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European Law Blog #15 – Competition, Competition, Competition

European Law Blog #15 – Competition, Competition, Competition

There have been lots of bits and bobs of news from the EU this week to do with competition law, including a case regarding the operation of Article 101 TFEU – one of the main competition law regulations – and the upcoming case of Mastercard against the Commission in regard to card fees that could have major repercussions on the global finacial industry – how exciting! Elsewhere, French President Hollande makes an embarassing faux pas in Japan and argues with China. We continue our European leader profile series with Italy’s new Prime Minister Enrico Letta and a new feature has arrived…the Tiny European Country of the Week! Or TECoW to his friends.

Case C-536/11: Bundeswettbewerbsbehörde v Donau Chemie AG

Austrian ban on court documents in breach of EU law

This case concerns competition rules and the obtaining of documents belong to the Austrian competition authority (Bundeswettbewerbsbehörde; BWB). In Austria, the BWB prosecutes alleged infringements of competition law. The relevant court (the ‘Cartel Court’) found that a cartel existed amongst companies selling printing chemicals and imposed fines on them. This is contrary to Article 101 TFEU which states:

The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market…

The Austrian Flag Image courtesy of Andrey Belenko on Flickr under the Creative Commons Licence

The Austrian Flag
Image courtesy of Andrey Belenko on Flickr under a Creative Commons Licence

  • A cartel is the competition law term for a group of companies that conspire together to fix prices on a certain product, thus increasing the profits of all the companies in the cartel.
  • The trade association related to the printing chemicals wanted to obtain the court documents in order to pursue their own investigation.
  • However, Austrian rules banned access to such documents.
  • The Cartel Court, somewhat bemused by these rules, challenged the ban and sought a preliminary ruling from the ECJ.
  • They asked whether: (1) the ban was a infringement of the principle of effectiveness in EU law; and
  • (2) Whether it breached the principle of equivalence because similar documents relating to other cases were available.
  • The principle of effectivness states that national rules should not make it difficult for EU law rules to apply and should respect the other principles of EU law, such as proportionality, in order to be deemed legal. In other words, if a national law does not prevent EU law from operating then it can be applied. So, in this case, it was argued that the ban on court doucments prevented EU law (i.e. competition rules on cartels) from operating properly.
  • The principle of equivlanece says that procedures must operate in the same way, with neither EU law or national law being more difficult than the other, or as stated in the case itself:

…the rules applicable to actions for safeguarding rights which individuals derive from the direct effect of EU law must not be less favourable than those governing similar domestic actions.

Held: that although such decisions should usually be left to national courts to decide on a case-by-case basis, the Austrian ban clearly made it more difficult for the relevant parties to exercise their rights under EU law. Thus, it was decided that the ban was in breach of the principle of effectiveness under EU law. In light of the answer to the first question, the court did not answer the second on the principle of equivalence. The judgment can be found here.

Mastercard takes on the Commission

Attempts to overturn ban on cross-border fees

Mastercard have appealed to the ECJ in an attempt to overturn the ban on so-called multilateral interchange fees (MIFs), which the Commission banned in 2007. Their case was dismissed by the General Court in 2012, who upheld the Commission’s regulation. The MIFs are the charges that retailers pay to your bank when you use their credit or debit card. The Commission banned such fees and argued that they were in breach of EU competition rules and unfairly increased costs for retailers. The case is due to be heard in July.

China and EU at loggerheads

French wine threatened, Hollande outraged
Image courtesy of MCA / Mike Allyn on Flickr under the Creative Commons Licence

Image courtesy of MCA / Mike Allyn on Flickr under a Creative Commons Licence

The Commission has confirmed that it will impose a duty of 11.8 per cent on the importation of Chinese solar panels, in an attempt to curb competition between solar panels made in China and in Europe. China’s panels are sold at below cost price, known as ‘dumping’ (thus creating the label ‘anti-dumping levy’), resulting in a 48 per cent cheaper retail price than their European counterparts. As a result, China has gained 89 per cent of the European solar panel market. According to the BBC, China ‘resolutely opposes’ the duties, labelling them ‘unfair’. In response, China has launched its own anti-dumping investigation into wine from the EU, of which by far the biggest exporter is France, thus outraging President Hollande in particular, who called for a negotiated deal to be struck.

IMF: We’ve made a big mistake

International Monetary Fund admits problem inGreek bailout handling

The IMF has published a report this week admitting that they made a raft of mistakes when handling the Greek bailout in 2010. The bailout granted Greece €110 billion, only for them to require another bailout of €130 billion in 2012. In order to qualify for a larger (than normal limits) bailout, the relevant country must fulfil the criteria for ‘exceptional access’. The IMF admits in the report that they did not follow their own rules for granting Greece exceptional access because they were too optimistic about Greece’s prospects. The report can be found here.

Continental news round-up

President Hollande caused an awkward moment in Japan this week when he mistakenly referred to its inhabitants as ‘Chinese’. His translator picked up on the mistake and corrected it during the simultaneous translation, but he apparently did not notice and continued talking.

Latvia has been given support to enter the eurozone despite its economic troubles and the country’s population mainly voting for anti-Euro parties. There will now be 18 countries using the Euro.

It emerged that Finland has fallen into a triple-dip recession after its economy shrunk by 0.1 per cent in the first quarter of 2013. It had also shrunk by 2.8 per cent in 2012. After the figures were re-evaluated, it was shown that they had been in recession for a year. Finland is one of the EU’s key pro-austerity countries.

A banker in Germany fell asleep whilst making a transaction and transferred €22,222,222.22 instead of €64.20 when his finger was left on the keyboard. This was worldwide news.

Tiny European Country of the Week (TECoW)

Image courtesy of Nicolas Raymond on Flickr under the Creative Commons Licence

Image courtesy of Nicolas Raymond on Flickr under a Creative Commons Licence

ELB was chatting last week about President Hollande (a recurring figure in these pages, it seems) when it was discovered that the President of France is also the Co-Prince of Andorra. Intrigued, we carried out some research on this little known area and it turns out that there are quite a few interesting small sovereign states hidden on the Continent:

Name: Andorra
Location: Squished between the southern border of France and the northern border of Spain.
Demonym: Andorran
Official language: Catalan
Economy: Highly prosperous due to its thriving tourist industry and status as a tax haven.
Political status: Not a member of the EU, but the Euro is widely used.
Fun fact: It has the seventh highest life expectancy in the world and all Andorrans are required by law to keep a rifle in their house.

What’s the deal with… Enrico Letta?

Pursuant to the ELB’s objective of keeping EU law students up to date on the legal and poltical happenings of the troubled continent, this week’s profile focusses on the new Italian prime minister, Enrico Letta.

Image courtesy of Enrico Letta on Flickr under the Creative Commons Licence

Image courtesy of Enrico Letta on Flickr under a Creative Commons Licence

Name: Enrico Letta
Age: 46
Nationality: Italian, born Pisa (of leaning tower fame), though he spent much of his early life in Strasbourg.
Education: Degree in Political Science from the University of Pisa; doctorate in European Union law from the Sant’Anna School of Advanced Studies of Pisa
Notable previous occupations: Member of European Parliament for North East Italy (2004-2006); Member of Chamber of Deputies (2006 – present)
Political leanings: Described by the BBC as a centrist, his coalition is deemed to be centre-left and a member of Democratic Society party.
Political journey:

  • Began as a young man in the Christian Democracy party, a dominant Roman Catholic ‘catch-all’ party that consisted of both left and right wing members.
  • Through his association with this party he became, and continues to be, a firm supporter of the EU.
  • Chief-of-staff for the Minister of Foreign Affairs between 1993–4.
  • Upon the collapse of the Christian Democracy party in 1994, he immediately joined its successor the Italian People’s Party.
  • Appointed Minister of European Affairs in 1998, making him the youngest ever minister in post-war Italy.
  • Appointed Minister of Industry in 1999.
  • Elected to the Chamber of Deputies in 2001.
  • Leaves Italian parliament in 2004 for the European Parliament.
  • In 2006, he returns to the Chamber of Deputies
  • Elected as Deputy Secretary of the Democratic Party in 2009
  • Invited to form a coalition government after the 2013 Italian election shambles.

Fun fact: He’s a fan of AC Milan and drove himself in his own Fiat to his prime ministerial acceptance ceremony.

Coming next week
  • ELB special report: summary of the English–French official language debate in the EU
  • Another edition of the TECoW
  • No mention of Francois Hollande
  • More legal news
  • And much more from the Continent…

The ELB is written by Associate Editor of TSL, Natalie Hearn. Law Graduate from the University of Birmingham, prospective EU Law Masters student at UCL, currently teaching English in Japan. Follow her on Twitter: @ninjahearn

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