s activities over the past two years, followed by a presentation from Natalie Harsdorf-Enderndorf, case handler at the BWB, on the authority’s practical approach and the new powers envisaged in the pending amendment to the competition law. Raoul Hoffer, partner in a large Austrian law firm, represented the perspective of the legal community and emphasized the issue of legal guarantees and protection against the background of the envisaged restriction of the undertakings’ right to refuse the inspection of certain documents by the BWB. Nikolaus Schaller, judge at the Cartel Court, pointed out the necessity of the envisaged legal changes for securing efficient enforcement considering that the existing provisions lead to a transfer of the investigative work from the BWB to the court. At the same time, he expected an increase in importance of the exclusion of evidence in the future. The discussions concluding the event touched on practical questions such as the rights and duties of undertakings, as well as issues such as the legal position of employees.

The next event will be held on 29 January 2013.

See further information on past and upcoming events of the BWB (in German)

Press spokespersons: Stefan Keznickl, Stefan.keznickl@bwb.gv.at; Veronika Haubner, veronika.haubner@bwb.gv.at

• Bulgaria: The Commission on Protection of Competition launches the Sofia Competition Forum On 12 November 2012, the Bulgarian Commission on Protection of Competition (CPC) and the United Nations Conference on Trade and Development (UNCTAD) jointly launched the Sofia Competition Forum (SCF).

The initiative aims to assist Balkan countries in adopting and enforcing competition law and to maximize the benefits of well functioning markets for consumers in these countries. Both institutions joined their efforts in the establishment of an active platform for technical assistance, exchange of experience and consultations in the field of competition policy and enforcement on issues related to:

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• Strengthening competition legislation to fit the specific legal and economic structure of the Balkan countries and best address the development needs of the Balkan competition authorities;

• Reinforcement of the institutional set-up of competition authorities;

• Capacity-building for the efficient enforcement of competition law and policy;

• Negotiation process for EU membership.

The SCF is designed to provide capacity-building assistance and policy advice through seminars and workshops. Through maintaining a web-based platform for the publication of information, materials and presentations, as well as for conducting webinars, the SCF expects to further facilitate cooperation between competition authorities in the region and foster the development of regional relations among them.

See further information (in Bulgarian)

• Czech Republic: 6th St. Martin Conference in Brno focused on new Trends and Developments in Competition Law and PolicyOn 13 and 14 November 2012, the Czech Office for the Protection of Competition (the Office) organized its traditional autumn conference at its premises in Brno. The conference was opened by the chairman of the Office, Mr Petr Rafaj, who welcomed participants from the Czech Republic and from abroad. In his speech, Mr Rafaj pointed out the benefits of the conference such as the opportunity to discuss competition matters from the point of view of both the public and the private sector. The Vice-chairman of the Office, Mr Michal Petr, presented the results of the Office’s activities in 2012 and provided information about the preparation of new guidance documents which will – inter alia - explain the changes to the procedures introduced by an amendment of the Czech competition act. The topics of this year’s discussion panels included new trends and developments in competition law and policy in the Czech Republic, the US and the EU, such as the distortion of competition by public authorities, a more economic approach in network and regulated industries and competition in health services.

The nearly thirty speakers who presented their views during the conference included competition experts, lawyers, economists and academics from Austria, Belgium, Croatia, Czech Republic, Finland, Germany, the Netherlands, Slovakia and the USA. European Commission and OECD experts were involved as well. During the numerous discussions, the participants exchanged their views and opinions and learned about current competition cases in specific countries.

The St. Martin Conference is traditionally visited by many participants. The Office hopes it fulfilled their expectations and looks forward to welcome people interested in competition law in Brno next year again.

• France: The Autorité de la concurrence hosts first ICN Advocacy Workshop The first ICN Advocacy Workshop took take place in Paris on 26-27 October 2012 with an audience of more than 120 participants from 50 different jurisdictions.

The Workshop addressed substantial policy issues - most notably regarding advocacy activities directed to Governments - with a plenary session on ‘Competition impact assessment of legislation’. The plenary session collected feedback from members on a project proposed by Eduardo Perez Motta, Chair of the ICN, which involves the creation of a work product to complement the OECD’s Competition Assessment Toolkit. Based on the feedback received during the Workshop and the recent publication of its “Guide for competition assessment of draft legislation”, the Autorité de la concurrence will circulate a draft project, in cooperation with other ICN members.

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Two Advocacy Working Group projects, on ‘The Benefits of Competition’ and on ‘Competition Culture’, respectively led by the Portuguese Competition Authority and the Competition Commission of Mauritius, have also been launched during the Workshop. In addition, the ongoing project on ‘Working with Courts and Judges’ led by the Polish Office of Competition and Consumer Protection, has also been promoted in the Workshop.

In discussions on ‘Advocacy and institutional reform’ and ‘The role of the ICN in competition advocacy’, it was explored how the ICN can act as an advocate within the network, in support of its members, as well as outside the network, as a possible advocate for competition in the international arena.

Further discussions were held on subjects of special interest to Non-Governmental Advisors (NGAs) with a session on ‘Advocacy: the role of NGAs’, to younger agencies with a session on ‘The ABCs of advocacy’ and to more mature agencies with a session on ‘Advocacy and economics’.

The Advocacy Working Group is co-chaired by the Autorité de la concurrence, the Portuguese Competition Authority and the Competition Commission of Mauritius.

See furher information on the ICN 2012 Advocacy Workshop (in English)

• Germany: Meeting of the Working Group on Competition Law in Bonn - Call for more efficient procedural Rules in Cartel Prosecution On 4 October 2012, more than 100 experts met upon the invitation of the Bundeskartellamt (BKartA) to discuss current challenges in competition law implementation and enforcement in Germany and Europe.

This year’s meeting of the Working Group on Competition Law brought together a large number of national and international high-ranking competition experts from law and economics faculties, courts, competition authorities and ministries. The discussions took place under the theme “Cartel fines proceedings: the German systemic approach and European convergence”. They highlighted that whereas German competition rules underwent a significant reform after Regulation 1/2003 came into force and cartel prosecution was subsequently intensified, procedural aspects of cartel prosecution continue to be governed by the German Administrative Offences Act which is an instrument of criminal procedure. The application of procedural law for offences committed by natural persons to business behaviour has consequently become a considerable burden in terms of time and resources for the BKartA and for the courts.

In light of these developments, many participants in the conference called for the enactment of a specialized procedural framework for cartel prosecution. Many also held the view that a logical further step in the development and integration of EU competition law after the harmonization of substantive competition rules would be to embark on a European project harmonizing procedural aspects of competition enforcement.

See press release (in English)

• Malta: EU Competition Law and its Application in MaltaOn 13 and 14 September 2012, the Malta Competition and Consumer Affairs Authority organised a training seminar for members of the judiciary and their assistants in Gozo, in partnership with the University of Glasgow and with the support of the Judicial Studies Committee. The seminar was entitled ‘EU Competition Law and its application in Malta’ and was organised within the framework of the project on the Training of National Judges in EU competition law, which is co-financed by the European Commission.

The conference provided an excellent opportunity for the Maltese judiciary to broaden their knowledge of the application and enforcement of EU competition law. The speakers at the seminar were Dr Sylvann Aquilina Zahra and Dr Lisa Abela from the Office for Competition, Dr Yana Haber from the State Aid

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Monitoring Board and Professor Rosa Greaves and Mark Furse from the University of Glasgow.

The training seminar dealt with the main articles on competition law in the Treaty on the Functioning of the European Union (TFEU) and the rationale behind them. It specifically covered issues of public and private enforcement of competition law, as well as the interplay between these two different methods of enforcement. The discussion also focused on leniency programmes and the disclosure of documents in private actions drawing on existing case law.

The seminar also provided an overview of essential economic principles in competition law, an in-depth explanation of the concept of effect on trade and an update on the application of EU Competition law in Malta, especially in the light of the significant amendments introduced last year to the Competition Act.

Speakers from the University of Glasgow explained the UK experience in the judicial review of national competition authorities’ decisions and the role of national courts and their obligations under EU law. The members of the judiciary and their assistants were also briefed on the application of Article 107 TFEU and the role of national courts in cases concerning state aid. The seminar allowed ample scope for questions and discussions and included hypothetical case studies.

• Poland: The Office of Competition and Consumer Protection hosts Conference on Bid Rigging What is bid rigging, how to detect it, when is cooperation between bidders allowed? – these were the most essential issues raised during the conference organized by the Office of Competition and Consumer Protection (UOKiK) in cooperation with the Nicolas Copernicus University in Toruń. The event entitled ‘Competition protection in public procurement’ took place on 12 October 2012 at the premises of the Faculty of Law and Administration of the Nicolas Copernicus University in Toruń.

The participants of the conference included representatives of national competition authorities, the Organization for Economic Co-operation and Development (OECD), public institutions, as well as authorities responsible for exercising control over the legality of tender procedures, contractors, entrepreneurs and lawyers.

The conference was opened by Mrs Małgorzata Krasnodębska-Tomkiel, President of UOKiK who underlined that the effective protection of competition in the field of public procurement is one of the top priorities of competition authorities and constitutes a key topic of discussion raised in the international arena.

The core objective of the meeting was to discuss the best ways of enhancing effectiveness in detecting and eliminating tender collusions and to endeavor to establish why entrepreneurs decide to enter into such prohibited agreements in the first place. Furthermore, the conference –since it was a follow-up regional event held by UOKiK-, was also aimed at presenting the actions of the branch offices of UOKiK and bringing closer the effects of their work to the public at large.

The video of the conference (in Polish) is available on the website of UOKiK. All materials in Polish, including the agenda of the event, the list of speakers and the presentations can be found in the official press release whereas the English version of the presentations of the speakers of the event is available in the English press release.

• Poland: Seminar on Effective Use of Economics in Competition Enforcement On 22 November 2012, the Office of Competition and Consumer Protection (UOKiK) hosted a seminar on the “Effective use of economics in competition enforcement” at its premises. The event preceded the meeting of the ECN Chief Economist Working Group which took place in Warsaw on 23 November 2012.

The application of economic tools is of great significance for antitrust and merger proceedings. They allow going beyond formal and legal analyses and turning to a more individual examination of particular cases and their assessment. However, the use of economics can bring difficulties connected inter alia with shortcomings and limitations in analytical techniques and the effective presentation of economic evidence by ‘non-economists’.

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During the seminar, the participants who included economists from international organizations and national competition authorities, judges, lawyers as well as representatives from academic circles, discussed how to apply economic tools efficiently in the enforcement of competition law.

The first panel was devoted to the issue of the use of economics in the detection and prosecution of bid-rigging. The participants shared their practical knowledge of the application of empirical tools in the fight against this form of anticompetitive practices.

The focus of the second panel was efficient presentation of economic evidence in decisions issued by competition authorities including at the stage of defending them before the court. The subjects discussed concerned: the amount and level of sophistication of economic analysis required for a case to be successfully concluded and defended, proper role of economists within a competition authority, quantitative and qualitative economic evidence as part of the case narrative and economic concepts which lawyers may find difficult to understand, as well as how to solve communication problems. See press release (in Polish)

• Slovakia: Workshop on Protection of Leniency Documents vs. Defence RightsOn 17 October 2012 the Antimonopoly Office of the Slovak Republic (the Office) organized a workshop “Protection of Leniency Documents vs. Defence Rights”. The workshop took the form of a public discussion. The audience consisted mainly of external and in-house lawyers. The workshop is part of the advocacy activities of the Office and seeks to raise awareness of the importance of effective enforcement of competition law.

The issue of the protection of leniency documents is very topical, especially after the Pfleiderer judgment given by the ECJ in 2011 (Case C-360/09; see also ECN Brief 3/2011). Even if there have been no private damages claims stemming from leniency cases in Slovakia so far, the legal community in Slovakia is aware of this constraint to the effective use of leniency programmes. The Office considers the leniency programme to be the key element in the fight against cartels and wants to preserve the incentives for companies to apply for leniency. However, the Office is also under the obligation to ensure the legality of its procedures and especially the rights of defence of the parties under investigation, including the right of access to file.

The workshop discussions focussed on the question of how to ensure proper access to the file for the parties to the proceedings and, simultaneously, to ensure adequate protection of the leniency documents which were submitted to the Office by the leniency applicant.

As regards these issues, there are currently, no specific legal provisions in the Slovak Competition law. However, the Office was faced with such issues in its decision-making practice. It took inspiration from the European Commission’s practice and in the case-law of the European Courts. In the few cases of relevance that the Office had to deal with, it chose a case-by-case exercise in order to find a proper balance between the different interests of the parties and its own obligation to comply with fair trial requirements. In practice, the Office has used procedures such as not allowing the copying of leniency documents but enabling external legal representatives to examine the documents in its premises and make their own notes.

In the panel, representatives of the Office, the European Commission and the Slovak bar were present. The Office described its existing experience and highlighted its intention to continue protecting leniency documents. The European Commission’s representative provided information on the procedures at the Commission’s level and the respective case-law of the EU courts and finally, the attorney representing the Slovak bar shared their practical experience.

It can be concluded that these issues deserve special attention and the Office, based on the feedback it has received during the discussion, will contemplate suggesting possible changes in the competition law to the government in order to increase the legal certainty of its procedures.

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• France: New Vice-President at the Autorité de la concurrence On 14 November 2012, Emmanuel Combe, an economist and Board member of the Autorité de la concurrence since 2005, was appointed Vice-President of the Autorité de la concurrence.

Mr Combe holds two advanced degrees in social sciences as well as in law and economics and a PhD in economic sciences (University of Paris I).

He has been a Lecturer and Professor at several universities in France (Paris XI, Sciences Po, Le Havre, Paris XII). Since 1998, he is Affiliate Professor at ESCP-Europe 2005 and since 2005, Professor of economics at the Univer-sity Paris I (Sorbonne).

Mr Combe also taught at the College of Europe (Bruges), at the University of Salvador (Buenos Aires) and at the Ecole Supérieure des Affaires (Beirut).

He is the author of many books and publications on competition policies.

The Board of the Autorité de la concurrence is composed of seventeen members. Aside from the President and four Vice-Presidents, all of whom perform their duties on a full-time basis, the Board has other non-permanent members. In his capacity as Vice-President, Mr Combe will chair one Section of the Board. See press release (in English)

• United Kingdom: Office of Fair Trading appoints Executive DirectorOn 15 November 2012, the Office of Fair Trading (OFT) announced the appointment of Sonya Branch as an Executive Director, filling the role recently vacated by Clive Maxwell when he was appointed Chief Executive.

Sonya Branch will be responsible for a large part of the OFT’s front-line delivery work, overseeing competition and consumer enforcement cases and merger reviews, and will sit on the Board and Executive Committee. She will work alongside Vivienne Dews, the OFT’s other Executive Director, who will oversee market studies, con-sumer credit regulation, corporate services and transition.

Sonya Branch is currently on secondment to the Department for the Environment, Food and Rural Affairs, leading the Triennial Review of two of its biggest agencies and the largest such review by the UK Government to date. Before this, she was a Senior Director in the OFT’s Markets and Projects area and led a number of competition enforcement cases and market studies, including the recent private healthcare, motor insurance and dentistry market studies. Sonya Branch joined the OFT in 2007 from global law firm, Clifford Chance LLP, where she was one of the Partners leading its competition practice.

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• Austria: How Regulation 1/2003 influenced the Development of Competition LawSince 2002 Austrian competition law underwent a series of significant changes concerning substantial and procedural aspects as well as the institutional setup of the competition authority. Most of these changes were directly or indirectly triggered by Regulation 1/2003.

In fact, the modernization process behind what was to become Regulation 1/2003 in late 2002 influenced the political and legislative process in Austria already from 2000 onward. The cornerstones for the modernization of the European competition rules set out in the Commission’s White Paper of 1999, namely the abolition of the notification system and the decentralization of the application of competition rules had started raising doubts as to the adequacy of the institutional setup for competition enforcement that existed then in Austria. This process eventually led to the enactment of the Competition Act establishing the independent Federal Competition Authority (FCA) as of 1 July 2002 as the designated body for the investigation of competition cases (under national as well as European competition law) and introducing specific investigative powers, notably requests for information and inspections. Moreover the existing sanctions system of the Cartel Act 1988 was converted from a criminal punishment system to a system of fines based on the European model. Apart from that the substantive law remained widely unchanged.

With the enactment of the Cartel Act 2005 (Cartel Act) which entered into force on 1 January 2006, a broad harmonization of national law with European law was effected. The new act marked the abolition of the notification system and aligned the text of Article 1 Cartel Act (as well as the conditions for exemption foreseen in Article 2) with Article 81 EC Treaty (now Article 101 TFEU). The types of decisions available under national competition law were designed to correspond to the respective provisions of Regulation 1/2003. Full convergence was also achieved in the field of fines and periodic penalty payments as well as for the limitation period for the imposition of fines. In parallel an amendment to the Competition Act created the legal basis for a leniency programme. Again the materials of the legislative process were referring to the developments within the framework of Regulation 1/2003 and the European Competition Network as laid out in the Commission Notice on cooperation within the Network of Competition Authorities.

The latest draft amendment to national competition law, which is currently pending in parliament, also makes reference to Regulation 1/2003. In light of practical experience gained in enforcing the competition rules, a further alignment of the FCA’s powers with those of the European Commission is foreseen. The FCA shall be vested with the power to seal premises during inspections as well as to ask for explanations on facts and documents relating to the subject-matter and purpose of the inspection. Furthermore the FCA shall receive the power to issue requests for information by way of binding decision (instead of obtaining a court order). The draft bill amending both Cartel Act and Competition Act passed the competent parliamentary committee in late November and is scheduled to be enacted during the plenary’s December session: it is intended to enter into force on 1 March 2013.

The legal environment brought about by Regulation 1/2003 has given momentum to regulatory reforms in the field of competition law in Austria and the developments which have taken place at European level and within the ECN have led to a high degree of convergence.

• Bulgaria: The Modernisation of Competition Law after Regulation 1/2003The adoption of Regulation 1/2003 was a benchmark event for EU competition policy which sought to adapt the EU competition acquis communautaire to the realities of the 21st century and to the functioning of an extending community of EU Member States. The Regulation substantially changed the legal framework for the enforcement of EU competition law with the introduction

10th Anniversary of Regulation 1/2003: Convergence and Cooperation in the ECN

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of the decentralized system of enforcement of Articles 101 and 102 TFEU. More responsibilities were given to the national competition authorities, requiring them to adapt their national competition laws to the newly established European legal framework on competition. This is particularly true for the new EU Member States, Bulgaria being one of them, which undertook major efforts to introduce national competition law reforms that reflected the new role of the national competition authority in relation to the modernized application of the EU competition law after Regulation 1/2003.

The Bulgarian Law on Protection of Competition (LPC) is a good example of legal reform driven by the changes in EU competition law.

Bulgaria became a member of the EU as of 1 January 2007. The competition law in force at that time was relatively adequate, adopted in 1998 and with several amendments made thereafter. Notwithstanding this, the existing law contained provisions, both substantial and procedural, which might have caused legal uncertainty and/or discrepancies when applied alongside Regulation 1/2003. Driven by the necessity to amend the LPC before Bulgaria’s accession to the EU in order to avoid contradiction between the national and EU competition rules, the Bulgarian Commission on Protection of Competition (CPC) drafted a new law in view of providing it with competences as a national competition authority under Regulation 1/2003, as well as incorporating provisions based on the enforcement practices of the European Commission and other NCAs as regards the legal framework for competition protection.

As a result, an entirely new Law on Protection of Competition was adopted at the end of 2008. The new LPC established a clear legal basis for the efficient enforcement of competition rules, including Articles 101 and 102 TFEU as well as for the cooperation of the CPC with the European Commission and with the national competition authorities of the EU Member States within the European Competition Network (ECN).

The most important changes in Bulgaria’s competition law since 2008 can be summarized as follows:

• The LPC designated the CPC as the competition authority responsible for the implementation of the competition rules laid down in Articles 101 and 102 TFEU (pursuant to Article 35 of Regulation 1/2003);

• The LPC abolished the previous notification regime with regard to agreements between undertakings, introducing the modern ipso iure approach when applying the national antitrust prohibition corresponding to Article 101 TFEU;

• The LPC introduced provisions on block exemptions which are fully harmonised with the corresponding provisions of Regulation 1/2003. Further to this, the CPC subsequently adopted a Block Exemption Decision reflecting the recent novelties in the European BERs thereby ensuring legal certainty for undertakings;

• The LPC abolished the existing rebuttable presumption of at least 35% market share for establishing a dominant position in order to be fully convergent with Article 102 TFEU. The CPC now bases its assessment not only on market share, but also on the undertaking’s financial resources, entry on the market, technological innovation and other factors in order to decide whether the undertaking holds a dominant position;

• The LPC empowered the CPC with new competences, namely to impose interim measures and approve commitments proposed by undertakings (in line with the provisions of Article 5 of Regulation 1/2003). The criteria and procedures for the approval of commitments (behavioural or structural, positive or negative) are stipulated in the detailed Rules on examining proposals to undertake commitments;

• A turnover-based method for calculating sanctions imposed for competition infringements was introduced, replacing the lump sum sanctions under the repealed LPC. Periodic sanctions were also introduced in the LPC now in force;

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• The ‘de minimis’ thresholds were harmonized with those of the EU De minimis Notice;

• The LPG includes specific provisions on the competence and the forms of cooperation of the CPC with the European Commission and the NCAs as envisaged in Regulation 1/2003, including special procedural provisions empowering the CPC to fully implement its cooperation duties under the Regulation;

• New and detailed procedural provisions for investigations into infringements of the LPC and/or Article 101 and Article 102 TFEU were introduced, with the Statement of Objections being the main legal instrument to guarantee the right of defence of the parties.

In addition to the LPC, the CPC adopted a number of acts of secondary legislation, such as a new Leniency programme and Rules on Access to File aimed at creating a comprehensive legal framework harmonised with EU competition law.

As a newcomer to the EU, Regulation 1/2003 enabled the Bulgarian CPC to assert its authority as national competition body entrusted with all the powers and legal instruments necessary to ensure effective competition within the Internal Market. The Regulation has played a significant role for improving the legal framework for the protection of competition in the EU and increasing the effective implementation of both EU and national competition rules, thereby creating favourable conditions for the development of a coherent competition policy in the EU.

• Cyprus: A small Authority’s Perspective on Regulation 1/2003 and the ECNCyprus joined the EU on 1 May 2004 and since then its competition authority has been entrusted with the application of EU competition rules including Regulation 1/2003.

By using the platform provided by the ECN to receive guidance and share expertise, the Commission for the Protection of Competition (CPC) which is a small and relatively inexperienced authority, is given the right means to effectively enforce the EU competition rules.

So far the formal cooperation of the CPC with the European Commission and other NCAs within the framework of the ECN in relation to actual cases has been taking place on a rather small scale: assisting the European Commission during an inspection in Cyprus, collecting information on behalf of other NCAs, acting as rapporteur in the context of the Advisory Committee, as well as informing the network of national cases that affect trade between MS.

The ECN has also helped the CPC to develop valuable enforcement tools, exchange useful information and expertise and participate in the formulation of policies as well as to coordinate on the application of competition policy. In addition, the knowledge and information shared within the ECN on different sectors of the economy has enabled the CPC to avoid pitfalls and bypass to a large extent the learning curve in the application of the EU competition rules.

One such example is the ECN Model Leniency Programme which has served as a basis for the Cypriot Leniency Programme introduced on 2 May 2012. Thanks to the exchange of experience with other ECN members, the CPC has become aware of various difficulties that may arise in practice in the application of leniency programmes and has been able to take these into account while setting up its own programme. Another example where the CPC benefits from the expertise from other competition authorities is the area of cartel settlements in which it is greatly inspired by the procedures and approach used by the European Commission in such cases. The work done within the Financial Services WG has also helped the CPC to deal with its cases in this sector.

Through the ECN, all NCAs, whether large or small, are given the opportunity to participate in the discussion of policies, to raise issues which affect to a greater or lesser extent other NCAs, as well as to alert other NCAs of competition concerns which could be of interest for them. This is particularly valued by the CPC which, due to its size, limited resources or travel costs, does not always have the opportunity to take part in all meetings.

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• Denmark and Sweden: Success Stories of Cooperation within the European Competition Network - Assistance in carrying out Investigations pursuant to Article 22 of Regulation 1/2003Denmark and Sweden are geographically closely situated and their markets have similar characteristics. Thus, the Danish Competition and Consumer Authority (DCCA) and the Swedish Competition Authority (SCA) encounter similar competition concerns.

When Regulation 1/2003 entered into force on 1 May 2004 it provided the NCAs with different tools for cooperation in order to ensure the effective enforcement of competition rules in the EU. In particular, Article 22(1) allows an NCA to request another NCA for assistance in carrying out investigations to establish whether there has been a breach of Article 101 and/or 102 TFEU. This possibility has proven to be very valuable and essential for the NCAs when gathering relevant information about infringements of the competition rules, where the undertakings involved are established outside the territory of the requesting NCA.

The DCCA and the SCA have mutually assisted each other, on several occasions, in carrying out inspections and in sending out requests for information pursuant to Article 22.

Cooperation was launched already in 2004 when the DCCA assisted the SCA in carrying out an inspection in the energy sector regarding an alleged infringement of Articles 81 and 82 EC Treaty (now Articles 101 and 102 TFEU).

The second case of request for assistance took place in April 2009 when the SCA requested assistance from the DCCA in conducting an inspection in Denmark in an alleged abuse of dominant position case on the market for dairy products. The suspected undertaking´s headquarters were located in Denmark and it was crucial for the SCA to gather information from the undertaking´s premises in its neighboring country. Simultaneous inspections were therefore carried out in several of the undertaking’s premises as well as the premises of unsuspected undertakings in Sweden and Denmark. During the inspection an SCA official was present at the offices of DCCA to facilitate coordination between the competition authorities.

Cooperation between the two NCAs was intensified at the beginning of 2011. In January 2011, the SCA carried out an inspection following a request for assistance by the Director of Public Prosecutions in Denmark, in cooperation with the DCCA. The inspection was carried out at the premises of the suspected undertaking’s north European headquarters located in Sweden regarding an alleged infringement of Article 101 TFEU and the Danish Competition Act on the market for white goods.

A few months later, in March 2011, the SCA carried out an inspection following a request for assistance by the DCCA at the premises of an undertaking located in Sweden. The Swedish company was believed to be in possession of evidence, although it was not, at that time, one of the suspected companies. The request referred to an alleged abuse of dominant position on the market for spare parts for train engines. Inspections were carried out simultaneously in Denmark, Germany, the Netherlands and Sweden.

Following the inspections carried out in the above-mentioned cases from 2011, the SCA searched the digital and forensic evidence collected. As a result of the inspections in Sweden and Denmark, the Director of Public Prosecutions in Denmark and the DCCA have initiated further investigations based on the material seized. Investigations are still ongoing in these cases.

Besides assisting each other in conducting inspections, the SCA and the DCCA have assisted each other on several occasions with regard to sending out requests for written information pursuant to Article 22. For example, during the spring of 2012 the DCCA assisted the SCA in sending out a questionnaire regarding the relevant market to clients of an undertaking which was under investigation. The investigation relates to an abuse of dominant position on a highly complex market and the possibility for the SCA to gather information about the market from clients situated in another member state was seen as vital for the investigation.

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Although the investigations have not always led to formal proceedings, the assistance regarding both inspections and requests for written information was successful and cooperation between the authorities functioned well. The two NCAs have learned that the cooperation in investigative matters can be essential for the enforcement of European and national competition rules. The SCA and DCCA believe that in the coming years there will be even more success stories about their cooperation pursuant to Regulation 1/2003.

• France: The ECN Work on LeniencyWith Regulation 1/2003 came the need to ensure a coherent framework for the enforcement of EU competition law by national authorities and the Commission in a system of parallel competences. This was especially the case regarding the functioning of leniency programmes, which are essential tools for cartel enforcement by helping to detect such practices and contributing to their effective prohibition. End 2012, all but one members of the ECN have adopted a leniency programme.

In the context of parallel competences under Regulation 1/2003, potential leniency applicants are likely and even encouraged to apply to all authorities whose territory is affected by the infringement and which may be considered well placed to act against the infringement in question (see point 38 of the Commission’s ‘Network Notice’). This implies that the incentives to apply under a given leniency programme depend both on the said programme’s inherent characteristics but also on the availability of leniency and the characteristics of the programmes established by other authorities within the ECN which may also be in a position to act against the infringement. Discrepancies between programmes may thus, in some instances, have a chilling effect on multijurisdictional applications.

From the authorities’ perspective, a reason for more convergence between the respective leniency programmes lies in the need to allow for a swift and efficient cooperation amongst competition authorities, either to allocate the case or to improve coordination in related cases which have triggered multiple leniency applications. Convergent conditions and safeguards can facilitate cooperation amongst authorities to an extent which may not be achieved by a mere exchange of experience and/or increased knowledge of jurisdictional differences.

These concerns were taken on board with the publication of the ECN Model Leniency Programme (MLP) on 29 September 2006. The drafting of the MLP was co-steered by the Conseil de la concurrence (now the Autorité de la concurrence) and the Office of Fair Trading. The MLP provides for a set of procedural and substantive principles designed to serve as a blue-print for a leniency programme and thereby to address major discrepancies between ECN leniency programmes that may have undermined leniency attractiveness in Europe. ECN members have committed to make their best efforts to align their leniency programmes with the principles of the MLP. The MLP also initiated a system of ‘summary applications’, whereby undertakings can introduce applications to national competition authorities with minimum requirements, if a leniency application is being lodged before the Commission in the case of cartels covering more than three Member States. Under the original MLP, only the first – immunity – applicant could benefit from this instrument. Summary applications considerably reduced administrative burdens in the context of cross-border infringements.

The overall success of this initiative was assessed in a 2009 report which highlighted the broad convergence of existing leniency programmes with the principles set out in the MLP (see ECN Report on the Assessment of the State of Convergence in relation to the MLP).

The exchange of practical experience among ECN authorities was continued within the ECN and its members met on nine occasions to discuss the matter between 2010 and 2012 in the Working Group Cartels ECN Working Group Cartels: Practice and Policy (WG Cartels).

This work which involved the active participation of a large number of ECN authorities including the Autorité has resulted in a revised MLP which has been endorsed by the ECN Heads of Authorities

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during their meeting on 22 November 2012. A major feature of the revised MLP is the extension of the system of summary applications to all leniency applicants, regardless of whether they are the first to come forward before the Commission or the “well placed” national competition authorities. Together with other ECN members, the Autorité has actively contributed to this revision. The extension of the summary application system will further lessen the administrative burden for firms filing parallel leniency applications in the context of cross-border infringements as well for authorities receiving the application.

Already in May 2012 and following up on the Pfleiderer judgment of the European Court of Justice (C-360/09), the Heads of the European Competition Authorities endorsed a resolution published on 23 May 2012, which stresses the importance of protecting leniency material against disclosure in the context of civil damages actions to the extent that is necessary to ensure the effectiveness of leniency programmes.

• Finland: Reforms of Competition Law lead to increased ConvergenceFinland has been a member of the European Union since 1995. Its membership has led to profound changes in the national competition legislation, which was initially harmonized with Articles 101 and 102 TFEU already in 2004 (Act on Competition Restrictions (480/1992), incl. amendment (318/2004)). However, recent changes in the newly adopted Competition Act of 2011 (Competition Act (No 948/2011) entered into force on 1 November 2011)) have resulted in great strides towards further convergence with Council Regulation 1/2003.

The first national legislative reform resulted from the modernization of the EU antitrust rules which enabled the decentralization of cases to national competition authorities (NCAs) as well providing for measures to ensure the uniform application of common competition rules. Although the 1992 Competition Act was considered adequate in principle, it became apparent that in order to secure a well-functioning competition mechanism the Finnish Competition Authority (FCA) would need more up-to-date tools at its disposal. Consequently, the latest national legislative changes focus predominantly on procedural provisions as well as leniency.

Taking effect from 1 November 2011, the amended Competition Act (the Act) gives the FCA the possibility to prioritize its tasks and to decide not to investigate a case if it does not meet a fixed set of criteria. As a result, the FCA can better focus its efforts and allocate limited resources to fighting the most serious violations in the economy, thus meeting its legal obligations.

The reform strengthens the FCA’s investigatory powers in many ways. First of all, in line with Reg-ulation 1/2003, the national investigative powers now provide for inspections of private prem-ises. The FCA will, however, require prior authorization from the Market Court.

Moreover, the Act grants the competition authority the power to summon a natural person for an interview if there is a reasonable suspicion of their participation in a competition infringement. This extends the FCA’s ability to seek clarifications and conduct enquiries at other times than the inspection of an undertaking itself.

Even though there is not a legal obligation to harmonise national leniency systems, it is essential that applicants are not subjected to conflicting demands which may jeopardise the attractiveness of leniency in general. As a step in the direction of voluntary convergence, the national leniency provisions have been aligned with the ECN’s Model Leniency Programme. For example, the new law includes provisions for the amount of reduction of fines and further requirements for the qualification for immunity from or reduction of fines. This offers better incentives to cooperate for subsequent applicants as the reductions are predictable. Moreover, leniency may be granted, upon the fulfillment of certain conditions, even after the FCA has begun inspections.

An important new provision in the amended Competition Act states that the documents provided to the FCA in a leniency procedure may not be used for any other purpose than the handling of the case by the FCA, the Market Court or the Supreme Administrative Court.

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A further amendment includes aligning the provisions for calculating the limitation period for fines with the provisions of the Council Regulation 1/2003 to achieve uniformity regardless of which provisions are applied. It is the Market Court that imposes fines at the FCA’s proposal.

In order to improve transparency, the rights of defence of undertakings are now explicitly provided for in the law and are similar to those set out in EU case law e.g. in terms of self-incrimination and legal professional privilege. The FCA has a legal obligation to inform the undertaking of its position in the investigation and what it is suspected of as soon as possible, without jeopardising the investigation.

Further, the law now expressly states that, in line with EU case law, in addition to undertakings, also any natural person is able to seek compensation for damages. This expands the scope of eligibility as previously only undertakings were mentioned.

Finally, another substantive change relates to the harmonization of the definition of an undertaking with EU law, providing legal certainty and uniform application regardless of whether national or EU provisions are applied.

It may be concluded that the principles set out by Regulation 1/2003 as well as the continuous need for further convergence have resulted in repeated national legislative reforms and shaped the Finnish competition culture.

Finland has been an active partner in the ECN for the past decade. Despite its geographical location, cooperation within the ECN engages the entire Authority in one way or another. Future developments undoubtedly pave the way for increased convergence and possibly even call for additional legislative changes. We look forward to being a part of this progress.

• Germany: Ten Years after the Adoption of Regulation 1/2003 – the Road to further ConvergenceRegulation 1/2003 has been adopted ten years ago and its entry into force brought a fundamental change to the enforcement of EU antitrust rules, in particular by laying the foundation of effective cooperation between the competition authorities of the EU. Ten years later, very much has been achieved on that basis. The substantive standards under which anti-competitive practices are assessed throughout the EU have been aligned to a large degree: the principle that undertakings themselves assess the compatibility of their commercial practices with Articles 101 and 102 TFEU has proven very workable and cooperation between authorities (Commission and NCAs) has gone far beyond traditional notions of international cooperation.

However, recent practice has raised some concern that, in certain cases, the good functioning of the ECN may be impaired by procedural discrepancies existing between the ECN members on the one hand and the European Commission on the other hand. In a system of flexible case allocation, the possible sanction imposed on a company for an antitrust infringement should not be too divergent depending on whether the case is decided on the national or the European level.

There are two prominent examples from German practice in which particularities of national procedural law may impede the effective enforcement of Articles 101 and 102 TFEU, which would be possible on the basis of European law.

The discrepancy underlying both examples is the following: according to the prevailing legal opinion, German procedural law allows only for the exact legal entity which committed an antitrust infringement to be sanctioned. It does not allow for imposing a sanction on another legal entity belonging to the same economic unit, despite the fact that according to substantive law, the economic unit is what is meant by the notion of ‘undertaking’ in the sense of Article 101 and 102 TFEU. It is counter-argued that Article 5 Regulation 1/2003 directly confers to NCAs the competence to sanction the “undertaking” in the sense of Article 101 and 102 TFEU, i.e. the

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economic unit including all legal entities which are part thereof. This opinion is currently being discussed before the courts in Germany, but has not yet been commonly accepted. Pursuant to the European rules, this problem does not occur: indeed, the sanction may be imposed on legal entities belonging to the economic unit which, as the ‘undertaking’ in the sense of Article 101 and 102 TFEU, committed the antitrust infringement.

As a consequence, there are two situations in which it is questionable whether, on the basis of the German procedural law, an effective sanction for an antitrust infringement can be imposed. If in these two situations it is possible to impose a sanction, additional and possibly exceptional preconditions are to be met.

The first situation is one in which it appears adequate to impose a sanction on a parent company for an antitrust infringement committed by its subsidiary. As explained above, the fact that the parent company and the subsidiary belong to the same ‘undertaking’ in the sense of Article 101 and 102 TFEU is not sufficient on the basis of the German procedural rules. The BKartA consistently argues that even if the parent company cannot be sanctioned for the antitrust infringement based on the fact that they belong to the same undertaking, it can be sanctioned for violating its obligation to supervise its subsidiary, which comprises the obligation to take all measures necessary to avoid antitrust infringements committed by the subsidiary. However, some voices contest that this is a workable way to sanction the parent company, and it has not yet been confirmed by the courts.

The second situation is where the infringer has ceased to exist after having transferred its assets to another company which is the legal or economic successor of the infringer. In such case, the question arises whether the sanction can be imposed on the legal or economic successor. According to the jurisprudence of the German Federal Court of Justice, even within the same economic unit, a sanction can only be imposed on the legal or economic successor under extremely restrictive conditions which are met in practice only in very rare cases. In cases dealt with on the basis of the European competition rules, the problem does not arise in the majority of cases in which the succession takes place within the same economic unit. Even if this is not the case, it is possible to sanction the successor if there is ‘functional and economic continuity’ between the successor and the predecessor.

These are two examples, taken from current German legal situation, in which the discrepancies between national and European procedural rules render the effective sanctioning of an antitrust infringement at the German level by far more difficult, if not in practice impossible, than it would have been at the European level. It is not excluded that other Member States also encounter certain issues arising from procedural divergences, given that national procedures for the enforcement of the EU competition rules are not harmonised. This may be problematic not only for the NCAs but also for the companies concerned if, as in the cases described above, the sanction they may expect is potentially considerably different depending on which authority decides their case.

Therefore, as a consequence of the existing substantive harmonization, progressive procedural harmonization appears to be an important next step to ensure the good functioning of a system of parallel competences which has, in the first ten years of its existence, proven to be a great success in the joint effort to improve antitrust enforcement.

• Hungary: The Hungarian Perspective on the 10th Anniversary of Regulation 1/2003When Regulation 1/2003 entered into force the competition authorities of the EU Member States faced new challenges such as the direct application of EU competition rules and the elaboration of cooperation mechanisms within the ECN. In parallel, some Member States, and in particular Hungary, met at the same time additional challenges due to their accession to the EU, which brought new tasks that were a matter of routine for existing Member States, such as participation in Advisory Committees, Oral Hearings, cooperation in the field of merger control, etc.

The fact that the European Commission invited all the competition authorities of the candidate

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countries to participate in the fine-tuning of the decentralisation system significantly helped the Gazdasági Versenyhivatal (GVH - Hungarian Competition Authority) in the preparation for its EU membership.

Similarly to the competition authorities of all the other candidate countries, the GVH had to elaborate and introduce the necessary internal (intra-agency) cooperation mechanisms which enabled the authority to successfully determine the tasks of the organisational units of the GVH concerning the ECN-related cooperation and to fulfil the tasks stemming from the ECN membership thereby enabling a smooth “accession” in the field of competition law enforcement.

Fortunately, the 13 years spent in ‘association status’ between 1991-2004 had given the GVH the opportunity to gradually adjust the national competition rules to European law. As a result, on the eve of accession, Hungarian competition law was to a great extent harmonised with EU law (with the exception of the individual exemption system which was not abolished at that time). After accession, the GVH has continued to keep the national competition regime in harmony with EU norms, and with policies elaborated at ECN level (such as the ECN Model Leniency Programme). Milestones of this process were the abolishment of the possibility of individual exemptions from national law, reform of the leniency programme and fining policies, introduction of the possibility for the authority to intervene as amicus curiae for purely national situations, etc.

From the entry into force of Regulation 1/2003 until November 2012, the GVH has opened 92 proceedings under Articles 101 and/or 102 TFEU. This represents around 40% of the cases investigated by the GVH concerning restrictive agreements and abuses of dominant position. However, the possibility of applying European competition rules was considered in every antitrust case which was opened during this period.

The cases initiated under EU law (as the practice shows, the majority are brought by the GVH under national and EU rules in parallel) cover a wide range of sectors, e.g. agricultural products, professional services, transport, postal services, telecoms, electricity, financial services. Similarly, they also concern a quite wide variety of types of violation, e.g. bid rigging and other hard-core cartels, RPM, price squeeze, hindering market entry by operating a discount system and rebate scheme and price discrimination.

The GVH has also used several cooperation instruments foreseen by Regulation 1/2003. There have been examples of exchanges of information under Article 12, Article 22 requests for assistance in investigative measures (and vice-versa). Contrary to what had been expected by some before the entry into force of the Regulation, the number of re-allocated cases has remained relatively low, but interestingly this is an ECN-wide phenomenon. Still, there have been a few cases reallocated from the GVH to another ECN member, and also one case was reallocated from another ECN member to the GVH.

The GVH has significantly benefitted from the cooperation taking place in the framework of the ECN. In addition to the experience gained in EU competition law application, the staff of the authority has learnt and continues learning from the practice and expertise of other ECN members. A further obvious achievement of the ECN is the widening of personal relations among the members of the competition authorities on different levels (heads of authorities, general contact persons, chief economists, investigators) which enhances the multilateral work at different levels of the Network.

All in all, the GVH has benefited significantly from the accession process and the experience of being an ECN member authority in two ways. On the one hand, by keeping an eye on EU competition law practice, the national enforcement is more deliberately in line with EU law and principles, and on the other hand, the cooperation within ECN has brought about fruitful and lively exchange of views and close liaison with colleagues from other NCAs, which in turn makes cooperation smoother.

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• Ireland: Courts as Competition Authorities - Reflections on Ireland’s Implementation of Regulation 1/2003When Regulation 1/2003 came into force, Ireland found itself in an unusual position. The Irish Competition Authority does not make decisions as to whether an undertaking has infringed Irish competition law as the decision-making power in relation to infringements of any law is reserved to the Irish courts. Instead, the Competition Authority acts as a plaintiff, alleging that the law has been infringed. Where a criminal prosecution is brought, it is brought by the Director of Public Prosecutions (infringements of the Competition Act 2002 and of Articles 101 and 102 TFEU are criminal offences in Ireland. However, it is also open to the Competition Authority to proceed by way of civil litigation, and in practice, only hard-core-cartel-type activity is likely to be the subject of a criminal prosecution). So the only way in which the Irish Government could ensure that EU competition law was applied in the same way and by the same bodies as national law was to designate;

(a) all the courts except the Special Criminal Court for the purposes of Article 5 of the Regulation,

(b) the Authority to perform the functions set out in Chapters IV, V, VII, VIII and IX of the Regulation, and

(c) the Authority, the DPP and the Courts, or the offices of the courts, for the purpose of performing the functions set out in Articles 11(1), 11(5), 27(2) and 28(2) of the Regulation (see the Irish implementing regulations - European Communities (Implementation of the Rules on Competition laid down in Articles 81 and 82 of the Treaty) Regulations 2004).

It was not clear back in 2003 whether the Irish courts would distinguish between situations where they act as competition authorities (and thus adopt Article 5 decisions) and situations where they sit as courts (and so give judgment in cases involving the application of Articles 101 and 102 TFEU, whether those cases were brought by the Competition Authority or by private parties).

In the ten years that have elapsed since then, two cases involving the application of EU law have gone to full judgment. One was the BIDS case (The Competition Authority v The Beef Industry Development Society, High Court, 27 July 2006; Court of Justice of the EU, 20 November 2008; Supreme Court 3 November 2009). No mention was made in either the High Court or Supreme Court judgments of whether the courts believed themselves to be sitting as competition authorities or as courts, or both.

However, in the second case, The Competition Authority v O’Regan and Others (also known as the ILCU case) Mr Justice Kearns was quite clear that the court was acting as a competition authority, as he explained in his judgment in the High Court:

‘On the 30th of July, 2004 the court, because it was acting in its role as a designated competition authority, provided its envisaged decision (as it then was) to the Commission pursuant to Article 11(4) of R. 1/2003.’

Mr Justice Kearns makes no mention of whether he believed that the court was also acting in its normal capacity, i.e. as a court.

Both Article 11(4) and Article 15(2) are designed to ensure that the Commission becomes aware of the manner in which EU law is being applied in the Member States. In the case of Article 11(4), the Regulation provides that the Commission should know in advance, so that if necessary it can intervene to prevent the decision being taken, whereas in the case of Article 15(2) the Regulation simply requires that the Commission be informed after the event, presumably out of deference to the judicial function. If in any particular case a court does not avert to the fact that it is acting as a competition authority, it is unlikely to notify the Commission in advance of a decision requiring an infringement to be brought to an end.

See here for a more detailed discussion on this issue.

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• Italy: The Italian Mastercard Case as an Example of Consistency of Decisions adopted by NCAs and the European CommissionOn 3 December 2010, the Italian Competition Authority (ICA) adopted a decision following an investigation concerning the fixing of multilateral interchange fees (MIFs) for various payment services offered by MasterCard in Italy (case Credit cards, decision n. 21768 of 3 November 2010, Boll. n. 43/2010). The ICA ascertained infringements of Article 101(1) TFEU and imposed a fine of € 2 700 000 on MasterCard as well as a € 3 300 000 fine collectively on the eight banks acquiring the MasterCard transactions.

In its decision, the ICA qualified MasterCard as an association of undertakings, even after its IPO, because of the role that the licensees still played in the governance of the network, both directly and indirectly. As to the direct role played by the licensees in the governance of the network, the ICA took into account the following elements: (i) the role that licensees continued to play in the election process of some members of the governance of MasterCard, (ii) the presence of banks representatives in the governance boards of MasterCard and (iii) the role that the pre-IPO board of directors of MasterCard had played in the election of the first Global Board after the IPO. The flow of information between the Europe Board and the Global Board of MasterCard was taken into account as an indirect role.

The following practices were declared unlawful by the ICA: (i) fixing of national specific MIFs for Italy by MasterCard as an association of undertakings with no economic justification; (ii) the inclusion – through the licence agreements between MasterCard and its acquirers in Italy – of certain clauses in merchants’ contracts, namely: the non-discrimination rule (the final price of a good is the same irrespective of the different means of payment); the blending rule (applying one merchant fee for all the different payment brands); the presence of a merchant fee on transaction on-us (transactions where the issuing bank and the acquiring bank are identical) and the honour all cards clause (retailers must accept all cards of the scheme even those with higher merchant fees).

The ICA found that the commonality of interest between MasterCard and its acquirers to define and implement high MIFs lessened competition by creating a floor effect for merchant fees to the detriment of retailers and, lastly, to consumers. More specifically, upstream competition incentivises the network to raise MIFs as net issuers increase their revenues, while net acquirers can pass them on to merchants. The clauses in merchants contracts increased the restrictive effects of MIFs

The ICA established that MasterCard and its acquirers manifested a unitary agreement in order to promote the circuit’s expansion by passing the MIFs on to retailers. These MIF passed on retailers were, consequently, translated on the prices effectively applied to consumers. The result of the conduct was, therefore, a decrease in consumers’ welfare.

This investigation by the ICA is an example of fruitful cooperation between a national competition authority (NCA) and the European Commission (DG COMP), both in terms of methods of analysis and of economic and legal concepts adopted. Mastercard decoupled its MIFs in Italy from the cross border one in April 2007, following the European Commission’s position in the Statement of Objections adopted in June 2006 (see case COMP/34579-MasterCard decided in December 2007). Therefore, the ICA’s intervention on the Italian specific MIFs complemented that of the European Commission on the cross border fees.

Furthermore, the ICA’s final decision reflects in its substance the results of the Commission’s investigations in the cross-border payment systems (cases COMP/39.398-VISA MIF, COMP/34579-MasterCard, COMP/36.518-EuroCommerce and COMP/38.580-Commercial Cards) and, particularly, the investigation closed on 19 December 2007, which prohibited MasterCard’s MIFs for cross-border payment card transactions made with MasterCard credit cards and Maestro debit cards and stated that it restricted price competition between acquiring banks by artificially inflating the basis on which these banks set their charges to merchants. Similarly to the European Commission, the ICA verified whether the model presented as supporting MasterCard’s MIFs was founded on realistic assumptions, whether the methodology used to implement that model

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could be considered objective and reasonable and whether MasterCard’s MIFs had led to any positive effects. In particular, ICA found that the MIFs that MasterCard introduced specifically for Italy in April 2007 had no economic justification and were defined at the same level of the previous cross border ones without any specific analysis for the Italian market.

Both competition authorities agreed that MIFs were not based on an efficient model, for example regarding the use of alternative payment instruments, and found that the concrete model underlying MasterCard’s methodology could not be expected to determine a MIF level that would benefit consumers and that MasterCard had failed to submit empirical evidence to demonstrate the claimed positive effects of its MIFs on the market.

See further information on the proceedings as well as the press release (both in Italian).

• Latvia: Development of National Competition LawCompetition policy in Latvia dates back to 1991 when the law ‘On Competition and Restriction of Monopoly’ was adopted. This led to the creation of the Anti-monopoly Committee, just a few months after Latvia finally retrieved its independence. In 1998, a new Competition Law came into effect and the Competition Council was formed on the basis of the Anti-monopoly Committee.

The present Competition Law is in force since 2002. In 2004 investigative tools were broadened to include unannounced However, it was only in 2008 that the regulatory regime was expanded to take full advantage of the modern investigative and enforcement tools.

In March 2008, several amendments were introduced into the Competition Law.

The Competition Council obtained greater powers to conduct market inquiries, including the right to enter without prior warning business premises of market participants, including the right to request and obtain necessary information and documents.

By the same amendments in 2008, the previously existing 40% threshold as a mandatory indication for dominant position was removed, thus bringing the notion of dominance closer to the EU competition rules. A new concept of abusive practice in the retail sector was also introduced, to prevent misuse of bargaining power of large retailers against their suppliers.

A leniency programme was introduced in 1997. It offers reduction of fines from 75 % to 100% for participants in a cartel agreement. However, it is only since 2004 that the leniency programme explicitly guarantees full immunity from fines.

In 2008, a new leniency programme was enacted based on the ECN Model Leniency Programme, introducing the possibility of markers and summary applications. The Latvian leniency programme does not differentiate between the types 1A and 1B of leniency applications: it provides immunity if the evidence submitted in the leniency application is sufficient to initiate the case. Currently, amendments are proposed to ensure that leniency applications and additional related documents are treated confidentially and are used only in the relevant case investigated by the Competition Council of Latvia.

Since 2008, the Latvian Competition Act introduced the option of commitment proceedings. Accordingly, the Competition Council of Latvia can terminate its investigation if an undertaking offers legal obligations (commitments) which meet the competition concerns expressed by the Competition Council, and the latter makes these commitments binding by decision. In practice the commitment procedure has proved to be an effective and successful enforcement tool which saves investigative resources and ensures immediate elimination of the competition concerns identified. So far, only in a single case an undertaking has failed to comply with its commitments.

The availability of information on enforcement of the competition rules by the European Commission, decisional practice of the ECN members and the case law of the Court of Justice of the European Union significantly facilitates a coherent level of understanding and application of

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the EU competition rules by all stakeholders.

The Latvian Competition Council strongly believes that the decentralized application of the EU Competition rules introduced by Council Regulation 1/2003 achieved a much higher level of participation in the efficient and harmonious enforcement by ECN members, facilitated greater convergence between the EU and national competition regimes, increased awareness about competition rules and facilitated the development of a modern national competition culture.

• Malta: Amendments to Competition Rules leading to increased Convergence with Regulation 1/2003The Competition Act (Chapter 379 of the Laws of Malta) in Malta has been amended on different occasions. In particular in 2004, following Malta’s accession to the EU, the individual exemption and negative clearance systems were repealed and a system based on self-assessment was adopted in line with Regulation 1/2003.

In 2011, significant amendments were introduced to the Competition Act with the coming into force of the Malta Competition and Consumer Affairs Authority Act (Chapter 510 of the Laws of Malta ), which established the Malta Competition and Consumer Affairs Authority (MCCAA), the latter amalgamating within it the previous Consumer and Competition Department and the Malta Standards Authority. One of the entities within MCCAA is the Office for Competition which is responsible for the application and enforcement of the Competition Act.

The 2011 amendments were aimed at making the Competition Act more effective in achieving its objective of regulating competition and providing for better functioning markets. Notably, they served to boost the rights and remedies available under Maltese competition law. Some of the amendments introduced also had the effect of aligning the procedures under the Competition Act with Regulation 1/2003. This article focuses on the most significant amendments which led to increased convergence with Regulation 1/2003.

The role of the Director General of the Office for Competition has evolved from a purely investigative role to a role involving both investigative and decision-making powers similar to the powers conferred by Regulation 1/2003 to the European Commission. The decisions of the Director General are subject to appeal on points of law and fact before the Competition and Consumer Appeals Tribunal (CCAT) presided by a judge who sits with two other members in every case, and the decision of the CCAT can be subject to further appeal on points of law to the Court of Appeal.

The Director General has wide investigatory powers under the Competition Act akin to those found under Regulation 1/2003. The Director General can request all necessary information and enter and inspect business and non-business premises. In order to strengthen the procedural safeguards of the undertakings concerned, the 2011 amendments clearly laid down the procedures relating to investigations, providing for more onerous obligations on the Director General and enhancing the right to be heard before the Office. These new provisions are largely based on Regulation 1/2003 and Commission Regulation (EC) No 773/2004. Before taking an infringement decision, the Director General must notify the undertakings concerned with a statement of objections. The amendments also specifically confer the right of access to the file to the undertakings concerned without prejudice to the non-disclosure of information which is deemed to be confidential. Undertakings may also request a separate and individual meeting with the Office to submit their views orally and may, on the initiative of the Director General, also be called to participate in an oral hearing, to which the complainant and third parties may also be invited, so that all those present are given the opportunity to develop their arguments and make counter submissions.

The procedure for the application of interim measures under Article 15 of the Competition Act has been significantly simplified and aligned with Article 8 of Regulation 1/2003 giving the Director General the power to order interim measures in cases of urgency due to the risk of serious and

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irreparable damage to competition.

Article 12C of the Competition Act is essentially based on Article 9 of Regulation 1/2003 which provides that in those cases where the Director General intends to adopt a decision requiring that an infringement is brought to an end, the undertaking concerned may offer commitments to the Director General to meet his or her concerns.

The 2011 amendments introduced the possibility for the Director General, in the framework of cartel investigations, to invite, prior to issuing a statement of objections, some or all of the undertakings concerned to indicate in writing whether they are willing to engage in settlement discussions with a view to introducing settlement submissions. The relevant article was modelled on Commission Regulation 662/2008 of 30 June 2008 amending Regulation (EC) No 773/2004 as regards the conduct of settlement procedures in cartel cases.

Following the 2011 amendments, the Competition Act, along the same lines as Article 17 of Regulation 1/2003, enables the Director General to carry out inquiries into any particular sector of the economy or into any particular type of agreements across various sectors where the trend of trade, the rigidity of prices or other circumstances suggest that competition may be restricted or distorted within the market in Malta. This is complemented by a provision in the Malta Competition and Consumer Affairs Authority Act enabling the Office to keep under review markets and commercial activities relating to the supply of goods and services and to collect information and evidence for the purpose of ascertaining whether such markets and activities may adversely affect the interests of consumers and to study markets and recommend action where required.

Prior to the amendments, infringements of the Competition Act were punishable as criminal offences. Following the 2011 amendments, criminal liability for infringements of the substantive rules and for breaches relating to the supply of information has been replaced by the possibility to impose administrative fines, as is the case under Regulation 1/2003. A prescription period for the imposition of administrative fines has also been introduced.

The amendments have also enhanced the position of complainants. In the current system, the complainant is entitled to be informed of the preliminary view of the Director General where he or she considers that the complaint should be rejected, thus giving the complainant the chance to be heard before the Director General issues a decision. The complainant has a right to appeal the decision of the Director General to reject the complaint to the CCAT. The rights of the complainant have also been improved with respect to hearings. In the course of an investigation, a complainant is entitled to a non confidential version of the statement of objections, provided that there is no settlement procedure in progress. The complainant may make written observations on the statement of objections and may also be given the opportunity to develop arguments orally if it has so requested in the written submissions.

The abovementioned amendments which are of a procedural nature, have strengthened the role of the Office for Competition, increased the deterrent effect of the law and enhanced the rights of the parties involved in the proceedings. The increased alignment of the Competition Act to Regulation 1/2003 puts the Office in a better position to refer to the judgments of the Court of Justice of the European Union and to decisions and interpretative notices of the European Commission on the application of the relevant procedural provisions.

• Poland: Implementation of Regulation 1/2003 - a Polish PerspectiveEver since the accession of Poland to the European Union in 2004, the President of the Polish Office of Competition and Consumer Protection (UOKiK) has concluded 25 antitrust proceedings based on both national and EU provisions. In the majority of those cases, the President of UOKiK declared the investigated practices as restricting competition and required the infringements to be brought to an end. During this period, two commitment decisions were adopted (the first one issued on 24 August 2010 in the ZAiKS case and the second one on 13 April 2012 in the PGNiG case), as well as one interim decision issued on 10 October 2005 in the Telekomunikacja Polska

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S.A. case (Decision DOK- 127/05), which was based on national and EU competition rules.

In general, the application of the provisions of Regulation 1/2003 by UOKiK has not raised any significant issues. However, there has been one controversial case related to Article 5 of the Regulation and to the procedural autonomy of NCAs, which was the object of a referral to the Court of Justice of the European Union (ECJ). On 3 May 2011, the Court of Justice of the European Union rendered its preliminary ruling in the case of the President of the Office of Competition and Consumer Protection vs. Tele2 Polska (now Netia SA), clarifying the interpretation of the last sentence of Article 5 and leaving no grounds for any further misinterpretations of this provision (Judgment of the Court of Justice, C-375/09).

In this judgment, the Court of Justice confirmed that NCAs – where they do not find sufficient grounds to adopt a prohibition decision – may only decide that there are no grounds for action, notwithstanding national procedural rules providing otherwise. The Court considered that the European Commission alone is empowered to make a finding that there has been no infringement, in this case, the prohibition of abuse of dominant position in accordance with Article 10 and Recital 14 of Regulation 1/2003 (see ECN Brief 2/2011).

The case concerned a request for preliminary ruling referred by the Polish Supreme Court in a competition case where the Polish Competition Authority had concluded that a certain conduct did not meet the conditions for prohibition under Article 102 TFEU (then Article 82 EC). Relying on Article 5, third sentence, of Regulation 1/2003, the NCA held that there were no grounds for action on its part (Decision of the President of UOKiK DOK-112/06). Upon appeal, the first instance review court considered that UOKiK was required by national procedural rules to take a decision on substance, i.e. make a finding that Article 102 TFEU was not infringed. As last instance, the Supreme Court seized the ECJ with the matter. Following the answer to the preliminary ruling, the Supreme Court revoked the appealed judgment and sent the case to the Court of Appeal in Warsaw (Judgment from 8 May 2011, in the case III SK 2/09).

UOKiK greatly values the framework created by the provisions of Regulation 1/2003 and the close cooperation with the European Commission and the NCAs of other EU Member States which was established as a result thereof. Moreover, the set of informal instruments in place within the ECN have allowed NCAs to exchange know-how and gain essential information for the effective performance of the activities of antitrust agencies. The Polish Agency has particularly benefited from this experience in the context of the on-going review of the Polish legislative solutions for competition protection (see this ECN Brief). While preparing the draft proposal for the amendment of the Act on Competition and Consumer Protection, UOKiK drew inspiration from the legal framework of other jurisdictions and benefitted from contributions from the ECN members, who provided a detailed overview of their relevant national legislation. The envisaged modifications seek to clarify the national rules and to counteract misinterpretations and to enhance the implementation of the rules laid out in Regulation 1/2003.

• Portugal: Regulation 1/2003 and Competition Enforcement in PortugalAfter 8 years of implementation of Regulation 1/2003, Manuel Sebastião, President of the Portuguese Competition Authority (PCA), reflects on how the functioning of the European Competition Network (ECN) has influenced legislation and enforcement of competition in Portugal.

Q1. How has the PCA’s experience in implementing Regulation 1/2003 influenced the recent legislative reform in Portugal?

The Portuguese Parliament recently adopted the new Portuguese Competition Act, Law No. 19/2012, of 8 May 2012, as part of a wider reform of the Portuguese competition regime. The aims of the new Portuguese Competition Act were to increase legal certainty and predictability of competition enforcement, to harmonise Portuguese competition law with EU law and international best practices, and to increase the effectiveness of the Portuguese Competition Authority (PCA) competition enforcement and advocacy.

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I consider these eight years of experience in implementing Regulation 1/2003, both through formal and informal cooperation, as essential for achieving each of these aims, bringing European best practices and experience to the forefront of our legislative reform. The new Portuguese Competition Act includes the possibility to set priorities for competition enforcement, new procedural tools in antitrust enforcement, a new merger control test and reinforced powers for conducting sectoral inquiries, bringing the Portuguese competition regime more in line with the European competition regime and practice.

The legislative review was carried out within the framework of the implementation of the measures foreseen in the Memorandum of Understanding signed between the Portuguese Government and the IMF/ECB/EC (measure 7.19 ii), also as part of a broader reform of the Portuguese competition legal framework, which has led to the creation of the new specialized Court on Competition, Regulation and Supervision.

It is my opinion that this Competition Act, built on the foundations of Portuguese experience and European convergence, paves the way for more effective enforcement of competition in Portugal.

Q2. What was the impact of the ECN in drafting the new Portuguese Leniency programme?

The New Portuguese Competition Act brings profound changes to the Portuguese leniency programme, making it, for the first time, an integral part of the Competition Act, and bringing it closer to the European Commission leniency programme and the ECN Model Leniency Programme. It is a fundamental tool in the competition authority’s toolbox in the detection and prosecution of cartels.

Cooperation within the ECN was vital for the overhaul of the leniency programme, including the development of the ECN Leniency Model Program and subsequent discussions and exchanges of experiences between competition authorities. We have benefited a great deal from the experience of other authorities that has allowed us to draft a sound, attractive and predictable leniency programme.

In fact, one major innovation of the new leniency programme in Portugal is its limitation to cartel investigations. The new leniency regime also brings important changes to leniency applications. Immunity from fines will be granted to the first member of the cartel that provides sufficient information for the PCA to launch an inspection or to the first applicant to provide evidence that allows the PCA to establish an infringement and no other cartel member has qualified for immunity. Reductions of fines are available for subsequent cartel members that come forward and do not qualify for immunity, but provide evidence that adds significant value to the PCA investigation. Reductions are then progressive for subsequent applicants. Applicants, in order to qualify for immunity or a reduction of fine, must also fully cooperate with the PCA.

In addition, individuals that may be the object of individual sanctions for breach of the competition rules in the context of a cartel investigation may also apply for leniency under the new programme. In these cases, immunity or reduction of the fine would be limited to the fine imposed on that individual. The new Competition Act grants advanced protection to leniency applicants allowing for oral applications and limiting access to leniency documents, giving an additional layer of protection from disclosure to those who cooperate with the PCA.

The new procedural rules of the leniency programme were subject to public consultation during the summer of 2012 and the final documents were recently published.

Q3. How has cooperation within the framework of 1/2003 led to the better promotion and defence of competition policy in Portugal? Which type of cooperation was most beneficial?

Throughout the years of implementation of Regulation 1/2003, the PCA has benefitted from the various forms of formal and informal cooperation within the ECN. Experience in joint investigations has allowed the investigation and prosecution of cross-border cartels, exchanging

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evidence with our European counterparts and organising simultaneous dawn-raids. This has not only improved the effectiveness of our enforcement but has also increased deterrence against competition infringements in Portugal.

Looking beyond formal cooperation, informal cooperation within the ECN has shown itself to be of crucial importance for European competition authorities.

Participation in working groups, both at the horizontal level, as well as at the sectoral level has allowed for an exchange of experience and best practices that has kept the European Competition Network at the cutting edge of competition law and policy. Informal exchanges of information have been extremely useful in broadening our knowledge base in a very wide range of areas of competition enforcement and advocacy.

In terms of competition advocacy, the PCA has been very active in its sector enquiries, which have greatly benefitted from the cooperation of our European counterparts, either by receiving input or by discussing the results we reached in areas such as fuels, retail distribution and telecoms.

• Romania: Overall Activity of the Romanian Competition Council towards the Enforcement of Regulation 1/2003The effective enforcement of EU competition law jointly by the European Commission and national competition authorities, is supported by the proper and consistent application of Regulation 1/2003, in a decentralised system in which the ECN members have parallel competences.

In line with the decisional and investigative powers conferred by Regulation 1/2003, the Romanian Competition Council (the Council) amended the national competition law to enhance the enforcement of EU competition rules as well as the mechanisms for cooperation within the ECN.

As from 2010 the number of investigations opened for alleged infringements of Article 101 and/or Article 102 TFEU by the Council has increased. In the last two years, the Council has launched 36 investigation procedures based on EU law, out of which almost 2/3 are either closed or are in the phase of an envisaged decision. The amount of fines imposed in antitrust proceedings based on EU law increased sharply from € 36 000 000 in 2010 to € 230 000 000 in 2011. In several investigative procedures undertaken by the Council, NCAs from Austria, Bulgaria, Italy, Netherland and Sweden provided their assistance under Articles 12 and/or 22 of Regulation 1/2003.

In 2011, following the investigation of vertical agreements on the pharmaceutical market concluded between producers and distributors to impede parallel trade, the Council imposed heavy fines on four producers of medicines for contractual clauses prohibiting exports and imports of certain pharmaceutical products which were found to infringe Article 101 TFEU and Article 5 of the Competition Law no. 21/1996, as amended. The Council found that agreements which impose restrictions on imports and exports within the European Union are by their very nature restrictive for competition and are also capable of affecting trade between Member States (see ECN Brief 01/2012).

In 2012, the Council’s activities were particularly focused on investigation and competition advocacy in the liberal profession sector, investigation of anticompetitive agreements regarding bid rigging in public procurement procedures, retail food and telecommunications. A report on competition in the key economic sectors, such as energy, transport, telecommunications, insurance and banking, was endorsed at the end of October, presenting recent market evolutions (developments). The report (in Romanian) can be accessed here.

While proving to add real value to the Council’s overall activity, ECN mechanisms of cooperation have contributed to help the Council to meet its increasing targets and to make the best use of its resources.

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• Slovakia: The Application of Article 15 (3) of Regulation 1/2003 in Proceedings before Slovak CourtsSubstantive Slovak competition law is aligned on the EU competition rules and the Antimonopoly Office of the Slovak Republic (the Slovak competition authority, AMO) relies on EU case law in its decisional practice. As ECN member, the AMO seeks to ensure the coherent application of EU competition rules and takes active part into the exchange of expertise and experience with other ECN members.

Regulation 1/2003 has put into place several mechanisms to enhance the coherent application of EU competition rules, including Articles 11(4) and 15(3). For example, Article 11(4) seeks to ensure the coherent application of EU competition rules by the national competition authorities (NCAs) by providing that the NCAs inform the European Commission (the Commission) no later than 30 days before the adoption of a decision requiring that an infringement be brought to an end, accepting commitments or withdrawing the benefit of a block exemption Regulation.

When a decision by a NCA applying EU law is subject to review by a national court, that court will also have to decide on the application of the EU competition rules. As competition law is a rather complex legal discipline involving economic assessments, the coherent application of the competition rules by the courts requires that settled concepts in EU case law are taken into account, even if those are rather novel for the national law system. Coherent application may be furthered through the intervention of the Commission as amicus curiae (Art 15(3) Regulation 1/2003), and/or the possibility to refer preliminary questions the Court of Justice of the EU. The latter possibility was until now, used only once by the Slovak courts in competition cases, in the still pending preliminary ruling case C-68/12 (see ECN Brief 2/2012).

As to Article 15 of Regulation 1/2003, it foresees that “where the coherent application of Article 81 or Article 82 of the Treaty so requires, the Commission, acting on its own initiative, may submit written observations to courts of the Member States. With the permission of the court in question, it may also make oral observations…”. Written observations have so far been submitted by the European Commission in at least nine instances, in eight different cases (http://ec.europa.eu/competition/court/antitrust_amicus_curiae.html). These interventions may concern lawsuits between private parties as well as judicial review proceedings of decisions of a NCA up to the highest national court (including proceedings before the Constitutional Court).

The Commission has submitted observations in a competition case in the Slovak Republic. It intervened as amicus curiae in the framework of judicial review proceedings pending before the Supreme Court of the Slovak Republic (second instance review court) concerning a decision of the Slovak NCA which had fined an abuse of a dominant position by Železničná spoločnosť Cargo Slovakia, a.s. (see ECN Brief 2/2012).

In its decision applying Article 102 TFEU the Slovak NCA held that ŽS Cargo, the economic successor, was liable for the abuse by its predecessor, which had ceased to exist at the time of the decision. The Regional Court in Bratislava (first instance review court) accepted the company as the successor, however significantly reduced the sanction that was imposed by the Slovak NCA with reference to the succession. In its observations, the Commission focused on the application of the concept of economic continuity within an undertaking and the effectiveness of fines in relation thereto. It emphasised that the application of the concept of economic continuity must guarantee that the successor company can be held fully liable for the conduct of its predecessor and, thus, bear all the consequences resulting from such liability, including fines. The Supreme Court accepted the economic continuity concept in its entirety as it was settled case law of the Court of Justice of the EU which had until then not been applied in Slovakia. The amicus observations thus contributed to the coherent enforcement of EU competition law.

The Commission has also submitted written observations in a case pending at second instance before the Supreme Court. The case concerns a decision of the Slovak NCA fining an abuse of dominant position case. The Supreme Court has to review the judgment of the court of first instance which has annulled the decision of the Slovak NCA. The case is currently pending before

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the Supreme Court.

So far, the experience in the Slovak Republic shows that Article 15 (3) of Regulation 1/2003 plays an important role in the coherent application of EU law.

In conclusion, numerous courts have a role in the application of the EU competition rules. Judicial review in the field of antitrust infringements is organised differently in the EU jurisdictions and the national courts do not have a forum of the same type as the ECN. Against this background, Article 15(3) will remain an important tool to foster coherent application of EU competition rules.

• Spain: Draft Bill creating the National Markets and Competition CommissionOn 27 September 2012, the Spanish Government submitted to the Parliament a Draft Bill establishing a new agency which will merge the current competition authority (the National Competition Commission – CNC) and several sector regulators into a single organisation named National Markets and Competition Commission.

The new authority will have hybrid functions, involving both the enforcement of antitrust rules and the regulation of several economic sectors such as energy, airports, railways, media, telecoms, post and games. Consequently, the Draft Bill envisages the setting up of four internal Divisions within the new agency: competition (in charge of antitrust enforcement in all sectors), telecoms (regulation), energy (regulation) and transport (regulation). The Competition Division will retain all powers as established by the current 2007 Competition Act. The Draft Bill also establishes the creation of a nine-member Council, which will issue final decisions on all cases. The proposed Bill foresees a functional separation between the antitrust enforcement and the regulatory activity of the four Divisions and the decision-making body, the Council.

The Government will appoint the members of the Council (including the Chairman) for six-year non-renewable terms. The Ministry of Economy and Competitiveness will designate its members from a pool of renowned professionals in the field. The Economy and Finance Committee of the Lower House of the Parliament will conduct public hearings on the suitability of the candidates prior to their final appointments. At these hearings, members of the Parliament could veto one or all of the proposed candidates. The Government will also appoint the Directors of the Divisions for four-year renewable terms. Such appointments will however require approval of the new agency´s Council.

The Draft Bill also foresees the potential creation of an Executive Commission inside the Council to oversee ongoing management tasks.

All previous agencies, including the National Competition Commission, will cease to exist when the new “super-regulator”, as it is already known in Spain, is established.

Once the new legislation is passed, there will be a four-month transitional period during which the old agencies and the new National Markets and Competition Commission will co-exist. At the end of this four-month period the new agency will have full powers as stated above. Thus, the Draft Bill provides for potentially extending the maximum transitional period for issuing and notifying the resolution of pending proceedings.

On 15 March 2012, the Council of the National Competition Commission issued a report on the initial version of the Draft Bill (see ECN Brief 2/2012), as did also other sectorial regulators concerned by the new legislation.

• European Competition Network refines its Model Leniency Programme On 22 November 2012, the European Competition Network (ECN) published a refined Model Leniency Programme (MLP), around which ECN competition authorities align their own leniency procedures. The MLP was adopted in 2006 to make it easier for companies to apply for leniency,

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in particular where it is not clear which competition authority will take the case forward. The ECN has now, in particular, clarified and simplified the information that must be provided by companies that apply to several different authorities in the EU.

The main changes introduced in November 2012 are:

• All leniency applicants applying to the European Commission in cartel cases concerning more than three Member States will be able to submit a summary application to national competition authorities (NCAs). Previously, only the first applicant, i.e. the immunity applicant, was entitled to use summary applications under the MLP, although some NCAs had already extended the right to all applicants.

• The ECN has agreed on a standard template for summary applications, which companies will be able to use in all Member States. Moreover, the MLP clarifies in which situations leniency applicants will need to update summary applications at NCA level.

• The ECN has published a list of NCAs which accept summary applications in English and specified applicable language requirements for summary applications in all Member States.

Other changes to the MLP include clarifications on conditions which applicants must meet in order to qualify for leniency, in particular on the duty to cooperate. Also, the scope of leniency programmes under the MLP, which covers secret cartels, has been clarified: it may include cartels with vertical elements, such as, for example, hub-and-spoke cartels.

The revised text further clarifies that the ECN competition authorities should offer the same level of protection against disclosure for written and for oral leniency statements.

The MLP does not in itself have the effect of changing individual leniency programmes. By endorsing the revised MLP, the heads of the ECN competition authorities have agreed to use their best efforts to align their current and future leniency programmes and practices with the refined MLP. MLP changes will become operational when they have been introduced in the respective programmes or applied by authorities in practice.

More information about the MLP and its 2012 revision is available on the European Commission’s competition website.

• ECN: Publication of Reports on Investigative and Decision Making PowersIn November 2012, ECN Reports on investigative and decision-making powers were published, which for the first time provide an overview of the enforcement procedures in the ECN.

Regulation 1/2003 took a key step in providing a more level playing field for businesses operating cross-border, as all EU competition enforcers including the national competition authorities (NCAs) and national courts are obliged to apply the EU antitrust rules to cases that affect trade between Member States.

While the NCAs now regularly apply the same substantive competition rules, they do so according to divergent procedures and they may impose a variety of sanctions. The Report on the functioning of Regulation 1/2003 found that divergences of Member States’ enforcement systems remain on important aspects. It concluded that this aspect may merit further examination and reflection.

To this end, the ECN has drawn up Reports on investigative and decision-making powers. The Reports demonstrate that national legislators have made clear efforts to make their procedures for the enforcement of Articles 101 and 102 TFEU more convergent. Basic elements of decision-making powers and procedures, such as the power to take prohibition or commitment decisions or to grant interim measures are present in all or in a very vast number of jurisdictions. Moreover, procedural steps that are crucial in terms of safeguarding fair procedures (such as the right

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to be heard through a statement of objections or equivalent; access to file) are present in all jurisdictions in one form or another.

However, it has not led to uniformity. Divergence subsists for a few fundamental questions such as whether competition authorities have the power to set priorities or the legal framework to conduct interviews, as well as numerous aspects at a more detailed level, including the criteria for adopting interim measures and sanctions for non-compliance with investigatory measures. The Reports are intended to provide a basis for informed debate about the need for further procedural convergence within the ECN. The ECN will continue looking into this matter, in order to further enhance the level playing field for companies operating in the single market.

The Reports are available here.

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to be heard through a statement of objections or equivalent; access to file) are present in all jurisdictions in one form or another.

However, it has not led to uniformity. Divergence subsists for a few fundamental questions such as whether competition authorities have the power to set priorities or the legal framework to conduct interviews, as well as numerous aspects at a more detailed level, including the criteria for adopting interim measures and sanctions for non-compliance with investigatory measures. The Reports are intended to provide a basis for informed debate about the need for further procedural convergence within the ECN. The ECN will continue looking into this matter, in order to further enhance the level playing field for companies operating in the single market.

The Reports are available here.

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